Crasti v Heitmann

In *Crasti v Heitmann* [1993] NSWCA 77, the New South Wales Court of Appeal considered a dispute between a vendor and a purchaser concerning the sale of a property. The purchaser sought to terminate the contract of sale, alleging that the vendor had failed to comply with a condition precedent.

The primary legal issue before the Court of Appeal was whether the vendor had fulfilled their obligations under a specific clause of the contract, which required them to obtain a "satisfactory report" from a valuer regarding the property's value. The court had to determine the meaning of "satisfactory report" in the context of the contract and whether the vendor's actions constituted a genuine attempt to satisfy this condition.

The Court of Appeal held that the vendor had not discharged their obligation to obtain a satisfactory report. The court reasoned that the vendor's conduct, in obtaining a report that was demonstrably unsatisfactory and then failing to take further steps to obtain a satisfactory one, did not demonstrate a genuine endeavour to comply with the contractual condition. The principle applied was that where a party has a contractual obligation to obtain a report that is satisfactory to them, they must act honestly and reasonably in assessing that report and must make a genuine effort to satisfy the condition.

The Court of Appeal allowed the purchaser's appeal, finding that the contract had been validly terminated. The court ordered that the deposit paid by the purchaser be returned.