Ebejer v Wilkinson

The New South Wales Court of Appeal considered a dispute between Ebejer and Wilkinson concerning the interpretation and enforceability of a written agreement. The agreement, entered into on 15 March 1995, stipulated that Wilkinson would sell to Ebejer a parcel of land at a price of $150,000, with a deposit of $15,000 payable on signing. The balance of the purchase price was to be paid on completion, which was scheduled for 15 June 1995. Crucially, the agreement contained a special condition that stated: "This contract is subject to the purchaser obtaining finance on terms satisfactory to the purchaser." Ebejer paid the deposit but subsequently failed to complete the purchase, asserting that he was unable to obtain finance on satisfactory terms. Wilkinson, however, contended that Ebejer had not made reasonable efforts to obtain finance and that the condition had not been satisfied, thus entitling Wilkinson to forfeit the deposit.

The central legal issue before the Court of Appeal was whether Ebejer had satisfied the special condition requiring him to obtain finance on terms satisfactory to himself. This involved determining the objective standard of reasonableness that Ebejer was required to meet in his efforts to secure finance, and whether his actions were sufficient to discharge his obligation under the contract. The Court also had to consider the implications of the phrase "satisfactory to the purchaser" and whether it conferred an unfettered discretion on Ebejer or imposed an implied duty to act honestly and reasonably.

The Court of Appeal held that the special condition imposed an obligation on Ebejer to take reasonable steps to obtain finance. While the phrase "satisfactory to the purchaser" indicated that the ultimate decision on whether the terms were satisfactory rested with Ebejer, this discretion was not absolute. It was implied that Ebejer must act honestly and reasonably in his pursuit of finance. The Court found that Ebejer had not demonstrated that he had made genuine and reasonable efforts to secure finance, nor had he provided sufficient evidence to establish that the finance he was offered was genuinely unsatisfactory. Consequently, the Court concluded that Ebejer had failed to satisfy the condition precedent to completion.

The Court of Appeal allowed Wilkinson's appeal, setting aside the primary judge's order and ordering that Ebejer's claim for the return of the deposit be dismissed. The Court confirmed Wilkinson's right to forfeit the deposit.