Fassifern Investments Pty Ltd v Gordon

Fassifern Investments Pty Ltd (the appellant) appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales. The dispute concerned the interpretation of a clause within a contract for the sale of land, specifically whether the vendor had validly exercised a right to terminate the contract. The purchasers, Gordon and another (the respondents), had failed to settle the purchase by the due date.

The primary legal issue before the Court of Appeal was whether the notice of termination issued by the vendor was valid and effective. This required the court to consider the proper construction of clause 14 of the contract, which stipulated the conditions under which the vendor could terminate the agreement due to the purchaser's default in settlement. The court also had to determine whether the vendor's conduct prior to issuing the notice amounted to a waiver of its right to rely on the strict terms of the settlement date.

The Court of Appeal held that the notice of termination was invalid. The court reasoned that clause 14 required the vendor to give the purchaser a specific notice specifying the default and allowing a period for rectification before termination could be exercised. The notice issued by the vendor did not comply with these requirements, as it purported to terminate the contract immediately without affording the purchasers an opportunity to remedy their default. Furthermore, the court found that the vendor's conduct, including its communication with the purchasers after the settlement date, indicated an intention to proceed with the sale despite the delay, thereby constituting a waiver of its right to rely on the original settlement date.

Consequently, the appeal was allowed, and the orders of the Supreme Court were set aside. The court declared that the contract remained on foot and ordered specific performance of the contract in favour of the purchasers.