Fekala Pty Ltd v Castle Constructions Pty Ltd

This case involved an appeal by the Vendors, Fekala Pty Ltd and others, from orders made by Windeyer J in favour of the Purchaser. The dispute arose from a contract for the sale of land entered into on 28 June 2001. The Vendors were a group of mortgagees exercising their power of sale. A key issue was that one of the named mortgagees, Valerie Winifred Colburt, had died before the contract was signed, and her executors had been granted probate, a fact not disclosed by the Vendors to the Purchaser. The completion date was 9 August 2001.

The legal issues before the Court of Appeal concerned the validity and effect of a notice to complete served by the Vendors. Specifically, the court had to determine whether a party giving a notice to complete could unilaterally extend the time stipulated in that notice, whether the Purchaser was precluded from terminating the contract due to its own alleged failure to submit a transfer form, and whether the Vendors' failure to disclose the death of a mortgagee and the grant of probate to her executors impacted the validity of the notice to complete. The court also considered whether the Vendors had waived their right to rely on the Purchaser's alleged breach of the transfer submission clause by serving a notice to complete.

The Court of Appeal upheld the primary judge's reasoning. It was held that a notice to complete, once served, binds both parties and cannot be unilaterally extended by the party issuing it. The Vendors' failure to disclose the death of mortgagee Colburt and the grant of probate to her executors, which was information necessary for the form of transfer, constituted a breach of clause 4.2 of the standard contract. This breach meant the Vendors were not entitled to issue a valid notice to complete, as they had not complied with their own obligations under the contract. Furthermore, the court found that by issuing the notice to complete without having complied with clause 4.2, the Vendors had waived any breach by the Purchaser of clause 4.1 concerning the submission of the transfer form.

Consequently, the Purchaser's termination of the contract was deemed effectual. The appeal by the Vendors was dismissed with costs.