Frankel v Paterson

The matter before the court was Frankel v Paterson. The dispute involved the sale of a strata unit where the purchasers claimed they need not complete the sale because of an encroachment on part of the common property, specifically their garden. The purchasers argued that the Flight v Booth principle should apply, allowing them to avoid completion. This case was heard in the Supreme Court of New South Wales.

The primary legal issues the court had to decide were whether the Flight v Booth principle applied to strata unit sales and, if so, whether the encroachment on the purchasers' garden was sufficient to invoke this principle. The court also needed to determine the extent of the unit holders' rights over the common property in a strata title context.

The court held that the Flight v Booth principle could apply to strata unit sales, particularly where there is a material defect affecting common property. However, the court found that the encroachment on the purchasers' garden, while problematic, did not constitute a material defect that would release the purchasers from their obligation to complete the sale. The court clarified the unit holders' rights over common property, emphasising that these rights are not absolute and can be subject to the rights of other unit holders and the body corporate. Ultimately, the court ruled in favour of the vendor, requiring the purchasers to complete the sale.

The final orders of the court mandated that the purchasers complete the purchase of the strata unit as per the original contract terms. The court did not grant the purchasers relief from completing the sale due to the encroachment on their garden. The decision underscored the importance of distinguishing between minor issues and material defects in property sales, particularly in strata titles where common property rights are involved.