Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd

Fu Tian Fortune Pty Ltd, the first plaintiff, brought a claim against Park Cho Pty Ltd, the defendant and vendor, and the second plaintiff, alleging a novation of a contract for sale of property from the second plaintiff to itself. The second plaintiff denied the novation and issued a Notice of Termination to the first plaintiff. The first plaintiff initially sought a declaration that the contract for sale was still in effect and specific performance but later abandoned these claims. The first plaintiff sought the return of a deposit in the alternative, while the vendor cross-claimed to retain the deposit. The court had to determine whether the Notice of Termination was effective and whether the vendor was entitled to retain the deposit under section 55(2A) of the Conveyancing Act 1919.

The primary legal issues were whether the contract for sale was novated from the second plaintiff to the first plaintiff, and if not, whether the Notice of Termination was effective. If the Notice of Termination was effective, the court also had to determine if the vendor was entitled to retain the deposit under section 55(2A) of the Conveyancing Act 1919. The court needed to assess the evidence presented regarding the alleged novation and the circumstances surrounding the termination of the contract. The court had to consider the statutory provisions and relevant case law to decide if the vendor could retain the deposit.

The court found that there was no evidence of a valid novation of the contract for sale from the second plaintiff to the first plaintiff. The Notice of Termination was validly issued by the vendor to the first plaintiff. Given that the first plaintiff was not the original party to the contract, the court held that the vendor was entitled to retain the deposit under section 55(2A) of the Conveyancing Act 1919. The court ruled that the first plaintiff's claims were without merit and dismissed them. The vendor's cross-claim to retain the deposit was successful.

The court ordered that the first plaintiff take nothing by way of its claims and pay the vendor's costs of the proceeding. The vendor was entitled to retain the deposit paid by the first plaintiff.