Gennusa v Cleavely

In *Gennusa v Cleavely*, the New South Wales Court of Appeal considered a dispute between the parties concerning a contract for the sale of land. The appellant, Gennusa, was the vendor and the respondent, Cleavely, was the purchaser. The core of the disagreement revolved around the interpretation of a special condition within the contract of sale.

The primary legal issue before the Court of Appeal was whether the special condition, which stipulated that the sale was subject to the purchaser obtaining finance on terms satisfactory to the purchaser, had been validly satisfied or waived by the purchaser. This required the court to determine the objective meaning of the special condition and the conduct of the purchaser in relation to obtaining finance.

The Court of Appeal held that the special condition imposed an obligation on the purchaser to act honestly and reasonably in seeking finance. It was not sufficient for the purchaser to simply decide, subjectively, that finance was not satisfactory. The court found that the purchaser had not acted reasonably in their attempts to secure finance, having made only a cursory inquiry and then deciding that the terms were unsatisfactory without proper investigation. Consequently, the purchaser was not entitled to terminate the contract on the basis that the condition had not been satisfied.

The Court of Appeal allowed the appeal, set aside the order of the primary judge, and ordered that the contract be specifically performed.