Gillies v Nancarrow

In *Gillies v Nancarrow and Anor* [1998] NSWCA 92, the New South Wales Court of Appeal considered a dispute concerning the enforceability of a contract for the sale of land. The appellant, Mr. Gillies, sought to enforce a contract against the respondents, Mr. and Mrs. Nancarrow, who had agreed to sell their property to him. The central issue was whether the contract, which was subject to the purchasers obtaining finance, had been validly terminated by the vendors.

The court was required to determine whether the vendors had lawfully rescinded the contract on the grounds that the purchasers had failed to satisfy the finance condition within the stipulated timeframe. This involved an examination of the purchasers' conduct in seeking finance and whether they had taken all reasonable steps to obtain it, as required by the contract. The court also considered the proper interpretation of the clause relating to the finance condition and the implications of the vendors' actions in purporting to terminate the agreement.

The Court of Appeal found that the purchasers had taken all reasonable steps to obtain finance, including making multiple applications to different lending institutions and providing all necessary information. The court held that the vendors were not entitled to terminate the contract because the purchasers had not breached their obligations under the finance clause. The principles applied included the objective test for determining whether reasonable steps had been taken to satisfy a contractual condition and the requirement for good faith in contractual dealings.

Consequently, the Court of Appeal allowed the appeal, set aside the orders of the primary judge, and ordered that the contract for the sale of land be specifically performed. The respondents were ordered to complete the sale of the property to the appellant.