Gray v Latter

The case of Gray v Latter involved a dispute between two couples over the sale of land. The purchasers, the Grays, sought relief under the Contracts Review Act. They alleged that the vendors, the Latters, had exploited their trust and friendship by setting an exorbitant price that was grossly disproportionate to the property's market value. The Grays further contended that the vendors had concealed the improvidence of the transaction through vendor finance terms that made default inevitable upon the conclusion of the finance period. The case was heard by the Supreme Court of New South Wales.

The primary legal issues revolved around the applicability and scope of the Contracts Review Act in this context. The court had to determine whether the Act could be invoked in a private sale of land between two couples, without the involvement of a bank or financial institution. Additionally, the court had to consider whether the vendors' conduct amounted to exploitation and whether the setting of the contract price and the terms of vendor finance were unconscionable.

The court held that the Contracts Review Act could be applied to the circumstances of this case. The judge found that the vendors had indeed exploited the Grays' trust and friendship by setting a grossly inflated price and concealing the true nature of the transaction through vendor finance terms. The court concluded that the vendors' actions amounted to unconscionable conduct. Consequently, the court granted the Grays' application for relief, setting aside the contract and ordering the vendors to refund the deposit paid by the purchasers. The court also noted that the setting of the contract price outside the fair or market value range of the property and the inevitability of default upon the conclusion of the vendor finance period further supported the finding of unconscionability.

In conclusion, the court ordered that the contract for the sale of land between the two couples be set aside. The vendors were ordered to refund the deposit paid by the purchasers. The decision underscores the importance of fair dealing and transparency in commercial transactions, even between individuals who are friends or family members.