Greencapital Aust Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) (No 3)

The dispute between Greencapital Aust Pty Ltd and Pasminco Cockle Creek Smelter Pty Ltd (subject to Deed of Company Arrangement) concerned the sale of land contingent upon the achievement of specific conditions precedent by a predetermined sunset date. The contract allowed for either party to rescind if the conditions were not met by the deadline, and also permitted the purchaser to step in and attempt to achieve the conditions themselves if they were not fulfilled by the vendor. The primary legal issues revolved around whether the purchaser’s right to step in superseded the vendor's right to rescind, the entitlement of the purchaser to a reasonable period to elect to step in, the validity of the vendor's termination attempt on a non-business day, and the applicability of frustration or specific performance to the contract.

The Court examined the terms of the contract and found that the purchaser's right to step in did not override the vendor's right to rescind, but did entitle the purchaser to a reasonable time to decide whether to exercise this right. The Court ruled that the vendor's termination on a non-business day was ineffective, and the contract was not frustrated. The Court further determined that while specific performance was not applicable, the vendor should be restrained from rescinding the contract for a period of 12 months from the date of the judgment.

Ultimately, the Court ruled that the vendor could not terminate the contract on a non-business day and that the purchaser was entitled to a reasonable time to elect to step in and fulfill the conditions precedent. The Court also provided an injunction to prevent the vendor from rescinding the contract for a period of 12 months from the judgment date. This decision ensures that both parties have clarity on their rights and obligations under the contract and provides a pathway for resolution if the conditions precedent are not met within the stipulated timeframe.