Harrington v Greenwood Grove Estate Pty Ltd

In the case of Harrington v Greenwood Grove Estate Pty Ltd, the parties involved were the purchasers, Harrington, and the vendor, Greenwood Grove Estate Pty Ltd, who were in dispute over the sale of land within a residential estate. The crux of the disagreement lay in the vendor's later development application, which the purchasers claimed was inconsistent with the management plan annexed to their contract. The case was heard in the Supreme Court of New South Wales.

The court had to determine whether there was an express or implied term in the contract prohibiting the vendor from developing the estate inconsistently with the management plan. Additionally, the court needed to consider if there was a collateral contract that would impose such a restriction. The court also needed to establish whether the lodgement and pursuit of the later development application constituted a breach of either a contractual term or a collateral contract. Furthermore, the court had to decide if an injunction should be issued to prevent the vendor from pursuing its development application.

The court concluded that there was no implied term in the contract that would prohibit the vendor from developing the estate inconsistently with the management plan. Nor was there a collateral contract to that effect. However, the lodgement and pursuit of the later development application constituted a breach of an express term of the contract. The contract was, however, subject to the operation of local and state planning instruments, which determined whether what would otherwise be a breach of contract had any effect. The court found that the Ballina Local Environmental Plan 1987 and the SEPP (Affordable Rental Housing) 2009 suspended the provisions of the contract restricting development of the estate. As such, the lodgement and pursuit of the later development application did not constitute a breach of contract.

The court did not issue an injunction to restrain the vendor from pursuing its later development application. Instead, it found that the operation of the planning instruments meant that the lodgement and pursuit of the later development application did not constitute a breach of contract.