Kelly v Galafassi

The case of Kelly v Galafassi involved the plaintiff, Kelly, and the defendant, Galafassi, before the Supreme Court of New South Wales. Kelly sought damages for breach of contract after Galafassi repudiated a contract for the sale of a property. The dispute centred around the availability of damages for repudiation when the plaintiff had commenced and subsequently abandoned a suit for specific performance, as well as the extent to which Kelly was required to mitigate his loss.

The primary legal issues were whether Kelly could claim damages for repudiation after abandoning his specific performance suit, and the extent of Kelly's obligation to mitigate his loss. Additionally, the court had to determine whether a notice to complete was required before Galafassi could terminate the contract, the measure of damages, and the availability of interest under the contract for late completion.

The court held that Kelly was entitled to claim damages for repudiation despite having previously sought specific performance, as the abandonment of the specific performance suit did not preclude a claim for damages. The court also found that Kelly had adequately mitigated his loss by promptly seeking a new buyer. Regarding the vendor's remedies, the court ruled that a notice to complete was not necessary before terminating the contract if the purchaser had indicated an inability to complete. The measure of damages was determined to be the loss on resale, and the court found that interest under the contract for late completion was not payable as the completion did not occur. The court also held that costs of sale and resale were recoverable.

In conclusion, the court awarded Kelly damages for the breach of contract, including loss on resale and costs of sale and resale, but did not award interest under the contract for late completion.