Kheng v Secola

Kheng v Secola involved a dispute over the sale of land where the contract was conditional upon approval from the Foreign Investment Review Board. The purchaser, Kheng, failed to use all reasonable endeavours to obtain the necessary approval, leading to the vendor, Secola, seeking to forfeit the deposit under a default clause in the contract. The court was required to decide whether the default clause could be invoked due to the purchaser's failure to use reasonable endeavours and whether the deposit could be forfeited as a result.

The central issue before the court was whether the default clause in the conditional contract applied to the purchaser's failure to use reasonable endeavours to obtain the required approval. The court needed to determine the scope and effect of the default clause in the context of a conditional contract for the sale of land and whether the failure to meet the condition of obtaining the approval constituted a breach that triggered the clause.

The court examined the terms of the contract and found that the default clause was broad enough to encompass the failure to use reasonable endeavours. The court reasoned that the purchaser's obligation to obtain approval was a condition precedent to the sale, and the failure to use reasonable endeavours to achieve that condition constituted a breach. Consequently, the default clause was activated, and the deposit could be forfeited. The court also considered the equitable principle of forfeiture but found that it did not prevent the operation of the default clause in this context. The appeal was dismissed, affirming the lower court's decision.