M and v Trading P/L v Shorecolt P/L

The case involved a dispute between M and Trading P/L, the vendor, and Shorecolt P/L, the purchaser, concerning the sale of land. The contract for sale stipulated that the vendor would provide evidence of approval from the council for the use of the premises as a boarding house. Shorecolt P/L, the purchaser, sought to rescind the contract on the basis that the vendor had failed to provide this evidence. The matter was heard in the Supreme Court of Victoria.

The primary legal issue before the court was whether the vendor had indeed failed to provide the required evidence of approval from the council, and if so, whether this constituted a breach of contract warranting rescission. The court was also required to consider whether the purchaser had validly exercised their right to rescind the contract under the circumstances.

The court examined the contract terms closely and found that the requirement for evidence of approval was a condition precedent to the sale. The vendor had not provided this evidence, and therefore had not fulfilled this condition. The court further held that the failure to provide the evidence of approval was a material breach of contract. Given that the condition precedent had not been satisfied, the court concluded that the contract was not validly formed. Consequently, the purchaser was entitled to rescind the contract. The court granted the purchaser's application for rescission and ordered that the contract be rescinded, with both parties to bear their own costs of the proceedings.