Malouf & Anor v Sterling Estate Development Corp Pty Ltd

McHugh and Heydon JJ of the High Court of Australia considered a dispute between Malouf and Anor (the purchasers) and Sterling Estate Development Corp Pty Ltd (the vendor) concerning a contract for the sale of land. The purchasers sought to terminate the contract, alleging that the vendor had breached a condition precedent by failing to obtain a necessary planning permit by the stipulated date. The vendor contended that the purchasers had waived the condition or were estopped from relying on its breach.

The central legal issue before the High Court was whether the purchasers were entitled to terminate the contract for the vendor's failure to satisfy the condition precedent within the agreed timeframe. This required the court to determine whether the purchasers had, by their conduct, waived the condition or were estopped from asserting its breach, thereby precluding them from terminating the contract.

The High Court held that the purchasers had not waived the condition precedent. Their Honour McHugh J, with whom Heydon J agreed, found that the purchasers' conduct, including their continued engagement with the vendor regarding the planning permit and their request for an extension of time, did not demonstrate an unequivocal intention to abandon their right to rely on the condition. The court applied the principles of waiver, emphasizing that it requires a clear and unambiguous election to forgo a known right. Furthermore, the court found no basis for an estoppel, as the purchasers' actions did not lead the vendor to believe that the condition would not be enforced in a manner that would cause detriment to the vendor if the purchasers later sought to rely on its breach.

Consequently, the High Court found in favour of the purchasers, upholding their right to terminate the contract.