Martin & Anor v Individual Homes Pty Ltd

The High Court of Australia heard an appeal concerning a dispute between the purchasers of a residential property, Martin & Anor, and the vendor, Individual Homes Pty Ltd. The purchasers sought to terminate the contract of sale, alleging that the vendor had breached a condition precedent to settlement.

The central legal issue before the High Court was whether the vendor's failure to obtain a certificate of occupancy for the property by the settlement date constituted a breach of the contract, thereby entitling the purchasers to terminate. The contract stipulated that the vendor was to provide vacant possession and a certificate of occupancy prior to settlement.

The High Court, in dismissing the appeal, held that the purchasers were not entitled to terminate the contract. Gleeson CJ and Gummow J reasoned that the obligation to provide a certificate of occupancy was not a condition precedent that, if breached, would automatically allow for termination. Instead, it was a contractual term that, if breached, would give rise to a claim for damages. The court emphasised the distinction between a condition precedent, the breach of which discharges the contract, and a warranty, the breach of which gives rise to a remedy in damages. The purchasers' remedy lay in seeking damages for any loss occasioned by the vendor's delay in providing the certificate, rather than terminating the contract.