McKenzie v Villata

In *McKenzie v Villata* [1995] NSWCA 284, the New South Wales Court of Appeal considered a dispute between a vendor and a purchaser concerning the sale of a property. The purchaser sought to terminate the contract of sale, alleging that the vendor had failed to comply with a condition precedent.

The central legal issue before the Court of Appeal was whether the vendor's conduct constituted a repudiation of the contract, thereby entitling the purchaser to terminate. Specifically, the court had to determine if the vendor's failure to obtain vacant possession by the settlement date, as required by the contract, amounted to a breach so fundamental as to discharge the contract.

The Court of Appeal held that the vendor's failure to deliver vacant possession by the settlement date was a breach of a condition precedent. Applying established principles of contract law, the court found that this breach was sufficiently serious to amount to a repudiation of the contract. The vendor's inability to fulfil this essential term demonstrated an intention no longer to be bound by the contract, giving the purchaser the right to terminate.

Consequently, the Court of Appeal dismissed the vendor's appeal and affirmed the primary judge's decision, which had found in favour of the purchaser and ordered the return of the deposit.