McMillan & Kato

McMillan & Kato concerned a dispute between the parties regarding the interpretation of a contract for the sale of land. The case was heard in the Full Court of the Federal Court of Australia.

The primary legal issue before the Full Court was whether the purchasers, McMillan & Kato, were entitled to terminate the contract for the sale of land due to the vendor's alleged failure to comply with a condition precedent. This condition required the vendor to obtain all necessary approvals for a proposed subdivision of the land by a specified date. The purchasers argued that the vendor's inability to secure these approvals rendered the contract voidable at their election.

The Full Court considered the principles of contractual interpretation, particularly in relation to conditions precedent. Their Honours examined the wording of the contract and the surrounding circumstances to ascertain the parties' intentions. The Court held that the condition precedent was a condition for the benefit of the purchasers, who had the right to waive it. As the purchasers had not waived the condition and the vendor had failed to fulfil it within the stipulated time, the purchasers were entitled to terminate the contract. The Court emphasised that where a condition precedent is not satisfied, and it is not waived by the party for whose benefit it was inserted, the contract may be voidable.

The Full Court dismissed the vendor's appeal and affirmed the decision of the primary judge, finding that the purchasers had validly terminated the contract.