McRae & Anor v Bolaro Pty Ltd

The case of McRae & Anor v Bolaro Pty Ltd involved the plaintiffs, who were vendors of a property, and the defendants, who were the purchasers. The dispute arose from the purchase and sale of land where the purchasers repudiated the contract, leading to an anticipatory breach, followed by actual breaches. The court had to determine several legal issues, including whether the purchasers had evinced an intention to no longer be bound by the contract, if the affirmation of the contract by serving an ineffective notice pursuant to General Conditions 5 and 6 of Table A was valid, and whether the failure to pay interest constituted a breach of an essential term. Additionally, the court had to decide if the breach accepted by the vendors consisted only of the actual breach or also included the anticipatory breach, and whether there was an abandonment of the contract by both parties.

The court found that the purchasers' repudiation constituted an anticipatory breach, and the vendors' acceptance of this breach did not limit their rights to also treat the actual breaches as repudiatory. The court held that the purchasers' intention to repudiate was evident from their conduct and statements, which demonstrated their unwillingness to proceed with the contract. Regarding the ineffective notice, the court ruled that it did not amount to an affirmation of the contract. The failure to pay interest was deemed to be a breach of an essential term, which entitled the vendors to terminate the contract. The court concluded that the breach accepted by the vendors was not limited to the actual breach but included the anticipatory breach as well. It was also determined that there was no abandonment of the contract by both parties, as the purchasers' repudiation and subsequent breaches warranted the vendors' right to terminate the contract.

The court ordered that the contract of sale be rescinded, and both parties were to bear their own costs of the proceedings. The vendors were also entitled to recover the deposit paid by the purchasers. The court's decision provided clarity on the rights and obligations of the parties involved in a real estate transaction where a repudiation and subsequent breaches occur, affirming the importance of the terms and conditions outlined in the contract.