Menczer v Bruinsma

The New South Wales Court of Appeal considered a dispute between Mr. Menczer and Mr. Bruinsma concerning the enforceability of a contract for the sale of a property. The central issue revolved around whether the contract, which was subject to the purchaser obtaining finance, had been validly terminated by the vendor due to the purchaser's alleged failure to take all reasonable steps to secure that finance.

The court was required to determine whether the purchaser had breached the condition precedent requiring them to take all reasonable steps to obtain finance, and if so, whether this breach entitled the vendor to terminate the contract. This involved an examination of the purchaser's conduct in seeking finance and the vendor's subsequent actions in purporting to terminate the agreement.

The Court of Appeal found that the purchaser had indeed taken all reasonable steps to obtain finance, as required by the contract. The vendor's termination was therefore deemed to be wrongful. The court applied the principles of contract law concerning conditions precedent and the implied duty of good faith in the performance of contractual obligations, particularly in relation to the purchaser's efforts to satisfy the finance condition. The vendor's termination was found to be premature and without proper cause.

Consequently, the Court of Appeal ordered that the vendor's purported termination of the contract was invalid and that the contract remained on foot. The court also made orders for specific performance of the contract, compelling the vendor to proceed with the sale to the purchaser.