Pacifico v Berlian

Pacifico v Berlian concerned a dispute arising from a contract for the sale of land, where the sale was conditional upon the registration of a subdivision. The vendor, Berlian, purported to rescind the contract, and the purchaser, Pacifico, challenged the validity of this rescission. The matter came before the New South Wales Court of Appeal.

The Court of Appeal was required to determine whether Berlian's purported rescission of the contract was valid. Specifically, it considered whether Berlian's alleged breach of an obligation to take all reasonable steps to procure the registration of the subdivision disentitled it from exercising its right to rescind. The Court also had to assess whether Berlian's refusal to comply with certain Council requirements, which the Court found to be erroneous, constituted unreasonable conduct that would prevent rescission.

The Court reasoned that the vendor's obligation to take all reasonable steps to procure registration of the subdivision did not extend to complying with erroneous requirements imposed by the Council. Berlian was therefore not disentitled from rescinding the contract by its refusal to comply with those erroneous requirements. The Court applied the principle that a party is not obliged to take unreasonable steps to fulfil a condition precedent, and that a failure to comply with an erroneous demand does not constitute a breach of an obligation to act reasonably.

The appeal was dismissed, and Berlian was ordered to pay Pacifico's costs.