Palasty v Parlby

In the Supreme Court of New South Wales, the appellant (purchaser) appealed a decision concerning damages arising from a breached contract for the sale of a property at Hunters Hill. The respondent (vendor) had terminated the contract after the purchaser failed to complete the purchase, resulting in the forfeiture of the purchaser's deposit. The vendor, having relied on the completion of this sale to purchase another property in Killara, was subsequently unable to complete that second purchase and forfeited the deposit paid for it.

The central legal issues before the court were the measure and remoteness of damages recoverable by the vendor for the purchaser's breach of contract. Specifically, the court had to determine whether the vendor's loss of the deposit paid on the Killara property was a foreseeable consequence of the purchaser's breach of the Hunters Hill contract, and whether the return of the Hunters Hill property at the date of termination adequately compensated the vendor for its losses.

The court reasoned that the vendor's loss of the Killara deposit was a foreseeable consequence of the purchaser's breach. It was established that the vendor had entered into the Killara contract in reliance on the completion of the Hunters Hill sale, and that the timely receipt of the purchase monies was known to both parties to be essential. The court held that the return of the Hunters Hill property did not adequately compensate the vendor for the losses stemming from the breach, particularly the forfeiture of the Killara deposit.

The appeal was dismissed, and the appellant was ordered to pay the costs of the appeal.