Perpetual Trustee Company Ltd v Meriton Property Management Pty Ltd

Perpetual Trustee Company Ltd (the vendor) and Meriton Property Management Pty Ltd (the purchaser) were parties to a contract for the sale of land. The dispute concerned the vendor's attempt to make variations to the contract, which the purchaser resisted. The vendor sought to rely on contractual provisions that permitted variations where council imposed conditions on a subdivision, while the purchaser argued these variations were not permitted. The case also involved claims regarding the inability or unwillingness of either party to perform the contract and liability for interest on the purchase price for the period between the planned and actual completion dates. The matter came before the New South Wales Court of Appeal.

The Court of Appeal was required to determine whether the variations sought by the vendor were permissible under the terms of the contract, particularly in light of council conditions imposed on a subdivision. It also had to consider whether either party had demonstrated an inability or unwillingness to perform their contractual obligations, and consequently, whether the vendor was liable to pay interest on the purchase price for the extended period between the original completion date and the eventual settlement.

The Court analysed the relevant clauses of the contract, focusing on the interpretation of provisions that allowed for variations in circumstances where council imposed conditions on a subdivision. The judges found that the variations proposed by the vendor were indeed permitted by the contract. Consequently, the purchaser's resistance to these variations was deemed to be a failure to perform its obligations under the contract. The Court held that the purchaser was liable for interest on the purchase price for the period from the original completion date until settlement, as the delay was attributable to the purchaser's conduct.

The appeal was allowed, and the orders made by the Equity Division on 29 June 2005 were set aside. The parties were granted leave to file short minutes of order to facilitate the necessary calculations, and the respondent (the purchaser) was ordered to pay the appellant's (the vendor's) costs of both the appeal and the proceedings in the Court below.