R v Crombie

The dispute in *R v Crombie* concerned a contract for the sale of land, where the vendor sought to terminate the agreement. The contract was conditional upon the vendor obtaining development and subdivision approvals for adjoining land. A key clause stipulated that the vendor could terminate if these approvals were not "on terms and conditions acceptable to the vendor in all respects." The vendor purported to terminate the contract after a deferred approval was granted, subject to the release of a restriction as to user that burdened only part of the adjoining land. The purchasers challenged the validity of this termination. The matter came before the Court of Appeal of New South Wales, comprising Sheller, Stein, and Giles JJA.

The central legal issues before the Court of Appeal were whether the condition imposed on the development approval, namely the release of the restriction as to user, constituted a "term or condition" within the meaning of the vendor's termination right. The court also had to determine whether this condition was indeed "not acceptable to the vendor in all respects" as required for termination, and whether the vendor had exercised its right to terminate within any implied limited time.

The Court of Appeal reasoned that the restriction as to user was a burden on the adjoining land, and its release was a necessary step for the development to proceed as intended. Therefore, the condition imposed by the consent authority was a term or condition directly related to the development approval. The court found that the vendor was not obliged to accept a development approval that required the release of a restriction on part of the adjoining land, as this was not acceptable to the vendor in all respects. The court further held that the vendor was entitled to terminate the contract as soon as it became apparent that the approval would be granted subject to this condition, and that the termination was validly exercised.

The appeal was allowed. The declaration and orders made by Young J were set aside, and in their place, an order was made dismissing the proceedings with costs. The purchasers were ordered to pay the vendor's costs of the appeal, with a certificate under the Suitors Fund Act available to the purchasers if they qualified.