Retirement Village Bargo Pty Ltd v Anwar

Retirement Village Bargo Pty Ltd, the purchaser of land, sought to rescind a contract for sale on the basis that the land was substantially damaged and materially different from that which they had contracted to buy. The vendor, Anwar, resisted the rescission, arguing that the damage to the land was not sufficient to warrant the termination of the contract. The dispute was heard in the Supreme Court of New South Wales. The central legal issues were whether the land had been substantially damaged and whether the damage rendered the land materially different from that which the purchaser had contracted to buy. Additionally, the court had to determine whether, if the rescission was valid, the vendor was entitled to retain the deposit and whether a clause requiring a further “deposit” upon termination constituted a penalty.

The court found that the purchaser had validly rescinded the contract. The land had been substantially damaged, and the materials deposited on the land, which may or may not have contained asbestos, rendered the land materially different from that which the purchaser had contracted to buy. The court held that the purchaser was entitled to rescind the contract and that the vendor was not entitled to retain the deposit. Furthermore, the court found that the clause requiring a further “deposit” upon termination constituted a penalty and was unenforceable. The court also determined that there was no evidence of hardship or that the sale would prejudice the existing owner, and therefore, the court exercised its discretion not to order a judicial sale out of court.

The court ordered that the contract for sale be rescinded, that the purchaser be refunded the deposit, and that the vendor be prohibited from enforcing the clause requiring a further “deposit” upon termination. The court also declined to order a judicial sale out of court.