SAMM Property Holdings Pty Ltd v Shaye Properties Pty Ltd

SAMM Property Holdings Pty Ltd (the purchaser) brought an action against Shaye Properties Pty Ltd (the vendor) seeking a declaration that the purchaser was not liable to pay interest on the purchase price of the property as per the rectified contract. The vendor cross-claimed for interest. The dispute was heard in the Supreme Court of New South Wales. The central legal issues were whether the purchaser was liable to pay interest on the purchase price as per the rectified contract, and if so, whether the interest provision was a penalty. Additionally, the court had to consider the vendor's conduct in relation to a Calderbank offer made by the purchaser.

The court found that the rectified contract did not specify the interest rate or when interest was to begin accruing. The court interpreted the phrase "in accordance with the provisions herein" to mean that interest was to be paid as per the original contract, which specified an interest rate and commencement date. The court concluded that the interest provision was not a penalty because it was not extravagant or unconscionable in the circumstances. Regarding the Calderbank offer, the court found that the offer involved a significant compromise and the vendor was unreasonable not to accept it. Consequently, the vendor was ordered to pay the purchaser's costs of the cross-claim.

The purchaser's claim for a declaration that it was not liable to pay interest was dismissed. The vendor's cross-claim for interest was also dismissed. The vendor was ordered to pay the purchaser's costs of the cross-claim on an indemnity basis.