Sara v Balasubramanian

In *Sara v Balasubramanian* [1995] NSWCA 417, the New South Wales Court of Appeal considered a dispute between a vendor and a purchaser concerning the sale of a property. The core of the disagreement revolved around the purchaser's alleged repudiation of the contract of sale and the vendor's subsequent actions in relation to the deposit paid.

The primary legal issues before the Court of Appeal were whether the purchaser had validly repudiated the contract and, if so, whether the vendor was entitled to forfeit the deposit. The Court also had to consider the principles governing the recovery of deposits by purchasers in circumstances where they have breached a contract for the sale of land.

The Court analysed the conduct of the purchaser and determined that their actions amounted to a repudiation of the contract. Applying established principles of contract law, the Court held that where a party unequivocally demonstrates an intention not to be bound by the terms of a contract, the other party is entitled to accept that repudiation and treat the contract as terminated. In this context, the vendor's acceptance of the repudiation meant the contract was at an end, and the vendor was entitled to retain the deposit as a genuine pre-estimate of damages. The Court affirmed that a deposit serves as a security for performance and is generally forfeited upon the purchaser's default.

The Court of Appeal dismissed the purchaser's appeal, upholding the primary judge's decision that the vendor was entitled to retain the deposit.