Shalhoub Holdings Pty Ltd v Donnelly

Shalhoub Holdings Pty Ltd and others appealed to the New South Wales Court of Appeal against a decision of the Supreme Court of New South Wales concerning a dispute over a contract for the sale of land. The primary issue on appeal related to the interpretation of a special condition within the contract and its impact on the obligations of the parties.

The Court of Appeal was required to determine whether the special condition, which stipulated that the sale was conditional upon the purchaser obtaining finance on terms satisfactory to the purchaser, had been validly satisfied or waived. Specifically, the court had to consider whether the purchaser had acted reasonably and in good faith in their attempts to secure finance and whether their conduct amounted to a waiver of the condition.

The Court of Appeal found that the purchaser had not acted reasonably or in good faith in their efforts to obtain finance. The evidence indicated that the purchaser had not pursued finance with sufficient diligence and had, in fact, indicated an intention not to proceed with the purchase even if finance were available. Consequently, the court held that the condition had not been satisfied and that the purchaser was not entitled to terminate the contract on that basis. The principles of good faith and reasonable endeavours in contract law were central to this determination.

The Court of Appeal allowed the appeal, set aside the orders of the Supreme Court, and remitted the matter back to the Supreme Court for further consideration of the remaining issues.