Stephen Julian-Fraser v Stephen Roche

In the matter of *Stephen Julian-Fraser v Stephen Roche*, the Supreme Court of New South Wales was asked to determine whether a party to a contract for the sale of land had validly exercised a right to terminate the agreement. The dispute arose from a contract for the sale of a property located at 140 Old South Head Road, Vaucluse, New South Wales. The plaintiff, Stephen Julian-Fraser, was the vendor, and the defendant, Stephen Roche, was the purchaser.

The central legal issue before the Court was whether the purchaser had validly terminated the contract for sale. This required the Court to consider the proper construction of a special condition within the contract, which stipulated that the purchaser could terminate if they were "not satisfied with the results of a building and pest inspection report." The Court had to determine what standard of satisfaction was required by this clause and whether the purchaser's stated dissatisfaction was genuine and objectively justifiable in the circumstances.

Justice Irgang found that the purchaser had not validly terminated the contract. Her Honour held that the contractual right to terminate based on dissatisfaction with a building and pest inspection report required the purchaser to act honestly and reasonably. The evidence before the Court indicated that the purchaser's stated reasons for dissatisfaction were not genuine and were not based on reasonable grounds arising from the inspection report. Consequently, the purchaser's purported termination was ineffective. The Court therefore ordered that the contract remained on foot.