Woolley v Spagnol

Woolley v Spagnol concerned a dispute between a vendor, Ms. Woolley, and a purchaser, Mr. Spagnol, regarding a contract for the sale of a residential property. The purchaser sought to terminate the contract, alleging that the vendor had breached a contractual term requiring the property to be vacant on settlement. The matter came before Judge Barnes in the County Court of Victoria.

The central legal issue before the court was whether the vendor's failure to ensure the property was vacant on the settlement date constituted a repudiatory breach of the contract, thereby entitling the purchaser to terminate. This required the court to consider the nature of the contractual term in question and the consequences of its breach in the context of a standard contract for the sale of land.

Judge Barnes found that the vendor's obligation to deliver vacant possession was a fundamental term of the contract. The evidence established that at the time of settlement, the property was not vacant, as a tenant remained in occupation. The court held that this failure amounted to a repudiatory breach, as it deprived the purchaser of a substantial part of the benefit they were to receive under the contract. The purchaser was therefore entitled to accept the repudiation and terminate the agreement.

Consequently, Judge Barnes made orders declaring the contract terminated and directing the vendor to refund the deposit paid by the purchaser.