Vendor and Purchaser Remedies - Contracts For The Sale of Land
When a contract for the sale of land is terminated either the vendor or the purchaser may suffer loss or damage relating to legal costs, advertising costs, the deposit and perhaps loss of bargain damages. No doubt when that happens the vendor/purchaser will be interested in recovering such losses as they can. In some instances the preferred remedy would be specific performance, however, in other cases it may be damages.
If the parties cannot agree between themselves how such losses should be recovered it may be necessary to bring proceedings in respect of the losses suffered. Whilst it depends on the specific circumstances of the case many such matters are contested in the Supreme Court of New South Wales.
Vendor and purchaser remedies typically concern questions about who keeps the deposit, whether there is any entitlement to pre-contractual expenses and in cases where the property has appreciated the loss of bargain damages.
Potential Scenarios - Vendor and Purchaser Disputes
Potential Vendor Remedies
- sometimes when a purchaser fails to complete, by repudiating the agreement, the vendor will be interested in claiming the difference between the contract price and the value of the land together with legal costs and advertising costs less the deposit received.
- if your professional advisor or agent by negligence caused the sale to fall through you may be entitled to the difference between the contract price and the value of the land.
Potential Purchaser Remedies
- in some cases where the vendor repudiates the agreement the purchaser may wish to claim loss of bargain damages, damages for delay, loss of income (i.e. rental) and potentially loss of profits.
- a purchaser may in some other cases seek the discretionary relief under s 55 (2A) of the Conveyancing Act for the deposit to be refunded by the vendor where specific performance would not be ordered.
Note: Where a contract is terminated pursuant to a contractual right, where the breach is a non-fundamental breach, the parties may not be entitled to loss of bargain damages.
A great deal depends on the circumstances of the case so please contact us for legal advice regarding your options.
Important Quotes in Disputes On Recovery Of A Deposit
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The right to recover the deposit is embodied in Section 55(2A) of the Conveyancing Act. It provides that the Court may 'if it thinks fit' order the repayment of any deposit with or without interest. This is not simply a broad discretion. Nor is it an equitable discretion. It is a statutory discretion, the limits of which are well settled. In Lucas and Tait (Investments) Pty Limited v Victoria Securities Ltd (1973) 2 NSWLR 268 at 272, the Court emphasised that the section does not permit an overall discretionary supervision of monetary adjustments. It emphasised that:
A vendor who forfeits a deposit in strict enforcement of his legal right is not to be deprived of it under section 55(2A) unless it is unjust and inequitable to permit him to retain it.
9In Havyn Pty Limited v Webster [2005] NSWCA 182 the Court emphasised that the purchaser must do more than merely show that the deposit has been forfeited and that it will result in a windfall to the vendor. This would usually be the case in any event. It added that the proper function of a deposit in providing a sanction, so that purchasers treat the making and completion of contracts with due seriousness, should be respected ...
Let Us Help You
- Determine whether the contract has been terminated by breaches of a contractual term, essential term, fundamental term or by repudiation;
- Decide on the heads of damage (if applicable) that you may wish to pursue;
- Consider the evidence you may need;
- Prepare the Court Documents such as a Statement of Claim;
- Brief Counsel to help you with your case.