Fu Tian Fortune Pty Ltd v Park Cho Pty Ltd [2018] NSWSC 528

The contract for sale was effectively novated to Fu Tian Fortune Pty Ltd by mutual conduct and correspondence; Park Cho was entitled to issue notices to complete and to terminate to Fortune, not Mr Zhang. Fortune breached the contract by failing to complete, thus Park Cho was entitled to termination, to retain the deposit, and to agreed damages. No sufficient grounds for relief against forfeiture or return of deposit under statutory or equitable principles were established.

Parties: First Plaintiff/cross Defendant: Fu Tian Fortune Pty Ltd ACN 611 503 256; Second Plaintiff/cross Defendant: Defu Zhang; Defendant/cross Claimant: Park Cho Pty Ltd ACN 096 066 250
Jurisdiction: Australia
Judgment Date: 24 May 2018
Procedural Posture: Principal Judgment / Trial Judgment; Post Hearing Final Orders
Outcome: Plaintiffs' summons dismissed. Defendant/cross-claimant entitled to retain deposit and to damages. Costs ordered against plaintiffs unless special application is made.
Legal Topics: Conveyancing, Novation of Contract, Contract Termination, Relief Against Forfeiture, Retention of Deposit, Damages

Equity Land Law Conveyancing Novation of Contract Contract Termination Relief Against Forfeiture Retention of Deposit Damages

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Parties

Fu Tian Fortune Pty Ltd ACN 611 503 256

First Plaintiff/cross Defendant

Defu Zhang

Second Plaintiff/cross Defendant

Park Cho Pty Ltd ACN 096 066 250

Defendant/cross Claimant

Procedural Posture

Principal Judgment / Trial Judgment; Post Hearing Final Orders

Legal Issues

1 Whether the contract for sale was effectively novated from the original purchaser to the first plaintiff
2 Whether the vendor lawfully terminated the contract for sale
3 Whether the vendor is entitled to retain the deposit under the Conveyancing Act 1919, s 55(2A)

Ratio Decidendi

Court Disposition

Plaintiffs' summons dismissed. Defendant/cross-claimant entitled to retain deposit and to damages. Costs ordered against plaintiffs unless special application is made.

Orders

Declare Park Cho is entitled to the deposit monies paid under the contract for sale with Fu Tian Fortune.
Declare the contract was novated to Fu Tian Fortune as purchaser in substitution for Mr Zhang.