Proietti-Formaggio v Sacca [2022] NSWSC 1019

Proietti-Formaggio v Sacca [2022] NSWSC 1019

The plaintiffs never agreed to accept a reduced deposit, so Special Condition 8 was not engaged and it was unnecessary to determine whether it was penal. The defendants failed to complete by the time made essential by a valid Notice to Complete, entitling the plaintiffs to terminate and to recover the unpaid portion of the 10% deposit under cl 9.1. Although the plaintiffs resold the property quickly at a higher price and suffered little loss, the defendants gave no adequate explanation for their failure to complete and did not establish circumstances making it unjust or inequitable for the plaintiffs to recover and retain the deposit; relief under s 55(2A) was therefore refused.

Jurisdiction
Australia
Judgment Date
29 July 2022
Procedural Posture
Equity Proceedings Concerning Recovery of Unpaid Deposit Under a Contract for the Sale of Land / Principal Judgment After Hearing
Outcome
Judgment for the plaintiffs; defendants' defence based on Conveyancing Act 1919 (NSW) s 55(2A) not made out.
Legal Topics
['deposit Under Contract for Sale of Land' 'notice to Complete' 'termination for Failure to Complete' 'relief Against Forfeiture Under Conveyancing Act 1919 (nsw) S 55(2 A)' 'penalty Clause']
['contracts' 'property Law' 'equity'] ['deposit Under Contract for Sale of Land' 'notice to Complete' 'termination for Failure to Complete' 'relief Against Forfeiture Under Conveyancing Act 1919 (nsw) S 55(2 A)' 'penalty Clause']

Case Brief

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Procedural Posture

Equity Proceedings Concerning Recovery of Unpaid Deposit Under a Contract for the Sale of Land / Principal Judgment After Hearing

Legal Issues

  1. 1 ['Whether the plaintiffs agreed to accept a deposit of less than 10% of the purchase price.' 'Whether Special Condition 8 was engaged and, if so, whether it was unenforceable as a penalty.' 'Whether cl 9.1 of the contract entitled the plaintiffs to recover the unpaid portion of the deposit after termination for failure to complete.' 'Whether the defendants should obtain relief against forfeiture of the deposit pursuant to Conveyancing Act 1919 (NSW) s 55(2A).' "Whether the plaintiffs' profitable resale of the property was sufficient to make forfeiture of the deposit unjust or inequitable."]

Ratio Decidendi

The plaintiffs never agreed to accept a reduced deposit, so Special Condition 8 was not engaged and it was unnecessary to determine whether it was penal. The defendants failed to complete by the time made essential by a valid Notice to Complete, entitling the plaintiffs to terminate and to recover the unpaid portion of the 10% deposit under cl 9.1. Although the plaintiffs resold the property quickly at a higher price and suffered little loss, the defendants gave no adequate explanation for their failure to complete and did not establish circumstances making it unjust or inequitable for the plaintiffs to recover and retain the deposit; relief under s 55(2A) was therefore refused.

Court Disposition

Judgment for the plaintiffs; defendants' defence based on Conveyancing Act 1919 (NSW) s 55(2A) not made out.

Orders

  • ['The plaintiffs are entitled to recover $219,125 plus pre-judgment interest calculated from 1 February 2021.' 'The plaintiffs are directed to submit within 7 days an interest calculation to enable the judgment sum to be calculated.' "The defendants are to pay the plaintiffs' costs of the proceedings."]