Which case won?

casea
The case for the buyer
  • The contract said that the seller had to complete the works and comply with the council order before completion, and the completion date specified in the contract was 25 June 2015.
  • The seller did not complete the works by the completion date.
  • I issued a Notice to Perform to give the seller another chance to meet his obligations under the contract and he again failed to do so.
  • The seller was plainly in breach of the contract and I was therefore entitled to terminate. The court should order that I be repaid my deposit.
caseb
The case for the seller
  • In the contract, “completion date” and “completion” did not have the same meaning.
  • “Completion” meant the actual time by which the contract had to be completed by both parties. While the “Completion date” was specified in the contract as 20 June 2015, that was not an essential date. It often happens that parties to a contract for sale of land can’t complete on the date specified.
  • There’s no debate that I had not complied with the special condition by 20 June 2015, but that did not mean I was in breach of the contract. The buyer’s notice of termination was therefore invalid.
  • I did ultimately comply with the special condition and I remained ready, willing and able to complete the sale. It was the buyer who was not willing to complete.
  • I validly terminated the sale and I should be allowed to keep the deposit due to the buyer’s breach.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case B won. You were right!

How people voted
a75%
b25%

Expert commentary on the court's decision

“Had the contract specified that the seller was required to satisfy his obligation to reinstate the property to its previous condition by the ‘completion date’, rather than by ‘completion’, the outcome would probably have been the opposite. The buyer would have been entitled to cancel the contract and have the deposit paid back to him.”
Supreme Court of NSW finds in favour of property seller

In the case Ebadeh-Ahvazi v Namrood [2017] NSWSC 399, the seller won. The court found that the seller, Mr Ebadeh-Ahvazi, took steps to comply with his contractual obligations and had not repudiated the contract, which meant that the buyer’s termination of the contract was invalid.

The court decided that the seller validly served the Notice to Complete and the buyer was in default at the time the notice was issued, which meant the seller was entitled to terminate the contract and could keep the ten per cent deposit paid by the buyer.

The buyer, Mr Namrood, appealed the Supreme Court decision and the matter was heard by the Court of Appeal. (See Namrood v Ebedeh-Ahvazi [2017] NSWCA 310.) Unfortunately for Mr Namrood, the Court of Appeal upheld the original decision and dismissed his appeal.

Importance of using precise language when writing legal documents

This case demonstrates the importance of making sure the contract you are signing exactly reflects your understanding and your intentions. The court identified an important distinction between the meaning of “completion date” and “completion”. The seller was only required to satisfy his obligation to complete the works by “completion” – that is, the date on which the seller could be made to complete the contract.

Had the contract specified that the seller was required to satisfy his obligation to reinstate the property to its previous condition by the “completion date”, rather than by “completion”, the outcome would probably have been the opposite. The buyer would have been entitled to cancel the contract and have the deposit paid back to him.

Benefit of having a lawyer review your contract before you sign it

Unfortunately, the buyer entered into the contract without first obtaining advice from a lawyer.  Indeed, he had not obtained a copy of the contract before bidding for the property at auction, because he only became aware that the property was for sale on the morning of the day of the auction.

Had he engaged a lawyer to review the contract for him, the important distinction between the terms “completion date” and “completion” would likely have been recognised, and the unfortunate outcome for the buyer could have been avoided.

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