In Klein v McMahon [2017] NSWSC 1531 the plaintiff sought an order for the specific performance of a contract that it said the defendants failed to rescind.
The defendants were the owners of a lot in an unregistered plan and the plaintiff was the purchaser who had paid a deposit of $35,000. Sometime later when the sub-division was not registered within the 6 month period contemplated by the contract (noting it was registered later) the vendors purported to rescind due the failure of the time stipulation.
Shortly after the purported rescission the purchaser wrote to the vendor that it relied upon s 66ZL, that the contract was on foot and that the balance of the deposit should be returned to the agent. The vendors then latched onto this request for the balance to be returned to the agent as a basis for repudiation. The repudiation was denied by the purchasers and another round of correspondence followed coupled with a fresh notice of rescission.
The plaintiff then sought specific performance and relied upon s 66ZL of the Conveyancing Act 1919 (NSW) . This was contested by the defendant. After considering this section the court found that the rescission was not valid and that the plaintiff was entitled to specific performance.
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