Are vendors entitled to the deposit in addition to other remedies in the event of termination for purchaser’s default? Are vendors entitled to the deposit in addition to other remedies in the event of termination for purchaser’s default?

Are vendors entitled to the deposit in addition to other remedies in the event of termination for purchaser’s default?

20 June 2013 | General
Willmott & Anor v McLeay & Anor [2013] QCA 84

The Queensland Court of Appeal (Appeal Court) recently found a vendor under a Contract of Sale has a right to claim the deposit as a debt in addition to the rights under clause 9.4 (rights on purchaser default) of the Contract where the purchaser failed to pay the balance deposit and failed to complete the Contract.

The purchaser argued that the recovery of the deposit (in addition to the remedies available under clause 9.4) would constitute an “unfair windfall” to the vendor. The Appeal Court held the recovery of the deposit did not constitute an unfair windfall rather it demonstrated the dual character of the deposit as:

(a) part payment of the purchase price; and
(b) “a guarantee that the purchaser means business” (Bot v Ristevski [1981] VR 120).

For further information contact Freeda Stevenson or Belinda Curtin.