In Dasreef Developments Pty Ltd v Josiv Velkovski  NSWSC 1698, A purchaser failed to complete a contract for sale of land. The vendors then terminated the contract and retained the deposit of $63,000. The purchaser sought relief against forfeiture of the deposit under s 55(2A) Conveyancing Act 1919 (NSW). The purchaser argued that the deposit should be returned, especially since he was seeking approval for a bank loan at the time of termination.
The Court held that s 55(2A) does not grant the Court an overall supervisory role over parties to a contract which has been terminated and the deposit forfeited. A Court will not deprive a vendor of a deposit forfeited in strict enforcement of their legal rights unless it is unjust and inequitable to permit its retention. The Court held that despite the undesirable position of the purchaser, there was no unjust or inequitable outcome. Had the purchaser actually informed the vendor that he was raising finances when the contract was terminated, it may have been unjust and inequitable to retain the deposit. Read full case