The case of Alexakis v Wan  NSWSC 367, involved a contract for the sale of land, where the purchaser would pay an amount of $241 500 as a 5% deposit payable in two instalments. The first instalment of $150 000 was to be paid on exchange of contracts and the second of $91 500 was to be paid on the 4th month after the contract date (with that time being an ‘essential’ term of the contract).
The Vendor purported to terminate the contract when the Purchaser failed to pay the second instalment on the agreed date. The Purchaser brought proceedings in the Court seeking specific performance of the contract for sale.
By cross claim, the Vendor sought recovery for the 2nd deposit instalment amount with interest, as well as an order requiring the Purchaser to withdraw the caveat that it had lodged against the title to the property.
The Court found that the Vendor could rely upon their termination of the contract, as the Purchaser failed to pay part of the deposit within the time expressed by the contract, which was an essential term of the contract, and amounted to a serious breach of the contract.
Accordingly the Purchaser was required to pay the balance of the deposit to the Vendor as well as costs. The Purchaser’s attempt to rely on equitable estoppel failed because he was found to have considerable experience in buying and selling real property, and should have understood that if the deposit was not paid on time he risked losing the ability to buy the property and losing the deposit.
This case demonstrates the consequences of breaching contractual terms, and the importance of adhering to obligations under a contract of sale.