Written by In STM123 No. 16 Pty Ltd v Wang [2025] NSWSC 444, the Supreme Court of New South Wales considered the consequences of a purchaser defaulting under a contract for the acquisition of a high-end residential apartment. The decision demonstrates that a buyer’s failure to complete a property transaction can expose them to substantial financial liability, particularly where market conditions deteriorate before the property is resold.
The dispute concerned the sale of a luxury off-the-plan apartment in Point Piper. Under the contract, the purchaser was required to pay a deposit in instalments and complete the transaction by an agreed settlement date. The purchaser was in default after failing to satisfy the outstanding deposit obligation and subsequent contractual requirements. The purchaser was placed in default and the vendor ultimately terminated the contract.
Following termination, the vendor undertook extensive efforts to secure another purchaser. The property was actively marketed over an extended period, including inspections, private viewings and ongoing price adjustments designed to reflect changing market conditions. Despite these efforts, the property eventually sold more than a year later for $3.68 million less than the original contract price.
The Court was required to determine the extent of the vendor’s recoverable loss. A significant issue was whether damages should be assessed by reference to the property’s value at the time the contract was terminated or by reference to the eventual resale outcome. While the usual position is that damages are assessed at the date of breach, the Court found that approach would not adequately reflect the circumstances of the prestige residential market, where sales opportunities can be limited and market movements may materially affect value. In assessing damages, the Court accepted that the later resale provided the most reliable measure of the vendor’s actual loss. The vendor was awarded damages reflecting the significant shortfall on resale, together with additional losses arising from the failed transaction, including additional marketing expenses and interest.
The decision serves as a reminder that defaulting purchasers may remain exposed to significant claims long after a contract has been terminated. It also highlights the willingness of courts to adopt a practical approach when assessing loss in specialised property markets where an immediate resale cannot reasonably be achieved.