A buyer’s termination of a house contract sold “subject to vacant possession” because of the presence of building rubble in a swimming pool on the site, has been rejected by a court.

vacant possessionProperty developer Luigi Zaurrini arrived at the home about an hour before the auction in September 2014, for an inspection and to read through the contract.

The “dilapidated residence” was knocked down to him on a bid of $633k and he signed up then and there.

When settlement date arrived in December, his company Combined Pastoral Pty Ltd failed to complete.

Rather it asserted the building waste discovered in the pool prior to settlement was not there at the time of the auction or at least Zaurrini did not see it (nor was it pointed out to him) “because it was obscured by water”.

Sellers Philip and Debbie Berrell terminated the contract and sued to recover the $63.3k deposit.

The seller’s evidence that the building waste was always present and was visible through the pool water was accepted by Justice Geoff Lindsay.

In the court’s view, the buyer “was looking for points to take to obtain financial concessions as a price for timely settlement and to buy time for completion of the contract.”

The evidence also suggested a “want of financial capacity to complete”.

In any event the court thought that the rubble’s presence was unlikely to be contrary to the “vacant possession” requirement given the decrepit nature of the home and the fact that the pool itself was “marked out by safety tape” at the time of the auction.

The contract was declared to have been validly terminated and the sellers entitled to be paid the deposit by Harcourts Unlimited at Blacktown . The court also ordered that the buyer’s caveat be “withdrawn forthwith”.

Berrell v Combined Pastoral Pty Limited [2015] NSWSC 1334 Lindsay J, 11/09/2015
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