On 12 June 2025, the Supreme Court of New South Wales (McGrath J) delivered judgment in Belrose RB1 Pty Ltd v Oldfield [2025] NSWSC 603. McGrath J found for the defendant, David Oldfield, the vendor in a dispute over the termination of a contract for the sale of property in Belrose, New South Wales. Peter Newton SC appeared for the successful defendant, instructed by Staunton & Thompson Lawyers.

The case centred on whether Mr Oldfield had validly terminated the contract for sale with the purchaser, Belrose RB1 Pty Ltd.

Mr Oldfield provided vendor finance to Belrose RB1 for the purpose of funding part of the purchase price. Under the contract for sale and a related loan agreement, the vendor finance was secured by a mortgage. To fund the balance of the purchase price, Belrose RB1 applied to borrow funds from a lender. As a term of the loan, the lender required a deed of priority with Mr Oldfield giving them priority over Mr Oldfield’s loan in respect of all amounts owing to them by Belrose RB1, which was to include not just the loan to fund the balance of the purchase price but further advances made by Belrose RB1 and any refinance by other lenders. Mr Oldfield did not agree to the terms of the proposed deed of priority. The lender refused to provide a loan, which meant that Belrose RB1 could not complete the purchase. Mr Oldfield served a notice to complete, which was not complied with, and terminated the contract for sale.

Belrose RB1 claimed that Mr Oldfield’s termination was invalid. They argued that the refusal to accept the proposed terms of a deed of priority amounted to a breach or repudiation of a duty to cooperate and an alleged “further assurance” provision to do whatever Belrose RB1 reasonably requires.

The Court rejected the claim by Belrose RB1. McGrath J found that Mr Oldfield was under an implied duty to cooperate, which obliged him to do all things necessary on his part to enable Belrose RB1 to have the benefit of the contract for sale and not to hinder or prevent the fulfilment of the purpose of the express promises made in the contract for sale. McGrath J found that the proposed terms of the deed of priority did not fall within Mr Oldfield’s obligations under the implied duty to cooperate or the assurance provision and would require him to give up rights in the contract for sale and loan agreement.

McGrath J concluded that Mr Oldfield was ready, willing, and able to complete the sale on the date specified and that Belrose RB1’s failure to do so entitled Mr Oldfield to validly terminate the contract for sale.

Link to judgment: https://www.caselaw.nsw.gov.au/decision/197612694553cc28dab927a2