When the Vendor Could Not Settle: A Success Story of how the purchasers secured their Central Coast Property through the Supreme Court

Our clients approached Conditsis Lawyers after settlement of their high value Central Coast property purchase had failed. They had exchanged contracts, paid the deposit and obtained unconditional finance, but the vendor said he could not complete. Their objective remained clear: they wanted the property they had agreed to purchase.

The vendor attributed his inability to complete to debts secured against the property and the effect that a sale would have on his business lending arrangements. The title was affected by two mortgages and two caveats, and a shortfall had emerged between the funds available for settlement and the amounts required to discharge the relevant debts. As the dispute developed, the property was advertised for lease despite the contract requiring vacant possession. The purchasers subsequently discovered that a swim spa expressly identified in the contract had been removed.

At its centre, the dispute raised a familiar tension in property litigation: a purchaser who has performed every contractual obligation, confronted by a vendor whose undisclosed financial position threatens to defeat the bargain and whose conduct, if unchecked, risks altering the condition and availability of the very asset the purchaser is entitled to receive.

Why the Problem Was Urgent

Our first step was to review the contract, the existing notice to complete, the conveyancing correspondence and the purchasers’ funding position with counsel. The clients’ existing conveyancing solicitor remained responsible for the transaction, while our team handled the litigation. That coordination was important: protecting the purchasers’ ability to settle was as necessary as pursuing the vendor’s compliance.

A notice to complete had already been issued by the purchasers’ conveyancing solicitor. Our task was to assess the existing contractual position and preserve the clients’ claim for specific performance [a court order requiring the contract to be carried out] while addressing the immediate risks to the property

In this matter, the commercial pressure on the vendor and the apparent intention to continue dealing with the property made the orthodox pathway inadequate on its own. Three features made the position acute:

• The amounts required to discharge the mortgages and caveats needed to be verified, and further changes could increase the settlement shortfall.
• The leasing campaign created a risk that a tenancy would complicate delivery of vacant possession.

The removal of an improvement identified in the contract raised concerns about further changes to the property before completion.

Measured but decisive action was required to preserve the subject matter of the contract and to prevent further dealings from making completion more difficult.

The Advocacy Approach

Our strategy had three connected objectives: preserve the property, pursue completion of the contract, and establish the financial arrangements needed to achieve settlement. .

Proceedings were issued in the Equity Division of the Supreme Court of New South Wales seeking:

• specific performance of the contract;
• urgent interim injunctions restraining leasing, further drawdowns under facilities secured against the property, the granting of further security, and the removal of fixtures, fittings and contractual improvements or inclusions; and

associated claims for damages and costs.

The interlocutory application was prepared on an urgent basis, supported by affidavit evidence establishing the exchange of contracts, the purchaser's readiness, willingness and ability to complete, the vendor's communicated inability to settle, and the observable steps toward leasing.

At the first urgent hearing, the Court granted interim orders restraining the vendor from advertising or leasing the property, drawing further funds under secured facilities, granting further security, or removing fixtures, fittings and items identified in the contract. Those orders operated until the next hearing, allowing the vendor time to put forward evidence while protecting the property in the meantime.

We assembled affidavit evidence from the purchasers, their conveyancing solicitor and our litigation team. It addressed the contract, the funding available for completion, the vendor’s communications, the leasing campaign and the removal of the swim spa.

Key Issues Before the Court

Several issues required disciplined attention:

• Readiness to complete. We assembled finance records, evidence of available funds and conveyancing correspondence to demonstrate the purchasers’ ability and willingness to complete. We also considered the risk that a lengthy extension could require their lender to reassess the finance application.

• Adequacy of damages. Specific performance is a discretionary remedy, and the court's willingness to grant it turns in part on whether damages would be an adequate substitute. The uniqueness of the land, the Central Coast location and the purchasers' settled life plans supported the conclusion that damages were not an adequate remedy. The purchasers had spent considerable time searching for a suitable property and wanted the purchase completed. Our claim sought specific performance rather than treating financial compensation as an adequate substitute, while recognising that specific performance remained a discretionary remedy.”

• Preservation of the asset. The interlocutory relief was framed proportionately: restraints targeted conduct that would alter the property's condition, occupation or encumbrance, rather than imposing a wider freeze than the circumstances warranted.

• Understanding the secured lending. We compared payout figures in PEXA, sought information from the mortgagees and caveators, and requested supporting loan records. Company searches also identified a receiver appointment. We contacted the receiver and established that a lender had appointed him over bank accounts of companies associated with the vendor – not over the property personally owned by the vendor. That distinction was important when assessing the implications for settlement.

The Outcome

The interim injunctions protected the property while we continued investigating the settlement position and pressing for an early determination of the specific performance claim.

The vendor subsequently ceased opposing continuation of the injunctions. At the next hearing, the parties consented to orders requiring completion of the contract within seven days. The Court also recorded the vendor’s undertakings to meet the settlement shortfall and ensure that the property was transferred free of mortgages, caveats and other debt-related encumbrances.

Those orders secured the practical outcome our clients had pursued: an enforceable requirement to complete the purchase. They were made by consent, rather than following a contested final judgment.

There was still work to do before the purchase could complete. Our litigation team coordinated with the purchasers’ conveyancing solicitor over the discharge arrangements, settlement figures and pre-settlement inspection. We also negotiated a monetary adjustment to resolve the removed swim spa issue, rather than allowing that dispute to derail completion.

The purchase settled the following day. After the uncertainty of failed settlement and urgent proceedings, the clients finally became the owners of the property they had contracted to purchase.

We subsequently obtained consent orders fixing a substantial contribution towards the purchasers’ legal costs.

Significance

The significance of this matter lies in what it reinforces about the position of a purchaser confronting a vendor's undisclosed financial exposure. A failing settlement is not the end of the transaction. Where contracts have been exchanged and the purchaser has performed, the court retains a protective and remedial jurisdiction that can compel completion and preserve the property in the meantime.

The outcome also illustrates the value of a proportionate, principled approach to interlocutory relief: orders targeted precisely at the risk, supported by a sustained evidentiary record and a coherent narrative of entitlement, are more persuasive than broader claims that outrun the facts.

For purchasers in these circumstances, three practical observations follow.

• First, act early: early advice can help purchasers preserve their contractual position, gather evidence and identify whether urgent court protection is required. .

• Second, preserve the evidentiary record: contemporaneous records of the purchaser's readiness and the vendor's communications are often decisive.

• Third, be prepared to seek a reassessment of what the proceedings must achieve as updated lending information, the vendor’s evidence and changes affecting the property emerge n, so the relief sought continues to match the risk.

What to Do Next

If a vendor has indicated that settlement cannot proceed, or if there are signs that the property is being advertised, re-let or dealt with inconsistently with the contract, the first step is to obtain considered advice before serving notices or making elections that may limit later remedies. A purchaser's options are shaped significantly by the sequence of steps taken in the first days of the dispute, and advice at that point protects both the contractual position and the equitable remedies that may follow.

Our property law team acts for purchasers and vendors in Supreme Court property disputes across the Central Coast and greater New South Wales and works closely with our lawyers to protect transactions that have become contested. To discuss your matter in confidence, please contact our office.

This case study has been anonymised and summarises the outcome of a particular matter. It is not legal advice, and outcomes depend on the circumstances of each case.