Contract Dispute for Purchase of Property: STM123 No. 16 Pty Ltd v Wang [2025] NSWSC 444
The decision in STM123 No. 16 Pty Ltd v Wang [2025] NSWSC 444 is an important New South Wales Supreme Court decision concerning a contract dispute arising from a purchaser’s failure to complete a contract for the sale of land. The Court entered judgment for the vendor in the amount of $2,425,534.54, together with costs, after the purchaser failed to pay the balance of the deposit, failed to complete, and took no active step in the proceedings.
The case is particularly significant because it explains how damages may be assessed in a breach of contract of sale claim where the property is later resold in a limited or falling market. Although damages for breach of contract are ordinarily assessed at the date of breach, the Court accepted that a later resale date was appropriate because the property was a prestige Point Piper apartment with no ready market for immediate resale.
For vendors, purchasers, developers and commercial parties, the decision is a clear reminder that failure to complete a contract for sale can have severe financial consequences well beyond forfeiture of the deposit.
If you are involved in a contract dispute or breach of contract of sale, contact Arida Lawyers today for a complimentary 10-minute telephone conference to discuss your situation.
STM123 No. 16 Pty Ltd v Wang [2025] NSWSC 444
Key Takeaways
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A purchaser who fails to complete a contract for sale of land may be liable for substantial damages beyond forfeiture of the deposit.
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A vendor may terminate the contract after valid default notices and pursue damages for breach of contract.
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Under the general law, damages are usually assessed at the date of breach, but a later date may be used where that is necessary to fairly compensate the innocent party.
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Where the property is unique, high-value, or difficult to resell quickly, the eventual resale price may be the appropriate basis for assessing loss.
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Clause 9 of the standard form contract for sale of land remains central to vendor remedies following purchaser default.
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Parties who ignore proceedings risk judgment being entered against them in their absence, including for very substantial amounts.
Background
On 8 June 2023, STM123 No. 16 Pty Ltd, as vendor, entered into a contract with Mr Yejian Wang, as purchaser, for the sale of an off-the-plan residential apartment in Point Piper. The agreed purchase price was $16.5 million. The property was a premium apartment located in one of Sydney’s most prestigious residential markets.
Under the contract, a 10 per cent deposit was payable in two instalments. The purchaser paid the first instalment of $825,000, but failed to pay the second instalment of $825,000 by the completion date, being 18 July 2023. On 19 July 2023, the vendor served a notice requiring payment of the balance of the deposit by 26 July 2023. The vendor also served a notice to complete, requiring completion by 7 August 2023. The purchaser failed to comply with both notices.
On 8 August 2023, the vendor terminated the contract. The termination triggered the vendor’s rights under the contract and general law to pursue remedies arising from the purchaser’s non-compliance. The dispute then became a substantial claim for damages arising from a breach of contract of sale.
The Contract Dispute
The contract dispute arose from a straightforward but serious failure by the purchaser to comply with essential contractual obligations. The purchaser did not pay the balance of the deposit, did not complete the purchase, and did not respond by taking any active role in the proceedings once litigation commenced.
Following termination, the vendor placed the property back on the market. The evidence before the Court showed that the vendor engaged a leading prestige real estate agent, Sydney Sotheby’s International Realty, to conduct an extensive sales campaign. Between October 2023 and November 2024, the property was marketed through scheduled inspections, private appointments and ongoing price reassessment. Approximately 93 parties inspected the property during the campaign, yet only two contracts were issued.
This evidence mattered because the vendor sought to recover the deficiency between the original contract price and the eventual resale price. The property was ultimately resold on 11 November 2024 for $12,820,000, substantially below the original contract price of $16.5 million. The central issue for the Court was whether the vendor’s damages should be assessed by reference to the value of the property at the date of breach or by reference to the later resale price.
The Proceedings in the Supreme Court
The proceedings were commenced on 1 September 2023. The vendor alleged breaches of contract and sought both liquidated and unliquidated damages. The defendant did not actively participate in the proceedings. The Court made orders for substituted service, and Justice Pike was satisfied that the defendant was aware of the hearing but had chosen not to take any role in the matter.
Before the final assessment of unliquidated damages, the Court had already entered judgment for the vendor in relation to the unpaid balance of the deposit. On 22 November 2024, Justice Peden entered judgment for $825,000, together with interest of $91,938.67, and costs as agreed or assessed. The remaining issue before Justice Pike was the assessment of the vendor’s unliquidated damages, including the deficiency on resale, resale-related expenses and interest.
The plaintiff relied on affidavit evidence concerning the purchaser’s default, service of the proceedings, the remarketing campaign, and the eventual resale. The plaintiff also relied on expert valuation evidence from Mr Jason Field of Field & Kaye National Property Valuers, who addressed both the value of the property and the characteristics of the prestige property market.
Clause 9 of the Contract for Sale
A critical part of the Court’s analysis concerned clause 9 of the standard form contract for sale of land. Clause 9 provided that where a purchaser did not comply with the contract, or a notice under or relating to the contract, in an essential respect, the vendor could terminate by serving a notice. After termination, the vendor could keep or recover the deposit, up to a maximum of 10 per cent of the price, and sue the purchaser for further relief.
Clause 9.3.1 allows a vendor to recover the deficiency on resale where the property is resold under a contract made within 12 months after termination. However, in this case, the resale contract was entered into on 11 November 2024, more than 12 months after termination on 8 August 2023. As a result, clause 9.3.1 was not available to the vendor.
The vendor therefore relied on clause 9.3.2, which allowed the vendor to recover damages for breach of contract. Justice Pike confirmed that under clause 9.3.2, the general law of damages applied. This distinction was important because it required the Court to consider the ordinary principles governing the assessment of damages for breach of contract, including the usual date for assessing loss and whether departure from that date was justified.
The Assessment of Damages for Breach of Contract
The general rule is that damages for breach of contract are assessed as at the date of breach. However, the Court recognised that this is not an inflexible rule. A later date may be appropriate where selecting the date of breach would not fairly compensate the innocent party.
The Court considered authorities including Jampco Pty Ltd v Cameron (No 2) (1985) 3 NSWLR 391, Ng v Filmlock Pty Ltd (2014) 88 NSWLR 146, Liggins v Park Trent Properties Group Pty Ltd (No 2) [2022] NSWSC 176 and S T Investment Pty Ltd v Geng (2020) 19 BPR 40,071. Those authorities recognise that, although the breach date is usually the starting point, a later date may be adopted where there is no ready market or where the nature of the property and the market conditions make immediate resale unrealistic.
That principle was decisive in this case. The property was not an ordinary residential property with a broad and readily available market. It was a prestige Point Piper apartment, appealing to a limited pool of potential purchasers. The valuation evidence showed that the prestige market could be patchy, inconsistent, volatile and sensitive to fluctuations. The expert also expressed the opinion that properties of this kind do not necessarily have an immediately available market and may require a protracted campaign to identify a suitable buyer.
Of significance, at paragraph 28 of the decision, Justice Pike held:
“As noted by Gleeson JA in Filmlock, whether the date of breach or another is used, is ultimately a question of fact. Having regard to the evidence that I have summarised above, particularly as to the attempts that were made to re-market the Property between October 2023 and November 2024, and the opinions expressed by Mr Field as to the nature of the market in which the Property exists and is being sold, it is appropriate on the facts of this case to use the sale in November 2024 for the purposes of calculating the deficiency on resale. Using the valuation expressed by Mr Field of $13.5 million in August 2023 would not, in my view, fairly compensate the plaintiff in the circumstances, having regard to the lack of a ready market in August 2023 to immediately re-sell the subject Property.”
The above extract reinforces that the assessment of damages in a breach of contract of sale dispute is ultimately fact-specific. The Court was not prepared to apply the date of breach mechanically where doing so would undercompensate the vendor. Instead, it adopted a commercially realistic approach based on the evidence of the actual market and the vendor’s efforts to resell the property.
The Court’s Findings
The Court was satisfied that the vendor had made every reasonable effort to remarket and sell the property so as to obtain the best available price. The evidence showed a lengthy and serious marketing campaign by a leading prestige agent, regular inspections, ongoing engagement with prospective purchasers and repeated reassessment of price expectations.
The Court accepted that the eventual resale price of $12,820,000 should be used for the purpose of calculating the deficiency on resale. The original contract price was $16.5 million, meaning that the shortfall on resale was $3.68 million. Credit was then given for the full deposit of $1.65 million, comprising the first instalment already paid and the second instalment previously ordered by Justice Peden to be paid. This left a resale deficiency of $2,030,000.
The vendor also claimed costs and expenses arising out of the purchaser’s breach and the resale process. Those costs totalled $300,701.46 and were supported by evidence. After adding those expenses, the damages totalled $2,330,701.36. The Court then added pre-judgment interest of $94,833.14, calculated from the date of resale to the date of hearing. The final judgment entered in favour of the vendor was $2,425,534.54, together with costs.
Significance of the Decision
This decision is significant for vendors, purchasers, developers and parties involved in property-related contract disputes. It demonstrates that a purchaser’s failure to complete a contract for sale can create exposure far beyond the deposit. Where the vendor suffers a real loss on resale, together with additional expenses and interest, the financial consequences can be severe.
The judgment is also important because it confirms that damages in a breach of contract of sale case will be assessed in a way that seeks to fairly compensate the innocent party. The date of breach remains the ordinary rule, but it is not applied in a vacuum. Where the property is unusual, the market is limited, and resale requires a lengthy and genuine campaign, the Court may adopt the later resale date as the proper basis for calculating damages.
For vendors, the case highlights the importance of carefully documenting all steps taken after termination. Evidence of marketing, inspections, pricing strategy, communications with agents, market conditions and eventual resale can be critical. In this case, that evidence allowed the vendor to establish that it had taken reasonable steps to obtain the best available price and that the eventual resale price was a proper measure of loss.
For purchasers, the case is a warning. Failure to complete a contract for sale can result in substantial liability, particularly where the market moves against the vendor before resale occurs. A purchaser who defaults cannot assume that forfeiture of the deposit will be the end of the matter.
For litigants more generally, the decision also illustrates the consequences of failing to engage with proceedings. The defendant took no active step, and the Court proceeded to assess damages on the evidence before it. Where a party is served and chooses not to participate, the Court may still enter substantial judgment.
How Can Arida Lawyers Assist
Arida Lawyers can assist in contract disputes, including claims involving breach of contract of sale, failed settlements, purchaser default, vendor remedies, deposit disputes, termination notices, damages claims and Supreme Court proceedings.
We assist clients by assessing contractual rights, advising on termination and default notices, preparing claims for damages, responding to breach allegations, negotiating commercial resolutions and conducting litigation where necessary. In property disputes, early legal advice is often critical because the timing and form of notices, the preservation of evidence, and the steps taken after termination can materially affect the outcome.
If you are involved in a contract dispute, or if a purchaser or vendor has failed to comply with a contract for sale, Arida Lawyers can provide clear, strategic and commercially focused advice.
Frequently Asked Questions
Q1. What is a breach of contract of sale?
A breach of contract of sale occurs when one party fails to comply with an essential obligation under the contract. In a property transaction, this may include failing to pay the deposit, failing to complete settlement, failing to comply with a notice to complete, or otherwise refusing or being unable to perform the contract.
Q2. Can a vendor recover more than the deposit if a purchaser fails to complete?
Yes. Depending on the contract and the circumstances, a vendor may be entitled to retain or recover the deposit and also sue for damages. Those damages may include a deficiency on resale, resale expenses, holding costs, interest and other losses caused by the purchaser’s breach.
Q3. How are damages calculated in a contract dispute involving a failed property sale?
Damages are usually assessed by comparing the contract price with the value of the property at the date of breach. However, where that approach would not fairly compensate the innocent party, the Court may use a later date, including the date of actual resale.
Q4. Why did the Court use the later resale price in STM123 No. 16 Pty Ltd v Wang?
The Court used the later resale price because the property was a high-value prestige apartment with no ready immediate market. The vendor undertook an extensive marketing campaign over more than 12 months before achieving a sale. The Court accepted that using the eventual resale price better reflected the vendor’s actual loss.
Q5. What is clause 9 of the standard contract for sale of land?
Clause 9 deals with the vendor’s rights where a purchaser fails to comply with the contract or a notice in an essential respect. It allows the vendor to terminate, keep or recover the deposit, and sue for further relief depending on the circumstances.
Q6. What should a vendor do if a purchaser fails to complete?
A vendor should obtain legal advice promptly. The correct notice procedure must be followed, and any termination must be carefully managed. The vendor should also preserve evidence of attempts to resell the property and any expenses arising from the purchaser’s breach.
Q7. What should a purchaser do if they cannot complete settlement?
A purchaser should seek urgent legal advice before the completion date or before the expiry of any notice to complete. Depending on the circumstances, there may be options to negotiate, seek an extension, challenge a notice, or limit exposure to further damages.
This article provides general information relevant to our legal services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.
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If you are involved in a contract dispute or a breach of contract of sale, Arida Lawyers can assist.
Contact Arida Lawyers today for a complimentary 10-minute telephone consultation to discuss your circumstances.
This article provides general information relevant to our legal services. It is not legal advice and should not be relied upon as such. If you are seeking legal advice, you should contact us for a free initial consultation.
Liability limited by a scheme approved under Professional Standards Legislation.