The Supreme Court of New South Wales in Lewington v Dulyakarn (No 2) [2025] NSWSC 808 redefined how courts interpret key conveyancing terms in property transactions outside the standard contract format. The case involved a private sale agreement written in Thai between two unrepresented parties and raised important questions about validity, deposits, and repudiation in NSW conveyancing law.
Background
On 18 March 2022, Purchaser Plaintiff: (Kalaynee Lewington) and Vendor Defendant: (Nittaya Dulyakarn) signed a one-page agreement to sell a house in Guildford for $1.15 million. The seller prepared a short Thai-language document instead of using the usual contract format for NSW property sales. Neither party had a lawyer involved at the time.
The Plaintiff paid $150,000 as a deposit about 13% of the sale price plus an additional $20,000 fee. But the sale never went through. Nearly a year later, on 13 February 2023, the defendant sold to her son for $925,000.00.
The Plaintiff then took the matter to Court, seeking to recover the $170,000 already paid.
What the Court Said
The Court ruled that the defendant had to return only $20,000 of the $170,000 paid by the plaintiff.
1. No completion date? Still a valid contract.
The agreement between the parties did not specify a completion date. However, that did not make the contract invalid.
A valid contract for the sale of land must state the essential terms, including the parties’ identities, the property being sold, and the price (Tapp v Barnett [2021] NSWSC 1271).
If the contract does not specify a date, the law implies that completion must occur within a reasonable time. What counts as reasonable will depend on the facts, context, and fairness between the parties (T & L Alexandria Pty Ltd v Sharvain Facades Pty Ltd [2023] NSWSC 947 at 255; Cavallari v Premier Refrigeration Co Pty Ltd. [1952] HCA 26; 85 CLR 20; Perri v Coolangatta Investments Pty Ltd (1982) 149. CLR 537. )
In this case, the Court did not decide what a reasonable time would have been, because neither party gave formal notice requiring completion. Still, the Court confirmed that the absence of a completion date did not render the contract void.
2. Repudiation: when one party clearly refuses to go ahead
This should be assessed objectively when Repudiation occurs (Australia City Properties Management Pty Ltd v Owner – Strata Plan No 65111). A party clearly shows they are not ready or willing to perform their obligations under a contract. (Plumor Pty Ltd v Handley (1996) 41 NSWLR 30).
The plaintiff argued that they were acting in good faith and misunderstood the contract.
But the Court didn’t accept this. The letter sent on 25 October 2022 made no offer to honor the contract if their interpretation proved incorrect. Because of that, the Court found the conduct was more than a mistake; it showed a clear refusal to perform the agreement.
On 6 December 2022, the defendant formally accepted the Repudiation, bringing the contract to an end. This was a valid and effective termination, consistent with the requirement for an express and clear election (Millstream Pty Ltd v. Schultz (1980) 1 NSWLR 547).
3. “Ready, willing, and able” when is it required?
Whether a party needs to prove they were ready, willing, and able to perform depends on what legal outcome they are seeking.
Suppose a party is simply accepting the other party’s Repudiation to bring the contract to an end. In that case, there is no need to prove readiness.
However, if a party wants to go further and claim damages that are particularly substantial, then readiness, willingness, and ability to perform are generally required.
In this case, the Court did not decide whether retaining the deposit amounts to a claim for damages (which would require the defendant to prove readiness). But the Court noted this uncertainty and made no firm ruling on that point.
Regardless, the Court found that the defendant was, in fact, ready, willing, and able to complete the contract. As a result, the issue did not affect the outcome. (Sharjade Pty Ltd v Commonwealth of Australia [2009] NSWCA 373)
4. Was the 13% deposit a penalty?
The Court held that the 13% deposit in this case was not a penalty. Although the standard deposit in most conveyancing transactions is 10%, the higher rate did not make it invalid or unreasonable.
The key question was whether the deposit was reasonable and genuine. It also considered whether it was a disguised penalty imposed as punishment for breach. What mattered was the purpose of the payment, not just the percentage.
In this case, the plaintiff offered the deposit to the defendant as security to remove the property from the market. Both parties were unaware of the customary 10% rate. The Court found the amount commercially fair. It reflected a genuine commitment to complete the sale, not a penalty for non-performance.
Under section 55(2A) of the Conveyancing Act 1919 (NSW), the Court may order repayment of a deposit if it is unreasonable. However, the Court declined to exercise that discretion. The Court allowed the defendant to keep the 13% deposit. It ordered the defendant to return only the $20,000 processing fee to the plaintiff.
Why was the deposit retained in Lewington v Dulyakarn (No 2) [2025] NSWSC 808
The Court allowed the seller to keep the deposit because the contract was valid and the buyer had breached their obligations, giving the seller lawful grounds to terminate it. Whether someone can hold a deposit usually depends on the facts of what happened. Suppose the contract had been invalid from the start. In that case, the buyer might have had a better chance of recovering the money under section 55(2A) of the Conveyancing Act 1919 (NSW). Because the agreement was legally binding and the seller acted appropriately, the Court decided the seller did not need to return the deposit.
Conclusion
The Court found that the contract was valid, the Plaintiff had repudiated it, and the defendant had lawfully accepted that Repudiation. The deposit, although higher than usual, was genuine and commercially justified. The Court found no legal or factual basis to depart from the default position, allowing the defendant to retain the deposit. It ordered only the $20,000 processing fee to be refunded.
Jake McKinley notes that this article is written for the purpose of providing generalised information and not to provide specialised legal advice. If you require qualified legal advice on anything mentioned in this article, our experienced team of solicitors at Jake McKinley are here to help. Please get in touch with us on 02 9232 8033 today to make an enquiry.
