The decision was made in the NSW Supreme Court as as result of a dispute over the deposit between Davis Investment Group Holdings Pty Ltd, which is in liquidation, and the seller Sentinel Orange Homemaker Pty Ltd over the deposit.

The investment group was created for the purchase of the property.

Interest was expressed in April 2018 for a motor dealership at the site, subject to DA approval.

The purchase price was $3,960,000 and the $100,000 deposit was made before the exchange of contracts on August 17, 2018.

The purchase was so John Davis Motors could relocate from East Orange to the new location. The motor group lodged an application for a $3 million redevelopment of the site, which was approved by Orange City Council on March 17, 2020.

However, Sentinel argued the group did not actively seek the signed copy of the DA after it was passed amid delays caused by the COVID pandemic.

The investment group contended that it was entitled to the deposit because it validly terminated under a special condition in the contract on March 31, 2020. The special condition provided for a right of termination by either party if the approved DA was not obtained by March 31.

However, Sentinel said it was entitled to the deposit and contended that the investment group did not validly terminate the contract pursuant to the special condition.

It argued the investment group had no right to terminate on March 31, 2020, because the relevant conditions had been satisfied by the time the defendant sought to terminate.

Sentinel argued that the investment group did not use all reasonable endeavours between March 17 and 31 to obtain the signed development approval from Orange City Council. The original signed DA documents were received on April 7, 2020.

The investment group went into liquidation on April 17, 2020, and Sentinel terminated the contract on May 22, 2020.

Justice Rowan Darke declared that Sentinel validly terminated the contract, and is entitled to the deposit of $100,000, together with any interest earned.

The investment group is to pay Sentinel's costs of the proceedings, which are to be decided.

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