Simanke v Liu
CourtHigh Court of New Zealand
Full case nameSimanke v Liu
Citation(s)(1994) 2 NZ ConvC 191,888
Court membership
Judge(s) sittingHenry J

Simanke v Liu (1994) 2 NZ ConvC 191,888 is a cited case in New Zealand regarding cancellation of a contract under the Contractual Remedies Act. It held that any deposit in excess of a customary deposit, in this case 10%, is refundable to the purchaser.[1]

Background

Simanke agreed to sell a property to Liu for $650,000, with the sales agreement stating that a deposit of $300,000 was to be paid within 14 days.

The contract was later cancelled, and Siminake sued for the $300,000 deposit. Liu defended the claim by saying as under the Contractual Remedies Act 1979, once a contract is cancelled, no party is obliged to perform any further on a contract. Simanke argued that the Act still requires the deposit to be paid.

Held

The court ruled that in New Zealand, the customary deposit is 10%, meaning in this case, $300,000 was not in the nature of a deposit, and so was not enforceable here. Furthermore, Simanke's claim was not helped either by the fact that the sales agreement had limited the forfeiture of deposit to be only 10%, anyway. Simanke's claim was dismissed.

References

  1. ↑ Chetwin, Maree; Graw, Stephen; Tiong, Raymond (2006). An introduction to the Law of Contract in New Zealand (4th ed.). Thomson Brookers. p. 362. ISBN 0-86472-555-8.


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