Key Takeaways
- Court: Supreme Court of New South Wales (Equity Division, Real Property List)
- Case: Lewington v Dulyakarn [2025] NSWSC 635; Lewington v Dulyakarn (No 2) [2025] NSWSC 808
- Our client: Defendant (vendor in a contract for the sale of land)
- Claim against our client: $170,000 (deposit + processing fee)
- Result: Substantive claim dismissed. $150,000 deposit retained. Plaintiff ordered to pay 90% of our client's costs.
- Counsel: Sam Sykes, Greenway Chambers
A Vendor Sued for $170,000 She Was Entitled to Keep
Our client sold a property in Western Sydney for approximately $1.15 million. The purchaser paid a $150,000 deposit, roughly 13% of the purchase price, along with a separate $20,000 processing fee.
Then the purchaser refused to complete the sale.
Our client did what any vendor in that position would do. She accepted the repudiation, terminated the contract, and retained the deposit. The purchaser responded by filing proceedings in the Supreme Court of NSW to recover the full $170,000.
The purchaser's arguments were wide-ranging. She claimed the deposit was excessive, unenforceable as a penalty, and recoverable under both common law principles and s 55(2A) of the Conveyancing Act 1919 (NSW). She further argued our client had no right to terminate at all because she hadn't proven she was "ready, willing and able" to perform her side of the contract.
For our client, the claim threatened more than the deposit itself. A loss would mean repaying the $150,000, surrendering the $20,000 processing fee, and bearing tens of thousands in irrecoverable legal costs for proceedings she never started. That is the reality of property litigation in NSW: a vendor who follows the law can still be dragged into the Supreme Court and forced to justify keeping money the buyer walked away from.
What the Purchaser Argued
The purchaser's case rested on four arguments. Each one needed to be met head-on.
The deposit was a penalty. At approximately 13% of the purchase price, the $150,000 deposit exceeded the conventional 10% threshold. Courts have scrutinised above-threshold deposits, and the purchaser relied heavily on that line of authority to argue the deposit was unenforceable.
The vendor wasn't ready to perform. The purchaser claimed our client had no right to terminate because she hadn't demonstrated she was "ready, willing and able" to complete the sale. This is a well-known requirement in contract law, but it does not apply in every situation. If this argument succeeded, the entire termination would have been invalid regardless of the buyer's own conduct.
Section 55(2A) relief. Even if the deposit was technically enforceable, the purchaser asked the Court to exercise its discretion under the Conveyancing Act to grant relief against forfeiture. That section allows a court to order repayment of a deposit if keeping it would be unjust.
The processing fee. She argued the $20,000 processing fee was recoverable separately from the deposit.
Four arguments, $170,000 on the line, and a body of case law on both sides.
How We Defended the Deposit
Our approach targeted the factual and legal foundations of each claim.
Repudiation first
We established that the purchaser's conduct and statements amounted to an unequivocal refusal to complete. This wasn't a buyer who struggled with finance or missed a settlement deadline by a few days. Her words and actions made clear she would not settle. Under contract law, that is repudiation. It entitled our client to terminate the contract and retain the deposit without waiting for the settlement date to pass.
Justice Pike agreed. The purchaser's conduct, objectively assessed, was repudiation of the contract. The vendor was entitled to accept that repudiation and bring the contract to an end.
The "ready, willing and able" argument collapsed
We submitted that a vendor accepting repudiation does not need to prove she was ready to perform. The law is clear: readiness and willingness are relevant to claims for damages or discretionary relief, not to the effectiveness of a termination based on the other party's repudiation. Justice Pike confirmed this distinction. The law does not require futile demonstrations of readiness when the other party has already refused to perform.
The deposit was genuine
The 13% figure attracted scrutiny, as deposits above the conventional 10% threshold always do. But the facts supported our client. The purchaser herself had nominated the deposit amount. The transaction was conducted at arm's length. No solicitor was involved in setting the figure. It was not imposed by the vendor or inflated to create a windfall.
Justice Pike held the deposit was genuine. Not penal. Not unjust.
No basis for discretionary relief
With the deposit upheld and the termination valid, the purchaser's fallback was s 55(2A) of the Conveyancing Act. We demonstrated there was no injustice or inequity in retaining a deposit the purchaser had set herself, in a transaction conducted at arm's length, after she refused to complete. The Court declined to grant relief against forfeiture.
The $150,000 stayed where it was.
$150,000 Retained, Claim Dismissed
Justice Pike dismissed the purchaser's claim in substantial part.
Our client kept the $150,000 deposit. The only amount repayable was the $20,000 processing fee, which the Court found was not properly part of the deposit, plus $4,186.99 in pre-judgment interest calculated from 6 December 2022. Total judgment: $24,186.99, against an original claim of $170,000.
Five of six contested issues resolved in our client's favour. The hearing centred on the deposit question, which consumed the bulk of the court's time. Our client prevailed on that issue entirely. The forfeiture of deposit stood. The rescission of contract argument failed. The application for relief against forfeiture was refused.
Costs Followed the Practical Result
The purchaser then argued she was entitled to her legal costs because she had obtained a monetary judgment ($24,186.99). Justice Pike rejected that approach.
The Court applied the "practical result" test, relying on Ryde Developments Pty Ltd v The Property Investors Alliance Pty Ltd (No 2) [2018] NSWCA 40 and related authorities. The "event" for cost purposes is not simply who obtained a judgment. It is the practical outcome of the proceedings as a whole.
The purchaser received judgment for $24,186.99. She had claimed $170,000. That gap defined the case. The defendant prevailed on the vast majority of contested issues, and the deposit question, which dominated the hearing, was resolved entirely in our client's favour.
The Court ordered the plaintiff to pay 90% of our client's costs on the ordinary basis. On the Court's assessment, our client won the case that mattered.
If You're Facing a Property Deposit Dispute
A buyer who refuses to complete does not automatically get the deposit back. Even deposits above 10% can be upheld. Context matters. Bargaining position matters. Commercial justification matters. An arm's-length transaction, a commercially justified figure nominated by the purchaser, and no evidence of unconscionable conduct can be enough.
Contract repudiation entitles the innocent party to terminate. You don't need to prove you were ready to settle before accepting the other side's refusal to complete. And if the buyer sues to recover the deposit, costs can follow the practical result, not just who obtained a formal judgment.
The purchaser in this case claimed $170,000. She recovered $24,186.99. She was ordered to pay 90% of the defendant's costs. That is the risk of bringing proceedings on grounds that largely fail, and it demonstrates why vendors in a strong position should seek legal advice before responding to claims.
These decisions, Lewington v Dulyakarn [2025] NSWSC 635 and Lewington v Dulyakarn (No 2) [2025] NSWSC 808, confirm those principles in the Supreme Court of NSW.
If you're a property vendor dealing with a buyer who won't settle, or defending a claim to recover a deposit, getting legal advice early can help you understand where you stand. Call State Law Group on 1300 011 149 or contact us online to discuss your situation.
Legal disclaimer: This case study describes the outcome of a specific matter settled on its own facts and circumstances. Past results do not guarantee similar outcomes. Every claim involves different injuries, losses, and legal issues. This article is general information, not legal advice. If you need advice about a property dispute, contact State Law Group directly.
