The Court of Appeal held that where a vendor failed to provide a release of mortgage by the contractual settlement date (time being of the essence), the purchasers' agreement to extend the settlement date to a fixed date — while expressly reserving their rights — did not amount to an affirmation of the contract destroying the essentiality of time. The purchasers' subsequent rescission upon the vendor's continued failure to provide the release was held to be valid, and the vendor's purported rescission was ineffectual. The Court also considered that once the mortgagee exercised its power of sale under s 87(1) Property Law Act (Qld) 1974, the vendor lost all capacity to settle, reinforcing the purchasers' entitlement to rescind. The vendor's application for summary judgment forfeiting the deposit was dismissed and summary judgment was entered for the purchasers.
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