Shortfall in Walnut Grove sale recovered

The vendor, Horsell Nominees, has now been successful in recovering the shortfall - plus interest and costs - from the original defaulting buyer.

The South Australian Supreme Court found that NAJB Pty Ltd defaulted on a sales contract to buy the village when it repeatedly delayed the $3.5 million sale.

Masonic Homes and NAJB both put up their hands as potential purchasers when Walnut Grove was placed on the market to reduce debt levels.

NAJB, part of the group that operates Fernleigh Gardens Retirement Village in Woodcroft and the Garden Estate Retirement Villages at Christie Downs and Hackham, agreed to the purchase in February 2007 but delayed settlement on three occasions  delays that formally terminated the agreement.

In a judgement handed down last week, Justice Ann Vanstone dismissed NAJB's argument that the sale to Masonic Homes was not "at arm's length".

"It is noteworthy that the price paid by Masonic was within a few per cent of the price which the defendant had agreed to pay," she said.

"I do not consider it to be of consequence that, when Mr Horsell took steps to resell the retirement village, he did not seek the services of an agent specialising in the sale of that sort of asset and did not advertise the sale.

"What he did was exactly what he had done in late 2007 and in both instances those steps achieved contracts at prices above valuation."

NAJB was ordered to pay $322,940, including $175,000 for loss of bargain, interest and $29,076 for costs of resale.