Buyer’s Caveat and Threats - Not Economic Duress
A buyer lodges a caveat over your property and threatens court proceedings unless you complete the sale. You feel pressured into signing a replacement contract. Can you later claim economic duress? In a recent case, the NSW Court of Appeal rejected that claim on the particular facts.
What happened?
The seller and his former wife agreed to sell their Norwest unit for $1.02 million. The contract’s front page was signed and the buyers paid a 0.25% holding deposit.
The buyers’ solicitors subsequently raised concerns: the paperwork used the 2019 standard contract rather than the 2022 edition, and the purchaser’s details were blank. They requested a replacement contract identifying their superannuation trustee company as purchaser.
After delays, the company lodged a caveat in July 2023. The seller then requested $1.05 million in August. The buyers refused and threatened proceedings to enforce the sale.
The sellers signed a replacement contract at $1.02 million in November, and settlement occurred in December 2023.
After the buyer sued over post-settlement rent and other expenses, the seller brought a damages claim for approximately $166,720, alleging coercion.
Why did the duress claim fail?
On 6 November 2026, the Court dismissed the seller’s appeal.
There was a genuine dispute about the original contract’s legal effect. Nothing suggested the buyers did not believe their position was correct. Asserting that position, negotiating through solicitors, obtaining barrister’s advice, lodging a caveat and threatening proceedings were ordinary steps in resolving this dispute.
Economic duress requires more than feeling pressured. The pressure must induce the agreement and satisfy the applicable legal test. The Court acknowledged competing authorities about whether lawful but illegitimate pressure can suffice, but found the claim failed under either approach.
A genuine belief does not automatically justify a caveat
A purchaser claiming an equitable interest under a binding sale contract may have grounds to lodge a caveat. Whether there is a proper basis depends on the circumstances.
Owners can obtain advice about a lapsing notice or removal proceedings. Compensation may be available where a caveat was lodged without reasonable cause and caused attributable financial loss.
Evidence of loss also mattered
The seller independently failed to prove his claimed loss. His valuation report was excluded after the valuer failed to attend for requested cross-examination and expert-code requirements were not met. Other material did not establish an undervalue.
What should buyers and sellers remember?
Get advice before signing, renegotiating or responding to a caveat. These matters turn on the specific facts, and there is no one generic advice. If you are buying or selling property, see our property law page.
How Surge Legal can help
Our property law team can review a contract for sale before you sign, and advise on caveats, delayed settlements and disputes between buyers and sellers.
Call (02) 8551 7851 or email info@surgelegal.com.au. New clients can book a free initial consultation, by appointment, with one of our lawyers. You can also book online.
Case: He v N & G Superannuation Pty Ltd acting as trustee for N & G Superannuation Trust (No 3) [2026] NSWCA 237 (NSW Court of Appeal, 6 November 2026) This article is a general summary of the decision cited above for information purposes only. It does not constitute legal advice. Every case turns on its own facts. Please contact Surge Legal to discuss your individual circumstances.
