Money paid to a third party

A court will not usually intervene to return a deposit to a purchaser.123 Unlike a part payment in advance, a deposit is regarded as a guarantee of performance by the purchaser. However, where the vendor’s conduct is unconscionable, the court may order the return of the deposit.124 In particular, if the sum paid is a penalty, rather than a deposit, the court may order the return of the deposit on the basis that it is unjust for the vendor to keep it. A deposit in excess of 10% will be regarded as a penalty, unless the vendor can show ‘special circumstances’.125