Water rates
Land rates
Address Weeds Notices (I was told by Inspector by Xmas)
2. Agree to Peter's demands but not immediately capable of doing so (26K is ADJ not of balance 13K dep 13K in advance.
3. Pay $550 per week rent adjistment for first quarter.
4. Deposit into trust acc full proceeds of sale of Carrs Creek (200K app) immediately on settlement (may not take 12 months (2 houses to sell buy buyers).
5. Borrow 202K against Peter's property at time of settlement (total) 400K.
6. I need a period of time (3-6 months) of good debt rating and I would be able to borrow the remainder of this year's ADJ and deposit that Peter has required plus also arrive at balance of 200K for settlement.
7. Wondered if I settled in 6 months would Peter consider at proportionate deduction of that 26K of balance (will be guided by you)
Matt if you can put this together for me I would much appreciate it."
49 These and other documents indicate that Mr O'Meara was capable of managing his affairs, planning in relation to his financial position, putting forward proposals, and negotiating on how to achieve the best outcome in relation to his properties and the contract with Mr Brennan. When viewed with the medical reports this material shows that Mr O'Meara was not mentally ill within the meaning of the clause, that is, his diagnosed condition was causing no impediment to the fulfilment of his contractual obligations.
(b) Did Mr O'Meara become mentally ill prior to completion?
50 Even if I am wrong in my first conclusion it is necessary to consider whether Mr O'Meara, prior to completion, became mentally ill. The clause does not say "die or is mentally ill". The word "become" indicates a change of state. The wording of the clause generally points to the "becoming" as a transition that takes place between the date of contract and completion although the clause does not expressly require it after the date of contract. However, if Mr O'Meara was relying on "becoming" mentally ill prior to the date of contract, he would come up against the principle that where a party deals with a mentally ill person (where the mental illness would otherwise avoid the contract ab initio) in good faith and for valuable consideration without knowledge of the mentally ill person's condition, the contract is good and cannot afterwards be set aside on the grounds of the mental illness: Molton v Camroux (1848) 2 Ex 487; 18 LJ Rep (Exch) 68, (affirmed 356). Mr O'Meara acknowledges that he did not disclose his mental illness to Mr Brennan or indeed anybody else at the time of entry into the contract.
51 If Mr O'Meara is otherwise entitled to say that he is mentally ill by reason of the diagnoses of Dr Ho and Dr Danesi with nothing more, it is clear from both of those doctors, from Dr Akkerman and even from Mr O'Meara's own acknowledgment, that his diagnosed mental illness has been present since at least 1997. In those circumstances it cannot be said that he has "become mentally ill".
52 However, Mr O'Meara submits that although he suffered from that mental illness for a lengthy period prior to the date of contract it was only when symptoms were worsened in or around November/December 2008, as a result of his altercations with Mr Rooke, that he became mentally ill. The difficulty with this submission is that it lacks any medical evidence to support the assertion. There is nothing to indicate how it was that Mr O'Meara was mentally ill in late 2008 and on 30 January 2009 simply as a result of things becoming worse for him. This again highlights, in Gzell J's terms, what becoming mentally ill must entail for the rescission rights to become operative, that is, an impediment to fulfilment of the contractual obligations.
53 In the light of the fact that all of the doctors conclude that Mr O'Meara's condition (however it is to be diagnosed and categorised) has been in existence for a lengthy period of time prior to entry into the contract, there is no evidence, medical or otherwise, to point to his becoming mentally ill after the date of contract and prior to completion.
(2) Penalty
54 The above conclusions are sufficient to determine the matter in favour of the Plaintiff. However, at the conclusion of the Plaintiff's submissions in reply Mr O'Meara said that he had a 2nd tier to his case. He claimed to be entitled to a refund of some of the monies he has paid to Mr Brennan as a result of his early occupation of the land. He claimed that he has paid pursuant to cl 47 of the contract the sum of $1000 per week plus GST for occupation and adjistment whereas a fair figure on a market basis was $500 per week. In those circumstances he claimed that the requirement to pay $1000 per week in cl 47 was a penalty. The cross-claim filed on his behalf by his solicitors made no such claim.
55 In his principal affidavit he set out all of the monies he has paid to Mr Brennan and he claimed a refund pursuant to cl 19 of the contract on the basis, it would seem, that his Notice of Rescission was valid. However, he added this:
"In calculating that amount that consists the deposit of $30,000 and a refund of one half of the amounts paid as "adjistment" pursuant to the contract. I am prepared to allow the vendor the amount of $500 per week as reasonable adjistment fees in the circumstances."
56 He had also made assertions elsewhere in his affidavit about what a reasonable fee for weekly adjistment would be and annexed a letter from an estate agent expressing that opinion without any evidence to support that opinion. That letter and the assertions in the affidavit were objected to and rejected by me on the basis that Mr O'Meara had no expertise on what the market for adjistment fees was and that, at least in the absence of an affidavit from the estate agent that would have enabled him to be cross-examined, his evidence was hearsay and should not be admitted. To the extent, in any event, that it purported to be expert evidence it fell a long way short of complying with the principles contained in Makita v Sprowles (2001) 52 NSWLR 705. It was a bald statement without reasons or assumptions being set out.
57 Notwithstanding there was no claim in the cross-claim for this or any other amount said to represent a penalty, bearing in mind that Mr O'Meara was unrepresented and that Mr Lockhart of Senior Counsel who appeared for Mr Brennan was not prejudiced or disadvantaged by this claim, I permitted it to be argued.
58 Clause 47.1 of the contract relevantly provides:
"Notwithstanding any other provision of this Contract, the Purchaser shall be permitted to enter into early occupation of the property one (1) calendar month after exchange of Contracts upon the following conditions:
47.1.1 The Purchaser shall pay to the Vendor direct occupation fees of $1000 (plus GST) per week quarterly in advance (i.e. $13,000 + GST) at the start of each quarter;