Clark v Zele

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

HEADNOTE [This headnote is not to be read as part of the judgment] Mr Clark and Mr and Mrs Zele entered into a contract dated 17 December 2021 ("Sale Contract") for the sale of Mr Clark's property located in Wyong, New South Wales (the "Wyong Property"). The completion date for the sale was 31 January 2022. Completion did not occur. Mr and Mrs Zele brought a claim seeking specific performance of the Sale Contract. In the alternative, Mr and Mrs Zele sought the return of a $150,000 deposit they had paid under the Sale Contract and other relief. On 11 July 2022, Parker J granted specific performance and declaratory relief in favour of Mr and Mrs Zele and reserved the question of damages. Parker J found (at [2], [11] and [37]) that the deposit under the Sale Contract had been wholly paid by Mr and Mrs Zele and that there was a valid and enforceable contract between the parties. On 24 October 2022, Parker J made further orders, noting that specific performance had become impossible. His Honour ordered that the matter be relisted before the Real Property List Judge. On 1 November 2022, Mr Clark purported to terminate the Sale Contract on the basis that Mr and Mrs Zele had not paid the deposit in full. On the same day, Mr and Mrs Zele served a Notice of Termination of the Sale Contract on the basis that Mr Clark's failure to complete the sale of the Wyong Property was a repudiation of the Sale Contract. On 14 June 2023, the matter came before Peden J to consider Mr and Mrs Zele's claims for damages and return of the deposit. During the hearing Mr and Mrs Zele abandoned their claim for damages. Mr Clark contended that Mr and Mrs Zele had not paid the deposit under the Sale Contract in full and were thus not entitled either to terminate the Sale Contract or to return of the deposit. He contended that he had terminated the Sale Contract and was entitled to keep the deposit paid. He submitted that the $150,000 purportedly paid as a deposit included an amount of $3,750 which had been paid as a 0.25% deposit under an earlier contract between the parties in November 2021 for the sale of the Wyong Property (the "Earlier Contract"). The Earlier Contract was rescinded during the cooling off period. Mr Clark contended that the $3,750 amount had been forfeited by Mr and Mrs Zele upon recission of the Earlier Contract by operation of s 66V of the Conveyancing Act 1919 (NSW). Thus, it could not form part of the $150,000 deposit under the Sale Contract. Peden J declared that Mr and Mrs Zele had validly terminated the Sale Contract on 1 November 2022 and ordered that the $150,000 deposit be returned to Mr and Mrs Zele. During the hearing Mr Clark did not resist Peden J making these orders including having regard to the reasons and orders of Parker J, but sought a stay on the release of the deposit. Peden J rejected that application but said that Mr Clark may make his own considered decision as to whether to seek a stay or some other order from the Court of Appeal. On appeal, Mr Clark contended that Peden J erred in making orders returning the deposit paid under the Sale Contract to Mr and Mrs Zele. Mr Clark did not appeal against the judgment or orders of Parker J. The Court (Stern JA, Payne and Kirk JJA agreeing) held, dismissing the appeal: Per Stern JA (Payne and Kirk JJA agreeing): (1) Mr Clark has not appealed, and does not seek to appeal, against the judgment or orders of Parker J. Thus, this Court must approach this appeal on the basis that, as found by Parker J, the full amount of the $150,000 deposit payable under the Sale Contract was paid by Mr and Mrs Zele, that having been part of his Honour's reasoning supporting the declaration made by him that there was a binding and enforceable agreement between the parties. Mr Clark cannot now contend that Mr and Mrs Zele did not pay that amount or that Mr and Mrs Zele were in breach of the obligation under the Sale Contract that they pay a 10% deposit: [45]. (2) Mr Clark did not resist Peden J declaring that Mr and Mrs Zele validly terminated the Sale Contract on 1 November 2022. A necessary predicate of that order was that the Sale Contract had not been terminated by Mr Clark before the termination by Mr and Mrs Zele on 1 November 2022. Otherwise Mr and Mrs Zele would not have been entitled to terminate the Sale Contract on 1 November 2022. It follows that Mr and Mrs Zele were entitled under cl 8.2 of the Sale Contract to recover the deposit that they paid under that contract: [46]. (3) Notwithstanding that he is a litigant in person, Mr Clark is bound by the conduct of his case below: [46] University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481, applied. (4) In any event, and whilst the dismissal of the appeal does not turn on this, the evidence before Peden J clearly established, consistent with the finding of Parker J, that the full $150,000 deposit under the Sale Contract was paid: [49]-[60].