These proceedings are concerned with entitlement to the deposit payable under a contract dated 4 May 2017 (the Contract) between the plaintiffs, Kersey and Yasmin Cooper as vendor (the Sellers), and the first defendant, Victoria King, as purchaser (the Buyer). The Contract was for the sale of land and improvements situated on Glencoe Street, Sutherland, NSW (the Sutherland Property). It is common ground that the Contract is no longer on foot. The dispute between the Sellers and the Buyer concerns the circumstances in which the Contract came to an end. That matter will determine whether the Buyer is entitled to have the deposit refunded to her.
The Contract was in the printed form of the 2005 edition approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales, together with additional provisions. The cover page of the Contract provided for a price of $1,080,000 and a deposit of $108,000. One half of the deposit was paid when the Contract was entered into, by two cheques for $27,000, one of which was drawn by the Buyer and the other of which was drawn by Christina King, the Buyer's sister, who has appeared for the Buyer in the proceedings.
The Contract named Coventry Conveyancing Services (Coventry Conveyancing) as the solicitors for the Sellers. The name and address of the Buyer was inserted as the Buyer's solicitor. The Contract named Gilbert Property Group Pty Ltd, trading as Greg Gilbert Real Estate (the Agent), as the agent of the Sellers.
Clause 9 of the printed form of the Contract relevantly provided that, if the Buyer did not comply with the Contract, or a notice under or relating to the Contract, in an essential respect, the Sellers would be entitled to terminate it by serving a notice. Clause 9 provided that, after such termination, the Sellers would be entitled to keep or recover the deposit, to a maximum of 10% of the price. Additional provision 8 of the Contract relevantly provided that, in the event that the Buyer defaulted in the observance of any obligation under the Contract the performance of which had become essential, the Buyer had paid a deposit of less than 10% of the purchase price and the Sellers terminated the Contract, then the Sellers were to be entitled to recover from the Buyer an amount equal to 10% of the purchase price, less any deposit paid, as liquidated damages, in addition to any other remedies available to the Sellers.
By their summons filed on 31 October 2017, the Sellers claim a declaration that the Contract has been validly terminated and a declaration that the deposit monies of $54,000 paid by the Buyer have been forfeited. The Sellers also claim an order for judgment against the Buyer in the sum of $54,000, for the unpaid part of the deposit. The Agent was named as the second defendant in the summons, which also claimed an order that the Agent pay the sum of $54,000 held by it as stakeholder less any commission or other amounts payable to the Agent. The Agent filed a submitting appearance to the summons.
In effect, the Buyer is the moving party. It is common ground that the Sellers are entitled to the relief sought in their summons unless the Buyer succeeds in the claims made by her in a cross-claim, which began as proceedings brought by her against the Sellers in the Local Court of New South Wales. Those proceedings were moved into the Equity Division and the statement of claim filed in the Local Court was treated as a cross-claim in the proceedings brought by the Sellers. The Buyer subsequently filed an amended statement of cross-claim, a further amended statement of cross-claim and a second further amended statement of cross-claim. The Agent was joined as a cross-defendant to the cross-claim. Although the Buyer originally sought substantive relief against the Agent, in the result, no substantive claim was pressed and the Agent filed a submitting appearance to the cross-claim.
In the final iteration of her statement of cross-claim filed on 14 December 2018 (the Cross Claim), the Buyer alleges that she was induced to enter into the Contract by misrepresentations made by the Sellers and claims several declarations in the alternative, namely, that the Contract was validly terminated on 13 July 2017, was validly rescinded on 31 July 2017 or was validly rescinded pursuant to the Conveyancing (Sale of Land) Regulation 2010 (NSW) (the Regulation). The Buyer also claims an order that the Agent pay to her the sum of $54,000, an order under s 55(2A) of the Conveyancing Act 1919 (NSW) (the Conveyancing Act) that the Sellers repay the sum of $54,000 or an order for relief against forfeiture of the deposit.
Section 55(1) of the Conveyancing Act relevantly provides that, in every case where specific performance of a contract would not be enforced against the purchaser by reason of a defect in the vendor's title, but the purchaser is not entitled to rescind the contract, the purchaser is nevertheless to be entitled to recover the deposit and to be relieved from all liability under the contract unless the contract discloses such defect and contains a stipulation precluding the purchaser from objecting to the defect. Section 55(2A) relevantly provides that, in any proceedings for the return of a deposit, the Court may, if it thinks fit, order the repayment of any deposit with or without interest. No facts are specifically pleaded in the Cross Claim in support of an order under s 55(2A) beyond the alleged misrepresentations and breach of warranty. In particular, no allegations are made in the Cross Claim that appear to be directed to any entitlement to relief against forfeiture.
Initially, the Buyer was self-represented. However, she was ultimately represented in the proceedings by her sister, Ms Christina King, who appeared as advocate at the trial. While Christina King is a solicitor, her conduct in the proceedings suggested that she has not had a great deal of experience in litigation. She was unable to appear on the day fixed for final oral argument and the parties asked that the Court decide the proceedings on the basis of written submissions without any further oral argument.
The Sellers relied on written submissions dated 18 November 2018. For the most part those submissions outlined the undisputed factual background to the failure of the Buyer to complete the Contract. It also addressed, in anticipation, the then version of the allegations made by the Buyer by way of cross-claim.
The Buyer relied first on submissions dated 14 December 2018, to which the Sellers responded by written submissions dated 18 December 2018. On 20 December 2018, the Court received submissions in reply on behalf of the Buyer. However, on 21 December 2018, the Court received, without any prior grant of leave, further submissions on behalf of the Buyer, which were said to provide material that had been inadvertently omitted. Since the additional material was effectively in support of the Cross Claim, I afforded the Sellers the opportunity of responding, which they did by submissions dated 11 January 2019. The written submissions filed on behalf of the Buyer made claims and allegations that went well beyond the pleadings. Bald assertions were made without reference to any of the evidence before the Court. More particularly, the written submissions made unfounded allegations of fraud that were not pleaded and were not the subject of any suggestion prior to the filing of the submissions.
[3]
The Buyer's Claims
The Sellers' case was essentially documentary. There was no dispute that the Buyer failed to complete in accordance with the Contract and that the Sellers gave notice of termination based upon repudiation by the Buyer. The Buyer's only answer is the Cross Claim.
The allegations made in the Cross Claim may be restated as follows:
1. On 4 May 2017, the Buyer entered into the Contract.
2. On 4 May 2017, the Buyer paid a deposit of $54,000 to the Agent.
3. The Sellers made the following representations concerning the Sutherland Property and each of the following was an essential term of the Contract:
1. the lower level accommodation was lawfully habitable;
2. the lower level accommodation was DA approved for use as accommodation;
3. the Sutherland Property could be used as a dual occupancy;
4. the Sutherland Property was DA approved for use as a dual occupancy;
5. the landing outside the kitchen was DA approved for use as a laundry;
6. the lower level accommodation could be separately rented from the upper level accommodation;
7. the lower level accommodation was DA approved for separate rental from the upper level accommodation;
8. the lower level accommodation could be rented for $350 per week;
9. the total rent able to be achieved for the Sutherland Property was $1100 per week.
1. Representations (i) to (vii) were made in public advertisements for sale of the Sutherland Property and representations (viii) and (ix) were made orally by Ms Sarah Street of the Agent on 28 April 2017.
2. …
3. …
4. …
5. …
6. The representations were false and misleading as:
1. the lower level accommodation is not DA approved for use as accommodation;
(iA) the lower level accommodation is not lawfully habitable;
1. the property is not DA approved for use as a dual occupancy;
2. the landing outside the kitchen is not DA approved for use as a laundry;
3. the lower level accommodation is not DA approved for separate rental from the upper level accommodation;
4. the lower level accommodation could not be rented for $350 per week;
5. the total rent able to be achieved on the Sutherland Property was not $1100 per week.
1. By making the representations, other than representations (xiii) and (ix), the Sellers breached the warranties contained in the Contract by the operation of s 52A(2)(b) of the Conveyancing Act and cl 8 and Pt 1 of Sch 3 of the Regulation.
2. By reason of the matters alleged in paragraph (9), the Sellers breached essential terms of the Contract and the Buyer became entitled to terminate the Contract.
3. In the alternative, the misrepresentations alleged in paragraph (9) gave the Buyer the right to rescind the Contract.
4. In the further alternative, the breach of the statutory warranty by the Sellers gave the Buyer the right to rescind the Contract pursuant to cl 16 of the Regulation.
5. …
6. The Buyer would not have entered into the Contract if she had been aware that the representations were false and misleading.
7. The Buyer elected to terminate the Contract by notice dated 13 July 2017.
8. In the alternative, the Buyer elected to rescind the Contract by notice dated 31 July 2017.
9. The Buyer is entitled to a refund of the deposit.
10. …
11. …
12. The Buyer has suffered loss of the deposit to $54,000.
It is significant that, by cl 1 of the additional provisions included in the Contract, the Buyer acknowledged that she did not rely upon any warranty or representation made by the Sellers or any person on behalf of the Sellers except as expressly provided in the Contract and that she had relied entirely on her own inspection of, and inquiries relating to, the Sutherland Property. It is common ground that neither the Buyer nor anyone acting on behalf of the Buyer conducted an inspection of the Sutherland Property prior to the Contract being entering into.
[4]
Termination of the Contract
On 13 July 2017, the Buyer sent a letter to Coventry Conveyancing purporting to terminate the Contract. The letter was headed "Without prejudice" and asserted that the Buyer was induced to enter into the Contract by misrepresentations made by the Sellers "via their agent". The letter asserted that the alleged misrepresentations were "essential terms" of the Contract and that the Buyer relied on the misrepresentations to her detriment. The letter ended by asserting that, if the Buyer did not receive a refund of the deposit plus interest plus $50,000 for damages and compensation by 5pm on 18 July 2017, the Buyer would "pursue all avenues for redress".
Typing in the Contract specified 28 June 2017 as the date for completion. However, that date was ruled through in handwriting and "10 WEEKS" was handwritten in its stead. That alteration was initialled by the Buyer. Thus, the date for completion of the Contract was 10 weeks from the date of the Contract.
On 17 July 2017, a document dated 14 July 2017 entitled "Notice to Complete" was delivered to the Buyer personally. On the same day, an email was sent to the Buyer attaching a copy of the notice to complete. By the notice to complete, the Sellers gave notice to the Buyer that they required the Buyer to pay the balance of purchase money and complete the Contract in accordance with its terms on 2 August 2017 and that, in that respect, time was of the essence. The notice to complete appointed 3pm on 2 August 2017 at the office of SAI Global, 60 Castlereagh Street, Sydney as the time for completion and stated that, if the Buyer failed to comply with it, the deposit paid by her would be forfeited and the Contract would be terminated.
On 19 July 2017, Willis & Bowring, the Sellers' solicitors, wrote to the Buyer confirming that Coventry Conveyancing continued to be the Sellers' conveyancer and would be in contact with respect to organising settlement of the sale due to occur on 2 August 2017. The letter asserted that, pursuant to the Contract, the completion date was 13 July 2017, being 10 weeks from the date of exchange. After referring to various communications, to which I shall refer below, the letter from Willis & Bowring stated that the Sellers had elected to affirm the Contract and to proceed with settlement at 3pm on 2 August 2017.
On 25 July 2017, Willis & Bowring wrote to the Buyer again, referring to their letter of 19 July 2017 and to emails received from the Buyer. Willis & Bowring repeated the Sellers' position that they elected to affirm the Contract and expected that the Buyer would be ready, willing and able to complete at 3 pm on 2 August 2017.
On 27 July 2017, Coventry Conveyancing wrote to the Buyer noting that settlement had been booked for 3pm on 2 August 2017. The letter enclosed a settlement sheet giving directions for the payment of the balance of the purchase price.
On 27 July 2017, the Buyer sent an email to Willis & Bowring saying that she had lodged a caveat and hoped that the matter could be resolved without the need for litigation. At some time on or after that day, the Buyer lodged a caveat in respect of the Sutherland Property. By the caveat the Buyer claimed "beneficial/equitable interest" in the Sutherland Property by virtue of the Contract.
On 28 July 2017, Willis & Bowring sent an email to the Buyer saying that it was assumed that the lodging of the caveat indicated that the Buyer intended to fulfil her obligations under the Contract. The letter noted that the Buyer had been provided with cheque directions in preparation for settlement and confirmed that settlement was scheduled to occur at 3pm on 2 August 2017.
On 31 July 2017, the Buyer sent an email to Coventry Conveyancing attaching a document described as "Notice of Rescission". The attached document, which was headed "Without prejudice", purported to be notice of rescission of the Contract pursuant to s 52A(2)(b) of the Conveyancing Act and cl 16(1)(b) of the Regulation. The document asserted that the Sellers had, inter alia, breached the warranty contained in the Regulation to the effect that, as at the date of the Contract and except as disclosed, there was no matter in relation to any building or structure on the Sutherland Property that would justify the making of any upgrading or demolition order or, if there was such a matter, a building certificate had been issued in relation to the building or structure since the matter arose. The document asserted that there were "several non-DA approved buildings/structures" on the land that would justify the making of an upgrading or demolition order. The documented ended by requesting refund of the deposit pursuant to cl 18(1) of the Regulation by 2 August 2017.
On 1 August 2017, Wills & Bowring wrote to the Buyer in response to her letter of 31 July 2017 saying, inter alia, that the Sellers elected to affirm the Contract and confirmed that the Sellers were ready, willing and able to fulfil the obligations at 3pm on 2 August 2017. The letter also referred to the Regulation and attached a building certificate issued by Sutherland Shire Council dated 19 January 1989. By the certificate, the Council certified that, in relation to the building on the Sutherland Property, the Council would not:
make an order under s 317B of Local Government Act 1919 (NSW) (Repair or demolition of existing buildings) in relation to the building or part,
take proceedings for an order or injunction requiring the demolition, alteration, additional rebuilding of, to the building or part, or
take proceedings in relation to any encroachment by the building or part onto the relevant land vested in or under the control of the Council.
The building certificate contained a note that the lower ground floor area had been assessed as "non-habitable rooms".
From 2pm until 3.25pm on 2 August 2017, Mr Alex Doenau, a registration clerk acting for the Sellers, attended the office of SAI Global. Neither the Buyer nor any representative of the Buyer was present at that office during that time. At 3.25 pm, Mr Doenau telephoned the Buyer and asked whether anyone would be attending settlement. The Buyer replied that the Contract had been rescinded.
On 3 August 2017, a document entitled "Notice of Termination" was left at the Buyer's address on behalf the Sellers. A copy of the document was sent by email to the Buyer at 3.47pm on 3 August 2017. By the document, the Sellers gave the Buyer notice that the Contract was terminated and that the deposit held by the Agent was forfeited. The notice required the Buyer to pay the balance of the deposit of $54,000 within seven days.
On 10 October 2017, Wills & Bowring wrote again to the Buyer, noting that the Contract had been terminated and requesting that the Buyer forward written authorisation to the Agent for the Agent to release the deposit in the sum of $54,000 currently held. The letter also requested payment of the balance of the deposit within 14 days.
[5]
The Evidence
The Buyer relied on affidavits sworn by her on 25 January 2018 and 27 August 2018. The Buyer prepared the affidavits herself and there was little in them that was admissible. The Buyer's affidavit evidence-in-chief was supplemented by oral evidence, She was cross-examined by counsel for the Sellers.
In addition to formal affidavits of service, the Sellers relied on an affidavit sworn by the first plaintiff, Kersey Cooper, together with affidavits sworn by Ms Sarah Street on 28 February 2018 and 16 November 2018. Ms Street is a licensed real estate agent in the employ of the Agent. As I have said, while the Agent was a party to the proceedings, in the result it submitted to such orders as the Court may make, save as to costs. It was joined only as the stakeholder under the Contract. Accordingly, Ms Street had no interest in the outcome of the proceedings.
[6]
The Buyer's Evidence
The Buyer said in her oral evidence that she initiated a conversation with Ms Street on 8 April 2007 because she was interested in purchasing the Property. She said that she contacted Ms Street to find out "how the sales campaign was going" and to ask her how much interest there was in the Property and the expected price. Importantly, she said that she asked Ms Street how much the Property would rent for and that Ms Street advised her that the upper level of the Property would rent for approximately $750 a week and the lower level of the Property could rent for about $350 a week. She said that Ms Street told her that the lower level was separate self-contained accommodation.
The Buyer said that she had another conversation with Ms Street at about the same time but could not remember the date. She asserted that she spoke to Ms Street again asking if the expected price range had changed. Her evidence was that the price that Ms Street advised her that the Property would sell for was "pretty much the same". She said that she asked Ms Street about the level of interest and how many purchasers were interested in the Property. She said that she told Ms Street that she was very interested. The Buyer also said that she saw an advertisement for the Property in which the Property was advertised as having four bedrooms and two bathrooms with a "floor plan" that had lower-level self-contained accommodation. She asserted that she "relied on the representation" in the advertisement that there was self-contained accommodation and that there were four bedrooms and two bathrooms. She said that she had observed that one of the bedrooms and one of the bathrooms were contained in a lower-level self-contained accommodation and she concluded that the upstairs could be rented and that the downstairs could be rented as well.
There was considerable confusion in the Buyer's evidence as to the plan that she said she had seen. Ultimately, she said that she saw an advertisement in a local newspaper and on the Agent's website. She said that she had a copy of the advertisement that she had seen in the local newspaper but it was not tendered. She asserted that she looked at the website prior to entering into the Contract but had not made a snapshot of the website that she looked at. Her evidence was that she looked at the Agent's website and saw a floor plan that included upstairs accommodation and downstairs accommodation. She asserted that it was a full floor plan and that she accessed it on 28 April 2017 as well as prior to that date. The Buyer was shown a floor/site plan, which she said she saw at the relevant time (the Floor Plan). The document that she identified is set out in Appendix 1 to these reasons. The Buyer asserted in the course of her oral evidence that it was "very important" to her that she saw the Floor Plan, an assertion that was not responsive to any question.
The Sellers accepted that the Floor Plan was accessible on a website of the Agent prior to the Contract being made. They also accepted that a link to the website had been sent to Christina King. However, they did not concede that it had been seen by the Buyer.
The Buyer then said that she saw text on the website that stated that there was separate self-contained accommodation, that there were four bedrooms, being three bedrooms upstairs and one bedroom downstairs, that there was a bathroom upstairs and a bathroom downstairs, that there were two kitchens, with one upstairs and a kitchenette downstairs, and that downstairs had a separate entry. She asserted that she saw words stating that "it could be separate self-contained accommodation". The text that was part of the advertisement that the Buyer claims to have seen is set out in Appendix 2 to these reasons.
The Buyer also said that she saw icons in an advertisement that showed four bedrooms, two bathrooms and two parking spaces and that she looked at the Floor Plan to cross-reference where the bedrooms and bathrooms were located. She asserted that she located three bedrooms upstairs and one bedroom downstairs, which, she said, was confirmed by the Floor Plan. She also asserted that the Floor Plan showed a living area, a kitchenette and a bathroom and stated "separate self-contained accommodation" and that she paid particular attention to the wording "separate self-contained accommodation". She accepted that those words were not on the Floor Plan but asserted, nevertheless, that she saw them on the Agent's website in a few places.
When asked why she was interested in purchasing the Property, the Buyer responded that she was eight-months pregnant at the time and was looking at having a family home in the future. She also said she was interested in the rental potential of the Property, so she could rent it out at first and then move into it. She also asserted that she was interested in some separate self-contained accommodation as she was planning on more than one child and possibly for a nanny. She also said that she had elderly parents and was looking at possibly having them live with her in separate self-contained accommodation. She asserted that she was going to rent out the property so the upstairs rental would be separate and the downstairs rental would be more affordable. She again asserted that she was very interested in the downstairs being separate living.
The Buyer then launched into evidence, without objection, about statements made by Ms Street. The Buyer asserted that Ms Street said to her:
"It could be separate self-contained accommodation, you could certainly live in it".
The Buyer asserted that she based her decision to purchase the Property on what Ms Street told her and on what she saw in "the print campaign" in the local newspaper and on the Agent's website. She again asserted that Ms Street "told me these things". When asked in chief whether she would have bought the Property if it did not have "those features" she responded "No".
The Buyer gave evidence that she spoke to Ms Street on 28 April 2017 and asked her about the accommodation in the Property and whether it would be able to be used as a dual occupancy. She asserted that Ms Street advised her that the levels could be rented separately as the top level was separate to the bottom level. The Buyer also gave evidence that she had a telephone conversation with Ms Street on 4 May 2017. She said nothing new was said on 4 May 2017 that had not already been said on 28 April 2017 and that the content of the conversation was "just pretty much the same".
The Buyer agreed in cross-examination that, at the time when she was considering the purchase of the Property, she owned at least three other properties, two of which were situated in Narwee and the third of which was situated in Brighton-Le-Sands. On 4 June 2017, the Buyer sent an email to Mr Cameron Wiles, a finance broker, in which she said she wished to determine the maximum amount she was able to borrow from any lender for investment. After describing a property at Cronulla, the Buyer said that she had purchased "a similar site (house on land) that could also have a duplex built". She said that the price was $1,080,000and with "duplex build total project worth $2,800,000". She said that the purchase was to settle on 13 July 2017. Thus, it is fairly clear that the Buyer was referring to the Contract, since the date fixed for the completion of the Contract was "10 weeks". After briefly describing her liabilities, the Buyer said that she believed she would have equity available in the two Narwee properties and the Brighton-Le-Sands property, which she said were worth $1,600,000, $1,250,000 and $700,000.
The Buyer was asked in cross-examination whether, in the process of purchasing a property, it was important to inspect it. She responded as follows:
"You could inspect it, or somebody else could inspect it on your behalf, or you could look at print advertisements and rely on those, or you could rely on oral - what someone had told you, which is what I did. So I don't necessarily agree you have to physically inspect a property to purchase it, and I think you can rely on the words of a licensed real estate agent and you can also rely on the print campaign of a licensed real estate agent, and take them at their word."
The Buyer then asserted that it was not important to inspect a property on which she was going to spend in excess of $1 million. She agreed that in purchasing a property it could be important to have a building report or a pest report but said that it may not be important depending upon what she was thinking at the time, whether she wanted to spend the money or not. She said that was something she may or may not do.
It is significant that, in an iteration of the Cross Claim, which was dated 7 November 2018, the Buyer claimed to have suffered damage due to the alleged misrepresentations, which she particularised as follows:
"[C]osts associated with preparation of DA for the property, including: architectural plans, AHD survey report, hydraulics support, geotechnical report, basix report, town planner report, landscape report."
When asked to produce any documents relating to that claim, the Buyer failed to do so. When asked in cross-examination about the claim, the Buyer asserted that the claim was made in error. She asserted that she was thinking of another property at the time when the claim was made. Cross-examination in relation to that matter is an example of the prevarication of the Buyer when answering questions. The relevant parts of the transcript read as follows:
Q. Through your solicitor that, through your sister you filed that cross-claim, the claim to claim those things?
A. Yes, in my error.
Q. So you did file it though?
A. It was filed but I made a mistake with the properties. I was thinking of another property at the time.
…
Q. With preparation, when the preparation of DA was that referring to a development, preparation of a development application.
A. No.
Q. Preparation of development approval?
A. No.
Q. What does DA stand for in your words?
A. I made a mistake, those terms that I was using, it was not in relation to this property. When I was speaking to my lawyer I was getting confused with the property. I was not well at the time and I made a mistake, so it was wrong and that is why it is not relied on, it was my error that it partly relied on, and it is incorrect.
Q. Ms King, the question I asked you is this. What do you mean by DA, does it mean development application or development approval.
A. A development application.
Q. So you were claiming costs associated with the development application for the properties.
A. As I have stated, no, I was not doing an application for that property, it was an error, it was my mistake, I had given birth to a second premature baby not long before then, and I was confused at the time as to what property I was referring to.
Q. What property do you say now that you were referring to?
A. I was not referring to that property … I was referring to something else … It was not that property, it was a property at Narwee.
…
Q. You were directed by this Court, weren't you, Ms King, to produce for inspection by the other parties, by way of discovery any draft DA application together with the other documents referred to at paragraph 22(iii).
A. Yes.
Q. You did not produce any of those documents, did you?
A. No, as I said, I don't know how many times.
…
Q. And so the documents do exist, don't they?
A. No.
Q. But they do exist in relation to another property, is that you what you are saying to this Court?
A. You are asking for a document in relation to [the Property] exist, they don't exist.
Q. You are telling this Court that the documents that you referred to at paragraph 22(iii) were in relation to a property at Narwee?
A. I'm telling the Court I was mistaken in, whether there were any documents, I was getting confused at the time. There was no documents or DA [for the Property], it was my error, it was a mistake.
…
Q. You told us were you confused, the answer is yes.
A. No in total, there were documents, a DA preparation for a property in Narwee, but not, as I said it is an error, it was not that property.
Q. And you have not produced to the Court any of those documents in relation to the Narwee property.
A. Well, it is [the Property], there are no documents in relation to [the Property]. The Court did not ask me to produce documents on the Property, even if there are documents or not, the point is, it was an error on my part, I got confused at the time, which I have apologised for, there were no documents for [the Property].
…
Q. I suggest that whether or not you had lodged any documents with Council, you had incurred costs and prepared documents in relation to or for the purpose of obtaining a DA in relation to the [Property]?
A. No.
Q. And you had done that because your intention was to knock down the Property and build duplexes on it.
A. No, because as I have said, no.
That is an indicative example of the approach of the Buyer in her evidence. I have no confidence at all that her evidence is credible.
[7]
Ms Street's Evidence
Ms Street said in her first affidavit that she was appointed by the Sellers for the sale of the Property on 27 October 2016 and at all times had principal carriage of the sale of the Property on behalf of the Sellers. On 3 April 2017 the Sellers instructed that the Property be advertised on the Agent's website. The advertisement consisted of the Floor Plan and the Text. Ms Street said that the advertising campaign for the Property commenced online on 3 April 2017 and that advertisements for the sale were accessible on the Agent's website as well as on the "domain.com.au" and "real estate.com.au" websites.
On 11 April 2017, Ms Street received an inquiry regarding the Property from the "domain.com.au" website. On that day, Ms Street sent an email to Christina King thanking her for her inquiry about the Property and providing a link "to inspection times, pricing, the contract for sale and further information for this property". The link contained in that email is to a "web book", which is an electronic document containing information relevant to the Property, including the Floor Plan and the Text. In the email, Ms Street thanked Christina King for contacting the Agent and said that she looked forward to assisting "you in your search for a new property".
On 11 April 2017, Christina King sent an email to Ms Street requesting that she advise of a "price guide" as soon as one was known. Later on the same day, Christina King sent another email to Ms Street asking if there was a survey, saying that none was attached to the draft contract. Thus, it is clear that Christina King had seen a draft of the Contract at that time.
On 15 April 2017, Christina King sent an email to Ms Street saying:
"Any update on price? Any offers yet?"
Ms Street responded on 17 April 2017 saying that nothing had changed "since our last conversation". She said:
"We have a number of buyers coming back for second inspections this week. I will keep you updated."
On 19 April 2017, Christina King sent a further email to Ms Street saying:
"Please advise price guide ASAP
Auction only one week away & I need to
Organise finance.
Thanks very much"
Ms Street spoke to Christina King by telephone on 28 April 2017 and had a conversation to the following effect:
Ms Street: I notice you are interested in purchasing the Property. Would you like to come and inspect the Property?
Christina King: No, we do not need to inspect the Property. We have driven past the Property. We are interested in the Property only for the purposes of demolishing the building and rebuilding a duplex structure.
Ms Street: Would you like to purchase a building and pest report for $50?
Christina King: No.
On 29 April 2017, Christina King spoke to Ms Street by telephone again and asked whether the owner of the Property would consider an extended settlement period for the purpose of lodging a development application to the Council. Ms Street said that she would have to ask the Sellers.
Within the web book is a letter dated "April 2017" addressed "to whom it may concern". The letter was headed with a reference to the Property and was in the following terms:
"With regards to your request for a rental appraisal at [the Property] we would like to make the recommendation of $650 - $700 per week. This figure is purely an opinion and a guide only, determined by evaluating the current market demand, equivalent property rental figures and the overall presentation of the Property. If further clarification is required you can contact me on [mobile telephone number].
Ms Street said that that letter was the only letter in relation to the Property that was sent to either the Buyer or Christina King prior to the Contract being entered into on 4 May 2017.
On 5 May 2017, the day after the Contract was entered into, the Buyer sent an email to Ms Street saying as follows:
"Thank you for your assistance last night.
I would appreciate if you could email me with a rental appraisal letter for [the Property]. This letter would be for the mortgage broker for the purposes of the loan only, and not to be relied upon for rental.
I would appreciate if the house rental could be at least $1000 per week and the granny flat - $500 per week.
Please advise the maximum rental amounts.
I would appreciate if you could provide this email asap."
Ms Street replied later on 5 May 2017 by email saying as follows:
Please find attached two separate rental letters, one being for the house and the other for the self-contained accommodation. These figures have been provided throughout the course of the campaign and advertised at the open equivalent to the current market demand."
Each of the attached letters was dated 5 May 2017. The first letter was in the following terms:
"With regards to your request for a rental appraisal at [the Property] we would like to make the recommendation of $750.00 per week for the 3 bedroom home. This figure is purely an opinion and a guide only, determined by evaluating the current market demand, equivalent property rental figures and the overall presentation of the property."
The second letter was in identical terms except that it referred to a recommendation of $350 per week for "the self contained one-bedroom accommodation".
Later on 5 May 2017, the Buyer sent a further email to Ms Street saying as follows:
"As advised, my request was for the purpose of the mortgage and not for actual rental purposes. Would you be able to increase these figures at all? Perhaps there would be a range that house like this could rent for, in a hotter market, such as $750 - $900. Same with the granny flat, say a range of from $350 - $475. Would you [be] able to email such letters?"
Notwithstanding the statements in the letters, there was no evidence that any rental figures had been provided during the course of the campaign save for the letter addressed "to whom it may concern", to which I have referred above. In cross-examination, Ms Street said that the figures she provided during the course of the campaign were in the web book. She said that the figure provided in the course of the campaign in the web book and to any potential buyers and "on display at open homes" was $650-$700. She said that the only figures that she provided were in the web book, being the letter addressed "to whom it may concern". Ms Street asserted that no other figures were provided throughout the campaign.
For the purposes of allowing prospective buyers to inspect the Property, "open homes" were conducted by the Agent on seven days in April 2017 and on 3 May 2017. The Buyer did not attend any of the "open homes", did not arrange for an inspection to be conducted by her and did not arrange for an inspection to be scheduled for the purpose of conducting a building or pest report with respect to the Property. However, on 6 May 2017, after the Contract had been entered into, Ms Street received a telephone call from Christina King who said "we would like to come and inspect the Property". Ms Street replied that she would contact the Sellers for a suitable time. Ms Street subsequently made an appointment for Christina King and the Buyer to inspect the Property on 6 May 2017 at 3pm. However, at about that time, Ms Street received a telephone call from Christina King saying:
"Unfortunately we will not be able to attend today's inspection. However, our parents are available to meet you. May they inspect the property for us?"
At around 3pm on that day, Ms Street showed the Property to the parents of the Buyer and Christina King. Neither of them gave evidence.
[8]
Resolution of the Issues
There is some overlap in relation to the representations. As is apparent from the above, there is a degree of tension between the pleadings and affidavits, on the one hand, and the oral evidence given by the Buyer, on the other. I shall deal with the issues separately.
[9]
Alleged Oral Representations
The Buyer's evidence was not compelling and, to the extent that it was inconsistent with the evidence of Ms Street, I prefer Ms Street's evidence. In cross-examination, the Buyer was argumentative, asked questions and made observations that were unresponsive to questions put to her. More specifically, on several occasions, the Buyer was given the opportunity to give evidence of everything she could recall about alleged conversations with Ms Street. The version given by her was vague and imprecise and lacked the detail that would be expected from someone who had an actual recollection of conversations that she regarded as being of some importance. For example, the Buyer gave no evidence in her version of the conversation of having referred to the Property despite never having spoken to Ms Street previously. She gave no evidence of introducing herself to Ms Street or referring to Ms Street's dealings with Christina King. That is all the more problematic in the light of the email sent by Christina King to Ms Street on 24 April 2017, in the following terms:
"Spoke with Victoria [K]ing (name of purchaser). Offer $1.1 million, 5% deposit, 5 1/2 month settlement. Offer expires 5pm 25.4.17."
The involvement of Christina King in the transaction is unclear. In that context, it is curious that one half of the 5% deposit was paid by a cheque drawn by Christina King while the other half was paid by a cheque drawn by the Buyer. There were several emails between Christina King and Ms Street prior to the Contract being entered into, but there was no evidence of any email between the Buyer and Ms Street. In particular, for example, there is no email referring to any conversation between them that might corroborate the evidence given by the Buyer.
Apart from the Buyer's evidence of her alleged conversation with Ms Street on 28 April 2017, there was no evidence that any appraisals such as are referred to in the letters of 5 May 2017 were provided during the sales campaign for the Property. Christina King, with whom Ms Street communicated on several occasions before 4 May 2017, was not called to give evidence, for example, of any appraisal sent to her. Having regard to the context in which Ms Street sent the appraisals, being an appraisal sought solely for the purposes of an application for finance, I consider that the statement that "these figures" had been provided "throughout the campaign" was erroneous. It may be that they were added by Ms Street to add a degree of verisimilitude to support an application for finance, although that was not put to any of the witnesses.
Ms Street was adamant that no conversation took place between her and the Buyer prior to the auction and denied that she made the representations alleged. It was suggested to Ms Street in cross-examination that the telephone conversation that she said she had with Christina King on 28 April 2017 could really have been a conversation with Victoria King. Ms Street rejected the suggestion. Ms Street was not challenged as to the conversation she reported having had with Christina King on 29 April 2017. It is significant that the Buyer's emails of 5 May 2017 make no mention of any conversation by her on 28 April 2017. I conclude that there was no such conversation.
On numerous occasions, the Buyer attempted to avoid answering questions directly, giving rise to an inference that she believed that the answers to the questions might be damaging to her case. The Buyer initially denied that Christina King undertook negotiations with Ms Street on her behalf in relation to the Property. Only after being taken to an email of 30 June 2017 did she agree that Christina King had undertaken negotiations on her behalf. In that email, sent by Christina King to Coventry Conveyancing, Christina King said as follows:
"As you appreciate, 'you' can be singular or plural. Both Victoria King & Christina King reasonably relied on this advice to apply to Victoria King as purchaser, Christina King as purchaser, or both Victoria and Christina King as joint purchasers. There would be no reasonable ground for vendor to prefer Christina King over Victoria King- vendor had no previous knowledge or acquaintance with either sister. An extension applied to one would reasonably apply to the other. At no time were either Christina or Victoria King advised that 12 week completion did not apply to Victoria. Christina King undertook the negotiations on behalf of Victoria King and applied for extension on behalf of Victoria. We are preparing for completion date of 27.7.17 and will shortly forward transfer document."
The email sent by Christina King to Ms Street on 24 April 2017, offering to pay $1.10 million, also confirmed the involvement of Christina King in negotiations.
Apart from the Buyer's assertions, the only contemporaneous evidence of any communication with Ms Street is of the emails between Christina King and Ms Street prior to the Contract being entered into. It appears that the Buyer spoke to Ms Street on the day of the Contract but I am not persuaded that there was any discussion between the Buyer, on the one hand, and Ms Street, on the other, concerning either the physical state of the Property or its suitability, either legally or physically, for separate accommodation in the lower floor. I am satisfied on the evidence that there was no discussion between the Buyer, on the one hand, and Ms Street, on the other, concerning possible rental values of any part of the Property, prior to the exchange of emails that occurred after the Contact been entered into.
The Buyer appears to be an experienced purchaser of real property. At the time of entering into the Contract, she owned three other properties which she informed Mr Wiles, in the email of 4 June 2017, were worth $1,600,000, $1,250,000 and $700,000. As at that date, the Buyer had also entered into a contract to buy a property at Cronulla for $1,635,000. It is highly improbable that a purchaser of the Buyer's experience, if relying on alleged representations made in a one-off conversation with an agent, would not have taken some steps to confirm what she had been told or to make further inquiries of her own as to the relevant matters, before entering into a legal commitment such as the Contract. In that context, it is highly significant that the Contract contained an acknowledgement by the Buyer that she did not rely on any warranty or representation except as expressly provided in the Contract and that she relied entirely on her own inspection and inquiries.
The Cross Claim asserts that the rental representations, (viii) and (ix), were made orally by Ms Street. The Cross Claim does not suggest that any oral representation was made by Ms Street in relation to the Property itself. I am quite firmly persuaded that there was no conversation between the Buyer and Ms Street prior to the making of the Contract that constituted any of the representations alleged in the Cross Claim. While the Buyer gave oral evidence of the representations, I do not accept that such representation was made orally. For reasons outlined above, I am firmly satisfied that no such representation was made by Ms Street. It follows that the Cross Claim, in so far as it is based upon representations (viii) and (ix), cannot succeed.
[10]
Alleged Written Representations
The Buyer's case in relation to representations (i) to (vii) is dependant wholly upon the advertisements. In the light of the express provisions of the Contract, containing acknowledgements by the Buyer that she did not rely on any warranty or representation made by the Sellers or any person on behalf of the Sellers and that the Buyer relied on her own inspections, knowledge and inquiries and that she did not rely on any warranties or representations made to her by or on behalf of the Sellers, it is well-nigh impossible for the Buyer to make out any misrepresentation case. In addition, cll 6 and 7 are relevant in that regard.
Under cl 6 of the Contract, the Buyer could claim compensation for an error or misdescription as to the Property in the Contract, the title or anything else and whether substantial or not. Under cl 7, the Buyer could make such a claim before completion only by serving the claim with a statement of the amount claimed. If the Buyer made one or more claims before completion, the Sellers could rescind if the total amount claimed exceeded 5% of the price and the Sellers serve notice of intention to ascend. Under cl 7.2, if the Sellers did not rescind, the parties were required to complete. In addition, cl 10 of the Contract relevantly provided that the Buyer could not make a claim or requisition or rescind or terminate in respect of a promise, representation or statement about the Contract, the Property or the title not set out or referred to in the Contract. In that regard, it is also relevant that the Floor Plan contains a disclaimer to the effect that it is "for illustrative purposes only" and did not "constitute part of any legal documents". The Buyer made no attempt to rely on those provisions.
The part played by Christina King gives rise to a further difficulty for the Buyer in establishing that she relied on any alleged representation. The email of 30 June 2017 stated that Christina King undertook the negotiations on behalf of the Buyer. Further, Ms Street gave uncontested evidence that she asked Christina King whether she would like to come and inspect the Property and was told that "we are interested in the Property only for the purpose of demolishing and rebuilding a duplex structure".
The Cross Claim alleges that the representations were made in the advertising material. The Buyer's submissions assert that the advertising material did not state that the use of the lower level as self-contained accommodation was subject to Council approval, that the lower level had been determined to be non-habitable and that the upper level laundry was subject to Council approval. They are not the representations alleged. In any event, there was no evidence that the use of the lower level accommodation was subject to Council approval or that the lower level accommodation had been "ordered" as non-habitable, as alleged, or that approval was required for the use of the upper level laundry.
More significantly, it is difficult, if possible at all, to find any of the alleged representations in the advertising material relied on by the Buyer. The submissions provided on behalf of the Buyer are unhelpful in identifying the alleged representations in that no attempt was made on behalf of the Buyer to identify precisely where the alleged representations were made in the public advertisements. The submissions allege that what is asserted is depicted by the advertising material, but do not actually identify to precisely what advertising material was being referred.
There is nothing in the advertising material to suggest that the Property was zoned for dual occupancy, which the Buyer contends was the matter that was of particular concern to her and about which she spoke to Ms Street. Much of the submissions refer to matters about which the Buyer gave no evidence of reliance. In particular, submissions relating to a laundry on the lower level are unsupported by any evidence.
In that regard, the building certificate dated 19 January 1989 stated that the ground floor area "has been assessed as non-habitable rooms". It does not follow that the lower level, including kitchen, bathroom and two other rooms described in the Floor Plan as living and bedroom, did not exist or that they physically could not be used. No attempt has been made to demonstrate what, if any, consequences flow from the Council's assessment that the ground floor has non-habitable rooms.
The objective evidence suggests that the Buyer's intention at the time when she entered into the Contract was to knock down the building on the Property and build duplexes, rather than to live there with her parents or to rent the lower level as she asserted in her oral evidence. In that context, it is relevant that neither the Buyer nor Christina King inspected the Property before the Contract was made, although their parents apparently inspected the Property afterwards. No steps were taken to obtain a building or pest report, something that might be thought to be of significance if the Buyer intended to occupy the Property with her family and her parents.
More specifically, Ms Street gave evidence that, on 28 April 2017, Christina King told her that they did not need to inspect the Property and that they were interested in the Property only for the purposes of demolishing and building a duplex structure. On 29 April 2017, Christina King asked Ms Street whether the Sellers would consider an extended settlement period for the purpose of lodging a development application. The evidence as to the 29 April 2017 conversation went unchallenged, and the 28 April 2017 conversation was challenged only by the suggestion that the conversation could have been with Victoria, rather than Christina, King. Those statements are hardly consistent with an intention or desire to live in the Property with family and parents.
Further, shortly before the Contract was entered into, Coventry Conveyancing sent an email to Christina King saying:
"Should you be the successful bidder at the auction the completion date will be altered to 12 weeks. The Vendors will accept a 5% cash deposit or 10% Deposit Guarantee Bond. The Vendors will sign a letter of consent to lodge plans with the various authorities but will not consent to access unless appropriate insurance policies are sighted."
I have referred above to the email sent by the Buyer to the finance broker on 4 June 2017 referring to proposals for building a duplex. I have also referred above to the proposed amended cross-claim of 7 November 2018, which claimed damages consisting of costs incurred in preparing a development application and associated documents. I have set out above the Buyer's evasive answers in dealing with her failure to produce documents.
Notwithstanding the notice of 13 July 2017, which purported to terminate the Contract, the Buyer executed a loan account authority to Commonwealth Bank of Australia, suggesting that, as at that date, she was intending to proceed with a loan from Commonwealth Bank and to grant a mortgage over the Property in favour of Commonwealth Bank. The Buyer did not tell her broker that she was not proceeding with the Contract. Having been informed on 25 July 2017, by an email from her finance broker, that finance to purchase the Property had been approved and that Commonwealth Bank was ready to arrange settlement, the Buyer did not inform either her broker or the Commonwealth Bank that she was not intending to proceed with the purchase.
The caveat is also a difficulty for the Buyer. The caveat claims a "beneficial/equitable interest" in the Property by virtue of "contract for the sale of land dated 4-5-2017". The Buyer sought to dismiss the significance of the caveat on the basis that she was self-represented and did not fully understand her position. I find that difficult to accept. The Buyer gave the impression of being an intelligent woman who would understand the inconsistency of saying, on the one hand, that she had terminated the Contract but, on the other, claiming an interest under the Contract. When the Sellers' solicitors made clear to the Buyer that they viewed the lodging of the caveat as an affirmation of the Contract, the Buyer took no steps to explain to the Sellers' solicitors that she was not intending to claim an interest in the Property.
In the notice of 31 July 2017 purporting to rescind the Contract, no mention was made of any alleged representations. That is another reason for concluding that they did not operate on the Buyer's mind in the way that she alleged in her oral evidence. As late as 10 October 2018, the Buyer sent a letter to her broker saying that she still wished to complete and inquiring as to how long the approval by Commonwealth Bank would last. That is a curious communication in view of the fact that by that time, she herself had purported to terminate and rescind the Contract and the Sellers had also purported to terminate the Contract.
I am not persuaded that the Buyer was induced to enter into the Contract by any representation made in the advertising material. I conclude that, even if any representations were made, they were not relied upon by the Buyer such that there was no causal connection between any loss suffered, on the one hand, and the alleged conduct in contravention of the Competition and Consumer Act 2010 (Cth), Sch 2 - Australian Consumer Law, on the other.
The Buyer also relies on alleged contravention of the Australian Consumer Law on the basis that the publication of the advertising material was misleading or deceptive and was undertaken in trade or commerce. Another answer to the claim based on the Australian Consumer Law is that the conduct alleged was not conduct in trade or commerce. Ordinarily, where a person sells his home, whether by private treaty or by auction and whether the person conducts the negotiations personally or through a real estate agent, the person would not be said to be undertaking those activities in the course of a trade or business or in a business context. Such a sale will remain a sale by the vendor of a house and not an act done in a business context. There is nothing about the character of the Sellers, such as being engaged in commercial activities, or the transaction being motivated by business reasons, as distinct from personal reasons, to suggest that the Contract was a transaction that occurred in trade or commerce [1] .
[11]
Breach of the Regulation
Section 52A(2)(b) of the Conveyancing Act relevantly provides that a vendor under a contract for the sale of any land is deemed to have included in the contract such terms, conditions and warranties as may be prescribed. Under Section 52A(4), a provision that purports to exclude, modify or restrict any provision of s 52A or a regulation made for the purposes of s 52A or that would, but for s 52A(4), have the effect of excluding, modifying or restricting such provision, is void. Clause 8 of the Regulation relevantly provides that, for the purposes of s 52A(2)(b) of the Conveyancing Act, a vendor warrants that, as at the date of the contract and except as disclosed in the contract, there is no matter in relation to any building or structure on the land that would justify the making of any upgrading or demolition order or, if there is such a matter, a building certificate has been issued in relation to the building or structure since the matter arose.
Clause 16(1)(b) of the Regulation relevantly provides that a buyer under a contract for the sale of land may rescind the contract for breach of the warranty referred to in cl 8 of the Regulation. However, under cl 16(3), a buyer may not rescind a contract unless the matter is such that the buyer would not have entered into the contract had the buyer been aware of its existence. Under cl 16(4), a buyer may not rescind a contract for breach of the warranty if a building certificate in respect of the building or part of the building to which the warranty relates has been issued since the date of the contract.
The Buyer has not identified a building that has been unlawfully erected or building work that has been unlawfully carried out within the meaning of the Regulation in relation to any building or structure on the Property. She has therefore failed to identify a matter affecting the Property that could justify the making of an upgrading or demolition order. It follows that there has been no breach of the implied warranty.
The Buyer has made no application for a building certificate. Section 149(2) of the Planning Certificate attached to the Contract provided that the Property was zoned "R2 low density residential". The Planning Certificate recorded that that zoning permit permitted home occupations without consent and permitted dual occupancies with consent and prohibited any development not otherwise specified. The Planning Certificate stated that Council records indicated that there was no other relevant information in relation to the Property and that advice regarding demolition orders should be sought by application for a certificate under s 149D.
Section 149B of the Environmental Planning and Assessment Act 1979 (NSW) (the Planning Act) relevantly provided that an application for a building certificate might be made by any person with the consent of the owner of the land or by the purchaser under a contract for the sale of property that comprises or includes the building or part. Under s 149D, if Council refuses to issue a building certificate, it must inform the applicant by notice of its decision and the reasons for it. Clause 12 of the contract relevantly provided that the Sellers must do everything reasonable to enable the Buyer to have the Property inspected to obtain any certificate or report reasonably required and to apply for any certificate that can be given in respect of the Property.
Thus, it was open to the Buyer to apply for a building certificate. If she had done so, the local Council would have been required to issue the certificate or identify the reasons for not doing so. Rather, the Buyer simply asserts a breach of the implied warranty without identifying the illegal structure or illegal building work that would justify the making of a demolition order or an upgrading order.
The building certificate attached to the letter of 1 August 2017 is dated 19 January 1989 and refers to a survey report dated 11 January 1989. It was issued approximately one month before the Sellers purchased the Property on 17 February 1989. The unchallenged evidence of the Sellers was that they had not carried out any building or construction work on the Property since purchasing it. It must follow that all building work in respect of the Property, including any in respect of the lower level floor, was performed before the building certificate was issued. Thus, it would appear that to the extent that any matter that it is alleged would otherwise justify the making of an upgrading or demolition order, a building certificate has been issued in relation to the building since that matter arose. Even if there is a restriction as to how the lower level rooms can be used, such as dual occupancy, it does not follow that the building or the building work is illegal and therefore a matter affecting the Property that would justify the making of a demolition or upgrading order. I am not persuaded there has been any breach of the implied warranty under the Conveyancing Act. In any event, in light of the evidence suggesting that the Buyer wanted to purchase the Property for the purpose of demolition and construction of a duplex and was intending to proceed with the purchase even after issuing purported notices of termination and rescission, it is well-nigh impossible to conclude that the Buyer would not have entered into the Contract had she been aware of the existence of the matter now relied upon, whatever that matter may be.
[12]
Section 55(2A) and Relief against Forfeiture
The Buyer was granted leave at the end of the first day of hearing to amend her claim to seek relief under s 55(2A) of the Conveyancing Act, limited to the facts that had been raised in the proceedings up to that time. The only facts then alleged were the alleged written and oral misrepresentation and breach of warranty as well as the alleged breach of contract. The claim must fail in the light of the conclusions reached as to the alleged misrepresentations and breaches of statutory warranty.
Section 55(2A) of the Conveyancing Act gives the Court a discretion as to whether or not to order that a deposit be returned. However, the section does not permit an overall discretionary supervision of adjustments between the parties. A vendor who retains a deposit in strict enforcement of the legal right to do so is not to be deprived of that right under s 55(2A) unless it is unjust and inequitable to permit the vendor to retain the deposit [2] . While it is not necessary to demonstrate special or exceptional circumstances in order to justify an exercise of the discretion under s 55(2A), the nature of the deposit, as an earnest for performance in conveyancing transactions, must be taken into account [3] . The grounds for making an order under the provision must be sufficient to warrant a departure from holding the purchaser to its obligations under the Contract. If the notions of justice and equity conditioning the discretion are to have meaning having regard to the purpose of a deposit as an earnest for performance, the purchaser must be able to do more than merely show that the deposit has been forfeited and that may result in a windfall to the vendor. The application of s 55(2A) should not weaken the proper function of a deposit as providing an earnest for performance, a sanction so that purchasers treating the making and completing of contracts with due seriousness [4] .
Nothing has been established on behalf of the Buyer to suggest that the forfeiture of the deposit that has been paid would be unjust or inequitable. Further, nothing has been advanced to suggest that she should not be bound by the promise she made in the Contract to pay the balance of the deposit and agreed that the Sellers could recover that deposit in the event that the Contract was terminated by reason of the Buyer's default.
Similar considerations lead to the conclusion that no case has been made out for relief against forfeiture of the deposit. There would be nothing unjust or inequitable or unconscientious in the Sellers receiving from the Buyer the whole of the deposit of 10% that she promised to pay.
[13]
Breach of Contract
The Cross Claim alleges that each of the representations was an essential term of the Contract. The legal basis upon which the representations could constitute terms of the Contract is not stated in the Cross Claim and was not adverted to in the Buyer's written submissions. They are clearly not express terms of the Contract, which was signed by the Sellers and the Buyer. The claim that they are terms of the Contract is totally misconceived, particularly in the light of the express provisions of the Contract referred to above. It is unnecessary to say anything further about the claim of alleged breaches of "essential terms" of the Contract.
[14]
Conclusion
It follows from the above that the Cross Claim must fail and should be dismissed. The Buyer should be ordered to pay the Seller's costs and the Agent's costs of the Cross Claim. It also follows, from the failure of the Cross Claim, that the Sellers are entitled to the relief claimed in their Summons. There should be a declaration that the Contract was validly terminated by the Sellers and that the deposit monies of $54,000 have been forfeited, together with an order that the Buyer pay to the Sellers the further sum of $54,000. The Agent should be ordered to pay to the Sellers the sum of $54,000 less any commission and other amounts payable to the Agent. The Buyer should pay the Sellers' costs and the Agent's costs of the Summons.
[15]
APPENDIX 2
Endless possibilities
Presenting a very promising lifestyle opportunity on an impressive 670sqm elevated corner block, this home will appeal for it's character, peaceful surrounds with an open outlook and a very convenient location
Families who value traditional proportions and excellent privacy will enjoy the bright interiors and versatile floorplan accompanied by lower level self-contained accommodation.
Features:
- 4 well sized bedrooms with robes
- Generous master bathroom with separate shower & bath
- Kitchen with breakfast bar overlooking dining area
- Multiple living options plus self-contained accommodation with kitchen,
bathroom & separate entrance
- Sunny outdoor entertainer's balcony with Royal National Park views
- An abundance of off-street parking, storage options & air-conditioning
- Opportunity to renovate or develop (STCA)
- Moments to shops, transport, schools & local amenities including Sutherland
Shire Leisure Centre
- No through traffic on Glencoe Street
[16]
Endnotes
See Williams v Pisano (2015) 90 NSWLR 342 at [38]; [2015] NSWCA 177 at [38].
See Lucas & Tait (Investments) Pty Ltd v Victoria Securities Ltd [1973] 2 NSWLR 268 at 272.
See Sydney Developments Pty Ltd v Perry Properties Pty Ltd [2016] NSWSC 515 at [52]-[53]; (2016) 18 BPR 35,905 at [52]-[53]; Dasreef Developments Pty Ltd v Velkovski (2017) 96 NSWLR 318 at [41]; [2017] NSWSC 1698 at [41].
See Havyn Pty Ltd v Webster [2005] NSWCA 182 at [155]; (2005) 12 BPR 22,837 at [155].
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 February 2019