Clark v Zele

[2023] NSWCA 296

Court of Appeal

Supreme Court

New South Wales

Medium Neutral Citation:

Clark v Zele [2023] NSWCA 296

Hearing dates:

28 November 2023

Date of orders:

11 December 2023

Decision date:

11 December 2023

Before:

Payne JA [1];
Kirk JA [2];
Stern JA [3].

Decision:

(1) Time for filing a notice of appeal is extended to 3 October 2023 under UCPR, r 51.16(2).

(2)   The appeal is dismissed.

(3)   Mr Clark is to pay Mr and Mrs Zele’s costs of the appeal.

Catchwords:

CONTRACT – sale of residential property – the appellant and respondents entered into a contract for the sale of the appellant’s property – completion did not occur by the completion date – the respondents sought and were granted specific performance and declaratory relief with the question of damages reserved – Parker J found deposit payable under contract of sale was paid in full by the respondents and was valid and binding – specific performance later became impossible – matter relisted before the Real Property List Judge – both parties purport to terminate the contract of sale – further hearing before Peden J to determine whether respondents are entitled to return of deposit paid under the contract of sale – appellant contends deposit not fully paid as sum of $3,750 had been forfeited pursuant to Conveyancing Act 1919 (NSW) s 66V – the respondents rescinded an earlier contract during the cooling off period – appellant contends forfeited amount cannot form part of the deposit under the contract of sale – Peden J declared the respondents validly terminated contract – Peden J ordered return of deposit to the respondents – Peden J’s orders made in accordance with earlier finding of Parker J that deposit was paid by respondents in full – whether Peden J erred in returning deposit amount to respondents – where appellant does not challenge earlier judgment or orders of Parker J.

APPEALS – procedure – appellant filed notice of intention to appeal on 10 July 2023 – appellant filed notice of appeal on 13 September 2023 – appellant served notice of appeal on 3 October 2023 – notice of appeal served out of time – respondent does not oppose extension of time for filing notice of appeal – extension of time for filing notice of appeal allowed pursuant to Uniform Civil Procedure Rules 2005 (NSW), r 51.16(2).

Legislation Cited:

Conveyancing Act 1919 (NSW), ss 66U, 66V(2), 66V(3), 66V(8), 66X

Supreme Court Act 1970 (NSW), ss 101(1), 101(2)(r)

Uniform Civil Procedure Rules 2005 (NSW), rr 51.16(1), 51.16(2).

Cases Cited:

Despot v Registrar General of New South Wales [2016] NSWCA 5

University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481

Zele v Clark [2022] NSWSC 925

Category:

Principal judgment

Parties:

Richard Bernard Clark (Appellant)
Paul Stefan Zele (First respondent)
Anne Margaret Zele (Second respondent)

Representation:

Counsel:

R. Clark (Appellant, self-represented)
J. Pearson (Respondent)

Solicitors:

Hunt & Hunt Lawyers (Respondent)

File Number(s):

2023/221746

Publication restriction:

Nil.

 Decision under appeal 

Court or tribunal:

Supreme Court of New South Wales

Jurisdiction:

Equity

Date of Decision:

14 June 2023

Before:

Peden J

File Number(s):

2022/83507

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.

1. 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].

   1. PAYNE JA: I agree with Stern JA.

   2. KIRK JA: I agree with Stern JA.

   3. STERN JA: These proceedings arise out of a contract dated 17 December 2021 (“Sale Contract”) between the appellant (“Mr Clark”) and the respondents (“Mr and Mrs Zele”) for the sale of a property belonging to Mr Clark in Wyong, New South Wales (the “Wyong Property”) with a completion date of 31 January 2022. That sale never completed. The issue that arises on the appeal is whether Peden J erred in making orders that returned the deposit paid under the Sale Contract to Mr and Mrs Zele. That ostensibly simple question arises, however, in a somewhat complicated procedural context.

   4. The failure by Mr Clark to complete under the Sale Contract gave rise to a claim by Mr and Mrs Zele against Mr Clark seeking specific performance or in the alternative return of the deposit they paid under the Sale Contract, and other relief. Judgment on that claim in favour of Mr and Mrs Zele was given by Parker J, and orders made, on 11 July 2022: Zele v Clark [2022] NSWSC 925. Specific performance and declaratory relief were granted and the question of damages reserved. Whilst he filed a notice of intention to appeal on 30 August 2022, Mr Clark did not, and does not now seek to, appeal against the judgment or orders of Parker J.

   5. Thereafter, on 24 October 2022 Parker J made further orders, noting that specific performance had become impossible (for reasons which are not relevant to the issues on appeal). His Honour ordered that the matter be relisted before the Real Property List Judge on 4 November 2022 for further directions in relation to the claim for damages.

   6. On 1 November 2022, Mr Clark sent an email to the solicitor for Mr and Mrs Zele contending that the deposit under the Sale Contract had not been paid in full and purporting to terminate the Sale Contract on that account. On the same day, Mr and Mrs Zele served a notice terminating the contract on account of Mr Clark’s failure to complete the Sale Contract. On the face of the emails it appears that Mr Clark’s email was sent two minutes before the email attaching Mr and Mrs Zele’s notice of termination, but it is not clear whether or not these timings are accurate. Before Peden J Mr Clark candidly said that he was not sure of the timing in this regard.

   7. On 16 May 2023 Robb J made directions preparing the matter for hearing of Mr and Mrs Zele’s claim for return of the deposit under the Sale Contract and damages. The directions included the following:

   “The Court:

   1.   Notes that the Court has informed the defendant that he will not be permitted at the hearing before Peden J on 14 June 2023 to challenge the validity of any order made by the Court to date and, in particular any order made by Parker J, and if the defendant wishes to have any such orders set aside he will have to do so by lodging an appeal to the Court of Appeal after Peden J has determined the remaining issues in the proceedings.

   2.   Notes that the defendant may be entitled to argue that he has a right to a reduction in the amount of any deposit that may be repayable to the plaintiffs as a result of their termination of the contract and that he may be entitled to be paid the amount of that reduction.”

   8. Thereafter the matter came before Peden J on 14 June 2023. As Mr and Mrs Zele abandoned their claim for damages during the hearing before Peden J, the only substantive question for her Honour was whether Mr and Mrs Zele were entitled to a refund of the deposit that they paid under the Sale Contract. In essence, Mr Clark resisted that order by contending that Mr and Mrs Zele never paid the deposit under the Sale Contract in full. Mr Clark contended, on that basis, that Mr and Mrs Zele had no entitlement to serve a notice to complete or to terminate the contract, nor were they entitled to return of the deposit.

   9. Peden J made the following orders:

   “1.   Declare that the contract for the sale of land between the parties determined by Parker J to be valid and binding was terminated by the plaintiffs on 1 November 2022.

   2.   Order that within 14 days of these orders, the defendant do all things necessary, including executing all necessary documents, to direct Stone Real Estate as stakeholder to transfer the sum of $33,000 together with any interest earned on that sum to the plaintiffs at the nominated bank account bearing the following details (Nominated Bank Account):

   …

   3.   Order that the sum of $117,000 held by the Court in these proceedings together with any interest that has been earned on that sum, be released to the plaintiffs at the Nominated Bank Account.

   4.   If the defendant fails to comply with order 2 or fails to execute any necessary document, the Registrar in Equity is appointed to act in place of the defendant.

   5.   Directs the plaintiffs, within 72 hours of the plaintiffs receiving cleared funds pursuant to orders 2 and 3, to provide to the defendant a notice of withdrawal of caveat.

   6.   Order that the plaintiff’s [sic] costs of the specific performance claim heard by Parker J are to be paid by the first defendant.

   7.    Order that 80% of the plaintiff’s [sic] costs of the damages and return of deposit claims heard by Peden J are to be paid to the first defendant.”

   10. Mr Clark appeals against orders 1, 2, 3 and 6 of those orders. He seeks orders that Mr and Mrs Zele pay to him the full amount of the deposit they paid under the Sale Contract. Whilst in his notice of appeal he also seeks damages, no submissions were made in support of that order.

   11. Throughout these proceedings Mr Clark has represented himself.

   12. For the reasons set out below, Mr Clark’s appeal should be dismissed.

Is leave to appeal required?

13. In his notice of appeal filed on 13 September 2023 Mr Clark states that leave to appeal to this Court was granted on 14 June 2023 (the date of the hearing before Peden J). That is not so but Mr Clark does not require leave to appeal as the sum in issue is $150,000: Supreme Court Act 1970 (NSW) ss 101(1), 101(2)(r).

Extension of time for serving the notice of appeal

14. A notice of intention to appeal was filed in person by Mr Clark on 10 July 2023 and served on 12 July 2023. Mr Clark’s notice of appeal was not served until 3 October 2023. He thus requires an extension of time for filing his notice of appeal, Peden J having made the orders on 14 June 2023: Uniform Civil Procedure Rules 2005 (NSW) (“UCPR”), r 51.16(1). There is no opposition to an extension of time. I would thus extend time for filing a notice of appeal until 3 October 2023 under UCPR, r 51.16(2).

No appeal against the judgment or orders of Parker J

15. As set out above, Mr Clark appeals against the orders of Peden J on 14 June 2023, not against those of Parker J on 11 July 2022. The orders made by Parker J are:

“1.   Declare that there is a binding and enforceable agreement between the Plaintiffs and Defendant in the terms set out [sic] the contract for the sale and purchase of land relating to Registered Plan Lot [XX] Deposited Plan 10543, known as [XX] Wyong in the state of New South Wales, dated 17 December 2021.

2.   Order that the Defendant specifically perform and carry into execution the agreement referred to in order 1.

3.   Reserve for further consideration:

(a)   the form of any directions required to give effect to the order for specific performance;

(b)    any claim for damages for past breach of contract; and

(c)   costs.

4.   Adjourn the proceedings for mention in the Expedition List on 15 July 2022.”

16. There is thus no appeal against the declaration that the Sale Contract was a binding and enforceable agreement between Mr Clark and Mr and Mrs Zele.

17. Before Parker J, Mr Clark had contended that the Sale Contract was unenforceable on two bases:

1. His conveyancer had exchanged contracts on his behalf without his authority; and

2. The deposit was paid late and this rendered the contract unenforceable.

18. These grounds reflected the terms of Mr Clark’s defence to the statement of claim filed by Mr and Mrs Zele. In his defence Mr Clark denied that the Sale Contract was entered into “in circumstances where the Conveyancer entered into a contract contrary to the authority of the Defendant.” He also denied that Mr and Mrs Zele had paid the $150,000 deposit under the Sale Contract, asserting that they “were unable to pay the full deposit and were in breach of contract”. Both grounds were rejected by Parker J. His Honour found that Mr and Mrs Zele had proved that Mr Clark had signed the Sale Contract intending to be bound by it and added that “that is not in dispute”: at [9]. His Honour found in the absence of contrary evidence it was sufficient that Mr and Mrs Zele had “produced a written contract signed by Mr Clark and have asserted, without objection, exchange[d] by him or on his behalf”: at [10].

19. Parker J found that Mr Clark had not proved that the Sale Contract was executed in escrow or that the conditions of the escrow were not satisfied. In those circumstances, his Honour found that Mr and Mrs Zele had proved that the Sale Contract was entered into by Mr Clark or on his behalf.

20. As to the deposit, Parker J found that the deposit under the Sale Contract had been fully paid and included a 0.2% holding deposit which was paid before the contract was signed: at [2] and [11]. As set out above, the holding deposit was in fact 0.25% but nothing turns on this. In this regard Parker J relied upon what his Honour described as the “agent’s receipt” in evidence. That is a reference to a document dated 6 July 2022 addressed to Mr Clark on letterhead of Stone Real Estate, his agent for the sale of the Wyong Property. It is described as a “Tax Invoice” and sets out, in the column headed “Money In”:

“0.25% Deposit for the purchase of [the Wyong Property]   $3,750.00

Part deposit for the purchase of [the Wyong Property]   $100,000.00

Bal 10% deposit for the purchase of [the Wyong Property]   $46,250.00

$150,000.00”.

21. On that basis his Honour made the orders set out above.

22. In oral submissions on appeal Mr Clark contended that he had sought, before Parker J, to lead evidence as to whether or not the deposit had been paid in full. He says that that is reflected in the judgment of Parker J (at [8]) where, having referred to Mr Clark’s contention that his agent had entered into the Sale Contract contrary to Mr Clark’s authority, his Honour states:

“There is no evidence from the conveyancer. … In the course of final submissions Mr Clark made a belated application for an adjournment so as to obtain evidence on this and on another subject for the purposes of his defence. This application came too late and I rejected it. It would have required an adjournment of an expedited hearing and I had no assurance that Mr Clark would indeed have been able to produce evidence to support his allegations.”

23. There is no evidence to support Mr Clark’s contention that he sought, before Parker J, to lead evidence that the deposit was never paid in full. In any event, that is of no moment given that there is no appeal against the judgment or orders of Parker J.

The hearing before Peden J

24. By the time that the matter came before Peden J, there had been two further developments. First, it had become apparent that specific performance was not possible and instead Mr and Mrs Zele sought repayment of the deposit that they had paid under the Sale Contract.

25. Second, as set out above, on 1 November 2022 both Mr Clark and Mr and Mrs Zele had sought to terminate the Sale Contract. Mr Clark’s email of 1 November 2022 alleged that the deposit had not been paid in full and stated:

“the Vendor Terminates due to unpaid deposit.”

26. Mr and Mrs Zele’s Notice of Termination dated 1 November 2022 relied upon the following:

1. On 1 March 2022 Mr and Mrs Zele had served a notice to complete the Sale Contract on Mr Clark making time of the essence for completion;

1. Mr Clark had failed, refused or otherwise neglected to comply with the terms of the Sale Contract and the notice to complete;

2. As a result of that Mr Clark had repudiated the Sale Contract; and

3. Mr and Mrs Zele accepted his repudiation and elected to terminate the Sale Contract.

27. In this regard, cl 8.2 of the Sale Contract provides:

“8.2   If the vendor does not comply with this contract (or a notice under or relating to it) in an essential respect, the purchaser can terminate by serving a notice. After the termination –

8.2.1   the purchaser can recover the deposit and any other money paid by the purchaser under this contract;

8.2.2   the purchaser can sue the vendor to recover damages for breach of contract; and

8.2.3    if the purchaser has been in possession a party can claim for a reasonable adjustment.” (Emphasis in original.)

28. Mr Clark again sought to terminate the Sale Contract by serving a Notice of Termination of Contract on Mr and Mrs Zele on 2 June 2023. The covering email, attaching that notice, stated:

“I confirm I don’t accept the validity of your termination notice emailed Tue 1/11/2022, please find enclosed herewith my notice of termination.”

29. Both the email of 1 November 2022 and the Notice of Termination of Contract of 2 June 2023 were tendered by Mr Clark before Peden J. Further, as set out above, when asked, Mr Clark said that he was not sure whether his email of 1 November 2022 came before the Notice of Termination served by Mr and Mrs Zele by email on the same day.

30. In resisting Mr and Mrs Zele’s application for return of the deposit paid under the Sale Contract, Mr Clark contended before Peden J that Mr and Mrs Zele had not in fact paid the full $150,000 deposit provided for in the Sale Contract but had instead paid only $146,250. His contention was that the $150,000 purportedly paid as deposit under the Sale Contract included $3,750 which had been paid to Mr Clark as a 0.25% deposit under an earlier contract agreed between the parties in November 2021 for the sale of the Wyong Property (“Earlier Contract”). The Earlier Contract was rescinded during the cooling off period provided in the contract. Mr Clark contended that the amount of $3,750 had been forfeited by Mr and Mrs Zele by the 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.

31. During the hearing her Honour clearly indicated to Mr Clark that she could not deal with issues about the correctness of the orders of Parker J and Mr Clark confirmed that he did not ask her Honour to “deal with that”. Further, before Peden J, Mr Clark’s oral submission was that he “agree[d] with Parker J” and that the Sale Contract was “valid and binding.” Mr Clark’s contention was that, by reason of what he claimed was Mr and Mrs Zele’s failure to pay the $150,000 deposit in full, he was entitled to terminate the Sale Contract and retain the whole of the deposit paid under it. He contended further that Mr and Mrs Zele did not have any entitlement to terminate the Sale Contract or to the return of the deposit.

32. When Peden J raised with Mr Clark the fact that Parker J had found (at [2] and [11]) that the deposit under the Sale Contract had been wholly paid, Mr Clark said that he was content for her Honour to make the orders sought by Mr and Mrs Zele, which included orders 1 to 3 as made by Peden J, but “with a stay on the release of the deposit.” Mr and Mrs Zele resisted any stay, contending that the course available to Mr Clark was to seek to appeal against the orders of Parker J. Her Honour then enquired of counsel for Mr and Mrs Zele as to whether the evidence before the Court included evidence as to what communications occurred as to cheques payable and adjustments at the time of exchange of contracts. Counsel for Mr and Mrs Zele said that that evidence was not before her Honour.

33. As to termination, in oral submissions before Peden J Mr Clark initially contended, when her Honour was seeking to clarify what evidence was relied upon by the parties, that he had attempted, or had, terminated the Sale Contract on both 1 November 2022 and 2 June 2023 and that Mr and Mrs Zele thus had no entitlement to terminate. However, during his substantive submissions, and after having been taken to the findings of Parker J, Mr Clark agreed that her Honour should make the orders as sought by Mr and Mrs Zele, including the declaration that Mr and Mrs Zele had validly terminated the Sale Contract on 1 November 2022. The only caveat to this concession was Mr Clark’s contention that her Honour should stay any orders she made as to the return of the deposit paid under that Contract.

34. Her Honour made the orders as set out (at [9]) above. In her Honour’s judgment Peden J said:

“Having been taken to paragraphs 1, 2, 8 and 11 of Parker J’s reasons, Mr Clark accepted that orders must be made in accordance with those findings as concerns the deposit.”

35. Peden J refused Mr Clark’s application for a stay. In her judgment, her Honour said:

“I note that Mr Clark may make his own considered decision as to whether he seeks a stay or some other order from the Court of Appeal.”

The notice of appeal filed by Mr Clark

36. Mr Clark appeals against orders 1, 2, 3 and 6 made by Peden J. Mr Clark’s contention on appeal is, in essence, that Mr and Mrs Zele did not pay the full 10% deposit required under the Sale Contract and on that account, have no right to terminate or to be repaid the amount they purported to pay by way of deposit under the Sale Contract.

37. In support of that ground Mr Clark contends (as he did before Peden J) that upon rescission of the Earlier Contract, by reason of s 66V(2) of the Conveyancing Act, Mr and Mrs Zele forfeited the 0.25% deposit that they had paid under that contract. Thus, that amount could not form part of the deposit paid under the Sale Contract for the Wyong Property. Mr Clark claims further that he never waived his rights to forfeiture under s 66V(8) of the Conveyancing Act. His oral submission was that there “has never been authority in writing or verbally to rollover the November deposit for use in the December contract.” Mr Clark also contends that he terminated the Sale Contract on 1 November 2022, entitling him to be paid the full amount held as deposit for the sale.

38. Mr Clark seeks orders on the appeal that the $150,000 is repaid to him. He also seeks interest, damages and costs.

39. In his written submissions (but not in the notice of appeal or in oral submissions) Mr Clark raised a further contention that Mr and Mrs Zele lost their right to terminate the Sale Contract because they had earlier affirmed the contract by commencing proceedings for specific performance. As this was not a ground of appeal it is unnecessary to consider this contention in any detail. Suffice to say, it must fail in light of the decision of this Court in Despot v Registrar General of New South Wales [2016] NSWCA 5 at [113] (Gleeson JA, Leeming JA and Sackville AJA agreeing). That case clearly establishes that where a party fails to comply with an order for specific performance, the other party may ask the Court to put an end to the contract. Thus, once it became apparent that specific performance was not possible, there was no impediment to Mr and Mrs Zele terminating the Sale Contract.

The Earlier Contract

40. The Earlier Contract was entered into on 22 November 2021. Before it was entered into both Mr Clark and Mr and Mrs Zele (separately) signed a document described as an “Authority to Exchange Contracts”. This included confirmation by Mr and Mrs Zele that they understood that their 0.25% deposit was forfeited to the vendor if they should rescind or cancel the contract during the cooling off period. The balance of the 10% deposit was to be paid upon expiration of the ten day cooling off period. A letter from Stone Real Estate (the agents for Mr Clark on the sale of the Wyong Property) to D. C Balog & Associates (Mr Clark’s solicitors on that sale) dated 22 November 2021 confirms that they had effected “an Office Exchange” for the Wyong Property and were holding a deposit of $3,750 in a trust account.

41. The Earlier Contract provided for a purchase price of $1.5 million and a deposit of $150,000. It included, under the heading “Cooling Off Period (Purchaser’s Rights)” a statement described as a statement required by s 66X of the Conveyancing Act. This included the following:

“A purchaser exercising the right to cool off by rescinding the contract will forfeit to the vendor 0.25% of the purchase price of the property. The vendor is entitled to recover the amount forfeited from any amount paid by the purchaser as a deposit under the contract and the purchaser is entitled to a refund of any balance.”

42. Clause 19.2 of the Earlier Contract provided:

“19.2   Normally, if a party exercises a right to rescind expressly given by this contract or any legislation –

19.2.1   the deposit and any other money paid by the purchaser under this contract must be refunded …”. (Emphasis in original.)

43. The cooling off period under the Earlier Contract was extended until 9 December 2021 by agreement. On that date Mr and Mrs Zele gave notice under s 66U of the Conveyancing Act that they rescinded the contract pursuant to their “cooling-off rights.”

Consideration

44. On this appeal, Mr Clark faces two significant difficulties arising out the matters set out above.

45. First, and of most significance, Mr Clark has not appealed, and does not seek to appeal, against the judgment or orders of Parker J. Thus, this Court must approach his 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. It necessarily follows that 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.

46. Second, before Peden J, Mr Clark did not resist her Honour 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. Given that Mr Clark accepted that Peden J should make that order, 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. Notwithstanding that he is a litigant in person, Mr Clark is bound by the conduct of his case below: University of Wollongong v Metwally (No 2) [1985] HCA 28; (1985) 59 ALJR 481 at 483. He cannot now contend that Peden J ought not to have granted the declaratory relief at order 1 of her Honour’s orders.

47. It is of some significance in this regard that all of the evidence upon which Mr Clark now relies was deployed, and relied upon, by Mr Clark before Peden J. Thus, this is not a case where Mr Clark relies upon some matter of which he was unaware, or the significance of which, he did not understand at the time of the hearing before Peden J.

48. Each of the difficulties I have set out above provides an independent basis upon which Mr Clark cannot succeed in his grounds of appeal against the orders of Peden J. In these circumstances, his appeal must be dismissed.

49. In any event, and whilst my 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.

50. According to an affidavit of Mr Zele dated 6 July 2022, he paid the deposit of $150,000 by 17 December 2021. This comprised:

1. An initial deposit paid in November 2021 in the amount of $3,750;

2. A further deposit of $100,000 on 16 December 2021; and

3. a final deposit amount of $46,250 on 17 December 2021.

51. Annexed to this affidavit are:

1. Copies of the transaction receipts reflecting the transfer of the sums (at [50(2)] and [50(3)]) above; and

2. The agent’s receipt, as described (at [20]) above.

52. There was also, before Peden J, a bank statement showing that the $3,750 had been withdrawn from Mr and Mrs Zele’s bank account on 12 November 2021.

53. The document described as a Tax Invoice, set out (at [20]) above, also supports the conclusion that Stone Real Estate, Mr Clark’s agent on the sale of the Wyong Property, accepted that the full $150,000 had been paid under the Sale Contract. In that document, the last instalment of the deposit paid is described as “Bal 10% deposit” for the purchase of the Wyong Property.

54. In an affidavit dated 8 June 2023 Mr Clark said that on 17 December 2021 he had been under the impression that the full 10% deposit had been paid. Attached to this affidavit are some screenshots of text messages between Mr Clark and Mr Choudhari of Stone Real Estate. These show that Mr Choudhari accepted that the full amount of the deposit had been paid and that Mr Clark did not dispute that. Indeed Mr Clark was seeking, consistent with special condition 9 of the Sale Contract, that the deposit be released to him to enable him to pay a deposit on a property he wished to purchase:

“17 Dec 2021

Mr Clark: Deposit get paid?

Mr Choudhari: yeh mate shoukd ge locked in tofay [sic]

Mr Clark: That may have just stuffed up sale

Mr Choudhari: Al [sic] sorted

Mr Choudhari: It’s locked in now

…

Mr Clark: Can it be transferred in next hour?

Mr Choudhari:   Call Sharmaine she needs to supple [sic] us with emails where it goes

Mr Clark: Agents fee is disbursed out of settlement funds? eg it should be full ten per cent released today

Mr Choudhari: We’re meant to always hold our commissions back

Mr Clark: I understood ten per cent was being released that was part of the deal. I am ok with rescinding on that basis

20 Dec 2021

Mr Clark: This sale been stuffed up by your staff. Contact buyer and advise rescinded. Gemma sent email to wrong lawyer, second time this had happened.”

55. Further, in his affidavit dated 8 June 2023, Mr Clark says that he was told around 17 December 2021 that Stone Real Estate was holding $103,750 on trust and expected exchange to occur. It is clear from this that as at that date Stone Real Estate held the $3,750 as part of the deposit under the Sale Agreement and that Mr Clark was aware of this.

56. The clear inference that should be drawn from the evidence I have summarised is that Stone Real Estate, the agent for Mr Clark, was holding the $3,750, initially paid as a deposit under the Earlier Contract, as part of the deposit under the Sale Contract.

57. Moreover, whilst Mr Clark asserts in his affidavit of 8 June 2023 that he thought the trust account should have totalled $153,750 to allow a 10% deposit on the Sale Contract, there is no evidence that he raised this with anyone at that time. Indeed, the first time that Mr Clark suggested in correspondence that the $3,750 should not form part of the deposit under the Sale Contract is in his email of 1 November 2022, purporting to terminate the Sale Contract.

58. Thus, whilst s 66V(2) of the Conveyancing Act provides that a purchaser forfeits 0.25% of the purchase price of a property to the vendor if the purchaser rescinds within the cooling off period, and Mr Clark had a right under s 66V(3) of the Conveyancing Act to recover the $3,750 paid by Mr and Mrs Zele under the Earlier Contract from any deposit paid under that contract, there is no evidence that he exercised that right prior to the full deposit being paid under the Sale Contract. Rather, as set out above, the inference to be drawn from the evidence is that that amount formed part of the deposit under the Sale Contract held by Stone Real Estate, and that there was a waiver by Mr Clark of the right to recover the $3,750 as contemplated by s 66V(8) of the Conveyancing Act.

59. Under cl 2.5 of the Sale Contract (which was not relevantly varied by special condition 10):

“This right to terminate is lost as soon as the deposit is paid in full.”
(Emphasis in original.)

60. Thus, on the evidence before Peden J, there would not, in any event, have been any basis to find that the deposit should not be returned to Mr and Mrs Zele.

Conclusion

61. For the reasons set out above, Mr Clark’s appeal must fail.

62. Mr and Mrs Zele, in their submissions, contended that the appeal should be dismissed with costs. No submissions to the contrary were made by Mr Clark. In those circumstances, the usual order as to costs should be made.

63. The following orders should be made:

1. Time for filing a notice of appeal is extended to 3 October 2023 under UCPR, r 51.16(2).

2. The appeal is dismissed.

3. Mr Clark is to pay Mr and Mrs Zele’s costs of the appeal.

Decision last updated: 11 December 2023