Dolphin Quay Pty Ltd v Symbol Nominees Pty Ltd - [2012] WASC 413

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CIVIL

CITATION: DOLPHIN QUAY PTY LTD -v- SYMBOL NOMINEES PTY LTD [2012] WASC 413

CORAM: MASTER SANDERSON

HEARD: 30 OCTOBER 2012

DELIVERED : 8 NOVEMBER 2012

FILE NO/S: CIV 2220 of 2012

BETWEEN: DOLPHIN QUAY PTY LTD
First Plaintiff
STRZELECKI HOLDINGS PTY LTD
Second Plaintiff
AND
SYMBOL NOMINEES PTY LTD
Defendant

Catchwords:

Sale of properties by offer and acceptance - Failure to pay deposit - Whether contract terminated by operation of subject to finance clause - Turns on own facts

Legislation:

Nil

Result:

Judgment for the plaintiff

Category: B

Representation:

Counsel:

First Plaintiff                :     Mr J H Jacobson
Second Plaintiff            :     Mr J H Jacobson
Defendant:     Ms N M Breach

Solicitors:

First Plaintiff                :     Hotchkin Hanly Lawyers
Second Plaintiff            :     Hotchkin Hanly Lawyers
Defendant:     D'Angelo Legal

Case(s) referred to in judgment(s):

Nil

MASTER SANDERSON: This is the plaintiffs' application for summary judgment. The application is brought out of time and an extension of time is required. The reasons for the delay in bringing the application are explained in an affidavit of Andrew Cecil Thorpe sworn 26 October 2012. The defendant did not actively oppose the application for extension and given an explanation has been provided and no prejudice suffered by the defendant I am prepared to grant the extension of time.
The relevant facts as taken from the statement of claim are as follows. By three separate contracts the defendant agreed to purchase certain properties in Mandurah from the plaintiffs. The first contract was dated 20 October 2011 and was entered into between the first plaintiff and the defendant. The other two contracts were dated 31 October 2011 and were entered into between the second plaintiff and the defendant. The terms of each contract are identical save for the description of the property, the purchase price and the deposit details.
Each contract contains the REIWA Contract for Sale of Land or Strata Title by Offer and Acceptance and incorporates the 2011 REIWA General Conditions. Each contract was subject to finance being obtained by the defendant within 21 days of the acceptance of the offer. The seller's agent was nominated as Jordana Investments Pty Ltd as Trustee for the Epiphany Property Trust (Epiphany).
Each of the contracts required payments of deposits. The contract between the first plaintiff and the defendant required a deposit of $100,000. The contract between the second plaintiff and the defendant required a payment of $20,000 on each contract as deposit. All of the deposits were to be paid within three days of the acceptance of the offers. It is common ground between the parties the deposits have never been paid.
By notices of default dated and served 9 January 2012 the plaintiffs required the defendant to pay the deposits within 48 hours of the service of the notices otherwise the contracts may be terminated. This notice was given under cl 1.4 of the General Conditions. As the deposits were not paid the plaintiffs terminated the contracts. They did this under cl 1.5 of the General Conditions. It is not in dispute the notices were issued and properly served by the plaintiffs.
It is the defendant's position all three contracts were subject to finance, the defendant could not obtain finance and it gave notice to that effect to the plaintiffs and the contracts had come to an end well prior to 9 January 2012. That argument was developed in this way.
Clause 1 of the offer and acceptance is headed 'Subject to Finance'. Clause 1.2 which bears the subheading 'No Finance Approval by the Latest Time: Non Approval Notice Given' is in the following terms:
This Contract will come to an end without further action by either Party if on or before the Latest Time:
(a)written Finance Approval has not been obtained; and
(b)the Buyer gives a Non Approval Notice to the Seller or Seller's Agent.
The phrase 'Non Approval Notice' is defined to mean:
A Notice in writing given by the Buyer or the Lender to the Seller, or the Seller Agent to the effect that Finance Approval has been rejected or has not been obtained.
The defendant says the non‑approval notice is contained in emails exchanged between Ms Annie Rodway‑Cicero of Epiphany, the plaintiffs' agent, and Ms Dianne Roberts acting on behalf of the defendant. These emails appear as annexures DC4 ‑ DC8 to the affidavit of Donato Colosante sworn 27 September 2012 and filed in opposition to the application. The first email was sent by Ms Rodway‑Cicero to Ms Roberts on 2 November 2011. It points out at that stage the $100,000 deposit on the sale between the first plaintiff and the defendant had not been paid. There was some discussion about finance. The email is best regarded as a polite enquiry accompanied by a gentle prod.
Although it is not eluded to in any of the affidavit material it would appear some discussions took place between the parties. As neither party regards those discussions as of significance they can be put to one side. But there must have been discussions as otherwise the next three emails do not make any sense. The first of these emails were sent by Ms Rodway‑Cicero to Ms Roberts at 8.42 am on Friday 4 November 2011. Ms Rodway‑Cicero acknowledges the defendant was having trouble coming up with the deposit. She says the plaintiffs would be prepared to accept a $50,000 to cover all three properties. She mentions the possibility of a default notice for failure to pay the deposit and asks for some guidance as to when the deposit might be paid.
Ms Rodway‑Cicero sent a further email to Ms Roberts at 11.26 am on 4 November 2011. I will quote that in full:
I have it on advice that the sellers would prefer to secure the deposit of $50,000 today instead of allowing the offers to lapse.
Can you advise when I can collect please? I am able to meet at the bank - got to be bank cheque - on site at your office or wherever.
I am driving all over the place today with client appointments so let me know please.
Ms Roberts emailed back at 1.38 pm on 4 November 2011. Again I will quote that email in full:
I have just been instructed by Don to let you know that we are unable to come up with the $50,000.00 today and we will be having a meeting with our finance brokers on Monday evening and get back to you on Tuesday regarding the deposit, but Don has said if you are unable to hold the apartments he fully understands and please if you have others waiting for these apartments please go ahead and sign them up. We can always put another offer in once our finance has been sorted.
A further email from Ms Rodway‑Cicero followed. It was sent at 2.24 pm the same day. It reads as follows:
That is unfortunate about the deposits. We are in breach of contract now and although the seller is unlikely to pursue anything I just want all parties to be mindful of it. The only reason that the two short stay see [sic] available at that price is due to the original buyers defaulting and the developer is suing all 12 of them for breach of contract. The balance is being recovered. I will wait for the deposit ... Tuesday?
Please stay in touch.
During the course of submissions I asked counsel for the defendant whether it was suggested there had been a variation to the contracts such that the defendant was only liable to pay $50,000 deposit to cover all three purchases. She said it was not the defendant's position that such an agreement had been breached. With respect that is clearly correct. Assuming an offer to that effect was made by the plaintiffs it was never accepted by the defendant. So the defendant is left with only one line of defence - a non‑approval notice had been given to the plaintiffs.
In my view there is nothing in the correspondence which supports the defendant's position. There is some mention of difficulty raising the deposit but that is not to the point. What is required by cl 1.1 of the General Conditions is the buyer (in this case the defendant) must apply for finance. There is no evidence this was done. Then if finance is not obtained a written notice to that effect must be given by the buyer to the seller. Nothing in the email exchange would equate with such a notice. True it is there is no particular form the notice must take. But the definition of non‑approval notice requires the buyer to state that finance approval has been rejected or finance has not been obtained. The email exchange simply does not do that.
In my view there is no defence to the plaintiff's claim. There should be judgment for the plaintiffs with damages to be assessed. The defendant should pay the costs of this application including the reserved costs.