Economedes v Debray
[2015] VCC 989
•24 July 2015
| IN THE COUNTY COURT OF VICTORIA | Revised Not Restricted Suitable for Publication |
AT MELBOURNE
COMMERCIAL DIVISION
EXPEDITED CASES LIST
Case No. CI-14-04974
| HELEN ECONOMEDES | Plaintiff |
| v | |
| ALEXANDRA MARIE DEBRAY | Defendant |
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JUDGE: | His Honour Judge Cosgrave | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 20 July 2015 | |
DATE OF JUDGMENT: | 24 July 2015 | |
CASE MAY BE CITED AS: | Economedes v Debray | |
MEDIUM NEUTRAL CITATION: | [2015] VCC 989 | |
REASONS FOR JUDGMENT
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Subject: REAL PROPERTY
Catchwords: REAL PROPERTY – contract for the sale of land – where deposit not paid –notice of default served
Cases Cited: Bot v Ristevski [1981] VR 120; Nund v McWaters [1982] VR 575 (FC)
Judgment: Judgment for the plaintiff for possession and debt
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr C Northrop | G&M Lawyers |
| For the defendant | Mr D Phillips (former solicitor for the defendant appeared as amicus curiae) |
HIS HONOUR:
1 This case involves a claim for the unpaid deposit moneys due by the defendant (“Debray”) to the plaintiff (“Economedes”) as the purchaser of the property at 19 Monckton Road Templestowe (“the property”).
2 Economedes is the registered proprietor of the property. It comprises a double storey family home with four bedrooms and a pool.
3 By a contract of sale dated March 2014 (“the contract”) Economedes sold the property to Debray for $1,486,000. The contract was in the standard form of the sale document produced jointly by the Real Estate Institute of Victoria and the Law Institute of Victoria.
4 There were terms of the contract that:
(a) Debray would pay a deposit of $148,000 by 20 June 2014, of which $8,000 would be paid at or shortly after signing;
(b) the balance of the purchase price would be paid at settlement on 10 October 2014;
(c) time was of the essence of the contract;
(d) interest at a rate of 2% per annum plus the rate for the time being fixed by section 2 of the Penalty Interest Rates Act 1983 (Vic) was payable on any money owing under the contract during the period of default, without affecting any other rights of the offended party;
(e) a party was not entitled to exercise any rights arising from the other party’s default, other than the right to receive interest and the right to sue for money owing, until the other party was given and failed to comply with a written default notice;
(f) the default notice must:
· specify the particulars of the default; and
· state that it was the offended party’s intention to exercise the rights arising from the default unless, within 14 days of the notice being given, the default was remedied and the reasonable costs incurred as a result of the default and any interest payable were paid;
(g) all unpaid money under the contract became immediately payable to the vendor if default were made by the purchaser and were not remedied and the costs and interest were not paid;
(h) the contract immediately ended if:
· the default notice also stated that unless the default was remedied and the reasonable costs and interest were paid, the contract would be ended in accordance with this general condition; and
· the default were not remedied and the reasonable costs and interest were not paid by the end of the period of the default notice;
(i) if the contract ended by default notice given by the vendor:
· the deposit up to 10% of the price was forfeited to the vendor as the vendor’s absolute property, whether the deposit had been paid or not; and
· the vendor was entitled to possession of the property;
· the vendor may retain any part of the price paid until the vendor’s damages had been determined and may apply that money towards those damages; and
· any determination of the vendor’s damages must take into account the amount forfeited to the vendor.
5 Economedes sold the property through the firm of real estate agents Jellis Craig. The responsible agent was Fabio Forlano. He introduced Debray to the property. Initially, Debray offered a purchase price of $1,480,000. But Economedes wanted a higher offer and after Forlano communicated this, Debray managed to raise an additional $6,000 from her mother. Hence, the agreed sale price was $1,486,000. Debray paid the holding deposit of $8,000 but did not pay the remaining $140,000 on the due date of 20 June 2014 – or at any other time.
6 Through her solicitors, Economedes gave Debray a written notice of default dated 10 July 2014. The notice advised Debray that:
· she was in default under the contract;
· Economedes was going to exercise her rights unless the defaults were remedied and proper costs and interest in accordance with the Schedule in the notice were paid within 14 days of service of the notice upon the purchaser;
· unless Debray remedied the default, the contract would end in accordance with General Condition 28.2 of the contract;
· if the contract ended through a notice of default given by the vendor, then
o the deposit up to 10% of the price was forfeited to the vendor as her absolute property whether the deposit had been paid or not; and
o the vendor was entitled to possession of the property.
7 Debray did not remedy the default. As a result, the contract terminated and Debray owed Economedes the balance of the unpaid deposit together with interest.
8 The pleadings in this case are informative to the extent that Debray admitted most of the major allegations made by Economedes. The critical element to Debray’s defence was her contention that the contract was conditional upon, and subject to, Debray obtaining finance to purchase the property and Debray’s partner, Mark Grover (“Grover”), selling a property he owned in Abbotsford. While one might reasonably think that Debray’s claim to a conditional contract was consistent both with other allegations in the defence and her conduct in apparently finding it difficult to pay a holding deposit of $8,000, there was no evidence led by or on behalf of Debray to support her position. When the agent was asked about his conversations with Debray and Grover, he expressly denied that there were any discussions to the effect that the sale of the property was subject to Debray obtaining finance or Grover selling another property.
9 In the circumstances, I am satisfied both by Debray’s pleadings and also by the evidence which Economedes led that the vendor is entitled to succeed in her claim. If authority were required to support Economedes’ case, Bot v Ristevski[1] makes clear that a vendor who discharges a contract for the sale of land by accepting the purchaser’s repudiation of the contract can recover from the purchaser a deposit that should have been paid before the contract was discharged. Here, the purchaser’s failure to pay the balance of deposit due approximately three months after the initial holding deposit, together with the later failure to respond to the default notice and to settle the transaction amounts to a repudiation of the contract, especially where time is of the essence.[2] In any event, the contract would be rescinded in accordance with its terms and the vendor entitled to the deposit and possession of the property.
[1][1981] VR 120
[2]See also Nund v McWaters [1982] VR 575 (FC)
10 Accordingly, I order that:
(a) there be judgment for the plaintiff in the sum of $140,000 together with interest in the sum of $17,129.86 making a total of $157,129.86
(b) the defendant’s counterclaim is dismissed
(c) the defendant pay the plaintiff’s costs of the proceeding and counterclaim, including any reserved costs, to be taxed on a standard basis in default of agreement
(d) there be a stay of 30 days from today in the taking effect of these orders
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