Le v Tran

[2016] NSWSC 632

Supreme Court

New South Wales

Medium Neutral Citation:

Le v Tran [2016] NSWSC 632

Hearing dates:

24 February 2016

Date of orders:

18 May 2016

Decision date:

18 May 2016

Jurisdiction:

Common Law

Before:

Harrison AsJ

Decision:

Judgment:

 

(1) It is adjudged that the plaintiff have possession of the property described in paragraph 1 of the statement of claim.

 

The Court orders that:

 (2) The defendant is to pay the plaintiff the sum of $99,070.96.
(3) The cross claim is dismissed.
(4) The defendant is to pay the plaintiff’s costs of the proceedings, including the costs of the cross claim.

Catchwords:

REAL PROPERTY – possession of land – failure to pay rent and option payments – notices of default and termination of rental and option agreements served – defendant has not demonstrated why agreements should be set aside – option fees, rent and mesne profits to date of judgment payable

Legislation Cited:

Competition and Consumer Act 2010 (Cth)
Fair Trading Act 1987 (NSW)
Residential Tenancies Regulation 2010 (NSW)
Trade Practices Act 1974 (Cth)

Cases Cited:

Blomley v Ryan (1956) 99 CLR 362
Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447
Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432
Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; 42 ALR 1

Category:

Principal judgment

Parties:

Philip Le (Plaintiff)
Thanh Hue Tran (Defendant)

Representation:

Counsel:
N Allan (Plaintiff)
Thanh Hue Tran (Defendant) (In person)

  Solicitors:
Cordato Partners Lawyers (Plaintiff)

File Number(s):

2015/38098

Publication restriction:

Nil

Judgment

1. HER HONOUR: By statement of claim the plaintiff seeks to recover possession of land and payment of rent pursuant to a residential tenancy agreement and option payments under an option to purchase. The defendant’s lease term has expired and the defendant, as occupant, has not paid the agreed rent.

2. By statement of cross claim the defendant seeks to set aside the option agreement and the residential tenancy agreement. She seeks an order requiring the plaintiff to repay the amount paid by the defendant pursuant to the option agreement and a declaration that the defendant’s payments are full satisfaction of the residential tenancy agreement and that the defendant owes the plaintiff no further money with respect to the agreement.

3. The plaintiff is Philip Le (“Mr Le”). He was represented by Mr N Allan of counsel. The defendant is Thanh Hue Tran (“Ms Tran”). She was self represented and utilised the services of an interpreter. The plaintiff relied on his affidavits dated 13 March 2015 and 25 August 2015 and six affidavits of his solicitor Fiona Ta’akimoeaka dated 13 March 2015, 29 May 2015, 30 June 2015, 11 November 2015, 29 January 2016 and 3 February 2016. The defendant relied on her affidavits dated 9 March 2015 and 21 September 2015.

History of the proceedings

4. On 8 October 2014, the plaintiff applied to New South Wales Civil and Administrative Tribunal seeking possession and a money judgment. As the claim exceeded the Tribunal’s jurisdictional limit the plaintiff withdrew his proceedings and the case was dismissed in December 2014.

5. On 6 February 2015, the plaintiff filed a statement of claim in this Court seeking judgment for the plaintiff for possession of property at Mount Pritchard, NSW; leave to issue the writ of possession forthwith; judgment for the plaintiff against the defendant in the sum of $99,383.44; interest; and an order that the defendant pay the plaintiff an occupation fee of $550 per week from the date of judgment until the date of vacation of the land.

6. On 9 March 2015, the defendant filed a defence.

7. On 13 July 2015, the defendant filed a cross claim. The defendant pleads that the plaintiff does not own the property and that she was misled into paying the option fee. The defendant also says that she leased the property because of an assurance that she could improve the land and sub-let it. She alleges that the plaintiff promised “to help her use” the land as security.

8. On 4 September 2015, the plaintiff filed a defence to cross claim. In essence he denies the defendant’s allegations.

9. On 19 June 2015, Button J made orders that until further order, the defendant is to pay an occupation payment of $360 per week and $50 per week in reduction of the rent arrears. These payments were ordered to be made weekly in advance from 26 June 2015 by direct deposit into the plaintiff’s bank account. As at 5 October 2015, the defendant fell into default in making payments in accordance with the court’s order.

10. As a result of the defendant’s default, on 5 February 2016, Garling J made an order that judgment be entered for the plaintiff against the defendant in the sum of $6,480 forthwith and that the defendant pay the plaintiff’s costs of the notice of motion filed 29 January 2016.

11. After the hearing before me concluded and judgment was reserved, Ms Tran forwarded a number of unsolicited documents to my chambers. They include a settlement adjustment sheet relating to a different property in Fairfield Heights, a Vietnamese mortgage, other documents in Vietnamese without translations or explanations, Centrelink documents, remittance advices, screenshots of bank account information, receipts dated 8 July 2014 and 5 October 2014, a letter dated 13 April 2016 addressed to my associate by the defendant and an admission form from a hospital. They are largely irrelevant to the issues in dispute and I have disregarded them.

The pleading framework

The statement of claim

12. The following is a summary of the matters pleaded in the statement of claim.

13. The plaintiff is the attorney appointed under a registered power of attorney for the whole of the land folio identifier LOT B DP XXXXX X situated at Mount Pritchard, New South Wales (“the property”).

The residential tenancy agreement

14. On 1 March 2013, Ms Tran entered into a residential tenancy agreement with Mr Le. The agreed rent under the residential tenancy agreement was $550 per week for a term of two years commencing on 1 March 2013. The lease expired on 1 March 2016. On 1 March 2013, Ms Tran took possession of the property and to date remains in possession. She has been in default as she has not made rent payments.

15. On 1 March 2013, Ms Tran also entered into an option agreement with Mr Le. This option agreement provided for Ms Tran to pay an ongoing option fee by weekly instalments commencing on 1 March 2013 as well as an ongoing option fee of $60,000 payable by way of six monthly instalments of $10,000 commencing on 1 April 2013. On 1 March 2013, Ms Tran paid a part option fee of $20,000 and on about 8 March 2013, she paid a second part option fee of $10,000 in accordance with the option agreement.

16. Counsel for Mr Le concedes (in submissions) that, in the event of a default, Mr Le may deliver a notice of default describing the default and requiring it to be remedied within 14 days per clause 8. If she failed to remedy the default pursuant to the notice of default, Mr Le could deliver a notice of termination per clause 9. Mr Le has to prove that he has complied with this contractual provision.

Notices

17. On 22 November 2013, the plaintiff alleges that Mr Le served a notice of default of option and notice of default of residential tenancy agreement on Ms Tran and that she did not comply with either of these notices.

18. On 7 October 2014, Mr Le alleges he served a notice terminating the residential tenancy agreement and on 18 December 2014, he served a notice of termination of the option agreement personally on Ms Tran. Ms Tran disputes firstly, that she has been served with these notices and secondly, that she has not complied with them.

19. Ms Tran also disputes the amount due and owing for the option instalments as at 1 February 2015 and the total amount paid and the total arrears owing under the option agreement.

The cross claim

20. By her cross claim, Ms Tran seeks the following orders:

1. That the option agreement of 1 March 2013 for the purchase of the property be set aside on the basis of being misleading or deceptive, unconscionable, unable to be completed and/or void for uncertainty;

2. that the plaintiff repay the defendant the amount of $40,233.08, which was paid to the defendant pursuant to the option agreement;

3. interest on the amount paid by the defendant pursuant to the option agreement at $7.17 per day from the date of 1 March 2013 until the date of judgment;

4. that the residential tenancy agreement be set aside on the basis of being misleading or deceptive and unconscionable; and

5. a declaration by the court that the defendant’s payment of $25,546.92 is full satisfaction of the residential tenancy agreement and that the defendant owes no further money on account of this agreement.

21. A defence has been filed to the cross claim but it is not necessary to set it out here. Essentially it denies the matters asserted by Ms Tran.

22. I shall firstly set out the factual background, secondly the issues raised in relation to Mr Le’s statement of claim and finally the issues raised in relation to Ms Tran’s cross claim.

Credibility

23. It is convenient that I record my observations and findings as to Mr Le and Ms Tran’s credibility. They both gave evidence and were cross examined. I carefully observed them while they were in the witness box.

Mr Le

24. Mr Le has lived in Australia since 1981. He has been self-employed as a builder since 2005. Mr Le was articulate in speaking English and comfortable reading documents in English. However, it was difficult to properly assess his credit due to the manner he was cross examined by Ms Tran. Overall, I accept his evidence as being truthful as it is logical and borne out by written documentation.

Ms Tran

25. As previously stated, Ms Tran was self represented and utilised the services of an interpreter. Understandably she had difficulty comprehending the difference between the giving of evidence and the making of submissions, even though this Court attempted to explain it to her. She portrayed herself as being unable to speak or understand all but the most basic English. She gave evidence that she could not read English very well. This portrayal is contrary to the impression she gave to Mr Hooper.

26. Where there is a factual dispute between Mr Le and Ms Tran, I prefer the evidence of Mr Le unless there is documentation indicating otherwise. Mr Hooper is a solicitor who provided legal advice to Ms Tran in relation to the tenancy and option agreements. Where there is a factual dispute between Ms Tran and Mr Hooper, I prefer and accept the evidence of Mr Hooper. I shall refer to the meeting with Mr Hooper in more detail later in this judgment.

27. Ms Tran gave some evidence which I found difficult to accept. I will refer only to a few examples here but others will appear throughout this judgment. Ms Tran was asked whether she operated two email accounts, including [email protected] and [email protected]. She denied that she operated these email addresses. So far as the first email address is concerned, Ms Tran explained that her cousin operated the account (T55.38). Mr Le’s solicitor, Ms Ta’akimoeaka forwarded correspondence to Ms Tran at the first email address ([email protected]) (Ta’akimoeaka Aff, 29/1/2016, [9]). Ms Ta’akimoeaka received email responses to her emails. I accept that Ms Tran used this email address to write and receive emails. Ms Tran was also shown pictures from a Facebook account in her name. The pictures included Ms Tran and her children. When asked if she posted the photos on the Facebook account, she said she did not and explained that anyone could have done so (T59.11-14).

28. Ms Tran was asked whether Mr Le attended the property on 22 November 2013 to serve her with notices of default. She admitted that he came to the property but she says that it was because he wanted to sell vitamins to her mother, not to serve her with notices. Ms Tran was asked whether she had received two letters from Mr Le’s solicitor around 18 December 2014. They had been sent by post to the property. She said that she had not received them because “it was raining and they got wet” (T60.39-40).

29. Finally, in cross examination, counsel for Mr Le asked Ms Tran the following:

“Q. When I asked you to look at that document [the notice of default of option] 20 minutes ago you read it without an interpreter, didn't you?

A. INTERPRETER: Yes, that's right, I read it.” (T55.27-29).

30. Ms Tran then denied that she could read and write in English (T55.31-32).

31. I have reluctantly come to the conclusion that I can only accept her evidence where it is unchallenged or corroborated.

The factual background

32. In early December 2012, Mr Le was introduced to Ms Jenny Phan, the registered proprietor of the subject property. Ms Phan was looking to sell the property. On 14 January 2013, Mr Le signed a Heads of Agreement with Ms Phan in relation to the property in which she agreed to grant Mr Le an option to purchase the property at an agreed price, exercisable until a certain date. Ms Phan also gave Mr Le a power of attorney (referred to earlier in this judgment).

Meeting between Mr Le and Ms Tran in January 2013

33. In January 2013, Mr Le published an advertisement in the Vietnamese newspaper “Chieu Duong” for the sale of the property. Ms Tran contacted Mr Le about buying the property.

34. In January 2013, Mr Le met Ms Tran at the property. Mr Le says that he had a conversation with Ms Tran in which he represented that he had a power of attorney over the property and was entitled to sell the property to her for $450,000. He then offered her a lease option to buy the property with a $70,000 deposit along with a 24 month residential tenancy agreement. If the option was completed, the balance owing would be $380,000 with 8% interest per annum. Ms Tran informed him that she owned and managed five nail shops in Westfield Shopping Centres at Hornsby, Chatswood, Eastgardens, Penrith and West Ryde. She also told him that she was setting up another nail shop at Miranda Westfield Shopping Centre. She informed Mr Le that the house would be an investment property and she would give “$90,000.00 to $110,000.00 instead of $70,000.00” for the deposit (Le Aff, 25/8/2015, [9]-[10]).

35. When Mr Le asked Ms Tran whether she understood the contract and whether she had any problems with contracts in English, she responded that she could read and understand English and had many years of experience in business dealing with a variety of types of contracts (Le Aff, 25/8/2015, [11]).

36. Mr Le’s evidence is that he advised Ms Tran that she could convert the garage into a granny flat once she owned the house, which would require approval from the council. Ms Tran asked Mr Le whether she could sub-let the house. Mr Le advised her that she would need to inform him in writing to get his approval (Le Aff, 25/8/2015, [12]). Ms Tran’s evidence is that at this meeting, she told Mr Le that she wanted to sub-let the property and build a granny flat upon the property and he replied he did not have any objections (Tran Aff, 9/3/2015, [5]). I prefer Mr Le’s evidence as it makes commercial sense. There is no contractual term authorising Ms Tran to sub-let or build a granny flat.

37. Ms Tran’s evidence is that she told Mr Le at this meeting that she required a bank guarantee to cover three months’ rent in advance for two shops that she operated at Westfields. In order to get a bank guarantee, she was required to have a total of $66,000 in her account or a property as security. Ms Tran said Mr Le told her he would help her get the money out of the bank and use the property as security if she agreed to an asking price of $450,000 for the property. Ms Tran told Mr Le that the market value was $340,000, to which he replied that the property would increase in value in two years. She could sign the option then and settlement would take place in two years. Ms Tran says she signed the option agreement on this basis (Tran Aff, 9/3/2015, [3]-[5]).

38. On 8 February 2013, Ms Tran signed an Offer to Purchase with Vendor Finance and gave Mr Le a $2,000 deposit (Le Aff, 25/8/2015, [15]). This document shows the purchase price as being $450,000, to be paid by a $30,000 deposit on signing the contract, followed by $10,000 each month for six months after and “$3081.81 by 24 monthly payments of $_____ each and $_____ after _____ months.” The underlined spaces here indicate portions of the document that were incomplete. A handwritten note on the document indicates “COMMENCING DATE 1/3/2013”. It is signed by Ms Tran.

39. At some point during the following two weeks, while the contract was being drafted, Ms Tran contacted Mr Le and requested that her total deposit amount be $90,000, not $110,000, and that it be split into seven part payments of $30,000 payable immediately on the date of signing the contract, then $10,000 every month thereafter for the next six months, while paying rent and option fees for 24 months. Mr Le agreed and instructed his solicitor to prepare the option in accordance with Ms Tran’s request (Le Aff, 25/8/2015, [16]).

40. Mr Le said that during his next telephone conversation with Ms Tran, he asked her whether she would be able to afford the option instalments while also paying monthly rent and option payments. Ms Tran indicated that this was not a problem as she expected payment of a sum of $80,000 in a few weeks (Le Aff, 25/8/2015, [17]).

41. On 1 March 2013, Ms Phan granted an option to Mr Le to purchase the property together with a three year lease. The lease commenced on 1 March 2013 and ended on 1 March 2016. The option agreement between Ms Phan and Mr Le expressly provided that Mr Le had Ms Phan’s consent to sub-lease the property under the residential tenancy agreement: cl 11(ii). The option commencement date was 1 March 2013.

42. On 1 March 2013, Ms Tran’s solicitor, Mr Tien Ngoc Do, asked Mr Le to attend a meeting between him and Ms Tran in order to sign the prepared lease option documents. At this meeting, Mr Do indicated that he had performed a title search on the property and had discovered Ms Phan was the registered owner of the property. Mr Le told Mr Do that Ms Phan had given him a power of attorney to sell the property and lease it out. Mr Do then turned to Ms Tran and indicated that he no longer wished to represent her or advise her in relation to executing the agreement. When Mr Le and Ms Tran asked why, Mr Do indicated that there was nothing wrong with the contract and it is “a perfect contract for the right people”, however he would not advise Ms Tran to execute this contract (Le Aff, 25/8/2015, [18]). Ms Tran’s evidence was that Mr Do could not help her because he did “not deal in such matters.” (Tran Aff, 9/3/15, [6].)

43. Mr Le and Ms Tran had a conversation when they left Mr Do’s office. Mr Le said that Ms Tran asked whether he could refer her to any other solicitor so the contract could be signed on that day as she was very busy. Mr Le suggested Mr David Hooper, whose sign Mr Le had seen from opposite Fairfield Local Court.

The meeting with the solicitor, Mr Hooper on 1 March 2013

44. At the hearing, Mr David Hooper gave oral evidence and was cross examined. He is a solicitor with a legal practice on Spencer Street, Fairfield. Mr Hooper regularly deals with people from non English speaking backgrounds, including some Vietnamese (T20.25-31). He did not furnish an affidavit. His version of events is as follows.

45. On 1 March 2013, when Mr Le and Ms Tran arrived together at Mr Hooper’s office, Mr Le introduced Ms Tran to Mr Hooper. Mr Le explained that Ms Tran needed independent legal advice concerning an agreement between them and asked Mr Hooper to provide it. Mr Hooper asked whether an interpreter was required. Mr Le indicated that he would interpret, however Mr Hooper refused as Mr Le was a party to the transaction. Mr Hooper told Mr Le that an independent interpreter was required so the advice could be given independently.

46. Mr Le said that he had “never met or done any business with Mr Hooper prior to the meeting with him on 1 March 2013.” (Le Aff, 25/8/2015, [19].) This is at odds with Mr Hooper’s oral evidence, in which he said he had previously met Mr Le. Mr Hooper’s evidence is that he was not exactly sure where he had met Mr Le, but that he had met him a number of times before 1 March 2015 and had made telephone calls to him. He also said he may have had lunch with him once or twice at a local restaurant. He said he had never acted as Mr Le’s lawyer (T12.1-19). Ms Tran says that Mr Hooper and Mr Le knew one another (Tran Aff, 9/3/2015, [6]). I accept Mr Hooper’s evidence that he had not been retained by Mr Le.

44. When asked whether Ms Tran said anything to him in English, Mr Hooper gave the following evidence:

“A. Not very much, but I did say, “Do you need an interpreter?” and she had just nodded to say, ‘No, I don’t,’ but I know that she knew the question I was asking because… I believed she understood very good English.” (T13.11-15).

48. Mr Hooper then asked to look at the documents that had been provided by Mr Le and Ms Tran. They gave the documents to Mr Hooper and he told them that the transaction was “very unusual” and that he was “not sure many solicitors would be familiar with it” (T15.29). He said that in order for him to be able to provide proper advice he would need until late the following week so he could read and comprehend the documents. When asked whether Ms Tran said anything in response to this, Mr Hooper said Ms Tran indicated that she could not wait until next week because she was very busy as “she had a business involving five or six shops that she had and she had to attend to that business.” (T15.40-42).

49. Mr Hooper’s evidence continued as follows:

“Q. And how did you deal with that?

A. I was very unhappy, I said, "Look, this is an important transaction, you should wait, I would prefer that you waited." She insisted, "No". I then said, "What is the urgency?" Now, I must say I was concerned with the pressure that was being put on Mrs Tran by Mr Le at that moment. I rang Mr Le's solicitor, Mr Cordato, I asked if any urgency in the transaction. I can't tell you what Mr Cordato said, but I tell you, I said to both of them there is no urgency.

Q. Did she say anything?

A. No, "I want to do it today.”

Q. That is Ms Tran?

A. Yes.

Q. Did you say anything to her about the documents, apart from the fact you wanted to reflect on them and give proper advice later?

A. I did say to her that I was concerned, that it was a very unusual transaction, it was not the typical conveyancing transaction where you are just dealing with the vendor.

Q. Did you say anything factual to her, what the documents were, not just what you thought about them?

A. The documents were a contract with Mr Le who did not actually own the property.

Q. Did you say this to her?

A. He did not own the property. I said to her most solicitors would not be happy with that, and that is probably why the first solicitor went to, would not sign them because he would have been concerned that Mr Le did not have the power to deal with the property and he may have had his reasons, I don't know, but I surmised and advised Mrs Tran that it was unusual because Mr Le was dealing with somebody else's property, not his own.

Q. Did that raise a response from Ms Tran?

A. No, I understand what it is about. She said in so many words, I understand what this is about.

Q. In English?

A. In English.

Q. Did she say she had received any prior explanations of what was going on?

A. No, she simply said she did not understand why her previous solicitor would not sign the documents and I feel bad. My guess as to why he would not, by saying it is an unusual transaction, and I then reiterated I would prefer the time to sit back and have a good look at it and talk about it with an interpreter with you.” (T15.44-16.39.)

50. The documents that were provided to Mr Hooper at the meeting included an unsigned contract for the sale of the property, a signed residential tenancy agreement and a signed option agreement (Ex A). On the contract for the sale of land, Mr Le’s name appears as the vendor. His name also appears as the landlord on the residential tenancy agreement and his signature appears on the last page of the agreement in the section requiring the signature of the landlord/agent. Mr Le is referred to as the “Owner” on the first page of the option agreement and his signature appears on each page of the document, including the last page where he signed as the “Owner” (Ex A). Ms Tran said she did not receive a copy of the contract of sale (Tran Aff, 9/3/2015, [9]).

51. Mr Hooper explained to Ms Tran that the property was not owned by Mr Le, but rather it belonged to Ms Phan who had an arrangement with Mr Le whereby he was able to sell the property on Ms Phan’s behalf once Ms Tran had fulfilled the option and paid it off (T19.8-11). Mr Hooper did not sight a power of attorney amongst the documents upon which he was asked to provide advice. The documents (Ex A) that Mr Hooper was given do not show Ms Phan as the registered owner of the property. It is unclear how Mr Hooper learned this information, although when asked by counsel for the plaintiff about her name, Mr Hooper stated that he had seen her name in the papers and that she was clearly the owner of the property.

52. Mr Hooper explained to Ms Tran that, under the option agreement, $30,000 was owed on that day and a payment of $10,000 per month for six months was due thereafter and that this was a lot of money, which alarmed Mr Hooper (T19.33-4).

53. At some point in the conversation, Mr Le began interrupting Mr Hooper and Ms Tran’s conversation. Mr Hooper asked Mr Le to leave the room and Mr Hooper continued his conversation with Ms Tran on her own. He then invited Mr Le back in and proceeded to take Ms Tran through the documents, in particular the option agreement itself. When Mr Hooper indicated that Ms Tran had to pay $10,000 per month, he drew a diagram depicting five or six shops and asked her where her shops were and how much money she made from each shop. Ms Tran responded by pulling a large wad of bank notes out of her handbag, saying, “I have the money. This is $30,000 cash. I know what I am doing.” Mr Hooper did not count the money but believed it to be $30,000 (T20.2-20).

54. After Mr Hooper took Ms Tran through the option agreement one paragraph at a time, he then took her through the lease agreement. He was asked:

“Q. The lease is there as well?

A. Then I got to the lease and I must say I had not really thought about the lease until this time when I got to the lease. I realised here is another $550 a week and I said to Mrs Tran “This is a lot of money. You have got $10,000 a month under the option, you have got another I think it was $220 a week as a second part of the option fee but it reduced every two years and then on top of your $550 a week for the residential lease for two years” and I was going “My God, even if you are wealthy this is a lot of money to pay.” And I was reiterating that to Mrs Tran “and if you miss any of these payments you could lose your money” and that was always in the--

Q. What did she say?

A. I have got money. I can pay. She had showed me the $30,000. She had shops, she had a business, she owned commercial leases. She knew what she was doing.” (T24.27-41).

55. In Ms Tran’s evidence, she says she does not remember being told by Mr Le or Mr Hooper that she was required to pay $10,000 per month in option fees for six months (Tran Aff, 9/3/2015, [8]). I accept that Ms Tran was told this by Mr Hooper.

56. When Mr Hooper came to writing the receipt for payment between Ms Tran and Mr Le he noted that the agreement had been amended by hand so that the $30,000 upfront option fee was payable “on or before 8 March 2013, payable by way of first instalment of $20,000 on 1 March 2013 and balance of $10,000 by 8 March 2013”. According to Mr Hooper, Ms Tran told him that she paid the first instalment on 1 March 2013 to Mr Le. This money was not paid in front of Mr Hooper however Mr Le signed the receipt handwritten by Mr Hooper acknowledging the payment. Mr Le said that Ms Tran could only pay $18,000 on the day and would pay the remaining $10,000 in a week (T22-23). I note that Ms Tran had paid a $2,000 deposit on 8 February 2013, making the total paid by her as at 1 March 2013 the sum of $20,000.

57. Mr Hooper wrote a receipt for Mr Le, signed by Mr Le and dated 1 March 2013, in the following terms:

“I hereby acknowledge and confirm receipt of the sum of $20,000 from Thanh Hue Tran of XXXX Cabramatta, New South Wales being the first payment under Clause 2(1) of the Document headed “Option” dated 1 March 2013 and signed by me, Philip Le, the “Owner” and Than Hue Tran, the “Purchaser”.” (Ex B).

58. Once the documents were signed, Mr Hooper advised Ms Tran to come back to see him if she had any questions. He also advised her that she must return once she had paid the six $10,000 instalments so that he could assist her in applying for bank finance so she could properly buy the house from the bank. Ms Tran said that she would do so. Sometime in October 2014, she returned requesting that he provide her with the documents.

59. Ms Tran alleges that she did not receive a copy of the contract of sale of land from Mr Le or Mr Hooper after she signed the option agreement (Tran Aff, 9/3/2015, [9]). Mr Le said that Ms Tran received this document from Mr Do before going to Mr Hooper’s office (Le Aff, 25/8/2015, [28]). Mr Hooper’s evidence was that he did not know whether Ms Tran kept copies of the documents, including the contract of sale of land. He said he kept the documents he was given. He handed them back to Ms Tran when he was requested to do so in about October 2014 (T15.13). In Ms Tran’s cross examination of Mr Le she asked whether he provided her with the contract of sale, to which he replied that he had given it to her Vietnamese lawyer, Mr Do, who gave it to her and afterwards she brought it to Mr Hooper.

60. Towards the end of the conference, Ms Tran asked Mr Hooper to put a caveat on the property for her. Mr Hooper gave the following evidence:

“WITNESS: That was the other thing at the end of the conference. She asked me in her own words “Will you put a caveat on for me?”

ALLAN

Q. She asked for the caveat?

A. She asked for the caveat. She said to me “Will you put a caveat on for me?” and I said “Yes I will” and that was voluntary from her without my prompting.

Q. That is a bit of legalese isn’t it, caveat for a non-English speaker?

A. Yes. Mrs Tran was giving me to understand that she was familiar with legal documentation, with leases, commercial leases, handling large amount of money, handling complex transactions.

Q. She used the word “caveat”?

A. She used the word “caveat” in that question.” (T25.35-26.1).

61. Ms Tran’s evidence was that Mr Hooper advised her to place a caveat on the property in order to protect the option agreement and so she instructed him to do so (Tran Aff, 9/3/2015, [7]). While cross examining Mr Hooper, she submitted that she never asked Mr Hooper to lodge a caveat, rather, he did so of his own accord (T30.41).

62. On 24 April 2013, Mr Hooper lodged a caveat with NSW Land and Property Information on behalf of Ms Tran in accordance with her instructions. Mr Hooper listed his office address as the address for service of notices. He paid the fee in relation to lodging the caveat with funds he says had been provided to him by Ms Tran on 1 March 2013 (T27.2-3). On 30 April 2013, Mr Hooper sent Ms Tran a letter advising her that he had lodged a caveat (Ex C). Attached to the letter was a copy of the caveat, a copy of the tax invoice issued by NSW Land and Property Information and a copy of the receipt in payment of the invoice. The letter was accompanied by a translation of the letter from English to Vietnamese. At the bottom of the translation is a note stating, “This is not an “official” translation”. In oral evidence, Mr Hooper said that he translated the letter himself using Google Translate (T22.17). When counsel for the plaintiff tendered the letter (Ex C), Ms Tran denied that she had ever seen it before (T26.6-7).

63. Sometime later, Mr Hooper recalled that Mr Le contacted him to say that Ms Tran had not made payments. In October 2014, she sought the return of the documents held by Mr Hooper. Ms Tran told Mr Hooper that she needed them to purchase the house and to contest proceedings brought against her by Mr Le to vacate the property in the NSW Civil and Administrative Tribunal. As previously stated, Mr Le had contacted Mr Hooper concerning Ms Tran’s failure to make payments. Ms Tran came to Mr Hooper’s business premises on two or three occasions. On one occasion, she brought her husband with her. Mr Hooper attempted to offer them legal advice and assistance, however was not retained by Ms Tran or her husband. He provided Ms Tran with the documents.

Cross examination of Mr Hooper by the defendant

64. Ms Tran cross examined Mr Hooper but her style of questioning was largely argumentative. She denied many of the answers he gave to her questions. They were more in the nature of submissions so I will treat them as such. Accordingly, Ms Tran submitted the following:

1. She could not understand what he was saying at the meeting (T29.7);

2. Mr Hooper did not see her take cash from her bag (T29.29);

3. Mr Hooper did not offer to get an interpreter for Ms Tran (T29.38) and both Mr Hooper and Mr Le said they would cheat Ms Tran because she was a woman and therefore there was no need to get an interpreter (T30.32-39); and

4. Mr Hooper did not tell Ms Tran that the property did not belong to Mr Le (T29.45).

65. I prefer Mr Hooper’s evidence to Ms Tran’s submissions. While Mr Hooper had a good recollection of the meeting, he refreshed his memory from documents (Ex A). One unusual feature that stuck in his mind was that Ms Tran asked him to lodge a caveat from funds received from her on 1 March 2013. This is telling as it demonstrates that Ms Tran understood what was being said in English and had some commercial experience. Mr Hooper, in accordance with Ms Tran’s instructions did indeed lodge the caveat. It is most unlikely he would have lodged the caveat without instructions and without payment of the lodging fee.

Rental of the property by Ms Tran

66. Ms Tran says that about a month after Ms Tran signed the agreements with Mr Le, she advertised in the Vietnamese Newspaper “Chieu Duong” to rent out the property. She also made arrangements for builders to start work on a granny flat. When the builders were about to commence work, Mr Le arrived at the property and told them he was the owner of the property and that he had not given permission for the building to occur so they had to stop work. He told Ms Tran that she could not build a granny flat or sub-let the property until she was the owner of the property (Tran Aff, 9/3/2015, [10]).

67. Mr Le disputes Ms Tran’s version of events. According to Mr Le, the events occurred in October 2014, not a month after entering into the agreement. On 10 October 2014, Mr Le walked past Ray White Real Estate at Cabramatta and saw in the window that the property was listed on the market to be rented for $430 per week. Mr Le immediately attempted to contact Ms Tran but was unable to do so. He went into Ray White and provided a written notice to the agent to take the property off the rental market. He says that his objection to Ms Tran building on the property also occurred in October 2014. Ms Tran had not consulted Mr Le or informed him that she wished to sub-let the property and she listed the property on the rental market without Mr Le’s authorisation or approval (Le Aff, 25/8/15, [58]).

The relevant documents

68. I shall briefly set out the relevant documents. They are the option agreement between Ms Tran and Mr Le and the residential tenancy agreement between Ms Tran and Mr Le.

Option agreement

69. The option agreement provided that Ms Tran would be granted an option to purchase the property for the price and in accordance with the terms of the Contract for Sale attached to the option agreement in return for an option fee, comprised of an upfront fee and ongoing instalments. The option fee was to be credited against the purchase price of the property. So long as Ms Tran paid the option fee in accordance with the schedule, all payments would be credited towards the purchase price for the property. Although the option agreement appears to be expensive, the benefit it conferred on Ms Tran is that she had the right to purchase the property and the payments made by her were creditable to the sale price.

70. The relevant terms of the option agreement between Mr Le and Ms Tran 1 March 2013 are as follows:

“1. Grant of Option

The Owner grants to the Purchaser an option to purchase the property for the price and in accordance with the terms of the Contract for Sale attached, in consideration of the option fee, on the following terms (“the option”).

2. Option fee

The option fee is payable as follows:

(i) An upfront option fee of $30,000.00 is payable on or before 8 March 2013, payable by way of first instalment of $20,000 on 1 March 2013 and balance of $10,000 by 8 March 2013.

(ii) An ongoing option fee of $60,000.00 is payable by 6 instalments of $10,000.00 per month as follows:

(a) on 01/04/2013 - $10,000.00

(b) on 01/05/2013 - $10,000.00

(c) on 01/06/2013 - $10,000.00

(d) on 01/07/2013 - $10,000.00

(e) on 01/08/2013 - $10,000.00

(f) on 01/09/2013 - $10,000.00

(iii) An ongoing option fee is payable by monthly instalments as follows:

(a) on 01/03/2013 - $831.81, payable by four instalments of $220.45

(b) conditionally upon the payment in paragraph (ii) (a) being made, on 01/04/2013 - $808.43, payable by four instalments of $202.11

(c) conditionally upon the payment in paragraph (ii) (b) being made, on 01/05/2013 -$735.06, payable by four instalments of $183,76

(d) conditionally upon the payment in paragraph (ii) (c) being made, on 01/06/2013 - $661.63, payable by four instalments of $165.42

(e) conditionally upon the payment in paragraph (ii) (d) being made, on 01/07/2013 - $588.31, payable by four instalments of $147.08

(f) conditionally upon the payment in paragraph (ii) (e) being made, on 01/08/2013 - $514.93, payable by four instalments of $128.73

(g) conditionally upon the payment in paragraph (ii) (f) being made, on 01/09/2013 - $441.55, payable until the option expires every month by four instalments of $110.39.

If a payment described in paragraph (ii) is not made by the due date then the payments will continue in the same amount until the payment is made, where upon the condition being satisfied as described, then the reduced payment will be made. Each of the conditions described in paragraph (b) to (g) must be satisfied sequentially for the Purchaser to be entitled the (sic) make the reduced payments. The payments are to be made in conjunction with the rent payments under the Residential Tenancy Agreement.

(iv) If an instalment of the ongoing option fee described in paragraph (iii) is paid late, a late administration fee of $50.00 will be payable.

(v) The occupation date will be the date the Purchaser takes occupation under the Residential Tenancy Agreement and will be 1 March, 2013.

The whole of the upfront option fee paid as described in paragraph (i) and the whole of the ongoing option fee paid as described in paragraph (ii) will be credited against the price payable under the Contract for Sale, if the option is exercised. The credit for each instalment of the ongoing option fee will apply to the instalments which are paid by the due date for payment.

3. The option expiry date

(i) The option will expire on 28 February, 2016 at 4:00pm or if that day is not a business day, on the next business day after that day (which day and time is the “option expiry date”);

(ii) The option will expire on the option expiry date (as may have been extended) unless one of the following has occurred beforehand:

(a) The option is exercised before the option expiry date; or

(b) The option is terminated by the Owner pursuant to this Deed before the option expiry date; or

(c) The option is terminated by the Purchaser pursuant to this Deed before the option expiry date; or

(d) The Owner and the Purchaser mutually agree to terminate the option before the option expiry date.

(iii) If the option expires, without being exercised, then

(a) the option shall be at an end; and

(b) the Purchaser will forfeit the option fee paid to the Owner, and

(c) no further rights and obligations shall exist between the Owner and the Purchaser other than the rights and obligations which have accrued to that time.

…

6. Purchaser’s covenants

The Purchaser covenants with the Owner as follows:

(i) to pay the option fee on the date of the option and on the due dates for payment;

(ii) to pay the deposit on the exercise of the option;

(iii) to observe all of the provisions of the option;

(v) to pay the rent on the due dates for payment under the Residential Tenancy Agreement;

…

7. Owner’s covenants

…

(ii) The Owner grants to the Purchaser a caveatable interest in the Property. The Purchaser will consent to the registration of any mortgage procured by the Owner secured by the Property provided that the amount secured by the mortgage does not exceed the balance price payable under the Contract for Sale. The consent shall be either in the form of a letter or a Withdrawal of Caveat, as the Owner may specify when making the request.

8. Notice of Default

(i) If the Purchaser is in default of a covenant under clause 6, then the Owner may deliver a notice in writing (the “Notice of Default”) to the Purchaser which will:

(a) describe the default; and

(b) if the default is a default under clause 6 (i), (ii), (iii), (v), (vi), (vii) or (viii) require the default to be remedied within 14 days of delivery; or if the default is a default under clause 6(iv), and therefore incapable of remediation, then no period for remediation shall need to be given.

…

9. Termination

(i) If a party has failed to remedy a default pursuant to a Notice of Default which allows for remediation of a default, or if the default is incapable of remediation, then the party that is alleging the default may deliver a notice in writing to terminate this option (the “Notice of Termination”) to the party in default.

(ii) The Notice of Termination will serve to:

(a) terminate the option effective upon the date of delivery; and

(b) if delivered to the Purchaser, forfeit the option fee and any other monies paid to the Owner under the Option; and

(c) if delivered to the Owner, require the option fee paid to be refunded to the Purchasers; and

(d) set out any default costs expenses and any further claims a party may have under the option.

10. All notices and other documents required to be delivered under the option:

(i) shall be signed; and

(ii) shall be delivered to the address of the Owner or Purchaser (as the case may be) specified in the option, or as may have been notified in writing (the “address”); and

(iii) may be delivered by hand or posted by express post or registered mail to the address; and

(iv) shall be considered to be delivered, if by post two days after being posted, and if by hand the next day after delivery, to the address.

…

13. Meanings

In this option:

(i) The document shall take effect as a deed

…

(vii) The option fee shall represent a non-refundable advance to the Owner, which shall vest in the Owner on the exercise of, lapsing of or termination of the Option (as the case may be).”

(Italicised words indicate handwriting.)

Residential tenancy agreement

71. The residential tenancy agreement is a standard form agreement in accordance with the Residential Tenancies Regulation 2010 (NSW) Schedule 1 clause 4. Mr Le’s name appears as the landlord. Ms Tran’s name appears as the tenant. The term of the agreement is two years commencing on 1 March 2013 and ending on 28 February 2015. The rent is $550 per week payable in advance commencing on 8 March 2013. Mr Le’s bank account details are provided as the bank account into which Ms Tran is required to pay rental payments. A rental bond of $550 was required to be paid by Ms Tran upon signing the agreement. The remainder of the agreement was in accordance with the standard form. It is necessary to set out the relevant terms of the residential tenancy agreement.

72. Under clause 3, which concerns the payment of rent, the tenant agrees:

“3.1 to pay rent on time, …”

73. Under clause 4, the landlord relevantly agrees:

“…

4.4 to accept payment of unpaid rent after the landlord has given a termination notice on the ground of failure to pay rent if the tenant has not vacated the residential premises, and

…

4.7 to keep a record of rent paid under this agreement and to provide a written statement showing the rent record for a specified period within 7 days of a request by the tenant (unless the landlord previously provided a statement for the same period).”

74. Clause 27 governs alterations and additions to the premises by the tenant. The tenant agrees:

“27.1 not to install any fixture or renovate, alter or add to the residential premises without the landlord’s written permission, …”

75. Clause 32 governs the transfer of the tenancy or sub-letting by the tenant. The landlord and tenant agree that:

“32.1 the tenant may, with the landlord’s written permission, transfer the tenant’s tenancy under this agreement or sub-let the residential premises, and

32.2 the landlord may refuse permission (whether or not it is reasonable to do so) to the transfer of the whole of the tenancy or sub-letting the whole of the residential premises, and

32.3 the landlord must not unreasonably refuse permission to a transfer of part of a tenancy or a sub-letting of part of the residential premises, …”

76. Note 2 in the Notes section of the agreement provides for continuation of a fixed term tenancy agreement:

“Once any fixed term of this agreement ends, the agreement continues in force on the same terms as a periodic agreement unless the agreement is terminated by the landlord or the tenant in accordance with the Residential Tenancies Act 2010 (see notes 3 and 4). Clause 5 of this agreement provides for rent to be able to be increased if the agreement continues in force.”

77. Note 5 provides other grounds for ending the agreement:

“The Residential Tenancies Act 2010 also authorises the landlord and tenant to end this agreement on other grounds. The grounds for the landlord include … breach of this agreement by the tenant…”

78. The agreement was signed on the final page by Mr Le and Ms Tran on 1 March 2013. The signatures were witnessed by Mr Hooper, whose signature appears below each party’s signature.

79. In her defence, Ms Tran disputed Mr Le’s claims concerning the construction of the option agreement with respect to termination, service and compliance with the notices of default and termination of the option and residential tenancy agreements. After dealing with each issue I will turn to consider the amount owing under the option agreement and the residential tenancy agreement. I will then consider the cross claim.

Construction of the option agreement

80. Mr Le pleaded that the option agreement provides that in the event of default, Mr Le is entitled to terminate the option agreement effective immediately upon delivery. Ms Tran disputed Mr Le’s construction of the option agreement with respect to termination. Ms Tran submitted that the option agreement provides that in the event of default by her under clause 6 (i), (ii), (v), (vi) or (vii) Mr Le may deliver a notice in writing to her in which the default would be described and required to be remedied within 14 days of delivery, ie, a notice of default, as per clause 8. If Ms Tran failed to remedy a default pursuant to the notice of default, Mr Le could deliver a notice in writing, ie, a notice of termination, to terminate the option, as per clause 9.

81. However, counsel for Mr Le in his written submissions agreed with Ms Tran’s interpretation of the clauses relating to termination of the option agreement. He submitted that the effect of the notice of termination was that the option was terminated and the option fees paid were forfeited to Mr Le. This is the effect of clause 9(ii)(b), which provides that the notice of termination will, “if delivered to the Purchaser, require the option fee and any other monies paid to the Owner under the option”.

82. I will now deal with whether or not the notices of default and notices of termination were given by Mr Le to Ms Tran.

Notices

83. The parties disputed whether the notices of default and termination of the option agreement and residential tenancy agreement were provided by Mr Le to Ms Tran.

Notice of default of option and residential tenancy agreement

84. On 22 November 2013, Mr Le says he served Ms Tran a notice of default of option and a notice of default of tenancy agreement by express post and personally delivered to her a paper copy. The notice of default of option is dated 22 November 2013 and is signed by Mr Le (Le Aff, 25/8/15; Ex PL2, 473). The notice of default of residential tenancy agreement is dated 22 November 2013 and is signed by Mr Le (Le Aff, 25/8/2015; Ex PL2, 474).

85. In her evidence, Ms Tran accepted that Mr Le came to the property to visit her in November 2013. However she denied that he gave her the notices of default (T51.21-23). Rather, her explanation was that Mr Le came to the property on 22 November 2013 “to sell my Mum some vitamins” (T52.14). Mr Le denies her version of events. I prefer and accept Mr Le’s evidence that he served these notices upon Ms Tran on 22 November 2013.

Notice of termination of the option agreement

86. On 18 December 2014, Mr Le’s solicitor sent a letter to Ms Tran demanding payment of the outstanding amount pursuant to the option agreement of $70,266.74 by 22 December 2014 and vacant possession of the property. Mr Le’s solicitor indicated that she was instructed to commence proceedings in the Supreme Court of NSW seeking orders for payment of the option arrears if payment was not received. Attached to this letter was a notice of termination of option dated 18 December 2014 and signed by Mr Le (Le Aff, 13/3/2015, [3]).

87. Copies of this letter were sent to Ms Tran by express post and by email to [email protected] and [email protected]. In cross examination, Ms Tran denied she received the letter and the attached notice of termination. She said, “I never receive. I saw a pile of documents but because it was raining and they got wet.” (T60.39-40.) This excuse is implausible as it does not explain how she identified the notice of termination if she only saw a pile of documents. I do not accept that Ms Tran did not receive the notice of termination. Ms Tran operated the email address [email protected]. Ms Tran received the notice of termination sent by express post to the property.

Notice of termination of the residential tenancy agreement

88. On 7 October 2014, Mr Le sent the defendant a notice to terminate tenancy agreement by express post and by hand. The notice required Ms Tran to vacate the premises on 1 November 2014. The notice, dated 7 October 2014, is signed by Mr Le and was provided to Ms Tran on the basis of non payment of rent and breach of clause “15.4 of the residential tenancy agreement dealing with damage to the premises.”

89. Ms Tran did not give any evidence disputing receipt of this notice. I accept that Ms Tran was served with the notice of termination of the residential tenancy agreement.

90. On 18 December 2014, Mr Le’s solicitor, Ms Ta’akimoeaka sent a letter to Ms Tran, by email to [email protected] and [email protected] and by express post to the property, demanding payment of the outstanding amount pursuant to the rental agreement of $22,853.08 and vacant possession by 22  December 2014. Ms Ta’akimoeaka advised Ms Tran that she was on notice that Ms Ta’akimoeaka was instructed “to immediately commence proceedings against you in the Supreme Court of NSW without further notice” and that her firm would seek a writ for possession of the property and orders for payment of the rental arrears if payment was not received. Attached to this letter was a tenant payment schedule demonstrating that, as at 18 December 2014, the rent paid was $25,546.92 and Ms Tran’s rent was in arrears in the sum $22,853.08. The letter referred to the termination of residential tenancy agreement sent by Mr Le to Ms Tran on 7 October 2014.

91. I accept Mr Le’s evidence that he provided the Notice to Terminate Tenancy Agreement to Ms Tran on 7 October 2014.

Compliance with the notices

92. Ms Tran disputes Mr Le’s claim that she did not comply with the notices of default and termination of option and the notices of default and termination of the residential tenancy agreement.

93. With respect to the option agreement, under the notice of default, she was required to remedy the default by paying the outstanding option instalments that were owed at the time Ms Tran received the notice. Mr Le’s solicitor’s letter accompanying the notice of termination required Ms Tran to pay the outstanding amount pursuant to the option agreement and give vacant possession of the property by 22 December 2014.

94. Ms Tran admits that she has paid only $40,233.08 in option fees under the option agreement. As at 22 November 2013, Ms Tran had missed a number of instalment deadlines under clause 2 of the option agreement. As she did not make these payments, she remained in default of the option agreement and therefore did not comply with the notice of default.

95. Turning to the residential tenancy agreement, Ms Tran admits that payments remain outstanding under this agreement. I have made findings that she received the notice of default and Ms Tran has not complied with it as she still remains in arrears. She also admits to remaining in possession of the property, therefore she has failed to comply with the notice of termination of the residential tenancy agreement.

96. Subject to the matters raised in the cross claim, I shall calculate the amount she owes.

Option fees owing

97. The parties disagree as to the amount owed by Ms Tran to Mr Le under the option agreement. Mr Le claims that the total of all option fee instalments owing is $72,130.36 as at 1 February 2015 (S/C [11](iii)). Ms Tran claims that the total amount owing is $54,698.69 as at 1 February 2015 (D [11](iii)). It is common ground that Ms Tran has paid $40,233.08 to Mr Le pursuant to the option agreement (D [11(ii)]; Ex D). Therefore, the parties dispute the calculation of the total amount owing under the option agreement, which determines the total amount remaining to be paid.

98. Clause 2 of the option agreement provides for the payment of the option fees. Clause 2(i) required Ms Tran to pay an upfront option fee of $30,000. Clause 2(ii) required Ms Tran to pay six ongoing option fees by monthly instalments of $10,000 each, commencing on 1 April 2013. Finally, clause 2(iii) required Ms Tran to pay ongoing option fees by seven monthly instalments. These payments and their due dates were as follows: $881.81 due on 1 March 2013; $808.43 due on 1 April 2013; $725.06 due on 1 May 2013; $661.68 due on 1 June 2013; $588.31 due on 1 July 2013; $514.93 due on 1 August 2013; and $441.55 due on 1 September 2013. Counsel for Mr Le submitted that clause 2 creates a sliding scale of option fees, conditional upon prompt payment. Where payment is not prompt the clause accumulates the fee at its original value.

99. Clause 2 of the option also provides that where a payment described in clause 2(iii) is not made by the due date, the payments will continue in the same amount until the payment is made, “where upon the condition being satisfied as described, then the reduced payment will be made.”

100. It is noted that clause 2 of the option agreement refers to the non-payment of a payment in paragraph (ii), that is, the “ongoing option fee of $60,000” payable by 6 instalments of $10,000. However, the words of the clause seem to be referring to the payments in (iii), as it refers to “the reduced payment” and to paragraphs “(b) to (g)”. Respectively, there are no reduced payments in clause 2(ii) as each instalment is $10,000 and there is no paragraph (g). Therefore, it seems to have been a typographical error so I have read “paragraph (ii)” as “paragraph (iii)”, otherwise it does not make sense.

101. On 18 December 2014, Mr Le terminated the option agreement. The option agreement expired on 28 February, 2016, although all of the option fees due under clause 2 of the agreement had fallen due by the time Mr Le terminated it. I shall calculate how much Ms Tran owes pursuant to this agreement.

102. The total amount owing under clause 3(i) is $30,000 (the upfront fee). The amount owing under clause 3(ii) is $60,000 (the six ongoing option fees of $10,000 each). Hence, the total amount owing under clause 3(i) and (ii) of the option agreement is $60,000 plus $30,000, which equates to the sum of $90,000.

103. The defendant did not make any payments in accordance with clause 3(iii). Since she failed to make any payment under clause 3(iii), the initial instalment amount of $881.81 remains payable in respect of all seven payments under that clause. That is, $881.81 x 7 which equates to the sum of $6,172.67. Therefore the total amount payable in relation to the option fee is $90,000 plus $6,172.67, which equates to $96,172.67.

104. However, clause 2(iv) of the option agreement also provides that a late administration fee of $50 is payable if an instalment of the ongoing option fee described in clause 2(iii) is paid late. Ms Tran must pay late payment fees under clause 2(iv) for each month that she was late in making payments pursuant to clause 2(iii). She has been late in making the first payment on 1 March 2013, so she must pay a late payment for each month at $50 x 7 months, totalling $350. The sum of $350 must be added to $96,172.67, making a total of $96,522.67.

105. The total payable under the option agreement is $96,522.67 less the amount paid by Ms Tran. It is agreed that Ms Tran has paid the sum $40,233.08. Therefore the balance owed by Ms Tran to Mr Le ($96,522.67 less $40,233.08) equates to the sum $56,289.59. Therefore Ms Tran should pay Mr Le the amount of $56,289.59 due and owing under the option agreement.

Rental payments owing under the tenancy agreement

106. The residential tenancy agreement was for the period 1 March 2013 to 1 March 2015. It was terminated on 7 October 2014 by Mr Le. Ms Tran remained in and continues to remain in possession of the property. Therefore, Mr Le is entitled to outstanding rent payments until the date of termination (7 October 2014) and mesne profits from 7 October 2014 to the date of judgment (18 May 2016). In the absence of evidence of what the market rent for the premises should be (see Lamru Pty Ltd v Kation Pty Ltd (1998) 44 NSWLR 432, at 439 per Cohen J), in my view Mr Le is entitled to mesne profits equal to the weekly rental value owed by Ms Tran under the residential tenancy agreement, namely $550 per week. Finally, for the sake of simplicity, in his submissions Mr Le has calculated the amount of outstanding rent or mesne profits owed as equalling $2,200 per month. This corresponds with four weeks to each month and ignores any remaining days in each month. For ease and in accordance with Mr Le’s submissions I have checked and adopted this calculation method.

107. Mr Le submits that a judgment should be entered for the balance of rent outstanding of $36,967.08 as at 29 February 2016. This takes into account the rent accrued up to the end of the month of February 2016 ($79,200), minus the payments made by Ms Tran between 1 March 2013 and 24 February 2016, the date of the hearing ($35,752.92), and the order of Garling J on 5 February 2016 that judgment be entered for Mr Le against Ms Tran in the sum of $6,480.

108. To bring the payments up to date, Ms Tran owes $2,200 for each of the months of March 2016 and April 2016, which equates to $4,400. The defendant also owes two weeks and four days rental payments from 1 May 2016 up to and including 18 May 2016 (the date of judgment), namely $550 x 2 equals $1,100, plus 4/7 x $550 equals $314.29, which equates to the sum of $1,414.29. Accordingly, the total amount of rental payments presently owed for the period 1 March 2016 to 18 May 2016 is calculated as $4,400 plus $1,414.29, which equals $5,814.29.

109. The total amount of rental payments and mesne profits due and owing is $36,967.08 plus $5,814.29, which totals the sum of $42,781.37.

Total amount owing

110. Ms Tran is liable to pay the sum of $56,289.59 due and owing under the option agreement plus rental arrears of $42,781.37. The total amount of the debt due and payable is $99,070.96.

Cross claim

111. I will now deal with Ms Tran’s claims under the cross claim as adjustment may need to be made.

112. I have set out the relief Ms Tran seeks earlier in this judgment at [20].

113. The cross claim is not properly pleaded and it is unclear which pleadings she relies upon to support her claims. She has not pleaded the bases upon which she alleges support of the orders that she seeks. Nevertheless, I shall deal with each issue.

Is the option agreement void for uncertainty?

114. Ms Tran did not clearly articulate in her pleadings or in her submissions how the option agreement is void for uncertainty. The plaintiff has not responded to this aspect of Ms Tran’s claim. A fair reading of the option agreement does not lead me to conclude that the option agreement is void for uncertainty.

Was the option agreement misleading or deceptive?

115. The prohibition against misleading or deceptive conduct is set out in s 18(1) of Schedule 2 to the Competition and Consumer Act 2010 (Cth). It reads:

“18   Misleading or deceptive conduct

(1)   A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.”

116. It is given effect as a law of New South Wales by s 28 of the Fair Trading Act 1987 (NSW). This section is in substantially the same terms as its predecessor, s 52 of the Trade Practices Act 1974 (Cth). Conduct that is “misleading or deceptive or is likely to mislead or deceive” is conduct that leads or would lead a person into error: Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd (1982) 149 CLR 191; 42 ALR 1 per Gibbs CJ at [8]. This Court may make an order declaring a contract void under s 243 of Schedule 2 to the Competition and Consumer Act.

117. Ms Tran’s pleadings in relation to this cause of action are deficient in a number of respects. For example, Ms Tran does not refer to Mr Le’s conduct being in trade or commerce or her reliance on his conduct that led her into error.

118. However, doing the best I can, her allegations can be summarised as follows:

1. Mr Le did not tell Ms Tran that Ms Phan was the registered proprietor of the property and he was therefore unable to sell the property under the option agreement;

2. Mr Le represented that he would help Ms Tran use the property as a bank guarantee in substitution for $66,000 she had deposited in the bank;

3. No Vietnamese translation of either the option agreement or the residential tenancy agreement were provided to Ms Tran;

4. Mr Le represented to Ms Tran that she would be able to build a granny flat on the property and that she would be able to sub-let the property and refused permission to Ms Tran when she sought to sub-let the property and build a granny flat on the property; and

5. Ms Tran was not given the contract of sale of land on 1 March 2013.

119. I will now address each issue in turn.

(1)   Did Mr Le tell Ms Tran that Ms Phan was the registered owner?

120. I accept Mr Le’s evidence that he did inform Ms Tran that he was not the registered owner of the property and that he did not have title to the property but had a power of attorney that allowed him to deal with the property on behalf of the owner, Ms Phan. This is supported by Mr Hooper’s evidence. Mr Hooper said that he told Ms Tran that Mr Le had an arrangement with Ms Phan, who was the owner of the property, which would allow Mr Le to sell the property once Ms Tran had paid the option off (T19.8-11).

(2)   Use of the property as a bank guarantee in substitution for $60,000

121. Ms Tran alleges that Mr Le promised to help her use the property as security for three months’ rent in advance on properties where Ms Tran operated businesses and failed to do so. She submitted that this failure meant she was unable to afford to pay rent and option fees under the agreements with Mr Le. Mr Le denied he promised he would help her use the property as a bank guarantee in substitution for this amount. Ms Tran did not provide evidence to show that she had $66,000 deposited in the bank as she alleges and Ms Tran did not say that she relied on his representation to seek a bank guarantee. Mr Le was not asked about Ms Tran’s intention to use the property for a bank guarantee in cross examination. I do not accept that Mr Le promised Ms Tran that he would help her use the property as security and that this led to her being unable to withdraw money from a bank. I also do not accept that Mr Le’s conduct caused her to be unable to afford to pay rent and option fees under the agreements.

(3)   Vietnamese translations of the agreements

122. As previously stated, Mr Hooper gave evidence that Ms Tran refused the services of an interpreter and his view was that she could understand English and the advice he gave. Additionally, Ms Tran admitted that she read and understood a document while being cross examined. While I accept that Ms Tran did not receive translations of the agreements into Vietnamese, it is my view that she understood what she was told. Interestingly, she was able to request that the solicitor lodge a caveat over the property.

(4)   Representation that Ms Tran would be able to build a granny flat and sub-let and his refusal to grant permission

123. Ms Tran alleges that she signed the residential tenancy agreement in reliance on Mr Le’s representation that she would be able to build a granny flat on and sub-let the property. She claims that his refusal to allow her to build a granny flat on and sub-let the property resulted in her being unable to afford to pay the rent and option fees owed to Mr Le.

124. Clause 27.1 of the residential tenancy agreement provides that the tenant may not renovate without the landlord’s written permission and clause 32.1 provides that the tenant cannot sublet the premises without the landlord’s written permission. I have already dealt with this issue earlier in this judgment and I have accepted Mr Le’s evidence. In relation to the building of the granny flat, I accept Mr Le’s evidence that he advised Ms Tran she could build a granny flat on the property once she owned it. So far as the sub-letting of the property is concerned, I accept Mr Le’s evidence that he told Ms Tran she was required to ask permission from Mr Le before sub-letting the property and that she did not do so.

(5)   Provisions of the contract of sale

125. Ms Tran alleges that she did not receive a copy of the contract of sale. Mr Le said that she did receive it after he provided it to her Vietnamese solicitor, Mr Do. She then provided it to Mr Hooper, who held on to possession of the document until she called for it in October 2014. I am satisfied that Ms Tran did receive a copy of the contract of sale on 1 March 2013. She handed it to Mr Hooper and could have requested a copy from him on 1 March 2013 but she did not do so.

126. For the reasons given above, it is my view that Mr Le did not engage in conduct that was misleading or deceptive in the course of his dealings leading up to and signing the agreements with Ms Tran.

Is the option agreement unable to be completed?

127. Ms Tran claimed that, as Mr Le did not have legal title to the property, he could not legally sell the property to her and thus the option agreement was incapable of being performed.

128. Mr Le has a power of attorney from Ms Phan which was registered on 3 February 2015 (almost two years after it was granted), authorising him to execute a sale of the property on behalf of Ms Phan.

129. On 1 March 2013, Mr Le and Ms Tran entered into the option agreement. In January 2013, Mr Le had told Ms Tran at their initial meeting that he was capable of selling the property on behalf of the registered proprietor, Ms Phan, by virtue of the power of attorney Ms Phan granted to Mr Le on 1 March 2013. On 1 March 2013, Mr Hooper also advised Ms Tran at their meeting that Mr Le was not the owner of the property and that he had an arrangement with Ms Phan which allowed him to sell the property on her behalf. It is necessary to consider the terms of the option agreement between Mr Le and Ms Tran and the circumstances surrounding it to determine whether the option agreement was able to be completed.

130. The option agreement provides that Mr Le grants to Ms Tran “an option to purchase the Property for the price and in accordance with the terms of the Contract for Sale… in consideration of the option fee”. Mr Le’s submission is that had Ms Tran called for the property under the option agreement, he would have been forced to call for the property under his option agreement with Ms Phan. Thus, the agreement was capable of being performed.

Were the agreements unconscionable?

131. The principles relating to unconscionable conduct are set out in Commercial Bank of Australia Ltd v Amadio [1983] HCA 14; 151 CLR 447 at 474 per Deane J:

“The jurisdiction is long established as extending generally to circumstances in which (i) a party to a transaction was under a special disability in dealing with the other party with the consequence that there was an absence of any reasonable degree of equality between them and (ii) that disability was sufficiently evident to the stronger party to make it prima facie unfair or “unconscientious” that he procure, or accept, the weaker party's assent to the impugned transaction in the circumstances in which he procured or accepted it. Where such circumstances are shown to have existed, an onus is cast upon the stronger party to show that the transaction was fair, just and reasonable…”

132. In Blomley v Ryan (1956) 99 CLR 362, Fullagar J set out the relevant principles concerning the circumstances in which unconscionable conduct may arise:

“The circumstances adversely affecting a party, which may induce a court of equity either to refuse its aid or to set a transaction aside, are of great variety and can hardly be satisfactorily classified. Among them are poverty or need of any kind, sickness, age, sex, infirmity of body or mind, drunkenness, illiteracy or lack of education, lack of assistance or explanation where assistance or explanation is necessary. The common characteristic seems to be that they have the effect of placing one party at a serious disadvantage vis-a-vis the other. It does not appear to be essential in all cases that the party at a disadvantage should suffer loss or detriment by the bargain. … But inadequacy of consideration, while never of itself a ground for resisting enforcement, will often be a specially important element in cases of this type. It may be important in either or both of two ways - firstly as supporting the inference that a position of disadvantage existed, and secondly as tending to show that an unfair use was made of the occasion.”

133. Ms Tran claims she was at a special disability on the basis that, as her primary language is Vietnamese, she required a translation of the option agreement and the residential tenancy agreement in order to understand them as she spoke only broken English and could only read simple English. As she did not receive this assistance, she could not understand the agreements and she did not understand what she was signing. She claims that Mr Hooper did not adequately explain the agreements to her and did not offer an interpreter. She claims that Mr Le and Mr Hooper knew each other.

134. Mr Le submitted that Ms Tran’s understanding of the agreements arose from her competency in English and the advice she received from Mr Hooper. He submitted that her email to Mr Le’s solicitor and her reading in the witness box of one of the default notices shows her ability to read and write English. Finally, Mr Le submitted that Ms Tran held herself out as a businesswoman who was involved in a number of businesses.

135. It is my view that Ms Tran demonstrated a sound ability to comprehend documents written in English while in the witness box and while she was defending herself in court. When she was asked by counsel for Mr Le during cross examination whether she had read a default notice, she responded that she had. I also observed her proficiency in understanding documents written in English from the manner in which she conducted her case.

136. I accept Mr Hooper’s evidence that he offered her an interpreter when she came to his office and she declined it. I also accept that Mr Hooper believed Ms Tran was capable of understanding his advice and that he made an effort to ensure she followed what he told her in the course of taking her through the agreements before she proceeded to sign them. She was the instigator who wanted to sign the documents that day as she was busy running her nail business. She told Mr Hooper that she had five or six shops and pulled out $30,000 from her handbag. He went through the documents (absent the power of attorney) explaining them to her.

137. Finally, there is no evidence that Mr Hooper and Mr Le had colluded to take advantage of Ms Tran on the basis that she was a woman with two young children. Mr Le took the effort to ensure Ms Tran received independent legal advice concerning the agreements by taking her to Mr Hooper’s office on 1 March 2013. In his evidence, Mr Hooper admitted that he had met Mr Le prior to meeting Ms Tran on 1 March 2013 however he had never acted for him as his solicitor (T12.2-19). Mr Hooper’s evidence demonstrates that he took steps to ensure Ms Tran appreciated the nature of her obligations to Mr Le under the agreements. Mr Hooper offered Ms Tran the services of an interpreter, he sent Mr Le from the room when he was interrupting and he took Ms Tran through the documents one paragraph at a time. In my view, Ms Tran was not at a special disadvantage. She was capable of understanding English and her obligations under both the option and the residential tenancy agreements. Indeed, Mr Hooper’s evidence that she requested he place a caveat on the property demonstrates a level of sophistication in her understanding of English. He had some concern that the option agreement was for a considerable amount of money, with both the $10,000 instalments and weekly payments due. However, under clause 2, if the $10,000 instalment payments and the weekly instalments were paid on time, that total sum would have been credited against the price payable under the contract of sale if the option was exercised. In other words if she complied with clause 2 the amount she paid would have been offset against the purchase price of the property. Hence, it is my view that the terms of the option and tenancy agreements and the circumstances in which they were signed were not unconscionable.

138. The defendant’s claims in the cross claim fail. Her cross claim should be dismissed.

Conclusion

139. The plaintiff is entitled to possession of the property and judgment for the sum owing under the option agreement and residential tenancy agreement.

140. Judgment is to be entered in favour of plaintiff against the defendant in the sum of $99,070.96.

141. Costs are discretionary. Costs usually follow the event. The defendant is to pay the plaintiff’s costs of the proceedings, including the costs of the cross claim.

Judgment:

(1)   It is adjudged that the plaintiff have possession of the property described in paragraph 1 of the statement of claim.

The Court orders that:

(2)   The defendant is to pay the plaintiff the sum of $99,070.96.

(3)   The cross claim is dismissed.

(4)   The defendant is to pay the plaintiff’s costs of the proceedings, including the costs of the cross claim.

**********

Decision last updated: 19 May 2016