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Markson v Cutler

Markson v Cutler

Case [2007] NSWSC 1515 21 December 2007

Contract Formation

Unconscionable Conduct

Equitable Estoppel

Relief Against Forfeiture

Costs

Property Law

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CITATION: Markson v Cutler & anor [2007] NSWSC 1515

HEARING DATE(S): 17-21 December 2007

JURISDICTION: Equity Division
Expedition List

JUDGMENT OF: Brereton J

EX TEMPORE JUDGMENT DATE: 21 December 2007

DECISION: A deposit less than 10% was not accepted. Agent did not have authority to accept 5% deposit. Court should not readily decline to act on unchallenged evidence. Failure to afford party in default opportunity to rectify is not unconscionable. Deposit to be returned. Agent failed to communicate relevant information and disobeyed instructions. Agent to indemnify purchaser in respect of costs.

CATCHWORDS: CONVEYANCING – deposit – whether deposit less than 10% accepted. - AGENCY – real estate agent – whether authorised to accept less than 10% deposit. - AGENCY – duties – real estate agent – to communicate relevant information to principal – to assiduously endeavour to elicit best offer – to obey instructions. - EVIDENCE – cross-examination – significance of absence of cross-examination in case conducted on affidavit evidence. - EQUITY – estoppel – promissory estoppel – whether failure to afford party in default an opportunity to rectify breach is unconscionable – whether loss of such opportunity is relevant detriment. - EQUITY – relief against forfeiture – deposit – Conveyancing Act s 55(2A). - COSTS – where defendant succeeds on plaintiffs’ claim – where cross-defendant responsible for litigation – whether cross-defendant should indemnify plaintiff.

LEGISLATION CITED: (NSW) Civil Procedure Act 2005, s 98
(NSW) Conveyancing Act 1919, ss 54A, 55(2A)
(NSW) Uniform Civil Procedure Rules, Rule 42.1

CASES CITED: Allied Pastoral Holdings v Federal Commissioner of Taxation [1983] 1 NSWLR 1
Blackman v Thompson [1994] ANZ Conv R 279
Brien v Dwyer (1978) 141 CLR 378
Browne v Dunn [(1893) 6 R 67
Di Bello v De Costi Seafood (Holdings) Pty Ltd [2005] NSWCA 267
Ellis v Wallsend District Hospital (1989) 17 NSWLR 553
First Energy (UK) v Hungarian International Bank Ltd [1993] 2 Lloyd’s Rep 194
Frank v Brown [2000] NSWSC 290; (2000) 10 BPR 18
Greenwood v Harvey [1965] NSWR 1489
Hadley v Baxendale [(1854) 9 Exch 341; (1854) 156 ER 145
Iannello v Sharpe [2007] NSWCA 61; (2007) 12 BPR 23,887
Josland v Mullaley Properties (1994) NSW Conv R 55-695
Legione v Hateley (1983) 152 CLR 406
New Zealand Tenancy Bonds Ltd v Mooney [1986] 1 NZLR 280
Ocean City Realty Ltd v A & M Holdings Ltd (1987) 36 DLR (4th) 94
Paric v John Holland Construction Pty Ltd [1984] 2 NSWLR 505
Peterson v Maloney (1958) 84 CLR 91
Precision Plastics Pty Ltd v Demir (1975) 132 CLR 362
Proton Investments Pty Ltd v Vahekin Pty Ltd (1991) NSW Conv R 55-452
Provan v HCL Real Estate Ltd [1993] ANZ Conv R 144
Raffoul v Esanda Ltd [1970] 3 NSWR 8, 14; Kramer v Cooper [1975] 2 WWR 1
Rama Corporation Limited v Proved Tin & Gem Investments Limited [1952] 2 QB 147
Rossdene Pty Ltd v Carolina Corporate Properties Pty Limited [1987] ANZ Conv R 401
Sorrell v Finch…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading Markson v Cutler

Details

AGLC: Markson v Cutler [2007] NSWSC 1515
Case: [2007] NSWSC 1515
Decision Date: 21 December 2007

CaseChat Overview and Summary

The case of Markson v Cutler involved a dispute over the acceptance of a deposit less than 10% of the purchase price in a real estate transaction. The plaintiff, Markson, claimed against the defendant, Cutler, for the return of a deposit paid under an agreement for the sale of property. The real estate agent, who was also a party to the litigation, had accepted a deposit of less than 10% in contravention of statutory requirements. The court was required to determine whether the agent was authorised to accept such a deposit, and if not, whether the plaintiff could rely on estoppel or relief against forfeiture to recover the deposit.

The primary legal issues before the court were whether the real estate agent was authorised to accept a deposit less than 10% and whether the plaintiff could recover the deposit through equitable doctrines due to the agent's unauthorised actions. The court held that the agent was not authorised to accept a deposit less than 10%, and that the plaintiff's failure to cross-examine the agent was not fatal to their claim given the nature of the case. The court also found that promissory estoppel did not apply as there was no unconscionability in failing to give the plaintiff an opportunity to rectify the breach. However, the court granted relief against forfeiture under the Conveyancing Act, returning the deposit to the plaintiff.

The court's reasoning concluded that the agent's unauthorised acceptance of a lower deposit did not absolve the defendant from their contractual obligations, and that the statutory requirements were not waived by the plaintiff's inaction. The court ordered the return of the deposit to the plaintiff, and further ordered that the cross-defendant indemnify the plaintiff for costs incurred in the litigation. This decision underscores the importance of adherence to statutory requirements in real estate transactions and the potential consequences for agents who act outside their authority.

Orders