Of Beenleigh Pty Ltd v Khalaf Management Pty Ltd

In the case of OF Beenleigh Pty Ltd v Khalaf Management Pty Ltd, the plaintiff, OF Beenleigh Pty Ltd, claimed the return of a deposit paid under a Put and Call Option Deed which had become the deemed deposit under a Contract for the sale of land. The defendants, Khalaf Management Pty Ltd, argued against the refund of the deposit on various grounds, including that the plaintiff had waived its right to terminate the Contract and that the plaintiff had elected to proceed with the Contract despite being aware of a proposed resumption of part of the land for a road project, which was not disclosed in the Contract. The court had to determine whether the deposit was only liable to be refunded if the Contract came to an end as a result of a breach by the defendants and whether the plaintiff had waived its right to terminate the Contract or engaged in an election.

The court held that the deposit under the Contract was like any other deposit paid under a contract for the sale of land. If the Buyer was entitled to terminate the Contract because of non-disclosure of a matter or for any other valid reason, the deposit was refundable. This was the commercial context of this transaction. The court found that the deposit was liable to be refunded pursuant to clause 3.5 if the Contract came to an end because the Buyer exercised its right to terminate under clause 21.1. The court further found that the plaintiff did not waive its right to terminate the Contract or engage in an election by entering the Contract with knowledge of the proposal to locate Transport Infrastructure on the land or by taking steps under the Contract in relation to its development application. The court distinguished the concept of election and waiver, holding that the plaintiff's actions did not amount to an election or waiver of its right to terminate the Contract.

The court ordered that the plaintiff lawfully terminated the Contract on 12 July 2023 and is entitled to the return of the deposit. The court ordered the defendants to pay the plaintiff the sum of $275,000, together with interest (from a date to be fixed) pursuant to s 58 of the Civil Proceedings Act 2011 (Qld). The court also declared that the plaintiff holds an equitable lien over the land for the deposit.