Owenlaw Mortgage Managers Ltd v Baird - [2007] VSC 521

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMERCIAL AND EQUITY DIVISION

No. 5753 of 2005

OWENLAW MORTGAGE MANAGERS LTD	Plaintiff
v
DAVID BAIRD	Defendant

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JUDGE:	HANSEN J
WHERE HELD:	Melbourne
DATE OF HEARING:	29 November, 3 and 5 December 2007
DATE OF JUDGMENT:	13 December 2007
CASE MAY BE CITED AS:	Owenlaw Mortgage Managers Ltd v Baird
MEDIUM NEUTRAL CITATION:	[2007] VSC 521

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Sale of land – Vendor and purchaser – Deposit – Not paid – Vendor rescinds for purchaser’s repudiation – Whether vendor made agreement or representations that affected right to recover unpaid deposit.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr N P Jones	Owenlaw Legal Pty Ltd
The defendant appeared in person

HIS HONOUR:

This is a claim for the amount of an unpaid deposit under a contract for the sale of a commercial property at 2 - 6 Murphy Street, South Yarra. The plaintiff, Owenlaw Mortgage Managers Ltd (“Owenlaw”), was the vendor under the contract. Owenlaw sold the property as mortgagee in possession. The contract of sale was in writing and entered into on 24 February 2005 following a public auction of the property held that day. The property was knocked down to David Baird, the defendant, who was duly named as the purchaser in the contract. The contract provided for a purchase price of $4,562,000 payable as to $400,000 by way of deposit payable on signing and the balance 45 days from the day of sale or earlier by mutual agreement. At the time of signing the contract the defendant provided a cheque payable to the plaintiff’s agent, Biggin & Scott, for $400,000 and drawn on the account of M K River Pty Ltd (“M K River”). Later that day, Biggin & Scott deposited the cheque with its banker, the National Australia Bank with a request for a special clearance. The cheque was dishonoured on presentation. On 25 February the bank advised Biggin & Scott that the cheque had been dishonoured. Later on 25 February, following receipt of that advice, the plaintiff sent a notice of rescission by post to the defendant and his solicitor Radebe & Associates at their respective addresses stated in the contract. The notice required that the default in paying the deposit, and requiring also the payment of interest and costs, be remedied within two days of service of the notice; the notice was given in accordance with the provisions of the contract and is taken as received on Monday 28 February 2005. The default not having been rectified, indeed no amount at all having been paid, the contract was rescinded upon the expiry of the period of two days. Subsequently, on 8 March 2005, the plaintiff re-sold the property to another party for the same price of $4,562,000. It is in those circumstances, briefly described, that the case arises.

The proceeding was commenced by writ filed on 28 April 2005. In the statement of claim endorsed on the writ the plaintiff, relying upon the contract…

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.

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Details

Case: [2007] VSC 521
Decision Date: 13 December 2007

CaseChat Overview and Summary

Owenlaw Mortgage Managers Ltd sued Baird, the purchaser, in the Supreme Court of Victoria for the recovery of an unpaid deposit on the sale of a property. The dispute arose after Baird failed to pay the deposit, leading Owenlaw to rescind the contract for repudiation. Baird contested the recovery, arguing that Owenlaw had made agreements or representations that should affect the vendor's right to the deposit. The court had to determine whether any such agreements or representations existed and, if so, whether they influenced the vendor's right to reclaim the deposit.

The legal issues before the court were whether Owenlaw had made any representations or agreements that would affect their right to recover the deposit and whether such representations or agreements constituted a waiver of that right. The court needed to examine the contract, the circumstances surrounding the agreement, and any relevant communications between the parties to ascertain if there was any conduct by Owenlaw that could be interpreted as a waiver of their right to the deposit.

The court examined the terms of the contract and the evidence presented. It found that there were no representations or agreements made by Owenlaw that would affect their right to the deposit. The court held that there was no evidence to suggest that Owenlaw waived their right to reclaim the deposit. Consequently, Owenlaw was entitled to recover the unpaid deposit from Baird.

The court ordered Baird to pay Owenlaw the unpaid deposit, along with interest and costs as determined by the court. The judgment confirmed that the vendor's right to the deposit was not affected by any representations or agreements, and the rescission for repudiation was upheld.

Orders