Pattinson v Shortman

[2011] QDC 244

DISTRICT COURT OF QUEENSLAND

CITATION:

Pattinson v Shortman [2011] QDC 244

PARTIES:

YVONNE MAUREEN PATTINSON
(Plaintiff)

V

DONALD CLAUDE SHORTMAN and DOROTHY CATHERINE SHORTMAN
(Defendants)

FILE NO/S:

D 89/2009

DIVISION:

Trial

PROCEEDING:

Civil

ORIGINATING COURT:

District Court, Maroochydore

DELIVERED ON:

21.10.11

DELIVERED AT:

Maroochydore

HEARING DATE:

26.09.11 & 27.09.11 and written submissions received 10.10.11 (defendants); 14.10.11 (plaintiff in reply)

JUDGE:

Robertson DCJ

ORDER:

Judgment for the plaintiff. Counter-claim dismissed.

CATCHWORDS:

CONTRACT- BREACH OF CONTRACT- TERMINATION OF CONTRACT-where plaintiff claims damages against defendant for breach of contract- where plaintiff (the vendor) executed a contract for sale of her property to the defendants (the purchaser)- where defendants sought to terminate the contract a day before settlement on the basis of mistake alleging that the words ‘easement’ was not included in the contract.

ISSUE- whether or not the word ‘easement’ had been inserted after the defendants signed the contract- whether or not the defendants had notice of the existence of the easement prior to signing the contract.

COUNTER-OFFER- whether actions by defendant subsequent to receipt of the contract constituted acceptance of a counter- offer made by the plaintiff.

COUNSEL:

Mr L. Nevison for the plaintiff

Mr S. Di Carlo for the defendants

SOLICITORS:

Ferguson Cannon Lawyers for the plaintiff

Forbes Dowling Lawyers for the defendants

Introduction

1. Yvonne Maureen Pattinson (the plaintiff) and Donald Claude Shortman and Dorothy Catherine Shortman (the defendants) all executed a contract dated 29 May 2008 whereby the plaintiff purported to sell her property at 17 Cootamundra Drive, Mountain Creek to the defendants for $820,000.  On 26 August 2008 the defendant’s solicitors purported to terminate the contract on the basis of “mistake and pursuant to cl 7.5(4) of the contract”.  The plaintiff rejected the defendants’ purported termination and affirmed the contract by facsimile on the same date from her solicitors, and required the defendants to settle on the due date which was at 2.00pm on 27 August 2008.  There is no dispute that the plaintiff attended to settle at the time and was ready, willing and able to settle but that the defendants did not.  On 5 September 2008, the plaintiff elected to terminate the contract and forfeit the deposit of $5,000.  The plaintiff subsequently sold the property to another party for $690,000 by contract dated 26 November 2008 which settled on 8 December 2008.

1. The plaintiff claims damages against the defendants for breach of contract comprising the difference in price, agent’s commission and default interest.  The defendants have counter claimed for the deposit and default interest. 

The History of the Pleadings

1. The plaintiff’s statement of claim filed 7 April 2009 has remained in the same terms.  Relevantly to the central factual issue raised at trial, the statement of claim alleges:

“1.By Contract in writing dated 29 May 2008 (“the Shortman Contract”), the Plaintiff, as Seller, sold to the Defendants, as Buyer, property situated at 17 Cootamundra Drive, Mountain Creek in the state of Queensland, more particularly described as Lot 31 on RP139216, County Canning, Parish Mooloolah, being the whole of the land comprised in Title Reference 15777141 (“the Property”) for the sum of $820,000.00.  The Plaintiff will refer to the Shortman Contract for its full terms, meaning and effect at trial.

2.The Shortman contract, inter alia, provided for the following:-

(a)         That the property was sold subject to a Easement No.  601138639 (Reference Schedule – Title Encumbrances);

(b)        For the payment by the Defendants of a deposit in the sum of $5,000 (Reference Schedule – Deposit);

(c)         For the conduct by the Defendants with the building and pest inspection within seven days of the date of the Shortman Contract (Reference Schedule – Building and/or Pest Inspection);

(d)        For settlement to occur 90 days after the date of the Shortman Contract (Reference Schedule – Settlement Date).”

1. In its defence filed 17 June 2009, the defendants admitted these allegations although denied in the same pleading any “discussion with the defendants by the plaintiff or her agent about an easement”.  At that stage, the defendants’ case was that they mistakenly believed that when the agent referred to an easement at the time of inspection he was referring to an access easement and not a council drainage easement.

1. The defendants’ position changed and as a result they attempted unsuccessfully before Judge Dodds on 7 December 2010 to withdraw their admissions on the basis that they then alleged that reference to the drainage easement in the contract was inserted after they had signed the contract. 

1. Ultimately, the defendants were successful in amending their defence to withdraw those admissions and an amended defence and counterclaim was filed on 6 September 2011.  I infer that the plaintiff did not oppose that course at that time because by then the defendants had obtained an affidavit from Lisa Henebery filed 15 August 2011 whose evidence I will refer to later. 

1. The effect of the amended defence was (essentially) to allege that the words “Easement No. – 601138639” under the heading “Title Encumbrances” in the contract dated 29 May 2008 had been inserted after the defendants signed the contract on 28 May 2008, so that when (as is admitted by the defendants) the contract dated 29 May 2008 was received by them on 2 June 2008 (i.e. inside the five day cooling off period) it constituted a counter-offer by the plaintiff which was not accepted by the defendants, as a result of which there never was a contract between the parties. 

1. The plaintiff filed an amended reply and answer to the defendants’ amended defence on 21 September 2011.  It has always been the plaintiff’s primary position that the words “Easement No. – 601138639” were handwritten into the contract at the time the defendants signed on 28 May 2008.  Alternatively, in the amended reply and answer the plaintiff’s plead at 4(i)(ii):

“… If it is concluded that the signing of the Shortman Contract constituted a counter-offer by the Plaintiff (which is denied), then the counter-offer was accepted by the Defendants as evidenced by the signing of a Form of Buyer Form/Acknowledgment For Signed Residential House and Land contract sent by post dated 4 June 2008.” 

The real issues in the case

1. It follows that the dispute went to trial on the basis of the claim filed 7 April 2009, the defendants’ amended defence and counter-claim filed 6 September 2011 and the amended reply and answer filed by the plaintiff on 21 September 2011.  The factual dispute focussed on whether or not the words “easement no. – 601138639” were in the contract signed by the defendants, and whether or not they had notice of the existence of the easement prior to signing in any event.  If I conclude, as the plaintiff urges, that the defendants had knowledge of the easement prior to signing and the easement was notified as an encumbrance in the contract they signed, then it would follow that the plaintiff would succeed.  If I conclude, as submitted by the defendants, that they had no prior knowledge of the easement and it was not written in the contract they signed on 28 May 2008, then the plaintiff must fail unless I conclude that they knew of the evidence of the easement prior to signing and by their  actions subsequent to receipt of the contract by them by post, with admittedly the easement details included and their response, constituted an unequivocal acceptance by them of a counter-offer made by the plaintiff.

The evidence

1. There is really no dispute that the contract was signed by all parties on 28 May 2008.  Ms Winter, the office manager of Harcourts Mooloolaba (the plaintiff’s agent), wrote in the words “29.5.08”, I infer, the day after the contract was signed and the contract was forwarded to the defendants by post on 30 May 2009 by her.

1. The agent involved in the sale was Mr Craig Atwell.  He had been with Harcourts for approximately three months, and had made one prior sale when he took a client to an auction conducted by another agency.  His affidavit filed 3 December 2010 was tendered.  He now agrees that he showed the Shortmans the property on 28 May 2008 and was present when they signed and that the plaintiff signed subsequently that evening in his presence and paragraphs 3 and 7 of that affidavit should be amended accordingly.  In his affidavit, he swears that the words “Easement No. – 601138639” were in the contract at the time the Shortmans signed.

1. His evidence of what occurred on 28 May 2008 is disputed significantly by Mr and Mrs Shortman.  His evidence is that he had listed the property at around the time that Exhibit 3 (the PAMD Form 22(a)) was completed by him on 15 April 2008.  It was an open listing and the plaintiff gave evidence that the property had been listed by her with a number of agents and she had paid a number of $20 for title searches to be conducted.  Mr Atwell frankly acknowledged that he had never seen a title search of the property and that the responsibility for obtaining searches in the office was with Ms Winter.  He recalls meeting Mr Shortman at the Harcourts Office at Brisbane Road on 28 May 2008 and was told by him he was looking at waterfront property.  His recollection is that he drove to the property and was followed by both Mr and Mrs Shortman in their vehicle.  He said in evidence:

“We arrived at the property in separate vehicles.  Three of us inspected the property.  Whilst we were standing on the outside near the boundary fence of 17 Cootamundra Drive and 15 Cootamundra Drive, I discussed the easement with both Mr and Mrs Shortman, explained there was an easement on the property to which Mrs Shortman said, ‘We’re not worried about an easement.  We’ve had one on our property for five years.’”   

1. He said that Mr and Mrs Shortman were present when this was said.  He went on and said:

“From there, I spoke with Mr Shortman under the rear patio area; we were looking towards the water.  I did not recall that Mrs Shortman was there at that time.  We discussed the property with regards to would he like to – is he interested in purchasing a property and would he like to place an offer on the property.  To which the answer was yes. …  From there, Mr Shortman said that he would be- we spoke about the price.  I told him that the price that the owner had the property for sale was $890,000.  They said that- he said that they were looking at around about $800,000 and that’s what they were looking to purchase.”

1. He said he didn’t have any documents with him at this stage but he was confident that he had the listing kit in his car at the time.

1. Mr Atwell informed me that although he was not a hundred per cent sure he believes that he went back to the Harcourts office after the initial inspection and wrote in then the $800,000 which Mr Shortman had offered. 

1. He then went to the house of Mrs Shortman’s sister at Mooloolaba in the afternoon with the contract and as he recalls sat outside with Mr and Mrs Shortman and discussed the offer.  He recalls being told that the defendants had placed money only a day or two before into a term deposit for three months.  He was not challenged about this recollection which appears to be accurate. He then had a discussion with them about the price and he reiterated to the defendants that the plaintiff was chasing $890,000 for the property and they might like to “put their best foot forward” and they then agreed to increase their offer to $820,000.  He then crossed out the $800,000 figure, placed in the new $820,000 figure and the contract was initialled and signed by the Shortmans in his presence.  In his evidence before me he acknowledged that the writing “29.5.08” was not his; neither was the figure “15777141” on page one of the contract or the words “Easement No. – 601138639” on page two.  Lisa Henebery who was working as a receptionist at Harcourt at the time gave evidence on behalf of the defendants and identified those handwritten entries, apart from the date, as being in her handwriting. 

1. In his evidence-in-chief Mr Atwell was not as categorical as he appeared to be when he said in his affidavit sworn 2 December 2010:

“5.After inspecting the property I went to Mr and Mrs Shortmans daughter’s house where I provided to them a contract for them to submit an offer to purchase the property.  The contract which I provided them contained the handwritten words “Easement No. – 601138639” next to the heading Title Encumbrances at the top of page two of the contract.  I am not aware of why the easement was handwritten rather than typed however it was written on the contract when I provided it to Mr and Mrs Shortman.”

1. In his evidence before me he said that to the best of his recollection he “believed” that those words were handwritten in the contract at the time it was signed by the defendants.

1. As I have noted he has a recollection of returning to the office at Brisbane Road then going to the house of relatives of Mrs Shortman at Mooloolaba at which time the Shortmans signed the contract after agreeing to increase the initial offer made at the time of the inspection from $800,000 to $820,000.

1. Mr and Mrs Shortman give a quite different account of what occurred prior to the signing.  Both say that Mrs Shortman did not inspect the property prior to signing the contract.  Both say that she first inspected the property after signing at her sister’s place.  Mrs Shortman says that Mr Atwell spoke to her then about an easement while her husband was inside the house taking photographs with his phone, but she understood Mr Atwell to be referring to an easement down the fence line on the adjoining property.  In fact the drainage easement noted in Ms Henebery’s handwriting does run down the boundary but is all within the property the subject of the contract of sale.  Mrs Shortman says that despite her being immediately worried about the easement, she did not say anything to her husband.

1. Both Mr and Mrs Shortman say essentially that Mr Atwell was pushy and impatient at the time of signing.  Mrs Shortman said that Mr Atwell said to her “You don’t have to read it”.  Mr Shortman said “He pushed his way in to the house” when he arrived with the contract, then he looked at the contract but did not study it and when he hesitated Mr Atwell became anxious.  In cross-examination he said that when he started to read the contract, Mr Atwell squirmed so he (Mr Shortman) signed as he was anxious to get going to avoid hitting the traffic on his return over the Gateway Bridge to his home south of Brisbane.  None of this was put to Mr Atwell in cross-examination. 

Were the words “Easement No. – 601138639” written on the contract when the Shortman’s signed?

1. It is axiomatic that with the passage of time, the human memory fades.  A number of witnesses, for example Mr Atwell, were prepared to make this obvious concession.  Some other witnesses such as Ms Winter were not. 

1. Ms Pattinson recalls speaking to Mr Atwell on the phone, I infer, while he was either back at the office or at the house of Mrs Shortman’s sister prior to the defendant signing when the price and the settlement time were discussed.  Mr Atwell has no recollection of speaking to the plaintiff prior to going to her house at Black Mountain for her to sign on the night of 28 May, although Mr Shortman had a recollection of Mr Atwell speaking to the seller at the house.  The plaintiff recalls asking “Do they know there is an easement?” to which he replied “Yes”.  She recalls seeing the words handwritten in the Title Encumbrance section when she signed at the table in the presence of Mr Atwell and her partner Russell at her home at Black Mountain on the night of 28 May 2008.

1. As I have noted Mr Atwell’s evidence was, at its highest, that he believed the words were in there when the Shortmans signed. 

1. Francine Winter gave evidence on behalf of the plaintiff.  At the time she was the business development manager of Harcourts and is still employed at the agency.  She described herself as a particular person who likes everything to be perfect.  Part of her duties were to supervise Lisa Henebery.  Part of Ms Henebery’s duties were to prepare draft contracts when a property was listed with the agency which went into a file known as a “Listing Kit”.  Ms Winter told the Court that she has a specific recollection of this transaction and the Listing Kit which is Exhibit 7.  She recalls that when the contract in draft is placed back in the file, her duty was to go through the Listings Checklist on the front of the file which in Exhibit 7 was signed by Mr Atwell and signed off by Ms Winter.  She says she specifically recalls seeing a title search on that file and noting that the easement was not recorded in the contract and instructing Ms Henebery to correct that error.  She told me that when she inserted the date “29.5.08” in the contract on that date, the easement was noted and the contract signed by all parties.  Unlike Mr Atwell, she was not prepared to make any concessions.

1. The difficulty for her is that the Listing File contains no copy of the title search and, on the “Listings Checklist” on the front of the file which she has signed there is a cross in the section headed “Administration” beside the words “Request title search from Frankie for Auction properties only”.  Despite there being the words “Title search $20” in the Form 22a in that file prepared by Mr Atwell on or about 15 April 2008, there is no documentary evidence at all to indicate that Harcourts did a title search.  As I have noted there is no title search on the file and the entry on the front of the file would seem to carry the natural meaning of the words and that is that a title search would only be requested from Ms Winter for Auction properties.  This was not an Auction property but was an Open Listing.  Ms Winter, and to some extent Mr Cattle, the principal and owner of the business, tried to explain away this obvious point by saying that the form was changed around this time, but their evidence in this regard simply does not accord with the contemporaneous documentary records.  No one from the agency was able to produce any other document e.g. a trust account receipt or an invoice for payment for a title search, to support Ms Winter’s categorical evidence that she had a title search and directed Ms Henebery to include reference to the easement in the draft contract prior to 28 May 2008. 

1. I think the resolution of this factual dispute can be put beyond doubt by reference to Exhibit 8 which was disclosed very late by the plaintiff.  Despite Mr Di Carlo’s rhetorical hints at conspiracy and deceit, the explanation given by Mr Nevison for the late disclosure of this important piece of documentary evidence is quite satisfactory.  Indeed, after a “cooling off” period, Mr Di Carlo accepted at the start of the trial what seemed to be obvious to me before I knew much about the case apart from reading the pleadings, that the documents disclosed late assisted his client and did not prejudice them in any way, and he did not persist with his initial application for an adjournment with indemnity costs against the plaintiff. 

1. The documents in Exhibit 8 comprise an email sent from Craig Atwell to Tony Pattinson (the son of the plaintiff and then employed as a solicitor with Ferguson Cannon Lawyers) sent on Thursday 29 May 2008 at 10.04am.  The email is in these terms:

“Hi Tony

Please find attached proposed contract for 17 Cootamundra Drive, Mountain Creek as per Yvonne’s request.  Should you require any further information please do not hesitate to contact me.

Kind regards

Craig Atwell
Sales Consultant”

1. At 1.33pm on that day Verity Marr, a paralegal on behalf of Tony Pattinson, replied to Mr Atwell.  I infer that it was a reply because the subject matter is the same.  Attached to the reply was a copy of Exhibit 1, the title search.  The email is in these terms:

“Dear Craig

Tony has advised that the contract needs to note easement in gross number 601138639 as a title encumbrance. 

Attached is a copy of the title search which should be attached to the contract. 

Any queries please call me on the number below.

Regards

Verity Marr
Paralegal
Ferguson Cannon Lawyers”

1. Despite searches at both Harcourts and Ferguson Cannon Lawyers by their IT specialists, the alleged attachment to the first email has never been located.  Despite Mr Nevison’s persuasive attempts to make light of these documents and despite the absence of the attachment, it is the timing and date which leads me comfortably to the inference that the contract signed the day before the exchange of emails in Exhibit 8 did not contain reference to the easement.

1. This conclusion based on the documents is supported by the evidence of the much maligned Lisa Henebery.  It is indisputably true that she had been dismissed from Harcourts for stealing $2,600 from the Trust Account, and had been convicted and punished by the court.  Her evidence at trial did not come anywhere near the positive assertion in her affidavit “Exhibit 25” filed 15.8.2011:

“40I recall that at the time I wrote in the words “Easement no. 601168639” and the words “Title Reference 15777141”, I saw that the Shortman contract had on its face:

(a)handwriting which I did not recognise;

(b)Craig Atwell’s handwriting;

(c)Craig Atwell’s signature;

(d)signatures which I was not familiar with;

(e)signatures of the buyer and seller on page three of the Shortman contract; and

(f)initials at the foot of each page of the contract.”

1. Her evidence at trial was, to the best of her recollection, more than three years after the event is that she wrote in the words “Easement No. 601138639” and the figure “15777141” at a time when the buyer and seller had not reached agreement.  In cross-examination, she conceded (honestly I think) that she could not give reliable evidence about when she inserted those details. 

1. I conclude that it is more probable than not that in accordance with the Listing Checklist a title search was not obtained by Harcourts prior to 28 April 2008.  I infer that Ms Henebery wrote in those words on 29 May 2008 after Harcourts had received a copy of the title search from Ferguson Cannon as an attachment to an email dated 29 May 2008 at 1.33pm.

1. I am satisfied that the contract sent to the defendants by Ms Winter on 30 May 2008 included the title reference number on page one and the reference to the easement on page two in Ms Henebery’s handwriting.  I am satisfied that the defendants received the completed contract in the form as it appears in Exhibit 4 by post within the cooling off period.  I infer that at the time they signed Exhibit 10 “The Buyer Acknowledgement For Signed Residential House And Land Contract Sent By Post” on 4 June 2008, the defendants had already consulted Quinn & Scattini who acted for them initially on the conveyance. Mr Shortman gave evidence of instructing Mr Holmes of that firm to terminate the contract on the basis of an unfavourable pest report, and said Mr Holmes would not do so within the required time without consulting the firm’s principal, Mr Quinn. This evidence together with the first letter dated 5 June 2008 and the correspondence contained in Exhibit 24 indicates that the defendants’ concern at this critical stage was about the building and pest reports, not the easement. In his written submission (at para 21(a) to 25) Mr Di Carlo argues (contrary to his client’s own pleading at para 1 (ii)) that the sending of the fully executed contract on 30 May 2008 with the easement details inserted did not constitute a counter-offer by the plaintiff. This was not the case advanced by his clients at trial which was that the counter-offer was not accepted by his clients. In any event, on the basis of my conclusions of fact the sending of the contract was a clear counter-offer by the plaintiff and the parties clearly intended at that time to execute an agreement, and the defendants were then aware of the existence of the easement and, for the reasons enunciated below I am satisfied that the defendants were not concerned about the easement details in the contract sent to them on the 30 May 2008 because they were aware of, and not concerned with it as an encumbrance. 

1. In relation to the defendants’ knowledge of the easement prior to signing the contract on 28 May 2008, I comfortably prefer Mr Atwell’s evidence to that of the Shortmans as to what occurred at the first inspection.  He impressed me as a careful and honest witness doing his best to recall what occurred three years ago at what was actually his first solo sale of a property on behalf of Harcourts as a real estate sales person.  He was prepared to make concessions, particularly relating to the key words which I found, contrary to his belief, were not in the contract signed by the Shortmans on 28 May 2008.  I do not think that the Shortmans have been deliberately dishonest.  Rather, they have made what has to be seen as a rather impetuous decision to purchase a property in circumstances in which they had come to the Sunshine Coast for another reason; and then subsequently regretted it and have tried to withdraw from it firstly on the basis of building/pest reports and ultimately on the basis of the easement issue.  It strikes me as inherently improbable that even the most trusting and loyal woman would sign a contract to purchase a property for $820,000 without inspecting it as Mr and Mrs Shortman would have me believe.  The defendants I think have convinced themselves of a version of events which I find does not accord with common sense and I readily prefer Mr Atwell’s evidence as to the course of events and the discussion about the easement which occurred prior to the return to Mrs Shortman sister’s house.  Mr Shortman would have me accept that on the one hand he signed without reading the contract properly because Mr Atwell was pushy and became anxious; and on the other hand, despite him being anxious to return home to avoid the traffic on the Gateway Bridge, they all returned for a further inspection (on the evidence of the defendants Mrs Shortman’s first inspection), which obviously involved some time as Mr Shortman was inside the house (on his version), taking photographs and Mrs Shortman undertook a full inspection of the house after the conversation about the easement. 

1. Mr Di Carlo informed the Court understandably in advance of Mr Shortman giving evidence of his hearing problem.  Clearly he has difficulties hearing and uses a hearing aid.  His wife said that his hearing has deteriorated significantly since this dispute arose.  Despite that, Mr Shortman clearly understood questions and is obviously an intelligent man, well versed in property dealings.  He told me that he had purchased six properties prior to this one.  He struck me as the type of personality who would not be pushed around by a real estate agent and would not be pushed into signing a contract unless he truly wished to buy the property.  As I have noted, none of the evidence critical of Mr Atwell’s behaviour at the house and at the inspection was put to him and I do not accept it.

1. Although the plaintiff does not suggest that I draw any adverse inference against the defendants and I don’t because it is not necessary given my acceptance of the evidence of Mr Atwell, and given that neither of the defendants were questioned about it, it is curious that on all versions these were at least two adults at Mrs Shortman sister’s house who might have been able to support the fact that Mrs Shortman did not leave the house with Mr Shortman on the first occasion when he says he went to Harcourts on his own.  On any version i.e. Mr Atwell’s and Mrs Shortman’s, there was some discussion about an easement at the property so Mr Atwell clearly knew about the easement prior to 28 May 2008.  How he knew is not clear on all the evidence.  He could not recall whether he went to the plaintiff’s house or she came to the office when she signed the 22a appointment form on 15 April 2008, but certainly the plaintiff had a copy of Exhibit 2 (the Council letter and the plan showing the easement) at home at the time. 

1. My preference for Mr Atwell’s evidence about what occurred with the defendants at the first inspection on 28 May 2008 and prior to signing, is supported by the behaviour of the defendants after that date.  Firstly, there is the return of Exhibit 10 dated 4 June 2008 and the payment of the deposit of $5,000 which was receipted into the Harcourts Trust Account on 5 June 2008.  Clearly by 4 June, Mr Holmes the solicitor had seen the contract and the defendants.  As Mr Shortman recalls he reminded them that the deposit needed to be paid.  I comfortably infer that they were then (that is on 4 June 2008), well aware of the easement as (a) it had been discussed with them at the first inspection with Mr Atwell and (b) was written in the contract on the same page as the building and pest inspections requirements which they received on or about 2 June 2008.  Exhibit 19 is a letter to the defendants from Mr Holmes dated 22 July 2008 in which he says, inter alia:

“Easement

As you are aware, there is an easement burdening the land declared on the Contract.  Please advise whether you would like us to obtain a copy of this easement document and separate plan from the Department of Natural Resources.”

1. This is at a time when Mr Shortman says (in Exhibit 17) he already had advice from his present solicitors that the defendants could avoid the contract because the easement was not disclosed on the face of the contract when they signed it.  In any event, in their amended defence filed 6 September 2011 at para (1)(h)(iii) and (g) the defendants admit that their solicitors received Exhibit 4, the contract which then included the reference to the easement on 2 June 2008.  It follows that on the basis of my factual findings I uphold the defendants pleading of law at 1(i) of that same pleading despite the finding that the defendants were aware of the existence of the easement prior to signing.

Did the defendants unequivocally accept the plaintiff’s counter-offer?

1. In my opinion they did.  The execution of Exhibit 10 and the payment of the deposit of $5,000 at a time when the defendants were aware that the easement had been noted in the contract a form as an encumbrance are clear acts constituting unequivocal acceptance of the plaintiff’s counter-offer. 

1. The defendants were apparently unconcerned about the easement after receiving legal advice from Mr Holmes, such that it is not mentioned in attempts to terminate on the basis of the pest report referred to in the correspondence contained in Exhibit 24.

1. It would follow from my analysis of the evidence outlined above that I find that the plaintiff was mistaken in her evidence that the easement was referred to in the contract she signed on the evening of 28 May 2008.  I do not accept the positive evidence of Ms Winter to the effect that she had a title search prior to 28 May 2008 and instructed Lisa Henebery to write in the title reference and the easement number prior to then.  Mr Cattle’s evidence really does not take the plaintiff’s primary argument anywhere as he had nothing to do with the Shortman contract and was called primarily to give evidence about the subsequent sale which he handled.

1. In light of my conclusion on the facts it is unnecessary for me to consider the issue of mistake.  The defendants had no basis to terminate as they purported to do on 26 August 2008 and given the failure of the defendants to attend settlement on 27 August 2008, the plaintiff was entitled to terminate the contract pursuant to cl 9.1 of its terms and to forfeit the deposit and elect to re-sell.

1. Again, given my factual finding, it is not necessary for me to further consider Mr Di Carlo’s submission that a Jones v Dunkel inference should be drawn against the plaintiff because of its failure to call Mr Pattinson who (effectively) was the author of the second email in Exhibit 8 and who was acting for his mother.  Even if I had concluded that the words related to the easement were in the contract signed by the defendants on 28 May 2008, I would have been reluctant to draw any inference as Mr Pattinson’s absence was explained by his mother in her evidence. At paragraphs (35) to (40), in response to Mr Nevison’s submissions in relation to unilateral mistake (which, is for the reasons stated it is not necessary for me to decide) Mr Di Carlo raises a plea in equity of unconscionable conduct again not pleaded in the Amended Defence and Counter-Claim. In any event, there is no acceptable evidence of ‘sharp practice” on the part of Mr Atwell or anyone else associated with the plaintiff’s agent.  

Damages

1. Mr Di Carlo concedes properly that the defendants failed to satisfy the onus upon them to prove that the plaintiff failed to mitigate her loss by selling the property subsequently to Lindesfarne Pty Ltd on 26 November 2008 for $690,000.  Mr Nevison  on behalf of the plaintiff has abandoned that part of the claim relating to the commission on the Lindesfarne contract and legal fees, and has appropriately reduced his clients claim for interest (claimable under the contract at the Queensland Law Society default rate of 14.01%) to date from the date of settlement of the Lindesfarne contract.  The plaintiff is entitled to judgment against the defendants for $208,332.68 and the counter-claim is dismissed. I will order the defendants to pay the plaintiff's costs of and incidental to the claim and counter-claim on the standard basis.