Re Sparks & Sparks

IN THE SUPREME COURT
OF QUEENSLAND
No. 190 of 1999
[Re Sparks & Sparks]

IN THE MATTER of the Property Law Act 1974
- and -
IN THE MATTER of an application by DAVID MICHAEL ETHERIDGE SPARKS and MARGARET HELEN SPARKS
REASONS FOR JUDGMENT - WHITE J

Delivered the 16th day of February 1999

CATCHWORDS: Vendor and purchaser summons - s.70 Property Law Act 1974 - appropriateness of procedure - declarations re deposit - compensation - construction of two contracts - form of conveyance - outstanding issues of fact.

Counsel:Mr D Campbell for the applicants.
Mr T Quinn for the respondents.

Solicitors:Hemming & Hart for the applicants.
Quinn & Scattini for the respondents.

Hearing Date: 8 February 1999.

IN THE SUPREME COURT
OF QUEENSLAND
No. 190 of 1999
IN THE MATTER of the Property Law Act 1974

- and -

IN THE MATTER of an application by DAVID MICHAEL ETHERIDGE SPARKS and MARGARET HELEN SPARKS

REASONS FOR JUDGMENT - WHITE J

Delivered the 16th day of February 1999

The applicants, Mr and Mrs Sparks, the purchasers, seek declarations and compensation against the respondents, Mrs and Mrs Marriage, the sellers, on a summons brought pursuant to s.70 of the Property Law Act 1974. Mr T Quinn who appears for the sellers objects to the use of this form of relief since neither party contends that the contract is still on foot. The purchasers seek declarations that good title had not been shown in accordance with the contract and are thereby entitled to the deposit. They also seek compensation for legal and other expenses associated with the purchase and interest on the deposit. Dowsett J in Re MacDonald [1987] 2 Qd R 29 discussed limitations on the use of s.70 where both parties had clearly abandoned the contract. If this matter were not to be heard on a s.70 summons it could not be treated as an application pursuant to O.64 r.1 BB because of the claim for compensation which involves contested issues of fact. Since I have reserved the application it has become apparent that there are other issues of fact going to the principal relief that have not been adverted to fully in the material and which are likely to be necessary for a resolution of this matter.
The proper forum for this dispute given the amount in issue is the Magistrates Court however the state of the chamber list was such that there was time available to hear the application and not to have heard it in that circumstance would have led to wasted costs. In order to identify the “missing” facts it is necessary to consider briefly the chronology and the relevant terms of the contract
On 25 May 1998 the Sparks entered into a contract with the Marriages to purchase an apartment situated at “Cathedral Place” in Brisbane. The Marriages are the original purchasers from the developer, Cathedral Place Developments Pty Ltd., and had onsold it whilst it was still under construction to the Sparks. The contract between them provides for a sale price of $264,500 and a deposit of $26,450, $1,000 of which was payable on the execution of the contract and the balance of $25,450 14 days thereafter. The deposit monies were paid to the Marriages’ former solicitors, Flynn & Company. The special conditions for the contract of sale, not all of which are relevant to this enquiry, were:
“1.The Buyers acknowledge that the subject property is being resold and that same was initially purchased from the original proprietor for a price less than the Contract price herein.
2.The Seller will arrange for an air conditioning system to be installed in the Buyer’s lot/unit, delivery and installation to be carried out, at the Seller’s expense, by settlement date.
3.This contract is subject to the Sellers agreeing to carry out variations listed as contained in annexure “A” hereto, which forms part of this contract.
4.This contract shall be subject to settlement of this contract taking place at the same time and place as settlement of the purchase of the subject property by the Seller from Cathedral Place Developments Pty Ltd.
5.This contract shall be subject to the term and conditions, so far as they apply to the Purchasers herein, of the Sellers contract to purchase the subject property from Cathedral Place Developments Pty Ltd.”
The relevant special conditions are nos. 4 and 5. I have some doubt as to what precisely special condition 5 means with its reference only to the purchasers and counsel did not address that issue. Mr D Campbell who appears for the Sparks contends that clauses 24 to 26 of the contract with the developer govern the manner in which settlement of the contract between the Sparks and the Marriages was to occur. Those clauses provide relevantly:
“24.Time & Place for Settlement
24.1When the last condition precedent in clause 3 is satisfied, the Seller must give notice to the Buyer that all conditions precedent have been satisfied. Settlement is due ten (10) business days after the Seller gives that notice or such other time as nominated by the Seller in writing.
24.2Settlement must take place in Brisbane at a place to be nominated by the Seller, between the hours of 9 a.m. and 5 p.m. at a time nominated by the Seller.
25.Transfer Documents.
25.1The Seller must prepare the Transfer Documents.
25.2If the Buyer pays the Seller’s reasonable expenses, it may require the Seller to produce the Transfer Documents at the Office of State Revenue in Brisbane, for stamping prior to settlement.
26.Procedure at Settlement.
26.1In exchange for payment of the Balance Purchase Price, the Seller must deliver to the Buyer at Settlement:-
(a)Any instrument of title for the Land required to register the Transfer to the Buyer;
(b)Unstamped Transfer Documents capable of immediate registration (after stamping);
...”
Time was of the essence except as to the time of day for settlement, clause 29. Time was not separately mentioned in the Sparks/Marriage contract.
In addition to the installation of air conditioning and variations noted in the special conditions there were certain other minor matters of fit-out required by the applicants. By letter dated 23 November 1998 the Sparks’ solicitors made it plain that the terms of the contract were to be strictly complied with concluding:
“Also, the Contract Terms and Conditions No. 26.1(b) requires the Seller to deliver to the Buyer at settlement “Unstamped Transfer Documents capable of immediately registration (after stamping).” Delivery of a prior Transfer at settlement does not comply with the Contract Terms and Conditions and we require delivery at settlement of stamped Transfer by Direction.”.
In a letter dated 24 November Flynn & Company wrote that the Marriages were unable to settle by way of transfer by direction because of the attitude of their financiers who needed several days to register their documents prior to settlement. The Sparks’ solicitors responded the following day drawing attention to special condition 4 of the contract which required contemporaneous settlement of the subject contract with the settlement of the contract between the Marriages and the developer and indicated that the Sparks insisted upon strict compliance with this condition in the contract.
Flynn & Company wrote by letter dated 26 November: “We refer to the above matter which is due to settle on Friday 27 November 1998 at 4 p.m. at the Titles Office,” and set out settlement figures. There is no indication in the material how this date and time was arranged. In particular, there is no indication as to whether the developer nominated this date as being 10 business days after giving notice that the conditions precedent had been satisfied or such other time nominated by the developer in accordance with clause 24.1 and 24.2 of the contract between the Marriages and the developer. The tenor of the letter suggests that there had been previous communication between the parties’ solicitors about the settlement date but the affidavits do not advert to it. It is the developer in accordance with the clause 24 of that contract who was to nominate the settlement date and the terms of special condition 4 were such that the Sparks were dependant upon that nomination.
By letter dated 25 November (but probably dictated 26 November) and received by the Sparks’ solicitors on 26 November, Flynn & Company wrote that the only way in which the respondents could settle on 27 (described as tomorrow) because of the Marriages’ financier’s conditions was to conduct lodging in conjunction with a settlement at the Titles Office at 4 p.m. The Marriages offered to reimburse any expenses incurred.
On 26 November the Sparks’ solicitors stated that their clients were ready to settle at the Titles Office at 4 p.m. and referred to the meaning given to the expression “capable of immediate registration” by the Full Court in Cawood v Infraworth Pty Ltd (1990) 2 Qd R 114. The writer indicated that a prior stamped transfer was not acceptable and would not be accepted if provided. Flynn & Company responded by letter dated 27 November that the Marriages were incapable of providing a transfer by direction and asked for some flexibility. The only response was an indication of willingness to settle in accordance with the terms of the contract.
Flynn & Company by letter dated 27 November referred to a telephone conversation with Mr Hemming of the Sparks’ solicitors at 3 p.m. that day and proposed that settlement be extended to 4 December with the Marriages to pay any costs associated with the extension. That offer was rejected.
The Sparks’ solicitors attended at the Titles Office for settlement and waited until 4.10 p.m. when a representative of Flynn & Company attended to inform them that she did not have instructions to effect settlement in return for the proffered settlement cheque by a transfer by direction.
By letter dated 30 November the Sparks’ solicitors rescinded the contract on behalf of their clients because of the Marriages’ breach and sought a direction that the deposit be released to them. By letter dated 30 November Flynn & Company wrote:
“For reasons which have nothing to do with this sale and in circumstances where our clients were in no way responsible the purchase from Cathedral Place Developments Pty Ltd could not take place last Friday.
We hereby give you notice to complete this Contract at the same time and place as settlement of our clients purchase of this property from Cathedral Place Developments Pty Ltd. the specific time for which shall be notified to you as soon as we are informed of same by Cathedral Place Developments Pty Ltd. and in reliance upon clause 24.2 of the Contract.”
By their letter dated 10 December 1998 the respondents’ present solicitors wrote that they accepted the applicants repudiation of the contract and elected to cancel the contract of sale and forfeited the deposit monies. Flynn & Company were then notified that the parties were in dispute in relation to their respective rights and obligations under the contract and gave notice that the deposit monies were to be held as stakeholder.
Because the date and time of settlement of the contract between the Sparks and the Marriages is dependant upon the nomination of the developer to the Marriages of the time and date, or so it seems, there are issues of fact which need to be determined. For example, if the developer nominated a time to the Marriages (and I am referring to their solicitor) who in turn notified the Sparks, what is the status of the latter notification should the developer agree to a different time with the Marriages? I am not satisfied that this factual matter has been explored adequately or that all relevant correspondence is before the court to resolve the issue.
The issue of compensation is contentious. The claim made by the Sparks for an amount of $3,267 for professional fees incurred was challenged by the Marriages who had had no notice of the quantum of the claim since it was made without particulars in an affidavit filed at the hearing. Cross-examination of the solicitor deponent, Mr I Caravousanos was of no assistance since he was involved in the file only recently and had never attended upon a taxation. Similarly, a claim for rent by the Sparks could not readily be challenged.
There was no evidence of a costs agreement with the clients. The evidence supporting the claim was a memorandum of fees from the solicitors to their clients dated 4 January 1999 in the sum of $3,267 which remained unpaid as at the date of the hearing despite including a term of payment within 14 days. Further evidence was a “matter transaction report” covering some 15 or so pages where time costing for numerous items is set out with little or no information about the extent or nature of the work. In the absence of the terms of the retainer it became impossible to challenge the fees except for the Marriages present solicitors to depose that in the competitive conveyancing market time costing is unusual and a fee in the region of $600 to $800 would be appropriate. There is no dispute with the disbursements.
In all the circumstances I would decline to make the declarations sought or assess the amount of compensation. I understand that there is some time available for a judge in civil sittings this week so that the application can be fully dealt with and subject to further submissions would propose adjoining the summons to the civil list.

[1999] QSC 24

16 February 1999