Sainuddin v Brady Flinders Pty Ltd
[2012] VCC 644
•29 May 2012
| Revised | |
| IN THE COUNTY COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
CIVIL DIVISION
COMMERCIAL LIST
GENERAL DIVISION
Case No. CI-10-00976
| NANCY SAINUDDIN | Plaintiff |
| v | |
| BRADY FLINDERS PTY LTD (ACN 085 343 488) HAINES & POLITES | Defendants |
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JUDGE: | HIS HONOUR JUDGE GINNANE | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 24-25, 28-29 November 2011 | |
DATE OF JUDGMENT: | 29 May 2012 | |
CASE MAY BE CITED AS: | Sainuddin v Brady Flinders Pty Ltd | |
MEDIUM NEUTRAL CITATION: | [2012] VCC 644 | |
REASONS FOR JUDGMENT
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CONTRACT – agency agreement to sell off the plan apartment – claim for commission - terms of agency agreement - whether agent introduced buyer
SALE OF APARTMENT – whether enforceable contract – whether exchange of signed contract – whether acceptance proved by conduct – whether repudiation of contract – return of deposit
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Self represented | |
| For the First Defendant | Mr A Schlicht | Corrs Chambers Westgarth |
| For the Third Defendant | Mr R Heath | Monahan + Rowell |
HIS HONOUR:
1 The plaintiff, Ms Nancy Sainuddin, sues the first defendant, Brady Flinders Pty Ltd (“Brady Flinders”), which is the developer of an apartment tower, the Eifel Tower, in Flinders Street, Melbourne. The tower contains 29 floors.
2 Ms Sainuddin is an education consultant, who assists Indonesian students to study in Melbourne. She acts as an education agent for Australian educational institutions and receives income from that work. She spends time both in Indonesia and in Australia.
3 On 16 May 2008, Ms Sainuddin sued Brady Flinders and Mr Brady, a director of Brady Flinders, in the Magistrates Court for the return of the deposit paid in respect of apartments in the Eifel Tower.
4 By an amendment to her statement of claim dated 24 November 2008, Ms Sainuddin introduced alternative claims, which assumed, without admitting, that contrary to her primary position, that she had purchased apartments 2207/2208 and alleged that Brady Flinders had repudiated the contract and claimed loss and damages. The amended statement of claim also pleaded a sales agency agreement under which Brady Flinders would pay a commission of 2% of the sale price, when Ms Sainuddin introduced the purchaser.
5 The claim against Mr Brady was not pursued. The proceeding was transferred to the County Court in 2010.
6 As her pleadings were ultimately framed, Ms Sainuddin brings four claims. The first is that she is owed commission, as agent for Brady Flinders, for introducing the buyer of a penthouse, apartment 2701 in the Eifel Tower. The second is that she paid a deposit to purchase two apartments off the plan, apartments 2207 and 2208, but that no binding agreement was made. She claims the return of the deposit paid. The third claim is an alternative to the second claim, ie that there was a binding agreement for the purchase of the two apartments off the plan from Brady Flinders, but that it breached that agreement or, repudiated it. A further limb of this argument is that Brady Flinders did not give her an opportunity to remedy any default by her under the contract. Under this third claim, she seeks the return of the deposit and damages based on the loss of profit that she would have made on the resale of the apartments. Ms Sainuddin has a fourth claim, which is that by putting the two apartments on the market and selling them to other purchasers, without telling Ms Sainuddin, Brady Flinders engaged in unconscionable conduct in breach of s 8A of the Fair Trading Act 1999 and in misleading and deceptive conduct, or conduct that was likely to mislead or deceive, in breach of s 9 of the Fair Trading Act.
7 Brady Flinders’ defence to the first claim is that no commission is owing. It agreed to pay Ms Sainuddin the sum of $10,000, not by way of commission, but to prevent her interfering with the sale. In respect of the second and third claims Brady Flinders contends that a binding contract was made with Ms Sainuddin in August 2003 to sell her two apartments. She acted on the basis that a contract existed by paying a deposit and by making requests for the design of a combined three bedroom apartment. However Ms Sainuddin repudiated the contract by a solicitor's letter dated 28 March 2006 asserting that no contractual relationship had been entered into. Brady Flinders accepted that repudiation. It has resold the two apartments. It denies the claims under the Fair Trading Act.
8 Ms Sainuddin also sued the third defendant who was one of her former solicitors. On the second day of the trial that part of the proceeding was dismissed by consent with no order as to costs.[1]
[1]Transcript (“T”) 135
9 Despite this dismissal of the proceeding against the third defendant, Ms Sainuddin continued to criticise the conduct of the solicitors that she had engaged. Those solicitors were either not parties to the proceeding, or in the case of the third defendant ceased to be so, and therefore the matters raised by Ms Sainuddin were not before me for determination.
10 Ms Sainuddin gave evidence herself and called evidence from the following solicitors who had acted for her: Mr M J Kenny, Ms R Fahey, Mr C Summons and Mr D Young. Brady Flinders called evidence from Mr M Muir solicitor, Mr A Brady and Mr S Pethica both of Brady Flinders, Mr A Busse land surveyor and Mr K Kabo, who had acted for the ultimate purchaser of apartment 2207.
The commission claim
11 The commission claim arises from the sale on 3 August 2003 of one of the penthouses on the 27th floor of the Eifel Tower for $1.3 million. Ms Sainuddin claims that the purchasers were her cousin’s sister-in-law and her husband, whom she introduced to the property. Ms Sainuddin claims the sum of $39,000, being 3% of the purchase price of $1.3 million, less $5,000 credited to her by Brady Flinders for her purchase of two apartments.
12 The commission claim is to be understood against a background, which includes the earlier sale of an apartment in another building developed by the Brady Group – the Wills Tower in Wills Street, Melbourne.
The Wills Tower Apartment Sale
13 In April 2003 Ms Sainuddin received a flyer from Brady Jakarta, a company associated with Brady Flinders, stating that if she introduced a client who bought an apartment at an exhibition or “Expo’ to be held at the Hyatt Hotel in Surabaya, Java, then she was entitled to receive 2 per cent of the sale price as commission. The Expo related to the Wills Tower and was held in July 2007.
14 Ms Sainuddin’s client purchased a two-bedroom apartment for $480,000 in the Wills Tower. Mr Matthew Georgeson, a manager with Brady Flinders, who was present at the Expo, told her that he would give her commission of 2% of the sale price, but that the next time she introduced a client, who purchased an apartment, he would give her 3% commission. She was credited with commission of $9600 in respect of the Wills Tower sale, which was 2% of the sale price.
15 There were two commission agreements in evidence made between Ms Sainuddin and Brady Flinders. Commission was to be paid in two halves: the first half when the contract was signed and the second half upon the settlement of that contract.
16 The first agreement was dated 2 August 2003 and dealt with the commission to be paid to Ms Sainuddin for the sale of the apartment in the Wills Tower. It stated in relevant parts:
“4.1 Marketing Commission
In consideration of the AGENT performing its appointment described herein the COMPANY shall pay fees and commissions calculated by reference to the agreements entered into in respect of Condominium /Apartment Unit, Town Houses or Houses sold in any of the BRADY GROUP’S PROJECT, subject always to ARTICLE 1 and 2 above.
a. Sales Commission
In the event of the agent INTRODUCING a client, the COMPANY will pay a fee of 2% of the sale price for the successful sales.
b. Payment of the commission
The above mentioned commissions will be payable:
- 1% on exchange (upon the purchaser signing the Contract of Sale and the COMPANY receiving 10% deposit) and
- 1% on settlement of the project.”
Next to the commission clause is a handwritten annotation stating:
“This commission is (sic) exists for Unit 2101 at Wills Tower only.”
The Eifel Tower sale commission claim
17 Ms Sainuddin learned of a further property Expo that the Brady Group was to hold the following week in the Shangri-La Hotel, Surabaya, for the sale of apartments in the Eifel Tower building in Flinders Street, Melbourne.
18 Mr Anthony Brady, the director and owner of Brady Flinders, gave evidence that the property expos were big events, organized with the purpose of selling apartments in Melbourne developments. A large function room was hired in which to conduct the expo, it was widely advertised and invitations were sent to persons likely to be interested in purchasing an apartment. Mr Brady attended the expos to meet clients and reassure them that his company was a good developer and builder.
19 Ms Sainuddin gave evidence that on 2 August 2003, she told Mr Georgeson that her cousin’s sister-in-law, Catharin Widodo, who lived in Surabaya, wanted to buy an apartment in the Eifel Tower, because she knew that Ms Sainuddin had purchased one. Ms Sainuddin told Mr Georgeson that she would bring her cousin’s sister-in-law to the expo on the Sunday morning, 3 August 2003, to see the apartment.
20 On 3 August 2003, Ms Sainuddin asked Mr Georgeson whether she could receive 3 per cent commission. On that morning, Mr Georgeson gave her a second commission agreement. Article 4 of that second agreement was headed “Professional Fees and Commission” and stated:
“4.1 Marketing Commission
In consideration of the AGENT performing its appointment described herein the COMPANY shall pays fees and commissions calculated by reference to the agreements entered into in respect of Condominium/Apartment Unit, Town Houses or Houses sold in any of the BRADY GROUP’S PROJECT, subject always to ARTICLE 1 and 2 above.
a. Sales Commission
In the event of the agent INTRODUCING a client, the COMPANY will pay a fee of 3% of the sale price for the successful sales.
b. Payment of the Commission
The above mentioned commissions will be payable:
- 1.5% on exchange (upon the purchaser signing the contract of sale and the COMPANY receiving 10% deposit), and
- 1.5% on settlement of the project.”
21 The second agreement was signed by Ms Sainuddin and by Mr Georgeson. Underneath their signatures is the following handwritten annotation:
“* 1% on walk-in clients at the exhibitions
* For Penthouse Eifel 2901 TBA”
Next to that annotation was the signature of Mr Georgeson.
22 At about the time that Ms Sainuddin received the second agreement, she told Mr Georgeson that her cousin’s sister-in-law had not been able to come together with her because she had to go to Sunday school with her children. Mr Georgeson replied that because they did not come together that he would regard the cousin’s sister-in-law as a walk in client, in respect of whose purchase no commission was payable. Later, Mr Georgeson told her that he would give her 1 per cent as a working client and would pay her the difference between the two commission rates with pocket money. Ms Sainuddin said that she replied that she did not want pocket money and that Mr Georgeson’s boss had to pay her 3 per cent.
23 Mr Georgeson apparently ceased employment with the Brady Group in February 2004 and was not called as a witness. Mr Simon Pethica, director and general manager of Brady Flinders, who gave evidence, said that he did not know his whereabouts.
24 Ms Sainuddin said that the annotation to the second agreement “for Penthouse Eifel 2901 TBA” reflected Mr Brady’s action in reducing the commission from 3%. She said that Mr Georgeson refused to honour the agreement of 3% commission. She was disappointed and spoke to Mr Brady. She told him that if she could not get additional commission, she would like a greater discount on the price of the apartments that she had purchased. She said that Mr Brady told her that he could only give her $10,000.
25 According to Ms Sainuddin, when her cousin’s sister-in-law arrived, she made an offer to purchase the penthouse for $1.3 million, but then bargained with Mr Brady and the price was reduced below $1 million. However the price of the penthouse returned to $1.3 million after an issue about the size of the apartment was corrected and at that point the purchasers signed the contract. Mr Brady then told Ms Sainuddin that because of the fierce bargaining by the purchasers, she was not entitled to $10,000 commission, but only $7,500. However later he agreed to pay her $10,000, of which $5000 was used as part of the deposit for her purchase of Eifel Tower apartments.
26 Ms Sainuddin gave evidence that she did not accept the offer of $10,000. However she received the sum of $5,000 in respect of the purchase and it was allocated as a payment of her deposit.
27 Mr Brady’s evidence was as follows. Catharin Widodo, the person described by Ms Sainuddin as her cousin’s sister-in-law, arrived at the Expo on Saturday, 2 August 2003 with some of her family, but not her husband Tandiono Limanto[2]. She was looking for a large apartment for family members, who were going to attend school in Melbourne. They spent a lot of time in discussion with Brady Flinders’ sales staff. They returned on the Sunday afternoon with Catharin Widodo’s husband. Negotiations continued until about ten o'clock that night when the sale was completed. The sale price was $1.3 million.
[2]See the further and better particulars of Ms Sainuddin’s amended statement of claim in the Magistrates Court proceeding.
28 According to Mr Brady, Ms Sainuddin had offered to bring clients to Brady Flinders in Surabaya. She attended the Eifel Tower Expo, but was making a nuisance of herself and claiming that every person who walked in was her friend. The Australian manager and Indonesian staff of Brady Flinders, who were at the Expo, told Mr Brady that Ms Sainuddin was after commission and, if they did not give her something, she was going to destroy the deal. They decided to offer Ms Sainuddin the amount of $10,000 and she accepted it.
29 An important difference between Ms Sainuddin’s evidence and Mr Brady’s was that Mr Brady said that the purchasers of the penthouse first arrived on the Saturday on their own, whereas Ms Sainuddin said that they only arrived on the Sunday, when she was present.
30 Neither the purchaser or Mr Georgeson gave evidence. I refused leave at the end of the case for Ms Sainuddin to attempt to obtain a written statement from the purchasers, as that would have required an adjournment to see if the purchasers would attend Court to give evidence.
31 I accept Mr Brady’s evidence of the events concerning the sale of the penthouse apartment. I consider that his evidence as to when the purchasers first arrived is likely to have been accurate, as he conducted negotiations with Ms Widodo. In addition, Ms Sainuddin was not present when the purchasers arrived on the Saturday.
Submissions of the parties about commission
32 Ms Sainuddin disputed that the purchasers of apartment 2701 were walk-in purchasers and claimed an entitlement to 3 per cent commission of the purchase price on the basis that she had introduced them.
33 Brady Flinders submitted that Ms Sainuddin had to establish any entitlement to commission under the second agreement, because it applied to the penthouse at the Eifel Tower. The handwritten annotation on the second agreement stated that “for Penthouse Eifel 2901 TBA". This reflected the fact that there was genuine disagreement about whether the purchasers were introduced by Ms Sainuddin. That disagreement had existed from the time that the purchasers arrived at the Expo. Brady Flinders did not accept that Ms Sainuddin had introduced the purchasers. Because of the dispute, Mr Brady agreed to pay Ms Sainuddin $10,000 to ensure that the purchase proceeded without disruption.
Conclusion on Ms Sainuddin’s commission claim
34 It is necessary to consider all the evidence and make an objective determination of the terms of the agreement about commission. Having done that, it is necessary to determine whether Ms Sainuddin has established an entitlement to commission under that agreement.
35 The second agreement applied specifically to the Eifel Tower sale, but it provided that commission payable for its sale was “to be agreed”. In those circumstances, Ms Sainuddin is unable to rely on the terms of clause 4 of the second agreement to claim commission. There was no agreement about the rate of commission.
36 Ms Sainuddin received and was credited with the sum of $10,000 on 3 August 2003, but that payment was not made, or credited, under any binding agreement.
37 In any event, even if 3% commission was payable if Ms Sainuddin introduced a purchaser of apartment 2701, the evidence does not establish that she did introduce the purchasers. The evidence goes no further than establishing that the purchasers heard of Ms Sainuddin’s purchase of an apartment in the Eifel Tower and became interested in purchasing an apartment themselves.
38 Informing a purchaser of apartments being offered for sale at a property Expo does not amount to introducing the purchaser to a property that was available for sale at the Expo. Some act of introduction more direct than that is required. In Moneywood Pty Ltd v Salamon Nominees Pty Ltd[3] Gleeson CJ, stated:
“In the absence of a contrary agreement, the law implies a term that the agent is not entitled to commission merely because it has introduced the purchaser of property. If the agreement is that commission is payable on ‘introducing’ or ‘finding’ a purchaser for the property, the agreement will be construed as meaning that the commission is payable only when the agent has introduced or found a purchaser who is ready, willing and able to complete the purchase. Thus, unless the vendor’s default was the reason for the contract not being completed, the agent is entitled to the commission only ‘if the sale is completed’. Moreover, the agent must prove that the introduction was the effective cause of the sale. In this area of the law, as in other areas of contract, the common law has rejected the ‘but for’ test of causation.”[4] ( authorities omitted)
[3](2001) 202 CLR 351
[4](Supra) at 360
39 The evidence does not establish that any act by Ms Sainuddin was the effective cause of the sale of the penthouse apartment 2701.
40 Ms Sainuddin’s claim for commission therefore fails.
41 The next issues concern Ms Sainuddin’s dealings with Brady Flinders about her purchase, or possible purchase, of apartments 2207 and 2208 in the Eifel Tower.
Was there a contract?
42 The first issue is whether Ms Sainuddin and Brady Flinders entered into a contract for the sale of apartments 2207 and 2208 in the Eifel Tower. Ms Sainuddin says that they did not, that while she signed contractual documents on 3 August 2003, she never received a copy of contractual documents signed on behalf of Brady Flinders.
43 Brady Flinders’ case in this respect, as pleaded, is:
4C. On or about 6 August 2003 the First Defendant exchanged contracts with the Plaintiff
Particulars
On or about 6 August 2003 PT Brady Property Consultants Indonesia, on behalf of the First Defendant gave to the Plaintiff the contract of sale signed on behalf of the First Defendant.
The contract of sale signed by both parties, exchanged with the Plaintiff is in the possession of the solicitors for the First Defendant. A copy of the contract of sale can be inspected by prior appointment.
4D Between August 2003 and February 2004:
(a) the Plaintiff paid, and the First Defendant accepted from the Plaintiff, the deposit required under the contract of sale (in part);
(b) the Plaintiff requested that the Apartment be re-configured, and the First Defendant agreed to re-configure the Apartments into one apartment.
6It:
….
(c) says further that even if the Plaintiff made the Offer as alleged (which is specifically denied), by accepting the Plaintiff’s payment of the deposit the First Defendant had accepted the offer prior to 28 March 2006.
(d) says further, there was part performance of the agreement in that the First Defendant at the direction of the Plaintiff made considerable alterations to apartments 2207 and 2208 by combining the two apartments into one three bedroom apartment.
44 In further detail, Brady Flinders’ defence is that the contract was contained in the agreement dated 3 August 2003, a copy of which was contained in the Court Book[5] and in a facsimile from Mr Georgeson dated 12 February 2004. That facsimile attached transfer receipts for part of the 10% instalment of the apartments. It recorded four payments by Ms Sainuddin. In addition $9600 had been credited to her for commission in respect of the Wills Tower and a further $5000 credited to her, as half of the amount owing to her in respect of the sale of the penthouse apartment.
[5]Court Book (“CB”) 65-173
45 In determining whether there a contract was made, it is usual to determine who was the offeror and who was the offeree. I consider that Ms Sainuddin made an offer to purchase the apartments by signing the documents containing particulars of sale and giving them to Brady Flinders on 3 August 2003. However I consider that in this case, the same result would follow whichever of the parties was the offeror and the offeree.
46 To determine whether there was a binding contract, it is necessary to set out the events surrounding Ms Sainuddin’s signing of contractual documents.
47 Ms Sainuddin gave evidence that on 27 July 2003 at the Wills Tower Expo, she discussed with Mr Georgeson the possibility of purchasing a three bedroom apartment in the Eifel Tower. Mr Georgeson told her that the only way a three bedroom apartment might become available was by combining two apartments, 2207 and 2208. Apart from the penthouses, there were no other purpose designed three bedroom apartments. Another interested person had paid a holding deposit on apartment 2208 and had a week or two to decide whether to sign the sale contract, but did not proceed with the purchase. Ms Sainuddin paid a holding deposit of $10,000 on Monday 27 July. The commission of $9600 for the Wills Tower sale was credited to the deposit that she was to pay for the apartments.
48 On 28 July 2003 Ms M Kaltzidis, the Business Development Co-ordinator of the Brady Group, emailed Mr S Pethica, stating that Mr Georgeson had asked her for a quickly drawn design of apartments 2207/2208 combined into a 3 bedroom apartment. Mr Pethica responded by email on 1 August 2003 sending to Mr Georgeson options for the design of a combination of the two apartments.
49 Ms Sainuddin’s evidence was that on 3 August 2003 at the Expo, she signed an offer to purchase apartments 2207 and 2208, which were to be combined into one apartment. She gave the document that she signed to Mr Georgeson. The price for the two apartments was $886,000 with a deposit payable of $88,600.
50 Mr Brady agreed that Mr Sainuddin could pay the 10% deposit by instalments. Accordingly, she paid instalments in July, October and December 2003 and February 2004. As stated other amounts owing to Ms Sainuddin were credited to the deposit.
51 Ms Sainuddin gave evidence that Mr Brady did not sign the contract for the sale of apartments 2207/2208 at the Expo and that she did not receive a copy of the contract signed by him at that time, or at any time before the delivery of the Court Book in 2011. Mr Georgeson told her that the contract had to be brought back to Melbourne to be stamped. On 3 August 2003, Mr Georgeson gave her a copy of the pages of that part of the contract that she had signed, but they were not signed on behalf of Brady Flinders.
52 Ms Sainuddin said that for the next three years she unsuccessfully chased a copy of the contract signed by Brady Flinders.
53 Mr Brady gave evidence that it was his responsibility, as director and owner of Brady Flinders, to sign the contracts for the sale of apartments. He said that he signed the contract of sale for apartments 2207/2208, a copy of which was contained in the Court Book, in August 2003.[6] He signed six different contracts on 3 August 2003. He said that he did sign the contract and “I was there, I would have signed it”.[7] He said that Ms Sainuddin would have received a copy of the contract when he signed it.[8] However he said that he did not give Ms Sainuddin a copy of the contract, but that his staff did.[9] He passed the contract to his staff after he signed it.[10] He was not aware of requests by Ms Sainuddin for copies of the completed contract until much later.
[6]CB 65 -172
[7]T 249
[8]T 246
[9]T 250
[10] Ibid
54 Mr James Bean a solicitor employed by Johansson solicitors in Melbourne was present at the Expo. He was available to provide legal services to interested persons. Ms Sainuddin engaged Johanssons to act for her. She paid Mr Bean a fee for acting for her in connection with the purchase of the apartments.
55 Mr Brady arrived back in Melbourne on 5 August 2003. He gave evidence that he believed that his office in Jakarta would have sent the copy of the contract signed by him to Johanssons.
56 The contract of sale contained in the Court Book was the REIV version. The particulars of sale provided for a purchase price of $886,000, with a deposit payable as to $10,000, on the signing thereof and the payment of residue on the later of:
(1) 14 days after notification given to the purchaser’s representative of registration of the Plan of Subdivision at the Office of Titles; and
(2) 14 days after delivery to the purchaser’s representative of the occupancy permit for the subject property.
57 Ms Sanuddin wanted changes made to the floor plan of the combined apartments. On 6 August 2003, Mr Georgeson emailed Mr Pethica stating that the purchaser had signed contracts for apartments 2207 and 2208 and agreed with the redesign subject to three changes. The email concluded:
“Can you get a final design prepared as an annexure for inclusion in the contracts. In the interim, I will exchange the contracts.”
58 The email attached plans of the combined apartments. Ms Sainuddin said that she thought that her signature on the plans was forged.[11] She referred to other plans, with the handwritten date “27.08.03” which had her signature and the handwritten annotation:
“Dear Matthew,
This is the design I want but not to be included in the contract.”[12]
[11]T 169
[12]CB 181
59 Ms Sainuddin did not want them included in the contract because they were not CAD, or computer aided design drawings.
60 On 7 August 2003, Mr Pethica faxed Mr Peter Cross of Meldrum Partners, architects, who were working on the Eifel Tower project, requesting that he modify the draft plan supplied the previous week to incorporate the changes.[13]
[13]CB 175
61 On 28 August 2003, Mr Pethica faxed Mr Georgeson an amended floor plan showing a combined apartment.[14] On 19 September 2003 he informed Ms Christin, an employee of Brady Flinders based in Indonesia, by facsimile that he had requested the architects to prepare a CAD drawing identifying dimensions of rooms and the overall apartment. He added:
“In the interim, I have provided approximate dimensions based on the hand drawn plan previously signed off by the purchasers. This will give the purchasers an indication of the room size.”[15]
[14]CB 185
[15]CB 190
62 In September 2003, various emails were exchanged between staff of the Brady Group about the design for combining apartments 2207 and 2208. On 23 September 2003, Mr Pethica sent Ms Christin dimension plans for the combined apartment prepared by Meldrum Partners and asked her to arrange to have them signed as a matter of urgency.[16] Ms Sainuddin’s signature does appear on the plans.[17]
[16]CB 193
[17]CB 195
63 Ms Sainuddin made allegations that her signature on various parts of the plans appeared to be forged. I saw no basis on the evidence for reaching that conclusion.
64 Also on 23 September 2003, Ms Christin sent an email to Mr Georgeson marked “URGENT”, seeking an urgent confirmation of the status of apartments including 2207 and 2208.
65 On 29 March 2004, Ms Christin e-mailed Ms Sainuddin as follows:
“ Re-units 2207 and 2208 at the Eifel Tower Melbourne.
I attach the latest floor plan design for your apartment being Units 2207 and 2208 at the Eifel Melbourne. I also attach a photocopy of the receipt from Donald Davidson trust account for 10% DP, you have already paid. If anything is not clear [you] can contact me on the phone in the office on phone number…[18]
[18]This was the translation provided of the document contained at CB 218, see T 219
66 Mr Georgeson left the employ of Brady Flinders in early 2004 and thereafter Ms Sainuddin dealt with Ms Christin.
67 According to Ms Sainuddin, Ms Christin told her that the contract signed by Mr Brady was in Melbourne and had been given to Johansson solicitors. But Mr Johansson kept telling her that contracts had not been exchanged.
68 On 18 May 2004, Johansson solicitors wrote two letters to Ms Sainuddin in Surabaya. The first letter confirmed their instructions to act and stated that Mr James Bean, or Mr Terry Johansson, the principal of that firm, would be the solicitor handling her matter. The letter stated that as they did not have a copy of the original contract of sale, they could not confirm “whether the contract you are purchasing lots with is a residential unit and a separate title for the car space”.[19]
[19]CB 218
69 The second letter, which appears to have been written by Mr Terry Johansson, stated, inter alia:
“ Further to our telephone conversations, we do not have your clear instructions as to whether you wish to withdraw from the purchase and/or negotiate a reduction in the price.
The situation at first glance is that the Vendor has not accepted and exchanged the contract, so you may be in a position to withdraw. This will require research, consideration and notification to the Vendor.
….
This opportunity is only available until the Vendor sends us the exchanged contract.
Unless you decide to instruct us to negotiate your withdrawal, we will assume that you have decided to go ahead and purchase the property.
Please note that once we receive the Transfer of Land back and notify the Vendor that we need an exchanged contract of sale or if the Vendor sends this to us in the meantime, you will not be in a good position to withdraw from the contract.”[20]( Emphasis in the original)
[20]Contained in the Johannson File, Ex A, pp 46-47
70 On 3 March 2005, Mr Pethica faxed Ms Cynthia Peretz of the Brady Group stating:
“ I note that we have a deposit paid in relation to Apartment 2207 & 2208 and that I have previously prepared and forwarded dimensioned floor plans to Midli for a combined apartment in September 2003.
However, I do not have any details related to an executed Contract of Sale or signed floor plans.
Could you please provide me a copy of the Contract of Sale as a matter of urgency so I can have the client’s requirements documented and incorporated into the construction works.”[21]
[21]CB 219.1
71 On 8 March 2005, Ms Peretz replied to Mr Pethica:
“ We are following up the following contracts with Vivian. She is apparently working with Tony on them.
2901
2605
2207 & 2208.
…”
72 Ms Sainuddin stated that she kept pushing Johanssons about obtaining a signed contract. They informed her that they were sorry that they could not give her the original contract with Mr Brady’s signature on it.
73 By March 2006, Ms Sainuddin wanted to sell the apartments.[22] There were a number of reasons for this. First she could not obtain permanent residency in Australia. Secondly her relationship with her boyfriend had ended and he was to have provided part of the finance. Thirdly she had suffered financial losses of $200,000 in foreign exchange transactions.
[22]T 194
74 Ms Sainuddin made enquiries of agents about the appropriate sale price for the apartments.
75 Ms Sainuddin swore an affidavit as to her financial resources, because her ability to pay the balance of the purchase price was put in issue. Upon the basis of figures suggesting that her annual income at relevant times was on average $50,000, Brady Flinders suggested that she did not have the money to pay the balance of the purchase price. Ms Sainuddin responded that she would have settled by having made arrangements to immediately on sell the apartment to pre-arranged purchasers.
76 Mr Pethica gave evidence that Ms Sainuddin informed Ms Christin that her financial circumstances had altered and she wished to be released from the sale. In March 2006, in Melbourne, she advised Ms Donna Lim, the assistant manager of sales and marketing of Brady Flinders in Melbourne, that she wished to on-sell the apartment as she was unable to settle. She brought some potential purchasers to the property.
77 Ms Sainuddin gave evidence that she attempted to show the apartment to potential purchasers. However, Ms Lim would not give her permission to inspect it. Mr Pethica gave evidence that as at March 2006, on Level 22, the concrete floor and ceilings, the perimeter walls and columns were in place. However the apartments themselves were just bare shells, with the plumbing penetrations in the floor and the sprinkler pipes on the ceilings. The framing of the internal walls had not commenced.[23]
[23]T 262
78 At about that time, Ms Sainuddin expressed a wish to reconvert the apartment to two separate units. However, the architectural plans and drawings had been prepared, and the plumbing rough-in had been installed, on the basis of a three bedroom design and she was told by Ms Lim that she would have to pay $10,000 for a second kitchen.
79 On 1 March 2006 Ms Christin sent a facsimile to Mr Steven Ng of the Brady Group asking him to put apartments 2207 and 2208 back into 2 apartments: one 2 bed and one 1 bed apartment as per the original designs and to see Mr Tony Brady about it. Drawings were prepared to do this.
80 Ms Sainuddin’s version of these events differed slightly, in that she said that Ms Lim wanted her to split the combined apartment into two, but she said that she would need to receive $10,000, being the price of the additional kitchen, to do that. Ms Lim said: “No, in that way I have to ask for my boss” and then said not to split it.[24]
[24]T 185
81 Ms Sainuddin’s potential purchasers wanted to see her contract signed by Brady Flinders. She again sought a contract signed by Brady Flinders from Mr Johansson. According to Ms Sainuddin, Mr Johansson told her that he could not get the original contract and he dropped her as a client.[25]
[25]T 180
82 In addition the bank, with whom Ms Sainuddin was dealing, wanted to see the contract to decide whether to provide her with finance.
83 On 21 March 2006, Mr Johansson wrote to Ms Sainuddin, confirming that she no longer wished his firm to act for her, and enclosing their file and a cheque for the balance of funds held for her in trust and stating:
“We refer to our letters to you dated 18 May 2004 and 15 July 2004 advising we had not received the original Contract from PT Brady Property Consultancy Indonesia. We advise you to contact them directly to obtain a signed original Contract.”
84 Ms Sainuddin said that she attempted to serve a subpoena on Mr Johansson to give evidence, but was unsuccessful in her attempts.[26]
[26]T 115, 150
Ms Sainuddin engages Haines and Polites
85 In March 2006, Ms Sainuddin was introduced to Mr David Young, solicitor of Haines and Polites and decided to engage him as her solicitor. According to Ms Sainuddin, Mr Young told her that even though Mr Brady had not signed the contract, there could be a contract by conduct, as she had made an offer that they had accepted. Ms Sainuddin said that in Indonesia, the belief was that there was no contract if the one party did not sign it and in those circumstances, the other party could ask for their money back. Ms Sainuddin told Mr Young that she needed a contract with Mr Brady’s signature on it, because potential buyers of the apartments wanted certainty. He told her that if she asked for the return of the moneys that she had paid, Mr Brady would accuse her of repudiation of the contract and take the deposit money and resell the apartments. She agreed that Mr Young would ask Mr Brady whether there was a contract. If his response was that there was, then they would go to settlement. If Mr Brady's response was that there was no contract, then Mr Young would ask for the return of the money that she had paid.
86 Mr Young said that Ms Sainuddin instructed him that there had been no exchange of contracts and that she wanted the return of the monies that she had paid. Her sole instruction was to seek the return of the deposit on the basis that there had been no exchange of the contract. She told him that she was always able to settle. She did not tell him that there were potential buyers. He did not advise her about a contract being created by conduct.
87 On 28 March 2006, Mr Young wrote to Mr D Davidson, the solicitor for Brady Flinders, in the following terms:
“RE YOUR CLIENT – BRADY FLINDERS PTY LTD
OUR CLIENT – NANCY SAINUDDIN
Pp: Lots 2207D and 2208D Plan of Subdivision 506544N
Located at Eifel Tower, 550 Flinders Street, Melbourne
We now act for Nancy Sainuddin who had previously been represented by Johansson Solicitors.
The purpose of this correspondence is to request repayment of monies paid by our client namely the sum of $88,600.00 which we understand was paid by a series of direct deposits into your trust account in October and December of 2003 and February of 2004. We understand that the monies were paid because of a contemplated purchase by our client of the above described unit. We understand that the matter was never consummated and at no stage did the Vendor ever communicate any form of acceptance particularly it did not effect an exchange of contracts.
In the circumstances it is clear that no contractual relationship has been entered into between our respective clients.
Accordingly, we would appreciate refund of monies held by you at your earliest opportunity.”
88 On 13 April 2006, Mr Davidson replied to Haines and Polites as follows:
“I refer to your letter dated 28 March 2006. I have sought detailed instructions from my client on the matters raised therein, and with my client’s approval, I enclose a copy of that letter of instruction.
I hold a copy of the contract of sale signed by both parties. It is apparent that your client has by her conduct confirmed the existence of the contract subsequent to it being executed on 3 August 2003. You are advised that direct deposits into my trust account from your client are as follows:
(showing the net sum credited to the account by my Bank)
15/10//03 $14,985.00
3/12/03 $27,985.00
13/2/04 $20,985.00
In accordance with the final paragraph of the enclosed letter, my client accepts your client’s repudiation of the contract of sale. The deposit will be forfeited and my client will take steps to re-sell the property. My client reserves all of its rights with respect to recovery of damages that may be sustained.”
Mr Davidson’s reply attached a letter of instructions from Mr Pethica, which:
(a) stated that “our office holds a photocopy of a Contract of Sale for this transaction. The Contract of Sale is dated 3 August 2003 and is signed by Anthony Brady as Vendor and is also signed by the Vendor. A copy has been provided for your records”.
(b) referred to the development of the plans for the combined apartment and the involvement of Ms Sainuddin in that process;
(c) stated that Mr Georgeson had advised him by facsimile on 6 August 2003 that:
- The Purchaser had signed the contract.
- The Purchaser paid $10,000 deposit.
- The Purchaser had requested changes to the proposed floor plan and they were to be incorporated into an amended plan to form an annexure to the Contract.
Mr Georgeson also advised that in the interim he would exchange contracts.
(d) stated that after the resolution of matters concerning the plans for the combined apartments, Ms Sainuddin made three instalment payments to Mr Davidson’s trust account on 15 October 2003, 3 December 2003 and 13 February 2004.
(e) stated that Mr Georgeson had left Brady Flinders’ employ and he was not aware of his current whereabouts, however he had no reason to doubt that he exchanged the Contracts of Sale as stated.
(f) stated that the conduct of Ms Sainuddin and Brady Flinders during 2003 and 2004 as outlined was indicative of both parties acting in accordance with a consummated agreement. No correspondence had been received from Ms Sainuddin, or her representative, between 3 August 2003 and Haines and Polites’ correspondence of 28 March 2006, seeking confirmation of the agreement, or a copy of the Contract of Sale.
(g) stated that Ms Sainuddin had been seeking to be released from the contract of sale.
(h) stated that Ms Sainuddin had repudiated the contract.
89 It is unclear to what document Mr Pethica was referring to when he stated that: “a copy has been provided for your records.”
90 At about this time, Ms Sainuddin was in Singapore and had difficulty contacting Mr Young. He sent her a letter telling her that Mr Brady alleged that she had repudiated the contract, but did not send her the actual correspondence with Brady Flinders. Ms Sainuddin’s evidence was that she spoke with Mr Young, who said that Mr Brady had acknowledged there were contracts in existence. He told her that even though Mr Brady said that she had repudiated the contract, he was required to give her an opportunity to remedy her alleged breaches.
91 On 2 June 2006 Mr Young wrote to Ms Sainuddin stating in part:
“ I have had correspondence from the solicitor acting for Brady Flinders Pty Ltd. They have provided a detailed view of the position from their client. They state that they hold a signed Contract of Sale signed by both parties. Secondly they indicate that your conduct confirms the existence of the Contract, namely since 3 August 2003 you paid direct deposits into the solicitors trust account as follows:…
the letter then summarised what was contained in Mr Davidson’s and Mr Pethica’s letters and continued:
I require your further instructions as to whether you intend simply to take no action. Obviously the loss of deposit is a substantial amount of money. There is also a significant risk that if the property is resold at a significant loss ( which appears likely), then action will be taken against you for the shortfall plus all consequent losses and expenses.”[27]
[27]CB 232
92 Ms Sainuddin’s understanding was that Mr Brady had a contract and she did not consider that she had repudiated the contract. She instructed Mr Young to proceed to settlement because Mr Brady had acknowledged the contract.[28]
[28]T 200
93 On 20 December 2006, Mr Davidson wrote a letter to Ms Sainuddin entitled, “With Reference to Apartment 2207” stating:
“I refer to previous correspondence on this sale. Please note that the Plan of Subdivision for the above project is now registered. In anticipation of settlement, I enclose the following:-
1.Copy of Land Victoria notification of registration and allocation of the particulars of the subject lot/s.
2.Copy of Occupancy Permit
3.Draft Copy of Vendor’s Land and Buildings Statutory Declaration
4.Body Corporate Form 3
As the Occupancy Permit has been issued, and the Plan of Subdivision is registered, settlement of this purchase is due within fourteen days of the receipt of this letter as per the Contract of Sale.
Settlement will be at Deacons Lawyers, Level 12, RACV Tower, 485 Bourke Street, Melbourne.
Cheque Distribution will be advised within the next few days.
Please note that in a number of cases, the purchaser has signed an agreement for variation to their contract. If you client is in this category, then the consideration in the Transfer must reflect the Contract Price as varied, and accordingly an amendment will be made to the Transfer if you already submitted it at the original (unvaried) figure. You will note that the attached Draft Land and Buildings Statutory Declaration incorporates the variation where applicable.
Please contact me with respect to an appointment for settlement.”
94 Ms Sainuddin attempted to obtain a bank loan to settle her purchase of the apartment, but the bank wanted a signed copy of the contract of sale. The settlement letter was insufficient. She gave evidence that a friend telephoned Mr Davidson on 2 March 2007 seeking a copy of the contract signed by the vendor. He was informed that the apartments were already sold to another buyer and that her previous solicitor had repudiated the contract.
95 On 7 March 2007, Mr Young wrote to Ms Sainuddin informing her that Mr Davidson had told him that the letter of 20 December 2006 was “a complete mistake” and should not have been sent to her. He also informed her that Mr Davidson had stated that apartment 2207 had been sold to another person, but that Ms Sainuddin’s position might be able to be salvaged, because there were other apartments in the development that were still for sale. He suggested that Ms Sainuddin take prompt action. However, Ms Sainuddin wanted apartments 2207/ 2208. She valued their sea views.
Resale of the apartments
96 Brady Flinders put apartments 2207 and 2208 up for re-sale in about July 2006. Work must have been done to reconvert them to separate apartments.
97 Apartment 2207 was resold for $609,000. Settlement occurred on about 16 March 2007. Apartment 2208 was resold for $460,000. Settlement occurred on 23 March 2007.[29]
[29]See the affidavit of Mr Simon Pethica of 24 October 2011.
Ms Sainuddin engages Kalus Kenny
98 Ms Sainuddin was in Indonesia, recruiting students to study in Melbourne. In 2008 she decided to sue Mr Brady. A friend told her to engage a new lawyer. In the interim she received advice from a lawyer that there was no contract in existence by which she was bound, because Mr Brady did not sign it[30]. She spoke with other lawyers and, in about April 2008, engaged Mr Jonathan Kenny of Kalus Kenny solicitors to represent her. Ms R Fahey of that firm assisted him.
[30]T 60
99 In July 2008 in the Magistrates’ Court proceedings, Kalus Kenny, on behalf of Ms Sainuddin, gave discovery of a partial copy of the contract dated 3 August 2008.[31]
[31]See the affidavit of Ms Sainuddin of 21 November 2011, paragraph 3
100 On 16 July 2008, Mr Kenny and Ms Fahey sent an email to Ms Sainuddin about her case, which stated in part:
“ The Contract
We have now been provided with a signed copy of the contract executed by Brady.
We have asked to inspect the original Contract. So far, they have not co-operated.
If the original is produced, we note you[r] instructions are that you wish to have an expert employed to attempt to determine when Brady signed this contract.
We will let you know.”
101 On the same day, Ms Sainuddin sent a responding email to Kalus Kenny. She stated that she would like to settle the sale, but the property had been sold. She had telephoned Ms Christin because she was really angry with her. She kept asking about the original contract and Ms Christin kept saying that the contract was in Melbourne and would be sent to Johansson, solicitors. She told Ms Christin that Johanssons no longer acted for her. She said that Ms Christin faxed her the first 4 pages of the contract to assist her in obtaining a visa at the Australian embassy. Ms Christin apologized to her because she could not help her get the property back. Ms Sainuddin said that she threw away the first 2 pages of the document sent by Ms Christin, because she was embarrassed to present it at the embassy, as it did not have the vendor’s signature.
102 A mediation was held in the Magistrates’ Court proceeding in November 2008, but the proceeding was not settled. The case was listed for hearing in April 2009, but the hearing did not proceed. Ms Sainuddin said that her solicitor told her that settlement discussions were being held. However, in March 2009 Kalus Kenny ceased to act for Ms Sainuddin.
Ms Sainuddin engages Whitehead Summons
103 A friend of Ms Sainuddin introduced her to Mr Summons, a solicitor with the firm of Whitehead Summons. He represented her from about April 2009 until late 2010, although it was on 18 February 2011 that he was granted leave to cease to act on her behalf. Thereafter Ms Sainuddin has represented herself.
104 Mr Summons advised Ms Sainuddin that she should commence proceedings in the County Court and should sue Haines and Polites as one of the defendants.
105 As stated, the Magistrates’ Court proceedings were transferred to the County Court in 2010.
106 Mr Summons prepared Ms Sainuddin’s affidavit of documents. It is dated September 2010, but appears to have been sworn on 21 November 2011.
107 Brady Flinders’ case that a contract was made, was based first on the argument that signed contracts, or counterparts were exchanged. That argument requires determination of the question whether Ms Sainuddin, or her solicitors, received a copy of the contract signed on behalf of Brady Flinders before 28 March 2006, or the reply to that letter of 13 April 2006.
Submissions of the parties
108 Brady Flinders’ case was that Mr Georgeson exchanged a copy of the executed contract on about 6 August 2003, as he said that he would in his email of that date.
109 The contract of sale in the Court Book is from the discovery of Ms Sainuddin. It is signed by both Ms Sainuddin and Mr Brady. Mr Brady’s evidence was that it was signed in early August 2003. Ms Sainuddin’s evidence was that she first saw that document when she received the Court Book, a short time before the commencement of the trial. However Kalus Kenny had received a copy of it in 2008 and it was listed in Ms Sainuddin’s affidavit of documents prepared by Mr Summons. Due to misunderstanding, or miscommunication, with her solicitors Ms Sainuddin did not receive a copy of it at that time.
110 On the balance of probabilities the Court should find that Brady Flinders provided Ms Sainuddin with a signed counterpart of the contract.
111 As previously stated, Ms Sainuddin contended that she had never received a copy of the contract signed by Mr Brady until she received a copy of the Court Book. She had sought a copy of the contract signed by Mr Brady for a number of years.
The documentary evidence on the issue
112 There was additional documentary evidence about the contractual documents that had been created. The evidence about the contractual documents in the possession of Ms Sainuddin and her solicitors was confusing, but on analysis shows that it was only in July 2008 that Ms Sainuddin’s solicitor, Kalus Kenny, received a copy of the contract executed by Brady Flinders. That occurred as part of discovery in the Magistrates Court proceeding.
113 It is important to first describe the contract that is relied on by Brady Flinders and is contained in the Court Book.[32] It has 108 pages. It has the General Conditions, the Particulars of Sale, Additional Special Conditions, 31 Special Conditions, Schedule A the Architect’s Plans of 21 pages and then the Schedule B Development Specifications of 6 pages. There is then the statement pursuant to section 32 of the Sale of Land Act 1962 of 58 pages, which appears to have been regarded as part of the contract, although strictly speaking it is a separate document. That statement includes the plan of subdivision, the planning certificates, the body corporate rules and the section 173 of the Planning and Environment Act 1987 agreement.
[32]CB 65 -173
114 The contract was signed on the first page, after the coversheet, by Mr Brady and Ms Sainuddin.
115 The evidence establishes that Kalus Kenny received a copy of this contract in July 2008 on discovery[33] and it was in the Kalus Kenny file that was handed onto Mr Summons, when he commenced to act for Ms Sainuddin in 2010.
[33]The evidence of Mr M Muir, the solicitor at Corrs Chambers Westgarth, who were acting for Brady Flinders T 234-236 The document that he provided was document 12 and 32 in the affidavit of documents of Brady Flinders made by Mr Simon Pethica.
116 In turn, Ms Sainuddin included this document in an affidavit of documents prepared by Mr Summons in 2010. It was marked “NS 34”, because it was document 34 in Ms Sainuddin’s affidavit of documents.
117 Mr M Muir, the solicitor at Brady Flinders’ solicitors handling the matter, gave evidence that discovery was provided on behalf of Brady Flinders to Kalus Kenny, who obtained copies of discovered documents.[34] He did provide Kalus Kenny with copies of the contract signed by Mr Brady.[35] That document seemed to be the same as that marked “NS 34” in Ms Sainuddin’s affidavit of documents, although of course, the document that he provided to Kalus Kenny did not have that marking.
[34]T 234
[35]T 235
118 Ms Sainuddin gave evidence that the contract in the Court Book was an altered version of the original contract for apartment 2207 only. She said that none of her solicitors had an original contract in the form of that contained in the Court Book.
119 The evidence suggests Ms Sainuddin, through her solicitors, only received a copy of the contract that is relied on by Brady Flinders in July 2008. Ms Sainuddin, of course, says that she only saw that copy when she received the Court Book.
120 The other contractual documents that were in the possession of Ms Sainuddin’s solicitors before 28 March 2006 did not include a copy of the signed contract.
121 These other contractual documents, included those contained in the file of Johansson solicitors (the Johansson file). The version of the contract in that file was only 15 pages in length.[36] It was not signed on behalf of Brady Flinders. It contained incomplete Particulars of Sale, Additional Special Conditions, a plan, Development Specifications, a Plan of Subdivision of the twenty second floor and a body corporate schedule.
[36]Page 85 of Exhibit A
122 There was then the document that Ms Sainuddin said that she received from Mr Brady on 3 August 2003. That contained the Particulars of Sale, which were complete, save for the absence of the details of the purchasers’ solicitors, the Additional Special Conditions, a plan, Development Specifications and a page from the section 32 statement.[37] This document was signed by Ms Sainuddin and initialled by some other unidentified person. There was a second version of that document which was listed as document 3, “Partial Copy of Contract of Sale of Real Estate”, in Ms Sainuddin’s affidavit of documents in the Magistrates’ Court proceeding. It had additional pages, containing a plan of subdivision and a body corporate schedule. This document was only signed by Ms Sainuddin. She said that the two versions of the document were the same,[38] but they differed, at least in respect of the persons who had signed them and the information included in them.
[37]Ex C
[38]T 347
123 Ms Sainuddin continued to request that her solicitors obtain a copy of the signed contract. The evidence is that her solicitors did not have a copy of the contract signed by Brady Flinders until July 2008. The evidence set out above is that in March 2005, staff of Brady Flinders were uncertain where the executed contract was. Mr Brady did not exchange it, and there was no evidence that anyone else did.
124 There is no evidence that a copy of the contract, or a counterpart, signed on behalf of Brady Flinders was ever exchanged by Brady Flinders with Ms Sainuddin, or her solicitors, prior to Mr Young’s letter of 28 March 2006 or the reply to it in April 2006.
125 The onus of proving the exchange of signed contracts lies on Brady Flinders. It is part of its defence to Ms Sainuddin’s claim for the return of her deposit..
126 I am not satisfied on the evidence that Brady Flinders exchanged a copy of the contract signed by it at any relevant time ie. at any time before Brady Flinders in April 2008 purported to accept Ms Sainuddin’s repudiation of the contract.
127 The evidence does not explain how Ms Sainuddin’s signature came to be on the section 32 statement, or when the 108 page contract in the Court Book came to be assembled. Nor does the evidence explain why Brady Flinders did not exchange a signed copy of the contract with Ms Sainuddin at any relevant time. These uncertainties, however, do not detract from the fact that Brady Flinders has not established that it exchanged a signed contract with Ms Sainuddin prior to July 2008. Rather the evidence is that only in July 2008, did Brady Flinders provide a signed contract to Ms Sainuddin’s solicitors.
Conclusion
128 Brady Flinders has not proved that it exchanged a signed copy of the contract of sale, or a counterpart with Ms Sainuddin prior to the letters of 28 March 2006, or 13 April 2006.
Acceptance by conduct
129 Brady Flinders relied on the alternative argument that, even if it had not exchanged a signed contract with Ms Sainuddin, it had accepted her offer by conduct: see Brogden v Metropolitan Railway Co[39] and Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd[40]. The facts examined objectively required this conclusion.
[39] (1877) 2 App Cas 666
[40] (1988) 14 NSWLR 523
130 In considering this argument, it is important to bear in mind that the exchange of contracts is a very well established means of forming a binding agreement for the sale of real estate.[41] In Sindel v Georgiou[42], the High Court stated:
“The usual practice in New South Wales is for parties entering into a contract for the sale of land to exchange signed counterparts of a written contract so that, in consequence of the exchange, the purchaser has possession of a copy signed by the vendor and the vendor has possession of a copy signed by the purchaser: Allen v Carbone; Brien v Dwyer; Smith v Lush. When the parties propose to enter into a contract for the sale of land by the customary procedure of exchange they do not contemplate the coming into existence of a binding contract before the exchange takes place. The exchange is the ‘crucial and vital fact which brings the contract into existence’: Eccles v Bryant and Pollock. The ceremony of exchange constitutes a mutual acknowledgement that the bargain has been struck. In earlier times that ceremony invariably took place at the office of one of the solicitors, exchange being effected by physical delivery. In more recent times exchange of contracts is effected by post (Eccles v Bryant and Pollock) and, sometimes, constructively by telephone.”[43]
[41]Parkin v Pagliuca [2008] NSWSC 168 at [27]
[42] (1984) 154 CLR 661
[43](1984) 154 CLR 661 at 665-666
131 The practice in New South Wales described in Sindel v Georgiou is also the practice in Victoria.
132 In Eccles v Bryant and Pollock, which was referred to in Sindel v Georgiou, Lord Greene MR stated that:
“Parties become bound by contract when, and in the manner in which, they intend and contemplate becoming bound. That is a question of the facts of each case…”[44]
[44][1948] Ch 93 at 104
133 The task therefore is to determine the common intention of the parties, viewed objectively[45].
[45]Parkin v Pagliuca [2008] NSWSC 168 at [37] citing Toll (FCGT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 177-180
134 Victorian authority has decided that the conduct of the parties subsequent to the making of a contract is not relevant to the interpretation of the contract.[46] However the post-contractual conduct of parties is relevant to deciding whether the parties intended to be bound.[47]
[46]FAI Traders Insurance Company Ltd v Savoy Plaza Pty Ltd [1993] 2 VR 343
[47]See the authorities cited in Young v Coupe [2004] NSWSC 999 at [71] including Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 at 77 and Barrier Wharfs v W Scott Fell & Co Ltd (1908) 5 CLR 647, at 668, 669 and 672
135 Brady Flinders’ argument appeared to have two strands, which if established would not infringe principles of contractual interpretation. First, the parties never required that there be an exchange of signed contracts in order for the contract to be accepted and, that therefore, acceptance by conduct was possible. Secondly, if initially the parties did contemplate that there was a term of the contract requiring acceptance by exchange of signed contracts, that requirement was either varied, or waived, therefore indicating that, viewing the facts objectively, the parties intended that acceptance could occur by conduct.
136 A contract can be created even though one party refuses to execute the document containing the printed terms of the contract. A party’s assent to the printed terms of the contract can be inferred from the whole of the dealings between the parties. It assists in considering this principle to set out some parts of the judgments in Empirnall Holdings Pty Ltd v Machon Paull Partners Pty Ltd[48], which decision was relied on by Brady Flinders. It is necessary to keep in mind however, that that case did not concern the sale of land, but the performance of work by architects for a developer. Kirby P stated:
[48](1988) 14 NSWLR 523; see also the authorities discussed in In the matter of Painaway Australia Pty Ltd (in prov liq)(admin apptd) [2011] NSWSC 205 at [189] – [245].
“The circumstances in which assent may be inferred, although never specifically stated, vary with the infinite variety of facts which come before the courts in disputed contractual cases. From the facts, looked at objectively, a court may be willing to infer a party’s acceptance. Various categories of this kind have emerged over the years. One arises where there have been previous dealings between the parties or where something in the history of the transaction between the parties gives rise to ‘an inevitable inference from the conduct’ of the disputing party, and from ‘its doing and saying nothing’ for a considerable time, that ‘it accepted the [contract] as valid.’
….
In these circumstances, I would apply what was said a century ago by Lord Hatherley in Brogden(at 682):
“My Lords, Mr Herschell… put the case on a very proper foundation, when he says that he will not contend that this agreement is not to be held to be a binding and firm agreement between the parties, if it should be found that, although there has been no formal recognition of the agreement in terms by one side, yet the course of dealing and conduct of the party to whom the agreement was propounded has been such as legitimately to lead to the inference that those with whom they dealt were made aware by that course of dealing, that the contract which they had propounded had been in fact accepted by the persons with whom they dealt. ( Emphasis added.) ”[49]
[49](Supra) at 528 and 531, authorities omitted.
McHugh JA stated:
“ A more accurate statement is that where an offeree with a reasonable opportunity to reject the offer of goods or services takes the benefit of then under circumstances which indicate that they were to be paid for in accordance with the offer, it is open to the tribunal of fact to hold that the offer was accepted according to its terms…
The ultimate issue is whether a reasonable bystander would regard the conduct of the offeree, including his silence, as signalling to the offeror that his offer has been accepted.”[50]
[50]At 535
137 These principles were discussed by the Victorian Court of Appeal in PRA Electrical Pty Ltd v Perseverance Exploration Pty Ltd.[51]
[51](2007) 20 VR 487
138 The acceptance of a contract by conduct has been recognized as being possible in the case of conveyancing contracts.[52]
[52]See eg Lee v Ross [2003] NSWSC 289; Young v Coupe [2004] NSWSC 999 and Parkin v Pagliuca [2008] NSWSC 168
139 The argument that both parties had accepted the written contract, even if it could not be shown that Brady Flinders had exchanged a signed contract with Ms Sainuddin, was based on the following facts. Ms Sainuddin had signed the contract on 3 August 2003. She had made four payments towards the deposits and they were accepted by Brady Flinders. She had negotiated amendments to the floor plans. Only lack of funds stopped her completing the purchase of the apartments. She sought to sell the apartments. These arguments were forcefully put in Mr Pethica’s letter to Mr Davidson of April 2006 about Ms Sainuddin’s alleged repudiation of the contract, which I have summarised previously.
140 The evidence suggests that the parties proceeded on the usual basis that there would be an exchange of contracts and that they would be bound when that occurred. Ms Sainuddin, through her solicitors, and in conversations first with Mr Georgeson and then with Ms Christin sought a copy of the contract signed by Brady Flinders. Ms Sainuddin’s conduct suggested that she considered that she was entitled to receive, and expected that she would receive, a copy of the contract signed on behalf of Brady Flinders. The properties sold were off the plan apartments. As previously stated, the date for the payment of the residue of the purchase price was the later of:
(1) 14 days after the notification given to the purchaser’s representative of registration of the Plan of Subdivision at the Offices of Titles; and
(2) 14 days after delivery to the purchaser’s representative of the occupancy permit for the subject property.”
141 The plan of subdivision was completed on 6 July 2006.[53]
[53]Evidence of Mr A Busse, T281
142 The long time that elapsed period between 3 August 2003, when Ms Sainuddin signed the contract, and her contention in March 2006 that there was no contract in existence, is in part explicable by the fact that property that she was to purchase was an off the plan apartment, which had to be constructed.
143 It has to be remembered that Brady Flinders’ case is that it accepted Ms Sainuddin’s offer. It is therefore both Ms Sainuddin’s conduct and Brady Flinders’ conduct in response, eg in accepting deposit payments and agreeing to redesign the apartments, that must be considered in determining whether Ms Sainuddin made an offer, which was accepted by Brady Flinders, without the need for the exchange of signed contracts or counterparts.
144 It is appropriate to repeat the statement of Heydon JA stated in Brambles Holdings Ltd v Bathurst City Council[54]:
[54](2001) NSWLR 153 at 176-177 [71]
“ … While the process by which many contracts are arrived at is reducible to an analysis turning on the making of an offer, the rejection of the offer by a counter-offer and so on until the last counter-offer is accepted, that analysis is neither sufficient to explain all cases nor necessary to explain all cases. Offer and acceptance analysis does not work well in various circumstances.”
His Honour gave instances of contracts that were difficult to analyse in terms
of offer and acceptance, including the exchange of contracts to sell land.
145 Ms Sainuddin’s requirement that two apartments be combined, which requirement was accepted by Brady Flinders, was not conduct showing her offer of, or acceptance of the contract, but was a step to establish or identify the apartment that she wished to purchase. Ms Sainuddin’s payment of the deposit by instalments was pursuant to arrangement with Brady Flinders and is equivocal as to whether any contract had come into existence in the absence of the exchange of signed contracts or counterparts. Deposits are often paid before contracts are exchanged.
146 A decisive consideration standing against the proposition that Brady Flinders accepted Ms Sainuddin’s offer by its conduct is that she never received a complete copy of the contract, even in an unsigned form, before July 2008. She received the particulars of sale, but did not receive many significant parts of the contract. It is one thing to conclude objectively by conduct, that a person has accepted an offer to enter into a contract on the basis of their conduct, when the parties are both in possession of the complete document that is to form the contract. In those circumstances, the failure of the party accepting the offer to exchange a signed copy, or counterpart, may not be decisive. It is quite a different matter for the party to assert that it has accepted an offer when the party said to be making the offer has never received a copy of the complete contract.
147 A comparison of the copy of the signed contract in the Court Book and the copies of the contract that Ms Sainuddin received on 3 August 2003 and that in the Johansson file, shows that Ms Sainuddin did not receive the following parts of the contract:
(a) The General Conditions;
(b) The one page schedule to the particulars of sale;
(c) The printed 31 special conditions;
(d) many of the pages of the architects’ plans;
(e) the section 32 statement and its attachments.
148 The General Conditions of Contract that Ms Sainuddin did not receive dealt with important matters, including the payment of purchase money, the incorporation of the provisions of Table A of the Seventh Schedule to the Transfer of Land Act, the provision of the transfer and the settlement. The Special Conditions that she did not receive dealt with matters such as Title, Subdivision and Building Works, to mention only a few.
149 Ms Sainuddin’s conduct could only be taken by the reasonable bystander to have offered to contract on the terms contained in the 108 page contract if she had received a copy of it, or knew all its significant conditions. She never received a copy of it at any material time, and there is no evidence that she knew the contents of the terms that she did not receive.
150 In those circumstances, the evidence, considered objectively, does not establish an acceptance by Brady Flinders of an offer by Ms Sainuddin to enter into the contract.
Estoppel
151 The equitable principles of estoppel may provide a remedy against the detriment suffered by a person, who acted on the basis that a contract came into existence when no exchange of contracts or counterparts has occurred. Much of the evidence about Ms Sainuddin’s conduct after August 2003, that is relied on by Brady Flinders, might have been relevant to a plea of estoppel. However no plea of estoppel was made, perhaps because Brady Flinders resold the apartments at a higher price. As the principles of estoppel were not relied on, I will express no view about their availability.
152 The defence did plead acts of part performance, but did not by counter claim seek any remedy as a result, for instance an order for specific performance.
Ms Sainuddin’s entitlement to a return of the deposit
153 On the basis that there no contract was ever made, Ms Sainuddin is entitled to the return of the deposit. No argument was put that, if it were found that no contract had been created, there was any defence to her claim for a return of the deposit as money had and received, or as it is pleaded, “monies to the use of the Plaintiff”.
154 Ms Sainuddin claims the return of deposit in the sum of $88,600, which is 10 per cent of the purchase price. Two parts of that sum represent amounts owing to her by Brady Flinders and credited to her - $9600 commission in respect of the Wills Tower sale and $5000, being part of the commission in respect of the sale of the penthouse, apartment 2701. Brady Flinders accepted Ms Sainuddin’s argument that those two amounts were entitled to be treated as payments made by her by way of deposit.[55] There was no dispute that she should be treated as having paid $88,600 by way of deposit.
[55]T 37, 45
Legal principles relating to repudiation of contract
155 For the sake of completeness, I will express my conclusion on the repudiation defence, even though I have concluded that there was no contract entered into. Counsel for Brady Flinders referred to the statement of Deane and Dawson JJ in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd that:
“It suffices that, viewed objectively, the conduct of the relevant party has been such as to convey to a reasonable person, in the situation of the other party, repudiation or disavowal either of the contract as a whole or of a fundamental obligation under it.”[56]
[56](1989) 166 CLR 623 at 658
156 In R & A Cab Co Pty Ltd v Kotzman[57] Ashley JA, with whose judgment Kellam JA and Osborn AJA, agreed stated some of the key principles relating to repudiation of a contract. These were, first, that repudiation is a serious matter not to be lightly found or inferred. Secondly, whether a party’s conduct amounts to a repudiation is not ascertained by an inquiry into a subjective state of the mind of the party in default; it is to be found in the conduct, whether verbal or other, of the party in default which conveys to the other party the defaulting party’s intention not to perform it or to fulfil it only in a manner substantially inconsistent with its obligations, and not in any other way. Thirdly, the whole circumstances of the case must be examined in order to determine whether there was a repudiation. Fourthly, in some circumstances, a mere honest misapprehension, especially if open to correction, will not justify a charge of repudiation. This proposition has typically fallen for consideration where the defaulting party has acted in reliance upon an erroneous interpretation of the contract.
[57][2008] VSCA 68 at [44] - [51]
157 If I had found that a contract had been made, then I would have found that the letter from Ms Sainuddin’s solicitor of March 2006 repudiated the contract. Looked at objectively that letter contained a clear statement that there was no contract. By that clear statement, Ms Sainuddin indicated that she did not intend to be bound by the contract.
158 In those circumstances, I would have found that there was no requirement to give Ms Sainuddin an opportunity to rectify her breach of contract: see Nund v McWaters.[58]
[58][1982] VR 575 at 589
Claims for unconscionable conduct and misleading and deceptive conduct
159 Ms Sainuddin’s pleading also contained claims in unconscionable and misleading and deceptive conduct in relation to the sale of the apartments. Those claims were based on the proposition that there was a binding contract, and that Brady Flinders had repudiated or breached it. I have found that there was no binding contract, so the claims cannot succeed.
Conclusion
160 Ms Sainuddin is entitled to recover the amount of the deposit, $88,600, that she paid towards the purchase of apartments 2207 and 2208. Her other claims fail. I will hear the parties about interest and costs
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