Steer v Burchill
[2017] QDC 206
•4 August 2017
DISTRICT COURT OF QUEENSLAND
CITATION:
Steer v Burchill [2017] QDC 206
PARTIES:
PATRICIA MONICA STEER
(plaintiff)v
GEOFFREY HENRY BURCHILL AND KAY VIVIENNE BURCHILL
(defendants)FILE NO/S:
230 of 2016
DIVISION:
Civil
PROCEEDING:
Application
ORIGINATING COURT:
District Court at Southport
DELIVERED ON:
4 August 2017
DELIVERED AT:
Southport
HEARING DATE:
5 June 2017
JUDGE:
Muir DCJ
ORDERS:
1. There be summary judgment for the defendants on the plaintiff’s claim to an entitlement to the deposit in the sum of $195,000 paid by the defendants under the contract of sale entered into between the plaintiff and the defendants on 14 February 2016.
2. There be summary judgment for the defendants on their counterclaim as to their entitlement to the Deposit in the sum of $195,000.
3. The defendants are entitled to payment of the Deposit in the sum of $195,000.
4. The plaintiff is to cause the Deposit in the sum of $195,000 to be paid to the defendants by 4.00pm Friday 11 August 2017.
5. The plaintiff is to pay interest on the sum of $195,000 from 1 July 2016 until 4 August 2017 in accordance with the Civil Proceedings Act 2011 (Qld).
6. Paragraphs 23(c), 27A and 27B of the further amended statement of claim are struck out
7. The plaintiff pay the defendants’ cost of their counterclaim, the summary judgment application and the strike out application.
8. The parties are to confer and to provide a final minute of orders as agreed, by 4.00pm Tuesday 8 August 2017, including a calculation of the interest amount.
9. If alternate orders as to the date for payment, interest and or costs are sought, the parties are to file written outlines of no more than 2 pages attaching the orders sought, by 4.00pm Wednesday 9 August 2017. If necessary the matter will then be relisted at a date to be fixed with leave to appear by telephone.
CATCHWORDS:
PROCEDURE – CIVIL PROCEEDINGS IN QUEENSLAND – ENDING PROCEEDINGS EARLY – SUMMARY DISPOSAL - LEGAL QUESTION - where plaintiff and defendants entered into a REIQ contract for sale of land containing a special condition that the contract was subject to the sale of another property owned by the defendants – where contract was terminated by the plaintiff -where plaintiff commenced proceedings for breach of contract and for misleading and deceptive conduct seeking an entitling to the deposit under the contract as well as a claim for damages for breach of contract and for misleading and deceptive conduct under the Competition and Consumer Act 2010 (Cth) - where defendants accept there is a need for a trial of the plaintiff’s claims for damages – where defendants contend that the plaintiff has no real prospects of establishing her claim to an entitlement to the deposit – where the defendants seek summary judgment on their counterclaim for the deposit – where facts not in dispute – whether legal issue ought to be determined summarily - whether defendants entitled to summary judgment on part of the plaintiff’s claim as it relates to the deposit - whether there is a need for trial on the issue of the plaintiff’s entitlement to the deposit under the contract.
CONTRACTS – CONSTRUCTION AND INTERPRETATION OF SPECIAL CONDITION IN CONTRACT - whether warranty in special condition an essential term under the contract or at common law or fundamental breach of an intermediate term entitling plaintiff to terminate the contract for breach – whether conduct by defendants amounted to an express or implied repudiation of contract – the effect of the extension of settlement date of contract - whether default by the defendants under the contract - whether a breach of special condition entitling plaintiff to affirm or terminate the contract .
PROCEDURE – CIVIL PROCEEDINGS IN QUEENSLAND – PLEADINGS – STRIKING OUT – GENERALLY – where defendants seek a strike-out of parts of the plaintiff statement of claim relating to the claim for the deposit under the contract and other parts of the statement of claim as unnecessary and scandalous - whether parts of statement of claim ought to be struck out.
Competition and Consumer Act 2010 (Cth), s 232, 236, 237
Uniform Civil Procedures Rules 1999 r 5, 171, 292, 293Ace Property Holdings Pty Ltd v Australian Post Corporation [2010] QCA 55, followed
Agar -v- Hyde (2000) 201 CLR 552, followed
Ansett Australia Holdings Ltd v International Air Transport Association (2006) 60 ACSR 468, considered
Bank of Queensland Limited v Chartis Australia Insurance Limited (2013) QCA 183, followed
Bernstrom -v- National Australia Bank Limited [2003] 1 Qd R 469, considered
Bolton Properties Pty Ltd v JK Investments (Australia) Pty Ltd [2009] 2 Qd R 202, considered
Coldham-Fussell v Commissioner of Taxation (2011) 82 ACSR 439, considered
Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232, followed
Donaldson v Bexton [2007] 1 QD R 525, cited
Ellul v Oakes (1972) 3 SASR 377, considered
Gange v Sullivan (1966) 116 CLR 418, considered
General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125, considered
Goggin v Majet [2016] 2 Qd R 401, distinguished
Howe v Smith (1884) 27 Ch D 89, considered
Koompahtoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115, considered
Maynard v Goode (1926) 37 CLR 529, considered
Mirvac Queensland Pty Ltd v Horne [2009] QSC 260, considered
Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 37, followed
Raging Thunder Pty Ltd & Anor v Bank of Western Australia Ltd [2012] QSC 329, considered
Sargent v ASL Developments Ltd (1974) 131 CLR 634, considered
Scali Properties Pty Ltd Crittenden & Anor [2009] QSC 290, considered
Soper v Arnold (1889) 14 App Cas 429, considered
Spencer v Commonwealth (2010) 241 CLR 118, considered
St George Bank Ltd v Wright [2009] QSC 337, considered
Suttor v Gundowda Pty Ltd (1950) 81 CLR 418, considered
Taylor v Corporation of St Helens (1877) 6 Ch D 264, considered
Theseus Exploration NL v Foyster (1972) 126 CLR 507, considered
Thomas -v- Balanced Securities Limited [2012] 2 Qd R 482, considered
Tropical Traders Ltd v Goonan (1964) 111 CLR 41, followed
Westpac Banking Corporation v Zilzie Pty Ltd [2016] QSC 238, considered
Yule v Smith [2012] NSWCA 191, consideredCOUNSEL:
Mr M Amerena for the plaintiff
Mr A Collins for the defendants
SOLICITORS:
Bell Legal Group for the plaintiff
Steindls Lawyers & Notary for the defendants
Introduction
On 14 February 2016 the first and second defendants as purchasers and the plaintiff as vendor, entered into a written contract for the sale of a property at 82/40 Cotlew Street East, Southport (“the Steer Contract”).[1] The purchase price under the Steer Contract was $1,950,000.00. A Deposit of $195,000.00 which was required to be paid within 48 hours of the execution of the contract, was paid by the defendants on 16 February 2016 (“the Deposit”).[2]
[1]Exhibit 2, pp 21 to 45 to the affidavit of Timothy Myles Elliott filed 16 May 2017, court document no. 13 (“the first Elliott affidavit”).
[2]Paragraph 10 of the first Elliott affidavit.
The Steer Contract contained the standard REIQ terms for residential property sales and included 7 special conditions. Relevantly, Annexure B contained Special Condition 7 which provided that:
“This Contract is subject to the buyer completing by the 11th May 2016 the sale of their property at 7 Eden Court, Nerang, under a Contract dated 2nd October 2015 made between the buyer as seller and Etarb Pty Ltd A.C.N. 608 293 769 as buyer.
The buyer warrants that the Contract referred to above is a binding and enforceable Contract of Sale signed by the buyer of their property and in respect of which all special conditions have been satisfied and so far as the buyer is aware there are no impediments legal or otherwise to the settlement of the sale of that property. (“Special Condition 7”) [Emphasis added]
The reference to a contract of 2 October 2016 in Special Condition 7 is a reference to a written contract entered into by the defendants on this date to sell a property they owned at 7 Eden Court, Nerang to Etarb Pty Ltd ACN 608 293 769 (“Etarb”) (“the First Etarb Contract”).[3] Relevantly and also on 2 October 2015, a contract for the sale of 9 Eden Court to Etarb, was executed (“the Second Etarb Contract”).[4]
[3]Exhibit 1, pp 2 to 19 to the first Elliott affidavit.
[4]It was uncontroversial that the property at 9 Eden Court was owned by the son and daughter in law of the defendants Anthony Charles Burchill and Geraldine Loraine Burchill; paragraphs 5 and 6 of the first Elliott affidavit.
The First and Second Etarb Contracts each contained a special condition that they were conditional on the other settling. The relevant provisions of the First Etarb Contract are as follows:
“3.1 This Contract is subject to and conditional upon the Buyer entering into a Contract, satisfactory to the Buyer, for the purchase of 9 Eden Court, Nerang on or before the signing of the Contract.
3.2 If the Buyer is unable to satisfy this condition it may elect to terminate this Contract by notice in writing to the Seller at which time this Contract shall be at an end and all monies paid hereunder shall be refunded to the Buyer without deduction.
3.3 This clause is inserted for the sole benefit of the Buyer and the Buyer may at its election by notice in writing to the Seller waive the benefit of this clause at any time.
13.1 The Buyer and Seller acknowledge and agree that this Contract is subject to and conditional upon the simultaneous completion of the property situated at 9 Eden Court, Nerang. The parties agree that should the property not simultaneously complete, then this Contract will be at an immediate end.”[5] [Emphasis added]
[5]An identical clause to 13.1 in the First Etarb Contract is found at clause 13.1 of the Second Etarb Contract.
Under the respective Etarb Contracts, settlement was to have taken place on 30 March 2016. Ultimately this date was extended, first until 11 May 2016 and then until 30 June 2016.
Settlement of the Steer Contract was scheduled for 11 May 2016. Due to the extended settlement date of the First Etarb Contract and after written negotiations between the solicitors for the parties to the Steer Contract, settlement of this contract was also extended until 30 June 2016.
Settlement of the First Etarb Contract did not occur on 30 June 2016. On 1 July 2016, the plaintiff terminated the Steer Contract asserting an entitlement to the Deposit by virtue of a breach of the warranty contained in Special Condition 7.
On 12 September 2016 the plaintiff commenced proceedings against the defendants alleging breaches of the Steer Contract and that Special Condition 7 contained both express and implied representations which were false and misleading such that the defendants had engaged in misleading and deceptive conduct in contravention of schedule 2 of the Competition and Consumer Act 2010 (Cth) (“the CCA”). By her claim, the plaintiff seeks the following relief:[6]
[6]The proceedings were commenced by way of a claim and statement of claim filed on 12 September 2016; the current pleading is the further amended statement of claim which was filed on 2 May 2017 (“the further statement of claim”).
1. A declaration that the defendants have forfeited the Deposit and are estopped from asserting an entitlement to terminate the Steer Contract pursuant to Special Condition 7; and
2. An Order that the Deposit be released to her; and
3. Damages in the sum of $135,692.38 for breach of the Steer Contract;[7]
4. Alternatively, damages pursuant to s 236 of schedule 2 to the CCA; and
5. Alternatively an order pursuant to s 232; alternatively s 237, schedule 2 to the CCA enjoining the defendants from taking the benefit of, or otherwise relying on Special Condition 7.
[7]The itemised amounts sought are set out in paragraph 29 of the statement of claim, court document no 1.
The entitlement to such relief is contested by the defendants who by their defence and counterclaim filed 28 October 2016, seek a declaration that they are entitled to the return of the Deposit and consequential orders for payment of the Deposit together with interest and costs (“the counterclaim”).
The defendants accept there is a need for a trial of the plaintiff’s claims for damages, but argue that the plaintiff has no legal basis to maintain her entitlement to the Deposit.[8] Accordingly, the defendants have applied pursuant to r 293 of the Uniform Civil Procedures Rules 1999 (“UCPR”), for summary judgment on this aspect of the plaintiff’s claim.
[8]Paragraph 7 of the submissions on behalf of the applicants/defendants.
The defendants have also applied under r 171 UCPR to strike out paragraphs 18A to 23, 27A and 27B of the plaintiff’s further amended statement of claim. [9]
[9]Paragraph 1 of the application filed 16 May 2017, court document no. 12; The application also sought to strike out paragraphs 5 and 28 of the further amended statement of claim, however during the course of the hearing, the striking out of these paragraphs was not pressed by counsel for the defendants.
Relevant legal principles
Summary judgment principles
By virtue of r 293 UCPR, the Court is empowered with a discretion to give summary judgment where:
(a) the plaintiff has no real prospect of succeeding on all or part of the plaintiff’s claim; and
(b) there is no need for a trial of the claim (or part of it).
The same test applies to a defendant applying for summary judgement as applies to a plaintiff under r 292 UCPR.[10] The rule is said to be expressed in clear and plain language.[11] The words “no real prospect of success” speak for themselves with the word “real” requiring other than a fanciful prospect of success.[12]
[10]Raging Thunder Pty Ltd & Anor v Bank of Western Australia Ltd [2012] QSC 329 at [11] per Applegarth J with reference to Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232; see also Coldham-Fussell v Commissioner of Taxation (2011) 82 ACSR 439 at [97].
[11]As White JA (with whom de Jersey CA and McMurdo P agreed) observed in Coldham-Fussell v Commissioner of Taxation (2011) 82 ACSR 439 at [98].
[12]Deputy Commissioner of Taxation v Salcedo [2005] 2 Qd R 232.
The case proceeded before me on the basis that there were no factual issues for my determination, with the real issue in relation to the entitlement to the Deposit turning on a question of law. Both counsel quite properly accepted that difficult questions of law could be decided on a summary judgment application.
The plaintiff’s counsel submitted that because the legal issue for my determination in this case concerned the interpretation of terms contained in the current standard form of REIQ contract which impacts the whole community, it should not be decided “in the context of the limitations of an applications court as opposed to the advantages of trial, which include full argument, full resort to what the law is…”.[13]
[13]T1-15 lines 40 – 17; T1-16 lines 1 – 5.
Certainly in some cases, the extent and complexity of questions of law may warrant a trial of those issues.[14] In other cases, where the facts are not in dispute and the rights of the parties turn upon questions of law, the court may give summary judgment even where the point of law is difficult.[15]
[14]Theseus Exploration NL v Foyster (1972) 126 CLR 507.
[15]Raging Thunder Pty Ltd v Bank of Western Australia Ltd [2012] QSC 329 at [15] with reference to Bolton Properties Pty Ltd v JK Investments (Australia) Pty Ltd [2009] 2 Qd R 202 at 210; Mirvac Queensland Pty Ltd v Horne [2009] QSC 269 at [18]-[24]; St George Bank Ltd v Wright [2009] QSC 337.
A court hearing an application for summary judgment may justifiably conclude that the proceeding has “no real prospect of success” where the success of a proceeding is critically dependent upon a proposition of law which contradicts binding authority.[16] However the fact that the success of a proceeding depends upon propositions of law apparently excluded by existing authority, is not always the end of the matter. As Applegarth J identified in Raging Thunder Pty Ltd v Bank of Western Australia Ltd,[17] with reference to the observations of French CJ and Gummow J in Spencer v Commonwealth:[18]
“Existing authority may be overruled, qualified or further explained. Summary processes must not be used to stultify the development of the law”
[16]Raging Thunder Pty Ltd v Bank of Western Australia Ltd [2012] QSC 329 at [13].
[17]Ibid at [25].
[18](2010) 241 CLR 118 at 132 [25].
Rule 293 is to be applied keeping in mind the purpose of the UCPR, articulated in r 5, to facilitate the just and expeditious resolution of the real issues in civil proceedings at a minimum expense.[19] That of course, does not detract from the well-established principle that the exercise of power to summarily terminate proceedings must always be attended with caution.[20] As Gaudron, McHugh, Gummow and Hayne JJ said in Agar v Hyde (2000) 201 CLR 552 at 575-576:
“Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formula which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.”[21]
[19]Bernstrom v National Australia Bank Limited [2003] 1 Qd R 469 at [38]; Salcedo at [3], [17] and [45]; Coldham-Fussell v Commissioner of Taxation at [101]; Thomas v Balanced Securities Limited [2012] 2 Qd R 482 at [69].
[20]Spencer v Commonwealth (2010) 241 CLR 118 at [24] per French CJ and Gummow J and at [60] per Hayne, Crennan, Kiefel and Bell JJ.
[21]Agar v Hyde (2000) 201 CLR 552 at 575-576 per Gaudron, McHugh, Gummow and Hayne JJ.
Before me, both parties were given ample opportunity to articulate their arguments and address me on the applicable law. Despite the application being listed for hearing for an hour, oral argument before me took over 2 hours. Both the plaintiff and defendants were legally represented and provided lengthy written submissions through their respective and experienced counsel.[22] Counsel for the plaintiff submitted orally that on balance “that’s more likely to indicate this shouldn’t have been an application for summary judgment”.[23] This of course is not the test. The fact that extensive legal argument is necessary to demonstrate that a claim is so untenable that it has “no real prospect of success” does not preclude the grant of summary judgment.[24]
[22]In the plaintiff’s case, the first submissions were 19 pages and the submissions in reply were four pages. In the defendants’ case, the submissions were 19 pages. Since the hearing of this case the District Court has implemented District Court Practice No 1 of 2017 which provides outlines should not exceed four pages (excluding a relevant chronology).
[23]Transcript 1-14.
[24]General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 at 129.
In the present case, the questions of law fall to be decided in the context of uncontroversial facts. This case turns on its own facts and in my view does not raise issues of any great broader public interest. Bearing in mind the overarching purpose of the UCPR and in light of the lengthy written and oral submissions made by the parties, I consider that there is no need to defer my decision. In my view, the overall interests of justice warrant that I determine the legal issues raised on the facts of this case.[25]
[25]Such an approach was taken by Jackson J recently in Westpac Banking Corporation v Zilzie Pty Ltd [2016] QSC 238 at [83], [84].
Strike out principles
The power to strike out pleadings is contained in r 171 UCPR and includes, where a pleading or part of a pleading discloses no reasonable cause of action or defence; or has a tendency to prejudice or delay the fair trial of the proceeding; or is unnecessary or scandalous; or is frivolous or vexatious; or is otherwise an abuse of the process of the court.
Uncontroversial background leading up to the Steer Contract being terminated
The original settlement date for both of the Etarb Contracts date of 30 March 2016 was notionally extended by an exchange of correspondence between solicitors on 21 October 2015 and 23 October 2015. By this correspondence, it was agreed, subject to certain conditions, settlement could take place at any time up until 30 June 2016.[26]
[26]See Exhibit 14, pp 2, 3 and 4 of the further supplementary affidavit of Timothy Myles Elliott filed 31 May 2016 (third Elliott affidavit).
On 4 February 2016 Etarb sought and was granted a further extension of the settlement dates for both of the Etarb Contracts until 11 May 2016.[27] It was uncontroversial that at the time they entered into the Steer Contract [14 February 2016] the plaintiff had no knowledge that the First Etarb Contract was dependent upon the Second Etarb Contract settling or that notionally settlement of the First Etarb Contract could be extended past 11 May 2016 up until 30 June 2016.
[27]Exhibit 13, pp 21 and 22 to the supplementary affidavit of Timothy Myles Elliott filed 29 May 2016 (second Elliott affidavit).
On 5 April 2016 the solicitors for Etarb advised the solicitors for the defendants in relation to the First and Second Etarb Contracts that their client was “hopeful that he will be in a position to settle these matters on the current settlement date, [11 May 2016] however he is unable to confirm that no extension would be required at this stage.”[28]
[28]Exhibit 15, p 6 to the third Elliott affidavit.
The evidence shows the following exchange of correspondence after 5 April 2016:
1. On 28 April 2016 the solicitors for the plaintiff emailed the defendants’ solicitors in relation to settlement of the Steer Contract as follows:[29]
[29]Exhibit 16, p 8 of the third Elliott affidavit.
“Our client has asked if your clients would confirm that settlement will be effected on the 11th [sic] May 2016 and no extensions requested. Our clients are looking to move out at the end of next week and would like confirmation of the settlement date.”
2. On 28 April 2016 the defendants’ solicitors provided an update to the solicitors for the plaintiff about settlement of the Steer Contract, in the context of issues with the settlement of First Etarb Contract [as advised by Etarb’s solicitors “OMB solicitors”], including that it could be extended for a period of no more than three (3) months from 30 March 2016, as follows:[30]
[30]Exhibit 16, p 9 of the third Elliott affidavit.
“…
In relation to the settlement to be effected on 11 May 2016, the simple answer is – I do not know.
Under Mr and Mrs Burchill’s sale contract, the initial settlement date was 30 March 2016 which was extended for a period “to be no more than three months”. OMB Solicitors (Kate Wheatland) is handling the matter for the buyers. We received advices on 4 February 2016 from OMB Solicitors requesting an extension of the settlement date for a period of six weeks to 11 May 2016 and that is the date that we have been working towards. We have requested on a number of occasions for confirmation of 11 May as the settlement date and on 5 April 2016 OMB Solicitors advised that they are instructed “that our client is hopeful that he will be in a position to settle these matters on the current settlement date, however he is unable to confirm that no extension will be required at this stage”.
Transfer documents were received from OMB Solicitors and have been signed and settlement booked with our clients’ mortgagee for 2.15pm on Wednesday 11 May 2016.
Upon receiving your email I telephone Kate Wheatland and asked if she is able to confirm settlement. She said she does not have instructions. She said she was urgently seeking instructions from her client and advised that she would contact me as soon as she had those instructions.
The lack of confirmation of the settlement date is concerning and there has not been provided to us anything except for the Transfer document.
My instructions are to keep you informed as to developments in relation to the sale of Mr and Mrs Burchill’s property and I will immediately do so when I hear anything from OMB Solicitors.”
3. On 5 May 2016 Etarb’s solicitors wrote to the defendants’ solicitors in relation to the First Etarb Contract as follows:[31]
[31]Exhibit 13, p 23 of the second Elliott affidavit.
“We note that our client’s settlement is due on 11 May 2016. We have been instructed by our client to request an extension of time to on or before the 22 June 2016 with time to remain of the essence.”
4. On 6 May 2016 the defendants’ solicitors, responded to Etarb’s solicitors as follows:[32]
[32]Exhibit 13, p 24 of the second Elliott affidavit. .
“The previous request for an extension made by your client and referred to in the facsimiles of 23 October 2015 provided for ‘total extended settlement period to be no more than three months.’ That would be to 30 June 2016. Is that the time that you should have referred to in your email? It seems nonsensical to request a settlement on or before 22 June 2016 when there is the previous reference to an extension before to on or before 30 June 2016 as the previous settlement date was 30 March 2016. I just wanted to discuss it with you and ask ‘am I missing something?’ Also I wanted to know some background to the request of extension. Do you have any background of what your client is doing in relation to the matter? I accept your client does not have to advise in that regard but I would like to have the matter of the extension date to 30 June clarified. As you would appreciate on a practical basis there is expense in organising a settlement date for all parties and our client wishes to again [sic] avoid that expense being incurred.”
5. By way of response, on 6 May 2016 Etarb’s solicitors wrote to the defendants solicitors as follows:[33]
[33]Exhibit 13, p 25 of the second Elliott affidavit.
“Our client is agreeable to an extension to 30 June 2016 with time to remain of essence.
As you are aware, our client intends to complete a transfer by direction and required additional time to finalise those arrangements. Our client is also anxious to have this matter settled and I am instructed is working as quickly as possible to affect a settlement.Would you please confirm your client’s agreeance.”
6. On 6 May 2016 the solicitors for the defendants wrote to the plaintiff’s solicitors, seeking an extension of the Steer Contract until 30 June 2016.[34] This letter stated:
[34]Exhibit 3, p 47 to the first Elliott affidavit.
“I refer to your email below and enclose:
1. Copy of facsimile from OMB Solicitors to us dated 5 May 2016.[35]
[35]That is the third letter referred to in my chronology of correspondence exchanged after 28 April 2016.
I have just received instructions with regard to that. Mr Burchill had a medical procedure this morning.
You will see the request of extension by the buyer of our client’s property is stated to be on or before 22 June 2016. The ability for the buyer to extend the contract is up to 30 June 2016. I have a phone call out for OMB Solicitors to contact me about this request and try to get some more background information of why 22 June 2016 has been nominated. In simple terms my client does not want to be approached by the buyer for a further extension to 30 June 2016. My client would prefer to grant the extension to 30 June 2016.
Subject to what I am advised by OMB Solicitors and if there is a change in the request for the extension date, I have instructions from my client to request an [sic] extension of the settlement date of the contract to 30 June 2016 with time to be of the essence and existing conditions of the contract remain and in particular subject to completion of the sale of 7 Eden Court, Nerang.”
7. On 6 May 2016 the plaintiff’s solicitors responded to the defendant’s solicitors as follows:[36]
[36]Exhibit 17, p 12 to the third Elliott affidavit.
“We refer to your email of 6th instant.[37]
[37]That is the sixth letter referred to my chronology of correspondence exchanges after 28 April 2016
Our client instructs us that in the initial negotiations our client was advised that your client’s contract was unconditional and settling on 11 May 2016. Our clients sought a copy to verify that, but was refused.
We are now informed that there is a right in your client’s contract for the buyer to extend that settlement date up to 30 June 2016.
Our client is in the process of moving and is travelling overseas on Saturday 14 May 20116. You will appreciate that this development is very concerning.
On the basis that your client’s contract is unconditional, our client requires the deposit monies to be released unconditionally to our client on Monday 9 May 2016 in exchange for our client’s agreement to an extension of the settlement date 30 June 2016, with time to remain of the essence.” [Emphasis added]
8. On 9 May 2016 the defendants’ solicitors responded in writing to the plaintiff’s solicitors, declining to agree to the unconditional release of the Deposit and referring to the plaintiff’s entitlement to terminate the Steer Contract if she chose. Relevantly this letter stated:[38]
[38]Exhibit 3, p 48 to the first Elliott affidavit.
“Our clients’ position is that they were advised by the buyer of their property that the settlement date was to be 11 May 2016 and that was the date our clients understood the sale of the property would settle.
While our clients understands that the matter is concerning to your client, it is out of our clients’ hands as there has to be the settlement of their property before they can purchase your client’s. That is the position and our clients cannot alter that position.
Our clients are not prepared to release the deposit monies unconditionally nor alter the pre-condition requirement that any settlement of your client’s property by our clients is conditional on the settlement of our clients’ property. If it is the case that your client terminates the Contract as Special Condition 7 has not been satisfied, then our client accepts your client is entitled to do so.
…
You have referred to a meeting. Our clients do not see the purpose of a meeting and there is nothing really further than can be added to what is set out in this letter.
Our clients restate their earlier position that they are prepare to extend the Contract to 30 June 2016 subject to the terms of the existing Contract, with time to be of the essence.” [Emphasis added]
9. On 9 May 2016 the solicitors for the defendants wrote to Etarb’s solicitors (with some other conditions) as follows:[39]
[39]Exhibit 13, p 26 of the second Elliott affidavit.
“We refer to your facsimile requesting an extension dated 5 May 2016 and our exchange of emails of 6 May 2016 in relation to the extension to 30 June 2016.
In accordance with your email of 6 May 2016, our clients confirm an extension of the settlement date to 30 June 2016 with time to remain of the essence.”
10. On 11 May 2016 the plaintiff through her solicitors, agreed in writing to an extension of the Steer Contract until 30 June 2016, stating as follows:[40]
[40]Exhibit 3, p 49 to the first Elliott affidavit.
“We are instructed to advise that our client consents to an extension of the settlement date to 30 June 2016, with time to remain of the essence. Our client reserves her rights against your clients with respect to the breach of warranty contained in Special Condition 7 of the contract. It is noted that at the time of writing, your clients have failed to adequately explain the ability of the buyer of their property to extend the contract.” [Emphasis added].
11. On 20 June 2016 in response to an email from the plaintiff’s solicitors on the same day, asking for confirmation that the defendants would be in a position to effect settlement on 30 June, the solicitors for the defendants emailed the plaintiff’s solicitors as follows:[41]
[41]Exhibit 20, p 19 to the third Elliott affidavit.
“Thank you for your email. Special Condition 7 (Annexure B) has not been satisfied. We have requested the solicitors for the buyer under the contract for the sale of our client’s property to advise as we also have to finalise the booking for that settlement. We will advise you when we are in a position to do so.”
12. On 28 June 2016 the solicitors for the defendants, emailed the solicitors for the plaintiff, relevantly as follows:[42]
[42]Exhibit 8, p 30 and 31 to the affidavit of Robert Bruce Boston filed 31 May 2017 (“Boston affidavit”).
“We refer to your email yesterday requesting the present position about settlement being effected on 30 June 2016. We are unable to get confirmation from the purchaser of our client’s property that they will be able to settle on 30 June 2016. As you are aware settlement of that Contract is covered by Special Condition 7 and if it is not satisfied our client cannot proceed with the purchase of your client’s property.
…”
13. On 30 June 2016 the solicitors for the defendants emailed the solicitors for the plaintiff stating:[43]
[43]Exhibit 9, p 32 to the Boston affidavit.
“We were contacted by OMB Solicitors this morning who advised they still did not have instructions to attend settlement. We will keep you informed.”
14. On 1 July 2016 the solicitors for the defendants, emailed the solicitors for the plaintiff stating as follows:[44]
[44]Exhibit 4 p 51 to the first Elliott affidavit.
“The contract for 7 Eden Court, Nerang did not settle yesterday.”
15. On 1 July 2016 the plaintiff elected to terminate the Steer Contract as evidenced in the letter from her solicitors to the defendants’ solicitors as follows: [45]
“Settlement of this transaction was scheduled to take place yesterday, but did not occur on the basis of your advices that your client’s sale did not take place. Our client therefore elects to terminate the contract and reserves her rights in relation to the breach of warranty.
We are instructed to notify the agent that the deposit is in dispute by virtue of the breach of warranty.” [Emphasis added].
[45]Exhibit 5, p 52 to the first Elliott affidavit.
Issues
These uncontroversial facts must be considered in the context of the relevant issues raised on the pleadings and the extensive written and oral submissions of the parties before me.
It is instructive before turning to these issues to pause and consider the role and purpose of a deposit in contracts for the sale of land. A deposit has two purposes. First, if the purchase is carried through to completion, the amount of the deposit is set-off against the purchase money; and second, it is a guarantee of performance by the buyer.[46] In Howe v Smith (1884) 27 Ch D 89 Lord Justice Fry undertook an historical analysis of the concept of the deposit and in doing so stated that:
“The deposit is not merely a part payment , it is also an earnest to bind the bargain so entered into and creates by fear of its forfeiture a motive in the payer to perform the rest of the contract…..That earnest is lost by the party who fails to perform the contract.” [47]
[46]Soper v Arnold (1889) 14 App Cas 429, 453 (Lord Macnaghten) (HL). See the discussion of What is a deposit the text “Land Contracts in Queensland; Third edition; S.A Christensen, W.M. Dixon, W.D. Duncan and S.E Jones; Federation Press, published 2011 at 4.6.1.
[47]Howe v Smith (1884) 27 Ch D 89 at 101-102.
The defendants position as Buyers and applicants for summary judgment
The defendants as the Buyers contend that the Steer Contract came to an end on 30 June 2016 through no default of theirs.[48] They argue that as the contract was terminated without default by the Buyer they are entitled to retain the Deposit pursuant to clause 2.4 (b) of the Steer Contract. This clause relevantly states:
[48]Paragraph (1) and (2) of the counterclaim.
“2.4 Entitlement to Deposit an interest
(1) The party entitled to receive the Deposit is:
(a) If this contract settles, the Seller;
(b) If this contract is terminated without default by the Buyer, the Buyer;
(c) If this contract is terminated owing to the Buyer’s default, the Seller
(2) …”[49]
[49]The relevant terms of the contract are pleaded in para 3 of the further amended statement of claim and admitted by the defendants in para 1 of their defence and counterclaim.
The defendants contend that there is no basis upon which the plaintiff can maintain an entitlement to the Deposit, in addition to a claim for damages based on her pleaded case that she would not have entered into the Steer Contract in the first place. The plaintiff’s pleaded case on this issue of reliance is that the second paragraph of Special Condition 7 contained:
· express representations that:[50]
[50]Para 4(a) of the further amended statement of claim.
(a) the [First] Etarb Contract contained special conditions;
(b) all the [First] Etarb special conditions have been satisfied;
(c) insofar as the defendants were aware, there were no impediments, legal or otherwise, to the settlement of the sale of the defendants property to Etarb; and
(d) the [First] Etarb Contract was binding and enforceable as against Etarb (“the Express representations”).
· Implicit representation when read in conjunction with the first part of the Special Condition, that: [51]
[51]Para 4(b) of the further amended statement of claim.
(a) the [First] Etarb Contract contained either or both of conditions precedent or subsequent that effected the formation of the Etarb Contract;
(b) All conditions precedent or subsequent had been satisfied;
(c) Etarb had no contractual entitlement to terminate or not perform the contract;
(d) Etarb had no entitlement to extend the day for settlement of their purchase at all;
(e) Etarb had no entitlement to extend the day for settlement beyond 11 May 2016.
The plaintiff further pleads that in reliance on both the express representations and the implied representations, she: [52]
[52]Para 6 of the further amended statement of claim.
(a) Executed the Steer Contract;
(b) Took her property off the market; and
(c) Did not renew her tenant’s lease of 22 Maxwell Brown Drive, Southport which was earning rent at $580 per week in anticipation of the plaintiff moving in upon completion of the contract.
The plaintiff’s pleaded case is that but for the Express and Implied Representations, she would not have done any of the things referred to above.[53]
[53]i.e. executed the Steer Contract and taken her property off the market and renewed her tenant’s lease.
The plaintiffs’ position as Seller and respondent to the summary judgment application
The plaintiff’s pleaded case is that the defendants have breached the Steer Contract and therefore she is entitled to the Deposit under cl 2.4(1) (c) of the Steer Contract and at law.
By the written submissions relied upon by the plaintiff at the hearing, her entitlement to the Deposit was developed and articulated on what was described as “two alternate independent bases” as follows:[54]
[54]Her entitlement to the Deposit on these bases was said to be the better but fairly arguable view; see para 72 of the outline of argument of the respondent plaintiff.
(a) First, under cl 2.4(1)(c) because the election of the plaintiff which terminated the Steer Contract was owing to the default of the defendants as the Buyers in not completing the Steer Contract on the due date [30 June 2016], there was a repudiation of the Steer Contract in accordance with Goggin v Majet [2016] 2 Qd R 401.
(b) Secondly, further and alternatively under cl 9.4(2) of the Steer Contract, because the defendants had failed to comply or have breached the Steer Contract by reason of breaches of the second limb of Special Condition 7 properly construed : even if the second limb of Special Condition 7 is not an essential term of the contract when breached as alleged, it alternatively resulted in the fundamental breach of an intermediate term of the contract because such breach justified termination on the other party’s part.
Discussion
In order to determine whether the plaintiff has no real prospects of success on her claim for the Deposit, the following issues fall to be considered and determined.
How should Special Condition 7 be construed?
The plaintiff’s construction of Special Condition 7 is that it is expressed as a single composite condition containing two limbs related by their proximity and subject matter. [55] The first limb is properly described by the plaintiff and the defendants as a condition precedent or subsequent to performance of the type dealt with and discussed in Perri v Coolangatta InvestmentsPty Ltd (1982) 149 CLR 537.[56] The contingency as the plaintiff submitted is of a well-known type and in this case is the defendants’ completion of the sale of their property under the First Etarb Contract. [57] It is uncontroversial before me that that non- performance of a contingency in the performance of a contract does not in itself result in a breach of contract, and without more, the contract remains on foot; with some election either of the Buyer or Seller required to achieve the termination of the contract.[58]
[55]Para 35 of the outline of argument of the respondent plaintiff.
[56]Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 37 per Mason J at 551 and 552 and Gibbs CJ at 541; See also Maynard v Goode (1926) 37 CLR 529 per Isaacs J at 541; Yule v Smith [2012] NSWCA 191 at para [81];
[57]Para 37 of the outline of argument of the respondent plaintiff.
[58]Para 39 of the outline of argument of the respondent plaintiff; para 34 of the submission on behalf of the applicants/ defendants. See Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 at 541.8, 553.1, 557.2 and 559.9 and 566.3.
The plaintiff contends that the second limb which contained the warranty, is explicitly promissory in its language and as the first paragraph (the condition), depended on the accuracy of the second paragraph, it should be construed as:
(a) An essential term within the meaning of the Steer Contract entitling the plaintiff to terminate the Contract under Clause 9.1 and permitting the plaintiff to both forfeit the Deposit (under 9.4(2) and sue the defendants for damages (under clause 9.4 (3)); or further,
(b) As an essential term at common law, breach of which justified termination of the Steer Contract; alternatively,
(c) A term though not essential but if breached, manifested an unwillingness or inability to perform by the defendants such that the plaintiff was entitled to conclude that the Steer Contract would not be performed according to its requirements.[59]
[59]With reference to Koompahatoo Local Aboriginal Land Council v Sanpine Pty Ltd (2007) 233 CLR 115 per Gleeson CJ, Gummow, Heydon and Crennan JJ at [44].
The plaintiff contends that the term “warrants” is itself ambiguous and one meaning it can have as an ordinary English word is a “formal promise, the positive assurance of a thing”. That is the construction contended for by the plaintiff.[60]
[60]Para 45 of the outline of argument of the respondent plaintiff.
The plaintiff submits that Special Condition 7 was a substantial inducement for the plaintiff to have entered into the Steer Contract because (and as the defendants knew), the plaintiff had booked and was leaving on an extended holiday in Europe in May 2016 and it was important that settlement took place by 11 May 2016.[61] For these reason the plaintiff urges the court to construe the term ‘warrant” in Special Condition 7 in the way she contends for.
[61]For this reason and other associated reasons pleaded in para 5 of the statement of claim.
The plaintiff urges this court to be wary of attributing the legal connotation or label to the word warranty in this case; that is of indicating an obligation, a warranty, the breach of which sounds only in the right to claim damages and not to terminate the contract for breach.[62]
[62]The remedies which are available to an aggrieved Buyer or Seller under a land contract will depend on the wrong committed. In the case of breach of the agreement, the innocent party may be entitled to terminate the agreement and claim damages for a substantial breach or merely damages for a minor breach. In addition the seller may be entitled to recover other money pursuant to any default provision in the contract.
The plaintiff submits that if there is any difficulty, obscurity or ambiguity as to the meaning or effect of Special Condition 7, it should be construed contra proferenten against the defendants and the construction reasonably available most favourably to the plaintiff adopted.[63]
[63]Taylor v Corporation of St Helens (1877) 6 Ch D 264 per Jessel MR at 270 and 271.
In my view, the contra proferenten rule does not apply.[64] This was a commercial contract entered into at arm’s length by parties who had legal representatives. Even if it were inserted, this has no effect on the interpretation to be applied. The alternate argument is that it was a clause inserted for the plaintiff as the Seller. However, I accept the defendants’ submission that this is also of no effect in the present case. As Keane JA said in Donaldson v Bexton:[65]
“A conclusion that a condition is for the benefit of one party and may, therefore, be waived by that party does not support for the resolution of the different question which arises in this case, namely whether the first party may defeat a right to terminate which has accrued to the other party in accordance with the terms of the contract as understood in the light of the principles discussed in Suttor v Gundowdo[66] and Gange v Sullivan[67].”
[64]Bank of Queensland Limited v Chartis Australia Insurance Limited (2013) QCA 183 at [38].
[65]Donaldson v Bexton [2007] 1 Qd R 525 at page 544 [45].
[66]A reference to Suttor v Gundowda Pty Ltd (1950) 81 CLR 418.
[67]A reference to Gange v Sullivan (1966) 116 CLR 418.
I accept that the mere usage of a well-known legal phrase cannot constitute a transaction the substance of which is to a different effect.[68] In my view, there is no ambiguity to Special Condition 7. On a plain and ordinary reading, the first paragraph of Special Condition 7 did not impose actual obligations on the parties to perform certain tasks by which they would be in default. Rather, it created the circumstances by which the Steer Contract could come to an end at the election of a party. It was supported by a ‘warranty’ that certain things were true. The term warranty is a well-known legal term. It appears in the Steer Contract elsewhere in clause 7.4 (the usual Sellers warranty). In my view the word should be given its usual legal meaning [as identified by the plaintiff] that is one of indicating an obligation, a warranty, the breach of which sounds only in the right to claim damages and not to terminate the contract for breach.[69]
Did the defendants by their conduct in not completing the Steer Contract on 30 June repudiate the Steer Contract?
[68]Ansett Australia Holdings Ltd v International Air Transport Association (2006) 60 ACSR 468 per Nettle at [88] and [118]; affirm on this point in the High Court in (2008) 234 CLR 151 per Gummow, Hayne, Heydon, Crennan and Kiefel JJ at [67] to [70].
[69]Ellul v Oakes (1972) 3 SASR 377 at p 380
The plaintiff argues that the default by the defendants in this present case justified the plaintiff treating the contract as rescinded. That is, there was conduct by the defendants amounting to an express or implied repudiation of the Steer Contract. In making this argument the plaintiff refers to the term “repudiation” as it is used by Lord Justice Fry in Howe v Smith (1884) 27 Ch D 89 in the “first” sense of referring to conduct which evinces an unwillingness or inability to render substantial performance of the contract.[70] The plaintiff also refers to the common law not limiting repudiation to its “second sense” which involves any breach of the contract which justifies termination by the other party.[71]
[70]Howe v Smith (1884) 27 Ch D 89 per Fry LJ at 103.1, 101.8 and 105.2.
[71]With reference to the High Court in Koompahtoo Council v Sanpine Pty Limited (2007) 233 CLR 115 per Gleeson CJ, Gummow, Heydon and Crennan JJ at 44.
As the correspondence in evidence set out above shows, prior to granting an extension of the Steer Contract until 30 June 2016, the plaintiff attempted to have the Deposit released unconditionally in exchange for her agreement to do so. The defendants were not prepared to release the Deposit on the plaintiff’s terms and referred to the pre-condition that any settlement was conditional on the settlement of their property, whilst accepting that the plaintiff was entitled to terminate the Steer Contract [at that point in time] “as Special Condition 7 had not been satisfied”. Against this uncontroversial factual matrix, the plaintiff granted the extension of the Steer Contract until 30 June 2016, with time to remain of the essence and reserved her rights with respect to the breach of warranty.
On the undisputed facts, it is difficult to see how the plaintiff’s argument that there was default by the defendants in not settling on 30 June 2016 which justified the plaintiff treating the contract as rescinded can be maintained. On any view of the evidence, Special Condition 7 still applied as at 30 June 2016. However the warranty as to knowledge of impediments was no longer of any effect insofar as it related to the settlement by 11 May 2016. It could not be. The communications set out above evidence a clear and unequivocal intention by the plaintiff to proceed to completion and are consistent in my view with the plaintiff maintaining or affirming the Steer Contract.[72] The First Etarb Contract had been extended until 30 June 2016 and it was uncontroversial before me that the plaintiff knew this at the time she granted an extension of the Steer Contract to this date.
[72]See the comments of Chief Justice de Jersey in Scali Properties Pty Ltd Crittenden & Anor [2009] QSC 290 at [9] with reference to Sargent v ASL Developments Ltd (1974) 131 CLR 634, 641-6, 656-6.
I do not think that Goggin v Majet advances the plaintiff’s case.[73] That decision concerned whether a disclaimer of a contract by the trustee in bankruptcy of the original purchaser, was a default on the part of the buyer within the meaning of cl 2.4(1) (c).[74] The Queensland Court of Appeal noted that the meaning of “default” in this clause was not defined in the contract (as remains the case here). Dismissing the appeal, but on the basis of different reasoning to the judge at first instance, Gotterson JA found that the disclaimer constituted a default of the buyer within the meaning of cl 2.4(1)(c) and therefore the sellers were entitled to the deposit.[75]
[73][2015] QCA 244; [2016] 2 Qd R 401.
[74][2016] 2 QD R 401. Clause 2.4(1) (c) in that case was identical to the present.
[75]At [41].
In my view the plaintiff has no real prospects of success at trial on its claim to an entitlement to the Deposit under clause 2.4 (c) of the Steer Contract.
Was there a breach of Special Condition 7 entitling the plaintiff to affirm or terminate the Steer Contract for breach?
The plaintiff contends that the defendants did not settle the Steer Contract on 30 June 2016 in breach of clauses 9.1 and 9.4(2) of the Steer Contract.
Clause 9.1 of the Steer Contract provides as follows:
“9.1Seller and Buyer May Affirm or Terminate:
Without limiting any other right or remedy of the parties including those under this contract, or any right at common law, if the Seller or Buyer, as the case may be fails to comply with an essential term, or makes a fundamental breach of an intermediate term, the Seller (in the case of the Buyer’s default) or the Buyer (in the case of the Seller’s default) may affirm or terminate this contract.
Clause 9.4 provides as follows:
“9.4 If Seller terminates:
If the Seller terminates this contract under Clause 9.1, it may do all or any of the following:
(i) resume possession of the Property;
(ii) forfeit the Deposit and any interest earned;
(iii) sue the Buyer for damages;
(iv) re-sell the property.
The plaintiff contends that the specific matters which the defendants promised were true at the time they entered into the Steer Contract under the second limb of Special Condition 7 were:[76]
[76]Para 48 of the outline of argument of the respondent plaintiff.
(a) that the First Etarb Contract was binding and enforceable and signed by the buyer;
(b) that all special conditions in the First Etarb Contract had been satisfied; and
(c) there were no “legal impediments or otherwise” to the settlement.
The plaintiff accepts that she ought to be regarded as having poor prospects at trial of proving a breach of the second limb of Special Condition 7 on the basis that the First Etarb Contract was not binding and enforceable and signed by the buyer.[77]
[77]Para 49 of the outline of argument of the respondent plaintiff.
As to the contention by the plaintiff that not all special conditions in the First Etarb Contract had been satisfied as at the date of the Steer Contract [14 February 2016], the plaintiff alleges she has good prospects at trial demonstrating that the defendants were in breach of the second limb of Special Condition 7. For the purposes of this application only, the defendants submit as at May 11 2016, the court can accept that not all special conditions in the First Etarb Contract had been satisfied as at the date of the Steer Contract.[78]
[78]Para 37 of the submissions on behalf of the applicants/defendants.
At the time the plaintiff granted an extension of the Steer Contract on 11 May 2016, she purported to reserve her rights with respect to the breach of warranty only. At this point she elected to extend or affirm the contract on 11 May 2016 in the knowledge, at least from her perspective, that there had been a breach of warranty (or on her case, a breach of an essential term). She could have ended the contract on 11 May 2016 but chose to extend in full knowledge that there had purportedly been a breach of the warranty (or on her case, a breach of an essential term). In my view the granting of an extension of time in this case was consistent with the continuance of the Steer Contract remaining on foot and constituted at that point an election by the defendants against rescinding. This election once made cannot be retracted.[79] It follows and I accept the defendants’ submission on this point that it is not possible for a party to extend a contract by consent or elect to continue with the contract and then claim that a right they previously had, was re-established.
[79]Tropical Traders Ltd v Goonan (1964) 111 CLR 41 at 55 (per Kitto J). On the facts of that case however Kitto J considered the grant of an extension of time was not an election, in the sense of affirming the contract, such as to lose the right to terminate for the failure to perform, but was a postponement of the party’s choice to terminate the contract for breach.
In the present case, the only allegation on termination by the plaintiff was there had been a breach of warranty. There was no suggestion at that time that the warranty was an essential term or an intermediate term, or indeed that there was a repudiation giving rise to an entitlement to terminate, distinct from the rights accrued under Special Condition 7.
Clause 9.1 is now relied upon by the plaintiff as entitling her to the return of the Deposit as well as the right to sue for damages. However for the reasons articulated above, I am inclined to the view that on 11 May 2016, the plaintiff unequivocally affirmed the Steer Contract so that her right to terminate was then extended to 30 June 2016. She did this with actual knowledge the First Etarb Contract could not be completed by 11 May 2016. She had at this point knowledge of the fact that a breach had occurred or that there were circumstances entitling her to terminate the Steer Contract, and as such she made in my view, a binding election to affirm the contract[80]. In my view, it follows that any ability to rely on the warranty in support of the conclusion is lost.
[80]See Ace Property Holdings Pty Ltd v Australian Post Corporation [2010] QCA 55; Sargent v ASL Developments Ltd (1974) 131 CLR 634, 658.
The third breach of warranty which the plaintiff says entitles her to the Deposit is that there were no legal impediments or otherwise to the settlement of the First Etarb Contract by 11 May 2016. In my view, the warranty as to knowledge of impediments was no longer of any effect insofar as it related to the settlement by 11 May 2016. As the defendants point out, it could not be. The First Etarb Contract had been extended until 30 June 2016 and the plaintiff was informed of this.
In conclusion, I find that:
(a) as at 11 May 2016, the plaintiff was well aware that the Steer Contract was not going to settle and the First Etarb Contract had been extended. If there had been any misrepresentation which was actionable and on which she reserved her rights, she had knowledge of those rights on 11 May 2016;[81]
[81]This is not to say that the plaintiff does not have a valid case for misrepresentation or damages pursuant to the CCA.
(b) on her case, she would have terminated either on the basis of Special Condition 7 or for alleged repudiation. In that knowledge, she elected to extend knowing that the Steer Contract remained on foot and relevantly was subject to the completion of the First Etarb Contract. There was no longer any warranty about there being any impediment to sale on or before 11 May 2016;
(c) in this case, Special Condition 7 became a condition subsequent of which the contingency had not been met and either party had the ability to elect to terminate;
(d) the plaintiff elected to terminate the Steer Contract pursuant to Special Condition 7.
Conclusion on summary judgment
It follows on the above analysis, that in my view, the plaintiff has no real prospect of succeeding on her claim that she is entitled to retain the Deposit under the Steer Contract or at law and there is no need for a trial on that part of the claim. The defendants are entitled therefore to summary judgment on the part of the plaintiff’s claim seeking an entitlement to the Deposit.
Strike out
The defendants submitted that if I was to grant summary judgment that I should strike out all of the paragraphs of the further amended statement of claim that deal with the Deposit. I do not think this is necessary. I will however strike out paragraph 23(c) of the further amended statement of claim as it is the pleaded claim for the Deposit under clause 2.4(1) (c) and at law.
The further amended statement of claim also alleges that the defendants are estopped by their conduct in now asserting an entitlement to terminate the contract in reliance upon Etarb’s failure to complete pursuant to Special Condition 7.
In my view, this plea by the plaintiff has the tendency to delay the fair trial of the remainder of the proceeding and is unnecessary and scandalous. There is no plea by the defendants or any evidence that they sought to terminate the Steer Contract or have asserted any right to do so. Accordingly, I consider that paragraphs 27A and 27B of the further amended statement of claim should be struck out.
Proposed orders and declarations
Given my conclusions above, I can see no reason why costs ought not follow the event. By their application, the defendants also seeks summary judgment on their counterclaim. In the circumstances, I consider it appropriate to make the following orders [and declarations]:
1. There be summary judgment for the defendants on the plaintiff’s claim to the deposit in the sum of $195,000 paid by the defendants under the contract of sale entered into between the plaintiff and the defendants on 14 February 2016.
2. There be summary judgment for the defendants on their counterclaim as to an entitlement to the Deposit in the sum of $195,000.
3. The defendants are entitled to payment of the Deposit in the sum of $195,000.
4. The plaintiff cause the Deposit in the sum of $195,000 to be paid to the defendants by 4.00pm Friday 11 August 2017.
5. The plaintiff pay interest on the Deposit in the sum of $195,000 from 1 July 2016 until 4 August 2017 in accordance with the Civil Proceedings Act 2011 (Qld).
6. Paragraphs 23(c), 27A and 27B of the further amended statement of claim be struck out.
7. The plaintiff pay the defendants’ cost of their counterclaim, the summary judgment application and the strike out application.
I will allow the parties until 4.00pm Tuesday 8 August 2017, to consider the orders and declarations and to confer with a view to providing a draft of agreed minutes of the final orders sought. This draft ought to include the interest calculation and is to be emailed to my Associate.
If alternate orders as to the date (if any) for payment of the Deposit or interest and or costs are sought, then I will allow the parties until 4.00pm Wednesday 9 August 2017, to provide no more than a 2 page written outline to me through my associate. If necessary, I will relist the matter for hearing at a date to be fixed (with leave to appear by telephone).
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