Szlasa v Provident Capital Limited - [2009] SADC 104

DISTRICT COURT OF SOUTH AUSTRALIA
(Civil)
SZLASA v PROVIDENT CAPITAL LIMITED
[2009] SADC 104
Judgment of His Honour Judge Burley
7 October 2009
CONTRACTS - GENERAL CONTRACTUAL PRINCIPLES - DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH - REPUDIATION AND NON-PERFORMANCE - REPUDIATION - GENERAL PRINCIPLES
Plaintiff paid deposit pursuant to contract for sale of land - contract was between the registered proprietor and the plaintiff - registered proprietor was unable to obtain clear title and sought extension of settlement date - registered proprietor applied for 14 day extension - pursuant to substitution clause there was an election to substitute the defendant (first mortgagee) as vendor - vendor purported to exercise the rights conferred by the substitution clause to modify the original contract - plaintiff asserted that the contract had been validly terminated when registered proprietor failed to complete original contract at settlement date - plaintiff sought to recover deposit - defendant asserted that the plaintiff wrongfully repudiated the original contract - the defendant purported to terminate the new contract and thus asserted that the plaintiff forfeited the deposit.
Held: Settlement date was properly extended to 6 August 2008 and contract was still on foot up until this date. Although the registered proprietor was entitled to exercise the right in the substitution clause to substitute the defendant as vendor, it did not validly exercise this right because: failure to exercise the right conferred by the substitution clause at a time when it existed and the new or amended contract was not in the same terms as the original contract. Plaintiff is entitled to recover deposit.
Real Property Act 1886 s 136(1)(a), referred to.
Ogle Comboyuro Investments Pty Ltd (1976) 136 CLR 444; Summers v The Commonwealth (1918) 25 CLR 144; W & R Pty Ltd v Birdseye (2008) 102 SASR 477; Concut Pty Ltd v Worrell (2000) 75 ALJR 312; Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286; DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423; Hacker v The Australian Property and Finance Co (1891) 17 VLR 376; Holland v Wilstshire (1954) 90 CLR 409 , applied.

SZLASA v PROVIDENT CAPITAL LIMITED
[2009] SADC 104
Judge Burley
Civil

These proceedings have been brought by the plaintiff for the recovery of a deposit of $45,000 paid by her pursuant to a contract entered into between the plaintiff and the registered proprietor on 3 June 2008 for the sale and purchase of a residential property. The facts are uncontroversial. The pleadings are detailed and specifically set out, with one exception, all of the issues, which fall for determination.
The defendant asserts that it is entitled to recover the deposit and has counterclaimed accordingly.
The Parties
The plaintiff and her nominee were the purchasers. Her nominee was her husband, Andresj Szlasa. There was no debate as to whether or not he was a party to the contract. No point was taken that Mr Szlasa was not joined as a plaintiff. I proceed on the basis that the plaintiff is entitled to sue as sole plaintiff even if Mr Szlasa was a joint purchaser.
The vendor of the property was the registered proprietor, First Pacific Property Development Pty Ltd (In Liquidation) (First Pacific). The contract was executed by the registered proprietor by its attorney, the defendant, who was and is registered as the first mortgagee of the property. The defendant, when it executed the contract on behalf of the registered proprietor, was lawfully acting in pursuance of a power of attorney conferred on it by the mortgage.
The deposit was paid to the selling agent, Bernard H Booth Pty Ltd, who held and continues to hold it as stakeholder.
The Facts
My findings of fact are based upon the evidence and admissions in the pleadings.
First Pacific was placed under external administration on 27 October 2006. At all material times it was, and remains, the owner of the property at 31 Young Street, Parkside.
On 4 June 2008, a contract was entered into between the plaintiff and First Pacific, the essential terms of which were that the contract price was $976,500.00, a deposit in the sum of $45,000 was payable and that settlement was to take place on 23 July 2008, or at such other date as was mutually agreed in writing between First Pacific and the plaintiff.
The plaintiff paid the deposit of $45,000 on 10 June 2008 to the selling agent, which in turn held that sum in its trust account as a stakeholder between the vendor, First Pacific, and the plaintiff. The selling agent, late in 2008, forwarded part of the deposit to the defendant’s solicitors, retaining what I infer to be an amount equivalent to its commission. The defendant returned this sum to the selling agent because, I infer, it recognised that the deposit monies should remain with the selling agent as a stakeholder until either the parties agreed as to its disbursement or, in the absence of agreement, a court determined to whom the money was to be paid.
It was not disputed by the defendant that by email dated 22 July 2008 Mr DePalma, a solicitor, advised the plaintiff’s conveyancer, Mr Robazza, that First Pacific was having difficulty obtaining clear title from subsequent registered interests and claims and a 14 day extension of the settlement date (to 6 August 2008) was requested. Mr Robazza sought instructions and on 23 July 2008 advised Mr DePalma that the 14 day extension was granted.
That extension to 6 August 2008 was later purportedly withdrawn by email to Mr De Palma (Exhibit P4-29).
No settlement took place on 23 July 2008. The plaintiff maintained that she was ready, willing and able to settle on that date. The defendant alleged that the plaintiff had not tendered a signed transfer in accordance with the requirements of the contract prior to settlement. It is common ground that the transfer tendered showed both the plaintiff and her husband as the transferees. There is nothing in this point. The contract was a nominee contract, but even if it had not been, in the absence of agreement to the contrary, it is open to a purchaser, where there has been an assignment or sub-sale, to nominate other or additional transferees to whom the property is to be conveyed.
Neither party attempted to settle on 6 August 2008.
The Substitution Clause
It is appropriate to interrupt the narrative of events to refer to one of the terms of the contract. It contains the following special condition which I shall refer to as “the substitution clause”:
At the vendor’s election, the description of the vendor will be amended to “provident capital ltd [sic] exercising its power of sale under Mortgage No 10200936” [sic]. The purchaser may not object to the amendment or delay completion because of the amendment. If required by the vendor, the purchaser will enter into a new contract reflecting the amended description of the vendor and a completion date the same as the due date for completion under this contract, and otherwise on the same terms as this contract.
The clause refers to an election and to an amendment. Neither party contended that the word “election” was used in the sense that the substitution clause gave rise to an equitable election. The substitution clause empowered First Pacific to choose (unilaterally) to substitute the defendant as vendor which was referred to as an amendment to the contract. The clause contemplates a new contract “if required by the vendor”.
If there was an “amendment”, no objection could be taken to the amendment by the plaintiff nor could the plaintiff delay completion because of the amendment. Similarly, if the vendor, First Pacific, required the plaintiff to enter into a new contract, as occurred in this case, the new contract was required to have the same completion date as the original contract and to be on the same terms as the original contract.
The plaintiff argued that these stipulations led to the conclusion that First Pacific could only have recourse to the substitution clause prior to the date of settlement as originally provided in the first contract. The defendant argued to the contrary.
In support of her contention, the plaintiff submitted that the rights conferred by the substitution clause only persisted up to the time of settlement, namely 23 July 2008, because that was the plain meaning of the clause: the new contract had to contain the original settlement date. Consequently, once that date had passed, it was argued, First Pacific could not invoke the substitution clause.
I think that argument is, at least in part, correct. If and when settlement under the original contract fell due, First Pacific could not thereafter have recourse to the substitution clause. The possible flaw in the plaintiff’s argument is that, according to the plaintiff, only the specified date for settlement, 23 July 2008, is applicable. However, a settlement date could have fallen due under the contract in several ways, including the fixed date of 23 July 2008, or any agreed extension of that date or by virtue of default procedures in the contract which require, if the vendor is in default with regard to settlement, the purchaser to call upon the vendor to settle and to appoint a further time for settlement.
In my opinion, in the circumstances of this case, the effect of the substitution clause is that the substituted (or amended) contract must have the same settlement date as the original contract or any agreed extension thereof recorded in writing. In other words, if the contractually agreed extended settlement date passes without settlement taking place, irrespective of who is to blame for the lack of settlement, the vendor, First Pacific, was not thereafter able to exercise the rights conferred by the substitution clause.
In my opinion, the contractually agreed settlement date was not 23 July 2008 but the agreed extended time of 6 August 2008. The plaintiff, through her conveyancer, agreed to that extension. The purported withdrawal by the plaintiff of that agreement was ineffective.
The Facts (continued)
On about the 13 August the plaintiff was required or invited (and it is not clear which) to sign a new contract (Exhibit P4-36). The contract was a Law Society contract updated to 2008. It could not be said by any stretch of the imagination that the proffered contract was the same as the original contract. Perhaps recognising this, a further contract (Exhibit P4-43) was later submitted to the plaintiff for signature. It was the 2008 REI contract which again could not be said to be in the same terms and conditions as the original contract.
Finally, a photocopy of the original contract with modifications to it was tendered to the plaintiff in about November 2008 in purported exercise of the rights conferred by the substitution clause. The only difference between it and the original contract was that the defendant was shown as the vendor and the settlement date was different from the original settlement date.
The defendant argued that this became the governing contract relating to the purchase of the property by the plaintiff. The deposit paid under the first contract became the deposit under this contract. The defendant called upon the plaintiff to settle in respect of this contract and, when the plaintiff failed to do so, the defendant purported to terminate the contract. On that basis, the defendant argued, it was entitled to forfeit the deposit and have it paid to by the selling agent
The Issues
The pleadings reveal that the following matters fall for decision:
(a)     whether the plaintiff validly terminated the contract in early August 2008 because of the failure of the registered proprietor, First Pacific, to complete the contract, in which event the plaintiff should recover the deposit; or
(b)     whether the defendant, in December 2008 effectively terminated a new contract allegedly entered into in November 2008 between it and the plaintiff such that it became entitled to forfeit the deposit of $45,000; or
(c)     whether the first contract came to an end by repudiation or abandonment prior to December 2008.
The last of the issues was not specifically raised in the pleadings but the trial proceeded as if it had been. Before turning to the issues it is necessary to refer to a number of matters.
The relationship between First Pacific and the Defendant
There were dealings between the plaintiff and First Pacific and the defendant. The original contract was between the plaintiff and the First Pacific. The evidence was sometimes unclear whether the plaintiff had been called upon to enter into a new contract (or to accept an amendment of the original contract) by either First Pacific or the defendant. In the end, it does not matter if the factual situation is unclear. The plaintiff could only be called upon to do something in accordance with the original contract which was between the plaintiff and First Pacific. To the extent that the defendant required the plaintiff to do anything, the defendant could only do so, at best, as the agent of First Pacific.
Contrary to this conclusion, the defendant argued that it was a party to the original contract. I will set out later in these reasons why I have rejected that submission.
The Deposit Monies
The plaintiff seeks an “order for the repayment of the $45,000 deposit by the defendant to the plaintiff”. The defendant counterclaims for “a declaration that [it] is entitled to retain the deposit of $45,000.
It is axiomatic that (all other things being equal) a plaintiff may only obtain a monetary judgment against a defendant for the amount of a deposit if the defendant has actually appropriated that sum by purporting to forfeit the deposit and receiving payment thereof from the stakeholder. In this case, there has been no appropriation because the $45,000 is still held by the selling agent as stakeholder. The plaintiff claims the return of the deposit paid by her pursuant to the contract dated 3 June 2008. The defendant says that the $45,000 was, by the force of its substitution as vendor, to be applied as the deposit payable in respect of the contract between the plaintiff and defendant. In both instances, the $45,000 is still held by the selling agent as stakeholder. This means that a monetary judgment may not be obtained by either the plaintiff or the defendant. If the plaintiff is correct, the deposit of $45,000 was, at the time of termination of contract dated 3 June 2008 held by the selling agent as a stakeholder between the plaintiff and First Pacific. First Pacific is not a party to these proceedings. In these circumstances the plaintiff may only obtain a declaration, binding on the defendant, that the plaintiff is entitled to the return of the deposit. A monetary judgment against the defendant may not be obtained because the defendant has not actually appropriated the $45,000.
If I conclude that the defendant never became a party to any contract, it could not claim the deposit. In that event, the cross-claim should be dismissed.
If the defendant cannot recover the deposit, who can? Only the plaintiff or First Pacific. The latter is not a party to these proceedings. What evidence there is suggests that it no longer contends that it is a party to the contract. However, given that it is not a party to the proceedings, I can grant no relief which binds it unless it can be shown, in other proceedings, that, being the privy of the defendant, it is subject to the res judicata principles.
The question arises: can, and if so, should I determine the plaintiff’s claim to the deposit without First Pacific being joined as the defendant? I think I can and I should determine the point. If I decide in favour of the plaintiff, I can only grant declaratory relief which may only bind the present parties. If First Pacific is not bound and claims the deposit, it can take action to recover it.
I propose to permit the plaintiff to amend the prayer for relief in the statement of claim to seek a declaration that it is entitled to recover the deposit monies from the stakeholder.
The relief sought by the defendant is consistent with above except that the word “recover” is preferable to “retain”.
The Law
The nature of the rights and obligations of parties to contracts for the sale of real estate has been reviewed in Australia in a number of appellate courts. In W & R Pty Ltd v Birdseye (2008) 102 SASR 477, Doyle CJ undertook a comprehensive review of modern authority, including cases on repudiation (at [72] et seq).
In that case the vendor contended that the purchaser repudiated the contract by failing to settle. His Honour first referred (at [73]) to the statement of the law by Dixon J in Shepherd v Felt and Textiles of Australia Ltd (1931) 45 CLR 359 about the rule which states (at 377-378):
…enables a party to any simple contract who fails or refuses further to observe its stipulations to rely upon a breach of conditions, committed before he so failed or so refused, by the opposite party to the contract as operating to absolve him from the contract as from the time of such breach of condition whether he was aware of it or not when he himself failed or refused the former stipulations of the contract.
In Concut Pty Ltd v Worrell (2000) 75 ALJR 312, Gleeson CJ, Gaudron and Gummow JJ said of this statement that Dixon J had identified “a rule of general application with respect to the discharge of contract by breach” (at [29]). This was accepted by McHugh and Kirby JJ.
These cases have a bearing on whether the contract the subject of these proceedings was discharged by repudiation on the part of First Pacific and an acceptance of that repudiation by the plaintiff. If it is assumed that First Pacific repudiated the original contract by insisting (when it had no contractual right to do so) that the plaintiff enter into a new contract or by insisting that the plaintiff be bound by amendments (as contemplated by the substitution clause) when the new arrangement was not consistent with the terms of the original arrangement, by what means may the plaintiff be taken to have accepted the repudiation? The only means was the requirement of the plaintiff that the deposit be returned. However, the basis of this demand was not that First Pacific had repudiated the contract in the manner just stated, but instead, on the unsustainable basis that First Pacific had wrongly failed to settle on the 1 August 2008.
Is it nevertheless now open to the plaintiff to rely upon an assertion that First Pacific had wrongly repudiated the contract? I think she can. The breach relied upon must be of a condition, i.e., an essential term: Neeta (Epping) Pty Ltd v Phillips (1974) 131 CLR 286. In my opinion, the principle stated by Dixon J in Shepherd is capable of applying to the facts of this case. If First Pacific did repudiate the contract by breaching a condition thereof or, to put it another way, if First Pacific evinced an intention (objectively viewed) not to be bound by the contract, the plaintiff’s demand for the return of the deposit is consistent with an acceptance of the repudiation which has the effect of discharging the contract.
My analysis so far has assumed a repudiation in a particular manner, namely repudiation by the conduct of the repudiating party. Doyle CJ examined repudiation by conduct in the context of the submission that protracted delay in settling on the part of a purchaser could be characterised as a refusal to perform the terms of the contract. That is not the factual situation here, but the principles stated in the cases referred to by his Honour are applicable.

Doyle CJ made reference (at [79]) to DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423 where Stephens, Mason and Jacobs JJ said (at 432):
No doubt there are cases in which a party, by insisting on an incorrect interpretation of a contract, evinces an intention that he will not perform the contract according to its terms. But there are other cases in which a party, though asserting a wrong view of a contract because he believes it to be correct, is willing to perform the contract according to its tenor. He may be willing to recognise his heresy once the true doctrine is enunciated or he may be willing to accept an authoritative exposition of the correct interpretation …
I return now to the issues.
(a) Did the plaintiff validly terminate the contract in August 2008?
First Pacific was unable to settle on the 23 July 2008 because the second mortgagee would not discharge its mortgage. First Pacific did not have the advantages available to the first mortgagee (the defendant) to transfer the property free of interests registered or claimed after registration of the first mortgage. This difficulty was anticipated by the inclusion within the contract of the substitution clause. If the defendant was effectively substituted as vendor, the purchaser on settlement would take free of any interest in respect of “which the mortgagee . . . . . . [had] priority”: see s136(1)(a) of the Real Property Act 1886
After the failure to settle by First Pacific on 23 July 2008, the plaintiff gave notice to complete and the new settlement date fixed was 1 August 2008. The defendant says that the notice to complete was ineffective for a variety of reasons, including the fact that it did not allow sufficient time for First Pacific to be ready for settlement and, in any event, the settlement date had been extended to 6 August 2008. The notice to complete was not complied with and a notice of termination was given by the plaintiff. However, I agree with the defendant’s contention that the termination was ineffective (if only because the extended settlement date of 6 august 2008 had been agreed) with the result that, as at early August 2008, the contract was still on foot. The answer to issue (a) is no.
(b) Whether the defendant effectively entered into and subsequently terminated a contract with the plaintiff
What occurred next was:
(1) either the defendant (as opposed to First Pacific) entered into negotiations with the plaintiff for a new contract to be signed which contained a provision that the original contract between First Pacific and the plaintiff was terminated on entering into the new contract between the defendant and the plaintiff; or
(2) First Pacific required the plaintiff, purportedly pursuant to the substitution clause, to enter into a new contract with the defendant as vendor exercising its power of sale
As to paragraph (1) above, if the dealings between the parties after 1 August were merely an invitation to treat on the part of the defendant, there is no significance in the plaintiff not signing a new contract. The original contract was still on foot. If it remained on foot, the tender of subsequent contracts, i.e. the contracts after the initial tender of the Law Society form contract (Ex P4-36) becomes relevant.
The second contract tendered for signature was in the 2008 REI form (Ex P4-43). Was the plaintiff obliged to sign that, given that it was in a different form from the original contract and that the tender was made after the extended date for settlement had long passed? Again it might be said that the defendant (or First Pacific or both of them) recognised that tendering the 2008 form was defective because there was a later tender of a photocopy of the original contract with a modification as to the vendor. The question again arises as to whether or not the tender of the 2008 form constituted a repudiation by First Pacific of the original contract. In turn, did the plaintiff accept that repudiation by insisting upon the return of the deposit to her.
As to (2), if First Pacific ineffectively attempted, pursuant to the terms of the original contract, to substitute the defendant as vendor because either the new contract was not (as contended by the plaintiff) on the same terms as the original contract, or because the time for settlement under the original contract (and with it the right to substitute the defendant as vendor) had passed, the plaintiff was not obliged to enter into it. The plaintiff argued that First Pacific recognised that its first attempt to substitute a new contract was ineffective because there was a subsequent tender of a different contract using the 2008 version of the Real Estate Institute printed form. In addition there was the tender of another contract later in the year.
(c ) Whether the original contract was repudiated or abandoned by the plaintiff and First Pacific
If the defendant’s (or First Pacific’s) attempts to substitute a new contract were ineffective, the question arises whether the insistence by either First Pacific or the defendant or both of them that the plaintiff enter into a contract which was not on the same terms as the original contract (including the settlement date) constituted a repudiation of the original contract by First Pacific? If so, did the plaintiff’s subsequent insistence on the return of the deposit constitute an acceptance of that repudiation? I turn to those questions.
This case was argued by reference to two contentions: by the plaintiff that she had validly terminated the contract in early August 2008 because First Pacific had failed to settle when required to do so; and, by the defendant, that it had by the valid exercise of the rights set out in the substitution clause, become, in November 2008, the vendor and that it had validly terminated the contract in December 2008 because the plaintiff had failed to settle when required to do so.
It was submitted by the defendant that the plaintiff, by wrongly insisting that she had validly terminated the original contract in early August 2008, repudiated her obligations under the contract. Thus far I agree with the contention: Ogle Comboyuro Investments Pty Ltd (1976) 136 CLR 444 at 453 per Barwick CJ. It was next submitted that that repudiation was accepted by the defendant in December 2008. By that time the defendant or First Pacific had tendered a contract which constituted a photocopy of an original contract with the variations referred to. The defendant called upon the plaintiff to settle, the plaintiff failed to do so and the defendant purported to rescind this final “contract”.
In my opinion, the events of November/December 2008 could not be characterised as an acceptance by First Pacific of the plaintiff’s wrongful termination of the original contract in early August 2008. It is to be remembered that at the time the plaintiff purported to terminate the original contract, there had been no effective substitution of the defendant as a vendor and consequently the only party who could accept the repudiation was First Pacific. There is no evidence that it did. In addition, between August and November 2008 the contracts submitted for execution by the plaintiff (except for the last) were not in the same form as the original contract and were tendered after the 6 August being the date by which I have previously held that the rights under the substitution clause had to be invoked.
In any event, the defendant’s argument that it had accepted, in December 2008, the plaintiff’s repudiation of the original contract in early August 2006 does not meet the argument that both parties by November 2008 had acted in such a way that they had each abandoned or abrogated the original contract. In addition, even if it is accepted that as early as August 2008 the plaintiff had wrongfully repudiated the original contract, that repudiation was not accepted by First Pacific who continued to insist that the powers of the substitution clause had been invoked and that the plaintiff should comply with First Pacific’s exercise of those powers, namely that the plaintiff should sign and be bound by the proffered contracts.
The defendant’s argument
Part of the defendant’s argument was based on the assertion that it was a party to the original contract entered into on 3 June 2008 and, as such, was entitled to and did exercise the right in the substitution clause to be substituted the vendor. I reject that contention. The defendant was not named as a party in the original contract and, contrary to the defendant’s assertion, it did not sign the contract as a party. It signed the contract solely on behalf of First Pacific as the donee of a power of the attorney contained in the mortgage.
In any event, I have had to deal with the possibility that First Pacific validly exercised the right to have the defendant substituted as vendor. I have concluded that the defendant never became the vendor for two reasons: first, because, even if it is assumed that First Pacific purported to exercise the right to have the defendant substituted as vendor, it did not do so at a time when the right to do so conferred by the substitution clause existed; and second, even if the right had been in existence, that purported substitution was not effective because the new or amended contract was not in the same terms as the original. The non-existence of the right to substitute arises from my conclusion that the right could only be exercised before any settlement date could fit by reference to the terms of the contract.
The question therefore becomes: did First Pacific effectively exercise its rights under the substitution clause on or before 6 August 2008? The new or amended contract was not tendered before 6 August 2008 or, if it was, it was not in the same terms as the original contract. This means that right up to December 2008, First Pacific purported to exercise a right that it did not have. The new or amended contract never came into force and so there was nothing to terminate. In that case, no forfeiture of the deposit by either First Pacific or the defendant was possible.
Alternatively, or in addition, First Pacific had repudiated the original contract as early as August 2008 and it continued in that vein until December. Equally clearly, the plaintiff, since August 2008, sought to recover the deposit. She did so for the wrong legal reasons because she had not effectively terminated the original contract in August, but that, in my view, does not matter. Where effectively neither party was prepared to settle in accordance with the original contract, they must both be taken to have abandoned it, in which event, the plaintiff is entitled to recover the deposit.
Abandonment or abrogation of a contract was considered by Isaacs J in Summers v The Commonwealth (1918) 25 CLR 144. That case involved the supply of goods but the principle applies to any form of contract. The plaintiff invoked the original jurisdiction of the High Court and the trial was heard by Isaacs J. It was held that, in the circumstances of the case, both parties had abandoned or abrogated the contract. Reference was made to cases involving repudiation arising from the conduct of parties. The case is authority which supports my conclusion that First Pacific repudiated the contract by insisting upon the substitution of the defendant as vendor in circumstances not permitted by the original contract: see also Holland v Wiltshire (1954) 90 CLR 409 of at 420 and DTR Nominees Pty Ltd v Mona Homes Pty Ltd (1978) 138 CLR 423. The plaintiff did not rely upon that conduct in the sense that she accepted such a repudiation. However, her conduct, in insisting that she had validly rescinded the contract as early as August 2008 constituted on her part an abandonment or abrogation of the contract.
Arising from this, there is an additional reason why the plaintiff is entitled to the return of the deposit. It is that First Pacific never effectively made the election while the original contract was on foot. In other words, by October 2008, when the final form of the new contract was tendered to the plaintiff, the plaintiff and First Pacific had before then mutually abandoned the original contract by their conduct: by the plaintiff who insisted (wrongly) that she had terminated the original contract and by First Pacific who insisted (wrongly) that the plaintiff act in accordance with a purported election which had no contractual force.
Because the defendant never became the vendor, it was never in a position to terminate any contract whatever the conduct of the plaintiff. The defendant’s and/or First Pacific’s insistence that contracts containing different terms and conditions constituted a repudiation by First Pacific of the contract of 3 June 2008. Although the plaintiff did not claim repayment of the deposit on the basis that the original contract had been repudiated in such a manner, the plaintiff nevertheless, for the wrong reasons, regarded the original contract as at an end and claimed the deposit. That, in my view, is a sufficient acceptance of the repudiation.
What took place later in the year, with the tendering of different forms of contracts, and the defendant calling upon the plaintiff to settle in December 2008 had no legal significance because the original contract had been brought to an end, perhaps as early as August 2008 when the plaintiff was required to enter into a new contract in different terms from the original contract.
There were a number of arguments advanced by the defendant in support of its defence for the plaintiff’s claim and in support of its counter-claim. I do not intend to deal with all of the matters raised. It is sufficient to say that, in my opinion, my conclusion that either there was a repudiation by First Pacific of its obligations under the contract and an effective acceptance of that repudiation or that there occurred a mutual abandonment of the contract by the plaintiff and First Pacific are determinative of all of the issues in dispute between the parties. In either case the plaintiff is in entitled to have the deposit returned to her.
For the above reasons, I propose to grant permission to the plaintiff to amend the prayer for relief by seeking declaratory relief and to grant a declaration that the plaintiff is entitled to recover the deposit monies of $45,000 presently held by the selling agent as stakeholder.
I will hear the parties as to costs.