Turcinovic v Curtsen Pty Ltd

[2010] QDC 251

DISTRICT COURT OF QUEENSLAND

CITATION:

Turcinovic v Curtsen Pty Ltd [2010] QDC 251

PARTIES:

HAJRUDIN TURCINOVIC
(plaintiff)
v
CURTSEN PTY LTD TRADING AS JENSEN PROPERTY ABN 20 209 356
(defendant)

FILE NO/S:

No 979 of 2010

DIVISION:

Civil

PROCEEDING:

Applications

ORIGINATING COURT:

District Court

DELIVERED ON:

18 June 2010

DELIVERED AT:

Brisbane

HEARING DATE:

15 June 2010

JUDGE:

Samios DCJ

ORDER:

Defendant’s application dismissed.  Judgment for the plaintiff against the defendant for $12,815.26.  The defendant is ordered to pay the plaintiff’s costs of the proceedings, the defendant’s application and the application for summary judgment on the scale of costs applicable in the Magistrates Court.

CATCHWORDS:

Negligence – Professional Negligence – Real Estate Agent – failure to inform Seller contract terminated during cooling off period – Seller sues Buyer for forfeiture of deposit – Seller incurs costs of baseless action

Uniform Civil Procedure Rules r 171(1)(a), 292

Bolton Properties Pty Ltd v JK Investments (Australia) Pty Ltd [2009] QCA 135
Hardchome Engineering Pty Ltd v Kambrook Distributing Pty Ltd No 7810 of 1996 13 September 2000 (2000) VSC 359 per Gillard J) Havas v Cornish and Company Pty Ltd (1985) 2 Qd R 353
March v E&MH Stramare Pty Ltd (1990-1991) 171 CLR 506

COUNSEL:

Mr McMahon, solicitor for the plaintiff
Mr Le Plastrier for the defendant

SOLICITORS:

McMillan Boylson Lawyers for the plaintiff
Denise Maxwell for the defendant

1. There are two applications before the court. The plaintiff’s application seeks summary judgment against the defendant pursuant to r 292 of the Uniform Civil Procedure Rules (UCPR). The defendant’s application seeks to strike out the plaintiff’s claim pursuant to r 171(1)(a) of the UCPR.

1. There is no dispute the plaintiff engaged the defendant in its capacity as a real estate agent to sell a property situated at 142 Ekibin Road East, Tarragindi.  Further, on 17 June 2008 the plaintiff and a prospective purchaser executed a contract for the sale of the property subject to inter alia finance.  The contract was for $795,000, settlement was to occur 30 days from the date of the contract and the purchaser had 14 days from the date of the contract to obtain finance to complete the contract.

1. It is also not disputed that it was an implied condition of the retainer between the plaintiff and the defendant that the defendant would at all material times act in the best interests of the plaintiff and exercise due care and skill when representing the plaintiff.  It is also accepted the contract required the purchaser to pay the deposit of $20,000 to the defendant as deposit holder (as defined in the contract) on the terms and conditions contained in the contract. 

1. Finally, it is admitted that the solicitor for the purchaser sent a facsimile addressed to the defendant on 23 June 2008 giving notice that the purchaser terminated the contract under the cooling-off period.

1. It is also not disputed on the hearing of these applications that the defendant did not inform the plaintiff that the solicitor for the purchaser had sent the facsimile addressed to the defendant on 23 June 2008 giving notice that the purchaser terminated the contract under the cooling-off period.

1. The plaintiff alleges that as a result of the defendant’s failure to inform the plaintiff that the contract had been cancelled under the cooling-off provisions of the contract, the plaintiff was under the erroneous belief that the contract was as at 5pm on 23 June 2008 unconditional.  The plaintiff in its reply to the notice of intention to defend and defence alleges that it was the plaintiff’s belief that the contract was unconditional from 1 July 2008.  Clearly, these allegations are inconsistent. I prefer to act on what the plaintiff has sworn to in his affidavit in support of his application.

1. It is not disputed that the plaintiff commenced proceedings against the purchaser seeking recovery of the deposit.  However, the plaintiff claims he became aware of cancellation of the contract after legal proceedings were instituted by the plaintiff against the purchaser.  The plaintiff’s claim against the defendant is that the plaintiff incurred $13,416.02 in legal costs pursuing the purchaser for the return of the deposit on the property as a result of the failure of the defendant to act in the plaintiff’s best interests and the failure to inform the plaintiff that the contract had been cancelled during the cooling-off period.

1. The plaintiff swears that as he had no notice of any cancellation of the contract he was under the impression that the contract was as of 1 July 2008 unconditional.  Accordingly, he believed that the purchaser had defaulted under the contract and he was entitled to the deposit.  On or about 25 July 2008 he instructed his solicitors to forward a letter to the purchaser seeking his consent to release of the deposit to the plaintiff.  There was no response to that letter.  In accordance with his belief that the purchaser had defaulted under the contract he sought to recover the deposit of $20,000 held by the defendant.  Also, on or about 25 July 2008 the plaintiff’s solicitors caused on his instructions, to be forwarded by ordinary post a letter to the defendant seeking disbursement of the deposit.  As he did not receive the deposit despite the request, he instructed his solicitors to bring an action against the purchaser for a declaration that the purchaser had defaulted under the contract and an order that he was entitled to the $20,000 deposit.  Those proceedings were commenced.  On or about 4 December 2009 he was informed by his solicitors the solicitors for the purchaser had cancelled the contract under the cooling-off period.  As a result it became apparent that the plaintiff did not have a cause of action against the purchaser as the contract had been terminated pursuant to the cooling-off period provisions of the contract and the plaintiff abandoned his claim against the purchaser accordingly.  Consequently, he incurred the costs and disbursements for which he seeks to recover in these proceedings against the defendant.

1. The defendant submits the plaintiff’s proceedings disclose no reasonable cause of action.  Clause 5 of the contract provides:-

“5.        Finance

5.1This Contract is subject o the Lender approving a loan to the Buyer in the Finance Amount, on terms and conditions satisfactory to the Buyer, for the purchase of the Property by the Finance Date (or such extended date as may be agreed).  See Item (10).

5.2In compliance with this Clause the Buyer will promptly, after the signing of this Contract by the Seller, make application to the Lender for the Loan and take all reasonable steps to obtain the Finance approval by the Finance Date.

5.3The Buyer must give notice to the seller immediately upon approval/rejection of Finance in accordance with Clause 29 (Notice).

5.4If the Buyer has not obtained the Finance approval by the Finance Date then the buyer may by notice to the Seller:

(a)        terminate this Contract; or

(b)        waive the benefit of this condition.

5.5          Should the buyer not give notice to the Seller in accordance with Clause 5.4 (a) or (b) by 5.00 pm on the Finance Date the Seller may, by notice, terminate this Contract.

5.6          This Contract is not terminated until notice is given.

5.7          All monies paid by way of Deposit will be forthwith refunded to the Buyer once this Contract is terminated in accordance with this Clause.

5.8          Should the Buyer not obtain Finance Approval by the Finance Date and then subsequently:

(a)        obtains Finance Approval; or

(b)        waives the benefit of Clause 5.1,

and notifies the Seller prior to the Seller giving notice to terminate this Contract in accordance with Clause 5.5, then the Buyer will have complied with the requirement to obtain a loan in the Finance Amount.”

1. Clause 9.2 of the contract also provides:-

“9.2Should the Seller terminate this Contract the Seller may, without prejudice to any other rights:

(1)claim forfeiture of the Deposit; and/or

(2)resell the Property and provided such resale is completed within 12 months, any deficiency, including the expense of such resale, shall be recoverable by the Seller from the Buyer as liquidated damages.

(3)may retain the Property and sue the Buyer for damages for breach of this Contract.

(4)claim any Deposit monies that are in arrears as a liquidated debt.

(5)appropriate the profit, if any, on the resale.”

1. The defendant submits on the proper construction of the contract the plaintiff was not entitled to recover the deposit from the purchaser by the joint operation of clause 5.5 and clause 9.2.  It is submitted such an erroneous belief was the plaintiff’s and the plaintiff’s alone.  The plaintiff cannot now seek to recover the costs of his misreading the contract from the defendant.

1. It is correct to say in this case clause 5.5 and clause 9.2 could not be used by the plaintiff to claim forfeiture of the deposit.  The plaintiff accepts for the purposes of the present proceedings, he did not have a cause of action against the buyer for recovery of the deposit (see para 11(d) of the Reply). 

1. Despite this point made by the defendant, the plaintiff’s pleadings allege a contractual term that the defendant would at all material times act in the best interests of the plaintiff and exercise due care and skill when representing the plaintiff or in the alternative a duty of care and a breach of the contract or the duty of care and damage.  In that regard I do not accept the submission that the plaintiff’s pleadings disclose no reasonable cause of action.

1. Therefore, the defendant’s application is dismissed. 

1. This brings me to the plaintiff’s application for summary judgment.  The approach should be as Chesterman JA in Bolton Properties Pty Ltd v JK Investments (Australia) Pty Ltd [2009] QCA 135 at [24] observed:-

“Summary judgment should not be given where the facts upon which the parties’ respective rights depend are disputed, or where the respondent to the application for summary judgment adduces evidence as to the existence of facts, which, if proved, would establish a defence or a right to relief.  In other words it is only where all the facts are known and/or are established beyond controversy that the court should embark upon determining whether to give summary judgment.  Where relevant facts are controverted, or where it appears that facts may exist which may affect a right of action or defence, there should be a trial to determine the facts.”

1. As I have said, the plaintiff concedes he had no cause of action against the purchaser for recovery of the deposit.  In my opinion, the plaintiff sought to recover the deposit on an erroneous belief that he could do so pursuant to clause 9.2 despite clause 5.7.  

1. The defendant’s submission is that the plaintiff acted under clause 9.2 when he was not entitled to act under that clause.  The defendant submits the plaintiff’s action against the purchaser was baseless.  There was no adequate or sufficient connection between the loss and the alleged breach.

1. I accept the plaintiff was acting erroneously under clause 9.2 when he was not entitled to do so.  Nevertheless, the question remains did the defendant breach the contract of retainer or was the defendant negligent by failing to inform the plaintiff the contract had been terminated during the cooling off period and  if “yes” what caused the plaintiff’s loss.

1. I am satisfied the defendant did breach the contract of retainer or was negligent by failing to inform the plaintiff the contract had been terminated during the cooling off period (Havas v Cornish and Company Pty Ltd (1985) 2 Qd R 353).
   
   

1. Where negligence is an issue, causation is essentially a question of fact to be answered by reference to common sense and experience and one into which considerations of policy and value judgments necessarily enter (see March v E&MH Stramare Pty Ltd (1990-1991) 171 CLR 506, 509, 515, 522, 524-5). It is now generally accepted that the principles of law concerning causation and novus acteus interveniens breaking the chain of causation, are the same in the law of contract and tort (see Gilliard J Hardchome Engineering Pty Ltd v Kambrook Distributing Pty Ltd No 7810 of 1996 13 September 2000 (2000) VSC 359).

1. In my opinion, even if the plaintiff pursued the buyer upon an erroneous belief as to his rights, as a matter of common sense and experience, it was the failure of the defendant to inform the plaintiff that the contract had been terminated during the cooling-off period that caused the plaintiff’s loss.

1. In my opinion, there is no need to examine any further facts as between the plaintiff and the defendant in these proceedings.  It can be accepted that the plaintiff had no cause of action for return of the deposit and proceeded on an erroneous belief as to his rights.  However, I accept the plaintiff would not have pursued the buyer if he had known the contract had been terminated during the cooling-off period.

1. Therefore I give judgment for the plaintiff against the defendant for the sum of $12,815.26.

1. The plaintiff seeks its costs on the indemnity basis.  My concern is as to the amount claimed.  That is these proceedings should not have been commenced in the District Court.  Although a declaration was sought it was completely unnecessary and not required for the just determination of the dispute between the parties.  These proceedings could have been commenced in the Magistrates Court.  The costs would have been considerably less in that court. 

1. Therefore, the order I make as to costs is that the defendant pay the plaintiff’s costs of the action, the defendant’s application and the application for summary judgment on the scale of costs applicable in the Magistrates Court.