Written by Peter CarterSeptember 13, 2014
In an indicator of a heating property market, Redcliffe peninsula buyers have taken Supreme Court proceedings to hold a seller to their November 2013 contract and prevent the seller terminating just two weeks after signing.
Solicitors for Terry and Cheryl Simpson notified by fax at 4:57 pm on 9 December that they were satisfied with the outcome of the building and pest inspection of the Newport home and there was no obstacle to settlement on the due date.
Unfortunately, the notice was sent to the selling agent, not to the solicitors of seller Gary Jackson as required by clause 4 of the REIQ standard version contract that had been used to document the deal. A few minutes later, after 5 pm, Jackson’s solicitors – perhaps because of a pending higher offer – terminated the Simpsons’ contract by facsimile to their solicitors who responded with a copy of their notification to the agent.
Jackson refused to proceed with the sale promoting the buyers to lodge a caveat and commence court action in June 2014 for specific performance. It was not seriously contended that notice to the agent was effective under the contract which clearly required the notice to be given to the seller or the seller’s solicitor.
The Simpsons, however, advanced a novel argument that because standard condition 10.4 specified “notices given after 5:00 pm will be treated as given on the next business day,” the seller’s termination notice of 5:06 pm and their own notice in response of 5:10 pm, must both be treated as having been given on 10 December.
It followed – so their argument ran – that both notices had been given a “nanosecond after midnight,” ie “simultaneously” at the commencement of the next day. Justice Peter Applegarth agreed the effect of the clause was to treat the notices as having both been given on the next business day.
But His Honour, was not prepared to hold that such provision means that the notices should be “treated as having been given in a different sequence or simultaneously”. Such an interpretation “would give surprising and unintended results”. Rather than in his view, the court was obliged to extend “a proper and businesslike interpretation and uphold the intentions of the parties as expressed in the contract.”
To do otherwise “would simply lead to the perplexing conclusion both notices given at precisely the same time, leaving everyone to guess which, if either of them, were effective”. The Simpsons’ caveat was ordered to be removed and their specific performance claim dismissed with the Simpsons been ordered to pay Jackson’s costs.
Jackson is free to sell the home at a higher price to another buyer.