CK & PT Property Holdings Pty Ltd atf CK & PT Property v Novadeck Pty Ltd [2025] QDC 50

DISTRICT COURT OF QUEENSLAND CITATION: CK & PT Property Holdings Pty Ltd atf CK & PT Property act Novadeck Pty Ltd [2025] QDC 50 PARTIES: CK & PT PROPERTY HOLDINGS PTY LTD ATF PT PROPERTY ACN 5651775996 (plaintiff) v NOVADECK PTY LTD ABN 65602273932 (defendant) FILE NO: 3147 of 2024 DIVISION: Trial Division PROCEEDING: Claim ORIGINATING COURT: District Court of Queensland at Brisbane DELIVERED ON: 10 February 2025 DELIVERED AT: Brisbane HEARING DATE: 29/11/2024 JUDGE: Burnett AM, DCJ ORDER: Direct the parties submit a form of order within 21 days of date of judgement to give effect to this ruling. In default of agreement direct the matter to be listed for mention. CATCHWORDS: REAL ESTATE CONTRACTS – payment of balance deposit by EFT – direction to transfer and notice of transfer given by purchaser to deposit holder on due date – purchaser’s bank effected transfer next business day IMPLIED TERM – EFT instruction to bank and notice of instruction given by purchaser – part payment of deposit made upon instruction to purchaser’s bank to pay funds to the deposit holder -- 1 of 9 -- 2 CASES: CITATION: Electricity Generation Corporation v Woodside Energy Ltd (2014) 88 ALJR 447, considered McCann v Switzerland Insurance Australia Limited (2000) 176 ALR 711, cited BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266, cited Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, cited D&J constructions Pty Ltd v Machello Pty Ltd (1987) 2 Qd.R. 350 Banking Law in Australia , 11ed Didenko Lexis Nexis Australian 2024, cited Land Contract In Queensland, Christensen, Dixon, Duncan and Jones, The Federation Press 2016 COUNSEL: C Doyle for the Applicant A Choy for the Respondent SOLICITORS: Kilmartin Knyvett Lawyers for the Applicant David K Lawyers for the Defendant Introduction [1] The applicant in this case seeks specific performance of a contract to purchase a lot in a development of a CTS scheme known as Kinsella Residences Community Title Scheme. The Contract dated 26 August 2021 and concluded on or about 30 August 2021 was in essence an off the plan purchase with settlement set at a then unknown but definable future date. A part deposit of $1000 was paid upon execution of the Contract in accordance with clause 3.2 of the Contract. That clause relevantly provided: “3.2 Deposit (a) the Buyer must pay the Deposit to the Deposit Holder at the times shown in the Reference Schedule. The Deposit Holder will hold the Deposit until a party becomes entitled to it; (b) the Buyer will be in default if: (i) it does not pay the Deposit when required; (ii) pays the Deposit by post dated… cheque; or (iii) pays the Deposit by cheque which is dishonoured on presentation; -- 2 of 9 -- 2 … (d) the entitlement of the parties to receive the Deposit and any interest on the Deposit is to be determined as follows: … (ii) if this Contract is terminated without default by the Buyer, the Buyer is entitled to the Deposit and any interest on the Deposit;” [2] The Balance Deposit was payable the later of 14 days from Contract Date or upon satisfaction or waiver of the Finance Condition. The definition of Deposit provided for is provided for in Clause 1.2 means “the total deposit monies consisting of the Initial Deposit and the Balance Deposit”. Clause 1.2 also provides the Initial Deposit means “the amount referred to in the Reference Schedule”; (in this case the sum of $1000) and the Balance Deposit means “the amount referred to in the Reference Schedule (being a sum of $48,990)”. Together the sums total $49,990 being 10 per cent of the purchase price provided for by the Contract. An additional relevant provision in the Contract was a finance provision, Clause 15. Relevantly it provided: “15. Subject to Finance Approval If the Buyer has selected ‘Yes’ in relation to Finance Approval in the Reference Schedule of this Contract then the following provisions of this Clause 15 will take effect otherwise Clause 15(c) to (g) will not apply to this Contract. (a) … (c) This Contract is subject to and conditional upon the Buyer obtaining Finance Approval on terms satisfactory to the Buyer from a Bank or other financial institution in respect of the lot within 21 days from the date the Seller notifies the Buyer that the Property has reached practical completion; (d) The Buyer must give written notice to the Seller by 5pm on the Finance Due Date that: (i) the Buyer has not obtained satisfactory Finance Approval in respect of the Lot in which case the Contract will be at an end; or (ii) the Buyer has obtained satisfactory Finance Approval in respect of the Lot in which case the contract will no longer be subject to this Clause 15.” [3] By combination of the definition of Business Day provided for by Cl 1.2 and the interpretation provision contained in Cl 1.3(f)(ii) , if something had to be done on a particular day it had to be done by 5pm on that day or it would be considered to be done the next day. [4] It is not in dispute that the plaintiff executed the Contract and paid the Initial Deposit of $1000 on or about 30 August 2021. The Contract was subject to finance. It is not -- 3 of 9 -- 3 in dispute that the plaintiff received notice of Finance Approval from its financier on 16 October 2024 a date well before the Finance Due Date as provided for by the Contract. Subsequently the plaintiff’s conveyancer sent by email on 16 October 2024 at 11.50am notice to the vendor’s solicitors that they had “received instructions from (the plaintiffs) they have received satisfactory finance approval”. The notice continued, “the Contract is now unconditional …”. At about the same time they wrote advising, “Further to our email below, we give notice that our clients have attended to the payment of the Balance Deposit”. [5] Just over an hour earlier at 10.32am the plaintiff caused its banker, Macquarie Bank to transfer by EFT a sum of $48,990 into the vendor’s solicitors’ trust account as Deposit Holder purportedly in accordance with the requirements of Clause 3.2 and the Reference Schedule. [6] Despite the instruction directing an electronic transfer of the Balance Deposit being given at approximately 10.32am to Macquarie Bank that sum did not depart Macquarie Bank until 6.06pm that day, 16 October 2024. It was not received into the Deposit Holder’s account at Westpac, Eagle Street Brisbane until 20.33 AEST. The transferred fund in turn was not released into the Deposit Holder’s account until 21.38 AEST that night. [7] By letter dated 16 October 2024 solicitors for the vendor wrote to the plaintiff’s conveyancer noting that the time of the dictation of that letter (6.30pm) “the Balance Deposit has not been received into our trust account and accordingly the Balance Deposit has not yet been paid”. They contended that by operation of the contract the Balance Deposit was paid on 17 October 2024 in breach of Cl 3.2(a) of the contract. They identified the purported default under the Contract noting the plaintiff had failed “to comply with an Essential Term of the Contract” and its rights upon its election to “terminate the contract”. [8] Upon that basis it gave notice of the vendor’s election to accept the breach and terminate the contract. [9] The applicant/plaintiff rejected the vendor’s purported termination and affirmed the contract. It now seeks specific performance. [10] The issue for determination is whether the applicant/plaintiff has paid the Balance Deposit in accordance with the Contract. The express terms of the Contract do not contemplate the situation as it does not provide for deposit payments by EFT. Accordingly resolution of the question comes down to a matter of construction. [11] The applicant/plaintiff contends the question to be addressed is: “what is meant by the term pay/s” where it appears in clause 3.2 of the Contract. It submits that in that context the term “pay” means the act of causing the bank transfer. Clause 3.2(b) does not contemplate the “receipt” of funds. The applicant submitted that the contract is construed as a whole with the words of the contract given their natural and ordinary meaning and in the case of commercial contracts, to interpret the contract by reference to what a “reasonable business person would have understood those terms to mean”: Electricity Generation Corporation v Woodside Energy Ltd (2014) 88 ALJR 447 at [35]. -- 4 of 9 -- 4 [12] It is further submitted that the meaning of the term “pay” is to be answered in “in a practical and realistic way, not in a way which adopts an overly fine or theoretical approach that is alien to commercial agreements”: McCann v Switzerland Insurance Australia Limited (2000) 176 ALR 711 at 729. [13] The term “pay” is defined in the Macquarie Dictionary to mean: “Pay - verb 1. To discharge (a debt, obligation etc.), by giving or doing something 2. To give (money etc.) as in discharge of debt or obligation 3. To satisfy the claims of (a person, etc.) as by giving money due … 12. To give money, etc., due: to pay for goods 13. To discharge debt …” [14] The respondent/defendant contends “pay” also means “received” in this context. Accordingly the meaning of that term should also be considered. The term “received” is defined in the Macquarie Dictionary to mean, “Receive – verb 1. To take into one’s hand or one’s possession (something offered or delivered) … to receive something” [15] The standard definition of “pay” does not assist in defining “pay” to mean receive although that appears to be a direct product of the verb. As I have noted, the term receive means “to take into one’s hand or one’s possession (something offered or delivered)”. These terms have a clear meaning in understanding in the physical context. For instance when cash money is tendered for a transaction the tendering and passing over of cash reflects both the payment and receipt at the moment of the transfer. However that does not necessarily follow with other forms of payment such as payment by cheque or EFT.I do not think in context “pay” means “receipt”. [16] The subject contract was executed about 18 months into the COVID pandemic and some of its features evidenced consequent adjustments for contracts entered into at the time addressing the then extant community concerns, particularly related to human contact. For instance, the contract was electronically executed by an electronic execution platform such as DocuSign or some similar platform. However, some aspects of the contract reflect the more carefree ways of pre-COVID times such as the terms here concerning payment of the deposit. Clause 3.2(b) by its terms precisely follows the terms of clause 2.2(2) of the standard form REIQ contract which was in place until the introduction of standard form REIQ contract EF001 06/24. [17] The meaning of clause 2.2(2) does not appear to have been the subject of reported or unreported judicial determination. None were referenced by counsel or uncovered by later research. From that it can inferred its terms were clear and provided an effective -- 5 of 9 -- 5 and workable process for the payment of deposits, at least in the past. So what has changed? Clause 3.1 (b) specifies that the sum due on settlement is to be paid by bank cheque, but the contract is otherwise silent on how other payments are to be made. As a matter of practice deposits have traditionally been paid by personal cheque although it is clearly open to inference that payment might be made by other means such as by cash or in kind : D&J constructions Pty Ltd v Machello Pty Ltd (1987) 2 Qd.R. 350. More generally payments are made by personal cheques as clause 3.3.2 (b) (ii) and (iii) clearly contemplates. Specific provision is made for payment by bank cheque on settlement for obvious reasons. But otherwise the contractual terms themselves otherwise do not expressly provide for any other form of payment. [18] The conventional practice for payment of deposit by personal cheque has been accompanied by the protections afforded by clauses 2.2(b)(ii) and (iii). That is, in the event that the cheque is paid and difficulties later arise following presentation, the deposit is deemed to not have been paid. That accords with conventional banking law.1 That incidentally follows by operation of the contract so to that extent the contract reflects the common law. In Banking Law in Australia2 at 312 the author explains the nature of payment obligations arising from contract. In particular it highlights the difference between absolute and conditional payments. He noted, “an absolute payment discharges the payment obligation. It cannot be revived by subsequent events”. At para 9.2.3 the author continued; “A conditional payment may be revived in some circumstances. For example, when payment is by cheque, the creditor must present the cheque for payment. If then the cheque is dishonoured, then the payment obligation revives.” In other words it would appear in such circumstances there has been no payment with the consequent contractual consequences. These contractual practices now have been so longstanding that in the circumstances it could reasonably be expected that parties regulate their conduct because of practice rather than by express reference to the terms of the standard contract. [19] Otherwise, more generally contracts have proceeded on the basis that cheques are presented and drawn upon in the ordinary course and the contract proceeds, that is assuming the bank honours the cheque. In that case, as here, in the absence of a special clearance (which customarily is never sought in respect of deposit cheques), the benefit of the cheque, beyond its value as a chose in action, does not follow immediately upon the delivery of the cheque but is realised upon later honouring by the bank. Although counsel were invited to make submissions concerning the legal status of funds during this lacuna that is between the time of presentation (whether it be by presentation of cheque or the electronic direction to a bank to electronically transfer funds) until such time as funds are received into the account to which those monies are directed to be payable, no further submissions were made. [20] The law relating to cheques addresses the matter so far as cheques are concerned, and perhaps it does so in a manner which is different to the process which is now employed for payments by EFT but despite invitation neither party made submissions on that matter. [21] In any event, the most recent iteration of the REIQ contract adequately addresses the circumstances that inform payment of a deposit by EFT, and as it happens largely answers the respondent/defendant’s submissions, at least in my view. 1 Banking Law in Australia , 11ed Didenko Lexis Nexis Australian 2024, para 10.2.3 at p 312 2 Banking Law in Australia , 11ed Didenko Lexis Nexis Australian 2024 -- 6 of 9 -- 6 [22] The applicant/complainant submits the matter can be resolved by implication of a term. No form of the term was proffered but nonetheless a term in these terms could be implied, namely, “that if payment of the deposit is made by EFT and notified and the purchaser does not take action to defer the payment to the deposit holder it is taken to be received by the deposit holder on the day the EFT is effected”. [23] For a term to be implied into a contract the essential features to be proven include that the term to be implied must be reasonable and equitable; it must be necessary to give business efficacy to the contract; it must be so obvious that it goes without saying; it must be capable of clear expression; and it must not contradict any expressed term of the agreement. See BP Refinery (Westernport) Pty Ltd v Hastings Shire Council (1977) 180 CLR 266 at 283 and Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 at 346. [24] In my view, the term to be implied addresses each of those matters. (a) First; it is a term which must be reasonable and equitable. In this case it is a matter of common knowledge that an EFT will be backed by available funds and that once the electronic instruction is issued and directed to a bank to transfer funds by EFT the electronic processes in place will render it almost impossible for the direction to be withdrawn. If it is withdrawn it is only done so because of a claim of fraud or mistake. The certainty of that process makes for the term to be fair and equitable with neither party being able to take unfair advantage in the performance of the contract because of the process. (b) Second; it must be necessary to give business efficacy to the contract. That is to say that once the direction is given to transfer funds by electronic or EFT both the vendor and purchaser with a lay understanding of the manner in which the EFT system works appreciate the significance of an EFT, just as in times gone by a similar appreciation was applied to the provision of a cheque by way of deposit. In the absence of that appreciation, uncertainty would exist concerning the issue of whether or not a binding arrangement had come into play. (c) Third; it must be so obvious that it goes without saying. Again, in context, the provision of advice that a sum has been paid by EFT, coupled with the layman’s understanding of that process would in the ordinary course be accepted as the fact of payment and in fact is better than the process of delivering a personal cheque would be. (d) Fourth; it must be capable of clear expression. This matter is readily satisfied. (e) Finally; it must not contradict any express term of the agreement. No contradiction is evident in this instance. This contract made no provision for EFT payments. [25] To that end, it is noteworthy that the most recent iteration of the REIQ contract has addressed this mischief. In clause 2.2 of the standard REIQ contract relevant to this issue it provides: “2.2 deposit -- 7 of 9 -- 7 (1) the buyer must pay the deposit to the deposit holder at the time shown in the reference schedule. The deposit holder will hold the deposit until a party becomes entitled to it. (2) the buyer will be in default if it: (a) does not pay the deposit when required; (b) pays the deposit by a post-dated cheque; (c) pays the deposit by cheque which is dishonoured on presentation. (3) subject of clause 2.2(4), if the buyer; (a) affects an electronic transaction to pay all or part of the deposit to the account of the deposit holder on a day; (b) provides written evidence to the deposit holder that the electronic transaction has occurred; (c) does not take any action to defer the payment to the deposit holder to a later day, The payment is taken to be received by the deposit holder on the day the buyer affects the electronic transaction even if, because of circumstances beyond the buyer’s control, the payment to the deposit holder’s account happens on a later day. …” [26] This current iteration of the REIQ contract includes an additional step namely the provision of “…written evidence to the deposit holder that the electronic transaction has occurred”. That would afford a particular protection to a perspective vendor but such term in my view is not essential to the implied term as articulated earlier. In my view the term articulated in para [22] can be implied. [27] In finding as I do I am conscious of the views expressed by the authors of Land Contract in Queensland3, where at page 255 they state;“ A deposit holder may be paid by cash, cheque or direct debit to the deposit holder’s account, provided these details are included in the Reference Schedule. Parties should ensure the date of payment by direct debit takes into account the delay which usually occurs between the time of directing payment and the receipt of the payment in the account of the deposit holder”. Those remarks were not supported by authority and were made in 2016. Since that time two significant events have occurred. First was the Covid pandemic with its consequential social and procedural transformation . Second was the consultation paper published by the Australian Treasury in 2023 following which it was resolved to phase out cheques from 2028. Now EFT is a daily part of life; so much so that that process is commonly appreciated to operate as do cheques or interchangeably with them although with greater certainty. That occurs because as a matter of common experience a bank will not permit a deposit holder to EFT a sum that exceeds an account balance. Accordingly, unlike with cheques there is greater degree of confidence in the likelihood an EFT will affect funds transfer. Previously it might 3 Land Contract In Queensland, Christensen, Dixon, Duncan and Jones, The Federation Press 2016 -- 8 of 9 -- 8 reasonably have been thought that the parallels between cheques and EFTs did not go without saying; however in more recent times I do not think that is the case. [28] To conclude, I do not accept the respondent/defendant’s submission that the term “pay” also means “receive”. No doubt each party was able to advance arguments identifying curious and unusual circumstances supporting their respective contentions. To that end, for each of the unusual and extreme illustrations by each party against the other an implied term might be crafted according to the peculiar circumstances that inform the contractual arrangements. But that is not this case. This was a standard vendor and purchaser arrangement between two commercially minded parties for the sale and purchase of an allotment “off the plan”. Any implied term must be considered in that context. [29] It follows adopting the implied term as I find it that the Balance Deposit was paid upon the applicant/plaintiff’s solicitor providing the respondent/defendant’s solicitor notice at 11.50am on 16 October 2024 that the Balance Deposit had been paid. At 21:38hrs that day the funds were released into the Deposit Holder’s account. Accordingly the deposit was paid on 16 October 2024 at 10.32am and the terms of Cl 3.2 concerning the Balance Deposit was paid when notified to the Purchaser’s solicitor at 11.50am. the terms of clause 3.2 of the contract were satisfied. Order Direct the parties submit a form of order within 21 days of date of judgment to give effect to this ruling. In default of agreement direct the matter be listed for mention. -- 9 of 9 --