Evenden & Anor v Millwood Rise Developments Pty Ltd [2023] QCAT 512

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Evenden & Anor v Millwood Rise Developments Pty Ltd [2023] QCAT 512 PARTIES: MARK ALFRED EVENDEN ELIZABETH EVENDEN (applicants) v MILLWOOD RISE DEVELOPMENTS PTY LTD (respondent) APPLICATION NO/S: Q325/23 MATTER TYPE: Other minor civil dispute matters DELIVERED ON: 18 December 2023 HEARING DATE: 17 October 2023 HEARD AT: Brisbane DECISION OF: Adjudicator Scott-Mackenzie ORDER: The respondent pay to the applicants $19,718.41 within 21 days of this order CATCHWORDS: MINOR CIVIL DIPUTE – contract for houses and residential land – deposit paid – offer of new contract at higher price – options identified – whether contract terminated by mutual agreement – whether contract repudiated Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 Koompahtoo Local Aboriginal Council v Sanpine Pty Ltd (2007) 233 CLR115 Shevill v Builders Licensing Board (1982) 149 CLR 620 APPEARANCES & REPRESENTATION: Applicants: Self-represented Respondent: Mr Watson, Millwood Rise Developments Pty Ltd REASONS FOR DECISION Application [1] The applicants, on 17 March 2023, made application to the Tribunal for payment to them by the respondent of $17,950.00, together with $329.17 interest and $367.00 the fee on filing the application (application). -- 1 of 6 -- 2 Uncontroversial facts [2] The uncontroversial facts may be summarised in the following terms. [3] On 22 October 2021 the parties entered into a contract for houses and residential land under which the respondent agreed to sell to the applicants and the applicants agreed to buy from the respondent proposed lot 48, Millwood Rise, 41 Glenbrook Drive, Nambour for $359,000.00 payable by an initial deposit of $1,000.00 and the balance of the deposit of $16,950.00 on satisfaction or waiver of a finance condition (contract). The applicants paid to the respondent both the initial deposit and the balance of the deposit. [4] On 9 November 2022 the applicants received from Mr Simon Ewing, a sales consultant for CFMG Residential Communities, on behalf of the respondent, an email inquiring whether they had received the letter attached to the email (Mr Ewing’s first email). They had not. [5] The letter is from the general manager of CFMG Residential Communities, Mr Andrew Thomson. It is addressed to the applicants and dated 24 October 2022 (24 October 2022 letter). The opening paragraph of the letter reads: As you may be aware, our progress with the physical execution of the Millwood Rise Estate at Nambour has been delayed as a consequence of matters beyond our control. [6] The letter outlines some of the reasons for the delay and states the building work will commence on 10 October 2022. Then, it is said: Because of the significant delays and cost pressures we will act in our financial best interest and in turn those of our lenders when deciding whether to act upon the statutory 18 month period. To provide you with a greater level of certainty and as a show of good faith we will enter into a fresh contract with you for the sale and purchase of lot 48 at Millwood Rise at a purchase price of $437,000 which has been calculated at halfway between the current contract price and the current list price for the allotment. Attached for your reference is a comparable market analysis report that we have commissioned to assist in determining the current list price for the allotments. If you would like to take up this opportunity and to enter into a fresh contract to purchase the allotment at a purchase price of $437,000 can you please let me know by 25 November 2022 and I will arrange for the contract to be prepared and forwarded to you for signing. [7] The first applicant responded to Mr Ewing’s first email the same day, 9 November 2022 (Mr Evenden’s first email). The email, omitting formal parts, reads as follows: No, I hadn’t received this notification, Simon, and it’s very disappointing. What are our options? - Pull out and our deposit is refunded? - Agree to the inflated price? Will additional deposit be required? Will balance be payable upon registration? - Will you negotiate the $437,000? -- 2 of 6 -- 3 We were ready to build early this year. All selections have been made both for builder and total fitout. We paid $359,000 and this is around 21.5% rise and as I said, we were ready early this year. The build will have gone up same to!! This was a ‘first time’ try at building a speck home so am not sure now. (Emphasis added) (Mr Evenden’s first email) [8] Mr Ewing responded to Mr Evenden’s first email a short time later, again on 9 November 2022. The response, omitting formal parts, reads as follows: I can fully understand your frustrations and disappointment surrounding this purchase, unfortunately there have been circumstances beyond the developers control that have led to this. You have correctly understood the options that are available to you and in regard to what additional deposits I don’t believe management is looking for any additional top ups on your initial deposit. Should you wish to proceed your new contract would have a new purchase price of $437,000 as you have correctly identified, management will not negotiate on that price. If there is anything I can help you with please don’t hesitate to contact me. (Emphasis added) (Mr Ewing’s second email) [9] Mr Evenden responded to Mr Ewing’s second email on 25 November 2022. The email, omitting formal parts, reads as follows: We wish to terminate the contract and have the deposit refunded asap. Please advise when you believe this action will be undertaken. We will be losing some monies already paid to the selected builder which is more than a shame. (Emphasis added) (Mr Evenden’s second email) [10] Mr Ewing responded to Mr Evenden’s second email later the same day (Mr Ewing’s third email). The email, omitting formal parts, reads as follows: Please have your solicitor advise the seller’s solicitor of your wish to terminate due to time restraints and that you want your deposit refunded in full. [11] On 25 November 2022 the applicants’ lawyers, bytherules Conveyancing, sent to the respondent's lawyers, JMH Legal, a letter by email (25 November 2022 letter). The letter, omitting formal parts, reads as follows: We refer to the contract dated 22 October 2022 wherein we act for the buyers and you act for the seller, and to recent correspondence received by our clients from your client, direct, about delay and price increases. Our clients hereby terminate the contract on the basis that there is no practical prospect of the conditions in the contractor of 22 October being fulfilled. Our clients are entitled to the deposit. Please advise us whether this termination is disputed. [12] JMH Legal responded to the 25 November 2022 letter by email on 28 November 2022. The email, omitting formal parts, reads as follows: -- 3 of 6 -- 4 Your notice that your client has purported to terminate the contract is unlawful and amounts to an act of repudiation of the Contract because it evinces an intention to not be bound by the terms of the Contract. Our client elects to accept your client’s repudiation of the contract, to terminate the contract and in these circumstances to forfeit the deposit. We confirm that the contract is at an end and the deposit has been forfeited to our client. (JMH Legal’s first email) [13] In a subsequent email sent to bytherules Conveyancing on 29 November 2022, JMH Legal expand on the assertion the termination of the contract is illegal (JMH Legal’s second email). Omitting formal parts, the email reads: I am instructed to advise that with respect, our respective clients had a contract for the sale and purchase of the proposed allotment 48 in the Millwood Rise Estate, Nambour. That contract set out the terms which our respective clients agreed which contemplated a period of 18 months before either party had a right to take steps to terminate the contract. Your notice dated 25 November 2022 purporting to terminate the contract was unlawful and an act of repudiation of the contract because it was contrary to the terms of the contract and showed a clear intention on your client’s part to not be bound by the terms of the contract. The contract between our respective clients did not entitle you on behalf of your client to seek to unilaterally terminate the contract because of a presumption reached on your part. Nothing in the correspondence you have provided changes that. Our client has accepted your client’s repudiation and has elected to terminate the contract and forfeit the deposit. Hearing [14] The proceeding was heard by the Tribunal on 17 October 2023. [15] Mr Evenden was self-represented and appeared on behalf of the second applicant. Mr Watson appeared on behalf of the respondent. [16] At the conclusion of the hearing, the parties were directed to file and serve any submissions in closing by 31 October 2023. They did so. Applicants’ submissions in closing [17] The applicants assert that following receipt of the 24 October 2022 letter, they sought clarification of the options open to them, spelling out their understanding of the options. The options were confirmed, and they accepted the option to terminate the contract with the deposit refunded in full. Respondent’s submissions in closing [18] The respondent, in summary, asserts: (a) the 24 October 2022 letter did not amount to repudiation of the contract; (b) the 24 October 2022 letter was not an offer to terminate the contract; (c) Mr Ewing’s first and second emails were not offers to terminate the contract; -- 4 of 6 -- 5 (d) the contract was not frustrated; and (e) the applicants’ lawyers, bytherules Conveyancing, in its 25 November 2022 letter, purported to terminate the contract. [19] The respondent cites Koompahtoo Local Aboriginal Council v Sanpine Pty Ltd1 and Shevill v Builders Licensing Board2 as authority for the test to be applied to decide whether an action or conduct amounts to evincing an intention to no longer be bound by a contract, and Codelfa Constructions Pty Ltd v State Rail Authority of New South Wales3 as authority for when a contract is frustrated. Discussion [20] Special condition 2.1 of the contract provides the contract “… is subject to and conditional upon the Seller causing the completion of the physical execution of the development and a survey plan of the reconfiguration to be registered at the Department of Natural Resources and Mines so a separate Certificate of Title is issued by the Department of Natural Resources and Mines for the Land by the date which is 18 calendar months are from the Contract Date (“Sunset Date”).” [21] Condition 2.3 then provides that if special condition 2.1 is not satisfied by the Sunset Date, either party may terminate the contract by notice to the other. [22] The 24 October 2022 letter foreshadowed special condition 2.1 not being satisfied by the Sunset Date. Instead of the invoking special condition 2.3, the respondent offered the applicants a new contract at a higher price. Other options available to the applicants, if any, were not identified. [23] The applicants sought clarification, spelling out possible options: - Pull out and our deposit refunded; - Agree to the inflated price. They also asked whether the respondent was prepared to enter into negotiations for the new price. [24] Mr Ewing responded a short time later, in clear and unequivocal terms, “You have correctly understood the options that are available to you …” The applicants accepted the offer confirmed by Mr Ewing, termination of the contract and a refund of the deposit. The contract was thereupon terminated by mutual agreement between the parties and the applicants became entitled to a refund of the deposit. [25] The respondent submits the contract, despite the agreement to terminate it, continued to bind the parties, and because the Sunset Date had not been reached, the bytherules Conveyancing 25 November 2022 letter constituted a repudiation of the contract. The submission is rejected. The contract had already been terminated, as I have said, by mutual agreement between the parties. [26] It follows the applicants are entitled to a refund of the deposit. [27] The applicants claim interest on the deposit from 25 November 2022 and the filing fee on the application, $367.00. The amount of interest to which they are entitled, 1 (2007) 233 CLR 115. 2 (1982) 149 CLR 620, at 625-626. 3 (1982) 149 CLR 337. -- 5 of 6 -- 6 from 25 November 2022 to the date of this decision, calculated in accordance with the Supreme Court of Queensland interest calculator, is $1,401.41. They should also receive the fee on filing the application. [28] The total amount to which at the applicants are entitled is $19,718.41, calculated as follows: Deposit $17,950.00 Interest $ 1,401.41 Filing fee $ 367.00 $19,718.41 Decision [29] There will be an order of the Tribunal that the respondent pay to the applicants $19,718.41 within 21 days of this order. -- 6 of 6 --