Bou-Tamer & Anor v Uzoma [2021] QCATA 64

QUEENSLAND CIVIL AND ADMINISTRATIVE TRIBUNAL CITATION: Bou-Tamer & Anor v Uzoma [2021] QCATA 64 PARTIES: MOUHAMMAD BOU-TAMER (first applicant/appellant) JASON ERKAN (second applicant/appellant) v MELVIN KELECHI UZOMA (respondent) APPLICATION NO/S: APL177-20 ORIGINATING APPLICATION NO/S: MCDO17-20 Holland Park MATTER TYPE: Appeals DELIVERED ON: 14 May 2021 HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Member Howe ORDERS: 1. Leave to appeal granted. 2. Appeal dismissed. CATCHWORDS: APPEAL AND NEW TRIAL – APPEAL – GENERAL PRINCIPLES – RIGHT OF APPEAL – WHEN APPEAL LIES – ERROR OF LAW – where the respondent agreed with the applicants/appellants to purchase a car – where time was not made of the essence – where more than half the price was paid as deposit – where an extension of time to pay the balance due under the contract was granted – where notice making time of the essence of the contract was given the respondent buyer – whether the time was reasonable in the circumstances Queensland Civil and Administrative Tribunal Act 2009 (Qld) s 142(3)(a)(i) Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd (1989) 166 CLR 623 Louinder v Leis (1982) 149 CLR 509 Perri v Coolangatta Investments Pty Ltd (1982) 149 CLR 537 APPEARANCES & REPRESENTATION: -- 1 of 6 -- 2 Applicant: Self-represented Respondent: Self-represented This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) REASONS FOR DECISION [1] The respondent Mr Uzoma agreed to purchase a motor vehicle from Mr Erkan, who was part owner of the vehicle with Mr Bou-Tamer. The vehicle was a 2015 Mercedes A Class A250, advertised online. [2] The price was $22,000. Mr Uzoma paid a deposit of $12,000 on 11 December 2019. There was no agreed date for the payment of the balance other than Mr Uzoma agreed to pay it within two or three weeks. [3] Mr Uzoma did not have the rest of the money available by the end of December 2019 and Mr Erkan and Mr Bou-Tamer allowed him “a couple of weeks” more to pay. [4] The balance was still unpaid as at Monday13 January 2020 when he was told by Mr Erkan that if he did not pay by Wednesday 15 January 2020 the car would be sold to someone else. [5] On Wednesday 15 January 2020 Mr Uzoma contacted Mr Erkan and asked for a further two days to Friday 17 January 2020 to pay the balance but that was refused. [6] The appellants sold the vehicle to someone else on Monday 20 January 2020 for $19,000. Mr Uzoma asked for the return of his deposit of $12,000 but that was also refused. [7] Mr Uzoma brought minor civil dispute consumer dispute proceedings in the Tribunal seeking recovery amongst other things of his deposit of $12,000. [8] The matter was heard before an Adjudicator who found in favour of Mr Uzoma and ordered the appellants to refund him the sum of $12,000. [9] The appellants now seek leave to appeal that decision. Given this is an appeal from a decision made in the Tribunal’s minor civil dispute jurisdiction, leave to appeal must first be obtained before any appeal proceeds.1 [10] Leave to appeal will usually only be granted where an appeal is necessary to correct a substantial injustice to the appellant and where there is a reasonable argument that there is an error to be corrected.2 [11] The application for leave to appeal is broad brush as concerns the grounds of appeal, which is not uncommon in minor civil dispute matters. As best understood, there are two grounds of appeal: 1 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 142(3)(a)(i). 2 Pickering v McArthur [2005] QCA 294. -- 2 of 6 -- 3 (a) First that the Adjudicator erred in finding that the deposit was refundable despite no signed contract in writing stating the deposit was refundable. (b) Second that the Adjudicator failed to take into account the appellants’ claim for damages of $3,000 suffered selling the vehicle to another buyer. The grounds of appeal [12] Both grounds of appeal may be conveniently addressed together. [13] The agreement between the parties was partly oral and partly in writing. [14] The writing was limited to a one page handwritten note stating: I Jason Erkan received $10,000 deposit for 2015 Mercedes-Benz A250 sport from Melvin Uzoma 11-12-19. Total payment of the car is $22,000. [15] At the bottom of the document following signatures by both Mr Erkan and Mr Uzoma there appears the additional note: This is an acknowledgement receipt between Jason and I. Jason acknowledging the receipt of $10,000 cash from me and a further $2,000 was transferred via bank transfer same day. [16] The Adjudicator noted in her reasons for decision, given ex tempore on the day of hearing, that when the arrangements were first struck, no specific date for payment of the balance monies was agreed, save that payment would be made within two or three weeks. [17] That aspect of the arrangements was not controversial as between the parties. [18] The Adjudicator further determined that as at the date of agreement, time for payment of the balance monies was not of the essence of the bargain. [19] The evidence given at hearing supports that finding, save that Mr Erkan claimed that he had informed Mr Uzoma when he paid his deposit that if he did not pay within “two, three weeks” he would lose his deposit.3 [20] The Adjudicator rejected his evidence about that. She was well entitled to do so given there was no such statement contained in the written note signed on 11 December 2019 to that effect. Nor was that mentioned by Mr Erkan in his detailed letter written in response to a claim by solicitors writing on behalf of Mr Uzoma seeking return of their client’s deposit, when one might expect, had such statement been made, it would certainly have been raised. [21] In contracts such as the one at hand, where no specific date is agreed for performance, delay without more does not of itself entitle a party to terminate the agreement. [22] Here, the due date for payment of the balance $10,000 was always left vague between the parties. First there was mention made of two or three weeks after payment of the deposit. Then, when that time passed, Mr Uzoma was allowed another couple of weeks to pay. When that time also passed, only then did the 3 Transcript 1-12 Line 46. -- 3 of 6 -- 4 appellants tell Mr Uzoma that they would terminate the contract if he did not pay in two days. [23] Where a contract does not stipulate a time for performance then it is implied that the contract must be performed within a reasonable time.4 What is a reasonable time is a question of fact depending on the circumstances.5 [24] Where a date set for performance passes but time is not an essential requirement of the contract, that is, ‘of the essence’ of the contract, then a party may serve a notice stipulating a reasonable time for performance. As long as the time stipulated for performance is reasonable, performance by the time set by the notice becomes essential to the contract, and failure to meet the date of performance evidences repudiation of the contract, which in turn entitles the innocent party to terminate the contract: The result of non-compliance with the notice is that the party in default is guilty of unreasonable delay in complying with a non-essential time stipulation. The unreasonable delay amounts to a repudiation and this justifies rescission.6 [25] The notice period given however must be reasonable. What constitutes a reasonable period is determined as at the date of service of the notice, and as explained by the High Court in Laurinda Pty Ltd v Capalaba Park Shopping Centre Pty Ltd:7 … the onus must rest with the party giving the notice of showing that the time limited by the notice is reasonable judged as at the time the notice is given.... The question is one of fact and it falls to be determined by reference to evidence which, as one might expect on an issue of this kind, is rather indefinite. However, the evidence of Mr Lockhart is sufficient to raise a serious doubt in my mind as to the prospect of having the lease stamped and lodged for registration within the period of thirteen days limited by the notice. Of course this is not a decisive consideration because it is relevant to have regard to the opportunity which Capalaba had to attend to these matters before the notice was given.8 [26] It is clear that time was not made of the essence of the contract from the outset. Mr Uzoma was therefore entitled to perform his obligations under the contract within a reasonable time. By 13 January 2020 the appellants decided Mr Uzoma’s delay was unreasonable however, and put him on notice that he had to complete the contract by 15 January 2020, two days hence. [27] If the notice was unreasonable, then the purported termination of the contract by the appellants was invalid and itself a repudiation of the contract, entitling Mr Uzoma to terminate for the appellants’ breach, and recover his deposit. [28] If the notice was reasonable, then the deposit paid by Mr Uzoma as an earnest of his good intentions to perform the contract might be kept by the appellants. Following 4 Perri v Coolangatta Investments Pty Ltd 422 (1982) 149 CLR 537; [1982] HCA 29, [5] (Gibbs CJ). 5 Ibid, [13] (Brennan J). 6 Louinder v Leis (1982) 149 CLR 509; [1982] HCA 28, [34] (Mason J). 7 [1989] HCA 23. 8 Ibid, [37]-[38] (Mason CJ). -- 4 of 6 -- 5 from that, the question whether the deposit is the sum of $12,000 or a lesser amount might then arise for consideration however. [29] Hence, both complaints raised by the appellants in their application for leave to appeal in fact require focus on which of the parties was in breach of the contract, rather than on whether or not there was a signed contract in writing stating the deposit was refundable, or whether the appellants were entitled to claim damages. [30] Unfortunately the Adjudicator did not address the relevant question in reaching her decision in which she ordered the monies paid be refunded to Mr Uzoma. The question to be asked and answered after concluding time was not of the essence was, was the notice making time of the essence given on 13 January 2020 requiring payment of the balance money by 15 January 2020, reasonable in the circumstances pertaining as at the date of giving the notice? [31] Given that question was not addressed by the Adjudicator in giving her reasons for decision, the Adjudicator fell into error and the appellants have potentially suffered substantial injustice. It is therefore appropriate to grant leave to appeal. The error concerning reasonable notice is one of mixed law and fact and therefore the appeal should proceed by way of rehearing. The appeal [32] I adopt the learned Adjudicator’s primary findings save where they are challenged in the appeal. [33] Those primary findings that are relevant are that time was not of the essence of the contract between the parties; that Mr Uzoma was not advised that his deposit was non-refundable at the time of entering into the contract; that the time agreed for completion was initially two to three weeks, which was then extended by the appellants for a further period of two weeks, time still not being of the essence; that the appellants then purported to make time of the essence of the transaction by giving two days’ notice to complete. [34] The issue for determination is whether or not the two days’ notice to complete given to Mr Uzoma on 13 January 2020 was reasonable considered in the circumstances that existed as at date of giving the notice. [35] The following factors are relevant. [36] The money paid to the appellants described as a deposit was more than half the contract price. The appellants complained that they were in need of money and that was the reason for the sale, but they had the benefit of more than half the price from the outset of agreement. [37] The times mentioned for completion prior to the giving of the notice were periods of weeks rather than days. [38] I conclude that a reasonable period of notice requiring Mr Uzoma to pay or be deemed to have repudiated his obligations under the contract was no less than two weeks’ notice effective from 13 January 2020. As such, a short time limit of two days was unreasonable in the circumstances as at the date of giving the notice. The two days’ notice was therefore ineffective in making time of the essence of the contract and the purported termination by the appellants after the two days’ notice amounted to repudiation of the contract on their part. -- 5 of 6 -- 6 [39] Given the appellants were in breach of the contract, they were neither entitled to retain any part of the money paid by Mr Uzoma as a deposit nor damages for breach of contract. Orders [40] Whilst the Adjudicator failed to address the issue of the reasonableness of the notice purporting to make time of the essence, her order requiring the appellants to repay the money paid them by Mr Uzoma was correct and should not be disturbed by an order of the Appeal Tribunal. -- 6 of 6 --