Acker v Polanski and ors [2013] QDC 187

DISTRICT COURT OF QUEENSLAND CITATION: Acker v Polanski and ors [2013] QDC 187 PARTIES: FREDERIC MICHAEL ACKER, GERILYN MARIE POLANSKI, CARMICHAEL CONSULTING PTY LTD (ACN 074 898 150) (Applicants) V KELVIN CLYDE JONES (Respondent) FILE NO/S: Rockhampton R36/2013 DIVISION: Civil PROCEEDING: Originating Application ORIGINATING COURT: Rockhampton DELIVERED ON: 16 August 2013 DELIVERED AT: Brisbane HEARING DATE: 7 August 2013 JUDGE: Smith DCJ ORDER: 1. The court declares that the instalment contract between Glen Barry Kable and Kelvin Clyde Jones dated 14 January 2003 (the benefit of which was assigned to the Applicants in or about August 2004) for the sale of 5 Cork Lane Mt Morgan Queensland described as Lot 1 on Crown Plan MPH25536 County Raglan Parish Calliungal title reference 18799110 (“the land”) has been validly terminated by the Applicants. 2. The court declares the Applicants are entitled to possession of the land. 3. The Applicants do recover possession of the land to the exclusion of the Respondent. 4. It is declared the Applicants are entitled to retain all instalments paid under the instalment contract until the present date pursuant to the instalment contract or alternatively as compensation to the Applicants for the Respondent’s use and occupation of the land. 5. That the Respondent pay the Applicants’ costs of and incident to this application as agreed or assessed on the standard basis. -- 1 of 7 -- 2 CATCHWORDS: CONTRACT- Instalment contract for the purchase of land- whether the Vendor entitled to terminate the contract District Court Act 1968 (Qld) s 68 Property Law Act 1974 (Qld) s 72 Associate Newspapers v Bancks (1951) 83 CLR 322 McDonald v Dennys Lascelles Ltd (1933) 48 CLR 457 Shevill v Builders Licensing Board (1982) 149 CLR 620 COUNSEL: T Arnold for the Applicants No appearance for the Respondent SOLICITORS: Steindls Lawyers and Notary for the Applicants No appearance for the Respondent Introduction [1] This is an originating application by the Applicants for the following: (a) A declaration that the instalment contract between Glen Barry Kable and Kelvin Clyde Jones (the Respondent) dated 14 January 2003 (the benefit of which was assigned by Glen Barry Kable to the Applicants in August 2004) for the sale of Lot 1 on Crown Plan MPH245536 has been terminated; (b) That the Applicants are entitled to and have possession of the land and premises being Lot 1 on Crown Plan MPH25536 (the land) to the exclusion of the Respondent; (c) That in accordance with special clause 10 of the instalment contract, the Applicants are entitled to retain all instalments paid under it to the date at which the Respondent vacates the land in accordance with order (b) as compensation to the Applicants for the Respondent’s use and occupation of the land; (d) Costs. Service [2] The originating application was filed on 16 May 2013. Despite due search and inquiry, it is not possible to personally serve the Respondent. [3] Caitlyn Kelly in her affidavit filed on 18 July 2013 deposes to the fact that on 22 May 2013 she sent a letter to Alpha Collections instructing them to serve the Originating Application on the Respondent. His last known residential address was 5 Cork Lane, Mt Morgan. In an email from Alpha Collections dated 5 June 2013 (CK1) the agents attended 5 Cork Lane, Mt Morgan. The property was closed up and appeared abandoned with an overgrown yard; overflowing with mail and generally a neglectful appearance. The agents spoke to the neighbour at 3 Cork Lane who advised that Kelvin Jones did a “runner” five months previously. The Queensland Police were seeking to interview him regarding an assault on a minor. -- 2 of 7 -- 3 He had not returned to the house in the last five months. A mobile number was provided but this was disconnected. The agents also conducted various searches but were unable to progress the matter further. [4] On 26 June 2013 Ms Kelly telephoned a police officer in the Rockhampton district and asked him if he had knowledge of the Respondent. She was informed by the officer that the Respondent was known to Rockhampton police and they were presently looking for him. The last time he was located was in September 2012 in a random street check. The police officer informed Ms Kelly that they believed he had fled interstate. [5] Ms Kelly also made further inquiries with the Australian Electoral Commission. A printout from the electoral roll (CK2) revealed that Kelvin Clyde Jones resided at 5 Cork Lane, Mt Morgan. There were no other matches to “Kelvin Clyde Jones”. [6] Ms Kelly in an affidavit filed 24 July 2013 forwarded a letter to David Mills Lawyers in Rockhampton who had previously acted for the Respondent. David Mills Lawyers advised that they had had leave to withdraw from acting for him on 9 May 2012 and they understood a warrant was issued for the Respondent’s arrest. [7] There is an affidavit from David Ian Page, the process server, filed 18 July 2013 which confirms the report contained in Ms Kelly’s first affidavit. [8] As a consequence of this material, on 29 July 2013 the Applicants applied for an order for substituted service under r 116 of the UCPR. That order was made. It was ordered that service be effected by: (a) posting the originating application to the residential address at 5 Cork Lane, Mt Morgan; (b) advertising the hearing date of the application (7 August 2013 at 10 a.m.) in both The Courier-Mail and The Australian newspapers. [9] The affidavit of Ms Kelly filed 2 August 2013 annexes a copy of the public notices and a copy of the letter forwarding by Express Post the Originating Application. [10] There is proof it was delivered (CK10). In the circumstances the Respondent’s name was called three times and he failed to appear. I consider it appropriate to proceed notwithstanding his non-appearance. The facts [11] Frederic Acker is one of the registered proprietors together with Gerilyn Marie Polanski and Carmichael Consulting Pty Ltd (ACN 074 898 150) of a property located at 5 Cork Lane, Mt Morgan, Queensland, described as Lot 1 in Crown Plan MPH25536, County Raglan, Parish Calliungal, title reference 18799110. Exhibit FMA1 discloses that this property was registered on 20 September 2004. [12] The property was purchased by the Applicants from Glen Kable in or about August 2004 subject to an instalment contract in favour of the Respondent. [13] Mr Acker deposes that the terms of the instalment contract included: (a) A purchase price of $32,000; (b) An obligation to pay fortnightly instalments of $225 in reduction of the purchase price including interest; -- 3 of 7 -- 4 (c) An obligation by the Respondent to pay the rates on the property and excess water charges; (d) An obligation on the Respondent to insure the property against fire and other risks and to provide a copy of the insurance policy to the registered proprietors annually. [14] The original instalment contract has been lost (see [2] of the affidavit of Caitlyn Kelly filed 24 July 2013). Caitlyn Kelly in a further affidavit sworn 7 August 2013 says she is instructed by the Applicant Ms Polanski that the Applicants are of the belief that the instalment contract between the Applicants and the Respondent was a standard REIQ contract. [15] Exhibit CK11 is a copy of the special conditions of the contract. Importantly at para 10 it provides: “The buyer agrees that if the buyer fails to comply with any provision of this contract and the seller elects to terminate the contract, then, in additional (sic) to any other remedy available to the seller, the seller may retain all of the instalments paid or payable by the borrower up to the date of termination or the date which the buyer vacates the property (whichever is the later) as compensation to the seller for the buyer’s use and occupation of the property.” [16] I am satisfied on the evidence that this was a term of the contract. Mr Acker says that when the registered proprietors (the Applicants) purchased the property from Mr Kable a notice of purchase was given to the Respondent dated 18 October 2004. Exhibit FMA2 is a true copy of that letter. Exhibit FMA3 is a notice from Mr Kable to the Respondent advising of the applicant’s acquisition of the property. [17] Mr Acker deposes to the fact that the Respondent’s fortnightly payments became erratic and he failed to comply with the other terms of the instalment contract including the provision of insurance in the property and the payment of rates and water. [18] Over the period 14 December 2006 until August 2011 he was written to a number of times (Exhibit FMA4). The last instalment paid by the Respondent under the instalment contract was in respect of the fortnight ended 6 August 2010. No payments have been made since then. [19] On 7 October 2011 the applicant Mr Acker sent the Respondent a letter together with a notice of default under instalment contract pursuant to s 72 of the Property Law Act 1974 (Q) in respect of unpaid fortnightly instalments for the period 14 May 2008 until 28 September 2011 inclusive of unpaid rates and excess water. The notice stated that unless within the period of 30 days of service payment was tendered the contract could be determined. Exhibit FMA5 is a copy of the notice. [20] No payments were made by the Respondent after the notice. [21] On 14 November 2011 the Respondent was sent by the applicant Mr Acker a notice of termination of instalment contract by virtue of the failure to remedy the default (Exhibit FMA6). -- 4 of 7 -- 5 [22] On 2 December 2011 a notice to leave the property by 5 January 2012 was sent to the Respondent but he failed to do so (Exhibit FMA7). [23] On 21 January 2012 the applicant Mr Acker received notice from Brisbane Titles Registration of a caveat lodged against the property by the Respondent through his solicitors claiming an equitable interest as purchaser of an estate in fee simple (Exhibit FMA8). The caveat has expired and no action was taken by Mr Jones to pursue or enforce the caveat. [24] On 23 January 2012 an email was received from David Mills Lawyers (acting on behalf of the Respondent) claiming the major issue was that he was not sent new deposit slip books and the banks seemed to be under instructions not to accept general deposit slips. Neither statement was true (Exhibit FMA9). [25] No further communications have been received from the Respondent or David Mills Lawyers. [26] On 15 October 2012 Mr Acker gave instructions to his solicitors to write to the Respondent giving him notice that unless the caveat was removed and he vacate the property within 30 days proceedings would be issued. No response was received. It was four years and 10 months since the Respondent ceased making fortnightly payments or paid the rates and insurance relating to the property. [27] The Applicants therefore sought an order for possession of the property. [28] A Valuer-General’s search shows the unimproved value of the land is within the jurisdiction of the District Court (FMA10). FMA11 is a schedule of the amounts which remain due and owing. Submissions [29] The Applicants’ counsel has submitted that the general terms of the contract have been lost. It is submitted the right to terminate relied upon arises at common law where there has been a breach of a fundamental term of the contract or an intention not to be bound by the terms of the contract. The Applicants refer to Associate Newspapers v Bancks (1951) 83 CLR 322 at 337 and Shevill v Builders Licensing Board (1982) 56 ALJR 793 at 795. [30] It is submitted an examination of the conduct of the Respondent at the time of the issue of the notice of default under the Property Law Act 1974 (Q) shows: (a) 80 agreed payments of $225 unpaid ($18,000); (b) Unpaid rates of $2,008.50; (c) Unpaid excess water charges in the amount of $378.85. [31] It is submitted that there is ample evidence that the Respondent demonstrated an intention to no longer be bound by the contract. [32] It is pointed out that the contract is an instalment contract and therefore governed by the provisions of the Property Law Act. In particular s 72(1) of the Act provides: “(1) An instalment contract shall not be determinable or determined because of default on the part of the purchaser in payment of any instalment or sum of money (other than a deposit or any part of a deposit) due and payable under the -- 5 of 7 -- 6 contract until the expiration of a period of 30 days after service upon the purchaser of a notice in the approved form.” [33] It is submitted that there has been such a notice (Exhibit FMA5). [34] It is submitted that the notice did come to the attention of the Respondent and the notice substantially complied with the approved form. It is submitted the notice was valid in accordance with the applicable legislation and brought the instalment contract to an end. Determination [35] In my opinion the Respondent on the evidence has clearly evinced an intention to no longer be bound by the contract. He repudiated his obligations. [36] In those circumstances it is my opinion that the Applicants had the right to terminate the contract. [37] In my opinion there has been compliance with the relevant provisions of the Property Law Act 1974 (Qld). [38] In those circumstances I am prepared to declare that the contract has been validly terminated. [39] The next order sought relates to the right to possession. In my opinion the contract having been validly terminated means that in the circumstances the Applicants are entitled to possession of the land and premises. [40] Pursuant to s 68(1)(b)(xi) of the District Court Act 1968 (Qld) I order that the Applicants do recover possession of the land to the exclusion of the Respondent. [41] The third order sought is that there should be a declaration that the amounts paid under the terms of the contract are to be retained by the applicant as compensation for the use and occupation of the land by the Respondent. The Applicants rely on McDonald v Denny Lascelles Ltd (1933) 48 CLR 457. [42] Bearing in mind the secondary evidence of the terms of the contract to which I have referred earlier, it seems to me there was a contractual right in the Applicants to retain the monies already paid. [43] Alternatively, it is my opinion that the amounts paid by way of instalments represent a reasonable sum for the use and occupation of the property by the Respondent. In the circumstances I am prepared to make the order sought. [44] In the circumstances I make the following orders: (a) The court declares that the instalment contract between Glen Barry Kable and Kelvin Clyde Jones dated 14 January 2003 (the benefit of which was assigned to the Applicants in or about August 2004) for the sale of 5 Cork Lane Mt Morgan Queensland described as Lot 1 on Crown Plan MPH25536 County Raglan Parish Calliungal title reference 18799110 (“the land”) has been validly terminated by the Applicants. -- 6 of 7 -- 7 (b) The court declares the Applicants are entitled to possession of the land. (c) The Applicants do recover possession of the land to the exclusion of the Respondent. (d) It is declared the Applicants are entitled to retain all instalments paid under the instalment contract until the present date pursuant to the instalment contract or alternatively as compensation to the Applicants for the Respondent’s use and occupation of the land. (e) That the Respondent pay the Applicants’ costs of and incident to this application as agreed or assessed on the standard basis. -- 7 of 7 --