BSC Holdings Pty Ltd v Shearn [2005] QSC 189

State Reporting Bureau [a«)GSC IT<{ Queensland Government Department of Justice and Attorney-General Transcript of Proceedings Copyright in this transcript is vested in the Crown. Copies thereof must not be made or sold without the written authority of the Director, State Reporting Bureau. SUPREME COURT OF QUEENSLAND CIVIL JURISDICTION MUIR J No 7522 of 2004 BSC HOLDINGS PTY LTD ’ and ELAINE SHEARN BRISBANE . .DATE 16/06/2005 JUDGMENT REVISED COPIES ISSUED State Reporting Bureau Date: 6 July, 2005 Plaintiff Defendant WARNING: The publication of information or details likely to lead to the identification of persons in some proceedings is a criminal jffence. This is so particularly in relation to the identification of children who are involved in criminal proceedings or proceedings for heir protection under the Child Protection Act 1999, and complainants in criminal sexual offences, but is not limited to those :ategories. You may wish to seek legal advice before giving others access to the details of any person named in these proceedings. . 1 th Floor, The Law Courts, George Street, Brisbane, Q. 4000 Telephone: (07) 3247 4360 Fax: (07) 3247 5532 -- 1 of 11 -- 1 HIS HONOUR: The plaintiff, BSC Holdings Pty Ltd, sues for specific performance of a contract for the sale and purchase of land, dated 23 October 2002, entered into between it as purchaser and the defendant, Elaine Shearn, as vendor. The purchase price stated in the contract is $1,400,000. Under clause 4 the contract was subject to development approvals being obtained. Clause 4 (b) permitted the plaintiff to extend the time within which approvals was to be obtained by three months should it be unable to obtain the approvals by the specified date. That happened. Clause 4(d) permitted the plaintiff, by notice in writing, to waive the benefit of the clause . The plaintiff waived the benefit of the clause. After it did so, the parties agreed to vary the contract by: (a) extending the date for completion to 1 July 2004; (b) payment of "further deposit moneys of $48,000" on or before 28 November 2003; (c) payment of a further "balance of deposit" of $42,000 to be held by the plaintiff and "used to pay the seller's agent commission" ; (d) increasing the contract price to $1,454,000. Those terms were set out in a letter dated 18 November 2003 from the plaintiff to the defendant. The defendant notified her acceptance of the terms by signing a copy of the letter. A further variation of contract is recorded in a letter from the plaintiff to the defendant dated 2 July 2004, a copy of which was also signed by the defendant notifying her 16062005 D.l T13/HCL (Muir J) 10 20 30 40 50 2 JUDGEMENT 60 -- 2 of 11 -- 1 acceptance of the terms. That variation extended the date for, settlement to 8 January 2005, increased the contract price to $1,526,500, and provided for payment of "additional deposit" of $72,500 within five days of 2 July. The $72,500 was not paid within the time provided and on 14 July 2004 Mr James Woolford, the defendant's husband, delivered to the plaintiff a letter of that date which stated: "I refer to your letter dated 2 July 2004. To date I am not in receipt of the $72,500 as was a written agreement stated in your letter. I now wish to cancel the above contract, effective immediately. " The letter was signed by Mr Woolford, purportedly on behalf of the defendant. I should mention that irrespective of how other copies of that letter may or may not have been given on behalf of the defendant to the plaintiff, one copy of it was sent by facsimile transmission to the Queensland State Manager of the plaintiff, Mr Bermingham. There were some telephone conversations between Mr Bermingham and Mr Woolford, in consequence of which a meeting took place between them and Mr Cahill, a director of the plaintiff, at the Morayfield Sports Club. A discussion ensued, in consequence of which Mr Woolford agreed to provide the telephone number of the defendant, whom he said was at that time in New Zealand. There was a telephone conversation the next day between Mr Woolford and Mr Bermingham and Mr Bermingham arranged for Mr Woolford to meet him later that morning in the plaintiff's offices in Wickham Street, The 16062005 D .1 T13/HCL (Muir J) 10 20 30 40 50 3 JUDGEMENT 60 -- 3 of 11 -- Valley. A meeting between the three men then took place. In the course of it, Mr Woolford said words to the effect that he held a power of attorney from the defendant and was authorised to act on her behalf. He also indicated that he had documents with him to enable settlement of the transaction to take place. The upshot of the discussion at the meeting was that Mr Woolford signed a letter dated 14 July 2004 addressed to the plaintiff stating: "I hereby confirm that the notice of cancellation in my letter of 12th July 2004 is now withdrawn." The letter was signed by him on behalf of the defendant. On it, he wrote: "Per Elaine Shearn as per Enduring Power of Attorney." He also signed a letter from the plaintiff to the defendant setting out the terms of a variation to the contract on behalf of the defendant again writing "as per Enduring Power of Attorney" beside his signature. The variations effected by that letter were: (a) the new date for settlement was Friday, 6 August 2004; (b) the purchase price, described as "the new contract value", was $1,474,000; 16062005 D .1 T13/HCL (Muir J) 1 10 20 30 40 50 4 JUDGEMENT ' 60 -- 4 of 11 -- (c) a further deposit of $100,000 was payable on 14 July (receipt of the money being acknowledged in the letter) ; (d) it was agreed that $42,000 be paid on behalf of the defendant to the defendant's agents FDP Savills. The letter confirmed that deposits paid, "Include $58,000 being the initial $10,000 paid at the date of contract and a further $48,000'paid at 22 December 2003." On 2 August 2004, the defendant contacted Mr Bermingham by telephone. A meeting between them was arranged. It took place at about 9.30 a.m. on 3 August 2004 at the plaintiff's Wickham Street offices. Mr Jolly, a member of the firm of Biggs & Biggs Solicitors, was also present at the meeting but nothing much turns, I think, on what happened at it. The defendant said that she wanted to get to the bottom of what happened and to find out what their position was. Mr Jolly stated the plaintiff's position was that a variation of the contract was effected on 14 July and that completion was due on Friday 6 August. The defendant, I think it fair to say, disputed that there was any variation binding on her and intimated that she would get legal advice. The previous day, she had sent a letter to Mr Cahill in which she stated, inter alia: 16062005 D.l T13/HCL (Muir J) 1 10 20 30 40 50 5 JUDGEMENT 60 -- 5 of 11 -- 16062005 D.l T13/HCL (Muir J) "Jim had no rights to enter into or alter any agreements made by me and I did not give him any authority to act on my behalf. He has nothing to do with this property. The Power of Attorney he showed you is not properly witnessed, so is not legal. He tried to access my account in which he had deposited your cheque while I was away in New Zealand but was unable to do so. The money is still there and I intend to return it to you. .. My intention is to abide by our latest agreement dated 02-07-04.. . If you would like settlement to be brought forward to the 06-08-04 with balance of money being $1,526,500 less moneys already paid. Could you please inform me of your intentions by 5 p.m. on 03/08/04." In a letter of 3 August on the letterhead of Glen Alpine Properties Pty Ltd, Mr Bermingham asserted that the letter of 14 July 2004 recorded: "The current arrangements in relation to completion of the sale purchase." It contained an offer for a further variation which was not accepted. The defendant nominated the place and time for settlement and attended at settlement prepared to.tender the balance purchase price under the contract as varied by the agreement reached on 14 July 2004. The defendant did not attend on settlement. It is contended in the defence and counterclaim that Mr Woolford lacked authority to enter into the variation agreement on 14 July and to provide the letter of 14 July confirming cancellation of the letter of 12 July. There is something of an inconsistency in the defendant's position. The letter of 2 August 2004, it will be recalled, 1 10 20 30 40 50 6 JUDGEMENT 60 -- 6 of 11 -- 1 asserts that Mr Woolford had no authority to act on behalf of the defendant and that he had nothing to do with the property, yet the defendant relies on a letter dated 12 July 2004 signed by Mr Woolford on her behalf. The evidence reveals that Mr Woolford had a considerable amount to do with the property in that he exercised considerable influence concerning the decision-making of the defendant concerning the property and undoubtedly had her authority for some dealings at least. His evidence was, as I think I have already mentioned, that he held an Enduring Power of Attorney and that was consistent with the way in which he executed the documents . Mr Bermingham swears to having in fact seen such a document produced by Mr Woolford at the meeting of 14 July and to noticing that it had what appeared to be the defendant's signature on it. I note that in the defendant's letter of 2 August 2004, she did not assert that there was in fact no Power of Attorney held by Mr Woolford. The point she made was that it was not "properly witnessed", thereby accepting by inference that there was in fact a Power of Attorney in existence. I find that Mr Woolford did hold a Power of Attorney and that he acted pursuant to it. Furthermore, I am not persuaded that at any material time he lacked the authority of the defendant to act as he did. 16062005 D.l T13/HCL (Muir J) 10 20 30 40 50 7 JUDGEMENT 60 -- 7 of 11 -- If there be any doubt about the matter, and in my view there isn't, it seems to me that this would be an appropriate circumstance in which to apply the presumption of regularity: see Carpenter v Carpenter Grazing Co Pty Ltd (1987) 5 ACLC 506 at 514, and Popovic v Tanasijevic (No 5) (2000) 34 ACSR 1. The defendant faces the further problem that the contract became an instalment contract within the meaning of section 71 of the Property Law Act 1974 once the monies payable under it, whether deposit or otherwise, exceeded 10 per cent of the purchase price. See e.g., Emlen Pty Ltd v Cabbala Pty Ltd [1989] 1 QdR 620. That occurred on 2 July 2004. That being the case, by operation of section 72, the contract could not be determined because of default on the part of the defendant in payment of any instalment of or sum of money until the expiration of 30 days after service on the defendant of a notice in the approved form. No such notice was ever served, and therefore the contract necessarily remained on foot . It is further contended on behalf of the defendant that because of alcohol supplied to Mr Woolford by servants or agents of the plaintiff on 14 July 2005, Mr Woolford was at a special disadvantage in dealing with the plaintiff, not able to properly make judgments in his own interests or in the interests of the defendant and was taken unconscionable advantage of by the plaintiff. 16062005 D.l T13/HCL (Muir J) 8 JUDGEMENT 1 10 20 30 40 50 60 -- 8 of 11 -- 1 The evidence does not support any such allegation. In particular, it does not support the existence of any lack of mental capacity of Mr Woolford at relevant times. I see no reason why in this regard I should not accept the evidence of the plaintiff's witnesses, including that of Mary Trim, which evidence was unchallenged. I accept their evidence generally. In my view Mr Woolford's recollection was substantially unreliable . The evidence reveals that the plaintiff was ready, willing and able to settle at material times, and, accordingly, I find that the contract, as varied from time to time, remains on foot and that the plaintiff is entitled to specific performance. I declare that the contract described in paragraph A of the claim, as varied on or about 18 November 2003, 2 July 2004, and 14 July 2004 remains on foot and that such contract ought be specifically performed and carried into execution. I order that: (1) the date for completion of the said contract be 14 July 2005; (2) that the transfer documents be produced by the defendant to the plaintiff's solicitor for stamping no later than five business days prior to 14 July 2005, and that such documents, unless otherwise agreed between the plaintiff and defendant, be 16062005 D.l T13/HCL (Muir J) 10 20 30 40 50 9 JUDGEMENT 60 -- 9 of 11 -- returned to the defendant after stamping; (3) in exchange for any instrument of title to the subject land required to register its transfer to the plaintiff and transfer documents capable of immediate registration, the plaintiff pay to the defendant on completion $1,274,000 (subject to any adjustments required under the said contract) ; (4) the defendant pay the plaintiff's costs of and incidental to the proceedings (including reserved costs, if any) to be assessed on the standard basis; (5) that there be liberty to either party to apply on two days' notice in writing to the other. MR WILSON: Could I be heard on the question of costs, your Honour . 16062005 D.l T13/HCL (Muir J) HIS HONOUR: I add to the costs order except that the costs of and incidental to today's hearing be assessed on an indemnity basis, such costs being counsel's fees in respect of today's hearing and the costs of the plaintiff's solicitors in respect of today's hearing. I make that order having regard to the three offers to settle, including the one made on 16 May 2005 on terms more advantageous to the defendants than the order made here. 1 10 20 30 40 50 10 JUDGEMENT 60 -- 10 of 11 -- It seems to me that, at least by the time the defendant received and perused the witness statements, it should have been abundantly plain, if it had not been apparent earlier, that the case had little merit 'and was unlikely to succeed. In order to conform with those reasons, on reflection, the only costs I will order be paid on an indemnity basis are the costs of and incidental to today's hearing. The formal order will be amended accordingly. 16062005 D.l T13/HCL (Muir J) 11 JUDGEMENT -- 11 of 11 --