- Unreported Judgment
SUPREME COURT OF QUEENSLAND
No 8084 of 2002
MARTIN JAMES OLD
KATHERINE EMMA FEROS AND SIMON JOHN FEROS
HER HONOUR: This application for removal of a caveat requires the resolution of a factual issue, whether there was an oral agreement made by or on behalf of the vendor, who is the applicant, to extend the date in respect of finance under clause 3.2 of the terms of contract.
The respondents are the purchasers under the contract dated 26 July 2002 with the applicant of the house property situated at 149 Hillside Terrace, St Lucia. The finance date for the purpose of clause 3.2 of the contract was 9 August 2002.
On 7 August 2002 the applicant became aware that the respondents were either seeking or intending to seek an extension of the finance date. It is common ground that on that day the applicant telephoned the respondents' solicitor's office and spoke to a conveyancing secretary, Ms Lauren Eadie. The applicant had not yet appointed solicitors to act for him and therefore made the telephone call himself because he wanted an explanation for why the respondents might require additional time for finance.
The applicant stated that at the outset of this conversation with Ms Eadie, who, it appears, answered the telephone at the respondents' solicitors office, he said “I believe there's been a request for an additional four days for finance.”
Although Ms Eadie does not recall or refer in her evidence to the applicant opening the conversation in such specific terms, she does recall the particular conversation and that the applicant was inquiring about the reason for an extension for the finance being sought by the respondents. Ms Eadie's evidence is found in the statutory declaration which she made on 23 August 2002, which is Exhibit CIN21 to the affidavit of Craig Ian Newport that is shown on the file as having been filed on 19 September 2002, and in the oral evidence which she gave on the hearing of this application.
Mr Anderson of counsel, on behalf of the respondents, concedes that the respondents' case turns upon the evidence of Ms Eadie and that, to be successful, she must be accepted to the exclusion of the applicant. Although I have no doubt that Ms Eadie gained some sort of impression from the conversation that she had with the applicant that he was agreeing to the idea of an extension to the finance date, she conceded in her oral evidence that no date to which the extension would operate was agreed.
Mr Anderson submitted that that was not an impediment to my concluding that there was an agreement between Ms Eadie and the applicant because of the fact that the applicant approached the conversation with an understanding that the request was for an additional four days for finance and that, on that basis, if the applicant agreed to the extension for finance, it must be taken to have been an agreement to the additional four days.
I have difficulty with this argument. Even though a paralegal, Ms Eadie appears to have been experienced in undertaking conveyancing. I have no doubt from the manner in which she gave her oral evidence and the content of it that she would not reach an agreement on behalf of her client without instructions as to what period of time was being sought by her clients for the extension. I am not satisfied that Ms Eadie was aware at the time of her conversation with the applicant on 7 August 2002 of what period of time the respondents wished to seek by way of an extension of the finance date. There is no indication in Ms Eadie's evidence that she accepted that any period of time raised by the applicant on his side of the conversation accorded with what her clients would, in fact, require.
Ms Eadie did not say in her oral evidence or in her statutory declaration that she had instructions from the respondents to seek an extension to a particular date. In passing in paragraph 8 of the statutory declaration she does refer to stressing to the applicant that “it was only an extension until Wednesday” in the context of assuring the applicant that everything would then be done in the power of the respondents to settle the matter on the settlement date stipulated in the contract. Ms Eadie did not explain where the reference to Wednesday came from and, in fact, it is apparent from the balance of her evidence that she thought that it was only two extra days that may have been sought and her ultimate concession was that the date needed to be clarified. I therefore reject the submission made on behalf of the respondents that an agreement can be found as to the date to which the finance was to be extended by the applicant having agreed to the time period of four days which was raised by him at the outset of the conversation with Ms Eadie.
I have inferred from Ms Eadie's evidence that, by the end of the conversation that took place between her and the applicant on 7 August 2002, the applicant was agreeable to considering the extension, but that no concluded agreement for the extension was reached between Ms Eadie and the applicant about what would be the extended finance date. Time is of the essence under the contract between the applicant and the respondents. There could be no agreement between them as to an extension of the finance date without the particular period of time for which the extension was to operate being agreed between them.
The conclusion that I have reached that there was no agreement as to the particular date to which the finance would be extended under the contract reached between Ms Eadie and the applicant is supported by the evidence of the applicant himself about the conversation that took place between him and Ms Eadie and also by the fact that the first contact on 7 August 2002 after the applicant had given instructions to his solicitors between Ms Vicky Rasmussen, the conveyancing paralegal employed by the applicant's solicitors, Marrinans, and Ms Eadie was to ascertain whether the respondents' bank could accommodate an extension to 13 August 2002, rather than 14 August 2002, which was a public holiday in Brisbane.
Ms Eadie's account of the conversation with Ms Rasmussen on 7 August 2002, which is set out in the statutory declaration of Ms Eadie, is consistent with the date not having been the subject of specific agreement, but to be the subject of further negotiations. It is also supported by the terms of the letter sent by facsimile on 9 August 2002 by the respondents' solicitors to the applicant's solicitors. The second and third paragraphs of that letter state:
“As per our previous telephone conversation, we wish to request an extension on finance approval to 14 August 2002. We also note that a $10,000 reduction on the purchase price has been agreed to, due to a less then (sic) satisfactory building inspection.”
Although Ms Eadie endeavoured to explain that she did not refer to the agreement for extension in this letter because she described the applicant's agreement with her as “a verbal” and she did not rely on “verbals” in conveyancing, it is consistent with there being no agreement about the date to which an extension for finance might be granted, when the agreement which the applicant acknowledges that he had conveyed to the agent about the reduction in purchase price is referred to in the letter of 9 August 2002 in unambiguous terms as something having been “agreed to”.
The fact that there was no concluded agreement between Ms Eadie and the applicant is also supported by how their conversation on 7 August 2002 ended. Ms Eadie was aware from what the applicant had told her at the commencement of the conversation that Marrinans were going to be acting for the applicant. She was conscious that it was not appropriate that she deal directly with the applicant about matters under the contract when he had solicitors acting for him. She stated in paragraph 9 of her statutory declaration, “I said that the extension will need to be in writing for it to be confirmed and that I will send correspondence to them to clarify this request.” The reference to “them” in that sentence is to the applicant's solicitors. That accords with how the applicant recalls the conversation ending, with him telling Ms Eadie to the effect, “Marrinans will be handling this from here.”
In paragraph 9 of Ms Eadie's statutory declaration she refers to the applicant stating towards the end of the conversation something along the lines of, “Yes, well, all right, then.” She then states after that sentence that, “I took that statement as meaning, yes, he was agreeing to the extension.” The preceding paragraphs of the statutory declaration set out in fairly full terms what Ms Eadie recalls of that conversation. She was at pains to explain to the applicant, which the applicant acknowledged in his evidence, that all that was being sought was an extension for the date for finance approval and that there was no request for an extension to the settlement date.
Ms Eadie also explained the process of the respondent's finance approval and that it had reached the stage where all that was remaining was a satisfactory valuation and she assured the applicant that it meant that the other aspects of a finance approval had been satisfactorily complied with by the respondents.
In paragraph 8 of the statutory declaration she finishes off with, “I continued to stress to him that it was only an extension until Wednesday and that we would be doing everything in our power to settle this matter on the settlement date.” Ms Eadie conceded in her oral evidence that there was no other conversation of substance before the applicant said the words, “Yes, well, all right, then,” which she took to mean that he was agreeing to the extension.
It is apparent on Ms Eadie's own evidence that those words were not said directly in response to a request for an extension and I do not consider that Ms Eadie's evidence can be put as highly as showing that the words of the applicant “Yes, well, all right, then” were responsive to a request for an extension. I consider that she has drawn a conclusion about how the conversation went with the applicant which allowed her to state that she took the statement as meaning that he was agreeing to an extension, when it was clearly not a simple matter of a request being responded to in an affirmative way.
The respondents rely on the diary note made by Ms Eadie on 7 August 2002 as a contemporaneous record of her conversation with the applicant. Ms Eadie put the conversation with the applicant as lasting for somewhere up to 15 minutes, although the applicant thought that the conversation may have been somewhere around three minutes. It clearly was a significant conversation. The short memorandum dated 7 August 2002 which contains inaccuracies, which Ms Eadie acknowledged in cross-examination, can in no way be taken as an attempt to fully record the import of the conversation with the applicant. I considered that Ms Eadie expanded greatly on this conversation in her evidence orally and the statutory declaration that was made on 23 August 2002 (which was made while the events were relatively fresh in Ms Eadie's mind) and that it would be dangerous to treat the memorandum of 7 August 2002 as anything but a quick note of a conversation that was not intended to record accurately what was the legal effect of that conversation.
I have already dealt with the conversation between Ms Rasmussen and Ms Eadie on 7 August 2002. I accept that Ms Eadie said something in the course of that conversation to Ms Rasmussen that she thought that the applicant was okay with the extension, but I find that was just Ms Eadie conveying the impression that she had formed after her conversation with the applicant and it was in no way intended to be part of an offer to make an agreement in respect of an extension for Ms Rasmussen to accept. I find in any case, after considering Ms Rasmussen's evidence, that there was no agreement on her part to any extension.
After the facsimile on 9 August 2002 was sent there appears to have been no further communication by either firm of solicitors to the other on that day to conclude an agreement for an extension of the finance date. There was a conversation emanating from Marrinans to Toogoods after the receipt of the facsimile. Ms Rasmussen telephoned Ms Eadie about the fact that the facsimile referred to 14 August 2002 when the date that had been referred to by Ms Eadie in her conversation with Ms Rasmussen on 7 August 2002 was, in fact, 13 August 2002. Both Ms Rasmussen and Ms Eadie gave consistent evidence that Ms Eadie responded that the reference to 14 was a typographical error and meant to be a request to extend to 13 August 2002.
The finance date of 9 August 2002 therefore passed with no extension being made by the parties to the finance date. The applicant was therefore entitled to terminate the contract in the manner in which he did on 12 August 2002 to enable him to enter into another contract on that date to sell the property for an additional $30,000 which was not conditional on finance.
It therefore follows that the respondents do not have an interest which supports the caveat lodged. I therefore order that caveat number 705877547 be removed.
HER HONOUR: On the question of costs, the respondents submitted it was not appropriate that the applicant receive the costs of the hearing on 11 September 2002. The first return date of this application was 11 September 2002. This application was filed after the respondents had filed a claim and statement of claim in proceeding 7912 of 2002 seeking specific performance of the contract. By letter dated 4 September 2002 after the applicant had served the respondents with the originating application in this proceeding, the respondents' solicitors requested that the applicant's solicitors take instructions with, respect to consenting to orders vacating the date of 11 September 2002 and proceeding to defend the respondent's claim and statement of claim. The respondents were prepared to conduct their proceeding expeditiously.
The claim and statement of claim was not supported by any sworn material. It was not until the return date of 11 September 2002 that the respondents sought to read and file the affidavit of their solicitor, Mr Newport, which exhibited statutory declarations from relevant witnesses, including Ms Eadie, that went to the very issue that had to be resolved on this removal of caveat application. Because of the late disclosure of that material I can understand why the applicant was loath to vacate the date of 11 September 2002.
The applicant obviously wishes to pursue the sale of the property unimpeded by the respondents' caveat. The fact that the respondents had lodged a caveat did not necessarily mean they would follow through with resisting the application to remove the caveat. When a party lodges a caveat to prevent the sale of property, they embark on a course of action over which they do not necessarily have control. It was not unreasonable for the applicant to wish to continue with his application that was listed for 11 September 2002 in order to pursue the removal of the caveat. I therefore consider that even though the hearing of the application required enough time to enable the oral evidence to be heard, it was not unreasonable for the matter to remain listed on 11 September 2002.
I therefore order that the respondents pay the applicant's costs of the application, including reserved costs, to be assessed.
- Published Case Name:
Martin James Old v Katherine Emma Feros and Simon John Feros
- Shortened Case Name:
Old v Feros
 QSC 325
10 Oct 2002
No Litigation History