Francis v Amos[1998] QDC 226

BETWEEN:

AND:

REASONS FOR JUDGMENT - WILSON A.D.C.J.

Delivered the 31 day of August 1998

The plaintiff, Ian Thomas Francis, sues the defendant, Edward Amos, for specific performance of a contract relating to the sale and purchase of a parcel of land at Deagon described as Lot 161 on Registered Plan No. 29258, County of Stanley, Parish of Nundah; alternatively, the plaintiff claims damages for alleged breach by the defendant; and/or relief from forfeiture; and/or damages in lieu of specific performance with interest; and, a lien over the subject land in respect of damages. The defendant denies breach and seeks a declaration that he effectively rescinded the contract with cause, and was entitled to forfeit the deposit of $8,500. No evidence was adduced in respect of other counterclaims pleaded for the defendant - damages for breach of contract and/or in respect of a caveat over the land lodged on behalf of the plaintiff - and at trial his counsel advised those claims were abandoned.

The defendant was at all material times a licensed real estate agent. In mid-1997 he advertised the Deagon property for sale in the Courier Mail and the plaintiff, a school teacher, responded to that advertisement and had several telephone conversations with the defendant. On 11 July 1997, the defendant posted a letter to the plaintiff (Exhibit 3) enclosing, inter alia, a contract of sale in duplicate and a land tax clearance letter for the subject property up to 30 June 1998. The contract showed the defendant as the stakeholder for the deposit of $8,500 and recorded that he was acting on his own behalf as vendor; that his address was 830 Sandgate Road, Clayfield; and, that his telephone no was 3262 2848. The defendant also inserted certain special conditions under which the purchaser acknowledged the contract was not subject to finance (Clause 3) and, relevantly:

1. “2.
   The purchaser acknowledges receipt of a copy of a land tax clearance for the subject property to the 30 June 1998 and that paragraphs 2.5(4) and (5) of the terms of contract do not apply.

...

1. 4.
   The purchaser acknowledges that notwithstanding anything to the contrary and the terms of contract the completion of this contact shall take place at the office of the vendor at 830 Sandgate Road, Clayfield at 4.30 p.m. on the Eighth day of August 1997”.

Attached to and incorporated in the contract was a standard pro-forma called “Terms of Contract”. The reference to particular paragraphs in Special Condition No.2 touched on part of those printed terms: para.2.5(4) which related to obligations on both parties to adjust land tax and 2.5(5) which read:

At the time the defendant advertised the land he was indebted to the Queensland Commissioner of Land Tax in an amount of over $50,000. His evidence was that on 9 July 1997 he paid the outstanding land tax relating, in particular, to the subject property and another parcel he owned at New Farm. He said:

The plaintiff signed and returned the contract to the defendant by a letter dated 23 July 1997, enclosing a cheque for the deposit of $8,500 and asking the defendant to sign the contract and post it to his solicitors, Lang Hemming & Hall. It was not until 30 July 1997, however, that the defendant sent the contract to the solicitors by a letter which read:

The letter was sent by registered mail.

At Lang Hemming & Hall carriage of the matter was given to an experienced conveyancing clerk, Mrs Margaret Genninges. She received the defendant's letter 30 July the following day and wrote and initialled a note on the bottom of the original reading “No receipt attached”. On 1 August she caused a letter to be sent to the defendant advising the receipt for the deposit had not been enclosed, and submitting transfer documents being a Memorandum of Transfer, a Form 24, and an “undertaking” for execution by him. The letter asked that the documents be returned for “pre-settlement stamping”.

On the morning of 5 August 1997, the defendant sent a letter (Exhibit 7) by facsimile to Lang Hemming & Hall referring to their letter 1 August. It asserted that the receipt for the deposit was “definitely enclosed” in his earlier letter 30 July; and, said that he had signed the transfer and if the purchaser's solicitors wished to stamp it before settlement “then please telephone me today before 3 p.m. on 018 198 225 as I will be in the inner city area and I will take the transfer with me in case you want me to produce it at the office of the State Revenue”. Mrs Genninges and the defendant agreed that later that morning, in response to the facsimile, she rang him on the specified telephone number (a mobile telephone) and as a consequence he agreed to send her a photocopy of the signed transfer. Otherwise there is significant disagreement about two aspects of this telephone conversation: firstly, Mrs Genninges asserts the defendant said he would transmit the photocopy transfer by fax, but he denies this; and, secondly and more importantly, the defendant claims he told her he would be paying all outstanding rates, and rates for the current period before the settlement date in cash, and would produce a receipt at settlement and “...I offered then and there to work out the current adjustment of rates and she said she couldn't do it then because she hadn't got her search back from the Council”. Mrs Genninges said the conversation involved no mention whatsoever of rates, a rates adjustment, or any intention by the defendant to pay the rates before settlement.

Exhibit 7 was certainly sent from Clayfield Post Office by facsimile around 9.12 a.m. on 5 August 1997. It is the defendant's case, however, that he sent two further letters on that day to the plaintiff's solicitors: the first (Exhibit 9) was allegedly sent by ordinary post through a mail box near Oriel Park, Clayfield (in the vicinity of the defendant's home) and enclosed a photocopy of the transfer. It read, in part:

Later in the day, the defendant says, he realised the adjustment was wrong and prepared another letter (Exhibit 33) which he took with him on the occasion of a visit to his solicitors, Keller Nall & Brown, that afternoon, and asked Mr Collinson of that firm to fax for him. When his solicitors refused, he went to a Post Office in Toowong Shopping Village and sent Exhibit 33, he says, by security post. Exhibit 33 reads:

Mrs Genninges says she never received this letter, in any form or by any means. It never reached her file. Her principal, a partner in Lang Hemming & Hall, Mr McIvor, gave evidence he first learned of it when it was exhibited to an affidavit sworn by the defendant on 15 September 1997 in summary proceedings brought by the plaintiff. Thereafter, he directed a search be conducted in the office for the letter. Lang Hemming & Hall's mail clerk, Ms Palmer, conducted that search, but did not find it. The search was fairly desultory, but it was of course being carried out some five or six weeks after Exhibit 33 was allegedly sent.

On 5 August 1997, Lang Hemming & Hall received, from the Office of State Revenue and in response to their application for a land tax clearance, a form called a “Declaration of Agent” under the Land Tax Act 1915 addressed to the plaintiff (although his names were juxtaposed) appointing him its agent to withhold, and collect from the settlement monies, an amount of $50,168.33 being outstanding land tax for which the defendant was liable. On 6 August Mrs Genninges says she telephoned Brisbane City Council and obtained information about outstanding rates, which she recorded as $1,365.30. On that day she sent a letter by express post to the defendant's address in the contract (Exhibit 10) which enclosed a copy of the land tax “Declaration of Agent”; noted the plaintiff was therefore compelled to pay $50,168.33 of the purchase monies direct to the Office of State Revenue; and, recorded that outstanding rates and fire levy (including arrears in interest) to 30 September 1997 were $1,365.30 so at settlement, the plaintiff would pay the Council $1,365.30, the Office of State Revenue the abovementioned sum of land tax, and $25,111.16 to the defendant. The rates adjustment was said to be $144.79.

The defendant's case is that this letter was, as usual, put in his PO box at Clayfield Post Office but he did not collect nor see it until Monday, 11 August i.e. after the time for settlement. He said he did go to the post office on 6 August, did not think he went on the 7th and certainly not on 8th when he was at the Gold Coast, before retailing to Brisbane late in the afternoon for that settlement.

Mr Mounter, manager of the Clayfield Post Office at the relevant time, gave evidence he actually saw the defendant in the post office two or three times a week. The defendant himself said his principal source of revenue was rental income from properties he owned and, generally, he had the tenants pay rent by money orders. Mr Mounter produced, on subpoena, two money orders payable to the defendant and signed for by him on 7 August. Mr Mounter also gave evidence that express post is a postal service guaranteeing delivery by the following day, but generally, in feet, it reaches the addressee the following morning. Exhibit 28 shows the plaintiff's solicitors' letter 6 August did reach the Clayfield Post Office on 7 August and, most likely, in the morning.

Whether or not the defendant received the plaintiff's solicitors' letter 6 August, there was no communication between that date and around 4.30 p.m. on Friday, 8 August when Mrs Genninges took three bank cheques, in the sums set out above, to the defendant's Clayfield office. In the interim she says she tried on numerous occasions on 7 and 8 August to telephone the defendant at the telephone number shown on the contract (his home telephone) and another number she found in the then current Brisbane White Pages for “Amos Real Estate Pty Ltd”, 3262 4322 (Exhibit 18). Neither telephone responded. She did not attempt to call the mobile telephone number she had used on 5 August.

The defendant says that in accordance with the promise he had allegedly made to Mrs Genninges in their telephone conversation on 5 August, and in writing in Exhibit 33, he went to the Brisbane City Council on the afternoon of Thursday, 7 August, and paid outstanding rates, including arrears and interest in the total amount of $1,368.30 (Exhibit 35). Then, he travelled to the Gold Coast, remaining there until the afternoon of Friday, 8 August, returning to Brisbane by car shortly before the allotted time for settlement, 4.30 p.m.

Mrs Genninges and the defendant present strikingly different versions of what happened when she arrived at his office shortly after 4.30 p.m. First, she says she arrived around 4.31 p.m. by taxi, while the defendant asserts she did not appear until 4.40 p.m. Mrs Genninges' evidence was set out in the diary note she prepared at her home that evening but she gave evidence about these events before seeing that note in the witness box. She said on arrival she told him she had tried at least six times to reach him to arrange a new settlement time, but he replied that he had “got up out of a sick bed down the coast to come up for the settlement”. She asked if he had received her letter of 6 August sent by Express Post, and he said he had not. She told him of the results of her searches and as a consequence she had three cheques for settlement. He said he expected to receive $76,644.79 and he had that amount written on a small piece of paper. He said he had the Deed and signed transfers but wanted one cheque for that amount. She showed him her searches but he said they were incorrect. He said he had a “special arrangement” with the Land Tax Office in respect of payment. He said he would not settle on those amounts. She asked for an extension to Monday or if she could ring her office to get instructions but he told her no telephone was available. He said again that unless there was one cheque no settlement could take place.

The defendant's version is that Mrs Genninges produced three cheques to him and he said “What's this about?” She told him of the payments due to the Land Tax Department and the Brisbane City Council and showed him correspondence and searches. In respect of the “Declaration of Agent” he says he remarked “Well it's not signed by anybody and it's not addressed to anybody and it seems to have an incorrect name on it”. He produced the Brisbane City Council rates receipt to her and allegedly told her he had paid those rates “like I said I would in a previous conversation on 5 August”. He claims she responded to the effect that because he had paid the rates, the cheque to the BCC should be payable to him and she “wanted an extension to readjust her cheques”. He refused. He said that at the time he had in his possession the original Certificate of Title and executed Memorandum of Transfer.

A significant point of contention concerns his claim that Mrs Genninges also refused to settle on another ground altogether: namely, that he would not sign and deliver to her the form of undertaking she had enclosed in her letter to him 1 August. That document is part of Exhibit 6. Under it, Mr Amos would have undertaken to pay any land tax assessment and to indemnify the purchaser against “all lawful claims by the Commissioner for Land Tax”, etc. Mrs Genninges' evidence is that the defendant had told her in the telephone conversation on 5 August he would not sign this document and she had not pressed him, it being standard conveyancing practice in her office to tender such a document to vendors, but not to press for its execution if that was refused.

On 11 August, Mr McIvor telephoned the defendant. The defendant's evidence was that McIvor wanted to try to complete the settlement, but he told McIvor it should have settled the previous Friday and the contract was “cancelled and I would put the matter in the hands of my solicitors”.

The defendant says he told McIvor his reason for refusing to settle was “...there was a cheque payable to the Brisbane City Council for nearly 51,400 which should have been payable to me” (Transcript, p.115, lines 39-41).

On 11 August, Mr McIvor wrote to the defendant saying the plaintiff remained willing and able to effect settlement in accordance with terms set out in its letter 6 August 1997, and threatening that, unless the defendant confirmed in writing no later than 4 p.m. on 12 August he would settle, the plaintiff would bring proceedings for specific performance. The defendant replied himself by facsimile letter 12 August 1997 asserting he was not obliged to complete settlement because the purchase monies were short by $1,365.30 i.e. the amount of the cheque payable to the Council. On the same date the defendant's solicitors, Keller Nall & Brown wrote advising they had instructions and reiterating the settlement monies were short by the amount of the rates adjustment cheque to the Council; and, asserting that on 5 August the defendant had written informing the plaintiff's solicitors of the precise adjustments. No mention was made of the land tax adjustment or the validity, or otherwise, of the “Declaration of Agent” issued by the Office of State Revenue.

The trial was conducted over two days, 13 & 14 July 1998. Mrs Genninges, Mr McIvor, the mail clerk, Ms Palmer, the plaintiff and the post office manager, Mr Mounter gave evidence in the plaintiff's case. The defendant gave evidence, as did his solicitor, Mr Collinson, who said that on the afternoon of 5 August 1997 the defendant came to his office on other business and asked to use his facsimile. The defendant showed him a letter which was, he said, Exhibit 33, but he refused to allow the defendant to use the facsimile because he was not acting for the defendant in the sale and he suggested the defendant send the letter by fax or express courier and should go to Toowong Village Post Office, about 300 metres away from Mr Collinson's office in Toowong.

After trial, counsel for both parties delivered written submissions. The defendant's submissions are admitted and marked Exhibit 38, and the plaintiff's submissions Exhibit 39.

Both at trial and in written submissions substantial attacks were made upon the credit of the plaintiff's principal witness, Mrs Genninges, and the defendant. The attack upon the defendant involved assertions that he never sent Exhibit 33, but manufactured it at some later time; that notwithstanding his denial, he did receive the plaintiff's solicitors' letter 6 August 1997 on the morning of 7 August; that upon receipt, he resolved to thwart the conveyance by paying the arrears of rates, and rates for the current period in full and not tell the plaintiff's solicitors of those payments and, that he then unconscionably put that scheme into operation and used it as a basis for refusing to settle on 8 August.

Mrs Genninges impressed me as an honest and careful witness. She made a diary note of the aborted settlement on the same evening (Exhibit 22) which, I find, contains a true record of the events at the defendant's office that afternoon. Her evidence, before she looked at the diary note in the witness box, was generally consistent with it. When she was unsure of a matter, she said so: initially, she could not recall whether or not the defendant had actually said anything, at the time of settlement, to the effect that he had actually paid the rates. Later, after checking her affidavit overnight, she asserted positively that he had not. It was not surprising she was prepared to rely upon the affidavit, which was made a few weeks after the relevant events.

I did not find Mr Amos an impressive witness. There are a number of matters in respect of which his evidence is contradicted by, or does not sit plausibly and logically with, other oral or documentary evidence. Some are relatively minor, but others are of major import and, in total, they raise grave doubts about his credit.

First, on 30 July 1997 he said he sent the plaintiff's solicitors a receipt for the plaintiff's deposit of $8,500 under cover of his letter of that date. That letter, Exhibit 5, has no holes or marks indicating the receipt was ever attached to it, and Mrs Genninges made a note about the absence of the receipt on the letter when she received it on 31 July. Although part of the evidence concerned the possibility that documents (in particular, Exhibit 33) had been lost in the plaintiff's solicitors' office it is improbable, having regard to the evidence of Mr McIvor, Ms Palmer and Mrs Genninges about the system of dealing with mail in that office and Mrs Genninges' note and the absence of marks on the letter, that the receipt was included with Exhibit 5, and I find that it was not.

The second point concerns Exhibit 33 - i.e. one of the three letters the defendant claims he sent, by different methods, to the plaintiff's solicitors on 5 August. It is clear that one letter, Exhibit 7, was sent by facsimile from Clayfield Post Office at 9.08 a.m. on that day. I find that Mrs Genninges received that facsimile at 9.41 a.m. and telephoned the defendant on his mobile telephone with a view to obtaining, at least, a copy of the transfer so that she could ensure it had been properly executed. She says that after speaking to the defendant, and in light of his refusal to actually return the original transfer, and after conferring with one of her employers, Mr Hemming, she asked the defendant to provide her with a copy and he agreed, and told her he would send it by facsimile. The defendant's evidence was that he posted a photocopy of the transfer to the plaintiff's solicitors under cover of Exhibit 9, which is mother letter signed by him on 5 August; and, he said, he effected that posting at a box near his home in Clayfield. That letter stated the purchaser's proportion of the current assessment of Council rates was $229.48, and that the defendant would require a bank cheque for the balance purchase price “payable to me on settlement”. Later that day, the defendant says, he realised the rates adjustment was wrong and he typed up Exhibit 33 and took it with him to his solicitor's office, with a view to sending it by facsimile. He showed it to his solicitor, Mr Collinson, but upon the solicitor's refusal to allow him to use his facsimile machine, he went to Toowong Post Office and sent it by security post at 3.14 p.m. His explanation for not sending Exhibit 33 from Toowong Post Office by facsimile was that security post cost less - $3, or $4. A number of aspects of the defendant's evidence about these letters are troubling: the inexplicable use of three different methods of written communication on 5 August - facsimile, ordinary post, and security post; the defendant's contention that some urgency attached to Exhibit 33 so that the letter might have been sent, more logically, by facsimile or express post, or the information in it communicated by telephone; and, the alleged use of security post for Exhibit 33 when it contained no important enclosures. Against that, Exhibit 9, containing the copy transfer, might more logically have been sent by security post.

There are other unusual aspects to the defendant's claims about his dealings with Exhibit 33. He said he typed it up at his home but chose not to send it by facsimile from his office (although he used this method on 12 August, to forward Exhibit 14) or from the nearby Clayfield Post Office, which he had used that very morning. Instead he says he travelled across to Toowong and asked his solicitor for the use of his facsimile machine. One explanation is that, on Mrs Genninges' evidence, the defendant promised to send her the copy transfer by facsimile that morning. He denied this, but I accept her version. It is not implausible that what the defendant in fact took with him when he went to see his solicitor on the afternoon of 5 August was not Exhibit 33, but Exhibit 9. If the defendant was in fact carrying Exhibit 9, enclosing the copy transfer, his use of security post from Toowong Post Office shortly afterwards makes more sense.

It is the plaintiff's argument that Exhibit 33 was created sometime after 5 August. There is telling evidence this is, in truth, what occurred: Exhibit 33 refers to “the buyer's proportion of the current rate assessment” at $144.79 - not $229.48, the figure mentioned by the defendant in Exhibit 9, and, on any view, wrong; but, Exhibit 33 also purports to enclose a copy of a rates assessment and says:

The defendant's evidence was that the document allegedly enclosed with Exhibit 33 was a copy of the defendant's rates account, Exhibit 35, which does not show a figure of $1,365.30 but, rather, $1,368.30. Mrs Genninges' letter of 6 August 1997 to the defendant containing settlement figures (Exhibit 10) showed the outstanding rates at the first figure, $1,365.30. Mrs Genninges said she obtained this figure from the Brisbane City Council. The defendant's evidence was that he had not contacted the Council, but calculated the rates adjustment from his own rates account, Exhibit 35. He also said, of course, that he had never received Exhibit 10. It is indeed extraordinary, then, that Exhibit 33 reflects both the accuracy and the inaccuracy of Exhibit 10 - i.e. the correct rates adjustment, but an incorrect amount payable to the Brisbane City Council. It would be an extraordinary coincidence if, in truth, the defendant had not received Exhibit 10, he would yet make precisely the same error about outstanding rates as Mrs Genninges, but adopt the same adjustment figure, particularly if, as the defendant claims, he had Exhibit 35, showing the correct figure for outstanding rates, in front of him when Exhibit 33 was allegedly prepared. It was suggested on the defendant's behalf, but not in evidence by the defendant himself, that the explanation lies with Mrs Genninges - namely, that she must have had Exhibit 33 (which, it will be remembered, she says she never received) with her when she made the calculations set out in her letter, Exhibit 10. But Exhibit 33 also, allegedly, contained a copy of the rates notice and it might be expected that, with the notice in front of her, Mrs Genninges would have got the adjustment right.

Other evidence touches upon the question whether the defendant sent Exhibit 33 on 5 August, or received Exhibit 10 on 7 August. He said that he regularly attended Clayfield Post Office at about 8 a.m. to collect money orders sent to him by his various tenants for rent, and cashed them at the post office. He claimed however that he did not receive Exhibit 10 until the following Monday, 11 August. He believed he had collected his mail from his post box on 6 August, but was uncertain whether or not he had been to the post office on the morning of 7 August before leaving, after paying the rates that afternoon, for the Gold Coast. It is certain he did, in fact, collect two money orders from his post box on the morning of 7 August: Exhibit 37. Mr Mounter, the manager, said that by reference to the location of a sticker in a post office record book (Exhibit 28) it was likely the plaintiff's solicitor's letter of 6 August, Exhibit 10, was placed in the defendant's box on the morning of 7 August. Very late in his evidence, after re-examination by his own counsel had been completed, the defendant suggested that he had collected Exhibit 37 from his post box before ordinary business hours, waited for the post office to open, and then cashed the money orders; thereby missing the opportunity to collect Exhibit 10 which, by inference, was put in his post box later.

An obvious question arises: why would the defendant have manufactured a letter and/or pretended not to receive a letter from the plaintiff's solicitors? I am asked to infer the plaintiff did these things, and paid the rates in full, including substantial arrears, on the afternoon before the day of settlement with a view to giving himself grounds to refuse tender of the cheques set out in Exhibit 10 and, in particular, the payment of $50,168.33 to the Office of State Revenue for outstanding land tax. The defendant's evidence was that he had been negotiating with a land tax official, Mr Jemanis, and had a “gentlemen's agreement” with him to the effect that he (the defendant) would take steps to sell two of his numerous parcels of land and, from the proceeds of whichever sold first, pay the outstanding debt in full. In the past, the defendant said, he had been able to negotiate favourable terms with land tax officials, such that outstanding interest had been waived. In pursuit of this plan he advertised the subject property and, after agreeing a price with the plaintiff, paid the outstanding land tax in respect of that parcel of land on 11 July 1997 and obtained a clearance letter. He did not prepare or send the contract until he had that letter. Then, he prepared a contract and gave the plaintiff a copy of the clearance letter in the hope, the plaintiff contends, that a purchaser would decide there was no need to conduct a land tax search - the clearance, on the one hand, removed the need and the terms of the contract, on the other, removed the right to any adjustment. If a search was carried out, the defendant was at risk, the plaintiff contends, that the Commissioner for Land Tax would be alert to the pending sale of one of the defendant's properties and take steps to secure the debt owed to it; and that is exactly what occurred. It is argued that on receipt of the defendant's solicitors' letter 6 August (Exhibit 10) showing that almost two thirds of the balance sale proceeds would be paid to the Office of State Revenue, the defendant realised his plans had gone awry, and he would achieve no benefit from proceeding to settlement. Rather, if he was to have another opportunity to put himself in the favourable position vis a vis, the Office of State Revenue, he would need to avoid settlement under the existing contract.

On first blush, this scenario appears far-fetched; but, it renders explicable events which can otherwise not be readily explained - e.g. the coincidence in the figures in Exhibits 10, and 33; and, an explanation for the defendant's decision to pay outstanding rates on the afternoon before settlement and, for that purpose, his travel to the city at some inconvenience go to the City Council offices and effect payment. Exhibit 35 shows that at the time outstanding rates of $1,368.30 included arrears of $1,075.89. Adjustment at settlement meant those arrears would, in the event of non-payment up to the date of settlement, have been deducted from monies payable to the defendant, and the figures for the current period would reflect the parties' respective obligations. There was no material benefit to the defendant whatsoever in paying all of the rates one day early - save, perhaps, for a few cents in interest. A credible explanation is that he paid them in circumstances where he had received Exhibit 10, and had determined upon a course which would enable him, he believed, to refuse the plaintiff's tender.

The defendant also alleged that in a telephone conversation with Mrs Genninges on the morning of 5 August he had told her that he would pay the rates before settlement. She denies this. I accept her version. I find that the defendant received the plaintiff's solicitors' letter 6 August on the morning of 7 August and, thereafter, determined to pay the rates without letting the plaintiff know he had done so.

The defendant's solicitor, Mr Collinson, was called and said that he had seen Exhibit 33 on the afternoon of 5 August. He was not acting for the defendant in the conveyance, and had no interest in the contents of the letter - and, had no reason to read it or discuss those contents or make any note of the encounter. He simply refused the defendant's request to use his facsimile machine for the purpose of conveyance. He was first called upon to reconsider that brief encounter about a week later. He has been acting for the defendant in the present proceedings since 12 August and represented him in the plaintiff's application for summary judgment in late 1997. Although material was filed on the defendant's behalf, no affidavit was filed by or on behalf of Mr Collinson then about the matters in respect of which he gave evidence. He agreed the encounter about the letter took 10 or 15 seconds. In the light of the findings I have already made, it is probable that what he saw on the afternoon of 5 August 1997 was in fact Exhibit 9, which the defendant then sent by security post later that afternoon.

I find the defendant did not send Exhibit 33 by security post to the plaintiff's solicitors on the afternoon of 5 August; or, ever.

It was also the defendant's case that, on the occasion of the aborted settlement, Mrs Genninges indicated she would not settle unless the defendant signed and gave her the form of undertaking sent to him by her letter 1 August 1997 (Exhibit 6). Her evidence was that she knew if a vendor refused to sign the undertaking she could not insist upon it as a term of settlement, and she did not do so. The defendant did not repeat this assertion in his telephone conversation with Mr McIvor on the following Monday, 11 August. (Neither, significantly, did he assert, or even mention, the existence of Exhibit 33 or his alleged earlier advice that he would pay the rates before settlement). I accept Mrs Genninges' evidence on this point.

I further find that the plaintiff was at all material times ready, willing and able to settle, and so remains; and, that the defendant was at all material times, and remains, able to settle but not ready and willing to do so.

The defendant contends the plaintiff was in breach of the contract by failing to tender performance in accordance with its terms on 8 August and by not settling on that day, and that those breaches entitled the defendant to rescind, and forfeit the deposit. During cross-examination of the defendant it was learned that he had paid the deposit out of his trust account, and to his own benefit within about two weeks of 8 August notwithstanding correspondence after that date in which he and his solicitors both threatened and invited proceedings. The matter was not, apparently, disclosed before His Honour Judge Boulton at the hearing of the plaintiff's application for summary judgment on 17 September 1997 at which time the defendant undertook, through his counsel, not to sell or encumber the subject property.

The defendant's written submissions acknowledge that relief against forfeiture, and specific performance may be granted where it would be unconscionable to permit the defendant to rely upon the absence of strict compliance with a contractual provision; but, assert that the plaintiff's failure to tender correct purchase money occurred in circumstances in which the defendant was blameless, entitling him to refuse the settlement and forfeit the deposit, and denying the plaintiff any equitable relief: Union Eagle Ltd v Golden Achievement Ltd (1997) 2 WLR 341; Dawson Enterprises Ltd v Talisteam Ltd (1995) 1 HKLR 93, both cases in which it was held that a purchaser's failure to complete by a stipulated time - in the first, only 10 minutes late - constituted a refutatory breach and, time being of the essence, entitled the vendor to reject the late tender and rescind.

Specific performance is a discretionary remedy, granted by the court in the exercise of its equitable jurisdiction: JW Williamson Ltd Lukey & Mulholland (1931) 45 CLR 282 per Dixon J at 297-8. I have found that the cause of the plaintiff's failure to tender correct payment on 8 August 1997 was the particular acts of the defendant designed to ensure that very thing happened. In Legione & Anor v Hateley (1983) 152 CLR 406, Mason and Deane JJ said at 447-8:

In Stern v McArthur (1988) 165 CLR 489, Deane and Dawson JJ said at 526-7:

Here, on the findings I have made, there are a number of elements which would make it unconscionable to permit the defendant to avail himself of any benefit arising from the plaintiff's failure to strictly comply with the terms. I find therefore that it would be inequitable to insist on forfeiture of the purchaser's interest under the contract and that justice requires the plaintiff be granted relief against forfeiture by means of specific performance, with compensation, against the plaintiff.

For the sake of completeness, I should also say that I would grant the plaintiff specific performance even if the findings of the fact I have made against the defendant were not open. Applying the questions posed by Mason and Deane JJ in Legions v Hateley (supra) at 449, the conduct of the defendant did contribute to the purchaser's breach in that, if he actually sent Exhibit 33, it contained nothing more than a notice of his intention to pay outstanding rates prior to settlement, but he did not then communicate the fact of payment at any time between the afternoon of 7 August, and 4.30 p.m. on 8 August. While the purchaser carries the primary obligation of seeking out the vendor and tendering the correct purchase money, the obligation of parties to a contract to achieve final settlement are mutual, and concurrent: Ireland v Leigh (1982) Qd.R. 145 per Connolly J at 148, and 151. Here, the purchaser's tender was, proportionately, wrong by only a relatively insignificant sum in circumstances where the defendant paid the rates only 24 hours before settlement, did not communicate that fact to the plaintiff's solicitors and, on his own version, did not clear his mail box so that he would receive the plaintiff's solicitors' letter 6 August with particulars of the cheques which it was proposed to tender - thus denying himself the opportunity to communicate a correction to the solicitors. Secondly, the breach was relatively trivial and, on any view, inadvertent and not wilful. Thirdly, at trial, the defendant advanced no claims for damages (although pleaded) and, through his counsel, abandoned them. The only adverse consequence has been the delay in settlement and that has been caused by the defendant's own refusal to grant an extension until the Monday immediately following 8 August; and, subsequently, by his purported recision and continued refusal to settle. His gain is forfeiture of the deposit in a substantial sum, which he promptly took for himself, and retention of the property which has not been resold. The purchaser's loss is the deposit, and the opportunity to convert his equitable interest in the land, under the contract, into a concrete one. In those circumstances I would find, if it were necessary, that the fact time was of the essence of the contract should not be a bar to specific performance.

I will hear submissions as to the form of order.

BETWEEN:

AND:

SUPPLEMENTARY REASONS FOR JUDGMENT - WILSON A.D.C.J.

Delivered the 4th day of September, 1998

In this matter I published reasons for judgment on 31 August 1998, holding that the plaintiff was entitled to specific performance of a contract relating to the sale and purchase of a parcel of land. Upon delivery of that judgment counsel for the plaintiff tendered an Offer to Settle made by the plaintiff two weeks before the trial commenced and a draft order containing a judgment for specific performance. In addition, the plaintiff seeks an order that the defendant pay his costs of and incidental to the action on a solicitor and own client basis. That application was argued on 2 September 1998.

DCR 363 clearly gives the court a very wide discretion in respect of the burden of costs and in light of my findings in this matter would dictate, at least, that the plaintiff recover his costs from the defendant on a party and party basis. DCR 118(1) provides further, however, that if the plaintiff makes an offer to settle which is not accepted by the defendant and the plaintiff obtains a judgment no less favourable than the offer, the court shall order the defendant to pay the plaintiff's costs “fixed on a solicitor and client basis” unless the defendant shows that another order for costs is proper in the circumstance. Before me, counsel for the defendant conceded that the plaintiff's offer was one to which the rule applied, but argued that the defendant should only have to pay costs on a solicitor and client basis from the date of the offer.

The District Court Rules are generally silent about solicitor and client costs, and have nothing to say about solicitor and own client costs save that, in respect of the former, Schedule 2 contains a “General note” which mentions them. The Supreme Court Rules are similarly unhelpful save that Order 91 Rule 82 refers to “costs as between solicitor and client”; and the learned authors of Ryan, Weld & Lee in their commentary on Order 91 Rule 1 say at para 91.1.6 that orders for costs on an “indemnity” basis have been made in Queensland courts, but there has been no judicial interpretation of the basis upon which such an order should be taxed. It is appropriate to mention “indemnity” costs because there is clearly uncertainty as to just what that term means viz a viz the other commonly used phrase “solicitor and own client costs”; see, e.g., the unreported judgment of Byrne J. in A Whistle & Co (1979) Ltd v Gorham & Anor, unreported (Supreme Court Brisbane, 58/92, 16 January 1992) in which His Honour said that he would award costs “on an indemnity basis” but then actually ordered that the costs be taxed “as between solicitor and own client”.

It does not seem to me that DCR 118(1) places a statutory limit upon the costs the plaintiff can recover when he has made an offer to settle which attracts the rule; to limit his costs to an award on a solicitor and client basis only would inhibit the discretion the court otherwise has under DCR 363 and, for reasons discussed hereunder, generally.

The power to award costs on an indemnity, or solicitor and own client basis, has been considered in a number of cases to which I was helpfully referred by counsel for both parties. In EMI Records Ltd v Ian Cameron Wallace Ltd (1983) 1 Chancery 59, Sir Robert Megarry, V-C held that the court had power to make an order for costs on an indemnity basis although no such basis appeared in the Rules of Court, or elsewhere. That case was followed by Holland J in the NSW Supreme Court in Degman Pty Ltd (In Liq) v Wright (No.2) (1983) 2 NSW LR 354, in which it was also held that where an unsuccessful party had prolonged a trial, by deliberately false defences and allegations of fact, costs on an indemnity basis was the appropriate order. Those cases have been followed in Queensland by the Honourable Justice Moynihan in Re; Talk Finance and Insurance Services Pty Ltd (1994) 1 QdR 1 in which His Honour said at 560:

In A Whistle & Co (1979) Co v Gorham (Supra) Byrne J also held that some “special circumstance” must be made out to justify an order for costs on an indemnity basis. I was also referred to the unreported judgment of Shepherdson J. in Naomi Marble & Granite Pty Ltd v FAI General Insurance Company Ltd (No. 2) and provided with a copy of His Honour's reasons for judgment, published by Butterworths. (I note the judgment is now, shortly, reported in the 1988 Queensland Law Reporter, at p800). His Honour held that in circumstances in which the plaintiff was guilty of, inter alia, misconduct by attempting to deceive both the defendants and the court, the plaintiff should pay the defendant's costs of the entire action on an indemnity basis. Finally, I was referred to the recent judgment of Goldberg J in the Federal Court in White Industries v Flower & Hart, and told that His Honour also awarded costs, there, on an indemnity basis.

In Colgate Pamolive Company & Anor v Cussons Pty Ltd (1993) 46 FCR 225, to which defence counsel referred me, Sheppard J said at p232 - 233 that the ordinary rule, under which costs are only payable on a party and party basis, will not be lightly departed from, and then only if the circumstances of the case are such as to warrant it. His Honour referred to Andrews v Barnes (1887) 39 Chancery 133 at 141 in which the Court of Appeal held the court had a general and discretionary power to award costs as between solicitor and client as and when the justice of the case might so require it; and, Fountain Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397, in which Woodward J adopted the same test as has been applied in Queensland i.e. that there must be some “special or unusual” feature in the case to justify the court departing from the ordinary practice.

Defence counsel argued that Naomi Marble (Supra) could be distinguished on the grounds that it was a case which last 126 days; was lengthened because the plaintiff made allegations which it must have known to be false; involved clear findings of fraud and findings of fact to the effect that knowledge of the fraud was within the directing minds of the plaintiff company; and, the case was unduly delayed for tactical reasons, and the plaintiff ought well have know at an early date that further contest was useless. I accept those matters but they do not seem to me to be decisive; rather, the important question is simply whether, in the circumstances of the present case, there is some special or unusual aspect which would warrant a costs order on an indemnity basis.

I have found that the defendant received a letter from the plaintiff's solicitors shortly before the settlement date for the contract and, thereafter, set about thwarting the settlement. In the course of pursuing that end he falsely denied receiving the solicitors letter; manufactured a letter which he claimed to have sent, but did not; paid outstanding rates on the property without informing the plaintiff's solicitors; and, wrongly refused to settle. Thereafter he swore affidavits resisting a summary judgment application, and persisted with this untrue evidence at trial. It is not putting the matter too high to say, as counsel for the plaintiff submitted, that the defendant was guilty of manufacturing evidence, engaging in a deliberate and deceitful course of conduct, telling significant untruths, and presenting a defence based upon trickery, and falsehood.

In my opinion these matter constitute special and unusual circumstances justifying an order for indemnity costs which, for the sake of regularity and in accordance with the decided cases in Queensland, shall be expressed as an order that the defendant pay the plaintiff's costs of and incidental to the action as agreed or failing agreement to be taxed on a solicitor and own client basis.

Otherwise the draft order presented to me by counsel for the plaintiff is in a form adopted from Kentucky Fried Chicken (Kedron) Pty Ltd v Leybourne (1972) QDWN 21, and is satisfactory.