Glynn v Brown[2016] QDC 313

DISTRICT COURT OF QUEENSLAND

Introduction

1. [1]
   The applicant, Michele Glynn (also known as Michele Carrasco) and the second respondent, Land Pastures Queensland Pty Ltd (Land Pastures), through the first respondent, Malcolm Brown, who is a director of Land Pastures, entered into a tenancy agreement (the Lease) commencing on 1 September 2013.  That tenancy agreement was subject to a Call Option Agreement (COA) pursuant to which Land Pastures was given an option to purchase the leased premises at 151 Varsity Parade, Varsity Lakes (the Property).  The Property was registered in the name of Ms Glynn and was subject to a mortgage to ANZ Banking Group. As at September 2016 the amount outstanding under that mortgage was $361,129.

2. [2]
   Land Pastures, by email written by Mr Brown and sent to Ms Glynn on 19 March 2015, purported to exercise that COA. Pursuant to it, on the exercise of the COA the parties became bound to complete the sale of the Property in accordance with the terms of a contract of sale attached to the COA.

3. [3]
   That sale was not completed. Whilst the legal proceedings are somewhat complicated, Land Pastures essentially seeks specific performance of a contract of sale dated 29 July 2016 and consequential orders, including equitable damages. Ms Glynn seeks orders for possession of the property against both respondents and for payment of outstanding rent. Both parties seek consequential orders.

4. [4]
   The progress of the matter has been unusual and somewhat disjointed. It was commenced by originating application in the Supreme Court. Earlier on neither side was legally represented. Eventually all parties were represented by solicitors and barristers. Pursuant to orders made in this court the solicitors for the applicant prepared and filed a document entitled “Amended Statement of Claim”. The respondents’ document in response entitled “Further Amended Defence” was settled by counsel. No order has ever been made that the action, commenced by originating application in the Supreme Court and then transferred to this court, should continue as if started by claim. In view of the way the case has developed – and in particular because a central issue relates to a contract of sale executed only on 29 July 2016, after commencement of proceedings, and originally due to settle on 30 September 2016 – little is now to be gained from making any such order.

5. [5]
   The parties, when both sides were legally represented, agreed on bundles of documents to be admitted at the trial. A document marked “A” for identification at the trial was an email from the respondents’ counsel to, inter alia, the applicant’s then counsel setting out that all documents, in the prepared bundles were admitted by consent except one document in the applicant’s bundle, Document 30. 

6. [6]
   The applicant’s and the respondents’ bundles were both provided to the Registry by their respective solicitors on 15 November 2016, the day prior to trial.

7. [7]
   At the commencement of the trial I was advised by the applicant’s counsel that he and his solicitors sought leave to withdraw. The applicant herself indicated that she did not have sufficient funds and so was unable to engage them for the trial. In such circumstances, but after she had executed a Notice of Party Acting in Person, those legal advisors were given leave to withdraw. Ms Glynn thereafter represented herself. I also made an order that her daughter-in-law, Grace Salano, be able to assist her at the Bar table with organisation of documents and such matters. This occurred throughout the trial.

Background

8. [8]
   Prior to July 2013, the applicant was the registered proprietor of the Property. She came to know a man, Doug Wroe, who influenced her to enter into the Lease and associated COA with Land Pastures and, in turn, to vacate the Property and enter into a lease, again with the COA to purchase a nearby property which was, not coincidentally, owned by Mr Wroe.

9. [9]
   I am not here concerned with the wisdom of these transactions though, it seems clear they have not ultimately advantaged Ms Glynn.

10. [10]
    Initially, Land Pastures and Ms Glynn had entered into a lease of the Property for a period of six weeks from 15 July to 31 August 2013. The rent was $410 per week and Land Pastures was obliged to pay for electricity, gas and phone services. Ms Glynn was obliged to pay all other services and outlays.

11. [11]
    The reason why that six week lease was arranged is irrelevant and in any case never properly explained at the trial.

12. [12]
    On 1 September 2013, Ms Glynn and Land Pastures entered into two relevant and interrelated contractual arrangements - the Lease of the Property and the COA. I shall during the course of the judgment refer to various clauses of that Lease. For present purposes it is sufficient to note only the following.

The Lease

13. [13]
    The Lease (Ex R2, Tab 2, pp 69-77) was for a fixed five year term from 1 September 2013. Rental was to be $2,594.10 per month and there was a not uncomplicated formula for calculating rental increases to occur on 1 September 2014 and 1 September 2015. Fortunately the rental increase from 1 September 2014 was agreed prior to the dispute between the parties. From that day, the monthly rental was $2,649.57.

14. [14]
    The Lease agreement also provided that the monthly rental was inclusive of all outgoings meaning that the applicant was obliged to pay them.

15. [15]
    Special Condition 3 of the Lease provided:

Call Option Agreement

16. [16]
    On the same day Land Pastures and Ms Glynn entered into the COA (Ex R2, Tab 1, pp 1 – 68). Under it Ms Glynn granted to Land Pastures an option to purchase the Property on certain terms and conditions.

17. [17]
    I shall refer to various clauses of the COA in the course of this judgment but for present purposes it is sufficient to note the following matters.

18. [18]
    The term “Call Option Period” was defined to mean “the period starting on the start date of the Call Option Period specified in schedule 4, and ending on the earlier of the date the Call Option is exercised and the end date of the Call Option Period specified in schedule 3.” In the schedules, the start date was said to be the date of the agreement, namely 1 September 2013 and the end date was five years from that date.

19. [19]
    “Equity Credit” was said, in schedule 5 of the COA, to be $368.01 for every full monthly rental payment.

20. [20]
    “Call Option Fee” was said, in schedule 1 of the COA, to be $20,000, payable in three tranches of $2,000, $8,000 and $10,000. That such sums were paid by Land Pastures to Ms Glynn was not in dispute.

21. [21]
    “Lease” was defined to mean the lease of 1 September 2013 that I have already referred to. Importantly, clause 2.1 of the COA provided:

22. [22]
    In the Sale Contract attached to the COA, the applicant’s address was said to be 143 Varsity Parade, Varsity Lakes QLD 4227 and her solicitor was said to be Canning Craymer Conveyancing (A division of Forbes Dowling Lawyers). Their address, phone number and facsimile was also set out in that contract. It was not suggested by Ms Glynn that she at any time gave to the respondents another address as required by clause 7.1(b) of the COA.

23. [23]
    Finally, clause 8.7 of the COA provided that time was essential under the agreement.

24. [24]
    The contract of sale of the Property attached to the COA provided for a purchase price of $399,000 and a deposit of $20,000. The $20,000 was paid by way of the Call Option Fee having regard to clause 2.2 of the COA set out above. In addition, the terms “Building Materials” and “Development Approval” and “Building Plans Application” were defined. Nothing now turns on them but the contract enabled Land Pastures to construct a studio bedroom in accordance with those approved plans, using the building materials set out in the inventory which Ms Glynn had previously purchased, intending to do the work herself.

25. [25]
    Special Condition 2 of the contract defined, Equity Credit as follows:

Upon the Purchaser exercising the option pursuant to the Option Deed, the Purchase Price is reduced by the amount equal to the Equity Credit obtained by the Purchaser, as defined in the Option Deed. 

Exercise of COA

26. [26]
    After entering into possession of the Property, and between November 2013 and November 2014 the studio bedroom earlier referred to was built by Mr Brown on behalf of Land Pastures using an owner builder’s license and subcontractors. There was some dispute about the cost of doing so. Ultimately, although neither Mr Brown nor Ms Glynn gave very cogent evidence about the cost of building the studio bedroom, I prefer the evidence of Mr Brown that the total cost of doing so, including the cost of materials, subcontractors and consultants such as an architect, building certifier and engineer approached $50,000. Ms Glynn’s assertion that it would have cost only $10,000 or $11,000 lacked any specificity or factual background, was based only on what others had told her and in any case did not appear to include all building items or any consultancy fees.

27. [27]
    Until about March 2015, the arrangement appeared to be working well. Land Pastures was paying the monthly rental and, I find, continued to do so until the last payment for the period up to the 31 July 2015. Ms Glynn had herself entered into the lease and call option agreement of a nearby residence to which I earlier referred. A dispute arose between her and Mr Wroe about that arrangement. The details of it are unimportant but, ultimately, Mr Wroe obtained an order evicting Ms Glynn from those premises. As a consequence, she lost the benefit of the call option agreement she had entered into with him, and did not have premises in which to live.

28. [28]
    As a consequence of that event Ms Glynn had a meeting with Mr Brown, his wife and his son. During it they discussed the fact that she was required to vacate the premises owned by Mr Wroe. She told Mr Brown she still had the same email as previously (T1-29, ln 40).

29. [29]
    It was to this email address that Mr Brown sent an email at 6.06pm on 19 March 2015 (Ex R2, Tab 5A, p 83A). On the previous day, Ms Glynn, using the name Michele Carrasco, had sent an email to Mr Brown setting out payments for rent made by Land Pastures up to the end of February 2015, and of the amount of corresponding Equity Credits. The document she sent (Ex R2, Tab 5, p 82) establishes that all rental payments up until the end of February 2015 had been paid and that the balance owing under the contract, to take account of the $20,000 deposit and Equity Credits up to that time, had reduced from $399,000 to $372,743.83.

30. [30]
    The email from Mr Brown to Ms Glynn sent at 6.06pm and earlier referred to, was clearly headed “Exercise of Call Option for Purchase of 151 Varsity Parade”. A Call Option Exercised Notice, in the same form as a draft Call Option Exercise Notice being Annexure 2 to the COA and signed by Mr Brown on behalf of Land Pastures, was enclosed with his email. The email specifically referred to clause 3.1 of the COA earlier set out. It requested Ms Glynn to sign and return two copies of the Sale Contract, Land Pastures was entitled to do so under that clause. Importantly, it indicated notices regarding the exercise of the Call Option had also been posted by registered post to Ms Glynn’s business, Hair Extensions Full Stop Pty Ltd, at an address in Orchid Avenue and also to her at 143 Varsity Parade, the address shown in the execution page of the COA. In addition it indicated the Call Option Exercise Notice had also been sent to the solicitors referred to in the Contract of Sale attached to the COA, at the address set out therein. It was thus sent in compliance with the requirements of clause 7.1 of the COA to both Ms Glynn and her named solicitors. At no time did Ms Glynn contacted Mr Brown requesting copies be sent to her at a different address.

31. [31]
    Mr Brown said copies of a Contract of Sale were also enclosed. That is entirely consistent with the email seeking Ms Glynn sign and return the contracts.

32. [32]
    I find therefore that in accordance with clause 3.1 of the COA, Land Pastures had given Ms Glynn, and her solicitor as set in the Sale Contract, the notices required to exercise the option, with the consequences that followed pursuant to the terms of the COA. I shall refer to the legal consequences of giving that notice later, but on any construction of clause 3.1 the parties were then each bound to complete the sale of the Property in accordance with the contract attached to the COA.

Contract of Sale of 19 March 2015

33. [33]
    There were a number of minor additions to that attached Contract of Sale in the contract sent by Mr Brown on 19 March 2015 to Ms Glynn and her solicitors. Those differences were however inconsequential. They are accurately set out in submissions of the respondents’ counsel as follows:

1. (a)
   A contract date of 19 March 2015 was inserted;

2. (b)
   The ABN and email address of Land Pastures were included;

3. (c)
   The telephone, mobile and email address for Land Pastures was included;

4. (d)
   Tenancy details were set out;

5. (e)
   Deposit holder details and deposit details were given;

6. (f)
   The non-applicability of the Finance Clause was noted;

7. (g)
   A settlement date of “on or before 21 January 2016” was included; and

8. (h)
   The contract was duly executed by signing and initialling by Malcolm Brown on behalf of Land Pastures.

34. [34]
    None of those is of any significance, other than (g) above. The contract attached to the COA did not have any settlement date. That is understandable, perhaps, because it could have been exercised at any time in the five year period of the lease. It could, of course, have provided for settlement within a particular period after the exercise of the option, but did not. In such a circumstance the law would imply a condition that it was to be settled in a reasonable time after the giving of notice.

35. [35]
    The contract dated by Mr Brown on 19 March and sent to Ms Glynn on that day in providing for settlement “on or before 21 January 2016” did not breach the COA. If the parties wished they could have nominated an earlier but reasonable time for settlement.

Land Pastures Ability to Complete

36. [36]
    I find that Land Pastures was in a position to settle at any time, given reasonable notice. Mr Brown gave evidence of the company’s financial position, which I accept. At all relevant times it was the registered proprietor of a double block of land, with some substantial improvements on one of those blocks, at Clifton. That property had been purchased at a mortgagee sale in April 2013 for $220,000. It has been continuously rented from shortly thereafter for $69,000 per annum. Expenses and outlays, including interest on the mortgage loan secured over the property, are about $20,000 per annum, resulting in a net income from that property of $49,000 annually. Given that return it is highly likely, indeed almost inevitable that, the property is worth significantly more than the purchase price. The full purchase price was borrowed by Land Pastures from the ANZ Bank and Mr Brown said a small capital sum had been repaid from the original mortgage sum.

37. [37]
    Land Pastures also owns two unencumbered properties in Clifton. One is part of a residential duplex purchased in 2011 for $230,000, and rented continuously since purchase for $230.00 per week. The other is a vacant block of land purchased in mid-2011 for about $168,000.

38. [38]
    It can be seen the company have unencumbered assets of at least $398,000 and an encumbered property of significant value, in excess of the extent of the mortgage over it and presumably well in excess of that mortgage. It was not suggested that Land Pastures had other liabilities which would significantly, or at all, have effected its capacity to readily borrow sufficient sums to allow completion of the sale.

39. [39]
    The capacity of the company to borrow funds to complete the purchase was also demonstrated by the evidence of Grant Thompson who is a private lender operating through a company, AAGT Private Loans Pty Ltd (AAGT).  He was recently approached by Mr Brown, on behalf of Land Pastures, and agreed to lend Land Pastures $400,000 at an interest rate of 10% per annum (see evidence of Mr Brown T1-125, ln 20) to enable it to complete the purchase of the Property, subject to a mortgage over the Property and a second mortgage over the already encumbered property at Clifton.  I infer he, a man of significant lending experience, was also of the view that Land Pastures had significant equity in the Clifton property. Mr Thompson said that Land Pastures had paid to AAGT a sum of $13,000, being $8,000 as an application fee and $5,000 for legal expenses and that AAGT was in the position to immediately lend the $400,000 to Land Pastures.  That had been arranged in anticipation of a proposed settlement of 17 October 2016 to which I shall later refer.

40. [40]
    Given the evidence of Mr Brown about the company finances I have no doubt that Land Pastures was in a position to borrow funds to enable a completion of the sale of the Property, given reasonable notice, at any time after March 2015.

41. [41]
    Furthermore, the company had significant equity in the property itself – evidenced by its payment of the $20,000 deposit and the $368.01 monthly Equity Credits each month from 1 September 2013 to 31 July 2015 inclusive (amounting to $8464.23), together with its investment of a sum approaching $50,000 to build the studio bedroom by about November 2014 - all of which would be lost if the sale was not completed. I have no doubt that it was at all times the intention of Land Pastures to complete the subject sale, and that it was able to do so.

Ms Glynn’s Response

42. [42]
    How then did Ms Glynn react to the receipt of the Call Option Exercise Notice? Her response was in my opinion extraordinary. It was, I’m sure, brought about by a realisation that she had lost the opportunity to purchase Mr Wroe’s property from which she had been evicted and was now being forced, as she saw it, to sell her Property to Land Pastures.

43. [43]
    Initially she seems to have done nothing. She does not appear to have responded to Mr Brown’s email on 19 March. She did not write and say she was not living at 143 Varsity Parade, or would not get mail sent to that address, despite having clearly received the email on that day indicating documents had been sent to her at that address. It seems that she did not contact her solicitors, Forbes Dowling, the lawyers referred to in the draft contract attached to the COA and specifically referred to in the email from Mr Brown. She did not tell me in evidence how it was she did not get the letter sent to Hair Extensions Full Stop Pty Ltd at 26 Orchid Avenue. Both, the Varsity Lakes letter and the Hair Extension letter were returned to Mr Brown undelivered, marked “Return to Sender” (Ex R2, Tab 8). Presumably this is because Ms Glynn had left both premises, had not arranged a forwarding address and had not given written notice of any alternate address as required by clause 7.1 of the COA. The letter to Forbes Dowling however was not returned.

44. [44]
    In any case, I am satisfied the Call Option Exercise Notice was sent to the applicant in compliance with the COA.

45. [45]
    The first response of the applicant was to send to Land Pastures, a document dated 20 April 2015 entitled “Notice to Complete” (Ex A1, Tab 8, p 87). The purported “Notice to Complete” referred to the Call Option Exercise Notice and stated:

It was signed by Ms Glynn.

46. [46]
    On 28 April 2015, a document purporting to be a “Notice of Default” was served (Ex A1, Tab 9, p 88). It was apparently attached to an email of 10.04am on that day in which Ms Glynn advised of her mailing address at Tourangeau Crescent, Varsity Lakes. It was to similar effect as the Notice to Complete. The notice of default provided so far as relevant:

47. [47]
    It is apparent from the form of the notices that Ms Glynn had received some advice in respect of their compilation. She agreed in evidence that she had received that advice from a man in South Australia. She also agreed in evidence that he was a former solicitor who had now been struck off the roll. No details of his misconduct that might have justified that striking off were given and, in any case, seemed to me to be irrelevant.

48. [48]
    On 28 April 2015, the day of a purported Notice of Default sent by Ms Glynn, Mr Brown wrote to Ms Glynn (Ex R2, Tab 9, p 106) referring to the purported Notice to Complete and Notice of Default of 20 April and 28 April, respectively. The letter, addressed to an address at Tourangeau Crescent that Ms Glynn has provided to him as her mailing address on that day stated:

We put you on notice that neither the Notice to Complete and the subsequent Notice of Default neither comply with your contractual obligations you entered into on 7 August 2013 being the Call Option Contract. 

Take further notice you have provided no advancement of the said contract nor made any genuine attempt to comply with the terms of this contract.

It further threatened legal action “to bring this matter to conclusion”. 

Consideration of Ms Glynn’s Notices

49. [49]
    It can immediately be seen that the purported Notice to Complete and the Notice of Default are entirely misconceived. Under clause 3.1 of the COA, Land Pastures, if it intended to exercise its option to purchase, must give a notice in the form attached to the COA. It did that on 19 March 2015. On that occurring, the parties were then “bound to sell and purchase the Property in accordance with the Sale Contract”. Whilst the Buyer may request the Seller to sign two copies of the Sale Contract and deliver them to the buyer – as here Land Pastures did – there was no corresponding right in the Seller to require the Buyer to do that and pursuant to clause 3.1(c) of the COA “delivery and execution of the Sale Contract is not a condition precedent to the parties being bound under the clause” to complete the sale.

50. [50]
    Ms Glynn did not comply with her obligation to sign and return the two copies of the contract. Mr Brown said, and I accept, that she did not contact him to seek to take steps to complete the sale. Ms Glynn, I find, took no steps to complete the contract of sale as she was obliged to do. In fact, she sought to frustrate settlement.

Purported Notice of Termination

51. [51]
    On 25 May 2015, Ms Glynn issued a further notice, said to be a “Notice of Termination of Call Option Contract” asserting that she gave Land Pastures “this notice of termination of contract and I will proceed as advised” (Ex A1, tab 12, p 92).

52. [52]
    On 9 June 2015, she served a purported “Notice to Vacate and Surrender Possession” (Ex A1, Tab 12, p 93). Curiously in that document she acknowledges that “by notice in writing dated 19 March 2015, the option was exercised”.

Subsequent Conduct of Parties

53. [53]
    Land Pastures and Mr Brown still remain in possession of the Property. Land Pastures paid further sums by way of monthly rental to cover the period to the end of July 2015 but has paid nothing since.

54. [54]
    During submissions Ms Glynn accepted that as at the end of July 2015 Land Pastures was up to date with rent, meaning it had paid each month from 1 September 2013 to 31 July 2015, a total of 23 payments.

55. [55]
    Mr Brown indicated to, me and I accept, that Land Pastures thereafter stopped paying rent because of its grave concern at Ms Glynn’s erratic conduct in breach of the COA.

56. [56]
    On 10 August 2015, Ms Glynn issued a Notice to Remedy Breach in relation to the alleged non-payment of rent for that month. That payment had, of course, become due on 1 August 2015. It seems neither party did anything further until Ms Glynn brought proceedings in the Queensland Civil and Administrative Appeals Tribunal seeking to have Land Pastures removed from the Property. That proceeding was dismissed on 22 October of that year. The reason for that occurring is unimportant. What is important is that by bringing those proceedings to remove Land Pastures from the Property, Ms Glynn indicated her continued unwillingness to comply with her contract obligations to complete the sale pursuant to the provisions of the COA.

57. [57]
    On 29 October 2015, Ms Glynn emailed Mr Brown enclosing a blank form entitled “Commitment to Depart”. He was asked to fill it out and return it to Ms Glynn. He, unsurprisingly, did not do so.

58. [58]
    There matters lay for some time until Ms Glynn commenced proceedings in the Supreme Court and sought summary judgment, to evict Land Pastures and Mr Brown from the Property. That application was refused by Flanagan J. His Honour transferred the matter to this court.

59. [59]
    The matter has been the subject of a number of directions hearings by different judges. During the course of the matter winding its way ultimately to the trial before me, the parties were not inactive in progressing the matter.

Contract of July 2016

60. [60]
    In a way that Mr Brown described as “out of the blue”, Ms Glynn provided, through her then solicitors Glaser Lawyers, a signed contract for the sale of the property. That was done on 22 July 2016. The signed contract was that dated 19 March 2015 and, as at that earlier time, provided for settlement “on or before 21 January 2016”, a time already passed.

61. [61]
    The letter enclosing that contract – assuming there was one – was not one of the multiple documents admitted into evidence.

62. [62]
    In any case, Land Pastures’ solicitors responded on 28 July 2016 (Ex R2, tab 14, p 135ff). The letter affirmed that at all times Land Pastures was “ready, willing and able to complete the Sale Contract”. I have found that to be so. It asserted – again in my view correctly – that Ms Glynn had “frustrated the completion of [the] Sale Agreement”. Land Pastures’ solicitors nominated a new date of settlement under the contract, 30 September 2016. They requested Ms Glynn’s “offer to settle” the dispute relating to the court proceedings. Resolution of that issue would, I have no doubt, have been a necessary pre-requisite to consensual settlement of the contract of sale.

63. [63]
    The following day Glaser Lawyers, on behalf of Ms Glynn, wrote denying that she had frustrated the completion of the Sale Agreement (Ex R1, Tab 16, p 147). In my view that denial by the solicitors can be seen to be one of form and not substance. Her conduct after receipt of Call Option Exercise Notice of 19 March 2015 was, I find, very clearly and deliberately designed to frustrate the completion of the sale. She simply did not want it to occur.

64. [64]
    In any case the letter stated:

Our client denies that she frustrated the completion of the subject sale agreement.

Our client agrees to your nominated settlement date of 30 September 2016 and we enclose the Sale Contract signed by our client as requested.  The parties are now bound by the contract and settlement should occur on or before 30 September 2016.

65. [65]
    Pursuant to s 206 of the Body Corporate and Community Management Act 1997 (Qld) (BCCM) Ms Glynn was required to provide a body corporate disclosure statement, also known as a CTS statement, to Land Pastures before Land Pastures entered into the contract of sale of the Property.  The statement was required to disclose the secretary of the body corporate, the amount of body corporate contributions payable by the owner and other information relevant to a purchaser of the lot as identified in s 206(2) and (4) of the BCCM.  I accept the following submissions by the counsel for the respondents:

143. Amongst other things, such a Body Corporate Disclosure Statement reveals to the buyer the person who at that time is responsible for keeping Body Corporate records, typically the current Body Corporate Manager; see s.205A and s.206(2) to (4) of the BCCM Act. Amongst other things, the Body Corporate Manager, because of its possession of such records, will be in a position to advise whether or not the seller has paid up to the date of settlement, the regular periodic contributions (popularly known as levies) payable to the Body Corporate which constitute outgoings under the Standard Terms in contracts such as the Contract dated 29 July 2016. If levies are owing, they are to be adjusted against the seller’s credit from the balance purchase price at settlement; see clause 1.1 and clause 2.6(1) of the Standard Terms.
144. By clause 2.6(7), as an adjustment to the purchase price at settlement, the buyer may deduct the amount of unpaid levies from the balance purchase price at settlement. To obtain this information, one needs, of course, the details of the identity and address of the relevant Body Corporate Manager which are to be found in the Body Corporate Disclosure Statement.
145. Provision to the buyer of the Body Corporate Disclosure Statement is therefore an important obligation. This is acknowledged in s.206(5) of the BCCM Act which provides that if the Contract has not already settled, the buyer may terminate the Contract if the seller has not complied with its duty to provide the Body Corporate Disclosure Statement.

66. [66]
    No disclosure statement was provided either at the time of the execution of the COA in September 2013, nor, more importantly, when Land Pastures gave the Call Option Exercise Notice which bound Ms Glynn to complete the sale in March 2015 nor, most importantly, in July 2016 when Ms Glynn through Glaser Lawyers provided a signed contract as had originally been requested in March 2015.

67. [67]
    During September the solicitors for Land Pastures, Accuro Legal, wrote to Glaser Lawyers a number of times in relation to the settlement. On 16 September 2016 they wrote (Ex R2, Tab 24, p 210) noting that settlement was “set” on 30 September 2016 but advising they “tried calling your office in the past two days but to no avail.” The letter concluded:

As the settlement is drawing near please reply to this letter on an urgent basis, thank you.

68. [68]
    At 11.37am on that day (Ex R2, Tab 26, p 223) they emailed Ms Glynn as follows:

We have just been notified by Glaser Lawyers that they no longer represent you… Please contact us immediately to discuss the settlement or, alternatively, provide us with your latest representative’s information so we can proceed with the settlement process.

69. [69]
    Another firm, McCormicks, thereafter acted for Ms Glynn until they were given leave to withdraw from the action on the first day of the trial. At 3.13pm on 19 September 2016 they advised Accuro Legal that they now acted for Ms Glynn. At 5.42pm Land Pastures’ solicitors wrote (Ex R2, Tab 29, p 225) asking McCormicks to provide the body corporate disclosure statement “as soon as possible”, and also sought executed transfer documents.

70. [70]
    The disclosure statement required pursuant to s 206 of the BCCM was in fact not then provided. At 11.32am on 28 September 2016 McCormicks emailed Land Pastures’ solicitors (Ex R2, Tab 34, p 263) advising:

Once we receive a copy of the CTS statement we will provide this to your office so that you may complete the settlement statement (this is required in order for ANZ to expedite the discharge).

In the meantime, would you please seek instructions to extend settlement (if required) to Tuesday, 4 October 2016?

71. [71]
    At 2.42pm on 28 September 2016, only two days before settlement, McCormicks provided the disclosure statement. The document disclosed, for the first time, that Ernst Body Corporate Management was the relevant body corporate manager. The email (Ex R2, Tab 35, p 267) says:

Please find attached our disclosure statement.  We understand that this is all the information that you require in order to complete the settlement statement.

72. [72]
    The attached letter from the body corporate manager to Ms Glynn identified relevant contributions, fees and information and said “please find attached information to prepare a Disclosure Statement pursuant to s 206.”

73. [73]
    On its face the letter from the body corporate manager therefore seems to be information provided by the body corporate manager to Ms Glynn so that she could herself use the information to prepare the requisite disclosure statement. Nevertheless the respondents’ pleading at [94] accepts that the applicant provided the Disclosure Statement in its email of 2.42pm on 28 September 2016.

74. [74]
    In his submissions counsel for Land Pastures said:

What the Body Corporate Disclosure Statement did not contain which could only be obtained from the third party, namely, the relevant Body Corporate Manager, Ernst Body Corporate Management, was what levies determined by the Body Corporate for the subject property had been paid and what had not been paid.  This information permitted Land Pastures to deduct any unpaid levies from the balance purchase price at settlement and pay them to the Body Corporate pursuant to clause 2.6(7) of the standard terms.

75. [75]
    I accept that to be so, and that the late provision of the Disclosure Statement caused the second respondent both to be unready for settlement on 30 September 2016 but, more importantly, to believe Ms Glynn did not require settlement at that time.

76. [76]
    Nevertheless at 3.06pm on 28 September 2016, Accuro Legal emailed McCormicks advising they would send “the draft settlement statement shortly”. At 10.43am on 29 September 2016 McCormicks emailed Accuro Legal advising they would be delivering transfer documents within the hour.

77. [77]
    At 11.01am on 29 September 2016, Accuro Legal again emailed McCormicks (Ex A1, Tab 24, p 174) in response to McCormicks’ letter, which had asked Accuro Legal to “seek instructions to extend settlement (if required) to Tuesday, 4 October 2016”. Accuro Legal wrote:

I have just received an email from our client and he says he cannot confirm the settlement date until this afternoon.  Therefore, a draft settlement statement is not ready for your review.  Once we receive a confirmation from our client regarding the settlement date, we will send the draft settlement statement as soon as possible.

78. [78]
    I conclude, against the background of the earlier emails, that the solicitors for Land Pastures had concluded that the proposed settlement on 30 September 2016 was not to occur. They were correct in so concluding. The delay in providing the name of the body corporate manager until 28 September 2016, the time necessarily involved in obtaining necessary information from that manager, or otherwise obtaining the information necessary to prepare settlement figures, the fact that settlement figures had not then been provided and McCormicks had not actively sought them and the request by Ms Glynn’s solicitors that Land Pastures’ solicitors obtain instructions to extend settlement, if required, to 4 October 2016, all support that view, as do Ms Glynn’s solicitors emails over the balance of 29 and of 30 September 2016.

79. [79]
    Accuro Legal again wrote at 11.30am to McCormicks (Ex R2, Tab 40, p 283). That letter does not refer to the fact that further time might be required to ascertain the information necessary to prepare settlement figures. I strongly suspect, given the current dispute and what had previously occurred, that the preparation of agreed settlement figures would not have been any easy task.

80. [80]
    Again this email confirms my view that the parties were of the view that settlement would occur, at the earliest, on 4 October 2016 and that the earlier proposed settlement on 30 September 2016 had been abandoned. Nowhere in the correspondence did Ms Glynn’s solicitors indicate their insistence on settlement on 30 September 2016 or say anything to disabuse Land Pastures’ solicitor’s reasonable conclusion that settlement on that day had been abandoned. The fact that neither party at any time nominated a time or place for settlement on 30 September 2016 strongly supports this view.

81. [81]
    Rather in the email of 11.30am Accuro Legal identified a clear problem with the transfer documents that had been provided. As appears from the email and attached transfer document (Ex R2, Tab 40, pp 283-284) Ms Glynn and the solicitor who witnessed her signature had mistakenly executed the transfer documents as transferee rather than transferor. The solicitors for Land Pastures advised Ms Glynn’s solicitors of this and returned them for resigning.

82. [82]
    Apparently in response to the email of 11.01am on 29 September 2016 McCormicks at 1.52pm wrote to Accuro Legal:

In order for us to obtain instructions would you please advise in writing the reasons why your client is unable to confirm the settlement date.

It is curious that the email referred to confirmation of the settlement date, and not confirmation of settlement on the following day if that was what was contemplated.

83. [83]
    At 4.04pm on that day McCormicks again wrote; “Would you please advise if you have received instructions from your client in relation to the settlement statement and date for settlement as it is currently scheduled for tomorrow”.

84. [84]
    It appears to me the emails of 1.52pm and 4.04pm are open ended enquiries related to the possibility that Land Pastures might seek a settlement date later than 4 October 2016, rather than an enquiry as to whether settlement on 30 September 2016 was to take place.

85. [85]
    At 4.14pm Land Pastures’ solicitors wrote stating:

I understand that the original settlement date was scheduled tomorrow.  I am actually waiting for my client’s instruction regarding the settlement date.  He has sufficient finance to proceed the purchasing (sic).  But he is waiting for his bank’s reply regarding the mortgage arrangements.  The bank’s reply is supposed to be this afternoon. (My underling)

86. [86]
    At 4.59pm Ms Glynn’s solicitors wrote saying:

Would you please clarify with certainty what your client means by ‘mortgage arrangements’?

They did not say anything to indicate settlement was to occur on 30 September 2016.

87. [87]
    On 30 September 2016 Land Pastures’ solicitors wrote to Ms Glynn’s solicitors inter alia advising:

We have just received an email from our client, Malcolm Brown. He instructed us to request an extension of the settlement date to next Friday (7 October 2016). Please seek your client’s instructions regarding the settlement date? We look forward to your reply.

88. [88]
    In my view at that time a reasonable person in the position of Land Pastures and its solicitors would have concluded, as they did, that Ms Glynn had agreed settlement should be postponed until at least 4 October 2016, and were enquiring whether a further extension to 7 October 2016 could be agreed.

89. [89]
    In any case, even if she had not, the cause of Land Pastures’ inability to settle on 30 September 2016 was directly related to Ms Glynn’s default in not providing information, required by s 206 of BCCM, to Accuro Legal in reasonable time. The request by Land Pastures to extend time beyond 4 October 2016 to 7 October 2016 did not in my view amount to a rejection of the proposal by Ms Glynn to settle on 4 October 2016. If she had insisted, I have no doubt Land Pastures – subject to the parties reaching agreement as to settlement figures – would have settled at that time.

90. [90]
    In any case, at 1.36pm on 30 September 2016, Accuro Legal again emailed McCormicks requesting an extension to 7 October 2016 (Ex A1, Tab 24, p 178). They did not reply until after close of business on that day. At no time on that day did they seek settlement figures or set a time and place of settlement. They did not indicate their insistence on settlement that day or do anything to indicate that it was their view that settlement was to occur that day.

91. [91]
    At 5.01pm they emailed Land Pastures’ solicitors purportedly terminating the contract. In my view, for reasons I will later set out, they were not entitled to do so.

Proper construction of the COA

92. [92]
    A significant legal issue to consider concerns the proper construction of the Option Agreement. Counsel for the respondents submitted, ultimately, that:

On the proper construction of the option deed the due and complete exercise of [the] option requires more than the mere giving of the notice in annexure 2. In addition, the performance by both parties of the obligations stipulated in the option deed including the stipulated condition that, for instance, Land Pastures pay the balance of the purchase price is required.

93. [93]
    He submitted that this construction of the COA was important because it gave business efficacy to the transaction. Because, he submitted, the option continued past the giving of the notice, Land Pastures was lawfully entitled to continue to occupy the premises pending settlement of the Contract of Sale pursuant to its entitlement under the Lease. In other words, the exercise of the COA under clause 3.1 by Land Pastures did not bring the COA to an end. Rather, the COA continued as a contract to sell or buy the land pursuant to the terms of the COA and the Contract of Sale attached thereto.

94. [94]
    It will be recalled that pursuant to clause 3 of the Special Conditions of the Lease; (i) the tenants agreement was subject to the COA; and (ii) if the tenants “exercised the option” pursuant to the COA the tenancy is “deemed to be at an end in accordance with s 277 of the Act”. The Act is of course the Residential Tenancies and Rooming Accommodation Act 2008 (Qld) (RTRA) and s 277 thereof deals with ways in which a residential tenancy can be ended.  One of the ways provided for under subsection (2) of the section is by written agreement of the parties.

95. [95]
    On one view, upon Land Pastures giving to Ms Glynn the Call Option Exercise notice on 19 March 2015, this constituted an act whereby Land Pastures “exercises the option pursuant to the [COA]” within the meaning of clause 3.2 of the COA with the effect that the tenancy was at an end.

96. [96]
    It is for this reason that counsel emphasised what he said was the proper construction of the COA. In particular he submitted that the use of the phrase “may only exercise the Call Option by giving the seller… a notice in the form set out in Annexure 2” meant that in order to exercise the option it was “necessary” to give such a notice, but the giving of the notice did not mean that the option was then fully exercised. The buyer, Land Pastures, continued to be obliged to perform the stipulated conditions in order to become the purchaser.

97. [97]
    Such a construction is consistent with the approach of Gibbs J in Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57 at p 76 where His Honour said:

For these reasons I consider that an option to purchase (at least one in a form similar to that in the present case) is a contract to sell the land upon condition that the grantee gives the notice and does the other things stipulated in the option. An option to purchase, regarded in that way, is not an agreement which gives one of the parties the right to perform it or not as he chooses; it gives the grantee the right, if he performs the stipulated conditions, to become the purchaser.

98. [98]
    The second sentence of clause 3.1 of the Special Conditions commences “on exercise of the Call Option, the Seller and the Buyer are immediately bound to sell and to purchase the Property in accordance with a sale contract…” (My underlining).  Taken in context, the preposition “on” is not inconsistent with the notice delivered on 19 March 2015 not being the completion of the exercise of the option.  As counsel for Land Pastures submitted, “on” can mean “towards a place, part or object”, as in the phrase “to look on”.  Here its use is consistent with the notice being the first step in the parties’ movement towards completion of the option by completing the sale of the property.  The use of the words underlined is also consistent with the fact that irrevocable obligations arising under the COA to buy and to sell the property commence only “on” the giving of the Annexure 2 notice.  That is so even if a further signed contract is not exchanged between the parties.  The obligation is to complete the sale in accordance with the contract attached to the COA.  

99. [99]
    In my view, it follows that, on its proper construction, clause 3.2 of the Special Conditions does not mean that on the giving of the notice of 19 March 2015 the tenancy was terminated. Rather it continued – and still continues – until completion of the sale. Only then is the option ultimately “exercised”.

100. [100]
     I would add that if I am wrong in that analysis it would be my view that, in clause 3.2 of the Special Conditions, the words “and the parties complete the purchase of the property” would implied into the agreement, after the words “General Tenancy Agreement”, when first used in clause 3.2 of the Special Conditions of the COA.

101. [101]
     Such a condition is entirely consistent with the intention of both parties. No one suggested that on giving the notice on 19 March 2015, Land Pastures would vacate the premises pending settlement. The opposite was true. Both parties intended Land Pastures to continue in possession paying rent at the rate of $2594.10 per month, as adjusted in accordance with the contract, and accumulating an equity credit of $368.01 for each month of rental payments.

102. [102]
     That implied term is also consistent with clause 2.5 of the Standard Terms of the contract (Exhibit R1, Tab 1, p 29) that provides:

Adjustment to Balance Purchase Price

1. (1)
   The Seller is liable for Outgoings and is entitled to Rent up to and including the Settlement Date.

103. [103]
     It would be contrary to common sense to expect a purchaser, who had expended a significant sum improving the property by building the studio bedroom that I have referred to, would be required to vacate after giving an Annexure 2 notice causing the parties to be irrevocably committed to settlement, until settlement. I have no doubt if it had done so, Ms Glynn would, understandably, have objected to that conduct, and to its ceasing to pay rental payments.

104. [104]
     The fact that on giving of the notice on 19 March 2015, Land Pastures continued to pay rent in accordance with the lease, which rent Ms Glynn accepted without requiring Land Pastures to vacate, is consistent with the fact that it was their intention that the Lease continued and is consistent therefore with the implied term that I have foreshadowed.

105. [105]
     Consequently, whether by force of the construction of the COA as being fully exercised only on completion of the sale that the buyer irrevocably elected to complete by giving the Annexure 2 notice or by force of the implied condition which I have otherwise found would apply, the result is that the tenancy agreement between the parties continued and, unless the COA was otherwise terminated, will continue until settlement of the Contract of Sale.

Did Ms Glynn lawfully terminate the COA?

106. [106]
     I have, during the course of my consideration of the facts of the case, indicated my conclusion that the Notice to Complete the Call Option of 20 April 2015, the Notice of Default of 28 April 2015, the Notice of Termination of the Call Option of 25 May 2015 and the Notice to Vacate of 9 June 2015, all delivered by Ms Glynn, were all of no legal effect.

107. [107]
     There was no legal entitlement to demand what underpinned those notices – namely, that Land Pastures deliver to her a signed contract of the kind she demanded. The premise of giving the notices illustrated a complete misunderstanding of the terms of the COA and the obligation upon her to complete the sale in accordance with the contract attached to it.

108. [108]
     The next notice she gave was the Notice to Remedy Breach of the rental agreement given on 10 August 2015 (Exhibit A1, tab 15, p 96-7). It related, inter alia, to the fact that Land Pastures had discontinued paying rent from 31 July 2015 and was obliged to pay one month’s rent in advance by 1 August 2015.  It did not do so and has paid no rental thereafter.  This is, as I have found, due to the extraordinary response of Ms Glynn to the Annexure 2 notice given by Land Pastures on 19 March 2015 and Land Pastures’ conclusion that it was her intention not to be bound by the contract.  In such circumstances, it is understandable that Land Pastures thereafter refrained from paying the agreed rent, above market rental, which I find was about $410 per week consistent with the six week rental agreement entered into in July 2015. If it had paid the higher rent under the tenancy agreement it would have been money Land Pastures might well have concluded it would never recover. 

109. [109]
     Non-compliance with the Notice to Remedy Breach did not however result in termination of the COA or tenancy. A residential tenancy agreement could only be terminated in accordance with s 277 of the RTRA. There is no suggestion that any of the circumstances mentioned in that Act had application to the facts of this case.

110. [110]
     That the COA was terminated is also entirely inconsistent with Ms Glynn’s conduct in sending to Land pastures’ solicitors a signed contract of sale on 22 July 2016. The circumstance of the contract being sent by Ms Glynn’s solicitors to Land Pastures were earlier considered.

Failure to Complete Contract of 29 July 2016

111. [111]
     Thereafter the parties agreed to settle that July 2016 contract on 30 September 2016. That did not occur in the circumstances I have earlier set out.

112. [112]
     The applicant contends that she was justified in refusing to complete the contract on 30 September 2016, or 17 October 2016 – which the respondents’ solicitors set as the date of the settlement after 30 September 2016 had passed – because:

1. (a)
   The respondents provided no explanation for failing to settle on 30 September 2016 (see letter from McCormicks 30 September 2016 being Ex A1, Tab 26, p 179); and

2. (b)
   The respondents

1. (i)
   failed to include any payment for rent owing;

2. (ii)
   failed to include any adjustments for outgoings before 29 July 2016;

3. (iii)
   failed to correctly calculate equity credits claimed by Land Pastures (see [46] of Applicant’s Amended Statement of Claim).

113. [113]
     This latter ground misunderstands the nature of property settlements. Preparation of, and agreement upon, a settlement statement is a feature of conveyancing contracts reflecting the parties mutual obligation to cooperate. If there was a dispute about settlement figures Ms Glynn’s solicitors ought have raised that with Land Pastures’ solicitors. That did not occur.

114. [114]
     I accept that if a party refused to settle except on particular settlement figures, which were calculated in error or in disregard of the party’s contractual rights and obligations, that could be seen as giving the other party a right to terminate the contract. But as I have said, that did not here occur. There was simply no demand made by Ms Glynn’s solicitors for amendment of any settlement figures or indeed for settlement figures, or an assertion that Land Pastures was required to settle on a particular figure advocated by Ms Glynn.

115. [115]
     Instead what occurred is as I’ve earlier set out. I also find, given what I have found about Land Pastures’ capacity and desire to settle, that if some alleged error had been identified by Ms Glynn’s solicitors to Land Pastures’ solicitors they would have either accepted that position or sought to explain why it was not accurate.

Did Ms Glynn Lawfully Terminate the Contract on 30 September 2016?

116. [116]
     I have at paragraphs [60] – [91] herein dealt in detail with the correspondence passing between Ms Glynn’s solicitors and Accuro Lawyers. I have indicated my view that the effect of that correspondence was that Ms Glynn’s solicitors had caused the respondents and their solicitors to conclude that Ms Glynn did not require settlement on 30 September 2016 and that an extension of settlement, at least until 4 October 2016, was to be inferred.

117. [117]
     Counsel for the respondents submitted that either:

1. Ms Glynn had, on the proper understanding of the solicitors’ correspondence and her conduct in not providing the s 206 statement as required and in the circumstances I have set out, agreed to defer settlement until of least 4 October 2016, with time to remain of the essence.

2. Alternatively, because of such matters, she waived the requirement that time be of the essence.

118. [118]
     I prefer the first of those approaches. It is consistent with the approach of the High Court in Tropical Traders Ltd v Goonan & Anor (1964) 111 CLR 41 per Kitto J, where his Honour referred, at p 53, to the approach of Jessel MR in Barclay v Messenger (1874) 43 LJ Ch 449, that “a mere extension of time, and nothing more, is only a waiver to the extent of substituting the extended time for the original time, and not an utter destruction of the essential character of the time”.

119. [119]
     Ultimately however it is unnecessary to finally decide the question of whether Ms Glynn had waived the requirement that time be of the essence or had merely agreed to extend time to at least, 4 October 2016, with time to remain of the essence.

120. [120]
     On either construction she was not entitled to terminate the contract as she purported to do at 5.01pm on 30 September 2016.

Other Issues – Deregistration of the Second Respondent

121. [121]
     Land Pastures was deregistered on 17 April 2015. It was reinstated on 28 August 2015. It seems this occurred due to oversights by management in the filing of necessary annual returns.

122. [122]
     I accept that no provision in the option agreement or the General Tenancy Agreement (GTA), expressed or implied, and of the general law:-

1. (a)
   obliged Land Pastures to inform Ms Glynn of its deregistration;

2. (b)
   existed so as to make Land Pastures deregistration “a breach” of the Option Agreement or the GTA.

123. [123]
     Section 601AH of the Corporations Act 2001 (Cth) relevantly provides:

Effect of reinstatement

3. (5)
   If a company is reinstated, the company is taken to have continued in existence as if it had not been deregistered. A person who was a director of the company immediately before deregistration becomes a director again as from the time when ASIC or the Court reinstates the company. Any property of the company that is still vested in the Commonwealth or ASIC revests in the company. If the company held particular property subject to a security or other interest or claim, the company takes the property subject to that interest or claim.

124. [124]
     I adopt counsel’s submissions that:

Land Pastures’ interest as tenant under the GTA and as grantee under the option agreement revested in it by force of this provision. A company cannot exist for some purposes and not for other purposes, and such reinstatement is for all purposes from the date of reinstatement; see Re Future Life Enterprises Pty Ltd (1994) 33 NSWLR 559 and Re Amtrao Pty Ltd (1994) 13 ACSR 654. This does not mean that anything which was purported to be done on behalf of a company during its period of deregistration ought necessarily be regarded as valid. However that issue does not have to be decided in this case. In fact nothing was done on behalf of Land Pastures (as opposed to things done by Ms Glynn) during the period of Land Pastures deregistration from 17 April 2015 to 28 August 2015 which is germane to any of the issues that need to be decided in this case.

125. [125]
     It follows that the deregistration of Land Pastures is irrelevant.

Consideration of Applicant’s delay regarding s 206 BCCM Notice

126. [126]
     I have referred to the fact that the applicant had not provided the requisite notice under s 206 of the BCCM, and did not even provide the name of the body corporate manager, until 28 September 2016. Where a party’s failure to perform its obligations pursuant to a contract has been caused by the other party’s failure to perform its obligation, the failure is not a breach, unless the other party has tendered full performance of its obligations. There is nothing here to indicate that the applicant had done so. In circumstances where there had been no attempt to agree upon settlement figures or to fix a time and place for settlement. I conclude that Ms Glynn did not wish to settle on 30 September 2016.

127. [127]
     In Frankcombe v Foster Investments Pty Ltd [1978] 2 NSWLR 41 at p 48-49, Holland J said:

The obligations … were those in relation to settlement of the contract. In the absence of contrary provisions in the contract, the obligations of each party on settlement are dependant and concurrent, that is, a party failing on his part to perform is not in breach unless the other party has tendered performance of his obligations … The purchaser refrained from manifesting any intention or desire to settle, and the vendor has been able to prove to the Court that it had no such intention or desire, but wished to escape from the contract.

128. [128]
     So too in Sharjade Pty Ltd v Commonwealth of Australia [2009] NSWCA 373, Hodgson JA said at [55]:

…[U]nder a contract for the sale of land, the obligation of the vendor to transfer the land and the obligation of the purchaser to pay the price on completion are mutually dependant and concurrent; and that generally neither party who fails to perform its obligation when the time for performance arrives can terminate for the other party’s failure at that time to perform its obligation.

129. [129]
     In my view, even if settlement on 30 September 2016 had not been waived, and extended to at least 4 October 2016, as I have found it was, Ms Glynn would, in any case, not have been able to terminate. She had herself failed to perform her own obligations and her failure in relation to the s 206 notice had caused Land Pastures to itself be unable to complete on that day.

Damages

130. [130]
     In such circumstances I conclude that the contract dated 25 July 2016 remains on foot and the respondent is entitled to an order for specific performance.

131. [131]
     The respondents also claim equitable damages pursuant to s 8 of the Civil Proceedings Act 2011 (Qld).  Their entitlement to do so, or at least the second respondent’s entitlement, arises, it is said, because of Ms Glynn’s conduct and the requirement it pay rent at the rate set out in the tenancy agreement or, has otherwise incurred loss by reason of Ms Glynn’s conduct. In particular, the respondents point to her conduct after receipt of the Annexure 2 Notice of 19 March 2015 including her delivery of the various notices thereafter seeking to compel the respondents’ exclusion from the property as indicating her refusal to be bound by the terms of the COA and attached Contract of Sale. 

132. [132]
     I accept, as I have previously indicated, that it was in such circumstances that the second respondent, having paid rent at the rate of $2,594.00 per month up to September 2014, and $2,649.57 per month as required by the COA thereafter, ceased paying any rent from 31 July 2015. I have also found its decision to do so was understandable. The market rental of the property was, as I have also found, only that paid pursuant to the short term lease of July 2013, that is, $410.00 per week plus electricity, gas and phone.

133. [133]
     The higher rental payments were made pursuant to the COA in order to recognise the benefits the second respondent would receive under that agreement if it gave the Annexure 2 Notice and completed the settlement.

134. [134]
     The conduct of Ms Glynn in reacting as she did to the notice of 19 March 2015 clearly indicated she did not intend to be bound by her irrevocable obligation to complete the sale. This, I find, left the second respondent the position where its decision not to pay the higher agreed rent was justified.

135. [135]
     It had significant equity in the property as I have earlier set out. To continue to pay the above market rental in circumstances where that could all be lost if Ms Glynn simply refused to settle, especially in circumstances where the property was subject to her significant mortgage to ANZ Banking Group, is obvious. That her position was perilous is supported by consideration of a Notice given pursuant to s 84 of the Property Law Act 1974 (Qld) by her mortgagor. It indicates that in September 2016 the amount outstanding was $361,129.66.

136. [136]
     The consequence of Ms Glynn’s conduct has been such that the second respondent has been held out of its entitlement to become the registered proprietor of the property. It has, however, had the benefit of occupation of the premises since July 2013 and, in particular, has paid no rental during that occupation since 1 August 2015. Moreover, because of the delay in settlement, it has not incurred costs associated with ownership, including mortgage payments on the loan that Land Pastures was obliged to make in order to complete settlement.

137. [137]
     Counsel for the respondents submits that I should conclude any demand for rent by Ms Glynn – even for market rent – would be inequitable and would amount to her “seeking to profit from her own wrong”. He submits that it is reasonable to conclude that, but for Ms Glynn’s conduct, and despite the contract of March 2015 providing for settlement “on or before 21 January 2016” settlement would probably have been effected by 1 August 2015. I accept that to be so. That date would, I conclude, have been a “reasonable time” after the giving of the Annexure 2 Notice of 19 March 2015 and in circumstances where Ms Glynn says in her submissions that she would have required earlier settlement than 21 January 2016, I think it reasonable to conclude settlement would have occurred by August 2015, if the parties had met their irrevocable obligations. Counsel for the respondents submits that if that had occurred Ms Glynn would have received no rental thereafter.

138. [138]
     That is, of course, self-evidently true.

139. [139]
     She would, on the other hand, have thereafter also incurred no mortgage repayments or outgoings on the property. Correspondingly, Land Pastures, whilst it would not have incurred any obligation to pay rent, would have incurred those obligations in respect of outgoings together with gas, electricity and phone that it was required to pay under the initial rental agreement. More importantly, it would have incurred significant mortgage costs. Whilst the contract was not subject to finance, it was in fact to be financed by a mortgage. Evidence was given, as I have previously set out, of the second respondent’s intention to borrow $400,000 at an interest rate of 10% per annum to enable settlement on 17 October 2016, the date nominated by Accuro Legal for settlement after Ms Glynn had purported to terminate the agreement. It is possible, that Land Pastures might have borrowed at lower rates with a bank. I note that the second respondent has a mortgage with a bank over one of the properties at Clifton. What interest payments might have been from 1 August 2015 is however uncertain.

140. [140]
     In my view, because of the obligation on a party seeking equity to do equity, it is appropriate that the second respondent pay to Ms Glynn market rental from 1 August 2015.

141. [141]
     Counsel for the respondents in his submissions said:

It may soundly be inferred that the true market rental for this property is of the order of $1,640.00 per month.

142. [142]
     This was clearly a reference to the weekly rental in the earlier short term lease I have referred to. I accept that earlier rental agreement to which he was referring is a strong indicator of market rental. I however calculate such rent at $410 per week, amounting to $21,377 per annum (52.14 weeks) or $1,781 per month. The second respondent also, as I have said, was obliged under that lease to pay electricity, gas and phone utilities if they were registered in Ms Glynn’s name.

143. [143]
     For the period from 1 August 2015 to 14 December 2016, which appears to me to be a date when settlement might now be effected, the total market rental would therefore amount to $29,316.

144. [144]
     In my view, equity requires that the second respondent pay such rental to Ms Glynn. In determining that I am also influenced by the conduct of the second respondent. Whilst I have found the second respondent’s decision, in the face of Ms Glynn’s obvious rejection of her obligations under the COA after 19 March 2015, to cease paying the rental in accordance with the lease after 1 August 2015 was justified, the respondents did little to bring the matter to a conclusion. Faced with her conduct, the respondents merely continued to occupy the premises free of rent. To pay nothing for that period during which, if they had purchased the property, they would, as I have said, been required to pay mortgage payments and outgoings, would I think, be inequitable.

145. [145]
     Under the terms of the earlier tenancy agreement, Land Pastures would have been required to pay gas, electricity and phone services to the property but other expenses such as, council rates, water rates and body corporate fees and charges would have been the responsibility of Ms Glynn. They should remain so.

146. [146]
     All of these matters should be reflected in the settlement figures to be adjusted to the date of settlement of the contract of 29 July 2016, proposed by me to be 14 December 2016.

147. [147]
     It appears to me that the findings I have made enable the parties to appropriately settle the matter on 14 December 2016. The parties should prepare and exchange settlement figures to enable that to occur, consistent with the findings I have made in this case.

148. [148]
     Subject to further discussion about the form of the orders I propose to order:

1. That the Contract of Sale dated 29 July 2016 between the applicant as vendor and the second respondent as purchaser ought to be specifically performed and carried into execution.

2. That subject to other order of the court, settlement of the Contract of Sale be effected on 14 December 2016.

3. That the parties agree on settlement figures to enable that settlement to be effected.

4. That the settlement be effected on 14 December 2016 at a time and at a place suitable to the ANZ Banking Group.

5. The parties be at liberty, upon giving reasonable notice to the other, to list the matter before me for any ancillary orders to enable settlement to be effected.

6. That the applicant pay the respondents’ costs of and incidental to this application including any reserved costs, to be assessed. 

7. That the applicant’s claim be dismissed.