Latimore Pty Ltd v Lloyd [2020] QSC 136
Recently the Supreme Court of Queensland was tasked with interpreting a special condition for an REIQ Contract for the sale of a house (16th Edition) which was sold at auction with a balance purchase price of $1,853,807.71 payable at Settlement.
The special condition was:-
- SELLER TO PROVIDE POOL SAFETY CERTIFICATE
- Notwithstanding anything else in the Contract, the Seller agrees to provide a Pool Safety Certificate to the Buyer 7 days prior to Settlement. The parties agree that this is an essential term of the Contract.”
The parties agreed that the day which was “7 days prior to Settlement” was 15 April 2020.
At 5:03pm on the 15th of April the Buyer’s solicitor wrote to the Seller’s solicitor terminating the contract due to a failure of the Seller’s solicitor to provide a copy of the Pool Safety Certificate. The Seller’s solicitor provided the Pool Safety Certificate at 6:31pm on the 15 April 2020.
The Seller, left with no other recourse, made an application to the Supreme Court for the Buyer to be ordered to follow through with the purchase.
The Supreme Court was tasked with determining whether the special condition fell within the realm of a notice for the purpose of clause 10.4 of the REIQ contract, which provides at clause 10.4(5) that notices given after 5pm on a Business Day are treated as being delivered at 9am the next day.
The Court discussed at length the definition of a Notice for the purposes of the REIQ Contract and determined that a “notice” was the conveying of information and not the providing of a tangible thing like a Pool Safety Certificate.
The Supreme Court held that the Pool Safety Certificate did not fit the definition of a “notice” and was therefore not subject to the time limitations of clause 10.4(5). Technically the Pool Safety Certificate in this instance was able to be provided to the Buyer’s solicitor right up until 11:59pm on the 15 April 2020. The Buyer was ordered to proceed with the purchase and to pay the Seller’s legal costs on an indemnity basis.
The importance of proper drafting of special conditions
In Queensland it is not uncommon for Agents or even parties to the Contract of sale to insert their own special conditions to a Contract. What Latimore Pty Ltd v Lloyd highlights is the pitfalls of not having a special condition drafted in a way that minimises the risk of a dispute arising at a later date and costing the parties significant amounts of money in legal costs.
The best Contracts of sale are the ones that are uncontroversial and the parties are fully advised and aware of their rights and obligations prior to signing the Contract. That is why it is critical that when considering special conditions that parties and/or their agents consult with a professional to assist in drafting the condition or at the very least alert the drafter to the appropriate things to consider when drafting the condition. Had this been done for the client’s in the above matter they would have been spared the significant expense of going to the Supreme Court.
MacGregor O’Reilly Nash Solicitors are happy to take calls from Agents or Clients who have any questions regarding special conditions.
We hope the above information gives you some food for thought, and as always if you have any questions feel free to get in touch.