The insertion by an agent of drainage easement particulars into a residential contract reference schedule – after the buyers had signed it – seemed valid reason enough for “impetuous” Sunshine Coast house hunters to crash their waterfront purchase.
Following inspection, elderly couple Don and Dorothy Shortman made their initial offer which the Harcourts Mooloolaba agent was skillful enough to convert later the same day, to a signed $820,000 contract. His task made all the easier, by Don’s repeated concern to “avoid hitting the traffic on his return over the Gateway Bridge”.
The real estate office insisted that it had obtained a title search and the easement particulars had been inserted before the buyer signed albeit, in freehand, because of the initial oversight of a trainee receptionist.
This proposition was rejected by the Maroochydore District Court after a two-day trial. Three of the four Harcourts personnel wavered in the witness box from their robust affidavit testimony and no receipt or other paperwork could be produced for the title search they claimed to have ordered.
Late-in-the-day court disclosure of e-mail traffic from the seller’s solicitor revealed it was he – the solicitor was in fact the seller’s son – who first brought the easement to the agents’ attention and who sent a copy of the title search the day after the contract had been signed.
“Despite persuasive attempts to make light of these documents,” concluded his honour, “it is the timing and date which leaves me comfortably to the inference that the contract signed the day before the exchange of e-mails did not contain the reference to the easement”.
The court ruled that the seller was “mistaken” in her evidence that the easement was referred to in the contract when she signed the day before. He “did not accept” the evidence of the agency supervisor as to “instructing the receptionist to write in the easement number prior to then”.
Embarrassing for sure. But despite urging on behalf of the buyers that the agency had engaged in “unconscionable conduct”, the court inferred “there is no acceptable evidence of sharp practice on the part of anyone associated with the plaintiff’s agent”.
Even so, evidence of the “much maligned” receptionist – who had since been convicted of theft of $2,600 from the agent’s trust account – was ranked more reliable than that of other staff who gave testimony.
But even this wasn’t enough to allow the buyers to escape the contract. The seller – represented by Ferguson Cannon Lawyers – persuaded the court that the sending of the altered contract amounted in fact, to a counter-offer.
The unfortunate buyers were taken to have accepted the counter-offer by “clear acts constituting unequivocal acceptance” including the subsequent payment of their deposit and other conduct.
The court was satisfied that the buyers had been made aware of the easement and had made light of it when perhaps they ought to have given the issue greater consideration. The buyers “subsequently regretted it and have tried to withdraw firstly on the basis of building/pest reports and ultimately on the basis of the easement issue”.
Judgment was given in favour of the seller for $208,000 being the loss on resale plus legal and other costs.
This decision was reversed on appeal in June 2012 because, it was found, the buyers’ conduct did not amount to an unequivocal acceptance of the altered contract terms.
Contract addendums – even if unsigned and uninitialled – may not affect contract validity if accepted the opposite party’s conduct. See Take the law… July 2010 posts for a similar example of this proposition.