When Ai and Kris O’Neill signed a contract to buy a $360,000 residence at Ormeau, little did they know that the purchase price might not be enough to clear the sellers’ mortgage debt and literally leave their family without a roof over their heads.

That’s how this seemingly straightforward deal — the contract was signed in November 2008 – was to unfold, culminating in a verdict in their favour in Southport’s District Court for $65,000 damages.

The agreed settlement date in December arrived but the sellers could not deliver clear title because of a mortgagee payout shortfall. They requested a settlement extension to which the O’Neills consented provided they were allowed into immediate occupation.

Subsequent settlement dates came and went with the seller still unable to convince its mortgagee – Challenger Mortgage – to allow the sale to proceed.

In May 2009 the Mortgagee entered into possession of the property and ordered the O’Neills to vacate.

The buyers found a similar home for the family – at Coombabah, a litte older and with 3 bedrooms plus study as compared to four bedrooms – but at $65,000 more than the Coomera home contract price. They moved in to the Coombabah home in August 2009.

In February 2011, they filed a breach of contract claim against the sellers claiming the extra amount they ended up having to pay for the family home and expenses thrown away: legal fees, storage costs, home rental until the Coombabah home became available.

The court accepted that the substitute home was “another property of like-quality” and that the other losses “flow from the breach of the contract by the defendants”.

By the time the case came before the court on a summary judgment application, the sellers were acting on their own behalf. They did not appear in court to contest the claim when the $75,000 damages plus legal costs of the recovery proceedings were awarded against them.

O’Neill v Brown [2011] QDC 221 Samios DCJ published 30/09/2011



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