A travel agent who defaulted on two off-the-plan Surfers Paradise apartment buys signed up in February 2008 has claimed the Property Agents Fidelity Fund
Bidding stopped at $1.05 million and they were “persuaded” to reduce the reserve to that sum only to then find that the would-be purchaser did not have the cash immediately available for the deposit.
The first thing buyer Jun Ma did after having the property knocked down to him – according to Mr Adams – was to ask agent Darren Dowd whether he could pay the deposit by daily instalments of $20k from funds in China.
Adams was so fearful his mother would lose the sale completely because the buyer did not seem good for the money, he dashed out on the street in an unsuccessful attempt to find the under-bidder presumably to elicit a bid from him at the same price.
To his relief, Ma wrote a personal cheque for the $105k deposit. Unnoticed at the time, the cheque had been post-dated by two days until Monday 8 December by which time a transfer of funds into the account ensured it was honoured after presentation that day.
That very same morning, Ms Adams purported – by notice from her solicitors – to terminate the contract because, she said, the deposit “had not been paid as required under the contract”.
In New South Wales as in Queensland, standard form contracts provide that payment of deposit by post-dated cheque is a default on the part of the buyer.
In the ensuing Supreme Court dispute, buyer Ma argued that the sellers right to terminate on the grounds of any post-dating was lost once the cheque was capable of being banked and honoured. Because this had occurred by the time he sellers notice of termination had been received, it was – they argued – ineffectual.
Justice Stephen Robb of the NSW Supreme Court disagreed: “A cheque that is post-dated when drawn dies not lose that character as the date that the cheque bears is reached.”
The seller also resisted the buyer’s claim for specific performance on the grounds that Mr Ma was not “ready willing and able” to complete the contract because his finance application still awaited a valuer’s inspection of the home – refused by Ms Adams – before it could be formally approved.
The court was not prepared to hold that the buyer was not in a position to complete when the seller was responsible for the particular obstacle that stood in the way of settlement.
Regardless of that minor victory, the buyer’s claim for performance of the contract by the seller, was dismissed and he was ordered to pay the sellers legal costs of the proceedings.
Ma v Adams  NSWSC 1452, Robb J, 02/10/2015