Investors who successfully recovered a $135k deposit as a result of a settlement “no-show” on the sale of their $1.35 million Isle of Capri home in September, have themselves been ordered to pay up more than $200k for their own defunct Gold Coast property buy.
Having fronted with only $1000 to hold the property, John and Julie McLeay agreed that a further $204k top up deposit would be paid within 7 days.
That deadline came and went as did other extended dates. The sellers – John and Virginia Willmott – called for settlement and when this inevitably did not occur, they terminated the contract.
Although the property re-sold for a modest loss of only $55,000, the Willmotts elected to sue for the entire unpaid deposit and commenced proceedings in the Southport District Court in February 2012.
Clause 2.3 (3) of the pro forma REIQ contract specifies that the seller can recover the unpaid deposit as a debt but this was resisted by the McLeays on the basis that such recovery “in addition to damages which might be claimed under clause 9″, would “confer an unfair windfall on the seller”.
With no decided cases on point, the judge at first instance sided with the McLeays and held that the issue was of sufficient complexity to warrant consideration in a trial setting.
The Willmotts promptly appealed and in April, three appeal judges ruled against the “unjust enrichment” proposition. They had no hesitation in declaring that the McLeays must front up with the unpaid the deposit plus the Willmotts’ costs of the legal proceedings.
In more accomodating news for them, the McLeays’ recent deposit victory was upheld on appeal in which judgment was delivered on 24/05/2013.