In January 2012 Brian Maloney identified a home in bayside Brighton as an ideal location for the construction of a display home to promote sales for his growing residential building business.

Specific performance - Splitting house in two not an option

He approached Coronis – the agent with whom it was listed – “but received no response”. He then contacted the elderly owner direct and explained his proposal that involved “bulldozing the home”.

Maloney was already aware that the site consisted of two lots – 97 and 99 – and that the residence straddled the boundary.

Gwendoline Lowe – who had made 57 Seaview Street her home for 38 years – “had no emotional attachment to the home”, was keen to sell and was looking forward to moving to a retirement home.

Maloney subsequently made contact with Brodie Roselle at Elders about his display home requirements and mentioned the Seaview St site.

On ascertaining that the Coronis appointment was about to expire, the Elders man approached Mrs Lowe and was duly appointed her new sales representative.

He promptly presented her with two signed unconditional contracts he had received from Maloney – one for each lot – each at a buy price of $200k .

Mrs Lowe rejected the offers as she did two further efforts as Maloney upped his bids to $220k and then $230k.

Once the dollars reached $240k, the seller accepted but by adding two special conditions of her own, returned the signed contracts as counter offers which Maloney then accepted by initialling the added terms.

It was then discovered that somewhere along the line the front page of the contract for lot 99 had been photocopied and used for lot 97, with “97” being written in over the original lot number.
That would have been of no consequence had it not always been Maloney’s intention that the lot be acquired by different entities in his corporate group.

In April 2012 the buyer’s solicitors requested of their counterparts opposite that – to rectify the position – the seller execute a fresh contract of sale for lot 97.

Mrs Lowe’s solicitors promptly refused those requests, apparently as a result of a decision to no longer proceed with the sale.

The buyer’s solicitors attended settlement – for lot 99 only – on the due date at the end of April. The seller refused to complete. Specific performance proceedings for both lots soon followed.

Gwendoline Lowe – 77 ½ years of age at the date of hearing – defended the proceedings on the basis that it was implied that the sales were interdependent.

That contention was supported by the fact that all discussions related to the sale of both lots; the property had always been marketed as a single parcel; Mrs Lowe had never contemplated selling only one lot; and that the residence took up portions of each lot.

Justice Philip Morrison observed “it would be perverse to find that Mrs Lowe contemplated the scenario where her house had to be moved or cut up” were a sale of only one of the lots to proceed.

He and two other appeal judges upheld the reasoning of the court below which concluded “the intention of the parties was to sell both lots together and not separately. There was an implied term that settlement of lot 99 was contingent upon the contemporaneous settlement of lot 97.”

Such term was – according to all four judges – “so obvious as to go without saying, was reasonable and equitable, was capable of clear expression and was necessary to give efficacy to the contract”.

That on at least three occasions Maloney had offered signed contracts for both lots was also indication, in its view that the subject matter of the transaction was the entirety of the land at the location.

Maloney’s appeal was dismissed and he was ordered to pay all of Mrs Lowe’s legal costs.

Interlink Australia Pty Ltd v Lowe [2015] QCA 211 Gotterson and Morrison JJA and Dalton J 30/10/2015


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