Margaret and Andy Culjaks’ $1.55 million December 2020 sale of their residence was due to settle on 22 February after negotiation of an extension to the original January completion date.
The Fairfield property in Sydney’s west had been knocked down to buyer Ben Akrawe at auction but on 17 February his solicitor told his counterparts opposite – in a conversation Akrawe denied any knowledge of – that his client “did not have the funds to complete”.
The sellers offered the 2-month extension – and to enter into a deed to effect the substitution of Mr Akrawe’s son as buyer – provided they were immediately paid the $155k deposit from the agent’s trust account and that the buyer agreed it would be non-refundable.
Documents to put the arrangement into effect were sent by the Culjaks’ solicitors to those of the buyer – who also acted for his son – on 25 February.
Absent any response by 3 March, they delivered a Notice to Complete calling on the 81-yr-old buyer to attend for settlement on 18 March at 12 noon at a specific PEXA workspace ID.
The sellers nevertheless agreed to proceed with the sale to the substitute buyer if all documents were signed by Saad Saeed – Mr Akrawe’s son – and delivered with payment for document preparation fees to the sellers’ solicitors by no later than 5 PM on 10 March.
But on that day, the buyers’ solicitors requested a variation to extend Mr Saeed’s settlement until 42 days from contract execution.
That request too was agreed, provided the executed documents etc were returned by no later than 12 noon the following day.
When that did not occur, the sellers’ solicitor notified that she was awaiting instructions in relation to Mr Saeed’s delay but absent any such instructions the Notice to Complete previously served in respect of Mr Akrawe, would stand.
A further settlement reminder was sent with the observation that “you have not accepted the date and time for settlement” in the nominated PEXA workspace.
On 17 March the documents executed by Saeed and cheques for the deposit and legal fees were delivered to the seller’s solicitor with the observation that “there would be no legally binding relationship until an ‘exchange’ had taken place”.
In response the sellers’ solicitor called for documentary evidence that Saeed had been approved a loan of the requisite funds for settlement on 19 April.
Such evidence was not forthcoming.
Numerous phone and email exchanges on 17 and 18 March made it clear that the sellers reserved the position of relying on the Notice to Complete unless they notified otherwise.
Akrawe did not accept the 18 March settlement date in PEXA and did not attend the PEXA workspace for the appointed time.
Rather – at the same time as amending the aborted time for settlement in the PEXA workspace to 23 March – his solicitors sought a further extension of settlement to that date.
Denying that request, the sellers terminated the contract and demanded payment of the $155k deposit from the selling agent’s trust account.
They commenced Supreme Court proceedings seeking a declaration that the contract had been duly terminated.
Akrawe counterclaimed for an order compelling the sellers to complete.
He eventually conceded that the notice calling for completion was sufficiently effective to require settlement on 18 March but contended that had he been timely informed of the plaintiffs’ position vis a vis Mr Saeed, he could have put funds into PEXA to settle that day.
The sellers’ failure to notify him was – he alleged – conduct that caused or contributed to his breach.
Justice Rowan Darke had to decide whether “equity should intervene on the basis that it would be unconscientious for the plaintiffs to insist upon their legal right to terminate the contract”.
He noted the absence of cogent evidence that Mr Akrawe had the cash available to settle particularly given his solicitor had clearly stated a contrary position just one month earlier.
His Honour ruled that Akrawe had not established that his failure to complete was caused or contributed to by any adverse conduct or silence on the part of the sellers.
He made the declaration that the contract had been duly terminated and ordered that the deposit funds which had been paid into court, be paid out to the sellers.
Culjak v Akrawe [2022] NSWSC 949 Darke J, 19 July 2022 Read case
