Embarrassing but not fraudulent: Appeal court baulks at binding buyers to fixed-up contract
An elderly couple, penalised because they had failed to “baldly accuse” a seller’s lawyers that easement particulars had been surreptitiously inserted into a contract after execution, won an appeal on Friday against a District Court ruling that had required they pay $208,000 for the seller’s re-sale loss.
In reasoning that was upheld on appeal, the trial court – contrary to the protests of Harcourts Mooloolaba – found that a trainee receptionist had only inserted drainage easement details into the contract particulars of the waterfront luxury home, after receiving a copy title search from a local lawyer (who was also the seller’s son) and after the parties had signed up!
Notwithstanding, the trial judge was persuaded that the agent’s dispatch of the signed document back to the buyer with the encumbrance easement added, amounted to a counter-offer, which octogenarians Don and Dorothy Shortman were then deemed to have accepted, by means of the cumulative effect of a number of things subsequently done by them or on their behalf.
However what the trial judge thought last October were “clear acts constituting unequivocal acceptance”, were viewed somewhat differently by the three appeal judges.
The buyers’ solicitors, naturally enough, would not “have contemplated the possibility” that the document they received may have been doctored. Any delay in them raising the irregularity with those opposite, must therefore not be counted against the buyers.
Moreover, the evidence was that the Shortmans had no knowledge of the easement insertion until much later and certainly not before they returned the buyer’s acknowledgment and paid the deposit.
“The learned judge could not properly infer that those acts constituted an unequivocal acceptance of a counter-offer,” ruled the court of appeal. “The judgment must be set aside”.
Thus the buyers’ termination on the grounds of the undisclosed easement was upheld and the seller could not pass on to them the $130,000 re-sale shortfall plus interest and legal expenses.
The trial finding that “there is no acceptable evidence of sharp practice on the part of anyone associated with the plaintiff’s agent”, was left undisturbed on appeal as was the evidence from the trainee receptionist, who was presumably “much maligned” for activities that have since led to a conviction for the theft of $2,600 from the agent’s trust account.