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Evans v Jan [2025] QSC 31

A recent decision by the Supreme Court of Queensland, Evans v Jan [2025] QSC 31, provides a crucial lesson for purchasers in property transactions. The result in this case is an important reminder to never rely on a selling agent’s representations without verifying them with your legal representatives first. If there’s a discrepancy between what the agent says and the contract terms, get it confirmed in writing. Failing to do so can risk termination of the contract and forfeiture of your deposit.

The Case Overview

The purchaser entered into a standard residential property sale contract to buy a property for $985,000 from the vendor. The contract required a 10% deposit of $98,500 to be paid upon signing. The contract was signed electronically by the parties at different times on 22 January 2024. The parties accepted that the contract was entered on 23 January 2024 when the agent emailed the purchaser stating that the property was “under contract now,” requiring the deposit to be paid that day. However, the deposit was not fully paid until 25 January 2024, two days late, breaching an essential term of the contract. The vendor subsequently terminated the contract on 28 January 2024, citing the purchaser’s failure to pay the deposit on time. The purchaser argued that the agent had authorised the late payment through text messages and emails exchanged on 24 January 2024. At 9 am on that day, the purchaser transferred $45,000 to the agent’s trust account and sent an email apologising for the delay, stating, “Do apologise. Deposit today and balance tomorrow. Very sorry bank is painful to deal with.” The agent replied, “Ok as long as I let vendor know 2 deposits today and tmr (tomorrow).” The remaining balance of the deposit was paid in three instalments on 25 January 2024. The purchaser claimed he relied on the agent’s messages as a representation that the vendor had consented to the delayed payment. He argued that had it not been for the agent’s message, he would have arranged for full payment of the deposit on 23 January 2024.

Could the purchaser assume that the agent had the authority to amend the contract on behalf of the vendor?

The purchaser claimed that the agent had "actual authority" to represent the vendor and agree to an extension for the deposit payment. Alternatively, the purchaser argued that if the agent lacked actual authority, the agent had "ostensible authority" to send text messages extending the deposit payment deadline. The court rejected the purchaser's arguments regarding both actual and ostensible authority for the following reasons:

  1. Actual Authority: Actual authority must be established through the conduct of the vendor, not the agent. The agent’s use of the plural pronoun "we" in text messages was seen as a standard reference to the deposit holder under the contract, not an indication of the vendor's direct authority.
  2. Ostensible Authority: Ostensible authority would arise if the vendor had held out the agent as having the authority to make decisions on the vendor's behalf. The agent’s communication of the contract's formation did not create an impression that the agent had authority to amend essential terms of the contract, such as the payment of the deposit. The mere fact that the agent sent the signed contract and mentioned the deposit due date did not equate to an authorization for the agent to extend the payment terms. Therefore, there was no reasonable basis for the purchaser to assume the agent had the authority to modify the contract.

The court determined that neither actual nor ostensible authority existed for the agent to modify the contract terms, especially regarding the payment of the deposit.

Judgment

The vendor successfully upheld the termination of the contract and secured the forfeiture of the $98,500 deposit, based on the fact that the deposit was not paid on 23 January 2024 as required under the contract of sale.

Key Takeaways for Purchasers

Before entering into any property transaction, it’s crucial for purchasers to seek legal advice to understand their rights and obligations under the contract. Relying solely on verbal assurances or informal communications from agents can lead to costly mistakes, as seen in this case. To protect your interests and avoid potential disputes, ensure that any amendments to the contract are clearly documented and confirmed in writing.

How RKL Lawyers and Consultants Can Help

At RKL Lawyers and Consultants, we understand the complexities of property transactions and the serious implications of any contract terms. Our experienced legal team can provide you with clear, practical advice to safeguard your interests, ensure that all representations are properly authorised and documented, and minimise the risk of costly disputes, whether you are buying or selling, negotiating contract terms, seeking to enforce a contract, or dealing with potential breaches.

For more information on how RKL Lawyers and Consultants can assist you with matters related to Property Law & Conveyancing