This case examined the time for settlement under the Queensland
standard form contract for sale of land. The property was $1.35
million home on the Gold Coast.
The contract contained the following clauses:
Clause 5.1(1) provided that settlement must occur between 9am
and 5pm on the settlement date.
Clause 6.1 provided that time was of the essence in the
contract, except regarding any agreement between the parties about
the time for settlement.
The Vendor nominated 3pm as the time for settlement, however
reserved its rights to settle at any time on that day by including
in the correspondence:
"Notwithstanding that a
specific time, date and place for settlement is arranged whether by
mutual agreement or otherwise, any such arrangement shall be deemed
tentative, and we reserve our clients' right to effect
settlement at any time on the day appointed pursuant to the terms
of the contract."
The Purchaser arrived at the place for settlement at 3pm. The
Vendor was not able to settle at that time because their mortgagee
was not ready. The Purchaser said their instructions were to only
wait until 3.05. The Vendor's mortgagee not ready until
The Purchaser left at 3.05. The Vendor phoned the Purchaser at
3:10 and asked them to come back. They didn't come back.
At 4:36, the Vendor sent a fax stating that the Purchaser was in
fundamental breach by failing to settle before 5pm and the Vendor
reserved its rights.
The sale did not settle and the parties went to court.
The Purchaser argued that the Vendor was not ready at the
scheduled time (3pm), and so the Purchaser was entitled to rescind.
The Purchaser also argued that they might have been able to settle
sometime between 4.36 and 5pm, however, upon receipt of the
Vendor's fax, they understood that the Vendor was not willing
to settle. The Purchaser considered that they should be excused
from the obligation to settle on that day due to the Vendor's
The Court rejected the Purchaser's argument. The Court found
that the fax did not indicate that the Vendor was not ready willing
and able to settle, but just reserved the Vendors rights if
settlement did not occur. The Vendor had made an attempt to contact
the Purchaser to settle after 3pm, which was ignored by the
The Court also found that the Purchaser was never ready willing
and able itself. The Purchaser's failure to be ready willing
and able to settle by 5pm was a breach of an essential term. In
addition, the Vendors failure to be ready at precisely 3pm did not
give the Purchaser a right to rescind.
The Vendor initially sought specific performance, however the
Purchaser continued to show no sign of being prepared to settle, so
the Vendor terminated the contract and claimed the $135,000
Traditionally, in Queensland, time for settlement has been
strictly enforced. The practice of arranging a settlement time, and
reserving rights to settle at anytime on the settlement date is a
new but common practice in Queensland conveyancing. This case seems
to affirm this new practice.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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