In brief - Timeframes specified in property sale contracts must
be strictly observed
The seller of a residential property validly terminated the
contract after the buyers failed to notify the seller in time that
they were satisfied with the building and pest inspections they had
performed, according to a recent decision of the Supreme Court of
Contract for the sale of residential property
In the case of Simpson & Ors v Jackson  QSC 191, the
buyers, Ms Simpson and others, had entered into a contract with the
seller, Mr Jackson, for the sale of a residential property at
Newport, north of Brisbane, on 23 November 2013.
The contract was subject to and conditional upon the buyers
obtaining satisfactory building and pest inspections by 9 December
2013 and notifying the seller of the outcome of these inspections
by the same date.
Buyers' notice not received on time by seller's
At 4.57pm on the inspection date, the buyers' lawyer sent a
facsimile letter to the real estate agent (but not to the
seller's lawyer) noted on the contract, advising that the
buyers were satisfied with the building and pest inspections they
had performed ("buyers' notice").
Seller terminates contract and buyer places caveat over title
Having not received the buyers' notice, the seller's
lawyer sent a facsimile letter ("seller's termination
notice") to the buyers' lawyer at 5.06pm on the inspection
date, terminating the contract due to the buyers' failure to
notify the seller of the outcome of the building and pest
inspection condition by 5pm on the inspection date.
After receiving the seller's termination notice, the
buyers' lawyer sent the seller's lawyer a copy of the
buyers' notice. The buyers subsequently placed a caveat over
the title to the property and sought an order for specific
performance of the contract.
Satisfaction, termination or waiver of building and pest
The contract required the buyers to notify the seller either
that a satisfactory inspector's report had not been obtained by
5pm on the inspection date and the buyers were terminating the
contract, or that the building and pest inspection condition had
been either satisfied or waived by the buyers.
If the buyers failed to give the above notice to the seller, the
seller had the right to terminate the contract. Terminating the
contract was the seller's only remedy for the buyers'
failure to give notice, subject to the buyers' continuing right
to give written notice to the seller of satisfaction, termination
or waiver of the building and pest inspection condition up until
the time when the seller terminated the contract.
Clause 10.4(4) of the contract provided that notices sent by
facsimile will be treated as given when the sender obtains a clear
transmission report. Clause 10.4(5) provided that notices given
after 5pm will be treated as given on the next business day.
Buyers argue that buyers' notice and seller's
termination notice received simultaneously
The buyers argued that because both the buyers' notice and
the seller's termination notice were received after 5pm on the
inspection date, both notices were deemed to have been sent and
received simultaneously on the next business day.
In addition, the buyers argued that where the notices were
deemed to have been sent and received simultaneously, it could not
be held that the seller's termination notice was given ahead of
the buyers' notice.
Seller argues that seller's termination notice received
earlier and contract validly terminated
The seller argued that the seller's termination notice was
given prior to the seller's lawyer receiving a copy of the
buyers' notice, regardless of whether both notices were deemed
to have been given on the next business day after the inspection
The seller argued that he had therefore validly terminated the
Buyer ordered to remove caveat and denied order for specific
performance of contract
The court strongly rejected the buyers' argument and held
that the seller had validly terminated the contract.
The court noted that the concept of each of the buyers'
notice and the seller's termination notice being given
simultaneously (as argued by the buyer) would leave the parties
guessing as to which notice was effective. The better course was to
treat the buyer's notice and the seller's termination
notice as being given on the next business day, but in the order
The buyer was ordered to remove the caveat it had registered
over the property and was denied an order for specific performance
of the contract.
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