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REIQ Journal : June 2008
Legal Issues 29 Legislation over-rules client instruction Phillips and Anor v Scotdale Pty Ltd  QSC 368 By Michael Gapes, Partner, Carter Newell Lawyers In the recent decision of Phillips and Anor v Scotdale Pty Ltd  QSC 368, the Supreme Court of Queensland ruled that it was illegal for a real estate agent to release a deposit to a seller prior to the finalisation of the contract, even though all parties had agreed to the deposit being released early. The case serves as a reminder to agents that their duties prescribed at law prevail over instructions issued to them by their clients. The facts On 17 July 2007, the seller entered into a contract to sell a residential property at Gilston for $3.5 million to Scotdale Pty Ltd (“the buyer”). The contract was a standard REIQ Contract for Houses and Land with a number of special conditions. The Reference Schedule set out how the deposit was to be paid: $10,000 was payable when the buyer signed the contract and $90,000 was payable 14 days from the contract date. Centrepoint First National (“Centrepoint”) was nominated as the deposit holder. Settlement was due to take place on 22 August 2007. However, the buyer requested an extension of the settlement date to 27 September 2007. An agreement was reached whereby the settlement date was extended to 4 September 2007 or, if the buyer paid a further $100,000 deposit to the agent on or before 4 September 2007, the settlement date would be extended to 27 September 2007. REIQ Journal June 2008