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REIQ Journal : June 2008
30 LEGAL ISSUES However, the question which confronted the Supreme Court was whether the parties’ agreement was consistent with the rights and obligations as stated in the Property Agents and Motor Dealers Act 2000 (Qld) (“PAMD Act”). Special Condition 1 of the Contract was varied to provide for payment of: “$100,000 by way of further part deposit payable on 4 September 2007 to be released immediately to the Sellers (and for the purpose of clarity the parties agree that Special Condition 13 shall also apply to this further part deposit).” Special Condition 13 provided: “The parties mutually acknowledge, authorise and agree that as soon as practicable after payment of the balance deposit the deposit holder shall pay to the Seller the Deposit…” The buyer was unable to complete the contract on 27 September 2007 and sought a further extension of the settlement date. The seller refused and terminated the contract and asserted it was entitled to retain the deposit already released to it. The buyer claimed that the contract was an instalment contract and the seller was not entitled to retain the deposit. The matter proceeded to the Supreme Court, with the seller seeking a declaration that the contract had been validly terminated and that it was entitled to retain the deposit. The buyer sought a declaration that the contract was an instalment contract and, therefore, it was entitled to the return of the deposit. The law The seller submitted that the intent of Special Condition 13 was to authorise Centrepoint to pay part of the deposit to it before the completion or earlier termination of the contract. Justice Fryberg agreed with the seller’s submission and held that the Special Condition was intended to authorise payment of part of the deposit to the seller before the finalisation of the contract. Section 384 of the PAMD Act provides that an amount paid to a trust account must be kept in the account until it is paid out under the Act, and an amount may be paid from a trust account only in a way permitted under the Act. Section 385 of the PAMD Act governs the withdrawal of money from the licensee’s trust account. Section 385(2) the PAMD Act of provides: “The licensee is authorised – (a) to draw an amount from the transaction fund to pay a transaction expense when the expense becomes payable; and (b) when the transaction is finalised (emphasis added), to draw an amount from the transaction fund that is equal to the difference between – (i) the balance of the transaction fund; and (ii) the total of the licensee’s transaction fee and any outstanding transaction expense; to pay the person entitled to the amount or in accordance with the person’s written direction; and (c) to draw the licensee’s transaction fee from the transaction fund when the amount, if any, mentioned in paragraph (b) has been paid and when the transaction is finalised (emphasis added).“ Continued page 32 REIQ Journal June 2008