court orders 'broke' bidder to pay $447,000 plus costs

Terryw

Terryw

Interesting article

Legal hammer falls - court orders 'broke' bidder to pay $447,000 plus costs

EXCLUIVE by Janet Fife-Yeomans
From: The Daily Telegraph
September 03, 2011

IT was just a two-bedroom cottage with dream, never-to-be-built-out panoramic ocean views.

The auction for the clifftop home along the northern beaches was going well.

There were three bidders, then two, then the hammer fell on the final bid of $2.3 million.

Then it turned into every home seller's nightmare - the winning bidder left a dud cheque for the compulsory 10 per cent deposit.

rest at
http://www.dailytelegraph.com.au/ne...47000-plus-costs/story-e6freuzi-1226128477654
 
Interesting read. Not sure if the buyer was broke, but is now. Started out dishonest and got what was deserved.

Brian
 
Hi Brian

According to paragraph 3 of the judgment she had a net worth of over $1mil:

At Mr O'Kane's request the defendant provided a Balance Sheet of her assets, which consisted of three properties. Those properties were in Manly (valued at $950,000 with liabilities of $226,000), Salamander Bay (valued at $380,000 with no liabilities listed against it) and Townsville (valued at $500,000 with liabilities of $492,000). The Balance Sheet recorded that the defendant had total assets of $1,830,000 over liabilities of $718,000.
Click to expand...
 
What a great read - thanks for posting Terry.

I had a slight chuckle when the Purchaser's solicitor informed the Vendor's solicitor that indeed the Salamander Bay property wasn't 'not unencumbered'....about a quadruple negative right there.

He also wrote to say that the Purchaser wasn't sure about her finances, but it was pretty clear that the Townsville property, with a value of 500K and a loan of 492K against it, was obviously X-colled by Westpac with the Salamander Bay property.


The slimy act of the Purchaser's solicitor trying to worm his way out by saying that the Vendor's acceptance of the 50K as full deposit and therefore the Contract still "on foot".....love that terminology....and therefore the Vendor had no right to terminate the Contract, instead of a part deposit was low indeed.


It went specifically against the wording of the Contract, which is quite clear. At point 23, this poncy promissary estoppel, where some airy fairy unrecorded conversation with the husband of the Buyer - who wasn't even a party to the Contract - could even get a look in - and challenge the wording of the Contract is disgraceful. It should have been thrown out as fluff way earlier.


I'm very glad the judegment went the Vendor's way....although I believe the time delay from 12 Dec 2009, the date of the auction, and late August 2011 the date of the decision is waaaayyyy to long.

On top of that, although the judgement ordered costs and interest, they haven't agreed the amounts for those......and knowing solicitors.....they never agree to anything upfront, so they'll be arguing the toss over that. I note that last Friday was when the Judge would hear arguments for that argy-bargy.

I would be very interested to know the final date when the $ 350K differential, plus costs plus interest was actually paid and the Vendor is fully recompensed. I would hazard a guess the Purchaser could drag that **** out for another year or two.

What a nightmare for the Vendors.

I took many lessons from that - thanks once again for posting.
 
Glad you liked in Dazz.

I think it is good to read about these cases and what really happens when things go to court.
 
That made for excellent reading, thanks Terry.

I am glad to see that the "correct" ruling was made.

I can't believe these people who bid at auctions, clearly aware of their requirements to present 10% on winning (or other pre-agreed amount), then try and wriggle out of it as they don't have the money ready.
 
I wonder about compensation for the legal fees - tis not really fair the vendor loses $50k (guessing) in legal fees?
 
When it comes to auctions, I have often wondered about the following scenario.

A prospective buyer gets a friend to bid, who bids up to or over the agreed amount, the prospective buyer then decides to they dont want it afterall.

Is the friend now responsible for the purchase?
 
Yes. The person who bid for the property is ultimately responsible unless they have it in writing that the person they are bidding for will indemnify them for it.
 
Aaron_C said:
In any court case you never expect to get more than 60% of your costs back in any legal proceeding, whether you win or not.
Click to expand...

For those who would like to read more on the topic of costs:

Here's what Halsbury's says on costs

Quantifying party-party costs by way of taxation or assessment The costs indemnity rule1 dictates that, in the usual case, an unsuccessful litigant will be ordered to indemnify the successful litigant for the latter’s costs in bringing or defending the suit.2 Although the term ‘indemnity’ is used, the reality is that a complete indemnity may cast too heavy a burden on a losing party as well as discourage an ultimately successful party from conducting litigation in a cost-effective fashion. The courts, rather, speak of a fair,3 qualified4 or reasonable5 indemnity which serves to place a limit upon the costs to be paid by an unsuccessful litigant. Except where the parties agree on the quantum of costs or the court otherwise fixes the quantum of costs the successful party can recover from the unsuccessful party,6 the extent of the costs indemnity is determined on a process known as ‘taxation’ or ‘assessment’.7 The costs that are allowed on taxation or assessment are impacted on by the basis upon which the taxation or assessment is conducted, as stipulated by the court8 or by a contract.9


Here is where you can find the court costs for QLD
Schedule 1-3 of the UCPR (http://www.legislation.qld.gov.au/LEGISLTN/CURRENT/S/SuprCrtQUCPRu99.pdf) contains the costs that a solicitor may charge if no costs agreement/ disclosure is given. $200ish an hour for district court, up to $300 hour for supreme court, mags court can be fixed amount according to value of trial. As you can see these are significantly lower than what a solicitor would charge under a costs agreement.
 
Another lesson is - at the end of the day - would the vendor have been better of saying "oh bum", contacting the underbidder and just getting the damn thing sold in 2009?

Probably.
 
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