Evans v Jan [2025] QSC 31
Deposits in property contracts are often seen as a routine administrative step. However, a recent decision in the Supreme Court of Queensland demonstrates how severe missing a deposit due date can be.
In Evans v Jan [2025] QSC 31, a purchaser lost their deposit of $98,500.00 plus interest after failing to pay it by the due date. The case is a useful reminder that in Queensland property contract, time is “of the essence”, and even a short delay can have significant consequences.
The parties of Evans v Jan entered into a standard REIQ Contract for House and Residential Land for the purchase of a residential property at Shailer Park, the key terms of which were:
The contract was executed by all parties on 23 January 2024 setting the contract date, which made the requirement for the deposit to be paid by 5pm that day.
However, the purchaser encountered a banking transfer limit that prevented him from transferring the full amount immediately. Instead, the deposit was paid in instalments across 24 and 25 January 2024.
The purchaser had sent a text message to the real estate agent explaining the issue and proposing to transfer the funds over two days. The purchaser was under the assumption that the agent had effectively agreed to this arrangement.
The Seller’s solicitors subsequently terminated the contract due to failure to pay the deposit on time. Under the contract the payment of the deposit was an “essential Term” which gave the right to the seller to terminate the contract if the purchaser was at breach, and retain their deposit.
After proceedings were initiated by the Purchaser seeking specific performance of the contract and the Seller counterclaimed for the forfeiture of the deposit.
The Supreme Court of Queensland held that the claim for specific performance is dismissed, and the full deposit is forfeited to the defendant with interest at the Contract Rate.
The Court held that the contract had required the deposit to be paid when both parties had signed, being 23 January. Due to the purchaser not paying the deposit on that day, he had breached an essential term of the contract.
Further, the Court held that the Agent had no authority to Extend the Deadline. The purchaser had relied on text messages from the real estate agent rather than an extension or agreement between solicitors which would have been binding.
As a result, the purchaser could not rely on those communications to justify the late payment.
Key takeaways from this case are:
Deposit Due Dates Matter
If a contract states that a deposit is payable upon signing, the deposit is due immediately and even short delays may constitute a breach of an essential term.
Do not rely on informal Communications
Statements by a real estate agent may not bind the seller unless the agent has authority to vary the contract. Buyers should ensure any extension of time is formally agreed and documented between their solicitors.
Conclusion
The decision in Evans v Jan serves as a stern warning for property purchasers in Queensland property. What might seem like a minor administrative delay can result in substantial monetary losses.
As a Buyer, the safest course is to ensure the deposit funds are ready and capable of immediate transfer before signing the contract. If you are entering into a property contract in Queensland, obtaining legal advice before signing the contract can help avoid costly mistakes.
