We remain open and continue to serve our communities during the COVID-19 pandemic. Click here for more info

Which case won?

casea
The case for the vendor
  • The purchaser hasn’t paid us the deposit as required by the contract and so we are entitled to terminate the contract.
  • The contract required that the purchaser pay the deposit either by cash of up to $2000, or by cheque.
  • The purchaser instead paid the second instalment of the deposit by electronic funds transfer at the direction of the agent. This is clearly not in compliance with the contract.
  • It is unfortunate that the agent’s email was hacked, causing the purchaser to make the payment into a fraudulent account, but legally it’s not our problem.
  • The general authority that we granted to the agent was to find a purchaser for our property. This authority did not extend to directing the purchaser to pay a deposit in a way that is not provided for in the contract of sale.
  • Nor did the document under which we appointed the agent authorise them to direct the purchaser to pay the deposit in a manner that was not provided for in the contract.
  • Since the agent had no authority to direct the purchaser to make the payment by electronic funds transfer, the purchaser cannot claim to have paid the deposit as required by the contract.
  • If the purchaser has suffered a loss due to its deposit money being stolen, it should take that up with the agent. As for the purchaser’s contract with us, they are in breach of it and the court must find that we are entitled to terminate the contract.
caseb
The case for the purchaser
  • We paid the second deposit in accordance with a valid direction received from the vendor’s real estate agent. Therefore, the vendor is wrong to assert that we haven’t paid the deposit as required by the contract.
  • It is unfortunate that the agent’s email was hacked, causing the vendor not to receive the deposit, but legally it’s not our problem.
  • The agent was appointed by, and is the representative of, the vendor.
  • The document by which the vendor appointed the agent authorised the agent to do all things to facilitate the purchase of the property by the purchaser.
  • Payment of the deposit is one of the things that facilitates the purchase of the property by us as purchaser.
  • It follows that the agent was authorised by the vendor to direct us to pay the deposit by electronic funds transfer, which is what the agent did.
  • Since we paid the deposit in an authorised way, we have satisfied our obligation under the contract, and are entitled to proceed with the purchase.
  • The vendor is therefore obliged to complete the sale, and the court must restrain the vendor from dealing with the property otherwise.

So, which case won?

Cast your judgment below to find out
Case A Case B

Case A won. You were right!

How people voted
a42%
b58%

Expert commentary on the court's decision

“The purchaser in this case learned the hard way that email is not always a secure form of communication and is open to fraud. As a general rule, anyone who is asked to send money electronically should not rely on payment details provided in an email. They should always check that the payment details provided in the email are correct by making personal contact with the intended recipient of the money. If making contact via phone, they should first ensure that they independently verify the phone number provided in the email.”
Supreme Court rules in favour of vendor

In the case of Deligiannidou v Sundarjee ([2020] NSWSC 437, the Supreme Court of New South Wales ruled against the purchasers, Efthalia Deligiannidou and Patrick Sven, finding that the vendors, Hasmukh and Jesal Sundarjee, were entitled to terminate the contract.

Agent not authorised to direct purchaser to pay via EFT

The court found that the contract for sale of land required that the deposit be paid by either cash of up to $2000, or by cheque.

The contract did not provide for the deposit to be paid by electronic funds transfer.

Neither the general authority of the agent, nor the specific authority of the agent pursuant to the document by which the agent was appointed to represent the vendor, authorised the agent to give the purchaser directions on behalf of the vendor as to payment of the deposit.

Consequently, by paying the second instalment of the deposit by electronic funds transfer, the purchaser was in breach of the requirement of the contract that the deposit be paid by cash or by cheque.

The vendor was entitled to terminate the contract.

Always verify payment details contained in an email before making any payments

The purchaser in this case learned the hard way that email is not always a secure form of communication and is open to fraud.

As a general rule, anyone who is asked to send money electronically should not rely on payment details provided in an email.

You should always check that the payment details provided in the email are correct by making personal contact with the intended recipient of the money.

If making contact via phone, you should first ensure that you independently verify the phone number provided in the email.

Could the purchaser have made a claim against the agent?

In this case, the court was not required to consider whether the purchasers could have made a claim against the agent for the loss they suffered.

Potentially though, they could have argued that the agent was liable for their loss, as the agent should not have given a direction to them requiring that the deposit be paid in a manner that was not authorised by the contract.

NOTICE: This article is accurate as at the time of publication and does not constitute legal advice. Please see our legal notices page for more information. Information related to coronavirus can be outdated very quickly.
Have your say

Other cases

Fill out this form and one of our local law professionals will be in contact

By submitting this form you agree to the terms of our Privacy policy