Does a vendor lose the right to terminate a sale of land contract for the late payment of a deposit upon payment of the deposit by the purchaser? Qld vs NSW.

In this article, we will look at the controversial decision of Evans v Jan [2025] QSC 31, and contrast that case with the NSW position.

• Evans v Jan [2025] QSC 31

On 23 Jan 2024, the two parties entered into a contract for the sale of residential land in Shailer Park in QLD.

The price was $985,000, with the 10% deposit thus being $98,500.

The contract was drafted so that payment of the 10% deposit was due when both parties had signed, with the parties accepting that date as being 23 Jan 2024.

The purchaser had issues with transferring the deposit due to their bank’s transfer limits.

This issue was raised with the sales agent, as we shall see.

The deposit was not paid in full until 25 January 2024 when the last of four instalments was paid at 3:45 pm.

Subsequently, on 29 Jan 2024, the vendor terminated the contract due to the purchaser’s failure to pay the deposit by the due date in accordance with the contract.

Importantly, this termination occurred after the deposit was paid in full.

Was the vendor’s purported termination valid?

As we will see, the vendor’s termination was indeed valid.

Would the answer be different if in NSW?

In short, yes, albeit that is working off the terms of the standard Law Society/REI NSW contract for the sale of land.

We will look at this issue at the end of this article.

Had the vendor granted an extension via the sales agent?

Importantly, on 23 Jan 2024 – the due date for the 10% deposit – the purchaser realised they had a $50,000 bank limit on their transfers, and that they did not have time to get to the bank that day in person to raise the limit.

The purchaser called the agent to discuss this issue.

On 24 January 2024 the agent sent the purchaser a text message which said, “Hi stephen [the purchaser] you may need to deposit today. Call me if you have any issues.”

The purchaser then transferred $45,000.

The purchaser further advised the agent they would “deposit today and balance tomorrow Very sorry bank is painful to deal with”.

The agent replied:

“Ok

As long as I let seller know.

Two deposits today and tmr”

On 25 Jan 2024, the purchaser transferred the balance of the 10% deposit via 3 instalments during the day.

Issue: did the agent’s conduct bind the vendor to grant the extension to the purchaser?

Copley J dealt first with actual authority, and then ostensible authority, ultimately determining that that agent lacked either.

Thus the vendor was not bound on the basis the agent had authority to bind them.

Interestingly here, there was nothing in the circumstances to indicate to the purchaser that the agent had the authority (express or ostensible) to override the terms of the contract.

Copley J also looked at whether the vendor had “affirmed” the contract (a legal doctrine whereby the vendor has actual or imputed knowledge of the breach but affirms the contract regardless) as well as whether the vendor was ‘estopped’ from terminating the contract on the basis they had induced the purchaser to adopt an assumption or expectation, and it would be unconscionable for the vendor to back out. But both of these doctrines were not enlivened on the facts.

• Would the outcome have been different is the land was in NSW?

If using the standard NSW Law Society/REI contract, then yes. Cl 2.5 of the 2026 version provides:

"2.5 The vendor can terminate if –

2.5.1 any of the deposit is not paid on time;

2.5.2 a cheque for any of the deposit is not honoured on presentation; or

2.5.3 a payment under clause 2.4.3 [electronic funds transfer] is not received in the deposit holder’s nominated account by 5.00 pm on the third business day after the time for payment.

This right to terminate is lost as soon as the deposit is paid in full." (emphasis added)

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