Conveyancing: Time is of the Essence
The vast majority of residential conveyances in Queensland are conducted using the REIQ Standard Conditions v9, which provides that “Settlement must occur between 9am and 5pm on the Settlement Date” (clause 5.1(1)).
In Caprice Property Holdings Pty Ltd v McLeay & Anor  QCA 125, the Queensland Court of Appeal held that notwithstanding later agreement between the parties as to time to settle, if time is to remain of the essence for a contract then regardless the parties have until 5pm to settle.
In the above case, the Buyer and Seller had agreed to settle on the Settlement Date at 3pm. Come 3.00pm, the Seller was still trying to organise a release of mortgage from the Bank. The Buyer (who was represented at settlement by a Clerk from their Solicitors office) left the place of settlement at 3.05pm, and refused to re attend 10 minutes later when the Seller requested the Clerk re attend. The Buyer’s position was that as the Seller was unable to settle at 3pm, the Seller was in breach and the Buyer was entitled to terminate.
Proceedings were instituted by the Seller for Specific Performance (ie, to force the Buyer to buy the House), however shortly before the hearing of the Application, the Seller elected to terminate the contract.
The Court of Appeal held that the Seller was entitled to terminate, and the Buyer was not. The Contract noted that time was to remain of the essence, and that the contract provided for settlement to occur at anytime before 5pm on the Settlement Date. As the Seller was ready, willing and able to perform by 3.30pm, the Buyer was not entitled to terminate.
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