By Xiaonan (Nancy) Wang, Legal Practice Director, W & G Lawyers
When it comes to property contracts in Queensland, timing is everything. A recent Court of Appeal decision has clarified a deceptively simple but critical question: does “pay” mean that funds are treated as paid once the buyer initiates a transfer, or only when the deposit holder actually receives the money?
The case of Novadeck Pty Ltd v CK & PT Property Holdings Pty Ltd [2025] QCA 170 highlights the importance of understanding how contractual terms are interpreted — and the serious consequences if deposit payments are not made strictly on time.
The Facts
The contract required the buyer to pay a balance deposit of nearly $50,000 “upon satisfaction of the finance condition.” On the due date, the buyer instructed its bank to transfer the funds by EFT in the morning.
However, the funds did not appear in the deposit holder’s account until after 5:00 pm. The seller promptly terminated the contract, arguing that the buyer had failed to pay on time. The trial judge initially ruled for the buyer, finding that “payment” was made when the EFT was initiated. The seller appealed.
The Court of Appeal’s Decision
By majority, the Court of Appeal overturned the trial decision and held:
- “Pay” means actual receipt of funds. A payment obligation is not satisfied until the money arrives in the account of the deposit holder.
- Because the funds were not received before 5:00 pm on the due date, the buyer had breached an essential term, and the seller’s termination was valid.
- The Court rejected an implied term that EFT instructions alone could amount to payment, noting that such provisions appear only in later versions of the REIQ contract and were not part of this agreement.
A dissenting judge took the opposite view, reasoning that the buyer had discharged its obligation by doing all within its control — instructing the bank for a same-day EFT. Still, the majority’s interpretation now stands as the binding authority.
Why This Matters
The decision has significant implications for both buyers and sellers:
- For buyers: Initiating payment is not enough — you must ensure funds are received before the deadline.
- For sellers: You may rely on strict contractual deadlines to enforce your rights.
- For both parties: Contracts can be varied to expressly define when EFT payments are effective, but this needs to be drafted clearly.
Key Takeaways
- Transfer funds early; do not rely on same-day EFTs close to the 5:00 pm cut-off.
- Confirm the timing provisions in your contract, and seek clarification if uncertain.
- Have a solicitor review the contract to identify essential terms, explain your obligations, and negotiate sufficient timelines for payments required under the contract.
How W & G Lawyers Can Help
At W & G Lawyers, we ensure our clients understand their rights and obligations under property contracts. Whether buying or selling, strict compliance with contract terms is vital to protect your interests.
📞 Contact us today on 0433 071 350 or 📧 info@wglawyers.com.au to speak with one of our experienced solicitors about your property transaction.
Disclaimer
This article provides general information only and does not constitute legal advice. For advice specific to your circumstances, please contact W & G Lawyers.