When an Intercepted Email Loses a Buyers New Home

22 JUN 2020


Transactions relating to the sale and purchase of property inevitably involve the transfer of large amounts of money. In reality, for most people, buying and selling property is the largest transaction that they are a part of.

As we move further into the digital world, the ease and accessibility of funds available for property transactions, particularly through Electronic Funds Transfer (EFT), has unquestionably benefited the conveyancing process. We can now receive and transfer funds in an array of manners, often at a click of a button. However, the recent New South Wales case of Deligiannidou v Sundarjee [2020] NSWSC 437 has highlighted the potential danger of transferring funds to fraudulent accounts, particularly the vulnerability that parties have in the conveyancing process when relying on email confirmation of bank accounts and the importance of implementing ‘cyber safe’ practices when transferring any amount of money throughout your property transaction.


The case involved a Contract for the Sale of a residential property which was exchanged on 1 February 2020. Under the Contract, a 10% deposit was agreed to be paid in two stages, being an initial deposit on the date of the Contract and the balance by 12 February 2020.  The Contract also provided that the deposit was to be paid in cash (up to an amount of $2000.00) and/or by bank cheque only.

Prior to exchange, the real estate agent acting in the matter directed the proposed purchaser to transfer the initial deposit amount into his trust account by EFT. The agent provided their correct account details, and the initial deposit was successfully paid. On 9 February 2020, the proposed purchaser received what appeared to be another email from the real estate agent attaching a tax invoice for the balance of the deposit. The email was from the same email address as all previous correspondence from the real estate agent and even included the trailing email chain between the parties. However, the invoice contained bank details to a different fraudulent bank account.

The purchaser proceeded to transfer the balance of the deposit by EFT to the fraudulent account (without noticing the difference in account details from the initial deposit). The balance of the deposit was therefore not sent to the Vendor by 12 February 2020.

Following a failure to receive the balance of the deposit, the vendor terminated the Contract.


The purchaser brought proceedings to retrain the vendor from terminating the Contract on the basis that the agent, who was presumed to be acting on the vendor’s authority under an agency agreement on foot, had directed them to pay the deposit by EFT and therefore they have satisfied their obligation to correctly pay the deposit under the Contract, irrespective of the fraudulent conduct at hand.

The Supreme Court found that:

  1. any agency agreement which the vendor was a part of did not have the effect of giving the agent authority to make directions, inconsistent with the Contract, as to how the deposit was to be paid. Despite the agency agreement, the Contract was clear that the deposit was to be paid in cash and/or by bank cheque; and
  2. consequently, the purchaser had not paid the deposit correctly in accordance with the terms of the Contract.

The vendor’s termination of the Contract was found as valid and binding.


Whilst the case also concerns the role of the ‘stakeholder’ (deposit holder) in a Contract, for the purposes of this article, the important lesson is that precaution and vigilance should always be taken when relying on emails and other digital media platforms to confirm parties account details. In a seemingly innocent property transaction, where the vendor, the purchaser and arguably even the agent had not done anything wrong, the ‘unfortunate’ result incurred should serve as a timely reminder of the importance of cyber safe practices, particularly when paying money in your present and future property transactions. This may include verbal confirmation of bank account details, always notifying the recipient of funds that the transfer has occurred with a deposit receipt (if available) or instructing your solicitor to transfer funds on your behalf to agents.

If you require more information on the above please contact Ben Wong on bwong@marsdens.net.au or by phoning 02 4626 5077.

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.

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