Emails are not always a secure form of communication and are susceptible to being hacked. The recent case of Deligiannidou v Sundarjee  illustrates the consequences of failing to take cyber threats seriously.
A buyer entered into a contract to buy residential land. The purchase price was $560,000 and the deposit was 10% of the purchase price. An initial 0.25% deposit was paid on exchange on 1 February 2020 and the balance of the deposit of $54,600 was payable on or by 12 February 2020. The form of contract used provided for payment of the deposit by cash up to $2,000 or cheque.
The Agent directed the buyer to pay the initial deposit to the agent’s trust account by EFT. The Agent provided the buyer with the account details and the buyer paid the initial deposit by EFT. On 7 February 2020, the Agent sent an email to the buyer reminding them to pay the balance of the deposit and again setting out their trust account details. Two days later, the buyer received what appeared to be a further email from the Agent attaching an invoice for the remainder of the deposit and requested payment of the deposit to a fraudulent bank account. The buyer paid the balance of the deposit into this fraudulent bank account.
The vendor sought to terminate the contract on the basis that the deposit had not been paid by the time specified in the contract. The buyer commenced proceedings seeking to enforce the contract on the basis that the Agent had directed the buyer to pay the deposit into its trust account by EFT and the agent was acting at the direction of the vendor and that the purchaser had therefore satisfied its obligation to pay the deposit.
The Court concluded that the fact the contract authorises the agent to receive the deposit in accordance with the contract and to direct the purchaser to pay the deposit to the agent, it does not authorise the agent to bind the vendor in dealings with respect to the deposit.
The contract did not authorise the payment of the deposit by EFT. The agency agreement did not authorise the real estate agent to act on behalf of the vendor when directing or accepting payment of the deposit as stakeholder under the contract. The Court held the buyer was in breach for not paying the deposit in accordance with the contract. The vendor was entitled to terminate the contract.
The Court did not consider whether the Agent was liable to the buyer as stakeholder.
It is an unfortunate outcome for the buyer. However, the case emphasises that extreme care must be taken when relying on emails, without more, to transfer large sums of money. The prudent course of action is to call the sender of the email to verify account details over the phone.
 NSWSC 437