Astill v South Esplanade Developments Pty Ltd - [2007] SASC 231

SUPREME COURT OF SOUTH AUSTRALIA
(Full Court: Civil)
ASTILL & ANOR v SOUTH ESPLANADE DEVELOPMENTS PTY LTD
[2007] SASC 231
Judgment of The Full Court
(The Honourable Chief Justice Doyle, The Honourable Justice Bleby and The Honourable Justice Sulan)
26 June 2007
CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - STATUTORY PROTECTION OF PURCHASERS
CONVEYANCING - RELATIONSHIP OF VENDOR AND PURCHASER - VENDOR AND PURCHASER SUMMONS: SUMMARY PROCEDURE
Sale of land under Land and Business (Sale and Conveyancing) Act 1994 (SA) – action by purchasers for return of deposit paid on rescission – application by purchasers for summary judgment refused by District Court – whether common law or equitable principles affect purchasers’ statutory right to rescind contract – whether statutory right to rescind can be waived by conduct of purchaser – whether defence of election or estoppel can apply – Appeal dismissed (by majority).
Land and Business (Sale and Conveyancing) Act 1994 (SA) ss 5, 7, 9, 10, 11, 12, 14, 15, 16, 33, 34; District Court Rules 1992 (SA) r 25.02; Supreme Court Rules 1987 (SA) r 96A.02; Land and Business (Sale and Conveyancing) Regulations 1995 (SA) regs 7, 16, referred to.
Andrew Knox Holdings Pty Ltd v ANZ Banking Group Ltd & Esanda Finance Corporation Ltd (1996) 188 LSJS 385; Sargent v ASL Developments Ltd (1974) 131 CLR 634; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; O'Connor v S P Bray Ltd (1936) 36 SR (NSW) 215, applied.
Szep v Blanken [1969] SASR 65; Zucker v Straightlace Pty Ltd (1987) 11 NSWLR 87; Blackman & Blackman v Milne & Milne [2006] QSC 350; Myles Pearce & Co Pty Ltd v Leuci & Martin (1997) 193 LSJS 491; The Commonwealth of Australia v Verwayen (1990) 170 CLR 394; Blackman & Blackman v Milne & Milne [2006] QSC 350, considered.

ASTILL & ANOR v SOUTH ESPLANADE DEVELOPMENTS PTY LTD
[2007] SASC 231
Full Court: Doyle CJ, Bleby and Sulan JJ

DOYLE CJ: The issue in this appeal turns on the construction of provisions of the Land and Business (Sale and Conveyancing) Act 1994 (SA) (“the Act”).
The Act gives a purchaser under a contract for the sale of land a right to given written notice rescinding the contract.
The issue is whether that statutory right to rescind can be waived or lost as a result of conduct by the purchaser that, but for the operation of provisions of the Act, would amount to a binding election to affirm the contract; or to a binding election to proceed with the contract, or that would give rise to an estoppel which prevented the purchaser from exercising the right to rescind.
The question is whether the provisions of the Act, properly interpreted, confer on a purchaser a right to rescind, the exercise of which cannot be affected by the operation of common law or equitable principles referred to.
The issue arises on an application by purchasers of land for summary judgment in proceedings instituted by the purchasers in the District Court. In those proceedings the purchasers claim to have exercised the statutory right to rescind, and claim the return of the deposit paid. On appeal the vendor does not dispute that the purchasers were entitled to exercise the right to rescind, unless the purchasers by their conduct have lost the entitlement to exercise that right.
Because of the way in which the point arose, on an application for summary judgment, the facts supporting the vendor’s pleaded defence were not investigated. The issue is whether the plea was capable of giving rise to a defence to the purchasers’ claim for the return of their deposit. That is why I have had to describe the answer made by the defendants in rather general terms.
History
Mr and Mrs Astill (“the Astills”) entered into a contract on 18 February 2003 with South Esplanade Developments Pty Ltd (“the Company”) to purchase land.
In fact the Astills agreed to buy an apartment to be constructed by the Company on certain land. It was one of a number of apartments to be constructed on that land. However, the interest that the Astills contracted to purchase is defined by the Act as land: see s 5 of the Act.
The Company undertook to procure in due course a Certificate of Title in respect of the apartment. Settlement was to take place after the later of the completion of the apartment or the deposit of a Community Plan (leading to the issue of a Certificate of Title).
The Astills were given a vendor’s statement, in the form required by the Act, in apparent compliance with the Act. They were given the statement when the contract was signed. It later turned out that the statement contained errors.
There were some delays in the construction of the apartment. By letter dated 8 June 2005 the Company told the Astills that settlement was to take place on 17 June 2005.
On 15 June 2005 the Astills gave notice in writing to the Company of their intention not to be bound by the contract. They relied on the right to rescind the contract conferred by s 5 of the Act. The Astills also claimed that they were entitled to terminate the contract because of breaches of the contract by the Company.
Settlement did not take place. On 18 July 2005 the Company terminated the contract, alleging that the Astills had repudiated the contract.
The Astills then brought proceedings in the District Court. They claimed that the vendor’s statement was defective, and that because it was defective the prescribed time for rescinding the contract had not expired. They claimed that the vendor’s statement that the Company had given them was not a valid statement because of the defects, and was not capable of setting a limit to the time within which they could rescind the contract. The Astills claimed that the contract was rescinded by their notice of 15 June 2005. They claimed the return of the deposit that they had paid.
They also claimed that they had terminated the contract because of breaches of the contract by the Company.
The Company filed a Defence. The Company denied that the vendor’s statement was defective. On appeal the Company acknowledged that the statement was defective. The Company pleaded in the alternative that even if the vendor’s statement was defective, and that the prescribed period within which the Astills might rescind the contract had not expired, the Astills by their conduct had lost the entitlement to exercise the right to rescind. The plea is as follows:
19Further and in the alternative to the matters pleaded at paragraphs 1 to 18 inclusive, and in answer to the entire claim, the plaintiffs are prevented as a matter of law and fact from obtaining the relief sought in the claim:
19.1   The plaintiffs have, by their conduct, evinced an election to affirm the Contract and are thereby prevented from rescinding the Contract, which conduct includes:
(a)The delay in which the plaintiffs participated before purporting to rescind;
(b)By executing the authority for extension of time for completion referred to in paragraphs 11 and 16 of the Statement of Claim;
(c)By inspecting the site and discussing the progress of the development with Cardone both before and after construction was commenced on the development at number 2 South Esplanade Glenelg;
(d)By discussing with Cardone the nature of the development at number 2 South Esplanade Glenelg and its impact upon the development at number 3 and 4 South Esplanade Glenelg at various times, including immediately prior to the practical completion of the Apartment.
(e)By being in receipt of advertising material in relation to the development at number 2 South Esplanade Glenelg which described the nature of the development and raising no objection at that time.
(f)By attempting to on-sell the Apartment by way of assignment during its construction.
(g)By purporting to cool-off only after the final inspection of the Apartment with the Plaintiff’s sales and valuation agent.
All of the above are inconsistent with the exercise of a right to rescind and are only consistent with the exercise of an election to affirm the Contract.
19.2   Further, in the premises of the matters referred to at sub-paragraph 19.1, rescission of the contract is barred.
19.3   Further and in the alternative to sub-paragraphs 19.1 and 19.2, the plaintiffs are prevented from rescinding by reason of laches arising from the said delay or are otherwise estopped from purporting to rescind by reason of the changed circumstances in relation to the development.
By counterclaim the Company alleged that because the Astills had failed to settle they were in breach of the contract, and further that because of the purported rescission of the contract, the Company was entitled to and had terminated the Contract. The Company claimed that the deposit was forfeited, and claimed damages.
On appeal the Company does not deny that the vendor’s statement was defective. The Company accepts that because of the defects the prescribed period within which the Astills could exercise the right to rescind had not expired. The Company made these concessions on appeal in light of findings by the District Court Judge who dealt with the summary judgment application, and in light of the decision of this Court in Myles Pearce & Co Pty Ltd v Leuci & Martin (1997) 193 LSJS 491. In that case the Full Court held that a defective vendor’s statement was invalid, and could not put a limit on the time within which the purchasers’ right to rescind could be exercised.
On appeal the Astills accepted that if the Company’s plea gave rise to an arguable defence, the action had to go to trial.
So the issue is whether, in light of the provisions of the Act, the plea set out above gave rise to an arguable defence.
The Act
It is now necessary to outline the statutory provisions.
By s 5(1) the Act gives “a purchaser under a contract for the sale of land or a small business” a right to give written notice to rescind the contract. The right is commonly called a right to cool off. It must be exercised, if at all, before “the prescribed time” specified in s 5(8).
The Act requires the vendor to serve on the purchaser a vendor’s statement which a statement in a prescribed form and containing prescribed information. The information required in the case of the sale of land differs from the information required on the sale of a small business. It is the giving of that vendor’s statement that limits the time within which the purchaser must exercise the right to rescind.
Section 5(1) provides as follows:
Cooling-off
5 (1) Subject to this section, a purchaser under a contract for the sale of land or a small business may, by giving the vendor written notice before the prescribed time of the purchaser's intention not to be bound by the contract, rescind the contract.
There are circumstances in which the section will not apply to a contract. Section 5(7) of the Act sets out those circumstances. It is not necessary to set them all out. By and large they are based on the circumstances in which the sale takes place. The nature of these exceptions is sufficiently indicated by the first three subparagraphs, which provide as follows:
5      …
(7)     This section does not apply in respect of a contract for the sale of land or a small business where—
(a)in the case of a contract for the sale of land, the purchaser is a body corporate; or
(b)the purchaser has, before entering into the contract, received independent advice from a legal practitioner and the legal practitioner has signed a certificate in the form approved by regulation as to the giving of that advice; or
(c) the sale is by auction; or
…
The prescribed time within which a notice rescinding a contract may be given, in connection with a contract for the sale of land, is determined by s 5(8)(a) which provides as follows:
5      …
(8)     In this section—
"prescribed time" means—
(a)    in relation to the sale of land—
(i)where the vendor's statement is served on the prospective purchaser before the making of the contract—the end of the second clear business day after the day on which the contract was made; or
(ii)where the vendor's statement is served on the purchaser after the making of the contract—the end of the second clear business day from the day on which the statement was served,
or the time settlement takes place (whichever is the earlier);
It should be noted that the effect of the vendor serving a vendor’s statement is to trigger the closing of the period within which the notice may be given. There is no need for a purchaser to wait for the vendor’s statement to be served before giving a notice rescinding the contract. If a vendor’s statement is not served, then the effect of s 5(8)(a) is that the notice rescinding the contract can be given at any time up to settlement.
The contents of the vendor’s statement are set out in s 7(1), which requires a vendor of land to serve a statement in the required form on the purchaser “at least ten clear days before the date of settlement”. This reinforces the point just made. A vendor can defer the giving of a statement until ten days before settlement; but there is no need for the purchaser to wait until then before giving notice rescinding the contract. A failure to give the required vendor’s statement at all will not prevent the purchaser from giving the notice.
The information that must be in the vendor’s statement is information setting out the purchaser’s right to cool off, information relating to mortgages and other interests affecting the land, and information relating to transactions involving the land within twelve months before the date of the contract, and prescribed matters.
By s 14 it is an offence to fail to comply with the relevant part of the Act, and so it is an offence to fail to serve a vendor’s statement.
Section 15(1) provides:
15(1) Where a vendor's statement is not given or certified as required by this Part, or the statement given is defective, the purchaser may apply to a court of competent jurisdiction for an order under this section
By s 15(2), on the hearing of such an application the Court, “if satisfied that the purchaser has been prejudiced by failure to comply with this Part”, can avoid the contract, make orders required to restore the parties to their respective positions, may award damages and may make such other orders as may be just. Bearing in mind the ability of a purchaser to give a notice rescinding the contract under s 5(1), this provision appears to be intended to deal with a situation in which the right to rescind cannot be exercised because settlement has taken place. For example, a situation in which the purchaser failed to rescind, settlement has taken place (no statement having been given, or the statement being defective) and subsequently the purchaser complains that the failure to give a statement, or an accurate statement, has caused the purchaser prejudice, and the purchaser now wishes to rescind. The claim in such a case is not a claim to rescind under s 5. It is a claim for relief because the vendor has not complied with s 7 and because that non‑compliance has prejudiced the purchaser.
Section 16 provides:
Defences
16It is a defence to a charge of an offence, or to civil proceedings, under this Part arising from an alleged contravention or non-compliance with a requirement of this Part if the defendant proves—
(a)     that the alleged contravention or non-compliance was unintentional and did not occur by reason of the defendant's negligence or the negligence of an officer, employee or agent of the defendant; or
(b)     that the alleged contravention or non-compliance was due to reliance on information provided by a person or body to which an inquiry to obtain the information is, in accordance with the regulations, required to be made; or
(c)     that—
(I)the purchaser received independent advice from a legal practitioner in relation to waiving compliance with that requirement; and
(ii)the legal practitioner signed a certificate in the form required by regulation as to the giving of that advice; and
(iii)the purchaser waived compliance with that requirement by signing an instrument of waiver in the form required by regulation.
Finally, it is necessary to note some provisions that are found in Part 6 of the Act. Section 33 provides:
No exclusions etc of rights conferred or conditions implied by Act
33Subject to this Act, a purported exclusion, limitation, modification or waiver of a right conferred, or contractual condition implied, by this Act is void.
And s 34 provides:
Civil remedies unaffected
34Nothing in this Act prejudices any civil remedy available apart from this Act.
Proceedings in the District Court
On 25 October 2005 the Astills applied for summary judgment under r 25.02 of the District Court Rules 1992 (SA). The application came before a Master. The Master appears to have considered only the question of whether the vendor’s statement was defective, and whether the prescribed time for the purposes of s 5(1) had passed. The Master found in favour of the Astills, and entered judgment in their favour, declaring in effect that the contract had been rescinded and that the deposit paid by the Astills should be returned to them.
The Master’s decision was given on 18 May 2006.
The Company appealed to a District Court Judge on 2 June 2006. The appeal was heard on 12 July 2006. On 6 March 2007 the Judge allowed the appeal and set aside the judgment.
The Court was not informed about the course of the proceedings in the District Court, but I cannot help remarking that it is unfortunate that about 17 months went by in this way. The Astills having appealed to this Court, further time has passed, and still the issue of summary judgment is being contested.
Be that as it may, the Astills appealed to the Supreme Court, with the benefit of a certificate from the Judge under r 96A.02 of the Supreme Court Rules 1987 (SA). This means that leave to appeal is not required. The appeal was referred to the Full Court.
The District Court Judge found that the Act did not exclude the operation of the principles of election and estoppel, and that the company had an arguable case on the facts that the conduct of the Astills amounted to an election to affirm the contract, or gave rise to an estoppel that would prevent the Astills from exercising their right to rescind. In effect, the Judge decided that para 19 of the Defence (set out above) raised an arguable defence.
The Company now accepts that when the Astills purported to give notice under s 5 rescinding the contract, the prescribed time for the purposes of that section had not arrived. The issue is whether para 19 of the Defence gives the Company an arguable defence to the Astills’ claim.
Submissions on appeal
Mr Rochow for the company submits that the scheme of the Act is not inconsistent with the exercise of the right to rescind under s 5 being subject to the operation of the legal and equitable principles relied on by the Company.
Mr Rochow submits that s 33 of the Act applies only to contractual terms or provisions that have the purported effect referred to. He submits that s 33 does not apply to the principles invoked by the Company in its defence. That is, s 33 does not apply to legal or equitable principles that operate by reference to the conduct of the purchaser. He further submits that the use of the term “void” is a further indicator that the reference is to a contractual provision, not to the principles invoked by the Company. He submits that one would not refer to a waiver based on election or estoppel as being “void”, but rather as being “ineffective”. He argues that “void” is a word naturally applied to a term of a contract. For these reasons, s 33 is to be understood as a provision relating to attempts by contract to eliminate the right conferred by s 5.

Mr Rochow also relies on the provisions of s 34. He submits that the remedies preserved by that section include a “remedy” such as election or estoppel. In the alternative, the remedy of a declaration or order enforcing the contract, consequential upon a claim that the right to rescind has been lost by election or estoppel, is a remedy that has been preserved.
On the other hand Mr Hayes QC, for the Astills, submits that the scheme of the Act is inconsistent with the operation of the doctrine of election or estoppel to deprive a purchaser of the ability to exercise the power conferred by s 5 of the Act.
Consideration of submissions
There can be no doubt that the relevant provisions of the Act are intended to provide protection for a purchaser of land under a contract.
To that end the purchaser is given an unqualified right to rescind the contract, provided the right is exercised before the prescribed time.
I describe the right as “unqualified” because its exercise does not depend upon the purchaser having any cause for complaint, nor does it depend upon any default or failing on the part of the vendor. The purchaser can exercise the right for no reason at all, or because the purchaser has had a change of mind, or because the market has moved and the contract no longer seems advantageous to the purchaser.
This is a relevant factor. The exercise of the right has nothing to do with fairness as between vendor and purchaser, and is not affected by possible prejudice to the vendor as a result of its exercise.
It is also relevant that the right is a self‑help remedy that is to be followed by the return of money paid under the contract (subject to certain exceptions) and, ordinarily, without the intervention of the Court.
Moreover, a vendor must be taken to know that the purchaser has this right, and that failure to serve a vendor’s statement, or the serving of a defective vendor’s statement, will mean that the right to rescind will remain available until settlement, subject to the giving of an accurate vendor’s statement.
The vendor’s protection is to serve an accurate vendor’s statement on the purchaser, thus triggering the prescribed time.
These features suggest, but do no more than suggest, that the exercise of the purchaser’s right to rescind is not affected by the purchaser’s conduct, nor by the fact that the exercise of the right will cause loss or other prejudice to the vendor. Parliament has given a purchaser a right the exercise of which, in the nature of things, may cause prejudice or loss to the vendor.
The next significant feature of the Act is that by s 5(7)(b) Parliament has provided a means whereby the purchaser can, in effect, surrender the right under s 5(1). The ability to do so is carefully limited. This provision is not of itself inconsistent with the possibility of a later surrender or waiver of the right as a result of the purchaser’s conduct. However, it does seem odd to me that the right to rescind should be able to be lost as a result of a purchaser’s conduct after entering into the contract, when the ability to make the section inapplicable is as carefully limited as it is by s 5(7)(b).
I have already commented on the remedy conferred on a purchaser by s 15. It is a quite different remedy.
The circumstances in which s 16 will operate are not entirely clear. Relevantly, the focus of s 16 is on the failure of the vendor to comply with Part 2 of the Act. For example, the case might be one in which settlement occurred, the purchaser not having exercised the right to rescind. After settlement the purchaser might complain that the purchaser has been prejudiced by the failure of the vendor to serve a vendor’s statement, or by the serving of a defective statement. Under s 15 the remedy is based on prejudice to the purchaser, resulting from the vendor’s failure to comply with the Act. This is quite a different remedy from that given by s 5(1).
But it is noteworthy that by s 16(c) it seems that the purchaser will lose the right to complain about the failure to deliver a vendor’s statement, or the delivery of a defective statement, if the requirement for advice, a certificate and an instrument of waiver is met. Once again, it seems that s 16 does not contemplate a purchaser waiving compliance with the requirement for an accurate vendor’s statement, as a result of the purchaser’s conduct. To allow that to occur seems inconsistent with s 16(c). This is another pointer towards a conclusion that the Act does not contemplate informal waiver of rights or entitlements on the part of the purchaser.
I come now to s 33, which is set out above. The terms used, “exclusion, limitation, modification or waiver” indicate an intention to cover a wide field. To my mind there is no difficulty in describing the pleas by the Company in para 19 of the Defence as a plea of “waiver”. I agree with Mr Rochow that in relation to waiver the adjective “ineffective” or “inoperative” is more appropriate than “void”. But if one focuses on the result of the purchaser’s conduct, calling that a “waiver”, it makes sense to refer to that waiver as being “void” in the sense of being ineffective. Accordingly, I do not accept Mr Rochow’s submission that s 33 is incapable of applying, as a matter of language, to the plea raised by para 19 of the Defence.
It would be surprising that Parliament would enact, in such general terms, that a contractual exclusion, limitation, modification or waiver is void, but allow an informal waiver to be effective, or allow the very same right to be lost as a result of conduct on the part of the purchaser. It makes no sense at all, as a matter of policy, to prevent a purchaser from surrendering the right conferred by s 5(1) explicitly by contract, but to allow the purchaser to surrender or lose the same right informally as a result of the purchaser’s conduct.
To my mind s 33 discloses a clear intention to protect a purchaser by preventing the purchaser from surrendering the right conferred by s 5(1), other than by following the procedure referred to in s 5(7)(b).
So read, the provisions of s 5(1), 5(7)(b), 7(1) and s 33 form a coherent scheme.
In my opinion there is nothing contrary to this conclusion in s 34. This section must operate subject to the provisions of the Act, otherwise it would undermine them.
Quite apart from that, the defences pleaded by the Company in para 19 of the Defence can only with some difficulty be described as a “civil remedy”. By that plea the Company does not exercise a civil remedy. In effect it denies that the Astills have a civil remedy available to them. This difficulty is not avoided by identifying the civil remedy as the Company’s counterclaim, by which it claims a declaration that the Astills were not entitled to terminate the contract, with consequential relief including damages. Even if the counterclaim can be described as a “civil remedy” (which I doubt), it is available to the Company only if the Astills’ exercise of the right to rescind is barred.
For those reasons I consider that the scheme of the Act is inconsistent with the right to rescind under s 5(1) being lost, or being unable to be exercised, by reason of the conduct of a purchaser that would, but for the provisions of the Act, amount to an election to affirm the contract rather than to rescind, or that would give rise to an estoppel of a kind that would, somehow or other, prevent the purchaser from exercising the right to rescind.
The scheme of the Act is to specify in s 5(7)(b) how the right to rescind can be surrendered or lost, other than by the arrival of the prescribed time.
The scheme of the Act is to protect the vendor by enabling the vendor to trigger the prescribed time, by delivering an accurate vendor’s statement before the contract is signed, or after the contract is signed. A vendor who fails to do so must be taken to know that the prescribed time will not arrive until settlement takes place.
I realise that this conclusion could result in injustice to a vendor of land. A purchaser might assure a vendor that the purchaser has no intention to cool off, and that the purchaser does not require the delivery of a vendor’s statement. The vendor might then act to the vendor’s prejudice, relying on that statement, but later find that the purchaser serves a notice to rescind. The short answer is that this is a result of the scheme of the legislation.
If the submissions for the Company were correct, the apparent clarity and certainty of the statutory scheme would be eroded. Whenever a purchaser exercised the right to rescind, the vendor could sift the circumstances for conduct on the part of the purchaser suggestive of an election to affirm, or giving rise to a possible estoppel. Indeed, a purchaser would have to take care, before the prescribed period arrived, to avoid any conduct that might suggest an election or give rise to an estoppel. Moreover, the carefully expressed limit in s 5(7)(b) on the ability to surrender the right would seem pointless, as would the prohibition against (on this approach) contractual exclusions of the right to rescind, by virtue of s 33 of the Act.
Finally, the Court was referred to a number of decisions in which somewhat similar statutory rights were held to be subject to and affected by principles similar to those invoked by the Company in para 19 of the Defence. The decisions are Szep v Blanken [1969] SASR 65; Zucker v Straightlace Pty Ltd (1987) 11 NSWLR 87; Andrew Knox Holdings Pty Ltd v ANZ Banking Group Ltd & Esanda Finance Corporation Ltd (1996) 188 LSJS 385; Blackman & Blackman v Milne & Milne [2006] QSC 350. The short answer to the submission based on those cases is that each case turns on the terms of the legislation then under consideration. In none of those cases was the legislative scheme sufficiently similar, in my opinion, for the reasoning in those cases to be applicable to the present case.
Conclusion
I would allow the appeal. I would set aside the order of the District Court Judge allowing the appeal to him, and setting aside the judgment in favour of the Astills entered on 18 May 2006. I would order that there be substituted an order that the appeal to the District Court Judge be dismissed. That will leave standing the orders made by the District Court Master.
BLEBY and SULAN JJ:
Introduction
The facts giving rise to this appeal and most of the relevant provisions of the Land and Business (Sale and Conveyancing) Act 1994 (SA) (“the Act”) are adequately covered in the reasons of the Chief Justice. We will not repeat them except where it is necessary to do so for the purpose of these reasons.
The appellants and the respondent were purchasers and vendor respectively under a contract of the sale of land as defined in the Act. What is in issue is whether the conduct of the purchasers could either amount to an election to be bound by the contract or give rise to an estoppel which prevents the purchaser from rescinding the contract where the time in which the purchaser may rescind the contract under s 5 of the Act has not passed.
The purpose and effect of Part 2 of the Act
The principal purpose of Part 2 of the Act is to require full disclosure by a vendor of land of facts and matters relevant to or which may impinge upon a purchaser’s decision to enter into or to be bound by a contract to purchase the land at the purchase price specified in the contract.
Central to the operation of Part 2 of the Act is the requirement to serve a vendor’s statement. Subsection (1) of s 7 provides:
(1)A vendor of land must, at least 10 clear days before the date of settlement, serve, or cause to be served, on the purchaser a statement in the form required by regulation (signed by or on behalf of the vendor) setting out—
(a) the rights of a purchaser under section 5; and
(b) the particulars required by regulation of—
(i)all mortgages, charges and prescribed encumbrances affecting the land subject to the sale; and
(ii)where the vendor obtained title to the land within 12 months before the date of the contract of sale, all transactions involving transfer of title to the land occurring within that period; and
(iii)any prescribed matters.
The rights of a purchaser under s 5 include the right to rescind or the cooling-off right to which the Chief Justice has referred.
The prescribed matters are contained in Parts A, B and C and the Schedule of Form 1 prescribed by reg 7 of the Land and Business (Sale and Conveyancing) Regulations 1995 (SA) (“the Regulations”). In total Form 1 with its Schedule occupies 26 pages of the Regulations. Part A requires details of the parties to the contract and the land. Part B sets out the details of the right to rescind contained in s 5 of the Act. Part C is the vendor’s statement to the effect that the Schedule contains all particulars required to be given pursuant to s 7(1) of the Act.
Division 1 of the Schedule to Form 1 sets out a table of 58 sets of particulars which must be supplied. Most of those particulars will not be applicable in any particular case, and may be completed by the answer “Not Applicable” or “N/A”.
Division 2 of the Schedule provides for the giving of the particulars required by s 7(1)(b)(ii) of the Act, where applicable, and particulars which will only be applicable to certain types of land or to certain conditions affecting the land. These include particulars relating to what is described as a “community lot”, a “development lot”, a strata unit, particulars relating to asbestos in buildings and particulars of other matters that may affect title to, or the possession or enjoyment of, the land. The particulars required to be given are particulars which will either be within the knowledge of the vendor, will be recorded on the Certificate of Title or will be readily available by enquiry from local councils and other statutory authorities.
Section 9 of the Act provides for the verification of the vendor’s statement by agents, where they are involved, and for the certification of the accuracy and completeness of the particulars contained in the statement.
Section 10 requires that the vendor’s statement must be accurate as at the date of service, but that if it is served before the purchaser signs the contract and a change in circumstances occurs requiring a change in the particulars, a notice of amendment must be served, and the date of service of the notice of amendment becomes the relevant date for the purposes of calculating the prescribed time referred to in s 5.
In the case of a sale by auction, s 11 requires that the vendor’s statement be made available in certain ways specified in the section before commencement of the auction.
Section 12 obliges councils and statutory authorities to make relevant information available on enquiry and enables the Regulations to prescribe charges by such bodies for supplying that information.
A contravention of or failure to comply with a provision of Part 2 of the Act is an offence. That will include a failure to comply with s 7 or with s 10.
In short, the Act goes to some length to ensure that accurate information relevant to a decision to purchase is given to a purchaser before settlement. The Act places an onus of providing that information on the vendor and on agents on pain of a penalty if that is not done.
The only circumstances where a vendor’s statement need not be supplied is where the purchaser has given a formal waiver under and in accordance with the safeguards provided in s 16(c) of the Act. A form for that is prescribed by reg 16 of the Regulations and is contained in Part B of Form 3. Except in those circumstances, an accurate vendor’s statement is regarded as essential for a purchaser to be placed in a position where he or she can make an informed decision about whether to enter into or to proceed with the contract.
The service of the vendor’s statement also happens to determine the period within which the purchaser may exercise the right to rescind provided by s 5. That right can be exercised for no reason at all, but the purchaser loses that right within a short time of either being given the full information or signing the contract, whichever happens last. The vendor’s statement is an important trigger in determining the prescribed time for the purpose of exercising the right to rescind, as well as being the means of informing the purchaser of what the legislation regards as all relevant information to enable the purchaser to make an informed decision. The scheme of the Act is therefore not merely to require service of a vendor’s statement in order to enable a vendor to trigger the time within which a cooling-off notice must be given. The principal purpose of the statement is to provide a statement of the purchaser’s rights under s 5 as well as a great deal of factual information relating to the land.
We repeat what was said in Myles Pearce & Co Pty Ltd v Leuci & Martin[1] of the Act’s predecessor, which is equally applicable to the present Act:
The cooling-off period is inextricably linked with the delivery of the vendor's statement, and it must be linked for a reason. That reason is not difficult to discern. The information required to be given by s90 [here, s 7(1)] and by the Regulations is information which a purchaser in many cases will not be able readily to obtain. It is information which may well affect the purchaser's decision to buy at all, or which may affect the price which the purchaser is prepared to pay. It appears reasonably clear that Parliament intended that a purchaser should be given all that relevant information, and then be allowed a reasonably short period in which to review the decision to purchase before becoming irrevocably bound by it.
Parliament and the Governor in Council have determined what information must be supplied to the purchaser, and by inference have determined what information may be material to the purchaser's decision. Parliament has also made plain by s 91B(1) [here, s 10(1)] that the information in the vendor's statement must be accurate. In sub-section (2) it has taken the further expedient that where the vendor's statement has been served before the contract is signed and so the cooling-off period has not yet begun to run, the information must be accurate at the time when the cooling-off period does start to run. By linking the commencement of the cooling-off period to the provision of accurate information in the vendor's statement, Parliament has provided the clearest inference that the cooling-off period is not to run until accurate information of a material kind has been provided. If some of that material information is not supplied or is misleading, the purchaser cannot make an informed decision, and the cooling-off period will not commence to run against the purchaser.[2]
[1] (1997) 193 LSJS 491.
[2] Ibid at 498, Bleby J.
Section 5(7) of the Act removes the right to rescind (but not the obligation to provide the vendor’s statement) either in circumstances where the right to rescind after signing the contract would be impracticable (as in sale by auction, sale by tender or sale by means of the exercise of a contractual option to purchase) or where it is assumed that relevant and appropriate advice has been or can be obtained by a certain class of purchasers described in the subsection, namely bodies corporate and purchasers acting on independent legal advice, duly certified by the legal practitioner concerned.
Any failure to serve a vendor’s statement or any defect in the statement does not render the contract void or unenforceable. It merely means that, subject to what is said below, the purchaser’s right to rescind is extended until after a valid notice is served. However, it does not survive settlement.[3]
[3] Section 5(8) of the Act.
The cooling-off provisions concern a purchaser’s right to elect. Before the expiry of the prescribed time the purchaser may elect to rescind the contract by delivering a notice of rescission. Conversely, the purchaser may elect to affirm the contract and not give the notice.
Election by conduct

It is not now in dispute that the vendor’s statement given to the purchasers in this case was defective in several material respects. The prescribed time for giving a notice of rescission had not expired when the notice was given. The question is whether the purchasers, by their conduct, can be said to have elected irrevocably to affirm the contract during that time.
It can be seen from the scheme of the Act that once the provisions of s 7 are complied with and the purchaser is taken to have all the relevant information available, the right to rescind is brought to an end within a reasonably short time. If the purchaser does not rescind within that time there is an election to be bound by the contract. The failure to exercise the right to rescind before expiry of the prescribed time constitutes, in most cases, the election to be bound by the contract. An election to rescind is evidenced by the giving of a notice under s 5 of the Act.
In Sargent v ASL Developments Ltd[4] Mason J (as he then was) described the right of election in the following terms:
A person is said to have a right of election when events occur which enable him to exercise alternative and inconsistent rights, i.e. when he has the right to determine an estate or terminate a contract for breach of covenant or contract and the alternative right to insist on the continuation of the estate or the performance of the contract. It matters not whether the right to terminate the contract is conferred by the contract or arises at common law for fundamental breach - in each instance the alternative right to insist on performance creates a right of election.[5]
[4] (1974) 131 CLR 634.
[5] Ibid at 655. See also O’Connor v SP Bray Ltd (1936) 36 SR (NSW) 248, Jordan CJ at 257 – 263; Andrew Knox Holdings Pty Ltd v ANZ Banking Group Ltd and Esanda Finance Group Ltd (1996) 188 LSJS 385 at 394.
In a case such as the present the relevant event is the entry into a contract which is governed by the provisions of Part 2 of the Act. Without the Act the contract would be binding on both parties. However, while the contract remains binding on the vendor, the Act confers on the purchaser a right to rescind at any time before expiry of the prescribed time. It is the exercise of the right to rescind or of the inconsistent right to affirm the contract which constitutes the election.
As to the required state of knowledge of the person making the election Mason J said:
If a party to a contract, aware of a breach going to the root of the contract, or of other circumstances entitling him to terminate the contract, though unaware of the existence of the right to terminate the contract, exercises rights under the contract, he must be held to have made a binding election to affirm. Such conduct is justifiable only on the footing that an election has been made to affirm the contract; the conduct is adverse to the other party and may therefore be considered unequivocal in its effect. The justification for imputing to the affirming party a binding election in these circumstances, though he be unaware of his alternative right, is that, having a knowledge of the facts sufficient to alert him to the possibility of the existence of his alternative right, he has acted adversely to the other party and that, by so doing, he has induced the other party to believe that performance of the contract is insisted upon. It is with these considerations in mind that the law attributes to the party the making of a choice, though he be ignorant of his alternative right. For reasons stated earlier the affirming party cannot be permitted to change his position once he has elected.[6]
[6] (1974) 131 CLR 634 at 658.
In this case awareness of the right to elect is not in question. The purchasers were served with a notice explaining their right to rescind under s 5 of the Act. But as we have said, s 5 is all about an election to be bound or to rescind, but only where the purchaser is fully informed of the facts relevant to making that election. That is the essence of the requirements of Part 2 of the Act. The election to be bound is achieved by doing nothing. Has the Act thereby excluded any common law rules relating to the principle of election? There is nothing in the Act to suggest that it has.
Most purchasers will rely on the information contained in the vendor’s statement. However, some may have made their own enquiries and may, independently, be fully informed of the relevant information despite a defective notice. If they do have full knowledge of all the material facts they will be aware of the relevant defects in the vendor’s statement. In those circumstances there is no reason why they should not be able to elect either expressly or by their conduct to be bound by the contract. This could happen at any time before expiry of the prescribed time. In order for the election to be valid, they must, however, have knowledge of the relevant facts which the statement fails to reveal. If they do, ordinary principles of election can apply notwithstanding the defective vendor’s statement and the fact that it is ineffective for the purpose of fixing the prescribed time.
Such an approach is not inconsistent with the objectives and purposes of the Act, namely the provision of an opportunity to make an informed decision before becoming bound by the contract.
As we have said, the Act and the Regulations specify the state of knowledge in a particular case that a purchaser must have before he or she is able to make a valid election, either expressly or by conduct or by doing nothing. This necessitates an enquiry into the state of knowledge of the purchasers of those facts which should have been contained in the vendor’s statement, but which were not, at the time when the conduct which is said to give rise to the election takes place.
Nothing else that was said in the Myles Pearce Case[7] is qualified by this conclusion. There will still be circumstances where, with a defective statement, a purchaser does nothing to indicate an election to affirm the contract and does not rescind until shortly before settlement, even for reasons not associated with the defects in the statement. That is a course open to a purchaser under the Act. There was no allegation in Myles Pearce of an election to affirm the contract.
[7] Myles Pearce & Co Pty Ltd v Leuci & Martin (1997) 193 LSJS 491.
Enquiry into the purchaser’s state of knowledge and whether the purchasers’ conduct constitutes an election are matters for trial. They cannot properly be resolved on an application for summary judgment.
Estoppel
In Waltons Stores (Interstate) Ltd v Maher,[8] Brennan J (as he then was) discussed the requirements for establishing an equitable estoppel. He said:
In my opinion, to establish an equitable estoppel, it is necessary for a plaintiff to prove that (1) the plaintiff assumed that a particular legal relationship then existed between the plaintiff and the defendant or expected that a particular legal relationship would exist between them and, in the latter case, that the defendant would not be free to withdraw from the expected legal relationship; (2) the defendant has induced the plaintiff to adopt that assumption or expectation; (3) the plaintiff acts or abstains from acting in reliance on the assumption or expectation; (4) the defendant knew or intended him to do so; (5) the plaintiff’s action or inaction will occasion detriment if the assumption or expectation is not fulfilled; and (6) the defendant has failed to act to avoid that detriment whether by fulfilling the assumption or expectation or otherwise.[9]
[8] (1988) 164 CLR 387.
[9] Ibid at 428-9.
Mason CJ and Wilson J said:
[The] doctrine [of promissory estoppel] extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his position or suffering detriment, does not bring promissory estoppel into play. Something more would be required. Humphreys Estate suggests that this may be found, if at all, in the creation or encouragement by the party estopped in the other party of an assumption that a contract will come into existence or a promise will be performed and that the other party relied on that assumption to his detriment to the knowledge of the first party.[10]
[10] Ibid at 406 (citations omitted).
In this case, the doctrine of estoppel focuses on the vendor’s state of belief and reliance on an assumption or expectation induced by the purchaser.
In most cases, the vendor, either as a result of their own endeavours or those of their agent, would serve the statement on the purchaser genuinely believing it to state accurately the prescribed information so as to effect the commencement of the prescribed time. In circumstances where the vendor genuinely believes the statement to be true and complete but where the purchaser knows the statement to be defective, and consequently that their right to rescind is preserved, the purchaser may engage in conduct, such as making requests of the vendor to effect changes to the property or engaging in further negotiations in respect of the property, that would induce the vendor to believe that the parties were bound by the agreement from which neither could resile. In such circumstances it is conceivable that a vendor may rely on that assumption, which has been induced by the conduct or by statements of the purchaser. If then the vendor acts to his or her detriment, then the purchaser may be estopped from exercising the right to rescind the contract.
Once again, knowledge by the purchaser of the full facts is important, and the availability of estoppel in those circumstances is entirely consistent with the objects and purposes of Part 2 of the Act.
In circumstances where the vendor has relied on the conduct of the purchaser in assuming the contract between them to be binding, and has suffered detriment as a result, it is a matter for trial whether it is unconscionable for the purchaser subsequently to rescind the contract on the basis that their right to do so has not expired due to the vendor’s failure to serve a valid statement. In our view, whether the elements of estoppel are satisfied is a matter of evidence. The issue cannot be satisfactorily resolved on an application for summary judgment.
Sections 33 and 34 of the Act
Section 33 of the Act provides:
33—No exclusions etc of rights conferred or conditions implied by Act
Subject to this Act, a purported exclusion, limitation, modification or waiver of a right conferred, or contractual condition implied, by this Act is void.
The question is whether the right to rescind under s 5 can be “waived” by the conduct of the purchaser. Waiver is described by Mason CJ in The Commonwealth of Australia v Verwayen[11] in the following terms:
[G]ranted that some statutory rights can be waived, the mere existence of cases in which statutory rights have been held to be susceptible to waiver does not signify that those cases are all exemplifications of one concept or doctrine. As often as not, the term "waiver" is used to describe the result of the application of various principles rather than to designate a particular legal concept or doctrine. The consequence is that the expression "waiver" has been the subject of robust criticism, notably by Dr. Ewart in his work Waiver Distributed (1917); see also Bysouth v. Shire of Blackburn and Mitcham [No 2][12]; Larratt v. Bankers and Traders' Insurance Co.[13]; Kammins[14], per Lord Diplock. This is because "waiver" is an imprecise term capable of describing different legal concepts, notably election and estoppel.[15]
[11] (1990) 170 CLR 394.
[12] [1928] VLR 562 at 579.
[13] (1941) 41 SR (NSW) 215 at 226.
[14] [1971] AC at 882-883.
[15] (1990) 170 CLR 394 at 406.
But for the opening words of the section, the terms of the section would prevent a purchaser from making an election to affirm the contract by “waiving” his right to give notice of rescission. Conversely, it would prevent a purchaser from electing to rescind by waiving his right to affirm the contract. As the whole purpose of s 5 is to confer on the purchaser a right to elect, s 33 says nothing about that type of election. That is an election which, consistent with the Act, allows or even requires common law principles to apply to it.
The waiver referred to in s 33 is therefore referring to something else. Mr Rochow, counsel for the respondent, submitted that it referred to a contractual term whereby rights under the Act were waived. It certainly includes that, but it may include other forms of waiver. In our view, it refers principally to the type of waiver referred to in s 16(c) of the Act without the safeguards referred to in that paragraph. It includes any form of waiver of the requirement under the Act to be given a vendor’s statement other than in circumstances described in s 16(c). We agree with Mr Rochow’s submission that the use of the word “void” in that section suggests something in the nature of a contractual arrangement or of some other act or deed of waiver, rather than a waiver in the form of an election, and particularly an election by conduct.
Mr Rochow also sought comfort from s 34 as preserving “remedies” of election and estoppel. Section 34 provides:
34—Civil remedies unaffected
Nothing in this Act prejudices any civil remedy available apart from this Act.
There is no need to dwell on this argument. It is not necessary to resort to s 34 to preserve the principles of election which, in our view, form the foundation on which s 5 is built. Nor is it necessary to decide whether “remedies” for the purpose of s 34 are limited to remedies claimed by a plaintiff. The principles of estoppel as pleaded by the vendor in this case do not depend on s 34.
Resolution of the appeal
The question arose in this case on an application by the purchaser for summary judgment under r 25.02 of the District Court Rules 1992 (SA). As the defendant has pleaded and given particulars of an election by the plaintiffs to be bound by the contract, that necessitates not only proof of the plaintiffs’ conduct and an assessment as to whether that constitutes an election, but proof of the plaintiffs’ state of knowledge of the relevant facts which were omitted from the vendor’s statement. The purchasers must have known about at least one of the defects in the statement when they gave the notice of rescission under s 5. One of the issues at trial will be when they found out and whether, at the time of their conduct alleged by the vendor to constitute an election, they knew of the relevant facts. That will also be relevant to the plea of estoppel, as will be proof of the other elements of estoppel if the vendor is to succeed. These are all matters for trial and cannot appropriately be resolved on an application for summary judgment.
The District Court Master entered summary judgment for the plaintiffs. The District Court Judge allowed the appeal and set the judgment aside. In the circumstances we would dismiss the appeal.