JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: BARKER -v- MIDSTYLE NOMINEES PTY LTD [2014] WASCA 75
CORAM: BUSS JA
NEWNES JA
MURPHY JA
HEARD: 21 OCTOBER 2013
DELIVERED : 11 APRIL 2014
FILE NO/S: CACV 30 of 2013
BETWEEN: MICHAEL HEWITT BARKER
CAROL ANNE BARKER
AppellantsAND
MIDSTYLE NOMINEES PTY LTD
Respondent
FILE NO/S :CACV 31 of 2013
BETWEEN :MICHAEL JOHN JORDON
Appellant
AND
MIDSTYLE NOMINEES PTY LTD
Respondent
ON APPEAL FROM:
Jurisdiction : SUPREME COURT OF WESTERN AUSTRALIA
Coram :BEECH J
Citation :MIDSTYLE NOMINEES PTY LTD -v- JORDON [2013] WASC 85
File No :CIV 3018 of 2009, CIV 2739 of 2010
Catchwords:
Contract - Illegal contracts - Effect of illegality or invalidity - Sale of Land Act 1970 (WA), s 13 - Whether a contract entered into in breach of s 13 of the Sale of Land Act is unenforceable or voidable by the vendor or the purchaser
Legislation:
Sale of Land Act 1970 (WA), s 13
Result:
CACV 30 of 2013
Leave to appeal granted
Appeal allowed
CACV 31 of 2013
Leave to appeal granted
Appeal allowed
Category: A
Representation:
CACV 30 of 2013
Counsel:
Appellants: Mr C G Colvin SC & Mr R J S French
Respondent: Mr B Dharmananda SC, Mr A C Willinge & Mr A J Papamatheos
Solicitors:
Appellants: K & L Gates
Respondent: Lewis Blyth & Hooper
CACV 31 of 2013
Counsel:
Appellant: Mr C G Colvin SC & Mr R J S French
Respondent: Mr B Dharmananda SC, Mr A C Willinge & Mr A J Papamatheos
Solicitors:
Appellant: K & L Gates
Respondent: Lewis Blyth & Hooper
Case(s) referred to in judgment(s):
Alati v Kruger [1955] HCA 64; (1955) 94 CLR 216
Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27
Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15; (1989) 166 CLR 454
Australian Competition and Consumer Commission v Baxter Healthcare Pty Ltd [2007] HCA 38; (2007) 232 CLR 1
Braham v Walker [1961] HCA 7; (1961) 104 CLR 366
Brooks v Burns Philp Trustee Co Ltd [1969] HCA 4; (1969) 121 CLR 432
Cheers v Pacific Acceptance Corporation Ltd (1959) 60 SR (NSW) 1
CIC Insurance Ltd v Bankstown Football Club Ltd [1997] HCA 2; (1997) 187 CLR 384
Commissioner of Taxation v Sara Lee Household & Body Care (Australia) Pty Ltd [2000] HCA 35; (2000) 201 CLR 520
Equuscorp Pty Ltd v Haxton [2012] HCA 7; (2012) 246 CLR 498
Farrow Mortgage Services Pty Ltd (in liq) v Edgar (1993) 114 ALR 1
Fitzgerald v F J Leonhardt Pty Ltd [1997] HCA 17; (1997) 189 CLR 215
George v Greater Adelaide Land Development Co Ltd [1929] HCA 40; (1929) 43 CLR 91
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- Case
- [2014] WASCA 75
- Decision Date
CaseChat Overview and Summary
The primary legal issue before the court was the interpretation of section 13 of the Sale of Land Act 1970 (WA). The court needed to determine whether a contract entered into in breach of this section is voidable by the purchaser, or if it remains enforceable despite the contravention. The plaintiff argued that the contravention of section 13 allows the purchaser to void the contract up until the point of settlement, while the defendant maintained that the contravention does not affect the enforceability of the contract. The court had to consider the legislative intent behind section 13, the purpose of the provision, and the consequences of a contravention on the contractual rights of the parties.
In delivering the judgment, the court held that a contravention of section 13(1) of the Sale of Land Act 1970 (WA) does not render the contract voidable by the purchaser. The court found that the contravention does not vitiate the contractual rights of the purchaser, and that the contract remains "on foot and operative so far as the purchaser and his rights are concerned." The court reasoned that the penalty for a contravention of section 13(1) is modest, and it was likely intended to have some civil consequences for the vendor. However, the court could not accept the proposition that a contract prohibited by section 13 is "voidable" at the option of the purchaser. The court found that the purchaser is left with their common law rights intact under the contract, but that the contravention does not confer additional rights of avoidance and rescission not provided for by the contract or implied by the statute.
The court's decision in Barker v Midstyle Nominees Pty Ltd clarifies the legal consequences of a contravention of section 13 of the Sale of Land Act 1970 (WA). The court held that a contravention of this section does not render the contract voidable by the purchaser, and that the contract remains enforceable despite the contravention. The court's interpretation of the legislative intent behind section 13 and the consequences of a contravention provides clarity for developers and purchasers in Western Australia, and ensures that the statutory purpose of the provision is fulfilled.
Orders
Orders of the court
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Background
Background to the litigation
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Evidence
Evidence Before The Court
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Decision
Reasons for decision
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Ratio Decidendi
Legal Principle Established
As I have indicated, the judge found, and it is common ground, that a contravention by the developer of s 13(1) does not vitiate the contractual rights of purchasers for whose benefit the section is enacted. In other words, despite the contravention of s 13(1), the contract is left 'on foot and operative so far as the purchaser and his rights are concerned' (in the language of Street CJ in Cheers v Pacific Acceptance Corporation Ltd (1959) 60 SR (NSW) 1, 2 - albeit that in that case, that result was reached by reference to an express provision in the legislation). The penalty is, on any view of it, modest in its application to a developer of a larger subdivision. It would appear to me to have been drawn on the basis that some civil consequences for the vendor were intended to be attendant on its breach, particularly where the Act contains no detailed provisions dealing separately with the consequences of contravention (compare Master Education [18], [25] ‑ [30]; and see also in this regard the observations of Owen J in Permanent Building Society (in liq) v Wheeler (1992) 10 WAR 109, 140, affirmed on appeal in Permanent Building Society (in liq) v Wheeler (1993) 10 WAR 145). It is a dispute about the nature and scope of those civil consequences which lies at the heart of this appeal. The purchasers contend that, on its proper construction, a contract made in contravention of s 13 is voidable at the option of the purchaser up to the point that a settlement of the contract is completed. The vendor's principal contentions may be summarised as follows (written submissions pars 44, 51, 52, and 55 and supplementary submissions pars 17):•Parliament's purpose was to ensure that buyers dealt with a seller who had title and that the legislature's purpose is fulfilled 'if the buyer can avoid when the seller does not have title; and if the buyer cannot avoid after the seller obtains title'.•Section 13(1)'s purpose is served if the sellers know that a buyer can avoid a contract before they become registered proprietor.•The Parliament's statutory purpose is wholly 'served' by giving a buyer a right to avoid a contract made in contravention of s 13(1) whilst the seller does not have title.•The purchaser is protected by being able to avoid the contract before title is obtained. I am unable to accept the proposition that a contract prohibited by s 13 is 'voidable' at the option of the purchaser on the proper construction of s 13 of the Act. It is one thing to say that a purchaser is left with his or her common law rights intact under the contract notwithstanding the contravention by the vendor. It is another thing to say that the purchaser has additional rights of avoidance and rescission conferred not by the contract, but impliedly by the operation of the statute. (In each case there was a contractual right of termination if the vendor did not obtain the requisite title by a specified date, but the right was conferred only on the vendor - cl 2.1, GB 90.)