Harvey Fields Private Estates Pty Ltd v 33 Malcolm Street Pty Ltd

JURISDICTION:<Jurisdiction>SUPREME COURT OF WESTERN AUSTRALIA</Jurisdiction>

<HeldIn>IN CIVIL</HeldIn>

CITATION:<Citation>HARVEY FIELDS PRIVATE ESTATES PTY LTD -v- 33 MALCOLM STREET PTY LTD [2012] WASC 218</Citation>

CORAM:<Coram>KENNETH MARTIN J</Coram>

HEARD:<Heard>18-19 APRIL 2012</Heard>

DELIVERED:<Delivered>22 JUNE 2012</Delivered>

<CaseNo>CIV 1546 of 2011

CIV 1547 of 2011

</CaseNo>

FILE NO/S:<FileNo>CIV 1546 of 2011</FileNo>

BETWEEN:<Between>HARVEY FIELDS PRIVATE ESTATES PTY LTD

Plaintiff

AND

33 MALCOLM STREET PTY LTD

Defendant</Between>

<mpb>

FILE NO/S:<FileNo>CIV 1547 of 2011</FileNo>

BETWEEN:<Between>BIRDWALK INVESTMENTS PTY LTD

Plaintiff

AND

33 MALCOLM STREET PTY LTD

Defendant</Between></mpb>

Catchwords:

<Catchword>Strata titles - Vendor and purchaser - Off the plans acquisition of strata lot - Notifiable variations - Reduced unit entitlement - Increased floor area - Structural wall required by vendor's architect - Panoramic view of Swan River obscured by solid wall - Purchaser's avoidance notice - Ground not notified</Catchword>

Legislation:

<LR>Strata Titles Act 1985 (WA)</LR>

Result:

<Order>Purchasers' avoidances of contracts of sale upheld</Order>

Category:<Category>A</Category>

Representation:

Counsel:

<Counsel>Plaintiff:Ms C H Thompson

Defendant:Ms W F Gillan</Counsel>

Solicitors:

<Solicitors>Plaintiff:Nielsen & Co

Defendant:Mabel Chua</Solicitors>

<mpr>

CIV 1547 of 2011

Counsel:

<Counsel>Plaintiff:Ms C H Thompson

Defendant:Ms W F Gillan</Counsel>

Solicitors:

<Solicitors>Plaintiff:Nielsen & Co

Defendant:Mabel Chua</Solicitors>

</mpr>

Case(s) referred to in judgment(s):

<CRJ>

Bankmist Holdings Pty Ltd v Azina Holdings Pty Ltd [2009] WASC 230

Bassingthwaite v Butt [1982] QdR 670

Deming No456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129

Gold Coast Carlton Pty Ltd v Wilson [1985] 1 QdR 182

Latitude Developments Pty Ltd v Haswell [2010] QSC 346

Mirvac (WA) Pty Ltd v Yeo [2011] WASC 162

Mirvac Queensland Pty Ltd v Wilson [2010] QCA 322

Sommer v Abatti Holdings Pty Ltd [1992] 1 QdR 300

Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245

Walker v Clough Property Claremont Pty Ltd [2009] WASC 367

Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232

Wilson v Mirvac Queensland Pty Ltd [2010] QSC 87

</CRJ>

<Judge>KENNETH MARTIN J</Judge>:

Introduction

1These two actions concern long term 'off‑the‑plans' purchases of strata lots within the meaning of the Strata Titles Act 1985 (WA) (the STA).In both actions, the plaintiff Purchasers (Harvey Fields Private Estates Pty Ltd (Harvey Fields) and Birdwalk Investments Pty Ltd (Birdwalk)) issued notices of avoidance to the same Vendor (the defendant, 33Malcolm Street Pty Ltd), pursuant to s69D of the STA in September 2010.They contend that their obligation to settle has, as a result, been ended.

2The Vendor contends the Purchasers' notices of avoidance are of no moment.It says that each Purchaser was required to settle in September 2010 and has repudiated that obligation by failing to do so.As a consequence the Vendor seeks damages by counterclaim against both Purchasers.

Overview

3There was minimal factual disputation between the parties in these trials.I address a few limited areas of factual controversy in the running.

4In both actions, the Purchasers contracted to acquire off‑the‑plans strata lots proposed to be built as part of a new multi‑storey residential apartment building at 33Malcolm Street, West Perth, on the western fringe of the CBD.The Vendor takes its name from that location.The proposed building was to be known as 'Scene Apartments'.As events unfolded, the construction process for the apartment building spanned a period of over 2½ years from the date of entry into the contracts of sale.

5In CIV1546 of 2011, the Purchaser is Harvey Fields.It committed to acquire apartment42 in the Scene Apartments building once it was built, under an offer and acceptance strata title contract accepted by the Vendor on 21January 2008 (exhibit 1, pp 112 ‑ 217).The nominated purchase price was $2,140,000.Settlement on acquisition of apartment42 was to be after the registration of the building's strata plan, enabling separate certificates of title to be issued for the apartments (also known as 'lots') in the strata development.

6According to draft floor plans forming part of the draft proposed strata plan (and incorporated as an attachment in the contract of sale), apartment42 was to have an area of 145m² as a two level apartment occupying areas across levels 6 and 7 in the Scene Apartments building once completed, along with 32m² comprising a car bay and storage area, for a total of 177m² (see annexureD - appendix2 found in exhibit 1 at pp 163 ‑ 174).

7In CIV1547 of 2011, the plaintiff Purchaser is Birdwalk.It committed to acquire apartment36 within the proposed Scene Apartments building by a strata title contract accepted by the Vendor on 31December 2007 (see exhibit 2, pp 329 ‑ 438).The nominated purchase price was $1,100,000.There were similar arrangements concerning settlement after completion of the building and the issue of a separate certificate of title for this apartment.

8Apartment36 was to be situated on level5 of the Scene Apartments building.The draft proposed strata plan incorporated within the Birdwalk contract documentation showed proposed apartment36 as occupying a total area of 123m², including the car bay and storage area (see exhibit 2, p 393).

9Annexures to each contract of sale included lengthy boilerplate special conditions, general conditions, floor plans and seven appendices within annexureD relating to obligations and matters associated with the requirements of the STA, plus annexuresE, F and G.These annexures were vendor‑prepared standard form documentation in each contract of sale.There is no substantive difference in content of this material as between the Birdwalk and Harvey Fields contracts of sale.

10The Harvey Fields and Birdwalk contracts of sale were explicit as to the proposed 'unit entitlement' tied to each strata apartment that was to be constructed.For strata lots the statutory concept of 'unit entitlement' is important.The term is defined within s3 of the STA.The implications of a notified reduction by the Vendor of each Purchaser's unit entitlement is a central feature of these actions.

11Section3(1) of the STA defines 'unit entitlement', unless the contrary intention appears in the Act.'Unit entitlement'

in respect of a lot, means the unit entitlement of that lot shown on the schedule of unit entitlement registered with the Registrar of Titles.

12Section5 of the STA, as regards the strata plan, relevantly provides:

(1)A strata plan shall -

(a)consist of a location plan and a floor plan in respect of the parcel;

…

(c)be accompanied by a schedule specifying, in a whole number, the proposed unit entitlement in respect of each lot into which the parcel is to be subdivided and specifying also the proposed aggregate unit entitlement.

(My emphasis in bold)

13Section14 of the STA provides:

The unit entitlement of a lot, as stated in the schedule referred to in section5, determines -

(a)the voting rights of a proprietor;

(b)the quantum of the undivided share of each proprietor in the common property; and

(c)subject to subsection (1)(c)(ii) of section36, the proportion payable by each proprietor of contributions levied under that section.

14The proposed unit entitlement of a lot within a strata plan, as well as aggregate unit entitlement, is 'notifiable information' a vendor must provide to a purchaser pursuant to s69A(c) of the STA.

15Section69(2) allows a vendor to provide the notifiable information by (as happened in this case) ensuring it forms part of the contract of sale:see s 69(2)(b).

16For apartment42, Harvey Fields was notified by the Vendor of an indicative unit entitlement of 51units in its contract of sale.This unit entitlement was out of an aggregate of 1,000 units which were allocated across the lots in the Scene Apartments building (i.e. allocated across the 42proposed lots).Expressed as a percentage, Harvey Fields was, in effect, told by the Vendor in January 2008 that apartment42 would carry 5.1% of the Scene Apartments building's aggregate unit entitlement (see exhibit 1, p 175).

17Birdwalk's apartment36 was the subject of notifiable information in December 2007, when the Vendor advised Birdwalk (by annexureD to its contract of sale) of an indicative unit entitlement of 26units out of the 1,000 unit aggregate or, expressed as a percentage, 2.6% of the building's aggregate unit entitlement (see exhibit 2, p 396).

18A controversy arising in both actions concerns the validity of notices of avoidance given in September 2010 on behalf of Harvey Fields and Birdwalk (through their solicitor) to the Vendor.In both instances, the Purchasers' notices sought to invoke the statutory right of avoidance afforded to purchasers of strata lots under s69D of the STA.That provision is found within PartV of the STA.

19PartV is headed 'Protection of purchasers'.I have had occasion to assess provisions within PartV of the STA in other recent decisions:see Walker v Clough Property Claremont Pty Ltd [2009] WASC 367 and Mirvac (WA) Pty Ltd v Yeo [2011] WASC 162.In Walker [14] ‑ [18] I addressed the protective legislative objectives as regards purchasers of off‑the‑plans strata lots, within PartV's provisions.See also Mirvac v Yeo [27] ‑ [29], [35] and the observations of Martin CJ in Walker v Clough Property Claremont Pty Ltd [2010] WASCA 232 [21], [42].There is no need to repeat those observations.

Trial evidence

20The evidence adduced at trial was largely uncontroversial.Exhibits1 and 2 constitute a joint trial bundle.The trial bundle is divided into three sections by reference to:

(a)documents common to both actions;

(b)documents relevant to the Harvey Fields action (CIV 1546 of 2011); and

(c)documents relevant to the Birdwalk action (CIV 1547 of 2011).

21By an amended trial bundle index (exhibit3), the parties agreed to excise documents numbered 13, 14, 17, 27, 28, 29 and 43 from the original index.

22The balance of the documents were uncontroversially received and constitute the bulk of the trial evidence.

23In addition, I received two edited witness statements of MrAdam Paul David Wheeler, adduced on behalf of the Vendor in each action (see exhibits5 and 6).MrWheeler was not required for cross‑examination.MrWheeler's evidence establishes that the Vendor was ready, willing and able to effect settlement of apartments42 and 36 from 21September 2010 (see exhibit5, pars27 and 28; exhibit6, pars28 and 29).

24The parties administered to each other a series of notices to admit facts in the period leading up to trial.These notices and the responses in the Harvey Fields action are together exhibit7.I refer in that respect to a notice to admit facts of 1March 2012 administered by the Vendor, responded to by Harvey Fields on 10April 2012; the Vendor's notice to admit facts of 4April 2012 and a reply from Harvey Fields by its solicitors on 10April 2012; and Harvey Fields' notice to admit facts administered to the Vendor on 12March 2012 and the response by the Vendor on 31March 2012.The Vendor administered its third notice to admit facts on 16April 2012 and a response to that request was received by email on behalf of Harvey Fields on 17April 2012.

25There was also a notice to admit facts issued in the Birdwalk action.This was administered by the Vendor on 1March 2012.Birdwalk responded on 10April 2012 (see exhibit 8).

26In addition, the statement of an expert valuer, MrMatthew Garmony, was adduced by the Vendor.It became exhibit 4.Mr Garmony's report is attachmentMG1 to that witness statement, and is dated 28March 2012.

27Mr Garmony was cross‑examined about his report.MrGarmony's evidence was adduced by the Vendor for the purpose of establishing that the notified reduction in the Purchasers' proportionate undivided shares in common property did not affect the market value of the apartments.His evidence also opined that the reductions in unit entitlements notified to the Purchasers for apartments36 and 42 would not in September 2010 affect the market value of each apartment.

The Purchasers' notices of avoidance given under STA s 69D

28Each Purchaser's notice of avoidance was given on 9September 2010 through their common solicitor.In the case of Harvey Fields, the notice identified two grounds (see exhibit 1, pp 287 ‑ 289).RecitalsI and J refer respectively to a 'first' and 'second' notifiable variation.

29RecitalO concluded, 'Pursuant to sections69D(1), (2) and (3) of the Act, the Buyer is entitled to avoid the Contract'.The operative part of the notice of avoidance by Harvey Fields provided:

NOW TAKE NOTICE:

1.The Buyer hereby gives notice that it avoids the Contract on the basis of, but not limited to, the matters set out above.

2.The Seller must promptly repay the Deposit by way of release of the bank guarantee.

30The notice on behalf of Birdwalk was in similar terms for the ground relating to diminished unit entitlement (see exhibit 2, pp 447 ‑ 449).It was the sole ground expressly raised in the Birdwalk notice of avoidance.Under recitalM, Birdwalk invoked s69D(1) and (2) of the STA.

31As regards an avoidance based upon diminished unit entitlement, Harvey Fields' notice said:

E.By email dated Wednesday 1 September 2010 at 4.37 pm ('the Email'), the Seller by its legal representative Summerslegal purported to provide a notice of a Notifiable Variation (within the meaning of sections69B and 69C of the Strata Titles Act 1985 as amended (Act)), together with a 'Copy of the Strata Plan 54157', being an amended version of the Proposed Strata Plan ('Amended Strata Plan'), and a document setting out the amended unit entitlements of the Buyer and other purchasers of lots in the Proposed Strata Plan ('Amended Unit Entitlements').

…

I.The Amended Unit Entitlements constitute a notifiable variation pursuant to section69C(3)(d) of the Act ('First Notifiable Variation').

…

K.The Email purported to be a notification relating to the First Notifiable Variation only.

L.The Seller has failed to serve notice of the First Notifiable Variation on the Buyer in accordance with its obligations under section69C(1) of the Act and clause21 of the General Conditions.

…

N.As to the First Notifiable Variation, by reason of the changes to the unit entitlement for Lot42, the Buyer has been materially prejudiced within the meaning of section69D(2)(b) of the Act.

(I note substantively equivalent recitals F, I, J, K and L in Birdwalk's notice given in respect of apartment 36.)

32In their pleadings, the Purchasers allege that the Vendor's solicitors' email of 1September 2010 (the Email) was an insufficient notification of the notifiable variations that had been made to the apartments.But the Purchasers no longer press the point.Accordingly, recitalsK and L in the Harvey Fields notice, and J and K in the Birdwalk notice, may now be ignored.

33In both actions, the common issue of contention (raised in recitalN by Harvey Fields and recitalL by Birdwalk) is whether the Purchasers were 'materially prejudiced', within the meaning of s69D(2)(b) of the STA, by a diminution in their respective unit entitlements, as they were notified by the Email.As I mentioned, that is Birdwalk's sole ground of avoidance.Harvey Fields' statement of claim says (par 12):

The plaintiff was materially prejudiced by the change in unit entitlement by reason of:

(a)the reduction in its voting entitlements afforded on a poll as between the members of the strata company; and

(b)the reduction in its share of the parcel as a whole.

(See also par12 of Birdwalk's statement of claim which is in only slightly different terms.)

34Bearing in mind s14(a) and (b) of the STA, to which I have referred, this assertion by the two Purchasers as to their respective material prejudice arising from a reduced unit entitlement, calls into focus, in terms of assessing the practical ramifications of the asserted prejudice, the issue of a strata lot owner's reduced voting power on a poll at a meeting of the building's strata company.More generally, each Purchaser asserts a proprietary prejudice by the reduction in its share in the common property of the Scene Apartments building when complete.

Two other key issues in the Harvey Fields action

35For Harvey Fields, two further grounds of avoidance are relied upon.The first concerns an increase in the floor area of apartment42 of some 13m².The second concerns the intrusion of a solid wall, interrupting what would otherwise have been a panoramic view south over the Swan River, on level 6.

Increased floor area of apartment 42

36RecitalsF, J, K and M from the Harvey Fields notice of avoidance of 9September 2010 states, as to this further basis of avoidance:

F.The Amended Strata Plan records a material change in the floor area of the apartment which comprises Lot42, being a change of 13square metres in the floor area, which change is more than 5% of the floor area of the apartment.

…

J.The alteration in the floor area contained in the Amended Strata Plan constitutes a notifiable variation pursuant to section69C(3)(c) of the Act ('Second Notifiable Variation').

K.The Email purported to be a notification relating to the First Notifiable Variation only.

…

M.In breach of section69C(1) of the Act, no notification has been served on the Buyer relating to the Second Notifiable Variation.

37For this ground Harvey Fields does not contend that it has suffered 'material prejudice' by s 69D(2)(b).

38Instead, Harvey Fields says it was never notified of this floor area change by the Vendor.Hence it invokes s69D(1), not s69D(2), to avoid.

39As a result, Harvey Fields says it only has to show, before it can avail itself of s69D(1), a variation of the strata plan in a 'material particular' as to floor area (under s69C(3)(c) STA), of which it was not notified.The change in floor area only has to be material, it says.

40Harvey Fields argues that a material change does not necessarily have to be detrimental, just materially significant.The increase in floor area by 13m² for apartment42, it argues, constitutes a material change for the purpose of s69C(3)(c).It says the non‑notification by the vendor leads to a right of avoidance under s 69D(1).

The wall

41The third ground of avoidance advanced by Harvey Fields concerns what it refers to as a 'design change' for apartment42.This issue, which concerns the addition of a structural wall on level6, was not the subject of overt mention in the avoidance notice given by Harvey Fields on 9September 2010.But it will be remembered that that notice, after expressly referring to the diminished unit entitlement and increased floor area grounds of avoidance, then described itself as an avoidance 'on the basis of, but not limited to, the matters set out above'.Harvey Fields invokes these words of non‑limitation to advance and maintain the design change as a third, independent ground of avoidance.

42A plurality of the High Court in Deming No456 Pty Ltd v Brisbane Unit Development Corporation Pty Ltd (1983) 155 CLR 129, by reference to broadly similar legislation in Queensland, concluded that a purchaser seeking to rely on a statutory right of avoidance could rely upon grounds not expressly mentioned in its notice of avoidance.Applying that approach, I assess it to be permissible for Harvey Fields to advance its third ground, regardless of whether the third ground as ultimately raised and relied upon was known to it when it gave the notice of avoidance:see also Sunbird Plaza Pty Ltd v Maloney [1988] HCA 11; (1988) 166 CLR 245, 280 (Gaudron J).

43In Bankmist Holdings Pty Ltd v Azina Holdings Pty Ltd [2009] WASC 230 [34], [37] JohnsonJ accepted that the breadth of the drafting of a s69D notice of avoidance can support the purchaser's avoidance on a basis otherwise unexpressed.That is the case here with the notices' use of the broad phrase 'but not limited to'.That decision is a further basis of support to allow the third ground to be considered.

44Accordingly, it is appropriate that I do assess the design change ground raised by Harvey Fields' pleading and arguments, notwithstanding the defendant's objection.On the authorities that objection cannot be maintained.

45The design change ground of Harvey Fields is set out in pars 16 ‑ 18 of Harvey Fields' statement of claim:

16.Subsequent to the service of the notice of avoidance, the plaintiff became aware that the design of Lot42 had been altered so that when constructed the south facing glass sliding doors and windows from the living room had been partially replaced by a solid wall, reducing the panoramic view from Lot42 towards South Perth (design change).

17.The design change:

(a)is a notifiable variation within section69C(1) of the Act; and

(b)was not notified to the plaintiff as soon as it became known to the defendant, or at all, as required by section69C(2) of the Act.

18.By reason of the matters pleaded in paragraph17, the plaintiff had a right to avoid the contract pursuant to section69D(1) of the Act and exercise that right by service of the notice of avoidance.

(my emphasis in bold)

46The italicised preface seen in par16 above, in relation to Harvey Fields supposedly not becoming aware of the design change until after service of the notice of avoidance, is now accepted to be factually incorrect.Counsel for Harvey Fields made that concession very clearly in opening (ts54).The facts surrounding this knowledge had also been the subject of admission by Harvey Fields in answer to a notice to admit facts served by the Vendor (see exhibit7 and the answer provided to question 2 on 10 April 2012).I proceed from that corrected factual premise.

47The design change ground relates to the erection of the unexpected structural wall on level6 in apartment42.The solid wall in the completed lot obscures what would otherwise have been a panoramic south‑looking view of the Swan River.

48Harvey Fields knew about this structural wall being in place at least by March or April 2010.On occasions in March or April 2010, Harvey Fields' director, MrKennedy, had personally inspected apartment 42 on level 6 and 7 as the Scene Apartments building neared structural completion.It is now accepted that MrKennedy noticed the presence of the solid wall.

49Harvey Fields nevertheless contends that MrKennedy's knowledge of the wall is irrelevant.It says the correct question is not what MrKennedy saw for himself during personal inspections of the unfinished apartment42.Rather, the question is whether the Vendor should have notified Harvey Fields of this new wall as a material change to what had been previously shown on the draft strata plan held by Harvey Fields.

50Harvey Fields contends that as a strata lot purchaser, it was entitled under s69C(1) to receive notice in writing from the Vendor giving 'full particulars' of all 'notifiable variations'.It then says, by reference to s69C(3)(c), that the Scene Apartments strata plan, as was lodged for registration and as sent in the Email, differed in a 'material particular' from the draft strata plan in its contract of sale.

Contrasting floor plans:The work

51Harvey Fields contrasts the floor plan for level6 found in the unlodged version of draft floor plans for strata plan54157 in its contract of sale (exhibit 1, p 173) with the floor plan for level6 lodged with Landgate and ultimately registered.Harvey Fields received this version of the strata plan as part of the Email of 1September 2010 (see exhibit 1, p 2, item2 and exhibit 1, p 14).

52It is convenient to juxtapose the different floor plans for apartment 42 on level 6 of the Scene Apartment building:see attachment'A' at the end of these reasons showing the two floor plans underneath each other.

53In the version of the plan for level6 that was lodged (see the bottom half of attachmentA), on the right side of the plan about halfway down the parallel vertical lines that divide the balcony area from its adjoining internal space, there can just be observed a narrow oblong shape.The oblong marking protrudes slightly towards the balcony side of the dividing line.The oblong marking is otherwise unexplained.The oblong marking is not seen in the draft floor plan forming part of the contract of sale for apartment42 (see the drawing in the top half of attachment A).

54The oblong marking on the 2010 plan, it was accepted by both parties at trial, represents the solid wall on level6 of apartment42, as finished.

55Harvey Fields then argues that if the vendor deemed it necessary to alter the level6 floor plan for apartment42 to include the oblong shape not on the plan previously, this alteration must be a variation in a 'material particular' for the purposes of s 69C(3)(c).

56Harvey Fields also invokes, in the alternative, s69C(3)(d) as regards an asserted adverse relative value consequence for apartment42.This, it is argued, arose from the obscuring of what would otherwise have been an uninterrupted panoramic view south over the Swan River.Hence, it was contended that the relative market value of apartment42 in the Scene Apartment building was diminished by this wall, thereby reducing the unit entitlement of apartment42.This is because unit entitlement, properly understood as a concept used within the STA, is tied to the relative values of all the strata lots in the finished building.The wall, it was put, lowered the relative value of apartment42 and thus, lowered its unit entitlement.

57However, the evidence adduced at trial concerning relative apartment values in the finished Scene Apartments building does not provide a foundation in fact for Harvey Fields' contention that there was a reduction in relative value and the relative unit entitlement of lot42 by reason of this wall.The evidence, which I will address later in more detail, is that once the Vendor's valuer had re‑performed his relative value unit entitlement calculations correctly on about 14September 2010, there was no reduction in unit entitlement as between the schedule in the contract of sale and that date.On that basis alone the wall‑related unit entitlement argument must fail.

58I proceed then to deal with the common issue (which is the sole issue in the Birdwalk action) as regards the notified reduction in unit entitlement as a stand alone basis for statutory avoidance under s69D of the STA.

59There is no issue over whether or not a reduction in unit entitlement constitutes a notifiable variation.It does.But there was a clear notification by the Vendor of this aspect by the Email.The issue of controversy is whether or not the Purchasers can both show their separately sustained 'material prejudice', sufficient to meet that threshold requirement in s69D(2)(b) in order to validly avoid their contracts with the Vendor.

Avoidance and termination

60For apartment42, the notice of variation of unit entitlement sent in the Email advised of a revised unit entitlement of 190units out of a total of 5,140.Expressed as a percentage, this amounted to a reduction in unit entitlement by 1.404% (i.e. down from 5.1% to 3.696% of the aggregate unit entitlement of the building).Calculated as a percentage reduction of Harvey Fields' originally notified unit entitlement, this amounts to a 27.53% reduction.

61For apartment36, the new unit entitlement of which Birdwalk was notified was 123units out of 5,140.Expressed as a percentage, this amounted to a reduction of 0.207%, in aggregate unit entitlement, down from having 2.6% of aggregate unit entitlement to 2.393%.Calculated as a percentage reduction in Birdwalk's originally notified unit entitlement, this amounted to a 7.96% reduction.

62As mentioned, both these reduced unit entitlements had been first notified to Harvey Fields and Birdwalk's solicitor on 1September 2010 by the Email (see exhibit 1, pp 2 ‑ 4).

63The covering advice in the Email, written by the Vendor's solicitors concerning reduced unit entitlement, said (exhibit 1, p 3):

Alteration to unit entitlements - section 69C(3)(d)

We inform you that the final unit entitlements for the development differ from the preliminary unit entitlements (prepared in December 2007) forming Appendix3 of AnnexureD of your Contract of Sale and prepared in as outlined in the enclosed table.

64This communication did not expressly mention reductions in unit entitlements.But no point is raised over that less than fulsome covering advice.

65From the Email attachment the reductions in unit entitlement will be appreciated by scrutinising percentage reduction information that is given for all lots, including for lots 36 and 42 as found in the table attached to the Email (exhibit 1, p 4).

66The same covering advice from the Vendor's solicitors also said, as regards the altered floor area issue:

We inform you that there has been no material change to the strata plan or the dimensions of any of the strata lots (the majority of which are slightly larger in area than stated in the preliminary strata plan that formed Appendix2 of your Contract of Sale).

67The Vendor's solicitors' assertion that there had been 'no material change' to the strata plan, or to the dimensions of any of the strata lots, is hotly disputed by Harvey Fields.It says, as we have now seen, that the increased floor area and a solid wall obscuring the panoramic view over the Swan River on level6 were very material changes.

68Pursuant to s69D(2), the stipulated time for the giving of a notice of avoidance by a purchaser is seven working days after receipt of the particulars of a notifiable variation from the vendor.No contention is advanced by the Vendor that the Purchasers' notices of avoidance were not given and received by the Vendor within that tight seven working day period.

69However, the Vendor does not accept that either Purchaser was or would be materially prejudiced for the purposes of s69D(2)(b) by the notified reductions in unit entitlements.Accordingly, the Vendor pressed Harvey Fields and Birdwalk to settle notwithstanding their notices of avoidance.Both refused to settle.

70In the end, the Vendor set a settlement date which was not met.The Vendor gave each Purchaser notice of termination.The terminations were expressed to be on the basis of asserted repudiation by each Purchaser.The Vendor reserved its rights to pursue damages against each Purchaser (see exhibit 1, pp 309 ‑ 310 and exhibit 2, pp 470 ‑ 472).

71Apartment36 has since been resold, albeit at a lower price.The Vendor has quantified its damages by reference to the gap between sale prices.There is a small issue between the parties over interest and that sum.Apartment42 has not yet been resold.

Valuer's error as to notified reduced unit entitlements

72It is a curious but substantively irrelevant fact that events emerging subsequent to both Purchasers' notices of avoidance of 9September 2010 show that the Vendor's valuer had made what, on the face of it, presents as a rather significant blunder in calculating the unit entitlements advised by the Email for each of the finished lots at the Scene Apartments.His calculations of unit entitlement, as advised to Harvey Fields and Birdwalk in the Email, had, it turned out, used the wrong underlying criterion. The Vendor's valuer had used the criterion of the relative area of each unit in the Scene Apartments building.But he should have used the criterion of relative value.

73Both parties accepted at trial that relative value was the proper criterion for use in calculating the different unit entitlements (see ts139 - counsel for the defendant, at commencement of day 2).

74The valuer's conceptual mistake soon became apparent.In the meantime, however, the strata plan for the Scene Apartments building, with amended unit entitlements, had been registered at Landgate on 7September 2010.Moreover, Harvey Fields and Birdwalk through their solicitors had by then given their notices of avoidance to the Vendor on 9 September 2010.

75A recalculation of unit entitlements for each lot was done by the Vendor using the correct criterion of relative values for each lot in the Scene Apartments building.A resolution of the Scene Apartments strata company was moved and passed to correct the unit entitlements.

76The recalculation, correctly done, showed unit entitlement outcomes that do not differ at all from those which were given as the indicative contractual strata plan unit entitlements for proposed lots36 and 42 at annexureD, appendix3 in the sale contracts (see exhibit 1, p 175).

77But the unit entitlement calculation correction was not fully implemented until 14September 2010 (see exhibit 1, p 291).By then it was too late.Harvey Fields and Birdwalk had given their notices of avoidance under s69D(2) of the STA.They had acted, reasonably enough, on the basis of the notification of reductions in unit entitlement received on 1September 2010, particularly bearing in mind they only had seven working days to decide on a course of action.

78In the Vendor's defences in both actions, it pleads that there was no actual change in the unit entitlements of lots36 and 42.This pleaded position has proved to be a misconceived distraction.The Vendor, by its solicitors, clearly gave notice under the Email of a notifiable variation under s69C(3)(d).There were only seven working days in which each Purchaser could decide whether to give notice of avoidance or not.Failure to act within that short period would mean losing any potential right of avoidance.

79The avoidance decision had to be made by each Purchaser on the basis of the notified information.The Purchasers had no independent knowledge of the true facts concerning that entitlement and the values calculation mistake.The right to avoid under s69D(2) can only be assessed by reference to the state of each Purchaser's knowledge within that seven working day window.The assessment is not to be made by reference to events occurring later, or by reference to matters such as the correction of the valuer's calculation error.That information was not within the Purchaser's knowledge in the seven working day time frame that is under assessment.The fact it came to light later is wholly irrelevant.At trial, counsel for the defendant accepted this to be so (ts 47).

80The key dispute remains, then, whether either Purchaser suffered material prejudice, assessed by reference to the notified reductions in unit entitlement.The proof of material prejudice lies upon Harvey Fields and Birdwalk, under s 69D(2)(b).

Material prejudice:law

81There is no West Australian case authority which directly addresses the correct meaning of the term 'material prejudice', as used within s69D(2)(b).Likewise, there is an absence of local case authority concerning the meaning of the term 'material particular', as used within s 69C(3)(c).

82Whilst there is an absence of direct local authority, assistance can be obtained, in my view, from a series of cases that contain curial interpretations of the terms 'materially affected' and 'material prejudice' used in Queensland legislation:see Bassingthwaite v Butt [1982] QdR 670; Gold Coast Carlton Pty Ltd v Wilson [1985] 1 QdR 182; Mirvac Queensland Pty Ltd v Wilson [2010] QCA 322; Latitude Developments Pty Ltd v Haswell [2010] QSC 346; and Deming No 456.

83In Bassingthwaite, McPhersonJ was called upon to assess s49(5)(b) of the Building Units and Group Titles Act 1980 (Qld).That legislation's structure can, on the face of it, be seen to bear some broad resemblance to s69D(2)(b) of the STA.A proviso within s49(5)(b) of that Queensland statute was in these terms (see Bassingthwaite (673)):

Provided always that a purchaser may not void a contract, agreement or other document pursuant to paragraph (b) unless he proves that his rights have been materially affected by a matter referred to in that paragraph.

84The meaning of the phrase 'materially affected', assessed as regards the rights of a purchaser, was one of the issues considered by McPherson J (674G).

85In Bassingthwaite it was the purchaser's assertion that it had been materially affected by a reduction in 'lot entitlement' arising in the period between execution of its contract and registration of the strata plan.McPhersonJ examined the Queensland concept of 'lot entitlement' by reference to s19(1) of the local legislation (677B ‑ D).I observe that the concept of 'lot entitlement' looks very similar to unit entitlement under the STA.

86Under the Queensland statute, lot entitlement determined a lot proprietor's voting rights, quantum of undivided share in common property and, subject to certain qualifications, a lot owner's liability to make contributions toward strata levies.

87Having identified some factual repercussions of a reduced lot entitlement (677D ‑ 678A), McPhersonJ observed (678B ‑ C):

My conclusion is that whether the foregoing matters are regarded singly or in combination, they cannot on any view be said to result in a deprivation of 'substantially the whole benefit' which the plaintiff may have been intended to receive from the contract; nor, if the contract is completed, can she be regarded as obtaining something different in substance from that contracted for.It follows, therefore, that she was not entitled for the reasons mentioned to rescind for breach of contract.

88His Honour turned to consider the validity of an attempted exercise by the purchaser of the statutory right of rescission by reference to s49(5)(b) in the Queensland legislation.He observed (679E):

Here the test to be applied is not that of difference in substance but whether the rights of the purchaser have been 'materially affected' by the change in aggregate lot entitlement … Section49(5) is not in terms limited to an affecting that is prejudicial or detrimental to the purchaser, although it is difficult to accept that the intention is to confer a right to avoid where the purchaser is affected in a manner operating to his advantage.

89McPhersonJ proceeded to consider the correct meaning of the local phrase 'materially affected'.His Honour assessed common law authority, observing (680B):

My conclusion is that the rights of the plaintiff as purchaser were undoubtedly affected by the change or alteration in aggregate lot entitlement between contract and registration of the building plan.The question is whether they were altered or affected 'materially'.On the question of 'material' I was referred to Simons v Herald & Weekly Times Ltd [1970] VR 131, 138, where 'material' was treated as connoting 'of consequence'.Among the meanings given in the Shorter OED is '5. Of much consequence; important'.

90Although the phrase used by s69D(2)(b) in the STA is 'materially prejudiced', not 'materially affected', McPhersonJ's analysis of the meaning of the word 'materially' is of assistance in ascertaining the meaning of that word, not only in s69D(2)(b) but also in relation to the meaning of the phrase 'material particular', as used in s 69C(3)(c).

91Following the observations about the meaning of the word 'material', his Honour said (680C):

It is clear that much depends on the context in which the word is used.It is implicit that in s49(4) that it is not any or every alteration in aggregate lot entitlement that is to be regarded as giving rise to a right of avoidance but only such as 'materially affect' the rights of the purchaser.

92These observations are apposite to an interpretation of the phrase 'materially prejudiced' within s69D(2)(b) as regards its application to a change in notified unit entitlement under s 69C(3)(d).

93His Honour then concluded in terms I would see as his impressionistic assessment of the facts in Bassingthwaite (680D):

One can readily see that in the case of a comparatively small number of proprietors an increase by only one in the total number of lot entitlements would be capable of affecting in a material respect the rights of a single proprietor in respect both of voting, share in common property and otherwise; but in my view a reduction of the interest of a proprietor from a 1/62nd to a 1/63rd share is insufficiently significant to be regarded as materially affecting those rights.Accordingly, it is my conclusion that the plaintiff was not entitled under s49(5) of the Act to avoid the contract of sale.

(my emphasis in bold)

94From Bassingthwaite I extract these propositions:

(a)the statutory language of the Queensland statute in question, contrasted with the STA, as regards the phrases 'materially affect' and 'materially prejudice', looks to be similar overall.In Bassingthwaite his Honour appears to have assessed the word 'affected' as denoting a likely prejudicial effect (679F);

(b)his Honour's observations and conclusion appear to be very closely confined to the particular facts of Bassingthwaite.Those facts concerned a reduction in lot entitlement from a 1/62nd share to a 1/63rd share.His Honour expressly left open a different outcome for facts where there was a 'comparatively small number of proprietors' (680D);

(c)the phrase 'materially affect' was assessed in Bassingthwaite in a context of repercussions as regards reduced lot entitlement not only prejudicing voting rights but (as is the case here) also generating the reduced shares in 'common property';

(d)the observation in Bassingthwaite that a mere change in lot entitlement (or unit entitlement in Western Australia) is insufficient of itself to generate a material effect (and correlatively, as I see it, material prejudice) is, with respect, plainly correct.There could be no viable function for s69D(2)(b) to perform if a quantitative reduction in unit entitlement of any magnitude would suffice to afford a purchaser a statutory right of avoidance;

(e)where the line is to be drawn, when assessing the existence or otherwise of a material effect or material prejudice after a reduction in unit entitlement, must raise pure questions of fact and contextual evaluation in every case;

(f)in Western Australia, the legislature has not provided any definition of the term 'materially prejudiced' in the STA.There is no assistance from extrinsic materials.An interpretation of the term therefore becomes a matter of assessing the meaning within place and context, first within s69D, next within PartV of the STA, and then within the framework of the STA as a whole.The task of assessing the statutory purpose is also a part of that process.

95The character of PartV's provisions in the STA is important.PartV provides protection for purchasers in the context of off‑the‑plans strata acquisitions, possibly over a long period before completion, in the case of horizontal strata subdivisions.

96But equally important is the enforceability of legitimate contractual bargains, so parties may have certainty as regards the ultimate performance of those bargains:see s70B.The scope for opportunistic escapes, motivated by a rising or falling market, from contractual obligations arising out of wholly trivial circumstances ought not find undue curial encouragement:see generally Deming No 456 (163 – 164) (Wilson J).

97McPhersonJ's ultimate view in Bassingthwaite was that there was no detrimental material effect.This factual conclusion was effectively rendered in three lines in the short passage commencing 'but in my view' (680D), which I have cited.

98In Deming No 456, as regards the same Queensland legislation, WilsonJ observed (168 ‑ 169):

With all respect to the learned primary judge, I think an 11% increase in contributions is capable of materially affecting the rights of [the purchaser] … But no doubt it is true that mere quantum is not the only criterion.Its significance must be judged in the light of all the circumstances and the higher the contract price the less may be the impact which an increase in lot entitlement, even of 11 per cent, would have on a prudent purchaser … We are construing a statute which reflects a firm resolve on the part of the legislature to protect the purchasers of home units with quite specific statutory remedies.Section49(4) contemplates that there will be circumstances which are capable of materially affecting the rights of purchasers.These circumstances encompass the entry into or variation of a management agreement or service agreement, the making or variation of a by‑law or a change in the lot entitlement of any lot or the aggregate lot entitlement.Of course, it would be quite unjust if minor changes or adjustments in these areas were to entitle a purchaser to avoid a contract.On the other hand, if the changes are not insignificant and have the effect of changing the substance of that contracted for, the intention of the Legislature would seem to be plain.In the present case, [the purchaser] was clearly entitled to be informed promptly of the change in lot entitlement and the question of material affectation could reasonably have been raised by [the purchaser] had it wished them to avoid the contract on that ground.

(my emphasis in bold)

99He continued, as regards the change in lot entitlement in that case (169):

I have not found this question an easy one to resolve.In the end I have resolved it against [the purchaser] … There was no attempt to show the likely effect of an 11 per cent increase in liability for contributions.The primary judge was not given a relevant description of the common property and the likely financial responsibilities of the body corporate for which it would be obliged to levy contributions.No estimate was made of the likely amount of the levies that were to be expected.As the materials stand at present, it would be sheer speculation to conclude that there is a serious issue to be tried.In these circumstances there is no escape from the conclusion that [the purchaser has] failed to discharge the onus placed upon them.

(my emphasis in bold)

100In Deming No 456, WilsonJ assessed the phrase 'materially affected' within s49 to refer to changes which operated 'to the prejudice of a purchaser to a significant extent' (166).Like McPhersonJ in Bassingthwaite, WilsonJ observed that it 'is a question of fact and degree whether there is such an effect in any particular case' (166).

101Almost a year after the High Court's decision in Deming No 456, the Full Court of the Queensland Supreme Court (AndrewsSPJ, Macrossan and WilliamsJJ) again considered s49 of the Building Units and Group Titles Act, in Gold Coast Carlton v Wilson.As regards 'materially affected' used in s49(4), AndrewsSPJ, in the context of an argument about the purchaser's rights being materially affected by the cost of services provided under a management agreement, said (189):

The respondents argued that their rights were 'materially affected'.What this amounts to is that their share of the costs of the services of Body Corporate Services Pty Ltd was to be $63,000 for the first year rising to $70,000 for the next year.Whether this amounts to material affectation of their rights is a question of fact.They argue to the effect that they had a right to expect that the body corporate, or a member or members of it would carry out the tasks involved.They did not make much of a fist of showing what this would involve for the individual or individuals concerned.There is no reasonable ground to assume that other individuals will perform the work for nothing.There is nothing to show that they could or would do the work themselves.I cannot accept that 'materially affect' means other than to affect rights deleteriously in some way.I am by no means persuaded that to show that a purchaser is to pay what appears to be rather a modest sum for work of this kind is to show that his rights have been affected at all.

(my emphasis in bold)

102MacrossanJ said (197):

[E]ven if the purchasers are able to establish a deficiency in the notice given under s49(4), the proviso to subsec(5) makes it clear that they are not entitled to avoid the contract on account of that deficiency unless they prove that their rights have been materially affected by the matter.

103Subsequent Queensland decisions consider a more recent statute, the Body Corporate and Community Management Act 1997 (Qld).Section214(4)(b) of this legislation provided, as regards notified inaccuracies in a seller's disclosure statement:

The buyer may cancel the contract if -

…

(b)the buyer would be materially prejudiced if compelled to complete the contract, given the extent to which the disclosure statement was, or has become, inaccurate.

(my emphasis in bold)

104So the phrase 'materially prejudiced' is seen as used in the 1997 Queensland legislation.This brings the more relevant Queensland provision even closer in its structure to s 69D(2)(b).

105In Wilson v Mirvac Queensland Pty Ltd [2010] QSC 87 [30] ‑ [31], Margaret WilsonJ rejected a contention that proving material prejudice under s214 of the Body Corporate and Community Management Act required a purchaser to show that, but for a misdescription of a material and substantial matter, the purchaser would never have entered the contract.In rejecting that contention, her Honour distinguished an earlier decision of DerringtonJ in Sommer v Abatti Holdings Pty Ltd [1992] 1 QdR 300, 302 concerning s49(4) of the Building Units and Group Titles Act.

106As regards 'material prejudice' now found in s214 of the Body Corporate and Community Management Act, her Honour observed (in terms subsequently approved by the Queensland Court of Appeal in Mirvac Queensland Pty Ltd v Wilson [50]) [32]:

Some matters are clear.

(a)The focus is on the buyer.This suggests the test is objective having regard to the particular buyer's circumstances:would someone in those circumstances be materially prejudiced?

(b)Given that the buyer has only 14 days in which to cancel the contract, and the completion date may still be some months away (as it was in this case), material prejudice must be assessed in the light of the buyer's circumstances when the Further Statement is received or at the latest at the expiry of 14 days from its receipt.

(c)There must be a causal relationship between the inaccuracy and the prejudice.

(d)There must be proportionality between the inaccuracy and the prejudice.

(e)Because this is consumer protection legislation, it should be construed beneficially.

107By reference to the facts underlying that decision, Margaret WilsonJ observed [35]:

In my view it would be enough for the applicant to establish that she would be disadvantaged in some substantial way if she were obliged to complete the contract on the premise that the Body Corporate would not have the CCTV security system and other items of property which had been included in the first Disclosure Statement and omitted from the Further Statement.I note that the applicant's assertion of material prejudice was based principally on the omission of the CCTV security system.She relied on the other omissions as compounding the prejudice.

(my emphasis in bold)

108Personal security issues were of particular importance to the applicant purchaser in Wilson v Mirvac.Her husband had been appointed a Federal Magistrate in August 2006.Those underlying facts were of significance, even in an application of an objective test, by reference to the buyer's particular circumstances as regards a buyer's material prejudice.Her Honour explained [39]:

The security system had been promoted as an integral feature of the development and arrangements for its management.Viewed objectively, a person in the applicant's circumstances in August 2009 would be disadvantaged in a substantial way by its omission.That disadvantage was compounded by the omission of other items of property which would have enhanced the amenity of the apartment.

109Her Honour concluded that the applicant was entitled to cancel the contract and declared accordingly.

110That decision was upheld on appeal, as I have mentioned.On the appeal, after expressing his view that the primary judge was correct in rejecting the use of the test to ascertain material prejudice from Sommer v Abatti Holdings, JonesJ observed [58] ‑ [59]:

Turning then to the terms of the legislative provision.In the context of s214 (and also s217), the question of prejudice depends upon the information which has come to the buyer's actual knowledge and whether the information on an objective basis is inaccurate … [T]he prejudice for the purpose of s214 flowing from the inaccuracy arises from some detriment or disadvantage to the buyer.In its ordinary meaning 'prejudice' in this context means 'to injury [sic] or to impair the validity (of a right, claim or interest) to damage'.A person is 'prejudiced' when affected disadvantageously or detrimentally [referring to definitions in the Oxford English Dictionary (2nded) and Macquarie Dictionary (4thed)].

A person would be 'materially prejudiced' if disadvantaged 'substantially' or 'to an important extent'.The Court of Appeal in Vennard v Delorain Pty Ltd as Trustee for the Delorain Trust suggested, that in a similar context, the phrase meant 'disadvantaged in a way which is substantial or of much consequence' [[2010] QCA 309 [27]]. It is this concept that requires a consideration of the personal circumstances of the buyer in what is otherwise a determination to be made objectively.The concept of using an objective standard but having regard to personal characteristics is not novel in law.It commonly finds expression in relation to personal self control in criminal law [referring to Stingel v The Queen (1990) 171 CLR 312] and in relation to varying standard of care in 'reasonable person' tests [McHale v Watson (1966) 115 CLR 199].The material prejudice for the purpose of s214 (and s217), has to be assessed in the context of the buyer's personal circumstances being required to complete the contract on its changed terms.The evaluation of whether any disadvantage or detriment reaches the level of material prejudice such as to warrant cancellation of the contract, must be objectively determined in accordance with community standards.

111I find considerable assistance in these Queensland decisions, particularly Wilson v Mirvac.That is so in the task of assessing the meaning of both 'materially prejudiced' in s69D(2)(b) and 'material particular' in s 69C(3)(c).

112The factors identified by Margaret WilsonJ are important in answering what is essentially a question of fact and degree denoted by the phrase 'material prejudice' under s 69D(2)(b).

113Material prejudice is to be assessed objectively but, nevertheless, having regard to the buyer's particular circumstances.The showing of material prejudice by a purchaser will require a demonstration of a degree of disadvantage by a purchaser which is substantial or of much consequence or 'to an important extent'.To borrow the terminology of WilsonJ from Deming No 456, there must be shown to be 'prejudice of a purchaser to a significant extent'.

114I also note some further observations by the President in Mirvac Queensland Pty Ltd v Wilson.McMurdo P observed at [2] that it is the information notified to a purchaser which is relevant, not other facts which could indicate that a matter said to constitute material prejudice may not in fact be the case.Those observations I find to be most apposite here, in connection with the erroneous calculations of unit entitlement by the Vendor's valuer.Those calculations were subsequently corrected, but only after each Purchaser had given its notice of avoidance.As McMurdoP concluded, subsequently learned facts are essentially irrelevant.

115To demonstrate material prejudice it is not necessary for a purchaser to show, to an objective standard, that had the purchaser been notified of the correct information, the purchaser would never have entered into the contract of sale in the first place.That threshold is set at too high a level.The proper test is whether or not the purchaser has suffered a substantial disadvantage, not whether the contract would have been entered into or not.However, evidence that the purchaser would not have entered into the contract of sale if the change had been notified at the outset may nevertheless be received, if that is the position.If a court concludes, applying an objective standard, that that is the likely position, then the likelihood of a finding as to material prejudice would be strong.

116I also mention observations in a subsequent decision by Peter LyonsJ in Latitude Developments Pty Ltd v Haswell [59] and [60], as regards the Body Corporate and Community Management Act s 214.

117Essentially, then, what is now required is a factual assessment and value judgment concerning the reductions in unit entitlements notified to Harvey Fields and Birdwalk on 1September 2010 by the Email.The exercise involves questions of degree that need to be assessed in the two specific realms of alleged prejudice pleaded by the plaintiffs, in respect of which they carry the onus of proof.

118The Purchasers argue that two kinds of prejudice followed from the notified reduction of unit entitlements:the reduction of their voting entitlements and a diminution of their property rights in the common property.

119Before rendering an assessment as to that asserted material prejudice, it is necessary to mention some further context concerning the terms and conditions found within the parties' contracts of sale.

The Harvey Fields and Birdwalk Contracts of Sale:Contractual provisions

120Unlike in Mirvac v Wilson, Harvey Fields and Birdwalk raise no particularly unique presenting facts as regards their respective positions as the Purchasers of apartments36 and 42 in the Scene Apartments building.I have already mentioned the purchase prices for those lots in each contract of sale.

121Contextually, however, I need to refer to some standard terms within the parties' annexureA special conditions.Both Purchasers accepted these conditions.Manifestly, they were presented to the Purchasers by the Vendor for their signature.They were not open for negotiation.

122These conditions concern variations by the Vendor (special condition7) and errors, misdescriptions and requisitions (special condition15.1, and particularly (e) and (f)):

7.VARIATIONS BY SELLER

7.1The Seller may make any change to the Detailed Plans, Proposed Strata Plan, Apartment or Specifications after the Contract Date (provided that any change shall not involve materials of a lesser quality):

(a)where arising from any condition imposed by an Authority on the Seller, Builder, Development or Apartment;

(b)for the purpose of meeting practical methods of construction according to good building practice;

(c)in accordance with any recommendation of the Seller's architect, builder, structural engineer, mechanical engineer or electrical engineer and not adversely affecting the Buyer's use and enjoyment of the Apartment;

(d)due to the availability of materials;

(e)due to increases in the cost of materials or products described in the Detailed Plans or Specifications it is reasonable for the Seller to substitute those materials or products with equivalent materials or products;

(f)due to matters that arise which the Seller could not have reasonably foreseen; or

(g)where the Seller believes the changes will enhance the Development or Apartment.

7.2Provided that a change pursuant to Special Condition 7.1 does not materially prejudice or affect the size or value of the Apartment by more than five per cent (5%) the Buyer shall have no right to make any objection requisition or claim for compensation in respect of such change.

7.3If the floor area of the Apartment as shown on the Strata Plan is less than the floor area of the Apartment as shown on the Proposed Strata Plan by more than five per cent (5%), the Purchase Price will be reduced on a pro‑rata basis to the extent that the reduction is in excess of five per cent (5%).For the sake of clarity if the floor area is reduced by six per cent (6%) the Buyer will be entitled to a one per cent (1%) reduction of the Purchase Price.

7.4If the floor area of the Apartment as shown on the Strata Plan exceeds the floor area of the Apartment as shown on the Proposed Strata Plan by greater than five per cent (5%) the Seller may, by notice in writing to the Buyer, elect to increase the Purchase Price payable at Settlement by the percentage that the increase in floor area exceeds five per cent (5%).For the sake of clarity if the floor area is increased by six per cent (6%) the Seller will be entitled to increase the Purchase Price by one per cent (1%).If the Buyer is unwilling to pay the increased price the Seller may by written notice to the Buyer at any time prior to Settlement elect to terminate this Contract.

7.5Any change pursuant to Special Condition 7.1 does not create any right for the Buyer to:

(a)delay Settlement; or

(b)terminate this Contract.

…

15.ERRORS, MISDESCRIPTIONS, REQUISITIONS

15.1The Buyer is not entitled to terminate or rescind this Contract or to make any objection requisition or claim for compensation or damages or retain any part of the Purchase Price by reason of:

…

(e)any variation of five per cent (5%) or less from the floor area shown on the Proposed Strata Plan to the floor area of the Apartment;

(f)any alteration in the Unit Entitlement of any lot on the Proposed Strata Plan and the Unit Entitlement finally allocated thereto on the Strata Plan.

123In these boilerplate special conditions, present in both contracts of sale, I detect, assessing the positions of the parties objectively, that the parties have placed significance on the threshold level of 5%.This figure was used as an indicator of materiality in assessing the ramifications of a change bearing upon the parties' respective contractual obligations (see special conditions 7.2, 7.3, 7.4 and 15.1(e)).So in special conditions7.3 and 7.4 the threshold of 5% as regards floor area delimits scenarios in which the purchase price could be reduced on a pro rata basis, or increased on a pro rata basis.In circumstances where that 5% floor area figure was exceeded, the purchase price could be adjusted either up or down.(In the present case, the Vendor did not seek a price increase under special condition7.4 from Harvey Fields, notwithstanding the notified increased floor area of 13m² for apartment42.)In special condition 15.1(e), the Buyer's right of termination or rescission is, as regards floor area, tied to variations of 5% or less.

124The ultimate assessment as to purchasers' material prejudice is inevitably tied to the unique circumstances of each case.Ultimately, it is a matter of overall impression, and as WilsonJ observed in Deming No 456, it is not, I find, an easy one to resolve.A reduction in notified unit entitlement obviously would not, of itself, be enough.The legislature has clearly specified an additional requirement.I note that the certificate of the licensed valuer which is at the foot of the Form3 schedule of unit entitlement itself makes reference to s14(2a) of the STA and to an assessment that uses a threshold of 5% proportionate value in the process (see exhibit 1, p 293, contrasting exhibit 1, p 26).The purchaser must show material prejudice.

Voting on a poll

125As regards voting on a poll, the Vendor argues that a reduced unit entitlement is, in a practical sense, only capable of manifesting at a meeting of the strata company, and then in the limited context of a poll taken for a contentious special resolution.'Special resolution' is defined within s3 of the STA (see also s 3B, s 3C and s 3CA).

126The occasion for a special resolution vote in the deliberations of the strata company can arise by reference to certain occasions mentioned in provisions specified in the STA:see s16 (resolutions to apply to the State Administrative Tribunal to amend unit entitlement), s41(1) (change of name of the strata company), s42(2)(c) (amendment of Schedule 2 by‑laws), s42(14) (amendment of Schedule 1 by‑laws in respect of voting and unit entitlement, where none of the lots are used for residential purposes), s47(1) (limitations on expenditure by the strata company), s42(2) (the Schedule 1 by‑laws) and Schedule1 cl4(8) (removal of a member of council between annual general meetings).

127The Vendor contends, practically speaking, that the notified reductions in the Purchasers' unit entitlements would not of themselves impact upon or against Harvey Fields or Birdwalk voting alone to pass, or even to veto, a special resolution at a meeting of the strata company:see s3B(2)(a) and (b).I accept that to be the case.The requirement to carry a special resolution is 50% of aggregate unit entitlement, and the presence of 50% of proprietors in the scheme.To prevent a special resolution being passed requires a negative vote of 25% or more of the aggregate unit entitlement of lots in the scheme and 25% or more of the proprietors of lots in the scheme.

128But the Purchasers argue that the notified reductions to their unit entitlement, and thus to their voting rights, should be assessed pragmatically, in the context of potential blocking vote by groups of aligned proprietors.They say that the significance of a 'balance of power' scenario ought not be deprecated.It is put that there could be, for instance, considerable significance flowing from a reduction to voting rights where, for instance, a group of proprietors from a particular floor or floors opposed a proposal made by another group of proprietors from different floors.Furthermore, they say that given the seven day window within which an avoidance decision has to be made, it is not unreasonable to assess these potential voting outcome ramifications on a hypothetical basis.

129I accept that from a voting perspective, the notified reductions in unit entitlement have been quantitatively detrimental to each Purchaser when assessed for a hypothetical poll vote on a contentious special resolution.But, for the facts of each case here, are they substantial enough to constitute material prejudice for Harvey Fields and Birdwalk?

130The unit entitlement reduction for Harvey Fields, as notified, amounted to a 1.404% reduction (down from 5.1% to 3.696%).Such a devaluation, in a voting context for a poll, particularly on a close contest, could prove to be significant or even determinative, especially on a block veto 25%context.In fairness to Harvey Fields the numerical reduction in voting rights cannot, I think, simply be brushed off as wholly theoretical in relation to the passing or blocking of a contested special resolution at a meeting of the strata company.The nature of the exercise must be theoretical to an extent, given the seven day timeframe for potential avoidance that is involved.

131A movement in an alignment of voting power can make a crucial difference on a close vote.The composition of Australian parliaments sometimes displays this phenomenon.But, fundamentally, by PartV of the STA the legislature has enshrined the intrinsic importance of a purchaser's unit entitlement.It does that by requiring the Vendor's notification of variations to unit entitlement (s69A(c)) in furtherance of its policy aim of protecting purchasers.That is not to say that any numerical reduction in unit entitlement will deliver material prejudice.It will not.But clearly the subject matter of unit entitlement enjoys the legislature's special concern as an identified area of protection for the purchaser.When is the line crossed by a reduction that is enough to connote material prejudice in the facts of a particular case?In my view, the bar should not be set at too high a quantitative level given the partly theoretical nature of the material prejudice evaluation that is required.

132For the present case, the notified reduction to Harvey Fields' unit entitlement amounted to a reduction of 27.53% as against the unit entitlement notified at the time of contracting.Evaluated in the context of these precise contractual relationships, where the parties, objectively assessed, identified a threshold of a 5% change in floor area or value as being a significant demarcation towards detecting a relevant change in their contractual relationship (see special conditions 7.2, 7.3 and 7.4), the percentage reduction in unit entitlement of 27.53% is, in my view, significant.I reject the Vendor's submission that I must focus predominantly on the size of the reduction in unit entitlement in absolute terms (being 1.404%), rather than a percentage reduction viewed as a proportion of the unit entitlements originally notified to the Purchasers.That submission is not supported by the approach found in the special conditions as regards floor area and allied potential increases or reductions in purchase prices.

133For Birdwalk, the percentage reduction in absolute terms was smaller than for Harvey Fields, down 0.207% (from 2.6% as had been contractually notified, to 2.393% by the notifiable variation information in the Email).That amounted to a reduction of 7.96% to the unit entitlement as originally advised to Birdwalk.That level of reduction also exceeds the 5% threshold, which I assess in all the circumstances of those two purchase contracts, assessed objectively, to be an appropriate demarcation criterion towards materiality in both contracts.

134These reduction percentage calculations for Harvey Fields and Birdwalk can be contrasted with the position in Bassingthwaite.There the reduced lot entitlement, assessed for the purposes of the Building Units and Group Titles Act 1980, only amounted to an overall percentage reduction of 0.026% (i.e. down from 1/62nd to 1/63rd, being 1.613% to 1.587%).Hence the purchasers' reduced entitlement in Bassingthwaite was a mere reduction by 1.587% from the entitlement as originally notified.

135As a pure quantitative mathematical comparison therefore, a 7.9% reduction for Birdwalk and a 27.53% reduction for Harvey Fields, when assessed in a context of these two contracts of sale, is greater than that assessed by McPhersonJ (a reduction of 1.587%) in Bassingthwaite.

136It was not argued before me that special condition15.1(f), as regards 'any alteration' in unit entitlement being sterilised as to its adverse contractual repercussions, could validly inhibit these purchasers' statutory rights to give a notice of avoidance, once the provisions in PartV of the STA were otherwise engaged.That must be so in any event, in my view, as regards contractual provisions not ultimately being allowed to impinge against the protections of PartV in the statute:see s70A(1) STA and my observations in Mirvac v Yeo [35].I do take special condition15.1(f) into account, however, in the overall exercise of construction.However, its content, as regards the end assessment as to material prejudice, is, I think, significantly outweighed objectively by the importance of the carefully chosen threshold of 5% as a touchstone of significance, when assessing significant change in both contracts.

137In Deming No 456, WilsonJ was prepared to accept that an 11% increase in a proprietor's liability to pay levies was 'capable of materially affecting Deming's rights as a purchaser' (168).In the end he resolved the prejudice question against the purchasers, essentially because the purchasers had not discharged the evidentiary onus they carried as a party resisting an application for summary judgment.WilsonJ observed that there had been no attempt to show the likely effects of an 11% increase in liability for contributions (169).Here the position is somewhat different from an evidentiary perspective, especially given the 5% threshold for materiality to be applied to these parties in the special conditions which were drafted by the Vendor.

138Here, material prejudice to both Harvey Fields and Birdwalk resulting from a reduction of unit entitlements in the context of a contested special resolution by a poll vote of the strata company, is in my view sufficiently established by each Purchaser in its own right.

Reduced common property

139There is also the allied question of the reductions by reference to unit entitlement for each Purchaser's share in common property.Although this question would be most relevant if the strata building had suffered some sort of catastrophe, the law's traditional respect for property rights extends, in my view, even to shared statutory rights to common property in the event that a strata building or property is extinguished.This is a contributory factor towards material prejudice.Once again the quantitative position is a higher reduction in common property than in Bassingthwaite.By contrast, see the observations of McPhersonJ in Bassingthwaite (677B ‑ G) and also STA s 14(1)(b).

Conclusions as to material prejudice

140These two elements (reductions in voting entitlement and in common property) delivered by the notified reductions in voting entitlement, assessed together, persuade me, on the balance of probabilities, that Harvey Fields and Birdwalk have both proved their material prejudice for the purposes of s 69D(2)(b).

141In both cases, reductions of greater than 5%to their respective unit entitlements, as first advised, were notified to Harvey Fields and Birdwalk by the Email.I assess a 5% threshold reduction to be significant in the overall unique contexts of these cases.The notified reductions in unit entitlements and, in turn, to shared rights in common property, cannot just be brushed off as insignificant.That is especially so in the context of PartV of the STA, which was inserted for the protection of purchasers of off‑the‑plans strata lots.

142Overall, I am of the view that both Birdwalk and Harvey Fields, assessed in the unique circumstances of the terms of their individual contracts with the Vendor, have established the material prejudice arising out of the Vendor's notified reductions of 5% to their respective unit entitlements.

143As a result, they were both entitled to give notices of avoidance within seven working days under s69D(2).Their notices of avoidance were legitimately grounded upon each Purchaser's material prejudice directly arising out of the extent of the reductions of their unit entitlements.

144On that basis alone, both plaintiffs succeed.Harvey Fields is correlatively entitled to orders for the cancellation of a bank guarantee it provided in lieu of a deposit.In Birdwalk's case, it is entitled to a refund of its deposit.

145From that platform, I move to assess in briefer fashion the remaining two grounds raised on behalf of Harvey Fields.Harvey Fields' success on these points would simply serve to buttress the legitimate avoidance conclusion I have already reached in the Harvey Fields action.

Harvey Fields:increase in aggregate floor area from 177m² to 190m²

146Even though it expressly relied on this change in its notice of avoidance, Harvey Fields says the Vendor had failed to notify it of this floor area change, as was required by s 69C(3)(c).

147The issue over non‑notification is important because, if it is correct, Harvey Fields' termination may then be grounded upon s69D(1) rather than s69D(2).Where s69D(1) applies, it is not necessary for Harvey Fields to show material prejudice, as is otherwise required for an avoidance under s 69D(2).

148In response, the Vendor first says it was not obliged by s69C(3)(c) to give notice on this issue of increased floor area, because there was no change in any 'material particular'.The Vendor says an increase in floor area of 13m² for apartment42 was actually a beneficial thing for the Purchaser.Accordingly, it says an increase in floor area is not a notifiable variation.

149That argument generates an issue over the true meaning of the phrase 'material particular', as used in s69C(3)(c), in the context of a difference or variation as regards the strata plan.

150Harvey Fields contends that s69C(1) and (2) both embody the protective principle that significant variations must be notified to purchasers by vendors.Moreover, these variations must also be notified timeously by a vendor.Failure to notify the purchaser of a change in a material particular, where required, is the policy explanation, says Harvey Fields, for the stronger right of avoidance afforded to purchasers by s69D(1), in contrast to s 69D(2).

151Harvey Fields says it does not matter that it may enjoy or even benefit from an increase in floor area of more than 5%.That, it argues, is not at all the point in issue.Rather, it is the absence of a timeous notification from the Vendor of something material which delivers its entitlement to avoid under s69D(1).It says the Vendor's exposure to an avoidance may have been ameliorated to a degree, by a late notice given pursuant to s69D(3).But late notice is not, under the STA, a panacea.A late notice from a vendor will only commence the seven working day period in which the purchaser must decide whether to exercise its right of avoidance.

152But the question remains.Is the notified increase in the floor area of apartment42, particularly on the seventh floor, to be assessed in fact as a material particular that ought to have been notified to Harvey Fields?That is the real question, even though Harvey Fields obviously knew of the floor area increase as at 9September 2010 (having incorporated such information as a ground of its notice of avoidance).

153In the end, I reach the conclusion that this amount of increased floor area in apartment42 was a change in a material particular and thus was a notifiable variation by the Vendor by reference to s 69C(3)(c).

154Again, the 5% threshold figure found in the special conditions presents to me as an objectively significant threshold for the floor area increase.

155A 13m² increase in floor area for apartment42, taking the aggregate area from 177m² to 190m², is an increase of 7.34%.

156In the sale contract, special condition15.1(e) is seen to address variations in floor area.It does so by reference to the threshold figure of 5% or less.Special condition15.1(e) does not simply address reductions in floor area.It is drawn in terms wide enough ('any variation') to catch increases in floor area as well.And with a variation of more than 5%, by reference to special condition15.1(e), the contractual constraint against a buyer enjoying an entitlement to terminate or rescind or even to object or claim compensation, is not applied.

157I conclude that this variation, by way of the increase in floor area for apartment42, was not notified by the Vendor in accordance with s69C(1), read with s69C(3)(c).It should have been.Hence, the Purchaser's avoidance right will be assessed by reference to s69D(1), not s69D(2).As a result, there was no need for Harvey Fields to establish material prejudice, once it had shown that the strata plan had been varied and now differed in a material particular, as against what had originally been advised.

158Here, covering advice from the Vendor's solicitors in the Email informed Harvey Fields in affirmative terms there had been no material change to the strata plan or the dimensions of any of the strata lots.The solicitors also seem to have thought that a positive increase in floor area was not a material change:see the words used in parenthesis, '(the majority of which are slightly largely in area than stated in the preliminary strata plan that formed appendix2 of your Contract of Sale)' (exhibit 1, p 3).

159The solicitors' covering advice was wrong.There was a material change.That the change was an increase in floor area, and therefore possibly advantageous to a purchaser, was not the point.It was a significant change to floor area.

160On the issue of increased floor area, there may in the end have been no material prejudice to Harvey Fields arising out of the increase, had that assessment ultimately been required.But this question does not now arise for determination.Prejudice is not a consideration that is in play where a vendor has failed to give notice of what is assessed to be a notifiable variation.

161For the present case, the increased floor area constituted a change in a material particular under s69C(3)(c).The Vendor's efforts to persuade me of the immateriality of this variation - pointing out that most of the increased floor area was on the seventh level and was attributable to an absence of one of the voids as originally shown - do not advance its cause.Nor does its argument that part of the increased area on the seventh floor is attributable to an area occupied by a stairwell.

162None of that can detract from a conclusion that the Purchaser ought to have been notified, in accordance with s69C, that there had been a variation in a material particular, by reason of a 13m² increase in the floor area of apartment42, and was not.

163Another suggestion from the Vendor that Harvey Fields was notified, in effect, because it may or could have worked out for itself that the floor area had increased, from floor plan information provided with the Email, is conceptually misconceived.It is for the Vendor to notify, expressly in writing.But that argument is also undermined by the Vendor's solicitors' covering observation in the Email, wrongly advising that there had been no material change (exhibit 1, p 3).

164And if provisions of the Email on 1September 2010 were to be regarded as a Vendor's notification of a variation in a material particular as regards increased floor area, for the purposes of s69D(3), Harvey Fields still had seven working days to then give a notice of avoidance.It met that deadline.In that window material prejudice was not a relevant consideration.

165This second ground for Harvey Fields is not a scenario of the material prejudice threshold under s69D(2)(b) being made applicable.All that occurs once s69D(3) is engaged is that the Purchaser's rights must be exercised within seven working days.That is in contrast to what would otherwise be an open‑ended right of avoidance via s69D(1), open and available until settlement.

166In the end, therefore, Harvey Fields' avoidance by reference to the increased floor area provides a second ground to sustain its avoidance, this time pursuant to s 69D(1).

Harvey Fields' further basis of avoidance:the wall obscuring a panoramic view from apartment 42

167Paragraphs 16 ‑ 19 in the Harvey Fields statement of claim allege that a design change reduced 'the panoramic view from Lot42 towards South Perth' and that this was a notifiable variation within s69C(1).It is alleged that the change was not notified to the Purchaser as soon as it became known to the Vendor, as required by s69C(2).Harvey Fields thus contends that it held a right to avoid on this basis alone, again pursuant to s69D(1), which right was exercised by its service of the notice of avoidance on 9 September 2010.

168The Vendor, by pars17 and 18 of its pleaded defence, denies Harvey Fields' contentions as regards the wall.It says:

(a)if there has been a design change, then by virtue of special conditions7.1(c) and 7.1(g) of the contract of sale, Harvey Fields consented to what it refers to as the 'Detailed Plan' being changed in accordance with a recommendation by the Vendor's architect, builder or structural engineer for the proposed Lot 42;

(b)the Vendor's structural engineer required a supporting structure and had accordingly placed the solid wall between two glass sliding doors to support the room above (i.e. on level7) and to provide a solid feature for the sliding doors to finish into;

(c)the Vendor's architect recommended having a solid wall between the two glass sliding doors on level6 as the solid wall:

(i)delineated the living and dining areas;

(ii)assisted with the high heat loading to apartment42 and hence its 'sustainability';

(iii)provided hanging space for artworks, mirrors, pictures or a television; and

(iv)assisted with the layout of furniture;

(d)by reason of cl17.1 of the contract of sale Harvey Fields accepted that the Vendor had made no representations nor given any warranty regarding apartment42, the Scene Apartments building or the land upon which the Scene Apartments building was to be erected;

(e)by cl20 of the contract Harvey Fields agreed that the contract of sale constituted the entire agreement between the parties, that there were no prior or other agreements which had any effect on the contract of sale and that there were not any correspondence or documents which might have passed between Harvey Fields and the Vendor before execution of the contract of sale which would have any effect whatsoever upon the contract.

169Factually, these propositions from the Vendor can be accepted.The question is:where do they get the Vendor?

170Harvey Fields' avoidance arguments were amplified in written submissions for the purposes of trial in these terms:

44.The change in plans which resulted in the construction of a solid wall, rather than glass sliding doors, is admitted by the [Vendor], who says that the change was structural and architectural and a variation permitted by the contract terms.However, if the variation is a notifiable variation, the reasons for it are irrelevant because, regardless of the rights under the contract, the STA does not permit contracting out, so that even if the variation fitted within cl7, that does not relieve the [Vendor] of its obligations under s69C.

45.The change was a notifiable variation under s69C(3)(c) or s 69C(3)(d).

46.The floor plan which comprises part of the strata plan, indicates a single boundary without differentiation along the length of the line between the internal and external areas of level6; the amended floor plans indicate three separate segments to the boundary line, the middle of which is the offending wall.

171(See in this respect AttachmentA showing a contrast as between exhibit1 page173 and exhibit1 page53.See also AttachmentB being exhibit1 page67 showing a photograph of the constructed wall in situ, and obscuring what would otherwise have been a panoramic view through glass to the south over the Swan River.)

172Harvey Fields' submissions continue:

47.This is a material particular because of the impact on the view from inside the apartment.

48.As to s69C(3)[(d)], unit entitlement comprises, in part, a determination of the relative value of the lot:s14 STA.That value will be impacted by numerous things including changes in the views available from the apartment.The building of the wall reduced the views from the apartment and consequently negatively impacted on the value of that lot, relative to the other lots in the strata plan.

I reject this submission in any event on the basis that it is not supported by the evidence.The evidence is to the contrary, by reference to a subsequent valuation certificate issued and which maintained the relativities of unit entitlement across the 42lots within the building (see exhibit1 pages 292 ‑ 293).

173However, the Vendor:

(a)denies that a design change concerning the wall was a notifiable variation.It contends that the STA is not at all concerned with matters of design.The Vendor draws attention to the amended long title of the STA and to s 4(1) in Part II of the STA, as regards the purpose of the legislation concerning the subdivision of land into lots or lots in common property by registration of either a strata plan or a survey strata plan ('strata plan' being defined in s4(1a)).The Vendor then notes s5(1)(a) as to strata plans requirements consisting of a location plan and a floor plan in respect of a parcel of land.By s5(1)(c) there must be a schedule specifying the proposed unit entitlement in respect of each lot into which the parcel is to be subdivided.The definitions for 'location plan' and 'floor plan' are found within s3(1) of the Act.'Lot' is defined in s3(1) of the STA, in relation to a strata scheme, as 'one or more cubic spaces forming part of the parcel to which the strata scheme relates' and involves the delineation of that cubic space by vertical and horizontal boundaries.Section3(2)(b) explains the boundaries of cubic space referred to in a floor plan.The definition of wall is also found in s3(1) STA and includes a door, window or other structure dividing a lot from common property or from another lot;

(b)says that in strata plan54157 for the Scene Apartments building, the boundary of the cubic space forming part of the proposed lot, in so far as it constituted part of a building, consisted of the space up to the inner surfaces of the walls, the upper surface of the floor and the under surface of the ceilings with the walls, ceilings and floors constituting common property.(I did not understand this analysis to be challenged by Harvey Fields);

(c)by reference to the matters in (a) and (b), says that the provisions of the STA for strata plans such as 54157 are concerned with the 'position, shape and size of the cubic spaces making up a lot'.The STA is not concerned with 'the interior layout or design' of a lot or apartment, or with the 'standards of its construction or fitout' (Vendor's written submissions, par 45);

(d)says Harvey Fields' core grievance, as regards an interference with an anticipated panoramic view, is essentially irrelevant because the STA is not concerned with matters such as views;

(e)contends that matters of view and design only raise matters of aesthetics, which are essentially issues to be dealt with between the parties on the basis of their stipulated contractual arrangements and without reference to the STA;

(f)says that to constitute a notifiable variation, a design change would need to result in a variation in some 'material particular' to the strata plan.That submission is put essentially by reference to the use of the phrase 'material particular' twice within s69C(3)(c).Only where there is a variation or difference in a 'material particular' would an obligation to give notice of a notifiable variation under s69C(1) and (2) arise, says the Vendor.Here, the grievance raised by Harvey Fields as regards the wall, being a matter concerning a view and hence only aesthetics, was not a notifiable variation for the purposes of s 69C;

(g)says it will be seen, by a comparison of the original and the varied strata plans as they relate to the southern wall of proposed apartment42 (see AttachmentA), that windows and doors are not the subject of any details on the strata plan (defendant's written submissions, par103).The strata plan essentially delineates space.

174The Vendor also attempted to raise another factual argument relating to Harvey Fields' director MrKennedy gaining personal knowledge about the construction of this wall in either March or April 2010 and then, either acquiescing in, or positively affirming, the design change.However, there was no pleading by the Vendor as to waiver, acquiescence or affirmation as regards the knowledge or conduct of Harvey Fields through a director at some time prior to 9 September 2010.

175After the Vendor closed its case at trial, its counsel sought leave in principle during her closing to add a plea of waiver, acquiescence or affirmation to its defence in the Harvey Fields action.I refused that in principle application for leave to amend.It was opposed.Moreover, it should have been raised, not to mention formulated precisely as an amendment on notice, a lot earlier.If such an amendment had been moved at an earlier time it would, in my view, have very likely carried with it contentious issues over disputed facts which would likely have affected the running of the trial.

176At no stage was the conceptualised amendment ever actually formulated on behalf of the Vendor as regards some in principle position as to waiver, acquiescence or affirmation.Hence, as a matter of discretion, I refused the application.

177The defendant also contested whether the design change issue could be pursued, on the ground that it was not expressly referred to in Harvey Fields' notice of avoidance.I also rejected that contention, as I mentioned, on the basis of contrary case authority.

178The Vendor also contended that by allowing MrKennedy to inspect apartment42 in March or April 2010, it substantially complied with s69D(3) of the Act.Section69D(3) erects something of a bridge between the preceding two subsections.As we have now seen, its effect is only to start the running of a seven working day period, after a delayed provision of information by a vendor for circumstances that would otherwise be governed by s69D(1), affording the purchaser a right to avoid before settlement on the contract.

179However, there is in my view a conceptual gulf as between what a purchaser could learn for itself by carrying out a personal inspection of an incompleted building and what it should be told in writing by a vendor.The objective of PartV of the STA is to impose an obligation on the vendor to provide by notice in writing full particulars of matters which constitute a 'notifiable variation'.The vendor's provision of such information must also be carried out timeously (s69C(2)).If a notice is not given, the purchaser need not show material prejudice in order to sustain its statutory avoidance of the contract.

180The Vendor's argument in the present case that it substantially complied with s69C must be rejected.The provision requires that a purchaser be given information by the vendor.The vendor's obligation is not satisfied in circumstances where the purchaser is simply left to glean for itself something not otherwise notified in writing by the vendor.A contrary view would defeat the evident statutory policy underlying s69C and s 69D.

Evaluation of the 'design change' argument

181In the end the commencing question is whether or not this change in relation to a solid wall, the effect of which was to interrupt what would otherwise have been a panoramic view south over the Swan River, falls within the ambit of s69C(3)(c).Was the introduction of this wall a variation in a 'material particular'?

182The question again calls for a comparison as between the proposed strata plan found in the contract of sale (exhibit1, page173) and the floor plan received under cover of the Email on 1 September 2010 (exhibit 1, page14; see Attachment A).

183Provisions within the contract of sale with Harvey Fields, such as special conditions 15.1(e) and (f) or 7.1(c) or 7.2, cannot validly impinge against or diminish a statutory right of avoidance held under s69D:see s70A(1) and my observations in Mirvac v Yeo [35].

184But the anterior question, as to whether or not this issue lies within the scope of a 'notifiable variation', remains.If the design change did constitute a notifiable variation, it was clearly not notified by the Vendor.Harvey Fields accordingly would hold a right of termination under s69D(1).As a result there would be no need for Harvey Fields to establish 'material prejudice' under s 69D(2)(b).

Final evaluation as to wall

185Has there been in this regard a variation of the proposed strata plan in a 'material particular'?Harvey Fields emphasises the oblong marking just visible within the vertical line dividing the inner room from the balcony of apartment42 (see exhibit1, page14; Attachment A).

186Upon this issue I am, in the end, of the view that the Vendor's submission to the effect that the STA is concerned with cubic space and not with aesthetic benefits such as views, must be accepted.Aesthetic issues, in my assessment, are matters to be dealt with by the parties' contract.Here they relevantly were not as regards this view for Harvey Fields.

187In the present case, I conclude special condition7.1(c) is applicable to contractually justify a decision by the Vendor to add this wall.I see nothing in the STA to cut back that contractual right, as regards this particular feature.

188With the benefit of extra information provided to me by counsel, I can then better appreciate that the oblong shape just seen within the level6 plan is meant to represent, in two dimensional terms, the insertion of a solid structural wall into a space that would otherwise have been a glass window.But this can only be appreciated with the benefit of the further information to that end, not from the drawing alone.

189Viewing the level6 plans as proposed, then as finalised, does not disclose of itself a solid wall variation, or for that matter any substantive difference or variation as between the floor plans for level6.More information is needed to apprehend all that.

190I hold a degree of discomfort about this conclusion as to aesthetics for purchasers generally.The possible adverse implications for unsuspecting purchasers may be disturbing:under the STA as currently enacted, purchasers may end up losing out on what they perceived when signing up to be a significant selling point for a strata lot that is purchased 'off‑the‑plans'.Nevertheless, that is the outcome presently dictated by the terms of the STA, unless amended to expressly require a vendor to give notice of aesthetic changes.That is a policy issue requiring a policy debate before the legislature.

191The Vendor also correctly points out that there was no live misrepresentation or statutory claim by Harvey Fields for misleading and deceptive conduct as regards this issue, although there once was.A claim for misleading and deceptive conduct linked to the arrival of this wall had been pleaded, but was abandoned before trial (see pars 21 ‑ 27 of the statement of claim).

192Accordingly, I am of the view that the third ground as raised by Harvey Fields concerning the wall does not, as a matter of law, provide a sustainable basis to support an avoidance of the contract of sale.

193In the end, that outcome matters little as Harvey Fields has succeeded on its other two grounds of avoidance.

Final conclusions

194Harvey Fields has been successful in relation to two grounds of avoidance:the change in unit entitlement and the increase in floor area.On that basis the notice of avoidance given on its behalf on 9September 2010 was valid.Harvey Fields would have been entitled to a refund of a deposit.But in the particular circumstances of this case arrangements were made for the deposit to be provided by means of a bank guarantee.In those circumstances, there being no basis to proceed against Harvey Fields for damages in the wake of its justified avoidance of its contract of sale, there should be correlative orders made, if required, concerning the termination of that bank guarantee given in lieu of a cash deposit.

195Birdwalk has been successful on its sole ground of avoidance and is entitled to a refund of its deposit.

196Both Harvey Fields and Birdwalk have been successful and should prima facie receive their taxed costs.There should be no apportionment as to costs by reason of the Vendor's success on the wall issue.Ultimately Harvey Fields has been successful.

197I will hear the parties as to substantive orders implementing these reasons and as to costs, if necessary.

198The parties now should confer and provide a minute of consent orders within seven days of the publication of these reasons.Absent consensus, the parties' respective minutes of proposed orders should be submitted within 14days of the delivery of these reasons.

Attachment A

Attachment B

[2012] WASC 218

22/06/12