Lo v Russell
[2016] VSCA 323
•16 December 2016
SUPREME COURT OF VICTORIA
COURT OF APPEAL
S APCI 2016 0089
| CHENG LO | First Applicant |
| and | |
| ENG KIAT TAN | Second Applicant |
| v | |
| THOMAS JOHN RUSSELL | Respondent |
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| JUDGES: | WARREN CJ, TATE and McLEISH JJA |
| WHERE HELD: | MELBOURNE |
| DATE OF HEARING: | 13 October 2016 |
| DATE OF JUDGMENT: | 16 December 2016 |
| MEDIUM NEUTRAL CITATION: | [2016] VSCA 323 |
| JUDGMENT APPEALED FROM: | [2016] VSC 93 (Cameron J) |
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REAL PROPERTY – Applicants contracted to purchase land owned by respondent – Applicants purported to exercise cooling-off right by sending notice of termination to respondent’s estate agent – Whether notice of termination effective – Whether ‘agent’ in Sale of Land Act 1962 s 31 includes estate agent.
REAL PROPERTY – Contract of sale of land substantially conforming to standard form contract of sale of real estate contained in Estate Agents (Contracts) Regulations 2008 sch – Cooling-off right under Sale of Land Act 1962 s 31 – Whether contract permitted service of notice of termination on respondent’s estate agent – Appeal allowed.
CONTRACT – Interpretation of terms giving effect to statutory requirement – Whether contract may go further than statute requires – Digby v General Accident Fire and Life Assurance Corporation Ltd [1943] AC 121, 141; Fawcett v BHP By-Products Pty Ltd (1960) 104 CLR 80, 89–90, applied.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicants | Mr P Best with Mr P R Miller | Kalus Kenny Intelex |
| For the Respondent | Mr R Hay QC with Mr R T Wodak | Dellios West & Co |
WARREN CJ
TATE JA
McLEISH JA:
The applicants, Mr Eng Tan and Dr Cheng Lo, purchased a property located at 43 Erin Street, Richmond pursuant to a contract of sale with the respondent vendor, Dr Thomas Russell. A few days later, they sought to exercise their cooling‑off right under s 31 of the Sale of Land Act 1962 (‘SLA’) to terminate the contract. The manner of their doing so was said by the respondent to be ineffective. After a three-day trial, a judge in the Commercial Court agreed.[1] The applicants now seek leave to appeal.
[1]Tan v Russell [2016] VSC 93 (‘Reasons’).
Background
The respondent decided to sell the property in early 2014. On 26 February 2014, he signed an exclusive auction authority appointing Marshall White Real Estate (‘Marshall White’) as estate agents for the sale. Mr Andrew Gibbons of Marshall White was appointed to look after the property. He was assisted by Mr Chris Burne, an employee of Collins Simms, a real estate agency associated with Marshall White.
The applicants were interested in purchasing the property for use by Dr Lo and his wife, Dr Elaine Chong, as a medical practice. The applicants and Mr Tan’s wife, Dr Jean Low, inspected the property on 29 March 2014. After a subsequent inspection by Mr Tan and an architect, on 3 April 2014 Mr Tan and Mr Gibbons exchanged text messages regarding the proposed purchase of the property. On that date, the applicants made an offer to Mr Gibbons to purchase the property for $3.5 million. They provided him with a bank cheque for $350,000 as a deposit and signed two copies of a contract of sale. Subject to various modifications, the contract of sale conformed to the standard form of contract in the Estate Agents (Contracts) Regulations 2008 sch.
The applicants were soon informed that the respondent had rejected the offer. Further discussions ensued. On the afternoon of Friday 4 April 2014, Mr Gibbons indicated to Mr Tan that another prospective buyer had emerged and that the respondent wanted to have a private auction between the applicants and that person that evening. The applicants attended the auction and ultimately succeeded in purchasing the property for $4.48 million.
The contract of sale that the applicants had previously signed was amended by hand to reflect the new purchase price and deposit. The balance of the increased deposit was required to be paid by the end of June 2014.
The cover page of the contract of sale contained, within a box headed ‘IMPORTANT NOTICE TO PURCHASERS’, a notice as to the cooling-off period, as required by s 31(6) of the SLA. That notice relevantly read as follows:
Cooling-off period (Section 31 Sale of Land Act 1962)
You may end this contract within 3 clear business days of the day that your [sic] sign the contract if none of the exceptions listed below applies to you.
You must either give the vendor or the vendor’s agent written notice that you are ending the contract or leave the notice at the address of the vendor or the vendor’s agent to end this contract within this time in accordance with this cooling-off provision.
You are entitled to a refund of all the money you paid EXCEPT for $100 or 0.2% of the purchase price (whichever is more) if you end the contract in this way.
On the following page, under the heading ‘PARTICULARS OF SALE’, were listed the ‘vendor’s estate agent’ (giving contact details of Marshall White including the email address of Mr Gibbons), followed by the name (but not any contact details) of the ‘vendor’, the name and contact details of the ‘vendor’s legal practitioner or conveyancer’, the ‘purchaser’ and the ‘purchaser’s legal practitioner or conveyancer’, and particulars of the ‘land’, ‘property address’, ‘goods sold with land’ and ‘payment’.
Special conditions 3.1 and 3.2 provided for the replacement of general conditions as to service, so as to read as follows:
17.1 Any document sent by—
(a)post is taken to have been served on the next business day after posting, unless proved otherwise;
(b)email is taken to have been served at the time of receipt as provided in section 13A of the Electronic Transactions (Victoria) Act 2000.
17.2Any demand, notice or document required to be served by or on any party may be served by or on the legal practitioner or a conveyancer for that party. It is sufficiently served if served on the party or on the legal practitioner or conveyancer:
(a) personally; or
(b)by pre-paid post; or
(c)in any manner authorised by law or the Supreme Court for service of documents, including any manner authorised for service on or by a legal practitioner; or
(d)by email.
General condition 11.1, concerning payment of the deposit, provided:
The purchaser must pay the deposit:
(a)to the vendor’s licensed estate agent; or
(b)if there is no estate agent, to the vendor’s legal practitioner or conveyancer; or
(c)if the vendor directs, into a special purpose account in an authorised deposit-taking institution in Victoria specified by the vendor in the joint names of the purchaser and the vendor.
At 5:56 pm on Wednesday 9 April 2014, Mr Tan emailed Mr Gibbons and Mr Burne (copying in Dr Lo, Dr Low and Dr Chong) as follows:
Subject: 43 Erin Street, Richmond
…
Hi Andrew and Chris,
After due and further re-consideration by the entire investment syndicate regarding this property, we have decided to exercise the 3 clear business days’ cooling off period with immediate effect.
That is, we are withdrawing from this tentative Contract of Sale as allowed by law.
Thanks.
Regards,
Eng K Tan
Later that evening, Mr Tan sent a further email to Mr Gibbons, asking for the return of the deposit. Mr Gibbons rejected that request in an email sent the next morning in the following terms:
This matter will be in the hands of the Solicitor as the 3 Day cool off expired at 5:00 pm yesterday afternoon close of business working day. We will advise [the respondent] for his instructions on what his Solicitor advises Chris & I to do.
By letter dated 17 April 2014, the solicitors for the applicants wrote to the solicitors for the respondent demanding that the respondent refund the deposit less 0.2 per cent of the purchase price by 4:00 pm that day. The respondent did not do so.
On 23 May 2014, the applicants filed a statement of claim in the Supreme Court seeking a declaration that the contract of sale was terminated on 9 April 2014, payment by the respondent of $341,040[2] (plus interest), damages and costs.
[2]Being the deposit of $350,000 less 0.2 per cent of the sale price of $4.48 million (as provided in SLA s 31(4) and the ‘important notice to purchasers’ in the contract).
On 1 July 2014, the respondent’s solicitors served a notice of default on the applicants for failing to pay the balance of the deposit by the end of June as provided for in the contract. The notice required that the default be remedied within 14 days of service of the notice. The applicants did not pay the balance.
The respondent contended that the contract was rescinded on 15 July 2014 and made arrangements to re-sell the property.
On 4 August 2014, the respondent filed a defence and counterclaim alleging that the applicants had not lawfully exercised their cooling-off right. He sought damages, interest and costs. The damages claimed were in the sum of $1.18 million, being the difference between the contract sale price of $4.48 million and the current value of the property, said to be $3.3 million.
The property was sold at auction on 30 August 2014 for $4.07 million. At trial, the respondent sought damages under his counterclaim consisting of the residue of the deposit, the loss on resale (being $410,000) and the costs incurred in respect of resale including by reason of the ensuing delay in settlement.
The trial took place in October 2015. The judge’s reasons record that there were three issues for determination:
(1)Did the notice of termination comply with the requirements of s 31 of the SLA?
(2)If so, did Mr Tan’s signature on the email of 9 April 2014 satisfy the requirements of s 9 of the Electronic Transactions (Victoria) Act 2000?
(3)Did the failure of Dr Lo to provide written authority for Mr Tan to give the notice of termination contravene s 126 of the Instruments Act 1958, and therefore render the notice of termination invalid or inoperative?[3]
[3]Reasons [22].
The judge decided the first of these issues in favour of the respondent and did not determine the others. The respondent did not press the remaining issues on the appeal. The judge dismissed the applicants’ claim and referred the assessment of damages on the counterclaim to an associate judge. The only question now before the Court is whether the judge was correct to conclude that the applicants had not satisfied the requirements for terminating the contract under s 31 of the SLA.
Provisions of the SLA
Section 31 of the SLA is entitled ‘Power of purchaser to terminate a contract for sale of land’. Relevantly, it reads as follows:
…
(2)Where a purchaser under a contract for the sale of land signs that contract he may at any time before the expiration of three clear business days after he has signed the contract give notice to the vendor that he wishes to terminate the contract and where he has signed that notice and given it in accordance with the provisions of this section the contract shall be terminated.
(3)A notice under subsection (2) shall be given to the vendor or his agent or left at the address for service of the vendor specified in the contract or the address of his agent within three clear business days after the purchaser has signed the contract.
(4)Where a contract for the sale of land has been terminated in accordance with the provisions of this section the purchaser shall be entitled to the return of all moneys paid by him under that contract except for the sum of $100 or 0.2 per centum of the purchase price (whichever is the greater) which may be retained by the vendor.
(5)This section does not apply to a contract for the sale of land where—
…
(d)the purchaser is an estate agent within the meaning of the Estate Agents Act 1980 or a corporate body.
(6)A contract to which this section applies shall contain a conspicuous notice advising the purchaser that he may before the expiration of three clear business days after he signs the contract give notice that he wishes to terminate the contract.
…
(8)Any provision in the contract or in any other document whereby any right conferred by this section on the purchaser is excluded, modified or restricted shall be void and of no effect.
‘Vendor’ is defined in s 30(1) to include ‘any person acting as agent for the vendor’.
Section 15 makes provision for the service of notices under the SLA. It relevantly provides:
(1)A notice in writing required or authorized to be given by this Act shall be sufficiently served upon any person—
(a)if it is served personally or left at his last known place of abode in Victoria; or
(b)if served personally or by post upon his legal practitioner or conveyancer named in the contract or otherwise authorized by the person to be served to act in the particular matter.
Trial judgment
At trial, the respondent conceded that the email sent by Mr Tan at 5:56 pm on 9 April 2014 was received on the relevant email server for Mr Gibbons on that date and was therefore received by Mr Gibbons within the three clear business days stipulated by s 31(2). The issue was whether Mr Gibbons was the correct recipient of the notice of termination for the purposes of s 31.
The applicants submitted that they had validly exercised their right to terminate under s 31. That submission was put on two bases: that Mr Gibbons had the authority to receive the notice of termination by virtue of s 31(3) because, as estate agent, he was the respondent’s ‘agent’ within the meaning of that provision; and because, in any event, he had implied or ostensible authority to receive the notice.
In relation to s 31, the judge held that the fact that Mr Gibbons was the respondent’s estate agent did not make him the respondent’s ‘agent’ within the meaning of s 31(3). After summarising the parties’ arguments, she explained her conclusion as follows:
In my view, [the applicants’] contention that s 31(3) of the [SLA] creates a statutory authority in the manner they contended cannot be sustained.
Rather, as [the respondent] submitted, the definition of ‘vendor’ in the [SLA] simply includes an agent of the vendor, but does not give any further content or meaning to the term ‘agent’.[4] This conclusion is reinforced by the fact that the [SLA] specifically refers to estate agents in other provisions. There is simply no basis on which to conclude that ‘agent’ means anything but an agent at law. To the extent that Lloyd and Rimmer suggest that ‘agent’ in this context will include an estate agent[5] (as opposed to may), their conclusion, with respect, is not supported by the clear words of the statute, nor is it supported by authority.
The fact that, in practice, a real estate agent may provide a disclosure statement to a prospective purchaser pursuant to s 32 of the [SLA], is a situation entirely distinct from, and irrelevant to, the consideration of whether a real estate agent may, in the particular circumstances of the case, be deemed an agent for the purposes of s 31(3) such that they can affect the legal rights of their vendor client by valid receipt of a notice of termination.[6]
[4]SLA s 30.
[5]D P Lloyd and W F Rimmer, Sale of Land Act Victoria (Lawbook, 2015) 155 [31.130].
[6]Reasons [50]–[52].
The judge also held that Mr Gibbons did not have implied or ostensible authority to receive the notice of termination. The applicants had submitted that the respondent had held out Mr Gibbons ‘as the conduit for communication with respect to the sale and the contract’.[7] The judge distinguished cases relied on by the applicants on the basis that they concerned relationships other than as between a vendor and an estate agent.[8] She accepted the respondent’s submission that an estate agent is not, despite the title, the agent of the vendor (absent unusual circumstances to the contrary).[9] None of Mr Gibbons’s conduct ‘[went] beyond that of an estate agent attempting to market or sell a property’.[10] Nor was there anything in the respondent’s conduct suggesting that Mr Gibbons had any authority beyond the usual authority of an estate agent.
[7]Ibid [53].
[8]Ibid [54]–[59].
[9]See Petersen v Moloney (1951) 84 CLR 91, 94–5 (Dixon, Fullagar and Kitto JJ); Brien v Dwyer (1978) 141 CLR 378, 395 (Gibbs J).
[10]Reasons [61].
Proposed grounds of appeal
The applicants seek leave to appeal on two grounds:
1.The learned trial judge erred in failing to find that the email from Tan on behalf of the Applicants to the Respondent’s estate agent sent and received on 9 April 2014 was effective pursuant to section 31 of the [SLA] to immediately terminate the contract in that contrary to her Honour's determination:
(a)section 31 of the [SLA] authorized the vendor’s estate agent to receive a notice of termination pursuant to that provision;
(b)the respondent, by signing and delivering the signed contract of sale on 4 April 2014 to the applicants, authorized the respondent’s estate agent named in the contract to receive on the respondent’s behalf a notice of termination pursuant to section 31 of the [SLA].
2.The learned trial judge erred in failing to find that Tan’s signature on the email from Tan (on behalf of the applicants) to the agent sent and received on 9 April 2014 was a valid and sufficient signature pursuant to section 9 of the Electronic Transactions (Victoria) Act, at common law, and pursuant to section 31 of the [SLA].
Ground 2 is not now contested by the respondent. The live question is whether the judge erred in finding that the email terminating the contract was not effective under s 31 of the SLA.
Arguments on the application for leave to appeal
The applicants’ primary contention, under proposed ground 1(a), was that s 31 authorises service of a notice of termination on the vendor’s estate agent. In support of this submission, counsel placed significant emphasis upon extrinsic and historical materials, including the report that recommended, inter alia, the introduction of a cooling-off period (‘the Dawson report’)[11] and the second reading speech when that recommendation was subsequently enacted in the Sale of Land (Amendment) Act 1982. In particular, the Dawson report observed that most sales of land other than at auction were concluded through estate agents using ‘sale notes’ pending a formal contract of sale. The sale note was generally enforceable against the purchaser (but not the vendor) despite giving the appearance otherwise. To address the unsatisfactory features of sale notes and as a form of protection against the influence of sales methods used by estate agents, the report recommended the introduction of a cooling-off period.[12] Citing the second reading speech and the Dawson report,[13] the applicants contended that s 31 is remedial legislation and should therefore be interpreted beneficially in favour of purchasers of land.[14]
[11]Committee of Inquiry into Conveyancing, Further and Final Report (1980).
[12]Ibid 4–6.
[13]Ibid 4–5; Victoria, Parliamentary Debates, Legislative Assembly, 14 September 1982, 222–3, 225 (John Cain, Attorney-General); Victoria, Parliamentary Debates, Legislative Council, 24 November 1982, 986 (Bill Landeryou, Minister for Economic Development).
[14]See IW v City of Perth (1997) 191 CLR 1, 12 (Brennan CJ and McHugh J).
The second reading speech also indicated that a new contract note and contract of sale of real estate would be prescribed ‘shortly’. In that regard, the applicants pointed to other legislative instruments which, they submitted, formed part of a ‘legislative scheme’ that gave effect to the intention of s 31(3). In particular, the Estate Agents (Standard Forms of Contract) Rules 1983 (‘Standard Forms of Contract Rules’) made reference interchangeably to the ‘agent’ and the ‘vendor’s agent’ in the standard form contracts that they prescribed.[15] It was said that those documents were intended to direct the purchaser to serve a notice of termination, inter alia, on the vendor’s agent named in the contract, which meant the vendor’s estate agent. Moreover, it was pointed out in oral argument that the rules made it clear that the agreements in the schedules were for use by estate agents.[16] The applicants made cognate submissions in respect of the legislation and prescribed form of contract in place at the time the contract of sale in this case was executed.[17]
[15]Standard Forms of Contract Rules schs 1–2. Pursuant to r 1, these rules came into effect on the same day as SLA s 31.
[16]Standard Forms of Contract Rules r 4, schs 1–2.
[17]See Estate Agents Act 1980 ss 53A, 99(1)(ge); Estate Agents (Contracts) Regulations 2008 reg 1, sch.
As the argument proceeded, counsel for the applicants did not contend that the ‘vendor or his agent’ in s 31(3) necessarily meant or included the vendor’s estate agent in every case. He noted that the prescribed forms of contract were not mandatory and another form of contract prepared by a lawyer could also be used.[18] The submission was rather that the ‘agent’ referred to in s 31(3) was the agent specified in the contract, and the legislative scheme indicated that where the prescribed form was adopted (as it was in the present case), this referred to the vendor’s estate agent.
[18]Estate Agents Act 1980 s 53A.
The applicants’ construction of s 31 was also said to be supported by contextual features, including the requirement in s 31(6) that a notice regarding the cooling‑off right appear in the contract for sale, and that, in conveyancing and as a matter of ordinary usage, ‘vendor’s agent’ means the estate agent.[19]
[19]The examples given were Urban No 1 Co-Operative Society v Kilavus [1993] 2 VR 201, 208, 211, 213–14 (Hedigan J); Futuretronics International Pty Ltd v Gadzhis [1992] 2 VR 217, 225 (Ormiston J); Dean v Gibson [1958] VR 563, 564 (Monahan J).
The applicants submitted that the trial judge erred by placing weight on the legal position, which counsel accepted, that an estate agent is not the agent of the vendor in the usual sense of the word. The question was instead what was meant by the word in the context of s 31(3). It was wrong to assume it had its general legal meaning.[20] Further, nothing could be derived from the use of the term ‘estate agent’ elsewhere in the SLA, because each of those provisions was dedicated to the subject of estate agents and their particular statutory obligations (in most cases concerning the holding of deposits pending sale).[21]
[20]TEC Desert Pty Ltd v Commissioner of State Revenue (WA) (2010) 241 CLR 576, 583 [14] (French CJ, Gummow, Heydon, Crennan and Kiefel JJ).
[21]SLA ss 9AA, 16, 23–5, 27, 29O, 33B.
Secondly, the applicants contended under proposed ground 1(b) that the respondent authorised the service of the notice of termination on Mr Gibbons by his execution of the contract. They based this submission on several factors that they said demonstrated that the prescribed form of contract, as executed by the parties, draws a clear distinction between the ‘vendor’s estate agent’ or the ‘vendor’s agent’, on the one hand, and the ‘vendor’s legal practitioner or conveyancer’ on the other, namely:
(a)in the particulars of sale, there is provision for insertion of the contact details of the vendor’s estate agent and, separately, those of the vendor’s legal practitioner or conveyancer;
(b)on the cover page there is reference to a person whose signature is secured by an estate agent acknowledging being given by ‘the agent’ a copy of the contract at the time of signing;
(c)general condition 11.1 draws a clear distinction between the estate agent and the legal practitioner or conveyancer; and
(d)while special condition 3.2 provides for a notice to be served on a party or its legal practitioner or conveyancer, that provision is facultative rather than mandatory.
Moreover, the s 31 notice on the cover page of the contract, which refers to giving notice to the ‘vendor or the vendor’s agent’, was immediately followed by the particulars of sale, the first item of which consisted of the contact details of the ‘vendor’s estate agent’. The vendor’s legal practitioner was nowhere described as an agent. In that context, the proper construction of the notice was that the ‘vendor’s agent’ was the vendor’s estate agent. As to special condition 3.2, if notice were to be served on the vendor or the vendor’s legal practitioner or conveyancer, then it would have to be complied with; but here, where service was on the vendor’s estate agent, special condition 3.2 was silent and compliance with it was not necessary. Finally, to the extent that ‘vendor’s agent’ in the notice was ambiguous, the applicants said that it ought to be construed contra proferentem against the vendor.
The same argument was put also as going to ostensible authority. It was submitted that by executing the contract in the terms described above, the respondent represented that the notice of termination could be served on either the respondent himself or Mr Gibbons. The applicants reasonably relied on that representation and would suffer substantial detriment if the respondent were permitted to resile from it, in the form of the forfeiture of the deposit. These matters showed that Mr Gibbons had ostensible authority to receive the notice of termination.
The respondent submitted that ‘agent’ in s 31(3) simply meant a person authorised by the vendor. It did not connote an estate agent; the word ‘agent’, when used to refer to an estate agent acting for a vendor, is misleading[22] and Mr Gibbons was not the respondent’s agent at general law. Estate agents have a limited mandate; the law does not provide them with a general authority to act on the vendor’s behalf. Further, nothing in the SLA suggested that ‘agent’ in s 31 bears a special meaning. ‘Agent’ is not defined in the SLA, and the SLA elsewhere makes reference to ‘estate agents’ and ‘licensed estate agents’, including in s 31 itself, which does not apply to a contract where the purchaser is an estate agent within the meaning of the Estate Agents Act 1980.[23]
[22]Brien v Dwyer (1978) 141 CLR 378, 395 (Gibbs J). See also Petersen v Moloney (1951) 84 CLR 91, 94–5 (Dixon, Fullagar and Kitto JJ).
[23]SLA s 31(5)(d).
The respondent relied also on s 15(1)(b), which provides for a notice authorised by the SLA to be given to a person to be served upon that person or the person’s legal practitioner or conveyancer named in the contract or upon a person otherwise authorised by the person to be served to act in the particular matter. To read s 31(3) as designating the vendor’s estate agent as authorised to receive a notice under the provision would be inconsistent with the terms of s 15(1)(b).
The respondent submitted that the provisions of the Estate Agents Act 1980 and related regulations relied upon by the applicants were irrelevant to the construction of s 31(3). Moreover, there had been a change in the regulations so that the prescribed form of contract note no longer provided for particulars of ‘the agent’ but of the ‘vendor’s estate agent’, weakening the force of the applicants’ argument in any event.
The respondent also relied on the principle of statutory interpretation that Parliament is presumed not to intend to alter common law doctrines or abrogate common law rights.[24] He submitted that Parliament should not be presumed, in the absence of clear words, to have insisted that an estate agent be able to receive a notice affecting the vendor’s relationship with the purchaser.
[24]See Bropho v Western Australia (1990) 171 CLR 1, 17–18 (Mason CJ, Deane, Dawson, Toohey, Gaudron and McHugh JJ).
As to the applicants’ submissions in respect of ground 1(b), the respondent accepted that the provisions of special condition 3.2 were not mandatory, but submitted that they did provide authority for service to be effected on the vendor’s legal practitioner or conveyancer. He submitted that special condition 3.2 showed that the parties had turned their minds to how notices should be served. Given that the contract of sale listed the contact details of the respondent’s conveyancer, any notice should have been served on the conveyancer. Had the parties intended that Mr Gibbons could be served with notices, then special condition 3.2 could and should have made provision that notices could be served on estate agents.
The inclusion in the particulars of sale of details of the ‘vendor’s estate agent’ served a specific purpose, namely to provide for the payment of the deposit as required by general condition 11.1 of the contract (which made reference to the ‘vendor’s licensed estate agent’) so that the deposit could be dealt with in accordance with ss 24–7 and other provisions of the SLA.
In response to the submission that the respondent represented that the notice could be served on Mr Gibbons,[25] the respondent characterised this argument as seeking to raise an estoppel. There was no reference to estoppel in the pleadings, and, apart from the claim that Mr Gibbons had implied or ostensible authority to accept the notice of termination, no estoppel was alleged. The claim of implied or ostensible authority was rejected by the trial judge.[26] It was contended that the applicants ought not be permitted to allege a new form of estoppel now, as the respondent could have answered that case by evidence had it been advanced at trial.
[25]See [36] above.
[26]Reasons [61], [64].
Analysis
As explained above, the applicants did not ultimately submit that ‘agent’ in s 31(3) meant ‘estate agent’. They submitted that it was capable of comprehending an estate agent and that, in cases such as the present where the prescribed form of contract of sale was relevantly adopted, it included the person nominated as the ‘vendor’s estate agent’ in the particulars of sale.
The applicants were correct not to contend that s 31(3) operates to designate a vendor’s estate agent as a person capable of receiving a cooling-off notice under s 31. In the first place, the SLA elsewhere uses the expression ‘estate agent’, including in s 31(5)(d), in terms making it clear that a specific meaning is intended. The legislature could have used that expression in s 31(3), but did not. Especially when ‘estate agent’ is used in s 31(5), it is more likely that ‘agent’ in s 31(3) has its ordinary meaning rather than the special meaning of ‘estate agent’. Secondly, s 15(1)(b) contemplates service of notices under the SLA on persons authorised by the person served to receive them. The better view is that, consistently with that provision, ‘agent’ in s 31(3) simply means a person authorised by the vendor to receive the notice for which s 31 provides. In other words, ‘agent’ in s 31(3) has its ordinary legal meaning.
Further, as the respondent submitted, the word ‘agent’ does not accurately describe the legal status of an estate agent in relation to a vendor.[27] The suggested special meaning of ‘agent’ is therefore based on a non‑technical usage rather than the legal meaning of the word. There is a presumption that where a statute uses a word with an established legal meaning, that is the meaning that the word will bear unless the context suggests otherwise.[28] In the present case, there is no indication in the statute that it adopts any meaning for ‘agent’ other than its established legal meaning, and the presumption that this is the correct meaning is therefore not displaced.
[27]See above n 22 and accompanying text.
[28]A-G (NSW) v Brewery Employés Union of New South Wales (1908) 6 CLR 469, 531 (O’Connor J); Bathurst City Council v PWC Properties Pty Ltd (1998) 195 CLR 566, 585–6 [45] (Gaudron, McHugh, Gummow, Hayne and Callinan JJ); Palgo Holdings Pty Ltd v Gowans (2005) 221 CLR 249, 261 [25] (McHugh, Gummow, Hayne and Heydon JJ).
Nothing in the extrinsic materials demands the contrary interpretation by which a vendor’s estate agent is, by force of s 31(3), empowered to receive a cooling‑off notice. Those materials are consistent with ‘agent’ having its legal meaning or the specific meaning essayed by the applicants. Both meanings advance the beneficial purpose of the provision and it is difficult to say that one does so more effectively than the other. Both meanings enable a purchaser to serve the notice for which s 31 provides on some person (noting also that ss 31(6) and (8) serve to facilitate that right). A construction which enables a vendor to appoint any person at all as agent might well be thought to be at least as ‘beneficial’ as one which mandates that ‘agent’ means an estate agent. In the circumstances, the principle that legislation with a beneficial purpose should receive a liberal interpretation does not assist the applicants. That principle is one of construction. It is wrong to bypass construction and deploy the principle to adopt a construction simply because, in the particular case, it operates in favour of a person within the class intended to be benefitted by the legislation.[29]
[29]Barnes v Victoria [2015] VSCA 343 [40] (Santamaria, Ferguson and McLeish JJA).
Nor do the other components of the ‘legislative scheme’ on which the applicants relied serve to advance the question of construction. At most, as the applicants accepted, they indicate that it was anticipated that when s 31 operated in conjunction with the prescribed forms of contract, a vendor’s estate agent was the agent of the vendor for the purposes of s 31(3). It will be necessary to turn to that question shortly.
The construction adopted above introduces an initial appearance of circularity into s 31(3), because the word ‘vendor’ itself as defined in s 30 already includes a person acting as agent for the vendor. However, the additional words ‘or his agent’ as used in s 31(3) are not redundant. They serve to highlight the distinction between the vendor and the agent and to allow for the succeeding distinct references to the vendor (whose address is described as being specified in the contract) and the agent (whose address is not referred to).
For the preceding reasons, ground 1(a) fails.[30]
[30]As we have observed, the applicants’ submission departed significantly from the manner in which ground 1(a) was formulated. However, the ground was not abandoned.
The issue is then whether the contract itself constituted Marshall White the agent of the respondent for the purpose of s 31. The starting point must be the ‘important notice’ which embodies the language of s 31(3) itself. It uses, of course, the words ‘the vendor or the vendor’s agent’ to describe the person to whom the notice must be given. At the top of the next page are found the details of the ‘vendor’s estate agent’. No other person is described in the contract using the term ‘agent’. Further, the cover page includes the words ‘Any person whose signature is secured by an estate agent acknowledges being given by the agent …’, indicating a use of the word ‘agent’ to describe an estate agent. As the applicants submitted, ‘agent’ is commonly used as shorthand for an estate agent. Whereas, for the reasons given, Parliament did not adopt that shorthand usage in s 31(3), the same conclusion does not necessarily follow when the same words are replicated in a contract of sale.
The sale contract is to be construed in accordance with the general principles of construction of contracts. That requires consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract.[31] These principles are here to be applied to the same language as is found in s 31(3), but in a different instrument and context and applying different principles. Despite those differences, however, there is some overlap in the purposes to be served by the language in common in each case.
[31]Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640, 656–7 [35] (French CJ, Hayne, Crennan and Kiefel JJ). See also Mount Bruce Mining Pty Ltd v Wright Prospecting Pty Ltd (2015) 256 CLR 104, 116 [46]–[48] (French CJ, Nettle and Gordon JJ), 132 [109] (Kiefel and Keane JJ), 134 [120] (Bell and Gageler JJ).
The immediate purpose or object intended to be served by incorporation of the ‘important notice’ was doubtless to comply with s 31(6) of the SLA.[32] Section 31(6) requires the contract to contain a notice advising the purchaser of the right to terminate for which s 31 provides. Inclusion of the notice serves the purpose of ensuring that the right is brought to the attention of the purchaser. The wider purpose of s 31(6), supported by s 31(8), is to enable the purchaser, within a short period after signing the contract, to end the contract by means of providing a written notice. The contract should be construed according to the same purposes.[33] At the same time, however, it is the contract, rather than the statute, which is now being construed and there is no reason why the contract may not go further than the minimum requirements of the legislation.[34] In particular, s 31 does not insist that the vendor nominate an agent or provide particulars for service on that agent, but a contract to which the section applies may well do so. Moreover, while s 31 does not have the effect that the vendor’s estate agent is an ‘agent’ for the purposes of the section, the contract may have that result.
[32]Cf Digby v General Accident Fire and Life Assurance Corporation Ltd [1943] AC 121, 141 (Lord Wright).
[33]Fawcett v BHP By-Products Pty Ltd (1960) 104 CLR 80, 89–90 (Windeyer J); Orica Ltd v CGU Insurance Ltd (2003) 59 NSWLR 14, 19–20 [11] (Spigelman CJ); Reinwood Ltd v L Brown & Sons Ltd [2008] 1 WLR 696, 700 [11] (Lord Hope).
[34]Fawcett v BHP By-Products Pty Ltd (1960) 104 CLR 80, 86 (Menzies J), 90 (Windeyer J); Digby v General Accident Fire and Life Assurance Corporation Ltd [1943] AC 121, 141 (Lord Wright). In a given case, the contract could of course fail to comply with the legislation, but that is not in issue here.
It is commonplace, where the vendor has an estate agent, that the purchaser is likely, up until and including the point of signing the contract, to have dealt principally if not exclusively with that estate agent rather than with the vendor or the vendor’s legal practitioner or conveyancer. Ordinarily, where an estate agent has been appointed, those other parties have no involvement with prospective purchasers prior to sale. It is in the nature of an estate agent’s role that he or she deals with prospective purchasers, and a legal practitioner or conveyancer is generally not required until after the contract is signed. Moreover, the estate agent accepts the purchaser’s deposit in accordance with both statute and the present contract. The estate agent with whom a purchaser will have been so dealing is prominently identified as such in the contract. This is an important aspect of the context in which the contract of sale operates.
While there was no indication in the SLA that the above considerations informed the meaning of ‘agent’ in s 31(3) so as to give it other than its ordinary legal meaning, it is natural that a reasonable person in the position of the purchaser or the vendor reading the contract would infer that the ‘vendor’s agent’ to whom reference is made in the ‘important notice’ is the person with whom the purchaser has been dealing in place of the vendor and who is described immediately thereafter as the ‘vendor’s estate agent’. That conclusion is supported by the use of the word ‘agent’ earlier on the cover page in a context where it plainly means ‘estate agent’.
The purpose of the notice provision is advanced by the above construction. The alternative construction would require the purchaser closely to examine the general and special conditions in order to find an express authority. The purpose of the notice provision is better achieved by a construction which enables the purchaser to rely on the common use of the word ‘agent’ to describe an ‘estate agent’, rather than requiring the purchaser to divine from provisions which do not even use that word that the true ‘agent’ is, in fact, somebody else. The latter construction impedes, rather than advances, the purpose of the ‘important notice’ and its intention that the right in s 31(3) be able to be exercised.
It is true, as the respondent pointed out, that the contract also provides for service of notices upon the vendor’s legal practitioner or conveyancer. Such service would plainly have constituted giving notice to the vendor’s agent within the meaning of s 31(3), because that legal practitioner or conveyancer is expressly appointed under the contract as a person who may be served. But that does not exclude the possibility of a further, implied, appointment of an agent.
Nor does the fact that an estate agent is not, without more, an ‘agent’ in the ordinary sense of the word deny the possibility of such an agency being created, either for limited purposes or more generally. The authorities warning against treating an estate agent as an agent in the legal sense acknowledge that possibility.[35]
[35]See, eg, Petersen v Moloney (1951) 84 CLR 91, 95 (Dixon, Fullagar and Kitto JJ).
The trial judge in her reasons regarding implied or ostensible authority concentrated primarily on the conduct of the respondent and the agent, which had formed the main focus of the applicants’ submissions at trial, rather than the terms of the contract. The judge held that nothing in the respondent’s conduct suggested that Mr Gibbons had any authority beyond marketing and selling the property. In relation to the contents of the contract itself, which the parties had also addressed, the judge held it was of no consequence that the respondent’s contact details were not in the contract, noting that the conveyancer’s details were, and the applicants could have made inquiries to ascertain the contact details of the respondent. The judge did not further address the considerations outlined above. On the application for leave to appeal, argument mainly addressed the contract.
As is evident, in our opinion the conduct of the respondent in signing the contract did convey that the requisite authority was given to Mr Gibbons (and Marshall White). As already mentioned, the fact that the conveyancer’s details were in the contract did not exclude the possibility that the estate agent was also an available person upon whom to serve the notice. To the extent that the trial judge considered that the applicants could have served the respondent after making inquiries to ascertain his contact details, such a suggestion sits uneasily with the purpose of the s 31 notice as outlined above. If a purchaser had to resort to such means to effect the right under s 31 to give notice to the vendor in the limited time available, an issue would arise as to whether the contract complied with ss 31(3), (6) and (8). However, that issue does not need to be explored further.
Nor is it necessary to consider whether the applicants’ argument regarding implied or ostensible authority involved a new case of estoppel, which they should not be allowed to advance on appeal. It suffices for the applicants to have demonstrated that the respondent’s signature of the contract, having the meaning identified above, authorised his estate agent to receive a notice under s 31(3).
Conclusion
It should be noted that the outcome of this case depends upon the operation of the contract employed, albeit that it was relevantly in substantially the same terms as the prescribed form of contract for sale. Subject to compliance with s 31, it is open to parties to contracts for the sale of land to use other contractual language which may provide for different modes of giving the notice for which s 31 provides.
The application for leave to appeal should be granted and the appeal allowed. The orders of the trial judge should be set aside. In their place it should be declared that the contract of sale was terminated by the applicants on 9 April 2014. It should be ordered that the respondent pay the applicants $341,040 together with interest under s 58 of the Supreme Court Act 1986 from 17 April 2014[36] and that the respondent’s counterclaim be dismissed.
[36]See [12] above.
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