McHutchison v Asli
[2017] VSC 258
•15 May 2017
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
PROPERTY LIST
S CI 2017 1390
| PAULA McHUTCHISON | Plaintiff |
| - and - | |
| MAJID ASLI | First Defendant |
| MONEYWEST PTY LTD (ACN 169 010 977) | Second Defendant |
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JUDGE: | Digby J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 28 April 2017 |
DATE OF JUDGMENT: | 15 May 2017 |
CASE MAY BE CITED AS: | McHutchison v Asli |
MEDIUM NEUTRAL CITATION: | [2017] VSC 258 |
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PROPERTY – Application to declare rescission notice void – Purchaser’s rescission notice – Satisfaction – Sale of Land Act 1962, ss 32(1), 32(2), 32D, 32H, 32K, 32K(4)(1) and (2).
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APPEARANCES: | Counsel | Solicitors |
| For the plaintiff | Mr B Harding | Northcote Lawyers & Associates |
| For the defendant | Mr J D McKay | HUB Property Specialists Pty Ltd |
HIS HONOUR:
Background
This proceeding concerns the enforcement of the Contract of Sale of land executed by Paula McHutchison (plaintiff) and Majid Asli (first defendant), on 16 October 2016 (Contract of Sale), whereby the first defendant purchased the land situated at 36-38 Arundel Road, Park Orchards in the State of Victoria, more particularly described in Volume 7929 Folio 150 (Property).
The Property was purchased at public auction for $1,850,000. A deposit of $185,000 was paid by the defendants (deposit).
By Sale of Real Estate Nomination Form (Nomination Statement) dated 16 October 2016, the first defendant nominated the second defendant, Moneywest Pty Ltd, as substitute purchaser under the Contract of Sale.
On 14 March 2017, the defendants issued a notice[1] seeking to rescind the Contract of Sale under s 32K of the Sale of Land Act 1962 (Vic) (Act) on the grounds that the Vendor’s Statement dated 16 October 2016, provided pursuant to s 32 of the Act, failed to disclose that no mains sewerage was connected to the Property (purported Rescission Notice). The defendants on their application also rely upon the plaintiff’s failure to provide a Septic Tank Permit.
[1]Affidavit of Paula McHutchison, 18 April 2017, Exhibit “PM-12”; Defendants’ Submissions, 26 April 2017, [5(s)].
Plaintiff’s application
By Amended Originating Motion dated 18 April 2017 and Summons dated 20 April 2017, returnable in the Practice Court, the plaintiff makes a pressing application for the following relief:
(a) a declaration that the defendants’ purported Rescission Notice dated 14 March 2017, in respect of the Contract of Sale, is void and of no effect;
(b) that the defendants specifically perform their obligations under the Contract of Sale;
(c) alternatively, the defendants pay the plaintiff the sum of $1,665,000 pursuant to the Contract of Sale and, upon payment of the said sum, the plaintiff transfer the land to the defendants and/or their nominee(s);
(d) interest at a rate of 11.5% on the sum of $1,665,000; and
(e) compensation pursuant to clause 25 of the Contract of Sale.
The Facts
The core facts giving rise to the dispute between the parties are summarised as follows:[2]
[2]Defendant’s Submissions, 26 April 2017, [5] (omitting controversial statements by the defendant).
(a) The Property is the land described in Certificate of Title Volume 7929 Folio 150, and is Lot 210 on Plan of Subdivision 11939.
(b) The plaintiff has been the sole registered proprietor of that land since 30 December 2011.
(c) In or about July 2016, the plaintiff engaged Theodore Politis (Politis) of Barry Plant Real Estate (Agents) to advertise and sell the Property.
(d) The Agents caused an advertisement for the Property (Advertisement) to be placed on the internet site “Real Estate.Com”. The Advertisement stated that the Property contained: “an environmentally-friendly fully irrigated watering system to the front and rear gardens via the Septic Treatment Plant and a 4,500-litre rain water tank with new Onga pump”.
(e) The first defendant is an Iranian national.
(f) The first defendant inspected the Property on 15 October 2016.
(g) On the day of the auction, namely 16 October 2016, the first defendant again inspected the Property.
(h) The Contract of Sale was executed on the day of the auction. It provided for a purchase price of $1,850,000.00, with a 10% deposit. Settlement was scheduled to occur 90 days from the date of sale.
(i) The Vendor’s Section 32 Statement as part of the Contract of Sale contained, amongst other things, a Yarra Valley Water Certificate with what the plaintiff refers to as an infrastructure plan.
(j) The Vendor’s Section 32 Statement specifically, and falsely, represented that the Property was connected to a mains sewerage system.[3]
[3]Affidavit of Paula McHutchison, 18 April 2017, Exhibit “PM-2”; Vendors Statement required by s 32 of the Act, Clause 8.
(k) By Nomination Statement dated 16 October 2016, the first defendant nominated the second defendant as purchaser under the Contract of Sale.
(l) The second defendant suffered delays in procuring finance to complete the purchase by the due date of 17 February 2017. By a letter from the defendants’ solicitor to the plaintiff’s professional Conveyancer, “In House Property Conveyancing”, dated 10 February 2017, an extension of settlement to 15 March 2017 was sought.
(m)Correspondence was exchanged between the vendor and the purchasers in relation to settlement between 10 February 2017 and 16 February 2017. The first defendant asserts that he understood that he had secured an extension on the terms outlined in the plaintiff’s Conveyancer’s correspondence dated 14 February 2017.
(n) On 21 February 2017, the defendants’ solicitor provided a signed Transfer of Land to the plaintiff’s Conveyancer. On 23 February 2017, the deposit paid under the Contract of Sale was released to the plaintiff following the provision of a signed s 27 Statement by the defendants.
(o) On 9 March 2017, the defendants’ Accountant, Mr Farrow Anvari (Anvari) was informed by the proposed financier that the second defendant’s application for finance had been approved. Anvari informed the first defendant of this on the same day. The relevant loan documents were provided to the first defendant on 14 March 2017.
(p) On 10 March 2017 the defendants’ solicitor obtained a land information certificate from the City of Manningham (Council) which showed that mains sewerage was not connected to the Property. The defendants’ solicitor informed Anvari of this fact on 10 March 2017, and Anvari informed the first defendant on the same day.
(q) On 10 March 2017, the defendants’ solicitor wrote to the plaintiff’s Conveyancer and informed her of the non-disclosure, stating that she would seek the defendants’ instructions as to whether they wished to terminate the Contract of Sale.
(r) On 14 March 2017, the defendants’ solicitor wrote to the plaintiff’s Conveyancer and purported to terminate the Contract of Sale pursuant to s 32K(1) and (2) of the Act, on the basis of the non-disclosure in relation to there being no mains sewerage connection at the Property, in contravention of s 32H of the Act.
(s) Also on 14 March 2017, the plaintiff’s Conveyancer responded to the defendants’ solicitor’s communication of 14 March 2017 and denied the validity of the defendants’ purported termination of the Contract of Sale, relying on the Yarra Valley Water Certificate as showing that the Property was not connected to a mains sewerage system.
(t) The defendants’ current solicitors undertook further enquiries with Council and on about 4 April 2017, it was revealed that a Permit (Permit) for the usage of the Septic Tank had been granted by Council under the Environmental Protection Act 1970 (Vic). The Permit had not been disclosed in the Vendor’s Section 32 Statement included as part of the Contract of Sale, or otherwise provided by the plaintiff before the time of execution of the Contract of Sale.
(u) On 10 April 2017 the defendants’ current solicitors wrote to the plaintiff’s current solicitors outlining their concerns in relation to the Permit, and purporting to terminate the Contract of Sale pursuant to s 32K(1) and (2) and s 32D of the Act, on the basis that the plaintiff had not as part of her s 32 Vendor’s Statement, disclosed the Permit to the extent that the purchasers’ previous purported termination notice was ineffective.
(v) The Permit[4] contains a number of conditions which impose obligations on the user of the Septic Tank, and which affect the user of the Property, including:
[4]Affidavit of Jacob Anthony Lunt, 21 April 2017 as “JAL-2”.
(i)Effluent from the system must not be discharged beyond the boundaries of the allotment.
The system is approved for wastewater flows not exceeding 3000 litres per day and an organic loading not exceeding 600 grams of B.O.D per day.
Extending the buildings served by the system may cause the above limits to be exceeded. A “Permit to Alter a Septic Tank System” must be obtained from Council before altering the system to cope with the increased flows associated with the installation of additional plumbing fixtures and features.
(ii)The effluent absorption area must be maintained as a permanent dedicated area.
(iii)Vehicles and livestock must be excluded from the effluent absorption area.
(iv)Suitable plants and landscaping must be established in the effluent irrigation area before effluent application commences, and the plants and landscaping must be maintained over the life of the system.
(v)The irrigation system must be permanently fixed with the distribution pipes buried below the natural ground surface.
(vi)The septic system must be desludged (pumped out) every three years, or whenever the tank becomes half full of sludge within that three years. Written evidence that this has occurred is to be provided to Council.
(vii)A sample of effluent must be taken every 12 months and analysed by a laboratory registered with the National Association of Testing Authorities for the tests specified below: (i) biological oxygen demand; (ii) suspended solids. A report must be provided to Council for the effluent analysis each year.
(viii)The treatment plant is to be maintained by an annual service contract by the manufacturer or serving agent and a copy of the contract forwarded to Council each year. A maintenance and service report is to be submitted to Council once every three months.
(ix)A licensed plumber or drainer is to inspect the septic system every three years and written evidence of each inspection must be forwarded to Council.
(x)The system must not be altered or modified, except with the approval of the Council. A “Permit to Alter a Septic Tank System” must be obtained from Council before making any alterations to the system.
(xi)The person to whom this Permit is issued must notify the new owner of the conditions of this Permit and information on the Septic Tank system at the Property when the Property is sold.
(xii)The owner of the Property must arrange for connection to reticulated sewer as soon as reticulated sewer is made available.
(xiii)Failure to comply with the conditions of this Permit may result in prosecution with a court penalty of up to $12,000.00.
(w) The Permit contains an attached site plan (Site Plan) which depicts two very large areas that are marked with parallel lines and noted with the words “subsurface irrigation area (under lawn)”. The plan also depicts a garden bed running along a portion of the side and rear of the Property which is marked with the notation: “drip irrigation through garden beds”.
(x) The notes in the Site Plan state that a further Permit was issued by the Council to install the Septic Tank on 18 April 2007 (Installation Permit).
(y) No Septic Tank Installation Permit has been provided to the defendants.
(z) The defendants have obtained a document from the Council entitled “Domestic Wastewater Management Plan” (Management Plan) which explains the Council’s existing policy in relation to Septic Tanks and the connection of reticulated mains sewerage in the Park Orchard area. The Management Plan amongst other things states:
(i)Yarra Valley Water (Yarra Valley Water) is in the initial planning stages of trialling a project in Park Orchards to assess the viability of an on-site wastewater servicing strategy. The trial involving 100 lots will assist Yarra Valley Water to identify the most suitable servicing option for this area.
(ii)Yarra Valley Water has identified two possible servicing strategies for the Park Orchards community (1,095 lots in total). These are: 1. Upgrades to existing on-site wastewater systems. 2. Construction of a sewer reticulation network.
(iii)The trial of onsite solutions (septic system upgrades) in Park Orchards is anticipated to run for 2 years and then a decision as to the best servicing solution will be made thereafter and hopefully rolled out before 2020.
(iv)The eastern edge of Arundel Road is within the Yarra Valley Water trial area, and the Property is only slightly outside the trial zone.
(v)As a result of ageing systems, failing systems and impacts on health and the environment, provision of reticulated sewerage is the preferred option for the majority of properties within Manningham’s unsewered residential areas.
(vi)Links have been established between contaminated water contact and the occurrence of illness such as gastrointestinal infections. Human wastes contain pathogens such as viruses (hepatitis A and E, rotaviruses), bacteria (Salmonella spp, pathogenic Escherichia coli, Vibrio spp), protozoa (Cryptosporidium parvum, Giardia lamblia), and helminth eggs. Septic systems are not always efficient at removing these potentially harmful pathogens.
(vii)One of the “potential threats and impacts” from “treated onsite effluent systems” is “pollution of groundwater”. The threats associated with “re-use of waste water” are “pathogens” and “odours”.
(viii)As of April 2015, 4,533 Septic Tank inspections have been carried out and recorded since implementation of the program. Of the 4,533 inspections recorded, 1,721 septic system components (38%) have been found unsatisfactory.
(aa) The plaintiff has not adduced evidence to demonstrate her compliance with the conditions of the Permit save for an invoice for maintenance and inspection of the Septic Tank dated 27 July 2016, and an invoice for emptying the Septic Tank dated 20 October 2015.
The defendants also assert the following:
(a) The first defendant saw the Advertisement in early October 2016, he read the description extracted above at subparagraph (c). He did not understand the word “septic”, and understood the extracted words as saying that the Property contained a watering system supplied by rain water.
(b) Neither the site plan nor the photographs forming part of the Advertisement depicted the Septic Tank. The first defendant did not understand from reading the Advertisement that the Property was not connected to the sewerage system, or that it contained the Septic Tank.
(c) At an inspection of the Property on 15 October 2016 by the first defendant, noticed a water tank. The first defendant did not notice a Septic Tank.
(d) The first defendant read the Vendor’s Section 32 Statement, and he noticed the section of the document which confirmed that services, including sewerage, were connected to the Property. The first defendant claims that he understood from this that services, including sewerage, were connected to the Property.
(e) The first defendant looked at the Yarra Valley Water Certificate however he did not notice the absence of any main sewer lines in that document.
(f) The Sales Agents of the vendor did not disclose the lack of sewerage connection orally during the course of the auction, and the first defendant gave evidence that he was unaware of this fact, or of the existence of the Septic Tank, when he signed the Contract of Sale.
The Principal Issues
The plaintiff accepts that the Vendor’s Section 32 Statement is inaccurate insofar as it states that there is a sewerage connection.
The plaintiff seeks to be excused from her non-compliance with s 32 of the Act pursuant to s 32K(4) thereof which requires the plaintiff to satisfy the Court as to the following four elements:
(a) the vendor has acted honestly;
(b) the vendor has acted reasonably;
(c) the vendor ought fairly to be excused for the contravention; and
(d) the purchaser is substantially in as good a position as if all the relevant provisions of the section had been complied with.
The defendants deny the plaintiff’s entitlement to the relief she seeks under s 32K(4) of the Act.
The relevant legislation: Sale of Land Act 1962
Section 32 of the Act relevantly provides as follows:
32 Statement of matters affecting land being sold
(1) A vendor under a contract for the sale of land must give to a purchaser, before the purchaser signs the contract, a statement signed by the vendor that contains the matters and attaches the documents specified in this Division.[5]
[5]The ‘Division’ referred to in s 32(1) and s 32K of the Act is Division 2. The Section 32 Statement, of the Act containing ss 32A to 32P, which specify the information documents which a vendor must provide as part of the vendor’s s 32, Sale of Land Act 1962 Statement are contained within Division 2 of the Act.
(2) For the purposes of subsection (1), a vendor may sign the statement to be given to a purchaser under this section by electronic signature.
…
32D Notices made in respect of land to be disclosed in Section 32 Statement
A Section 32 Statement must contain the following details in respect of any notices made in respect of the land—
(a) particulars of any notice, order, declaration, report or recommendation of a public authority or government department or approved proposal directly and currently affecting the land, being a notice, order, declaration, report, recommendation or approved proposal of which the vendor might reasonably be expected to have knowledge;
(b) whether there are any notices, Property management plans, reports or orders in respect of the land issued by a government department or public authority in relation to livestock disease or contamination by agricultural chemicals affecting the ongoing use of the land for agricultural purposes;
(c) particulars of any notice of intention to acquire served under section 6 of the Land Acquisition and Compensation Act 1986.
…
32H Disclosure of non-connected services in Section 32 Statement
A Section 32 Statement must specify if any of the following services are not connected to the land—
(a) electricity supply;
(b) gas supply;
(c) water supply;
(d) sewerage;
(e) telephone services.
Of particular significance to the plaintiff’s application is s 32K(4) of the Act, the provisions of which are as follows:
32K Supply of false information or failure to supply information in Section 32 Statement or failure to supply Section 32 Statement may result in rescission
(1) This section applies if a vendor—
(a) supplies false information to a purchaser in a Section 32 Statement or in any certificates, notices, policies or other documents attached to a Section 32 Statement for the purposes of complying with the requirements of this Division; or
(b) fails to supply all the information required to be supplied to a purchaser, either in a Section 32 Statement or attached to the Section 32 Statement, as required by this Division; or
(c) fails to give a purchaser a Section 32 Statement signed by the vendor before the purchaser signs the contract for the sale of land.
(2) The purchaser may rescind any contract for the sale of land which has been entered into on the basis of information contained in the Section 32 Statement or attached to the Section 32 Statement at any time before the purchaser accepts title and becomes entitled to possession or to the receipt of rents and profits.
(3) The purchaser may rescind any contract for the sale of land where the vendor fails to give the purchaser a Section 32 Statement before the purchaser signs the contract at any time before the purchaser accepts title and becomes entitled to possession or to the receipt of rents and profits.
(4) Despite subsection (2) and (3), the purchaser may not rescind a contract for the sale of land if the court is satisfied that—
(a) the vendor has acted honestly and reasonably and ought fairly to be excused for the contravention; and
(b)the purchaser is substantially in as good a position as if all the relevant provisions of this Division had been complied with.
Plaintiff’s Submissions
The plaintiff’s submission is that the court should “excuse the non-disclosure” which the plaintiff concedes has occurred in respect of sewerage connection at the Property, on the following bases:
(a) the Vendor’s Section 32 Statement prepared by the plaintiff’s professional Conveyancer contained a clerical error whereby “sewerage” was accidentally struck out, indicating that a sewerage service was connected;
(b) the Yarra Valley Water Certificate included in the Vendor’s Section 32 Statement shows that there is no “sewer” connection to the Property;
(c) the defendants were looking for any way to “get out” of the Contract of Sale;
(d) this is evidenced by the fact that three days before the original settlement date, the defendants’ solicitors wrote to the plaintiff’s Conveyancer and asked whether she would consider “cancelling the contract and walking away from it”. The plaintiff submits that this email from the defendants’ solicitors should strongly support the exercise of judicial discretion to enforce the Contract of Sale;
(e) the plaintiff also asserts that it was the first defendant’s inability to obtain finance which was the real reason why the first defendant wanted to terminate the Contract of Sale, not the existence of the Septic Tank.
(f) the septic tank system was at all times clearly visible on inspection. The first defendant inspected the Property on two occasions, namely the day before and on the day of the auction. The plaintiff asserts that the Septic Tank is a large treatment plant septic tank positioned next to the garage in clear view from the backyard and master bedroom bay window, and is clearly visible on any inspection of the Property. The plaintiff contends that a reasonable person would have noticed the Septic Tank.
Further, the plaintiff argues that the following circumstances should also weigh in favour of the court excusing her non-disclosure under s 32 of the Act pursuant to s 32K(4):
(a) The advertisement for the Property which appeared on stated that the Property had “an environmentally-friendly fully irrigated watering system to the front and rear gardens via the Septic-Treatment Plant and a 4,500-litre rain water tank with new Onga pump”.
(b) The cost of maintaining and emptying the Septic Tank is minimal. The cost for maintaining the Septic Tank and reporting to the Council is $330 per year, and $340 for desludging once every three years.
Further, the plaintiff at the hearing of this matter, both by her written submissions dated 27 April 2017, and via oral submissions, offered, as a gesture of goodwill, to pay the defendants the cost of maintaining the Septic Tank system on the Property over the next six years.
Requirements of s 32K(4) – Has the vendor acted honestly
The plaintiff submits that in this case there can be no suggestion that the plaintiff has acted dishonestly or with “moral turpitude”.
The plaintiff relies upon the fact that she engaged a professional Conveyancer to act on her behalf in the preparation of the Contract of Sale and the required Vendor’s Section 32 Statement.
Further, the plaintiff submits that it is obvious that the Conveyancer in this case made a “clerical error” rather than deliberately omitting the fact that there was no sewerage connection to the Property.[6]
[6]Plaintiff’s Submissions, 27 April 2017, [20]-[22].
Section 32K(4) – the vendor has acted reasonably
The plaintiff concedes that she needs to positively satisfy the Court that she has acted reasonably in the circumstances. The plaintiff adds in her submission that the test to be applied is an objective one, amounting to acting with due care and attention, and without negligence.[7]
[7]Ibid [23]; Payne v Morrison (1992) V ConvR 54-428.
The plaintiff submits[8] that a vendor is likely to be found to have acted reasonably for the purposes of s 32K(4), where a Section 32 Statement has been prepared containing all the property certificates which are commonly or usually obtained by a vendor in connection with the sale of the property together with all relevant attachments to those certificates.
[8]Ibid [25].
The plaintiff points to the possibility that there may be, for instance, incorrect information within those certificates due to the fault of the authority issuing the certificate.
The plaintiff submits that despite her Section 32 Statement disclosing that there was a sewerage connection at the Property, a document she provided, the Yarra Valley Water Certificate,[9] which was attached to her Section 32 Statement, on proper inspection, shows that there was no sewerage connection at the Property.
[9]Affidavit of Paula McHutchison, 18 April 2017, Exhibit “PM-2”.
Section 32K(4) – the vendor ought fairly to be excused for the contravention
The plaintiff also submits that a number of factors should persuade the court to exercise its judicial discretion to excuse the relevant contravention by her. The plaintiff contends, those factors are:
(i) that the defective Vendor’s Section 32 Statement was prepared by the plaintiff’s professional Conveyancer, which defect Ms Hutchinson’s affidavit evidence asserts, was in the nature of “a clerical error” whereby “sewerage” was accidently struck out, indicating that it was connected;[10]
[10]Plaintiff’s Submissions, 27 April 2017, [30]; Affidavit of Paula McHutchison, 18 April 2017, Exhibit “PM-2” and [16].
(ii) the Yarra Valley Water Certificate included in the defective Section 32 Statement shows that there was no “sewer” connected to the Property;[11]
(iii) the plaintiff asserts that the defendants were looking for “any reason to ‘get out’ of the Contract of Sale and have merely seized on the clerical error”, which the plaintiff characterises as the words struck out in clause 8 in the Vendor’s Section 32 Statement.[12]
The plaintiff says this is evinced by the fact that three days before the original settlement date, the defendants’ solicitors wrote to the plaintiff’s Conveyancer and asked whether the plaintiff would consider “cancelling the contract and walking away from it”.[13] The plaintiff submits that this communication from the vendors should strongly point towards the exercise of judicial discretion to enforce the contract.
[11]Affidavit of Paula McHutchison, 18 April 2017, Exhibit “PM-2”.
[12]Ibid Exhibit “PM-2”.
[13]Ibid Exhibit “PM-7”.
The plaintiff contends that in reality the first defendant’s inability to obtain the finance has always been the real reason why the vendors wanted to terminate the Contract of Sale. The plaintiff refers to where the first defendant states that he did have, at least at one point in time during which the conveyance was active, an unexpected inability to get finance as quickly as he had expected. In this regard the first defendant states in his said affidavit:
I was seeking to cancel the Contract or delay settlement solely for that reason. I was expecting to proceed with the purchase once my finance was approved, as is evident from the fact that I negotiated an extension of settlement.[14]
[14]Affidavit of Majid Asli, 26 April 2017, [45].
The plaintiff seeks to make her point about the genuineness and accuracy of the first defendant’s assertions about why he is seeking to avoid completing the Contract of Sale, by arguing that the first defendant instructed his solicitors to terminate the Contract of Sale on the basis that it had a Septic Tank, but did so two days before he received his finance documentation. The plaintiff submits that this shows that at the time the first defendant sought to rely on non-disclosure of the Septic Tank, the first defendant did not have the finance to complete the purchase and that this is the real reason why he used the existence of a Septic Tank at the Property as a basis upon which to terminate the Contract of Sale.
Further, the plaintiff contends that the Septic Tank was clearly visible to anyone inspecting the Property and points out that the first defendant inspected the Property on two occasions. The plaintiff contends that a reasonable person would have noticed the Septic Tank.
The plaintiff also relies upon advertisements for the Property on which stated the Property had “an environmentally-friendly fully irrigated water system to the front and rear gardens via the Septic-Treatment plant and a 4,500 litre rainwater tank with a new Onga pump”.[15]
[15]Affidavit of Theodore Politis, 13 April 2017, Exhibit “TP-1”.
Finally, the plaintiff also seeks to cast doubts upon the credit of the first defendant’s assertion that he has a poor command of English. The plaintiff points to the fact that the first defendant is a director of two Australian companies with substantial financial resources.[16] The plaintiff adds that the first defendant knew what the Vendor’s Section 32 Statement was and that his command of the English language was sufficient to allow him to read the statement and understand what connected services to look for.[17] The plaintiff relies also on the fact the first defendant felt confident enough about his command of the English language to bid at the auction for the Property, and did not need Anvari[18] to assist him at the auction.
Section 32K(4) – the purchaser is substantially in as good a position as if all aspects of the relevant requirements of the Act had been complied with
[16]Affidavit of Majid Asli, 26 April 2017, [4], [5] and [34].
[17]Ibid [25]-[27].
[18]Ibid [32]-[33].
The plaintiff submits that the purchaser is substantially in as good a position as if all the relevant provisions of the division of the Act concerning disclosure before the sale of land had been complied with.
Further, the plaintiff submits that the requirement in s 32K(4)(b) is to be tested objectively and further that in the context of that section “substantially” means that some minor or a trivial detriment will not be sufficient. That is, that if the purchaser’s position will only, at worst, be ephemerally or nominally prejudiced the plaintiff submits the first defendant will be substantially in as good a position as if the Act had been relevantly complied with.[19]
[19]Lloyd and Rimmer, Sale of Land Act s.32K.360, p 205.
In this regard the plaintiff submits that the current Septic Tank contract is paid in full and will extend to 11 October 2017.
The plaintiff also contends that the cost of maintaining and emptying the Septic Tank is minimal and that the associated costs thereof are in the order of $330 a year with a further $340 cost to the Property owner every three years to empty the Septic Tank.
Further, the plaintiff refers to the fact that she has offered to pay for the costs referred to in the last preceding paragraph for the next six years.
The plaintiff also submits that the above costs need to be viewed in the context of the purchase price of the Property, namely $1,850,000.
Defendants’ submission
The defendants submit that the plaintiff’s position on its application is unsustainable because:
(i) the Vendor’s Section 32 Statement attached to the Contract of Sale falsely represented that the Property was connected to the sewerage system;
(ii) in fact the Property contained a Septic Tank system which was not disclosed in the Vendor’s Section 32 Statement;
(iii) the plaintiff failed to disclose the Permit which contained onerous terms that will bind the defendants as purchaser of the land, and also subsequent purchasers;
(iv) the defendants were unaware of the Septic Tank or the Permit when the Property was purchased.
Accordingly, the defendants submit that the plaintiff’s non-disclosures in the above respects contravene s 32D and/or s 32H of the Act giving rise to a prima facie right on the part of the defendants to terminate the Contract of Sale, which right they have exercised. The defendant relies on the terms of ss 32(1), 32D and 32H of the Act.
The defendant points out that s 32H of the Act specifically provides that a Section 32 Statement must specify if sewerage services are not connected to the land.
The defendant submits that as a consequence of non-disclosure in relation to the non-connected sewerage services the first defendant is entitled to rescind the Contract of Sale pursuant to s 32K(2) of the Act.
The defendants also submit that the inclusion of the Yarra Valley Water infrastructure plan as part of the Vendor’s Section 32 Statement did not cure, or relevantly effect, or ameliorate, the plaintiff’s contravention of s 32 of the Act.
Section 32 of the Act applies, if as provided in s 32K, the vendor has supplied “false information to the purchaser in a Section 32 Statement…”.[20]
[20]s 32K(1)(a) of the Act.
Further, the first defendant submits that even if the Yarra Valley Water infrastructure plan did disclose that the Property was not connected to the mains sewerage system, which the defendants do not admit, in any event that does not negate the fact that the Vendor Statement itself contained a specific false representation to the effect that the sewerage was connected, when it in fact was not.
The defendants submit that they enjoy an alternative right to avoid the Contract of Sale under s 32K(2) by reason of the plaintiff’s non-disclosure of the Permit[21] for the usage of the Septic Tank granted by the Manningham Council under the Environment Protection Act 1970 (Vic) in July 2007.[22]
[21]Affidavit of Majid Asli, 26 April 2017, [52].
[22]Defendants’ submissions, 26 April 2017, [11] and Affidavit of Peter James Lynch, 18 April 2017, Exhibit “PJL-1”.
Section 32D(a) of the Act requires the vendor to disclose, amongst other things “an approved proposal directly and currently affecting the land”. In the first defendant’s submission the Permit also clearly affects the Property itself because:
(a) the Septic Tank is a fixture that forms part of the Property. By affecting the legal status of the Septic Tank, the Permit affected the legal status of the land itself;
(b) the Septic Tank falls within the extended definition of “land” in s 2 of the Act, which encompasses “buildings” and “parts of buildings” on land. As such, by regulating the usage of the Septic Tank, the Permit affected “land” within the meaning of s 32D(a) of the Act;
(c) the Council intended the Permit to apply to the Property itself because the Permit has not been issued to a particular person, but in respect of the title particulars and sub-divisional details of the Property;
(d) the Permit runs with the land and binds future owners, as evidenced by condition 11 thereof, which requires the “new owner” to be notified of the Permit “when the land is sold”;
(e) Finally, s 53N of the Environmental Protection Act 1970 (Vic) requires the occupier of land from time to time to adhere to the obligations in a Permit for usage of a septic system. The defendants submit that this also causes such Permits to run with the land in the same way as a planning Permit or restrictive covenant. Section 53N provides: “An occupier of premises on which a Septic Tank is located must maintain it in accordance with the requirements specified in the Permit issued by the municipal council for that Septic Tank system”.
The defendants submit that there is no document attached to the plaintiff’s Section 32 Vendor Statement which alerted the first defendant to the existence of the Permit and the onerous conditions which it contained.
The first defendant argues on the above bases that he has a prima facie right to avoid the Contract of Sale under s 32K(2) of the Act. He also submits that he can either rescind the Contract of Sale due to non-disclosure of the lack of sewerage connection or rescind the Contract of Sale on the basis of the non-disclosure of the Permit.
The first defendant submits that he has rescinded the Contract of Sale on both bases by his solicitor’s communication to the plaintiff’s Conveyancer dated 14 March 2017,[23] that is he has rescinded on the bases of both the plaintiff’s non-disclosure of the lack of sewerage connection and also on the basis of the non-disclosure of the Permit.[24] Further, the first defendant submits that both grounds of rescission should be considered together and that they in effect constitute a single argument for avoidance of the Contract of Sale.
[23]Affidavit of Paula McHutchison, 18 April 2017, Exhibit “PM-12”.
[24]The first defendant relies on Shepherd v Felt and Textiles of Australia (1931) 45 CLR 359, [377]-[378].
In relation to the first defendant’s communication of his rescission of the Contract of Sale to the plaintiff, the first defendant cites his solicitors’ letter of 14 March 2017 to In House Property Conveyancing, which states at paragraph [6]:
We are instructed to advise that the Purchaser hereby rescinds the Contract of Sale and requires full refund of the deposit monies in the sum of $185,500.00 by return in finalisation of this matter. Alternatively, the vendor expressly represented to the purchaser that sewerage was connected to the Property. Acting upon reliance of this representation the Purchaser was induced to purchase the Property. Pursuant to the vendor’s misrepresentation the Purchaser rescinds the Contract of Sale which is at an end and requires full refund of the deposit monies.
As to the plaintiff’s claimed statutory defence the first defendant emphasises that the plaintiff bears the burden of proving each of the four elements of her potential defence pursuant to s 32K(4) of the Act.
The defendants’ submission as to each of the four elements of s 32K(4) of the Act are as follows.
Honesty in relation to the requirement that the vendor has acted honestly
The defendants submit that the plaintiff must positively establish her honesty in connection with the relevant non-disclosures and will fail to do so if there is insufficient evidence of honesty to satisfy this first element of defence.
The defendants submit that the plaintiff has not met her burden of proof in relation to this first element because:
(a) the plaintiff has given no evidence to explain why the false representation as to sewerage connection was made, or why the Permit was not disclosed in the Vendor’s Section 32 Statement;
(b) the plaintiff has adduced no evidence to explain why she signed the Vendor’s Section 32 Statement in its erroneous form. The defendants submit that the plaintiff clearly knew that there was “no mains sewerage connected to the Property” and therefore the plaintiff has failed to establish that the subject non-disclosure or error occurred as a result of a “clerical error”;
(c) to the extent that a conveyancing error or oversight is to be blamed, there is no evidence from the Conveyancer admitting to, and explaining the circumstances of, and reason for, the error;
(d) the plaintiff’s non-disclosure of the Permit could not have been as a result of a conveyancing error. In this regard, the defendants say:
(i) the plaintiff appears careful to avoid any mention of the Permit in her evidence;
(ii) the plaintiff does not explain when she became aware of the Permit, and does not deny that she was aware of it well in advance of the Contract of Sale date;
(iii) the inference to be drawn from the evidence of Jacob Lunt (‘Lunt’), the plaintiff’s former partner, is that the plaintiff was well aware of the Permit’s existence several years prior to the date of sale;
(iv) Lunt exhibits a copy of the Permit to his affidavit of 21 April 2017. It however appears that he and the plaintiff had a copy of that document prior to its provision by the defendants’ solicitor;
(v) Lunt exhibits invoices which are directed to establishing that contractors were paid to carry out the “inspections and reporting required under the Permit”. These invoices are dated 27 July 2016 and 20 October 2015, suggesting that Lunt and the plaintiff were aware of the existence of the Permit and the conditions it imposed as early as 2015;
(vi) the plaintiff has not produced the Contract of Sale pursuant to which she purchased the Property in 2011;
(vii) given the above it is most unlikely that the plaintiff honestly and sensibly could have failed to include it in the Vendor’s Statement. The plaintiff could not have believed that the Permit could lawfully be concealed, because condition 11 of the Permit specifically required its disclosure to any new owner;
(viii) the plaintiff could not have believed that the Permit was of no practical concern to the defendants. The Permit expressly required the entry into maintenance contracts and the adherence to numerous conditions. Further, the plaintiff’s maintenance contract appears to have been paid up until July 2017.
The vendor has acted reasonably
On the defendants’ submissions the plaintiff has not satisfied her burden of proof on this aspect, because:
(a) The plaintiff did not act honestly in the circumstances in relation to the Vendor’s Section 32 Statement on the basis of the same facts and circumstances which the defendants argue above.
(b) The plaintiff has given no evidence to suggest that she checked the Vendor’s Section 32 Statement before signing it, notwithstanding that that document contained important information and was critical to the interests of the purchasers.
(c) The plaintiff knew that the Property was not sewered but serviced by Septic Tank and it is reasonable to infer that the plaintiff knew of the existence of the Permit in relation to the Septic Tank system.
(d) Though the plaintiff may seek to characterise the non-disclosures as a simple conveyancing error, that error would have been detected by the plaintiff if she had given proper consideration to the subject documentation prepared on her behalf. The defendants submit that the plaintiff obviously failed to check the Vendor’s Section 32 Statement or to do so with any reasonable care.
(e) There is no evidence from the plaintiff’s professional Conveyancer admitting to, or in any way explaining what the plaintiff suggests is an error made by that person.
(f) The plaintiff cannot establish that she has acted reasonably by merely referring to arranging for an expert lawyer or Conveyancer to deal with the Section 32 Statement. Here the defendants submit the relevant non-disclosures concern matters that were well known to the plaintiff and which would have been disclosed if the plaintiff had made any reasonable effort to read and check the Vendor’s Section 32 Statement.
(g) Further, condition 11 of the Permit required the plaintiff to disclose the Permit to any new owner of the Property. The defendants submit that even if the plaintiff was ignorant as to condition 11 of the Permit it cannot be said to be reasonable for her to have failed to familiarise herself with the condition imposed by that Permit, particularly when she was contemplating selling the Property and passing on the obligations in the Permit to the new owner.
(h) A reasonable vendor, the defendants submit, would have realised the nature of the conditions imposed by the Permit and that they necessitated the disclosure of that document to any purchaser.
The purchaser is substantially in as good a position
The defendants also submit that the plaintiff has not satisfied her burden of proof on this question because:
(a) In a private dwelling a Septic Tank system is inherently less valuable and desirable than a connected main sewerage system, because that system can produce odours and pathogens and contaminate groundwater,[25] and also because such a system requires regularly maintenance and compliance with regulatory requirements, which generate costs and which potentially affect the usage of the land.[26]
[25]Affidavit of Majid Asli, 26 April 2017, Exhibit “MA-5”, pages 7, 17, 30.
[26]Affidavit of Jacob Anthony Lunt, 21 April 2017, Exhibit “JAL-2”, [6(z)].
(b) The plaintiff has not established that she has complied with the existing conditions of the Permit, nor has the plaintiff shown that the septic system is working properly and in accordance with all requirements. The defendants also rely upon the fact that the plaintiff has not established that the Septic Tank is compliant with the several demanding conditions of the Permit as described in Exhibit PJL-1 to the Affidavit of Peter James Lynch sworn 19 April 2017 referred to in paragraph 24 of the defendants’ Outline of Submissions of 26 April 2017.
(c) The restriction which the Permit imposes upon an owner’s ability to use the Property as they might see fit, pursuant to for example Permit conditions 1(i), 3, 4 and 12 and other related requirements including the expense and inconvenience associated with having the septic system inspected, tested and reported on, and the disclosure condition 11 to the Permit.[27]
(d) Further, the defendants submit that as a result of the first defendant’s limited command of English it is acceptable that he did not understand the word “septic” in advertisements for the Property.
(e) Given the advertising photographs available to prospective purchasers and the nature of the Yarra Valley Water infrastructure plan, neither the existence of the Septic Tank, nor the existence of the relevant Permit, were known to the first defendant and as a result the first defendant did not know the true extent of the detriment associated with the Septic Tank, nor would such matters have been apparent to him.
[27]Detailed in the Defendants’ Submissions, 26 April 2017, [24(c)].
The vendor ought fairly to be excused
The defendants raised no further arguments in relation to this aspect of s 32K(4)(a). They rely on the other three grounds dealt with above and the bases upon which they have argued against those grounds being satisfied. The defendants ultimately submit on this aspect that it is clear the plaintiff ought not be excused from her contraventions of the Act, if only because she has not established that she has acted either honestly or reasonably.
Conclusions
Breach of s 32 of the Act
Before me there was no dispute that there was no sewerage service connected to the Property. Nor was there a dispute that the plaintiff’s Section 32 Statement supplied false information in this regard. Accordingly, the plaintiff is in breach of s 32(1) and s 32H of the Act.
The vendor has acted honestly
I am not satisfied that the plaintiff has discharged her onus to establish that she has acted honestly in the circumstances.
I note that this application was brought on and heard as a pressing matter in the Practice Court on affidavit material and in a proceeding which to date has not involved discovery. Further, at the hearing of the plaintiff’s application, neither party sought to test the other parties’ evidence.
Although the plaintiff seeks to characterise what she admits to be the supply of false information in her Section 32 Statement, and in particular paragraph 5 of the Vendor’s Section 32 Statement, as a mere “clerical error” made by the professional Conveyancer whom she engaged to undertake the conveyance of her Property, no evidence has been adduced by the plaintiff which satisfactorily addresses the circumstances which gave rise to the plaintiff’s failure to disclose that sewer as a non-connected service at the Property.
Furthermore, no evidence was sought to be put on by the plaintiff’s professional Conveyancer, nor has the plaintiff sought to explain in her evidence, why the plaintiff signed the Section 32 Vendor Statement in an inaccurate and erroneous form which conveyed false information.
Furthermore, the plaintiff does not seek to suggest otherwise than that she knew that there was no mains sewerage connected to the Property.
The plaintiff does not seek to explain at all how or why her Section 32 Statement did not disclose the Permit. Indeed the plaintiff makes no mention of the Permit in her evidence although I accept, as submitted by the defendants, that the affidavit evidence of Jacob Lundt, sworn 21 April 2017 provides a reasonable basis for the inference which I have drawn, that the plaintiff was well aware of the Permit for the Septic Tank for some considerable time before the date of the Contract of Sale.[28]
[28]Affidavit of Jacob Lunt, 21 April 2017, Exhibits “JAL-2”, “JAL-3” and “JAL-4”; Defendants Outline Submissions [20(d)(iii) and (v)].
In my view it was incumbent upon the plaintiff in this proceeding to address the existence of the Permit and any reasons as to why it was also not disclosed in the plaintiff’s Section 32 Statement. This was rendered necessary by the issues, burden and onus arising as a result of the plaintiff’s application relying, as it does, on s 32K(4) of the Act.
This is particularly so given that it is plain from the conditions imposed by the Permit, and the obvious cost and inconvenience of ongoing maintenance and compliance in relation thereto, that the Permit and the requirements associated with the Septic Tank are relevant and of interest to prospective, and actual, purchasers of the Property.
Further, in the circumstances, in particular the want of direct and comprehensive evidence from the plaintiff in relation to the circumstances of the production of her Section 32 Vendor Statement, I am also not satisfied that the plaintiff has acted without conscious impropriety or without intent to gain improper benefit or advantage from and in relation to the false information communicated by her Section 32 Statement.
I also reject the plaintiff’s contention that it is obvious that the Conveyancer made a “clerical error”, rather than deliberately omit the fact that no sewerage is connected to the Property. For reasons which I have already made plain, the plaintiff has manifestly failed to establish through her own evidence or that of the Conveyancer that the former was the position.
Furthermore, I am unpersuaded by the plaintiff’s assertion that the Yarra Valley Water Certificate, included as part of the Vendor’s Section 32 Statement, “shows that there is no ‘sewer’ connection to the Property”. In my view that certificate does not convey, and would not have conveyed to an ordinary reasonably prospective purchaser, that there was no sewer connection to the Property. Indeed the reference in the Yarra Valley Water Certificate, which is part of Exhibit “PM-2” to the affidavit of Paula McHutchison of 18 April 2017 is, I consider, opaque in the extreme as to what is indicated in relation to sewer connections.
In addition, the relevant Drawing, at page 4 of 8 of the Yarra Valley Water letter of 12 August 2016 is endorsed with an express disclaimer as to the accuracy or completeness of the information supplied including without limitation the location of Water and Sewer Annals.
Finally, read together with clause 8 of the Vendor’s Section 32 Statement itself, it is clear that it is the Vendor’s Section 32 Statement and in particular the part of the Vendor’s Statement dealing with “services” at clause 8 which is intended to convey what services are connected to the Property, and not the opaque and expressly qualified Yarra Valley Water Certificate relied on by the plaintiff.
The vendor has acted reasonably
I am also not persuaded that the plaintiff has established that she has acted reasonably, as required by s 32K(4)(a) of the Act in the circumstances.
In my view the same lack of explanation, by both the plaintiff and her Conveyancer, as to how and why the false sewerage connection information was provided in her Section 32 Statement and as to how and why there was no reference therein to the Permit and its conditions, nor any explanation as to the circumstances in which the plaintiff signed her Vendor Statement, results in a clear failure on the part of the plaintiff to establish that she has acted reasonably in the circumstances.
Similarly, and for the same reasons I have referred to in connection with the requirement for honesty, I do not consider that the Yarra Valley Water Certificate assists the plaintiff.
The plaintiff has not sought to establish that she in any way checked the Section 32 Vendor Statement before she signed it, even though clearly it is a document of importance including because of its statutory significance and related consequences in the case of non-compliance with the Act and in connection with such a statement being in any way false or deficient, misleading and deceptive as reasonably understood by a purchaser.
Absent such evidence from the plaintiff, in the particular circumstances of this matter, reasonable care by the plaintiff in relation to the production of the Vendor’s Section 32 Statement, and consequently, the requirement of reasonable conduct on the part of the plaintiff under s 32K(4)(a) of the Act, is not made out.
Further, in my view, it is insufficient in the circumstances of this application under s 32K(4) of the Act for a plaintiff to endeavour to blame the professional Conveyancer for what the plaintiff describes as a “clerical error”, absent evidence from the professional Conveyancer and the plaintiff explaining all the relevant circumstances.
Further in my view, absent any evidence from the plaintiff or on her behalf, in relation to the Permit non-disclosure and why or how the plaintiff and her advisers did not refer to that document in the Vendor’s Section 32 Statement, the plaintiff, in the circumstances of this matter has not established that she acted reasonably in the circumstances. This is particularly so given the existence and terms of condition 11 of the Permit which require disclosure of that Permit to any new owner of the Property.
Ought fairly to be excused
I reject the plaintiff’s submission that my discretion should be exercised in her favour in relation to this element because of “Conveyancer’s error” or on the basis of the suggested reference to the absence of a “sewer” in the Yarra Valley Water Certificate or any of the other matters relied on by the plaintiff. I do not accept these contentions by the plaintiff both because they have not, on the evidence relied upon, been established as I have earlier explained, and also because in order to be satisfied that I should excuse the plaintiff’s non-compliance with s 32 pursuant to s 32K(4)(a), I would first need to be persuaded that the vendor has acted both honestly and reasonably, and I am not so persuaded for the reasons I have addressed above.
I add that my conclusions as to the requirements of s 32K(4)(a) of the Act referred to in the last preceding paragraph do not amount to a finding by me that the plaintiff has acted either dishonestly or has acted unreasonably. I make no such findings. Rather, the plaintiff has not discharged her onus under s 32K(4)(a) of the Act, to positively satisfy me that she has acted honestly and reasonably.
I do not accept the plaintiff’s submission that by the proper application of s 32K(4)(a) of the Act she should not be liable for the conduct of her professional Conveyancer. In this regard the plaintiff relies upon Nicolacopoulos v Khoury[29] in which Judge Ginnane (as he then was) observed that some doubt remains as to whether a vendor is vicariously liable for the omission of its agent.[30] However, in this instance the plaintiff can derive no assistance from s 32K(4)(a) which would modify or remove her liability for a statement made on her behalf by her Conveyancer, because here the plaintiff has not discharged the burden of proving the required elements of honesty and reasonableness.
[29][2010] VCC 1576.
[30]See also Fifty-Eighth Highwire v Cohen [1996] 2 VR 64 and Paterson v Batrouney [2000] VSC 313.
Similarly I am not persuaded that the defendants were looking for any reason to “get out” of the Contract of Sale rather than being motivated by any genuine concern about the fact that the Property was not connected to a mains sewerage system or the existence of the Septic Tank on the Property.
The plaintiff also relies upon the asserted fact that the septic system would have been conspicuous to a person inspecting the Property and the established fact that the first defendant did inspect the Property on at least two occasions. The plaintiff similarly seeks to rely upon a reference to a “Septic Tank Treatment Plan” in the sales campaign advertising of the Property on the Web.
Further, I do not consider that the plaintiff’s peripheral submissions concerning the first defendant’s evidence being less reliable because of his command of English as a language and the plaintiff’s submissions concerning the first defendant’s assertions about his religious objections to a Septic Tank system and various other assertions of the plaintiff about the speculative nature of aspects of the first defendant’s evidence, either advance or detract from the plaintiff’s application and I do not propose to deal further with those submissions made by the plaintiff.[31]
[31]Plaintiff’s Submissions, 27 April 2017, [55]-[62].
I am not satisfied however, given my findings in relation to the non-establishment of the required element of honesty and reasonableness under s 32K(4) of the Act, that any one or a combination of these ancillary factors raised by the plaintiff and referred to in the last preceding paragraph, need be the subject of a finding by me in this matter.
The purchaser is substantially in as good a position
Finally, I reject the plaintiff’s submission that the purchaser was substantially in as good a position as if all the relevant provisions of the Division of the Act had been complied with, assessed on an objective basis.
Here, in my view, the many ramifications of the Property being served by a Septic Tank, rather than having its sewerage connected to the mains sewerage system are far from minor or trivial or ephemeral or nominal, but are in fact far reaching, real and substantial as established by the defendants by reference to the permit conditions referred to above.
I also reject the plaintiff’s attempt to convey the cost of maintaining and servicing the Septic Tank as minimal nor do I consider that the offer of the plaintiff to cover six years of such costs materially alters the real and substantial disadvantages to the plaintiff which arise in connection with the existence of the Septic Tank as compared to a mains connected sewerage system.
In his second affidavit affirmed on 28 April 2017 the first defendant has prima facie established that the cost to the owner of the Property of excavating and installing sewer pipes from the existing Septic Tank to any Council sewer mains connection facilities which may be available in the future would be at least $22,800. The first defendant has also established that such work would be likely to involve landscaping and the rectification of excavation works in an additional amount of $18,000. Such costs do not include the cost of decommissioning the existing Septic Tank once mains connection was achieved or upgrading any plumbing to connect with the new mains system or council or authority fees.
The potential costs associated with the replacement of the Septic Tank on the Property with a mains sewer connection highlight the substantial costs likely to be involved in connection with the owner of the Property acquiring the facility and convenience of a mains sewerage system. Those costs therefore, in my view, also support the conclusion that there is likely to be a substantial qualitative and value difference between a property which has its sewerage connected to the mains as compared to a property which relies on a Septic tank waste treatment system. In the latter case it appears likely that on both bases the owner of the Property would not be substantially in as good a position, and accordingly here the defendants who were wrongly informed that the Property had a connected mains sewer system are not substantially in as good a position as they would have been if the Act had been complied with and they had been informed before sale that the Property was served by a Septic Tank system only.
I am persuaded that in this particular case that the contravention of the requirements of s 32(1) and 32D and 32H of the Act, in all the circumstances, places the defendants/purchasers in a real and substantially disadvantaged position as compared to the position a purchaser would be in if all the relevant provisions of the Act had been complied with whereby the purchaser would have been clearly and expressly advised before committing to the purchase of the land, that sewerage was a service which was not connected to the Property.
Decision
For the above reasons I am not satisfied that the plaintiff is entitled to the relief she seeks under s 32K(4) of the Act.
The defendants’ rescission notice dated 14 March 2017 in respect of the Contract of Sale of land executed by the plaintiff and the first defendant on 16 October 2016 whereby the first defendant purchased the land situated at 36-38 Arundel Road, Park Orchards in the State of Victoria (more particularly described in Volume 7929 Folio 150) is valid, and the Contract of Sale has been duly rescinded by that notice.
Accordingly, I dismiss the plaintiff’s Summons of 20 April 2017.
Orders
Accordingly I order that:
1.Within 3 days of this order the plaintiff pay the defendants $146,705.00, being part of the deposit sum the defendants paid the plaintiff under the Contract of Sale.
2.Within 30 days of this order the plaintiff pay the defendants $38,295.00, being the balance of the deposit sum the defendants paid the plaintiff under the Contract of Sale.
3.The proceeding is dismissed.
4.The plaintiff pay the defendants’ costs of and incidental to the proceeding on a standard basis.
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