South Esplanade Developments Pty Ltd v Astill
[2007] SADC 24
•6 March 2007
DISTRICT COURT OF SOUTH AUSTRALIA
(Civil: Appeal Against a Master's Decision)
SOUTH ESPLANADE DEVELOPMENTS P/L v ASTILL & ANOR
[2007] SADC 24
Judgment of His Honour Judge Millsteed
6 March 2007
CONTRACTS
Appeal against a decision by a Master entering summary judgment in favour of plaintiffs.
Contract for sale of land - vendor (defendant) gave purchasers (plaintiffs) a Form 1 (vendor's statement) pursuant to s5 of the Land and Business (Sale and Conveyancing) Act 1994 - Form 1 defective - purchasers' right to cool-off under s5 did not commence to run by reason of defective notice - purchasers cooled-off over 2 years after execution of contract - whether right to cool-off displaced by principles of election to affirm and estoppel - summary judgment ordered by Master pursuant to DCR 25.02 on the ground that the right to cool-off had not been displaced - Master erred - appeal allowed.
Land and Business (Sale and Conveyancing) Act 1994 s5, s7; Development Act 1993; Trade Practices Act 1974 (Cth); District Court Civil Rules 1992 25.02, 25.04, referred to.
Myles Pearce & Co Ltd v Leuci and Others (1997) 193 LSJS 491, distinguished.
Wicklow Enterprises Pty Ltd & Anor v Doysal Pty Ltd & Anor (1985) 124 LSJS 225; Kadeh v Gill & Ors (2000) 211 LSJS 88; The Commonwealth of Australia v Verwayen (1990) 170 CLR 394; Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; Sargent v ASL Developments Ltd (1974) 131 CLR 634; Potter v Minahan (1908) 7 CLR 277; Minister of Lands and Forests v McPherson (1991) 22 NSWLR 687; Szep v Blanken [1969] SASR 65; Andrew Knox Holdings P/L & Others v ANZ Banking Group Ltd & Esanda Finance Corp Ltd (1996) 188 LSJS 385; Zucker v Straightlace Pty Ltd (1986) 11 NSWLR 87; Blackman v Milne [2006] QSC 350, considered.
SOUTH ESPLANADE DEVELOPMENTS P/L v ASTILL & ANOR
[2007] SADC 24Introduction
This is an appeal by the defendant South Esplanade Developments Pty Ltd against a decision by a Master pursuant to District Court Rule (DCR) 25.02 wherein summary judgment was entered in favour of the plaintiffs, Reginald and Donna Astill. The central issue raised by the appeal is whether the cooling-off rights of a purchaser of land under s5 of the Land and Business (Sale and Conveyancing) Act1994 (“the Act”) are subject to the principles of waiver, election, affirmation, estoppel and laches. In the course of my judgment I will refer to the parties as they were referred to in the proceedings before the Master.
Background circumstances
The defendant was the registered proprietor of two lots of land at 3 and 4 South Esplanade, Glenelg South that were transferred to the defendant on 24 October 2002 and 21 October 2002 respectively.
On 28 January 2003 the City of Holdfast Bay (the Council) granted Provisional Development Plan Consent (“Development Consent”), under the Development Act1993, in respect of an application by the defendant to develop a complex of residential apartments at 3-4 South Esplanade Glenelg South. The defendant engaged Taplin Glenelg Pty Ltd (“the agent”) to sell the apartments off the plan.
On 18 February 2003 the plaintiffs signed a contract whereby they agreed to purchase from the defendant an apartment in the proposed development for the sum of $905,000.The sale was negotiated by Mr Pasquale (Paul) Cardone an employee of the agent. On 19 February 2003 the defendant by its agent Taplin Glenelg Pty Ltd executed the contract. The plaintiffs paid the agent a deposit of $90,500 and received from the agent a vendor’s statement (Form 1) pursuant to s7 of the Act.
The apartment was described in the contract as Apartment 11 3-4 South Esplanade, Glenelg South and, in accordance with the Development Consent obtained on 28 January 2003 and plans incorporated in the contract, was to be one of 16 apartments in a residential building (tower) with associated undercroft parking. There was no provision in the contract for vehicular access through the undercroft garage to adjacent properties.
The final date for completion of the development was stipulated to be 29 October 2004. Settlement was to take place three business days after the last to occur of practical completion of the apartment or the date of deposit of the Community Plan with the Registrar General. Under the contract the defendant was to procure a Community Title for the apartments, pursuant to the provisions of the Community Titles Act1996 and in accordance with a Community Plan annexed to the contract. In fact no such plan was annexed to the contract.
On or about 1 August 2003 the defendant purchased an adjacent block of land at 2 South Esplanade, Glenelg. The land was subject to an easement for light and air and a right of way for foot passage for the benefit of 3 South Esplanade. There is a dispute in the pleadings as to whether the easement was intended to run with the land at 3 South Esplanade or was, as the defendant contends, intended to only operate in favour of Violet May Plummer, the transferee at the time of its creation in 1939.
On 29 August 2003 the plaintiffs and the defendant executed an “Addendum” to the Contract whereby they agreed to a new “Final Completion Date” of 22 March 2005. The Addendum was executed on behalf of the defendant by Mr Andrew Taplin and Mr Kevin Palmer, in their capacity as directors of the defendant.
On 9 December 2003 Provisional Development Plan Consent was granted by the Council, in respect of a further application by the defendant to construct a tower comprising 18 residential apartments with associated undercroft parking at 2 South Esplanade. For the purposes of the appeal, it is accepted by the defendant that this amounted to a variation of the Development Consent obtained on 28 January 2003. The effect of the variation was to allow the defendant to develop 2, 3 and 4 South Esplanade as a single development comprising two residential towers, containing a total of 34 apartments with vehicular access to the undercroft garage at 2 South Esplanade to be through the undercroft garage at 3-4 South Esplanade.
On 29 June 2004 the defendant transferred to Andrew Halliday Taplin a 1/1,000th interest in the land at 3 South Esplanade and to Kevin Owen Palmer a 1/1000th interest in the land at 4 South Esplanade.
By letter dated 12 May 2005 Mr Andrew Taplin advised the plaintiffs that the final completion date for the apartment had been extended to 30 June 2005 due to building delays.
Development of the land at 2, 3 and 4 South Esplanade was subsequently completed in accordance with the varied Development Consent.
In a letter dated 8 June 2005 Mr Taplin advised the plaintiffs that their apartment had been completed and that the defendant had nominated settlement to take place on 17 June 2005. The plaintiffs were advised that a pre-inspection of the apartment could be carried out on either 9 June or 10 June 2005.
On 10 June 2005 the plaintiffs inspected the apartment. That same day the Community Plan was deposited in the Lands Titles Office in respect of the development at 2, 3 and 4 South Esplanade resulting in the issue of a Community Title for 34 units. A copy of the Community Plan was sent by email to the plaintiffs’ solicitors.
By notice in writing dated 15 June 2005 the plaintiffs purported to exercise their cooling off rights under s5 of the Act and rescinded the contract. The plaintiffs further contended that they were entitled to terminate the contract because the defendant had breached the contract in various ways. By letter dated 18 July 2005, the defendant purported to terminate the contract on the ground that the plaintiffs had repudiated the contract.
The plaintiff institutes proceedings
On 19 August 2005 the plaintiffs filed a claim in the District Court seeking judgment in the sum of $90,500, being the return of the deposit paid, plus interest and, in the alternative, damages in the same amount.
The Statement of Claim asserted that by reason of defects in the Form 1 the “prescribed time” for cooling-off under s5 of the Act had not passed by 15 June 2005 when the plaintiffs exercised their right to cool-off and rescind the contract. Because the plaintiffs had lawfully rescinded the contract the defendant was required to return the deposit pursuant to s 5(4).
The Form 1 was said to be defective because it failed to disclose:
·whether the right of way for foot passage and the easement which existed over the land at 2 South Esplanade would be discharged at settlement contrary to s7(1)(b)(i) of the Act and Regulation 8 of the Land and Business (Sale and Conveyancing) Regulations;
·two transactions which had occurred within the previous 12 months, namely, the transfers to the defendant of 3 South Esplanade on 24 October 2002 and 4 South Esplanade on 21 October 2002 contrary to s7(1)(b)(ii) of the Act;
·the fact that the defendant had applied for and obtained from the Council on 28 January 2003 a variation the Development Consent contrary to s7(1)(b)(i) of the Act and Regulation 8 Schedule of Form 1).
The Statement of Claim further asserted that the plaintiffs were entitled to terminate the contract by reason of the defendant having breached the contract in the following ways:
·transferring an interest in the land to Mr Andrew Taplin and Mr Kevin Palmer;
·failing to develop the site at 3-4 South Esplanade as a single tower comprising 16 apartments with associated car parking but instead (1) enlarged the site to include the land at 2 South Esplanade, (2) built a second tower containing 18 apartments and (3) required vehicles to access the undercroft garage at 2 South Esplanade through the undercroft garage at 3-4 South Esplanade;
·failing to obtain approval from the plaintiffs to major amendments to the plans incorporated into the contract;
·lodging with the Registrar General for deposit an application for a Community Plan for 34 apartments at 2, 3 and 4 South Esplanade and caused such application to be deposited by the Registrar General; and,
·causing the easement and right of way which existed over the land at 2 South Esplanade to be extinguished without the approval of the plaintiffs.
The plaintiffs also alleged that they were entitled to damages by reason of misrepresentation and misleading and deceptive conduct contrary to the provisions of the Trade Practices Act 1974. This particular allegation was not relied upon by the plaintiffs in respect of their subsequent application for summary judgment.
On 23 September 2005 the defendant filed a defence.
On 25 October 2005, the plaintiff filed an application for summary judgment pursuant to DCR 25.02 contending that summary judgment was justified on the cooling off and breach of contract points summarised above. In support of the application the plaintiffs filed affidavits of the first plaintiff Mr Reginald Astill and the plaintiffs’ solicitor Mr John Daenke. The defendant contested the application and filed affidavits of Mr Andrew Taplin and Mr Pasquale (Paul) Cardone.
The application was heard by Master Rice on 5 December 2005.
On the hearing of the application the defendant applied for leave to file an amended defence and counterclaim. It was agreed between the parties that if the plaintiffs’ application for summary judgment was rejected that the defendant’s application would be granted. The Master proceeded to deal with the matter on that basis.
In broad terms the amended defence asserted:
·that the plaintiffs were not entitled to rescind the contract under s5 of the Act because the Form 1 sufficiently complied with the requirements of the Act;
·that the defendant did not breach the contract, or breach it in a manner that would give rise to a right to terminate;
·that, further and in the alternative to the above, the plaintiffs were not entitled to rescind or terminate the contract by reason of the principles of waiver, election, affirmation, estoppel and laches.
The defendant sought declarations that the plaintiffs were not entitled to terminate the contract, that they had failed to settle on the contract and that the deposit be forfeited in favour of the defendant. The defendant also claimed damages.
Myles Pearce
In Myles Pearce & Co Pty Ltd v Leuci and Others[1] the Full Court of the Supreme Court held that the cooling-off period under s90 of the Land and Business Agents, Brokers and Valuers Act 1974 (“the LBA”) did not commence to run until the purchaser had been served with a valid vendor’s statement.
[1] (1997) 193 LSJS 491
It is not in dispute that the decision in Myles Pearce applies to the cooling-off provisions of the Act. For relevant purposes the provisions of the Act and the LBA are similar. Thus, in the present case if the vendor’s statement was valid the plaintiffs’ right to cool-off under s5 expired on or about 22 February 2003.On the other hand, if the vendors statement was invalid the prescribed time for cooling off had not passed by the time the plaintiffs purported to rescind the contract on 15 June 2005.
The Master’s decision
On 18 May 2006 Master Rice made an order for summary judgment to be entered against the defendant.
The Master found that the Form 1 was defective for the reasons advanced by the plaintiff. The Master also found that after the defendant had transferred an interest in the land to each of Messrs Taplin and Palmer on 29 June 2004 it was obliged, by virtue of s10 of the Act, to serve upon the plaintiffs a notice of amendment of the Form 1 disclosing the fact of those transactions.
The Master concluded that because the Form 1 was defective he was bound by Myles Pearce to find that the plaintiffs were entitled to cool-off under s5 but did not expressly address the question of whether the right to cool-off was subject to an application of the principles of waiver, affirmation, estoppel and laches. The Master’s reasons disclose that he would not have been prepared to grant summary judgment in favour of the plaintiffs on the ground that the defendant had breached the contract in the various ways asserted by the plaintiffs.
The appeal
On the hearing of this appeal the defendant did not challenge the Master’s finding that the Form 1 was defective but argued that:
·the plaintiffs were not entitled to rescind the contract under s5 by reason of the principles of waiver, election, affirmation, estoppel and laches upon which the amended defence and counterclaim were founded;
·the Master had failed to properly consider the issues of fact and law raised by the amended defence and counterclaim;
·the issues raised in the defence and counterclaim were not amenable to summary judgment under DCR 25.02;
·the Master had in effect, granted summary relief on the defendant’s counterclaim without the requirements of DCR 25.04 being satisfied;
·the decision in Myles Pearce is distinguishable; and
·that the Master had erred in failing to state a case to enable the Full Court to consider whether the decision in Myles Pearce excluded the principles relied upon by the defendant in respect of s5 of the Act.
Notice of Alternative Contentions
Prior to the hearing of the appeal the plaintiffs filed a Notice of Alternative Contentions. In substance the Notice contends that the Master erred in finding that the plaintiff was not entitled to summary judgment on the ground that the defendant had breached the contract in the ways asserted in [31] above.
In my view it is not necessary to canvass the points contended for by the plaintiffs. I agree with the Master’s conclusion that in the main these matters raise disputed issues of fact that should be resolved at trial. But more than that the points raised in the Notice cannot succeed on this appeal, in my view, if the defendant has an arguable case based on principles of waiver, election and estoppel.
Principles governing summary judgments
Before I turn to consider the arguments presented on appeal by the parties I remind myself of the principles governing applications for summary judgment.
In Wicklow Enterprises Pty Ltd v Doysal Pty Ltd and Anor[2] King CJ identified three mischiefs created by applications for summary judgment. He said:[3]
An attempt to determine by means of the Summons for Immediate Relief issues of fact and law requiring substantial hearing time produces mischiefs which are well illustrated by the course which the present case took.
The first such mischief is that if the relief sought is likely to be delayed rather than expedited by the procedure followed …
The second mischief is that the adoption of this procedure leads to the decision of complex issues of fact of law other than by means of a regular orderly trial. The attempt to resolve such issues by means of a succession of affidavits and intermittent examination and cross-examination of witnesses rather than by means of a regular and orderly trial can only be regarded as unsatisfactory and possessing a tendency to lead to an incorrect result.
The third mischief is that if the procedure adopted in this case were followed on a substantial scale, it would disrupt the orderly arrangement of the business of the Court and would be unjust to the parties whose cases were listed for hearing in the ordinary way.
[2] (1985) 124 LSJS 225
[3] (1985) 124 LSJS 225 at 226
Later, in Kadeh v Gill and Others[4] Doyle CJ said[5]:
An application for a summary judgement invites the Court to do more than determine the adequacy of a Statement of Claim or Defence. It usually invites the Court to try and to determine facts by a summary process, usually by affidavit. If the proceedings are disposed of on affidavit, it deprives the relevant party of the usual right to a trial on oral evidence. Unless there are circumstances of urgency, the only basis for making an order can be that the case is, as a matter of law and as a matter of fact, bound to fail. There has to be some good reason to deal with a claim or defence in this summary fashion.
[4] (2000) 211 LSJS 88
[5] (2000) 211 LSJS 88 [29]
It is clear from these authorities that DCR 25.02 may be used where there is no serious question to be tried or to determine issues which are capable of speedy resolution. An application for summary judgment should succeed only where the defendant’s case is bound to fail either as a matter of fact or law.
The issues
In the present case it cannot be said that the Master was not alive to the principles governing applications for summary judgments. His Honour specifically referred to them in his reasons for decision. Furthermore, I do not accept, as Mr Rochow suggested in argument before me, that because the Master did not expressly address the question of whether the right to cool-off was subject to an application of the principles upon which the defendant’s case is founded that his Honour may have failed to consider those issues. In my view, the implication of the Master’s decision, is that he considered that the principles upon which the amended defence and counterclaim were based could not displace the plaintiffs right to cool-off under s5 and were therefore irrelevant.
In my opinion, this appeal raises for practical purposes two questions. First, whether it is arguable that s5 of the Act is subject to the principles of waiver, election, affirmation, estoppel and laches; and, if it is, whether the defendant has an arguable case that one or more of these principles find application in the present case. If the questions warrant affirmative answers then the appeal must be allowed.
Before I turn to analyse these issues it is appropriate to identify the relevant legal principles and the facts upon which the defendant’s case is based.
The principles of election and estoppel
The term waiver is not a distinct legal concept but rather embraces different legal principles. As Mason CJ observed in The Commonwealthof Australia v Verwayen:[6]
But, granted that some statutory rights can be waived, the mere existence of cases in which statutory rights have been held to be susceptible of waiver does not signify that those cases are all exemplifications of one concept or doctrine. As often as not, the term “waiver” is used to describe the result of the application of various principles rather than to designate a particular legal concept or doctrine. The consequence is that the expression “waiver” has been the subject of robust criticism. …This is because “waiver” is an imprecise term capable of describing different legal concepts, notably election and estoppel.
[6] (1990) 170 CLR 394 at 406
Similarly, it is not helpful to speak about affirmation as if it were a distinct concept. As Lander J pointed out in Andrew Knox Holdings Pty Ltd & Others v ANZ Banking Group Ltd & Esanda Finance Corp Ltd[7] affirmation is not a legal concept in its own right, but rather covers situations governed by the concepts of election and estoppel.
[7] (1996) 188 LSJS 385 at 393
Accordingly, it is appropriate to focus on the doctrines of election and estoppel. For reasons canvassed later it is not necessary to consider the defendant’s further contention that the defence of laches is available to it.
The principles governing the doctrine of election are conveniently summarised by Lander J in Andrew Knox Holdings wherein his Honour said:[8]
A right of election arises where events occur which give rise to the possibility of the exercise of alternative and inconsistent rights. Since rescission and affirmation are mutually exclusive, it is a condition of the enjoyment of either one that the other be abandoned …
For the doctrine of election to operate there must also be conduct sufficient to amount to the making of an election as between the two inconsistent rights (Sargent v ASL Developments Ltd at 642 per Stephen J; Argy v Blunts (1990) 94 ALR 719 at 745 per Hill J). An election against rescission, i.e. an election to affirm, may be express or implied and may arise from words or conduct, but it must be made in a clear and unequivocal form (Coastal Estates Pty Ltd v Melevende at 452 per Adam J; Hawker Pacific Pty Ltd v Helicopter Charter Pty Ltd at 304 per Priestley JA).
It is probable that the respondent does not have to establish any detriment arising out of the election made by the appellants (Sargent v ASL Developments Ltd per Stephen J at 647) …
Finally, for the doctrine of election to operate, there must also be an element of knowledge on the part of the elector. The extent of knowledge required is not entirely clear. Certainly it must be shown that the elector had acquired knowledge of the facts which gave rise to the right of rescission. Although it is not entirely clear, modern authority suggests, in my opinion, correctly, that it is not in general necessary to also show that the elector had full knowledge of the right to rescind.
[8] (1996) 188 LSJS 385 at 393-394
The doctrine of estoppel was expressed by Mason C J and Wilson J in Waltons Stores (Interstate) Ltd v Maher in these terms:[9]
[T]he doctrine extends to the enforcement of voluntary promises on the footing that a departure from the basic assumptions underlying the transaction between the parties must be unconscionable. As failure to fulfil a promise does not of itself amount to unconscionable conduct, mere reliance on an executory promise to do something, resulting in the promisee changing his [or her] position or suffering detriment, does not bring equitable estoppel into play. Something more would be required.
[9] (1988) 164 CLR 387 at 406
Similarly in The Commonwealth v Verwayen Mason CJ said:[10]
There is no longer any purpose to be served in recognizing an evidentiary form of estoppel operating in the same circumstances as the emergent rules of substantive estoppel. The result is that it should be accepted that there is one doctrine of estoppel, which provides that a court of common law or equity may do what is required, but not more, to prevent a person who has relied upon an assumption as to a present, past or future state of affairs (including a legal state of affairs), which assumption the party estopped has induced him to hold, from suffering detriment in reliance upon the assumption as a result of the denial of its correctness.
[10] (1990) 170 CLR 394 at 413
It is well recognised that unreasonable delay in the exercise of a right to terminate a contract may create an estoppel.[11]
[11] Carter and Harland, Contract Law in Australia 4th ed, Butterworths at [1984]; Mardorf Peach & Co Ltd v Attica Sea Carriers Corp of Liberia [1977] AC 850 at 871, 880.
There are two important distinctions between the doctrines principles of election and estoppel: first, estoppel does not require knowledge of the right to rescind or the circumstances which gave rise to the right; and, second election does not require detriment to have been suffered by the aggrieved party.[12]
[12] See Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 642
The facts upon which the defendant’s case is based
The defendant’s argument before the Master that the plaintiffs had elected to affirm the contract was founded on the affidavits of Messrs Pasquale Cardone and Andrew Taplin.
Mr Cardone deposed that the plaintiffs lived in High Street Glenelg. Following the execution of the contract he often spoke with first plaintiff, Mr Astill, concerning the development. Mr Astill indicated that the plaintiffs did not intend to live in the apartment but had acquired the apartment for investment purposes.
On or about 4 February 2005, the plaintiffs engaged Mr Cardone to on-sell the property for a price in the high $900,000s. At that time the apartments at 3-4 South Esplanade were close to completion. The tower at 2 South Esplanade was still under construction. Mr Cardone informed Mr Astill that he was asking too much for the apartment due to a surplus of apartments in the area and a fall in their value. Mr Cardone failed to on-sell the apartment for the price sought by the plaintiffs. According to the affidavits of Messrs Cardone and Taplin the plaintiffs received one offer of $830,000 but rejected it.
As earlier stated the plaintiffs arranged with the defendant to have a final inspection of the apartment on 10 June 2005. According to the affidavit of Mr Taplin the first plaintiff Mr Astill attended the final inspection with his agent Mr J Carey from Bernard Booth. Mr Carey attended for the purpose of giving the plaintiffs a sales and rental valuation of the apartment. The defendant asserts that it was only after the plaintiffs had received the valuation that the defendant received notice on 15 June 2005 of the plaintiffs’ intention not to settle on the apartment.
The defendant contends that it may be inferred from these circumstances that the plaintiffs would have settled on the contract if the apartment had not declined in value. The defendant further contends that by reason of the plaintiffs’ efforts to on sell the apartment they must be taken to have been acting as the equitable owner of the apartment in such a way that their conduct amounted to an election to affirm the contract. Accordingly, the plaintiffs thereby lost the right to rescind under s5. The defendant also relies on the delay (a period of over 2 years) before the plaintiffs’ purported recision of the contract as evidence of their willingness to maintain the contract.
Defendant has an arguable case subject to the operation of s5
In my view the defendant has an arguable case that the plaintiffs had engaged in conduct inconsistent with the right to rescind. However, as earlier observed under the doctrine of election, the elector must have known of the facts upon which the elector might have chosen to rescind the contract at the time of the act of affirmation. In the present case, that means that the plaintiffs must have known of the matters which rendered the Form 1 defective though they need not have known of their entitlement to rescind by reason of the defective Form 1.
The affidavit material placed before the Master by the defendant does not establish that the plaintiffs possessed the requisite knowledge at or before the time they are said to have elected to affirm the contract. However, I agree with Mr Rochow’s submission, that an examination of that issue should not be foreclosed by summary judgment. The question of whether the plaintiffs possessed the requisite knowledge may give rise to complex issues of fact. It is appropriate that such issues be canvassed at trial and where the defendant is afforded an opportunity to cross-examine the plaintiff on such matters. In the present case the defendant was entitled to cross-examine the plaintiffs to determine:
·when the plaintiffs first became aware of the defects in the Form 1;
·whether the 15th of June 2005 was the earliest time that they could have given notice of their intention not to settle on the contract;
·what facts they had discovered as a consequence of their discussions concerning the development;
·what inspections of the property they had conducted before the final inspection on 10 June 2005;
·what facts they had discovered as a result of any such inspections;
·whether they had received advice that they could cool-off at any time they liked because of the defects in the Form 1 but decided to see how the market went.
Even if the defendant could not establish that the plaintiffs had the requisite knowledge for the purposes of the doctrine of election it nevertheless has, in my view, an arguable case of estoppel. As earlier observed, knowledge is not a requirement of estoppel. In order to succeed on the ground of estoppel, the defendant would need to establish that there was a clear and unambiguous assumption or expectation by the defendant that the plaintiffs would settle on the apartment and that the defendant would suffer detriment if the plaintiffs were allowed to depart from that assumption or expectation in circumstances where such a departure would involve unconscionable conduct on their part.
In my opinion, it is at least arguable that it would have been unconscionable for the plaintiffs to attempt to escape their obligations under the contract merely because the value of the apartment had dropped. Furthermore, such conduct has arguably resulted in a detriment to the defendant. Due to the decrease in the value of the apartment its resale will result in a deficiency in the purchase price. Furthermore, it is likely as the defendant contends, that a resale will result in further costs, for example: marketing costs, hire of display furniture and fit out to achieve re-sale, removalist costs, cleaning costs and various holding costs such as interest, strata fees, utilities and council rates.
In summary, I am of the opinion that the defendant has an arguable case based on the principles of election and estoppel subject to the remaining question of whether those principles can, as a matter of law, displace a purchaser’s right to cool-off under s5. Because I am of that view it is unnecessary to consider the defendant’s further argument that the defence of laches is possibly available to it.
Does s5 exclude the principles of election and estoppel?
In order to answer this question it is necessary to consider the scheme and policy of the Act.
The Act
Section 5 relevantly provides:
5. (1) Subject to this section, a purchaser under a contract for the sale of land or a small business may, by giving the vendor written notice before the prescribed time of the purchaser’s intention not to be bound by the contract, rescind the contract.
…
(4)If a contract is rescinded under this section, the purchaser is entitled to the return of money paid, but the vendor may retain money paid, but the vendor may retain money paid by the purchaser-
(a) in consideration of an option to purchase the land or small business subject to the sale;
or
(b) by way of deposit in respect of the sale if the deposit does not exceed-
(i) $100; or
(ii) if a greater amount is fixed by regulation.
…
(8) In this section-
“prescribed time” means:-
(a) in relation to the sale of land-
(i)where the vendor’s statement is served on the prospective purchaser before the making of the contract-the end of the second clear business day after the day on which the contract was made; or
(ii) where the vendor’s statement is served on the purchaser after the making of the contract –the end of the second clear business day from the day on which the statement was served,
or the time settlement takes place (whichever is the earlier);
(b) …
The definition of “vendor’s statement” is to be found in s3.
“vendor’s statement” means the statement that the vendor of land or a small business is required to serve under Part 2, and includes all certificates that are required to be endorsed in or attached to the statement.
The obligation of a vendor to provide the purchaser with a vendor's statement is contained in s7 which relevantly reads:
7. (1) A vendor of land must, at least 10 clear days before the date of settlement, serve, or cause to be served, on the purchaser a statement in the form required by regulation (signed by or on behalf of the vendor) setting out -
(a) the rights of a purchaser under section 5; and
(b) the particulars required by regulation of-
(i)all mortgages, charges and prescribed encumbrances affecting the land subject to the sale; and
(ii)where the vendor obtained title to the land within 12 months before the date of the contract of sale, all transactions involving transfer of title to the land occurring within that period; and
(iii) any prescribed matters.
…
Section 10 requires the provision of accurate information in a vendor’s statement and deals with variations of the particulars in the statement.
10(1) A vendor’s statement must be accurate as at the date of service on the purchaser.
(2) If after the service of a vendor’s statement but before the purchase signs the contract circumstances change so that if a fresh statement were to be prepared there would have to be some change in the particulars contained in the statement, then the vendor’s statement will be regarded as defective until a notice of amendment is served and when such a notice is served it will be presumed that the vendor’s statement was served, as amended by the notice, on the date of service of the notice.
The Land and Business (Sale and Conveyancing) Regulations 1995 (“the Regulations”) prescribe the form of a vendor’s statement (Form 1) and various matters that must be included in the Form 1 (regs 7 and 8).
In addition to the self-help remedy available under s5 there are court-assisted remedies available to a purchaser under s15. This section provides:
15 (1)Where a vendor’s statement is not given or certified as required by this Part, or the statement given is defective, the purchaser may apply to a court of competent jurisdiction for an order under this section.
(2)On the hearing of an application under subsection (1) the Court may, if satisfied that the purchaser has been prejudiced by the failure to comply with this Part, exercise any one or more of the following powers:
(a)avoid the contract and make such other orders as the Court thinks necessary or desirable to restore the parties to the contract to their respective positions before entering into the contract;
(b)award such damages as may, in the opinion of the Court, be necessary to compensate loss arising from the non-compliance;
(c) make such other orders as may be just in the circumstances
(3)Damages may be awarded under subsection (2)(b) against –
(a) the vendor;
(b)if it appears that the purchaser has been prejudiced by a failure on the part of an agent to carry out duties imposed by this Part – the agent,
or both.
Section 16 provides for certain defences.
16It is a defence to a charge of an offence, or to civil proceedings, under this Part arising from an alleged contravention or non-compliance with a requirement of this Part if the defendant proves -
(a) that the alleged contravention or non-compliance was unintentional and did not occur by reason of the defendant’s negligence or the negligence of an officer, employee or agent of the defendant; or
(b) that the alleged contravention or non-compliance was due to reliance on information provided by a person or body to which an inquiry to obtain the information is, in accordance with the regulations, required to be made; or
(c) that –
(i)the purchaser received independent advice from a legal practitioner in relation to waiving compliance with that requirement; and
(ii)the legal practitioner signed a certificate in the form required by regulation as to the giving of that advice; and
(iii)the purchaser waived compliance with that requirement by signing an instrument of waiver in the form required by regulation.
By reason of s33 the parties to a contract cannot contract out the right to cool-off under s5 or indeed any other right conferred by the Act. The section states:
33.Subject to this Act, a purported exclusion, limitation, modification or waiver of a right conferred, or contractual condition implied, by this Act is void.
By virtue of s34 the statutory remedies available to a purchaser under s5 and s15 are additional to those available under the general law.
Summary of legislative scheme
It is evident that the policy of the legislation is to protect purchasers and reduce disputes concerning representations made by vendors when selling property. To that end the vendor is required to provide the purchaser with a Form 1 containing accurate information in relation to the property to be purchased. Should there be a subsequent change in relevant circumstances the vendor is required to serve the purchaser with a notice of amendment of the Form 1 (s10).
Section 5 enables a purchaser to make an informed decision about whether they will proceed with the contract or exercise their rights to cool-off. The cooling-off period gives the purchaser a reasonably short period of time in which to review the wisdom of their decision to purchase the property.[13] It is clear that a purchaser of land cannot rescind a contract under the section unless the cooling-off notice is given to the vendor before the “prescribed time” (s5(1)). By reason of the definition of prescribed time (s5(8)) the requirement to give such notice does not arise until after the purchaser has been served with a Form 1. In accordance with the decision in Myles Pearce, the time in which a purchaser can cool-off does not commence to run until the purchaser had received a valid Form 1.
[13] See Myles Pearce & Co Ltd v Leuci and Others (1997) 193 LSJS 491 at 498
The policy of protecting purchasers and enabling them to make an informed decision is reinforced by s33 which prevents the vendor and purchaser from contracting out the right to cool-off and, further, by s16(c) which allows a purchaser to waive the right to cool-off but only in circumstances where the purchaser has received independent legal advice from a legal practitioner.
Where there has been a failure by the vendor to provide a valid Form 1 the Act does not render the contract void. However, certain remedies are provided to the purchaser. Broadly speaking the remedies are two fold. First there is the right to cool-off under s5. That right does not survive settlement on the contract.[14] Second a purchaser may affirm the contract and seek some remedy under s15 or the general law (s34).
[14] Myles Pearce & Co Pty Ltd v Leuci and Others (1997) 193 LSJS 491 at 501
Analysis of issue
In my opinion, the relevant provisions of the Act neither expressly nor by necessary implication exclude the operation of the principles of election and estoppel. An application of these principles is consonant with the policy of the Act. As observed the intendment of the legislation is to ensure that vendors give purchasers relevant information and to enable them to make an informed judgment about whether to purchase the property. In a case such as the present, the doctrine of election would only apply if the purchaser had knowledge of matters that rendered the Form 1 defective. Furthermore, the doctrine of estoppel would only apply if the purchaser had engaged in unconscionable conduct to the detriment of the vendor.
I find it difficult to accept that Parliament intended to extend its protective policy to purchasers who choose to affirm a contract in circumstances where they are aware of the matters required to be set out in a valid Form 1, or to purchasers prepared to exploit their cooling-off rights in an unconscionable manner. The plaintiffs’ argument, taken to its logical conclusion, would mean that a purchaser who received a Form 1 knowing that it was defective and knowing that he or she was entitled to cool-off under s5, could defer exercising that right until just before the nominated date of settlement. The purchaser could sit on the contract, say to see how the property fared in the market, and rescind the contract at the last possible moment because the property had dropped in value or rescind it for some other reason that was unfair, unreasonable or unconscionable. It is not difficult to imagine circumstances in which an unscrupulous purchaser could, if the plaintiffs’ argument is accepted, convert the right to cool-off into an instrument of commercial oppression.
As earlier observed the Act provides that a vendor and purchaser cannot contract out the right to cool-off (s33) and further provides that a purchaser may waive their right to cool-off in limited circumstances i.e. where the purchaser has obtained independent advice from a legal practitioner (s16(c). Are these sections inconsistent with the construction I favour? These sections are concerned to ensure that purchasers make an informed choice about the maintenance of the cooling-off period. They do not address the question of whether a purchaser, who has entered into a contract in which the right to cool-off has not been contracted out and who is aware of that right, may be bound by subsequent conduct which gives rise to an election to affirm or estoppel. In Blackman v Milne[15] and Andrew Knox Holdings Pty Ltd v ANZ Banking Group[16] (to be discussed later) statutory rights of recision were held to be subject to principles of waiver and election in spite of provisions similar to s33 and s16(a).
[15] [2006] QSC 350
[16] (1996) 188 LSJS 385
Myles Pearce
At this point it is appropriate to canvass in more detail the decision in Myles Pearce.
In reaching the conclusion that the cooling-off period under s90 of the LBA did not commence to run until the purchaser had been served with a valid vendor’s statement Bleby J (with whom the other members of the Court agreed) said:[17]
The cooling‑off period is inextricably linked with the delivery of the vendor’s statement, and it must be linked for a reason. That reason is not difficult to discern. The information required to be given by s90 and by the Regulations is information which a purchaser in many cases will not be able readily to obtain. It is information which may well affect the purchaser’s decision to buy at all, or which may affect the price which the purchaser is prepared to pay. It appears reasonably clear that Parliament intended that a purchaser should be given all that relevant information, and then be allowed a reasonably short period in which to review the decision to purchase before becoming irrevocably bound by it.
Parliament and the Governor in Council have determined what information must be supplied to the purchaser, and by inference have determined what information may be material to the purchaser’s decision. Parliament has also made plain by s91B(1) that the information in the vendor’s statement must be accurate. In sub‑section (2) it has taken the further expedient that where the vendor’s statement has been served before the contract is signed and so the cooling‑off period has not yet begun to run, the information must be accurate at the time when the cooling‑off period does start to run. By linking the commencement of the cooling‑off period to the provision of accurate information in the vendor’s statement, Parliament has provided the clearest inference that the cooling‑off period is not to run until accurate information of a material kind has been provided. If some of that material information is not supplied or is misleading, the purchaser cannot make an informed decision, and the cooling‑off period will not commence to run against the purchaser.
[17] (1997) 193 LSJS 491 at 498
As earlier observed, the application of that approach to the provisions of the current legislation is not in doubt. The contentious issue is whether the right to cool-off is subject to the principles of election and estoppel.
Mr Daenke, counsel for the plaintiffs, placed reliance on the following passage in the judgment of Bleby J:[18]
Cooling‑off is a summary self‑help remedy. The purchaser does not have to justify the decision to cool‑off to anyone. The decision to cool‑off may or may not be related to the provision of the information required by s90 and the Regulations. That is a necessary consequence of the summary remedy that Parliament has provided. The mere fact that it may have taken the purchasers in this case some time to realise that the notice was defective does not deny them the right to cool‑off for any reason at any time occurring before the prescribed time referred to in s88(8). In the circumstances of this case, that time had not passed, and the cooling‑off rights granted by the Act could be exercised at any time and for any reason. (emphasis added)
[18] (1997) 193 LSJS 491 at 501
Mr Daenke argued that a right to cool-off constrained by the principles of election and estoppel is not a right to cool-off for any reason, and at any time, before the prescribed time. I think the short answer to that point is that the issues raised in this appeal were not canvassed in Myles Pearce. In other words, the remarks of Bleby J should not be construed as having been made by his Honour with issues of election and estoppel in mind.
For his part, Mr Rochow sought to derive support from another passage in the judgment of Bleby J. Immediately after the passage quoted above his Honour said:[19]
In my opinion it does not matter that an alternative remedy is provided by s91G. That is not a summary remedy. It is one that can only be invoked with the aid of a court. The right to cool‑off does not survive settlement on the contract. The remedy under s91G does. Section 91G is not an exclusive remedy available to the recipient of a defective statement. It should be seen as an alternative remedy. A purchaser who receives a defective statement, upon becoming aware of the defect, may choose to cool‑off or alternatively may choose to affirm the contract and seek damages or some other remedy under s91G or at common law. It cannot be said that s91G provides an exclusive remedy for a defective vendor’s statement. It provides an additional range of remedies where prejudice can be shown, and can be invoked before or after settlement. (emphasis added)
[19] Ibid
Mr Rochow submitted that this passage indicates that the statutory right to rescind does not exclude the principle of affirmation. I reject that submission. In my view it is clear that his Honour was simply making the point that a purchaser may, instead of exercising the right to cool-off, choose to allow the contract to proceed to settlement and then seek relief from the Court under s91G (now s15). It was not suggested by Bleby J that a person could lose the right to rescind through an act of affirmation.
In my opinion, there is nothing in the judgment of Bleby J which necessarily supports or undermines the notion that the right to rescind is, or may be, constrained by notions of election and estoppel. Accordingly, I am of the view that the learned Master erred in concluding that he was, by reason of the decision in Myles Pearce, bound to find that the plaintiffs were entitled to cool-off regardless of the issues raised in the amended defence and counterclaim.
Some general principles
The construction of the legislation which I favour is consistent with the general principle that legislation should not be construed as abrogating basic contractual and equitable principles or otherwise depart from the general law unless the legislation is manifestly clear.[20]
[20] See Pearce & Geddes, Statutory Interpretation in Australia 5th ed [5.22-5.23]
The general principle was expressed by O’Connor J in Potter v Minahan:[21]
It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used. (footnote omitted)
[21] (1908) 7 CLR 277 at 304
Here it could not be said that the Act makes it irresistibly clear that the right to rescind under s5 excludes the basic principles of election and estoppel.
In Minister of Lands and Forests v McPherson[22] the Court of Appeal (NSW) held that, the power of the Supreme Court exercising its equitable jurisdiction to provide relief against forfeiture had not been removed by the relevant Act as Parliament had not expressed a clear intent to do so. Kirby P (as he then was) said:[23]
It is the presumption of our legal system that Acts of Parliament are intended to operate justly. Where, then, a statute is silent as to procedures which are to be followed or basic rights observed, the assumption is made, and enforced by the courts, that the statute was intended to operated alongside and in harmony with the common law. The vivid expression of this presumption, oft-cited, is that of Byles J in Cooper v Wandsworth Board of Works (1863) 14 CB NS 180 at 194-195; 143 ER 414 at 420. Byles J there said in a passage not always quoted in full:
“ … a long course of decisions, beginning with Dr Bentley’s case (The King v The Chancellor & C, of Cambridge, 1 Stra 557, 2 Ld Raym 1334, 8 Mod 148, Fortescue, 202), and ending with some very recent cases, establish that, although there are no positive words in a statute requiring that the party shall be heard, yet the justice of the common law will supply the omission of the legislature. The judgment of Mr Justice Fortescue in Dr Bentley’s case, is somewhat quaint, but it is very applicable, and has been the law from that time to the present. He says: ‘The objection for want of notice can never be got over. The laws of God and man both give the party an opportunity to make his defence, if he has any. I remember to have heard it observed by a very learned man, upon such an occasion, that even God himself did not pass sentence upon Adam before he was called upon to make his defence. “Adam” (says God) “where are thou? Hast thou not eaten of the tree thereof I commanded thee that thou shouldest not eat?” And the same question was put to Eve also’.”
In a sense, Cooper asserts that, in fundamental matters of justice, the legal system will impute to Parliament an intention to respect and conform to basic rights. This is a presumption frequently applied in the High Court of Australia and in this Court in respect of basic principles of the common law: see, eg, Commissioner of Police v Tanos (1958) 98 CLR 383 at 395; Twist v Randwick Municipal Council (1976) 136 CLR 106 at 109; Ackroyd v Whitehouse (Director of National Parks & Wildlife Service) (1985) 2 NSWLR 239 at 246; Johns v Release on Licence Board (1987) 9 NSWLR 103; Macksville and District Hospital v Mayze (1987) 10 NSWLR 708; Lisafa Holdings Pty Ltd v Commissioner of Police (1988) 15 NSWLR 1 and Yuill v Corporate Affairs Commission of New South Wales (1990) 20 NSWLR 386 at 402.
[22] (1991) 22 NSWLR 687
[23] (1991) 22 NSWLR 687 at 698 G-699 E
In this matter the Act is, in my view, silent on the question of whether s5 is subject to election and estoppel. In accordance with the principles summarised by Kirby P, it should be assumed that the relevant provisions were intended to operate in harmony with these principles.
Authorities
The case law is replete with decisions in which statutory rights to rescind have been held to be subject to the application of principles of election and estoppel. There is a limit to the assistance that can be gained from decisions that turn on the construction of particular statutes. The following cases however, provide a measure of support for the approach that I have taken in relation to the cooling-off issue. At the very least they serve to illustrate that the defendant’s case cannot be categorised as one bound to fail.
In Andrew Knox Holdings v ANZ Banking Group[24] the Full Court of the Supreme Court (SA) rejected a similar argument to that advanced by the plaintiffs in the present case. The appellants in that case contended that they were entitled to relief under s87 (2)(a) of the Trade Practices Act (Cth) by reason of misleading and deceptive conduct by the respondent contrary to s52 (contained in Part V) of the act. Pursuant to s 87 (2)(a) the Court is empowered to declare any contract made between a party who has suffered loss or is likely to suffer loss as a result of conduct of another party in contravention of Part V, and that other party, “to be void and, if the Court thinks fit, to have been void ab initio.” The appellants argued that the powers under s87 (2)(a) meant that they were entitled to relief even if the court were to conclude that the appellants had affirmed the transactions under the general law. The Court rejected that argument, notwithstanding s68 (a provision similar to s33 of the Act) which prohibits parties contracting out the effect of s53.
[24] (1996) 188 LSJS 385
Lander J (with whom the other members of the Court agreed) said at 397:
In my opinion, however, there are significant problems involved in the appellant’s approach to s87. When taken to its logical conclusion, the appellants’ approach would mean that, whenever there is an allegation of conduct in contravention of Part V of the Trade Practices Act, an election by the party alleging the conduct to affirm its contract and to not seek a remedy is essentially meaningless and could never be binding upon the party electing. No matter how unequivocal the affirmation, there is always a s87 remedy potentially available. In my opinion, this position is untenable.
In my view the position contended for by the plaintiffs in the present case is equally untenable.
In Szep v Blanken[25] the defendant contracted to sell to the plaintiffs a retail business but failed to include in the contract certain particulars required by s39 of the Business Agents Act 1938 which rendered the contract voidable at the option of the plaintiffs.
[25] [1969] SASR 65
That section provided:
(1) Any contract for the sale of any business shall be voidable at the option of the purchaser at any time within six months from the making thereof, unless –
(a) the contract is in writing; and
(b) the contract contains the following particulars, namely –
(i) the name, address and description of the vendor; and
(ii) the name, address and description of the purchaser; and
(iii)the name, address and description of some person to whom all moneys falling due under the contract may be paid; and
…
(2)A purchaser shall not be deemed to have elected to affirm a contract which is voidable under this section by reason of any payments of money made by the purchaser pursuant to the contract within the period of six months aforesaid.”
The plaintiffs later sought to invoke s39 and rescind the contract. However, before they became aware that the contract was voidable the plaintiffs paid the full purchase price, entered into the business and conducted it for some time. Bright J concluded that the purchasers had by their conduct affirmed the contract and were not entitled to rescind it.
Mr Daenke submitted that Szep is distinguishable because contracts were “voidable” under s39 - a concept which imported contractual principles including election. He argued that the legislature’s intention to replace the concept of avoidance with a right to cool-off suggests that the latter was not intended to be constrained by principles of election and affirmation. I am not persuaded by this argument. It should be inferred, absent clear language to the contrary, that Parliament did not intend to displace such basic principles.
I turn to two interstate cases dealing with comparable legislation.
In Zucker v Straightlace Pty Ltd[26] Young J of the Supreme Court of New South Wales had occasion to consider whether a purchaser’s statutory right to rescind under the Conveyancing Act 1919 (NSW) had been lost due to acts of affirmation.
[26] (1986) 11 NSWLR 87
Pursuant to s52A a vendor under a contract for the sale of land shall be deemed to have included in the contract such warranties as may be prescribed by clause 5 of the Conveyancing (Vendor Disclosure and Warranty) Regulation 1986 one of which is that the land is not affected by zoning classifications under the Environmental Planning and Assessment Regulations 1980. The vendor exchanged a contract for the sale of land with the purchaser and annexed to the contract a certificate which failed to disclose that the land fell within a “Conservation Zone.” The vendor supplied the purchaser with an accurate certificate two weeks later. After the purchaser had received the second certificate he had discussions with the tenants of the property as to what would happen when the contract was completed. He also wrote a letter to the council opposing the vendor’s building application in respect of an adjacent property. As a result of the letter the council refused the application. The purchaser subsequently purported to rescind the contract pursuant to cl 7(2) of the Conveyancing (Vendor Disclosure and Warranty) Regulation which reads as follows:
In the event of a breach of warranty prescribed by clause 5, the purchaser may rescind the contract by notice in writing served on the vendor at any time prior to the completion of the contract.
Young J held that the purported recision was invalid, in part, because the purchaser’s conduct after he had received the second certificate amounted to an affirmation of the contract.
His Honour said:[27]
Were it not for the problems with the common law doctrine of election there would be no answer to the purchaser’s claim to have validly rescinded the contract. The doctrine of election however raises very serious problems.
In order to outflank these problems, purchaser’s counsel submitted that the words in the regulation “at any time prior to completion” meant that the legislature had displaced the doctrine of election and it was just not relevant to consider its application at all where there was a statutory right to rescind during this time.
Although I was initially attracted by this argument, on more mature consideration I have rejected it. First it should be observed that the words which I have most latterly quoted have been a common phrase in the standard form of contract in New South Wales since at least 1972 and appeared in the notorious cl 16 and cl 17 which gave rise to so much of the case law in the 1970s. In ACI Operations Pty Ltd v Manawaii Development Co No 7 Pty Ltd (1971) 25 LGRA 235 at 240, the very same argument was put to Helsham J in connection with cl 16 of the then form of contract and decisively rejected by his Honour. As Helsham J held the clause simply gives the right to rescind up to the very moment of completion provided that the right to rescind has not otherwise been lost. (my emphasis)
[27] (1986) 11 NSWLR 87 at 91G-92C
There is, in my opinion, no significant distinction between the relevant provisions of the Act and the legislation in Zucker. Here s5, like the clause under consideration in that case, gives a right to rescind provided it has not otherwise been lost.
In Blackman v Milne[28] Douglas J had occasion to consider whether the principles of waiver election applied in the context of the cooling-off provisions of the Property Agents and Motor Dealers Act2000 (Qld).
[28] [2006] QSC 350
Under that Act a buyer and seller, under a “relevant contract” to purchase residential property, are bound by the contract when the buyer or the buyer’s agent receive a “warning statement”(s365(1)) attached to the relevant contract and the seller or the seller’s agent has directed the attention of the buyer or the buyer’s agent to the warning statement: s365 (2)(c)(ii)). In order to be effective the warning statement must be in a form, and contain particulars, that comply with the requirements of s366. One requirement is that the buyer is informed that the contract is subject to a cooling-off period of five business days starting on the day the buyer or the buyer’s agent receives the “warning statement”. Buyers are given the right to waive or shorten the cooling off period if they provide the seller, or the sellers agent, with a certificate signed by a lawyer which states, in part, that the lawyer has explained to the buyer the effect of the contract, the purpose and nature of the certificate and the legal effect of the buyer giving the certificate (see ss369, 370). A buyer who has not waived the cooling off period may terminate the contract pursuant to s368(1).
In Blackman the seller contended that he was not bound by a relevant contract because he had failed to comply with the requirements of s365(2)(c)(ii). Douglas J rejected the argument and found that the buyer was entitled to waive the seller’s breach.
His Honour, said[29]:
It is significant here, however, that the obligation imposed by s. 365(2)(c)(ii) is statutory rather than contractual. As Connolly J said in Re Permanent Trustee Nominees (Canberra) Limited [1989] 1 Qd R 314, 322:
“The principle to be applied in such a case is shortly stated in the maxim quilibet potest renunciare juri pro se introducto. In Wilson v. McIntosh [1894] A.C. 129 the Privy Council was concerned with an application to bring land under the Real Property Act. Section 23 of the Act provided that a caveat against bringing land under the Act should be deemed to have lapsed after the expiration of three months unless within that time the caveator should have taken proceedings to establish his title. The applicant was held to have waived s.23 by stating a case and obtaining an order upon the caveator to state her case after the expiration of the three months. Their Lordships applied the maxim to which I have referred and cited with obvious approval a statement from the earlier decision in Phillips v. Martin (1890) 11 N.S.W.L.R. 153 to the effect that 'it is quite clear that a man may by his conduct waive a provision of an Act of Parliament intended for his benefit.’
Cases in which it has been held that a party may not renounce the benefit of a statutory provision abound. They will all be found to involve an element of public as opposed to private benefit. Thus a wife's right to maintenance cannot be bargained away: Davies v. Davies (1919) 26 C.L.R. 348, nor can the right to apply under the testator's family maintenance legislation: Lieberman v. Morris (1944) 69 C.L.R. 69, nor can a provision contained in life insurance legislation intended in the interests of the general public: Equitable Life Assurance of the United States v. Bogie (1905) 3 C.L.R. 878, nor can the requirement of notice of intention to call up or demand payment required by mortgagors' relief legislation, the statute being for the benefit of the public generally: Cataldo v. Clarke & Fauset [1936] St. R. Qd. 283."
See also Commonwealth v Verwayen (1990) 170 CLR 394, 496. The issue is whether the statutory provision here creates a private right merely for the private benefit of an individual such as the plaintiff or is a provision reflecting a public policy for the benefit of the community.
[29] [2006] QSC 350 [14]-[17]
His Honour then went on to discuss provisions similar to s16(c) and s33 of the Act. He said:[30]
One of the purposes of Ch 11 of the Act dealing with residential property sales is to give persons who enter into relevant contracts a cooling-off period. The content of the warning statement described in s 366D focuses on information likely to be needed by a buyer, rather than a seller, while s 367 concentrates on the buyer's rights if a warning statement is not given or is not effective. Similarly rights are given to buyers by ss 368, 369 and 370 in respect of terminating relevant contracts during a cooling-off period and waiving or shortening a cooling-off period. The focus of the chapter is on the rights of a buyer and the particular focus of s 365(2)(c)(ii) is on the obligation on the seller or its agent to direct the attention of the buyer or buyer's agent to the warning statement and the relevant contract. As to the aim of the chapter being the protection of purchasers, see also the discussion in Grieve v Enge [2006] QSC 037 at [34]-[41] (not adverted to in the appeal, Grieve v Enge [2006] QCA 213); MNM Developments Pty Ltd v Gerrard [2005] 2 Qd R 515, 519-520 at [16]-[17], [20]-[21] and Celik DevelopmentsPty Ltd v Mayes [2005] QSC 224 at [22].
The fact that specific provision was included in s 369 of the Act for the waiver, and in s370 for the shortening, of the cooling-off period was said by Mr Looney for the respondents to argue against the view that a buyer might waive a breach of the requirements of s 365(2)(c)(ii). The right to waive the cooling-off period provided in s 369 arises before the buyer is bound by the relevant contract and requires an approved certificate from a lawyer independent of the seller. Similarly the right to shorten the cooling-off period under s 370 is dependent on the giving of an independent lawyer's certificate. The sections do not address the rights of buyers to waive conduct of the type complained of here that the buyer later realises was in breach of the sellers' obligations under the Act. They focus rather on ensuring that buyers make an informed choice about the maintenance of the cooling-off period. The limited rights of waiver in that context do not persuade me that there should be no right in the buyer to waive a seller's agent's breach of s 365(2)(c)(ii).
[30] [2006] QSC 350 at [18] - [19]
His Honour went on to say:[31]
It seems to me, therefore, that the right in this case to have the buyers' attention directed to the warning statement was a statutory right created for the buyers' private benefit which they can, by their conduct, waive. That the performance of that obligation also permits sellers to clarify when the parties are bound to a contract does not stop the sellers' breach of the obligation from being characterised as a breach of a statutory right created for the buyers' private benefit.
My conclusion is, therefore, that the applicants have waived the breach by the respondents and Mr Ugrinic of their statutory obligations to direct the applicants' attention to the warning statement under s 365(2)(c)(ii) by affirming the contract in spite of those breaches. (my emphasis)
[31] [2006] QSC 350 at [20] - [21]
Although Blackman was a case in which the vendor was seeking to exploit his own breach of the legislation the decision of Douglas J recognised that a purchaser could affirm the contract and thereby waive his right to cool-off in the context of legislation which is not markedly dissimilar to the Act.
Conclusion
In my view it cannot be said that the defendant’s case was bound to fail either as a matter of fact or law. It appears to me that the defendant has an arguable case founded on the principles of election and estoppel. Accordingly, summary judgment should not have been entered against the defendant.
The appeal must be allowed.
Orders
1Appeal allowed.
2Judgment for plaintiffs entered on 18 May 2006 set aside.
I will hear the parties as to costs and the need for any consequential orders.
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