Stower v Furness
[2000] QCA 525
•22 December 2000
SUPREME COURT OF QUEENSLAND
CITATION: Stower v Furness [2000] QCA 525 PARTIES: DESLEY LYNETTE STOWER
(plaintiff/respondent)
v
WAYNE VICTOR FURNESS
(defendant/appellant)FILE NO/S: Appeal No 143 of 2000
DC No 315 of 1996
DC No 1807 of 1996DIVISION: Court of Appeal PROCEEDING: General Civil Appeal ORIGINATING COURT: District Court at Southport
DELIVERED ON: 22 December 2000 DELIVERED AT: Brisbane HEARING DATE: 10 October 2000 JUDGES: Pincus and Thomas JJA, Mackenzie J
Separate reasons for judgment of each member of the Court, each concurring as to the orders madeORDER: Appeal allowed with costs. The respondent’s action is dismissed and the respondent is ordered to pay the appellant’s costs of and incidental to the action. CATCHWORDS: CONTRACTS – CONSTRUCTION AND INTERPRETATION OF CONTRACTS – OTHER MATTERS - construction of provision in REIQ standard contract for sale of residential land – whether right to terminate had arisen by reason of failure to disclose absence of, or failure to comply with, all necessary approvals in relation to the construction of the building and improvements – where clause required that approvals be obtained and complied with at the date of contract – subsequent approvals or waiver of need for approval did not invalidate prior exercise of right to terminate
CONTRACTS – DISCHARGE, BREACH AND DEFENCES TO ACTION FOR BREACH – REPUDIATION AND NON-PERFORMANCE – REPUDIATION – GENERAL PRINCIPLES
Building Act 1975 (Qld), s 30A, s 66A
Standard Building Law (Qld), s 2.1, s 5, s 6.4Mitchell v Spring [1996] 1 Qd R 487, applied
COUNSEL: D C Andrews for the appellant
M P Amerena for the respondentSOLICITORS: Gadens Lawyers for the appellant
Bruce J Martin (Surfers Paradise) for the respondent
PINCUS JA: The question raised by this appeal is whether the appellant had the right to rescind under cl 21.1(b) of the contract for sale of the property in question. The onus was on the appellant to establish the existence of that right; what had to be proved was that at the date of the contract, 23 November 1994, "all permissions consents and approvals required from the relevant local authority ... have not been obtained or having been obtained, have not been complied with in all respects ...".
Although it is not clear that the case was conducted on this basis, there does not appear to me to be any doubt that the appellant had to show that there was an unfulfilled requirement for non-compliance at 23 November 1994, not later. If, for example, the appellant proved only that at the date of settlement there was an outstanding permission, the right to rescind under the provision relied on would not exist. Further, I can find nothing in the record, nor in the arguments advanced, which amounts to an admission advancing the appellant's case. Therefore, unless there is in the evidence material which unequivocally supports a finding on one of the four points relied on by the appellant, it appears to me that the appeal must fail.
Certificate of final completion
It was common ground that an approval of the building work initially contemplated was obtained on 21 July 1993. The appellant's complaint is that there was not at the relevant date a "Certificate of final completion, or other written approval to occupy" as required by condition 2 of the approval obtained. So the appellant had to show that on the date of use or occupation, being a date before the contract date, the building was used or occupied. The only evidence called on that point was (p 14) to the effect that the respondent and Mr Stower occupied the property until the appellant occupied it "some time in 1994". It appears that that date is incorrect.
Clause 3 of the special conditions of contract contemplated that the appellant would take possession "as from the 14th January 1995". I cannot find in the record any evidence of the date on which the appellant in fact took possession, but that is of no real consequence. There is no explicit evidence that on 23 November 1994 the building had been either used or occupied and so the appellant fails on this point; it does not appear to me to be enough that one would tend to assume that the property was, at the date of the contract, already occupied.
Request for building inspection
Condition 5 of the building approval which I have mentioned required that the permittee request an inspection before "completion of building prior to occupation". I do not doubt the validity of this condition, although there is no mention in the relevant provision of the Standard Building Law of inspection on final completion: see s 5.1(1)(b).
The wording of the condition is puzzling. It requires in terms that there be an inspection requested before the building's completion – but how long before? Surely it was not intended that the condition would be complied with if an inspection were requested after work had progressed for, say, only a day or two. That would defeat the evident purpose of the condition, which is to make sure that the building is when completed fit for occupation. Although it is difficult to be confident about what was meant, one must try to reach a conclusion which makes practical sense. On the whole, and not without doubt, I think it should be read as requiring that there be a request for inspection on completion, but before occupation.
Is it proved that the condition, so read, was breached? In my opinion the answer must be no. The reason is that, as mentioned above, there was no proof of the date of occupation; if the building was first occupied after 23 November 1994 (the date of the contract) the last date for request for the building inspection would not have arrived. In my opinion the appellant fails on this point also.
Request for building inspection prior to occupation
It seems unnecessary to discuss this in detail, in view of the conclusion reached with respect to the first point; since the appellant did not prove that the building was occupied on or before the date of the contract, this third ground must also fail.
Approval for rear sails
It appears to me that the evidence proved that the rear sails had been affixed before the contract which the appellant terminated was made: see par 12 and par 14 of the appellant's affidavit which begins at p 230, and Exhibit WVF3 to that affidavit, at p 244. Section 30A(1) of the Building Act 1975 requires that "approval of the local government" be obtained before carrying out "building work" at the relevant date. The expression "building work" was defined, so far as relevant to the present case, as meaning –
"work in the nature of –
(a) the erection, construction, underpinning, removal, repair, placing, alteration of, addition to, or demolition of, any building or other structure –...
but does not include work declared by the Standard Building Law not to be building work;".
The expression "building" had a definition reading in part as follows:
"... a fixed structure that is wholly or partly enclosed by walls and is roofed ...".
So far as one can tell from the depiction of them, the sails do not appear to be enclosed by walls. But the expression "structure" included –
"... a wall or fence and anything that is affixed to or projecting from a building, wall, fence or other structure".
The sails were affixed to the house and projected from it, so fall within that definition. Then there is the question whether the exclusion at the end of the definition of "building work" covers the sails. The Standard Building Law at the date of the contract is contained in Reprint 1; it seems evident enough that the sails were not excluded: see cl 1.2(b).
The next question is whether under cl 2.3 of the Standard Building Law, as it was at the relevant time, the local government was empowered to and did dispense with the lodgement of drawings, specification and a plan or with the obtaining of approval to the carrying out of the building work. Lodgement of drawing specifications and a plan could be dispensed in relation to –
"(a)(i)building work consisting of a minor alteration to an existing building or other existing structure ...".
It seems to me impossible to argue that sails are merely a minor alteration. They must constitute more than that, both in appearance and functionally.
Under cl 2.3(b), approval to the carrying out of building work "connected with any of the following Class 10 buildings or other structures" may be dispensed with. Reference to Part A, 3.2 of the Building Code of Australia shows that a Class 10 building is a "non-habitable building or structure"; there are two sub-classes. The house to which the sails were attached is outside Class 10. But on its proper construction cl 2.3(b) appears to contemplate that a dispensation with obtaining approval to the carrying out of work connected with any of the types of buildings and structures listed is possible, so long as the buildings and structures are themselves within Class 10. There is a list in cl 2.3(b)(i) of types of buildings or structures, which finishes with the words "or the like". The list includes a "greenhouse, conservatory, summerhouse". A greenhouse is usually a building, commonly glass-roofed, in which plants are grown; a conservatory is an expression which may be another name for a greenhouse or else a room (usually an annex to a house) in which plants are grown; a summer house is a building to which people resort to avoid the heat of the day, in summer. When considered as buildings ancillary to a residence, all three expressions have in common with the sails in question that they are capable of providing some shelter for people.
It appears to me consistent with the spirit of subparagraph (i) that the sails should be regarded as akin to "greenhouse, conservatory, summer house". The result is that under the clause the appellant could obtain dispensation with the necessity to lodge drawings, specification and a plan in relation to the sails and dispensation with the necessity to obtain approval to the carrying out of the building work connected with the sails.
By letter dated 4 May 1995, the Council required the lodgment of a building application for the sails, but on 17 May 1995 it wrote to say that a building application was not required. That letter makes no reference to the lodgment of drawings, specifications and a plan, but in my view the letter of 17 May should be taken to dispense with the necessity of lodging them.
The respondent's remaining difficulty, then, with respect to the sails is that although it obtained a dispensation the date of it was later than the date of the contract, 23 November 1994, and later than the date of rescission by the appellant. At the date of the contract and at the date of rescission the respondent had not fulfilled its obligations with respect to approval of the sails. On that basis, in my opinion, the appeal must be allowed and an order made as indicated by Thomas JA.
THOMAS JA: This case concerns the application of clause 21.1(b) of a form of REIQ contract for the sale of residential land that was in use in 1994.
The appellant was the purchaser under such a contract dated 23 November 1994. He agreed to purchase residential premises at Southport for $520,000. The date for completion was 14 July 1995, but he was let into possession on 14 January 1995 under a residential tenancy agreement. By a letter of 5 May 1995 he purported to rescind the contract, relying upon clause 21.1(b). It provides, so far as is relevant –
"Should it be established that at the date of the contract;
(a)…
(b)All permissions, consents and approvals required from the relevant local authority or other body having jurisdiction for the construction of the improvements on the land have not been obtained, or having been obtained have not been complied with in all respects …
and any such facts are not disclosed in the special conditions or elsewhere herein the Purchaser may by notice in writing to the Vendor given on or before the date of completion terminate the contract …"
No disclosure was made in the contract of four matters that are said to have been required by that clause to be disclosed.
The property was subsequently resold for $450,000 and the vendor succeeded in the District Court in obtaining an assessment of damages of $81,749 (which included incidental expenses of resale) and additional interest assessed at $42,000.
The purchaser appeals, essentially on the basis that he validly rescinded in reliance upon clause 21.1(b).
The vendor caused the relevant house to be built in 1993 after obtaining approval of the plans by means of a 'building work approval' from the Gold Coast City Council dated 21 July 1993. That would seem to have been an approval under s 30A of the Building Act 1975. The approval was subject to certain conditions, two of which are here relevant. One, (condition No 2), was that "it" (the building work) "must not be used or occupied until a Certificate of Final Completion or other written approval to occupy has been issued by council". The other, (condition No 5), was that the "permittee" was required to request an inspection at least 48 hours before completion of the building prior to occupation. The condition contained a statement that it was imposed "to enable council to ensure the construction has been carried out in accordance with the requirements of the Building Act prior to that stage of work being concealed" and a further statement that "a permittee's failure to request an inspection as required above will result in council refusing to certify that the building has been constructed in accordance with the Building Act". It also contained the following warnings:
"You are warned that the absence of a 'final' completion by council can seriously prejudice the sale of the property.
A final 'building' certification will not be issued until final approval of the plumbing and drainage installation has been granted by a Plumbing and Drainage Inspector. The Permitee is responsible to arrange for inspection of these installations."
No such request for inspection was made and the building was completed without obtaining a "Certificate of Final Completion". The vendor and her husband then commenced to occupy the building some time in 1993. In due course the subject sale was made to the appellant in November 1994.
On 4 May 1995, some months after the vendor had given possession and occupation to the purchaser, the council advised the purchaser's solicitors as follows:
"Final inspections of the house … were not carried out by council during progress of the work. It is therefore not possible for council to certify that the work was carried out in accordance with the Building Regulations. There is no record of a building approval having been granted for building work comprising … rear sails. The owner will be required to lodge a building application for such work to enable an assessment to be made."
On 5 May 1995 the purchaser notified the vendor that he was rescinding, noting that –
"… final inspections of the house … were not carried out by the council nor did the council grant building approval for the … rear sails. These facts are not disclosed in the … contract and … our client elects to and hereby terminates the contract pursuant to … clause 21.1(b) …"
On 17 May 1995 the council advised the purchaser's solicitors that further investigations had been made and that a building application was not required for the sail. The evidence suggests that this was prompted by an approach to a council representative by the vendor's husband, and that the representative had noted on the file that "I will accept sail as it is only marginally encroaching in setback".
The vendor, through her solicitors, rejected any right of rescission on the part of the purchaser, and by letter of 7 June 1995 treated the purchaser's letter as an act of repudiation and rescinded the contract. Some time later it seems that a request was made to the council on behalf of the vendor for final inspection of the building. This is said to have resulted, on 21 July 1995, in a "building approval" in that the building surveyor was said to have expressed satisfaction that the final stage of work was satisfactory and that it generally complied with the provisions of the Building Act "and other relevant legislation". This statement however was not made until after the agreed date for completion of contract (14 July 1995) and well after the purchaser's rescission of 5 May 1995.
Counsel for the appellant, Mr Andrews, relies on four separate matters to trigger the appellant's rights under clause 21.1(b). The failure to obtain a certificate of final completion or other written approval to occupy before occupation is said to be firstly a failure to obtain an approval required from the relevant local authority or body, and secondly a failure to comply in all respects with an approval that has been obtained; thirdly, the failure to request a building inspection prior to occupation was a further failure to comply in all respects with an approval that had been obtained; and fourthly, no approval was obtained for the rear sails which were affixed by bolts to the dwelling by the vendor after they commenced occupation.
The relevant building legislation at the time included the Building Act 1975 and the Standard Building Law (as amended to 1994). Section 30A(1) of the Act provides:
"A person shall not carry out or cause to be carried out building work in respect of which the Standard Building Law required the approval of the local government unless such approval has first been obtained."
Subsection 6 provides that in carrying out the building work a person shall comply with the terms and conditions of the approval.
"Building" is defined to mean "a fixed structure that is wholly or partly enclosed by walls and is roofed …". In turn, "structure" is defined to include a wall or fence and anything that is affixed to or projecting from a building, wall, fence or other structure. Section 2.1 of the Standard Building Law then in force under the Building Act provides that approval of the local government is required to the carrying out of all building work other than certain special exceptions which are not here relevant. Section 5 of that by-law authorises the imposition of conditions such as inspections at various stages of construction. The conditions imposed in the council's "building work approval" of 21 July 1993 are broadly consistent with section 5, though there is no mention in the Act or in s 5 of the by-law of a certificate such as the ”Certificate of Final Completion" mentioned by the council in condition No 2 of its "building work approval".[1]
[1]See para [21] above.
In the District Court the learned trial judge considered that the belated letters and indications obtained from the council or its officers were a sufficient answer to the purchaser's claim that breaches were proven of clause 21.1(b). His Honour found that on 9 August a final inspection was carried out and that it was "approved to the satisfaction of the building surveyor". There is no suggestion that any Certificate of Final Completion was ever issued, and his Honour seems to have relied in this respect on the evidence of a Mr Church who produced the council file, and informed the court that "there's a letter stating that a final inspection was carried out on 9 August [1995] and has been approved to the satisfaction of the building surveyor." His Honour's essential reasoning is in the following passage:
"However, in my view, the timing of the council's approval of the building as having been constructed satisfactorily is not harmful to the plaintiff in the circumstances of this case. The relevant certificate which had not been given by the local authority is the final certificate issued upon completion. The building was undoubtedly completed well before the date of the contract. There is no suggestion that any further building work had been commenced or contemplated beyond that. Unlike a footing or slab inspection, a final inspection can be made and a certificate issued, equally validly, at any time after completion. In the circumstances currently before me a final certificate or other indication that the subject house had been constructed according to the council's requirements applies to the condition of that house throughout the entire period between completion of the building and the time of the inspection, provided there has not been any further work completed or any significant deterioration. Thus, even a certificate issued in August 1995 establishes that as at the date of the contract there had been no failure to comply with the requirements of the relevant local authority. Accordingly, the subject property was not "adversely affected" within the meaning of clause 21.1 of the contract. The belated statement by the Gold Coast City Council that approvals were not required in respect of the sails and the pergola has a similar effect."
The reference to the words "adversely affected" is presumably to the heading to clause 21 which reads "Property adversely affected".
I do not think that this affords any answer to the appellant's case. Clause 21.1 is concerned with a state of affairs that can be shown to exist "at the date of this contract". Leaving aside questions of waiver, estoppel or affirmation, that clause gives a purchaser the express right to terminate by notice in writing on or before the date of completion if it can establish non-compliance with that clause at the date of the contract. This has been expressly recognised in this court with respect to an identical clause in Mitchell v Spring[2]. In that case, as in the present one, the vendor sought to rely upon a belated intimation from the council in response to an application made after the building had already been completed. The council had advised that in the absence of timely inspections it was not possible to certify that the work was structurally adequate, but had gone on to intimate that "from the information available and from what was visible during inspection, the building work does not appear to be contrary to the provisions of the Building Regulations." The council had further advised "there is no objection to the building work remaining as constructed". Under s 66A[3] of the Building Act a local government is said to be "competent" to decide an application for approval for building work even though the building work has been commenced or completed. The court considered that assuming (but not deciding) that such an approval would produce the result that there would be no further requirements for a s 30A approval, the letter did not constitute an approval under s 66A.
[2][1996] 1 Qd R 487.
[3]Section 66A, "Application for approval where building work commenced 66A (1) It is competent for a person to make and for a local government to decide on an application for approval to the carrying out of building work even though the building work to which the application relates has been commenced or completed.
(2)Subsection (1) must not be construed as affecting the operation of s 30A(1)."
More pertinently for present purposes, Pincus JA observed:
"It is necessary to keep in mind that the 25 July 1994 letter is too late to qualify as or form part of an approval, as the question posed by clause 21.1 of the contract is whether the necessary permission, consents and approvals had been obtained at the date of the contract, which was 14 June 1994."
His Honour also observed:
"The result is that the appeal fails. This may seem an unfortunate consequence and one must suspect that the result is, in a broad sense, unjust; it emerges in part from the rigidity of clause 21.1(b) which may enable a party to escape from obligations under a building contract on technical and indeed trivial grounds."[4]
[4]Ibid at 492.
McPherson JA considered that the term "approvals" should not lightly be regarded.
"One would therefore naturally expect that in using the expression 'approvals' in clause 21.1 the parties intended it to refer to something that was recognisable as such: that is, which possessed the outward appearance of an approval by being signified in some way that disclosed its character. Conversely, one would not expect it to refer to something that did not appear to anyone but the local authority in question to be an approval, but which the council, in this case over a fortnight later, intimated was its standard form of approval or 'authorisation', if that is the same thing. In other words, the parties by their contract surely cannot be taken to have intended that an approval wholly subjective to and known to be such only by the local authority itself and not by anyone else, should satisfy clause 21.1."
His Honour further observed:
"It only remains to add that the Real Estate Institute and the Law Society would, in the interests of their clients, be well advised to reconsider the retention in standard form contracts of this kind of the provision in clause 21.1(b) in its present form. While it remains, contracts for the sale of many properties, some of great value, will be at risk of termination on the unexpected and, one suspects, often arbitrary and irrelevant ground that some structure like a pergola or car port was erected on it without the necessary local authority approval."
In the present appeal Mr Amerena for the vendor submitted that the evidence was sufficient to support the existence of what was referred to as a s 66A approval[5]. He further submitted that such approval, when given, has a retrospective effect which is sufficient to satisfy or render unnecessary any further approval. It becomes effective, he submitted, from the time of completion of the building work. There are several answers to this submission, but the most obvious one is that there is no basis upon which a s 66A approval (even if prospectively effective) could be given a retrospective effect so as to destroy rights already accrued in favour of a third party. This section cannot be construed as having been intended to destroy such rights or to reverse a factual situation and its consequences which may have existed for a very long period.
[5]ie under s 66A of the Building Act 1975.
Mr Amerena further submitted that it would be unfair to permit a purchaser to avoid contractual obligations on such a basis. It must be observed however that the purchaser had already rescinded as he was entitled to do before the vendor attempted to tidy up the deficiency. Moreover unfairness is not so obvious when it is remembered that the contract only requires disclosure of such matters by a vendor who is in a better position to know of them than the purchaser. I do not suggest that the purchaser's rescission in this case was other than the taking advantage of a technical right, but it was nonetheless his right to do so.
It is desirable that something further be said in relation to the evidence establishing the purchaser's right. The approval which is to be obtained under s 30A of the Building Act is in the first instance an approval which will permit someone to carry out building work. In the normal case plans are submitted and must be approved before building work can commence. In the present case a s 30A approval has existed in relation to the building work since 21 July 1993. It was however a conditional approval, subject to satisfaction of prescribed conditions. Obviously the issue by the council of a Certificate of Final Completion to the satisfaction of the council would be the administrative means adopted for demonstrating that the provisional s 30A approval has become unqualified. The court however was not referred to any by-laws or other subordinate legislation making necessary the "Certificate of Final Completion" referred to in the conditions of the approval of 21 July 1993.[6] Although the distinction was not clearly adverted to in submissions it seems to me that different considerations may apply concerning the possible application of clause 21(1)(b) of the contract to the approval that is required under s 30A and to the "Certificate of Final Completion" which the council said was necessary before occupation as a condition of the s 30A approval.
[6]See above at para [21].
So far as the s 30A approval is concerned, there is no doubt that such an approval was "required" for the purposes of clause 21.1. But a s 30A approval was obtained, and the question here is whether a conditional approval of that kind amounts to an "approval required from the relevant local authority having jurisdiction for the construction of the improvements" within the meaning of the clause. No argument was addressed to this particular issue.
Without finally determining the question, I am not at this stage prepared to hold that under clause 21.1(b) the purchaser has proved that a s 30A approval required from the relevant local authority was not obtained. It may well be that the vendor at material times had a s30A approval, despite the fact that it remained conditional.
So far as the "Certificate of Final Completion" is concerned, on the material presented to the court, there is no direct legislative requirement that such a certificate be obtained, either under legislation or subordinate legislation. It is clear however that under the Building Act and Standard Building Law the local authority is given the power to impose conditions including the giving of notices permitting inspection of work at stages designated by the local authority. It was also the express duty of a local authority at the relevant time to prepare and issue a Certificate of Classification on the substantial completion of the building, or earlier if consent was to be given to occupation of part of the building before the entire building was substantially completed.[7] A copy of such a certificate was required to be retained by the local government and to be open to inspection. The by-law further provides that a person must not use or occupy any part of the building for which a certificate of classification is required to be prepared unless the certificate has been issued and remains in force. However no case has been made in relation to the existence or non-existence of a Certificate of Classification. The "Certificate of Final Completion" referred to in condition No 2 of the s 30A approval, on the evidence and submissions to the court would seem to have been the product of an administrative exercise by the local council of the powers and duties entrusted to it by the Standard Building Law. Mr Amerena on behalf of the vendor submitted that such a certificate was not contemplated as a relevant permission, consent or approval under clause 21.1(b) of the contract because it was not related to construction, but the learned trial judge, rightly in my view rejected that submission. The certificate was certainly capable of being a "permission" within the meaning of the clause, but the question whether it was "required" within the proper meaning of clause 21.1(b) is more difficult. As there are other grounds upon which it must be held that the purchaser proved his entitlement to rely on clause 21.1(b), I prefer to leave this difficult question open.
[7]Standard Building Law s 6.4.
It is sufficient for the purchaser to go to the second part of clause 21.1(b) in order to prove a non-compliance. Assuming in favour of the vendor that the necessary approval under s 30A of the Building Act had been obtained (which footing the vendor must concede she needs in order to avoid liability under the first part of clause 21.1(b)) the vendor plainly had not at the date of the contract complied in all respects with that approval.
With respect to the four matters of non-disclosure relied on by Mr Andrews -
(a) On the evidence and the provisions of the Building Act and Standard Building Law it seems that approval was required for the sails and that such approval was not obtained. The learned trial judge held that the council's letter of 17 May 1995 indicated either that no approval was required for the sails, or that if such approval was required the council waived it. The letter certainly does not prove the former, but it might be construed as a waiver. Section 2.3 of the Standard Building Law gives to the local authority some power to dispense with the necessity of lodging plans and of obtaining approval to the carrying out of certain classes of building work. Accepting in the vendor's favour for present purposes that the council waived this particular requirement on 17 May 1995, the waiver is too late to assist the vendor, because on the evidence there was a non-compliance at the date of the contract, and the purchaser had rescinded before any waiver;
(b) The remaining non-compliances were all matters falling within the provision that an approval "having been obtained [has] not been complied with in all respects". That was certainly true of the situation at the date of the contract and it remained true at the time when the purchaser rescinded. The view of the learned trial judge that a certificate issued in August 1995 would establish that as at the date of the contract there had been no failure to comply with the requirements of the relevant local authority is untenable. It is enough to say that the oral approval apparently given by the building surveyor on or about 9 August 1995 could not have the effect of rendering invalid a rescission which was plainly valid and effective some three months previously.
For the above reasons, the only view open on the evidence was that the purchaser established his right of rescission under clause 21.1(b).
Costs
A submission was received on behalf of the respondent after the hearing of the appeal for an order, in the event that the appeal was allowed, for the costs of trial according to issues, and (by inference) that the appellant be deprived of any costs concerning mitigation of damage. Having read the record I do not think there is any justification for making such an order.
Orders
The appeal should be allowed with costs. The respondent's action should be dismissed and the respondent should pay the appellant's costs of and incidental to the action.
MACKENZIE J: I have had the advantage of reading the reasons for judgment of Thomas JA. For the reasons advanced by him the purchaser had a right of rescission under cl 21.1(b) of the contract.
I specifically agree with his analysis which demonstrates that the relevant date was the date of the contract and that, at that date, an approval required from the local authority had not been complied with in all respects.
It may be thought that a provision such as cl 21.1(b) lends itself to efforts to avoid contracts for relatively inconsequential reasons, as Thomas JA in this case and Pincus JA in Mitchell v Spring (1996) 1 QdR 487 have noted. However, where the requirements implicit in cl 21.1(b) have not been complied with, exercise of the right to rescind must be allowed to be availed of.
I agree with the orders proposed by Thomas JA.
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