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  • Appeal Determined (QCA)

Fletcher v Kakemoto

 

[2011] QCA 46

Reported at [2012] 1 Qd R 107

SUPREME COURT OF QUEENSLAND

 

 

CITATION:

Fletcher v Kakemoto & Anor [2011] QCA 46

PARTIES:

BRIAN FLETCHER
(appellant)
v
AKEO KAKEMOTO
(first respondent)
LUCY COLE PRESTIGE PROPERTIES – PARADISE WATERS PTY LTD
ACN 101 178 705
(second respondent)

FILE NO/S:

Appeal No 7764 of 2010
SC No 2626 of 2008

DIVISION:

Court of Appeal

PROCEEDING:

General Civil Appeal

ORIGINATING COURT:

Supreme Court at Brisbane

DELIVERED ON:

18 March 2011

DELIVERED AT:

Brisbane 

HEARING DATE:

16 November 2010

JUDGES:

Margaret McMurdo P, Chesterman JA and Philippides J
Separate reasons for judgment of each member of the Court, each concurring as to the orders made

ORDERS:

1.   The appeal be dismissed.

2. The appellant pay the respondents’ costs of and incidental to the appeal.

CATCHWORDS:

CONVEYANCING – STATUTORY OBLIGATIONS OR RESTRICTIONS RELATING TO CONTRACT FOR SALE – PROTECTION OF PURCHASERS – OTHER MATTERS – where the buyer consented to waiving the cooling off period – where the proposed contract was a 'relevant contract' – whether the Property Agents and Motor Dealers Act 2000(Qld) requires Form 30C to be signed each time an amendment is made to a proposed contract – whether the vendor validly terminated the contract by reason of an alleged non-compliance with s 366B(4) and s 366D(3) of the Property Agents and Motor Dealers Act 2000 (Qld)

Property Agents and Motor Dealers Act 2000 (Qld) s 363, s 365, s 366B(4), s 366D(3), s 367

Doolan v Rothmont Projects Pty Ltd [2010] QSC 193, distinguished
Johnston v Jewry [2008] 1 Qd R 360; [2007] QCA 188; considered

COUNSEL:

The appellant appeared on his own behalf
J Sweeney for the first respondent
S Couper for the second respondent

SOLICITORS:

The appellant appeared on his own behalf
Hickey Lawyers for the first respondent
Carter Newell Lawyers for the second respondent

  1. MARGARET McMURDO P: The appellant, Brian Fletcher, entered into a contract with the first respondent, Akeo Kakemoto, for the sale of the penthouse in the Q1 apartment building, Surfers Paradise, for $8.5 million on 13 April 2007.  Settlement was due "on or before 9 months from the contract date".  Mr Fletcher purported to terminate the contract on 14 January 2008.  He contended he was entitled to do so under s 367 Property Agents and Motor Dealers Act 2000 (Qld)[1] because of non-compliance with s 366B(4) and s 366D(3), contained in Ch 11 (Residential Property Sales) of that Act.[2] 
  1. I agree with Philippides J's reasons for refusing this appeal with costs, but add a brief observation in case our construction of Ch 11 is wrong.
  1. Philippides J has set out the relevant statutory provisions.[3]  On 9 April 2007, Mr Fletcher signed both a proposed contract for the purchase of the penthouse and a Ch 11 warning statement.  The primary judge found this was "a proposed relevant contract" under Ch 11.  A few days later, on 13 April 2007, the parties executed a contract for the sale of the penthouse.  It is not disputed that this contract was "a relevant contract" under Ch 11.  There were variations between the proposed contract of 9 April 2007 and the relevant contract executed on 13 April 2007.  These changes, as the primary judge recognised and as is clear from Philippides J's reasons,[4] were not significant, especially in the context of an $8.5 million sale.  The relatively minor changes were of the fine-tuning kind, common as parties negotiate the final terms of a contract for the sale of residential property.  These relatively minor changes between the proposed contract of 9 April 2007 and the relevant contract executed on 13 April 2007 were not such as to make the proposed contract of 9 April 2007 something other than "a proposed relevant contract" within the meaning of that phrase in s 366B; s 366D and s 367 of the Act.  If this Court is wrong, and Doolan v Rothmont Projects Pty Ltd[5] is rightly decided, the primary judge correctly distinguished it from the present case. 
  1. I agree with the orders proposed by Philippides J.
  1. CHESTERMAN JA: I agree with the orders proposed by Philippides J and with her Honour’s reasons for making those orders.
  1. PHILIPPIDES J: On 13 April 2007 the appellant, Mr Brian Fletcher, as purchaser, entered into a contract with the first respondent, Mr Akeo Kakemoto, as vendor, for the sale of an apartment in the Q1 building at the Gold Coast (“the property”) for $8,500,000.  The sale was a “unit sale” within the meaning of that term in the Property Agents and Motor Dealers Act 2000 (“the Act”).  On 14 January 2008 Mr Fletcher purported to terminate the contract pursuant to s 367 of the Act. 
  1. The issue of whether Mr Fletcher had validly terminated the contract by reason of alleged non-compliance with s 366B(4) and s 366D(3) of the Act was ordered to be tried as a preliminary matter.

Background facts

  1. On 9 April 2007, Mr Fletcher attended at the offices of the second respondent, Lucy Cole Prestige Properties Paradise Waters Pty Ltd and spoke to its principal, Ms Lucy Cole, indicating that he wanted to make an offer to purchase the property for $8,500,000.  Ms Cole instructed an employee to prepare the relevant documentation so that Mr Fletcher could do so.  Mr Fletcher was handed a bundle of documents by Ms Cole which included:

(a)an unsigned and undated copy of a contract for the sale of the property (“the 9 April proposal”);

(b)a two-page “PAMD Form 30c” document (“the warning statement”); and

(c)a one-page document headed “The Buyer/The Seller” (“the first buyer’s acknowledgment”).

  1. The trial judge set out the factual background from the time of the 9 April 2007 meeting to the signing of the contract as follows:

“[Mr Fletcher] in his written submission stated that he was in agreement with all of the events around the meeting of 9 April as stated in the affidavit of Lucy Cole.  At that time there was only one affidavit from Ms Cole (dated July 2008), in which she said that:

(a)she, Mr Fletcher and Mr Blunt of her office discussed matters including the terms on which Mr Fletcher would be prepared to make an offer to purchase the property;

(b)she told Mr Fletcher that it was essential that the ‘cooling-off period’ be waived when making any offer as the auction of the property was set to proceed on 15 April;

(c)[Mr Fletcher] said that he would leave his offer open until 5 pm on Friday (13 April), was prepared to waive the cooling-off period and would get the necessary solicitor’s waiver form by Friday;

(d)she took [Mr Fletcher] through the bundle of documents referred to above, document by document;

(e)she directed [Mr Fletcher’s] attention to the warning statement, the information sheet and the disclosure statement; and

(f)[Mr Fletcher] then signed documents including the warning statement under the Act.  It was signed by Mr Fletcher before he signed the proposed contract.

In her affidavit of July 2008 Ms Cole said that between 10 April and 12 April [Mr Fletcher] kept coming back to her office asking whether there was any news about the contract.  She told him that there were some changes being made to the special conditions and would advise him as soon as she had further details.  On the morning of Friday 13 April a document from Mr Fletcher’s then solicitors was sent to Ms Cole’s office.  That document demonstrated that [Mr Fletcher] had received the appropriate advice about waiving the cooling-off period and that he did, in fact, waive the cooling-off period.

At 3.30pm on 13 April [Mr Fletcher] arrived at the premises of the third party to go through the proposed changes to the offer.  Ms Cole took [Mr Fletcher] through the documents, explained them to him, and he initialled those parts of the documents which had been changed.  There were no changes to the warning statement under the Act but Ms Cole deposes and, in the absence of any crossexamination of her on this or any other point, I accept that she drew [Mr Fletcher’s] attention to the warning statement under the Act.

After that some further changes were sent from the lawyers for the vendor and they were inserted into the proposed contract and were again initialled by [Mr Fletcher].

Ms Cole met with the vendor and his solicitors at 4.30pm and the vendor signed and initialled the documents.  By 14 May, [Mr Fletcher] had paid the sum of $850,000 as the deposit.  Settlement of the contract was due to take place on or before 9 months from the contract date.

On 14 January 2008, the then solicitors for [Mr Fletcher] wrote to the solicitors for the vendor in the following terms:

“We are instructed that section 366B(4) of the Property Agents and Motor Dealers Act 2000 was not complied with, in that our client’s attention was not directed by your client or your client’s agent to the information sheet and any disclosure statement.

On that basis we are instructed and do terminate the contract pursuant to section 367(2).

Please have your client refund the deposit within fourteen (14) days.”

The trial judge’s decision

  1. The primary issue raised before the trial judge by Mr Fletcher concerned the fact that, while he signed the warning statement on 9 April, he did not sign the same or another warning statement on 13 April. It was contended that the Act required that he sign the statement again, notwithstanding having signed one on 9 April. The respondents disputed that proposition, submitting that the contract signed by Mr Fletcher on 13 April was, in all relevant respects, the document signed by him on 9 April.
  1. In considering this issue, the trial judge referred to the statements made by Mr Fletcher and Ms Cole at their meeting on 9 April and made the following observations:

“It is important to note that [Mr Fletcher] then became aware that the ‘cooling-off period’ had to be waived when making any offer. That was accepted by him and, as I have recorded above, the relevant solicitor’s certificate with respect to waiving the cooling-off period was received on the morning of 13 April. It was, then, at that point that an offer could begin to be made. I accept that the documents signed on 9 April were not presented to [Mr Kakemoto] until late on the afternoon of 13 April. In the period before the presentation of those documents on 13 April a number of changes were suggested by an employee of Hickey Lawyers (Mr Boseljevic), who were acting for Mr Kakemoto.”

  1. The learned judge commented on the changes made at Mr Boseljevic’s suggestion as follows:

“(a)Page 6 of the reference schedule.  He made some minor changes to the reference to the certificate of title, the time for payment of the deposit, some body corporate information, and some information concerning insurance.  All of these were contained elsewhere in the documents which constituted the bundle signed by Mr Fletcher.  Those changes made no difference to the terms of the contract.

(b)Page 7.  He inserted the words ‘from the contract date’ after the words ‘on or before nine months’ with respect to the date for settlement.  That change would have been a necessary implication in the contract.

(c)Page 8.  He deleted Special Conditions 5, 6 and 7, and renumbered 8 and 9 so that they became Special Conditions 5 and 6.  Clause 5 was irrelevant as it was a subject to finance clause and the contract was not of that type.  The former clauses 6 and 7 were reworded and inserted in annexure ‘A’.  They had the same effect and more precisely represented the intentions of [Mr Fletcher].

(d)He replaced the words ‘PAMD 30(c)’ with the words ‘cooling-off period’ in renumbered Special Condition 5, which was consistent with the intention of [Mr Fletcher].

(e)He drafted page 9 in order that clauses 6 and 7 might be more clearly understood.  The effect of those provisions was the same as those which had appeared earlier in the contract.”

  1. The trial judge noted that later on 13 April a further change was made by Mr Boseljevic with respect to the licence fee to be paid and concluded that those changes would have been implied in the contract had they not otherwise been inserted.  There was one further late change with respect to the responsibility of Mr Fletcher for the consumption of electricity from the date of possession.  His Honour observed that that “was inserted but would have been the case, in any event, from the terms of the contract for residential lots in the Community Titles Scheme”. 
  1. The trial judge observed that on 13 April, as mentioned, Ms Cole took Mr Fletcher through all the documents again and Mr Fletcher initialled the changes to the proposed contract (his attention having been drawn to the warning statement made under the Act, the agent’s disclosure statement, the pre-signing acknowledgement, and the disclosure statement under the Body Corporate and Community Management Act 1997).  His Honour further noted that thereafter, the documents were presented for the first time to Mr Kakemoto, who then signed the contract and initialled the appropriate places in that document.  Mr Fletcher was then provided with the documents and his attention drawn to the warning statement as required by the Act.
  1. In respect of Mr Fletcher’s argument that the alterations made to the proposed contract were such that it was in fact a new contract, the trial judge noted that he had dealt with a similar submission in Doolan v Rothmont Projects Pty Ltd [2010] QSC 193.  His Honour, however, distinguished Doolan stating:

“The difference in that case, though, was that the prospective purchasers made an offer which was responded to by the vendor with a counter-offer.  In other words, the vendor had received and considered the offer, assessed it as being inadequate in some respects, and proposed a different contract.  That is not what occurred here.  It was clear to Mr Fletcher that until the certificate from a solicitor about the waiving of the cooling-off period was obtained, the vendor would not consider his offer.  After that certificate was obtained he accepted and initialled changes which had been suggested.  He need not have done so.  It was his offer.  Unlike the position in Doolan, the vendor had not considered his proposal and had not made a counteroffer.  The circumstances which played out on 13 April are such that they should be categorised as, in the main, a ‘tidying up’ of the proposed relevant contract in a form which could be put to the vendor.  Even though the document was prepared by the vendor’s real estate agent (and then subject to some further changes) it still amounts to an offer being made by [Mr Fletcher].”

  1. In rejecting Mr Fletcher’s submission, his Honour further stated that:

“The major aim of the warning statement provisions in the Act is to bring them to the attention of a prospective purchaser. That statement must be signed before any proposed relevant contract is signed. That does not mean, though, that a prospective purchaser is required to sign a new warning statement or resign the original warning statement on each occasion that the purchaser makes any changes to a proposed relevant contract before it is submitted to a vendor.”

Notice of Appeal

  1. The appellant seeks a declaration that he has lawfully terminated the contract pursuant to s 367 of the Act and an order that the sum of $850,000 be paid to him pursuant to s 367(8).
  1. The grounds of appeal as outlined in the Notice of Appeal are:

the learned judge erred in finding that there was one proposed relevant contract (within the meaning of that term as used in s 366 of the Act), and ought to have found that there were two proposed relevant contracts.

the learned judge made his decision on points that were not introduced or argued by the parties, breaching the rules of natural justice.

the learned judge erred in finding that it was only after the receipt of the relevant solicitor’s certificate with respect to waiving the cooling off period on the morning of 13 April that an offer by Mr Fletcher could begin to be made. This was said to be contrary to the evidence of Ms Cole that she met Mr Kakemoto on 10 April 2007 to go through the offer documents, although he was unwilling to sign them until he met with his lawyers.

the learned judge erred in finding that the changes suggested by Mr Boseljevic to clauses 6 and 7 had the same effect and more precisely represented the intention of Mr Fletcher because as stated in the Notice of Appeal:

“Clause 8.2   The introduction of a licensing agreement to replace the rental offer materially altered the rights and positions of the parties.

Clause 8.3 (a and b).   The requirement that [Mr Fletcher] accept the condition of the building in the condition at the date and make no claim.  (There were in fact significant problems with the air conditioning and pool heating discovered on inspection after the 13th April).

Clause 8.3 (e).   The vendor required variable outgoings in addition to the rent offered in the first offer, the amount of which would have been in the region of a further $22,000.”

Notice of Contention

  1. The respondents sought an extension of time to file a Notice of Contention (which being unopposed was granted). The respondents thereby contended that the decision of the trial judge should be affirmed on the following alternate basis:

“For the purpose of s 366D(3) of the Property Agents and Motor Dealers Act 2000, a draft contract to which a warning statement is attached when the warning statement is signed remains the same proposed relevant contract notwithstanding alterations to the terms of the draft contract provided that the identity of the seller and purchaser and the identity of the land remain unchanged.”

Submissions

  1. Mr Fletcher’s submission before the trial judge was that the alterations made to the draft contract were such that it became a new or further proposed relevant contract requiring the warning statement to be signed again. As the respondents submitted, it appears that the learned judge understood this argument to have two aspects. One was that the terms of the offer contained in the document changed between 9 April and 13 April 2007 so that the document could not be regarded as the same proposed relevant contract. The other aspect was that the alterations to the terms were made at the instruction of the solicitors for Mr Kakemoto and, although this was not clearly articulated by Mr Fletcher, the learned primary judge took this as involving a submission that Mr Fletcher had made an offer which had been rejected and that Mr Kakemoto had made a counter-offer. 
  1. Mr Fletcher’s arguments on the hearing of the appeal addressed both aspects.
  1. As to the first aspect, Mr Fletcher submitted that the alterations to special condition 7 by the insertion of a new special condition 8 were significant alterations in that the consequence of the amendment was to impose an obligation on him to bear the outgoings on the property from the date of his taking possession of the property (rather than from the settlement date in accordance with clause 2.6(1) of the draft contract). The result was to add a sum of some $23,000 to the balance of the purchase money on settlement for adjustments to rates, land tax, and body corporate levies. Mr Fletcher contended that it was incorrect to claim that the special condition 8.3 would therefore be implied. He submitted that the amendment constituted a significant alteration to the contract such that there was a second proposed relevant contract warranting a further warning statement to be signed by him.
  1. As to the second aspect, his contention was that, because Ms Cole delivered the documents signed by him to Mr Kakemoto on 10 April 2007, Mr Fletcher had, at that time, made an offer (notwithstanding the evidence that Mr Kakemoto was not prepared to consider any offer until the cooling-off period had been waived). The amendments that followed therefore were those of Mr Kakemoto. Dealing with this issue, counsel for Mr Kakemoto contended that what occurred should not be seen in terms of offer and counter-offer, but rather variations to an offer made by Mr Fletcher.
  1. The respondents contended that the learned primary judge was correct in his observations concerning the issues of whether there had been an offer followed by a counter-offer and also as to whether the amendments made to the contract document simply gave expression to the unexpressed, but nevertheless held, intentions of the parties so as not to constitute variations.  Nevertheless, they acknowledged that such an approach to the question of whether a proposed relevant contract became a different proposed relevant contract was one fraught with difficulties.  The respondents’ primary submission therefore was to urge the construction of s 366D(3) put forward in the Notice of Contention and to argue against an approach which analysed the issue of whether a proposed relevant contract became a new relevant contract by reference to the nature and course of negotiations and the materiality of alterations made to the terms of the proposed contract.  It is convenient to deal firstly with that matter.
  1. A starting point in considering the proposition raised in the Notice of Contention is the purposes and structure of Chapter 11 of the Act.  The purposes of Chapter 11 are set out in s 363:

363 Purposes of ch 11

The purposes of this chapter are—

(a)to give persons who enter into relevant contracts a cooling-off period; and

(b)to require all proposed relevant contracts or relevant contracts for the sale of residential property in Queensland to include consumer protection information, including a statement that a relevant contract is subject to a cooling-off period; and

(c)to enhance consumer protection for buyers of residential property by ensuring, as far as practicable, the independence of lawyers acting for buyers.” (emphasis added)”

  1. Central to the implementation of the purposes stated in Chapter 11 of the Act is Part 2 which concerns the giving of a warning statement. A “warning statement” is defined in s 364 as a statement in the approved form that includes the information mentioned in s 366D(1). The manner in which a warning statement is required to be given depends upon the way in which a proposed relevant contract is given to a proposed purchaser.  The provisions of s 366B, which applied in the present case provide:

366BWarning statement if proposed relevant contract is given in another way

(1)This section applies if a proposed relevant contract is given to a proposed buyer or the proposed buyer’s agent for signing in a way other than by electronic communication.

(2)The seller or the seller’s agent must ensure that the proposed relevant contract has attached a warning statement and, if the proposed relevant contract relates to a unit sale, an information sheet with the warning statement appearing as its first or top page and any information sheet appearing immediately after the warning statement.

(4)If the seller or the seller’s agent hands the proposed relevant contract to the proposed buyer, the seller or the seller’s agent must direct the proposed buyer’s attention to the warning statement and, if the proposed relevant contract relates to a unit sale, the information sheet and any disclosure statement.

Note

A contravention of this subsection is not an offence. Under section 366D(3), in the circumstances of this subsection a warning statement is of no effect unless it is signed by the buyer.

(5)Subsection (6) applies if the seller or the seller’s agent gives the proposed relevant contract to the proposed buyer or the proposed buyer’s agent in a way other than by handing the proposed contract to the proposed buyer or the proposed buyer’s agent.

(6)The seller or the seller’s agent must include with the proposed relevant contract a statement directing the proposed buyer’s attention to the warning statement and, if the proposed relevant contract relates to a unit sale, the information sheet and any disclosure statement.

Maximum penalty—200 penalty units.

(7)It is a defence to a prosecution for an offence against subsection (3) or (6) for the seller or the seller’s agent to prove that the seller or the seller’s agent gave notice to the proposed buyer or the proposed buyer’s agent under section 366C.” (emphasis added)

  1. The contents of a warning statement and the prerequisites for its effectiveness are set out in s 366D:

366D Content and effectiveness of warning statements

(1)The warning statement for a proposed relevant contract or relevant contract must include the following information—

(a)the relevant contract is subject to a cooling-off period;

(b)when the cooling-off period starts and ends;

(c)a recommendation that the buyer or proposed buyer seek independent legal advice about the proposed relevant contract or relevant contract before the cooling-off period ends;

(d)what will happen if the buyer terminates the relevant contract before the cooling-off period ends;

(e)the amount or the percentage of the purchase price that will not be refunded from the deposit if the relevant contract is terminated before the cooling-off period ends;

(f)a recommendation that the buyer or proposed buyer seek an independent valuation of the property before the cooling-off period ends;

(g)if the seller under the proposed relevant contract or relevant contract is a property developer, that a person who suffers financial loss because of, or arising out of, the person’s dealings with a property developer or the property developer’s employees can not make a claim against the claim fund.

(2)A statement purporting to be a warning statement is of no effect unless the words on the statement are presented in substantially the same way as the words are presented on the approved form.

(3)If the seller or the seller’s agent hands a proposed relevant contract to the buyer for signing, a warning statement is of no effect unless the buyer signs the warning statement before signing the proposed relevant contract.

(4)If a proposed relevant contract is given to the buyer for signing and subsection (3) does not apply, a warning statement is of no effect unless the buyer signs the warning statement.

(5)For subsection (3), the buyer’s signature on the warning statement is taken to be proof that the buyer signed the warning statement before signing the proposed relevant contract unless the contrary is proved.” (emphasis added)

  1. Section 365 sets out the circumstances in which the parties to a relevant contract will be bound. It relevantly provides:

365 When parties are bound under a relevant contract

(1)The buyer and the seller under a relevant contract are bound by the relevant contract when—

(b)for a relevant contract relating to a unit sale—the buyer or the buyer’s agent receives the warning statement, the information sheet and the relevant contract in a way mentioned in subsection (2A).

(2A)For a relevant contract relating to a unit sale, the ways are—

(c)by being handed or otherwise receiving the documents mentioned in paragraph (a)(ii), (iii) and (iv) other than by electronic communication, if—

(i)the warning statement and the information sheet are attached to the relevant contract with the warning statement appearing as the first or top page of the document and the information sheet appearing immediately after the warning statement; and

(ii)the seller or the seller’s agent directs the attention of the buyer or the buyer’s agent to the warning statement, the information sheet and the relevant contract.

(3)Without limiting how the buyer may withdraw the offer to purchase made in the contract form, the buyer may withdraw the offer at any time before being bound by the relevant contract under subsection (1) by giving written notice of withdrawal, including notice by fax, to the seller or the seller’s agent.

(5)If a dispute arises about when the buyer and the seller are bound by the relevant contract, the onus is on the seller to prove when the parties were bound by the relevant contract.

(6)In this section—

buyer’s agent includes a lawyer or licensee acting for the buyer and a person authorised by the buyer or by law to sign the relevant contract on the buyer’s behalf.”

  1. If the warning statement is not given or if it does not comply with s 366D then the buyer’s rights are provided for in s 367:

367 Buyer's rights if a warning statement is not given or is not effective

(1)This section applies if—

(a)a warning statement requirement for a proposed relevant contract is not complied with and notice is not given under section 366C; or

(b)a warning statement is of no effect under section 366D(2), (3) or (4).

(2)The buyer under a relevant contract may terminate the relevant contract at any time before the relevant contract settles by giving signed, dated notice of termination to the seller or the seller’s agent.

(3)The notice of termination must state that the relevant contract is terminated under this section.

(4)If the relevant contract is terminated, the seller must, within 14 days after the termination, refund any deposit paid under the relevant contract to the buyer.

Maximum penalty—200 penalty units.

(5)If the seller, acting under subsection (4), instructs a licensee acting for the seller to refund the deposit paid under the relevant contract to the buyer, the licensee must immediately refund the deposit to the buyer.

Maximum penalty—200 penalty units.

(6)If the relevant contract is terminated, the seller and the person acting for the seller who prepared the relevant contract are liable to the buyer for the buyer’s reasonable legal and other expenses incurred by the buyer in relation to the relevant contract after the buyer signed the relevant contract.

(7)If more than 1 person is liable to reimburse the buyer, the liability of the persons is joint and several.

(8)An amount payable to the buyer under this section is recoverable as a debt.

(9)In this section—

warning statement requirement, for a proposed relevant contract, means—

(a)if the proposed relevant contract is sent by fax—a requirement to comply with section 366(2) or (3); or

(b)if the proposed relevant contract is given by electronic communication other than fax—a requirement to comply with section 366A(2) or (3); or

(c)if the proposed relevant contract is given in a way other than by electronic communication—a requirement to comply with section 366B(2), (4) or (6).”

  1. The respondents submitted that the structure of the warning statement provisions in Part 2 of Chapter 11 of the Act demonstrated that the object of the provisions is to ensure that the warning statement was drawn to the attention of the buyer, so that the buyer was made aware of the wisdom of obtaining independent legal advice and an independent valuation and of the existence of the cooling-off period during which the advice and valuation can be obtained. This was achieved, where a proposed relevant contract was provided to the buyer, in the various methods outlined in sections 366, 366A and 366B.  It was said that in relation to a proposed relevant contract which does not fall within those provisions, because it is the proposed buyer that brings into existence a proposed relevant contract, which is signed and then provided to the proposed seller, the protection afforded by the Act came from s 365. 
  1. It was further submitted that Part 2 should be construed on the basis that it is directed towards the taking of those steps necessary to bring the warning statement to the proposed buyer’s attention in a clear and unequivocal way. Nothing in the express purpose of the chapter or the terms of the provisions in question suggested that Chapter 11 is concerned at all with the terms of a proposed relevant contract or offer or any change in the actual terms of an offer made before a binding contract comes into existence.

Conclusion

  1. While I agree with the conclusion reached by the learned judge as to the invalidity of the purported termination of the contract on the grounds of s 366B and s 366D, I accept the submissions made by the respondents that the learned judge adopted an incorrect approach in construing Part 2, and in particular the effectiveness of the warning statement under s 366B, from the viewpoint of whether the course of negotiations between the parties (that remained the same) resulted in there being a counteroffer or whether the nature of the alterations to the proposed relevant contract (which at all times concerned the same property) were material so that it could be said that there was a new proposed relevant contract.  Such an approach failed to have proper regard to the purpose of the warning statement provisions being to achieve the objects in s 363, especially the consumer protection provisions in s 363(b), and not to provide a caution to the proposed buyer as to any particular term of a proposed relevant contract or alteration that might be made to its terms.
  1. Section 363(b) states that the purpose of Chapter 11 is to require “all proposed relevant contracts or relevant contracts for the sale of residential property in Queensland to include consumer protection information”.  The word “all” should be construed as encompassing both categories of contracts referred to; there is no basis, for example, for construing “all” as intending to refer to each and every proposed relevant contract as materially varied.
  1. As I have mentioned, to construe s 363 so as to require that the warning statement be signed again, on each and every occasion on which a material variation to the proposed contract is made, would serve no purpose in promoting the object in s 363. Such a construction proceeds on the implicit assumption that the relevant contract as ultimately concluded will remain in materially the same terms as the proposed relevant contract, yet there is nothing in the Act to suggest such a legislative intention. “Relevant contract” is defined in s 364 as a contract for the sale of residential property in Queensland, other than a contract formed on a sale by auction.  No definition of “proposed relevant contract” is provided.  However it is apparent, given that “relevant contract” is defined in terms of a type of contract, that is, a contract for residential property, that “proposed relevant contract” is simply a proposed contract of that nature. 
  1. Once it is accepted as the respondents contended that bringing the warning statement to the proposed buyer’s attention is the object of the provisions, then that object is achieved in circumstances such as occurred in the present case by having a warning statement attached to the front of the unsigned draft contract and drawn to the proposed buyer’s attention and signed before the final contractual offer document is signed. The making of amendments to the contract document before it was submitted to the seller for acceptance did not detract from the fact that the warning statement had been drawn to the attention of the proposed buyer. There is nothing in the consumer protection aims of Chapter 11 to support the view that the Act should be construed so as to require the documents ultimately submitted to the seller to have precisely the same terms, unaltered from those in existence when the warning statement was signed. Such a construction serves no useful purpose.
  1. Given the view I have expressed, the respondents’ proposition raised in the Notice of Contention should be accepted and accordingly, for the purpose of s 366D(3) of the Act, the draft contract to which the warning statement was attached and signed on 9 April remains the same proposed relevant contract, notwithstanding alterations to the terms of the draft contract.
  1. It follows that the learned judge erred in the approach he took in analysing the issue that required determination in accordance with the approach outlined in Doolan.  It also follows that Doolan should not be accepted as good law.
  1. I note that this view accords with amendments made to the Act which took effect from 1 October 2010 (see Property Agents and Motor Dealers and Other Legislation Amendment Bill 2010).  The amendments provide in s 368(A)(4) and (5) as follows:

“(4)For this section a proposed relevant contract does not become another proposed relevant contract merely because, as a result of negotiations, the terms and conditions of the proposed relevant contract change if the residential property concerned and the parties remain the same.

(5)For subsection (4) it is immaterial whether the proposed relevant contract is textually amended to show the changed terms and conditions or another proposed relevant contract form is prepared that incorporates the changes.”

  1. I also note that it is apparent from the explanatory notes that these amendments were dictated by a legislative perception of a lack of clarity in the original provisions rather than to address an omission or alter the previous legislative intent: cf Johnston v Jewry [2008] 1 Qd R 360 at [32].  As the explanatory notes to the Bill state, “Section 368(A)(4) and (5) make it clear that a proposed relevant contract does not become another proposed relevant contract if the residential property concerned and the parties to the contract remain the same”. 
  1. As stated, I agree with the conclusion reached by his Honour that Mr Fletcher was not entitled to terminate the contract. My view, however, for reaching that conclusion is that the warning statement signed on 9 April 2007 at the time the proposed contract was signed remained effective for the purpose of s 366D(3), and notwithstanding that the contractual document signed by Mr Fletcher on 13 April 2007 contained altered terms, the latter did not become another proposed relevant contract.  It follows from the conclusion I have reached that it is unnecessary to deal further with the grounds of appeal raised by Mr Fletcher.

Orders

  1. I would order as follows:
  1. The appeal be dismissed.
  1. The appellant pay the respondents’ costs of and incidental to the appeal.

Footnotes

[1] It was agreed at the appeal that reprint 3 was the relevant reprint.

[2] Ch 11 has been extensively amended by Property Agents and Motor Dealers and Other Legislation Amendment Act 2010 (Qld), pt 2.

[3] See Philippides J's reasons at [25] – [29].

[4] See Philippides J's reasons at [12] and [13].

[5] [2010] QSC 193.

Close

Editorial Notes

  • Published Case Name:

    Fletcher v Kakemoto & Anor

  • Shortened Case Name:

    Fletcher v Kakemoto

  • Reported Citation:

    [2012] 1 Qd R 107

  • MNC:

    [2011] QCA 46

  • Court:

    QCA

  • Judge(s):

    McMurdo P, Chesterman JA, Philippides J

  • Date:

    18 Mar 2011

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2010] QSC 219--
Appeal Determined[2012] 1 Qd R 10718 Mar 2011-

Appeal Status

Appeal Determined (QCA)
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