MNM Developments Pty Ltd v Gerrard
[2005] QDC 10
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- Unreported Judgment
- MNM Developments Pty Ltd v Gerrard[2005] QDC 10
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MNM Developments Pty Ltd v Gerrard[2005] QDC 10
MNM Developments Pty Ltd v Gerrard[2005] QDC 10
DISTRICT COURT OF QUEENSLAND
CITATION: | MNM Developments Pty Ltd v Gerrard [2005] QDC 010 |
PARTIES: | MNM DEVELOPMENTS PTY LTD Applicant and WILLIAM ALAN GERRARD Respondent |
FILE NO: | 404/04 |
PROCEEDING: | Application |
ORIGINATING COURT: | District Court Southport |
DELIVERED ON: | 4 February 2005 |
DELIVERED AT: | Southport |
HEARING DATE: | 31 January 2005 |
JUDGE: | Newton DCJ |
ORDER: | Application dismissed |
CATCHWORDS: | CONTRACT – TERMINATION – alleged breach of the Property Agents and Motor Dealers Act 2000 – construction of the Act – where application seeks declaration that contract for sale of land validly terminated by notice – whether a warning statement was attached to contract – meaning of “attached” Property Agents and Motor Dealers Act 2000 Uniform Civil Procedure Rules Cases cited: MP Management (Aust) Pty Ltd v Churven & Anor [2002] QSC 320 Sidbent Pty Ltd & Anor v Reinisch [2003] QSC 203 |
COUNSEL: | Mr P Hackett – applicant Mr L Jurth - respondent |
SOLICITORS: | Schultz Toomey O'Brien – applicant Short Punch & Greatorix – respondent |
- [1]The applicant plaintiff seeks summary judgment of its claim and related orders pursuant to r 292 of the Uniform Civil Procedure Rules. More particularly, the applicant seeks the following orders:
- (a)a declaration that the plaintiff has validly terminated a contract dated 10 June 2003 for the purchase of a residential property at 18 Sunset Boulevard, Surfers Paradise, described as Lot 16, RP 81255, Parish of Gilston;
- (b)an order that the defendant refund the deposit in the sum of $62,500 paid under the contract, together with any accretions thereon to the plaintiff;
- (c)a declaration that the defendant’s purported termination of the contract on 19 March 2004 was unlawful; and
- (d)an order that the counterclaim be dismissed.
- [2]The facts and relevant chronology are not in dispute. The following summary of facts is taken from the very helpful written submissions of both counsel who appeared at the hearing of the application. In May 2003, the defendant agreed to sell, and the plaintiff agreed to purchase, a residential property at Surfers Paradise, situated at 18 Sunset Boulevard [“the Property”].
- [3]The following documents in the following order were sent by facsimile transmission on 26 May 2003 at 16:30 hours by the defendant’s agent, 2C Property, to Dr McGovern, a director of the plaintiff:
- (a)facsimile transmission cover sheet/covering letter;
- (b)Property Agents and Motor Dealers Act (“PAMD”) Form 27b (Selling Agent’s Disclosure to Buyer) (“the Disclosure Statement”);
- (c)PAMD Form 30c (Warning Statement) (“the Warning Statement”); and
- (d)REIQ Contract for Houses and Land (“the Contract”).
- [4]On the same day, McGovern executed the Disclosure Statement, the Warning Statement and the Contract in that order, being the same order in which they were transmitted. It may be inferred that they were received in the same order.
- [5]By return facsimile transmission on the same day at 17:50 hours, McGovern sent the executed copies of the Disclosure Statement, the Warning Statement and the Contract (in that order) to 2C Property.
- [6]On or about 2 June 2003, 2C Property received from McGovern, and forwarded to the defendant’s solicitor, the original copy of the Warning Statement, the Contract and a director’s guarantee (i.e. the copies containing McGovern’s original signature).
- [7]On 10 June 2003, the defendant executed the Contract. On 20 June 2003, the defendant’s solicitor sent the Contract to the plaintiff’s solicitor, which had now been signed by both parties. Settlement was to occur 360 days from the date of the Contract.
- [8]On 24 May 2004, being 349 days after the date of the Contract and 11 days before settlement was due, the plaintiff purported to terminate the Contract, such termination not being accepted by the defendant. The plaintiff did not attend at settlement and on or about 21 June 2004, the defendant terminated the contract.
- [9]There is no factual dispute on the pleadings or in the material filed about the order in which the Disclosure Statement, the Warning Statement and the Contract were sent to the plaintiff by 2C Property, received by McGovern or executed by McGovern, on behalf of the plaintiff.
- [10]Section 138 of the Act relevantly provides that:
“(1) A residential property agent for the sale of residential property must disclose the following
to any prospective buyer of the property-
- (a)…
- (2)The disclosure is effective for subsection (1) only if it is-
- given to the prospective buyer in the approved form; and
- acknowledge by the prospective buyer in writing on the approved form; and
- given and acknowledged before a contract for the sale of the residential property is entered into.”
- [11]Section 366(1) of the Act provides that, inter alia:
“A relevant contract must have attached, as its first or top sheet, a statement in the approved form (“Warning Statement”)…”
- [12]Section 366(4)(a) of the Act provides that, inter alia:
“A statement purporting to be a warning statement is of no effect unless before the contract is signed by the buyer, the statement is signed and dated by the buyer…”
- [13]It was submitted on behalf of the applicant that there was no attempt by the seller to differentiate the Form 27b from the Warning Statement or to number the Contract in such a way as to incorporate the Warning Statement as the first page of the Contract. Accordingly, it was submitted, the Warning Statement was not “attached” as the “first or top sheet” as required by the legislation. In the present circumstances, it was submitted, the Warning Statement should have been the first page of the facsimile and preferably numbered to indicate the intent of the Warning Statement to be the first sheet of the Contract. On this basis, it was submitted, the buyer (plaintiff) had a right to terminate the Contract pursuant to s 367 of the Act and did so in accordance with the Act.
- [14]Counsel for the respondent submitted that the order in which the Disclosure Statement, the Warning Statement and the Contract were sent to the plaintiff by 2C Property and executed by McGovern on 26 May 2003, was as required by and in compliance with ss 138 and 366 of the Act.
- [15]In MP Management (Aust) Pty Ltd v Churven & Anor [2002] QSC 320 Muir J addressed an argument that the contract there under consideration did not have attached, as its first or top sheet, a warning statement. His Honour stated as follows:
“[20] The word ‘attached’, in its less restrictive sense, may mean ‘accompanying’ or ‘associated’ (Bosaid v Andrey [1963] VR 465 at 473) and, in that sense of the word, one thing may be ‘attached’ to another without physical joinder. (Elliott Common School District No. 48 v Country Board of School Trustees Tex Civ App, 76 SW 2d 786, 780.
[21] In its more restrictive sense, and, I rather think, everyday sense, ‘attached’ connotes some form of joinder, fastening or affixation. There is nothing in the context of s 366 or s 367 which would tend to indicate that the word should be construed broadly, quite the contrary. The aim of the sections appears to be to give prominence to the warning statement by ensuring that not only is it inseparable from the contract proper but that it is the first document to be seen by a prospective purchaser when perusing the contract.
[22] Subsection (1), by requiring a contract to ‘have attached’ the warning statement ‘as its first or top sheet’, suggests that more than the mere placing of the warning statement on the contract or providing it in a folder together with the contract is required and that some form of physical joinder or incorporation is necessary.
[23] It may be that the requirements of s 366(1) could be complied with without the warning statement being stapled, pinned to or bound up with a contract. For example, if the warning statement was the first of a number of loose sheets placed together in a folder and numbered or otherwise identified as the first sheet of the bundle, it may be arguable that the warning statement was ‘attached’ to the other documents…”
- [16]Where a contract for the sale of land involves facsimile transmission between the parties, the more restrictive sense of the word “attached”, as identified by Muir J, will obviously not be applicable. In these circumstances it is the order in which the documents are transmitted that is important rather than the means by which they are affixed.
- [17]In Sidbent Pty Ltd & Anor v Reinisch [2003] QSC 203 White J considered rival contentions as to the sufficiency of an attachment of a warning statement to a contract. Her Honour stated that:
“What is meant by requiring that the warning statement be ‘attached’ to the contract as its first or top sheet … If 6 December is the relevant date for the purposes of s 366 is it sufficient that the Form 30b statement was sent by facsimile transmission as the first relevant contractual document making it impossible to attach the Form physically. Is it the intention of the legislature that this convenient method of doing business (as occurred here) is excluded? The contract provides for facsimile copies of the contract documents to be signed and the PAMD Act provides in s 365(2) for a copy of the concluded contract to be provided by facsimile transmission. Finally, it is an offence for which a substantial penalty is imposed on a seller for preparing a contract which does not have attached as its first or top sheet the warning statement. This might suggest that a broad interpretation be given to ‘attached’ although I note that Muir J in MP Management (Aust) Pty Ltd v Churven & Anor [2002] QSC 320 gave the expression a narrow meaning, namely, some form of actual joinder or physical fastening although that case did not concern contractual documents sent by facsimile transmission.”
- [18]In the present case, it should be remembered, the Warning Statement was placed immediately in front of the Contract in a continuous facsimile transmission. In my view, the Warning Statement was, therefore, “attached” to the Contract as its first or top sheet, thus satisfying the requirement in s 366(1) of the Act. The Warning Statement was also executed by McGovern before he executed the Contract, thus satisfying the requirement in s 366(4) of the Act. The requirement in s 138(2)(c) is satisfied only if the Disclosure Statement is “given and acknowledged before a contract” is entered into. I accept that the use of the possessive pronoun “its” in the wording of s 366(1) has the effect of incorporating the Warning Statement into the Contract as its “first or top sheet”. The Warning Statement then belongs to and is a part of the Contract. The Disclosure Statement must be sent ahead of and executed before the Warning Statement and the Contract. In the present case this was done and accordingly, the requirement in s 138 is also satisfied.
- [19]For these reasons the application must be dismissed. It was agreed by counsel at the hearing of this application that it would not be appropriate at this stage to make any order with respect to the relief sought in the counterclaim. I will receive submissions in relation to costs, if required, in due course.