DISTRICT COURT OF QUEENSLAND

1. [1]
   The plaintiff entered into a contract for the sale of land on 12 December 2004.^[1]  It is not disputed that the contract is one to which the Land Sales Act 1984 (“the Act”) applied.  Section 9 of that Act required the defendant, the vendor, to give the plaintiff before she entered into the contract (relevantly) a disclosure plan and a disclosure statement for what was then a proposed allotment.  A disclosure plan and a disclosure statement were given, but it was common ground they did not comply with all the relevant requirements identified in s 9, so that the plaintiff had, pursuant to s 9(5) of the Act, a right to avoid the contract “by written notice given to the vendor or vendor’s agent before the vendor gives the purchaser the registrable instrument of transfer for the allotment.”  Written notice was given on 12 October 2005.  The plaintiff alleges that that notice was effective to terminate the contract; the defendant disputes that proposition.  The plaintiff filed an application for summary judgment, and on the last business day before that application came on to be heard, the defendant filed a cross‑application for summary judgment.

2. [2]
   On the pleadings and as the matter was argued before me, there were only two issues. It was common ground that the date fixed for settlement under the contract was 13 October 2005.  Under cover of a letter dated 5 October 2005, the then solicitors for the defendant forwarded a transfer in form 1 executed by the defendant.  The letter said inter alia:

“We return the enclosed documents to you on your undertaking to hold the stamped transfer on our behalf pending settlement and to use the transfer for stamping purposes only.”

3. [3]
   That transfer was signed by the vendor but was not dated, as required by the form under the Land Title Act.  The issue was whether, as a result of that form having been then sent to the plaintiff’s solicitors, the defendant had “given” the plaintiff the registrable instrument of transfer for the allotment for the purposes of s 9(5).  It was submitted on behalf of the plaintiff that that had not occurred, for two reasons:

1. (a)
   because the document was forwarded only for the limited purpose specified in the letter enclosing it, until settlement it was not a registrable instrument of transfer which had been given to the plaintiff;

2. (b)
   because the document was undated, it was not in any event a registrable instrument of transfer.

4. [4]
   The term “registrable instrument of transfer” is defined in s 6 of the Act.^[2]  Relevantly, the term means:

“In respect of land that was a proposed allotment of freehold land at the time when a person entered upon the purchase thereof – a memorandum of transfer of the land in favour of that purchaser capable of immediate registration (subject to its being properly stamped under the Duties Act 2001) in the land registry.”

5. [5]
   The plaintiff’s argument in relation to the first point was essentially that when the letter was sent enclosing the transfer, the transfer was not capable of immediate registration in the land registry because it was expressly to be held subject to settlement. It was a transfer and may well have been capable of registration in the Titles Office (subject to being first stamped), but it was then forwarded expressly on the basis that it would not be registered unless and until settlement occurred, and therefore it was not capable of immediate registration. In effect, the plaintiff’s argument is that what is contemplated by s 9(5) is that the right to avoid the contract will continue until completion.

6. [6]
   The defendant, however, submitted that that was not in terms required by the statute, and so long as the document had been given, on any basis and for any purpose, to the purchaser, then the cut off point for avoidance under s 9(5) had been reached.  Both counsel said that they were unable to identify any earlier decisions under this legislation in which this particular point had been considered, and I have not myself been able to find any such decision.  Nevertheless, it seems to me that a consideration of the history of the legislation indicates that the submissions for the plaintiff are to be preferred.

History of the legislation – the original Act

7. [7]
   The Land Sales Act 1994 is a much-amended Act.  Indeed, even before it commenced (on 1 July 1985), it had been amended by the first of two amendment Acts passed during 1985.  It replaced restrictions formerly appearing in the Auctioneers and Agents Act 1971 on the sale of land which, in the case of freehold land, was subject to an unregistered plan of subdivision, or a proposed plan of subdivision.  The Act prohibited selling such land in the case of freehold land unless the subdivision plan had been approved by the appropriate local authority before the purchaser entered upon the purchase^[3]:  s 8.  It also required that, before the purchaser entered upon the purchase of the relevant land, the purchaser be provided with a copy of the relevant subdivisional plan approved by the local authority clearly identifying the land being purchased:  s 9.

8. [8]
   Section 10 then dealt with the situation where the copy plan subsequently became inaccurate; the vendor was required to give to the purchaser a notice in writing “that rectifies the inaccuracy”, which duty continued until a certificate of title in respect of freehold land that related to the land in question only had been issued by the Registrar of Titles:  s 10.  There was also a provision governing the holding of money paid under the contract.  Section 13 provided that where there had not been compliance with s 9(1), or where the copy plan was found to have been or to have become inaccurate, a purchaser might (subject to certain restrictions which have since disappeared and need not be considered further) avoid the contract by notice in writing given to the vendor or the vendor’s agent.

9. [9]
   Subsection(2) then provided that notice of avoidance, if it was to be effectual, had to be given “in the case of a sale or purchase of relevant freehold land, before a certificate of title that relates to that land only has been issued by the Registrar of Titles… .” There was an alternative provision in circumstances where the purchaser was relying on some inaccuracy in the copy plan, or responding to a notice of rectification under s 10, where potentially a different period could operate.  In addition, by s 15, the purchaser had a right to avoid the contract if no certificate of title to the land had issued and a period of six months had elapsed from the day on which it was made, unless the purchaser had already disposed of his interest in the land.  In the circumstances, it is not surprising that there was nothing in the debates when the 1984 Act was being discussed which throws any light on the present issue.

10. [10]
    Accordingly, as the statute then stood, if there was a failure to do what was required by s 9(1) of the Act, the purchaser had a right to avoid the contract by notice in writing (subject to certain conditions) but only before a certificate of title which related to that land only had issued.  The weakness of this as an exercise in consumer protection was readily apparent, and evidently it received a certain amount of criticism.  For example, Professor Duncan was critical of the 1984 Act in its original form in an article published in the Queensland Law Society Journal in August 1984.^[4]  At p 151, he said that the right to avoid should not come to an end when the certificate of title issued, pointing out that there was nothing to prevent a vendor from holding off giving a notice under s 10 until the certificate of title issued.  He continued:  “Clearly a purchaser should have the right to avoid up until the date for completion.”  He also said at p 152 that a right to avoid under ss 14 and 15 should be extended to the date of completion.

– The first amendment

11. [11]
    In March 1985, legislation to amend the Act was introduced. The then Attorney‑General in the second reading speech^[5] said inter alia:

“It was considered that, by limiting the time for the avoidance of the contract of [sic] the issue of the plan … the ability of the purchaser to avoid the contract may be limited unfairly as he may not become aware of an alteration to the plan until that date.  To correct this position, the bill extends the date whereby [sic] a purchaser may avoid the contract to which a notice of rectification relating to either before the expiration of 30 days after the receipt by him of the notice or before the delivery of a registrable instrument.  My concern has been to ensure fair dealing between the parties to the contract and a viable option to the purchaser.”

12. [12]
    In the course of the debate on p 4811, a representative of the opposition indicated support for the bill and added “under the original Act, it could fairly be said that unscrupulous operators could have taken people to the cleaners.”

13. [13]
    The Amendment Act did not alter s 9.  Section 10 was amended so that the duty imposed by it continued until “a registrable instrument of transfer that relates to the land in question has been delivered by the vendor or the vendor’s agent … to the purchaser or his agent.”  Section 13 was amended so that the notice of avoidance, if it was to be given, was to be given by that same time.  The term “registrable instrument of transfer” was defined in s 6 as inter alia:

“In respect of land that was relevant freehold land at the time when a person entered upon the purchase thereof, a memorandum of transfer of the land in favour of that purchase capable of being registered in the office of the Registrar of Titles.”

14. [14]
    Reading that definition into the form of words inserted in ss 10 and 13, the cut-off date became the time when “a memorandum of transfer of the land in favour of the purchaser capable of being registered in the office of the Registrar of Titles was delivered by the vendor or the vendor’s agent to the purchaser or his agent.”  That is, it seems to me, essentially a description of part of what happens on completion or settlement of a contract.  Under the then current REIQ contract in Queensland for the sale of land, on completion “the balance of the purchase price shall be paid … in exchange for possession … together with a duly executed transfer in favour of the purchaser capable of immediate registration (after stamping) in the appropriate office … .”^[6]  It would appear that in this respect the legislation was taking up the suggestion of Professor Duncan in the Law Society journal article.  Professor Duncan certainly thought so.^[7]

– Analysis of the Act after this amendment

15. [15]
    Apart from the similarities in the wording used in the amending Act and part of what occurs on completion, there is also the consideration that the legislature obviously intended to change the balance between the vendor and purchaser in the operation of these provisions, in a way which was more favourable to the purchaser, and in a way which was intended to make it more difficult for a vendor artificially to manipulate the process so as to deprive the purchaser of the protection of the legislation, or so as to reduce the value of the protection to the purchaser.

16. [16]
    In such circumstances, the date for completion is a natural date for the legislature to choose when seeking to fix a point at which the right to avoid the contract comes to an end. A right in equity to have a contract set aside on the ground of innocent misrepresentation will be lost once the contract has been completed.^[8]  Until the contract is completed, there is nothing to be undone if the contract is avoided except to provide for the recovery of any deposit paid, and the statute had other provisions designed to ensure that the deposit would be available to be recovered by the purchaser if necessary.  One would, however, not expect that a right of this nature would be available after completion.  The real question is whether the legislative intent was consistent with the right coming to an end if the transfer were delivered to the purchaser or the purchaser’s agent prior to completion.

17. [17]
    Ordinarily, a transfer is prepared by the purchaser’s solicitor and forwarded to the vendor’s solicitor for execution,^[9] and then lent back to the purchaser’s solicitor prior to completion for stamping.  This is essentially a matter of convenience; the vendor can prepare the transfer and is entitled to tender an unstamped transfer, because of the terms of the contract as to what is to be handed over on completion.^[10]  Allowing the purchaser to stamp the transfer prior to completion makes it possible for the purchaser to lodge the transfer of the registration more quickly after completion.

18. [18]
    If the interpretation contended for on behalf of the defendant is correct, after the 1985 amendment it would still have been possible as soon as a separate certificate of title for the land had issued for the vendor’s solicitor to send the purchaser’s solicitor a transfer, subject to the condition that it would not be registered prior to completion, and in that way render the amendment made in 1985 virtually of no effect. The sort of vendor against whom a consumer would most particularly need legislative protection is perhaps the sort of vendor who would be most likely to take such a step. I think therefore that it is unlikely that the legislature in 1985 when extending the time available within which the purchaser could avoid a contract under s 13, intended to extend the time to an event, the occurrence of which would be entirely in the hands of the vendor, so that a vendor if he chose could by unilateral action cut short the purchaser’s statutory right to rescind.

19. [19]
    The legislation is to be given a purposive construction.^[11]  It seems to me that the legislative purpose in 1985 was to extend the period within which there was a right to avoid the contract up to completion of the contract, and in my opinion that is the effect that should be given to the words then used.

– Further amendments

20. [20]
    The words used at the time have since been amended to some extent; indeed, there have been various changes to the legislation. Later in 1985 came the second amending Act of that year^[12], by which the definition of “registrable instrument of transfer” was amended by substituting for the words “being registered” the words “immediate registration (subject to its being duly stamped as required by any applicable law relating to stamp duty)”, thus bringing it closer to the wording of the REIQ contract.^[13]  Section 13 was amended by redrafting subsection (1) to make its operation more clear, and by redrafting part of subsection (2) in the same way, though not subsection (2)(a).

21. [21]
    In addition, s 10 was redrafted to provide that if the plan referred to in s 9 were varied at any time, there was a requirement after registration of the relevant plan to give to the purchaser or his agent a copy of the plan in the form in which it was registered.  The obligation arose whether s 9 had been complied with or not.  Subsection (4) then provided:

“Where a vendor or a vendor’s agent is required under subsection (1) to give to the purchaser or his agent a copy plan of survey, then—

1. (a)
   the vendor or his agent shall not deliver to the purchaser or his agent a registrable instrument of transfer in respect of relevant land the subject of the purchase in question; and

2. (b)
   the purchaser shall not be required to pay the outstanding purchase moneys,

until the expiration of a period of 30 days after the receipt by the purchaser or his agent of a copy plan of survey in accordance with subdivision (1) or until the time stipulated by the instrument in respect of the sale and purchase for the payment of those purchase moneys (whichever period is the later to expire) unless it is otherwise agreed in writing between the vendor or his agent and the purchaser or his agent after the receipt by the purchaser or his agent of a copy plan in accordance with subsection (1).”

22. [22]
    In other words, if the plan of survey were varied after the plan provided under s 9 had been provided, a copy of the registered plan of survey had to be provided, and completion was not to occur for at least 30 days, unless the purchaser agreed in writing after receiving the registered plan of subdivision.  It seems to me that what was described in paragraphs (a) and (b) in subsection (4) was essentially completion.^[14]  It seems to me that the wording in subsection (4) really only makes sense on the basis that the legislature was assuming that the delivery referred to in paragraph (a) was delivery on completion.

23. [23]
    This is consistent with the second reading speech for the bill for this amending act of the Attorney who said, apparently of this amendment, “It is proposed that the purchaser will now have at least 30 days after receipt of the registered plan to consider his position.  This will enable a purchaser to seek legal advice, if necessary, and to complete the contract with full knowledge of his position.”^[15]  He had earlier said that one of the purposes of the bill was “to ensure that the legislation remains consistent with long‑established and accepted commercial and conveyancing practice.”^[16]  As well, s 11 was amended in a way which indicated that the legislature assumed that the registrable instrument of transfer would be handed over, ie delivered, on completion.^[17]

– the 1997 amendments

24. [24]
    There were amendments to the definition of “registrable instrument of transfer” in 1992, but they were formal only. The next significant amendments were those of 1997 by the Land of Sales and Land of Title Amendment Act No 40 of 1997.  This Act introduced the statement of the objects of the Act in s 2.  There was no statement of the objects of the legislation in the Acts prior to this time, and therefore it could not have governed the interpretation of any part of the Act at that time.

25. [25]
    There was an explanatory note to the Bill which became the 1997 Amendment Act.^[18]  That indicated that these amendments were a response to a lobbying campaign by the real estate and development industries who were keen to remove or lessen the restrictions on the selling of allotments prior to the approval of the plan of subdivision provided that certainty of identification of the land purchased was assured.  The proposed amendments were not intended to infringe the original policy objectives of minimising as far as possible the deliberate or inadvertent misdescription of land, and providing readily available remedies to consumers who were nevertheless adversely affected.  Now they were to be achieved inter alia by “provisions, including the supply of a disclosure statement and disclosure plan to a purchaser, to ensure that a proposed allotment, in relation to which a registrable instrument of title is ultimately delivered to the purchaser, is substantially identical to that which was originally purchased by him or her; … if the allotment is not substantially identical but there is a significant variation between the disclosure plan and either the plan showing the constructed works or the plan proposed to be registered, the purchaser have an automatic right to avoid the contract of sale.”  In addition, the period of nine months^[19] between the date of contract and the date of “delivery of a registrable instrument of transfer for the proposed allotment” was to be extended to 18 months, but the ministerial discretion to extend that period was to be removed.

26. [26]
    Accordingly, s 9(1) was replaced with a provision which permitted, as an alternative to providing a copy of a sealed plan, a disclosure statement and disclosure plan; in other respects the section was essentially put into its current form,^[20] setting out the detailed requirements of the disclosure statement and the disclosure plan.  The explanatory note went on to say (p 1343) that the amendment to the section “also provides that a purchaser may avoid the contract prior to being given the registrable instrument of transfer if the vendor contravenes this section … .”  This meant that the provision in the former s 13 could be repealed because the relevant part had been placed in s 9.  Section 10A was to be inserted to give effect to the 18-month time limit.

27. [27]
    Section 10A as originally formulated was not well drafted, a fact recognised by amendments made in 1999, that put the section into essentially its current form; there was an 18 month limit for the vendor to give the purchaser the registrable instrument of transfer, and in addition, in those cases where the approved plan of subdivision was not provided prior to the purchaser entering into the contract, the vendor was required to give the purchaser certain other documents, again not later than 18 months after the purchaser entered upon the purchase.

28. [28]
    There is nothing to suggest that the change in 1997 from “delivered” to “gives” in relation to what must be done with the registrable instrument of transfer was intended to produce any change in the substantive meaning of the section, or in the operation of the Act. I suspect that the change was simply one of drafting style.^[21]  Although the former word more readily identifies the formality associated with the completion of a contract, I do not think that the mere change in the wording was intended to change the essential meaning of the term, so that the provision can now refer to something other than the handing over on completion.

29. [29]
    The current wording of s 10 provides in subsection (3) that:

“If the vendor gives the purchaser a significant variation notice … (b) the vendor must not, until the end of the prescribed period –

1. (i)
   ask the purchaser to pay the balance of the purchase price; or

2. (ii)
   give the purchaser a registrable instrument of transfer for the allotment.”

30. [30]
    The “prescribed period” is defined in subsection (5) in a way which picks up the concepts originally included in the latter part of subsection (4).  Again, the change of wording does not suggest any particular intention to change the meaning, and none is found in the explanatory notes; it may be put down to a change in drafting style.  The most significant change perhaps is that the conjunction “and” has been replaced by the conjunction “or”, although the overall expression does not as clearly identify the process of completion as did the original expression.  In the light of the history of the legislation, however, I think it likely that what is being spoken of in s 10(3)(b) is still completion.  The obligation to pay the purchase price and to transfer title on completion are concurrent, so that prior to completion the vendor is not entitled to ask the purchaser to pay the balance of the purchase price anyway.^[22]  Accordingly, the provision prohibits the vendor from doing either of the things which a vendor would necessarily do on completion.  This provision in my opinion supports an interpretation that the expression “give the purchaser a registrable instrument of transfer” is a reference to the “giving” that occurs on completion.

Analysis

31. [31]
    Counsel for the defendant relied on the interpretation of the expression “capable of immediate registration … in the land registry” in Cawood v Infraworth Pty Ltd [1990] 2 Qd R 114, where it was held that the word “immediate” had no temporal connotation, but required a transfer directly from the registered proprietor to the purchaser.  It was submitted that the absence of temporal connotation meant that a transfer could be capable of immediate registration, and hence a registrable instrument of transfer for the purposes of the Act, even though in terms of the contract it was not yet open for the purchaser to lodge the transfer for registration.  In my opinion, the significance of the expression in the definition in s 6 is that it corresponds with the expression used in the then standard contract in relation to completion, and provides an indication that what was being spoken about was the handing over on completion.

32. [32]
    I accept that in the definition in s 6 the word “immediate” has the interpretation given to it by the Full Court in Cawood.  But for present purposes the point is that prior to completion the transfer was not capable of registration, because the purchaser was not entitled to lodge it for registration in terms of the contractual arrangements between the parties.  If the purchaser had, immediately after the transfer was forwarded, stamped the transfer and then lodged it for registration prior to completion, that would have been not only in breach of the contract between the parties and in breach of the undertaking on the basis of which it was provided by the vendor’s solicitors, but probably also a fraud on the vendor.  I do not think that the concept included in the definition of “registrable instrument of transfer” was intended to refer merely to a document which was in the correct form.  I expect the legislature would have intended that the reference to “capable of immediate registration” was intended to be a reference to something which could be done lawfully.  That was not the case for registration of this transfer prior to the date on which the notice of avoidance was given.

33. [33]
    The original legislation was not solely an exercise in consumer protection, because to some extent it involved a relaxation of a prohibition which previously existed, and in that sense it was to facilitate property development in Queensland. The 1997 legislation was to the same effect, in the sense that it involved a further relaxation, on terms, and in that way facilitated property development, while at the same time retaining the consumer protection element. The first amendment in 1985, however, was clearly legislation intending to change the Act in a way which made it more beneficial for consumers. The consumer protection element of the Act has been recognised by the courts.^[23]  The Act does this by making various requirements on sales of land which fall within its scope, and by providing “readily available remedies” if, relevantly, those requirements were not satisfied.  This may well mean that a contract could fall over for what on its face is a relatively minor technicality.  But consumer protection legislation should be strictly applied, and it is important that those who are selling land subject to this Act do whatever is necessary in order properly to comply with it.^[24]

34. [34]
    In my opinion, on the true construction of the statute, and on the uncontested facts, the time in which it was open to the plaintiff to avoid the contract because of the defendant’s admitted breach of s 9 of the Act had not expired at a time when that right was exercised.  Accordingly, the contract is at an end, and the plaintiff is entitled to recover the deposit.

An alternative reason

35. [35]
    It occurs to me that there is a further reason why this must be correct in the present case. The letter of 5 October 2005 provided the transfer to the purchaser’s solicitor on the basis of the solicitor’s undertaking to hold the stamped transfer “on our behalf” pending settlement, that is to say, on behalf of the vendor’s solicitor.  Relevantly, therefore, the purchaser’s solicitor, when holding the transfer, was not doing so as agent for the purchaser, but was doing so as agent for the vendor, or the vendor’s solicitor.  Accordingly, the defendant had not given the plaintiff the registrable instrument of transfer for the allotment; all that had happened is that one agent of the defendant had passed the document over to someone else to hold as another agent for the defendant (or for the first agent, as agent for the defendant).  That in my opinion did not amount to giving to the purchaser for the purposes of s 9(5).  For that reason also the time limit in that subsection had not expired at the time when the notice to avoid the contract was given.

Conclusion

36. [36]
    In these circumstances, it is unnecessary to consider whether the document was not a registrable instrument of transfer because, although executed on behalf of the defendant, it was not dated. In relation to this, the defendant sought to rely on an affidavit giving some evidence as to practice in the titles office, which was served only on the last business day before the date of hearing of the application. The timing of the defendant’s material was not in accordance with the rules; although the plaintiff’s solicitors sent the application for summary judgment and the affidavits in support under cover of a letter sent by facsimile to the defendant’s solicitors on 17 November 2006, well outside the eight business days required for service of such an application under UCPR r 296(1), the defendant did not file this material in response within the time limited by r 296(2).  In addition, on the last business day before the date of hearing, the defendant filed a cross‑application for summary judgment.

37. [37]
    On the date of the hearing, counsel for the plaintiff objected to having to respond to the affidavit filed on behalf of the defendant in relation to conveyancing practice, or perhaps titles office practice, in the time available. In the event it has been possible to determine the matter without regard to that consideration. If, however, I had not been able to do so, I would not have decided the application without giving the plaintiff a further opportunity to consider her position, and to decide whether to put on further material. I would also not have decided the defendant’s application without giving the plaintiff a proper opportunity to respond. It is not necessarily the case that, if the plaintiff’s application failed, the defendant’s application would have to succeed.

38. [38]
    Although only one point was argued in the matter before me, because it was conceded that if the defendant lost on that point the plaintiff was entitled to succeed in the action, it does not necessarily follow, and it was not expressly conceded, that if the plaintiff lost on that point the defendant was entitled to succeed in the action. In the event, however, the defendant’s application should be dismissed, as it has become superfluous. There is a counterclaim, but it was conceded that if the plaintiff’s claim succeeded, the counterclaim would fail, and there should be judgment for the plaintiff on the counterclaim as well.

39. [39]
    In the present case, the matter before me turns essentially on a question of statutory interpretation. On the view that I take of the interpretation of the statute, there is no factual issue remaining in dispute, and the plaintiff would be bound to succeed at trial. In these circumstances, it is appropriate to give summary judgment for the plaintiff. I will therefore make the declarations sought in paragraphs 1 and 2 of the application, and give judgment that the defendant pay the plaintiff $26,500 being the amount of the deposit paid together with interest from the date on which payment ought to have been made, 13 October 2006, to the date of judgment.

40. [40]
    The plaintiff sought in the application interest at 10 per cent per annum under the Supreme Court Act.  That is a higher rate than I would ordinarily allow under that Act, although I note that under the contract there is provision for a default interest rate of 10 per cent  per annum; in terms of the contract, however, that is to apply only to money payable by the plaintiff to the defendant under the contract which is not paid at the appropriate time.  Nevertheless, as the defendant regards that as a fair figure for a default interest rate, I intend to adopt that as the interest rate payable under the Supreme Court Act.  I will therefore allow interest at the rate of 10 per cent per annum, which I calculate at $500.  There will therefore be judgment that the defendant pay the plaintiff $27,000, including $500 by way of interest.  I will also order the defendant to pay the plaintiff’s costs of and incidental to the action, including both applications, to be assessed.  Because of the declarations made, costs should be assessed on the District Court scale.