Queensland Judgments
Authorised Reports & Unreported Judgments
  • sclq logo
  1. Caselaw
  2. QDC
  3. 2014
  4. MJ Arthurs Pty Ltd v Heaysman - [2014] QDC 160

Authorised Reports & Unreported Judgments
Exit Distraction Free Reading Mode
  • Unreported Judgment
  • Appeal Determined (QCA)

MJ Arthurs Pty Ltd v Heaysman[2014] QDC 160

MJ Arthurs Pty Ltd v Heaysman[2014] QDC 160

DISTRICT COURT OF QUEENSLAND

CITATION:

MJ Arthurs Pty Ltd v Heaysman & Anor [2014] QDC 160

PARTIES:

MJ ARTHURS PTY LTD ACN 145 344 056

(plaintiff)

v

PETER ROBERT HEAYSMAN

(defendant)

and

LEONIE COLLEEN HEAYSMAN

(defendant)

FILE NO/S:

BD 3970/2013

DIVISION:

PROCEEDING:

Trial

ORIGINATING COURT:

District Court, Brisbane

DELIVERED ON:

21 July 2014

DELIVERED AT:

Brisbane

HEARING DATE:

23, 24 June 2014

JUDGE:

McGill SC DCJ

ORDER:

Plaintiff’s claims dismissed.  Order that the plaintiff’s caveat no. 715279971 be removed.

CATCHWORDS:

CONTRACT – Offer and acceptance – need for communication of acceptance – whether made to authorised agent of offeror – when effectively made.

PRINCIPAL AND AGENT – Authority of agent – whether third party agent – scope of authority of agent to receive communications on behalf of principal – no implied authority.

BUILDING AND ENGINEERING CONTRACTS – Statutory regulation – obligation to provide copy – whether and when performed – right to withdraw – when arising – whether exercised.

Domestic Building Contracts Act 2000 s 36, s 72, s 75.

Barker v GE Mortgage Solutions Ltd [2013] QCA 137 – cited.

Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 – cited.

Burt v Kirkcaldy [1965] 1 WLR 474 – cited.

Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693 – cited.

David Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 – cited.

George Hudson Holdings Ltd v Rudder (1973) 128 CLR 387 – applied.

IVI P/L v Baycrown P/L [2005] QCA 205 – applied.

Jeppesons Road P/L v Di Domenico & Anor [2005] QCA 391 – applied.

MNM Developments Pty Ltd v Gerrard [2005] 2 Qd R 515 – considered.

Magripilis v Baird [1926] St R Qd 89 – cited.

Midlands Cooperative Society Ltd v Commissioners of Revenue and Customs [2008] EWCA Civ 305 – considered.

Re Munro [1981] 1 WLR 1358 – cited.

Penman v Parker [1986] 1 WLR 882 – considered.

R v Chief Immigration Officer ex parte Insah Begum [1973] 1 WLR 141 – cited.

White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164 – cited.

COUNSEL:

L G Bowden for the plaintiff

G Handran for the defendants

SOLICITORS:

Quinn & Scattini Lawyers for the plaintiff

Stephens & Tozer Solicitors for the defendants

  1. [1]
    By this proceeding the plaintiff claims damages for breach of contract, or alternatively money owing under a contract between the plaintiff and the defendants, together with consequential relief in relation to a security interest in respect of any such liability over certain land owned by the defendants. The plaintiff’s case is that it entered into a contract with the defendants for it to build a house on their land, which they have subsequently repudiated. The defendants do not admit that a valid contract ever came into existence, but say that if one did they exercised a right under the Domestic Building Contracts Act 2000 (“the Act”) to withdraw from that contract, so that the only entitlement of the plaintiff is to a statutory right to certain payment, which in fact is not being pursued in the alternative by the plaintiff.  The trial has been run before me with the issue of liability litigated separately from the issue of quantum, given that, if the plaintiff is entitled to recover damages for breach of contract, those damages are likely to include damages for loss of profit on the contract, which may be a complex thing to prove.  As it turns out, the case turns very largely on the correct interpretation of s 36 of the Act, and the principles of the law of agency.

Background

  1. [2]
    There was no real factual dispute raised by the evidence in this matter; indeed a feature of the evidence was that it revealed that the parties had had no direct dealings, up to the point where things started to go wrong. In early 2013 the defendants became interested in house and land packages being marketed by a company Optima Wealth Solutions Pty Ltd. That company was one of a group of companies associated with a Mr Ross[1], and the defendants evidently agreed to purchase a parcel of land from a developer with a view to having a house constructed on it.  The plaintiff is a building company which has a number of standard house designs that it can construct, one of which was suitable for the parcel of land the defendants purchased: p 18; p 30. 
  1. [3]
    Optima arranged for the defendants to sign, on 14 January 2013, a form of contract in writing for the construction by the plaintiff on a specified parcel of land of a home to a particular design for a specified contract price.[2]  The documentation was based on a standard form contract prepared by the Housing Industry Association, its “plain language new home construction contract”, edition QC1 2003.  Annexed to the contract was a “contract information statement” said to be a statement approved under s 99(1) of the Act.  The defendants acknowledged receiving the contract information statement prior to signing the contract on 14 January 2013:  Exhibit 1 p 20.  The same day a scanned copy of the contract signed by the defendants was sent by email from someone at Optima to Mr Arthurs, the director of the plaintiff:  Exhibit 2.  Mr Arthurs signed the contract on behalf of the plaintiff on 21 January 2013.  He then sent the signed contract to Optima by registered mail:  p 26. 
  1. [4]
    The defendants evidently required finance for this transaction, and they were referred by Optima to a finance broker Optima Lending Solutions Pty Ltd (“OLS”), presumably a related company, where they spoke to Tracey Clay, a loans processor working under the supervision of the senior finance manager Ms McAllister:  p 37, 38.  There was no contract in writing entered into between the defendants and OLS (p 41), but in fact that company proceeded to act as a finance broker and arranged finance from a bank for the transaction.  In connection with this process, on 18 January 2013 Ms McAllister sent the defendants a copy of the “Optima credit guide” for their records:  Exhibit 1 p 72.  The credit guide stated that it set out “important information about us, the services we provide, and the person with whom you will be dealing”: p 73.  I cannot find in the document a clear statement of what services OLS was to provide the defendants, though parts of the document assume that it would be providing credit assistance, and for that purpose making a determination of which loan products were or were not unsuitable.  It did state expressly that the company did not make any promises about the value of any property financed with them or its future prospects, and that they did not provide legal or financial advice:  p 76.  What was meant by providing credit assistance was set out, and included when the company “suggests or assists you to apply for a particular credit contract with a particular credit provider”. 
  1. [5]
    At some point Ms McAllister received from Optima an email with a scanned version of the executed building contract attached, though the date on which this occurred was not the subject of evidence.[3]  An application for finance was made, with her assistance, by the defendants to the Commonwealth Bank, which was evidently approved.[4]  By 25 February the finance became unconditional.[5]  The contract for the purchase of the land settled on or about 11 June 2013, and the defendants became registered as proprietors of the relevant lot on 19 June 2013.[6]
  1. [6]
    The plaintiff from June 2013 took some preliminary steps with a view to undertaking the building work, by engaging a certifier, and preparing a drainage plan for the block and some other plans which were subsequently provided to the certifier for approval, along with some other documents.[7]  The builder was to put up a number of homes in this street on different blocks, more than one to the same design, and the developer required some differentiation in colour, and had other colour requirements, so under the arrangement set up by Optima the defendants authorised the plaintiff to allocate colours to the exterior of the house[8], which the plaintiff did.[9] 
  1. [7]
    In July the relationship between the plaintiff and Optima broke down[10], and as a result Mr Arthurs had his partner telephone the various owners, including at least one of the defendants on 25 July 2013, to confirm their email addresses and to tell them that progress payments were to be made not through Optima but direct to the plaintiff.[11]  On 27 July 2013 the plaintiff sent the defendants an invoice seeking payment of the deposit under the contract, in a sum of just under $15,000.[12] Apparently in response to this, the solicitors for the defendants wrote to the plaintiff on 1 August 2013 purporting to withdraw from the contract under s 72 of the Act:  Exhibit 1 p 164.  On 19 September 2013 the solicitors for the plaintiff sent an electronic copy of the executed contract to the solicitors for the defendants, as an attachment to an email.  In response on 26 September 2013 the defendants’ solicitors sent a further withdrawal notice, including by facsimile to the number which was identified in that contract document as the facsimile number for the plaintiff:  Exhibit 4. 

The issues

  1. [8]
    It seems to me that the following issues arise in relation to this matter:
  1. Was there a contract formed between the plaintiff and the defendants?
  1. As at 1 August 2013, were the defendants entitled to withdraw from that contract under s 72 of the Act?
  1. If so, did they validly withdraw on that day?
  1. If the answer to question 2 or 3 is in the negative, it is also relevant to consider whether the defendants had a right to withdraw on 26 September 2013, and if so, whether they then validly exercised that right.

The Act

  1. [9]
    There are a number of provisions in the Act which are relevant. The purpose of the Act is stated in s 3 as:

“(a)  to achieve a reasonable balance between the interests of building contractors and building owners; and

  1. (b)
    to maintain appropriate standards of conduct in the building industry.”
  1. [10]
    There was no dispute in this proceeding that, if there was a contract entered into between the parties, it was a domestic building contract for the purposes of the Act, and indeed a regulated contract for the purposes of the Act. Section 21 provides:

“In this Act, a reference to a building owner in association with a reference to a domestic building contract is a reference to the building owner under the contract.”

  1. [11]
    By s 26, a regulated building contract must be in writing, either when it is entered into or be put in that form within five business days after it is entered into.  That is an obligation placed on the building contractor, as is the obligation in s 27 to comply with the formal requirements of a regulated contract, which include that it state the required matters as set out in s 28, and contain the things required by s 29.  One of the latter is a conspicuous notice advising the building owner of the right the owner may have to withdraw under s 72.  One of the required matters is the date the contract is made:  s 28(2)(d).  By s 30, “a regulated contract has effect only if it is signed by the building contractor and building owner (or their authorised agents).”  By s 31, the contractor must keep each regulated contract and the plans, specifications and variations relating to the contract for seven years from the date each document is put into writing.[13]  Section 36 provides:

“As soon as practicable (but within 5 business days) after entering into a regulated contract, the building contractor must give the building owner a readily legible signed copy of the contract.

Maximum penalty—20 penalty units.”

  1. [12]
    Section 40 requires the building contractor to give the building owner a copy of the appropriate contract information statement for the contract, which must be given when the contract is entered into or as soon as practicable but within five business days after the contract is entered into. However it may be given before the contract is entered into: s 40(2).  It may be separate from or attached to the contract:  s 40(4).
  1. [13]
    Section 72 provides as follows:

“(1)  The building owner under a regulated contract may withdraw from the contract under this section.

  1. (2)
     
    The building owner may withdraw from the contract within 5 business days after the receipt day for the contract.
  1. (3)
    If 5 business days have elapsed since the contract was entered into and there is no receipt day for the contract, the building owner may withdraw from the contract.
  1. (4)
    Nothing in subsection (3) affects the right of the building owner to withdraw from the contract under subsection (2) if a receipt day subsequently applies to the contract.
  1. (5)
    In this section—

receipt day, for a regulated contract, means—

  1. (a)
    the day on which the building owner receives the following documents from the building contractor—
  1. (i)
    a copy of the signed contract;
  1. (ii)
    a copy of the appropriate contract information statement for the contract; or
  1. (b)
    if the documents mentioned in paragraph (a) are received by the building owner from the building contractor on different days—the later of the days.”
  1. [14]
    There are restrictions on the right of withdrawal in s 73, applicable if there had been a previous contract entered into in substantially the same terms, and under subsection (3) if the building owner received formal legal advice about the contract before entering into the contract, or if the building owner told the building contractor that that had occurred.[14]  Section 74 provides a right to withdraw if the notice required by s 29(2) was not given, and s 75 sets out the procedure for withdrawing from a regulated contract under s 72 or s 74:  relevantly the building owner must give a withdrawal notice to the building contractor, that is a written notice signed by the building owner under a regulated contract stating that the building owner withdraws from the contract, and the section of the Act under which the withdrawal is made. 
  1. [15]
    Section 76 defines the rights of the parties if a building owner withdraws from a regulated contract under s 72, and s 77 contains an equivalent provision if the withdrawal is under s 74.  Section 78 permits a building owner under a repair contract to waive the building owner’s right to withdraw from the contract and specifies how this is to be done.  There is no other provision for waiver of the right to withdraw.  Finally s 99 provides for the authority to approve a statement containing general information about regulated contracts for the benefit of building owners which may be approved for different classes of contracts, and s 100 requires the chief executive to keep copies of contract information statements available for supply on payment of a fee.

Was the contract made?

  1. [16]
    In the present case there was a written form of contract which was signed by the defendants, and then emailed by Optima to the plaintiff, and signed by the plaintiff, thereby accepting the defendants’ offer to contract on those terms. The issue however is in relation to the question of communication of acceptance. As a general proposition, a contract is not formed until the acceptance of an offer has been communicated to the offeror.[15]  There are some exceptions to this, but it was not submitted that any of those are relevant here. 
  1. [17]
    It would have been possible for the Act to have modified the requirements for entry into a contract[16], but, although the Act requires a contract in writing, it does nothing to modify the common law in relation to the process of entry into a contract, and indeed s 26 contemplates that a contract may be made other than in writing, by imposing an obligation to put it into writing, although by s 30 a contract not in writing is of no effect.  There is however nothing in the Act which dispenses with the requirement to communicate acceptance.  It was not submitted that s 36 amounted to a legislative prescription of the mode of acceptance of the offer, and indeed s 72(3) is inconsistent with that analysis, because by authorising the owner in certain circumstances to withdraw from the contract it assumes there is otherwise a contract from which the owner may withdraw. 
  1. [18]
    It is also possible for the contract itself to modify the requirements for acceptance, ordinarily if the offeror stipulates for a particular form of acceptance. In general, that will be effective and will prevent the offer being accepted in any other way.[17]  It was however not submitted that there was any provision in the offer which required acceptance in any particular way.  On the whole therefore the matter comes back to the common law requirement for acceptance to be communicated to the defendants.
  1. [19]
    It was alleged in the statement of claim that a copy of the executed contract was provided to the defendants by Optima, but there was no evidence of that, nor was there any evidence of any communication of acceptance specifically by the plaintiff, or indeed by anyone else, to the defendants personally.[18]  Ultimately however the plaintiff relied on the proposition that acceptance had been achieved by communicating the fact of execution of the contract by the plaintiff to OLS, or to Optima Wealth Solutions Pty Ltd, each of which was alleged to be the agent of the defendants.[19]  The defendants denied that Optima Wealth Solutions Pty Ltd was their agent for any purpose, and denied that OLS had their authority to receive communications of this nature from the plaintiff.  I accept that as a general proposition the communication of acceptance of an offer can be validly made by communicating acceptance to a person who is an authorised agent of the offeror, that is a person who has the authority of the offeror to accept communication of acceptance of the offer as agent on behalf of the offeror.[20]  The issue then becomes one of the authority of the alleged agents of the defendants. 
  1. [20]
    The suggestion that Optima Wealth Solutions Pty Ltd was an authorised agent of the defendants can be quickly dismissed. There was no evidence that that company was the agent of the defendants for any purpose, being simply a marketing company which had in the course of its business procured from the defendants a contract for the defendants to purchase a parcel of land from a developer, and had procured the execution by the defendants of a building contract which in fact nominated the plaintiff as the builder, although the document was done up to suggest that it was essentially an Optima document.[21]  In fact Optima then transmitted the signed offer to the plaintiff, but the mere fact that the defendants allowed them to do so does not give rise to an inference that that company was the agent of the defendants for the purposes of receiving communication of the acceptance of the offer by the plaintiff.  There was certainly no evidence of any express appointment of Optima for that purpose, and there was nothing in the nature of the commercial relationship between Optima and the defendants which would imply the appointment of Optima as agent for the defendants for the purpose of receiving the communication of the plaintiff’s acceptance of their offer. 
  1. [21]
    If in fact Optima had communicated that acceptance to the defendants, the acceptance would have been effective,[22] because ordinarily what matters is that the offeror is made aware of the acceptance rather than that it be communicated to the offeror specifically by the offeree.  There was however no evidence that the defendants were in fact made aware by Optima of the execution of the contract by the plaintiff.  The obvious inference is that Optima conveyed the offer from the defendants to the plaintiff because this was part of its business, rather than because it was requested to do so by the defendants, but even if Optima had conveyed the offer to the plaintiff at the request of the defendants I do not think that that in itself would imply authorisation of Optima to receive on behalf of the defendants communication of the plaintiff’s acceptance of the offer.
  1. [22]
    OLS is in a different position, because it is common to regard a finance broker as the agent of the borrower for the purpose of sourcing a loan.[23]  Presumably there was an implied request to OLS to undertake that role, and that would I think impliedly authorise OLS to receive on behalf of the defendants communications from potential lenders, although without more it would not have authorised OLS to make any agreement on behalf of the defendants with any potential lenders.  There was no evidence of any express authorisation of OLS to receive communication from anyone else, and in particular from the plaintiff, and I do not consider that a finance broker would have implied authority from its client to receive communications other than from potential lenders, and in particular to receive a communication from a prospective builder. 
  1. [23]
    No authority was cited on behalf of the plaintiff for the view that a finance broker has implied authority of that kind.[24]  I was referred to some cases about solicitors, which suggest that a solicitor retained by a client in relation to a matter has authority to receive communications generally in relation to that matter, but that does not mean that a person who for some purpose acts as a solicitor for a client has a general authority to receive communications on behalf of that client in relation to anything.[25]  One of the cases relied on for the plaintiff depended upon a finding of actual authority[26], but there is no evidence of actual authority before me.  Bearing in mind that the issue is not whether such a person might be a convenient channel of communication to the client, but whether the person is to be taken to have such authority to act on behalf of the client that communication to that person would be binding on the client in relation to the formation of a contract without the client in fact being advised of that, I do not consider that the finance broker had implied authority to receive on behalf of the defendants communications from the plaintiff, such as the communication of the fact of execution of the contract by the plaintiff.[27] 
  1. [24]
    There was evidence that an email from Optima attaching a scanned copy of the fully executed contract was sent at some time to OLS, and apparently passed on by OLS to the bank[28], but there was no evidence that the fact of execution of the contract by the plaintiff was communicated by OLS to the defendants, and the evidence of Ms McAllister was to the contrary: p 41.  The contract was not made by communication of acceptance to OLS.
  1. [25]
    The plaintiff relied in the alternative on a number of subsequent matters which were said to amount to a communication of acceptance, or to acceptance by conduct.[29]  There are difficulties with the idea of acceptance by conduct.  In the first place, there was no evidence that any of the conduct actually came to the notice of the defendants, and it seems to me that, except in the case of a unilateral contract, there must be some difficulty in establishing acceptance by conduct from actions of which the offeror is ignorant.[30]  In the present case however it is clear from the form in which the offer was made that what was contemplated was that the offer would be accepted by execution of the written form of contract.  There is also the consideration that s 30 of the Act would appear to render ineffectual acceptance by conduct.  In those circumstances, there can be no question of acceptance by conduct.[31]  Accordingly, what matters is whether something happened which would have the effect of communicating to the defendants that the plaintiff had executed the form of contract. 
  1. [26]
    The plaintiff relied on a notice dated 19 June 2013 to the building owner signed by the certifier it had retained as to its appointment[32], but there was no evidence this had been received by the defendants, and it does not expressly or impliedly advise that the plaintiff had signed the contract.  If this were notice of acceptance by the plaintiff, the notice of withdrawal of 1 August 2013 would have been effective under s 72(3).  The plaintiff also relied on letters from its solicitors on 30 July 2013 and 7 August 2013 as communications of acceptance.[33]  On the view I take they are irrelevant, but if the former had been effective to communicate acceptance the outcome would be the same.  If nothing else, the letter of 1 August 2013 was a withdrawal of any unaccepted offer, so it could not have been accepted on 7 August 2013.
  1. [27]
    The plaintiff relied on the telephone advice that progress payments were to be made to it rather than to Optima[34], and to the fact that subsequently an invoice for the deposit was sent by email.[35]  In neither case was there any express statement as to the fact of execution of the contract, and it seems to me that it is not a necessary or reasonable implication from advice that, instead of the arrangement originally proposed, the plaintiff was now seeking a different arrangement in relation to payment that the form of contract signed by the defendants had in fact also been signed by the plaintiff.  It strikes me as being rather in the nature of a counter offer[36], which, if it really was a counter offer, amounted to a rejection of the defendants’ offer.[37]  On the other hand, I consider that forwarding by email an invoice seeking payment of the deposit payable under the contract was necessarily consistent only with the proposition that the contract had been entered into by the plaintiff[38], and that when this occurred the contract in terms of the written document was made between the plaintiff and the defendants, that is, on 27 July 2013. 

Was there a right to terminate on 1 August?

  1. [28]
    The effect of s 72, which I have set out earlier, is that the building owner may withdraw within a period of five days after the “receipt day” as defined, or if five business days have elapsed since the contract was entered into and there is no receipt day.  The right to withdraw in subsection (3) does not appear to have an end point, but subsection (4) suggests that if at a time when the right to withdraw exists under subsection (3) there comes to be a receipt day, the existence of the right under subsection (2) supersedes the right under subsection (3), so that the right to withdraw expires after the fifth business day after the receipt day.  Although that is not really what subsection (4) says, if the intention was that there be an open-ended right to withdraw if there was no receipt day within five business days since the contract was entered into I consider that subsection (4) would have been differently worded, along the lines of:  “Nothing in subsection (2) affects the right of the building owner to withdraw from the contract under subsection (3) if a receipt day subsequently applies to the contract.”
  1. [29]
    I should say at once that it seems to me that a receipt day cannot be a day earlier than the day on which the contract is entered into. In the first place, the reference to the building owner receiving from the building contractor “a copy of the signed contract” in subsection (5)(a)(i) is clearly a reference to the performance of the obligation in s 36 of the Act, which is one to be performed “after entering into a regulated contract”.  On the other hand, a copy of the appropriate contract information statement for the contract may be given prior to the time when the contract was made.  This follows from s 40(2), and a contract information statement was attached to the form of contract, and in that way provided to the defendants at the time they signed the form of contract. 
  1. [30]
    It was submitted on behalf of the defendants however that this did not satisfy the obligation in s 40, because the contract information statement provided was not in the approved form.  The basis of this submission was that, in the introductory note to the statement, which was part of the approved form[39], the statement said that it was approved for “HIA QCJ, QC2 and QC3 contracts only”.[40]  This particular contract was on the form “QC1 2000 plain language new home construction contract” of the Housing Industry Association:  Exhibit 1 p 21.  The evidence suggested and I accept that the reference to “QCJ” was actually a misprint or  typographical error, and the approved form stated in the same position the expression “QC1”, the form of contract in fact used on this occasion.  The argument for the defendants was that this error meant that the document provided was not the statement in the form approved under s 99, so that there had never been a copy of the appropriate contract information statement for the contract provided to the defendants, there was no receipt day for the contract, and s 72(3) applied. 
  1. [31]
    In my opinion the difference between the approved form and the terms of the document in fact provided to the defendants was so small, indeed trivial, that I am not prepared to find that there had been a failure on the part of the plaintiff to comply with its obligation to provide the required contract information statement. This was not a situation where the statement provided was inappropriate, if one disregards the typographical error; the evidence was that apart from that error the form was the form approved for a QC1 contract.[41]  There was no suggestion and certainly no evidence that the defendants were in fact misled by the terms of the document provided, and the substantive information contained in the approved statement was all provided by the statement which was handed over.  Indeed, that part of the approved form which contained the typo was in the nature of an instruction to the plaintiff rather than part of the statement which actually conveyed relevant information to the defendants.  In my opinion the difference was of no practical significance, and whether the matter is approached on the basis of a theory of substantial compliance, or on the basis of an application of the principle of de minimis non curat lex, I am not prepared to accept the argument on this point advanced on behalf of the defendants. 
  1. [32]
    The Court of Appeal in MNM Developments Pty Ltd v Gerrard [2005] 2 Qd R 515 held that a requirement that a particular statutory statement be attached to a contract for the sale of land as its first or top sheet at a particular time had not been satisfied in circumstances where the contract and the statement had been transmitted by fax to the prospective purchaser at the same time.  Counsel for the defendants relied on the decision as authority for the proposition that a consumer protection provision such as this is one which must be complied with strictly.  I consider that that was a different situation, one where the real issue was whether the requirement in the statute that the statement be “attached” was satisfied when it was simply delivered with the contract.  To have interpreted the requirement in that way would have involved giving the term “attached” in the statute an unusually wide meaning, in a way which would have had the effect of diminishing rather than supporting the consumer protection function of the provision, and it is unsurprising that the court in those circumstances was not prepared to take that step.  The decision could be seen as an inconvenient one, but it was one really required by the terms of the legislation. 
  1. [33]
    On the other hand, in the present case the legislation required an approved statement to be provided and, but for an inconsequential typographical error in respect of one letter, the approved statement was provided. I do not consider that the requirement for strict compliance is as strict as that. In my opinion what occurred here involved the provision in substance of an approved contract information statement for the contract, attached to the contract, but given before the contract was entered into, in compliance with s 40.  That statement was received by the defendants on 14 January 2013, but that was not the “receipt day”, because of s 72(5)(b).
  1. [34]
    In the present case I have said already that the contract was not made or entered into until 27 July 2013 when the emailed invoice was sent to the defendants.  Under s 36, the plaintiff had five business days to give the defendants a readily legible signed copy of the contract, that is to say until 2 August 2013.[42]  This obligation was clearly not complied with.  Even if the earlier provision of the signed contract by Optima to OLS amounted to giving the defendants a readily legible signed copy of the contract, this was not done after the contract was entered into so that s 36 was not complied with.  On the other hand, as at 1 August 2013, there was still no receipt day, because the defendants had not received a copy of the signed contract from the plaintiff as at that day.[43]
  1. [35]
    It follows that as at 1 August 2013 there was no right to withdraw from the contract under s 72(3) since five business days had not elapsed since the contract was entered into.  There was also no right to withdraw from the contract under s 72(2) because the receipt day had not yet arrived.  Assuming that the letter from the defendants’ solicitors on 1 August 2013 satisfied the requirements of s 75 of the Act, it was not effective to put an end to the contract under s 72, because it was given too early.  The right to withdraw under s 72(3) arose only on 3 August 2013.

Was there a right to terminate on 26 September?

  1. [36]
    The plaintiff finally complied with its obligation under s 36 on 19 September 2013, assuming that the provision of an electronic copy of the executed contract to the solicitors for the defendants was effective compliance with s 36.  This raises the question of whether the obligation under s 36 can only be performed by giving the relevant copy to the building owner personally, or whether the obligation can be performed by giving it to an authorised agent of the building owner.
  1. [37]
    The Act does not say expressly whether or not the obligation in s 36 can be satisfied by giving the copy to an authorised agent of the building owner.  In this respect it may be contrasted with the provision of s 30 of the Act, which requires a regulated contract to be signed by the building contractor and building owner “(or their authorised agents).”  The term “building owner” is defined in terms which do not expressly extend to an agent of the building owner.  In view of the terms of s 21 and s 30, there is an argument that where the legislature used the term “building owner” in the Act and did not expressly provide to the contrary, it was a reference to the building owner personally and did not extend to an authorised agent.
  1. [38]
    I was referred to an authoritative text in support of the general proposition that where a statute authorises or requires someone to do something that can be done by an authorised agent, in the absence of some express provision to the contrary, or some implication arising from the context of the legislation.[44]  On the other hand, where the statute required that something be done or given to a person, there was no such presumption and the matter depended on the proper interpretation of the section in accordance with ordinary principles.[45]  The present case falls in the latter situation, and ultimately the question is one for interpretation.  My initial reaction, that when a statute requires something to be provided to X that was an obligation to provide it to X personally, probably involved a presumption the existence of which is not justified by the approach in the text.  Counsel for the plaintiff relied on English authority that the obligation can be satisfied by providing a copy of the contract to the owner’s agent, Penman v Parker [1986] 1 WLR 882, and Midlands Cooperative Society Ltd v Commissioners of Revenue and Customs [2008] EWCA Civ 305.  In the former case it was held that an obligation to give notice could be performed by service on an agent[46]; the latter was a decision on assignability of a statutory right to repayment.
  1. [39]
    In the present case there can be no question about the authority of the solicitors. Apart from the authorities referred to earlier, the solicitors in the letter of 1 August advised that any communications were to be directed through their office rather than directly to the owner, and no question has been raised as to the authority of the solicitors to communicate that proposition. If therefore the obligation can be satisfied by providing a copy to an authorised agent of the defendants, providing it to the solicitors satisfied the obligation.
  1. [40]
    My concern as to whether providing a copy to an authorised agent could satisfy the obligation in s 36 is that it appears from the context that the purpose of the requirement that the copy of the contract be provided to the building owners was to enable the building owners to obtain legal advice as to the implications of the contract, to compliment the power to withdraw from the contract within a reasonably short time after it had been entered into (provided that a copy was promptly provided to them), a time which would nevertheless be adequate to obtain legal advice, and from the fact that the right to withdraw does not arise in circumstances where in fact the building owners have obtained legal advice about the contract before entering into it: s 73(3).  It is perhaps particularly in circumstances such as the present, where “consumers” have been signed up to a house and land package by a marketing company such as Optima, that it is desirable that they have the benefit of legal advice at some useful stage in the process. 
  1. [41]
    If s 36 can be satisfied by provision of a contract to an authorised agent, it would be possible for someone like Optima to adopt the business practice of obtaining from the building owners express authorisation to receive the signed contract under s 36 on their behalf. Such a marketing company might, of course, dutifully pass on the contract promptly to them, but bearing in mind that it appears that Optima did not do that in the present case, it would obviously be possible for another marketing company which wished to frustrate the provisions in the statute allowing a right of withdrawal to refrain from handing over a copy of the contract to the owners until after the right to withdraw had expired. This would hardly be consistent with that aspect of the purpose of the statute which involved consumer protection, and is a reason why s 36 should be interpreted as requiring that the copy of the contract be given to the building owner personally.
  1. [42]
    On the other hand, there are practical considerations the other way. Would it mean for example that where there are two building owners, as is the case here, a copy of the contract has to be given to each of them? What if, immediately after signing, someone in the position of the defendants had consulted a solicitor, but did not at that stage have a copy of the contract as signed? If s 36 requires the copy to be provided to the building owner personally, it would not be open to the solicitor to write to the builder asking that s 36 be complied with by providing the copy to the solicitor[47], a step which would be likely to facilitate the provision of timely legal advice as to the terms of the contract. 
  1. [43]
    On the whole, I consider that, in circumstances where there is no specific exclusion in the Act of performance of the obligation under s 36 by giving a copy to the authorised agent of the building owners, either specifically in respect of that section or in general terms, the legislature should be taken to accept the general proposition that a person may act through an agent, so that s 36 should not be interpreted as requiring that the copy be given to the building owner personally. Accordingly I accept that provision of the copy of the contract on 19 September 2013 to the solicitors for the defendants amounted to performance of the obligation under s 36, and that day became the receipt day.
  1. [44]
    I should say that it does not follow from the fact that a copy ultimately found its way to OLS meant that s 36 had been satisfied. It may well be that the plaintiff could satisfy its obligation under s 36 by having its agent, Optima, provide a legible copy of the contract to an authorised agent of the defendants, but, for the reasons that I have already given, I do not consider that OLS was the agent for the defendants for the purpose of receiving communications from the plaintiff, and the same process of reasoning leads to the same conclusion in relation to receipt of the copy of the contract under s 36. Accordingly the day on which OLS received the copy of the executed contract was not the receipt day for the purpose of s 72.
  1. [45]
    The defendants had five business days from the receipt day to withdraw under s 72(2). The receipt day was a Thursday, so the last day to exercise that right to withdraw was 26 September. On that day the defendants had a right to withdraw from the contract under s 72(2), on the view that I have taken as to the correct construction of s 36.  I might add that if I am wrong about the proposition that the copy of the contract can be given to an authorised agent on behalf of the building owner, the position would be the same, because it would simply mean that, no copy of the contract having been given by the plaintiff to the defendants personally, there was still no receipt date so there was a right to withdraw under s 72(3), more than five business days having elapsed since the contract was entered into.

Was the right to withdraw validly exercised?

  1. [46]
    On 26 September 2013 the solicitors for the defendants sent another letter to the plaintiff, including by facsimile to the facsimile number identified in the contract as the number for the plaintiff: Exhibit 1 p 12.[48]  It is clear that such facsimile was sent to that number on that day (Exhibit 4), and clause 31.1(c) of the contract provided that a notice is deemed to be given and received if the notice is sent by facsimile transmission to the party’s last known facsimile number, on receiving confirmation of transmission.[49]  Confirmation of transmission was in fact received by the defendants’ solicitors: Exhibit 4.  I am prepared to take judicial notice of the fact that facsimile transmission is essentially instantaneous, so that if it was transmitted on 26 September it was received on 26 September. 
  1. [47]
    It may be that that fax number in fact related to Optima so that the notice did not come to the attention of the plaintiff on that day, but s 75(1)(c) expressly permitted the building owner to serve a withdrawal notice on the building contractor in accordance with any provision in the contract providing for service of notices on the building contractor by the building owner.  If therefore the notice of withdrawal was otherwise valid I find that it was served in time in that way.  On the evidence, that was the last facsimile number for the plaintiff which was known to the defendants, that being the number specified in the copy of the contract which was provided on 19 September 2013: Exhibit 1 p 12.
  1. [48]
    It was submitted for the plaintiff that the notice of withdrawal was not valid because it had been signed by the defendants’ solicitors rather than being signed by the defendants personally. Section 75(2) requires that the withdrawal notice be “signed by the building owner under a regulated contract”, and this therefore raises the same point about whether something which can be done under a statute by a party can be done by the party’s agent. There is nothing about s 75 which throws any light on this question one way or the other, but in circumstances where this is a provision authorising someone to do something under the Act, I consider that the appropriate presumption is that it can be done by the authorised agent of that person in the absence of some indication in the statute to the contrary.  I can find no such indication here.  The general principle of the law is qui facit per alium facit per se[50], a proposition which I consider the legislature may be taken to have known, so that if it intended that it not operate in this situation the legislation would have said so expressly.  Accordingly I conclude that a notice of withdrawal is validly given if given by an authorised agent of the defendants.  That the solicitors were authorised for this purpose was not put in issue on the pleadings, the only point raised by the plaintiff about authority being whether s 75(2) excluded a notice signed by anyone other than the building owner personally, a proposition which I reject.
  1. [49]
    The other point that was taken was that the notice did not identify the section of the Act. The notice in terms referred to s 72 of the Act, but the argument advanced on behalf of the plaintiff was that it was necessary to identify the subsection of s 72 on which the defendants were relying for the notice to be valid.  In my opinion there was no reason to read s 75 in this way, which involves inserting words not used by the legislature.  As it happens in the present case whether the right to withdraw arose under s 72(2) or under s 72(3) depended on whether s 36 requires a copy to be given to the building owner personally, or whether it is sufficient for a copy to be given to the building owner’s agent.  I do not accept that the legislature required that judgment to be made at the time of the formulation of the notice of withdrawal.  The point about identifying the section is that the right to withdraw could arise under s 72 or under s 74, and the obvious intention was to ensure that notice was given as to which of those sections the building owner was relying on. 
  1. [50]
    Accordingly all of the arguments advanced on behalf of the plaintiff for the invalidity of the notice of withdrawal on 26 September 2013 are rejected, and I find that by that notice the defendants validly withdrew from the contract.  It follows that they are not liable for damages for breach of contract, nor does the plaintiff have any cause of action for money payable under the contract.  It also follows that there cannot be any sum owed by the defendants in respect of which the plaintiff has any security over any land, as further alleged in the pleading.  Accordingly the plaintiff is not entitled to any of the relief claimed in the action, and there will be judgment in the action for the defendants.  I also order that the caveat lodged by the plaintiff (number 715279971) be removed.  I assume that costs follow the event but will receive submissions when these reasons are published.

Footnotes

[1]  Arthurs p 18.  I shall use the term “Optima” to refer to the group collectively, unless it is relevant to identify a specific company.

[2]  Exhibit 1 Doc 1.  See in particular p 4; p 9; p 52 of this document.

[3]  She could not recall if it was signed (p 40) but she identified a signed copy among documents produced on subpoena by the bank (p 42) which must have come from OLS: p 43.

[4]  Exhibit 3 p 25.  In fact there were two loans – McAllister p 38 – but this does not matter.

[5]  Exhibit 3 p 34.  Most of this exhibit is irrelevant to this action.

[6]  Statement of claim para 19, 20; defence para 9.  The reason for the delay did not emerge.

[7]  Arthurs p 30-2; Exhibit 3 p 47.  There was also a soil test done:  p 62.

[8]  Exhibit 1 p 64.

[9]  Arthurs p 47; Exhibit 3 p 99.

[10]  Arthurs p 48; Exhibit 3 p 107.

[11]  Arthurs p 48-49; Quinn p 54, 55.  This was confirmed by email on 25 July:  Exhibit 3 p 121.

[12]  Exhibit 1 p 163.  The invoice is dated 26 July 2013 but it was emailed on 27 July  2013:  Exhibit 3 p 127.

[13]  Unless there were two copies of the contract signed by the plaintiff, it appears that by sending the contract to Optima the plaintiff breached this obligation.

[14]  Neither of these apply here.

[15] George Hudson Holdings Ltd v Rudder (1973) 128 CLR 387 at 395.

[16]  As occurred with the Property Agents and Motor Dealers Act 2000 s 365, as it was in 2003:  [2005] 2 Qd R 519.

[17] George Hudson Holdings (supra).

[18]  The arrangement with Optima was said to exclude direct communication between the plaintiff and customers:  Arthurs p 18.  This seems contrary to s 36.

[19]  Reply para 10C(a), referring to the provision of the copy of the executed contract alleged to be in compliance with s 36.

[20] David Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099 at [167], a case where it was found that, after the offer had been made, there was an express agreement between the parties that the acceptance in writing would be sent to and held by a nominated person on behalf of the offeror. See also IVI P/L v Baycrown P/L [2005] QCA 205 at [2].

[21]  The contract stated that Optima Homes (Australia) Pty Ltd was the agent of the plaintiff:  Exhibit 1 p 4.  It did not mention any other Optima company.

[22] Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153 at [86] per Heydon JA

[23] Barker v GE Mortgage Solutions Ltd [2013] QCA 137 at [45].

[24]  There was no evidence, and it was not submitted, that the defendants had held either company out as their agent for receiving communications: cf Magripilis v Baird [1926] St R Qd 89 at 91.

[25]  Cordery on Solicitors (6th ed. 1968) p 111, p 116; Re Munro [1981] 1 WLR 1358 at 1361; White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164 at [128]; IVI P/L v Baycrown P/L [2005] QCA 205 at [30] – [40].

[26] Burt v Kirkcaldy [1965] 1 WLR 474.

[27]  Mr Arthurs said that in fact communication with OLS was rare:  p 18.  Ms McAllister said that the bank did not require production of an executed building contract until the stage of an advance being made (p 30, 40).  Although she had authority to communicate with the bank it does not follow that she had authority to receive communications from the plaintiff.

[28]  McAllister p 40, p 42, p 43.

[29]  Reply para 10A(a)-(d), (f) relied on things done by the defendants or by Optima, which obviously cannot be communication of acceptance by the plaintiff.  Para 10A(e), (h), (i) and (k) relied on conduct of the plaintiff.

[30]  See for example Brambles Holdings Ltd v Bathurst City Council (supra) at [85].

[31]  For the same reasons, the allegation in the reply para 10(e)-(g) that the provision of the blank form of contract was an offer to the defendants which they accepted by signing it was nonsense.

[32]  Reply para 10A(g).

[33]  Reply para 10A(m), (n).  I take the latter to refer to 7 August 2013.  These letters are in Exhibit 3 p 136, 139.

[34]  Reply para 10A(l).

[35]  Reply para 10A(j).

[36]  The contract required payment to the builder (Exhibit 1 clause 4.5, p 24) but that included anyone acting with the builder’s express authority (“builder” p 49) and Optima was so authorised:  p 4.  To withdraw that authority involved a change in the terms of the written offer (or contract).

[37]  Cheshire and Fifoot’s Law of Contract, 9th Aust. Ed, p 120 para 3.25.  This point was not taken by the defendants but is equally fatal to the plaintiff’s claims.

[38]  The contract required payment of the deposit on execution by the defendants (Exhibit 1 p 24 clause 4.5) but there was no contractual obligation to pay until the defendants’ offer had been accepted by the plaintiff.

[39]  Sparkes p 7.

[40]  Exhibit 1 p 52.

[41]  Sparkes p 5:  I accept this evidence.

[42]  27 and 28 July were a Saturday and Sunday, and not business days.

[43]  As noted earlier, I consider that this must be confined to a copy received after the contract had been entered into.

[44]  Bennion, “Interpretation – A Code” (6th ed.) p 1019; see also Midlands (infra) at [14].

[45]  Ibid p 1021.

[46]  See also R v Chief Immigration Officer ex parte Insah Begum [1973] 1 WLR 141 at 143.

[47]  Analogous to the facts in Penman v Parker (supra).

[48]  The number was 07 5677 0624.

[49]  Exhibit 1 p 46.

[50] Christie v Permewan, Wright & Co Ltd (1904) 1 CLR 693 at 700; Jeppesons Road P/L v Di Domenico & Anor [2005] QCA 391 at [9].

Close

Editorial Notes

  • Published Case Name:

    MJ Arthurs Pty Ltd v Heaysman & Anor

  • Shortened Case Name:

    MJ Arthurs Pty Ltd v Heaysman

  • MNC:

    [2014] QDC 160

  • Court:

    QDC

  • Judge(s):

    McGill DCJ

  • Date:

    21 Jul 2014

Litigation History

EventCitation or FileDateNotes
Primary Judgment[2014] QDC 16021 Jul 2014The plaintiff claimed damages for breach of contract, or alternatively money owing under a contract between the plaintiff and the defendants, together with consequential relief in relation to a security interest in respect of any such liability over certain land owned by the defendants. Plaintiff’s claims dismissed. Ordered that the plaintiff’s caveat no. 715279971 be removed: McGill SC DCJ.
Appeal Determined (QCA)[2015] QCA 11323 Jun 2015Appeal dismissed. Application to adduce fresh evidence refused. Appellant ordered to pay the respondents’ costs of the appeal: McMurdo P, Holmes JA, Atkinson J.

Appeal Status

Appeal Determined (QCA)

Cases Cited

Case NameFull CitationFrequency
Barker v GE Mortgage Solutions Limited [2013] QCA 137
2 citations
Jump To
Cite 1 - [2013] QCA 137
Cite 2 - [2013] QCA 137
Brambles Holdings Ltd v Bathurst City Council (2001) 53 NSWLR 153
2 citations
Jump To
Cite 1 - (2001) 53 NSWLR 153
Cite 2 - (2001) 53 NSWLR 153
Burt v Kirkcaldy [1965] 1 WLR 474
2 citations
Jump To
Cite 1 - [1965] 1 WLR 474
Cite 2 - [1965] 1 WLR 474
Christie v Permewan, Wright & Co. Ltd. (1904) 1 CLR 693
2 citations
Jump To
Cite 1 - (1904) 1 CLR 693
Cite 2 - (1904) 1 CLR 693
David Walker v Salomon Smith Barney Securities Pty Ltd [2003] FCA 1099
2 citations
Jump To
Cite 1 - [2003] FCA 1099
Cite 2 - [2003] FCA 1099
George Hudson Holdings Ltd v Rudder (1973) 128 CLR 387
2 citations
Jump To
Cite 1 - (1973) 128 CLR 387
Cite 2 - (1973) 128 CLR 387
George Hudson Holdings Ltd v Rudder [2005] 2 Qd R 519
1 citation
Jump To
Cite 1 - [2005] 2 Qd R 519
IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205
3 citations
Jump To
Cite 1 - [2005] QCA 205
Cite 2 - [2005] QCA 205
Cite 3 - [2005] QCA 205
Jeppesons Road Pty Ltd v Di Domenico [2005] QCA 391
2 citations
Jump To
Cite 1 - [2005] QCA 391
Cite 2 - [2005] QCA 391
Magripilis v Baird [1926] St R Qd 89
2 citations
Jump To
Cite 1 - [1926] St R Qd 89
Cite 2 - [1926] St R Qd 89
Midlands Cooperative Society Ltd v Commissioners of Revenue and Customs [2008] EWCA Civ 305
2 citations
Jump To
Cite 1 - [2008] EWCA Civ 305
Cite 2 - [2008] EWCA Civ 305
MNM Developments Pty Ltd v Gerrard[2005] 2 Qd R 515; [2005] QCA 230
2 citations
Jump To
Cite 1 - [2005] 2 Qd R 515
Cite 2 - [2005] 2 Qd R 515
Penman v Parker [1986] 1 WLR 882
2 citations
Jump To
Cite 1 - [1986] 1 WLR 882
Cite 2 - [1986] 1 WLR 882
R v Chief Immigration Officer ex parte Insah Begum [1973] 1 WLR 141
2 citations
Jump To
Cite 1 - [1973] 1 WLR 141
Cite 2 - [1973] 1 WLR 141
Re Munro and Anor; ex parte Singer v Trustee in Bankruptcy (1981) 1 WLR 1358
2 citations
Jump To
Cite 1 - (1981) 1 WLR 1358
Cite 2 - (1981) 1 WLR 1358
White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164
2 citations
Jump To
Cite 1 - [2002] NSWCA 164
Cite 2 - [2002] NSWCA 164

Cases Citing

Case NameFull CitationFrequency
M J Arthurs Pty Ltd v Heaysman [2015] QCA 1131 citation
M J Arthurs Pty Ltd v Isenbert [2017] QDC 853 citations
MJ Arthurs Pty Ltd & Anor v QS Law Pty Ltd trading as Quinn & Scattini Lawyers [2018] QDC 1502 citations
1

Require Technical Assistance?

Message sent!

Thanks for reaching out! Someone from our team will get back to you soon.

Message not sent!

Something went wrong. Please try again.