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Mark Bain Constructions Pty Ltd v Tim Barling[2006] QSC 48

Mark Bain Constructions Pty Ltd v Tim Barling[2006] QSC 48

 

SUPREME COURT OF QUEENSLAND

 

CITATION:

Mark Bain Constructions Pty Ltd v Tim Barling, Alex Watson and Timothy Scott [2006] QSC 048

PARTIES:

MARK BAIN CONSTRUCTIONS PTY LTD

(ACN 010 846 385)

(applicant)

v

TIM BARLING, ALEX WATSON and TIMOTHY SCOTT

(respondents)

FILE NO/S:

BS 9714 of 2005

BS 10249 of 2005

DIVISION:

Trial Division

PROCEEDING:

Application

ORIGINATING COURT:

Supreme Court

DELIVERED ON:

20 March 2006

DELIVERED AT:

Brisbane

HEARING DATE:

8 December 2005

JUDGE:

Philippides J

ORDER:

It is declared that:

1.the Put and Call Option Deed between Mark Bain Constructions Pty Ltd as grantor and Tim Barling, Alex Watson and Timothy Scott as grantees over land described as Proposed Lot 9 on SP 168305 Title Reference 50496527 County of March Parish of Webya dated 25 February 2003 was validly terminated by the respondents by written notice of termination delivered to the applicant dated 17 June 2004;

2.the Put and Call Option Deed between Mark Bain Constructions Pty Ltd as grantor and Tim Barling, Alex Watson and Timothy Scott as grantees over land described as Proposed Lot 10 on SP 168305 Title Reference 50496528 County of March Parish of Webya dated 25 February 2003 was validly terminated by the respondents by written notice of termination delivered to the applicant dated 17 June 2004;

3.the respondents are entitled to have refunded to them the deposit paid by them.

CATCHWORDS:

CONTRACT – put and call option deeds in respect of residential property – whether respondents’ purported termination of option deeds valid – whether respondents  entitled to a refund of deposit monies –  where respondents purported to terminate option deeds pursuant to s 367 of the Property Agents and Motor Dealers Act 2000 (Qld) (“PAMD Act”) for non-compliance with s 366(1) of PAMD Act – where s 366(1) required a “warning statement” to be attached to a “relevant contract” as its first or top sheet – where failure to attach a warning statement gave a buyer under the contract a right under s 367 of the PAMD Act to terminate the contract by notice prior to settlement –whether option deeds were “relevant contracts” for the purposes of s 366(1) of the PAMD Act – whether a “warning statement” was required to be attached as the first or top sheet of option agreement.

CONTRACT – put and call option deeds in respect of residential property – whether respondents’ purported termination of option deeds valid – whether respondents  entitled to a refund of deposit monies –  where respondents purported to terminate option deeds pursuant to s 170 of the Body Corporate and Community Management Act 1997 (Qld) (“BCCM Act”) for non-compliance with that provision – whether pursuant to s 170 of the BCCM Act an information sheet was required to be attached to the option deeds immediately beneath a PAMD Act warning statement.

Body Corporate and Community Management Act 1997 (Qld), s 170(1), s 170(5), s 170(6), Ch 5

Property Agents and Motor Dealers Act 2000 (Qld), s 17,      s 363 s 364, s 365, s 366, s 367, s 368, s 369, Ch 11

David Deane & Associates Pty Ltd  v Bonnyview Pty Ltd [2005] QCA 270

Devine Ltd v Timbs [2004] QSC 024

Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57

MNM Developments Pty Ltd  v Gerrard [2005] QCA 230

Nguyen v Taylor (1992) 27 NSWLR 48

Petelin v Deger Investments Pty Ltd (1976) 133 CLR 538

COUNSEL:

PJ Dunning SC with G D Beecham for the applicant

P E Hack SC with A M Musgrave for the respondents

SOLICITORS:

Sykes Pearson & Miller for the applicant

Siemons Lawyers for the respondents

PHILIPPIDES J: 

Issues

  1. On 25 February 2003, the applicant, Mark Bain Constructions Pty Ltd, as “grantor”, and the respondents, Tim Barling, Alex Watson and Timothy Scott, as “grantees”, entered into put and call option deeds in relation to two proposed lots, Lots 9 and 10, in a proposed Community Title Scheme at Park Crescent, Sunshine Beach, called No 1 Park. The deed for each proposed lot is in substantially the same terms.
  1. The issue for determination in this application is whether notices of termination dated 17 June 2004 delivered by the respondents to the applicant in respect of the two option deeds were effective to terminate the deeds. The applicant seeks declarations that the notices were not effective. The present respondents bring separate proceedings (BS 10249 of 2005) seeking declarations that the deeds were validly terminated. They additionally seek relief under the Trade Practices Act 1974 (Cth) and the Fair Trading Act 1989 (Qld), which it is accepted raise disputed factual issues that cannot be determined at this stage.  However, both parties seek to have the validity of the notices determined independently of those issues.
  1. The respondents’ purported termination relies upon alleged non-compliance with the Property Agents and Motor Dealers Act 2000 (Qld) (“the PAMD Act”) and the Body Corporate and Community Management Act 1997 (Qld) (“the BCCM Act”).  The respondents’ case is based on the contention that the option deeds constituted “relevant contracts” for the purposes of s 366 of the PAMD Act, so that a warning statement in compliance with that section was required to be attached to each option deed as its first or top sheet.  Similarly, it is contended that the option deeds were “contracts” for the purposes of s 170 of the BCCM Act so that an information sheet was required to be attached in accordance with that provision.
  1. The applicant on the other hand contended that the put and call option deeds were not “relevant contracts” for the purposes of the PAMD Act or contracts for the purposes of the BCCM Act.  Rather, it was submitted that what those Acts required respectively was that a warning statement and an information sheet be attached to the contract form executed pursuant to the exercise of the options. 

Background

  1. The option deeds were delivered to the respondents’ solicitors for execution under cover of a letter dated 11 December 2002, a draft of the deeds having previously been provided. The deeds were executed by the respondents and forwarded to the applicant’s solicitors by the respondents’ solicitors under cover of a letter dated 19 February 2003. There was also delivered under cover of that letter PAMD Form 32a Lawyer’s Certificates signed by the respondents’ solicitor as required by clause 15 of the deeds which states:

“The Grantee shall at the same time it enters into this deed, provide to the Grantor a PAMD Form 32a Lawyer’s Certificate waiving the relevant cooling off period which will apply if the Contract is formed upon the exercise of either the put option or the call option granted in this Deed and this Deed shall not come into effect until the Grantor receives a duly completed PAMD Form 32a.”

  1. The deeds were executed by the applicant and dated 25 February 2003. Copies of the executed deeds were sent to the respondents’ solicitors on that date.
  1. By the deeds the applicant granted to the respondents an option to purchase (“the call option”) and the respondents granted to the applicant an option to sell (“the put option”) the proposed lots. The respondents were entitled to exercise their call options during the call option period, which commenced from the date of the deed and ended on the date of recording by the Registrar of Titles of the Community Management Statement in respect of the scheme land (clauses 1 and 2). The applicant was entitled to exercise its put options from the expiry of the call option exercise period for a period of 14 days after the recording of the Community Management Statement (clauses 1 and 3).
  1. The terms of the call options are set out in clause 2 of the deeds:

2.Call Option

  1. The Grantor grants to the Grantee during the call option exercise period an option to purchase the property for the price described in the Contract.
  2. The Grantee must in order to exercise the call option serve notice of exercise for call option on the Grantor during the call option exercise period.
  3. Upon the exercise of the call option the Grantor and the Grantee shall be deemed to have entered into the Contract for the sale and purchase of the property upon the terms set out in the Contract.
  4. The Grantee will cause the Contract in duplicate showing the Grantee as buyer where appropriate in the Contract to be delivered to the Grantor or its solicitors duplicate duly executed by the Grantee and the Guarantor (sic).
  5. Upon receipt of the Contract by the Grantor or its solicitors the Grantor will execute and date the Contract and deliver the Grantee’s copy promptly to the Grantee or its solicitors ”
  1. The terms of the put options are set out in clause 3 of the deeds:

3.Put Option

  1. The Grantee grants to the Grantor during the option exercise period an option to sell the property to the Grantee for the price described in the Contract.
  2. The Grantor must, in order to exercise the put option, serve notice of exercise of put option on the Grantee during the option exercise period.
  3. Upon the exercise of the put option the Grantor and the Grantee shall be deemed to have entered into the Contract for the sale and purchase of the property upon the terms set out in the Contract.
  4. The Grantor will cause the Contract in duplicate showing the Grantee as buyer to be delivered to the Grantee or its solicitors and the Grantee must forthwith execute the Contract, cause the same to be executed by the Guarantee (sic) and to be delivered to the Grantor’s solicitors the Contract in duplicate.
  5. Upon receipt of the Contract by the Grantor’s solicitors the Grantor will execute and date the Contract and deliver the Grantee’s copy promptly to the Grantee or its solicitors.”
  1. The reference in the deeds to “the Contract” is to be understood in accordance with clause 1 of the deeds which defined that term to mean “the contract for sale attached and marked Schedule ‘A’ to which is attached the information sheet”. The deeds each contained, as Schedule A, a document entitled “contract”, the first two pages of which comprised a PAMD Form 30bWarning Statement. They were followed by a BCCM Information Sheet, which was in turn followed by a document entitled “Contract of Sale”. In that contract the applicant was described as “the seller” and the respondents as “the buyer”.
  1. The relevant Survey Plan and Community Management Statement for No 1 Park were registered on 19 May 2004, creating, inter alia, the lots referred to as unit 9 and unit 10.  The respondents did not exercise their call options.   However, by notices dated 27 May 2004, the applicant exercised its put options in respect of both units and forwarded to the respondents’ solicitors a form of contract of sale for each unit (in the same form as that in Schedule A) for the respondents’ execution.  Relying on clause 16 of those contracts, the applicant’s solicitors nominated 17 June 2004 as the date for settlement.  On 16 June 2004, the applicant’s solicitors sent a facsimile to the respondents’ solicitors reiterating that the “settlements are due on 17 June 2004”. 
  1. The respondents did not execute the contracts of sale proffered. Instead, on 17 June 2004, the respondents by their solicitors, delivered notices to the applicant’s solicitors purporting to terminate the option deeds, in reliance, inter alia, on s 367 of the PAMD Act and s 170 (by then renumbered to s 213) of the BCCM Act.  By letter dated 8 July 2004, the solicitors for the applicant gave notice that they regarded the respondents as having wrongfully repudiated the deeds.  The applicant in turn terminated the deeds based on that repudiation. 

Chapter 11 of the Property Agents and Motor Dealers Act 2000 (Qld)

  1. One of the objects of the PAMD Act is to protect consumers against particular practices associated with the promotion of residential property, especially that of “marketeering”.[1] “Residential property” is defined by s 17 to mean, inter alia, a lot that is a place of residence or in a residential area included in a community titles scheme, or proposed to be included in a community titles scheme, under the BCCM Act.  The PAMD Act makes provision for the regulation of contracts for the sale of residential property by ch 11. 
  1. It is ch 11 of the PAMD Act as in force in February 2003, when the option deeds were concluded, that is to be considered in the present case.[2]  Ch 11 has since undergone further amendment.
  1. The purposes of ch 11 are stated by s 363 as being:

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

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

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

  1. Section 364 defines “relevant contract” to mean “a contract for the sale of residential property in Queensland, other than a contract formed on a sale by auction”.[3]  It also defines “cooling-off period” for a relevant contract to mean “a period of five business days starting on the day the buyer under the relevant contract is bound by the relevant contract”.  At the relevant time, s 365 provided that a buyer and seller under a relevant contract were bound when the buyer or its agent received a copy of the contract signed by the buyer and the seller. 
  1. Crucial to the implementation of the purposes stated in ch 11 of the PAMD Act is    s 366 which mandates that a warning statement be given in respect of a relevant contract.  Section 366 was extensively amended after the date relevant in the present case.  At the relevant date, s 366 provided:

366Warning statement to be attached to relevant contract

(1) A relevant contract must have attached, as its first or top sheet, a statement in the approved form (“warning statement”) containing the information mentioned in subsection (3).

(2) The seller of the property or a person acting for the seller who prepares a relevant contract commits an offence if the seller or person prepares a contract that does not comply with subsection (1).

(3) The warning statement for a relevant contract must state the following information—

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

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

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

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

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

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

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

(4) A statement purporting to be a warning statement is of no effect unless—

(a) before the contract is signed by the buyer, the statement is signed and dated by the buyer;

…”

  1. Section 367 which confers on a buyer a right of termination, if a warning statement is not given as required by s 366, has also under gone amendment. At the relevant time s 367 provided:

“367Buyer’s rights if warning statement not given

(1) This section applies to a contract to which a warning statement must be attached.

(2) If a warning statement is not attached to the contract or is of no effect under section 366(4), the buyer under the contract may terminate the contract at any time before the contract settles by giving signed, dated notice of termination to the seller or the seller’s agent.

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

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

  1. By s 368, a statutory right to terminate the contract during the cooling-off period is conferred on a buyer:

368 Terminating contract during cooling-off period

(1) A buyer under a relevant contract who has not waived the cooling-off period for the contract may terminate the contract at any time before the cooling-off period ends by giving a signed, dated notice to the seller or the seller’s agent indicating that the buyer terminates the contract.

  1. If notice of termination is given under subsection (1), the contract is at an end.

…”

  1. The cooling-off period may be waived, within the strict parameters of s 369:

369 Waiving cooling-off period

(1) A buyer who proposes to enter into a relevant contract may waive the cooling-off period for the contract by giving the seller under the proposed contract or the seller’s agent a lawyer’s certificate in the approved form.

(2) The buyer may waive the cooling-off period only if the certificate is given to the seller or the seller’s agent before the buyer is bound by the contract.

(3) The lawyer’s certificate must be signed and dated by the lawyer giving the certificate and confirm the following by stating—

(a)the lawyer is independent of the seller, the seller’s agents and anyone else involved in the sale, or promotion of the sale, or provision of a service in connection with the sale, of the property and has no business, family or other relationship with any of those persons;

(b) the lawyer has not received, is not receiving, or does not expect to receive a benefit in connection with the sale, or for promoting the sale, or for providing a service in connection with the sale, of the property, other than professional costs and disbursements payable by the buyer;

(c) the lawyer has explained to the buyer—

(i)the effect of the contract; and

(ii)the purpose and nature of the certificate; and

(iii)the legal effect of the buyer giving the certificate to the seller or the seller’s agent.

…”

  1. As can be seen, a key consumer protection purpose implemented under ch 11 is the introduction of a cooling-off period for contracts for the sale of residential property, other than by auction. Unless it is waived or shortened, a buyer who enters into such a contract is entitled to a 5 day cooling-off period, during which the buyer may terminate the contract. The 5 day cooling-off period commences on the day the buyer is bound by the contract, that is, upon the buyer’s receipt of the contract executed by the parties. Importantly, the buyer is armed with information about the cooling-off period (including the buyer’s right of termination and the recommendation that the buyer seek independent legal and valuation advice during that period) through the provision of a warning statement, which must be signed by the buyer before the buyer signs the contract. 

Were the deeds “relevant contracts” within the definition of that term in s 364 of the PAMDAct?

  1. The difficulties arising from the use of the term “relevant contract” in ch 11 were discussed in MNM Developments Pty Ltd v Gerrard.[4]  The Chief Justice noted[5] that, while the statutory requirement in s 366(1) and the right of termination in s 367(2) are intended to relate to a concluded contract, other references in those provisions to a “contract” must be read as referring to a draft contract, e.g. s 366(2), s 366(4)(a).  Likewise, Williams JA observed[6] that what the legislature intended to say by s 366(1), but did not, was that the documents presented to a potential purchaser for execution, which would result in a relevant contract coming into existence, must have attached as the first or top sheet a warning statement. 
  1. It is not disputed that the subject matter of the option deeds concerns “residential property” as that term is defined in the PAMD Act.  What is in dispute, as mentioned, is whether the option deeds or the contracts to be executed upon the exercise of the options were the “relevant contracts” for the purposes of ch 11 of the PAMD Act.  The applicant’s contention was that the “relevant contract”, in a case such as the present, involving an option agreement, is the contract form executed by the parties following the exercise of the option, that being the contract of sale by which the land is ultimately conveyed.  

A consideration of the purposes of ch 11 of the PAMD Act

  1. The applicant sought to derive support for its construction of the term “relevant contract” by referring to the consumer protection purposes behind ch 11.[7]  As observed, that purpose is achieved by the introduction of a “cooling-off period”, the requirement that a warning statement be provided and the ensuring of the independence of lawyers acting for buyers. 
  1. The applicant submitted that in a case such as the present involving an option agreement, the consumer protection purposes of the legislation are best advanced, if the warning statement was required to be given when the contract of sale form was executed; the cooling-off period would thus be available to the buyer at a time that was closer, and necessarily more relevant, to the date for settlement of the purchase. It was said that the buyer would then be in a position to use its right of termination in light of the circumstances existing at a time that was reasonably contemporaneous with the date of settlement, and that any independent legal advice or any valuation obtained as a result of the warning statement would be based upon such circumstances.
  1. Those submissions must be rejected. While it would clearly be advantageous to a buyer to have available to it a cooling-off period following the exercise of a seller’s put option, the introduction of a 5 day cooling-off period at such a point would render a vendor’s put option nugatory.  The purpose behind the legislation is not to assist a buyer to achieve the best possible commercial outcome.  Rather, it is to ensure a period of informed reflection upon a contract for the sale of residential property being concluded.
  1. The interpretation urged by the applicant would also result in a party in the respondents’ position, being bound by the terms of an option agreement for potentially lengthy periods without having the benefit of a warning statement or a cooling-off period. That consideration was a factor which influenced Helman J in Devine Ltd v Timbs[8] in determining that the relevant date for the application of the provisions of the PAMD Act and the BCCM Act in that case was the date of the execution of the option agreements, rather than the much later date when the put options were exercised. 
  1. According to the applicant in a case such as the present, the provision of a warning statement in compliance with s 366 would only be required after the option was exercised, the cooling-off period then being available unless already waived. However, on the applicant’s approach, a vendor could defeat the consumer protection provisions of ch 11 of the PAMD Act by simply employing the vehicle of an option agreement and requiring, as a pre-condition of that agreement, that the purchaser waive the cooling-off period as it applied to the contract executed under the option.  Such an approach would defeat the reformatory object of the legislation.[9]  It is clearly not intended that the cooling-off period can be waived without a warning statement having first been provided in the manner required by s 366.  Indeed, it is central to the implementation of the consumer protection purposes of ch 11 that, before a buyer executes a contract, the buyer will be provided with information concerning the cooling-off period and the right to terminate during that period.  This is also made apparent by the terms of the PAMD Form 32a Lawyer’s Certificate.[10]  And while s 369 permits the waiving of the cooling-off period, it does not permit the waiving of the requirement that a warning statement be provided and signed as required by s 366.
  1. For these reasons, a consideration of the purposes of ch 11 of the PAMD Act does not in my view support the construction of the term “relevant contract” urged by the applicant.

Were the option agreements contracts for the sale of residential property?

  1. The respondents’ case was that the option deeds were “relevant contracts”, because they were concluded contracts for the sale of residential property, even though the obligations to buy and sell were conditional on the exercise of the put or call options.  In making that submission, reliance was placed by the respondents on David Deane & Associates Pty Ltd v Bonnyview Pty Ltd.[11]   In that case, the Court of Appeal was concerned with the question of whether the option agreements there under consideration were contracts of sale so as to require the payment of a commission.  Keane JA, with whose judgment the other members of the court agreed,  considered that there was “much to be said” for the view that the option agreements were properly described as valid and enforceable contracts of sale, even though the obligations of the parties to buy and sell depended upon the giving of notices exercising the options.[12]  His Honour referred to the “standing controversy” as to the true nature of an option to purchase and noted[13] the conclusion, that such an option constitutes a conditional contract to sell, reached by Gibbs J (as he then was) in Laybutt v Amoco Australia Pty Ltd, who stated:[14]

“I consider that an option to purchase (at least one in a form similar to that in the present case) is a contract to sell the land upon condition that the grantee gives the notice and does the other things stipulated in the option. An option to purchase, regarded in that way, is not an agreement which gives one of the parties the right to perform it or not as he chooses; it gives the grantee the right, if he performs the stipulated conditions, to become the purchaser.”

  1. It is to be observed that “relevant contract” is defined in s 364 of the PAMD Act not in terms of a contract “of” sale, but in terms of a contract “for” sale. 
  1. Keane JA explained in David Deane & Associates Pty Ltd,[15] how an option or contract relating to the sale of property may, by mutual resolution of the contingencies to which it was previously subject, become properly characterised as a contract of sale.   In the present case, even if the option deeds could only be characterised as contracts of sale upon the fulfilment of the contingent conditions to which they were subject, the option deeds are, nevertheless, in my view properly characterised as contracts for the sale of residential property.  Although contingent on the exercise of the put and call options granted under the deeds, the applicant assumed obligations to sell and the respondents assumed obligations to purchase from which they could not withdraw.  The form and substance of the contracts resulting from the exercise of the options, including the sale price, fell to be determined by reference to the option deeds.  The option deeds thus contained the machinery provisions which were facultative of the realization of the lots by sale by the applicant to the respondents.[16]   Further, as Barwick CJ observed in Petelin v Deger Investments Pty Ltd,[17] a clause in an option requiring a new contractual document in an identified form to be signed or exchanged does not contemplate the formation of a new and different contract, but merely the recording in a formal fashion of the agreement which resulted from the exercised option. 
  1. The applicant also relied on s 365(1) of the PAMD Act as supporting the proposition that the legislation was not intended to have application to options, it being submitted that, in the case of an option, the parties are not bound to proceed with the sale and purchase of lots until the exercise of the option.  Section 365(1) however does not assist the applicant.  In the present case, the respondents were obliged, from the date the option deeds were concluded, to proceed with the purchases, if the applicants chose to exercise its put options.
  1. In my view, the submissions made by the respondents are correct. A consideration of the term “relevant contract”, the terms and purposes of ch 11 of the PAMD Act, and the terms of the option deeds, lead to the conclusion that the option deeds were each a “contract for the sale of land” and thus a “relevant contract” for the purposes of that term in s 366 of the PAMD Act

Non-compliance with s 366 of the PAMDAct

  1. As stated in MNM Developments Pty Ltd v Gerrard,[18] the consumer protection purpose behind the mandatory requirements in s 366 of the PAMD Act tells against a liberal approach to non-compliance.  But in any event, the non-compliance in the present case is clear.  A warning sheet was not attached as the first or top sheet of the option deeds as required by s 366(1), nor were warning statements signed by the respondents as required by s 366(4)(a).  It follows that the respondents had a right to terminate the deeds under s 367(2). 

Are the respondents’ notices of termination effective?

  1. The right conferred on a buyer to terminate the contract pursuant to s 367 of the PAMD Act is required to be exercised by the giving of a signed and dated notice of termination “before the contract settles”. 
  1. The applicant argued that if the option deeds constituted relevant contracts, they were nevertheless not terminated before settlement, because pursuant to clause 3(3) of the option deeds, “settlement” occurred upon the giving of the notice exercising the put option. Alternatively, it was argued that under clause 3(4), upon the applicant exercising its put options, all that was required was that the respondents execute the Schedule A contracts of sale forms. It was thus submitted that the option agreements would have settled before the notices of termination, but for the wrongful breach by the respondents of their obligation to execute the contract of sale forms forthwith. In purporting to terminate, the respondents were thus said to be attempting to take advantage of their own breaches of the option deeds. Those contentions cannot be accepted.
  1. The exercise of the put options did not effect a “settlement” of the option agreements. As explained, the option deeds constituted contracts for the sale of residential property. They made provision, by reference to the terms in the Schedule A contract form, for the determination of the date of completion of the contract resulting from the exercise of the options. The date for settlement of the contracts for sale constituted by the deeds was the date thereby specified (see clause 16 of the Schedule A contract forms). The respondents accordingly, exercised their rights of termination before settlement, as they were entitled to do.

Was an information sheet required under the BCCM Act?

  1. Part 2 of ch 5 of the BCCM Act[19] deals with contracts for the sale of proposed lots, i.e. lots intended to come into existence as lots included in a community titles scheme when the scheme is established.  Where the proposed lot is residential property under the PAMD Act, an information sheet is required by s 170 (5) of the BCCM Act to be attached immediately beneath the warning statement which is required by s 366 of the PAMD Act to be attached as the first or top sheet of the contract.  A buyer may cancel the contract if a seller has not complied with that provision and the contract has not already been settled (s 170(6)). 
  1. Because of the conclusion I have reached with respect to the PAMD Act, the issue of non-compliance with the BCCM Act becomes academic.  I should add however that, for reasons similar to those stated, I consider that the option deeds were also contracts for the purposes of s 170 of the BCCM Act. The respondents were entitled to cancel the option deeds before they had settled as they did.

Refund of deposit

  1. A deposit was paid for Lot 9 by a deposit bond as provided for in the option deed. However, in respect of Lot 10 a cash deposit in the sum of $56,500 was paid by the respondents into the trust account of the applicant’s solicitors. That amount has been paid into court by the applicant’s solicitors to abide the outcome of this application. Given my conclusion that the respondents have validly terminated the option deeds, they are entitled to be refunded the deposit.

Orders

  1. It is declared that:
  1. the Put and Call Option Deed between Mark Bain Constructions Pty Ltd as grantor and Tim Barling, Alex Watson and Timothy Scott as grantees over land described as Proposed Lot 9 on SP 168305 Title Reference 50496527 County of March Parish of Webya dated 25 February 2003 was validly terminated by the respondents by written notice of termination delivered to the applicant dated 17 June 2004;
  1. the Put and Call Option Deed between Mark Bain Constructions Pty Ltd as grantor and Tim Barling, Alex Watson and Timothy Scott as grantees over land described as Proposed Lot 10 on SP 168305 Title Reference 50496528 County of March Parish of Webya dated 25 February 2003 was validly terminated by the respondents by written notice of termination delivered to the applicant dated 17 June 2004;
  1. the respondents are entitled to have refunded to them the deposit paid by them.
  1. I shall hear submissions as to costs.

Footnotes

[1] See s 10(2) and s 10(3)(d) of the PAMD Act.

[2] The PAMD Act as amended by amendments up to Act No 78 of 2002, is contained in Reprint No 1J (revised edition). 

[3] Prior to its amendment by the Property Agents and Motor Dealers Amendment Act 2001 (Qld) (No 61 of 2001), the PAMD Act drew a distinction in respect of residential sales, depending on whether or not they resulted from marketeering.  The distinction was reflected in the use of the terms “contract” and “relevant contract” in the PAMD Act.  The term “contract” was used to refer to a “contract to buy residential property in Queensland”, whereas the term “relevant contract” was confined to “a contract to buy residential property in Queensland that arises out of an unsolicited invitation to attend a property information session”.   The importance of the distinction was that the 5 day cooling-off period only applied to a relevant contract.  A warning statement however was required in respect of all contracts, and was required to state whether or not the contract was subject to a cooling-off period.

[4] [2005] QCA 230.

[5] [2005] QCA 230 at [6].

[6] [2005] QCA 230 at [29].

[7] See s 14A(1) of the Acts Interpretation Act 1954 (Qld).

[8] [2004] QSC 024.  The question of whether the option agreement or the contract executed pursuant to the option agreement was the relevant contract, did not arise for determination in that case.

[9] Nguyen v Taylor (1992) 27 NSWLR 48 at 53.  

[10] The relevant PAMD Form 32a Lawyer’s Certificate form was the form effective from 29 October 2001.

[11] [2005] QCA 270.

[12] [2005] QCA 270 at [22].

[13] [2005] QCA 270 at [22].

[14] (1974) 132 CLR 57 at 76.

[15] [2005] QCA 270 at [23].

[16] David Deane & Associates Pty Ltd [2005] QCA 270 at [23].

[17] (1976) 133 CLR 538 at 542.

[18] [2005] QCA 230.

[19] It is Ch 5 of the BCCM Act as in force at the date the option deeds were concluded that is to be considered in the present case (for which see Reprint No 1G). 

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Editorial Notes

  • Published Case Name:

    Mark Bain Constructions Pty Ltd v Tim Barling, Alex Watson and Timothy Scott

  • Shortened Case Name:

    Mark Bain Constructions Pty Ltd v Tim Barling

  • MNC:

    [2006] QSC 48

  • Court:

    QSC

  • Judge(s):

    Philippides J

  • Date:

    20 Mar 2006

  • White Star Case:

    Yes

Appeal Status

Please note, appeal data is presently unavailable for this judgment. This judgment may have been the subject of an appeal.

Cases Cited

Case NameFull CitationFrequency
David Deane & Associates Pty Ltd v Bonnyview Pty Ltd [2005] QCA 270
6 citations
Devine Ltd v Timbs[2004] 2 Qd R 501; [2004] QSC 24
2 citations
Laybutt v Amoco Australia Pty Ltd (1974) 132 CLR 57
2 citations
MNM Developments Pty Ltd v Gerrard[2005] 2 Qd R 515; [2005] QCA 230
5 citations
Nguyen v Taylor (1992) 27 NSWLR 48
2 citations
Petelin v Deger Investments Pty Ltd (1976) 133 CLR 538
2 citations

Cases Citing

Case NameFull CitationFrequency
APM Property 3 Pty Ltd v Blondeau[2011] 2 Qd R 1; [2009] QSC 3266 citations
Avis v Mark Bain Constructions Pty Ltd [2011] QSC 802 citations
Cheree-Ann Property Developers Pty Ltd v East West International Development Pty Ltd[2007] 1 Qd R 132; [2006] QSC 1825 citations
Crime and Misconduct Commission v FLP [2011] QMC 81 citation
Development and Finance Pty Ltd v The Commissioner of State Revenue [2016] QCAT 5382 citations
Gallagher v Boylan[2013] 1 Qd R 204; [2012] QCA 1597 citations
Hedley Commercial Property Services Pty Ltd v BRCP Oasis Land Pty Ltd [2008] QSC 2611 citation
Orchard Capital Investments Limited v Ross Neilson Properties Pty Ltd [2010] QSC 3406 citations
Ross Nielson Properties Pty Ltd v Orchard Capital Investments Ltd[2013] 1 Qd R 72; [2011] QCA 495 citations
Vale 1 Pty Ltd v Delorain Pty Ltd [2010] QCA 259 4 citations
Vale 1 Pty Ltd v Delorain Pty Ltd [2009] QSC 4252 citations
1

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