Marchesi v Viridian Noosa Pty Ltd
[2010] QSC 324
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- Notable Unreported Decision
- Marchesi v Viridian Noosa Pty Ltd[2010] QSC 324
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Marchesi v Viridian Noosa Pty Ltd[2010] QSC 324
Marchesi v Viridian Noosa Pty Ltd[2010] QSC 324
SUPREME COURT OF QUEENSLAND
PARTIES: | |
FILE NO/S: | |
Trial Division | |
PROCEEDING: | Hearing |
DELIVERED ON: | 1 September 2010 |
DELIVERED AT: | Brisbane |
HEARING DATE: | 25 August 2010 |
JUDGE: | Douglas J |
ORDER: | 1.Application dismissed. 2.On the respondent’s counterclaim, order specific performance of the agreements pleaded in paras 2, 3, 4 and 5 of the statement of claim. |
CATCHWORDS: | CONVEYANCING – STATUTORY OBLIGATIONS OR RESTRICTIONS RELATING TO CONTRACT FOR SALE – PROTECTION OF PURCHASERS – OBLIGATIONS ON VENDOR: DISCLOSURE, WARNINGS AND LIKE MATTERS – where the applicant signed four contracts for the purchase of residential units – whether warning statements attached to contracts included accurate information about when the cooling-off period started – whether applicant entitled to terminate contracts CONVEYANCING – BREACH OF CONTRACT FOR SALE AND REMEDIES – PURCHASER’S REMEDIES – BREACH OF AGENT’S STATUTORY OBLIGATIONS – where applicant requested amendments to the contracts – whether applicant waived right under s 367(2) of the Property Agents and Motor Dealers Act 2000 to terminate the contract Property Agents and Motor Dealers Act 2000, s 365(1), s 365(2A), s 366D(1), s 367(2) Blackman v Milne [2007] 1 Qd R 198; [2006] QSC 350, explained Hedley Commercial Property Services Pty Ltd v BRCP Oasis Land Pty Ltd [2008] QSC 261, cited Juniper v Roberts [2007] QSC 379, considered MNM Developments Pty Ltd v Gerrard [2005] 2 Qd R 515; [2005] QCA 230, cited Tudor Developments Pty Ltd v Makeig (2008) 72 NSWLR 624; [2008] NSWCA 263, considered QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41; [2008] QCA 257, cited |
COUNSEL: | R J Douglas SC, with P F Mylne, for the applicant M D Martin for the respondent |
SOLICITORS: | Sajen Legal for the applicant ClarkeKann for the respondent |
[1] Douglas J: The main issue in this case is whether the applicant is entitled to terminate four contracts for the purchase of residential units at Noosa because the warning statements attached to them did not include accurate information about when the cooling-off period started. As will become clear it is my view that the warning statements did include that information. If I had not formed that view then the respondent relied on a further argument that the applicant had waived such a breach of the relevant legislation or had elected not to rely on it. There is no need for me to resolve that issue but I shall discuss it briefly.
Validity of the warning statement
[2] The warning statement required for the formation of a binding contract for the sale of residential property in Queensland means a statement in the approved form that includes the information mentioned in s 366D(1) of the Property Agents and Motor Dealers Act 2000.[1] The documents relevant to this case were executed in January and February 2008 for the sale of units in a development at Noosa where, if the agreements were enforceable, completion was due on 1 July 2010.
[3] The relevant contracts and information sheets were accompanied by warning statements in the approved form but the applicant’s argument is that they did not include the information mentioned in s 366D(1) of the Act and, therefore, enlivened the buyer’s rights to terminate the contracts under s 367(2). The information significant to this case that had to be included was that the relevant contract was subject to a cooling-off period and when the cooling-off period started and ended. The warning statements included information showing that the relevant contracts were subject to a cooling-off period and said that that period began on the day the purchaser was bound by the contract and ended at 5:00pm on the fifth business day after the cooling-off period started. The warning statements also said: “Both the buyer and seller are bound by the contract as soon as the buyer or their agent, lawyer or personal representative receives a copy of the signed contract …”.
[4] That formulation of the required information was criticised by the applicant, however, for failing to describe properly the factual circumstances in which the buyer would be bound. It is useful to illustrate this by setting out in full the information that the approved form did provide and then by comparing it to the relevant sections of the Act. The warning statement said:
“When does the cooling-off period start?
It begins on the day you are bound by the attached contract.
Both the buyer and the seller are bound by the contract as soon as the buyer or their agent, lawyer or personal representative receives a copy of the signed contract.
In any dispute concerning the commencement of the cooling-off period, it will be up to the seller to prove the buyer received a copy of the contract.
Note: If the buyer is bound by the contract on a day other than a business day, the cooling-off period commences on the first business day after the day the buyer is bound by the contract.” (Emphasis added.)
[5] The passage emphasised is said to be misleading because s 365(1)(b) of the Act says that the buyer and seller are bound, for a contract relating to a unit sale, when the buyer or the buyer’s agent receives the warning statement, the information sheet and the relevant contract in a way mentioned in s 365(2A). Clearly that requires the receipt of more documents than simply the signed contract. The problem arose, evidently, because s 365(1) in an earlier form[2] said the parties were bound simply when the buyer or buyer’s agent received a copy of the contract signed by the buyer and seller. That was reflected in the then approved statement which was not relevantly amended when s 365(1) was amended to its present form in late 2005.
[6] The respondent’s argument recognises that the approved statement’s accuracy could be improved if it had been amended to reflect the amendment to s 365(1) but points out that all it is relevantly required to do by s 366D(1)(b) is to include information, namely when the cooling-off period starts and ends, and that it has done that by stating accurately that the cooling-off period begins on the day the buyer is bound by the attached contract. Mr M D Martin for the respondent also argued that the words following in the approved statement, that the buyer and seller were bound as soon as the buyer received a copy of the signed contract, were not in themselves inaccurate. It could be said that they are merely potentially incomplete if the statutory way of delivering the documents was not followed. It should not detract, he submitted, from the conclusion that the requirements of s 366D(1)(b) that the warning statement include information about when the cooling-off period starts and ends had been met. To conclude otherwise would be, he submitted with some justification, an “absurd triumph of form over substance.”[3]
[7] Mr Douglas SC, in developing his submissions that the information required to be included in the warning statement extended beyond the question begging formula that the cooling-off period started “on the day you are bound by the attached contract” referred to the other provisions of s 366D(1). The subsection provides:
“(1) The warning statement for a proposed relevant contract or relevant contract must include the following information -
(a)the relevant contract is subject to a cooling-off period;
(b) when the cooling-off period starts and ends;
(c)a recommendation that the buyer or proposed buyer seek independent legal advice about the proposed relevant contract or relevant contract before the cooling-off period ends;
(d) what will happen if the buyer terminates the relevant contract before the cooling-off period ends;
(e) the amount or the percentage of the purchase price that will not be refunded from the deposit if the relevant contract is terminated before the cooling-off period ends;
(f)a recommendation that the buyer or proposed buyer seek an independent valuation of the property before the cooling-off period ends;
(g) if the seller under the proposed relevant contract or relevant contract is a property developer, that a person who suffers financial loss because of, or arising out of, the person's dealings with a property developer or the property developer's employees can not make a claim against the claim fund.”
[8] He also drew attention to the consumer protection goal of the legislation as telling against a liberal interpretation of these requirements.[4]
[9] The argument based on the content of s 366D(1) was that the subsection focussed on the factual information of which the buyer should be warned and that, to make sense of that obligation in this context, he should have been told of all the documents he needed to have received before he was bound. The applicant’s counsel submitted that if, for example, the warning statement, information sheet and contract were not received by the buyer on the same day then, if properly informed in the warning statement, the buyer would know that the cooling-off period had not commenced.
[10] The example is not likely to be realistic in most cases because of the statutory “way” the documents should be received with the warning statement and information sheet attached to the relevant contract[5], but if a seller only delivered a warning statement and a contract and not the information sheet, for example, then it is conceivable that buyers who relied solely on the warning statement’s advice as to when they were bound may be misled as to their rights to terminate during the cooling-off period. That did not happen here and should not happen in the normal course of events, but the possibility may not be far-fetched. If it did happen, however, the buyer would be entitled to treat the non-delivery of an attached information sheet immediately after the warning statement as a failure to comply with a warning statement requirement giving a right to terminate under s 367(2) in any event.[6]
[11] Theoretically, therefore, if the information sheet had not been received by the buyer in this case, the warning statement would not have included accurate information as to when the cooling-off period started and ended. The facts established here, however, are that all three documents were received at the same time for each contract in the manner required by s 365(2A)(c).
[12] The consequence, therefore, is that the warning statement, in this case, was accurate in stating that the buyer was bound when he received a copy of the contract because he did, in fact, then also receive the warning statement and information sheet. That is the result that would apply in the expected performance of the requirements of the statutory scheme. In the result the warning statement provided accurate information about when the cooling-off period started and the buyer was not entitled to terminate the contract under s 367(2).
Did the applicant elect to proceed with the contracts?
[13] If I had determined that the applicant had rights under s 367(2) to terminate the contract because of non-compliance with a warning statement requirement the respondent argued that, in any event, the applicant had elected to proceed with the contracts. That submission was based on evidence from which it could be argued that the applicant had affirmed the four contracts by requesting an extension of the settlement date by 14 days in an email from his solicitors dated 23 June 2010 and from an earlier request to “swap” units within the development.
[14] His own evidence was that, at that stage, he was not aware of any rights he had to cancel or terminate any of the agreements. There was an immediate issue, therefore, whether the applicant was in a position to make an election or to waive his legal rights in the absence of such knowledge of those possible rights.[7]
[15] The next issue was whether a buyer can be held to such an election in the face of the statutory provision in s 367(2) permitting him to terminate at any time before the relevant contract settles. I have previously decided in Juniper v Roberts[8] there was no occasion to elect between alternative rights where this section applied. Mr Martin argued, however, that other decisions recognised a right to waive the benefit of such provisions.[9] In fact in Blackman v Milne[10] I recognised such a right where it was one created for the buyer’s private benefit but doubted the possibility of a party waiving a statutory right which reflected a public policy for the benefit of the community.
[16] Those decisions and a decision of the South Australian Full Court in Astill v South Esplanade Developments Pty Ltd[11] were discussed usefully in the New South Wales Court of Appeal in Tudor Developments Pty Ltd v Makeig.[12] Basten JA said:[13]
“[65] It will be necessary to return to the authority of Astill, but it is important to note in the present context that there is some apparent inconsistency between the statement in Blackman, repeated in Juniper, that a buyer could ‘waive’ a breach by a seller prior to the time for completion, and the suggestion that the buyer could not ‘affirm’ the contract, even knowing of his or her rights, so as to preclude a later exercise of the right to terminate. The apparent inconsistency may be resolved by treating the right to waive the breach, asserted in Blackman, as arising where there has been a repudiation of the contract by the seller and not as permitting the seller to rely on general law principles in other circumstances. In any event, the statutory terms differed in material respects from the present case: the requirement for a binding contract identified in the Queensland legislation involved no prohibition on any particular conduct, nor the imposition of any penal sanction.”
[17] In the circumstances it is unnecessary to express any concluded view in this case but the distinction drawn by me in Blackman v Milne related to whether the statutory provision said to have been waived created a private right merely for the private benefit of an individual or was a provision reflecting a public policy for the benefit of the community which could not be waived.[14] Mr Douglas SC submitted that the possible penal consequences of the failure to attach a warning statement found in s 366B(3) also warranted the conclusion that these provisions of the Act could not be waived by the buyer.
[18] The public policy reflected in the requirements for the provision of warning statements appears to be directed at the benefit of the community generally so that, if it were necessary to decide the issue, I would have been inclined to the view that the proper performance of the statutory provisions could not have been waived by the applicant in circumstances such as these. As I have formed the view that there has been no failure to comply with the Act, however, I do not need to discuss these issues further.
Conclusion and orders
[19] The application should be dismissed as I am satisfied that the respondent complied with the provisions of the Act requiring it to tell the applicant when the cooling-off period started. The applicant, in those circumstances, did not make any issue as to whether the respondent was ready, willing and able to perform the contracts. Accordingly there was no ground argued to oppose the relief sought by the respondent in its counterclaim for specific performance of the agreements pleaded in paras 2, 3, 4 and 5 of the statement of claim.
[20] Accordingly I shall dismiss the application and, on the respondent’s counterclaim, order specific performance of the agreements pleaded in paras 2, 3, 4 and 5 of the statement of claim and invite further submissions as to the form of the order and as to costs.
Footnotes
[1] Relevantly see reprint No. 3A of the Act and the definition in s 364 of “warning statement”.
[2] See reprint No. 2F of the Act as in force on 22 April 2005.
[3] QUYD Pty Ltd v Marvass Pty Ltd [2009] 1 Qd R 41, 46 at [2] per McMurdo P; [2008] QCA 257.
[4] MNM Developments Pty Ltd v Gerrard [2005] 2 Qd R 515, 519, 520, 521 at [16], [21], [30]-[31]; [2005] QCA 230 and Celik Developments Pty Ltd v Mayes [2005] QSC 224.
[5] See s 365(2A)(c) and s 366B(2).
[6] See s 367(1)(a) and s 367(9)(c).
[7] See Sargent v ASL Developments Ltd (1974) 131 CLR 634, 645, 658 and Ellison v Lutre Pty Ltd (1999) 30 ACSR 615, 627 at [64].
[8] [2007] QSC 379, [12]-[13]; see also MP Management (Aust) Pty Ltd v Churven [2002] QSCX 320 at [45]-[47].
[9] See, e.g., Hedley Commercial Property Services Pty Ltd v BRCP Oasis Land Pty Ltd [2008] QSC 261 at [99]-[100]; Collis v Corrumbin Investments Pty Ltd [2009] QSC 297 at [19]; Mirvac Queensland Pty Ltd v Beioley [2010] QSC 113 at [33].
[10] [2007] 1 Qd R 198, 201-203; [2006] QSC 350 at [14]-[21].
[11] [2007] SASC 231; (2007) ANZ Conv R 534.
[12] (2008) 72 NSWLR 624, 639-641; [2008] NSWCA 263 at [61]-[69].
[13] Tudor Developments Pty Ltd v Makeig (2008) 72 NSWLR at 640; [2008] NSWCA 263 at [65].
[14] [2007] 1 Qd R at 202; [2006] QSC 350 at [15].