Burridge & Anor v Saville

This case concerned a disclosure statement provided under s 206 Body Corporate and Community Management Act 1997. The defendant’s agent provided the buyer with a disclosure statement which stated “N/A” in respect of various matters of which the Act requires disclosure. These matters included whether the body corporate had a manager and the body corporate’s assets. The plaintiff sought to terminate the contract on the basis that disclosure statement was not compliant. The defendant argued that the disclosure statement was substantially complete under s 206(4) of the Act. The court accepted that the disclosure statement was substantially complete. The use of “N/A” was (although lacking in detail) sufficient in circumstances where no information had been created by the body corporate which could be disclosed in the disclosure statement.

Martin SJA

3 November 2023

This dispute was an application for determination of separate questions. The questions which were separately determined turned on whether the defendant had complied with s 206 Body Corporate and Community Management Act 1997 (“the Act”). That provision requires the seller of a lot in a community titles scheme to give a disclosure statement to a person who proposes to buy the lot. [5]. Under s 206(2), in relation to a two-lot scheme, the disclosure statement must contain, inter alia, the contact telephone number of each person responsible for keeping body corporate records, and the body corporate assets of more than $1,000 in value. [5]. The statement must also state whether there is a committee. [5]. Section 206(4) requires the disclosure statement to be “substantially complete” and s 206(5) allows a buyer to terminate the contract of sale if the seller does not comply with s 206.

In the present case, the plaintiffs, as buyers, and the defendant, as seller, entered into a contract for the sale of land in Mermaid Beach. [6]. On 19 November 2021, the defendant’s real estate agent provided to the plaintiffs a signed Real Estate Institute of Queensland Standard Form Disclosure Statement in relation to the property. [12]. That form contained the heading “Prescribed Information” and under that heading spaces were provided to enter each piece of information required to be disclosed by s 206. [13]. The defendant’s agent completed the form in accordance with instructions received from the defendant. The form recorded the answer “No” to the question “Is there a Committee for the Body Corporate?”. It also stated that there was an insurance contribution of $1,367. Otherwise, the defendant’s agent had responded “N/A” in answer to every question, as the defendant had advised, inter alia, that there was no body corporate manager, no secretary, and no common property on a register. [10]. There appears to have been no dispute that that information was true.

The buyer made further enquiries with the defendant’s agent about the state of the body corporate on 13 July 2022. [16]. The agent indicated that the details recorded in the disclosure statement were the only details he had for the scheme. [16]. On 20 July 2022, one day before settlement, the plaintiffs purported to terminate the contract pursuant to s 206(5) of the Act. The defendant contended that the plaintiffs’ termination was wrongful as the disclosure statement was substantially complete under s 206(4).

Before turning to whether the disclosure statement was substantially complete the court considered the meaning of “N/A” in the disclosure statement. [29]. The plaintiffs contended that N/A should be taken to mean “no answer” or “not available” rather than “not applicable”. [30]. On that basis, the plaintiffs said that “N/A” was an ambiguous answer which did not provide the disclosure required by s 206 of the Act. [29]. The court rejected the plaintiffs’ submission on the basis that “not applicable” is the commonly understood meaning of “N/A”. [36]. In addition, the court noted that the disclosure form stated that there was no committee for the body corporate, which meant that the body corporate did not comply with the Act. [36]. The fact that the body corporate was non-compliant supported the inference that the other questions raised by the disclosure statement may not have had an applicable answer. [36].

The court then held that the disclosure statement was substantially complete. In doing so the court relied on the case of Menniti v Chan [2007] QSC 190 where Keane JA (with Fraser JA agreeing) held that where no information had been created by the body corporate in relation to an item listed under s 206, the answer “not applicable” was accurate and satisfied the seller’s obligation under s 206. [41]. That proposition applied in this case. While the answers given in the disclosure statement could have been better expressed, “N/A” was sufficient to comply with the seller’s obligation. [44]. On that basis, the plaintiff’s wrongfully purported to terminate the contract of sale.

L Inglis