Duralla Pty Ltd v Merle Plant [1984] FCA 150

Federal Court of Australia|1984-06-04|Before: Beaumont JJ, Smithers J

Trade Practices - misleading and deceptive conduct - validity of notice avoiding contract to purchase.

Practice and procedure - nature of an appeal to Federal Court in the exercise of its appellate jurisdiction ~ rehearing or appeal strictly so called - retrospective legislation affecting substantive rights and its application where it comes into operation after judgment but before appeal is determined.

QUEENSLAND DISTRICT REGISTRY ) Q. No. G128 of 1983 ) )

BETWEEN: DURALLA PTY. LTD. Appellant and MERLE PLANT Respondent CORAM: Smithers, Northrop and Beaumont, JJ. DATE: 4 June 1984 PLACE: Melbourne ORDER

l. The appeal be dismissed. 2. The appellant pay the respondent's costs of the

On appeal from a single jud¢ of the Federal Court of Bustralia.

Smithers J.: Sy an application filed on 19 August 1983 Merle

Plant (the ressondenr) sought relier under the Trade Practices a

enent tehhich Duralla Pry. Ltd. (the appellant) asserted she

aar had entered into to purchase unit 22 in "Cleveland Waters" at

performance of an agreement in writing between the respondent as purchaser and the appellant as vendor of the said unit dated 24 June 1982 or, in the alternative, of an alleced agreement hetween those parties in those caracities concerning the same unit dated 14 April 1982, or in the alternative

damages for breach of one or othss of such alleged agreements.

RK uy i iro uw wD a oO ud Cc cr ct mo bat) ow m re) y a B s mn a

was deficient in a number of resvects. It was siaqned by the

respondent in ths weong place, it did not include a schedule

of finishes or vians, and it concsined a mooper of omissions. Shortiy artes 124 April 1982 the rescondarmc was requested by the appellant''s real estate agent, one Fitrcpatrick, to sign

another Gocument of adqreement. This document (exhibit 9) was

Signed by the respondent. When signed there were omitted from

Act 1980 (the Building Act 1980: particulars of the unit number, the name and address of the purchaser and the date of the statement. Also, when signed, there was no date in clause

"3(a) Cetrlement shall taks place within twenty-one (21) days after notice from the vendor's solicitors £9 the purchaser or nis solicitor that the relevant builiin plan nas en s at the Proverty 0 c i EROVILED if the buil 3

is not registered by the day of 198 , then either party may camcel the contract by written notice to ths other or its or his solicitors and on

cancellation all money paid by the grurchaser 1ereunder shall be vzefunded without deduction and neithes party shall have any claim against the other party under this agreement FESOVIDED

On being signed by the respondent exhibit 2 was handed to Mr. Fitcpatrick's secretary. The omissions referred to above wers later made good by a clerk in ths emsloy of the aopellant's sOlicitors but without reference to the respondent. Tt was dated 14 April 1982 but at what stage anc By whom does not appear. it was siaqned on behalf of the appellant either before or arftec the omissions had been made good. The respondent was net advised of this until Zeotember 1983 in

For some reason, possibly because the 5.49 statement in

exhibit 9 was signed by Mr. Fitzsatrick, whe was not an

authorized signatory for that purpose, Mr. Fitzpatrick

requested the reéesvondent to sign a furthers agreement between herself as purchaser and the aspellant as vencor of the unit. This she did on 24 June 1982. In this accument (exhibit 5) the dake "31 December 1983" appeared in clause 3(a) and the Particulars which had been omitted from the 5.49 statements in exhibit 9 were set out. It does not appear whether the s.49 statement 1n exhibit 5 bore a signature whem it was siaqned by

the respondent. It was found by the Ltearned Judge that

exhibit 5 was not dated when signed. When taken into evidence the s.49 statement bore the signature of one Melit who, for the purposes of 35.49, was duly authorizeé to sian ic. Tne respondent did mot retain any copy of exhibit 5 after sianing it. It was found by the learned Judge that the respondent did not read exhibit S before siaqning it. He fcund aiso that she had been told and believed that it did nct differ from what she had already agreed to and from what she haa already siqned. His Honour found that she did not know that the date "31 December 1983" to which she had never agreed, and vhich did not accord with what had Deen stated ta her concerning the

anticipated or contemplated date of completion of tne

builaing, was contained in clause =fa) in exribirc 4.

it was found Dy the learned Judce that until May 1983 +} respondent neither was given nor retained = copy of any cl the documentation. Ir is by no means clear from the evidence vore- cisely wnen any contract night have been comcliuded: that 1s to say, when and in what order the ssspecnive parties signed exhibit 5 or exhibit 9, which are the dacuments relied on bv the saopeliant or when there was communication of offer ard acceptance, or of the execution of the docunsnts. However, he did not doubt that there was a concluded comtract, sublect ta the matters now raised by the respondent, by about October

1982, as the appellant asserted in paragraph 14 of its De-

fence, im which it referred ta its soliciters' request for che

sum. The inference that a contract was sa concluded between the parties was made from the fact that the appellant in October 1982 advised the respondent that the roof slab hac Deen poured and that the further deposit of $5,797.50 was pay-

able. This payment was provided for in clause 2 of exhibit 5.

apréilant's solicitors to suprplr a copy of the contract of

the appellant provridean the respondent's sotacitors with & copy re = & B

of sale dated 14 April 1982, One of such motices stated that

ground that the appellant has failed" im varicus ways to comely with that section. The other notice stated that the

Gay of April 1982, ... a copy of which comtract is attachea

(i) serial alterations were made cto the agreement withour

a the knowledge ar authority of the respondent subsequent to her having executed the said agreement;

(ii) the respondens was induced to enter into the agreement

by material misrepresentations by or on benalf of the

appeilant concerning the vist which the unit would have

and the date by which the building would be completed,

"No reference was made in the notices dated 2 June 1983 to any contract dated 24 dJume 1982. The substance of the applicant's position seems to have been that she had acreed to purchase the unit in April 1982 ncz June 1982, an attitude which is consistent with her claim that all she was asked to sign when she signed Exhibit 5 was a Further criginal copy of the contract which she had already s

In relation cto the ciaim for relie= under the Act as specified in the statement of claim as it stood at the commencement of the hearing, it was alledqed that the apoesilant

had engaged in misleading and deceptive conéuct in that 1£ had

reoresented that there would be a good view from the unit when . constructed and that the building in which the unit was to be

constructed would be compieted by Decenher 1982 or January

The learned Judge vas not satisfied that the appellant's conduct in relation to the matters the subject of these allegations was misleading or deceptive within the

meaning of s.52 of the Act. But in the special circumstances

of the case an amendment to the statement of clain was

Po ro] mh 'S ab La a B. a crran a oD a FA) ar ict by G ns a

iD n ih) dq Jos fen w a a w w wD f cto % uw A 3) Qowy @ ye] cr gi fu a

permitted to call evidence on &@ plea oF non est fFactun concerning exhibit 5. The substanrte of that evidence was that

constituting the agreemant ta purchase the unit, she was told,

incorrectly, that the terms of exhibit 5, which was signed on 24 June 1992, were adentical tnth exhibit 3 previousiy signed ry her in connection with the vorcsssad purchase of the unit

it was decided sv the learnsd judge that the evidence

did net sustain the plea of ron est factum but did establish that conduct of the appellant, in putting forward the document of 24 June 1982 as containing the same . terms as the previous

agreement of 14 April 1982, was misleadinag and deceptive anda

that the respondent was misied thereby. 3is Honour held thaz

isisadind conduct, $0 establishec, could and dzra constitute & contravention of s.52 of the Act. He considered ' that therebv the general ples in the Statement of Claim that

the yrespondent signed the agreement as a conssquence of a

contravention of s.52 of tne Act was satisfied. Acting on

this finding his Honour found that the respondent had validly rescinded the agreement when, on 2 June 1983, she purvorted to

rescind the agreement on the ground that the appellant had

failed to compiv with 5.49 of the The Builéing Act 1980 and on

the groundc that she had been misled by the representatio that the unit would have a4 good view and that it would be

constructed not later than January 1983. His Honour tocx the

view that the respondent having fescinded the agreement cn grounds, one orf more of Which vere not available to her

aqreemenc. Apart from reliance cn an alleged failure to

in the notice of rescission, overated to give validity to the vescissicn. Sheppard ov. Felt % Textiles cf Australia Gta

Fe ) i) at lw (0)m Last ~ wn (ba ro) a nh [s) a i?) 13)a w ts ra Ie r) Q ct ts t ta)

document was regarded ty the learned Judge as a contravention of the provisions of s.52 of the Act. and ke acted on the view that as such it sufficiently supported a rescission of the

contract. However there would seem to be & ecror in

proceeding cn the basis that because the responcant had bee induced to sign exhibit 5 by the misreprésentation as to its contents and the applicant thereby engaged in conduct in contravention of 5.52 of the Act, thare was an entitlemerc in

the respcrdent to rescind tha agreement by her otm act. If

loss or damage were shown te have yvresulted from the contravention it would have suprerted @ claim for dameges under 5.82 of -vrellet under s.97 of the Act. But conduct, properiy described as misleading and déceptive within the

meaning of 5.52 cf the Act, does mot, merely on that account

does not follicw from the provisions of tne Sct that misleadina

operates in relation to a relevant contract as choug

Q a Cc iad Lf) a a Q ay a gC rp} ci ve] ad oO ns b iy fas) s p. m wm Q Lay BP b i] $a rou n A "ja io) I~ ib ful fn jos ; re} a Lay pu m is) a cal ct uw Ps ia)

within the meaning of 5.52 may also constitute the making of a4

frauculent oc innocent misrepresantation on a matter material

to the contract. If so it may in law suprort the rescission of the relevant contract by the farty aggrieved. But the learned Judge made no such finding. Of course, innocent

Misrepresentation was not pleaded other than that the relevant representations were pleaded as constituting a contravention

of the provisicns cf the Act. Fraud was nok suggested.

In any event, to ecbtain relief under the Act proof of loss or damage was essential. But this action was not desicned nor fought in a4 way which recognized this

requirement. Evicencse was not directed to proof of ioss or

damage. It 1s said that to enter into a camtract in which the

date 31 December 1983 in clause 3a) was substituted fora

date not stated inevitably involved loss or damage to the

respondent. But the learned Judge made mo such finding and there is uificient evidence usnen which this Court could so

ind. The date in clause 3(a) does not prezcribe the time for completion of the unit ar the buiiding generally. It 1s the date aftec which, if the relevant Puilding units plan is not registered at the Real Property Office, Brisbane, either varty mav cancel the contract. No doubt, if no-Gate were specified in clause 3(a), entitlement to cancel weuld arise at the

expiration cf & reasonable time. 'there is Little tasis upon

which the duration of that -ssascnable time might 52

clause. Depending upon' circumstances 4 gqrescer or longer time

may have been ceasonabls. as was rpointed cust, the question of what tas a reasonable time was not litigeted. There was na evidence as to how long a building such as Cleveland Waters would take to complete in the ordinary couese of affairs. The time that micht elapse in obtaining a sureveyor's certificate which was a ccndition of registration was mot established and

the time that micht have elapsed in obtaining the seal of the

was the possibility of time being taken up Dv inspections made by the Registrar of Titles and the ordinary processing of the plan in the Office of Titles. And a party contemplating a

yising or a falling market might well think that for the

purpose of claus@ 3{a) it was desirahbis that the peris

' specified therein should be longer or shorter according to his

In the scesuit it is impossible for this Court to draw the inference on the evidence thact the sieming cf the contract with the date 31 Dacembar 1983 inserted in clause 3(a) in' lieu or no date at all was a Getriment ta the respondent or maserzal co her signing of the document of 74 June 1982. For the same reascn, even in the absence of 4 provision such as clause 15 oi Exhibit 5 the resvonaent wes net entitled ts relief in respect ef che representatzon as =o the contents of exhibit 5 considered as an innocent misrepresentation. Materiality of the matter misresresented is a condition cf

such relief. See Hilson v. Brisbane City Council (1931) St.RO

360, per Hensham d. at 379; Halisbury 4th ed. Vol.31 9.547;

Cheshire & Firoot Law of (Contract 4th Aust. Ed.271; nc

Bower & Turner, Actionable Misrepresentation 3rd Ed. p.130.

Accordingly, relief was not availabl= to the respondent

under the Act or the general law either in respect of the

of claim or that concerning the contents of exnibic 5.

But the question of avoidance of th=2 contract pursuant

to s.49(5) oz the Building Act 1980 remains. To succeed in

" this appeal the appellant must show either that the finding of

contract was erroneous according to the Lay in force at the date or his judgment, or. that this Court should itself decide

whether upon the application of s5.49(5) ef the Buzrlding Acc

1980 to the matter of-the avoidance of the contract, the

respendent should be taxen to have been avers at all times, o

the erovisions of s.49 of the Buiiding Act 1980 and of the

obligations of an original proprietor thereunder and to have

read any statement or notice given to her Letng a stat

when he required it. See 5.3 of the Build=nta Units and Grour Tities Act 1993 (the Burldine Act 1983) ) a notice prescribed in subsection (4), the purchaser may void the comtract, agreement or other document signed ty him in relaticn to the originai oroprietor br notice in writing given to the original preceriator within 3 Gays after he first becomes aivare of the failure. ... {6} Uron the voidance of a contrace erred to in this section the original s nator snall ba liable at law for the. reo nv to the ourchaser of all moneys paid by © under the conceact and such moneys shall be recoverable, by action as for a debt, by the surchaser accordingly. December 1983 tne Building. Act 1923 By or it amended s.49 of the Buziding Act 1980 by:- "omitting subsection (5) and substituting the following subsection:- "(5) Tf the original proprietor fails to give to

hin) the xurchaser- may, Ey notice in writing giver to the original propristor, avoid the contract, aqréeemermt or other decument within 30 davs after he first hecomes aware of the failure:

herein prescribed 5b "re the expiration of €a}. in a case where che purchaser has become propriscter of m=mmhe lot before the commencement this Court is to

be conducted as an appeal stricter sensu. then this court will

decide whether the trial judge- erred im deciding upon the application of s5.49(5), as in force at the date of his judament, to the avoidance of the velevant contract but will

As) indicated above there is a sexmss in which this

Courct's judgment or decision must be a juéoament or a decision

context of the croper function of Ehis Courr, in this case, it

is not such a judgment or decision within the meaning o

s.49A. In this appeal "it is net- required that the Court

should grant any remedy or adopt ary procacture cther than such as is appropriate to the exercise of the Function of a Court exercising appellate jurisdiction strictu sensu. The only question is whether the learned Judge was in error in some matter of fact or of the law, then in issue, in giving his judament, on the date on which hé gave it. The judgment and

decision given by this Court in this appesi on that question

is, ain my opinion, not a jJjudament or wdscision upon the

application, as at the date of determination of the appeal, of s.49(5) to the avoidance of the contract. And it is only a

judement or decision of that kind which, on the proper

construction of s.49A, is a judgment or decision within the

Court will, in the exercise of its jurisdiction, qive or be yequired to give a judament or make a decision-'upons the application as at the date of that judgment or decision, of s.49(5) to the avoidance of a contract. Tmere, operating as @n appeal court in an appeal strictu sansu. the Court considers "hat the judgment of the learned judge at first instance was in error as to the aonzication ci s.49(5) to the avoidance of the contract it would be required, perhaps bz drawing inferences and possibiy with the azsistance of fresh evidence, to decide what the fudgment of tne learned judge Should have been at the date on which he gave i1t. It tiuld not be deciding whether, on the facts existing and the law in force at the date of the judgment on appeai, there was or was mot @ valid avoidance of the contract under 5.49(5). At first instance the question was, what is the effect according to law as at this date of applying s.49(5) to the avoidance of the contract. That is also the question before the appeal court acting strictu sensu. The question before a court in

contemplation of s.49A, and identified as a matter of

construction thereof, will inevitably be, 'shat, according to

the law as it is at the date of its judgment, is tne effect of applying s.49(S) to the avoidance of the contract. It is not to be thoucht that, on its proper construcrrion, s.49A has in contemplation @ court which will give a decision, not as to whether at the date thereof there has been a valid avoidance of a contract under s.49(5) under the law then in force, but whether an earlier Judgment of another court as to whether, at

the date it was diver, there was'a valid avoidance of €

contract accoréing to the facts then existicg and the law then

in forces, was correct. :-Treating this Court jurisdiction as

jurisdiction ts hear and determine appeals strictu'sensu, 4s

in my opinion it is, this Court is a Court cf the latter kind.

Council in Bobete Pty. Ltd. wv. Sunbird Plezcs Pty. Lrd. The

reasons vere mot availabie when this apesal was heard put subsequentiy hetame available. That case involved yet another "off the plan' vurchase of a unit and the auestions before the Privy Council were whether the decision of the Full Court of Queensland upholding the entry of summ=ary judgment for

specific performance against the appellant was correct anc

making a decision in which it 'was, Within the meaning of

s.4948, requirel to apply the provisions of that section. It held that it was anc that accordingly, although the decisions of the Court of first instance and the Caurt of Appeal were

both deliversi before s.49X was enacted, the provisions ci

appropriate to an adjudication on appeal by way of rehearing.

If the appeal were an appeal by way of rehearing a decision would have to be made by the Privy Council as to whether according tc the law n force at the date of the

appeal to it, including the statutory presumptions in para (b)

would be a judqment as to date of the force. : It is correct to sav as t "must nos? the 1980

But if sensu the ¢ecision to be made correct according

contract", but it would say that they must give a that section to the avoidance of the aurea to them and in

judgment appealed against. The judgment af the Privy Council appears to go that far but so far as 1t Gees, it must be on

the basis that the task before the Board was to hear the

appeal by way of rehearing. It has been said by the Privy

Council in Ponnamamma v. Arumogam £19053 A.C. 383 at p.3a8

that its appellate jurisdiction was to he exercised strictu

sensu, but it is a matter for the Privy Council. This Court

however, cannet treat itself as conducting a rehearing. The

question before it is whether the judgment under appeal was

As prévicusly stated s.49A requires @very court to act

on certain asstmptions for the purpose of =t giving a decisior

contract. Section 49R would require this Court to make thoss

of, avoicarnce was so be regarded as effective cr otherwise. Burt this Court's task is to decide whether when the decision under appeal was qiven it was correct according to the then current iar. And nothing can change this uniess the mature of an appeal to this court is to be changed from an apoeal strictu sensu to an appeal by way of rehearing. Sestion 49A does not purport to do that. Section 49A looks fortzmard to a2 situation in which. no decision having theretofore been given on the matter or where there 1s such a

decision a further decision has to be given de novo, a court

is required to give a decision upon the aoclication of s.49(5)

to the avoidance of the contract, situations in which, quite clearly, the statutory presumptions applicable at the time of the decision must be applied. The decision this Court is

So to construe para (b) of s.49A is to give full weight to its terms in their natural meaning and can hardly be said to frustrate their apparent intention. A decision of the kind

o yeferred to in s.49A must be a decision according 'to law as .

established in s.49A. Where a decision has to be made by 4 t in one of the situations referred to above it may be a decision concerning an avoidance which occurred Defore s.49A

was enacted as well as one which occurred after. The section

avoidance of the contract in which the rights cf the parties are to be determined by reference to the latz in force at the time of that cecision. Such a decision, thich must be ons made after s.49A was enacted, must apply its provisions. But s.494 has noth ing to say as to any presumption being applicable, "fcr the purpose of a court deciding" whether an earlier decision of a Court was correct when made. This does not méan that a court of appeal would not correct a decision made after s.49R twas enacted in which the statutory provisions of s.49(5) had been erroneously ignored. But in such a case

the question before the court of appeal acting strictu sensu

would remain one as to what the rights of the parties were as

Having reqard to the foregoing the chbservations of the

Privy Council in Boheto Ptv. Ltd. v. Sunbird Plaza Pty. Ltd.

(supra) are not pertinent to the function before this Court in

Accordingly the decision to be mae€s by this Court,

whether it allows or rejects the asrsal, wilii be a decision a to the application of s.49(5) as to the cionrs of the parties

as at the date of the judgment under arpeal and thus not 4

judgment or decision within the meaning of £.494 of the Act.

Accocdingly, the presumptions of fact intrsduced by s.492 do

learned trial judge nust be affirmed and th#s aopeal dismissed

BETWEEN: DURALLA PTY. LTD. Appellant and MERLE PLANT Respondent CORAM: Smithers, Northrop and Beaumont JJ. DATE: 4+ June 1984 PLACE: Melbourne REASONS FOR JUDGMENT NORTHROP J. I have had the advantage of reading the judgments of Smithers J. and Beaumont Jd. I agree with their reasons and concur in the orders proposed. I desire, however, to

make some further observations relating to the issue of the

nature of an appeal to the Federal Court in the exercise of

in short form. On 14 December 1983, judgment was given in favour of the respondent against the appellant. That judgment was based on facts properly found by the trial Judge who applied the then lav to those facts without error. On 22 December 1983 the relevant statutory law was amended with retrospective effect, as appears from the judgment of Smithers J., with the result that the respondent must have been deemed first to have become aware of the failure by the appellant to have given a statement in compliance in every respect with the statutory requirements at the latest on 24 June 1982. Therefore, the appellant ceased to be entitled to avoid the contract thirty days thereafter. If the amended Building Units Act had been in operation on 14 December 1983 the respondent could not have proved that she had validly avoided the contract and thus her application would have been dismissed and there would have been judgment for the appellant. The issue, therefore, 1s whether on this appeal the Federal Court, constituted as a Full Court exercising appellate jusidiction, 1s required to apply the law as it was on 14 December 1983, or as it is now. In substance, the

answer to this question depends on whether the appeal is in

the nature of a rehearing or is an appeal strictly so called.

It is interesting to note that this type of problem

has had a long history. The headnote to Shaw v. The

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (382 paragraphs)

Cited By (1)