Duralla Pty Ltd v Merle Plant [1984] FCA 150

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

1983. 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

assumptions 1© it was calisd upon to make a decision whether,

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

"A re-hearing should be decided according to the law at the time of the re-hearing. But Semble, an appeal should be decided by the law as it stood at the time of the original hearing, and not as altered by a retrospective Act, coming into force between the hearing and

Ltd. v. Sunbird Plaza Pty. Ltd., Privy Council, 1 May 1984,

presently unreported. That decision is considered in some detail later in these reasons. In Shaw's case, Molesworth J. of the Supreme Court of Victor1a, sitting in his capacity as Chief Judge of the Court of Mines, was considering an appeal from a Judge of the Court of Mines. In January 1867 one Coster, a shareholder in the company, made default in the

payment of a call on the shares held by him. Thereafter, the company, in accordance with its articles, forfeited those

shares. On 9 September 1869, in Nolan v. The Annabella

Company (1869), 6 V.R. (M) 38, Molesworth J. held that the

relevant statutory provisions then in operation did not

authorize the making of an article for the forfeiture of

shares. As said by Molesworth J. in Shaw's case at p.10:

"The case of Nolan v. The Annabella Company, as to forfeitures, was decided by me 9th September, and caused a good deal of sensation as contrary to received opinion and practice in the mining community; terminating in Legislative unterference by the Act No. 354."

The effect of Act No. 354, which came into operation on 14 October 1869, was to authorize the making of an article for

the forfeiture of shares and that authorization was given

retrospective effect to a date prior to the time when the Costerfield Mining Company forfeited the shares held by Coster. Thereafter, Shaw, as the trustee of the estate of Coster, then a bankrupt, successfully sued in the Court of Mines for a decree declaring the forfeiture invalid. The company appealed. Molesworth J. held that Nolan's case did not apply to render the company's article relating to forfeiture invalid. Because of the view of the law taken by the trial Judge, all material evidence to support the validity of the forfeature had not been given at the trial. On the appeal, Molesworth J. indicated that he proposed to take evidence if either party so wished, but that he would take as read, without objection, the deed of association of

the company and certain Government Gazettes. Neither party

desired to lead further evidence. On the question of the

retrospective effect of the Act, his Honour said at pp.12-13:

"As to the effect of the Act, if I re-hear I should decide the case with the Defendant as according to the law at the time of the re-hearing: Warne v. Beresford (2 M. & W.,

348). Independent of that, I doubt if I should reverse a decree which was right according to the law when it was made."

The reasoning of Molesworth J. 1s completely consistent with the opinions expressed by the Pravy Council

in Boheto's case. In Boheto's case, the respondent (vendor)

was a vendor of a lot coming within the provisions of the

Building Units Act. By contract dated 27 May 1981 the

appellant (purchaser) agreed to huy the lot. The purchaser's

solicitors received a copy on the contract on 1 June 1981.

By notice dated 24 June 1982 the purchaser purported to avoid

the contract under the Building Units Act on the basis that

the statement given by the vendor was not in compliance with the requirements of that Act. The vendor commenced proceedings claiming specific performance of the contract asserting that even if at had not complied with the

requirements of the Building Units Act, the appellant first

became aware of that failure when the purchaser's solicitors received the executed contract on 1 June 1981 and therefore

the power of avoidance under the Building Units Act had

terminated at the end of June 1981, being a date long before

Queensland ordered that the vendor have leave to enter judgment against the purchaser for specific performance of

the contract, and in so doing refused leave to the purchaser

to defend the action. That refusal must have been based on the fact that the respondent had failed to show that it was

entitled to avoid the contract under the Building Units Act.

On 10 February 1983, the Full Court of the Supreme Court of Queensland dismissed an appeal by the purchaser from that order. On 2 March 1983, leave was granted to the respondent to appeal to Her Majesty in Council against the order of the Full Court. Thereafter, on 16 November 1983, the High Court

gave judgment in Deming No. 456 Pty. Ltd. v. Brisbane Unit

Development Corporation Pty. Ltd. (1983) 50 A.L.R. 1,

holding, by majority, that a purchaser did not become aware

of the fairlure of an original proprietor to comply with s.49

of the Building Units Act until the purchaser acquired

knowledge of the provisions of s.49 and appreciated the meaning and effect of those provisions and understood that the original proprietor had failed to discharge the

obligations imposed on him by s.49. It 1s clear that that

decision resulted in the construction of a statute and thus

In ats opinion, the Privy Council, surprisingly, does not indicate whether the purchaser had made submissions

to the courts below on the construction of the Building Units

Act similar to the construction adopted by the High Court. Further, the Privy Council, surprisingly, does not indicate whether the purchaser had attempted to show facts which would

bring it within the benefits of the Bu2zlding Units Act on

such a construction of the section. The opinion of the Privy

"For the purposes of this appeal their Lordships accept, without comment, that the

purchaser and the purchaser's solicitors were, between Ist June 1981 and 18th June 1982, unaware of the contents or effect of section 49 of the 1980 Act or did not understand that the contract dated 27th May 1981 did not comply, and that the vendor had failed to

comply, in every respect with the provisions of section 49. In these circumstances the

contract was voidable from 1st June 1981 but the purchaser did not appreciate that the contract was voidable until 18th June 1982."

It is not clear whether there was any material before the courts below to support that assumption. In any event, the courts below must have held that the purported notice avoiding the contract was ineffective, i.e. contrary to the assumption made for the purposes of the appeal. In any event, the Privy Council, 1n commenting on the construction

of the Building Units Act adopted by the High Court un

"This surprising construction of the 1980 Act was not surprisingly corrected by the Building Units and Group Titles Act Amendment Act 1983 which became law on 22nd December 1983. The

question 1s whether the 1983 Act governs this present appeal."

The short answer to the appeal was that if the appeal succeeded, the summary judgment of the courts below

would be set aside and the purchaser would be given leave to

defend the specific performance action. At the trial of that

action the amended Building Units Act would apply of

necessity and the purchaser thus could not succeed in its defence. In giving its opinion, however, the Privy Council

"On behalf of the purchaser it was submitted, and there is a wealth of authority to prove, that the court will not give retrospective effect further than is necessary to comply with the plain meaning of ae statute. Following this principle, 1t was argued that paragraph (b) of section 49A only applies to a contract which was avoided after 22nd December 1983, the date when the 1983 Act came into force. But such a limitation would stulitify paragraph (b) of section 49A and is inconsistent with the requirement that every decision of any court after 22nd December 1983 must be made on the assumptions which the High Court of Australia declined to make in the Deming Case. Section 49A being clearly retrospective in its operation, and an intention having been shown that the Act should operate on pending proceedings, an appellate court is bound to give effect to it accordingly. See Attorney-General v. Vernazza

The last part of that paragraph appears to give the answer to the issue arising in the present appeal. However, the answer to that issue 1s not as clear as it appears. With the greatest respect, the Privy Council appears to have

The reference to the case of Attorney-General v. Vernazza 1s to what Lord Denning, speaking as a member of

"But what about the Court of Appeal? The new Act was passed afier the judgment of the High Court and before the hearing in the Court of Appeal. Can the Court of Appeal take the new

Act into account and make an order under it or must it leave the Attorney-General to make a fresh application to the High Court? It is, of course, clear that, in the ordinary way, the Court of Appeal cannot take into account a statute which has been passed in the interval since the case was decided at first instance, because the rights of litigants are generally to be determined according to the law in force at the date of the earlier proceedings: see Re Debtor, Ex p. Debtor (No. 490 of 1935)

British & French Trust Corpn., Ltd. (T1939] »- But it is different when the statute

1s retrospective either because it contains clear words to that effect or because it deals with matters of procedure only; for then Parliament has shown an intention that the Act should operate on pending proceedings, and the Court of Appeal are entitled to give effect to this retrospective intent as well as a court of first instance: sce Quilter v. Mapleson ((1882), 9 Q.B.D. 672) and Stovin v. Fairbrass ((1919), 88 L.J.K.B. 1004). Those decisions seem to me to show that the Court of Appeal can give effect to a retrospective Act passed an the interval since the case was at first instance, no matter whether it deals with vested rights or with procedure only; for, as Harman, L.d., pointed out ([1960] 1 All E.R. at p.192), the retrospective Act in Quilter v. Mapleson affected the vested right of the landlord to recover possession. And the retrospective Act in Stovin v. Fairbrass

affected the vested raght of the statutory tenant to remain in possession."

With respect, that statement 1s correct, since the an appeal before the Court of Appeal is that of a as will be explained later. The nature of an

strictly so called, and the question 1s whether the judgment

under appeal was correct when given. In Ponnamma v. Arumogam

"OQu1lter v. Mapleson ((1882) 9 Q.B.D. 672) was decided on a rule which prescribes that 'all appeals to the Court of Appeal shall be by way of rehearing.' And Jessel M.R. pointed out (9 Q.B.D. at p.676) that on an appeal strictly so called such a judgment can only be given as ought to have been given at the original hearing, but on a rehearing such a judgment May be given as ought to be given if the case came at that time before the Court of first instance. In 1ike manner the Supreme Court in Silva v. Swaris (1 Balasingham's Rep 61) relied on the terms defining their appellate jurisdiction, which they thought, rightly or wrongly, went beyond the correction of errors made by the Courts below. Without limiting the extent of His Majesty's prerogative, their Lordships can safely say that it is not the practice of this Board to entertain any other appeal than one strictly so called, in which the question 1s whether the order of the Court from which the appeal is brought was right on the materials which the Court had before it. The Board may, however, think that the Court below had not sufficient materials for its judgment, or improperly omitted to receive or to require further evidence, or to try some

issue, in which case it may remit the case for further hearing."

issue 1s the opinions expressed in Victorian Stevedoring and

General Contracting Co. Pty. Ltd. v. Dagnan (1931) 46 C.L.R.

73. In that case the appellants had been convicted in a

Magistrate's Court for an offence under a Commonwealth

regulation in force at the time of the convictions.

Subsequently, the regulation was disallowed within the time

allowed for an appeal. The appellants appealed to the High

Court. On the appeal the Court, by majority, allowed the

appellants to read an affidavit setting out those facts as

well as the fact that neither the fines imposed on the

appellants nor the costs awarded against them had been paid. An issue arose on the appeal relating to the effect of the disallowance of the regulation upon the convictions. That

issue was discussed at length by Dixon J. at pp.104-1ll1l, a

passage which should be read. The following extract from

"But what is to be done in such a case as this, where the decision that the defendants should be convicted is brought up by appeal to be considered at a time when they no longer would be liable to conviction? If the aunformations preferred against the defendants came on now to be heard for the first time, the charge must fail. Does the appeal to this Court bring up the proceedings so that the charge may be enyuired into anew and it may be determined here whether now, at the time of dealing with the appeal, the defendants are under a present liability to conviction; or does the appeal entitle the defendants to no more than a reconsideration of the question whether, at the time of their conviction, they were actually under the liabilaty to which they were adjudged? The appeal to this Court 1s given by sec. 73 of the Constitution, which provides that 'the High Court shall have Jurisdiction, with such exceptions and subject to such regulations as the Parliament prescribes, to hear and determine appeals from all judgments, decrees, orders, and sentences «+. (i2) Of any ... Court exercising Federal jurisdiction.' It 1s governed by the provisions of sec. 39(2)(b) of the Judiciary Act 1903-1927 and Section IV. of the Appeal Rules. The procedure which determines the mode of appeal does not affect the nature of the appeal iiself. It is established that upon such an appeal, 1t 1s for the Court to

form its own judgment of the facts so far as it 1s able to do so. (Bell v. Stewart ((1920) 28 C.L.R. 419)). For this reason an appeal to this Court is often said to be by way of rehearing. 'On an appeal strictly so called, such a judgment can only be given as ought to have been given at the original hearing; but on a rehearing such a judgment may be given as ought to be given if the case came at that tame before the Court of first instance' (per Jessel M.R., Quilter v- Mapleson ((1882) 9 Q.B.D. 672, at p-676). In the English Court of Appeal 'all appeals are by way of rehearing, that 1s by trial over again, on the evidence used in the Court below; but there is special power to receive further evidence'

(per Jessel M.R., In re Chennell; Jones v. Chennell ((1878) 8° Ch.D. 492, at "p.505)).

Accordingly, that Court must decide an appeal by applying to the circumstances as they exist, when the appeal 1s dealt with, the law which then operates to determine the rights and liabilities of the parties (Attorney-General v. Birmingham, Tame, and Rea District Drainage Board ((1912) A.C. 788, at pp- 801-802); Ex parte Thomas ((1889) 60 L.T. 728; 5 T.L.R. 234); and compare Borthwick v. Elderslie Steamship Co. [No. 2] ((1905) 2 K.B. 516, at p.521, per Romer L.J.); Robinson & Co. v. The King ((1921) 3 K.B. 183, at p.194, per Bankes L.J.)). If, by a retrospective change in the law, the rights and obligations of the parties come to depend upon facts which have not been ascertained, the Court of Appeal takes the necessary steps to have the dispute between the parties decided according to the law presently in force, and 1t may set aside the order appealed against, and remit the cause to be reheard so that the rights of the parties may be determined as at the date of

rehearing (Stovin v. Fairbrass (({1919) 121 L.T. 172; 88 L.-J.))."

"On the whole, I am of opinion that the appellate power does not enable or require this Court to deal with the rights and liabilities or immunities of the parties which have been acquired, incurred, or secured after

the judgment appealed from, and that it is confined to the position of the parties at the

The issue was discussed by Evatt J. at pp-112-3 and

"In my opinion the 'appeal' mentioned in sec. 73 of the Constitution and in sec. 39(2)(b) of the Judiciary Act 1s an appeal strictly so called. If so, it 1s not competent for this Court to take ainto consideration, for the purposes of exercising its appellate jurisdiction, matters which have occurred since the decision of the Magistrate. On the contrary, the Court '1s required to examine the merits and correct any error in the decision,' as was pointed out by Griffith C.J. in the Tramways Case [No. 1] ((1914) 18 C.L.R. 54, at p.6l). The distinction between an appeal in its strict sense, and one which is an the nature of a rehearing has often been emphasized, and I need only refer to the case of Quilter v. Mapleson ((1882) 9 Q.B.D. 672) and to the judgment of Lord Davey for the Judicial Committee of the Privy Council in Ponnamma v. Arumogam ((1905) A.C., at p.390). Of course there may be appeals in which it is proper to bring to the notice of this Court facts which have occurred after the pronouncement of the decision appealed against. Occasionally, the Court may think it proper to refrain from exercising its appellate jurisdiction because of such facts. If, however, the jurisdiction is to be exercised at all, it must be for the purpose of determining whether the decision of the inferior tribunal was right or wrong when it was pronounced."

illustrated by Mason J. in Builders Licensing Board v.

Sperway Constructions (Syd.) Pty. Ltd. (1976) 135 C.L.R. 616

at pp.619-622, another passage that should be read.

rehearing and an appeal strictly so called is referred to in Warren v. Coombes (1979) 142 C.L.R. 531 per Gibbs A.C.J.,

"We are concerned, of course, with an appellate tribunal to which there is an appeal by way of rehearing (Supreme Court Act, 1970

the powers and duties of Lhe court from which the appeal is brought, including those of drawing inferences and making findings of fact (s.75A(6)(b)). In other words the Court of Appeal is in the same position as the Court of Appeal in England and the Full Courts of the Supreme Courts of the other States. The appeal, although by way of rehearing, is conducted on the transcript of the evidence taken at the trial, and the witnesses are not called to give their evidence afresh, but the appeal is a general appeal and is not limited, for example, to questions of law."

It should be noted that the words "the appeal shall

be by way of rehearing" do not appear in the Supreme Court Rules providing for appeals to the Full Court of the Supreme

Court of Victoria; see 0.58, but those rules do make

Provision enabling a Full Court to receive further evidence and enabling the Full Court to draw inferences of fact and make any order that ought to have been made and such further order as the case requires; see 0.58, r.12. These provisions are similar to those which have been contained in

0.58 since at least 1906. The nature of an appeal to the

Full Court of the Supreme Court of Victoria is discussed by

Lush J. in Freeman v. Rabinov [1981] V.R. 539 at pp.546-8, another passage which should be read. In that passage, and after referring to Dignan's case and a number of other authorites and setting out the history showing how the words

"py way of rehearing" were removed from the Victorian Supreme

"In the result the rules of this Court appear, by allowing and in some case requiring the consideration of further evidence, and in spite of the omission of the reference to rehearing, to contemplate a wider power than exists in a court hearing an 'appeal strictly so called'. To say that the court is 'rehearing' cases may be difficult in view of the history of 0.58, r.1, but the issue may be one of terms. In my opinion this Court has powers which at least go so far as to enable 1t to vary such an order as was made on 28

February 1980 if the operation of that order can be said to have worked an injustice."

Despite these differences, as is illustrated by Martin v. Option Investments (Aust.) Pty. Ltd. (No. 2) [1982] V.R. 464,

the Supreme Court of Victoria applies the principles stated

"Shortly expressed, the established principles are, we think, that in general an appellate court as in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge. In deciding what is the proper inference to be drawn, the appellate court will give respect and weight to the conclusion of the trial judge, but, once having reached its own conclusion, will not shrink from giving effect to it."

its appellate jurisdiction, applies the same principles.

necessary to study the nature of the appellate jurisdiction of the Federal Court. That jurisdiction is conferred by Division 2 of Part 111 of the Federal Court of Australia Act 1976. That Division is headed "Appellate and related Jurisdiction" and comprises sections 24-30 inclusive. Under sub-section 24(1) the Federal Court has jurisdiction to hear

"(a) appeals from judgments of the Court constituted by a single Judge;

(b) appeals from judgments of the Supreme Court of a Territory; and

(c) an such cases as are provided by any other Act, appeals from judgments of a court of a State, other than a Full Court of the Supreme Court of a State, exercising federal jurisdiction."

In passing, it is noted that the Federal Court may not have original jurisdiction to hear and determine all matters arising from judgments of the Supreme Court of a Territory,

but that it may, under s.32 Federal Court of Australia Act,

have original jurisdiction to hear and determine all matters

which arise from judgments of a Supreme Court of a State and

exercised by a Full Court. Section 27 is set out in full:

"27. In an appeal], the Court shall have regard to the evidence given in the proceedings out of which the appeal arose, and has power to draw inferences of fact and, in 1ts discretion, to receive further evidence, which evidence may be taken on affidavit, by

oral examination before the Court or a Judge or otherwise 1n accordance with section 46."

In the exercise of its appellate jurisdiction the Federal Court has the wide powers set out in sub-section 28(1). For present purposes, placita (a), (b) and (c) are

"(a) affirm, reverse or vary the judgment appealed from;

(b) give such judgment, or make such order, as, 1n all the circumstances, it thinks fit, or refuse to make an order;

(c) set aside the judgment appealed from, in whole or in part, and remit the proceeding to the court from which the appeal was brought for further hearing and determination, subject to such directions as the Court thinks fit;"

It is 2zmportant to remember that the words "by way

of rehearing" do not appear in the Federal Court of Australia

Act to describe the nature of an appeal before the Federal

Court exercising appellate jurisdiction. There may have been

Constitutional difficulties in doing that. Thus the simple

application of authorities relating to the Court of Appeal in England is not open. Nevertheless, some of the attributes of the appeal being in the nature of a rehearing do apply. There is a power conferred upon the Court to admit further evidence. There 1s the wide range of orders that the Court may make on an appeal. There is the power to draw inferences of fact. These povers suggest that the nature of the appeal 1s by way of rehearing. At the same time, the Federal Court

of Australia Act clearly discriminates between the original

and appellate jurisdictions of the Federal Court. This discrimination is of importance. In speaking of the nature

of an appeal to the High Court, Dixon J., in Dignan's case

"The analogy of the English Court of Appeal is therefore not a sufficient foundation for holding that the appeal to this Court involves a rehearing of the cause as at the date of the appeal. in conferring jurisdiction upon this Court, the Constitution clearly discriminates between original and appellate jurisdiction. The simple language in which the appellate power 1s conferred, although implying the fullest authority to ascertain whether the judgment below ought, or ought not, to have been given, contains nothing to suggest that this Court is to go beyond the jurisdiction or capacity of the Court appealed from. To do complete justice between the parties litigant, as, according to Lord Atkinson, the Court of Appeal ought to do even though it should involve the making of an order which the Court below had not jurisdiction or power to make, smacks rather of original jurisdiction (Banbury v. Bank of Montreal ((1918) A.C. 626, at p-676)). The course of authority in this Court tends rather against such a wide view of the nature of the appeal."

In all the circumstances, it appears that the nature of an appeal to the Federal Court in its appellate jurisdiction is not in the nature of a rehearing. The Court has wide powers to ensure that injustice is not suffered and

for that purpose may admit further evidence on the hearing of an appeal. In an appropriate case the Court may, in the

light of fresh evidence, order a new trial; see Hoare v. The

Queen, Federal Court of Australia, 31 March 1983, unreported.

In an appropriate case the Court may, in the light of fresh evidence, refrain from exercising its appellate jurisdiction; cf. Dignan's case per Evatt J. at p.113- Boheto's case is an example where it would have been appropriate for the Privy Council to have refrained from exercising its appellate jurisdiction, even though leave to appeal had been granted. There the purchaser had been unable to obtain leave to defend the vendor's action for specific performance. The vendor had

been given leave to enter judgment for specific performance. If the Privy Council had considered the proper construction

of the Building Units Act in operation at the time of the

hearing of the matter an the Supreme Court of Queensland and had come to the same conclusion as that of the High Court in Deming's case, assuming that was the basis of the Judgments in the two hearings before the Supreme Court of Queensland, the Privy Council would have allowed the appeal and granted the purchaser leave to defend. It is obvious that when that

hearing took place, the Building Units Act, as amended, would

have been in operation and of necessity the purchaser would

have had no defence to the vendor's claim for specific

performance. Thus, the vendor would not be deprived of rights conferred upon it by the judgments of the Supreme Court of Queensland. If the Privy Council had come to a conclusion different to that of the High Court in Deming's

case, assuming that was the basis of the judgments in the

Supreme Court of Queensland, the Privy Council would have dismissed the appeal since there had been no error of law. The same result would have followed if leave to defend had been refused on factual material apart from the question of construction. Put another way, rights and Liabilaties between the parties arising under the unamended Building Units Act had merged in the judgment and the amendments to the Building Units Act could not have affected those rights and liabilities, unless the judgment had been set aside and the matter was then determined by way of rehearing. Even

then, on the rehearing the same results would have followed.

The present case is the converse to the position in

Boheto's case. In the present case the rights conferred upon

the respondent by the unamended Building Units Act and the

laabilities imposed upon the appellant by that Act had all merged in the judgment given on 14 December 1983. The

position 1s analagous to that discussed by Dixon J. in

"The doctrine of the common law is that a right conferred and a duty imposed by statute subsisted only while the statute remained in operation as a lav. This doctrine appears to be applicable to subordinate legislation. When the regulation 'ceases to have effect' how can a liability which arises under it, and depends upon it alike for its origin and continuance remain enforceable? It is only because the regulation had ''effect' as a law that the liability could continue. The power to make regulations is not a mere discretionary authority to determine when and how the statute itself shall operate. It is not as if the Act of Parliament alone imposed a liability for failure to conform to an

executive or administrative direction. The regulation is a real exercise of subordinate legislative authority. In my opinion, the

result 1s that upon the disallowance of the regulation it can no longer be relied upon as a source of liability. Thus, after a regulation has been disallowed, no one is liable to conviction for an offence committed while it was in force. His liability ceases when the law is revoked that imposed it. But 1£ he has already been convicted, then because his liability has merged in the conviction, it no longer depends upon the law under which it arose, and it does not lapse with the revocation of the law. The conviction has become the source of his liability for his offence, and the conviction continues in force because its operation does not depend upon the law creating the offence, but upon the authority belonging to a judgment or sentence of a competent Court."

If the Full Court allowed the appeal and ordered a retrial, the respondent's application for the return of the deposit, of necessity, would fail. She would be deprived of the rights conferred upon her by a judgment of the Court obtained without error of fact or of law. The Court should

This case is not to be compared to a case where the trial court in applying a principle of law relied upon an authority which subsequently 1s overruled by a court having binding authority upon the trial court. In those circumstances the original judgment would have been given by error of law and an appeal court would order a new trial or, in an appropriate case, make orders itself. In the present

case the amendments to the Building Units Act alter the

position, but by deeming facts to have occurred which in reality have not occurred. To set aside a Judgment of this

court on that basis would be unjust. The Court should not do

that. == ~ - - ~ 8 ers ne ere eB = rier I certify that this and the TWENTY~DNE (21)

ON APPEAL from a single judge of the Federal Court of Australia

BEAUMONT, J. I have had the advantage of reading in draft

form the judgment of Smithers, J. I agree with his reasons

and concur in the orders he proposes. [I would only wish to

Although the gucstion does not now arise because of the failure by the appellant to comply with the relevant Queensland statute, it should not be assumed, in my view, that apart altogether from any such statutory defence, this would have been a case where, given the circumstances in which the contract sued on was made and sought to be enforced, the discretionary relief of specific performance of the contract should be granted. Clearly, there is much force ain the respondent's contention that, the statute apart, the circumstances of the making of the contract were such as to deny to the appellant that equitable relief. The recovery of the deposit 1s, of course, a different question

So far as concerns the retrospective operation of the amending legislation now sought to be relied upon by the appellant, it is to be noted that the amending legislation makes no reference, expressly at least, to the situation which has now arisen at the appellate level. It 1s clear

enough that the amendment was intended to apply to proceedings at first instance, even if those proceedings had already been commenced. But it 1s a very different thing to suggest that such amending legislation was also intended to apply so as to, in effect, reverse a decision already properly arrived at by a judge at first instance from whom only an appeal stricto sensu, as distinct from an appeal by

rehearing, lies. In my opinion, in order to construe

amending legislation of the type now under consideration as applicable also at the appellate level, in an appeal in the strict sense, the most explicit language would be required, given the draconian result which would follow if sucha construction were adopted; and no such language was employed

| certify that this and the é\ preceding pages are a true copy of the reasons for judgment herein of The Honourable