Fletcher v Manton [1940] HCA 32

Fletcher v Manton [1940] HCA 32 - HCA 1940 case summary — Zoe

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The crucial question in the appeal is at what point of time any disability or restriction attached to the use of the property and the enjoyment of the estate. The answer to the question depends upon what construction is given to the relevant sections in the Slum Reclamation and Housing Act 1938 (Vict.). Sec. 8 (1) pro- vides that the commission, after making due inquiries and obtain- ing all necessary reports and being satisfied that any house or land on which any house is situate does not comply with the prescribed standard, may declare such house unfit for human habi- tation. Sub-sec. 2 (a) of this section provides for service of the declaration and statement of particulars on the owner and empowers 'it in writing to direct him to demolish the house if it does not comply with the regulations ; sub-sec. 2 (b) provides for service on the occu- pier of the declaration, statement and direction. Penalties under sub-secs, 3 and 4 are provided for disobedience to the commission's directions. Sub-sec. 5 empowers the commission to take the necessary steps to make the house comply with the regulations under sec. 8 or, as the case might be, to demolish it. Any owner may, under the conditions specified, appeal to a Court of Petty Sessions (sub-sec. 6 (a) ). Pending such appeal the provisions of sub-sees. 3, 4and 5 are suspended (sub-sec. 6 (c) ). Where the appeal is allowed the declaration of the commission and any notice or direction served in connection with such declaration shall be deemed to be and to have been void and of no effect (sub-sec. 6 (d)). The primary judge considered that the obligations and rights imposed and con- ferred by the Act in question attached at, "and not earlier than, the time of the receipt of the notices required to be given," that in the circumstances " no obligation rests upon the owner and no rights vest in the commission until the receipt by the owner of those notices" (1). With great respect I am unable to accept this construction of the Act. In my opinion the commission's declarations, as from the date of the declarations, operated in rem and attached an immediate disability to or restriction upon the premises. Upon the declarations being made, it is then the duty of the commission to ensure that this disability or restriction is made effective, and the subsequent sub- 'sections of sec. 8 are merely procedural or machinery to enable this tobe done. The right of an appeal is only an opportunity of obtain- ing the removal of a disability or restriction which has already attached to the property in question. In legislation similar to the Act under consideration provision for some observance of the

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vendor entered into a contract with the purchasers for the sale of the land "together with brick terrace erected thereon and known as Nos. 15, 17, 19, 21 Lt. Charles Street, Abbotsford" for £600. The terms of the sale stipulated for a deposit of £100 on the making of the contract and the residue of the purchase money within four months, when the property would be transferred. On 28th March requisitions on title were delivered on behalf of the purchasers. 'They included a question whether there were any outstanding notices or orders relating to the property under any Acts of Parlia- ment and a requisition that, if so, they should be complied with by the vendor forthwith. Some negotiations then took place between the parties, in view apparently of the demolition orders. On 8th May the vendor's solicitors gave a formal reply to the requisition, saying that since the date of the contract of sale a notice had been received by the vendor from the Housing Commission to demolish the properties erected on the land sold and that the order would be complied with. The vendor in fact did cause the buildings to be demolished in compliance with the order, as he was bound to do. On 21st June the purchasers refused to accept title, claimed to rescind and demanded payment of their deposit. They then issued a vendor and purchaser summons seeking declarations that a good title had not been shown to the property referred to in the contract 'of sale, that the contract was rescinded and that the deposit was repayable. The matter came before Lowe J., who decided that the loss fell on the purchasers because no statutory obligation under the demolition orders attached to the ownership of the land until after the date of the contract of sale, that is, until service of the 'orders on 3rd April. From that decision the present appeal is Drought. The demolition orders were made by the Housing Commission "under the Slum Reclamation and Housing Act 1938 (Vict.) (No. 4568). 'Sec. 8 (1) empowers the commission to declare a house unfit for human habitation when there has been a failure to comply with the 'regulations prescribing standards of fitness for human habitation. Sec. 8 (2) says that when a declaration is made the commission shall "serve on the owner a copy of such declaration and may direct him within a specified time after service to demolish such house. Sec. 8 (4) makes an owner guilty of an offence if he fails to comply with a direction within the time specified, having means to do so. Sec. '87 (1) (c) provides that service of a document may be affected by the document by post in a prepaid letter addressed to the person to be served at his usual or last-known place of abode,

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of the declaration ought not to be so regarded. The Housing Commission are an administrative body authorized to take a course adverse to the owner of land. They are not pronouncing a judicial 'sentence or decree but giving a direction or addressing a command to a person occupying the character of owner. What the commission do before issuing the direction or command to the person concerned, that is, before service of the declaration, is inchoate and affects only themselves and their officers. They are authorized to deal with the owner and ownership, that is to say, the owner of land as such. The statute means that the blow shall fall on the owner for the time being, and it specifies the means or occasion by which it shall take effect. Whoever is the owner at that moment must suffer the consequence. It is at this point that the equitable rule is invoked. The rule determines that for such purposes " ownership" shall be regarded as passing from vendor to purchaser at the date of the contract. It must be remembered that the parties were bargaining for the transfer from one to the other of slum property liable under a general Act of Parliament to be affected at any moment of time by service of a demolition order. Once it is seen that ownership with all its risks is in equity transferred from the moment of the contract, then no anomaly can be felt in imposing on the purchasers the burden arising from the promulgation afterwards of an order of the Housing Commission, though before the date of the contract proceedings within the commission had, without the knowledge of either party, advanced up to the final point before notification. The chief contentions of the purchasers in support of the appeal against the decision of Lowe J. consisted less in an attempt to show that ownership was affected before the date of the contract by the declaration than in efforts to establish that the case was not governed at all by the doctrine that in equity ownership passed on the making of a valid contract. It was said that the obligation of the vendor was to maintain up to the day fixed for completion a good title to the property sold and then to transfer or convey it, and that here on the very face of the contract the property sold was shown as not merely the land but also the buildings. The answer to this conten- tion appears to me to be that the description contained in the words "land . . . together with brick terrace erected thereon" imports no warranty or condition as to the continued existence or state of the terrace at the date of completion. It describes the subject matter of the contract as it stands at the date of the contract. If fire, lightning or tempest had destroyed or damaged the terrace after the making of the contract, these words could not have been VoL. LXIV. 4

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