Homes v Newland

Homes v Newland - [1999] NSWSC 894 - NSWSC 1999 case summary — Zoe

[17]

16 It is also important to bear in mind the provisions of s 33 of the Act. That section is in the following terms:- "33 Regard to be had to purposes or objects of Acts and statutory rules In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object." 17 This section reflects the contemporary approach to statutory interpretation. In Sarasvati v The Queen (1990-91) 172 CLR 1 at 21 Mr Justice McHugh explained this process in these terms:- "In many cases, the grammatical or literal meaning of a statutory provision will give effect to the purpose of the legislation. Consequently, it will constitute the 'ordinary meaning' to be applied. If however, the literal or grammatical meaning of a provision does not give effect to that purpose, that meaning cannot be regarded as the 'ordinary meaning' and cannot prevail. It must give way to the construction which will promote the underlying purpose or object of an Act." 18 It is necessary to consider the circumstances in which the section might operate. There would appear to be at least three circumstances in which, in the context of a Building Agreement between a builder and a owner, a caveatable interest might arise. These are:- 1. That the contract contains an appropriate clause granting either a mortgage or charge. 2. The contract may in terms provide an entitlement to lodge a caveat. Such a clause does give a caveatable interest, see Troncone v Aliperti Court of Appeal 20 April 1994. 3. Particular circumstances of an agreement between parties for the joint development of land, see Davies v Uratoriu Hodgson J 18 May 1995. 19 This last example which I have quoted would seem to be an extension of the principle referred to by Mahoney J in support of his conclusion in Troncone v Aliperti. There he said:- "It is a fundamental principle of construction that "Whoever grants a thing is deemed also to grant that without which the grant itself would be of no effect" ("Cuicungue aliquis quid concedit concedere videtur et id sine quot res ipsa esse non potuit" ): Broome's Legal Maxims (9th ed) p 307. The principle is said to go back at least to Shepherds Touchstone 89. … Thus, if the registered proprietor of land covenants by deed that, until a loan be repaid, he will not sell or deal with the land, that covenant would, in my opinion, create in favour of the covenantee an interest in the land to the extent at least that an injunction would go to restrain the covenantor from dealing with the land in a manner inconsistent with the covenant. It is not necessary for this purpose to pursue the nature of the estates or interests in land which, under the conventional law of real property, it was or is possible to create. No is it necessary to distinguish between an estate and an interest in land. The right, by the enforcement of an express or an implied negative covenant, to restrain a dealing with land is in my opinion an interest in land within this branch of the law. Accordingly, such an interest would, in my opinion, be within the words 'a legal or equitable estate or interest in land' within s 74F(1)."

[18]

20 There are thus a variety of ways in which the right to lodge a caveat will arise. The grammatical construction of s 7D, leaving aside the opening words for the moment, would seem to posite another circumstance which gives a caveatable interest. The circumstance is a licensee being a party to the contract who has obtained a judgment or order of the court. This could appropriately be described as the grammatical or literal meaning of the provision. It is notable that when the Act in other circumstances seeks to strike down a clause in a contract it does so expressly. See s 7C which declares void any arbitration provision. 21 It is necessary to look at the Act to try and discern the nature of its purpose in accordance with the principles I have referred to above. If one does, one finds an Act which applies to a limited class of building work where the particular people likely to be affected are, apart from the builders, owners of residential property. Division 1 deals with the contracts which are entered into for such work and contains a series of restrictions on matters such as insertion of arbitration clauses, amount of deposit and the form of such contracts. One then moves through other divisions which regulate the licensing of people to do work, obviously for the benefit of the consumer being the home owner and further provisions which provide statutory warranties to benefit the home owner. The Act then deals with a variety of other matters such as disputes, insurance and penalties. 22 Division 1, to which I have referred, deals with contracting for work. It contains a number of prohibitions and applies certain requirements for the contracts in question. In particular s 6(1) provides that s 7 and s 7D apply to a contract under which the holder of a licence undertakes to do, inter alia, any residential building work. Section 7 deals with the form of such contracts and prescribes a number of things that must be complied with and also proscribes a number of things which are not to be included. Section 7C provides that an arbitration clause in any such agreement is void. When one comes to s 7D the first line, which I take not to be a heading, is "Extent of Caveatable Interest in Land Under Contract". If one then looks at the remainder of the section which follows one finds nothing within it which qualifies the amount or "extent" of the caveatable interest. All the latter part does is say that a licence holder who has a judgment has a caveatable interest in the land. 23 This tends to suggest that "extent" has a different meaning other than defining the ambit of a particular caveatable interest. If the purpose of the Act and in particular this division is to protect an individual owner of residential land then a more natural construction of the word "extent" might see it as being a restrictive provision. Given as I have pointed out above that a caveatable interest can arise in a variety of circumstances even where the contract does not contain an express clause having as a legal result a caveatable interest such as the first two examples quoted above, a different interpretation of the word "extent" becomes more apparent. It is in effect a restriction on all caveatable interests and requires there to be a licence holder who has obtained a judgment. This construction is supported by the terms of the second reading speech which I have referred to before. Whether the section gives a caveatable interest where the law would not have previously found one is not a matter which requires a decision in this case. 24 It seems to me therefore that the proper construction of s 7D is one which provides for the section to restrict a caveatable interest to the holder of a licence who has a judgment or order of the court in his favour. As this is not the case in the present matter the point should be determined against the plaintiff. The appropriate orders are that the plaintiff forthwith withdraw caveat 5240488W and the plaintiff to pay the defendant's costs of the motion and the proceedings and I so order.

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