Supreme Court of Queensland|2009-04-27|Before: Hudpac Corporation P, Voros Investments P, Applegarth J

The applicant submits that it was not required to comply with s 22 for the reasons that I have earlier previewed. It relies particularly upon the reasons of Derrington J in Sommer v Abatti Holdings Pty Ltd [1992] 1 Qd R 300 at 304-305, and submits that the temporal restriction stated in s 22(1) is of no assistance to the respondent. It submits that s 22 of the LSA does not operate because by s 214(5) of the BCCM Act, the disclosure statement is taken to be the date of the further disclosure statement.

I am unable to agree with that submission, and it seems to me Sommer's case is not necessarily supportive of it. Sommer's case dealt with a different fact situation, and importantly, in that case, the present issue did not arise.

It is clear from the legislation that so far as the original disclosure statement is concerned that there is a legislative intent to ensure that there is not unnecessary duplication or repetition of the original information. However, the Act, in its terms, does not similarly state that a notice given under s 214 of the BCCM Act will operate to relieve a party from complying with the obligation in s 22(1) of the LSA. Such relief from the operation of section 22(1) cannot, in my opinion, be implied into the Act or carried forward by reason of the provisions in relation to the original statement.

The principal reason that I reach that conclusion is that

s 22(1) of the LSA and s 214 of the BCCM Act confer different rights in different circumstances. The obligation to give a statement, which I will refer to as a rectification statement, under each Act may arise in some cases at different times. The most important point of distinction is that s 22(4) gives a purchaser, in the circumstances in which a notice under

s 22(1) is received, a period of 30 days after receipt of the relevant document to pay. That section does not give a right to avoid.

However, the period of 30 days, amongst other things, will permit such a purchaser to check the title as registered and to, amongst other things, consider whether the changes are such as to give them a right to avoid the contract. By contrast, s 214 of the BCCM Act does not give that simple extension of time. It provides a buyer with an opportunity to cancel the contract if, amongst other things, the buyer "would be materially prejudiced if compelled to complete the contract, given the extent to which the disclosure statement was, or has become, inaccurate."

In some cases the contents of the rectification statement will be relatively innocuous and not give a party such a right to avoid. In other cases, it may. In other cases, it may be a matter of uncertainty.

It might have been possible for the legislation to be better aligned so as to avoid the unnecessary provision of rectification statements pursuant to both s 22 of the LSA and s 214 of the BCCM Act. However s 22 gives important rights to a purchaser. One right is to consider their position. It is a right which is conferred by statute, being a statute that has the purpose of protecting the interests of consumers in relation to property development and I do not consider that, in those circumstances, the Act can be construed so as to make it apply on a basis identical to that provided in s 214 of the BCCM Act. In essence, s 22(4) of the LSA gives important rights conferred by statute to an extension of time to settle.

I do not consider that the provision of the notice that was given on the 2nd of December removed the obligation to give a notice complying with s 22(1). The timing requirement in

s 22(1) cannot be overlooked. It is submitted on behalf of the applicant that such a result is commercially absurd. As inconvenient as it may be in some circumstances, I cannot regard it as commercially absurd. In some cases, as I have said, it may be possible for one notice to suffice as having been given under each Act. In other cases, it will not be. In this case it might have been possible. I do not reach any concluded view about this. However, to comply with s 22(1) of the LSA it was necessary to give the notice that was given on the 2nd of December shortly after the registration of the plan whereupon the proposed lot became registered.

Accordingly, I uphold the submissions of the respondent on the first point, and find that the applicant was obliged to give a notice under s 22(1) of the LSA as soon as reasonably practicable after the proposed lot had become a registered lot.

The second point is the consequences of what is said to be a breach of s 22. The applicant submits that if it failed to comply with s 22 by calling for settlement before the 30 days after a notice had issued that such a breach was rendered inessential by the statutory limitations on the respondent's right to rescind.

Particular reference is made to the fact that under s 25 a purchaser has a right to avoid where, amongst other circumstances, a statement in writing has not been given to the purchaser when required by s 22(1). It seems to me that

s 25 is not an exhaustive statement of the rights of a purchaser in such a case.

The present case may be one in which the purchaser might have elected to avoid - and there may be consequences of making an election. However, s 22 in its terms postponed the date for settlement and gave the purchaser, as it were, the right to not settle and not part with money until the notice under

s 22(1) had been given. I do not construe the apparent non-compliance with s 22 as obliging the purchaser to settle on the basis that the breach was some kind of inessential or unimportant non-compliance.

The occasion to settle simply had not arisen by virtue of the operation of the statute. Reliance is placed upon Lee v Surfers Paradise Beach Resort Pty Ltd [2008] QCA 29; [2008] 2 Qd R 249 but that seems to me to be a case which is factually different to this one. As appears at paragraph 56 of the judgment, in the judgment of Dutney J, his Honour observed:

"In this case the fundamental breach lay in failing to tender the purchase price on the date specified in the contract where time has been made of the essence by clause 1.4."

In this case, one is not concerned with a similar situation in which the issue arises as to whether a breach of an inessential term or obligation precludes a party from relying upon a fundamental breach by the other. Here, one has a different situation in which the applicant purported to terminate for failure to settle in circumstances where, on the facts that I have found them, the obligation to settle had not arisen by virtue of non-compliance with s 22 of the LSA.

Those are my reasons. I will hear the parties as to appropriate orders that arise as a consequence of those reasons.

HIS HONOUR: The orders that I will make will be the application is dismissed and the applicant pay the respondent's costs of and incidental to the application to be assessed.

Hudpac Corporation P/L v Voros Investments P/L [2009] QSC 275 (27 April 2009)

Hudpac Corporation P/L v Voros Investments P/L [2009] QSC 275

At a glance

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Judgment (23 paragraphs)

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Legislation Cited (1)

Cases Cited (1)

Hudpac Corporation P/L v Voros Investments P/L [2009] QSC 275 (27 April 2009)