HUEPPAUFF & ORS v INTER-CONTINENTAL TRAVELS P/L No. SCCIV-01-70 [2001] SASC 119

Perry J observed that he was not purporting to finally rule on the issue of law as further argument and evidence would be necessary before the point could be resolved. However, his Honour's observations are helpful. He said (p 309):

"If a warranty had been given which expressly referred to the soundness of a building, in my opinion the section is hardly likely to apply so as to put a plaintiff out of court, even if the alleged breach of warranty is as a result of defective building work which had been completed more than ten years before the action was brought.

To give the section such a construction would result in quite bizarre consequences. It would mean on Mr Manetta's argument that if an express warranty was given as to the soundness of a building as part of a contract of sale, the warranty could not be relied upon as a basis for the award of damages, if the unsoundness was as a result of building work which was more than ten years old. In my opinion, much clearer words in the section would be necessary before it could have such a strange result."

I agree. I also agree that s 73 operates to bar the remedy, but not the right. Section 73 has no application to a claim for damages resulting from a breach of a contractual warranty as to approvals and consents or for damages for misrepresentation as to approvals and consents.

There is a further obstacle in the path of the defendants' claim that s 73 is a bar to the plaintiff's cause of action. Regulation 97 of the Development Regulations 1993 provides that s 73 of the Act does not apply to defective building work carried out before the commencement of the Act. If reg 97 is a valid regulation, s 73 has no application.

Section 108 of the Act provides that the Governor may make regulations for the purposes of the Act. Section 7(1) of the Act provides that, subject to s 7, the Act applies throughout the State. Section 7(3) provides as follows:

(a) that a specified provision of this Act does not apply, or applies with prescribed variations, to a part of the State specified by the regulations;

(b) that a specified provision of this Act does not apply, or applies with prescribed variations, in respect of a particular class of development, or in any circumstance or situation (or circumstance or situation of a prescribed class), specified by the regulations,

and, subject to any condition to which the regulation is expressed to be subject, the operation of this Act is modified accordingly."

Counsel for the defendants argued that s 7(3) amounts to an unconstitutional abdication of sovereign legislative power because it confers on the Governor in Council an unlimited discretion to repeal or modify the Act. As a consequence, he contended that s 7(3) and reg 97 are void.

As I have taken the view that s 73 of the Act has no application, strictly speaking it is unnecessary for me to determine this issue. In addition, I was referred to a limited number of authorities. However, in brief I will indicate my views.

There is no doubt that while Parliament may delegate legislative power, it may not abdicate it: Giris Pty Ltd v Federal Commissioner of Taxation [1969] HCA 5; (1969) 119 CLR 365 at 373 Barwick CJ. In my opinion, s 7(3) does not amount to an abdication. While the delegation of power is broad, it does not confer upon the Governor in Council "the independent and unqualified authority which is an attribute of true legislative power ...": Victorian Stevedoring and General Contracting Co. Pty Ltd and Meakes v Dignan [1931] HCA 34; (1931) 46 CLR 73 at 102 Dixon J. The legislature has reserved for itself the ability to repeal or qualify s 7. The regulations must be tabled in each House of Parliament within six sitting days after they have been made and Parliament retains the power to disallow any regulation: Subordinate Legislation Act 1978. Section 7 does not purport to create a new legislative body with general legislative authority.

In my opinion reg 97 is valid and precludes the operation of s 73.

An issue was also raised as to whether, independently of reg 97, s 73 had any retrospective operation. Limited submissions were directed to that issue and to the question as to when the plaintiff's cause of action arose. It is unnecessary for me to resolve these matters.

The Magistrate entered judgment against all defendants who were parties to the contract. The final ground of appeal complains that the Magistrate should have found that neither the second nor the third defendant had committed any breach of contract or other wrong.

The defendants are Mr Huepauff, his wife and his son. All three signed the contract. Clause 1.24 of the contract defined "the vendor" as meaning "the person named and described in Item A of the Schedule". At Item A in the Schedule, the three defendants were named as the "vendor".

Notwithstanding the wording of the contract, and without reference to any authority, counsel for the defendants submitted that the warranty should be construed as several rather than joint. In those circumstances, as it was the uncontradicted evidence of Mr Huepauff and the second defendant that neither Mrs Huepauff nor their son had anything to do with the plumbing work or obtaining the necessary consents, the Magistrate should have found that neither the second nor the third defendant had committed any breach of contract. Alternatively, and again without reference to any authority, counsel for the defendants submitted that if the defendants had given a joint warranty, as only one of the defendants knew that building work had been carried out without all necessary consents and approvals having been obtained, none of the defendants were in breach of the warranty. Counsel accepted that such an approach would lead to an absurd result.

In my opinion, there is no ambiguity in the wording of the contract. In particular, there is no ambiguity in the wording of the warranty. The obligations undertaken by the defendants pursuant to the contract were joint obligations. They jointly gave the relevant warranty. In these circumstances, all defendants are liable for a breach by one of them of a contractual obligation. In my opinion there is no substance in this ground of appeal.