Tiplady, Murray Gordon & Anor v Gold Coast Carlton Pty ltd [1984] FCA 168

Federal Court of Australia|1984-06-19|Before: Fitzgerald J

TRADE PRACTICES - representations in sale of unit "off the

plan" which became contractual promises - whether later non-disclosure of variations or alterations to subject unit

misleading or deceptive conduct - effect of election to affirm on any right to rescind for misleading conduct.

VENDOR AND PURCHASER - vendor's essential obligation to transfer the property the subject of the contract - property to be transferred substantially different from property purchaser contracted to buy - purchaser's rights and remedies - jurisdiction of Court of Equity to order compensation - circumstances in which vendor denied specific performance - election to affirm contact - innocent party then repudiating - assessment of damages.

Trade Practices Act, ss. 82, 87, sub-ss. 4(2), 52(1)

Judiciary Act 1903, 5.79 Federal Court of Australia Act 1976, s.52

Building Act 1975-1984 (Q1d) Fire Safety Act 1974-1982 (Qld)

Building Units and Group Titles Act 1980-1983 (Qld), sub~ss. 20(3), 22(1)

Property Law Act 1974-1982 (Qld), ss. 62, 67, 68, 69

MURRAY NOPTON TIPLADY and LAUREL ROSE TIPLADY -v- GOLD COAST CARLTON PTY LIMITED

Judgment for the respondent against the applicants for $81,770.00.

Applicants pay to the respondent its costs, including any reserved costs, of the claim and cross-claim, to be taxed.

QUEENSLAND DISTRICT REGISTRY ) QLD G94 of 1983 GENERAL DIVISTON ) BETWEEN :

Respondent AND: GOLD COAST CARLTON PrY LIMITED Cross-claimant

By a contract in writing which bears date 14 January 1981 but which was signed nearly a month later, the applicants agreed to purchase from the respondent unit No. 56, one of two penthouses on the 14th and 15th floors of a building, "Ocean Royale", which was to be constructed by the respondent on land at

Old Burleigh Road, Broadbeach in the State of Queensland. The

purchase price was $385,000.00, of which ten per cent was payable by way of deposit. At the time the contract was entered into, the construction of "Ocean Royale" had not commenced and plans in respect of the proposed building had not been approved by the

The respondent's sales agent in respect of "Ocean Royale" was St. George Real Estate of Main Place, Broadbeach. Late in December 1980 or early in January 1981, the applicants, in company with friends, called at the agent's office and spoke to Mr Robert Quarmby, the agent's Sales Manager. Mr Quarmby had

a copy of the architect's plans for the proposed building and a

preliminary copy of an advertising brochure. The documents were referred to itn the course of a discussion which took place, principally between Mr Quarmby and Mr Tiplady, with respect to penthouse unit 56. A photostat copy of the architect's floor plans with respect to that unit was given to the applicants. The applicants were not informed that the plans had not been approved by the Council or that an application for a building permit had not even been submitted. By the end of the meeting, the applicants had formed an intention to buy penthouse unit 56 but

no documentation was signed and no money changed hands.

A contract was prepared and forwarded by the respondent to the applicants on or about 15 January 1981. Before the contract was signed and returned, copies of the advertising

brochure were printed and a copy of the brochure was sent to the

applicants. Floor plans for each of the two penthouses on the

14th and 15th floors were contained in the brochure, accompanied by a statement: "Measurements are approximate. Plans are

The front cover of the advertising brochure bore an "Artists impression" of the proposed "Ocean Royale" building. The "Artists impression" indicated a balcony on the north-eastern corner of the 15th floor, the upper level of the penthouse the subject of the contract between the applicants and the

respondent, and that the balcony would have a balustrade consisting of a horizontal rail and spaced vertical bars. Inside

the brochure was a statement: "The apartments will be professionally managed by the Broadbeach International Hotel". According to the floor plans for the penthouses on the 14th and 15th floors which were contained in both the architect's plans given to the applicants and the brochure, there was not to be a common lift lobby on the 14th floor in connection with the two lifts in the building. Instead, one lift was to open directly into a private vestibule within one penthouse and the other lift was to open directly into a private vestibule within the other penthouse. Similarly, there were to be separate fire stairs opening directly into the private vestibule in each penthouse. In the course of their discussion in late December 1980 or early January 1981, Mr Tiplady and Mr Quarmby had discussed this

feature of the penthouses and associated security arrangements.

The floor plans also showed storage space within each penthouse near the entry to the fire stairs from the private vestibule and a passage in each penthouse from the private vestibule into the

dining area past an open internal stairway leading to the upper

The "Artists impression" on the front cover of the advertising brochure did not accord with the engineering plans which the respondent had at all material times and which provided for a solid concrete balustrade around the north-eastern balcony on the upper level of penthouse unit No. 56. Discussions had taken place between the respondent and persons associated with Broadbeach International Hotel concerning the management of "Qcean Royale" and solicitors had been instructed to draft appropriate documentation but no agreement had been concluded and the matter remained ina state of negotiation only. It was not possible to build the penthouses with the private vestibules as proposed consistently with the Building Act 1975-1984 (Queensland) or the Fire Safety Act 1974-1982 (Queensland)

although that was not known to the respondent or its architect. The engineering plans also provided for the floor slab in respect of the upper level in each penthouse to "turn down" for

structural reasons where it was terminated in the vicinity of the

The contract document, signed by the applicants, was

received by the respondent together with part of the deposit on or about 6 February 1981. The balance deposit was received on 15

In the contract signed by the parties, the "Unit Sold"

"UNIT S80LD: No. 56 (Lot 56 in Proposed Building Units Plan No. )

FLOOR PLAN: In accordance substantially with the Plan in the Tenth Schedule hereto and edged in blue. The

Clause 16(c) of the contract made provision for a_ statement "giving certain particulars in connection with the said unit ..."

"in accordance with" s.49 of The Building Units and Group Titles

Act 1980 as amended (Queensland), and provided that the statement was "set out in the Twelfth Schedule to this Agreement". The

"IDENTIFICATION OF UNIT: Unit 56 on 14 & 15 Floor as identified in sketch plan in subject agreement (where Building Units Plan has been registered, Lot in Registered Building Units Plan No. »."

The sketch plan referred to in the Twelfth Schedule was the "Plan in the Tenth Schedule ... edged in blue". The Tenth Schedule to the contract consisted of an indication as to the direction the building was to face and four floor plans, a "Ground Floor Plan", a "Typical Floor Plan" and floor plans for the 14th and 15th

floor penthouses. The floor plan in respect of the 14th floor

was not as detailed as the architect's plans or the floor plans

in the brochure but did indicate both the private vestibule and the open staircases between the upper and lower levels of each

penthouse. A blue line was drawn around the northern sections of

the floor plans in respect of the 14th and 15th floors, including

the private vestibule within the boundaries of penthouse unit 56.

Other parts of the contract were also referred to in

argument. The contract contained recitals in the following

(a) The Vendor is or is entitled to be the registered proprietor of certain land described in the First Schedule hereto;

(b) The Vendor intends, subject to the terms hereof, to construct a multi-storey bu1llding (to consist of basement car park ground floor and Fifteen (15) further floors) to be called "Ocean Royale" on the said land in accordance with plans and specifications prepared by the Vendor's Architect and approved by the Council of the City of Gold Coast, the finishes to be substantially in accordance with the Schedule of Finishes annexed hereto;

(c) The Purchaser wishes to purchase from the Vendor the estate in fee simple in that part of the said building hereinbefore

described as the unit sold and hereinafter referred to as 'the said unit';

(ad) A separate freehold title to the said unit is to be conveyed to the Purchaser by virtue of the 'Building Units and Group Titles Act 1980' as amended."

(a) Settlement shall take place within thirty (30) days ... PROVIDED FURTHER

that should the construction of the said building be delayed due in whole or in part to one or more of the following:-

(iii) on account of the delay of any local or other authority in giving any necessary approval provided the Vendor has taken all reasonable steps to obtain such approval;

8.(a) The title to the said land described in the First Schedule will be, prior to

settlement, under the Real Property Act of Queensland; the title to the said unit will be or is subject to the provisions of the 'Building Units and Group Titles Act 1980' as amended.

(b) The Purchaser or his Solicitors may within fourteen (14) days from the date of registration of the subject Building Units Plan deliver to the Vendor or its Solicitors

requisitions or objections (if any) on or to the Vendor's title. All requisitions or

objections not so delivered shall be deemed waived by the Purchaser.

fourteen (14) days make any valid requisitions or objections on or to the Vendor's title which the Vendor shall be unable or unwilling to remove or comply with, the Vendor or its Solicitors (whether they shall have attempted to remove or comply with the same and notwithstanding any negotiation or litigation in respect thereof) may give to the Purchaser or his Solicitors notice in writing of the Vendor's intention to rescind the agreement at or before the expiration of seven (7) days without prejudice to any other rights which

the Vendor may have. Unless such requisition or objection shall be withdrawn or waived within such seven (7) days the Contract shall thereupon be rescinded and the Vendor shall repay to the Purchaser all deposit and other moneys received by it or its Agent on account of the purchase money but without interest costs or damages and the same shall be accepted by the Purchaser in full satisfaction of all claims. If the Purchaser withdraws or waives his objection or requisition ag aforementioned then this Agreement shall remain in full force and operate as if such requisition or objection had not been made and the said written notice of rescission had not been given.

(d) (i) The Purchaser acknowledges that he has not relied on any representations by the Vendor, the Vendor's Agent or any other person or persons or corporation in and about entering into this Contract other than as set out herein and that the conditions and stipulations hereof constitute the only agreement between the Purchaser and the Vendor.

(il) The Purchaser shall be entitled to premises with measurements and to a standard and specifications substantially in accordance with those set out in the said specifications and plans and the Schedule of Finishes hereinafter set out.

(e) Subject to the provisions of Clause 8(f) hereof the Vendor warrants that the unit entitlement of the respective units in the said building as shown in the relevant

Bullding Units Plan shall be as set out in the Second Schedule hereto.

(f) The Purchaser shall not be entitled to make any objection, requisition or claim for compensation by reason of:-

gaid unit between the Plan as produced to the Purchaser and the Building Units Plan

(ii) Any alterations in the number, size, location or unit entitlement of the lot or lots in the Building Units Plan (other than the lot or lots hereby sold) or in or to the common property provided that the unit entitlement of the lot or

lots hereby sold and the aggregate unit entitlement of all lots shail not thereby be varied,

(iii) Any alteration or variation in the gaid plans and specifications accordingly.

(iv) Any alteration or variation in the said plans and specifications and in the said Schedule of Finishes as may become necessary during the course of construction by reason of matters beyond the control of the Vendor which may result from, inter alia, the requirements and directions of any governmental or semi-govermental authority or as may be required by the practical exigencies of construction either by, but without limiting the generality of the foregoing, the dictates of good building practice and/or the availability of materials, PROVIDED HOWEVER that the Vendor shall take all available and reasonable steps to adhere wherever possible to the said

If the Gold Coast City Council or other competent authority imposes any conditions on the granting of the Town Planning Permit or

Building Permit for the land and building the subject of this Contract which the Vendor shall be unable or unwilling to comply with, then the Vendor may cancel this Contract by written notice to the Purchaser or his Solicitors and on cancellation all moneys paid by the Purchaser shall be refunded without deduction together with any interest accrued in respect of the deposit, and neither party shall have any claim against the other by virtue of this Contract or its cancellation as aforesaid.

The Purchaser expressly acknowledges that at the time the Vendor submits the relevant

Building Units Plan to the Council of the City of Gold Coast and in turn to the Registrar of Titles, Queensland both the said Council of

the City of Gold Coast and the Registrar of Titles have the right to refuse to allow the Vendor to use the name "Ocean Royale" as the

name of the parcel of land for the purposes of the relevant Building Units Plan. In the event of such refusal no objection thereto and

Purchaser. Such new name if required shall be a matter for the sole determination of the

Vendor. The Vendor shall take all available steps to reserve so far as possible for the purposes of the subject Building Units Plan the name "Ocean Royale".

Tt was a feature of this case that all of the principal actors were unreliable witnesses. Those who gave evidence included Mr and Mrs Tiplady, their son Warren, who for part of the relevant time was employed as a salesman by St. George Real Estate, Mr George Gauci, the respondent's managing director, and Mr Quarmby. None would score highly if rated for credibility. I have not found it a useful exercise to try to establish an order of preference between these persons as witnesses but have taken the evidence of each and my views concerning it into account in

arriving at what seems to me on the evidence overall to have been

The architect's plans, including the floor plans shown to the applicants, were inspected by a Building Inspector at the Gold Coast City Council in February 1981 and, perhaps a little later, by an officer of the South Coast Fire Brigade. The respondent was notified that what was proposed in respect of the private vestibules on the 14th floor was not acceptable. The evidence did not establish that the respondent received that information prior to its execution of the contract between it and the applicants. However, it knew soon afterwards, and had

received formal notification by letters from each authority by

early April 1981. Amended plans were submitted and the respondent received a building permit referable to the amended

At about the same time, the negotiations concerning the acquisition by Broadbeach International Hotel of the management

rights in respect of "Ocean Royale" were terminated.

By the end of 1981 or the first week in January 1982, substantial progress had been made in the construction of "Ocean Royale". On the 14th floor, the external entrance doors to the penthouse units were in place and all walls had been constructed subject to two qualifications; internal non-load bearing dividing partitions had not been completed although the metal frames were in place, and solid walls had not been plastered or painted where that was required. It was apparent that there was a common lobby on the 14th floor and that the lifts and the fire stairs opened off the common lobby. The penthouses did not include private vestibules in the form which had been indicated on the plans shown to the applicants. The entrance door to each penthouse opened almost immediately onto an archway which had been constructed between the door and the dining area. The wall containing the archway continued into the dining area around what had previously been depicted as an open staircase, was faced with brick, and contained a section which protruded almost half a metre into the dining area. As a result of the alterations the internal area of penthouse unit 56 had been reduced by 5 or 6 square metres and the dining area, which had always been

relatively small, had been rendered unattractive and of extremely

limited use. On the 15tn floor, the balustrade around the

north-east balcony had been constructed of concrete, impeding

both the view from a sitting position and the passage of breezes.

The applicants also complained in this proceeding of other changes, notably the addition of a cupboard ina _ room designated as a television room and the altered configuration of shower recesses. However, I am satisfied that these were mere straws seized upon to add weight to the applicants' case and that they are and were entirely immaterial to any question in the present proceeding save as an additional indication of the extent

to which the applicants were prepared to go in order to succeed

Major issues in this proceeding concerned what the applicants knew of the respondent's departures from the original proposals and when that knowledge was acquired. The applicants contended for total innocence until about April 1982, when their surprising discovery caused them dismay and led them to consult their solicitor almost immediately. The respondent's case, on the other hand, sought to suggest that the applicants had full knowledge from a very early stage. Mr Quarmby even stated, quite inaccurately, that the applicants were informed in the very first conversation that the architect's plans which they were shown were only "proposed plans", which was suggested to convey that the plans had not been approved. Other evidence was given that Mr Tiplady "haunted" the site during construction and observed in detail what was being built, and of conversations which he was

It is sufficient for present purposes to find, as I do, that, by 14 January 1982, the applicants were aware both that "Ocean Royale" was not to be professionally managed by Broadbeach International Hotel, of the manner in which the lobby, private vestibule, and dining area on the 14th floor had been constructed, and of the nature of the balustrade of the

building such as "Ocean Royale" might well be a matter of

legitimate interest and concern to a purchaser of a unit in the building, even one who was to reside in the unit and not use it

to produce income, I am satisfied that the identity of the particular manager originally named, "Broadbeach International Hotel", was not a factor which played any part in the applicants' decision to sign the contract to purchase penthouse unit 56 in "Ocean Royale". Further, the applicants learned that Broadbeach International Hotel was not to manage "Ocean Royale" sometime during 1981. For a period after Broadbeach International Hotel withdrew from negotiations with the respondent, the applicants' son Warren, in his role as a salesman employed by St George Real Estate, attempted to find a new purchaser for the management rights in respect of the building. During that period the applicants were 1n close contact with their son. The applicants were occasioned no concern by the knowledge that "Ocean Royale" was not to be managed by Broadbeach International Hotel and did

not for that reason reconsider their purchase under the contract.

The applicants did not learn of the changes in respect of the balustrade, lobby, private vestibule, and dining area until the end of December 1981 or very eariy in January 1982 when Mr Tiplady visited the site first with Mr Quarmby and then with his son, Warren. The applicants had contracted to purchase penthouse unit 56 to use as their residence on the Gold Coast. When they became aware of the alterations, they no longer regarded it as suitable for use for that purpose. As the applicants knew from what they were informed, there was no possibility of further alteration to make the unit correspond to what had originally been contemplated. The alteration or variation to the 14th floor in the vicinity of the lifts and

stairways had been essential to comply with the law and obtain a

respondent had been entered into early in 1981, the Gold Coast had been enjoying a period of considerable prosperity. Later, especially in the second and third quarters of the year, the market for new units on the Gold Coast became quite unrealistically buoyant. With the advantage of hindsight, it is now known that the boom had peaked before the end of 1981 and

that by early 1982 a downward trend had entered the market. However, that was not generally apparent in January 1982. The applicants took no step at that time to resile from their purchase of penthouse unit 56 in "Ocean Royale". Nor did they give any indication that they might not proceed to complete the

purchase. On the contrary, having decided that they did not wish

themselves to live in "Ocean Royale", they decided to take

advantage of the apparently high prices available for Gold Coast

units and to resell at ae profit the unit which they had

On 14 January 1982, the male applicant contacted Surfers Paradise Real Estate Pty Ltd, a real estate agency with which the applicants had had a previous dealing, and indicated that their penthouse unit in "Ocean Royale" was available for resale. It is not entirely clear whether the original resale price was $785,000.00 and was subsequently reduced to $585,000.00 or whether there was some confusion because of a suggestion that a sum of $200,000.00 might be available as "vendor finance" at 14 1/2%. The applicants also contacted other agents. Attempts were made to sell the unit. Both applicants went to the unit, Mr Tiplady on more than one occasion. Mr Gauci became aware of the applicants' proposal to resell and had a conversation with Mr Viplady in which the latter confirmed that the applicants intended to complete the contract between the applicants and the respondent if they did not resell the unit before the time for completion fell due. The applicants made no complaint to the respondent or its agent. Ido not accept that they told Mr Quarmby that they were contemplating legal action or that there was or might be some obstacle to a resale. Presumably, they were confident that they would be able to resell the unit at a profit

and did not wish any complications to be introduced into their

There was no basis for optimism. The downturn in the Market accelerated and grew more severe, prices fell, and it

became increasingly difficult to find purchasers for units.

The applicants changed their minds and decided to strive to escape from the contract. They consulted their solicitors. I find that they did so shortly before a notice dated 2 June 1982 was forwarded to the respondent purporting to avoid the contract. Considerable ingenuity and imagination were employed in the drafting of the grounds relied upon which, however, failed to make any identifiable reference to the alterations to the unit which the applicants had contracted to purchase. Nonetheless, I am satisfied that the applicants did inform their solicitors of those alterations and, in the same month, an architect was engaged on behalf of the applicants to inspect the unit and report. A letter from the applicants' solicitors to the respondent's solicitors dated 9 July 1982 does make reference to the diffences between the building as constructed and "as depicted in plans shown to our client prior to the execution by

Meanwhile, by letter dated 4 June 1982, the solicitors for the respondent wrote to the solicitors for the applicants informing them that the respondent did not accept that the applicants had avoided the contract and that if the applicants did not complete the respondent would forfeit the deposit monies and pursue its other rights. On 22 June 1982, the day upon which

the Building Units Plan (No. 5013) in respect of "Ocean Royale"

was registered, the solicitors for the respondent called for

completion on 23 July 1982 in accordance with the contract.

Insofar as 1t refers to penthouse unit 56, the registered

Building Units Plan corresponds with what has been constructed,

Further correspondence was exchanged between 22 June and

23 July 1982. By letter dated 7 July, the respondent indicated its intention to seek specific performance if the applicants did

not complete. Reference has already been made to the applicants' letter of 9 July; in it they confirmed their intention not to proceed. By letter dated 16 July the respondent again calied for completion on 23 July and enclosed transfer documents, showing a

The applicants did not complete. The respondent wrote a further letter dated 26 July 1982 indicating its intention to commence proceedings for, inter alia, specific performance. But the applicants struck first, commencing proceedings in the Supreme Court of Queensland on 4 August 1982. The respondent commenced a separate proceeding in the Supreme Court on 9 August 1982 and unsuccessfully applied for summary judgment for specific performance in September or October 1982. A further demand by the respondent in December 1982 for completion was ignored by the applicants and, by letter dated 10 January 1983, the respondent notified the applicants that it accepted their repudiation of the contract. The respondent's mortgagee, Seventeen Pty Ltd, later

resold the unit for $225,000, and that sale was completed on 3

May 1983. At an unspecified date, the respondent's agent

accounted to it for the full deposit plus interest which it had

attracted. The amount was unproven but it appears from correspondence that, as at 8 July 1982, the interest which had accrued on the deposit was $6312.77. Neither Supreme Court action had come to trial when the present proceeding was commenced in this Court by an application filed on 22 September 1983 and thereafter the actions in the Supreme Court were not proceeded with but the respondent delivered a cross-claim in this

The applicants' claim is to recover the amount of the deposit together with interest, either on the basis that the contract had been rescinded by the applicants or ought be rescinded by the Court pursuant to s.87 of the Trade Practices Act 1974 ("the Act") or as damages pursuant to s.82 of the Act in respect of an alleged contravention by the respondent of s.52 of the Act. No claim was made by the applicants for damages for breach of contract and no reference was made to 3.87 of the Act in argument. No suggestion was advanced that the contract was

illegal, for example as requiring the construction of a building

contrary to the Building Act 1975-1984 (Queensland) or the Fire

The respondent pleaded that the applicants were "precluded from relying upon any representation that may have been made by or on behalf of the respondent" by sub-clauses 8(d) and (f) of the contract but raised no other plea of estoppel. By a late amendment, the respondent added an allegation that the applicants obtained knowledge of the matters of which they

complained and with such knowledge "chose to affirm the ...

contract and elected to remain bound by it" by making "no attempt to rescind the contract and/or (the Applicants) put the said unit in the hands of Surfers Paradise Real Estate and St. George Real Estate for resale". The plea of election, and the respondent's counter-claim which followed upon it, assumed that the applicants' choice, if they had one, was either to terminate the contract or pay the full purchase price, a view which was not

The result of the applicants' election to proceed, according to the respondent, was that the applicants repudiated the contract by their subsequent persistent refusal to complete and are liable to the respondent in damages for breach of contract. It is unnecessary to consider further at this point

the basis upon which the respondent sought to quantify its

some of the applicants' complaints, notably the cupboard in the television room, the altered configuration of the shower

recesses, and the change in identity of the manager of "Ocean Royale", have already been disposed of. The nature of the

balustrade on the north-eastern balcony on the upper level of penthouse unit 56 can similarly be excluded from further consideration. The nature of the balustrade formed no part of the contractual arrangements between the parties. Some attempt was made on behalf of the applicants to establish that the architect's plans given to the applicants pre-contract depicted the balustrade as being of the same character as that shown in

the "Artists impression" in the brochure but I do not accept that

that was 80. Further, even if the respondent's conduct was misleading or deceptive or likely to mislead or deceive by reason of the "Artists impression" of the balustrade on the brochure, I am satisfied that the applicants placed no reliance whatever upon the "Artists impression" of the balustrade in arriving at their decision to purchase the unit. In addition, I am also satisfied

that the concrete balustrade had no appreciable effect on the

The remaining matter of complaint concerns the lobby and

The respondent submitted that, on its proper construction, the contract entitled the respondent to insist that

the applicants pay the full purchase price and accept the unit as

The starting point for the respondent's argument was a submission that the contract accepted that the architect's plans, including the 14th floor plan, shown to the applicants had not

been approved. It was submitted that the reference to "plans ...

approved by the Council of the City of Gold Coast" in recital (b) meant plans to be approved in the future. Reliance was placed on clause 13 which it was said envisaged the future grant of a building permit by the local authority, and it was pointed out that it is by the grant of a building permit that plans are

approved. The respondent's argument on this issue found favour

with a single judge of the Supreme Court of Queensland in other

litigation related to a relevantly identical contract: see Gold

Coast Carlton Pty Ltd v. Kamalesvaran (unreported judgment

delivered 16 December 1983). His Honour gave no reason for his opinion on the particular question other than the need to read the contract as a whole and his judgment is presently under

The next step in the respondent's argument did not find acceptance in the Supreme Courtin that case. The respondent submitted that, by sub-clause 8(d)(ii), the applicants' entitlement was to "premises ... substantially in accordance with those set out in the ... plans" in whatever form they were eventually approved because the "said specifications and plans" mentioned in sub-clause 8(d)(ii) referred back to the "plans and specifications" mentioned in recital (b). In the Supreme Court, it was held that that wags not so but that "the said specifications and plans" in sub-clause 8(d)(ii) referred to the

"Plan as produced to the purchaser" of which mention was made in

sub-clause 8(f)}(1). According to the respondent, the latter plan is that contained in the Tenth Schedule to the contract; however, in the Supreme Court, it was held against the respondent that sub-clause 8(f)(1) referred to the plan produced to the purchaser, pre-contract. Accordingly, it was held in the Supreme Court that the plans referred to in sub-clause 8(d)(ii) were the original architect's plans. I have arrived at the same

The contract is not without its difficulties but its meaning becomes less obscure if regard is had to the surrounding

circumstances and the purposes of the various provisions. The contract was an unconditional contract for the sale of a unit yet to be constructed - what is commonly described as a "Sale off the plan". One or more plans by which the property the subject of the sale might be identified pre-contract and described in the contract as an item of property were therefore essential. The latter function was performed by the Tenth Schedule. It is obvious enough that the plan by which the property was described in the contract as an item of property should and normally would correspond with that "produced to the purchaser" pre-contract to identify the property. Further, the possibility of that plan (or the corresponding plans) differing in some respect from the registered building units plan relating to the finished building was an appropriate matter for the draftsman of the contract to cater for: that was the role assigned to sub-clause 8(f)(i). Although the architect's plans produced to the applicants by Quarmby and the advertising brochure contained dimensions and other details, only the position and external size and shape of the unit was needed for the identification of the unit sold, the description of it as an item of property in the contract, and its comparison with the registered building units plan as cailed for by sub-clause 8(f)(1). The other matters in the architect's plans and the advertising brochure were not part of the description of the "Unit Sold" or of the subject matter of

sub-clause 8(f)(i) or the Tenth or Twelfth Schedules.

However, the contract was not silent as to such matters which were the subject of sub-clause 8(d)(1i); see also the proviso to sub-clause 8(f)(iv). Sub-clause 8(d)(ii) further delineated the subject matter of the sale. By it, provision was made with respect to the "measurements" and the "standard and

specifications" of the "premises" to which the purchaser was

entitled under the contract; the measurements standard and specifications were required to be "substantially in accordance with those set out in the said specifications and plans and the Schedule of Finishes hereinafter set out". To my mind, the words in sub-clause 8(d)(ii) constitute the clearest reference back to recital (b) which recorded the vendor's intention to construct the building "in accordance with plans and specifications prepared by the Vendor's Architect and approved by the Council of the City of Gold Coast, the finishes to be substantially in accordance with the Schedule of Finishes annexed hereto". Further, recital (b) obviously referred to architect's plans in existence at the date of the contract, even if the statement that they had been approved by the local authority was not only inaccurate but also ain conflict with clause 13. Any such

conflict would not be resolved by distorting the plain meaning of

the recital to read it as though it referred to plans which had not been and might never be approved with or without variation or alteration. But, in any event, the recital related to plans which had been prepared and were in existence, not to future plans which were intended to be prepared by the vendor's architect, just as it was concerned with existing specifications and to an existing (and annexed) Schedule of Finishes. The

additional misdescription "and approved by the Council of the

City of Gold Coast" was immaterial to the identification of the

plans and specifications, whatever its possible significance in relation to any claim which a purchaser might found on its inaccuracy. Further, it was equally immaterial that the contract might elsewhere suggest that the plans were not approved. Nowhere, including clause 13, was 1t suggested that plans had not been prepared and were not in existence and, even if a building permit had to be obtained, what was envisaged was a building permit which, whether 1t was conditional or unconditional, related to those existing plans subject to any alteration or variation permissible in accordance with the terms of the

Of course, the applicants' apparent entitlement under clause 8({(d)(ii) of the contract might have been qualified or varied in any way by other contractual terms. By sub-clauses B8(f)¢(i) and (if1), the applicants were disqualified from any objection, requisition or claim for compensation by reason of any minor variations as regards the said unit between the Plan as produced to the Purchaser and the Building Units Plan as registered by the Registrar of Titles or any consequential variations and alterations to the plans and specifications in respect of the unit. That was entirely consistent with the "substantial" compliance with the plans and specifications required by sub-clause 8(d)(ii). The respondent submitted that, in the events which occurred, the applicants' entitlement was not to a unit substantially in accordance with the original plans by

virtue of sub-clause 8(d)(ii), but only to a unit in accordance

with the later approved plans, and reference was made to clauses

3(a), B(f)(11), (iti) and (iv), 13 and 18. Clause 18 is plainly irrelevant for present purposes, being concerned not with approval of the architect's plans by the grant of a building permit but with approval of different plans, the building units

Shortly stated, the respondent's principal argument seemed to be that since clause 13, and arguably also sub-clause 3(a), acknowledged that the architect's plans had not been approved, any alteration or variations to the original plans which was necessary to obtain a building permit was properly described as an "alteration or variation in the said plans" which

had become "necessary during the course of construction by reason

of matters beyond the control of the Vendor" resulting from "the requirements and. directions of any governmental or semi-governmental authority" or "required by the practical exigencies of construction", and such an alteration or variation, however radical, was within the operation of sub-clause 8(f)(iv) of the contract. Similarly, but without reference to clauses 3(a) or 13, 1t seemed to be argued that the alterations or variation were within the operation of sub-clause 8(f)(iii) insofar as it related back to sub-clause 8(f)(ii). These propositions provided the foundation for the further argument that, given the circumstances to which sub-clause 8(f)(iii) or

sub-clause 8(f)(iv) were directed, it was implicit in the

contract that the applicants' entitlement under the contract was not to a unit substantially in accordance with sub-clause

8(a)(ii) but to a unit in accordance with the later approved

Both clauses 3(a) and 13 were generally expressed provisions intended to protect the vendor under the contract against possible eventualities. Sub-clause 3(a) was designed to protect the vendor in the event of unexpected and unavoidable delay in completion of the project. Its generality was such that it might operate by reference to "any necessary approval" froma "local or other authority", whether before or after the grant of a building permit and irrespective of whether or not construction had commenced. It carried no implication concerning whether or not a building permit had been granted at the time of the

In terms, clause 13 was not concerned with alterations to plans but with conditions to which permits might be subjected. There is no basis for a suggestion that the alterations which were made to the original plans were required by such a condition. On the contrary, the evidence clearly indicates that alterations to the original plans were necessary to obtaina building permit, and that no building permit, conditional or otherwise, would have been granted in respect of the original plans. The significance of clause 13 for the respondent's argument is that clause 13 was expressed in prospective terms and apparently presupposed that a building permit was yet to be issued, and thus that plans had not yet been approved at the time

It may be said immediately that there are reasons why

clause 13 should be treated with caution. On the basis of other contracts which have been the subject of litigation in the aftermath of the most recent unit boom there is reason to suspect that the "Ocean Royale" contract document was based on a standard form which was adapted to particular projects by the insertion of appropriate details, including recitals. However, the parties made no reference to such a possibility and I have not based any conclusion upon it. Nonetheless, if clause 13 implied the lack of a building permit, it also implied that a town planning permit was needed and had not been obtained. There was no suggestion that a town planning permit was needed or, if needed, had not

been obtained. Although there is no direct evidence on the

question, the clear inference was that no town planning permit was sought or obtained after the contract between the applicants

However, even were it correct, as the respondent would have it, that the contract did not provide that the architect's plans had been approved but envisaged that the grant of a

building permit lay in the future, the remainder of its argument would not necessarily follow from the fact that the alterations or variations which were made to the original architect's plans in respect of the 14th floor lobby and vestibules were necessary in order to have the plans approved and the building permit granted. In order to consider that question further, and also the respondent's other argument based upon sub-clause 8(f)(iii),

further analysis of sub-clauses 8(d)(ii) and 8(f) is essential.

It is curious, but not necessarily critical that, unlike

sub-clause 8(e), sub-clause 8(d) is not expressed to be subject to sub-clause 8(f). No doubt the two must nonetheless be read together. All that is expressly limited or excluded by sub-clause 8(f) is the right of the applicancs as purchasers to make "any objection, requisition or claim for compensation": see the introductory words to the sub-clause. The reference to objections or requisitions is a reference back to requisitions or objections "on or to the Vendor's title" in sub-clause 8(b). There is no provision in the contract which expressly provides any right to compensation in any circumstances but it is a well known jurisdiction of a Court of Equity in suits for specific performance to order compensation for discrepancy between what

was agreed to be transferred and what can be transferred:

Rutherford v. Acton-Adamg £19151 A.C. 866 at p.869 (P.C.).

Expressly at least, sub-clause 8(f) does no more than Limit the applicants' rights to deliver requisitions or objections or to claim compensation, Even in the circumstances in which it applies, sub-clause 8(f) does not expressly seek to modify the applicants' entitlement under sub-clause 8(d)(ii) or to limit or exclude any rights which the purchaser may have to terminate the contract (although there is authority that a provision excluding the right to make an objection in respect of a particular matter includes the right to rely upon that matter as a basis upon which to rescind: Cameron v. Lewis (1975) 1 B.P.R. 9137 at p.9138), or to recover the amount of the deposit

and/or other damages. The effect of sub-clause 8(f) on the

rights of the parties in the circumstances which have occurred,

including whether it obliged the applicants, as purchasers, to accept the unit as constructed without compensation "has to be considered against the background of the law governing the relationship of vendor and purchaser of land and the remedies

available to them": Beard v. Drummoyne Municipal Council (1969)

71 S.R. (N.S.W.) 250, per Walsh J.A. at p.262; Travinto Nominees

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (666 paragraphs)