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[1973] HCA 14
High Court of Australia
1973-07-01
Stephen JJ
Original judgment source is linked above.
High Court of Australia Barwick C.J. McTiernan, Menzies, Gibbs and Stephen JJ. Travinto Nominees Pty Ltd v Vlattas [1973] HCA 14
By an agreement dated 31st March 1969 the respondents granted the appellant an option to purchase land to which the title was held under the provisions of the Real Property Act, 1900 as amended NSW. The land was described in a schedule to the agreement which incorporated the provisions of the 1965 ed. of the printed Terms and Conditions of Sale approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales. However, the blank spaces in the printed form were not filled nor was an alternative chosen where printed clauses provided for differing situations or possibilities. This was particularly evident in connexion with cl. 12 of the printed conditions of sale. It was thought by the appellant's advisers that the option appeared to be inadequately expressed and that some supplementary agreement was needed. On instructions from their clients, the solicitors for the appellant therefore prepared and tendered to the respondents a further agreement which the respondents executed on 17th June 1969. As a result of the two agreements the appellant had an option to purchase the described property exercisable on or before 30th October 1969, the sale to be subject to existing tenancies as described but otherwise vacant possession to be given.
The property was described in the earlier agreement of 31st March 1969 as:
All that piece or parcel of land having a frontage of about eighty feet - inches to Marrickville Road in the Municipality of Marrickville by a depth of about 120 feet (be the said dimensions a little more or less) being Lot 13/16 as shown on D. P. 1971 and being the whole/part of the land comprised in Certificate of Title Volume 10172 Folio 151 together with the improvements erected thereon known as No. 198-204 Marrickville Road, Marrickville.
Clause 3 of the agreement of 17th June 1969 which, in my opinion, dealt with the matter of vacant possession was in the following terms:
if the said option is exercised the sale will be subject to the following existing tenancies but that vacant possession of the remainder of the subject land and premises will be given:
(a) As to the lock up shop premises known as 204 Marrickville Road, Marrickville - Lease No. K.135850 in favour of Ferdinando Macri for a term of five years from 1st August, 1965 at a rent at the rate of $343.20 per annum.
(b) As to the lock up shop premises known as 198 Marrickville Road, Marrickville - Lease in favour of Jim Gourlas and Mick Gourlas for two years and three months from 20th March 1967 at a rent at the rate of $1560.00 per annum.
Some of the particulars of the subject land as referred to in the First Schedule to the main agreement are more accurately described as follows: -
Lots 13 to 16 inclusive in D. P. 1971 being the whole of the land comprised in Certificate of Title Volume 10172 Folio 151 having a total frontage to Marrickville Road of 80′ 2″ by a depth on one side of 117′ 8″ and on the other side 123′ 2″ (be the said dimensions all a little more or less.
The appellant's solicitors had caused a search to be made of the real property register prior to the preparation of the agreement of 17th June. Perusal of the lease numbered K. 135850 had informed the solicitors' clerk making the search that included in the lessee's covenants in the lease of 204 Marrickville Road to Macri was a covenant:
That the lessees or the permitted assigns for the time being will not use or suffer to be used the premises for any purpose other than as a hairdressing salon and tobacconist shop and will manage and conduct the same so that it shall not become noxious noisome or offensive and the said lessee will at all times of the year during the usual business hours keep the demised premises open for carrying on the said business and a covenant by the lessors in each lease, i.e., to Macri and that in respect of no. 198 Marrickville Road: That if the lessee shall be desirous of continuing the tenancy hereby created for a further term of five (5) years at the expiration of the term hereby granted and shall at least three calendar months prior to the expiration of the said term give to the lessors notice in writing of such his desire and shall punctually pay the rent hereby reserved and duly observe and perform the several covenants and stipulations herein contained on his part to be observed up to the termination of the tenancy hereby created then the lessors shall at the expense of the lessee grant to him a lease of the demised premises for a further term of five years from the 1st August 1970, at the same rent and containing the same terms and conditions as are herein contained with the following exceptions:
(i) The new lease shall not contain this present clause for renewal.
(ii) The lessee shall pay a premium for the granting of such lease being One thousand seven hundred and forty-two pounds (£1,742.0.0.) which may be paid by equal monthly instalments in advance.
The clerk who searched the title, however, did not inform his master solicitor of the existence of those covenants. Thus the solicitor himself was unaware of the presence of the options to renew when he particularized the tenancies in the supplementary agreement. The option to purchase was duly exercised on 27th June 1969. The solicitor for the appellant, on being informed thereafter of the existence of the options to renew, demanded compensation pursuant to cl. 8 of the printed conditions of sale for what he claimed was "manifestly a misdescription of the nature of your client's interest in the subject land".
The printed conditions of sale contained provision for a description of the property sold and the following presently relevant clauses:
(a) the ownership or location of any boundary fence or wall separating the property from any adjoining land or the existence of a "give and take" fence as part of the boundary of the property;
(b) any water supply or sewerage or drainage service to the property being a joint service to any other property, the water supply sewerage or drainage pipes or connections for the property passing through other land or the water supply sewerage or drainage pipes or connections for any other land (not being mains or pipes of any water sewerage or drainage authority) passing through the property;
(d) any exception reservation or condition contained in any relative Crown Grant;
(e) the existence of the easements and restrictive covenants affecting the property which are noted in the 2nd Sch. hereto;
(f) the fact that the property is in a Mine Subsidence District under the Mine Subsidence Act 1961, or any consequence of it being so situated, if the fact is stated in the Second Schedule hereto.
The lease of the premises 198 Marrickville Road, Marrickville was terminated for breach by the lessee of the covenants of the lease. Thus, although that lease also contained an option of renewal, nothing now turns in this case on that circumstance.
The respondents resisted the appellant's demand for compensation. In the event the appellant bought out the option of renewal in respect of no. 204 Marrickville Road by the payment to Macri of the sum of $21,000 and settled the purchase transaction without prejudice to its claim for compensation for misdescription of the property.
The appellant commenced the present proceedings by originating summons in the Supreme Court of New South Wales in Equity seeking answers to a number of questions including the question whether the appellant was entitled to compensation for a misdescription of "the leasehold interest subsisting in respect of the said premises as at the date of the said contract of sale".
The primary judge declared that the description in cl. 3 (a) of the agreement of 17th June of the leasehold interest affecting the premises known as 204 Marrickville Road, Marrickville was a misdescription in respect of the leasehold interest subsisting in respect of the premises as at the date of such contract of sale and that the appellant was entitled to compensation for that misdescription in accordance with the provisions of cl. 8 of the printed terms of sale [1] .
In response to the appellant's claim that there had been a misdescription within the meaning of cl. 8 of the contract of sale the respondents asserted in the proceedings that both the lease to Macri and the conditional agreement to grant a new lease present in the option of renewal were void as the result of the operation of s. 88B (1) of the Industrial Arbitration Act, 1940 NSW, as amended.
Section 88B (1) of the Industrial Arbitration Act contains the following provisions:
(d) under which a person (in this section referred to as "principal") -
(i) leases or agrees to lease to any other person any premises for the purpose of or with a view to such other person carrying out or performing, or causing to be carried out or performed, or arranging for the carrying out or performance of, the work (in this section referred to as "contract work") of hairdressing in or on such premises;
where the contract work is of a class or type in respect of which a price or rate is for the time being fixed by an award or agreement for employees engaged therein
Sub-section 2 (a) provides that a contract to which this section applies shall not be entered into unless:
(i) the commission; or the committee established for the industry or calling in connection with which the contract work is to be carried out or performed, or if no committee is established for that industry or calling, such committee as may be nominated for the purpose by the registrar,
has approved, either absolutely or subject to conditions, of the terms and conditions of such contract. Sub-section (3) provides that where a contract to which this section applies is entered into without the approval of the commission or a committee or contrary to any conditions contained in any such approval:
(a) every person who is a party to the contract shall be liable to a penalty not exceeding $200;
Sub-section (5) defines "contract" as meaning contract, agreement or arrangement, whether verbal or in writing.
It was undisputed in the proceedings that a price or rate was for the time being fixed by an award or agreement for employees engaged in hairdressing and that no approval of the commission or a committee had been sought or obtained before Macri entered into the lease with the respondents or, indeed at any time.
The respondents also submitted that the registration of the memorandum of lease containing the option of renewal under the provisions of the Real Property Act gave Macri and his assigns "an indefeasible right to the renewal".
The primary judge, besides finding that there was a misdescription of the property, also found that the appellant was not bound by any notice prior to the making of the contract of the existence of the option of renewal; that, apart from any effect of registration under the Real Property Act, s. 88B of the Industrial Arbitration Act was effective to avoid both the lease and the option for its renewal because of the lack of any antecedent approval of the commission or of the relevant committee; that, whatever effect registration under the Real Property Act of the memorandum of lease may have had on the lease and its covenants operative during its term, Macri would not have been able to obtain specific performance of an agreement for the lease constituted by an exercise of the option of renewal contained in the lease because of the want of the appropriate approval to the grant of the option and the effect of s. 88B of the Industrial Arbitration Act, and that therefore registration of the lease did not give to Macri any enforceable rights in respect of the option to renew the lease. However, he held finally that the respondents were estopped from asserting the invalidity or unenforceability of the option by reason of the representation of the valid existence of lease and option which the primary judge found to have been made in the particulars of the lease contained in the contract of sale. He held that the purchase by the appellant of Macri's option of renewal was brought about by its reliance upon that representation.
Upon appeal the Court of Appeal Division of the Supreme Court unanimously decided to set aside the decretal order of the primary judge and order that the question as to the right to compensation be answered in the negative. On that appeal, though a submission in that sense was made, no argument was presented in support of the view that there was in truth no misdescription of the property within the meaning of cl. 8 of the printed conditions of sale [1] .
Their Honours who constituted the Court for the hearing of the appeal were unanimous (i) that the lease and the option were void because of the terms of s. 88B (1) of the Industrial Arbitration Act; (ii) that there was no estoppel precluding the respondents from asserting that invalidity; (iii) that the registration under the Real Property Act did not give the lessee any right to the benefit of the option to renew the lease. A majority of their Honours thought that the appellant was affected by notice of the existence of the option of renewal obtained through the solicitors' clerk before it entered into the transaction of sale.
Before this Court the question whether there was a misdescription of the property within the meaning of cl. 8 of the printed terms of sale has been fully debated. We have been referred to a large number of cases, most of which upon close examination are, in my opinion, little, if anything, more than particular instances of construction of particular forms of contract against the background of particular circumstances. I shall have occasion to refer to some of the reported decisions a little later. Meantime, I think it important to observe some basic principles in the selling of real estate which I think are relevant to the disposal of this appeal.
If an area of land is contracted to be sold without conditions, i.e., under an "open" contract, the law will import an obligation on the vendor first to show a good title in fee simple to the land, i.e., by an abstract of title or delivery of particulars of title, to prove that title, as on production of deeds or on examination of the register and on settlement to make such title by appropriate conveyance or memorandum of transfer. If it be land the title to which is held under the Real Property Act the vendor under such a contract must place the purchaser on settlement in a position to have himself immediately registered as the proprietor of the land for an estate in fee simple. Further, there will be an obligation on the vendor to give the purchaser on settlement vacant possession of the land sold.
The terms of a contract of sale may limit or vary these obligations, but, in my opinion, if the subject matter of the sale is an area of land, the conditions limiting or varying the implied obligations on the vendor as to the title to the land sold or as to delivery of vacant possession are not elements in the description of the thing sold. They are qualifications of the obligations of the vendor in relation to the conveyance or transfer of the title to the land or in relation to the requirement of vacant possession or as to both. A relevant example is the common condition of sale that the land is sold "subject to existing tenancies and occupancies". In my opinion, this limitation of the vendor's obligation to transfer a fee simple in possession or to give vacant possession does not form part of the description of the thing sold where the subject matter of the sale is land. Nor, in my opinion, does such a clause convert the subject matter of the sale from land into a reversion or reversionary interest in land.
The case is not different, in my opinion, if included in the existing tenancies and occupancies there is a lease for a term of years whether or not registered under the Real Property Act. The subject matter of the contract, in my opinion, remains the land but the obligation of the vendor is modified to the extent that the purchaser may not insist on vacant possession of the tenanted land or object to the existence of a term of years in the land; he must accept a conveyance or transfer which is subject to the outstanding tenancies or lease.
Of course, in every case the actual contract between the parties must be construed in order to decide whether the subject matter is land or some particular estate or interest in land. If a compensation clause such as cl. 8 makes error or misdescription of the property the criterion of its operation, what will satisfy its terms will depend primarily on what is the property sold. If it be land, the error or misdescription must, in my opinion, relate to the description of the land or to the improvements thereon. A statement as to the suitability of the land for some physical use may well form part of its relevant description. Again markings on plans may form part of that description. But where this is so, the error or misdescription still would relate to the description of the physical subject matter.
On the other hand, if the title to or an estate or interest in land be the subject matter of the contract, error or misdescription may relate to the title or the estate or interest rather than the land itself.
So far I have referred to the application of a clause in the precise terms of cl. 8. But, as the decided cases illustrate, compensation clauses are not always, and have not always been, in the same terms. The vendor - for the clause is, I think, primarily for his protection - may wish to guard against the destructive effect of an error of any kind in the "particulars" given in the contract; or may desire to cast the protective net even wider. Therefore, both the subject matter of the contract and the proper meaning and extent of the compensation clause need in most cases to be considered.
In the present case, the option to purchase incorporating the printed terms of sale described the land in the schedule which I have quoted as the property sold. The exercise of the option turned it into the agreement for sale of the same subject matter upon the terms of the option and the supplementary agreement, including the printed terms of sale. The printed terms of sale maintain the distinction between the property and the title to it. See, for example, cll. 2 and 3.
Clause 3 of the supplementary agreement removed the uncertainty present in cl. 12 of the incorporated printed terms of sale which had not been appropriately filled in. What occurred at best in the instant case, in my opinion, was that there was an inadequate description in cl. 3 of the terms of the lease of no. 204 Marrickville Road though its registered number was disclosed. But that, in my opinion, was not an error or misdescription of the property. It may be granted at once that the difference between the value of the land with vacant possession and its value with an outstanding term of years may be substantial, though not always necessarily so. Further, the difference between the value of the land with an outstanding term of no more than five years and its value with such a term with an option of a renewal for a further five years might well be considerable. But it seems to me that these considerations are beside the point when one is considering whether the subject matter of the sale has been misdescribed. The matter is not advanced by the use of what to my mind is imprecise language, speaking of the "quality of the land sold", the "quality" being related to its vacant possession or the proximity of its vacant possession. In my opinion, there is no justification for the use of such an expression when considering whether there has been error or misdescription of the property sold.
Earlier I indicated that, in my opinion, a sale of land subject to existing tenancies and occupancies is not a sale of a reversion. It is erroneous, in my opinion, to regard the subject matter of this sale as a reversion expectant on the two registered leases. Indeed, the land was sold as one parcel subject to two leases of lock-up shops, those shops not being the whole of the buildings on the land. Apparently a motion picture theatre was erected on the land, presumably in part at least above or round the lock-up shops. Of this vacant possession was to be given.
During the course of the argument there was discussion as to the meaning of the expression "error or misdescription" as it is found in cl. 8. I agree with the submission made by the appellant that with the addition of the word "error" the expression may cover more than would be covered by "misdescription" alone: but I am unable to accept the submission that the word "error" in the expression "error or misdescription" is unrelated to the description of the property and that it covers any mistake in any respect in or in connexion with the terms or conditions of the contract. It may be that the failure to describe some feature of the property at all might in some circumstances be thought not to be a misdescription but to be an error in description. Thus, it may have been thought necessary to include the word "error" to cover cases not technically within the scope of the word "misdescription" or the expression may have been merely an aggregation of words found singly in some contracts the subject of earlier decisions. Historically, contractual clauses with which the decided cases have dealt have at times contained only the word "error" and at other times only the word "misdescription" and at times both words: and at other times, in addition to the reference to the property, clauses have included the words "or the particulars thereof", the particulars at times having included a statement as to the title of the vendor. All these differences need closely to be observed in relation to the reasons given in the decided cases, so much so that, in my opinion, it may properly be said that no clear principle arises from the decided cases other than that it is a question of construction in each case as to whether a clause such as cl. 8 is protecting the vendor against misdescription of the property or against error in the statement of the title which he claims to have to it, or for that matter, against any other error in the terms of the contract.
In my opinion, in this contract the expression "error or misdescription" of the property means error in the description, or misdescription, of the property sold. As my brother Menzies suggested during argument, the phrase as a whole might well be treated as probably no more than "erroneous description of the property". That expression covers both errors of omission and of commission in the description of the property.
In order to apply these considerations it is necessary to determine the subject matter of the sale for it is error or misdescription of it which is relevant. In my opinion, upon its proper construction, the subject matter of the contract was land. The described land in the option was "the property" for the purposes of the printed terms of sale. That being so, I am clearly of opinion that there was no "error or misdescription of the property" within the meaning of cl. 8. To be such an error or misdescription, what is put forward as error or misdescription must relate to the physical subject matter. It is not enough, in my opinion, that there is a defect in the title to the land, which the respondents are or may be under an obligation to transfer to the appellant. A breach of the obligation as to title imposed by law upon the respondents does not demonstrate or constitute a relevant error or misdescription. Clearly in this case the land was properly and not erroneously described in the contract. There was, therefore, in my opinion, no basis for the appellant's claim for compensation.
I will later indicate how it seems to me some of the earlier decisions stand in relation to what is error or misdescription in relation to a clause such as cl. 8, and as to the relationship of that clause to a rescission clause based on requisition or objection.
However, as the case followed a different course in the Court of Appeal, I should first say something as to the two other major points which were made in argument. I have set out the terms of the relevant parts of s. 88B of the Industrial Arbitration Act. I feel confident that the Parliament, in enacting this provision, was intending to provide against the avoidance by the device of leasing premises to a hairdresser of the payment of award wages by a person who, if he directly employed the hairdresser, would be bound to pay them. However, after a good deal of consideration, I can see no escape from the conclusion that the section applies to the lease to Macri and to the agreement for lease which is contained in the option of renewal though the lessor was in no sense avoiding or attempting to avoid the payment of award wages to Macri or his employees. As drawn, the section in terms extends to any lease where the intended use of the premises is the carrying on of the activity of hairdressing in respect of which rates of pay have been set by award or agreement. The grounds upon which the commission or committee is required to refuse to consent to any such lease, in my opinion, fortify this view. Here the condition of the lease is that the premises shall be used for hairdressing or for conducting a hairdresser's shop. The work of a hairdresser is conceded to be covered by an award or agreement.
Further, I see no escape from the conclusion that the consent of the commission or committee must be obtained before the agreement to lease or the lease is made or entered into. Unlike the case of some other statutory provisions there is no room in the case of this statute to allow the agreement or lease to be made subject to obtaining the necessary consent. Accordingly, I agree with what has been said in the Court of Appeal as to the illegality and avoidance of both the lease and the option to renew. In the latter case, the grant of the option is an agreement to lease though conditional upon the exercise of the option and the performance of the conditions of the lease. It is none the less, in my opinion, within the terms of the section.
I am in agreement with the Court of Appeal in its conclusion that the respondents were not estopped from asserting the invalidity of the lease and of the option to renew either by reason of anything contained in the contract or by reason of their own complicity in the grant of the lease with its option to renew. I would be content in this connexion to adopt the reasons which have been given in the Court of Appeal [1] .
The other matter with which I need deal is the effect of the registration of the lease under the Real Property Act upon the validity or enforceability of the option to renew. I think it proper at the outset to point out that what the Real Property Act sets out to do is to make the registered title conclusive or in the jargon which has grown up, "indefeasible", by the series of sections to which attention was called in Frazer v. Walker [1] . Though as a term "indefeasibility" is convenient enough, it must always be remembered that it is the title to and possession of the land or of the interest in the land of which there is a registered proprietor which is rendered secure by the registration. In the case of a leasehold it may be and frequently is the case that the extent of the leasehold interest is not merely described by reference to a term of years but must of necessity be determined by reference to the operation and effect of those terms and conditions of the lease which affect or qualify the interest in the land which the lease purports to create. It may be noted that the Real Property Act recognizes that there may be terms and conditions in the memorandum of lease, see the Real Property Act s. 53 (3). These considerations seem to me to result in the conclusion that registration of the memorandum of lease does not ensure the validity of every term and condition of the lease or indeed of the enforceability of every covenant it contains. In my opinion, it must depend on the nature of the covenant and its relation to the limitation of the interest created in the land by the memorandum of lease itself. For example, a collateral covenant tying the lessee to the lessor in respect of some matter of trade does not obtain any validity or consequence simply because the memorandum of lease is registered. The validity or enforceability of such a covenant will remain a question under the general law. The same, in my opinion, is true of the option to renew the lease. It does not mark out the extent of the term created by the lease. It is an agreement to grant a new lease contingently on the exercise of the option and the observance during its term of the covenants of the lease. Whether such an agreement creates an immediate though defeasible equitable interest must ultimately depend on the specific enforceability of that agreement. I agree with the members of the Court of Appeal that the availability or unavailability of the remedy of specific performance if the option were duly exercised will determine whether the grant of the option creates any such interest in the land. I leave on one side as unnecessary for decision in this case the question whether an equitable interest arising on the grant of an option, which when exercised is capable of specific performance, forms part of the interest in the land which the registration of the memorandum of lease protects. I do so because in this case quite clearly, in my opinion, as in the view of the Court of Appeal Division, the option to renew if exercised would have been incapable of being ordered to be specifically performed because of the provisions of s. 88B of the Industrial Arbitration Act. It is not, in my opinion, the fact that the statute made the option void which is of consequence in this connexion. It is the fact that it made it illegal; and therefore incapable of specific performance which is the critical circumstance. I therefore find it unnecessary as did Mason J.A. as a member of the Supreme Court to decide whether Roberts v. District Land Registrar at Gisborne [1] and Pearson v. Aotea District Maori Land Board [2] ought to be followed. Here I agree with Mason J.A. that the fact that the statute renders the giving of the option illegal is sufficient to prevent the specific performance of an agreement which would flow from an exercise of the option.
I now turn to a brief examination of some of the reported decisions which bear upon the question of error or misdescription in relation to contracts for the sale of land, and the relationship of compensation and rescission clauses as commonly found in contracts of sale of real estate.
In the case reported as In re Beyfus and Masters's Contract [3] , the Court of Appeal (Cotton, Bowen and Fry L.JJ.) unanimously held that an error in the description in a contract of sale of the vendor's title to the land sold was not "an error in the description of the property or the particulars given of it, within the meaning of that expression in the contract". The unanimous view was that those words related to the description of the physical thing the subject of the sale, namely the land and buildings thereon. This case has been followed and has never been the subject of adverse comment.
In Palmer v. Johnson [4] , a contract contained a more widely expressed compensation clause. "If any error, misstatement, or omission in the particulars be discovered, the same shall not annul the sale but compensation shall be allowed " The only point which, according to Brett M.R., was argued was whether compensation might be recovered after conveyance. The Court of Appeal (Brett, M.R., Bowen and Fry L.JJ.), unanimously held that it could be recovered. The Court rejected the submission that the compensation clause related only to the correct description of the property, evidently, in my opinion, because of the width of the expressions used in the clause. The Court's reference to Cann v. Cann [5] and Bos v. Helsham [6] in my opinion indicated that this must be so.
In Cann v. Cann [5] the words of the compensation clause were "if there should appear any error or mistake in the description, or admeasurement of the estate in the particular, or any other error or mistake whatever should appear respecting the estate, or any part thereof, such error or mistake shall not annul the sale, but a compensation or equivalent should be given " A mis-statement of the annual value of the property sold was treated as falling within these words.
Bos v. Helsham [1] was a case where the compensation clause provided that "If any mistake be made in the description of any of the properties, or if any error whatever shall appear in the particulars of sale, such mistake or error shall not annul the sale but a reasonable compensation or equivalent shall be given " A mis-statement of the rental return of the properties sold was held to fall within the clause.
Byrne J. in Debenham v. Sawbridge [2] , held that a defect in the vendor's title to the land sold was not an error or mis-statement in the particulars of sale or the conditions of sale, the subject matter of the sale being described as "freehold stabling with dwelling rooms over". His Lordship relied, amongst other decisions, on Ex parte Riches [3] in which the Court of Appeal (Jessel M.R., Baggallay and Lindley L.JJ.) decided that even if the subject matter was a freehold estate, the discovery that the vendor had only a life estate in some portion of the land was not an error, mis-statement or omission in or from the particulars or conditions of sale. He also referred to In re Beyfus and Masters's Contract [4] .
Sargant J. in In re Courcier and Harrold's Contract [5] decided that a mis-statement of certain restrictions upon the use of the land sold was an "error, misstatement or omission" within the operation of a clause which covered "any error, misstatement or omission in the particulars", but which provided that no compensation would be allowed by the vendor. The proceeding before his Lordship was a vendor and purchaser summons in which the vendor sought in effect declarations that he had sufficiently disclosed the restrictions on use to which the land was subject and that he had shown a good title. His Lordship thought that to confine the operation of the clause to errors in the physical description of the property would be too narrow in view of the clause, which was in a form then in common use. It is to be observed that the error etc. was related in the clause to the particulars of sale and not as in the instant case to the property sold.
In Ashburner v. Sewell [6] , a vendor agreed to sell a dwelling house, with stabling and outbuildings and garden with an adjoining piece of land, all more particularly shown in a plan. Dotted lines on the plan indicated a road but not that strangers had a right to its use. In fact, there was a right of way on the land. The contract contained a compensation clause for error in the description of the property and a rescission clause if the vendor should be unable or unwilling to remove any objection made by the purchaser.
Chitty J. regarded the plan as part of the description of the property. His Lordship held that the existence of the right of way was a "latent defect", its existence being unknown to either party. He thought that the compensation clause was "so framed as to include not only misdescriptions but unintentional omissions and errors" and that it "only applies to those more or less inconsiderable errors which are fairly matters of compensation". He expressed the view that there may be errors - albeit of a small or minor kind - which fell within the compensation clause though they could also constitute objections to title falling within the rescission clause. Whether an error is of that kind, he thought to be a question of fact, requiring great consideration. In the case before him his Lordship concluded that the objection based on the existence of the right of way entitled the vendor to rescind.
In re Jackson and Haden's Contract [1] involved a vendor and purchaser summons in which a purchaser sought a declaration that he was entitled to insist on completion of a contract of sale with compensation in respect of the reservation of certain mines and minerals. The contract was to sell a villa by a description which would include the mines and minerals under it. In fact the mines and minerals had been reserved by an earlier conveyance to persons through whom the vendors claimed. Buckley J. [2] held there had been an "error, misstatement or omission in the particulars" within the meaning of those words in the contract, by putting them in a form which would include mines and that the purchaser was entitled to have the property at a reduced price.
On appeal, the Court of Appeal (Collins M.R., Romer and Cozens-Hardy L.JJ.), as I read the reasons for judgment, was of opinion that there was a misdescription in the failure to exclude the mines and minerals from the description of the property sold and that an objection based on the reservation of mines and minerals, though a misdescription could fall within the terms of the rescission clause in the contract. However, the Court decided that the vendor was not entitled to avail himself of that clause. Consequently, there being a misdescription, compensation was payable.
Reference was made in argument to Gardiner v. Orchard [1] . There the compensation clause covered "error or misdescription". The majority, Griffith C.J. and O'Connor J., thought that, as in their view the subject matter of the contract was the land in fact occupied by the bank, a mis-statement of the frontage of that land was within the compensation clause. Isaacs J., in minority on the point, thought the shortage in frontage was a defect in title but none the less within the compensation clause. In so expressing himself his Honour relied on In re Jackson and Haden's Contract [2] . Griffith C.J., however, in what is in the nature of a postcript to his reasons for judgment, said that even if, as Isaacs J. thought, the shortage in frontage constituted a defect in title, he would be of opinion that cll. 5 and 8 read together showed a contractual intention that an objection relating only to a deficiency in frontage should be the subject of compensation. Clause 5 was the compensation clause and cl. 8 a clause giving the vendor a right to rescind if unable or unwilling to remove an objection.
In In re Ridgeway and Smith's Contract [3] , a contract of sale of a property described as containing 152 acres or thereabouts contained by reference to Table A in the 25th sch. of the Transfer of Land Act 1915 Vict a rescission clause should the vendor be unwilling to remove or comply with an objection or requisition and a clause for compensation "if any mistake be made in the description or area of the property, or if any other error whatsoever shall appear in the particulars of the property". An instrument of transfer, called "Creation of Easement" was registered in respect of the vendor's title to the land.
On a vendor and purchaser summons the Supreme Court (Irvine C.J.) held that, though the instrument did not constitute a blot on the title to the land because only personal between a former proprietor and the other party to the instrument, its presence on the register would prevent the vendor from performing his obligation to enable the purchaser to obtain a "clean" certificate of title to the land. It was then properly the subject of a requisition on title. But the Court held its non disclosure in the contract of sale was not a relevant mistake or error. "Reading the conditions with the other conditions in Table A, and with the contract itself, I think the "mistake" or "error" must relate to the physical nature of the land sold, and does not cover a mistake or error in the title to the land" [4] . In re Beyfus and Masters's Contract [5] was relied upon and Wilkinson v. Detmold [1] distinguished. In the latter case the particulars included an error in the statement of the title and the compensation clause was regarded as wider than the clause in In re Beyfus and Master's Contract [2] .
I now turn to a group of cases decided in New South Wales upon which considerable reliance was placed by counsel for the appellant. Of these, the first and most significant is Grace v. Mitchell [3] . There a piece of land of stated measurements with houses thereon was sold under a contract containing a compensation clause for "error or misdescription of the property" and a rescission clause if the vendor should be "unable or unwilling to comply with or remove any objection or requisition". On production of abstract it was found that the title to the land was subject to "a right of way over and through a lane as at present". The purchaser therefore requisitioned the release of the right of way or compensation. There was no document extant which created the right of way, which, so far as appeared, resulted from use. It was not known whether the way was public or private, or to what land it was appurtenant. The area of the right of way had been closed for the preceding six years and its area had for that time been in the exclusive occupation of the owners of neighbouring land.
The vendors rescinded under the appropriate clause in the contract. Harvey J. held them entitled to do so. The case is a decision upon the rescission clause and an application of the equitable principles on which a vendor may be allowed to resort to such a clause.
However, in the course of his reasons, Harvey J. held that the purchaser's objection came within the compensation clause and that the compensation clause and the rescission clause were not mutually exclusive. His Honour founded these conclusions on In re Jackson and Haden's Contract [4] and Ashburner v. Sewell [5] . He said that it was decided in the former of the two cases that "any defect in title is a misdescription in such a contract", i.e., a contract containing a compensation clause.
With every respect to the distinguished judge, neither the Court of Appeal in In re Jackson and Haden's Contract [6] nor Chitty J. sitting in Ashburner v. Sewell [5] decided that any, i.e., every, defect in title is an error or misdescription. Nor does any other case, in the United Kingdom or in Australia. Further, in the latter of the two cases, the delineation of a road on a plan, which was held to form part of the description of the property was, in my opinion, fundamental to the decision that in that case there was a misdescription of the property. Also, the difference between the language of the compensation clause in the former of those cases and the language of the clause in the case before him was not observed upon by his Honour. I have already indicated that the terms of the compensation clause must be examined before its application to the facts and circumstances of a case.
Torr v. Harpur [1] , dealt with the undisclosed existence of a large stormwater drain through a parcel of land which was evidently the subject matter of a contract of sale. The land was described by frontage and depth and there was said to be a pair of semidetached cottages thereon. The decision seems to have been that the purchaser was entitled to rescind, the facts satisfying the criterion set out by Tindal C.J. in Flight v. Booth [2] . The vendor's attempt to confine the purchaser to compensation within a compensation clause covering "error or misdescription of the property" was rejected, as was the submission that that clause "did not cover defects of title". In this respect, Grace v. Mitchell [3] was relied upon by the Supreme Court (Williams J.): but there was no examination of that case or of any of the matters with which I have already dealt. However, as the existence of the stormwater drain was clearly an objection to title, and the facts as found by the learned judge warranted rescission on the part of the purchaser, it was sufficient for the resolution of that case that the fact, if it were the fact, that the existence of the drain also constituted a relevant error or misdescription afforded no reason to deny the purchaser's right to rescind.
In Goldsmith v. Smith [4] , a property was sold on Real Estate Institute of New South Wales standard terms and conditions which include clauses corresponding to cll. 8 and 14 in the instant case. A special condition provided "The property is sold subject to the following tenancies". The list of tenanted flats included as to each flat an amount of rent per week. It was found during the investigation of title that the actual rental of two of the listed flats was substantially less than the rentals set against those flats in the list. It was held that this mis-statement of the rents was an error or misdescription within the compensation clause. Pressed with such decisions as Re Halloran [5] and In re Beyfus and Masters's Contract [6] , his Honour expressed himself by saying [7] :
I have looked closely into the authorities bearing on this subject, and I have arrived at the conclusion that cl. 10 of the Real Estate Institute form of contract is not limited to errors or misdescriptions in relation to the physical condition of the land. I am of opinion that it applies to defects not only in the quantity of the property sold, but also in its quality, and in particular in the rents or profits which it is producing at the date of sale. 1. (1951) 52 S.R. (N.S.W.) 172. 2. (1904) 4 S.R. (N.S.W.) 630. 3. (1888) 39 Ch. 110. 4. (1951) 52 S.R. (N.S.W.), at p. 175.
This case seems to me to amount to no more than a decision that in point of fact the statement of the amount of the rentals formed part of the description of the property sold. For my part, I would not have reached such a conclusion. If the statement as to the rentals be regarded as part of the description of the land, it is not referable to the "quality" of the land in any relevant respect: nor is the nomination of the rentals comparable to a statement as to the suitability of the land for some particular physical use as in Beard v. Drummoyne Municipal Council [1] . The case is illustrative of the class of decision which affords no authoritative guidance in the resolution of other cases.
Beard v. Drummoyne Municipal Council [1] which was also put before us, does not seem to me to bear upon the present problem. There the subject of a contract of sale was described as being a suitable site for the construction of home unit buildings. A sewer pipe of nine inch diameter ran through a part of the land at a depth of nine feet. It substantially affected the use of the land for home unit building. The existence of the pipe, according to the primary judge, constituted an error or misdescription of the land as well as an objection to title. But neither the vendor nor the purchaser sought to rescind. Compensation was sought for an error or misdescription. The primary judge held the purchaser entitled to it.
On appeal the correctness of the finding of error or misdescription was not challenged, it being accepted that a defect in title could also be the basis of relevant error or misdescription. The appellate court decided that, whereas a purchaser might rescind, notwithstanding the existence of a compensation clause if an error or misdescription was so material as to make the property something which, had he known of the matter erroneously omitted or misdescribed, he would, in all probability, not have purchased (Flight v. Booth [2] ), the vendor could not compel the purchaser to rescind or compel performance without compensation. The decision in the case, therefore, has no bearing on the present appeal.
The cases to which I have already referred, including In re Jackson and Haden's Contract [1] and Ashburner v. Sewell [2] , in my opinion, show firstly that in a contract using the formula "error or misdescription of the property", that expression refers to the physical nature of the land the subject of the contract; secondly, that decisions on the particular language of a compensation clause by individual judges are not authoritative in the sense that they form precedents; thirdly, that an error or misdescription whether "in the particulars" or "of the property" may result in the exposure of a defect in title; and that therefore in such a case, where the right to rescind upon the requisition or objection as to title cannot equitably be allowed, compensation can be ordered. They also establish that an error or misdescription which can be the proper subject of a requisition or objection as to title may, in some circumstances, lead to rescission by the use of a clause such as cl. 14 of the present case. If it would be reasonable to rescind under that clause, the fact that the objection to title disclosed an error or misdescription within the compensation clause will not be a reason for refusal to allow rescission. This relative operation of the two clauses is expressed as "overlapping" or by a statement that they are not mutually exclusive in the reasons for judgment in these cases. Thus, an error or misdescription which is properly within a compensation clause will not cease to be such because it also amounts to or discloses an objection to title: and it is clear that in some circumstances an objection to title may be based upon an error or misdescription of the property. What is relevant error or misdescription will be decided in the manner I have earlier indicated. But it certainly does not follow that because there are cases where what forms an objection to title amounted to a relevant error or misdescription, all valid objections to title constitute relevant errors or misdescriptions. The cases to which Harvey C.J. in Eq. referred in Grace v. Mitchell [3] certainly, in my opinion, did not decide that they do. An appeal in Grace v. Mitchell [3] was dismissed by this Court in April 1926. No reasons were given for that course: but it is clear from the notice of appeal that no question of law arose. Rather the appeal related to the primary judge's conclusion as to the vendor's right of rescission. In Svanosio v. McNamara [4] , Grace v. Mitchell [3] was referred to as establishing that a misdescription as to a building on the land is a misdescription which is "an objection to title". As I have said earlier a misdescription, properly so called, may ground an objection to title.
In my opinion, therefore, whilst the actual decision in Grace v. Mitchell [1] and the reasons for allowing the vendor in that case to rescind are acceptable, the statement that every defect in title is a misdescription within a compensation clause is erroneous and not borne out by the decisions on which it was based. If it be appropriate for the vendor to rescind under a rescission clause, the fact that the requisition which gave rise to the operation of the rescission clause could also have founded a claim to compensation will not be ground for refusing to allow the vendor to rescind. But, on the other hand, if in such a case the decision is that the vendor should not be allowed to rescind, compensation may be ordered. That, it seems to me, is what Griffith C.J. meant in what I have called the postscript to his reasons in Gardiner v. Orchard [2] .
Whether or not there is a relevant error or misdescription which also founds an objection to title has been said to be a question of fact. Decisions upon such a question would only rarely result in authoritative pronouncements, as it seems to me Chitty J. indicated in his remarks in Ashburner v. Sewell [3] : "Cases on the law of vendor and purchaser are often extremely complex, and require minute investigation; and, although from some of them general principles may be evolved, they often result merely in the Judge's opinion on the particular contract actually before him."
We are not concerned in the present case with any question of rescission. The respondents settled the transaction reserving only their claim to compensation. The principal question is whether the failure to refer to the option of renewal when specifying the lease to Macri amounts to an error or misdescription of the property, in the case of a contract of which the subject matter was land. The appellant claims that it is, chiefly because the presence of the option of renewal is a defect in title and because in its submission every defect in a vendor's title is an error or misdescription of the property sold. With these matters I have already dealt.
I have had the advantage of reading the reasons of the Chief Justice and agree with him that the appeal should be dismissed.
The facts of this case and the findings of the courts below are stated in the judgment of the Chief Justice. It is sufficient for my purpose to state simply that an option to purchase land - described according to the particulars in the Certificate of Title Vol. 10172 Folio 187 " together with the improvements erected thereon known as no. 198-204 Marrickville Road Marrickville " - provided that should the option be exercised, vacant possession would be given subject to two specified leases of two shops, part of the property so described. One of these leases was stated to be for a term of five years from 1st August 1965. The lease, however, contained an option to the lessee to renew for a further five years. This option to renew was not mentioned. The appellant having learnt of it nevertheless completed the purchase, but sought compensation on the footing that the omission to refer to it in the contract amounted to a compensable "error or misdescription of the property". The claim succeeded before the trial judge but the Court of Appeal reversed that decision.
The first question to be answered by this Court is whether, by reason of the statement that the term of the lease was for five years without more, there was an "error or misdescription of the property" within the meaning of cl. 8 of the printed conditions incorporated in the contract. Unless there was such error or misdescription, the appellant is not entitled to compensation and must fail in this appeal.
The printed conditions are the 1965 Conditions of Sale approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales. These conditions do not attempt to state the main rights and duties of the parties but merely modify these rights and duties in certain particular respects. The rights and obligations of the parties still largely depend upon the common law, as tempered by the rules of equity. It is necessary to understand these before applying these conditions.
Williams on Vendor and Purchaser, 4th ed. (1936), at pp. 34-37 sets out the chief duties of a vendor at common law:
At common law, any difference, however trivial, between the land described in the contract and the land produced constituted a defect which entitled the purchaser to rescind.
Where there was only a slight difference, the Courts of Equity began to interfere and introduced the principle of compensation for deficiency: see Erskine L.C. in Halsey v. Grant [1] . Unless the deficiency was so substantial as to give the purchaser something entirely different from what he had contracted, equity would order specific performance on giving compensation for the deficiency.
Also to avoid the harsh effect of the common law, it became the practice to insert in contracts a clause stating that a difference from the description of the subject matter would not annul the sale. These clauses were of two types: those which allowed compensation to the purchaser for a deficiency, and those which did not. The right to compensation under a clause in the contract was independent of the right to compensation in a claim for specific performance.
However, where there was a clause in the contract preventing the sale from being annulled even if the purchaser had the right to compensation for a misdescription, equity would still permit the purchaser to rescind if the misdescription was a substantial one: see Flight v. Booth [1] ; Jacobs v. Revell [2] ; Lee v. Rayson [3] .
In this case the appellant is not seeking to rescind. It has completed the contract and is claiming compensation under cl. 8 of the contract.
Counsel for the respondents referred to cases in which it was stated that the description of a property meant the description of the land as a physical thing and not the statement of the title intended to be passed. This distinction may not be decisive, for a title description to land being sold is often necessary to identify what is being sold. It has, for instance, become accepted that, if nothing else appears, the estate to be transferred is unencumbered estate in fee simple. So if the vendor is disposing of something less he is bound to set this out in the description of the subject matter of the sale in the contract. The cases cited to the Court are not authorities for the proposition that matters relating to title cannot be part of the description of a property. Rather they are instances of where a court has held that a particular compensation clause did not cover errors or misdescriptions concerning matters of title. It is clear that parties can agree to give compensation for a mis-statement of matters of title as well as of physical content: see, for example, Flight v. Booth [4] ; In re Jackson and Haden's Contract [5] ; or can negative claims for title amendments; see, for instance, special condition 1 of the 1964 Copyright Contract of Sale (Vict.) which provides:
The Purchaser admits that the land as offered for sale and inspected by him is identical with that described in the title particulars given above. He shall not make any requisition or claim any compensation for any alleged misdescription of the land or deficiency in its area or measurements or call upon the Vendor to amend title or to bear all or any part of the cost of doing so. Condition 3 of the said Table "A" and of the said Third Schedule (of the Transfer of Land Act 1958 Vict) shall not apply to this Contract. 1. (1834) 1 Bing (N.C.) 370 [131 E.R. 1160]. 2. [1905] 1 Ch. 603; [1906] 1 Ch. 412 (C.A.).
Counsel for the appellant relied upon a line of decisions in New South Wales - Grace v. Mitchell [1] ; Torr v. Harpur [2] ; Goldsmith v. Smith [3] - which held that a clause of the Real Estate Institute Contract of Sale in identical terms to the present cl. 8, did cover defects of title. These decisions were based upon statements in a number of earlier English cases. There were, however, such substantial differences in the particular conditions under consideration in the English cases and the clause of the Real Estate Institute contract, that reliance upon the English cases was, in my opinion, misplaced. As to these cases I have had the advantage of reading what the Chief Justice has written.
I have reached the conclusion that, upon the proper construction of this contract, the words "error or misdescription of the property" cover only an erroneous description of the land sold and not an error in the statement of the title to it. This appears from the way the expression "the property" is used to refer to the land as a physical thing throughout the contract, particularly in cll. 10 (a), (b), (f), 11, 13 and 17.
Accordingly, it is my opinion that the omission to set out that the lease to which part of the property was subject contained an option to renew did not amount to an error or misdescription of the property giving rise to a claim for compensation under cl. 8 of the conditions.
This disposes of the appeal but further questions were argued.
As to the question concerning s. 88B of the Industrial Arbitration Act, 1940 NSW, as amended, I agree with what has been said by the Chief Justice. The respondents, however, submitted that the registration under the provisions of the Real Property Act, 1900 NSW, as amended, of the memorandum of lease containing the option to renew gave to the tenant "an indefeasible right to the renewal". Here, because of the effect of s. 88B of the Industrial Arbitration Act, the tenant was not entitled to register the memorandum of lease as there was no lease. If a person becomes registered in such circumstances, the Registrar-General can cancel the registration: s. 136, Real Property Act. The registration did not, in my opinion, validate an option in a lease given contrary to a statute. Accordingly, I do not find it necessary to consider the observations contained in the New Zealand cases cited as to whether registration under the provisions of the Real Property Act creates indefeasible rights in respect of each and every covenant of the lease which is registered.
I have read what Gibbs J. has written on this aspect of the appeal, and on the question of estoppel, I must express my agreement with it.
The appellant, the purchaser from the respondents of land at Marrickville in New South Wales, claimed to be entitled, under cl. 8 of the form of contract for sale of land approved by the Law Society of New South Wales and the Real Estate Institute of New South Wales (1965 ed.) which was incorporated into the contract between the parties, to compensation for an "error or misdescription of the property" within the meaning of that clause. The alleged "error or misdescription" was contained in a document of 17th June 1969 which formed part of the contract of sale, cl. 3 (a) of which stated that the sale will be subject to the following existing tenancies but vacant possession of the remainder of the subject land and premises will be given:
(a) As to the lock up shop premises known as 204 Marrickville Road, Marrickville - Lease No. K.135850 in favour of Ferdinando Macri for a term of 5 years from 1st August, 1965 at a rent at the rate of $343.20 per annum.
This statement was said to misdescribe the respondents' interest in the land which was sold to the appellant because it failed to mention that the lease of the premises at 204 Marrickville Road contained a covenant between the lessor (one of the respondents) and the lessee (Macri) in the following terms: That if the lessee shall be desirous of continuing the tenancy hereby created for a further term of five (5) years at the expiration of the term hereby granted and shall at least three calendar months prior to the expiration of the said term give to the lessors notice in writing of such his desire and shall punctually pay the rent hereby reserved and duly observe and perform the several covenants and stipulations herein contained on his part to be observed up to the termination of the tenancy hereby created then the lessors shall at the expense of the lessee grant to him a lease of the demised premises for a further term of five years from the 1st August 1970 at the same rent and containing the same terms and conditions as are herein contained with the following exceptions The exceptions included the covenant for renewal, but did not include cl. 3 (b) to which I shall later refer. The respondents, however, contend that there was no misdescription, or at least no misdescription in respect of which a claim for compensation could be made, because the lease and the covenant to renew are both void by reason of the provisions of s. 88B of the Industrial Arbitration Act, 1940 NSW, as amended. Section 88B (1) states that the section applies (inter alia) to any contract -
(d) under which a person (in this section referred to as "principal") -
(i) leases or agrees to lease to any other person any premises for the purpose of or with a view to such other person carrying out or performing, or causing to be carried out or performed, or arranging for the carrying out or performance of, the work (in this section referred to as "contract work") of hairdressing in or on such premises;
where the contract work is of a class or type in respect of which a price or rate is for the time being fixed by an award or agreement for employees engaged therein, but does not apply to any such contract under or in pursuance of which the contract work is to be carried out or performed by employees of the principal and by such employees only. Section 88B (2) (a) provides that "A contract to which this section applies shall not be entered into unless" the industrial commission or the relative committee "has approved" of its terms and conditions, and s. 88B (3) provides that "Where a contract to which this section applies is entered into without the approval of the commission or a committee" (inter alia) - (a) every person who is a party to the contract shall be liable to a penalty not exceeding two hundred dollars; and (b) the contract shall be void. In my opinion the words "any contract under which a person leases or agrees to lease" can only be given a sensible meaning if the word "under" is read as meaning "by" or "pursuant to". These words therefore refer to a lease, as well as to an agreement for a lease. Moreover, it seems to me impossible to escape the conclusion that the lease in the present case was granted with a view to the lessee carrying out, or causing to be carried out, or arranging for the carrying out, of the work of hairdressing on the demised premises. The lease contained a covenant (cl. 3 (b)) by the lessee in the following terms: That the lessee or the permitted assigns for the time being will not use or suffer to be used the premises for any purpose other than as a Hairdressing Salon and Tobacconist Shop and will manage and conduct the same in an orderly and quiet manner and shall conduct the same so that it shall not become noxious noisome or offensive and the said lessee will at all times of the year during the usual business hours keep the demised premises open for carrying on the said business. Clearly this clause obliged the lessee (including in that expression his permitted assignee) to carry on the business of a hairdressing salon and tobacconist shop on the premises throughout the term of the lease. The business of a hairdressing salon could not be carried on unless the work of hairdressing were carried out. It is true that the lease had in view that other work also might be carried out on the premises, viz., the work of a tobacconist. However, the fact that the lease was granted with a view to other work additional to the "contract work" being carried out does not render the section inapplicable. According to its terms the section applies to a contract under which a person leases premises to another person with a view to that other person carrying out the "contract work" and it is immaterial that it is intended that he should carry out other work as well. It was not disputed that the work of hairdressing is of a class or type in respect of which a price or rate is for the time being fixed by an award for employees engaged therein or that under the lease the contract work was not to be carried out only by employees of the "principal," that is, the lessor. It follows that the lease was a contract to which s. 88B applied. I see no need to discuss in detail the provisions of the other sub-sections of s. 88B, which, although in some respects difficult of application, do not lead to any different conclusion. Since the lease was entered into without the approval required by the section it was illegal and void. The provisions of sub-ss. (2) and (3) make it clear that a contract to which the section applies will only be valid if the approval of the commission or committee was obtained before the contract was entered into. It is not possible to save from invalidity such a contract, if entered into without such previous approval, by implying a condition that the contract will not become effective until approval is obtained. In this respect the section has a similar effect to the legislation considered in George v. Greater Adelaide Land Development Co. Ltd. [1] and is distinguishable from that considered in Butts v. O'Dwyer [2] . 1. (1929) 43 C.L.R. 91. 2. (1952) 87 C.L.R. 267.
A conclusion that the lease was illegal and void may be surprising and unjust but it is compelled by the wide provisions of s. 88B which were no doubt designed to protect certain kinds of employees from exploitation but which are so drafted as to bring within their scope contracts that are quite normal and innocuous. While the section remains in force, however, it must be given effect.
It was submitted on behalf of the appellant that s. 88B would not strike directly at the covenant for renewal - which was referred to both in the evidence and in argument as the option to renew - because that covenant would not come within the description "any contract under which a person leases or agrees to lease" premises for the purpose specified in the section. I find it difficult, but unnecessary, to consider the validity of the covenant in isolation from the remainder of the lease. The section applies to, and invalidates, the lease itself. The covenant for renewal forms part of the lease and if the whole lease is void no covenant in it can be effective. This proposition seems to me self-evident but if authority is needed it is enough to refer to the decisions in Moore v. Clench [3] and Bunting v. Sargent [4] , and to the remarks in Butts v. O'Dwyer [5] .
In the alternative the appellant submitted that, assuming the lease to be illegal and void, its registration under the Real Property Act, 1900 NSW, as amended ("the Real Property Act ") conferred on the lessee an indefeasible title to the interest in respect of which he was registered and that the covenant to renew was an integral part of the lease itself and shared in its indefeasibility. This argument took as its starting point Frazer v. Walker [6] , which was decided on the Land Transfer Act 1952 NZ but which is applicable to the similar real property legislation of the Australian States: see Breskvar v. Wall [7] . The decision establishes that the registration of a void instrument is "effective to vest and to divest title and to protect the registered proprietor against adverse claims" [8] . There can be no doubt that ss. 3 ("proprietor"), 40, 41, 42, 53 and 124 of the Real Property Act have the effect that upon the registration of a lease the lessee obtains a title to the estate or interest specified in the lease notwithstanding that apart from registration the lease would be void and ineffective and that subject to the exceptions mentioned in the statute, none of which is here applicable, that title is immune from attack. However, the Industrial Arbitration Act, 1940 was passed subsequent to the Real Property Act. According to ordinary principles of construction effect must be given to its provisions notwithstanding any contrary provision in the Real Property Act. "If there is an inconsistency between one statute and a later statute, the later statute prevails"; "if the later enactment contains clear language from which it is plain that its provisions were intended to apply to land under the Act and to apply in a manner inconsistent with the Real Property Act, then they must operate according to their meaning. For the later enactment of the legislature must be given effect at the expense of the earlier": South-Eastern Drainage Board (S.A.) v. Savings Bank of South Australia [1] . I have already said that the provisions of s. 88B of the Industrial Arbitration Act apply to leases. There is nothing in s. 88B to indicate that it was intended to apply only to leases of land not subject to the provisions of the Real Property Act and there would be no rational ground for excepting land under the Real Property Act from the application of the section. The provisions of s. 88B on their proper interpretation operate to avoid a lease, to which they apply, whether or not the lease is registered under the Real Property Act. Effect must be given to the section notwithstanding that under the Real Property Act the title of the registered lessee is indefeasible.
There is a clear distinction between the present case and Breskvar v. Wall [2] , in which this Court considered the position of a person who obtained registration by means of a transfer which, by reason of the provisions of s. 53 (5) of the Stamp Act 1894 Q, a statute passed later than the Real Property Acts Q, was absolutely void and inoperative. In that case the fact of registration vested the title in the transferee and it did not matter that the title was derived from a void instrument. The question whether s. 53 (5) of the Stamp Act should be regarded as effecting an implied repeal pro tanto or an implied amendment of any provisions of the Real Property Acts was mentioned by Walsh J. [3] , who answered that question in the negative. The two statutes there could stand together; the Stamp Act avoided the transfer but the Real Property Acts had the result that registration of the void transfer was effective to vest the title in the registered proprietor. In the present case the Industrial Arbitration Act renders void the lease itself and not merely some document or transaction from which the title of the lessee was derived. If the Real Property Act were held to have the effect of validating the lease, its provisions would be irreconcilable with those of s. 88B which declares the lease to be void.
The facts of the present case are distinguishable from those of South-Eastern Drainage Board (S.A.) v. Savings Bank of South Australia [1] which was concerned not with the effect of the registration of a void instrument but with the reconciliation of a conflict between a mortgagee claiming under a mortgage registered under the Real Property Act SA and a statutory body claiming to enforce a charge created by a later statute. However, the decision was reached in that case by a process of statutory interpretation which in my opinion should also be applied in the present case. Although the Real Property Act is of the greatest importance in relation to land titles it is not a fundamental or organic law to which other statutes are subordinate. The question is simply whether the provisions of the later enactment, s. 88B of the Industrial Arbitration Act, override the inconsistent provisions of the Real Property Act, and for the reasons I have given I consider that they do.
On this view it is unnecessary to consider the further question that was argued, whether a covenant or option to renew should be regarded as an integral part of a lease so that the registration of the lease renders indefeasible the rights given by the covenant or option. I would therefore leave open the question whether the observations on this subject in Roberts v. District Land Registrar at Gisborne [2] , and the decision in Pearson v. Aotea District Maori Land Board [3] should be regarded as correct and applicable to the Real Property Act.
I hold, therefore, that the lease and the option to renew were both void. It follows that the appellant had no right to compensation.
The learned primary judge held, however, that the respondents were estopped by their conduct from asserting that the lease and option to renew, as it was called, were not valid. Briefly, the facts relevant to this question were as follows. I have already referred to the statement in the contract between the appellant and the respondents which recited that the land was subject to a lease. On 3rd July 1969, after the appellant had exercised the option to purchase the premises, the respondents' solicitor informed the appellant's solicitor that the lessee had an option to renew and thereafter wrote letters which referred to the option without casting any doubt on its validity. The appellant then claimed to be entitled to compensation but the respondents denied liability to pay compensation. The appellant's solicitor suggested, without prejudice to the claim for compensation, that an investigation should be made as to whether the lessee had defaulted in payment of his rent or in the performance of his covenants and was thus disentitled to a renewal. The respondents' solicitor agreed to this suggestion but apparently no default was discovered. The purchase was completed on 15th July 1969. Thereafter, on 18th May 1970, the appellant paid to the lessee $21,000 in exchange for surrenders of the lease (which by that time had almost expired) and of the option. The learned primary judge considered that the respondents must be taken to have represented that there was a valid lease and a valid option to renew and that there was implicit a representation that any approval required under s. 88B had been obtained. He held that this was a representation of fact on which the appellant acted to its detriment by paying the $21,000. In truth neither the appellant nor the respondents knew at any material time of the effect of s. 88B or that any approval was required under that section. With great respect, I am unable to agree with the conclusion of the learned primary judge. In all the circumstances, and particularly having regard to the fact that the representations were made in the course of a conveyancing transaction in which the appellant was represented by its own solicitor who might be expected to advise the appellant as to the legal position, there is no justification for implying into the representations any statement as to the legal effect of the lease or of the option to renew. The representations should not be taken at any more than their face value, and they simply meant that there was in fact a lease containing an option to renew. Certainly they were neither intended nor understood to mean that the approval required by s. 88B had been obtained. In any case, there is no evidence that the appellant, who was throughout advised by its solicitor, was induced by the representations to pay the money to the lessee. In my opinion the evidence does not make out the elements necessary to ground an estoppel.
Since for these reasons I consider that the appellant had no claim upon the respondents for compensation I need not consider whether, had the covenant to renew been valid, there would have been an "error or misdescription of the property" entitling the appellant to compensation under cl. 8. I would dismiss the appeal.
In my opinion this appeal should be dismissed. A number of quite distinct propositions were argued and have been discussed at length in the reasons for judgment of other members of the Court. Dealing with them in the order in which they appear to me logically to arise, I agree with the conclusions of the Chief Justice and of Menzies J. that there was here no "error or misdescription of the property" within the meaning of cl. 8 of the relevant conditions of sale. The "property" referred to in cl. 8, and which that clause contemplated might be the subject of error or misdescription refers, I think, exclusively to the entity, the land being sold; this is made apparent from a number of passages throughout the conditions of sale. It follows that the clause is not directed to the particular misdescription complained of by the appellant, which was not a misdescription of the land itself.
The effect of s. 88B of the Industrial Arbitration Act is, in my view, to render void and illegal the lease in favour of Macri, and with it the covenant for renewal which cannot survive independently of the lease, for want of the prior consent of the industrial commission or of the committee referred to in sub-s. 2 (a) of that section; I adopt, with respect the views expressed on this aspect by the Chief Justice and by Gibbs J.
There are only two remaining aspects to which I wish to refer, whether the respondents were estopped from asserting invalidity of the lease and the covenant for renewal and what effect was given to that covenant by registration of the lease under the Real Property Act. As to the first I agree with the reasons of the Court of Appeal in rejecting the argument sought to be based upon an estoppel; as to the second I agree with the Chief Justice concerning both the effect of illegality upon any suit for specific performance of the option contained in the lease and also its consequence that registration cannot in any event here avail the appellant.
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