The other judges, Robert Walker LJ as his Lordship then was, and Clarke LJ gave similar reasons, the latter saying at 182 that where a particular estoppel relied upon would offend the public policy behind a statute it is necessary to consider the mischief at which the statute is directed.
7 In Shah v Shah [2002] QB 35, another panel of the English Court of Appeal endorsed what had been said in Yaxley. In this State, in Overmyer Industrial Brokers Pty Ltd v Campbells Cash & Carry Pty Ltd [2003] NSWCA 305, in a judgment with which Meagher and Beazley JJA agreed, I applied that line of authority; see [51] to [55].
8 The problem, of course, is to find what is the public policy behind the statute.
9 On this point, learned counsel who appeared, Mr J Agius SC and Mr A C Canceri for the plaintiff, and Mr G A Sirtes for the defendant, put vastly different submissions.
10 Mr Agius put that there is a very real difference between legislation which says that a contract is illegal and void and one which says that it is merely voidable at the election of the consumer. The authorities show that one needs to look to see the policy of the Act. Under the Home Building Act the policy is to ensure that home building work is properly insured. There are a group of sections commencing at s 90 which bring this about; they include s 92 which prohibits a person doing any residential building work under a contract unless that person has a conforming insurance policy, and s 94 which provides that if insurance is not in force, then the builder or contractor cannot sue for the cost of the building. That is then reinforced by s 96A (which I will set out shortly) which is part of a group of sections whose purpose is to ensure that there is insurance. Mr Agius submits that because the policy of the statute is that there be insurance, there is no offence to that policy in having an estoppel if, for instance, the facts are (as Mr Agius suggests they are in this case) that the purchaser is an architect, that the purchaser knew that the work was insured, knew details of the insurance and knew that the only thing she did not get was the certificate.
11 This construction is reinforced by the fact that s 96A(3) gives the option to avoid the contract, it does not make it void. Section 96A creates an offence, but does not affect the possibility of there being an estoppel.
12 Mr Agius refers to the decision of Hunter J in Australasian Concrete Services v Multiplex Constructions [1999] NSWSC 1140. In that case, a matter before the judge was whether, if there was no contract of insurance in place as required by s 92, the plaintiff could rely on an estoppel or waiver. That was a case where a sub-contractor had not taken out insurance. Hunter J said at [48]:
"The question to be addressed, in my view, is whether the provisions of Pt 6 of the Act, in particular s 92 and s 94, evince an intention to protect interests that may not be jeopardised by the agreement or the conduct of those bound by the legislation. The public interest in Pt 6 of this legislation is clear: the protection of an ultimate 'consumer' of a residential building, usually its owner, from shoddy or non-performance of residential building works by having in place statutory warranties and a contract of insurance indemnifying the beneficiaries under the Act from loss, inter alia, through non-performance or breach of those warranties."
13 His Honour then went on at [52] to say that the penal nature of s 92, the provision against contracting out in s 103D, another section which I will set out in due course, and the severity of the consequences of contravention of ss 92 and 94, "are clear enough legislative indications of the public's vested interest in the adherence to the provisions of s 92 and of the legislative intention that the operation of s 92 is not to be circumvented by agreement, conduct of the parties or otherwise … ". He concluded:
"[53] Whether these conclusions are an end to the matter depends upon the question which one addresses, namely, whether the estoppel acts to circumvent the operation of s 92 and s 94 of the Act, or whether the estoppel acts to circumvent the protection of the public interest which the sections are designed to provide. If the former then, clearly, in this case, [the plaintiff] may not avail itself of the benefit of estoppel. If the latter, I think just as clearly, estoppel is available to it. I prefer the latter approach in a legal action of this kind. It permits an analysis or distilling of the essential interest at stake and permits recourse to the particular facts of a case in deciding whether, in that case, the estoppel will leave the subject public interest untrammelled."
14 Mr Agius also referred me to the decision of Hulme J in Pacific Rim Developments Pty Ltd v Anketell [1999] NSWSC 304, where his Honour held, with respect to s 66ZG of the Conveyancing Act 1919, that where a statute makes a contract void there is no room for the operation of doctrines of estoppel. Again, however, his Honour seemed to focus on the existence of the policy behind the statutory provision being inconsistent with an estoppel and Kok Hoong's case see [17].
15 Finally, Mr Agius relied on a decision of the Full Court of the Supreme Court of British Columbia in Revell v Litwin Construction (1973) Ltd (1991) 86 DLR (4th) 169.
16 In that case, the law of British Columbia required a prospectus to be delivered in accordance with the local Real Estate Act if there was to be a sale of a town house in a development under construction. No prospectus was delivered. After the problem came to the purchaser's attention, he continued to do acts affirming the contract. The purchaser then rescinded the contract. At first instance, and the judgment was affirmed on appeal, it was held that the doctrine of estoppel operated to prevent the purchaser relying on the Real Estate Act.
17 The decision does not delve into the principles behind the maxim "there is no estoppel in the face of a statute". Indeed, it is not even mentioned, but the court treated the matter as being completely unfair if estoppel were not allowed to be determinative in the situation.
18 Mr Sirtes says that in the Canadian case the court did indeed assume that estoppel was available but did not deal with the awkward question that is before this court. He further put that any distinction between the contract which is void or a contract which is voidable has not validity. The right of a purchaser to elect whether or not to take advantage of the ability to rescind does not answer the question as to whether there is an estoppel against the statute.
19 I was taken to the Minister's Second Reading Speech to see if I could find the policy behind s 96A, but as often happens, the Speech does not focus on the present problem.
20 Mr Sirtes says that the statute intended to protect consumers. It is incorrect to say that it is aimed at providing information to the consumer. The Act involves people's homes, and whilst the people for whom the homes are being constructed may be learned people, or may be involved in the building and construction industry (like the purchaser apparently was in this case) they may also be people with absolutely no knowledge of these matters. The Act aims to protect consumers generally and to do that, certainty was to be provided by a certificate being given which the purchaser could take to his or her lender and other people so that it could instantly be seen, without the need for expensive enquiries, that the project was covered by insurance.
21 Mr Sirtes referred me to a number of cases. Of the cases to which he referred, the one which I found most helpful was the decision of Wootten J in Considine v Citicorp Australia Ltd [1981] 1 NSWLR 657.
22 That was a case over the old Hire Purchase Act 1960, which provided, inter alia, that every hire purchase agreement should contain a description of the goods sufficient to identify them. The agreement did not do so. Wootten J held that the doctrine of estoppel cannot exclude, modify or restrict the operation of a provision in a statute which is intended to protect the hirer or consumer. He pointed out, quoting what Buckley J said at first instance in Beesly v Hallwood Estates Ltd [1960] 1 WLR 549, 561, that traditionally no estoppels are permitted against requirements in laws governing gaming or usury protecting consumers or borrowers; see eg Carter v James (1844) 13 M & W 137; 153 ER 57.
23 Having set out the contentions of the respective parties, I should set out the provisions of the statute which need to be considered in detail.
24 Section 96A of the Home Building Act provides, so far as is relevant:
"(1) A developer must not enter into a contract for the sale of land on which residential building work has been done, or is to be done, on the developer's behalf unless a certificate of insurance evidencing the contract of insurance required under section 92 by the person who did or does the work for the developer, in a form prescribed by the regulations, is attached to the contract of sale.
Maximum penalty: 1,000 penalty units in the case of a corporation and 200 penalty units in any other case.
(1A) …