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• eNews index
• Happy New Year!!
• PAMDA – Warning Statement disputes likely to continue thru 2010
• Stamp duty concessions - be careful on timing
• Commercial landlords save costs with leasing bureau

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PAMDA – Warning Statement disputes likely to continue thru 2010

PAMDA laws - and buyer's efforts to escape contract liability as a result of non-compliance - were a recurring feature in Queensland courts in 2009. Regrettably this is likely to continue thru 2010.

 

Fortunately, agents are sometimes on the winning side. Take for example a recent decision where the Supreme Court had to answer whether the buyer’s attention was sufficiently drawn to the warning statement *.

On 9 January, C attended CI’s sales office and signed a contract of sale to purchase a block of land on which a dwelling was to be constructed. On 14 January C’s Solicitors received a letter enclosing the contract which was signed by the Seller, CI. The letter read:

We now enclose the following documents:

• Important Notice to Buyer;
• PAMDA Form 27c;
• Disclosure Statement;
• PAMDA Form 30c and Contract.

The contract was not terminated during the following five days but the buyer sought to terminate the contract at a later date.

C argued that the cooling off period had not begun to run because under section 365 (2A) (c) (ii), the wording of the letter enclosing the documents was insufficient to "draw his attention" to the warning statement.

The Seller submitted that they had sufficiently directed C’s solicitors attention in the letter particularly because it was addressed to C’s solicitor "who might have been expected to appreciate the significance of that particular document". The Court agreed saying that:

It was not necessary, in order to secure compliance with the statutory requirement, that the words “direct attention” as such must have been used.

The court reasoned that by referring to the document (Important Notice to Buyer) "as one of importance" this was sufficient to draw attention to the document. The court therefore held that the cooling off period had commenced on 14 January and C was bound to the contract because he had not terminated within the five-day period thereafter.

The court went on to consider, if C were correct in his assertion that the seller had not properly complied with PAMDA, whether C’s subsequent conduct constituted a waiver of any termination right. This question was also answered in the seller's favour with the court concluding that by taking further steps towards settlement, the buyer may well have waived any right that it had to terminate the contract.

Because the second issue was not essential to deciding the dispute between the parties, it is not conclusive authority for the proposition that buyers’ rights to terminate under PAMDA are always compromised by taking steps towards settlement. However it provides an indication as to the way this question will be interpreted when, inevitably, it comes before the court has the central issue in a future case.

Suffice it to say that every case may produce different results - proving once more that PAMDA is not only extraordinarily complex but is frequently unpredictable.

* Collis v Currumbin Investments Pty Ltd [2009] QSC 297

Send a PAMDA protest email to Hon Peter Lawlor, Minister for Fair Trading - get the PAMDA mess fixed! »

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