Capper v Thorpe P66/1966 [1997] HCATrans 334 (24 October 1997)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Perth No P66 of 1996

B e t w e e n -

SAMUEL PHILIP CAPPER

Applicant

and

ANDREW CECIL THORPE

Respondent

Application for special leave to appeal

TOOHEY J

McHUGH J

KIRBY J

TRANSCRIPT OF PROCEEDINGS

AT PERTH ON FRIDAY, 24 OCTOBER 1997, AT 2.55 PM

Copyright in the High Court of Australia

MR R.M. GARRATT, QC: If the Court pleases, I appear for the applicant. (instructed by Chalmers & Partners)

MR J.C. CURTHOYS: Your Honours, I appear for the respondent. (instructed by Messrs Amidzic & Co)

TOOHEY J: Yes, Mr Garratt.

MR GARRATT: If the Court pleases, this is a case concerning a statute which requires service of a notice under a sale of land contract. It does not require personal service of the notice and permits selection from a range of modes of service prescribed in Acts Interpretation legislation, and there is Acts Interpretation legislation of a similar character around the country offering a range of modes of permitted service.

The questions in this matter are whether contracting parties may effectively agree to a supplementary mode of service and may effectively agree as to when that mode of service is to be treated as taking effect. The trial judge resolved those questions in favour of the plaintiff, the applicant here. In the Full Court the leading judgment, in a sense, ducked the questions and resolved them simply by construing a condition of the standard form joint conditions applicable to all contracts of sale in Western Australia in a very narrow and, in our submission, manifestly wrong fashion.

If I could start by taking the Court to section 6 of the Sale of Land Act 1970 which is set out in many places in the material but particularly at the bottom of page 48 of the application book, the Court will see that what is provided there in relation to a terms contract is:

Notwithstanding any stipulation to the contrary, a terms contract shall not be determined or rescinded on account of a breach.....unless and until the vendor has served on the purchaser a notice -

There is no requirement of personal service and it is common ground in all the judgments that that picks up the interpretation of legislation Act, 1984. That does not require personal service; indeed, does not even require, in many cases, that the document actually come to the attention of the person served.

The joint conditions, the standard form conditions, are referred to on the next page and there are two that need to be addressed. Condition 16 deals with default notices and provides in (1)(a):

the vendor shall not be entitled to forfeit any money.....or take or recover possession of the property on the ground of the purchaser's default in performing or observing any obligation -

and again in (b), which I need not read -

Unless:

(i) the party not in default has first given to the party in default a written notice -

Then, the top of the next page:

(ii) the party in default fails to remedy the default within the period stipulated in that notice;

(iii) the period stipulated in the written notice .....shall not be less than fourteen (14) days from the date of service of that notice, or, if the contract is a terms contract -

which is the case here -

not less than the period of notice stipulated in Section 6 of the Sale of Land Act ;

That is 28 days. So the term, condition 16, plainly envisages a notice of default with respect to a breach of such a terms contract. Condition 21 of the same terms deals with modes of service, of notices and provides - I do not need to read it all, but you will see in (b):

in the case of an individual, by delivering it or posting it to the party at the party's address specified in the contract -

which was what was done here. So that is the mode. Then at the top of the next page in subsection (2):

A Notice.....posted shall be deemed to have been served at the expiration of forty eight (48) hours from the time of posting.

So what the parties here did was agree to a regime which provided for a supplementary mode of service, namely by posting to an agreed contract address whereupon, 48 hours later, the notice would be deemed to have been served.

Now, as I say, the trial judge, Justice Owen, held that the parties were entitled, for reasons of expediency, to agree upon a regime. They need certainty and that is exactly what they have done and the notice was to be treated as having been served 48 hours after it had in fact been posted to the agreed contractual address.

KIRBY J: There is a lot of force in what Justice Owen said but the fact remains this is a Western Australian form, Western Australian legislation, it is not necessarily applicable in other jurisdictions of the country and this is an interlocutory decision.

MR GARRATT: It is not an interlocutory decision, if I may address that point first, your Honour. This was an originating summons on agreed facts, a short point of construction as to whether a contract had been terminated. It was a final decision.

KIRBY J: Effectively final.

MR GARRATT: Effectively final and resolves the matter once and for all. As to - - -

KIRBY J: It may be catalogued as interlocutory, but I take your point. Move on to the more substantive challenge.

MR GARRATT: As to the question of it being merely a matter of local application, it is at least that in that it has wide local application in respect of all contracts of sale for sale of land in Western Australia. But in our submission, the way in which the Court ought approach the resolution of a problem like this has far wider implications because what one is talking about is the ability of the parties to displace the modes of service in Acts Interpretation legislation and what needs to be done, or what needs to appear from any other Act which refers to the notice concerned in order to displace the parties contractual ability to define for themselves their own service regime.

So it does have, in my submission, a wider application than merely Western Australia because one asks here, what is necessary to exempt the parties from their contractual ability to achieve certainty for themselves.

McHUGH J: But it could only involve construction of section 6 of the Sale of Land Act of Western Australia, what is meant by "served", and the Full Court took the view it meant "served" in accordance with section 75 and section 76 of the Interpretation Act. Now, that is an argument that is plainly open. That being so, where is the special leave point in this case? It may be, from the point of view of the parties and your client, this is an important case and maybe it is an important point, but having regard to this Court's responsibilities to declare the law for the nation, it is a long way from being a special leave point, Mr Garratt.

MR GARRATT: Your Honour, I obviously do not put the case at the height of a constitutional case or anything of that dimension but, your Honour, I must take issue with the question that it was - there is dispute about whether section 6 picks up 75 and 76.

McHUGH J: You contend to the contrary, I understand that, but that is the issue, is it not, that the judges below in the Full Court took the view that "served" picked up 75 and 76.

MR GARRATT: That is not the issue. We all agree that it picks up at least that. Where we disagree- or where the Full Court simply ducks the question is whether that means the parties cannot as well agree on some supplementary mode of service; whether section 75 is the exhaustive regime.

McHUGH J: It would be odd in a statute like the Sale of Land Act section 6 introduced, notwithstanding any stipulation to the contrary, that the parties could name their own form of service, irrespective of what it was, and it was sufficient service to serve it on the purchaser's mother or father or whoever might be specified, and particularly in a statute which is emphasising, notwithstanding any stipulation to the contrary, you have to give 28 days from the date of service of the notice. So it is really talking about real service, I would have thought.

MR GARRATT: Your Honour, if I may address that. Manifestly it is not. If one looks at section 76 and the modes of service, real service in one sense but not personal direct service, that is but one of four and more modes of service permitted; leaving at the last known abode, for example, is one of the modes of services which manifestly may well not come to the attention - - -

McHUGH J: I appreciate that, but if "served" in section 6 was at large, having regard to the context and the purpose of the section, I would have thought myself it meant personal service. However, you have an Interpretation Act which says that where the law requires a document to be served, then service shall be deemed to be effected et cetera et cetera. Now, in that context, "served" has to be given at least the meaning in 75, 76, but it is a large proposition to say the parties themselves can go outside the statutory framework.

MR GARRATT: The statute contemplates that itself, if I may say so, your Honour. It says "may" be served in one of these modes. It does not say can only be served in one of these modes. One is familiar, as technology, for example, progressed - - -

McHUGH J: Which section says "may" be served?

MR GARRATT: Section 76. One sees every day, increasingly it seems, new forms of service by fax machines and so on. There is every reason to think that when Parliament said "may", it meant "may". Indeed, every reason why the parties should be left, if there is a more effective means of service, for example by serving on one's solicitor or one's attorney, that the parties might not by contract agree to that. There is every reason, in our submission, for reading section 76 as merely being permissive and leaving the parties to their contractual ability to agree on an efficient means of service.

As I say, the Full Court ducked the question by reading condition 21 as simply not applying to the Sale of Land Act at all, condition 21 being the condition which said that you can post and it will be deemed to have been served two days later. That way of ducking the problem is manifestly not open, in our submission, because condition 16 plainly contemplates the notice with respect to a breach of the Sale of Land Act. So the question becomes, as the trial judge saw and as really the leading judgment or the only judgment in the Full Court ducked, if I may say, a central question of really can parties agree upon a supplementary regime? If so, can they agree upon when it is deemed to be effective? The Full Court ducked it. It is a central and important question. It has ramifications beyond the Sale of Land Act in Western Australia generally to when parties and what they need to do to displace the permissive modes of service regime in Acts Interpretation legislation.

McHUGH J: At the moment I do not think it has because I think it all depends upon the context - and it is section 6 - in which section 6 is found. If you had another statute in another context with a different remedy, different purpose, it may be it would be quite open for the parties to utilise some form of contractual agreement as to the mode of service. But having regard to what section 6 is designed to do, then prima facie it is to be given, at the moment in my view any way, a fairly narrow construction, personal service, except that you have 75 and 76 which enables you to go beyond mere personal service. But that said, I do not see any warrant for giving section 6 a meaning that would enable you to go beyond the modes of service described in 75, 76.

MR GARRATT: Your Honour, lastly, all I can say is that the trial judge did look at the purposes of the legislation, read the debates, identified what the purposes were and said, as a matter of policy, plainly enough there is no reason to inhibit the parties - - -

McHUGH J: I know, he took that view and at least, I think, by implication, although as you say not by express words, the majority took the opposite view. These are matters upon which people's views can differ. The question of the construction of statutory provisions are notorious for generating division of opinion.

MR GARRATT: Had one an elaboration in the leading judgment, one might more readily sympathise with that analysis. It is, of course, a one-line assertion, unelaborated, which conceals the real point in issue which is policy and ability to inhibit - the extent of an inhibition of contractual ability to agree upon the regime of service.

I cannot take the matter further than that, but those are the points, your Honours.

TOOHEY J: Yes, Mr Garratt, thank you. Mr Curthoys.

MR CURTHOYS: The point at which my learned friend has invited this Court to look in considering special leave is at the point below the real point. The real point, as it seems to me, with respect, Justice McHugh has identified, is section 6 of the Sale of Land Act. That is notwithstanding any stipulation to the contrary. Now, it may be that you can go to the sub-level and look at 75, 76 were it not for what lies above it.

KIRBY J: But 76 is in purely permissive terms, "may be effected". It does not say it has to be. Interpretation Acts are generally to deal with enlarging powers, not cutting them back.

MR CURTHOYS: Yes, that is correct, so when you go back to "Notwithstanding any stipulation to the contrary" which is, as it were, what feeds in to the Interpretation Act and to the context, when you look to the primary level, notwithstanding any stipulation to the contrary in those circumstances it seems, with respect, that it is clear that all that 75, 76 does is expand the mode of service. It does not release the mode of service completely so that the parties can then go away and come to some contractual agreement. It seems clear that they could not adjust the 28 day period, so equally it should apply to service.

TOOHEY J: Why does that follow? When you say equally it applies to service, do you mean to the mode of service?

MR CURTHOYS: To the mode of service, which should be the service as laid down by the Interpretation Act. Indeed, when you look to the history of the Act, when you look to I think it was the Law Reform Committee Report upon which it was based and what was said in terms of that and what was said in the parliamentary debates, it is clear that this was a mode brought about as a result of, and designed to protect, the purchaser.

The Full Court, of course, had Justice Owen's decision before it. I think to suggest that Justice Kennedy and the Full Court ducked these sort of questions or that they may be said to have simply overlooked it, in the context of Justice Owen's decision, it seems to me is just plainly not arguable. It is a Western Australian statute. Its relationship to Western Australian conditions that have changed even since these joint form of general conditions - - -

KIRBY J: Not in material respects, we are told.

MR CURTHOYS: No, but they do - well, it has changed in the sense it has changed from deemed to treated, whatever that may mean in terms of the change. They are conditions which at least change 85, 88, 91 and 94. It seems, with respect, in the respondent's submission that they are matters which pre-eminently ought be under the control of the Full Court of this State and that the Full Court of this State is best placed to give advice. That is the role of the Full Court, that it is not a matter of national importance and that it should not, in those circumstances, be a matter for which special leave should be granted.

KIRBY J: What is the stake involved here? What is the value of the property?

McHUGH J: It is the deposit, is it not?

MR CURTHOYS: It is a deposit and it is a residential property.

KIRBY J: The deposit is the stake, I assume.

MR CURTHOYS: $180,000 is the value in the offer and acceptance, I am told. I would have to go back to the - but these are matters, really, that fall within the role of the Full Court of Western Australia.

KIRBY J: You have said that, twice.

MR CURTHOYS: Yes. I will not say anything more, unless I can assist.

TOOHEY J: Thank you, Mr Curthoys. Mr Garratt.

MR GARRATT: My learned friend is correct in saying that there were two matters of policy in the Law Reform Committee's Report, a requirement for service of the notice and for 28 days. The Law Reform Committee said nothing about the mode of service. That was the only additional point which I wished to clarify.

TOOHEY J: Yes, thank you. There will be a grant of special leave in this matter.

AT 3.14 PM THE MATTER WAS CONCLUDED