In a sign that Queensland is enjoying a real estate resurgence at least somewhere, it was a seller who this time sought to escape a $4.3 million contract through PAMDA non-compliance – based on sloppy construction of an Office of Fair Trading approved form.
A call option signed in September 2010 for a Gladstone development site was exercised in February 2011. Along with the notice of exercise, the buyer – represented by Van de Graaff Lawyers – sent a Form 32a waving the cooling off period signed by the solicitor as required.
The seller refused to settle contending that the Form 32a had not been “properly completed” because the approved 32a form that the buyer’s solicitor signed, did not – in Part 2, the cooling off waiver section – reflect the requirements specified in the corresponding PAMDA sections.
In yet another oversight by the Office of Fair Trading, the approved 32a lists only some of the entities that the waiver-advising lawyer must certify as having no connection with. The approved certification also omits a qualification – found in the section but not in the form – for lawyer’s fees.
The seller argued that although OFT approved, the form that the buyer signed and delivered did not effectively waive the cooling off period and accordingly the option had not been validly exercised.
The seller’s further ground was that because the buyer had left the separate certification regarding lawyers’ independence in the approved 32a blank, it was not a “completed” form. The seller relied on the ambiguity in the instructions on the first page of the approved 32a to support this argument.
All of the seller’s arguments were dismissed. The court ruled that the fact that Part 1 of the form must be completed in order to comply with s 366 “does not mean that Part 1 must be completed in order properly to complete the form’s waiver of the cooling-off period”.
Thus specific performance and costs were awarded against the seller and the buyer will get the opportunity to develop the site.
Last year Take the law… predicted that some of the heads of the PAMDA monster would continue to thrive because proposed amendments did not go far enough. To wit this dispute.
OFT should act quickly to rectify its errors in the 32a certifications and the highlighted ambiguity in the form-filling instructions. At the same time, Chapter 11 should be amended to clarify that it does not apply to options nor to contracts arising from their exercise.
Do we need a further $1.5 billion wasted on compliance and disputation before they get the message?
Richsilk Investments Pty Ltd v Cove Developments Pty Ltd  QSC 063 (11/1542) Brisb Applegarth J 31/03/2011