On 28 February 2014, Justice Refshauge of the ACT Supreme Court handed down his decision in Acton Investments (ACT) Pty Limited and Momac 2 Pty Limited v Frank Batticcotto, Luigi Batticcotto and Sarina Batticcotto  ACTSC 31 (“the Acton case”). The case determined the consequences of not attaching a document (“Required Document”) specified in the Civil Law (Sale of Residential Property) Act 2003(ACT) (“the Act”) and required by the Act to be included in an ACT Contract for Sale (“the Contract”) but which was not physically attached to the Contract.
The defendants were the Buyers who entered into a Put and Call Option Deed. Acton Investments (ACT) Pty Limited (“Acton”) was the registered proprietor of the land and Momac 2 Pty Limited (“Momac”) was the developer of apartments constructed on the land. A Notice to Complete and Default Notice were issued to the Batticcottos when they failed to settle on the Date of Completion. The Batticcottos subsequently issued a Notice of Rescission on the basis that the Contract did not contain the Required Document and therefore did not comply with Section 11(1)(i) of the Act.
Acton and Momac rejected the Notice of Rescission, arguing that even though the Required Document was not physically attached or annexed to the Contract, the document was available for inspection at the offices of the their solicitor or “available upon request”.
The ACT Supreme Court rejected the argument that the Required Document was “available upon request” and therefore formed part of the Contract, stating that “there must be a relevant physical connection between the contractual provisions and the Required Documents.”
The Court then found that the breach of the condition gave the Batticcottos a right to rescind the Contract.
What does this mean for you?
Section 9 of the Act provides a list of documents that must be attached to a contract for sale for residential properties. The documents that are required depend on the type of property being sold. In order to protect the Seller, the Acton case makes it clear that the Required Documents must be physically attached to the contract. If this does not occur, then the Buyer may have the right to rescind the contract before completion.
If you have any questions about Required Documents in an ACT Contract for Sale, please do not hesitate to contact Angela Seeto, Conveyancing Manager and Solicitor or Peter McGrath, Partner at Griffin Legal.
Acton Investments (ACT) Pty Limited and Momac 2 Pty Limited v Batticcotto, Batticcotto and Batticcotto ACTSC 31