Reported Decision : (2003) NSW ConvR 56-031 New South Wales Supreme Court CITATION : Hijazi and Hijazi v Raptis [2002] NSWSC 499 FILE NUMBER(S) : SC 1423/02 HEARING DATE(S) : 10/05/02 JUDGMENT DATE : 11 June 2002 Atef Hijazi - 1st Plaintiff PARTIES : Daad Hijazi - 2nd Plaintiff George Raptis - Defendant JUDGMENT OF : Gzell J COUNSEL : Mr M Henry Mr G Segal SOLICITORS : H K Husseini & Co, Solicitors Konstan Lawyers CATCHWORDS : CONVEYANCING - Between contract and conveyance - Statutory Protection of Purchasers - Section 149 Certificate - Non-disclosure of Council Policy on flood-prone land - Breach of warranty - Recission - Return of deposit - Conveyancing Act 1919, s 52A(2)(b) - Conveyancing (Sale of Land) Regulation 2000, cl 7 - Environmental Planning and Assessment Regulation 2000, Sch 4 - Interpretation Act 1987, s 68(3)(b). - EVIDENCE - Matters relating to Proof - Best Evidence Rule - Inference of Due making of resolution by Council - Omnia praesumuntur rite et solemniter esse acta. Conveyancing Act 1919 Conveyancing (Sale of Land) Regulation 2000 Environmental Planning and Assessment Act 1979 LEGISLATION CITED : Environmental Planning and Assessment Regulation 1994 Environmental Planning and Assessment Regulation 2000 Evidence Act 1995 Interpretation Act 1987 Omychund v Barker (1744) 1 Atk 21 at 49 (26 ER 15 at 33) Robinson Brothers (Brewers) Ltd v Houghton and Chester-le-Street Assessment Committee [1937] 2 KB 445 at 469 Garton v Hunter [1969] 2 QB 37 at 44 R v Narula [1987] VR 661 Butera v Director of Public Prosecutions (Vict) (1987) 164 CLR 180 at 194-195 CASES CITED : Timanu Pty Ltd v Clurstock Pty Ltd (1988) 15 NSWLR 338 Mandalidis v Artline (1999) 47 NSWLR 568 Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 170 Morris v Kanssen [1946] AC 459 at 475 Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 at 164 McLean Brothers & Rigg Ltd v Grice (1906) 4 CLR 835 at 850 Knox County v Ninth Bank (1893) 147 US 91 at 97 DECISION : See par 26 IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION GZELL J TUESDAY 11 JUNE 2002 1423/02 ATEF HIJAZI & DAAD HIJAZI v GEORGE RAPTIS JUDGMENT 1 The plaintiffs as purchasers and the defendant as vendor entered into a contact for the sale of land at 71 Hannam Street, Turrella on 6 October 2001. The plaintiffs paid a deposit of $33,300.00. Attached to the contract was a certificate of Rockdale City Council under the Environmental Planning and Assessment Act 1979, s 149 stating that the Council had not adopted a policy to restrict development of the land by reason of the risk of flooding. The plaintiffs purported to rescind the contract on the basis that this statement was false and claimed the return of the deposit. The defendant served a notice to complete and, upon failure to comply, purported to terminate the contract and forfeit the deposit. The plaintiffs sought declaratory relief with respect to their rescission and entitlement to the return of the deposit. 2 The land was subject to the Rockdale City Council Local Environmental Plan 2000. Clause 20 dealt with development on flood-prone land. It provided that a person could not erect a building or carry out work on flood-prone land without development consent. It provided parameters for the grant of such consent. It enabled the Council, as a condition of consent, to require the floor level of a building to be at a height sufficient to prevent or reduce the incidence of flooding. 3 On 10 August 2001 the Manager Technical Services of Rockdale City Council wrote to Masterton Homes Pty Ltd. The letter was in the possession of the defendant's former solicitors and a copy was provided to the plaintiffs' solicitors under cover of a letter of 8 November 2001. The letter was in the following terms: "I refer to your letter dated 7 August 2001 requesting flooding information for 71 Hannam Street Bardwell Valley. Council has notated this property as being affected by the 1% Annual Exceedance Probability (AEP) flood. The 1% AEP flood means there is a 1% chance of a flood of this height, or higher occurring in a period of one (1) year. A study by consultants Webb McKeown and Associates indicates a 1% AEP flood level at the subject site of 5.3 m above Australian Height Datum (AHD), where zero metres AHD is approximately mean sea level. Council considers that this is the best currently available information on flooding at the site, but Council cannot comment on the accuracy of the result. In order to relate this flood level to your property you will need to undertake your own survey to determine the existing ground and floor levels to AHD at this site. For the design of new developments on this land the minimum habitable floor level will be 5.8 m AHD. The minimum garage floor level is 5.3 m AHD, however, garage floor levels lower than this will be permitted provided they are physically protected to the minimum habitable floor level. No filling is permitted under the building footprint of the house or garage consequently structural details are to be provided for strip footings and a suspended slab. All the footings are to be designed to resist scour and a velocity of 1.5 m/s should be considered. Floodwaters are to be allowed to freely enter in and out and the submitted plans are to detail how this is to occur. The only filling permitted is immediately under the driveway (ie contained by retaining walls) and can only begin within the property. A driveway profile to 1 to 20 scale is required to ensure vehicular access can be achieved and initially it appears that the garage may need to be set back further. Piering of the garage and retaining wall is required adjacent to the Council pipeline. Should you require any further information, please contact Council's Floodplain and Stormwater Engineer, Tony Merrilees on 9562 1652." 4 It was conceded by the defendant that the plaintiffs were not aware of the contents of this letter at the time they entered into the contract. The male plaintiff said, in short oral evidence, that if he had known of the contents of the letter at the time he would not have entered into the contract. He also said that once he was made aware of its contents he determined to cancel the contract. The defendant conceded that these same intentions applied to the female plaintiff. 5 Requisitions on title dated 10 October 2001 were delivered to the defendant's solicitor. They included an inquiry as to whether there were any restrictions on the development of the land by reason of the likelihood of flooding. On 13 December 2001 the response was that the plaintiffs should rely on their own inquiries. On 14 December 2001 a notice of rescission was sent to the defendant's solicitors by facsimile transmission. The defendant sent a notice to complete to the plaintiffs' solicitors on 17 December 2001 and, for failure of performance, a notice of termination and forfeiture of deposit on 2 January 2002. 6 The plaintiffs invite me to infer that Rockdale City Council had, prior to the making of the contract for sale, adopted a policy restrictive of development on the land because of the likelihood of flooding and that the statement to the contrary in the s 149 certificate was wrong. The defendant submits that the plaintiffs have not overcome their onus of proof that the Council had adopted such a policy, that requiring proof of a Council resolution. 7 I reject the defendant's submission that adoption of a policy by a local government authority can only be established by proving the resolution of the Council for its adoption and cannot be inferred from other evidence. 8 The classic statement of the best evidence rule is attributed to Lord Hardwicke LC in Omychund v Barker (1744) 1 Atk 21 at 49 (26 ER 15 at 33): "The judges and sages of the law have laid it down that there is but one general rule of evidence, the best that the nature of the case will admit." The rule has long been regarded as obsolete, its only remaining vestige being the requirement to produce an original rather than a copy of a document if available. Heydon, Cross on Evidence , (2000), 6th Australian ed, Butterworths, par 1480 suggests that this rule antedated the best evidence rule which, apart from this aspect, is merely a counsel of prudence, for the absence of the best evidence may always be the subject of adverse comment by a judge. 9 In Robinson Brothers (Brewers) Ltd v Houghton and Chester-le-Street Assessment Committee [1937] 2 KB 445 at 469 Scott LJ had said that where similar economic sites are let at a rack rent so that they are truly comparable, that evidence is admissible and indirect evidence is excluded, not because it is not logically relevant, but because it is not the best evidence. Albeit in an obiter dictum, Lord Denning MR disagreed with this proposition in Garton v Hunter [1969] 2 QB 37 at 44 as follows: "It is plain that Scott LJ had in mind the old rule that a party must produce the best evidence that the nature of the case will allow, and that any less good evidence is to be excluded. That old rule has gone by the board long ago. The only remaining instance of it that I know is that if an original document is available in your hands, you must produce it. You cannot give secondary evidence by producing a copy. Nowadays we do not confine ourselves to the best evidence. We admit all relevant evidence. The goodness or badness of it goes only to weight, and not to admissibility. So I fear that Scott LJ was in error." 10 In R v Narula [1987] VR 661, Vincent J sets out a useful summary of the cases. See also, on appeal, Butera v Director of Public Prosecutions (Vict) (1987) 164 CLR 180 at 194-195. The last vestige of the rule has now been overtaken by the Evidence Act 1995, s 48(1)(b) which provides that evidence of the contents of a document may be adduced by tendering a document that is or purports to be a copy that has been produced by a device that reproduces the contents of documents. 11 I note in passing that in Timanu Pty Ltd v Clurstock Pty Ltd (1988) 15 NSWLR 338 which concerned conflicting s 149 certificates, the one asserting an absence of road-widening adopted by resolution of a Council, the other asserting affectation by road-widening adopted by resolution of the Council, proof of the council resolution was adduced without adverse comment either at first instance or in the Court of Appeal by letter from a responsible officer of the Council stating the content of the Council resolution. And in Mandalidis v Artline (1999) 47 NSWLR 568, Austin J concluded, in similar circumstances of conflicting s 149 certificates, that the former was incorrect without proof of a resolution of the Council adopting the policy in question. I mention these authorities only in passing because it does not appear that the best evidence rule was raised in either case. 12 Having rejected the argument that failure to prove the Council resolution is fatal to the plaintiffs' case, the question for me is whether I should infer from the letter of 10 August 2001 that, contrary to the assertion in the s 149 certificate, Rockdale City Council had adopted a policy restricting development of the land because of the likelihood of flooding. 13 The letter was admitted without objection as an annexure to an affidavit read on behalf of the plaintiffs. Once admitted, the letter is evidence for all purposes. It may be that this consequence flows from the doctrine of waiver (Ritz Hotel Ltd v Charles of the Ritz Ltd (1988) 15 NSWLR 158 at 170). An analysis of that basis for admission is unnecessary in this case, however, because a further copy of the letter was exhibited to an affidavit read on behalf of the defendant. 14 In the letter the officer of Rockdale City Council asserts that the Council had noted the land as being affected by a 1% Annual Exceedance Probability (AEP) flood and that new development on the land must have a minimum habitable floor level of a certain height above Australian Height Datum (AHD) and, as no filling is permitted under the building footprint, structural details for strip footings, designed to resist a specified scour velocity, and a suspended slab are required by the Council. Counsel for the defendant submitted that these restrictions should be viewed as an interpretation by the writer of the study by the consultants, Webb McKeown and Associates. I reject this submission. The officer of the Council is doing more than interpreting the consultants' report. He is asserting that the Council will require any development on the site to be constructed with a floor level at a minimum height above AHD to meet expected flood levels and by slab construction designed to resist specified flood scour velocities. Such restrictions on development of the land could not lawfully be imposed by the Council unless it had adopted a policy in furtherance of clause 20 of its Local Environmental Plan. I infer from the fact that a responsible officer of Rockdale City Council asserted that minimum floor height, suspended slab construction and resistance to specified flood scour velocity requirements would be imposed, that a policy to restrict development of the land by reason of the risk of flooding had been adopted by the Council. 15 Another way of looking at the issue, is by reference to the maxim omnia praesumuntur rite et solemniter esse acta – all things are presumed to have been done rightly and regularly. As Lord Simonds said in Morris v Kanssen [1946] AC 459 at 475: "The wheels of business will not go smoothly round unless it may be assumed that that is in order which appears to be in order". In Minister for Natural Resources v New South Wales Aboriginal Land Council (1987) 9 NSWLR 154 at 164, McHugh JA said: "Where a public official or authority purports to exercise a power or to do an act in the course of his or its duties, a presumption arises that all conditions necessary to the exercise of that power or the doing of that act have been fulfilled. Thus a person who acts in a public office is presumed to have been validly appointed to that office: M'Gahey v Alston (1836) 2 M & W 206 at 211; 150 ER 731 at 733; R v Brewer (1942) 66 CLR 535 at 548; Hardess v Beaumont [1953] VLR 315 at 318-319. And a council which must form an opinion as to whether there will be any detriment upon the granting of a planning permit is presumed to have formed the opinion before granting the permit: Pearce v City of Coburg [1973] VR 583." 16 In McLean Bros & Rigg Ltd v Grice (1906) 4 CLR 835 at 850, Griffith CJ quoted with approval from Knox County v Ninth National Bank (1893) 147 US 91 at 97: " It is a rule of general application, that where an act is done which can be done legally only after the performance of some prior act, proof of the later carries with it a presumption of the due performance of the prior act." 17 The maxim applies is a wide variety of situations. In my opinion the fact that a responsible officer of Rockdale City Council asserted that the Council would require the above restrictions on development on the land gives rise to a strong presumption of regularity and validity in the due adoption of a policy on the issue by resolution of the Council. 18 It was for the defendant to rebut the presumption and that he failed to do. I do not regard the subsequent issue of the s 149 certificate as rebutting the presumption or requiring a different inference to be drawn. I give greater weight to the assertion of specific restrictions upon development in the letter of 10 August 2001 than I do to the general denial of adoption of any policy on flooding in the certificate. I conclude that the statement in the certificate was wrong. 19 The Conveyancing Act 1919, s 52A(2)(b) provides that a vendor is to be deemed to have included in a contract for sale of land such terms, conditions and warranties as are prescribed. The Conveyancing (Sale of Land) Regulation 2000, cl 7 prescribes the warranty set out in Pt 1 of Sch 3. Item 1(c) in the schedule is as follows: "The vendor warrants that, as at the date of the contract and except as disclosed in the contract: … (c) the section 149 certificate attached to the contract specifies the true status of the land the subject of the contract in relation to the matters set out in Schedule 4 (item 3 excepted) to the Environmental Planning and Assessment Regulation 1994." The Conveyancing (Sale of Land) Regulation 2000 commenced on 1 September 2000. The Environment Planning and Assessment Regulation 2000 commenced on 1 January 2001. Clause 286(1) repealed the Environmental Planning and Assessment Regulation 1994. The Interpretation Act 1987, s 68(3)(b) provides that in any Act or instrument a reference to an instrument that has been repealed and re-made, with or without modification, extends to the re-made instrument as in force for the time being, and a reference to a provision of the repealed instrument extends to the corresponding provision of the re-made instrument. Thus the reference to Sch 4 of the Environmental Planning and Assessment Regulation 1994 is now to be read as a reference to Sch 4 of the Environmental Planning and Assessment Regulation 2000. Item 7(a) of that schedule provides: "Whether or not the land is affected by a policy: (a) adopted by the council, or … that restricts the development of the land because of the likelihood of land slip, bushfire, flooding, tidal inundation, subsidence, acid sulphate soils or any other risk." The corresponding item 12 in Sch 4 to the Environmental Planning and Assessment Regulation 1994 was in similar, but not identical, terms. It is common ground that there is no difference between the regulations, a view which was adopted by Austin J in Mandalidis at 583. 20 Since I have concluded that the statement that no policy had been adopted by the Council with respect to flooding was wrong, it follows that there was a breach of the statutory warranty under the Conveyancing Act 1919, s 52A(2)(b). 21 Section 52A(6)(b) of the Conveyancing Act 1919 provides that regulations may make provision with respect to remedies and relief available to a purchaser for any breach of warranty deemed to be included in the contract. Conveyancing (Sale of Land) Regulation 2000, cl 19(1)(b) provides that the purchaser may rescind the contract for breach of the warranty referred to in cl 7 and Pt 1 of Sch 3. Clause 19(3) is in the following terms: "A contract or option may not be rescinded on the grounds referred to in subclause (1)(b) or (2) unless: (a) the breach constitutes a failure to disclose to the purchaser the existence of a matter affecting the land, and (b) the purchaser was unaware of the existence of the matter when the contract or option was entered into, and (c) the matter is such that the purchaser would not have entered into the contract or option had he or she been aware of its existence." Each of these matters was established. 22 The restrictions in the inferred policy adopted by the Council were matters affecting the land. The plaintiffs were not entitled to develop the land as they chose but were required to conform to height restrictions and limitations upon the use of fill necessitating suspended slab construction with footings designed to resist specified flood scour velocities. These are burdens upon the land of the type it is the legislative purpose to have disclosed. The purpose of the Act and regulation is to bring forward to the date of contract the provision of information deemed essential to an informed decision to enter the contract (Timanu at 345). Clause 19(3)(a) is satisfied. It was conceded that neither plaintiff was aware of the existence of the restriction when the contract was entered into. Clause 19(3)(b) is satisfied. The male plaintiff said that he would not have entered into the contract had he been aware of the existence of the restriction and it was conceded that the same view was held by the female plaintiff. Clause 19(3)(c) is satisfied. Indeed, counsel for the defendant did not press to the contrary of these matters before me, conceding that if I was of the view there was an adopted policy restrictive of the use of the land, the relief sought by the plaintiffs would not be opposed. 23 The Conveyancing (Sale of Land) Regulation 2000, cl 21(1) provides that a notice of rescission of a contract for the sale of land rescinds the contract as from the time the contract was made and, in that event, the deposit and any other money paid by the purchaser to the vendor under the contract is to be refunded. 24 I gave leave to the parties to provide me with additional written submissions limited to particular issues. In his written submissions, counsel for the plaintiffs sought to rely upon the Conveyancing Act 1919, s 55(2A) which empowers the Court in appropriate circumstances to order the repayment of any deposit. Counsel for the defendant in his written submissions opposed the application. In view of the attitude I take to the matter, it is unnecessary for me to consider the application of s 55(2A) and I do not do so. Nor would I have allowed the plaintiffs to re-open their case to raise this form of relief without hearing detailed oral submissions from both parties. 25 It follows from what I have said that in terms of the relief claimed in the summons, declarations should be made that the contract for sale of the land was validly rescinded and the plaintiffs are entitled to the return of the deposit of $33,300.00. The defendant should be ordered to give a written direction to the stakeholder forthwith to pay the deposit to the plaintiffs. The defendant must pay the plaintiffs' costs of the proceedings. I understand that the parties are in agreement that the original stamped transfer be provided by the defendant to the plaintiffs. 26 I direct the parties to bring in short minutes of orders reflecting these reasons. Last Modified: 06/12/2002 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.