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REIQ Journal : October 2008
34 Legal Issues Compliance with the warning statement provisions of the PAMD Act By Brett Heath, Special Counsel, Carter Newell Lawyers THE WARNING STATEMENT provisions in the Property Agents and Motor Dealers Act 2000 (Qld) have given rise to a raft of litigation relating to the proper application and interpretation of these rights. Questions which typically arise include: When do you attach the warning statement? How do you attach it? and Who can waive compliance with the PAMD Act? When to attach the warning statement In the case of Johnston v Jewry  QCA 188, it was argued that there is no contract until both parties are bound. It was also argued that if the PAMD Act had intended to refer to a proposed contract to which the warning statement must be attached, then the PAMD Act would have said so. However, Justice White of the Queensland Court of Appeal concluded that if a buyer is exposed to the warning statement before signing the contract, then the interests of consumer protection are advanced more effectively than if it were drawn to the buyer’s attention after he or she is bound (Ibid at 33). The judgment was based on a consideration of the PAMD Act before the 2005 amendments to the Act were effected. One of those amendments was to clarify, consistent with REIQ Journal October 2008 Justice White’s reasoning, that the obligation to attach a warning statement arises with respect to a “proposed relevant contract…whether or not the proposed relevant contract has been signed by the seller” (Section 366 (1) of the PAMD Act). So, the warning statement must be attached when the contract is presented to the buyer, even if the contract has not yet been signed by the seller. How to attach a warning statement Section 364 of the PAMD Act (as amended) has clarified what was previously a thorny issue. It states, consistent with the dictates of common sense, that: “attached, in relation to a warning statement… means attached in a secure way so that the warning statement… and the contract appear to be a single document”. The explanatory note to the section tidies the issue up even further, by stating: “[e]xamples of ways a warning statement… may be attached to a contract – ‘binding’, ‘stapling’.” However, this section is applicable only in circumstances when a contract is being physically handed to a buyer or sent by post.