Conveyancing

“ Generally3 Legal basis for adjustment4 ”

“ Adjustments is the exercise undertaken towards the end of a conveyancing transaction and put into effect at settlement, which is the time when the purchaser pays the balance of purchase price to the vendor and becomes entitled to the property. Ownership of property involves outgoings, such as ... ”

“ The mutual right and obligation of the parties to a contract of sale of land generally arises out of the agreement between them. In the case of a contract in the form of the contract prescribed under the Estate Agents (Contracts) Regulations 2008, which is the common form of contract in Victoria, ... ”

“ A contract that contains minimum information, such as the parties, property and price without more, is known as an open contract. Such a contract does not usually address the issue of adjustments and there may not be a right to adjust. A contract that does not include an adjustment provision will ... ”

“ General condition 15 does not specify whether the rates must be adjusted on a ‘rates paid’ or a ‘rates owing’ basis, so it is for the parties to agree. If the rates are in fact paid at settlement, adjustment will be on a ‘rates paid’ basis. The purchaser of land is required to pay municipal rates ... ”

“ Whilst a purchaser might prefer to settle on a ‘rates paid’ basis to ensure that all rates are paid at settlement, it is open to a purchaser to postpone payment of rates by paying by instalments. A purchaser is entitled to rely upon any instalment option that was open to the vendor. ”

“ If the rates are paid in full then it is no business of the purchaser how they were paid, whether by the vendor personally or with the assistance of a rebate. Therefore the whole rate is simply adjusted as paid and the appropriate allowance made in favour of the vendor. If the rates are unpaid then ... ”

“ General condition 15 states that adjustments shall be made on the ‘settlement date’, which will be specified in the particulars of sale. In a normal cash contract the settlement date will be the day that the purchaser becomes entitled to vacant possession (or receipt of rent from any lease) and ... ”

“ The vendor is liable to pay the rates, and is entitled to receive the rent, for settlement day. ”

“ Adjustments are linked to actual possession, and so if settlement is delayed adjustments should be recalculated to take effect on the day that settlement actually takes place. If the delay is caused by the vendor then the purchaser will have suffered no loss, at least in relation to rates, as the ... ”

“ A purchaser in default is obliged to pay penalty interest. Default occurs if the settlement does not occur before 4 pm on the appointed settlement day. Therefore, provided that the purchaser settles by 4 pm the next day, the purchaser has been in default for one day and is obliged to pay one day’s ... ”

“ Rates The first inquiry is to establish who is responsible for payment of the rates. If the landlord/vendor is responsible for payment, then adjustments are made in the normal way. ”

“ A purchaser who fails to adjust rates will be deemed to have waived the right to adjust. Mansez v Roberts [1991] 7 SR (WA) 222 ”

“ Adjustments made in error may be readjusted after settlement. Thus a vendor may claim an amount underpaid or a purchaser may claim an overpayment. This principle is an exception to the doctrine of merger that would otherwise mean that all contractual rights of the parties merge at settlement. See ... ”

“ The contract may relate to part of a larger property, such as one block on a plan of subdivision where the subject property is not yet separately rated. There is no hard-and-fast rule. In the absence of a special condition in the contract a proportionate rate should be calculated on the basis of ... ”

“ Whilst special rates are likely to be adjustable, a special levy imposed pursuant to the Local Government Act may be imposed by way of a notice and therefore fall for payment by one or other of the contracting parties (depending upon whether the notice was served before or after the contract) ... ”

“ Supplementary rates that relate to the period prior to settlement are recoverable by the purchaser from the vendor on the basis that they relate to the period when the vendor was entitled to possession of the land. (1988) LIJ April 313 ”

“ Annual charges are apportioned on the basis of time, not on the amount of water consumed. In re Hooper & Grass’ Contract [1949] VicLawRp 49 ”

“ Articles:Land tax - part 1Land tax - part 2 Land tax is based on capital unimproved value and is assessed on the basis of ownership on 31 December in each year. There is a threshold for general taxpayers and a lower threshold for trusts. These thresholds, and the tax rates, are available on ... ”

“ These are not ‘periodic outgoings’ and are therefore not apportionable under condition 15. They are covered by condition 21 and become the responsibility of the purchaser if struck after contract. ”

“ Those charges that are in the nature of a quarterly levy are apportionable outgoings within the meaning of condition 15 and are therefore adjustable. It is the recurring nature of the charge, be it monthly, quarterly or annually, that brings it within the definition of periodic outgoing. ”

“ These belong to the owners corporation and are not adjustable unless a special condition is included in the contract. ”

“ The Local Government Act 1989 previously allowed councils to seek payment of back rates after a property was sold if the property had been exempt from rates or enjoyed the benefit of low rates. This right is now limited to allowing councils to impose five years’ back rates on properties that were ... ”

“ Certain properties that have been exempt from land tax may be assessed for a one-off special land tax of 5% of value after a change of ownership if the use of the property is changed. If the use changes upon sale or within 60 days after sale, the previous owner is liable; if it changes more than 60 ... ”

“ Lodging documents at the land titles office by post incurs an additional ‘correspondence fee’. The conveyancing committee of the Law Institute of Victoria has ruled that these fees are not adjustable and are to be borne by the party lodging by post. The correspondence fee is abolished from 1 July ... ”

“ Although the correct method of adjustment is to deduct rates and adjust as paid, if rates are adjusted as unpaid, the purchaser is entitled to the benefit of any of the payment methods that were available to the vendor, such as instalments. Section 175 Local Government Act 1989 ”

“ Traditionally adjustment was on an annual basis but, as most outgoings now are assessed quarterly, adjustment may be conducted on a quarterly basis. Article:Adjustment of rates ”

“ Generally17 Period of possession17 ”

“ Possession of land has long been regarded as an indication of ownership, and the law has formalised this acknowledgment in the principle of adverse possession. Thus a person who has occupied the land of another may, in certain circumstances, prevent the true owner from reclaiming that land. The ... ”

“ No period of possession is specified in the Transfer of Land Act 1958 but the Registrar has traditionally relied on s 8 and s 23 of the Limitation of Actions Act to require proof of 30 years possession. In August 1993 the Registrar indicated that he was prepared to accept proof of 15 years ... ”

“ Traditionally this was done with the aid of a survey plan, but it is now possible to rely on aerial photographs as proof. Traykof v Shanco Holdings P/L [2001] VSCA 56 ”

“ The applicant may rely on possession of some third party provided that the applicant can show assignment of those possessory rights by the predecessor in title to the applicant. Although such transfer is usually evidenced by an assignment of possessory rights, a formal document is not absolutely ... ”

“ A discrepancy of 50 millimetres (which is about 2 inches) may be ignored in any dimension up to 40.3m (130ft) in length, and a discrepancy of one in five hundred may be ignored in any greater measurement. Trifling encroachments ought to be ignored. Section 272 Property Law Act 1958Black v Apps ... ”

“ By adverse possessor Although it would appear that a person claiming pursuant to adverse possession does have a caveatable interest, it is not recommended that a caveat be lodged unless the claim is ‘cast iron’, as this will put the registered owner on notice and may allow the registered owner to ... ”

“ The basic rule is that possessory rights will not be lost by an acknowledgment of the true owner’s documentary title on the basis that once a title is lost it cannot be revived.  But that rule may change if the parties are involved in negotiations and the dispute is settled by a compromise that ... ”

“ An adverse possession claim cannot be brought against councils. Section 7B Limitation of Actions Act ”

“ An adverse possessor is denying the person with the legal right to possession the enjoyment of the land. If the property is leased, it is the tenant who has the right to possession and it is the tenant’s interest that is being denied. If the adverse possessor remains in possession for the statutory ... ”

“ Adverse possession is essentially a defence to an action for trespass. An owner might trespass on neighbouring land by constructing footings over the title boundary. Clifton Developments (Vic) P/L v Owners Corporation 1 Plan No. PS510766U [2012] VCC 695 ”

“ Magistrates’ courts have jurisdiction in relation to adverse possession associated with fencing disputes: s 30E Fences Act 1968. ”

“ Generally23 Mutual obligations24 ”

“ Parties to a contract for the sale of land have rights and obligations. If one party breaches the contract, rights may arise in favour of the other party. This chapter is concerned with breaches of a minor nature that do not lead to termination of the contract but rather to a claim for compensation ... ”

“ The obligations of the vendor and purchaser are concurrent and mutual. The vendor is obliged to make title and the purchaser is obliged to pay the balance of purchase money, as part of a simultaneous transaction. Both parties must be ready, willing and able to complete their respective obligations ... ”

“ General condition 25 requires the payment of compensation and interest in the case of breach of contract. A party who suffers loss as a result of a breach will want to recover that loss as a part of the settlement. However the party who committed the breach will generally want settlement to proceed ... ”

“ It would be most unusual for the vendor to owe any money to the purchaser and as interest is only payable ‘upon any money overdue’, a purchaser is not likely to be entitled to claim interest. ”

“ The vendor’s primary obligation is to deliver possession of the property to the purchaser on settlement day. If the vendor breaches this obligation and is unable to settle, the purchaser may suffer loss. General condition 25 entitles the purchaser to compensation for reasonably foreseeable loss, ... ”

“ Article:Breach of contract - Penalty interest The vendor may claim interest at the rate prescribed in general condition 26 (2% higher than the penalty rate) on any amount owing under the contract. This would include interest on an unpaid deposit. If the rate changes whilst the breach continues then ... ”

“ In addition to penalty interest in accordance with general condition 25, the vendor may claim reasonably foreseeable losses, but the dispute panels have taken a limited view of what is reasonably foreseeable and have refused vendor’s claims for: additional loan fee; ”

“ There is no doubt that additional legal costs are a reasonably foreseeable consequence of default. Either party in breach will be obliged to pay the reasonable legal costs of the innocent party occasioned by the breach, calculated according to item remuneration. As those costs are capable of exact ... ”

“ General condition 6 requires the purchaser to deliver the transfer at least 10 days before settlement. Failure to comply is a breach of contract so, if settlement is delayed as a result, the vendor would be entitled to claim interest and reasonably foreseeable losses pursuant to general condition ... ”

“ The vendor is in breach if the vendor cannot produce the duplicate title at settlement. The purchaser may claim losses under general condition 25 and/or rescind the contract under general condition 28. If the purchaser does not rescind the contract and awaits replacement of the title, the question ... ”

“ Traditionally the availability of the original title for searching has been regarded as a problem for the purchaser and did not constitute a breach of contract by the vendor. The purchaser was obliged to settle or risk rescission. If a rescission notice was served, the registrar would normally ... ”

“ Some settlements occur when the duplicate title is in the titles office for other purposes. General condition 10(b)(i) requires the vendor to ‘do all things necessary to enable the purchaser to become the registered proprietor of the land’ thus recognising that the vendor may not have the ability ... ”

“ Whilst general condition 16.1 makes time of the essence, it seems to be as to the day rather than as to the hour. If the parties agree to settle at a particular time on settlement day and one party fails to settle at that time, settlement may still be conducted at a later time that day. Aussie ... ”

“ This will just be a matter of counting the number of days from when settlement should have occurred until the day that it did in fact occur. As general condition 10.3 requires settlement by 4.00pm on the settlement day, the breach occurs at that time and the first day after settlement is the first ... ”

“ A party in breach of contract may quickly cure that breach and seek to settle to minimise liability for compensation. But practicalities often mean that a party who was able to settle on the due date is not able to settle instantly the breach is cured. For instance, if the breach is caused by the ... ”

“ A purchaser in default is obliged to pay penalty interest. Default occurs if the settlement does not occur before 4 pm on the appointed settlement day. Therefore, provided that the purchaser settles by 4 pm the next day, the purchaser has been in default for one day and is obliged to pay one day’s ... ”

“ If one party breaches the contract, the other party has a right to damages under general condition 25. But, if the first party cures the breach and it is then discovered that the other party in fact was not in a position to settle on the settlement date, the party who was in breach may seek to ... ”

“ Disputes often arise when the vendor claims that the purchaser is in breach for not settling, but the purchaser claims that the vendor is in breach by failing to make title. The vendor’s contractual obligation as set out in general condition 10(1)(b)(i) is to ‘do all things necessary to enable the ... ”

“ Generally38 Common law liability to owner38 ”

“ At common law a builder who constructs a building will have contractual and tortious duties. The contractual duties will be owed to a party with whom the builder enters into a contract in relation to the building (the owner of the land) and tortious duties will be owed to those who are reasonably ... ”

“ A builder who builds a building for an owner will be liable in contract and negligence to that owner. A builder who builds a building and then sells that building to an owner will be liable in contract and negligence to that owner. Limit of liability ”

“ There will be no contractual link between the builder and a subsequent owner, so liability rests in tort and is based on foreseeability. The High Court has held that a builder does owe a duty to a subsequent owner to exercise reasonable care in the construction of the property. Bryan v Maloney ... ”

“ The liability of builders for their work has been the subject of attention by the legislature for many years. It is an area high on the list of consumer protection proponents, particularly in relation to domestic building contracts. A regime of registration of building practitioners was established ... ”

“ The original schemes did not extend to multistorey developments built over a number of levels, with apartments built over other apartments. The Domestic Building Contracts Act 1995 did require builders of multistorey developments to have warranty insurance, although developments built pursuant to a ... ”

“ Condition reports may be obtained from BSS - (03) 9377 3000Insurance may be obtained from BIS - (03) 8791 7691 ”

“ Generally44 Caveatable interest45 ”

“ The Torrens system of land ownership is based on registration of interests on a certificate of title that is absolute proof of ownership. Some interests in land are not capable of being registered and the caveat system creates a method by which such interests may be endorsed on title that, while ... ”

“ Section 89 of the Transfer of Land Act 1958 allows ‘any person claiming any estate or interest in land’ to lodge a caveat on the title. The duplicate title need not be produced. The following estates or interests justify a caveat: an estate in fee simple (equitable owner); ”

“ Having established the nature of the estate or interest claimed, the caveator must set out the grounds or basis of the claim. As s 53 of the Property Law Act 1958 requires all interests in land to be created or disposed of in writing, normally such a claim will be based on a document. Examples of ... ”

“ The existence of a debt is never, of itself, sufficient grounds to justify a caveat. The debt must be supported by a document in writing evidencing the debt and charging the land with liability to pay the debt. A document that evidences the debt, but does not charge the land, is not a good basis ... ”

“ Section 53(2) Property Law Act 1958 acknowledges that an interest in land may be created by a trust relationship that is not evidenced in writing. This is the common basis for a claim in a matrimonial or de facto situation where the property is registered in the name of only one of the parties. The ... ”

“ A beneficiary of a trust does not have a legal interest in the land, but rather has an equitable interest. This is sufficient grounds for lodging a caveat claiming an interest in fee simple on the basis that the registered proprietor holds the property on trust for the caveator. Hohol v Hohol ... ”

“ A guarantee in writing that includes a charging clause will support a caveat. The charged property may even include ‘after-acquired’ property, being property acquired by the guarantor after signing the guarantee, subject to satisfactory wording of the guarantee and charging clause. Doherty & Chiodo ... ”

“ An agreement that charges the chargor’s land with performance of an obligation, including the payment of money, will support a caveat. Dominion Lifestyle Tower Apartments P/L v Global Capital Corporation P/L [2004] VSC 307See however Sigma Constructions (Vic) P/L v Marvell Investments P/L [2004] ... ”

“ The titles office takes the view that the owner’s title is adequately protected by registration as registered proprietor, but will accept a caveat by the registered proprietor in two cases: where the owner does not have control of the duplicate title, for instance if the duplicate title has been ... ”

“ Most standard building contracts include a condition charging the property with payment of any amount due under the contract, and so a builder may lodge a caveat claiming an interest in fee simple as chargee pursuant to an agreement in writing. However, a mere right to possession of the site for ... ”

“ The Registrar has a duty to prevent improper dealings and has the power to lodge a caveat - known as a Queen’s caveat, if improper dealings are suspected. This power exists to protect the Register and also to protect persons who may suffer from a legal disability, such as infancy or unsound mind. ... ”

“ By selling a property an estate agent may be entitled to be paid a sum of money by the owner of that property. This is no more than a debt and of itself does not justify a caveat; however, some agents may include in their engagement or appointment authority a clause by which the owner charges the ... ”

“ Article:Caveats - Tenant's caveats ”

“ Even though the freehold owner has no direct relationship with the mortgagee of the lease, a caveatable interest arises through the lease. However an option to renew may not be protected by the caveat unless specified in the caveat. Leros P/L v Terara P/L [1992] HCA 22 ”

“ Whilst the burden of a covenant will normally be shown on the title to the servient land, thus securing the rights of the covenantee, a covenant is an interest in land and, if necessary, will justify the lodging of a caveat. Renwarl P/L v Birky [1999] VSC 148 ”

“ Although it may be difficult to exactly identify the land (and some subdividers attempt to discourage individual purchasers from lodging caveats), a purchaser does have a caveatable interest. ”

“ If only one of multiple proprietors of land had created the right in the caveator to lodge a caveat then the caveat must be limited to claiming a right against the interest of that joint proprietor only. Ren v Shi [2012] VSC 271 ”

“ A caveat does not give the caveator an estate or interest in land; it merely gives the caveator claiming an estate or interest the right to notice from the registrar of the lodgement of any dealing affecting the land. Thirty days after notice is given, the caveat automatically lapses to permit ... ”

“ A caveat that has lapsed or been removed shall not be renewed by or on behalf of the same person in respect of the same interest. s 91(4) Transfer of Land Act 1958 ”

“ A T3 transfer by a mortgagee defeats a subsequent ‘mortgage charge or encumbrance’ (s 77 of the Transfer of Land Act) but this phrase does not include a caveat, which is merely an instrument that is recorded on title. Section 91(2A) & (2B) provide that a caveat lodged pursuant to a ‘document ... ”

“ Section 89 authorises both a caveat and a withdrawal of caveat. A caveat may be signed by the caveator, or a solicitor acting for the caveator. A withdrawal may be signed by the caveator, or a solicitor acting for the caveator. If the caveat was not signed by the caveator, a withdrawal signed by ... ”

“ Section 89A of the Transfer of Land Act 1958 provides a mechanism for the removal of a caveat if the caveator refuses to withdraw or cannot be located. An application is made to the registrar and is supported by a solicitor’s certificate to the effect that the caveator no longer has the interest ... ”

“ If the caveator will not provide a withdrawal, s 91(2A) does not apply and s 89A is not an option, then s 90(3) allows ‘[a]ny person who is adversely affected by’ a caveat to apply to the Supreme Court for removal. ”

“ A caveat lodged by a purchaser pursuant to a contract of sale of real estate becomes ineffective and liable for removal if the contract pursuant to which it was lodged is rescinded by either party. The caveat claims an interest pursuant to the contract and the contract is no longer in existence, so ... ”

“ Section 118 of the Transfer of Land Act 1958 states that a person lodging a caveat without reasonable cause shall be liable for any loss or damage that follows. Bolton v Excell (1993) ANZ ConvR 562Farvet P/L v Frost [1997] 2 Qd R 39Edmonds & Ors v Donovan & Ors; Disctronics Ltd v Kingston Links ... ”

“ Failure to lodge a caveat will generally amount to postponing conduct and cause the earlier, unprotected interest to be postponed in favour of a later interest. Osmanoski v Rose [1974] VicRp 64 ”

“ A caveat is not as powerful as a mortgage. A caveat does not give any right to sell the subject property in the case of default. A caveat entitles the lodging party to notice of any dealings; it does not create an interest in land. A subsequent dealing will generate a notice to the caveator but 30 ... ”

“ Generally60 Chattels60 ”

“ When a property is sold or leased it will often consist of land and buildings. Those buildings are generally known as improvements and encompass all things attached to the land and the buildings. If the property is sold the purchaser expects to receive all improvements and the ‘doctrine of ... ”

“ ‘movable, tangible articles of property’ - Osborn’s Law Dictionary ‘movable goods’ - CCH Macquarie Law Dictionary ”

“ 'any chattel which has been affixed to land or a building so as to become part of it’ Osborn’s Law Dictionary 'a chattel so annexed to land as to be considered part of it’ CCH Macquarie Law Dictionary ”

“ Solar panels are now frequently included in a sale and require special consideration. Often a government buyback arrangement called a feed-in tariff exists. It is necessary to establish whether such an arrangement is assignable to the purchaser and if not what arrangement will apply. ”

“ There are basically two tests to be applied: the degree of annexation; and ”

“ Purchaser against vendor The most common dispute is between a vendor and a purchaser in the context of a sale of real estate. The contract includes the land and all improvements, which includes all fixtures that form part of the property. ”

“ Until the early 1980s it was common to reduce the price shown on a transfer of land by the nominal amount of the chattels on the basis that this amount did not relate to the consideration on the sale of real estate. However the legislation was changed to require the whole contract consideration, ... ”

“ Generally68 Form of contract68 ”

“ The contract between a vendor and purchaser is the primary document setting out the obligations of the parties. It is an executory document, meaning that it establishes the rights and obligations of the parties to be performed over a period of time, culminating with payment by the purchaser of the ... ”

“ Articles:Contract - Changing the contract by special conditionContract - Contract of sale tweakedContract - Electronic conveyancing special conditionContract - New contractContract - New special conditions for contract of saleContract - Happy Anniversary Estate agents are limited in the type of ... ”

“ Section 48 Transfer of Land Act 1958 previously provided that any contract may incorporate the terms and conditions set out in Table A of the Act. Previous forms of contract have incorporated Table A, but the 2008 prescribed contract does not incorporate Table A. The 2008 contract has adopted most ... ”

“ Many conveyancing practitioners used one of the various proprietary software programs to generate documents. These programs all have their own form of contract, but all of those contracts follow the wording, if not the layout, of the prescribed contract. Nobody owns the copyright in the words, as ... ”

“ Article:Contract - Trust transactions All contracts must be supported by consideration. Mutual promises are adequate consideration. ”

“ As well as satisfying all of the formal requirements, the parties must have intended to be bound by the contract. It may be possible that, while all the formal elements exist, the parties will not be bound to proceed because one or both did not intend that contractual relations should arise. This ... ”

“ A contract will not be binding until one party has made an offer, the other party has accepted that offer, and the acceptance of the offer has been communicated to the party that made the offer. This will generally mean that even if there has been an offer and that offer has been accepted by the ... ”

“ Article:Contract - Electronic signature ”

“ The courts are reluctant to presume that parties intended to enter into contractual relations. The best evidence to support the claim that a contract has come into existence is a document signed by both parties, although even then the court may decide that the relevant intention was absent. If a ... ”

“ Section 126 Instruments Act 1958 requires a signed document. The equitable principle of ‘part performance’ allows a party who has partly performed a contract that is unenforceable due to lack of compliance with s 126 to enforce the contract. However, the principle is extremely limited in relation ... ”

“ The requirement in s 126 of the Instruments Act 1958 of a signature would mean that the absence of a signature by one joint vendor would preclude enforcement of the contract against that vendor. Although it might be argued that the contract can be enforced against the vendor who has signed, it is ... ”

“ If one joint purchaser has signed and one has not, the contract could not be enforced against the purchaser who has not signed. Whether it could be enforced against the purchaser who has signed will depend upon intention. It is likely that a court would hold that the purchaser who has signed only ... ”

“ Auction contracts are no different to any other type of contract from this point of view, and until the contract is signed it is not enforceable. This means that a purchaser can walk away at any time until he/she has signed the contract and that the vendor is not obliged to proceed until the vendor ... ”

“ Any variation to a contract must comply with the same formality rules as for creation of a contract – in writing and signed by the parties. Variations made by representatives (either oral or in writing) will not be binding unless the representative has written authority to bind. This includes a ... ”

“ Documents that are faxed are made when and where the message is received and are enforceable in exactly the same way as original documents. Molodysky v Vema Australia P/L (1989) NSWConvR 55-446IVI P/L v Baycrown P/L [2004] QSC 430 (Email communications also considered)Hickory Developments P/L v ... ”

“ Article:Contract - Nomination A contract may include a right to nominate (eg. general condition 18 of the 2008 prescribed contract). However the common law has always recognised a right to nominate independent of any contractual right. ”

“ Article:Contract - Rights of nominees The vendor can enforce the contract against the original purchaser and any notice of default must be served on that purchaser. ”

“ A purchaser remains liable under a nominated contract, the nominee merely being permitted to exercise the purchaser’s rights. An assigned contract results in the nominee standing in the place of the purchaser. A novation is where the original contract is cancelled and the new purchaser enters into ... ”

“ A vendor of a contract that has a long settlement period, such as a terms contract or an off-the-plan sale, might be inclined to ‘sell’ the property during the course of the contract. In the past this was achieved by an assignment to a third party who thereby assumed the vendor’s rights and ... ”

“ A purchaser pursuant to a long term contract or an off-the-plan contract may see an opportunity to realise an increase in the value of the property that has occurred during the contract period without the need to complete the contract by ‘selling’ the contract to a subsequent purchaser. The first ... ”

“ There is conflicting authority as to whether only the purchaser may rely on a condition to terminate a contract or whether the vendor is also able to use non-fulfilment of the condition as grounds to avoid. The crucial issue is whether both parties can be said to gain a benefit from the condition, ... ”

“ If the special condition is for the benefit of one party only, that party may waive the benefit. In such a case the contract would proceed as if the condition had been satisfied. Sandra Investments P/L v Booth [1983] HCA 46Peatties Road v Hanson and Anor [2004] NSWSC 831 ”

“ A condition giving 45 days to obtain Foreign Investment Review Board approval is for the benefit of both parties and either party may rely on non-approval within the time limit to terminate the contract. Re Wickham Developments (Australia) P/L v Feros (1994) ANZ ConvR 347 ”

“ Articles:Contract - Finance conditionsContract - Finance conditions 2Contract - Finance conditions 3 ”

“ There is an implied obligation that the parties will take all reasonable steps to comply with a special condition. A purchaser who fails to take steps to satisfy a condition will not be entitled to rely on non-fulfilment of the condition as a basis for avoidance of the contract and a vendor in such ... ”

“ Failure to satisfy a minor requirement of a special condition, or the imposition of some minor encumbrance, will not entitle a party to avoid the contract. Bosbury P/L v Comgrigg P/L (1992) 57 SASR 241 ”

“ If a contract requires the consent or licence of a third party, the contract will be ‘null and void’ if that consent is not obtained. The vendor is responsible for obtaining such consent. General condition 5 of the 2008 prescribed contract of sale ”

“ Articles:Terms contractsTerms contracts 2Terms contracts 3 How created ”

“ A purchaser who signs a contract and pays a deposit acquires a lien over the land that is the subject of the contract for the amount of the deposit. This lien arises upon exchange of contracts, even if the contract is conditional on satisfaction of a special condition. Chattey and Another v ... ”

“ Must an option be in writing? Traditionally an option has been regarded as a document that creates an interest in land. As such it will not be enforceable unless it is in writing and signed. ”

“ A right of first refusal or right of pre-emption in favour of a lessee may be included in a lease. Such a right is regarded as different to an option to purchase. It is a purely contractual right, giving the lessee no additional interest in the land. Attorney-General v Methodist Church of New ... ”

“ Generally94 Qualifications94 ”

“ The basic principle of contract law is that, once a contract has been entered into, it is binding on the parties. In relation to the sale of land there is the additional requirement that the contract must be in writing and signed by the parties, but once that formality has been achieved the ... ”

“ The qualification for cooling off for residential property is within three clear business days of signing. s 31 Sale of Land Act 1962 ”

“ The exclusions to cooling off are: at auction or three clear business days before or after an auction; ”

“ A purchaser who exercises the right to cool off is entitled to a refund of the deposit less the greater of $100 or 0.2% of the purchase price. $100 is 0.2% of $50,000, so for all sales over $50,000 the penalty will be 0.2%. The penalty is payable even if the agent does not hold any deposit. ”

“ This means that the day of signing is not counted and the right may be exercised right up until the end of the third business day, commencing on the first business day after signing. A business day is a day other than a weekend or public holiday. If a contract is signed on a Saturday, the first day ... ”

“ It is the signing of the contract by the purchaser that is the trigger for time to commence to run, even if the vendor has not signed and the contract is not at that stage binding. Once the purchaser has signed, the three-day period commences, beginning on the next business day after the purchaser ... ”

“ The notice must be in writing. Casey, Graham Lawrence & Anor v Ryan, Vikka Lisa & Ors [2009] VCC 1475 ”

“ The Act prohibits contracting out and any condition in a contract that seeks to take away the right, with consent or otherwise, is void. The contract must also include a notice setting out the cooling off rights and a purchaser may rescind any contract that fails to do so. s 31(6) and (8) Sale of ... ”

“ The vendor may be estopped from denying the existence of a right to cool off if the contract includes a notice that suggests that the right applies but in fact it does not. This will not arise in the situation where the right does not apply because of one of the statutory exceptions, as the notice ... ”

“ Generally98 Creation of joint tenancy99 ”

“ If more than one person owns land then those owners are co-owners. There are two forms of co-ownership: joint tenancy; and ”

“ The legal test is to establish that the four unities exist. These are the unities of possession, interest, time, and title. Most conventional transactions will satisfy these requirements and the common law presumes that a joint tenancy exists unless a contrary intention exists. This presumption is ... ”

“ If words of severance are used in the creation of the interest then it must be a tenancy in common, with the co-owners owning the property in the shares specified by the words of severance - for example, equally, one-third shares, quarters. Even if words of severance are not used at the time of ... ”

“ The principal difference between a joint tenancy and a tenancy in common is the right of survivorship. As joint tenants universally own the whole of the property, the death of one of those joint tenants means that the other surviving joint tenant(s) automatically own(s) the whole of the property ... ”

“ Because of the consequences of the right of survivorship, the choice between joint or in common can be very significant. A solicitor who fails to advise a client of the choices is negligent. Taylor & Harman v Warners noted in (1988) PLB Dec 12 ”

“ A joint tenancy will be created if the four unities are present, no words of severance were used in creation, and there was no contrary intention. However, the joint tenancy may still be converted to a tenancy in common by various actions of the parties after creation. Such actions are described as ... ”

“ Co-owners may agree to terminate their co-ownership by selling the property, but if agreement cannot be reached they may seek the assistance of the court. Such proceedings are known as partition proceedings. Jurisdiction is now primarily vested in the Victorian Civil and Administrative Tribunal, ... ”

“ Co-owners who are legally married to each other will be subject to the Family Law Act 1975 and the Family Court may make orders in relation to co-owned property which the court deems appropriate. This now applies to de facto relationships. Generally see Family Law Act 1975. See also Relationships ... ”

“ There is no problem with a corporation being one of two or more tenants in common, but the right of survivorship does not sit too comfortably with the permanent nature of a corporation. However, the Property Law Act 1958 specifically recognises the ability of a corporation to be a joint tenant and ... ”

“ A joint tenant is entitled to mortgage or sell that joint tenant’s interest in the property. Katsaitis v Commonwealth Bank of Australia (1987) 5 BPR 12,049Lyons v Lyons [1967] VicRp 19 ”

“ One tenant in common can certainly mortgage that tenant in common’s interest in the land but one tenant in common cannot unilaterally mortgage the interest of another tenant in common in the property. Caldwell v Bridge Wholesale Acceptance Corporation (Aust) Ltd NSW Sup Crt 15/7/93Rossfreight ... ”

“ It is possible for tenants in common to apply for the issue of separate titles for their shares in the land. The request is included in the 'transferee' panel and an extra fee paid. s 98D Transfer of Land Act 1958 ”

“ No stamp duty is payable on mutual transfers between co-owners where each co-owner receives property equal in value to the co-owner’s interest in the property prior to the transfer. If co-owners own two equally valued properties they may transfer one property to each of them without stamp duty. ... ”

“ Generally107 Execution of documents108 ”

“ The law attempts to treat corporations the same as individuals, but the fact that corporations can only make decisions and perform actions through individuals does mean that there are some differences. For instance, a corporation is unable to make a statutory declaration as such a document requires ... ”

“ Execution is the word used to describe the formal process of signing a document as a deed. A deed is binding whether consideration exists or not and is executed by the legal person (individual or corporation) affixing its seal to the document. An individual does this by personally affixing a seal, ... ”

“ A person dealing with a corporation is entitled to presume that the internal affairs of the corporation are in order. The appointment of an officer of the corporation is presumed to have been made in accordance with the constitution of the corporation. A document that purports to be signed by an ... ”

“ The Corporations Act 2001 specifically authorises an individual, acting with the express (written) or implied authority of the corporation, to enter into contracts on behalf of the corporation. This power may be exercised without the use of the common seal. s 126 Corporations Act 2001Yarra Valley ... ”

“ Although the previous corporations Act specifically authorised a corporation to appoint an agent in writing under the seal of the corporation, there is no such specific power in the current Act. However, a corporation has all the powers of a legal person and may therefore appoint an attorney, by ... ”

“ A person dealing with a corporation is entitled to presume that a person held out by the corporation to be an officer or agent of the corporation has the power to perform duties customarily performed by such an officer. s 128 Corporations Act 2001ANZ Banking Group Ltd v Australian Glass & Mirrors ... ”

“ Most constitutions will empower directors to conduct the affairs of the corporation. This is usually done by way of directors’ meetings, either formal or informal, and so it is customary for directors to sign documents on behalf of the corporation at, or as a consequence of, a meeting of directors. ... ”

“ A contract for the sale of land must be in writing and signed by the party to be charged or by a person authorised in writing to sign on behalf of that party. s 126 Instruments Act 1958 ”

“ A transfer does not have to be sealed; it only has to be signed. Although the forms specified by the land titles office do require that signatures be witnessed. By s 40(2) of the Transfer of Land Act 1958 all registered instruments are deemed to be deeds. It would therefore appear that a company ... ”

“ Although most constitutions permit the appointment of an alternate director, not many permit the appointment of an attorney by a director. A general power of attorney by a director does not enable the attorney to exercise the donor’s directorial duties. The donor is not empowered to make the ... ”

“ The Property Law Act 1958 does have some specific sections that deal with conveyancing aspects of execution of documents, but they are of fairly limited application. s 74 Property Law Act 1958 ”

“ Joint proprietors enjoy the right of survivorship, meaning that the surviving proprietor succeeds to the interest in the property held by a deceased joint proprietor. A corporation can be a joint proprietor, notwithstanding that a corporation can never die. s 28 Property Law Act 1958 ”

“ Stamp duty on the sale of land is much higher than stamp duty on the sale of shares. If a corporation owns real estate as its only asset, then the sale of the corporation would achieve the same outcome as the sale of the real estate but would attract less stamp duty. The downside of this is that ... ”

“ All legal entities are capable of creating interests in, or charging their assets in favour of, third parties. A purchaser of a charged property will take subject to the rights of the chargee, if the purchaser has notice of the charge. However the principle of indefeasibility will allow the ... ”

“ Given that a purchaser will be subject to the interest of a prior chargee until registration, the purchaser may insist upon the vendor satisfying the purchaser that the charge has been withdrawn as part of the vendor’s obligation to make title. Naval and Military Club v Southraw P/L & Anor [2008] ... ”

“ The purpose of written confirmation that the land is no longer subject to the charge is to provide the purchaser with a defence should a claim be made by the chargee after settlement and before registration. After registration it is unnecessary, as indefeasibility will protect the purchaser. Prior ... ”

“ The chargee may also be a mortgagee of the property and will provide a discharge of mortgage at settlement. General condition 7 of the 2008 prescribed contract provides that the vendor’s contractual obligation to produce a withdrawal of charge does not apply if the chargee is also a mortgagee of ... ”

“ ASIC has the power to deregister a corporation that has not complied with the Corporation Act 2001. This generally occurs when a corporation fails to lodge annual returns. The corporation ceases to be a legal person and all of the assets of the deregistered corporation vest in ASIC. A deregistered ... ”

“ Although ASIC has power to act on behalf of a deregistered corporation, it will only use that power to perform administrative functions and would not complete a contract, which requires the exercise of discretion. s 601AE Corporations Act 2001 ”

“ ASIC has discretion to reinstate if the corporation has been deregistered as the result of administrative procedures that can be rectified; otherwise an application to the Supreme Court is necessary. s 601AH Corporations Act 2001ASIC Regulatory Guide 83Pilarinos v Australian Security & Investments ... ”

“ A certificate of reinstatement from ASIC or an authenticated copy of the court order would prove reinstatement. ”

“ It has been held that a registered instrument executed on behalf of a deregistered company does not qualify as indefeasible as the company did not exist at the time of execution. ANZ Banking Group Ltd v Barns (1994) 13 ACSR 592 ”

“ Generally118 Proprietary right118 ”

“ Covenants are the first example of town planning. They are used to limit the way property owners can utilise their land. The word ‘covenant’ has a wider meaning and basically means ‘promise’, but in the context of conveyancing it is used to describe restrictions that are placed over land use. In a ... ”

“ A covenant is essentially contractual in nature, with one landowner agreeing with another landowner to do or not to do some act. As a contract it is enforceable between the original contracting parties; however, as it is a contract that relates to land it may also create an interest in the land. In ... ”

“ An easement is a true proprietary right that has been recognised for centuries. An easement gives the owner of the land that benefits from the easement the positive right to go outside the boundaries of their land and enjoy the benefit of the land of another - for instance, the right to use a ... ”

“ As a covenant is essentially a contract between two people it can be positive or negative. However, the law will not enforce the burdens of a positive covenant on a third party so positive covenants have little practical importance. In fact, the Transfer of Land Act only recognises restrictive ... ”

“ To expand beyond mere contractual enforceability between the original parties and to be binding on successors in title, the covenant was said to have to ‘touch and concern the land’. This is to be contrasted with a mere personal benefit in favour of the covenantee which, while enforceable between ... ”

“ There must be both dominant and servient tenements and they must be in different ownership, as mutuality of ownership will result in a merger of the covenantor’s obligations. The lands must be proximate to each other. Mitcham City Council v Clothier [1994] SASC 5102Baramon Sales P/L v Goodman ... ”

“ A covenant may be created in a stand-alone document or as part of another transaction between the parties - for instance, as part of a transfer from the covenantee to the covenantor. If the covenant is created as part of a stand-alone transaction, an application to record covenant 88(1)TLA form is ... ”

“ The court will look at the substance rather than the form of the words and will give words their normal meaning, rather than regarding them as terms of art. Precision in setting out the extent of the restriction is required. Byrns v Davie [1991] VicRp 9327 Hopetoun Rd P/L v Sanctuary International ... ”

“ A covenant is for the benefit of the owner for the time being of the dominant land and may be enforced by that owner against the owner for the time being of the servient land. Burke v Yurilla SA P/L; Attorney General (SA) (intervening) [1991] SASR 382Forestview Nominees P/L v Perpetual Trustees WA ... ”

“ Traditionally municipal councils have not taken too much notice of covenants when considering planning applications that may be in breach of a covenant. However councils are now obliged to consider covenants as part of the planning process and must not issue permits which would result in a breach ... ”

“ Articles:Covenant - Removal of covenantsCovenant - Removal of covenants 2 By agreement ”

“ Crown grants often included restrictions on the use of land sold by the Crown. One such restriction meant that the land was liable to be reclaimed for the purposes of construction of a railway. All such conditions and restrictions have been removed by statute and are no longer of any effect. ”

“ Generally125 Defect in title126 ”

“ All properties have defects. Vacant land may have filling or contaminated soil or be liable to flooding. Buildings on land may be in breach of building regulations or planning laws, badly constructed or simply showing the effects of time. Such defects relate to the quality of the land or the ... ”

“ A title that is subject to an easement has a title defect, but if that easement is registered on the title and therefore apparent, the purchaser will have no grounds for complaint. Likewise, occupation of adjoining land outside the title boundary is capable of discovery by inspection. Such defects ... ”

“ Although a purchaser may avoid a contract on the basis of a latent title defect, the basic rule that still applies to the sale of real estate in Victoria is ‘buyer beware’ (caveat emptor) and any defect other than a latent title defect will not benefit the purchaser. Once a purchaser has signed an ... ”

“ Illegal works are simply one variety of defects in quality and are treated the same as any other such defect. The purchaser must conduct an inspection of the property before signing the contract, and once the contract is signed the purchaser accepts the condition of the property. The fact that ... ”

“ Articles:Defects - Occupancy and insurance certificatesDefects - Essential safety measures The existence of substantial cracks in the brickwork (Kadissi v Jankovic [1987] VicRp 20). ”

“ General condition 21 of the 2008 prescribed contract provides that notices served after the date of the contract become the responsibility of the purchaser. It will fall to the purchaser to comply with the notice, either before or after settlement, at the purchaser’s expense. ”

“ Section 32E Sale of Land Act requires the vendor to give particulars of any building approval obtained in the past seven years. It does not require disclosure of works done without a permit or even in contravention of a permit. The seven-year time limit gives a clue to the objective of this ... ”

“ A defect in quality will not assist the purchaser on the basis of caveat emptor (buyer beware). But there are exceptions to that principle which, if satisfied, will allow the purchaser to rely on the quality defect to avoid the contract or claim damages. These exceptions are: Agreement ”

“ The basic principle of caveat emptor is that a vendor is not responsible for quality defects, even if those defects are known to the vendor or indeed were caused by the vendor. It follows from this that a vendor is under no obligation or duty to inform the purchaser of quality defects; therefore, ... ”

“ Misrepresentation by silence has been recognised under the Competition and Consumer Act (formerly the Trade Practices Act 1974) and Australian Consumer Law and Fair Trading Act 2012 as misleading and deceptive conduct. Provided that the Acts apply, they give a purchaser who can prove ... ”

“ A vendor will be vicariously responsible for a misrepresentation made by the agent. Pricom P/L v Sgarioto (1994) V ConvR 54-508 ”

“ The law requires us all to do, and not do, lots of things. Specifically in relation to ownership of real estate, various statutory requirements impose duties on home owners and those engaged in the business of building homes.  Indeed, failure to comply with those statutory obligations can result in ... ”

“ Generally134 Deposit or penalty134 ”

“ The deposit is a payment made by the purchaser at the commencement of a transaction to indicate that the purchaser proposes to complete the transaction. In a conveyancing transaction the deposit is usually paid at the time that the contract is signed by the purchaser and is usually 10% of the ... ”

“ A condition that a party to a contract shall suffer a penalty for breach of contract will not be enforced. For instance, where a contract provides that a party must pay $1 million if the party breaches the contract, the condition will not be enforced. A condition that the purchaser will forfeit the ... ”

“ The deposit is usually paid when the purchaser signs the contract, but the parties may agree to other arrangements. A deposit of 10% payable in two instalments probably only constitutes one payment within the meaning of s 29A of the Sale of Land Act 1962. The deposit is ‘an earnest...to bind the ... ”

“ Putting aside the rare situation of the deposit going into a joint vendor/purchaser account, all deposits must be held by the agent or solicitor as stakeholder. This means that the stakeholder holds the deposit on behalf of both parties, not just one of them, and the agreement of both parties is ... ”

“ Articles:Deposit - Deposit releaseDeposit - Deposit release - a solution? The primary obligation of the stakeholder is to hold the deposit until settlement. After settlement the deposit, less any amount owed to the agent and solicitor, may be paid to the vendor. ”

“ If there is a mortgage affecting the land sold, the information required to release the deposit is to be given in the form prescribed, known as a deposit release statement. Whilst this information must be in writing, the vendor is not required to sign the form. s 27(3)(a) and Schedule 1 Sale of ... ”

“ The deposit may be released only if: there is no condition enuring for the benefit of the purchaser (see above); and ”

“ If the deposit is not released via s 27, it is released by settlement. However, a small number of transactions do not proceed to settlement as one of the parties rescinds the contract as a result of a default by the other party. If the vendor rescinds, the vendor is entitled to the deposit. If ... ”

“ It is possible for the parties to agree that the deposit will be non-refundable. Gribbon v Lutton [2001] EWCA Civ 1956 ”

“ The court has a discretionary power to relieve a defaulting purchaser from forfeiture. A purchaser will have to establish exceptional circumstances to gain relief. s 49 Property Law Act 1958Poort v Development Underwriting (Vic) P/L (No 2) [1977] VicRp 52Burke & Riversdale Road P/L v Gemini ... ”

“ A deposit bond is a guarantee by an insurer that a purchaser will pay the deposit when it falls due, at settlement or upon rescission. The purchaser pays an insurance premium and a certificate of guarantee is given to the vendor or agent. No money is paid until settlement, so the vendor is unable ... ”

“ Generally142 Risk142 ”

“ A contract for the sale of land is an executory contract, meaning that the parties will carry the contract into effect some period of time after the contract is made. This may be compared with a contract for the sale of an ice-cream, which is completed at the time that the agreement is made. This ... ”

“ The common law held that risk passed upon sale and that, while the vendor was in the position of a trustee for the purchaser during the contract period, the risk of any deterioration to the property during that period fell upon the purchaser. The prescribed contract reverses that common law ... ”

“ General condition 24 requires the vendor to ‘deliver the property to the purchaser at settlement in the same condition it was in on the day of sale’. If the property was in a poor state as at the date of the sale, the vendor does not have any obligation to improve the property, just to deliver it ... ”

“ The vendor’s fundamental obligation under the contract is to deliver either vacant possession or receipts of the rents and profits. A purchaser who is offered a property at settlement that has substantial rubbish on it may not be able to argue that the property has deteriorated if it is in the same ... ”

“ Whether the existence of such rubbish would entitle the purchaser to delay settlement will depend on the purchaser being able to establish that the rubbish amounted to ‘a substantial impediment to the undisturbed enjoyment of the property’. Point Glebe P/L v Lidofind P/L (1988) 4 BPR 9489Austral ... ”

“ Even if there has been some minor deterioration in the property during the contract period the vendor may still have no liability, as general condition 24.2 excludes liability for ‘fair wear and tear’. This means that a deterioration that is just part of the normal pattern of property ownership ... ”

“ If the property is in fact in a worse condition than when sold and that deterioration is beyond fair wear and tear, the purchaser is entitled to regard the vendor as being in breach of contract. Deterioration may fall into a number of categories. Damage to goods ”

“ Article:Lease - Abandoned goods See also Part 4.2 Australian Consumer Law and Fair Trading Act 2012 ”

“ Although the risk remains with the vendor under the contract, there are still grey areas. A purchaser is entitled to avoid the contract if the house is destroyed, but this does not cover all possibilities. Although the purchaser is entitled to rely on the vendor’s insurance, there is no compulsion ... ”

“ A vendor must disclose particulars of insurance ‘where the contract does not provide for the land to remain at the risk of the vendor’. s 32B(a) Sale of Land Act 1962 ”

“ Generally148 Two properties148 ”

“ An easement is an interest in land that allows one person to make use of land owned by another person for a specific reason. It is a positive benefit to the person who enjoys the easement and a limitation on the ownership of the person whose land is subject to the easement. A typical example is an ... ”

“ With one exception, there must always be a dominant tenement (property which enjoys the benefit of the easement) and a servient tenement (property which carries the burden of the easement). There may be more than one dominant tenement - for instance, in relation to a sewer easement that benefits a ... ”

“ An easement in gross will have a servient tenement, being the property over which the easement exists, but will not have an identifiable dominant tenement. An easement in gross can only be created in favour of a government authority or service provider, such as a municipal council or an electricity ... ”

“ It is fundamental to the existence of an easement that the dominant and servient tenements be in different ownership. If the two properties come into common ownership the easement will merge and disappear in a legal sense. ”

“ Easements may be created in four ways. By statute ”

“ By merger If both dominant and servient tenements come into the same ownership the easement will cease to exist. ”

“ Some easements may require maintenance or repair - for instance, an easement of way may need to be maintained to allow continuous passage. If the easement was created in writing the document may determine liability for maintenance but, in the absence of direction in the document, it is unclear ... ”

“ A combined drain has been described as ‘a feature in the nature of an easement’. Thus a combined drain needs to be disclosed in a vendor statement. A building over a combined drain needs to be disclosed as a breach of that easement. Cohen v Fifty-Eighth Highwire P/L (1995) V ConvR 54-518s ... ”

“ As part of the move towards greater control of the subdivision and development process by municipal authorities, those authorities are able to require subdividers to enter into agreements in relation to future land use and those agreements may be registered on title. To that extent they create ... ”

“ Most laneways began their life as easements. A subdivider would transfer out of the parent title all the land comprised in the residential blocks and create an easement over the land remaining, which would be laneways for rear access to the blocks for the purpose of removal of nightsoil. These ... ”

“ The extent to which the easement can be used, and the continued use of the land by the owner, also can be the subject of dispute. S S & M Ceramics P/L v Kin (1996) 2 Qd R 540 - no right to use laneway for unloadingRobmet Investments P/L v Don Chen P/L (1997) 8 BPR 15,461 - did include right to ... ”

“ See Hobsons Bay Council v Tonkin [2010] VSC 252 ”

“ Generally156 Obligations156 ”

“ The role of an estate agent has long been governed by legislation. Agents have strict obligations in relation to trust money and ethical obligations in relation to their conduct. Most agents belong to the Real Estate Institute of Victoria (REIV) and comply with the rules of that body, and are also ... ”

“ An agent must be licensed, have a written engagement or appointment signed by the principal, advise the principal that commission is negotiable, and include details of the method of calculation of commission in the engagement authority. ss 12, 49A & 50 Estate Agents Act 1980 ”

“ The authority must be signed by the principal before the agent seeks to recover commission. The authority must include the agent’s estimate of the selling price, which may be an estimate of a price range with a 10% differential, and details of advertising rebates. ”

“ In Victoria, the agent generally earns commission by procuring a purchaser who signs a contract, whether or not the sale actually proceeds. Thus a vendor who fails to complete a sale may nevertheless have an obligation to pay commission. Scott v Willmore & Randell [1949] VicLawRp 21Hudson Conway ... ”

“ Article:Estate agent - Agent's commission Commission usually forms part of the deposit paid by the purchaser to the agent. The agent must hold any deposit paid in respect of the sale of land as stakeholder pending settlement of the transaction, rescission of the contract, or early release of the ... ”

“ The Act does not prescribe forms of authority, but standard forms prepared by the Real Estate Institute of Victoria are in common use. The exclusive sale authority and exclusive auction authority forms allow for the length of the authority period to be specified in the authority. In default of a ... ”

“ The standard authorities include provisions that make commission payable if the property is sold after the expiration of the authority period to a person who was ‘introduced to the property’ during the authority period, even if the agent is not directly involved in negotiating the sale. ”

“ A contract for the sale of land will not be binding unless signed by the vendor or on behalf of the vendor by a person authorised in writing to sign on behalf of the vendor. s 126 Instruments Act 1958 ”

“ Agents will often offer to assist a purchaser to arrange finance, but not go so far as to promise to arrange finance. In such cases the agent has no additional obligations to the purchaser. However, if the agent does in fact promise to arrange finance, then the agent must give the purchaser a ... ”

“ An agent must ensure that a prospective purchaser receives a detailed financial statement in relation to a small business, which is defined as a business that is sold for less than $350,000. Such statements are not required for sales over this amount. s 4 and s 52 Estate Agents Act 1980Form 2 ... ”

“ An agent wishing to buy a client’s property must obtain the written consent of the vendor’s solicitor, accountant or conveyancer. s 55 Estate Agents ActHolland v Roperti [2009] VSC 378Legal Practitioners' Liability Committee bulletin 11 September 2014 ”

“ A licence is required for ‘negotiating for the sale or purchase’ of real estate. However, legal practitioners do not need a licence to perform tasks that are part of their ‘ordinary functions’. ss 4 and 5 Estate Agents Act 1980 ”

“ A contract to find a suitable property for a purchaser for a fee is different to a contract to sell a property for a vendor for a commission. Whether the agent will be entitled to the fee depends more on the terms of the contract than the Act. ”

“ An agent owes a fiduciary duty to its principal. In the normal situation the agent’s principal is the vendor and the agent will not owe a fiduciary duty to the purchaser, although the agent will be liable to the purchaser for negligence or misrepresentation. An agent has a statutory duty not to ... ”

“ Article:Estate agent - Agent beware Although the basic principle of property law is caveat emptor (buyer beware), there is no doubt that an agent will be responsible to the purchaser for any loss flowing from a misrepresentation made by the agent. This may be on the basis of the common law, ... ”

“ Although it is common practice for a managing agent to claim a re-letting fee when an assignment takes place, there may in fact be no proper basis for such a claim and each situation should be considered carefully. ”

“ Auction contracts generally authorise a vendor to bid personally or by an agent. It has been suggested that such a practice may be contrary to the Fair Trading Act 1999, but no case has yet confirmed that opinion. (2001) 9 APLJ 70 ”

“ Generally165 Foreign person165 ”

“ Australian government policy is to limit foreign ownership of Australian real estate. There are prohibitions on foreign persons buying real estate without approval from the Foreign Investment Review Board, which is located in Canberra. See their website and particularly the Resources page. The ... ”

“ Section 4 Foreign Acquisitions and Takeovers Act 1975 defines ‘foreign person’ as: (a) an individual not ordinarily resident in Australia; or ”

“ The definition of real estate is broad, covering all land in Australia. There is no threshold for residential land - it is all included - but purchases of commercial land of less than $55 million are not covered. There is a special exemption for ‘pre-approved off-the-plan developments’ (see below): ”

“ It is an offence to buy without prior approval, so the application must be made and approval obtained prior to buying. However, it is permissible to enter into a contract that is conditional upon FIRB approval being obtained. See ss 15, 81 and 84 Foreign Acquisitions and Takeovers Act 1975. ”

“ The Act requires a condition that provides the contract does not become binding unless approval is obtained, so some care must be taken in drawing the condition. ”

“ For a specific example of a purchaser avoiding a contract for non-fulfilment of a Foreign Investment Review Board condition see Yashima v Carroll [1995] ANZ ConvR 112. And this was notwithstanding that the purchaser advised of non-approval after the time limit imposed by the condition. However, ... ”

“ Conditional contracts generally are considered under the heading Contract, but for a specific example of a Foreign Investment Review Board condition that was held to be for the benefit of both parties and therefore exercisable by the vendor to bring the contract to an end see Re Wickham ... ”

“ The Foreign Investment Review Board is obliged to respond to applications for approval within 40 days of all relevant information being provided. Contract conditions should reflect this timing, so an approval period of seven days is unrealistic. ”

“ There are severe criminal penalties if a foreign interest purchases real estate without FIRB approval and a divestment order may be made. Is the contract illegal? ”

“ New dwelling exemption certificates Previously known as an advanced off-the-plan certificate, developers can apply for a new dwelling exemption certificate to sell new dwellings to foreign persons without the need for them to obtain individual FIRB approval. ”

“ Foreign persons who apply for approval, or who purchase is covered by a new dwelling exemption certificate, after 9 May 2017 will be subject to an annual charge where the property is not rented out or occupied for more than six months each year. The annual vacancy charge is not a condition of the ... ”

“ The Foreign Resident Capital Gains Withholding Payments provisions of the Taxation Administration Act 1953 came into force on 1 July 2016. The provisions were amended from 1 July 2017 by the Treasury Laws Amendment (Foreign Resident Capital Gains Withholding Payments) Act 2017. Essentially when a ... ”

“ Generally171 Threshold issues171 ”

“ GST (goods and services tax) is meant to impose a tax of 10% on consumers, but it is in truth a tax on suppliers, requiring the supplier to remit one-eleventh of the price to the Australian Tax Office (ATO) as a tax on the supply. In property transactions such as sales and leases the supplier is ... ”

“ However not all supplies attract GST. The four threshold requirements are: Consideration: This may be monetary or otherwise, but not a gift. ”

“ By far the most significant threshold issue is whether the supplier is engaged in an enterprise. The concept of an enterprise connotes activities conducted on a regular, recurring basis with a view to making a profit. On this basis the sale by private individuals of their family home will not be an ... ”

“ GST only applies to supplies made by a registered entity, or an entity obliged to be registered. However it is dangerous to accept an argument that, as the vendor or landlord is not registered, GST is not payable. Certainly that may in some cases be a true statement - for instance, if a landlord ... ”

“ It is important to remember that a supplier making a taxable supply is obliged to deliver a GST tax invoice. If a tax invoice is not issued at the time of supply, the supplier must issue a tax invoice within 28 days of being requested to do so by the recipient. s 29-70 GST Act ”

“ Farm The farm must have been carried on for five years before sale, but it need not have been carried on as such by the present vendor. The purchaser only needs an intention that a farming business be carried on; again that need not be personally carried on. A short cessation of the farming ... ”

“ Sale of residential land Vacant land can never be ‘residential premises’. A building capable of being occupied as a residence must exist on the land before it can be regarded as residential premises. ”

“ Article:GST - Margin scheme The margin scheme has two applications: ”

“ The ATO takes the view that, if GST is payable on the contract price, then GST is also payable on the rates, as the rates form part of the supply. If the rates have been paid by the vendor before settlement and there is an adjustment in favour of the vendor, then GST is payable on the increased ... ”

“ GST is payable on supply, which logically equates to possession. On this basis GST would be payable upon preliminary settlement, when possession is given. However the ATO generally takes the view that supply is made at final settlement, even on terms contracts. Payment of instalments may trigger a ... ”

“ Usually a mortgagee exercising the power of sale will be doing so in the course of an enterprise and thus making a taxable supply. This would be the case even if the mortgagor would not have been making a taxable supply if the mortgagor were selling. However the mortgagee will not be making a ... ”

“ A tenant is not liable to pay GST or reimburse a landlord for GST payable by the landlord unless the lease so provides. One way that the liability can be passed to the tenant is through an outgoings clause. An outgoings clause will not extend to make the tenant liable for GST unless it refers to ... ”

“ A vendor who forfeits a deposit upon default by the purchaser is liable to pay GST on the deposit, but only if the underlying transaction would have attracted GST. Commissioner of Taxation v Reliance Carpet Company P/L [2008] HCA 22ATO Decision Impact Statement ”

“ The consideration expressed in the transfer should reflect the full consideration and should include any GST paid by the purchaser in addition to the purchase price. Customer Information Bulletin Edition 90 May 2005 ”

“ It may be possible to rectify a contract if the GST consequences do not truly reflect the agreement of the parties. Where it can be independently established that the parties agreed that the price was to be plus GST but the contract erroneously specified an inclusive price, the contract was ... ”

“ Generally185 Guarantee or indemnity185 ”

“ A guarantee is an obligation assumed by a third party (the guarantor) in favour of a second party (the beneficiary) to secure the performance of the obligations of a first party (the debtor). If a contract exists between A and B, C may guarantee to A that B will perform the contract. If B fails ... ”

“ A guarantee is a secondary contract or obligation that depends upon the continuation of the principal contract or obligation. An indemnity is a primary obligation, accepted by the third party surety, and liability is independent of the principal obligation. To rely on a guarantee alone, breach of ... ”

“ A court would normally expect a contract of guarantee to be evidenced by a document. A contract of guarantee may be in writing or may be constituted by an oral agreement, or a combination of both. The modern statutory equivalents to the statute of frauds require a ”

“ Unless the guarantee is given under seal, consideration is an essential element of the contractual relationship between guarantor and beneficiary. However it will normally be satisfied by the beneficiary agreeing to enter into the principal contract. Consideration cannot be satisfied by past ... ”

“ A person who signs a guarantee will normally be bound by it. Even a sole signatory of a guarantee that has provision for two guarantors may be bound by his or her signature. Taubmans P/L v Loakes [1991] 2 Qd R 109 ”

“ Whilst it has long been established that a material alteration to a guarantee after execution will render the guarantee void, not all alterations will be material. Westpac Banking Corporation v Chan and Others (1991) 104 FLR 37 ”

“ Most guarantees will provide that the beneficiary of the guarantee will be entitled to enforce the debt against the original debtor or the guarantor, at the beneficiary’s discretion. Whilst those actions must be bona fide, the guarantee document may restrict the ability of the guarantor to inquire ... ”

“ Guarantees will usually be drawn such that all guarantors are jointly and severally liable for the debt. The beneficiary may choose to pursue just one of several guarantors. Whilst there is an underlying equity in that there must be equality of burden between co-guarantors, they may agree to place ... ”

“ A guarantor is entitled to an indemnity from the debtor in relation to any payment made by the guarantor in reduction of the guaranteed debt. O’Donovan and Phillips, The modern contract of guarantee ”

“ The benefit of a guarantee may be assigned, provided normal formalities are observed. Market Services P/L v Westpac Banking Corporation (1997) V ConvR 54-569 ”

“ Guarantors have been described as ‘favoured debtors, the darlings of the law’. Guarantees often arise through family ties and the law has shown a willingness to forgive such foolhardiness. There are many well established escape routes and some of more recent invention, and far wider application. ... ”

“ A guarantee may involve the guarantor providing security over land owned by the guarantor in favour of the beneficiary. This security may be in the form of a mortgage over the land, which may or may not be registered on the title, or just a charging clause whereby the guarantor charges the property ... ”

“ It is common for a landlord to seek a guarantee of a tenant’s obligations under a lease. The guarantor’s obligations continue notwithstanding the termination of the lease for breach. ”

“ A guarantor of a lease has a contract of guarantee with the landlord; but, if the landlord sells the freehold, the guarantor has no direct contractual relationship with the new owner. Nevertheless, the new owner may enforce the guarantee as a covenant that touches and concerns the land. Lang v ... ”

“ A guarantee of a purchaser will remain enforceable notwithstanding rescission of the contract for breach. Womboin P/L v Savannah Island Trading P/L (1990) 19 NSWLR 364 ”

“ Generally194 Personal insolvency195 ”

“ The consequences of the owner of real estate becoming insolvent are significant. These consequences ripple through to affect all those parties who have a relationship with the insolvent, including co-owners, mortgagees, tenants and simple creditors. The basic effect of insolvency is to remove from ... ”

“ Personal insolvency is governed by the Bankruptcy Act 1966, which provides two layers of insolvency, the first being a half-way house involving a formalised arrangement with creditors and the second involving formal bankruptcy. A person will be presumed to be insolvent if that person is unable to ... ”

“ A person who is unable to pay his or her debts may be technically insolvent but may not need to proceed to formal bankruptcy. A number of alternatives are available under part X of the Bankruptcy Act 1966. Deed of assignment ”

“ If the insolvent is unable to reach agreement with creditors, then bankruptcy is the last alternative. There are two ways bankruptcy may be achieved. Voluntary bankruptcy ”

“ The trustee in bankruptcy becomes the legal owner of all of the bankrupt’s assets. A caveat may be lodged to immediately protect the trustee’s interest and a transmission application, supported by a statutory declaration, lodged to transfer real estate into the name of the trustee. s 51 Transfer of ... ”

“ The date of appointment of a trustee is not the date of commencement of bankruptcy. The bankruptcy ‘relates back’ to the first act of bankruptcy committed by the bankrupt in the six months preceding the date of presentation of the petition. By this principle the trustee may ‘claw back’ certain ... ”

“ Voluntary transactions Voluntary transactions that occurred within a period of two years before the date of commencement may be clawed back, unless made bona fide. Some voluntary transactions up to five years prior to commencement may also be clawed back in certain circumstances. ”

“ Apart from the limited exceptions relating to corporate insolvency, secured creditors are not affected by insolvency of the debtor and may proceed to realise the security if default occurs. s 5 and s 58(5) Bankruptcy Act 1966 ”

“ The legal personal representative may lodge a voluntary petition or a creditor may lodge a creditor’s petition. All assets of the estate are vested in the trustee and the legal personal representative merely assumes the role of a creditor of the estate, on trust for the beneficiaries. ”

“ A trustee is able to disclaim assets that are burdened with onerous obligations. Thus an insolvent’s representative may disclaim a lease, thereby ending the representative’s obligations. This disclaimer does not reduce any liability that existed prior to disclaimer, nor prevent an action for ... ”

“ All of a bankrupt’s property vests in the trustee, with minor exceptions. All court proceedings by a bankrupt are stayed, with the exception of some personal injury claims, until the trustee elects to proceed. ”

“ Corporate insolvency is governed by the Corporations Act 2001, including reference to the Bankruptcy Act. It has a number of layers consisting of various levels of formalised arrangements with creditors and culminating in winding up, which is the corporate equivalent to personal bankruptcy. A ... ”

“ Scheme of arrangement These may vary from being informal, such as creditors agreeing to an extension of time for payment, to a formal deed appointing an administrator. In the latter case the administration is subject to supervision by ASIC (Australian Securities and Investments Commission) and all ... ”

“ If the corporate insolvent is not able to reach an agreement with its creditors then, just as in the case of a personal insolvent, corporate bankruptcy may be the last alternative. In the corporate world, this exercise is known as ‘winding up’ and is performed by a liquidator. Winding up may be ... ”

“ If there is a perceived risk of dissipation of the corporation’s assets between the date of application and the expected date of appointment of a liquidator, the applicant may apply for a provisional liquidator to be appointed. ”

“ Unlike the vesting of all a bankrupt’s assets in a trustee, corporate bankruptcy leaves the assets in the corporation and vests control of the corporation in the liquidator. Thus any document requiring the seal of the corporation is sealed by the liquidator and supported by a statutory declaration ... ”

“ Liquidation commences from the time of appointment of the liquidator. However the date that the proceedings were commenced is important as the ‘relation-back’ day (see below). ”

“ Specific statutory provisions create rights similar to the clawback rights which apply to personal bankruptcy: Unfair preferences given within a period of six months prior to the relation-back day may be clawed back, if the corporation was insolvent at the time that those preferences were given. ”

“ A liquidator is able to disclaim assets that are burdened with onerous obligations. Thus an insolvent’s representative may disclaim a lease, thereby ending the representative’s obligations. This disclaimer does not reduce any liability that existed prior to disclaimer, nor prevent an action for ... ”

“ The liquidator becomes an agent of the insolvent corporation, with power to deal with all of the corporation’s property. All court proceedings by a company in liquidation are stayed until the liquidator elects to proceed. ”

“ Generally206 Lease or tenancy207 ”

“ The owner of real estate may give possession of that real estate to another person, such that the other person has the right to use and enjoy the real estate to the exclusion of all of the world, including the owner. Such a right is recognised as a proprietary right and thus protected by the law. ... ”

“ Whilst there may have been a difference in the past between the meaning of lease and tenancy, the terms are now effectively interchangeable. To lease premises is the same as to rent. The landlord is the same as the lessor, and the tenant is the same as the lessee. This chapter uses the word lessor ... ”

“ A lease is as a proprietary right and, as such, enjoys the protection of the law. The lessee is entitled to enjoy the right until it expires and may enforce that right against all of the world. A licence however is merely a contractual right that exists between the parties to the contract. It is ... ”

“ Whilst there is little doubt that a lease for one year is of a fixed duration, a lease from week to week may go on forever. However such an arrangement is still regarded as a lease for a fixed duration as it is capable of termination by either party at the end of each repeating period. An ... ”

“ A lease must have a specified or definable commencing date. A lease that does not have a commencing date capable of precise definition will be void. Darling Point Securities P/L v Industrial Equity P/L (1991) NSW ConvR 55-589(2001) 76 ALJ 86 ”

“ Validity The common law has traditionally required proprietary rights to be established in a formal way; indeed the fundamental requirement in relation to interests in land is that they be created by deed, which is a document formally executed by seal. An arrangement that does not satisfy this ... ”

“ Equity is a concept, now applied by all our courts, that allows the court to achieve justice, notwithstanding technical legal rules. Thus the rule that would invalidate a lease of more than three years if it were not in the form of a deed was overcome by the creation of what is known as an ... ”

“ As equity has shown itself prepared to enforce an agreement to lease, it is often said that an agreement to lease is as enforceable as a lease. This concept has been merged with modern legal concepts to establish the principle that, where it would be unconscionable for either party to resile from ... ”

“ Whilst it is possible to register a lease of more than three years on the certificate of title, it is not normally done in Victoria because of the protection offered to a tenant in possession by the Act. s 66 and s 42(2)(e) Transfer of Land Act 1958Customer Information Bulletin Edition 83 October ... ”

“ Incorrectly defining or describing the premises may give the lessee a right to damages. Foong & Leong v Great Union P/L [2001] VCAT 1540 ”

“ The lessee is bound to use the premises in accordance with any specified use and a failure to do so will constitute a breach of the lease. If the lease provides that the use may be altered with the consent of the lessor, there is no implied obligation on the lessor not to withhold consent ... ”

“ Written leases are traditionally prepared in duplicate so that both lessor and lessee will have a ‘copy’ for their records. The lease is the basis of the lessee’s right to possess the property and as such it is the lessee’s title. The lessor is entitled to retain the certificate of title to the ... ”

“ It is normal for the lessor to arrange for preparation of the lease. As a result, it is normal for the lease to provide that the lessee will be responsible to pay the lessor’s legal cost. However these provisions are negotiable in all circumstances and in fact prohibited by statute in relation to ... ”

“ Many leases provide for the lessee to pay a security deposit to be held to secure the lessee’s compliance with the terms of the lease. Special rules apply in relation to residential and retail tenancies. Generally speaking there is no presumption that the lessor is to hold the security deposit in ... ”

“ Unless the proposed lessee ensures that the mortgagee of the freehold consents to the lease, the lessee will be liable to lose possession of the premises if the lessor defaults under the mortgage and the mortgagee wants to take possession. The prior-in-time interest of the mortgagee will defeat the ... ”

“ Whether it is the lessor or the lessee who is responsible to pay outgoings in relation to the leased premises will depend entirely on the agreement. Leases often require the lessee to pay outgoings, such as rates and taxes, but what is included depends entirely on the words used. Insurance premiums ... ”

“ The lessee is entitled to possession of the leased premises, free of interruption from the lessor or any other person. This right is known as the right to quiet enjoyment, but it is virtually the only right that the lessee enjoys. The right is created by the lessor covenanting with the lessee to ... ”

“ As the lessor generally prepares the lease, it usually creates rights in favour of the lessor. These rights are generally created by requiring the lessee to enter into covenants to do, or not do, certain things and empowering the lessor to enforce those covenants. A lessee will normally covenant to ... ”

“ The lease has traditionally been prepared by the lessor’s solicitor. This gave the lessor the ability to specify the terms and conditions, and it was normal practice to require a lessee to deliver up the premises at the expiration of the lease in the same condition that they were at the beginning ... ”

“ Leases often require the lessee to repair and/or maintain the premises and further to deliver the premises up at the end of the term in their original condition, which implies a need to repair and maintain. Repair may involve the replacement of parts of the premises but such clauses usually stop ... ”

“ Lessors have traditionally sought to pass the obligation to repair onto the lessee; but, if the lease does create an obligation on the lessor to repair, responsibility to do so will usually only arise after the lessor receives notice of the need for repair. O’Brien v Robinson [1973] UKHL 1 ”

“ The lessor has traditionally been in a position of strength. Federal competition and consumer legislation has sought to equalise negotiating power and many lessees have relied upon concepts such as misleading and deceptive conduct in disputes arising out of the economic downturn of the early 1990s. ... ”

“ In the absence of a review clause, rent will remain the same during the full term of the lease and, depending upon the option clause, possibly even through a further term. However, most leases do have a rent review clause which may provide for rent to be reviewed during the term of the lease and, ... ”

“ Recorded information is available by phone on 1300 135 070. Information is also available at the Australian Bureau of Statistics. ”

“ Errors may be rectified by the court. Thermoplastic Foam Industries P/L v Imthouse P/L (1990) ANZ ConvR 532 ”

“ A lease is a proprietary interest in land. Just like any other proprietary interest it may be used as security for a loan. The lease may have a clause requiring the lessee to obtain the lessor’s consent before giving a mortgage over the lease. Failure to obtain consent in such circumstances would ... ”

“ Surrender by agreement The parties may agree, or be deemed to have agreed, to terminate the lease by the lessee surrendering, and the lessor accepting. ”

“ It is common for a landlord to seek a guarantee of a tenant’s obligations under a lease. The guarantor’s obligations continue notwithstanding the termination of the lease for breach. Nangus P/L v Charles Donovan P/L (In Liquidation) [1989] VicRp 17Tebb v Filsee P/L & Anor; Tebb v KKV P/L & Anor ... ”

“ The consequences of a breach depend on the terms of the agreement between the parties. The lease may have detailed and specific clauses relating to breach and its consequences. Broadly speaking, a breach that is not remedied will entitle the other party to bring the lease to an end by termination. ... ”

“ Forfeiture is the process whereby the lessor, relying on a breach of a fundamental term of the lease by the lessee, forfeits the lease and thereby becomes entitled to re-take possession of the premises and re-enter. It was usually aided by a clause in the lease authorising re-entry upon forfeiture. ... ”

“ If the lease is terminated by the lessee for breach by the lessor, then the lessee will be entitled to damages. However such situations are rare, as the lessee would ordinarily be satisfied to be free of the lease or else have sought specific performance. If the lease is terminated by the lessor ... ”

“ The lease passes to the lessee the right to possession. If the lease is terminated, the lessee’s right to possession ceases and the lessor is again entitled to possess the property. If the lessor is able to effect re-entry and take possession of the premises without creating a disturbance of the ... ”

“ If a lease has been terminated and the lessee refuses to deliver up possession, the lessor may issue proceedings in the Magistrates, County or Supreme courts. Avin Operations P/L v Clover Pines P/L [2003] VSCA 58Order 53 procedure ”

“ Article:Lease - Abandoned goods If a lessee vacates the premises, leaving goods on the premises, ownership of those goods remains with the lessee and the lessor has no claim to ownership of them. If the lessee requests access to the premises for the purposes of removing the goods, the lessor will ... ”

“ Periodic leases roll on until terminated by notice of either party. In the absence of a contrary agreement, the notice must expire at the end of the period after the period in which it is given. ”

“ A lease is fundamentally a contract and the normal rules of privity of contract apply. But a lease also relates to real estate, and property law has traditionally affected more than just the parties to the contract. Rights arising from property law may therefore result in the lease affecting more ... ”

“ Sublease It is the intention of the parties that the lessee will return to ownership of the leasehold at some time prior to expiration of the lease. It is not intended that the lessee’s obligations will be diminished, merely temporarily assumed by the sublessee, so the lessee remains primarily ... ”

“ Whilst there was some doubt about this and some lessors would require the guarantor to specifically confirm the extension of the guarantee, that is no longer necessary as it has been held that the guarantee is enforceable by the freehold purchaser. Lang v Asemo P/L [1989] VicRp 67Gumland Property ... ”

“ Options generally require that the lessee not be in default in relation to any covenant as a condition of exercising the right to renew. This is construed strictly against the lessee. BS Stillwell and Co P/L v Budget Rent–A-Car System P/L [1990] VicRp 52Compare with: Caltex Properties Ltd v Pittard ... ”

“ The lessee is entitled to a lease that is identical to the expired lease and a renewal does not present the lessor with an opportunity to review the lease. The only justified changes are those necessary to reflect the effluxion of time and any change in the parties. The lessor either retypes, ... ”

“ A right of first refusal or right of pre-emption in favour of a lessee may be included in a lease. Such a right is regarded as different to an option to purchase. It is a purely contractual right, giving the lessee no additional interest in the land. ”

“ There are two ways that the lessee may change. Sublease ”

“ Lessor A may enter into a lease with lessee X, thus passing possession of the property to X for the duration of the lease. But A still enjoys ownership of the property, which at that stage is known as the right of reversion or reversionary interest. As property, that right may be transferred to ... ”

“ A consideration of residential tenancies is outside the scope of this work. ”

“ A consideration of caravan parks, which are governed by the Residential Tenancies Act, is outside the scope of this work. ”

“ Generally236 Application237 ”

“ Consumer protection considerations have dominated the development of the law for the last quarter of the twentieth century. One area of concern was the relationship between a landlord and a tenant of premises used for retail purposes. With the development of shopping malls, ownership of such ... ”

“ The 2003 Retail Leases Act applies to leases entered into after 1 May 2003, including the renewal (either by option or agreement) of an existing lease. Limited parts of the 2003 Act apply to all leases. s 11 Retail Leases Act ”

“ The Retail Leases Act applies to any premises from which goods or services are supplied to the general public. The 2003 Act requires that this be the sole or predominant use of the premises and provides that the Act does not apply to any part used for residential purposes. s 4 2003 Act as amended ... ”

“ Even if the premises are used for retail purposes, the Act will not apply if: the occupancy costs (rent and outgoings) exceed $1 million per annum (s 4(2)(a) Retail Leases Act 2003 and r 6 Retail Leases Regulations 2013); or ”

“ Floor area was relevant to the 1998 Act, but is not relevant to the 2003 Act. ”

“ Consumer protection requires information. A consumer is more likely to make a good decision if the consumer has access to all relevant information. The 2003 Act requires a landlord to provide all persons who negotiate to enter into a lease with a copy of the proposed lease and an information ... ”

“ The 2003 Act provides that an assignment is a continuation of the old lease. A lease that commenced prior to 1 May 2003 will come under the 2003 Act if renewed after 1 May 2003, but not if merely assigned after that date. The 1998 Act will continue to govern such leases. s 8 2003 ActSaratoga ... ”

“ The 2003 Act requires a retail lease to be for a period of five years. The tenant may request the Small Business Commissioner to waive the section. The waiver application may be found at www.vsbc.vic.gov.au. ”

“ Key-money is the demand for money by a landlord as a condition to the landlord granting a lease, agreeing to the exercise of an option, or consenting to an assignment or sublease. Key-money is prohibited by the Act. ”

“ The Act provides: that the lease specify the time and method of review; and ”

“ Traditionally leases drawn on behalf of landlords have included a requirement that the tenant pay the landlord’s legal costs in relation to preparation of the lease and also any matters arising during the lease, such as upon assignment or default by the tenant. However the Act prohibits the lease ... ”

“ Leases often require tenants to pay outgoings, such as rates and service charges, in relation to the property. As retail tenancies are often located in shopping centres, it is also common for such leases to require the tenant to contribute to body corporate and common area expenses. The Act ... ”

“ Many retail premises are located in retail shopping centres. The Act imposes penalties if the landlord fails to maintain the centre or interferes with the conduct of the tenant’s business. The tenant must be consulted in relation to changes within the centre. ss 53 – 59Fernandes v Lam P4/1999 ... ”

“ The primary venue for retail tenancy disputes is VCAT (Victorian Civil and Administrative Tribunal). However the Act seeks to ensure that all disputes first go to mediation. Either party to a lease may refer a dispute to the Small Business Commissioner and a VCAT application requires a certificate ... ”

“ At common law a landlord has a very limited repair obligation. See also Mega Byte Baby P/L v WJH P/L (Retail Tenancies) [2005] VCAT 1391Westgate Battery Company P/L v GCA P/L (Retail Tenancies) [2005] VCAT 1647 ”

“ The Act requires any security deposit paid by the tenant to be held by the landlord on behalf of the tenant in an interest bearing account. s 24 Retail Leases ActCafé Dansk P/L v Shiel & Ors (Retail Tenancies) [2009] VCAT 36 ”

“ The Act prohibits unconscionable conduct. s 76 Retail Leases ActBarbcraft P/L v Geobel P/L [2003] VCAT 1700Tenth Vandy P/L v Natwest Markets Australia P/L [2010] VSC 2Australian Competition and Consumer Commission v Dukemaster P/L (ACN 050 275 226) [2009] FCA 682Articles (2005) LIJ May 50 and ... ”

“ Generally250 Misdescription251 ”

“ This chapter is concerned with the issue of the physical dimensions of a property, the boundaries. Conveyancing is concerned with the transfer of ownership of land, including improvements, and the measurements or dimensions of the property sold are of critical importance to the parties. Disputes in ... ”

“ The law requires the transfer of ownership of land to be in the form of a deed, which is a document in writing executed under seal. This is known as the document of assurance. s 52 Property Law Act ”

“ A vendor has a fundamental duty to make title to land that the vendor has contracted to sell before a purchaser can be required to complete the transaction. This obligation consists of: a duty to show good title to the land sold; ”

“ Whether a misdescription may also constitute a defect in title will depend upon determining exactly what it is that the vendor has contracted to sell to the purchaser. The vendor must make title to that which the vendor has agreed to sell, but need not make title to something which the vendor has ... ”

“ If 10 Smith St is sold by description, then the vendor will be obliged to make title to the land physically occupied by 10 Smith St. If 10 Smith St occupies less land than the title to the property - that is, there is an excess of title or deficiency of land - then there will not be a defect in ... ”

“ If 10 Smith St is sold by title, then the vendor will be obliged to make title to the land described in the title. If 10 Smith St occupies less land than the title to the property - that is, there is an excess of title or deficiency of land - then there will not be a defect in title as the vendor ... ”

“ Land was traditionally sold by description. Conveyancing predates photocopiers. The sale of a piece of land could only be made by reference to a written description of that land. This could have been by recitation of a long description of the measurements of the land, the admeasurements, and by ... ”

“ The common law took a strict view of errors in description and held that any discrepancy between the property described in the contract and the property available for transfer justified the purchaser terminating the contract. ”

“ To determine whether there has been a misdescription, it is first necessary to determine what was agreed to be sold. This is precisely the same inquiry as is made to determine whether there has been a failure to make title. This returns us to the issue of sale by description as opposed to sale by ... ”

“ If the vendor is unable to deliver possession of all of the land in the title - that is, there is an excess of title or deficiency of land - then Koadlow establishes that there is a misdescription. However this is merely the threshold issue as, whilst the common law takes the strict view that any ... ”

“ Provided the contract is silent on the point, equity will save a vendor from avoidance, provided that the misdescription is immaterial, but will nevertheless require the vendor to pay compensation for that misdescription. ”

“ If equity excuses the misdescription because it is immaterial but requires compensation, then the issue is how to calculate compensation. In the absence of a condition in the contract dealing with this issue, it would simply be a matter of the parties agreeing on some method of valuing the loss ... ”

“ The parties are capable of agreeing to the terms of their contract. It is open to the parties to agree that the purchaser shall not have the right to avoid the contract for a misdescription. However this right is subject to the overriding principle that, if the misdescription is material and ... ”

“ As a rule of thumb, a discrepancy in measurements that affects 5% of the area of the property is regarded as material or substantial misdescription. Venture v Maladale (1987) V ConvR 54-206 ”

“ The parties are capable of agreeing to the terms of their contract. It is open to the parties to agree that the purchaser shall not have the right to claim compensation. ”

“ The common law provides that any discrepancy will justify avoidance. Equity overrides this by providing that a material discrepancy will justify avoidance, but that an immaterial discrepancy will only justify compensation. The parties are free to agree to their own terms and a contract may provide ... ”

“ It has been common for vendors to include special conditions relating to identity in contracts. This was to overcome the right given to the purchaser by table A to claim compensation for a misdescription. Such special conditions are no longer necessary as general condition 3 achieves this result. ... ”

“ A discrepancy of 50 millimetres (which is about 2 inches) may be ignored in any dimension up to 40.3m (130ft) in length, and a discrepancy of one in five hundred may be ignored in any greater measurement. s 272 Property Law Act 1958 ”

“ There is no obligation on the vendor to provide a survey. Svanosio v McNamara [1956] HCA 55 ”

“ The Subdivision Act 1988 requires all boundaries to be precisely identified. Prior to the Subdivision Act, the Strata Titles Act and the Cluster Titles Act allowed boundaries to be represented on plans by a wall, fence, floor or ceiling. Those two Acts were repealed by the Subdivision Act, but ... ”

“ It is possible to sell land off the plan, which means that at the time of sale the property being sold and the title to that property may not exist. All that exists is a proposed plan of subdivision that will describe the property by way of a diagram. When the property is built and the new title ... ”

“ The law relating to fences is set out in the Fences Act. If the dividing fence is sufficient for both occupiers, the Act has no application. ”

“ Trees may sometimes grow along or near boundaries, thus complicating the question of measurement of those boundaries. They may also force the ‘temporary’ relocation of fences delineating those boundaries and raise issues of adverse possession. ”

“ The boundary constituted by a river is the middle line of the river. If the course of the river changes naturally, the boundary line changes with the river. If the course of the river changes suddenly, the boundary does not change; however, if the parties agree to change the line of the river, the ... ”

“ Generally265 The doctrine of the merger265 ”

“ The common law doctrine of merger grew out of the principle that, when a lesser estate was vested in the same person as a greater estate, the lesser estate merged into the greater estate and was extinguished. A common example of this principle is where the dominant and servient tenements in an ... ”

“ The classical statement of the doctrine is: Where an executory contract is intended to be carried out by a deed of conveyance, it is merged in the conveyance; the final contract is that which is contained in the deed, and the executory contract cannot be used for the purpose of enlarging, ... ”

“ The doctrine was developed prior to the Torrens system.  It had some validity in a system that replaced a contract with a conveyance, which was a lengthy document that set out the ongoing obligations of the parties.  It has little relevance to a Torrens transfer, particularly the modern form of ... ”

“ Vendor’s obligations The obligation to deliver vacant possession.Cumberland Consolidated Holdings Ltd v Ireland [1946] KB 264 ”

“ Generally270 Old law mortgage271 ”

“ Mortgage is a totally fictional concept. It has no physical presence and, whilst it may be represented in a physical form by a document, that is not necessary. It is a legal concept created to represent a form of proprietary interest recognised by the law. It arises when an owner of property ... ”

“ The consequence of a mortgage of old system land is that ownership in law transferred to the mortgagee, subject to the right of the mortgagor to regain ownership upon repayment. This right was known as the equity of redemption.  That is not the effect of a Torrens mortgage, where ownership remains ... ”

“ Like all interests in land, the fundamental formality requirement for a mortgage is that it be created by a deed, being a document executed under seal. s 52(1) Property Law Act 1958 ”

“ Whilst the common law insisted on the formality of a deed, equity was more prepared to look at the intention of the parties and enforce relationships as mortgages, notwithstanding that they did not achieve the formality requirements of the common law. Equity merely needed to be satisfied that the ... ”

“ The simplest mortgage relationship involves two parties: the lender who provides the money and the borrower who receives it and gives a mortgage over the borrower’s property. However a third party may become involved if the borrower, whilst receiving the money and promising to repay, has no ... ”

“ As legal entities, corporations can enter into mortgages over property owned by the corporation. The risk for the mortgagee however relates to the execution of mortgage documents. A document that is fraudulently executed is a nullity at common law. A mortgagee who accepts a mortgage signed by ... ”

“ Most documents establishing a trust will authorise the trustee to borrow for the purposes of the trust. It is beyond the trustee power and in breach of trust for the trustee to borrow for purposes other than the trust. A lender might not have notice of the existence of the trust and therefore not ... ”

“ A loan agreement does not of necessity require the payment of interest. The agreement may simply require repayment of the principal sum. Interest is only payable if the agreement between the parties provides for the payment of interest. However s 75 Transfer of Land Act 1958 implies into registered ... ”

“ Care of expression is the key to this issue. The law strikes down penalties as contrary to public policy. Thus a provision in a mortgage that the mortgagor will pay interest at the penalty or higher rate in the case of default will be struck out. Steindlberger v Mistroni (1992) 29 NSWLR 351 at 356 ”

“ A mortgage is a contract. If the mortgage provides that repayment is to be on an ascertainable date, then that is the date for repayment and early or late repayment will be a breach of the contract. Early repayment ”

“ Legal costs In the absence of an agreement between the parties, the mortgagor is not liable to pay the mortgagee’s legal costs. However, most mortgage documents do provide that the mortgagor will pay those costs. Costs will be on a party-party basis only, unless otherwise agreed, but may provide ... ”

“ There is absolutely no difference in the form of a second or subsequent mortgage. There may be any number of mortgages granted over a property; it is just a matter of whether the mortgagee is satisfied that the mortgagor still retains sufficient equity in the property to support another mortgage, ... ”

“ Where there is more than one mortgage affecting a property, priority will be determined on the basis of time. In a Torrens environment it will be time of registration, with the first registered mortgage taking priority. If neither mortgage is registered, it will be time of creation, with the ... ”

“ Mortgagees may agree amongst themselves as to the priority of their mortgages. If those mortgages are registered, they may lodge a variation of priority. s 75B Transfer of Land Act ”

“ The terms of a mortgage may be varied and the variation may be registered. s 75A Transfer of Land Act 1958 ”

“ A further advance made pursuant to an existing mortgage is covered by the doctrine of tacking. The doctrine was established by the case of: Hopkinson v Rolt [1861] EngR 641See Oversea Chinese Banking Corporation (OCBC) v Malaysian Kuwaiti Investment Co Sdn Bhd (MKIC) & Anor [2003] VSC 495 ”

“ Marshalling relates to realising of security when two mortgagees have security over assets of the mortgagor.  If one mortgagee has security over two assets and a second mortgagee has security over only the first of those assets, marshalling allows the second mortgagee to rely on the second security ... ”

“ Material alteration of a mortgage will invalidate the mortgage. If the alteration is authorised by some, but not all of the mortgagors it will be unenforceable against the mortgagor who did not authorise the alteration. Farrow Mortgage Services P/L v Williams (1994) ANZConvR 41 ”

“ Most discharge documents simply refer to the discharge of the land from the obligations under the mortgage. This does not necessarily constitute a discharge of the personal covenants that bind the mortgagor pursuant to the mortgage contract. Industrial Acceptance Corp Ltd v Tarulli [1974] WAR ... ”

“ A minor may enter into a mortgage, but it will be void as against the minor. s 49 Supreme Court Act 1986 ”

“ A mortgage that comes into existence earlier in time to a lease will not be subject to the tenant’s rights under the lease. If default occurs, the mortgagee is entitled to take possession of the premises and may ignore the tenant’s right under the lease. Apollo 169 Management P/L v Pinefield ... ”

“ If a property that is subject to a mortgage is subdivided then the mortgagor has the right to ask the mortgagee to apportion the mortgage money and accept a new mortgage or a discharge in relation to individual lots. This right does not give the mortgagor any additional rights in relation to ... ”

“ No action for recovery of money due under a mortgage may be commenced after 15 years from the date when the right to the money accrued. s 20 Limitation of Actions Act ”

“ A mortgage creates a caveatable interest, so a caveat may be lodged. However, the power of sale conferred by s 77 Transfer of Land Act can only be exercised pursuant to a registered mortgage, not an unregistered mortgage protected by caveat. An unregistered mortgagee may be able to sell ‘out of ... ”

“ A joint tenant is entitled to mortgage that joint tenant’s interest in land. Katsaitis v CBA (1987) 5 BPR 12,049 ”

“ Generally288 Mortgagee's rights288 ”

“ A mortgage creates a security interest in the land in favour of the mortgagee. If the mortgagor breaches any of the requirements of the mortgage, as to payment or otherwise, the mortgagee is entitled to bring the mortgage to an end and rely on the property as security for the advance. The common ... ”

“ Power of sale The mortgagee’s fundamental right is the right of power of sale. This allows the mortgagee to sell the property and apply the proceeds towards discharge of liabilities relating to the property. ”

“ Power of sale Notice ”

“ Once the mortgagor has committed a default, the mortgagor’s only rights are to ensure that the mortgagee fulfils the duties outlined above. If the mortgagor is of the view that the mortgagee is in breach of any of those duties, the mortgagor may approach the court for help. Traditionally a ... ”

“ Purchaser from mortgagor Mortgages generally forbid the sale of the property during the course of the mortgage without the consent of the mortgagee. If a sale is made, the mortgagee may elect to cooperate and provide a discharge, or may refuse to provide a discharge, thus aborting the sale. ”

“ A mortgagee sale is effected by a special form of Transfer, known as a T3. The affect of registration of that document is to transfer the interest of the mortgagor as registered proprietor to the purchaser/transferee. ”

“ Foreclosure is the alternative to a mortgagee’s sale. As a result of the foreclosure procedure, the mortgagee becomes the registered proprietor, rather than selling the property to a third party. Foreclosure is rare. s79 Transfer of Land Act ”

“ Generally302 Legal obligation303 ”

“ Ownership of land requires the owner to have a relationship with many other people and organisations in relation to the land, for instance neighbours, local councils and other authorities. These relationships may result in these third parties taking a particular interest in the property and may ... ”

“ If an owner can ignore a document without legal consequences, then it is not a notice. If however the document is supported by some legal framework creating consequences for non-compliance, then it is a notice. For instance: A neighbour might verbally complain to an owner about noise made by ... ”

“ Notice served prior to sale The fact that a notice is in existence when a property is sold would mean that the property suffers from a latent defect in title and the vendor would remain responsible for compliance with the notice, unless liability is transferred to the purchaser by the contract. ”

“ Article:Notices - Liability for notices Condition 21 specifically states that it does not apply to periodic outgoings, so it does not apply to all notices. However it does apply to ‘any notice, order, demand or levy’ other than those relating to periodic outgoings. This would include such notices ... ”

“ Notices relating to periodic outgoings are covered by condition 15. Liability is apportioned between the parties by way of an adjustment at settlement. See Adjustments. ”

“ A purchaser may be left lamenting if: the communication was not a notice; or ”

“ Generally307 Common law liability308 ”

“ The liability of builders is dealt with under the heading of Builders liability. This chapter is concerned with liability for the construction of a building by a person who is generally referred to as an ‘owner-builder’. For the purposes of this chapter, an owner-builder is a person who is the ... ”

“ An owner-builder who sells a property to a purchaser would have contractual and tortious duties to the purchaser, but those duties might be very limited. In relation to the contract, any implied conditions relating to standard of workmanship are likely to be restricted and tortious duties will be ... ”

“ Local Government Act 1958 Part XLIX The first builder liability scheme in 1974 required builders to obtain guarantees in relation to homes that they constructed. It did not impose any obligations on owner-builders. ”

“ Article:Owner-builders The Building Act provides that owner-builder obligations only arise if a sale is made ‘within the prescribed period’, which is defined as 6 years and 6 months after the ‘completion date’ of a home and 10 years after completion for any other building (commercial premises). ... ”

“ An owner-builder would be unlikely to construct a building without obtaining a building permit, but it is common for owner-builders to undertake improvement work without obtaining a permit, indeed much such work does not require a building permit. Undoubtedly improvement work falls within the ... ”

“ Every sale by an owner-builder or builder-owner must include the following warranties in the contract: all building work was carried out in a proper and workmanlike manner; ”

“ The ministerial order that came into effect on 1 December 1998 allowed an owner-builder who is obliged to obtain insurance under s 137B to enter into a contract of sale conditionally upon obtaining insurance. ”

“ There are limitations on owner-builders obtaining permits. The objective is to prevent ‘professional owner-builders’, who are really just unregistered builders, from operating under the guise of owner-builders. An applicant for a building permit for domestic building works exceeding $12,000 must ... ”

“ The 2009 amendments specifically extended the owner-builder obligations to mortgagees and executors: s 137B(5AA). A mortgagee unsuccessfully applied to Victorian Civil Administration Tribunal for exemption from the obligation to obtain insurance in respect of works performed by the owner-builder ... ”

“ Vendor statements have always had an interest in building matters in relation to residential land. A vendor of land on which there is a residence must give particulars of any building permits obtained in the preceding seven years. s 32E Sale of Land Act 1962 ”

“ An owner-builder who arranges to move a home from one site to another is not undertaking building work. s 6(g) Domestic Building Contracts Act 1995 ”

“ An owner-builder who has work performed will be deemed responsible for that work unless a registered builder is nominated on the building permit. Even if the work is physically performed by a builder, the owner-builder will be responsible unless the builder is nominated as such on the permit. ... ”

“ Many homes are sold after they are constructed, indeed often after they have been occupied for some time. However some homes may be sold during the course of construction or even in anticipation of construction, the latter being known as selling ‘off-the-plan’. Developers pre-selling ”

“ Breach of s 137B gives the purchaser the right to avoid the contract, but breach of s 137E only leads to a monetary penalty, not the right to avoid. A purchaser from an owner-builder may be able to sue for loss and damage flowing from faulty workmanship and breach of the statutory warranties. ”

“ It has been held that a builder who enters into a building contract to construct a mixed development consisting of commercial and domestic components is obliged to have domestic building insurance. ”

“ Note: This chapter is currently under author review. For a current discussion of power of attorney please see the Powers of Attorney Guide. Generally323 ”

“ It is common for one person to want to appoint another person to be his or her representative for the purpose of undertaking some activity on his or her behalf. The law has always recognised this arrangement, which at its simplest is governed by the law of agency. The need for the person acting on ... ”

“ Traditionally, powers of attorney were in long, detailed form setting out the specific powers of the attorney, but the law was simplified by the Instruments Act 1958 in 1980 making provision for powers of attorney to be in a short form. This, however, does not mean that a long form of power of ... ”

“ The Act created a statutory form of power of attorney called a general non-enduring power of attorney. This is the simplest type of power, but it ceases to be enforceable if the donor of the power loses mental capacity. For this reason, an enduring power of attorney (see below) is preferred for use ... ”

“ The Act authorises a power of attorney that endures notwithstanding that the donor may have lost mental capacity. The attorney is able to continue making decisions on behalf of the donor even after the donor has lost legal capacity to make those decisions. This format should always be used where ... ”

“ Individuals have the right to make decisions in relation to their own medical treatment. An attorney under a conventional power of attorney could not make those decisions, and so a special power was created known as an enduring power of attorney (medical treatment). The power must be in the form of ”

“ Conditions or limitations may be imposed on the attorney’s power. s 24 Powers of Attorney Act 2014 ”

“ An enduring power of attorney may be given to two or more attorneys. If the power is joint, then all attorneys must agree; but if the power is joint and several then each attorney is capable of making decisions. s 30 Powers of Attorney Act 2014 ”

“ Alternate attorneys may be appointed to act when the attorney is unable to act. s 31 Powers of Attorney Act 2014 and s 5A Medical Treatment Act ”

“ It would appear to be permissible for two donors to use the same document to appoint an enduring attorney to act on behalf of each of them, but this is not recommended. It would appear that a joint appointment would not comply with the Medical Treatment Act 1988. ”

“ The Corporations Act 2001 does not contain a specific power for a corporation to grant a power of attorney, however a corporation may expressly or impliedly authorise an agent to enter into a contract on its behalf. Further a corporation has all the powers of a legal person, which would include the ... ”

“ Although most company constitutions permit the appointment of an alternate director, not many permit the appointment of an attorney by a director. A general power of attorney by a director does not enable the attorney to exercise the donor’s directorial duties. The donor is not empowered to make ... ”

“ A liquidator may appoint an attorney to act on behalf of the liquidator in the administration of the company. Australian Guarantee Corporation Ltd v Registrar of Titles (1992) 7 ACSR 577 ”

“ The basic rule is that a trustee should not delegate authority to another. However the Trustee Act 1958 does authorise a trustee to appoint an agent to transact business on behalf of the trustee and this power is often used to authorise solicitors and others to perform administrative functions on ... ”

“ The basic rule is that an executor or administrator cannot delegate and therefore cannot appoint an attorney. In rare circumstances the Probate Office may allow a personal representative to appoint an attorney to apply for a grant of representation. ”

“ A power of attorney may be expressed to be irrevocable if it is made to secure a proprietary interest of the attorney or the performance of an obligation owed to the attorney. s 17 Powers of Attorney Act 2014 – power of attorney for security ”

“ The death of the donor revokes an enduring power: s 51 Powers of Attorney Act 2014. The death of an attorney revokes an enduring power to the extent that it confers power on that attorney: s 52. ”

“ An enduring power must be signed by the donor and must be witnessed and dated by two adult witnesses who sign in the presence of the donor and each other. s 33 Powers of Attorney Act 2014 ”

“ At the time of signing the witnesses must certify on the document that the donor signed freely and had capacity to make the power. If the power was signed on behalf of the donor, the witnesses must certify that this was done with the donor’s consent and capacity. s 36 Powers of Attorney Act 2014 ”

“ Although it was once possible to register a power of attorney at the Registrar-General's office and obtain an official number for it, that is now no longer possible and there is nowhere to register a power of attorney. ”

“ Of donor As a general rule, the appointment of an attorney by an insolvent will be ineffective, as the insolvent has lost the ability to control his/her affairs. Equally, a power of attorney given by a donor who subsequently becomes insolvent will cease to be effective upon insolvency. ”

“ The best proof is the original document itself. An alternative is a photocopy of the original with a certificate by the donor or a solicitor or other authorised person to the effect that it is a true and complete copy. ss 16 and 82 Powers of Attorney Act 2014 ”

“ When signing documents pursuant to the power the attorney must make it clear in the signing clause that the attorney is signing on behalf of the donor. Provided it is clear that the attorney is signing on behalf of the donor, the attorney may sign either in the name of the attorney or in the name ... ”

“ As there is now no system of registration, there is no formal system of deregistration. The simplest method is destruction of the original power, but this does not overcome the possibility of certified copies being in existence. A formal method of revocation is by a deed of revocation but, again, ... ”

“ An attorney may resign. Part 5 Divisions 4 and 5 Powers of Attorney Act 2014 ”

“ The powers of an attorney are very wide. Acting within the limits of the fiduciary duty to the donor, the attorney may undertake almost all legal actions that the donor could have undertaken. However, acts that breach the fiduciary relationship between the parties will be struck down. Powell v ... ”

“ Even if there is an irregularity in the relationship between donor and attorney, the donor will be liable to innocent third parties for the actions of the attorney. National Australia Finance Ltd v Fahey [1990] 2 NZLR 482 ”

“ If there is some formal defect in the power or the appointment, the donor may ‘save’ a transaction by confirming the actions of the attorney pursuant to the power. Customer Information Bulletin Edition 91 October 2005 ”

“ An enduring power of attorney must be signed by the attorney to confirm acceptance of the appointment. The acceptance must be attached to the power and be in the approved form. s 37 Powers of Attorney Act 2014 ”

“ A Victorian power may be recognised in another state, but that is not a certainty. There is no uniformity of laws relating to powers of attorney throughout Australia and while the laws are similar, they are not identical. Some jurisdictions still require registration and the payment of stamp duty ... ”

“ The same arguments apply as for interstate enforceability. Although a Victorian power may satisfy formal requirements, there is every chance that it will not and so, if possible, instructions should be given to overseas solicitors or one of the firms in Victoria that have a knowledge of the ... ”

“ A power that is signed overseas will nevertheless be enforceable if it is in the approved form. A power that is prepared and signed overseas will still be enforceable if it is in the approved form. Additionally, a power made in another state or territory will be recognised in Victoria if it ... ”

“ These are of limited legal effect. Part 7 Powers of Attorney Act 2014 ”

“ Generally335 Legal interest takes priority335 ”

“ The law recognises that a number of interests in a piece of land may exist at any one time. Where two or more interests exist in the same piece of land, a method of determining how those interests relate to each other must be established. This will determine the order in which those interests ... ”

“ The first priority rule is that a legal interest prevails over all other interests. In the Torrens system, an interest will only be a legal interest if it is registered on title. The Torrens system is a system of title by registration, not just a system of registration of title. Breskvar v Wall ... ”

“ The second priority rule is that in a competition between two otherwise equal interests, the first in time prevails. In the Torrens system, time refers to the time of registration on title. Thus, in a dispute between two registered interests, both of which are legal interests by virtue of their ... ”

“ The third, and often determinative, consideration in determining priority is the conduct of the parties. This conduct may be overt, in that the parties actually achieve a change in priorities, or it may be implied from the conduct of the parties. An example of a deliberate or overt change is a ... ”

“ The most obvious example of conduct that justifies a court in overturning the priority of registered interests is fraud. At common law a fraudulent document was a nullity, of no effect. An interest gained by fraud or forgery was invalid and unenforceable and any person affected by such an interest ... ”

“ Given that fraud defeats indefeasibility, the first question is – whose fraud? There is no doubt that the person who committed the fraud will be denied indefeasibility and their registered interest will be set aside. The question is whether the fraud of another person, one step removed from the ... ”

“ Applying the priority rules to a dispute between a prior registered interest and a subsequent unregistered interest, the outcome is: legal interest prevails - the registered interest is legal; ”

“ Continuing to consider disputes only between competing registered interest holders, even if fraud cannot be established, a subsequently registered interest holder may still be able to challenge the priority of a prior registered interest on the basis of an in personam right. These rights arise out ... ”

“ The Torrens system rewards registered interests with indefeasibility, but that does not mean that it does not recognise unregistered interests. In personam rights are merely one example of rights relating to land that are recognised and enforceable notwithstanding that they are not registered. ... ”

“ Applying the three priority rules to disputes between registered interests results in: legal interest prevails - both are registered, therefore both are legal; ”

“ Resolution of priority disputes between competing unregistered Torrens system interests does not involve the concept of indefeasibility, because indefeasibility only attaches to registered interests. These disputes are resolved according to the general law principle that: All else being equal, the ... ”

“ Indefeasibility is a powerful concept. Even a document that would otherwise be void is protected by registration. Breskvar v Wall [1971] HCA 70 ”

“ A person who suffers a financial loss as a result of the operation of the Torrens system may, subject to some limited exceptions, make a claim against the assurance fund for compensation. s 110 Transfer of Land Act 1958 ”

“ Generally354 Rescission355 ”

“ The fundamental elements of a conveyancing transaction are the contract of sale and settlement. The contract establishes the rights and obligations of the parties and settlement puts those rights and obligations into effect. If one of the parties fails to honour contractual obligations, either ... ”

“ Rescission in this context has become a term of art in that it refers to the implementation of the rights previously conferred by condition 6 of table A of the Transfer of Land Act but now contained in general condition 28 of the 2008 prescribed contract of sale. Rescission has a somewhat wider ... ”

“ This is a common law concept that refers to the consequences of terminating a contract such that the contract is brought to an end as of the very beginning, as if the contract never existed. This might occur in cases such as fraud or mistake, but it is not relevant to rescission pursuant to general ... ”

“ Rescission and termination are virtually interchangeable, in that they both mean that the contract comes to an end as of the date of rescission/termination. Rescission is the word used to describe the consequences of breach of contract. Termination is the word used to describe the ending of the ... ”

“ Repudiation and rescission are different concepts. Rescission is the acceptance by one party of a breach by another party as a basis for bringing the contract to an end. Rescission in this sense is a confirmation of the contract by the implementation of the rights created by the contract. ”

“ The obligations of the vendor and purchaser are concurrent and mutual. The vendor is obliged to make title and the purchaser is obliged to pay the balance of purchase money, as part of a simultaneous transaction. Both parties must be ready, willing and able to complete their respective ... ”

“ General condition 15.1 of the 2008 prescribed contract makes time for performance of contractual obligations of the essence, which means that parties are required to perform their contractual obligations according to the timetable established by the contract. Any divergence from that timetable, ... ”

“ A breach of contract by one party gives the other party the right to issue a default notice and rescind if the default is not remedied. The innocent party may decide not to take action on the default, or allow the offending party a period of grace before taking action. This will often involve ... ”

“ A party who allows the contract to remain on foot for an extended period of time notwithstanding a breach by the other party must, before taking steps to enforce the contract, give adequate notice to the other party that time is again of the essence. Green v Sommerville [1979] HCA 60Mt Pleasant ... ”

“ Time for performance potentially arises twice. The first time is the settlement date as fixed by the contract. However, if settlement does not take place, the second focus is the last day fixed by a rescission notice. Failure to comply with the contract is not instantly fatal, but failure to comply ... ”

“ No statutory form is prescribed. The notice must comply with the requirements of general conditions 27 and 28. The courts have traditionally required a high level of compliance and have refused to enforce inadequate notices. Nund v McWaters [1982] VicRp 60Central Pacific (Campus) P/L v Staged ... ”

“ Time for General condition 10.3 requires settlement by 4 pm so an innocent party would be entitled to serve a rescission notice after 4 pm on the settlement day. ”

“ Ready, willing and able Subject to the vendor being ready, willing and able to settle, the vendor will be entitled to rescind if the purchaser fails to perform the purchaser’s contractual obligations. ”

“ Many of the matters discussed in relation to the vendor apply to rescission by the purchaser. General condition 27 is drawn so as to apply to both vendor and purchaser and general condition 28 is drawn such that parts apply to rescission by the vendor and parts apply to rescission by the purchaser. ... ”

“ To satisfy the need to tender, a purchaser must calculate precisely the amount due to the vendor pursuant to the contract, including adjustment of outgoings. This amount must be tendered by bank cheque in accordance with general condition 10.4. If the vendor refuses to give instructions as to ... ”

“ If breach remedied The party whose breach of contract led to rescission has 14 days to remedy the breach. In addition that party will, if the purchaser, be obliged to pay penalty interest and legal costs. If the vendor is the defaulting party and remedies the default, the vendor may be obliged to ... ”

“ If the vendor has been in breach the purchaser has the choice of seeking specific performance of the contract or rescinding. If the purchaser has elected to rescind and the breach has not been cured, the contract is at an end and the purchaser is entitled to a refund of any deposit paid. General ... ”

“ If the purchaser has been in breach and the vendor has elected to rescind then the contract is at an end 14 days after service of the notice. The vendor is entitled to costs on the rescission notice and interest at the penalty rate from the due date until that fourteenth day pursuant to condition ... ”

“ Upon rescission, the purchaser’s interest in the property ceases. The vendor is entitled to lodge an application for removal of the caveat. s 89A Transfer of Land Act 1958 ”

“ Rescission is a fundamental confirmation of the efficacy of the contract as it relies upon the terms of the contract. A party who successfully rescinds brings the contract to an end, but does not renounce the contract. However it is sometimes argued that a party who unsuccessfully rescinds a ... ”

“ Generally375 Contract of sale376 ”

“ It is common for solicitors involved in conveyancing transactions to act in relation to the sale of a business, either as part of a sale of real estate or independently. Business law is a discrete specialist area and this chapter is merely a guide to some of the common issues that arise in simple ... ”

“ A sale of business is fundamentally a contract, an agreement between two parties that is enforceable in a court. Unlike a contract for sale of land that must be in writing, there is no legal requirement that a contract of sale of business be in writing. Thus it is possible to enforce even a verbal ... ”

“ Just as a vendor of real estate must disclose certain particulars to a prospective purchaser, so too must a vendor of a business. s 52 Estate Agents Act 1980 ”

“ A sale of business generally envisages that the purchaser will continue to operate the business after settlement from the premises occupied by the vendor prior to settlement. If in fact it is intended that the purchaser will remove the plant & equipment that have been used by the business from the ... ”

“ Very occasionally a purchaser might wish to buy the goodwill or intellectual property associated with a business and not want to take over any plant and equipment or premises. Such a sale will still be a sale of business. For a discussion of the meaning of ‘goodwill’ see: ”

“ If a vendor breaches the disclosure obligations a purchaser may avoid the contract within three months of signing the contract and prior to settlement of the contract. However, unless the vendor has failed to give the information at all, the purchaser is unlikely to know that the key information ... ”

“ As well as the possibility of a claim based on misrepresentations contained in the disclosure documents, the purchaser may have a claim based on other pre-contract misrepresentations, such as anticipated improvements to the property or anticipated business growth. Moorna Constructions (NSW) P/L v ... ”

“ As most transactions use the copyright form of contract it is convenient to consider some of its important conditions. ”

“ Generally382 Who attends settlement383 ”

“ To some extent a conveyancing transaction culminates in settlement. This is the event that has been eagerly awaited by vendor and purchaser and, while there are still some matters to be attended to after settlement, this is the important event when the purchaser pays the balance due under the ... ”

“ If the vendor or purchaser are representing themselves then they will have to attend settlement. If they are represented by a solicitor or conveyancer then usually that representative will attend settlement on behalf of the vendor and purchaser, who will not attend in person, although they may do ... ”

“ General condition 11.3 of the 2008 prescribed contract of sale provides that the purchaser shall pay the money due to the vendor; or the vendor’s legal practitioner or conveyancer; or as the vendor, legal practitioner or conveyancer directs. ”

“ Payments required under the contract may be made by cash or ‘bank’ cheque, but not by trust account or personal cheque as these may be stopped or dishonoured. General condition 11.4 ”

“ General condition 11.3 requires the purchaser to pay the settlement money to, or in accordance with a direction from, the vendor or the vendor’s legal practitioner or conveyancer. Reasonable time ”

“ The purchaser is entitled to receive possession of the property from the time of settlement and the keys are the ultimate indication of possession. It is common practice for keys to be left with the estate agent, who is usually located in the general vicinity of the property. After settlement the ... ”

“ General condition 10.1 entitles the purchaser to ‘vacant possession’ of the property upon payment of the balance due under the contract, unless the contract is expressed to be subject to a lease. This means that the vendor must have vacated the property and left it in a condition that will allow ... ”

“ General condition 24.2 requires the vendor to hand over the property in the same condition it was on the day of sale, fair wear and tear excepted. This means that the property may be in a less attractive condition as compared with the day of sale: grass may have grown, walls and carpet may have ... ”

“ General condition 22 gives the purchaser and/or another person nominated by the purchaser the right to inspect the property at any reasonable time during the seven days preceding and including the settlement day. The right is to ‘inspect’ would appear to be a singular right, exercisable once only. ... ”

“ This issue has generally been considered from the point of view of the vendor’s obligation to make title and, as the certificate of occupancy is not a document going to title, the vendor is not obliged to provide it. A Queensland case has considered the issue from the point of view of vacant ... ”

“ The purchaser is obliged to seek out the vendor. This is often referred to as ‘settlement follows the title’ and allows the vendor to nominate the place of settlement. If the vendor has a clear title, settlement may be at any place in Victoria nominated by the vendor. If the vendor has a mortgage ... ”

“ Calculating the day for settlement depends upon the wording used in the contract. The standard particulars of sale included in the 2008 prescribed contract call for a specific date for settlement to be nominated. If a specific day for settlement is set - for example, 13 April - then settlement is ... ”

“ Whilst general condition 16.1 makes time of the essence, it seems to be as to the day rather than as to the hour. If the parties agree to settle at a particular time on settlement day and one party fails to settle at that time, settlement may still be conducted at a later time that day. Aussie ... ”

“ At common law a contractual obligation must be performed on the due date, whether that date is a business day or not. Failure to perform by or on that day will constitute a breach of contract. Lontav P/L v Pineross Custodial Services [2011] VSC 278 ”

“ It is common practice for a settlement date to be changed. One party may contact the other suggesting a change and, if agreement is reached, the new date is generally regarded as the settlement date. To prove the agreement, it is common to record it in a letter, but an oral agreement is often ... ”

“ A party in breach of contract may quickly cure that breach and seek to settle to minimise liability for compensation. But practicalities often mean that a party who was able to settle on the due date is not able to settle instantly the breach is cured. For instance, if the breach is caused by the ... ”

“ A purchaser in default is obliged to pay penalty interest. Default occurs if the settlement does not occur before 4 pm on the appointed settlement day. Therefore, provided that the purchaser settles by 4 pm the next day, the purchaser has been in default for one day and is obliged to pay one day’s ... ”

“ If one party breaches the contract, the other party has a right to damages under general condition 25. But if the first party cures the breach and it is then discovered that the other party in fact was not in a position to settle on the settlement date, the party who was in breach may seek to argue ... ”

“ Disputes often arise when the vendor claims that the purchaser is in breach for not settling, but the purchaser claims that the vendor is in breach by failing to make title. The vendor’s contractual obligation as set out in general condition 10.1(b)(i) is to ‘do all things necessary to enable the ... ”

“ Generally396 Basis of the relationship396 ”

“ This chapter is concerned with the relationship between solicitor and client and, to a lesser extent, between solicitors. See generally - the Law Institute of Victoria Ethics handbook. Questions and answers. ”

“ The relationship between solicitor and client is multi-layered. The fundamental basis of the relationship is the retainer. This is essentially a contractual relationship that may be evidenced by a written document, oral agreements or implied conditions. In addition, the proximity of the parties to ... ”

“ An actual conflict of interest between solicitor and client is in breach of the solicitor’s duty to the client. Such a conflict may arise directly, where the personal interests of the solicitor conflict with the interests of the client, or indirectly, where the interests of another of the ... ”

“ A solicitor facing a potential conflict of interest may be able to avoid that conflict becoming actual by ensuring that the client is given, or at least realistically offered, independent legal advice. If the client wants the solicitor to continue to act after having received that advice, the ... ”

“ Assisting a client to invest money in mortgages is not legal work. Vaughan & Anor v Legal Services Board [2008] VSC 200 ”

“ The solicitor is authorised by the relationship to act on behalf of the client. By this, the solicitor becomes the agent of the client but, owing to the fiduciary nature of the relationship, must exercise that authority strictly in the interests of the client. As regards third parties, the ... ”

“ The solicitor’s tortious liability is centred around negligence. Any failure to achieve the standard of a reasonably competent solicitor in the performance of the retainer will expose a solicitor to an action for negligence by the client. As mentioned above, such acts or omissions may also ... ”

“ A solicitor may be liable to a third party in negligence if a duty of care can be established. This will be so even if no retainer can be established. Eksteen v White (2000) ANZ ConvR 128Seymour v Seymour (1996) 40 NSWLR 358 ”

“ Barristers have always been immune from liability for negligence in relation to ‘court work’, which may include work performed in preparation for an appearance. D’Orta-Ekenaike v Victoria Legal Aid [2005] HCA 12 ”

“ Solicitors who obtain Specialist Accreditation and then hold out to their clients that the solicitor has specialist skills have a higher duty of care to their clients. Yates Property Corp v Boland (1998) 89 FCR 78Boland v Yates Property Corporation P/L [1999] HCA 64 ”

“ Articles:Solicitors - Executor's commissionSolicitors - Executor's commission - 2 It is common for solicitors to be named as executors in their clients’ wills. An executor is entitled to charge executor’s commission in the following cases: ”

“ The giving of an undertaking by a solicitor is a very serious matter. Failure to comply with an undertaking is a breach of the rules and may result in disciplinary proceedings. An undertaking given by an employee is binding on the solicitor. Rule 6 Legal Profession Uniform Law Australian ... ”

“ A solicitor is entitled to retain a client’s documents until the solicitor’s costs have been paid. This includes documents held on behalf of the client in relation to matters other than the matter in relation to which the costs are owed. The lien does not apply if it is the solicitor who brings the ... ”

“ Upon termination of the solicitor–client relationship, and payment of costs, the client is entitled to the file. However the solicitor is entitled to retain anything in the file that is the property of the solicitor. Thus the client is not entitled to: the file cover, which may include instructions ... ”

“ It is professional misconduct to lodge a caveat on behalf of a client unless the solicitor is reasonably satisfied that the client has a legitimate interest in the land. It is not sufficient that the owner of the land owes money to the client. This does not create an interest in the land such as to ... ”

“ Solicitors must make any payments from the trust account by cheque or electronic funds transfer. Section 144 Legal Profession Uniform Law (Victoria). ”

“ The fundamental rules relating to costs are set out in Part 4.3 of the Legal Profession Uniform Law (Victoria) and Part 6 of the Legal Profession Uniform Law Application Act 2014. Information ”

“ Solicitors may recover money paid to third parties in the proper conduct of the file. These must be itemised. Terms such as ‘sundry disbursements’ are unacceptable. Photocopying and fax transmissions undertaken in the solicitor’s office are not disbursements, but rather professional services. These ... ”

“ Communications between solicitor and client are privileged if the communication was made for the purposes of giving legal advice or for use in existing or anticipated legal proceedings. Privilege will rarely arise in relation to conveyancing transactions. For a case involving alleged privilege ... ”

“ The police or other authorised persons - ATO, ASIC, et cetera - may be authorised to search and remove documents from a solicitor’s office. Guidelines for such searches are in place. The solicitor will normally be entitled to photocopy any documents that are to be removed. Most documents relating ... ”

“ Generally417 Unstamped documents inadmissible418 ”

“ Stamp duty is imposed on most property transactions. There is absolutely no legal reason for this. It is simply an opportune occasion for the government to raise revenue. Property transactions generally involve high value assets and an element of formality that creates the opportunity to police the ... ”

“ Duty is payable on documents that evidence transactions. To ensure compliance with the imposition of duty, the Duties Act 2000provides that a document that is not duly stamped will not be admissible in court, except in criminal proceedings. Thus to be able to rely on and enforce a document, the ... ”

“ A transfer of dutiable property attracts duty. s 7(1)(a) Duties Act ”

“ An application for refund of overpaid duty must be made on a prescribed form, available on the State Revenue Office website, and must be made within five years of payment. ”

“ Duty on a transfer of land is calculated on what is known as an ad valorem basis, meaning that the rate of duty increases as the transfer consideration increases. Duty on transfers of less than $25,000 is 1.4%, but duty on transfers over $960,000 is 5.5%, with a gradual increase in between. ”

“ The Act specifies that duty on a transfer is to be paid by the transferee. s 12 Duties Act ”

“ Transfer of land is a dutiable transaction and attracts duty based on the value of the property. s 7(2) Duties Act ”

“ Whilst the basic proposition is that all transfers of land are dutiable, there are a number of exemptions. See Exemptions and concessions under Land Transfer Duty and Buying a Property. ”

“ Duty is payable on value. The State Revenue Office takes the view that the value of real estate includes any GST payable on the supply of that real estate. Therefore, if the transfer constitute