Who’s liable for unsafe rental premises?

Posted on January 11th, 2018

The N.S.W. Court of Appeal recently considered the respective liabilities of a landlord, managing agent and tenant arising out of the collapse of a balcony at a rental property at Collaroy, on the Northern Beaches of Sydney (Libra Collaroy Pty Limited v Bhide).

In 2005, the landlord engaged a real estate agent to manage their residential rental property pursuant to a Management Agreement. During the tenancy, the tenant raised numerous issues concerning the state of repair of the upstairs balcony. The managing agent obtained quotes for repairs and forwarded these to the landlord however these were not acted on.

In 2012, the balcony collapsed injuring 4 people, including the tenant’s daughter. The 4 injured persons commenced proceedings against the landlord and the managing agent for their injuries and the tenant also commenced proceedings against the landlord and the managing agent for psychological injury. The landlord and managing agent issued cross claims against each other and also against the tenant. Read the rest of this entry »

You need to amend your trust deed

Posted on December 15th, 2017

Recent amendments to transfer duty and land tax legislation may affect every Family/Discretionary Trust that either purchases or holds land in New South Wales.

A Family/Discretionary Trust is often used as an asset protection structure as the trustee normally has wide discretionary powers to distribute income and capital to wide classes of beneficiaries under the trust.

However, this wide discretionary power may cause a Family/Discretionary Trust to fall foul of the legislative amendments in 2016 targeted at “foreign persons” acquiring and holding land in NSW. Foreign persons are now subject to a 4% surcharge purchaser duty when acquiring residential land and a 0.75% surcharge on land tax where a foreign person holds residential land in NSW.   Read the rest of this entry »

When is a deposit refundable under a business sale agreement?

Posted on July 10th, 2017

The case of Sarker Trading Pty Ltd v Vanage Pty Limited [2016] NSWDC 250 recently addressed the issue of deposits and whether or not a deposit can be forfeited under a Business Sale Agreement where the Agreement is rescinded.

The facts of the case are:

  • Sarker, as purchaser, entered into a Business Sale Agreement with Vanage for the purchase of a Subway Franchise in Forestway NSW for $95,000.00 (“the Agreement“).
  • The Agreement provided that it was a condition precedent to completion that Sarker be approved as a Franchisee of Subway.
  • Sarker paid an initial deposit of $10,000 (10.5%) and a further “Security Deposit” of $75,000.00.
  • Sarker failed the relevant “Skills Test” performed by Subway required to be approved as a Franchise.
  • Sarker sought to rescind the Agreement for an inability to satisfy a condition precedent to completion.
  • Vanage asserted it was entitled to retain the deposit and the Security Deposit.

Read the rest of this entry »

Damage claims for repairs when leasing – Part Two

Posted on June 28th, 2017

The NSW Court of Appeal case, Ellis’s Town House Pty Ltd v Botan Pty Ltd [2017] NSWCA 20, is a particularly interesting case as it addresses two separate but interesting issues, being:

  1. What is the correct method of assessment of damages under a Lease for a breach of painting and repairing covenants? and
  2. When a party may make an application to appeal from a Judgment of the District Court for amounts under $100,000.00.

The facts of the case together with the measure of damages have been discussed in Part 1 of this series of articles.  Read the rest of this entry »

Damage claims for repairs when leasing – Part One

Posted on June 28th, 2017

The NSW Court of Appeal case, Ellis’s Town House Pty Ltd v Botan Pty Ltd [2017] NSWCA 20, is a particularly interesting case, as it addresses two separate but interesting issues, being:

  1. What is the correct method of assessment of damages under a Lease for a breach of painting and repairing covenants? and
  2. When a party may make an application to appeal from a Judgment of the District Court for amounts under $100,000.00.

We will address these two issues in two parts over two separate articles. Read the rest of this entry »

Are you ready for the changes to retail leasing?

Posted on April 4th, 2017

Despite the fact that Retail Leases Act 1994 NSW (“the Act“) has been in operation for some 23 years, compliance with the Act is often rare. 

Just as Practitioners appear to be wrapping their heads around the operation of the Act, the Retail Leases Amendment (Review) Bill 2017 NSW (“the Bill“) was passed by the NSW Parliament on 21 February 2017. The Bill amends the Act in a number of areas. To assist you with understanding the changes as early as possible this time, I have set out the following “Cheat Sheet” warning of the major changes to the ActRead the rest of this entry »

Assignment of contracts – pre-existing knowledge

Posted on March 27th, 2017

Where contractual rights are assigned; can the recipient’s pre-existing knowledge invalidate those rights?

In Walker Group Constructions Pty Limited v Tzaneros Investments Pty Limited [2017] NSWCA 27 just such an issue arose.

The case is both factually and legally complex but the relevant parts can be summarised as follows. Walker constructed some concrete pavements at the Port Botany Container Terminal. The construction contract included warranties to make good any defects in the construction. At the time of the construction, the relevant land was leased by P&O. The lease was later transferred to Tzaneros as was the benefit of the warranties to Tzaneros.
Read the rest of this entry »

Land tax – a win for property developers

Posted on February 20th, 2017

In a win for property developers, on 10 February 2017 the NSW Court of Appeal upheld a previous decision of the Supreme Court allowing a property developer the benefit of the primary production exemption from land tax (Chief Commissioner of State Revenue v Metricon Qld Pty Ltd).

Metricon had acquired a substantial land holding for approximately $60 million, which had been rezoned ‘Urban Expansion’ allowing for residential development. During the relevant period, Metricon sought development approval and paid approximately $2.2 million in consultant’s fees in preparing plans and reports in support of the development. Metricon also during this period agisted the land for cattle grazing for a rental of approximately $30,000.00 per annum. Read the rest of this entry »

Residential tenants – do you sub-lease to roommates?

Posted on January 20th, 2017

Are you a tenant in a share house and the only person on the Lease? If the answer to this question is yes, it is likely that you are actually subleasing the property for the purposes of the Residential Tenancies Act 2010. There are a number of important considerations you should be aware of if you are subleasing a residential property, including:

 

Read the rest of this entry »

Self-managed superannuation funds (SMSF) & enduring power of attorneys (EPOA)

Posted on December 21st, 2016

The following example from a draft tax ruling illustrates some of the issues in respect to Self-Managed Superannuation Funds (SMSF’s) and Enduring Power of Attorneys (EPOA).  If this prompts a query from you, give us a call:

EXAMPLE:  Clare is the sole member of a SMSF.  The SMSF trustee is Clear Pty Ltd and Clare is its sole director. The responsibilities of being director of the trustee company of the SMSF have become too difficult and time consuming for Clare. Read the rest of this entry »

Paying deposits by installments – vendors beware

Posted on December 19th, 2016

It is increasingly common in contracts for the sale of land, for vendors to accept less than the traditional 10% deposit. Commonly, contracts contain clauses to the effect that, although the deposit remains 10%, a smaller sum is payable on the exchange of contracts and the balance of the 10% remains payable – typically at the time of settlement.

Problems can arise when the contract does not settle due to default by a purchaser. The vendor has not received (and cannot retain) the full 10% deposit. Claims to recover the outstanding part of the deposit are often defended on the basis that ordering payment of the balance of the deposit would be a “penalty” and is therefore impermissible.  Read the rest of this entry »

Rights between joint guarantors

Posted on December 19th, 2016

The NSW Supreme Court recently dealt with a claim for contribution between multiple guarantors.  In simplified form a company “OD” loaned money to an incorporated legal practice.  The loan was guaranteed by three individuals and a further company Trout Hall “Trout”.  The loan was not repaid.  Two of the three individual guarantors became insolvent.  The lender sued the remaining individual guarantor, Mr Robert Clancy, and he cross claimed against Trout. joint guarantors rights

Prior to final hearing Mr Clancy paid an amount to the lender to settle the claim against him.  Ultimately, the Court held that Mr Clancy had paid more than required. Trout argued in its defence that because of the payment by Mr Clancy no amount remained owing from it to the lender.  It seems the lender accepted that argument because the claim between the lender and Trout also resolved. Read the rest of this entry »

Who bears costs when a case is settled?

Posted on November 21st, 2016

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

The NSW Court of Appeal recently had to consider whether costs should be awarded, in circumstances where a plaintiff accepted a settlement offer from a defendant which had been made prior to a hearing; but which was not accepted until after the hearing and when the Court’s judgment was reserved. The defendant’s offer was explicitly said to be “exclusive of costs”.  who bears costs settlement

The defendants later made an application that they be awarded the costs of proceeding, and the plaintiff contended that was a breach of the agreement, that entitled the plaintiff to damages. In this context it must be remembered that an agreement to settle litigation is a form of contract, and that usual contractual remedies are available for any breach of it. The Court rejected the plaintiff’s claim that the words “exclusive of costs” meant that it was an implied term of the contract that each party would bear their own costs.  Rather, consistent with decisions made in relation to formal Offers of Compromise, the phrase meant the settlement agreement did not deal with costs at all. The issue had to be dealt with under the general law rather than under the terms of a settlement contract.   Read the rest of this entry »

Dealing with Defects? Don’t Delay!

Posted on November 15th, 2016

Katie Thompson is a Solicitor at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation.

Your guide to home warranty insurance time limits.

The Home Building Act 1989 (The Act) requires builders and tradespeople to be licensed for the work that they do, and to have insurance and proper contracts in place for most jobs. Most residential building works must have home warranty insurance. Home warranty insurance provides insurance cover in respect of loss only if a claim is made to the insurer during the period of insurance. The period of cover depends on the type of loss that occurs. 

For non-completion of work, the Act requires insurance cover for a period of a least 12 months after the failure to commence, or cessation of the work. This means that the insurer must be notified within 12 months for a claim based on non-completion.

Read the rest of this entry »

Contractual Penalties – a change in landscape

Posted on October 26th, 2016

contractual-penalties-a-change-in-landscapeTony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

The concept of a “penalty” in Australian law is relatively easy to state, but often difficult to apply in practice. In essence, where a contractual provision (or some collateral arrangement) imposes an obligation for breach of contract, that is disproportionate to the actual cost or loss resulting from the breach, it can be set aside as a “penalty”.

Take a simple example of a contract to purchase a car for $10,000.00. It has a condition that if the purchasers do not complete the purchase on a specified date they must pay $1,000.00 per day, in addition to the price, until settlement occurs. That additional sum is obviously disproportionate to the vendor’s actual cost of delaying settlement. By contrast, a provision that is a genuine pre estimate of the injured party’s costs or losses will not be a “penalty”. Using the ‘sale of a car’ scenario above, if the ‘price’ for a delayed settlement was set by reference to the vendor’s actual holding costs (for example if the vendor’s loan repayment was $10 per day and the ‘price’ of delay was also $10 per day) it can readily be seen that the additional payment is a genuine pre-estimate of loss. Read the rest of this entry »

Selling with a swimming pool – beware

Posted on October 20th, 2016

selling-with-a-swimming-pool-bewareRobert Lindsay is a Director at Mullane & Lindsay in Newcastle and leads our Commercial & Property Law team.

If Contracts exchange for the sale of a property with a swimming pool, after 29 April 2016, the Vendor must attach one of the following prescribed documents to the Contract:

  • A valid Certificate of Compliance issued by either the municipal council, or an accredited certifier; or
  • A relevant Occupation Certificate and evidence that the swimming pool is registered; or
  • A Certificate of Non-Compliance.

If one of the above documents is not attached to the Contract at the time of exchange, then the purchaser has a right to rescind the Contract within 14 days after exchange of Contracts. If the purchaser rescinds, the Contract will be at an end and the deposit paid by the purchaser at the time of exchange of Contracts must be refunded to the purchaser. Read the rest of this entry »

Love thy neighbour but not their trees?

Posted on September 28th, 2016

by Felicity Wardhaugh

love-thy-neighbour-but-not-their-tree
Felicity Wardhaugh
is a Special Counsel at Mullane & Lindsay in Newcastle and specialises in wills and estate planning,
commercial dispute resolution & litigation, and employment law.

The Land and Environment Court provides assistance to neighbours who are in dispute about trees. It is obviously preferable to talk to neighbours rather than take them to Court.  However, knowing that the Court provides this type of service is helpful.  It might persuade a neighbour to be more reasonable. Section 7 Trees (Disputes Between Neighbours) Act 2006 enables an owner of land to apply to the Court for an order to remedy, restrain or prevent damage to property or injury to a person as a direct consequence of a neighbour’s tree. Read the rest of this entry »

Traps with Powers of Attorney

Posted on September 20th, 2016

Traps with Powers of Attorney Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

The NSW Supreme Court recently dealt with a case about the transfer of a property under a Power of Attorney (PoA). Briefly, a Mrs Cohen, an elderly and infirm lady, granted a PoA to her son. The son was also the sole beneficiary of the only known Will of his mother.

The son used the PoA to transfer a home unit from her name to his. This particular PoA expressly permitted the son to confer a benefit on himself.

By the time of the hearing Mrs Cohen was in aged care; the cost of her care exceeded her pension; and the NSW Trustee & Guardian had been appointed to manage her financial affairs. It wanted to sell the unit, to release funds to be used for Mrs Cohen’s care. It argued the transfer was improper, despite the PoA allowing the son to benefit himself. Read the rest of this entry »

Court costs – when do they not “follow the event”?

Posted on July 20th, 2016

by Tony Cavanagh

Tony Cavanagh is a Director at Mullane & Lindsay in Newcastle and specialises in commercial dispute resolution & litigation, and employment law.

Most of us are familiar with the expression “costs follow the event”; that is, in a litigated claim the loser usually is ordered to pay the winner’s costs. In some circumstances that rule can be varied. The NSW Civil and Administrative Tribunal (NCAT) recently dealt with an application to vary, based on two specific grounds.

A dentist was charged with, but acquitted of (under mental health legislation) indecent assaults against a patient. However the same facts resulted in disciplinary proceedings against him by the Health Care Complaints Commission. There was a finding of professional misconduct; and a declaration that, had the dentist not otherwise ceased to be registered, his registration would have been cancelled for a period of 18 months. The HCCC had sought a cancellation for 2 – 3 years. Read the rest of this entry »

Do I pay GST when Buying or Selling a House?

Posted on June 27th, 2016

by Lachlan Page

Lachlan Page is a Solicitor at Mullane & Lindsay and is part of our Commercial, Property & Estates Law team.

When buying or selling a property, it is important that you consider any GST implications under the A New Tax System (Goods and Services Tax) Act 1999 (CTH) (“the Act“).

The Act provides that the sale of a property can either be treated as a taxable supply, GST free or an input taxed supply. Each of these categories result in different treatment in relation to GST.

Generally speaking, the sale or purchase of a residential premises will be GST free. A residential premises is defined as a premises that can be occupied, is occupied or is intended to be occupied as a residence. As the sale/purchase of vacant land cannot be occupied until a residence is constructed, vacant land will not be considered a residential premises. Read the rest of this entry »