Author: baron + associates

The Building Products (Safety) Act 2017 commenced on 18^th December 2017. The Act is part of the NSW Government’s plan for fire safety following the Grenfell Tower fire in London in June 2017. The external cladding on the tower is believed to have accelerated the spread of fire in the building. Under the Act, NSW Fair Trading may ban a specific building product if it is deemed unsafe. Accordingly, building owners will be required to rectify their building where unsafe building product has been installed. Owners Corporations will need to include particulars of outstanding building product rectification under the Strata Schemes Management Act 2015. The contravention of a building product ban is an offence and may result in fines and/or imprisonment. Read more.

In Al Maha Pty Ltd v Coplin [2017] NSWCA 318, a buying agent offered to purchase a property with an 18 month settlement. Both parties learned that the land could be rezoned to high density residential. The transaction was to be carried out by use of put and call options. However the owner complained was that he was deprived of the opportunity to take legal advice. The primary judge agreed and held that the option agreement was unjust under the Contract Review Act 1980 (NSW).

The Court of Appeal overturned this decision and held that a contract can be considered “unjust” if a defendant has engaged in conduct depriving the claimant of a real or informed choice to enter into a contract. A contract that is merely not in the interest of the claimant or where a claimant had no independent legal advice does not render the contract unjust. The Court also highlighted other relevant considerations for potentially unjust contracts including inequality in bargaining power and the public interest test. Read full case.

In Dasreef Developments Pty Ltd v Josiv Velkovski [2017] NSWSC 1698, A purchaser failed to complete a contract for sale of land. The vendors then terminated the contract and retained the deposit of $63,000. The purchaser sought relief against forfeiture of the deposit under s 55(2A) Conveyancing Act 1919 (NSW). The purchaser argued that the deposit should be returned, especially since he was seeking approval for a bank loan at the time of termination.

The Court held that s 55(2A) does not grant the Court an overall supervisory role over parties to a contract which has been terminated and the deposit forfeited. A Court will not deprive a vendor of a deposit forfeited in strict enforcement of their legal rights unless it is unjust and inequitable to permit its retention. The Court held that despite the undesirable position of the purchaser, there was no unjust or inequitable outcome. Had the purchaser actually informed the vendor that he was raising finances when the contract was terminated, it may have been unjust and inequitable to retain the deposit. Read full case

All residential strata buildings in NSW must have window safety devices installed to prevent children falling from windows. The deadline is 13th March 2018. The regulation applies to windows that can be opened and are less than 1.7m above the internal floor, where the internal floor is more than 2m above the outside ground. The devices must enable the maximum opening to be less than 12.5cm A device that allows for a window to be fully opened or limited to less than 12.5cm is compliant. Complying safety devices include devices attached to a window frame or robust bars. The devices must also be installed on applicable windows in common access areas such as stair landings. Read more.

In Hyder v McGrath Sales Pty Ltd [2017] NSWCA 1647, McGrath was the agent for a battle-axe property that was sold. In previous years, an area of the driveway had been treated as a private parking area for this property. However after the Hyders purchased the property there was a dispute as to whether the area was in fact a private parking area. The Hyders claimed that McGrath made misleading and deceptive representations when describing the area as a private parking area.

The judge found that McGrath’s representations both orally and in the marketing material were misleading and deceptive. However, the Hyders failed to show that if these representations not been made, they would not have purchased the property. Also, the Hyders failed to take reasonable care for their own interests by not conducting pre-contractual enquiries. The judge reduced the damages by two thirds to take account of this. Read full case

In Namrood v Ebedeh-Ahvazi [2017] NSWCA 310, a property for sale was falsely advertised as a mortgagee sale. Mr Namrood attended the auction for this property and was the successful bidder at $1.46 million. After Mr Namrood had entered into a contract to purchase the property, he claimed that the advertisement of the auction by mortgagee sale was misleading and was calculated to and did induce him to bid at the auction.

The Court held that the advertisement of the property was misleading and deceptive. However there was no evidence that Mr Namrood made a bid because he believed it was a mortgagee sale. Mr Namrood stated that he bid at the auction because the bidding of other participants encouraged him to do so. Also, Mr Namrood had learned that the property owner was the manager of a housing company, which dispelled Mr Namrood’s belief that it was a mortgagee sale. Hence the Court held that despite the misleading and deceptive conduct, it did not cause him to enter into the contract. Read full case.

In Bunderra Holdings Pty Ltd v Pasminco Cockle Creek Smelter Pty Ltd [2017] NSWCA 263, a development consent required the construction of a pipe. However the approved construction certificate plans did not show that pipe. At first instance, Pasminco argued that s 80(12) of the Environmental Planning & Assessment Act 1979 provided that the absence of the pipe in the construction certificate meant that it was not part of the consent. However the Court held that Pasminco should ensure that the works were generally consistent with the consent.

The Court of Appeal overturned this decision and stated that s 80(12) has the effect that where the specifications in the construction certificate are inconsistent with the specifications in the development consent, the construction certificate will override the development consent. Read full case

In Camden Nurseries Pty Ltd v Aussie Growers (Aust) Pty Ltd [2017] NSWSC 1770 Ms Cassar agreed to sell a property to Mr Marjan which they would develop and co-own. The agreement implied that Ms Cassar totally owned the property and would transfer the whole property to Mr Marjan. However Ms Cassar only had a share as tenant in common with Mr Palmer.

The Court held that the agreement was a sham since Ms Cassar had no intention of transferring her share to Mr Marjan. Hence the contract did not reflect the true intentions of the parties to become co-owners. The Court ordered Mr Marjan to remove the caveat that purported to grant him an interest in the property. Mr Palmer was entitled to possession of the property and to exercise the power of sale.

In Bridge v Coles Supermarkets Australia Pty Ltd (No 3) [2017] NSWSC 1800 Coles was the lessee of a car park. Mr Bridge commenced proceedings against Coles after he slipped and suffered personal injury in the car park. At the time, the car park was wet and the surface where Mr Bridge slipped had a polished finish. Under the lease Coles was required to keep the car park in good repair. The landlord was required to undertake “structural repairs”. Coles argued that they could not apply a non-slip coating to the surface because it was structural repair.

The Court held that Coles had a duty of care to take reasonable care to avoid foreseeable risk of injury to lawful entrants. Under the lease Coles had the power to repair the floor with a non-slip coating which was not structural repair. Even if this conclusion was wrong, a reasonable person in the position of Coles would have sought permission to undertake repairs since Coles had previously identified the polished surface as a safety hazard.

In Denshire v Roads and Maritime Services [2017] NSWLEC 181 Mr Denshire’s land was compulsorily acquired by the RMS for a highway upgrade. Mr Denshire appealed under s 66(1) Land Acquisition (Just Terms Compensation) Act 1991 regarding the compensation payable. Mr Denshire submitted a claim for special value since his father had plans to subdivide the land and sell off individual lots. In the Act special value means the financial value of any advantage of land in addition to the market value.

The Court held that the potential to subdivide and sell of individual lots is not a special quality of the land. Rather it is an inherent characteristic of the land. Its value is included in the market value. Hence no additional compensation was payable to Mr Denshire.