The NSW government has announced plans to reform stamp duty taxes in the state, by indexing stamp duty brackets to the Consumer Price Index from 1 July 2019. This reform will be the first since 1986, and seeks to address the ‘bracket creep’ currently happening in NSW. This change will only affect residential property transactions.
The NSW government has passed the Conveyancing Legislation Amendment Act 2018, which will allow residential tenancy agreements to be signed and witnessed electronically. The Act is an important modernisation of the previous regulations, that will simplify leasing for agents, landlords and tenants. The government is also proposing that other forms of leases will be available electronically as early as next year, including surrender of lease and variation of lease.
The NSW Court of Appeal has confirmed a decision that held a real estate agent was not liable for misleading and deceptive conduct after representing to a client that she would have private parking on a property sold to her in 2015. Hyder v McGrath Sales Pty Ltd [2018] NSWCA 223 concerned the purchase of a $9.4 million residential property by Ms Hyder, who believed a representation made by a real estate agent that she would have private parking at the property. However, the property was a battle axe lot that shared a driveway, meaning the appellant would not have exclusive parking rights.
While the Court ultimately found that the real estate agent had made a misrepresentation under s18 of the Australian Consumer Law, they were not convinced that Hyder suffered any loss as a result of it. They stated that there was no evidence to suggest that had Hyder known the true nature of the parking arrangements, her decision to purchase the property would have been affected.
In the recent case of Scanlon v McLeay [2018] QDC 17 the court has highlighted that contributions to another person’s mortgage or purchase of property does not automatically give rise to a legal right in that property. In this case, the applicant sought equitable relief for the contributions she had made towards the property of her former partner, namely $49,000 towards a deposit for the property and $86,000 worth of ‘general contributions’ to the mortgage account.
While the respondent strongly argued that all of the payments were a gift, the court ultimately found that the deposit contribution did entitle her to an interest in the property by way of a trust of $49,000. However, the court took the opposite view on the more substantial contributions towards the mortgage, holding that these contributions were given for the applicant and her daughters to live at the property.
The Federal Court has handed down $18 million in penalties to We Buy Houses Pty Ltd (WBH) and its principal Richard Otton after they published a book and held a series of seminars that led consumers to believe they could buy a house for $1. In ACCC v We Buy Houses Pty Ltd (No 2) [2018] FCA 1748 the court found WBH had breached s18 of the Australian Consumer Law through a series of misleading representations in their book and seminars, including that consumers could buy a house and build a property portfolio without a loan, without using their own money, and without any real estate experience. WBH made $20 million off of these products from 2011-2014, but will now face almost as much in penalties for the misleading conduct, with WBH ordered to pay $12 million and Otton to pay $6 million for the breach.
The NSW Government has introduced further reforms to Security of Payment laws in the Building and Construction Security of Payment Act that will ensure prompter payments of subcontractors in the construction industry. The changes include a reduction of the time a head contractor has to pay a subcontractor from 30 to 20 business days, increased enforcement powers for Fair Trading and a payment structure that will allow sub-contractors to make a claim at least once per month for completed work.
Local Councils have a range of powers to issue notices to residents in their area regarding their property, but in the recent case of Cmunt v Snowy Monaro Regional Council [2018] NSWCA 237 these powers were challenged. The appellants in this case argued that the Council did not have the power to issue notices telling them to remove structures that had been constructed without development consent, including a laser fence and poles carrying CCTV cameras. As they were self-represented, Mr and Mrs Cmunt argued that such notices could not be made without a contract between themselves and the Council, and that the Council had no authority to demand they remove the structures. However this argument conveys a misunderstanding of the Councils powers, as under s121B of the Environmental Planning and Assessment Act 1979 a Council may give to the owner of a building an order to demolish or remove a building if the building is erected without prior consent.
As online retailers continue to rise in popularity among consumers, so do the prevalence of ‘click-wrap’ agreements online that ask users to click ‘I agree’ to the terms and conditions on the website. While these agreements are rarely read thoroughly, they can contain unfair terms that affect consumers. While this specific issue is yet to be dealt with in Australian courts, there have been a number of interesting claims in the USA regarding click-wrap agreements.
In Meyer v Kalanick, an Uber passenger sued Travis Kalanick, the founder of Uber, for antitrust behaviour. When Uber sought to refer to an arbitration clause in their terms and conditions, Meyer argued that the contract was invalid. As the contract was formed by a passenger filling out their payment details and forming an account on a phone, the terms and conditions were only referenced under the ‘register’ button in links to the extensive terms. The court said the key question was how conspicuous the terms were to consumers, noting that the links on a small iPhone screen were not particularly noticeable. However the court ultimately decided that the terms were enforceable in the contract because they were ‘standard,’ meaning no special attention had to be drawn to them.
The NSW Court of Appeal has set aside a transfer of property agreement after deeming it unjust in the recent case of Hanna v Raoul [2018] NSWCA 201. Mr Raoul was an elderly, ‘suggestible’ widower who defaulted on his mortgage. After speaking with his nephew, Mr Hanna, Raoul agreed that he would transfer the property to Hanna if he discharged the mortgage, subject to the condition that he could remain living in the property until his death. Mr Hanna’s solicitor prepared a deed of arrangement and a memorandum of transfer, but advised that Raoul should meet with another solicitor in order to have the terms explained.
However, the deed contained terms that significantly disadvantaged Mr Raoul, including the fact he would have no access to capital if he needed it as he aged, it subjected him to the discretionary decisions of Mr Hanna as to the management of the land and there was nothing in place to protect Mr Raoul in the event that Mr Hanna sold the property or died. The court found that Raoul’s solicitor appropriately explained the purpose of the agreement, but did not properly explain the aforementioned consequences. It was ultimately held that it was an invalid unconscionable agreement as there was no reasonable degree of equality between the parties; Hanna knew of Raoul’s desperation to discharge the mortgage as well as his frailty, and still sought to retain any benefit he could.
In the recent case of Carr v Miller [2018] NSWSC 1424 the court found a property developer liable for deliberate deceit regarding a residential development around Middle Harbour. In this case, the developer was not a licensed builder, but nevertheless oversaw the work of various tradespeople in the construction process who produced mostly defective work. Concerned about the quality of the house, Mrs Carr inserted a condition into the contract of sale that required Home Warranty Insurance certificates to be provided in respects of any works completed in the six years before the sale. The developer was only able to get these certificates by entering into back-dated fake contracts with a licensed builder who falsely claimed that the building works were completed by him.
Ultimately the three defendants (the developer, a trades person and the licensed builder) were each liable for various claims including a breach of statutory warranty and deceit. Mrs Carr was owed both the difference between the price paid for the property and its true value, as well as further damages for the deceit.
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