Author: baron + associates

A string of recent decisions in the District Court have undermined the court’s jurisdiction, with three cases this year holding that the District Court does not have the power to determine ‘commercial matters’. This finding is based on the meaning of rule 14.2 of the Supreme Court Rules (1970), that states the Supreme Court’s Commercial Division is to hear matters arising out of commercial transactions or those in which there is an issue that has an importance in trade or commerce. The importance of ‘or’ in the rules has previously been overlooked, but in Nova 96.9 v Natvia [2018] NSWSC 1288 the court ruled these are two separate types of proceedings the Supreme Court has jurisdiction over. This is of serious concern, as it could mean all proceedings currently in the District Court regarding commercial matters will need to be transferred to the Supreme Court and any previous decisions could be appealed.

When retail leases near their expiry, the lessor has certain obligations under s44 of the Retail Leases Act 1994 to give the lessee notice of their intention to either renew or terminate the lease upon its expiration. Under the Act, the lessor must give written notice of their intentions to the lessee no less than six months before the expiry of the lease.

In the case of Anka (Civic Centre) Pty Ltd v Sahyoun (2014) NSWSC 17 the court discussed the consequences of failing to comply with s44, and held that as per s44(3) of the Act failure to give notice will result in the lease being extended until six months after the proper notice is given. Notably, the court held that the notice required does not have to expressly refer to s44, as long as it manifests the lessor’s intention.

A South Australian court has held that a subcontractor was liable in negligence for damaging a power cable while excavating a trench in the case of D&V Services Pty Ltd v SA Power Networks [2018] SASCFC 92. The consequences of cases such as these can be serious, as the damage may not only affect the owner of the cable, but also end-users such as businesses who lose profits due to a power outage.

In this case, D&V had been given a copy of a ‘Dial before You Dig’ plan put together by SA Power that gave a rough indication of the location of power cables. However, this copy did not have the accompanying disclaimer and header sheet that stated the plan was only indicative and that contractors should contact SA Power if they planned to dig within 5 metres of a cable to obtain its exact location. D&V did not dispute that they owed a duty of care to SA Power, but argued that they had not breached this duty. However, the court held that D&V had not taken reasonable precautions to reduce the risk of damage, as the relatively easy task of contacting SA Power was not completed prior to excavation. Therefore, D&V had breached their duty of care and were liable for SA Power’s loss.

The New South Wales Parliament has passed a number of reforms to residential leases including mandatory fees for breaking a fixed term lease, minimum standards, and limiting rent increases. The Residential Tenancies Amendment (Review) Bill 2018 states that all rented properties will have to meet seven minimum standards in order to be deemed habitable, namely that it is structurally sound, there is adequate natural or artificial light in each room, there is adequate ventilation, the property is supplied with electricity or gas for lighting, heating and appliances, there is adequate plumbing and drainage, the property is connected to a water supply service, and it contains bathroom facilities that allows for user privacy.

In addition, rent increases will be limited to once every 12 months and mandatory set fees for breaking a lease early will be measured by the proportion of the lease left at the time of the breach. There have also been protections implemented for tenants who break a lease due to domestic violence within the property, by allowing victims to terminate the tenancy without penalty and ensure they are not held accountable for property damage that occurred during a domestic violence incident.

The NSW Parliament has passed an amendment to the Strata Schemes Management Act 2015 that will affect the way developers lodge bonds for strata schemes. The Strata Schemes Management Amendment (Building Defects Scheme) Bill 2018 will now require developers to lodge their bond before applying for an occupation certificate and agree with the owner’s corporation on the amount to be released for rectifying any defects within the building. In addition, there are increased penalties for failing to lodge a building bond and proposed offences for developers that give misleading information about the amount required for the bond.

A recent case in the Supreme Court of Victoria has departed from the reasoning of NSW courts when it comes to imposing a time limit on bringing claims under s18 of the Australian Consumer Law (ACL) for misleading or deceptive conduct. In Brighton Australia Pty Ltd v Multiplex Constructions Pty Ltd [2018] VSC 246 the court held that a clause imposing a time bar of seven days on any claim under the ACL was invalid, as any restriction is an ‘unacceptable interference with the public policy underpinning the provisions.’ However, this differs from the approach taken by NSW courts in Lane Cove Council v Michael Davies & Associates [2012] NSWSC 727, where a similar clause was held to be valid, as it did not exclude the operation of the ACL but only regulated it. Going forward, contracts under Victorian and New South Wales law may differ on this point.

The Land and Environment Court has handed down a penalty of $64,000 and supervision requirements to a woman that illegally removed native trees from her neighbour’s property in Hunter’s Hill. In the recent case of Hunters Hill Council v Liu [2018] NSWLEC 108, Ms Liu was found guilty of soliciting a contractor to remove two Cheese Trees on her neighbour’s property, as they dropped leaves into her pool. The trees were protected under the EPA, and the court found that Ms Liu was reckless as to whether she needed the Council’s permission to remove them. Notably, the court ordered Ms Liu to plant two new Cheese Trees on her own property, whose growth would be monitored by the Council, in addition to the substantial fine.

The NSW Supreme Court has invalidated a decision of the Independent Liquor and Gaming Authority to vary the trading hours of the Sydney Junction Hotel in Bondi in the recent case of Rogers v The Independent Liquor and Gaming Authority (No 2) [2018] NSWSC 1177. In 2017, after receiving advice from the Commissioner of Police that the extended trading licence granted to the Hotel should be revoked, the Authority notified the Hotel of the Commissioner’s request and invited the Hotel to make submissions to the Authority. After hearing submissions, the Authority chose not to revoke the extended trading license but reduce it from closure at 3am to 1.30am.

The owner of the Hotel appealed this decision on the grounds that this was not a proposed decision, and that the Authority should have gone through a second process in which they considered all statutory requirements and given all parties a reasonable opportunity to make submissions in respect of the variation. The decision ultimately relied upon the construction of s51(13) of the Liquor Act 2007, and the court held the lack of due process invalidated the Authority’s decision.

Existing use rights allow for the use of land that was lawful, but subsequently became unlawful by a change to the local environmental plan (LEP) or other environmental planning instrument after the use had commenced. In the recent case of Saffioti v Kiama Municipal Council [2017] NSWLEC 65, the Land and Environment Court considered what land this benefit will be conferred to, and ultimately based their decision on whether the land had been subdivided.

In this case, Ms Saffioti owned a block of land on the NSW Southern Coast that, other than a small dwelling from the 80s, was covered in native vegetation. Her development proposal to build another small dwelling and garage on another part of the property was rejected by the council, who argued that the new zoning laws only allow for development for environmental conservation. The Council conceded that Ms Saffioti has existing use over the current dwelling, but argued that this could not be extended to the entire block. However the court considered the fact that the land had not been subdivided in any way, either physically or by use, and therefore found that the existing use right applied to the whole block and the development should proceed.

In the recent case of The Owners – Strata Plan No 66375 v King [2018] NSWCA 170 the NSW Court of Appeal ruled that immediate subsequent home owners are able to enforce statutory warranties against developers under s18C of the Home Building Act 1989. In this case, the Kings contracted with Beach Constructions to build a residential and commercial strata development on their land, but after residents moved into the buildings various defects were found, including missing seals on elevator doors and other fire and safety defects. These were not a result of the builders work, but rather design flaws that the builder had followed.

The Owner’s Corporation brought a claim against the Kings and Meridian Estates, a company of which the Kings were the sole directors. On first instance, the primary judge held the Kings were not developers because only Meridian Estates was party to the contract, however the Court of Appeal overturned this decision and ordered a judgement of over $5 million against the Kings. The court held that the Kings fell within the definition of developers and that the warranties guaranteed under s18C were designed for situations like these, where immediate subsequent purchasers could seek compensation from the person responsible for the defective work where there is no direct legal relationship.