Author: baron + associates

Following the decision in Millers Point Community Assoc. Incorporated v Property NSW [2017] NSWLEC 92, the iconic Sirius building has successfully appealed land tax assessments on the site at of its luxury redevelopment 36-50 Cumberland Street in Sydney’s Rocks precinct.  In November of last year, Sirius challenged the land valuations issued by the NSW Chief Commissioner of State Revenue across 4 rating years, between 2020 and 2023. The Commissioner had initially valued the land as rising steadily from $105 to $155 million over that period. Sirius objected, arguing these figures had significantly overstated the site’s unimproved land value and would inflate its land tax obligations. These objections were partially upheld by the Valuer-General, which brought down the 2021, 2022 and 2023 figures slightly. Sirius appealed to the NSW Land and Environment Court where it sought lower valuations which would align more closely with its own assessments, which ranged from $62.8 million in 2020 to $88.4 million in 2023. The Valuer-General’s office submitted far higher figures during the appeal process than previously accepted, suggesting values exceeding $194 million in most recent years. After negotiations and a conciliation meeting, the parties reached agreement on revised valuations for all 4 years in question. The land was ultimately valued at $86.3 million in 2020, $95.1 million in 2022, and $88.4 million in 2023. This has substantially reduced Sirius’ land tax burden.

Late last year, a Sydney family was subject to an uncompromising land tax rule and assessment by Revenue NSW, resulting in an unexpected $116,000 bill. The issue arose because one individual in the family, a permanent resident originally from Scotland, left Australia for just under 9 months to care for her ailing family member. This put her marginally over the threshold of time allowed outside Australia to qualify for exemption from the foreign investor land tax surcharge. Under current NSW law, permanent residents are only exempt from the surcharge if they have been physically present in Australia for at least 200 consecutive days during the land tax year. That rule, introduced as part of broader foreign investment reforms, is under scrutiny for its strict and inflexible application. The property, a family home, was legally assessed as being foreign-held land under the state’s surcharge regime. The surcharge sits at 8% of the property’s unimproved land value, which is compounded annually. Despite applying for relief on the basis of “exceptional circumstances,” their application was rejected. While the intent behind the foreign surcharge regime is to discourage speculative international ownership, this case suggests a need to reassess whether the rules are being applied with proportionality and fairness. Revenue NSW has not yet commented publicly on the matter.

In Peek v Wheatley [2025] NSWSC 554, the Supreme Court of NSW held that a note found in the Notes app of Colin Peek’s iPhone, titled “Last Will of Colin L Peek”, was not a valid will under section 8 of the Succession Act 2006 (NSW). Peek, a wealthy Sydney property developer, had named a friend and a solicitor as beneficiaries and executors in the note. His estranged brother Ronald challenged its validity, claiming the note lacked formalities and that Colin died intestate. The Court found the note reflected testamentary intentions but did not show a final, binding intention for it to operate as a will. Peek had not told anyone about the note, and key evidence, particularly from the solicitor-beneficiary, was undermined by conflicts of interest and unexplained deletions of messages. As a result, the Court declined to admit the note to probate, and Peek’s $13 million estate will pass to his brother under intestacy laws.

The Conveyancing and Real Property Amendment Bill 2025 (NSW) introduces key reforms to ensure greater certainty for all parties in property transactions involving options. The reform responds to the Supreme Court’s decision in BP7 Pty Ltd v Gavancorp Pty Ltd (2021) NSWSC 265, which found that purchasers under put options were entitled to cooling-off rights. In that case, BP7 was able to rescind contracts, even after 14 apartment owners had exercised their put options, which forced those landowners to refund option fees and cover legal costs, despite the transactions having seemed final.

Previously, contracts arising from both put and call options were believed to fall outside the cooling-off regime, due to section 66T(d) of the Conveyancing Act 1919. The court distinguished put options as not constituting an “option to purchase” in the “natural and ordinary” sense, as they compel the purchaser to proceed. To eliminate this ambiguity, the 2025 Bill amends the Conveyancing Act to include a revised definition of “option” that captures both put and call options. Once enacted, purchasers entering contracts via either type of option will no longer be entitled to cooling-off periods, provided all required disclosure documents have been supplied upfront. By reinforcing the enforceability of option arrangements, the reform delivers certainty in finalising negotiated sales.

In Lendlease Communities (Figtree Hill) Pty Ltd v Mount Gilead Pty Ltd [2025] NSWSC 334, the Supreme Court of NSW issued a warning to commercial drafters and developers that when a contract sets out conditions precedent for exercising a put or call option, those conditions are not mere formalities. The dispute arose from an ambitious staged development at Campbelltown, where Lendlease and the landowners had already executed an agreement known as the ‘Irrevocable Offers Deed Balance Land, Mt Gilead’. The Deed was drafted to govern the sequential acquisition of 5 parcels of land (Lots 6 to 10). Lendlease had already developed adjoining Lots 1 to 5 into what is now known as Figtree Hill. The dispute was concerning the next phase of development. Under the Deed, Lendlease held a call option over the remaining five lots and could compel their sale by serving a compliant Plan of Subdivision. The key requirement was that the plan be “based upon” the draft plan annexed to the Deed (Annexure 2) though variations were allowed in limited, prescribed ways. Time was of the essence. Each lot was linked in sequence, both by timetable and intention.

However, Lendlease had a change of heart. Instead of acquiring all five lots, it submitted a plan (the 12 July Plan) that proposed to acquire only Lots 7 to 10, excluding Lot 6. The new plan also significantly altered lot boundaries and sizes, including shrinking the original 35.6-hectare Lot 6 to a mere 1.41 hectares. And although Lot 6 remained nominally “included,” the Court found that the resemblance between the original and revised plans was so minimal that the latter could no longer be said to be “based upon” the former. The definition of “Plan of Subdivision (Balance Land)” was not an invitation to redesign the proposal. It was a tightly drawn mechanism where “based upon” did not permit wholesale restructuring of the lots or selective acquisition. Drawing on principles from Fitzgerald v Masters [1956] HCA 53, the Court corrected an internal reference error in the Deed to read clause 7.3 (governing variations to easements and affectations) rather than 7.2, which spoke only to amendments. The linguistic correction mattered, and the lawful scope for variation was narrow. The 12 July Plan, proposing only four lots, could not satisfy the conditions set in clause 7.1. The change was too substantial to be a simple variation. It was a reimagining. As a result, Lendlease failed to trigger its option to purchase, and, crucially, the time limit under the Deed expired. As Lot 6 was now off the table, and because the Deed sequenced the acquisition of all five lots in order, Lendlease lost its ability to acquire Lots 7 to 10 as well. The timeline for completion of those later lots was expressly attached to the completion of the Lot 6 contract. That milestone could no longer occur. Even the Landowners’ reciprocal put option was rendered inoperative, since their right to compel a purchase depended on the same sequence. The Court read the Deed holistically, and the ultimate consequence of missing one step in the sequence was a collapse of the whole scheme.

In a detailed and instructive decision, the Supreme Court of New South Wales has provided authoritative guidance on how handwritten special conditions in building contracts, particularly those that impose cooperative duties, are to be interpreted. The ruling in Andrews & Andrews Construction Pty Ltd v Yao; Yao v Andrews & Andrews Construction Pty Ltd [2025] NSWSC 322 was ultimately found in favour of the builder, awarding judgment for over $840,000 in outstanding invoices, plus interest and costs.

The dispute concerned the construction of a luxury waterfront home in Northbridge. The plaintiffs, Andrews & Andrews Construction, had delivered a residential build over several years, with no issue raised by the owners as to the standard of work. The owners paid 17 invoices totalling around $4 million without protest, moved into the completed home, and raised no objections until months after practical completion. The disagreement then centred on a final invoice for $782,124.41, which was presented five months after the project finished, and a subsequent $60,500 invoice relating to post-construction labour. The owners resisted payment on the basis that the builder had allegedly breached a handwritten special clause in the contract which stated that:

“The Builder & Owners shall work together & cooperate to obtain the most competitive price for each element, trade or material & a minimum of two quotes shall be obtained for each item. All contracts are to be approved by the Builder & the Owners as to cost & quality.”

The owners argued that the clause imposed a strict obligation on the builder to source two quotes for every trade or material used. Where this was not done, they claimed, they had been overcharged, and sought to reduce the builder’s claim by $689,000 through a damages set-off. The Court rejected that construction. Justice Stevenson held that the clause in question created a joint obligation; one that was equally binding on both parties and not susceptible to unilateral enforcement. It reflected a shared commitment to cost transparency and cooperation, rather than a promissory condition that either party could sue upon. Indeed, the Court described the clause as “exhortatory”, consistent with the collaborative approach the parties had embraced during the build. The Court also found that even if the builder did not always obtain two formal quotes, this did not amount to a breach of contract. Both parties, including the owners’ son-in-law who frequently attended the site, were actively involved in decision-making throughout the build. The builder provided regular, detailed invoices supported by subcontractor documentation and kept the owners informed of budget updates. The process was fluid and transparent, which is a hallmark feature of cost-plus contracting.

The Court also scrutinised the owners’ reliance on the “facilitation principle”; a legal doctrine allowing courts to draw inferences about loss where a defendant’s breach makes precise quantification difficult. While this principle has been affirmed by the High Court in cases like Cessnock City Council v 123 259 932 Pty Ltd [2024] HCA 17, Justice Stevenson found it had no application here. The owners had waited years to raise the issue and could not show that any alleged non-compliance with the special condition had truly impaired their ability to assess loss. Even further, the evidence didn’t support the owners’ claim. Some items lacking two quotes were ultimately charged at less than what independent experts later deemed reasonable. Others involved work performed directly by the builder or urgent tasks where multiple quotes were impractical. There was no pattern of overcharging or concealment to be found, only a well-documented and evolving construction project which was carried out in close cooperation. The Court found no breach of the Special Condition and no basis for a set-off or damages. The builder was awarded the full amount of both disputed invoices.

Can a director of a developer company be held personally liable for defective building works? Under the Design and Building Practitioners Act 2020 (NSW) (DBPA), the statutory duty of care may indeed extend to individuals, where their role involves real control over construction. Section 37 of the DBPA establishes a personal, non-delegable duty of care owed by anyone who carries out construction work, including supervision or project management, to avoid causing economic loss to owners due to defects. The duty is not confined to builders or tradespeople, and can extend to directors who actively oversee or influence how the works are executed.Liability hinges on whether the individual exercised or had the capacity to exercise “substantial control” over the construction process. Mere position or title is insufficient; the practical reality of the person’s involvement is what matters.

The High Court clarified this in Pafburn Pty Ltd v The Owners – SP 84674 [2024] HCA 49. In that matter, the Owners – Strata Plan No. 84674 (Owners) commenced proceedings against both the builder (Pafburn) and the developer (Madarina), alleging that each had breached the statutory duty of care under section 37 of the DBPA in the course of a residential development at 197 Walker Street, North Sydney. Whilst the Builder admitted to owing the duty, both the Builder and Developer sought to invoke the proportionate liability regime under the Civil Liability Act 2002 (NSW), asserting that subcontractors and consultants involved in the project were concurrent wrongdoers. The Owners applied to strike out these defences, arguing that the DBPA duty is non-delegable under section 39. The High Court held that the DBPA imposes a personal and indivisible duty, meaning liability cannot be apportioned to others. Where a person had ‘substantial control’ over the construction work, and owes the duty under section 37, that obligation cannot be contracted out of (s 40) or delegated (s 39). Subcontracting arrangements do not diminish the legal responsibility of those in control. The statutory obligation here binds notwithstanding internal arrangements or disclaimers. For directors who assume hands-on roles in development projects, especially in smaller firms where lines between corporate oversight and site-level decision-making can often blur, this creates a real and direct risk of personal exposure.

In the context of Australia’s ongoing housing crisis, the Federal Government has introduced a suite of reforms aimed at addressing affordability and supply. Among these, a two-year ban on foreign purchases of established residential dwellings, effective from 1 April 2025, marks a significant tightening of access to the domestic property market. However, the policy framework also includes carefully defined exceptions, most notably for Build-to-Rent (BTR) developments, which remain a key focus of Australia’s housing strategy. While the ban is designed to reduce competition from foreign buyers and prioritise access for Australian residents, the BTR exception reflects a strategic effort to attract institutional capital into sectors that expand long-term housing stock. In exempting qualifying BTR projects from the general prohibition, the government has created a targeted channel for foreign investment aligned with national priorities.

Under this framework, foreign investors may continue to acquire residential land, subject to Foreign Investment Review Board (FIRB) approval, provided the land is used for eligible BTR developments. To qualify, BTR developments must contain at least 50 dwellings, held under single ownership and available for lease to the public on terms of at least five years (unless tenants request otherwise). At least 10% of the dwellings must meet the statutory definition of “affordable housing” under the Income Tax Assessment Act 1997, and the development must not fall within excluded categories such as student accommodation or retirement villages. Use and hold-period conditions ensure a long-term commitment. For land acquired for new BTR developments, the use must continue for 15 years or the duration of ownership, whichever is shorter. For acquisitions of existing BTR assets, the requirement continues for as long as the interest is held. As of late 2023, FIRB application fees for BTR-related residential land are calculated at commercial land rates, which are significantly lower than traditional residential rates. For example, a $10 million residential acquisition for a BTR project would ordinarily incur a fee of $796,500, but under the revised scheme, the fee is reduced to $14,700. Investors must specifically request this concessional treatment in their FIRB submission. These reforms indicate a dual-track approach: restricting speculative foreign ownership in established housing while enabling capital inflows into new, policy-aligned developments. For foreign investors, BTR presents a commercially viable and regulatorily endorsed opportunity to participate in Australia’s housing sector.

A proposal to replace a dilapidated boatshed with public toilets and a boardwalk at McMahons Point, submitted under DA 410/2024, has ignited debate over heritage and civic priorities in one of Sydney’s most iconic harbourfront locations. The proposal seeks to demolish a derelict house at 1 Henry Lawson Avenue and transform the site into a $1.3 million precinct including a coffee kiosk, toilet block, kayak storage, picnic facilities, a viewing platform and extended pedestrian boardwalks. It follows the property’s compulsory acquisition by the NSW Government in 2021 and its transfer to the Council the following year, with the stated aim of opening the foreshore to the public and remedying safety risks posed by long-neglected structures. While few object to the demolition of the dilapidated boatshed or the rehabilitation of the historically significant boat cradle and slipway, linked to infamous 1930s boatbuilder Reginald Holmes and the Shark Arm Murder, the inclusion of new built elements has provoked more than 60 formal objections. The land, once earmarked for public open space by the former state government, sits within the 2.5-kilometre buffer zone established to protect the World Heritage-listed Sydney Opera House.

The council, for its part, defends the project as both necessary and restrained. It contends that the scheme will enhance public access, restore derelict heritage elements, and ultimately improve foreshore continuity from Blues Point to McMahons Point. The viewing platform, it says, will expand the public’s experience of the harbour without compromising its visual integrity. The Council further insures that consultation will continue. For many, the proximity of existing facilities renders the new construction both redundant and financially unjustifiable, especially amid broader council cost concerns like the North Sydney Pool upgrade, as referenced in our May Newsletter. The outcome of the application will rest with the North Sydney Local Planning Panel following an independent assessment.

The legal battle over the $19 million estate of former Miss World contestant and Sydneysider Margaret Thelen recently played out in the Supreme Court of New South Wales, offering a compelling insight into how inheritance disputes are resolved under NSW succession law. Gail Thelen, once known as Gail Petith, rose to fame as a runner-up in the 1974 Miss World competition before joining the police force, following in the footsteps of her father and brother. However, it was her marriage to businessman Werner Thelen that caused her to amass significant wealth. After Werner’s death in 2014, Ms Thelen entered into a romantic relationship with Steven Rundle Bone, a fellow passenger she met during a cruise shortly thereafter. From that point forward, Mr Bone became an increasingly significant figure in Ms Thelen’s financial affairs.

Between 2015 and her death in 2021, Ms Thelen prepared a series of wills, providing considerable generosity to Mr Bone. By the time of the 2019 will, he was entitled to a $1 million legacy and a one-third share of the income generated by a multimillion-dollar testamentary trust. In 2021, just days before her death, Ms Thelen purportedly revised her will once more, this time granting Mr Bone the right to reside for life in her $12 million Clontarf property, or to use its proceeds to secure alternate housing. It was this final revision that became the subject of dispute. Ms Thelen’s brother, Paul Petith, brought the matter before the Supreme Court, alleging that his sister lacked testamentary capacity and that the final amendments were made under the undue influence of Mr Bone. Justice Ian Pike was ultimately asked to decide whether the 2021 will could be admitted to probate or whether an earlier version, executed in 2019, should stand. In NSW, testamentary capacity (the ability of a testator to understand the nature and effect of a will) is not presumed where evidence of cognitive decline exists. In Ms Thelen’s case, the court was not convinced she fully understood the terms of the 2021 will, particularly in light of her deteriorating health, chemotherapy treatments, depression, and alcohol-related cognitive impairments. While Justice Pike acknowledged that the relationship between Ms Thelen and Mr Bone was enduring, he also noted that Mr Bone was the primary beneficiary of the later wills and had played a central role in their drafting.

Accordingly, the court admitted the 2019 will to probate. It was deemed to reflect a point in time where Ms Thelen retained capacity, and where her testamentary intentions were clear and legally valid. Mr Bone, under the terms of that will, will receive a $1 million legacy, $2 million from Ms Thelen’s self-managed super fund, and an estimated $320,000 annual income from the testamentary trust. His attempt to claim further provision from the estate was dismissed, with the court finding that he remained comfortably positioned to secure suitable accommodation, even without lifetime residence rights in the Clontarf property.