Author: baron + associates

Since 2016, regulations under the Strata Schemes Management Act 2015 have made it easier for strata owners to make cosmetic or minor changes to their property. Previously, all renovations required a special resolution with a 75% majority from the owner’s corporation in order to be approved. Now under s109 of the Act cosmetic changes such as painting, installing hooks or screws, or laying carpet do not require approval and minor renovations listed under s110 such as renovating a kitchen, installing air conditioners, installing hard floors or reconfiguring walls only require a general resolution (50% majority).

Major work is considered any work not laid out in the Act as either cosmetic or minor and will still require approval via a special resolution from the owner’s corporation. This often includes any changes to the buildings appearance, renovating bathrooms and other larger renovations that may affect the common property of the owner’s corporation.

The Federal government has passed an amendment to the Competition and Consumer Act 2010 that increases the maximum penalty a court can impose for breaching the Australian Consumer Law. The Treasury Laws Amendment (2018 Measures No. 3) Bill 2018 raised the maximum penalty from $1.1 million to either $10 million, three times the benefit obtained from the breach, or if that benefit cannot be determined, 10% of the businesses annual turnover.

This decision has been spurred by recent cases such as ACCC v Apple Pty Ltd (No 4) [2018] FCA 953, where the penalties given to giant corporations have been trivial compared to the company’s turnover. In this case, Apple was fined $9 million for telling consumers that they were not obliged to fix faults in their iPhones if the consumer had taken it to a third party for repair. However considering Apple’s US$48.35 billion dollar yearly profit, Justice Lee is just one of many that have noted that the penalty is the equivalent of ‘loose change’ to the tech giant. This is compared to the recent $6.8 billion fine given to Google in the EU for abusing its market dominance.

The NSW Government has recently passed the Modern Slavery Act 2018 which will require some companies to report on the risks of modern slavery, such as child labour practices of their suppliers overseas, within their company and supply chain. Under the new Act, companies with revenue of over $50 million and at least one employee in NSW will have to report on the company’s supply chains, foreseeable risks for modern slavery, any actions the company has taken to address those risks and the effectiveness of such actions. If a company either fails to prepare the report in a timely manner or fails to publish the report to the general public, they may face penalties of up to $1.1 million.

The NSW Government has passed regulations that address issues with short-term rental businesses such as Airbnb and HomeAway. The new laws have introduced a range of regulations including the introduction of a mandatory code of conduct for service providers and a limit on renting premises for short term stays in Greater Sydney to a maximum of 180 days per year (with exemptions from these limits when the host is on site).

The Fair Trading Amendment (Short-Term Rental Accommodation) Act 2018 was introduced to combat complaints of unruly tourists in apartment blocks and popular Airbnb neighbourhoods, and have been embraced by Airbnb and other home-sharing services. The Code of Conduct includes a “two strikes and you’re out” policy to ensure industry compliance with the new regulations. The government has also indicated that they will be reviewing the regulations after 12 months to ensure they are successful.

A new ban made in the Building Products (Safety) Act 2017 has come into force, which prohibits the use of aluminium composite panels (ACPs) with a core of more than 30% polyethylene in certain building classes, whether they are used in external cladding, external walls, insulation or rendering. Notably, the ban applies retrospectively to buildings constructed before the ban came into force.

Owners of existing buildings may be issued a notice that requires them to either eliminate or minimise a safety risk caused by the cladding. Builders, manufacturers and suppliers may be liable under s15 of the Act if they contravene the ban, and face penalties of up to $1.1 million for corporations or $220,000 for individuals.

In the recent case of Kurmond Homes Pty Ltd v Marsden [2018] NSWCATAP 23, NCAT highlighted that monetary orders may be made in place of work orders even where a work order is preferred by the offending party. In this case, KH was appealing an order to pay $231,770 for defects in a home they built for Marsden. They argued that a work order to rectify the defects could have easily been made instead of damages, and that the Tribunal should not have considered any of their misconduct in previous building projects that were unconnected to this matter. KH also argued that under s48MA of the Home Building Act 1989 rectification of the defects by the responsible party is preferred.

Ultimately the Tribunal dismissed the appeal, stating that they were within their power to consider the previous misconduct of KH, as s79U(2)(g) Fair Trading Act 1987 states that the conduct of the parties to the claim in relation to similar transactions is to be taken into account when making orders. They also held that the preference for rectification in s48MA does not lead to an absolute right, and monetary orders can be made.

Interim Heritage Orders (IHOs) are a swift mechanism that can restrict or block development plans for a property. The recent case of Li v Willoughby City Council [2018] NSWLEC 1262 has highlighted just how easily a council can make such orders, if they consider the property may be of local heritage significance and is being or is likely to be harmed.

In this case, the council relied solely on a report prepared by the Council’s planning manager and a draft Inventory Sheet for the property in question prepared nine years earlier. The Inventory Sheet referred to studies and reports prepared by heritage consultants at the time it was created. The Court ultimately held that this document was enough to satisfy the IHO, despite the fact that nine years ago when the report was prepared the council had declined to make the same order. Therefore the heritage order was valid, and development on the property has halted.

The Federal Court has held that Meriton misled consumers on the popular travel website TripAdvisor by limiting the email addresses they supplied to the travel site for reviews or only supplying those of guests likely to give positive comments.

In Australian Competition and Consumer Commission v Meriton Property Services Pty Ltd (No. 2) [2018] FCA 1125, Meriton was found to have breached s34 of the Australian Consumer Law and was fined $3 million for their actions.

TripAdvisor requires their accommodation providers to supply the email addresses of guests that used the site to book their stay, and sends an email at the conclusion of the visit asking the guests to review the accommodation. However it was determined in court that Meriton’s standard operating procedure was to ask guests about their stay at check out, and if they responded negatively their email addresses would not be passed on to TripAdvisor. Meriton would also withhold all of the email addresses of guests whenever there was a service disruption at their property such as a broken lift or leak.

 

A recent decision in the Supreme Court has reinforced the principle that termination clauses will be interpreted in a sensible and businesslike manner. In DR Design (NSW) Pty Ltd v Grand City International Development [2017] NSWSC 1778, the court was asked to determine whether termination of an architectural services contract was valid, or in fact wrongful repudiation.

In the contract, both parties had an express right to terminate with 48 hours’ notice. GCI (the client) also had the additional obligation of paying DR the value of the work completed to date upon termination. When GCI purported to terminate the contract via a letter, DR claimed that their termination was not valid as they had not paid for the outstanding work yet. However, by applying the principle that termination clauses should be interpreted in a sensible, businesslike manner, the court decided that the payment obligation set out in the termination clause was a consequence of termination rather than as a condition precedent to the exercise of the right of termination.

The recent decision in Dennes v Port Macquarie-Hastings Council [2018] NSWLEC 95 has highlighted the importance of satisfying deferred commencement conditions before the specified period elapses, or else development consent may lapse. In this case, development consent for a flood-prone property in Beechwood was subject to a deferred commencement condition that required Mr Dennes to submit a Flood Emergency Response Plan (FERP) within 12 months. Mr Dennes submitted such a plan within that time frame, but it was rejected by the Council as it was ‘not capable of being supported in its current form.’ Mr Dennes then failed to take any action until four months after the time period of the deferred commencement condition had elapsed, at which time he appealed to the Land and Environment Court.

The court ultimately held that the presentation of the FERP to the Council was not enough to satisfy the deferred commencement condition, as it expressly required the council to find the FERP to be satisfactory. As this did not happened within the specified period, the court held that the development consent had elapsed with the deferred commencement condition. This decision is an important reminder that any appeals must be brought before the specified time period for the satisfaction of a condition elapses.