Court Grants Easement in Absence of Enforceable Agreement

In the case of Roma Lopeman v Win Corporation Pty Ltd [2020] NSWSC 1305, the Applicant sought an order that the Respondent perform its obligation pursuant to an agreement in the nature of an easement between the Applicant and Respondent with regard to the grant of vehicular access to the Applicant’s land though the Respondents land, or alternatively, an order for a declaration that the Respondent be estopped from departing from the terms of the agreement pursuant to s 88K of the Conveyancing Act 1919 (NSW) (“CA”) which provides the Court with power to create easements. 

Three issues arose, a) whether a letter from the defendant to the Council attaching a Deed of Vehicular Access constituted a binding and enforceable agreement; b) whether the Respondent would be estopped from departing from the terms of the alleged agreement or a representation that it would grant the easement; and c) whether, irrespective of the above, the Applicant satisfied the statutory test under s 88K CA for the granting of an easement. 

The Court ultimately found that the proposed easement would be reasonably necessary for the effective use and development of the land for the construction of a residential dwelling, and an easement was granted pursuant to s 88K of the CA. This case demonstrates the power of the Court under the Conveyancing Act to create easements in circumstances where parties have not reached a legally enforceable agreement. 

Strata Titles Case – Application for Order Under SSD Act

In a recent case about the sale of a strata plan, the Applicant sought an order that a strata renewal plan be given under the Strata Schemes Development Act 2015 (SSD Act) for the sale of a serviced apartment complex. Under this scheme, a whole of strata sale may be affected where there is not unanimous support by all lot owners in a strata plan for such a sale. The Applicant was the owner of the relevant corporation for the services apartment complex and they sought a collective sale of the relevant lots. Despite not having unanimous support for the sale, none of the non-consenting owners or their mortgagees sought to appear in the proceedings to object to the order, as they were entitled to under provisions of the SSD Act.

The Court found that the relevant steps that had been taken to prepare the strata renewal plan and obtain required support were carried out in accordance with the Act, which was demonstrated by thorough evidence and submissions of the Applicant’s satisfaction of the prescriptive requirements of the SSD Act. 

Additionally, there was no pre-existing relationship between the lot owners and purchaser and even if there had been, any relationship between the lot owners and purchasers had not prevented the plan being prepared in good faith. As such, the application was granted.

Frustration and Mutual Abandonment of a Contract

In the recent case of Gazcorp Pty Ltd v Woolworths Group Ltd [2021] NSWSC 308 the parties entered into an agreement for lease in relation to land owned by Gazcorp, who claimed that the agreement had ended because either the agreement was frustrated, or because of “mutual abandonment.” 

Under the contract, Gazcorp agreed to carry out works to construct a shopping centre and grant a lease to part of the shopping centre to Woolworths. However, Development Approval for the shopping centre was refused, which meant that the agreement was frustrated because of the unforeseen event that the shopping centre could not be constructed.

The agreement was further declared to have been “abandoned” because of the lengthy period in which the landlord did not carry out the building works during which the tenant was not calling upon the landlord to perform the contract. Hence, the inference drawn was that the contract had been terminated by mutual abandonment. Accordingly, the Court found that the agreement, whether as varied or executed, was no longer on foot. 

New ‘Material Fact’ for Real Estate Agents to be Aware of

The Property and Stock Agents Act 2002 sets out the rule that a real estate agent must not induce any person to enter into a contract or arrangement where they fail to disclose a ‘material fact’ of any kind prescribed by the Property and Stock Agents Regulation 2014, which the agent knows or reasonably ought to know. 

As of 1 September 2021, the Regulation now prescribes that if any one or more of either (i) a building work rectification order, (ii) a prohibition order, or (iii) a stop work order, is in force in relation to the property, then this will automatically be deemed to be a ‘material fact’ per s 54(1)(h) of the Regulation. 

The meanings of the orders set out above are defined in the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020

Developing on Foreshore Crown Land and Waterways in NSW

The NSW Department of Planning, Industry and Environment (the Department) is currently addressing unauthorised development on foreshore Crown lands and waterways. 

Owners of waterfront properties who construct or alter structures on Crown waterways must ensure that all necessary approvals and licences have been obtained before doing so. This is also important to landowners and prospective purchasers, who may not be aware of possible risks that exist for historical encroachments and development on Crown waterways. 

In general, all developments will require a development consent and depending on the proposed works may require a development certificate. Owners of waterfront properties and prospective purchasers should consider whether a development consent already exists, whether it is required for proposed works, or whether existing use rights are available. 

Moreover, licences to occupy foreshore Crown land and waterways are required to use and occupy Crown land below the mean high water mark for recreational infrastructure such as jetties, pontoons and boat ramps, and this licence must exist prior to construction of the structure. 

To avoid regulatory in action for breach of the Crown Land Management Act 2016 (NSW)it is important to be aware of the requirements for waterfront developments such as waterfront licences and owners consent.   

Potential for COVID Health Order for Apartment Buildings

If a person in an apartment building is diagnosed with COVID, the Minister for Health and Medical Research can declare the building a ‘high COVID-19 risk premises,’ and order the building to be strictly locked down for 14 days. This means all residents will not be able to leave unless directed by either the Commissioner of police, an authorised medical practitioner or for an emergency.

Non-residents in the building when the order is made will also have to isolate in the building until medically cleared to leave or may be instructed to go to a quarantine facility or hospital.

Any occupants of the building must respond to any request by police for information about the individuals residing in the apartment. The details of the order can be found here. It is important to be aware of these provisions which apply directly to occupiers of apartment buildings during COVID.

New Regulations for Designers and Building Practitioners of Residential Apartments

The recently released Design and Building Practitioners Regulation 2021 (Regulations) work alongside the Design and Building Practitioners Act 2020 (NSW) (Act) to provide guidance around the new obligations imposed on builders, designers, and engineers of NCC Class 2 (residential apartments) Buildings. The aim of the Regulations is to raise the standards of the building and construction industry and ensure that buildings are constructed in compliance with the Building Code of Australia. 

Under the new regulation, builders, engineers and design practitioners of Class 2 Buildings (residential apartments) can apply to be registered on the NSW Planning Portal. The regulations also introduce mandatory insurance requirements that will come into effect from 1 July 2022. 

From now, building work on Class 2 buildings cannot commence until regulated designs and design compliance declarations are lodged on the NSW Planning Portal. However, this excludes Class 2 Building work commenced before 1 July 2021. 

Whilst a building practitioner is not required to make a compliance declaration, they must still lodge a copy of all designs relied on to carry out the building work on the NSW Planning Portal before they are able to apply for an Occupation Certificate. 

Breach of Contract for the Sale of Land

The case of Alexakis v Wan [2021] NSWSC 367, involved a contract for the sale of land, where the purchaser would pay an amount of $241 500 as a 5% deposit payable in two instalments. The first instalment of $150 000 was to be paid on exchange of contracts and the second of $91 500 was to be paid on the 4th month after the contract date (with that time being an ‘essential’ term of the contract). 

The Vendor purported to terminate the contract when the Purchaser failed to pay the second instalment on the agreed date. The Purchaser brought proceedings in the Court seeking specific performance of the contract for sale.

By cross claim, the Vendor sought recovery for the 2nd deposit instalment amount with interest, as well as an order requiring the Purchaser to withdraw the caveat that it had lodged against the title to the property. 

The Court found that the Vendor could rely upon their termination of the contract, as the Purchaser failed to pay part of the deposit within the time expressed by the contract, which was an essential term of the contract, and amounted to a serious breach of the contract. 

Accordingly the Purchaser was required to pay the balance of the deposit to the Vendor as well as costs. The Purchaser’s attempt to rely on equitable estoppel failed because he was found to have considerable experience in buying and selling real property, and should have understood that if the deposit was not paid on time he risked losing the ability to buy the property and losing the deposit. 

This case demonstrates the consequences of breaching contractual terms, and the importance of adhering to obligations under a contract of sale. 

Warning to Corporations about Misleading and Deceptive Advertising

Recently the Federal Court of Australia declared that Lorna Jane Pty Ltd (Lorna Jane) the women’s activewear retailer, had made false and misleading claims in the promotion of her activewear during the COVID outbreak of 2020, which was in breach of Australian Consumer law. The four categories of misleading and deceptive representations made in respect of the activewear were that the ‘LJ Shield’ killed or eliminated pathogens including COVID-19, that the activewear protected wearers against COVID-19, that they stopped the spread of COVID-19 and that Lorna Jane had a reasonable scientific or technological basis for making those representations. 

The Federal Court found that Lorna Jane had sought to exploit the fear and concern of the public and that the marketing campaign that the activewear was effectively ‘a shield against COVID’ was ‘exploitative, predatory, and potentially dangerous.’ 

Lorna Jane’s penalty for the breach was $5 million and the company was ordered to refrain from making additional ‘anti-virus’ claims in connection with its activewear, unless it had a reasonable basis for doing so. It also was ordered to establish and maintain a three-year compliance program and to pay the ACCC’s legal costs of $370 000. 

This case is a clear illustration of the very serious consequences of false advertising under Australian Consumer Law. The full judgement of the case can be found here.

Termination of Contract of Sale of Land

The recent case of Sentinel Orange Homemaker Pty Ltd v Davis Investment Group Holdings Pty Ltd (in liq) considered whether a contract had been validly terminated or whether the conduct instead amounted to repudiation of the contract. In this case the parties entered into a contract for the sale of land. The Respondent contended that it was entitled to a deposit in accordance with a special condition 13.4 of the contract because it validly exercised its right of termination under that provision. The Applicant contended that the respondent had not validly terminated the contract pursuant to the special condition, but rather, its assertion that the contract had been terminated amounted to repudiation of the contract and on that basis the Applicant claimed that it was entitled to the deposit. 

The Applicant established that the Respondent breached the ‘all reasonable endeavours’ obligation under special condition 13.3 and that such default relevantly caused the condition precedent to not be satisfied on the agreed date. 

The Court found that the respondent could not rely upon non-satisfaction of condition precedent as the basis for their exercise of the right of termination under the special condition clause. Hence, the Respondent’s termination of the contract was invalid and ineffective, and they were not entitled to claim the deposit, or any interest earned thereon. 

Additionally, the Respondent’s conduct in maintaining that the contract was no longer on foot and consequently refusing to proceed to settlement of the contract, amounted to repudiation. Thus, the deposit was forfeited to the Applicant.