+news

Where subdivision of land occurs, easements as with any interest for the benefit of the land will be maintained between both new lots created. When amalgamating part of a block of land with another block, the easement will generally remain with the original lot, meaning the easement will not usually extend to the original lot that prior to the subdivision did not enjoy the benefit of such easement.

In Moreton Bay Regional Council v Mekpine Pty Ltd [2016] HCA 7, the High Court has restated the way easements apply to amalgamated blocks and under what circumstances it would be possible to extend an easement to an amalgamated block. The Court held that when amalgamation occurs, generally an easement would not extend to the larger amalgamated block, but rather remain with the original block, unless the sale specifically referenced the transfer or extension of an easement. The Court also held that an easement would only extend if it was required for the good use of the land, noting that the grounds for such extension would be unlikely to occur.

The Biodiversity Conservation Bill 2016 (NSW) (‘the Bill’) has been presented to the public for comment and will replace the Threatened Species Act 1995(NSW) and Native Vegetation Act 2003 (NSW). The Bill will introduce a new biodiversity offset scheme that will be mandatory where a development is “likely to have an impact on biodiversity.” This includes changing the vegetation to a degree where it is not at a “near natural state.”

The offset scheme will introduce credits. Credits will be created when developers take out specified steps in relation to sustainable management of land. Subsequent to the creation of these credits they can be sold to other developers and used in relation to developments that may have a negative impact on the land.

A consent authority will be inaugurated to oversee the offset scheme and will have additional discretion to enforce the scheme on developments that do not meet the threshold of “likely having an impact on biodiversity.” The Minister will also have the discretion to allow certain developments to make payment to the Biodiversity Conservation Fund instead of using credits.

The legislation will also introduce mandatory biodiversity assessments reports from an accredited assessor. As most developments are “likely to have an impact on biodiversity” it is probable that such reports will be required for all developments.

Within the coming months a new bill amending the Retail Leases Act 1994 (NSW) could be introduced to parliament. Discussions surrounding proposed amendments to the Act have increased recently, especially in relation to recommendations made in a 2013 report.

These amendments may include a good faith element being implied into all retail leases unless the duty is expressly excluded by the parties in a contract. This will mean lawyers must ensure their clients are acting fairly and disclosing all relevant information.

The courts in NSW have already implied a contractual duty of good faith in Renard Constructions (ME) Pty Ltd v Minister for Public Works (1992) 26 NSWLR 234. The proposed amendments would therefore bring statute in line with the common law by requiring parties in leasing agreements:

• not act unfairly including undermining bargaining;
• disclose all relevant information in a timely manner;
• make timely responses to proposals;
• act reasonably in attending and participating in meetings;
• genuinely consider the other party’s proposals;
• be honest, exercise discretion fairly by not acting arbitrarily;
• exercise powers reasonably, having regard to the interests of the other party.

In a recent case questions arose regarding whether a postdated cheque was legally a cheque and, whether the use of a postdated cheque would provide grounds for termination as though it was a breach of an essential term?

In MA and Another v Adams [2015] NSWSC 1452, the plaintiffs had purchased land by auction. However, upon handing over the cheque, the purchasers requested that the agent wait a few days before the cheque was banked. The cheque was also postdated, which the agent did not realise. Before the cheque was deposited and honoured the vendor terminated the contract.

The purchasers commenced proceedings on the basis that the vendor had no cause to terminate the contract. The vendor argued that the postdated cheque was a breach of an essential term and would provide grounds for termination.

The Court ruled in favour of the vendor finding that under the definitions within the standard form contract for sale of land that a “cheque” is not a cheque if it is postdated or stale. Under clause 2.5 of the standard form contract the Court held that because no cheque was provided and deposit never received the postdated cheque, not being a legal form of a deposit, was a breach of an essential term and therefore, grounds to terminate. Furthermore, the arguments for the defendant were strengthened by the fact that the agent had no authority to accept a postdated cheque there was no acceptance by the vendor.

Commonly, a misrepresentation that is not fraudulent may lead to the avoidance of a contract and a refund of any deposit paid if:

a.     the misrepresentation was material and substantial and,

b.    not for the misrepresentation a purchaser might never had entered into the contract at all.

This is called the Flight v Booth rule and was relied upon in, Fankel and Another v Paterson and Another [2015] NSWSC 1307, a recent case where the plaintiffs argued that there was a misrepresentation in the contract.

The plaintiffs argued that they would have never purchased a strata title unit but for the impression they received upon the site inspection of a garden which formed part of the common property . However, following exchange and prior to completion there were substantial changes to the garden area including the removal of trees and shrubs and, the existence of a large dog that now roamed the garden area.

The Court found that even if there was a misrepresentation, it occurred prior to the exchange therefore, the Flight v Booth rule did not apply in this case. There was nothing in the contract which referred to the use of the garden and the agent never made a representation with respect to the garden which had contractual effect. Furthermore, the court ruled that the actions of a third party in relation to the common property would not deprive the purchasers from enjoyment of the property.

In Allsvelte Pty Ltd v Cassegrain Wines Pty Ltd [2015] NSWSC 1370 the issue of whether a sublessor could terminate an option arose. The circumstances were as follows: the defendant leased a winery and under the lease granted a registered sublease for a three year term plus a three year option to the sublessee in order to run a restaurant. The sublessor terminated the option because the sublessee failed on numerous occasions to make payment in a timely fashion.

Earlier this month, the Department of Fair Trading opened consultations for the Strata Schemes Management Regulation 2016 and Strata Schemes Development Regulation 2016. These regulations will affect the powers of strata schemes and their members.

The new regulations will include:

• how the market value of a building and its site is to be determined;
• the information that must be included in a strata renewal proposal;
• the information that must be included in a prescribed form of notice that must be sent to owners when a strata renewal committee is established;
• the details of costs and expenses to be deducted from the sale price that must be included in a strata renewal plan which relates to a collective sale of a scheme;
• the supporting documents that must be sent to owners with a strata renewal plan.
• Contributions and comment close on 18 May 2016 and 27 May 2016, respectively.

Prior to these rounds of consultations the Department also held consultations regarding the draft strata Bills and also, industry roundtables. The new regulations are due in November-December 2016.

Under the Environmental Planning and Assessment Act 1979 (NSW) (‘the Act’) s 85A developers must apply through the local government council or an accredited certifier for a Complying Development Certificate (‘CDC’). However, recent cases serve as a reminder that the Court remains as overseer of private certifiers.

In Bankstown City Council V Ramahi (No 2) [2016] NSWLEC 34 a private certifier was found to have issued three CDCs invalidly. The first was found to have approved a non-compliant development application and, the remaining two were issued subsequent to modifications stated within the applications already having been completed.

The respondent questioned whether the Land and Environment Court had jurisdiction over the first CDC as it was the role of the certifier and council to approve developments on a basis of fact. However, the Court upheld a previous decision in Hornsby Shire Council v Trives (No 3) [2015] NSWLEC 190 where judicial jurisdiction was upheld. This is because whether a CDC has been issued validly and a development compliant requires a certifier be satisfied that the development is ‘complying development’ within the meaning of the relevant environmental planning instrument. For a certification to be in a state of “satisfaction” it must be one that could be formed by a reasonable person who correctly understood the meaning of the law.

The remaining two CDCs were found invalid as a CDC cannot be issued for development that has already been carried out, including a modification to a CDC under s87 of the Act. A modification of a CDC is unlike a modification application under s96 of the Act, which can be issued in respect of development that has already been carried out.

The non-compliant parts of the development were required to be demolished or rectified.