No More Paper CT’s for NSW

From 11 October 2021, all certificates of title (CT’s) will no longer have legal effect, and the Register-General will not issue CTs for anymore. Additionally, Authorised Deposit-Taking institutions, will no longer be issued with CoRD (the electronic equivalent of CT’s). Instead, from October 11, an Information Notice will be issued, confirming the details registered and the date of registration. All dealings with land will need to be lodged electronically from 11 October. Further details of this new regime can be found in the The Real Property Amendment (Certificates of Title) Bill 2021.

Easement Case Expedited

In the recent case of Au v Berlach [2021] NSWSC 806, the parties to the dispute were neighbours. The defendants had the benefit of a right of way over the land of the plaintiff. The parties were unable to agree on how the defendants were entitled to use and maintain the Right of Way in accordance with their rights at law. For example, they disputed about the right to use leaf blowers, and the taking of other steps on behalf of the defendants, to maintain and enjoy the rights to use the Right of Way. 

The Court dealt with the matter in a peremptory fashion, and the proceedings were referred to the Expedition List Judge. The defendants were ordered not to enter the easement other than to pass over the right of way. The specific requirements were that the defendants not perform maintenance other than by a third-party contractor; not more than twice per week; not more than for one hour on each occasion; and confined only to the removal of leaves, organic debris, moss and branches on the Right of Way. Additionally, the defendants were not to let their children ride their bicycles for extended periods of time on the right of way, or to chase bush turkeys on it. 4y

Modification Applications Made to a Court Can be Amended – Dartbrook Distinguished

A decision handed down on 6 July has distinguished recent comments of Preston CJ in AQC Dartbrook Management Pty Ltd v Minister for Planning and Public Spaces [2021] NSWCA 112 (Dartbrook), that there is no statutory power for a modification application under s 4.55 of the Environmental Planning and Assessment Act 1979 (EP&A Act) to be amended after it has been lodged. 

This decision was affirmed on 2 July in Duke Developments Australia 4 Pty Limited v Sutherland Shire Council [2021] NSWLEC 69 byRobson J. However, on 6 July 2021, Clay AC in Cavcorp Australia Pty Ltd v Hunters Hill Council [2021] NSWLEC 1392 held that the Court has power to amend an application to modify a consent granted by the Court that has been made directly to it under s 4.55(8) of the EP&A Act. These applications include “any document in the proceedings” under section 64 of the Civil Procedure Act 2005 (CP Act), overcoming the hurdle identified by Preston CJ in Dartbrook. Cavcorp, in contrast with Dartbrook and Duke, related to an application made to the Court to modify a consent previously granted by the court, not an appeal against a decision of the relevant consent authority. As such, Clay AC found that this difference in circumstances in which the application was brought meant that s 64 of the CP Act gave the Court power to amend the modification application. This case is important in illustrating how different circumstances can influence the amendment of applications under the EP&A Act. 

Penalty Clause in a Sale of Land

The recent case of Blanco v Wan 2021 considered whether a contact for the sale of land could be set aside for unconscionability and whether a payment clause was a penalty. The deposit in this contract for the sale of property was stated to be 10% of the purchase price but only a partial amount was actually paid by way of deposit and the balance was never paid. Arrangements were made for settlement of the contract but the settlement did not proceed as the Respondent was unable to settle by the relevant time. 

The Applicant served a notice of termination of contract and sought a declaration that the termination of the contract was valid, that they were entitled to the deposit and sought an order for the payment of the remaining balance and costs associated with issuing the notice to complete. 

The Court found that the condition in the contract, to the extent that it would permit the applicant to recover or forfeit a further amount of $125 000, was penal in nature and thus unenforceable. The condition operated in circumstances that imposed additional detriment upon the respondent that was extravagant, exorbitant and disproportionate to the interest sought to be protected, which was the applicant’s interest in due performance and the completion of the contract. However, the Court did not accept the Respondent’s argument that the contract should be set aside as being unjust or unfair as there was no material inequality of bargaining power, and the contract did not operate in an unconscionable, harsh or oppressive manner. The Court ordered the that the application was entitled to recover the deposit of 80 000 together with any interest earned, but not the $125 000. 

Updates to Construction Site Work Resuming From 31 July

The resumption of construction work effective from July 31 is now subject to new COVID safety measures.

The occupied residential building and renovation sites in Greater Sydney have been allowed to re-open with the exception of the local government areas in hard lockdown conditions. 

The new restrictions and safety requirements for building sites include a cap of 25 people or 1 person per 4 square metre on construction sites, and all construction sites must have and comply with an approved COVID-19 Safety Plan, with a copy of the plan available for inspection by any authorised compliance officers. 

Further restrictions for construction and renovation work on occupied sites in Greater Sydney include that no more than five persons can undertake work in an outdoor area at the same time, and no more than two persons in an indoor area. Secondly, if work is occurring indoors where residents are present at the premises, the residents must be in a separate room from the persons undertaking the work at all times. 

Additionally, face masks must be work at all times for permitted home building and renovation work. 

Recovering Loss for Latent Defects in Construction Projects

It is often the case that defects in construction works only become obvious once a project is complete, which creates issues relating to the cause of the defect, the person responsible and whether or not loss is recoverable. If a person has grounds for making a claim, then the claim must be made within the relevant limitation period under the Limitation Act 1969 (NSW), which may differ depending on whether the claim is for breach of contract, negligence, or misleading and deceptive conduct. It is important to be aware of the existence of the Limitation Act so as to ensure that no claims are made outside of the relevant time period to seek compensation for any damage or loss caused by construction or development works. 

Invalid Termination of a Building Contract for Delay

The recent case of Patel v Redmyre Group Limited [2021] NSWCATAP 132 considered whether the owners of a property could terminate a building contract due to the Builders failure to progress works with due diligence. The Owners led evidence that the builders had not completed works by the time stipulation in the contract. However, the evidence was not sufficient and the owners relied on the builders failure to reach practical completion in their case which was detrimental to their case because the Owners ended up excluding the builder from the site after issuing a show cause and termination notice purporting to terminate the contract. 

On appeal, the Court confirmed that the onus was on the Owners to prove that the builder had not proceeded with due diligence. It was not sufficient to prove that the Builder had not reached practical completion by the date specified in the building contract. 

This case is a reminder that owners wishing to terminate building contracts must ensure that contractual notices attempting to terminate the contract are in accordance with the terms of the contract, and secondly, that owners ought to consider whether they can validly terminate a building contract, in circumstances where delay in completing building works may not be sufficient to constitute a breach warranting termination of the contract. 

New levy placed on Developers for Residential Apartment Buildings

Amendments to the Residential Apartment Buildings (Compliance and Enforcement Powers) Act 2020 (NSW) (RAB Act), and the Design and Building Practitioners Act 2020 (NSW) (DBP Act) have been made under the Building Legislation Amendment Act which was passed on 8 June 2021. The Act aims to strengthen the powers of the NSW Building Commissioner and NSW Fair Trading to enforce the new regulatory scheme and introduce a new levy on developers to pay for the administration of the DBP Act.

The levy which is payable by developers is designed to provide an ongoing source of funding to the regulator, to administer the new practitioner registration scheme and conduct occupation certificate audits. The levy to operate the scheme is hoped to avoid defects and rectification costs during a project’s life cycle. 

In addition to the existing penalties under the RAB Act, the Amending Act imposes daily penalties for each day a developer fails to notify the Secretary for the Department of Customer Service of the intended completion date or a change of expected completion date – both of which are subject to significant fines. 

New Public Health Order – Face Masks to be Worn in Common Indoor Areas of Strata Buildings

The Public Health order enacted this month mandates face masks to be worn in indoor areas of common property in all residential buildings that are strata titled, community titled or company titled in Greater Sydney. Examples of common areas include a shared foyer or lobby of an apartment block, lifts, stairwells and corridors and shared laundry facilities. 

Masks must be worn by anyone entering indoor common property including residents and visitors, building managers, concierge staff and cleaners, people providing goods and services including tradespeople and contactors and those delivering food, mail and parcels. 

We will update you on any further measures enacted by the NSW Government in response to the COVID outbreak. 

New COVID Relief for Commercial Tenants

As of 14 July 2021, commercial landlords will not be able to take action against tenants impacted by the COVID-19 pandemic without first attempting to resolve the dispute by mediation.

If an impacted lessee breaches the lease by failing to pay rent or outgoings or by failing to be open for business during the hours specified in the lease, the landlord cannot take action against the tenant. However, this exception only applies to breaches between 13 July 2021 and 20 August. The landlord will only be able to take action such as eviction or suing for damages if the mediation has been unsuccessful in resolving the dispute. 

As per the Retail and Other Commercial Leases (COVID-19) Regulation 2021, an impacted lessee is a tenant who qualifies for a ‘Micro-business COVID-19 Support Grant’, a ‘COVID-19 NSW Business Grant’ or a ‘Job Saver Grant’ and had a turnover in the 2020-2021 financial year of less than $50 million. The onus is on the lessee to give the landlord a statement evidencing these three facts, and it must be given before or as soon as practicable after the breach, and within a reasonable time after the landlord requests it.