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By Lawyers Contract of Sale of Land VIC – Explanatory Memorandum

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BY LAWYERS CONTRACT OF SALE OF LAND (VIC) – INCLUDING s 32 VENDOR STATEMENT

Russell Cocks and By Lawyers have come together to release a new form of Contract of Sale of Land in Victoria which is available to LEAP users who take up the By Lawyers companion product and also by subscription to the By Lawyers website for non-LEAP users. This new contract is intended to make standard conveyancing in Victoria more efficient by smoothing the bumps in the conveyancing highway arising from shortfalls in the existing standard contract.

Russell is ideally placed to make these changes having been one of the authors of the standard contract over the last 25 years. Russell was largely responsible for the substantial changes achieved in the 2008 review of the standard contract and sees this NEW CONTRACT as a culmination of the desire to achieve efficiency in the standard conveyancing process. The advent of electronic conveyancing makes this the perfect time to make these changes.

First, a word about the ‘standard’ contract. For decades, a committee of the Law Institute of Victoria provided the Victorian government with a form of contract that was adopted in Regulations as the form of contract to be used by real estate agents if the proposed contract was not provided to the real estate agent by a solicitor or, more recently, a conveyancer. In practice, most contracts are provided to agents by solicitors and agents and, by and large, those contracts are in the standard form because that form has been adopted by the various proprietary software providers. The Law Institute of Victoria and Real Estate Institute of Victoria both produce a version of that contract, for which they charge, but it is the format, rather than the content, that is subject to copyright.

In September 2018 the Law Institute contract became more confusing. Because the LIV form must be based on the regulated form, the LIV cannot change any of the 28 General Conditions. So, the LIV contract now has 28 General Conditions and 12 Special Conditions, some of which in fact change the General Conditions. The NEW CONTRACT simply has 28 General Conditions, although users are entitled to introduce additional Special Conditions, but not such as to derogate from the General Conditions (see below).

The guiding principle for the successive authors of the LIV standard form has been EVENHANDEDNESS – a awkward word but nevertheless a perfect description of the desire for the contract to treat the vendor and purchaser EQUALLY. Give that it is usual practice for the vendor to prepare the contract it would be open to the vendor to produce a contract that unfairly favours the vendor to the detriment of the purchaser. This would lead to inefficiencies, with the purchaser having to negotiate a whole raft of unfair terms before even considering signing the contract. A standard, widely accepted contract avoids these inefficiencies and the NEW CONTRACT will honour those principles.

Another efficiency associated with a standard contract is that all participants in the conveyancing process know what the standard contract says. The 2008 contract sought to enshrine this principle by forbidding amendment of the General Conditions otherwise than by Special Condition so that unexpected changes could not be inserted into the General Conditions. This was achieved by the inclusion of a warranty in the contract and has proven to be successful in preventing changes to the General Conditions. However, the ability to amend by Special Condition has led to a return to past inefficiencies caused by the inclusion of pages of Special Conditions and this is the first important change to be made by the NEW CONTRACT.

The warranty about changes to the General Conditions will be a NON-DEROGATION warranty. Special Conditions can be added to the contract but they cannot DEROGATE from the rights created by the General Conditions.

This will prevent the pages and pages of Special Conditions that have become common in recent years that are designed to remove General Condition 23, or General Condition 8, or change the penalty interest rate to plus 4%, or change the number of bank cheques to 10. Such Special Conditions are not really Special Conditions at all, they are just attempts by some participants in the industry to give their clients an unfair advantage. This exercise totally defeats the advantage of a standard form contract and robs us all of the efficiency benefits that a standard form provides. By agreeing to use the NEW CONTRACT you will acknowledge that you are satisfied that your vendor client is adequately protected by the General Conditions and that your purchaser clients are likewise protected.

In practice, these interminable Special Conditions are inconsequential as they usually address issues already addressed in the standard contract or else are only relevant if default occurs and then simply produce an argument about what the Special Condition actually means. For this so-called benefit, we have to wade through pages of guff and advise our clients about all sorts of unlikely outcomes, thereby losing the benefit of a standard contract. ENOUGH!

However, proper Special Conditions will be permitted. Provided that they do not derogate from the General Conditions, Special Conditions still have a role to play in the contract. These may address aspect of the transaction that are truly unique or special to a particular contract or it may be a set of Special Conditions that relate to a specific type of contract – such as an off the plan contract that will result in the creation of an owners corporation and the vendor wishes to deal with issues that will arise after registration of the plan, or a contract that requires the creation of a covenant. The intention is not to dumb down the contract, it is to remove the unnecessary guff that undermines the efficiency of a standard contract.

When you consider that 90% of contracts relate to residential or small commercial properties, any contract that creates unnecessary hurdles in that environment is an albatross around our collective necks. If we are to enjoy the efficiencies that electronic conveyancing will bring to our practices we must first get the contract in order. It is doubtful that large CBD firms who generate telephone book sized contracts for large off the plan apartment sales will adopt this NEW CONTRACT. But for that huge number of conventional transactions that make up the bulk of our work we need a contract that is fair to both parties, easy to explain to our clients and allows us to conduct conveyancing efficiently. The NEW CONTRACT of SALE of LAND will do that.

Moving from the general to the specific, the NEW CONTRACT will improve the process in the following ways:

VENDOR STATEMENT

It takes the logical step of putting the VENDOR STATEMENT before the CONTRACT.

This allows for a front page that the user can adopt to ‘brand’ the document with firm specific details, such as name and logo, to emphasise the role of the firm in preparing the document.

The vendor statement must satisfy the disclosure requirements of s.32 Sale of Land Act but there is room to prepare the Statement in such a way that irrelevant information is deleted.

This is achieved by a Summary Feature that automatically includes the compulsory information and allows for non-applicable options to be deleted. If there is no Owners Corporation or no Notice or GAIC is not applicable then these options are deleted from the form at the outset and those irrelevant parts “collapse” and disappear from the form. This produces a much more user-friendly VENDOR STATEMENT that satisfies all relevant disclosure obligations.

The form also includes some handy commentary about requirements relating to Owners Corporation Certificates and Owner Builder Insurance that will assist in satisfying those requirements, if applicable.

CONTRACT

The preliminary pages satisfy the various ‘notice’ obligations and provide a convenient execution page.

  1. PARTICULARS OF SALE

Allows for the relevant details to be set out in table form.

Reference to Foreign Resident Withholding is noted in ‘payment’ section.

Applicability of GST is addressed. The price is GST inclusive. If the vendor wishes to recover GST then the price must be increased to reflect the vendor’s GST liability.

Reference is made to GST Withholding obligations.

Settlement is to be on a nominated date. If it is an off the plan contract then settlement is to be 14 days after notification of registration and reference to the ‘sunset date’ is included at this point. The default period of 18 months is adopted but may be changed. The important point is that the actual date for registration is available in the PARTICULARS and it is not necessary to wade through interminable Special Conditions to locate the sunset date. The General Condition has been amended accordingly.

Standard provisions for LEASE and LOAN are included and a new provision for BUILDING/PEST REPORT is added.

Whilst reference is made to TERMS CONTRACT there are NO TERMS CONTRACT General Conditions and this rarity must be dealt with in Special Conditions.

  1. GENERAL CONDITIONS

This is where existing practices that cause roadblocks in conveyancing have been identified and, hopefully, improved. The guiding principle has remained EVEN-HANDEDNESS so that the Conditions are, as much as possible, fair to both vendor and purchaser. 28 General Conditions have been retained so as to keep the NEW CONTRACT as close as possible to the familiar standard contract and changes have only been made where improvement was necessary.

  1. WARRANTY

This is where the all-important non-derogation warranty is made by the vendor that the General Conditions comply with the then current copyright form of contract (2018 version at present) and that the General Conditions will prevail over any Special Conditions.

GC.1 to GC.5                     no changes.

GC.6                                     recognises the possibility of electronic settlement.

GC.7                                     introduces an abbreviated electronic settlement Condition.

Existing GC.7 relating to PPSR has been deleted. It is simply not relevant to 99% of standard transactions. The long electronic settlement condition usually added as a Special Condition has been abbreviated and inserted as GC.7.

GC.8                                      requires the vendor to produce builder warranty insurance, if applicable.

GC.9                                      introduces an Off the Plan Condition.

Existing GC.9 relating to General Law land has been deleted. Again, rarely applicable.

The Off the Plan Condition links back to the sunset date specified in the Particulars of Sale (default period of 18 months from contract unless otherwise specified). Also gives EITHER party, not just the purchaser, the right to terminate. This General Condition replaces the pages of Special Conditions that simply repeat the provisions of the Sale of Land Act.

GC.10                                  new obligation on vendor to provide keys at settlement. Settlement to be conducted between 10am and 3pm, rather than 4pm as at present.

GC 11.                                  formatting change.

GC.12                                   stakeholding. Substantial change.

Release of deposit is a huge roadblock in the efficient conduct of a conveyancing file. Unreasonable refusal is an enormous time waster. GC.12 provides that if there is no mortgage or caveat then, provided that loan approval has been obtained, there is no outstanding SPECIAL CONDITION benefiting the purchaser and no valid objection to title within 28 days, the deposit may be released.

If there is a mortgage or caveat, the vendor must provide satisfactory proof that the amount owing does not exceed 70% of the price, allowing for the possibility of FRCGTW, or 80% if the vendor provides a FRCGTW Clearance Certificate.

GC.13                                 GST

Whilst some changes to the wording have been made, the meaning and intent is maintained. The condition has been expanded to take account of the purchaser’s GST Withholding obligation.

GC.14                                    loan approval

The current condition creates unnecessary work for both vendor and purchaser and exposes purchasers to potential loss. Time for approval is extended from 14 days to the more realistic 21 days. This new condition allows for automatic extension of loan approval, subject to the absolute ability of the vendor to end the contract if an extension is requested.

A similar building/pest report condition is added. To avoid disputes, the purchaser must be satisfied with the report(s) or is able to end the contract. The purchaser has an unfettered ability to end the contract and the vendor must accept that the contract is NOT binding on the purchaser until 7 days have elapsed. However, this is a better option than the possibility of arguments about “major structural defects” as often arise now.

GC.15                                   adjustments

The current condition has been adopted with the addition of an obligation on the purchaser to provide copy certificates and provision for Foreign Resident Capital Gains Tax Withholding.

GC.16                                   time

The current condition is adopted, with the extra provision allowing the parties to agree in writing to extend or reduce the time for performance.

GC.17-20                             no change

GC.21                                    notices

Addition to confirm that the vendor is liable for compliance with notices served BEFORE the date of contract.

GC.22                                    lease

A new condition requiring the vendor to provide the purchaser with the original or an acknowledged copy of any lease affecting the property.

GC.23                                   terms contract provisions deleted and replaced with existing GC.24

GC.24                                   abandoned goods

This new Condition passes ownership of abandoned goods to the purchaser.

GC.25                                    default

Perhaps the greatest waste of time in a conveyancing transaction occurs when one or other of the parties default in performance of the contract. Claim and counterclaim occur in a time-poor environment and additional costs are rarely recovered. This default condition allows for interest and limited costs to be claimed at settlement and postpones claims for other losses until after settlement.

GC.26                                    interest – no change

GC.27                                  default notice

A two-tier notice regime calls for a default notice as the first step with 7 days to remedy the default and specified costs of $440 on the notice.

GC.28                                    rescission notice

This follows if the default is not remedied and ends the contract after 10 days. Again, costs on the notice are specified at $440.

Consequences of ending the contract are in conformity with the standard contract.

SUMMARY

The most significant change effected by the NEW CONTRACT is the non-derogation principle whereby the General Conditions prevail over Special Conditions. This will result in a standard contract that will promote efficient conveyancing in the electronic environment.

Substantial improvements to deposit release, loan approval and consequences of default, together with improvements relating to off the plan sales, adjustments, leases and abandoned goods are designed to allow standard conveyancing files to be handled efficiently and cost effectively in the electronic environment.

Criminal procedure NSW

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Mandatory pre-trial disclosure has been introduced into Division 3 of Part 3 of the Criminal Procedure Act 1986, which now requires mandatory pre-trial disclosure for both the prosecution and the accused. The provisions are set out at ss 142 – 144 of the Act.

These provisions only apply after an indictment has been presented or filed in proceedings: s 141. As this only occurs after the matter is transferred from the Local Court to the District or
Supreme courts, mandatory pre-trial disclosure does not apply to summary matters, or to indictable matters which proceed summarily – that is, matters that remain in the Local Court.

If the matter is committed to a higher court on the basis of a plea of not guilty, the mandatory pre-trial disclosure provisions will need to be considered and complied with. The accused’s obligation is to provide:

(a)  the name of any Australian legal practitioner proposed to appear on behalf of the accused person at the trial,

(b)  the nature of the accused person’s defence, including particular defences to be relied on,

(c)  the facts, matters or circumstances on which the prosecution intends to rely to prove guilt (as indicated in the prosecution’s notice under section 142) and with which the accused person intends to take issue,

(d)  points of law which the accused person intends to raise,

(e)  notice of any consent that the accused person proposes to give at the trial under section 190 of the Evidence Act 1995 in relation to each of the following:

(i)  a statement of a witness that the prosecutor proposes to adduce at the trial,

(ii)  a summary of evidence that the prosecutor proposes to adduce at the trial,

(f)  a statement as to whether or not the accused person intends to give any notice under section 150 (Notice of alibi) or, if the accused person has already given such a notice, a statement that the notice has been given,

(g)  a statement as to whether or not the accused person intends to give any notice under section 151 (Notice of intention to adduce evidence of substantial mental impairment),

(h)  if any expert witness is proposed to be called at the trial by the accused person, a copy of each report by that witness that is relevant to the case and on which the accused person intends to rely,

(i)  notice as to whether the accused person proposes to raise any issue with respect to the continuity of custody of any proposed exhibit disclosed by the prosecutor,

(j)  notice of any significant issue that the accused person proposes to raise regarding the form of the indictment, severability of the charges or separate trials for the charges,

(k)  if the prosecutor disclosed an intention to adduce at the trial any audio or visual recording or the transcript of any audio or visual recording:

(i)  any request that the accused person has that the recording or transcript be edited (other than in circumstances to which subsection (2) (d) relates), and

(ii)  particulars sufficient to clearly identify the edits that the accused person requests.

As pre-trial disclosure relates only to trial matters in the superior courts, it is substantively outside of the scope of the By Lawyers Criminal Local Court guide. However because the provisions may be relevant to the overall strategic approach for a successful defence of indictable charges, a note has been added to the commentary alerting practitioners to these requirements.

Workers Compensation and Motor Accident changes – NSW

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The Workers Compensation Legislation Amendment Act 2018 amends both the Workers Compensation Act 1987 and the Motor Accident Injuries Act 2017.

Some provisions of the amending Act have now commenced, namely those removing limitations on workers injured in motor vehicle accidents obtaining statutory benefits for treatment and care under that Act where their entitlement to workers compensation has ceased, or where they recover damages from the employer in respect of the injury.

Schedules 1, 2 and 3 of the amending Act, which are yet to commence, provide for:

  • the abolition of the administrative system of dispute resolution and reinstatement of the jurisdiction of the Workers Compensation Commission to determine disputes and make determinations of permanent impairment;
  • the introduction of a simplified process to determine an injured worker’s pre-injury average weekly earnings, with a new Schedule 3 to the Workers Compensation Act 1987 providing the method for determining PIAWE and allowing insurers and workers to agree on the figure for PIAWE.

The By Lawyers NSW Workers Compensation and Motor Vehicle Accident publications have been updated to deal with these amendments.

Indexation of maximum costs – Motor accident injury claims – NSW

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Practitioners are reminded that, from 1 October 2018, indexation commenced of the maximum costs for legal services and the maximum fees for medico-legal services recoverable from an insurer in respect of motor vehicle accident claims relating to accidents which occurred on or after 1 December 2017. The maximum costs will be indexed each year in line with inflation.

The maximums for legal costs and medico-legal fees are set out in Schedule 1 to the Motor Accident Injuries Regulation 2017. The maximum amounts recoverable for legal fees depend upon the stage at which the matter is resolved.

The commentary for motor accidents after 1 December 2017 in the By Lawyers NSW Motor Accidents Guide has been updated to note the indexation and provide the relevant links to both the legislation and the costs section of the SIRA website.

Probate Registry online applications – South Australia

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From Monday 26 November 2018, all applications for probate and letters of administration in the Supreme Court Probate Registry must be filed through CourtSA – the new electronic management system that is in the process of being introduced for all South Australian courts.

As at 15 October 2018, the probate registry no longer accepts paper applications. The Court has advised that any current paper transactions where a grant is not issued by 26 November 2018, will need to be re-lodged online through CourtSA.

It is expected that the online process will ultimately streamline applications and result in faster processing times, but there clearly will be some delay in the implementation phase, as no applications can now be filed until 26 November 2018.

Magistrates Court (Civil) Guide- review – South Australia

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The By Lawyers South Australian Magistrates Court (Civil) Guide has been reviewed and updated to ensure that the precedents and commentaries are in line with current law and practice.

The extensive review was performed by our author Josephine Battiste, barrister at Mitchell Chambers.  As with all our authors, Josephine takes a practical approach, drawing on her considerable experience to cover all aspects of procedure and focus on practical tips that will help lawyers confidently represent their clients and successfully run civil matters in the Magistrates Court.

Highlights from the By Lawyers South Australian Magistrates Court (Civil) Guide include:

  • expanded commentary on settlement options, including Enforceable payment agreements, Pre-filing Alternative Dispute Resolution services in the Magistrates Court and Offers to consent.
  • new commentary on statutory actions;
  • new commentary and precedents in relation to service outside of South Australia;
  • expanded commentary on entry of default judgement, calculating interest on judgement debts and setting aside default judgement entered against a defendant;
  • expanded commentary on preparing and filing a defence;
  • new commentary and precedents on summary stay or dismissal of claim and striking out statement of claim, defence or reply; and
  • a new section on pre-trial processes covering discovery, the initial directions hearing and Alternative Dispute Resolution.

New precedents include a combined Offer and acceptance and an example List of documents for both plaintiff and defendant. All of the existing precedents in the guide have been reviewed to ensure they reflect current law and practice.

We invite you to explore this publication and to consider the wealth of assistance the guide offers for lawyers appearing for clients in civil matters in the Magistrates Court.

 

 

Criminal procedure amendments – VIC

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Various criminal procedure amendments introduced by the Justice Legislation Miscellaneous Amendment Act 2018 are now in effect, including:

Protection of certain witnesses from cross examination in committal hearings.

A committal hearing is not to be held in committal proceedings to which s 123 Criminal Procedure Act 2009 applies, namely cases involving a witness who:

(a) is a complainant in a proceeding that relates (wholly or partly) to a charge for a sexual offence; and

(b) was a child or a person with a cognitive impairment when the criminal proceeding was commenced; and

(c) made a statement a copy of which was served in the hand-up brief or whose evidence-in-chief or examination at a compulsory examination hearing was recorded and a transcript of the recording was served in the hand-up brief.

Such witnesses cannot be required for cross examination.

The By Lawyers Victorian Magistrates Court – Criminal guide has been updated accordingly.

Increased penalties for offences of violence against certain workers

Offences of violence alleged to have been committed against an emergency worker on duty, a custodial officer on duty or a youth justice custodial worker on duty, within the meaning of section 10AA of the Sentencing Act 1991, are now excluded from the list in Schedule 2 of the Criminal Procedure Act of indictable offences which can be tried summarily and custodial sentences for such offences are mandatory.

 

Magistrates’ Court Criminal Guide updated – VIC

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Our Victorian Magistrates’ Court Criminal guide has been updated, to make sure our Victorian subscribers who conduct criminal and traffic matters, or appear for applicants or respondents in Intervention Orders, in the Magistrates’ Court are right up to date with the law and practice.

The extensive review by our author, barrister Simone Tatas, includes recent amendments to both bail laws and sentencing for traffic offences. As with all our authors, Simone takes a practical approach, drawing on her experience as both a prosecutor and defence lawyer, to cover all aspects of procedure and focus on practical tips that will help practitioners confidently represent their clients and successfully run their matters in the Magistrates’ Court.

The commentaries have been updated in all of the guides in our publication – Criminal matters, Traffic matters and Intervention Orders. Highlights include:

  • bail amendments and the new ‘exceptional circumstances’ test;
  • programs the client needs to have completed before applying for re-licencing after a disqualification – taking into account whether the offence was committed before or after 1 April 2018;
  • steps to take prior to the commencement of a plea if imprisonment is a real possibility;
  • Community Corrections Orders as a sentencing option;
  • the application of the Behaviour Change program;
  • what to do when a client is in custody and an appeal needs to be listed;
  • the National Domestic Violence recognition Scheme;
  • The effect of ‘no electronic publication’ conditions in Intervention Orders.

Precedents include specific Retainer Instructions for Bail applications, Pleas and Mitigation, as well as for Criminal matters generally, Traffic matters and Intervention Orders. These have all been reviewed to ensure they reflect current law and practice.

We invite you to explore the matter plans in these guides and consider the wealth of assistance this publication offers for lawyers who appear in the Magistrates’ Court criminal jurisdiction.

Magistrates Court – Subpoenas – VIC

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New forms for Magistrates Court Subpoenas

The By Lawyers Victorian Magistrates’ Court – Civil guide has been updated to reflect recent changes to the Magistrates Court rules affecting subpoenas in civil matters.

The Magistrates’ Court General Civil Procedure (Miscellaneous Amendments) Rules 2018, which amend the Magistrates’ Court General Civil Procedure Rules 2010, came into effect on 15 October 2018.

These amendments make important changes to subpoena forms and processes in the Magistrates Court’s civil jurisdiction. The intention of the amendments is to harmonise Victoria with other Australian jurisdictions with regard to subpoenas.

Importantly, the existing form for Magistrates Court subpoenas, form 42A Subpoena to attend to give evidence, has been updated.

There are also two new forms for Magistrates Court subpoenas, forms – 42B, Subpoena to produce and 42C, Subpoena both to attend to give evidence and to produce.

For more information on Subpoenas generally, see the By Lawyers Reference Manual 101 Subpoena Answers located in the Reference Materials folder at the top of the matter plans in all By Lawyers litigation and criminal guides.

New precedents – Wills creating single testamentary discretionary trust

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Helpful new precedents have been added to all By Lawyers Wills publications for an individual, or a couple, to establish a single testamentary discretionary trust.

These precedents augment our existing precedents which create multiple testamentary discretionary trusts and make for faster and easier drafting where only one testamentary discretionary trust is required.

The new precedent, which is found in the Wills creating testamentary discretionary trust folder, was suggested by a subscriber. We love receiving feedback from firms who use our precedents and we are pleased to provide additional precedents where required.

 

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