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Nomination

1 August 2019 by By Lawyers

By Russell Cocks, Solicitor

First published in the Law Institute Journal
It is common for a named purchaser under a contract of sale of land to nominate an additional or substitute purchaser. What if disputes arise between the parties to the nomination?

Such a nomination, in its simplest form, is a two-party agreement between the named purchaser and the nominated purchaser. It is a contract that exists primarily in a written form, but it may be that there are also implied conditions arising from verbal agreements between the parties or the surrounding circumstances. It is possible to make a nomination a tripartite agreement, involving the vendor as the third party, but this is unusual and a conventional nomination binds the named purchaser and the nominated purchaser but does not bind the vendor, who stands aloof from such agreements.

There is no specified form of nomination. A form in common use simply recites the parties and records that the named purchaser nominates the nominated purchaser to take a transfer of the property in the place of the named purchaser. It is important to realise that the effect of such a nomination is NOT to replace the named purchaser with the nominated purchaser in the contract. Such a substitution of the named purchaser with the nominated purchaser can only be achieved with the consent of the other party to the contract, the vendor, and would result in the named purchaser exiting the contract and the nominated purchaser becoming a party to the contract and assuming all the rights and obligation of the purchaser pursuant to the contract. In a conventional nomination environment, the named purchaser remains as a party to the contract and the nominated purchaser assumes no rights or obligations under the contract, other than being nominated to take a transfer in the place of the named purchaser.

The nominated purchaser is therefore entirely dependent upon the named purchaser for enforcement of the contract and it is unwise for the nominated purchaser to allow any reimbursement of the named purchaser’s deposit to be released to the named purchaser prior to completion of the contract. If the named purchaser receives the reimbursement of deposit prior to completion, the named purchaser may be reluctant to enforce the contract at a later stage, leaving the nominated purchaser without any ability to require the vendor to complete the contract. This is a matter that should be, but rarely is, dealt with in the written nomination agreement.

The abbreviated form of standard nomination agreements means that if a dispute arises between the parties to the nomination, a Court may be required to look behind the written agreement to determine the full extent of the rights and obligations of the parties to the nomination. Ran Bi and Sortop P/L v Yingde Investments P/L [2019] VSC 324 is a case involving just such a dispute.

The named purchaser nominated the nominated purchaser to take transfers in relation to a number of properties that the named purchaser had entered into terms contracts to acquire for land development purposes. Substantial amounts by way of deposits were due under the contracts and the named purchaser was unable to fund those deposits, thus the nominated purchaser was introduced to the project to provide funding and proceed with a development via a land holding company owned by the named purchaser and the nominated purchaser. Disputes arose between the named purchaser and the nominated purchaser after the nominations had been signed, but before final settlement. The named purchaser argued that the nomination had been terminated by the parties and was no longer effective, leaving the named purchaser as the party entitled to take the transfers.

The Court was not satisfied that the nomination had in fact been terminated and held that the nominated purchaser was entitled to be the transferee when those contracts came to settlement. The Court had no problem with the concept of the nomination being retracted, it simply found that such an outcome could only be achieved by the agreement of the two parties to the nomination and that there was no such agreement in this case.

If the parties can agree to retract a nomination, could the named purchaser make another nomination? There appears to be no reason in principle why a second nomination cannot occur. Subject to the vendor being informed of the retraction and second nomination, the vendor has no role in the process other than to comply with the purchaser’s written direction in relation to the transferee.

Some vendors insert complex nomination conditions into contracts that impose specific notification requirements and/or require payment of a fee to the vendor. Section 42(3) Property Law Act prohibits the imposition of such a fee on the purchaser, but a requirement that the nominee pays a fee is enforceable.

Tip Box

•The right to nominate is regulated by the contract

•The nominee does not become a party to the contract

•A nomination may be withdrawn and a fresh nomination made.

Filed Under: Articles, Conveyancing and Property, Victoria Tagged With: conveyancing, Conveyancing & Property, nomination, property

Online applications for intervention orders – VIC

31 July 2019 by By Lawyers

Online applications for intervention orders are now available for family violence related matters, via the Magistrates’ Court website.

Amendments to the Family Violence Protection Act 2008 which commenced on 31 July 2019 allow an applicant to apply online, instead of attending in person at a police station or magistrates  court. Online applications for intervention orders take about 15 minutes to complete. They can be saved, amended and lodged at any time within 4 weeks of being started.

Police can also make the online application on someone’s behalf.

There is no requirement for the application to be sworn or witnessed. Rather, when completing the online application the applicant must make a declaration of truth as to the contents of the application. Making a deliberately false declaration of truth is an offence carrying serious penalties – up to 600 penalty units and 5 years imprisonment. The applicant must also acknowledge their understanding of that offence and those penalties when completing the application.

When deciding whether to make an interim order based on an online application, the Magistrates’ Court can waive the requirement that the application be supported by oral evidence or an affidavit. Before waiving the requirement the court must consider whether it is practicable to obtain oral evidence or an affidavit before the order is made.

The By Lawyers guide Intervention Orders (VIC) has been updated to cover online applications for intervention orders. This publication is located in the By Lawyers Criminal – Magistrates’ Court guide.

Assistance for potential applicants and background information on the new process is available from the Neighbourhood Justice Centre via the Magistrates’ Court website.

Filed Under: Criminal Law, Domestic Violence Orders, Legal Alerts, Victoria Tagged With: family violence, Intervention orders, online applications, victoria

Subpoena objections – FED and All states

30 July 2019 by By Lawyers

A new case on subpoena objections has been added to the By Lawyers Reference Guide 101 Subpoena Answers.

In Weeks v Nationwide News Pty Ltd [2019] WASC 268, the court considered whether a subpoena in a defamation case should be set aside for lack of  a legitimate forensic purpose (LFP).

The court succinctly stated the law on LFP, to the effect that The issuing party must identify expressly and with precision the legitimate forensic purpose for which they seek access to the documents. The issuing party must then satisfy the court that it is ‘on the cards’ that the documents would materially assist the issuing party in their defence‘.

In this regard the Court followed the leading LFP cases of R v Saleam (1989) 16 NSWLR 14 and Alister v R (1984) 154 CLR 404, 414. The Court also followed the earlier Western Australian full court decision of Stanley v Layne Christensen Co [2004] WASCA 50 regarding legitimate forensic purpose. The subpoena in this case was set aside.

This Western Australian decision has been added to 101 Subpoena Answers under the section on Legitimate forensic purpose in civil cases. This publication is an excellent resource for practitioners conducting litigation and dealing with subpoenas in all courts, whether issuing or responding, and including subpoena objections.

101 Subpoena Answers is available in all By Lawyers state court Litigation publications, as well as our Family Law, Family Provision, Injuries, Employment Law and Defamation guides.

 

Filed Under: Litigation, New South Wales, Publication Updates, Queensland, South Australia, Tasmania, Victoria, Western Australia Tagged With: legitimate forensic purpose, litigation, Subpoena, Subpoena to produce

Litigation guardian – solicitor’s certificate – VIC

26 July 2019 by By Lawyers

A new precedent ‘Solicitor’s certificate – Appointment of litigation guardian’ – has been added to By Lawyers Victorian civil litigation publications.

This precedent meets the requirement of reg 15.03(6)(a) of the Supreme Court (General Civil Procedure) Rules 2015. This regulation requires that, when seeking appointment of a litigation guardian in civil proceedings in the Supreme Court and the County Court, a certificate is to be completed by the solicitor for the person under disability certifying that the solicitor knows or believes that—

  1. the person to whom the certificate relates is a person under disability, including the grounds of the solicitor’s knowledge or belief; and
  2. the litigation guardian of the person under disability has signed the written consent and has no interest in the proceeding adverse to that person.

This certificate must be filed in the office of the Prothonotary before a person can be named as a litigation guardian in proceedings.

This helpful new precedent has been added to the By Lawyers Supreme Court, County Court and Family Provision claims publications. The precedent was created by our author as a result of feedback from a subscriber.

Filed Under: Litigation, Publication Updates, Victoria Tagged With: Appointment of litigation guardian, reg 15.03(6)(a), Solicitor's certificate

Training and supervision – Podcast

19 July 2019 by By Lawyers

Training and supervision of junior professional staff is a critical area for law firms. It impacts directly on many key areas of the practice: quality and consistency of output, productivity, team harmony and staff retention – and perhaps most importantly of all client satisfaction.

Our Managing Director Brad Watts recently shared some thoughts, as part of a LEAP global podcast series, about how By Lawyers practical legal guides can assist with training and supervising junior lawyers. Brad has 25 years of legal practice experience and is one of the contributors to the By Lawyers Practice Management guide.

Listen to the podcast to hear how By Lawyers guides can assist firms and individual solicitors with their training and supervision requirements.

By Lawyers guides include detailed commentaries and reference materials which are powerful tools to help ensure junior lawyers  have the guidance and support they need, improving productivity and retention of staff, while easing the pressure on principals and more senior lawyers.

Enjoy practice more, with By Lawyers.

 

 

Filed Under: Federal, Miscellaneous, New South Wales, Practice Management, Queensland, South Australia, Tasmania, Victoria, Western Australia Tagged With: education, practice management, staff development, supervision, training

1 July updates – FED and All states

3 July 2019 by By Lawyers

1 July updates are a big focus for By Lawyers. This is because many commonwealth and state legislative instruments provide for scheduled indexing of relevant monetary amounts and increases in government fees and charges.

These updates can include court filing fees, lodgement fees for property dealings, minimum weekly compensation amounts for Workers Compensation and various fines.

By Lawyers always monitor these changes for our subscribers. Each year we ensure that our publications are amended where necessary to reflect 1 July updates.

We also monitor and update for legislative indexing and increases which occur regularly at other times. These include 1 January changes and also other specific dates prescribed by some statutes.

The 1 July updates have been applied to the following By Lawyers publications:

  • Conveyancing and Property;
  • Criminal;
  • Litigation;
  • Family;
  • Estates;
  • Injuries; and
  • Employment.

Stay updated with By Lawyers guides and precedents. Happy new financial year!

Filed Under: Australian Capital Territory, New South Wales, Northern Territory, Publication Updates, Queensland, South Australia, Tasmania, Victoria, Western Australia Tagged With: 1 July 2019, legislation, updates

Working order condition

1 July 2019 by By Lawyers

By Russell Cocks

First published in the Law Institute Journal
A purchaser pursuant to a contract of sale of land may sometimes request that a ‘working order’ condition be added to the contract

Parties to a contract of sale of land are free to negotiate the terms of their contract and include whatever conditions they agree to. In the context of the standard contract of sale of land, such an agreement will be recorded by way of a Special Condition added to the 28 General Conditions. Such Special Conditions usually provide that all fittings, fixtures and chattels included in the sale are to be in working order as at the date of settlement. The focus of the purchaser is usually on such items as heating and cooling equipment, hot water services, swimming pool equipment and even stoves and lighting.

Because there is no General Condition applicable to this situation, the wording used often varies between contracts and the first difficulty is to determine the exact meaning and application of the Special Condition. No Court has had cause to interpret such a Special Condition, so no assistance can be gained from decided cases and as Working Order conditions are often drafted by estate agents on an ad hoc basis, interpretation is often a difficult task.

Such Special Conditions effectively seek to amend General Condition 24 of the standard contract, which provides that the vendor is obliged to deliver the property (which includes fittings & fixtures and arguably includes the chattels listed in the contract) to the purchaser at settlement in the same condition that it was in on the day of sale, fair wear and tear excepted. A Working Order Special Condition seeks to amend this general condition in two ways:

  1. General Condition 24 does NOT require the vendor to improve the property after contract, merely maintain it. Something that was not working on the day of sale does not have to be working at settlement, as it complies with General Condition 24 by being in the same condition at settlement as it was upon sale.

A Working Order Special Condition will require the vendor to improve an item that was not working on the day of sale, unless the vendor specifically excludes that item. Thus, an air conditioning unit that was not working on the day of sale must be repaired (or replaced) by the vendor prior to settlement, unless the vendor specifically excludes that unit from the Working Order Special Condition.

  1. The ‘fair wear & tear’ exception in General Condition 24 will be overridden by a Working Order Special Condition, such that the vendor will have an absolute obligation to have all aspects of the property in working order at settlement, irrespective of the cause of the deterioration. An air conditioning unit that was working at contract but stops working before settlement is an example of fair wear and tear, but under a Working Order Special Condition there is usually no provision for fair wear and tear and the vendor would be obliged to repair or replace the air conditioning unit prior to settlement.

Consequences of Breach

General Condition 24(a) provides a limited right to compensation for breach, but that right relates to a breach flowing from a failure to deliver the property in a significant sense, not the breach of a relatively insignificant provision such as a Working Order condition. (see April 2019 Property column) Therefore, the purchaser’s remedy for a breach of a Working Order condition is to rely on common law rights flowing from the breach and to sue the vendor AFTER settlement for consequential loss. There is certainly nothing in the standard contract that will allow the purchaser to refuse to settle for breach of a Working Order condition, or to claim a reduction in the purchase price. Even if the Working Order condition is framed as a warranty by the vendor, the common law remedy for breach of warranty is by way of damages to be pursued after settlement.

In those circumstances, a Working Order condition may be more trouble than it is worth. It reflects an unrealistic purchaser expectation that a second-hand property will be in an as-new condition at settlement and it simply creates disputation at the time-poor end of the transaction. Given that the purchaser’s right is limited to proceedings after settlement, the prospect of a pyrrhic victory looms large.

Conveyancing needs to be a smooth process, for both the clients and their representatives. Adding additional speedbumps to that process is not in the interest of either the clients or their representatives.

Tip Box

•Working Order conditions may be added to contracts

•Vendor may need to improve the property

•Purchaser can only sue after settlement

Filed Under: Articles, Conveyancing and Property, Victoria Tagged With: conveyancing, Conveyancing & Property, disputes

Retail Lease Summary – VIC

25 June 2019 by By Lawyers

By Lawyers Leases guide in Victoria now includes a summary precedent for the By Lawyers Retail Lease.

This helpful document is similar to the LIV Schedule, however this precedent is not intended to form part of the lease – it is strictly a summary of the central terms.

Amendments and additions are to be made in Item 24 of the Disclosure Statement.

This Retail lease Summary is particularly useful when explaining the lease to the client.

The corresponding item number from the disclosure statement and/or relevant clause of the terms and conditions is displayed on the left.

This precedent was created as a result of a user request. By Lawyers loves to respond to feedback from our users.

 

Filed Under: Conveyancing and Property, Victoria Tagged With: enclosure, Retail Lease, schedule, Summary

Insolvency To Do lists – FED

24 June 2019 by By Lawyers

The By Lawyers Bankruptcy and Liquidation guides have been updated with the inclusion of four Insolvency To do lists.

These new precedents provide practical guidance for practitioners as they progress through a matter.

The To Do lists provide helpful prompts for each important step to be taken in a matter when acting for either the creditor or the debtor in both personal and corporate insolvency matters, including:

  • Liquidation;
  • Winding up;
  • Deeds of company arrangement;
  • Debt agreements;
  • Personal insolvency agreements; and
  • Bankruptcy proceedings.

The new To Do lists can be found in folder A. Getting the Matter Underway in the By Lawyers Bankruptcy and Insolvency guides and will assist practitioners in safely and efficiently managing their matters.

Filed Under: Bankruptcy and Liquidation, Federal, New South Wales, Northern Territory, Publication Updates, Queensland, South Australia, Tasmania, Victoria, Western Australia Tagged With: bankruptcy, bankruptcy proceedings, corporate insolvency, debt agreements, deed of company arrangement, insolvency, liquidation, personal insolvency agreements, to do lists, winding up

Improving written submissions – All states

11 June 2019 by By Lawyers

A new article ‘Improving Written Submissions’ by Judge Alan Troy of the District Court of Western Australia has been added to the Reference Materials folder on the matter plan in all By Lawyers Litigation guides.

His Honour’s article, first published in Brief, the Journal of the Law Society of Western Australia, is full of valuable tips for improving written submissions. It will greatly assist practitioners when they are preparing submissions for all types of matters, in all courts.

The article emphasises the need to use clear and plain English, to be brief and succinct, to persuade the court via credible legal argument and to logically structure the submissions. His Honour recommends stating the main point of the argument at the outset and introducing each topic with a brief summary of the real substance of the issue to which it relates.

Drawing on his substantial experience both as an advocate and on the bench, Judge Troy gives specific and very practical guidance on how practitioners can best construct written submissions with these tenets in mind. His Honour’s tips include the use of a chronology, ways to structure both the text and the arguments and the importance of ruthless final editing.

By Lawyers are very pleased to make this helpful article available to our subscribers across Australia.

Filed Under: Articles, Litigation, New South Wales, Northern Territory, Publication Updates, Queensland, South Australia, Tasmania, Victoria, Western Australia Tagged With: advocacy, legal articles, litigation, written submissions

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