ByLawyers News and Updates

Family Law Rules – changes as of 1 March 2018

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As of 1 March 2018, changes came into effect in relation to consent orders in the Family Court.

The relevant By Lawyers publications, Children and Property Settlement, have been updated. The new forms have been linked to the matter plans and the commentary additions consist of the following:

Children changes

What was previously the annexure to consent parenting orders is now incorporated into the Application for Consent Orders form. A separate annexure is no longer required.

Three new forms were added for use in the Family Court.

The Notice of Child Abuse, Family Violence or Risk of Family Violence (Application for Consent Orders) must be filed with the Application for consent orders if parenting orders are sought and a party has said at item 25 of the Application there has been, or is a risk of child abuse, neglect or family violence.

The second form is the Notice of Child Abuse, Family Violence or Risk of Family Violence (Current Case). This form is now only for where cases are on foot: not for consent orders.

A third new form is the Submitting Notice. This form may be filed in Family Court proceedings if a party has been served with an Initiating Application, Response to Initiating Application, Reply or a Notice of Appeal, and does not want to contest the relief sought: Family Law Rules r 8.07.

Property Settlement changes

Previously, if the consent orders contained a provision for a superannuation splitting order, you had to ensure that a superannuation information form had been completed by the Trustee of the relevant super fund or a valuation had been obtained to the superannuation interest. However, as of 1 March 2018, a superannuation kit is no longer required. Proof of value of the interest is required to be filed with the Application.

By Lawyers Contract of Sale of Land – Victoria

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A new form of contract, co-authored by Russell Cocks, providing a vendor’s statement and contract in one document.

The contract is specifically designed for residential conveyancing transactions and seeks to smooth some of the traditional road blocks that arise in these transactions.

The By Lawyers Contract of Sale of Land is located in the Contract folder in the Sale of Real Property Guide.

Seven reasons to use the By Lawyers contract

  1. The Contract and Vendor’s Statement are combined into ONE document, with the Vendor’s Statement, logically, coming FIRST. The Vendor’s Statement is formatted in such a way as to deal with the obligatory fields first and then group the optional fields in way that makes removal of those fields simple if they are not required.
  2. Particulars of Sale in the Contract includes a “sunset date” for off the plan approval. No more searching through mountains of Special Conditions.
  3. Non-derogation warranty. General Conditions can be amended by Special Conditions BUT not such as to reduce the rights created by the General Conditions. No more contracts that say one thing on page 1 and reverse that on page 15. This Contract is fair to both parties; if someone wants to create an unfair contract they cannot hide it within this contract.
  4. General Condition 12 – deposit release. Establishes a clear protocol for release by requiring timely objection to title.
  5. General Condition 14 – loan condition. Extends time for approval to 21 days and allows for automatic extension, subject to vendor’s ability to end the extension by notice.
  6. General Condition 25 – losses. Removes disputes relating to default losses from the settlement process and allows the parties to resolve these issues after settlement.
  7. General Conditions 27 & 28 – default and rescission notices. Divides the process into two steps with specified legal cost in respect of notices.

There are also other improvements, such as simple off the plan and electronic conveyancing conditions, a requirement that a vendor produce a copy lease at settlement and a clause passing ownership of abandoned goods to the purchaser. This Contract continues the quest commenced by the 2008 Contract (remember Requisitions?) to simplify conveyancing by ironing out the speedhumps.

Deposit – Forfeiture of deposit

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By Russell Cocks, Solicitor

First published in the Law Institute Journal

A vendor may forfeit a deposit if the contract is ended but there are some circumstances where relief against forfeiture may be granted.

There are two basic principles in property law that generally co-exist but are capable of coming into conflict:

  • a deposit is an earnest paid to secure the performance of the contract; and
  • the law will not enforce a penalty imposed for breach of contract.

These two principles are usually able to co-exist as a result of the law recognising that a payment that constitutes a genuine pre-estimate of a vendor’s losses upon default by the purchaser is not a penalty and that a deposit of 10% of the price is an acceptable pre-estimate of such losses.

It is therefore fair to say that, in circumstances where the purchaser has paid a 10% deposit, a vendor who seeks to forfeit that deposit as a result of the purchaser’s breach of contract will be on safe ground. Section 49 Property Law Act confers on the court a discretion to grant the purchaser relief against forfeiture but it is generally accepted that the purchaser must show exceptional circumstances to justify the exercise of that discretion in circumstances where the deposit is 10%.

An example of such exceptional circumstances may be where the purchaser has taken possession of the property with the agreement of the vendor and has expended money on the property such as to have increased the value of the property. A court might find that the vendor is not entitled to retain the benefit of the funds expended as well as the deposit. But, as a general rule, the vendor can forfeit a deposit of 10% that has been paid by the purchaser. Equally, it will be rare for a vendor to be entitled to retain a deposit of more than 10%, as such a payment exceeds a reasonable pre-estimate of the vendor’s losses and amounts to a penalty.

Often, the deposit is expressed as being ‘10% payable as to $X on signing the contract and balance in 7 days’. Such a formula recognises that a purchaser might not always have a full 10% deposit available at the point of signing the contract and may require a short period of time to arrange for the balance to be available. If the purchaser breaches the contract the vendor needs to call upon the assistance of the court to recover the unpaid deposit and the spectre of a penalty arises. However, it has long been accepted that a vendor is entitled to recover any unpaid part of a 10% deposit notwithstanding that the contract has been ended – Bot v Ristevski [1981] VicRp 13 adopted as recently as Melegant & Sundrum P/L v Zhong [2017] VCC 1868.

However, where the deposit is expressed as some amount less than 10%, the court will not assist the vendor to recover 10%. This has been the situation in NSW for some time and now also applies in Victoria following Simcevski v Dixon (No 2) [2017] VSC 531 were the contract provided for a deposit of 5% and the court rejected a claim by the vendor for a further 5%.

In that case the vendor sought to rely upon a condition in the contract that provided that, if the contract was ended by the vendor, 10% of the price was to be forfeited to the vendor, whether it had been paid or not. Whilst the amount (10%) bore a resemblance to a deposit, the contract provided that the deposit was 5%, so the court had no hesitation in finding that any amount beyond the specified deposit was a penalty and thereby unenforceable, whether supported by a contractual right or not. It may therefore be concluded that any attempt to impose a liability beyond the specified deposit will be an unenforceable penalty.

One formula that has not as yet been scrutinised by a court is ‘deposit of 10% payable as to 5% on signing and the balance of 5% at settlement’. The 10% deposit will not be a penalty and the delay in payment should mean that the vendor is able to recover the full 10% in accordance with Bot v Ristevski.

Tip Box

  • the law will not enforce a penalty for breach of contract
  • a 10% deposit is not a penalty
  • a vendor cannot recover more than the specified deposit

Whilst written for Victoria this article has interest and relevance for practitioners in all states

VIC – Estates – Electronic lodgement of all survivorship applications, transmission applications and standalone transfers

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From 1 March 2018 all survivorship applications, transmission applications and standalone transfers must be lodged electronically.

Family Law Rules – Amendment

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ALERT – FROM 1 MARCH 2018 – APPLICATION FOR CONSENT ORDERS

Family Law Amendment (2018 Measures No. 1) Rules 2018

Parenting matters: Changes to consent orders and submitting notices. New forms for abuse/violence.

Financial matters: Superannuation interest – kit no longer required. Must file proof of value of the interest with application.

Data breaches – Mandatory reporting of eligible data breaches from 22 February 2018

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Mandatory reporting of eligible data breaches from 22 February 2018

Amendments to the Privacy Act come into force from 22 February. As holders of ‘personal information’ as defined in the Act, law firms which experience a data breach must:

  • Notify the Office of the Australian Information Commissioner, AND
  • Notify ALL affected individuals.

To cater for these changes, we have today added a new chapter to our Practice Management commentary: Data Breaches.

Taking the time to review your level of data protection is well worth the effort. This includes protective software and an efficient system of information management.

For more information please read our commentary.

Employment Law – 101 Employment Answers – New reference manual

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We are excited to announce that we have significantly enhanced our Employment Law publication by the addition of a new reference manual – 101 Employment Answers.

Sourced from our Mentor service 101 Employment Answers is an extremely useful collection of questions and answers on all aspects of employment law, from various states, on various topics, dealing with the status, rights and obligations of employers, employees and contractors.

101 Employment Answers can be accessed directly from the Employment Law guide within LEAP or from the Employment Law page on the By Lawyers website.

McKenzie Friend – A friend in need

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A McKenzie Friend (MF) is someone who assists an unrepresented person in court. They can be a lawyer, but they are not a substitute for a lawyer. So lawyer or not, when acting as a MF they may not address the court; they can take notes, organise papers, whisper quietly to and generally assist the litigant. McKenzie v McKenzie (1970) 3 W.L.R 472 was a family law case and MFs are more common in family and guardianship matters, but they may be permitted in any court where an unrepresented person needs assistance to ensure fairness. However, some MFs are overbearing do-gooders, or bush lawyers, who cause disruption and delay rather than actually assist and will not be permitted to remain. In guardianship hearings where there is no right of representation, a lawyer can act as a MF.

New Partnerships Guide

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Within the must have commercial publication Companies, Trusts, Partnerships and Superannuation we have created a new guide, commentary and precedents focusing extensively on the topic of Partnerships.

Partnerships covers all aspects of setting up and running a business using partnership trading structures including:

  • general partnerships;
  • limited partnerships; and
  • incorporated limited partnerships.

The commentary, guide and precedents provide an end to end solution for partnership businesses such as:

  • establishing a new partnership and the partnership agreement;
  • adding new partners or making changes to profit share structure of an existing partnership;
  • removing or expelling a partner; and
  • dissolving a partnership and business succession arrangements.

The commentary also discusses the taxation and property ownership implications of operating under a partnership structure.

The Companies, Trusts, Partnerships and Superannuation guides also provides detailed information about other business structures including companies, trusts and self-managed superannuation funds.

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