ByLawyers News and Updates

FAQs – By Lawyers Contract for the Sale of Land NSW

by

By Lawyers introduced a new contract for the sale of land for New South Wales earlier this year and have hosted a number of informational webinars about it for solicitors and conveyancers. Those webinars raised a number of questions which we have published here.

If you have any questions not covered here, please email us at askus@bylawyers.com.au.

2016 edition of the contract was released in May.

General FAQs

Q: Can this contract be used in practice now?

Yes, and its use continues to grow as practitioners become aware of its existence and benefits.

 Q: Given it is alternative to Law Society Contract for Sale, what if the purchaser’s solicitor/conveyancer refuses to use this version?

There is no prescribed contract for the sale of land.

It is for the vendor to decide the contract not the purchaser and it is not for the practitioner acting for the purchaser to jeopardise the transaction due to his personal preferences.

The Law Society contract is not the only one used. Several major firms use their own contract. The Barangaroo contract is an example which we understand has also adopted electronic execution to cater for the Chinese market.

Q: Is this contract available in LEAP Documents if we haven’t changed to LEAP Conveyancer yet?

Yes.

Q: Will LEAP take away access to the Law Society contract at any time?

Most unlikely. This is a matter for LEAP.

Q: Is there a time frame suggested that all parties should move to use the 2015 contract or Law Society contract rather than 2005?

We understand that the Law Society will cease providing 2005 contracts in January. You will need to confirm with them.  The By Lawyers contract is immediately available.

Q: Does the contract include the standard conditions from the law society as well (blue pages)?

No. This contract is a new contract quite separate from the Law Society contract.

Q: Can this contract be used for sale/purchase of properties in Queensland? 

No.

 

FAQ – Email and exchange questions

Q: Even if you do the exchange via email, can’t you still just mail out the contracts to the other side to “formally” complete the exchange and so you are holding the original signed Contracts…

This is a misunderstanding of the process. The exchange takes place when the vendor’s signed contract is emailed back to the purchaser. That emailed contract is the original and the one actually signed and retained in the office is a copy of the electronic original.

Q: If the contracts are exchanged via email do you still send the original paper contract to the other side?

No. The original is the electronic contract.

Q: If part of an exchange is ensuring that the contracts are identical, how is that carried out if they are emailed as part of the exchange and not physically checked in-house?

The purchaser’s electronic contract is checked against the vendor’s before returning the counterpart which can also readily be checked by the purchaser if they wish.

Q: When sending a contract by email on behalf of the purchaser, do you date it before sending and the vendor’s representative dates it when returned?

If the contract is to be exchanged the day that you send it then date it before you scan and send it. The vendor will do likewise. If the exchange may be on another unknown day then send it undated and the vendors copy returned to you will be dated that day and that is the date of exchange. The vendor may print and date the purchaser’s print version if he so chooses.

Q: Further to question about what date to list on contact for electronic exchange, do we list the cooling off date from date vendor send back signed copy?

Exchange is effected on email delivery to the purchaser’s solicitor which is the start of the cooling off period.

Q: What about when the agent does the exchange and it is incorrect, i.e. things which have been agreed between the parties have not been changed in the contract prior to exchange. Do we email a subsequent amended contract? Normally after exchange there are no changes.

The usual rules apply that any changes must be agreed and included in writing in the contract or in a separate document referred to in and supplemental to the contract.

Q: Is there a facility to electronically amend the document to add the date of exchange to the contract signed by the purchaser?

If that was considered necessary then it is printed dated and scanned in.

 

FAQ – Deposits

Q: Normally a deposit is released only if the vendor is purchasing a property; however it appears this contract allows it for any reason, what is the background for this?

Because it can be difficult to recover the deposit paid in a second transaction to which the purchaser is not a party it is not uncommon for such a request to be met by the response – get a deposit bond.

Sometimes the vendor is in need of cash urgently and the deposit is released to secure a price reduction.

As there are many reasons for release it is considered best left to the parties to negotiate.

The important part of the condition is the creation of a charge on the property securing repayment if it is released.

It is worth noting that the deposit release clause, like some other clauses in the terms and conditions, is activated by checking a box in the summary.

Q: With reduced deposits, are you suggesting or recommending that if the vendor will accept a 5% deposit, you just show that as the amount on the front page, rather than 10% and have a special condition dealing with a claw back in the event of default?

Yes. We doubt that a court will see a payment made after the exchange as an earnest for the transaction. There are a number of cases on this issue.

Q: If the release of deposit is ticked, can the deposit be released for any reason? Normally it’s only released for the purchase of another property.

Once the release of the deposit has been negotiated then all that is required is to tick the box which triggers condition 3 (c) in part 2 of the contract. If you wish to add any other conditions to the release then it would be necessary to draft a condition for inclusion as a special condition on page 4 of part 1.

 

FAQ – stamping questions

Q: Can you tell us again what the Office of State Revenue attitude will be to PDF documents.

OSR are well acquainted with stamping documents signed electronically. When sending it to them simply state that it is an original electronic contract.

Q:  If you have a provider who stamps can they stamp a PDF?

Yes.

Q:  You say the PDF exchanged copy becomes the original. For the purpose of stamping, can this be printed and the stamp applied to the printed version?

Yes.

Q: To stamp contract in house under EDR do we just need to print the PDF original and stamp it?

There is little point in doing so as long as the electronically stored contract is available if required by OSR.

Q: You mentioned the OSR requiring the original document for stamping. So how do we deal with that when contracts are exchanged electronically?

The OSR stamps a print version of the original electronic contract.

 

FAQ – Warranties, inclusions, and conditions

Q: What happens if you do not have a survey and have no way of knowing if there is encroachments on the property? One of the warranties appeared to warrant that there was no encroachments, from memory.

This is normally the subject of a special condition which is now included as a warranty in the contract. If the vendor knows of an encroachment and discloses it then the purchaser must accept it. If the purchaser does not get a survey then caveat emptor. If the purchase gets a survey after exchange showing an encroachment other than fencing then the purchaser may rescind the contract provided it is a material breach not known to the purchaser and the purchaser would not have purchased the property had he known of the encroachment and the vendor fails to remedy the encroachment.

Q: There is not much room for additional inclusions, I suppose we would have to have an annexure?

The space expands as words are added.

Q: If we want to amend some of these conditions for example insert a specific interest rate, how do we do that?

Type in the special condition or annex one. See page 5 of the summary.

Q: What about swimming pool clause regarding non-compliance SPA 1992 and Local Government Act and Regulations disclosure and purchaser taking as is and P not entitled to requisitions, objection, etc.?

See the warranties both statutory (reproduced in the summary) and contractual (clause 6). See clause 19(f) for taking as is.

Q: Off Plan Contracts form large part of our work and yet there is no section in LEAP conveyancing precedents or 2015 contract deals with off plan. What our options in this regard?

Within the library of special conditions are precedents for real property subdivision and strata development.

 

Can I copy the contract?

Q: Are we able to copy the contract without affecting the copyright provisions?

The contract is available as one of our precedents to those that use LEAP Conveyancer or subscribe to our Conveyancing Guide through our website.

Q: You said anyone can use the contract and that there is no breach of copyright. Does this apply whether or not you are a LEAP subscriber?

No. you must be using LEAP or have subscribed to our publication. Apologies for any misunderstanding.

 

 

 

 

Using By Lawyers Precedents within LEAP

by

Accessing Precedents

  • Open any Matter.
  • Click the ‘Guides & Precedents’ button at the top of the Matter.

8

Searching Precedents 

  • If you cannot find the precedent you need, click the ‘Search’ tab and type in the precedent name in the top left hand corner of the screen and click the Search searchbutton.

Creating Precedents

You can create new Precedents or modify the ones already in LEAP.

Need help modifying a precedent? LEAP Certified Consultants specialise in making advanced changes to precedents. Click here to find a consultant.

Note : All precedents are based on Document Types. If you wish to modify any information on a precedent such as an address, letterhead, signature refer to the section on “Document Types”.

To create your own precedents:

  • Open the matter type you wish to create the precedent in e.g. Letter to Vendor Regarding Signing of Contract, open a Sale matter.
  • Click on the ‘Guides & Precedents’ button at the top of the matter.
  • Right click anywhere on the screen and click New > Word or Excel Precedent.
Note: You can also create precedents in the folders available by double clicking on the folder and then right clicking and selecting New > Word or Excel Precedent.
  • Select the template you wish to use and then select the recipient of the template. Click ‘OK’.
  • Enter the contents of your precedent where the body bookmark is placed, i.e Below the “RE” line and above “Yours Faithfully”.

Inserting Fields

Fields can be inserted into your precedent to make it automated.

  • Have the precedent open in Word
  • Click the LEAP tab
  • Select the editing button, then click insert.  A list of fields will appear on the right hand side of the screen.
Note: The only place you can enter text is where the Body bookmark is located. Any other text will be overridden by the document template. For more information on locating the Body Bookmark, refer to the section above.
  • Make sure your cursor is in the correct location on the precedent.
  • Select the appropriate section where the field is located. For example, If you need the completion date, select ‘Matter’.
  • Select the appropriate field from the list E.g. ‘Completion/Settlement Date’.
  • Click ‘insert’ at the bottom right hand corner of the screen.
Note: The field you are looking for may also be a hidden field. Click the ‘Show hidden fields’ box and the bottom of the screen to view them.
  • Continue inserting fields in the appropriate locations on your precedent.
Note: To view the field name, right click on the field that has been inserted into the document and select “Toggle field codes”.
  • Once you have completed your precedent. Click ‘Save & Close’ in the top left hand corner of word.
  • Rename your precedent and click ok.

The precedent will now be available in all matters of the same matter type.

Modifying Precedents

To modify an existing precedent:

  1. Click once on the ‘Guides and Precedents’ button at the top of your matter.
  2. Locate the precedent you wish to amend.
  3. Right click on the precedent you wish to modify and then select ‘Modify Precedent’.

Your precedent will open in Microsoft Word allowing you to make any necessary amendments within the letter.

Importing a Precedent

You can also import precedents into LEAP that are saved on your computer. Make sure you open a matter that corresponds with the matter type that the precedent is for, then click the ‘Guides & Precedents’ button at the top of the matter. Simply right click on the screen and select ‘Import Precedent’.

You will be presented with a navigation screen. Navigate to where your precedent is saved on your computer and double click the precedent. This will import it to the location that you have opened in LEAP. You can then modify the precedent to add in fields.

Move, Shortcut or Duplicate Precedents

Move Precedents

There are two ways to move a precedent. Either right click on the precedent to cut and paste or follow the drag and drop method described below.

  • Open any Matter
  • Select the ‘Guides & Precedents’ button
  • Expand the folders on the left hand side of the window so that the folder that the precedent will be moved to is displayed
  • Locate the precedent to be moved
  • Click on the precedent so it is highlighted
  • Drag and drop the precedent into the correct folder.

Precedent folders can also be dragged and dropped into other precedent folders.

If a precedent has been moved and needs to be returned to it original location, right click on the precedent and select ‘Reset Precedent’s Location to Original’.

Shortcut Precedents

A shortcut creates a link to an original precedent. Shortcuts are useful when the same precedent is required in two different locations.

Using a shortcut instead of duplicating a precedent means that only one precedent needs to be updated and maintained.

To shortcut the precedent:

  • Open any Matter
  • Select the ‘Guides & Precedents’ button
  • Locate the precedent that you need a link to
  • Right click on the precedent and select ‘Create Shortcut’

The shortcut to the precedent will appear. A shortcut can be identified as it contains the shortcuticon.  If required, the shortcut can then be moved to a new location.

Shortcuts can also be created from a precedent folder. Removing a precedent from the original folder will also remove the precedent from the shortcut folder and vise versa.

To locate the original precedent or precedent folder from a shortcut, right click on the shortcut and select ‘Find Target Precedent/Folder’.

Duplicate Precedents

Duplicating creates an exact copy of the precedent, but does not contain a link back to the original document. This is useful when you want to create a new precedent based on an existing document.

Once a precedent is duplicated, any changes to the original document will not flow through to the duplicated version.

There are two ways to duplicate a precedent. Either right click on the precedent to copy and paste, or follow the method described below.

To duplicate a precedent:

  • Open any Matter
  • Select the ‘Guides & Precedents’ button
  • Locate the precedent that you need to duplicate
  • Right click on the precedent and select ‘Duplicate Precedent’

Another version of the precedent will appear and if required, can be moved to a new location.

Precedent Folders

Folders can be added to the ‘Guides & Precedents’ window. This allows users to customise the Guides & Precedents interface. It also allows user Precedents to be separated from LEAP Precedents.

Creating new Precedent Folders

  • Open the type of matter which you would like to add a folder.
  • Select the ‘Guides & Precedents’ button
  • Right-click on an empty space in the Precedent window
  • Select New > Folder
  • Name the new folder

Folders can also be created within other folders:

Deleting a Folder

  • Open the type of matter which contains the folder.
  • Select the ‘Guides & Precedents’ button
  • Locate the folder
  • Right click on the folder to be deleted
  • Click ‘Delete’

Reversing a Folder Deletion

  • Open the type of matter which contains the folder.
  • Select the ‘Guides & Precedents’ button
  • If known, find the location the folder was deleted from
  • Select ‘Tools’
  • Click on ‘View Deleted Precedents’
  • Right click on the folder you would like to retrieve
  • Select ‘Undelete’
  • To hide deleted folders, click on ‘Tools’ and deselect ‘View Deleted Precedents’.

Precedent History

The history of a precedent is recorded to allow you to monitor what version of the precedent you are using and to revert back to a previous version if required.

  • Follow the instructions at the top of the page under “Accessing Precedents” to locate the document.
  • Right-click on the precedent and select “History of Changes”

From this window, you will be able to see how many changes have been made to the precedent and when they were made. You can also use the buttons at the top to preview a certain version of the document, compare two versions or set a particular version as the current one.

Adding a Christmas Message to LEAP

This article demonstrates how to add a Christmas message to your correspondence.

Before modifying the document types you need to have your firms Christmas Message ready. An example is shown below:

Adding the Christmas message to the LEAP

To edit the document types in LEAP:

  • Open a matter.
  • Click the ‘More Types’ button at the top of the matter
  • You will be presented with a list of document types. Right click on ‘Letter’ and then click ‘Edit’. This will open the document in edit mode where you are able to insert your Christmas Message.
  • Once you have added your Christmas Message to the document, click the LEAP ‘Save & Close’ button in Microsoft Office Word.
  • Continue on editing any other document types you wish to use. E.g. Fax, File Note etc. These changes will go through to all precedents that use these document types.

Removing the Christmas message from the LEAP

When the Christmas period is over and the New Year has started, we will need to remove the Christmas message from the document types.  Please do the following:

  • Open a matter.
  • Click the ‘More’ button at the top of the matter.
  • You will be presented with a list of document types. Right click on ‘Letter’ and then click ‘History of Changes’. This will open the History of changes window.
  • In the History of changes window, select the document that was being used before the Christmas Message was added and hit ‘Set as Current’.

External Precedents Folder

The ‘External Precedents Folder’ functionality allows your firm to maintain and keep your precedents locally on your machine or a networked location outside of LEAP. The selected folder will appear in the ‘Guides & Precedents’ window under the ‘External Precedents Folder’ tab. This eliminates the need to manually import your precedents into LEAP every time.

To set an ‘External Precedents Folder’:

  • Open ‘Guides & Precedents’ in a Matter.
  • Select the ‘External Precedents Folder’ tab.
  • Click ‘Select Folder’.

Select the folder you want to display your local or networked precedents from. All folders and documents from within the selected folder will appear in the ‘Guides & Precedents’ window under the folder tree structure on the ‘External Precedents Folder’ tab.

If documents are added to the file structure, the ‘External Precedents Folder’ can be refreshed via the right-click menus ‘Refresh List’ option. You can also open the target location of any file via the right-click menus ‘Show in File Explorer’ option.

An external folder can be deselected by choosing ‘Deselect Current Folder’ from the options menu.

Custom Precedents Tab

Custom precedents can be viewed from a single tab in the ‘Guides & Precedents’ window. This can be enabled by selecting ‘Show Custom Precedents Tab’ from the options menu.

The ‘Custom Precedents’ tab will appear after the Search tab, listing every custom precedent created by the firm.

Inserting Fields

Fields can be inserted into your precedent to make it automated.

  • Have the precedent open in Word.
  • Click the LEAP tab.
  • Select the editing button, then click insert.  A list of fields will appear on the right hand side of the screen.
Note: The only place you can enter text is where the Body bookmark is located. Any other text will be overridden by the document template. For more information on locating the Body Bookmark, refer to the section above.
  • Make sure your cursor is in the correct location on the precedent.
  • Select the appropriate section where the field is located. For example, If you need the completion date, select ‘Matter’.
  • Select the appropriate field from the list E.g. ‘Completion/Settlement Date’.
  • Click ‘insert’ at the bottom right hand corner of the screen.
Note: The field you are looking for may also be a hidden field. Click the ‘Show hidden fields’ box and the bottom of the screen to view them.
  • Continue inserting fields in the appropriate locations on your precedent.
Note: To view the field name, right click on the field that has been inserted into the document and select “Toggle field codes”.
  • Once you have completed your precedent. Click ‘Save & Close’ in the top left hand corner of word.
  • Rename your precedent and click “OK”.

The precedent will now be available in all matters of the same matter type.

Converting Fields to Text 

When generating a document in LEAP, all of your client information is merged onto that document using ‘Field Codes’.

The advantage of this is that when you make a change to your matter in LEAP, those changes will carry over to the document, either when it is re-generated or when you click the ‘Update’ button at the top of Microsoft Word.

If you want to make a change to a particular document without that field being updated when a change takes place, you can convert that field to text and enter the desired information directly into the document.

To do this:

  • Open the desired document
  • Highlight the field you want to convert to text. If you are unsure if the highlighted text is a field, press Alt + F9 to view the field code.
  • Once the field is highlighted, select ‘Convert Fields to Text’ from the ‘Advanced Functions’ toolbar.

The converted field will no longer update when information is changed in LEAP for this document only. If you create a new document, it will still pull the relevant information from the Matter.

Customising Fields 

You can add custom ‘Ask’, ‘Fillin’ and ‘If Then Else’ fields into your documents that will appear when you open it.

Note: As customisation of fields can become quite complex, the guide below is for simple fields only. If you require advanced customisation of your documents, please refer to a LEAP Certified Consultant. 

Ask Fields

An ‘Ask’ field will ask one question upon opening the document that can be filled into multiple locations. For example, if you want your name to appear at three different points on the document, it will ask ‘What is your name’ upon opening and the answer will be filled into all three locations.

To do this:

  • Open the desired document.
  • Click ‘Editing’ on the LEAP toolbar, then ‘Insert’.
  • Click on th ‘Ask’ tab.
  • In the ‘Bookmark’ field, type the name of the bookmark, this is for your reference only.
  • Type the question into the ‘Prompt’ field and then the ‘Default Answer’ underneath.
  • Click above the section that you want to insert your answer, then click ‘Insert’ to place it into the document. An example dialogue box will open to show you how this will look.
NOTE: You will not see anything appear in the document at this point, but it MUST be above the section where you want your answers to go.
  • Go to the ‘Ask Result’ tab and click where you want your answers displayed on the document. Click ‘Insert’ to place the answer. The ‘Default Answer’ will be displayed as a placeholder.

Fillin Fields 

A ‘Fillin Field’ works similarly to an ‘Ask’ field but is only useful when the answer is to be displayed at one point in the document.

To do this:

  • Open the desired document.
  • Click ‘Editing’ on the LEAP toolbar, then ‘Insert’.
  • Click on the ‘Fillin’ tab.
  • Fill out the ‘Prompt’ and ‘Default Answer’ field, then click ‘Insert’ to place the answer into the document.

If Then Else Fields

An ‘If Then Else’ statement will display information on a conditional basis.

To do this:

  • Open the desired document.
  • Click ‘Editing’ on the LEAP toolbar, then ‘Insert’.
  • Click on the ‘If..Then..Else’ tab
  • You can choose to make the ‘Field’, ‘Fillin’ or ‘Ask’ field the comparable field. We’ll use ‘Field’ for this example.
  • Next, choose the field by clicking ‘Select’.
  • Fill out ‘Step 2’ with the comparison. You can choose a different comparison type by clicking on the drop down menu.
  • Next, select the values for ‘True’ and ‘False’
  • Click ‘Insert’ when completed to put it into the document.

In this example, if the matter field ‘Person Responsible Initials’ is equal to ‘MH’, it will display ‘True. If it is anything else, it will display ‘False’.

Beware the trap of the disgruntled employee – Part 1

by

By Brad Petley

Principal of Acumen Lawyers, and the By Lawyers employment law specialist.

It’s a familiar situation – an employee who pushes their manager’s buttons.

Challenging and questioning rather than simply getting on with things – ‘like the others do’. Disgruntled employees with unresolved workplace issues can be difficult to manage. Some employers adopt a ‘put up with it or there’s the door’ position. Yet, managing a disgruntled employee is not as easy as that.

Traps abound for the unwary – as today’s article, in Part 1 of our series, shows.

Case 1 – How not to handle a workplace dispute

Luckman v HP Bowral Pty Ltd T/A Highlands Property [2016] FWC 1250 (3 March 2016)

Ms Luckman worked in a permanent part time capacity for a property management company.

Her role involved managing a portfolio of properties, including sales and leasing.

Two disputes arose during Ms Luckman’s employment.

First Dispute

The first dispute arose when Ms Luckman considered that she had a full-time workload although she was working in a part-time capacity, based on the amount of properties she was expected to manage.

The dispute was resolved after Ms Luckman raised issue with her manager.

Second Dispute

The second dispute arose over a management decision that Ms Luckman would be managing two new properties in addition to her normal duties.

Ms Luckman was advised of the decision on 13 August 2015.

Ms Luckman objected to management’s decision on the basis that although she would be burdened with the responsibility for managing the properties, she would be effectively denied the associated sales commissions because each sale would occur during hours when she was not at work.

Later that day, Ms Luckman was invited to a meeting with the employer’s General Manager, Mr Walker.

Meeting – 13 August 2015

During the meeting Mr Walker explained the reasons for the decision and advised that he did not consider the transfer of work to her as unusual or uncommon.

Ms Luckman disagreed with Mr Walker’s explanation and at the conclusion of the meeting made comments along the lines of “I’m done, I’m over it, I’m out of here.”

Email exchange

After returning to her desk, Ms Luckman sent Mr Walker an email which included the following:

“Further to our meeting today as I feel there is nothing more to discuss it would be appreciated if the files could now be handed over so I can continue the management of those properties.”

Mr Walker responded by email which included the following:

“You may feel there is nothing more to discuss, but there is. It’s nothing to lose sleep over but I will make time for us to meet again.”

Dismissal

On 20 August 2015 Ms Luckman was invited to a further meeting with Mr Walker.

At the start of the meeting Mr Walker read out a letter terminating Ms Luckman’s employment.

The letter advised ‘misconduct’ as the reason for Ms Luckman’s dismissal.

Unfair dismissal claim

Ms Luckman challenged the termination of her employment by way of an unfair dismissal application to the Fair Work Commission.

The verdict

The FWC ultimately found the dismissal to have been harsh and unreasonable and thus – unfair.

Conduct not inappropriate

The FWC considered that the conduct of Ms Luckman in the meeting did not amount to a valid reason for her dismissal.

Although observing that Ms Luckman had been angry and hostile during the meeting of 13 August, the FWC recognised that there had been no use of inappropriate or foul language, or threatening or abusive behaviour, by either party.

The FWC also recognised that Ms Luckman’s email to Mr Walker immediately after their meeting demonstrated that she was ready to follow the instruction about the management of the two properties in question.

In particular the FWC commented:

‘The meeting on 13 August 2015 was a robust discussion where an employee had the courage to voice her disapproval over the way that she perceived that she had been victimised over the last four years.

The mere fact that there was no swearing or threatening language used solidifies the view that Mr Walker’s decision to terminate Ms Luckman’s employment was a monumental over reaction.’

Robust workplace discussions

Importantly for employers, the FWC made the following observation about robust discussions between employers and employees:

‘Robust discussions between employees and employers are a part of the Australian industrial landscape.

The notion of master/servant where an employee was not allowed to question the decision of the employer disappeared with the industrial revolution.’

Ultimately, the FWC handed down a decision of unfair dismissal.

As to the question of whether Ms Luckman could be reinstated, the FWC rejected a claim by the employer that there had been a breakdown of trust in the employment relationship.

Lessons for employers

  • Robust workplace discussions between an employer and employee are an accepted feature of the Australian employment landscape.
  • An employee may raise a workplace issue directly affecting him/her providing it is raised in an appropriate way.
  • Employers are not entitled to deem the mere raising of workplace issue as misconduct or insubordinate behavior.

Adjustment of rent

by

By Russell Cocks, Solicitor

First published in the Law Institute Journal

Rental properties present challenges at settlement and care must be taken when adjusting rent and dealing with a security deposit.

The starting point is GC 15 of the standard contract. But for an ‘adjustment’ condition in the contract, no adjustment of the purchase price would occur and the parties would simply have to accept that rent is in arrears or advance. But an adjustment condition allows the parties to adjust rent as at the settlement date on the basis that the vendor is entitled to the rent up to the settlement date and the purchaser is entitled thereafter.

No formal assignment of the landlord’s rights is required as s 141 Property Law Act confers upon the owner from time to time the right to recover rent due in respect of the property. Whilst it is common to enter into a Deed of Assignment or Transfer of the tenant’s rights under a lease, no such formality is required in the case of the transfer of the landlord’s rights to a new owner.

In the unusual situation where rent is paid up to the day of settlement, no adjustment between the parties is required. Where rent is paid in advance, the vendor must allow to the purchaser the amount of the prepayment beyond settlement day. Rent is deemed to accrue from day to day (s 54 Supreme Court Act) so rent is to be reduced to a daily rate and the rent for the number of days pre-paid is to be adjusted against the vendor. If rent is payable monthly, the monthly rent is multiplied by 12 and divided by 365 to give a daily rate. If rent is payable weekly, the amount is divided by 7 to give a daily rate.

Rent in arrears tends to present greater difficulties, not so much for the purchaser but for the vendor. In the absence of a Special Condition in the contract, the vendor cannot require the purchaser to allow to the vendor by way of an adjustment any rent due, but unpaid, at settlement. If the rent is in arrears, no adjustment is required. It is for the vendor to seek to recover arrears from the tenant and the vendor is aided by s 56 Supreme Court Act in this regard. This section provides that if the purchaser recovers arrears from the tenant, then the landlord is entitled to the arrears that relate to the pre-contract period. However a purchaser might not be inclined to issue proceedings against the tenant and the vendor would be wise to include a Special Condition requiring the purchaser to do so.

Alternatively, the vendor might issue proceedings against the tenant for arrears BEFORE settlement, as the vendor has the right to rely on the terms of the lease until settlement.

Security Deposit

A lease will regularly provide for the payment by the tenant of a security deposit to be held by the landlord to secure the performance of the tenant’s obligations under the lease. It is important that the purchaser makes arrangements for the transfer of this security deposit as the tenant will be entitled at the end of the lease to have the purchaser (as landlord) account for that security deposit. If the vendor holds that security deposit in the form of a cash bond, then adjustment may be achieved by the vendor allowing as an adjustment in favour of the purchaser the amount of the bond and the purchaser depositing that amount in an account under the control of the purchaser. Section 24 Retail Leases Act requires the landlord to hold the security deposit in an interest bearing account on behalf of the tenant and interest must be considered when undertaking this adjustment.

The tenant may satisfy the security deposit requirement by providing a bank guarantee. This presents particular difficulties upon the sale of the freehold. The guarantee will be made out in favour of the vendor and such guarantees CANNOT be assigned. Banks will only make payment to the NAMED beneficiary, so a NEW guarantee must be put in place to take effect from the date of settlement. This creates logistical difficulties, particularly if the lease does not include a clause requiring the tenant to provide a replacement guarantee in the case of a sale.

Tips

  • Rent is adjusted at settlement
  • Arrears of rent are the vendor’s problem
  • Security Deposit must be transferred at settlement
  • Bank guarantees cannot be transferred
  • While written for Victoria this article has interest and relevance for practitioners in all states

New Publication – Defamation

by

As of today, our library of publications now includes a Defamation & Protecting Reputation publication.

It is a complete guide to acting in defamation and related areas of the law including privacy, breach of confidence, injunctive relief, Injurious falsehood, and misleading and deceptive conduct.

You can find out more about what documents, forms and commentaries the guide includes by looking through the Table of Contents.

You can also check out ‘Public shame – Justice and defamation in the digital age‘, an interesting article we posted on online shaming and the defamation law in Australia.

As always, if you have any questions, please email us at support@bylawyers.com.au.

 

Public shame – Justice and defamation in the digital age

by

We know their names and we’ve seen the memes. Individuals such as former speaker Bronwyn Bishop, news presenter Brian Williams and dentist Walter Palmer are among the members of an ever widening group of people who have all been the subject of large scale public ire and ridicule in the digital era.

It is difficult to ignore the powerful role that social media plays in present day public shaming and defamation. These platforms have enabled individuals to reach potential audiences of millions overnight. The speed and ease of public shaming is matched by the ubiquity of internet outrage in our culture to the extent that author Jon Ronson (2015) in his book ‘So you have been publicly shamed’ argues that we are experiencing a ‘renaissance of public humiliation’.

Public shame, the law and the rise of internet mob ‘justice’

At various points throughout history, public humiliation has fallen in and out of favour as a means of justice and as a form of entertainment. While most formal modern justice systems have discarded public humiliation in favour of more effective, and less cruel methods, at various points in time, in a variety of cultures, public humiliation has been used as an important tool of criminal and social sanction (Breen, 2016).

In the colonial period many state sanctioned punishments had an element of publicity. For example, in Australia public flogging and head shaving were commonly used punishments for male and female convicts. However, as the increased urbanisation of the industrial revolution gave people greater anonymity and the ability to move more freely between towns, public humiliation ceased to be an effective deterrent.

Over time the law has developed a complicated relationship with public humiliation. The court strives to overcome the problems and bias of vigilante mob justice by applying methodical due process to enforce laws. Monetary and custodial orders have been the preferred methods of correction in many modern justice systems for the majority of the 20th and 21st centuries. However, in recent years there has been a resurgence of courts, particularly in the US, using shame as an alternative to criminal penalties or as a way to increase them. For example, in Ohio in 2013, a 62-year-old man who pleaded no contest to a misdemeanour charge was ordered to stand in public wearing a sign that read “I am am a bully! I pick on children that are disabled” in addition to receiving a short jail sentence and community service.

Many see the resurgence in public shaming orders as a response to prison overcrowding and the relationship between the courts, post-modern journalism and entertainment. The courts have evolved from public forums and it is still very common for trials to receive widespread public attention. It is a widely held perception that the general public has a stake in justice proceedings. In the US, the distinction between justice, news and entertainment is blurred by televised versions of court proceedings such as ‘Judge Judy’ and ‘The Peoples Court’. Kohm (2011) identifies the inherent emotionality of crime as the driving force behind the ability of court proceedings to capture widespread media and public attention. A crime or violation of accepted social norms can give rise to public fear, anger and outrage. Notable examples of this are the trials of Oscar Pistorius, OJ Simpson and Steven Avery, all were viewed by global audiences numbering in the millions.

Online, public shaming has most likely existed since the chat rooms of the early days of the internet. However online public shaming has been most prominent since the inception of large online forums and social media platforms in the early 2000’s such as YouTube, Facebook, Twitter, 4chan and Reddit. Before these websites it was difficult for information to ‘go viral’. Today it’s difficult to imagine the internet before the trolling, vitriolic comment threads and clickbait. Many authors argue that the speed of online communication has increased the demand for entertainment in the form of public humiliation.

Problems that arise with online shaming

The appeal of online shaming and outrage culture is easily visible. An individual who feels that they have been wronged need only turn to Facebook or Twitter where they will find a community of like-minded supporters who are willing to take up their cause. Online participation is also empowering, giving rise to the perception that there is a shortcut to justice that avoids the complexities and potential disappointment of litigation. The everyday individual alongside ‘hacktivists’ or ‘digitialantes’ can simply take the matter into their own hands.

The nature of the internet as a ‘global village’ presents numerous opportunities for online shaming to flourish. As we share more of our lives, information and opinions online, we are presented with two choices; conceal our identity or accept that everything we say online will be on record forever and moderate ourselves accordingly (Love, 2013). These contradictory features of online life give the internet the qualities of both a wild west frontier and a puritan small town. The long memory of the internet means that shaming can have consequences for the individual many years after the incident, while the ability to be anonymous online enables people to use an array of tactics to target others, leaving the law scrambling to identify and deal with those involved.

The principle issue with the online environment is that online shaming in the name of justice is a blunt instrument. The random nature of mob justice means that sometimes it targets people who deserve punishment while at other times targets people who do not (Fisher, 2015). Consider the example of a man who was taking a picture of himself outside a Melbourne Target last year. The man was standing next to a large picture of Darth Vader on ‘May the 4th’ taking a picture to send to his kids. Children who were nearby told their mother who then informed the shopping centre security and police and also posted a picture of the man on Facebook identifying him as a ‘creep’. Within a short time, the post and the man’s picture was shared with over 20,000 people. The man identified voluntarily submitted to a police search and interrogation in order to clear his name, while his accuser, even after issuing a public apology, received strong negative backlash that included death threats.

Another issue with online shaming is that it can have very serious offline consequences. Many people, such as the women at the centre of ‘Gamergate’, have had their personal information published online and have had to leave their homes after being subjected to numerous incidences of harassment and threats of physical violence. Others have lost their jobs, such as PR woman Justine Sacco, who after making a careless tweet about AIDs, took a year to find new employment (Ronson, 2015). Businesses have also suffered under negative online reviews posted on sites such as Yelp and TripAdvisor. For the individuals targeted, there are also many potential negative psychological outcomes of being the subject of online shaming such as depression, anxiety, insomnia and agoraphobia.

The ability of online shaming to have far reaching real world consequences inevitably gives rise to the ethical concerns of whether the punishment fits the crime. Modern justice systems attempt to deal with evidence and proportionalities, two important features which are absent from online shaming. In these situations, it isn’t clear who decides what punishment is fitting or how they arrived at the decision.

Common methods of online shaming

Doxing: Researching and publicly displaying personally identifiable information such as a person’s home address, phone number or financial information.

Swatting: An extension of doxing that has occurred in the US where prank calls lead to the deployment of emergency services to a targeted individual’s address.

Revenge porn: The publishing of non-consensual pornography on the internet in order to humiliate a person, frequently distributed by computer hackers or ex-partners.

Negative Reviews: Posting negative reviews of a business on websites such as Yelp and TripAdvisor.

Online shaming and defamation law in Australia

In Australia defamation can come under civil or criminal law (Breen, 2015). Defamation actions under civil law are covered by Australia’s uniform defamation laws. However, the state jurisdictions also have laws criminalising certain defamatory actions. For example, in New South Wales section 529 of the Crimes Act 1900 states that:

A person who, without lawful excuse, publishes matter defamatory of another living person (the “victim” ):

(a)    knowing the matter to be false, and

(b)    with intent to cause serious harm to the victim or any other person or being reckless as to whether such harm is caused,

is guilty of an offence.

The maximum penalty is 3 years’ imprisonment.

Criminal defamation is a rarely used charge in Australia, however in 2009 an Adelaide man was convicted of criminal defamation after posting defamatory material about a police officer on Facebook. He became the second person in South Australia’s history to be convicted of the charge.

Under civil law the remedies for defamation include compensation for economic and non-economic loss. It is also possible to obtain an injunction preventing further publication of defamatory material. For a civil defamation action to succeed the plaintiff must prove that:

  • the communication was published to one or more people (other than the plaintiff);
  • that the communication identified the plaintiff; and
  • that the communication was defamatory, meaning that it had the effect of diminishing the plaintiff’s reputation in the eyes of ordinary people in the community and/or leads people to avoid or dislike the plaintiff.

Burgess (2013) makes an important distinction between the purpose of civil and criminal defamation laws. Civil defamation law aims to vindicate and protect the reputation of the person defamed while criminal defamation law is intended to punish the defamer and protect the community.

Currently only one state in Australia has made revenge porn a criminal offence. In 2014 Victoria made it a criminal offence to maliciously distribute intimate images without a person’s consent. However further changes may be on the horizon. In October last year the Federal Parliament introduced a bill seeking to amend the Commonwealth Criminal code to criminalise the act of ‘sharing private sexual material’ without the consent of the subject of the material.

Although they have not been commonly used, there are also civil remedies for victims of revenge porn and other privacy breaches under the uniform defamation laws, through an action for breach of confidence. The elements of an action for breach of confidence include:

  • The information published was of a confidential nature;
  • The information was communicated or obtained in circumstances that carried an obligation of confidence; and
  • There was unauthorised use of the information.

At this time, it is unclear what legal actions are available to individuals who have had their personal information leaked online through doxing methods. While there is legislative protection for personal information, there is currently no right to sue for invasion of privacy in Australia. However, there is now widespread recognition that the current system of civil and criminal laws is inadequate for people seeking protection against privacy breaches.

In late February the New South Wales Standing Committee on Law and Justice recommended that NSW lead the way in creating new legal action for serious invasions of privacy. The proposed changes would enable a person to sue for damages if their privacy had been invaded intentionally or recklessly, and would make it possible to pursue governments and corporations for negligent privacy breaches. The government is required to respond by 5 September 2016.

As the internet has become a more integral part of our lives, many users of social media do not recognise the power that they have on these platforms (Hudson, 2013). Police and legal professionals have issued numerous warnings against taking grievances online, as public shaming actions which damage a person’s reputation either unjustifiably or inexcusably will likely be found to breach Australia’s defamation laws (Wolfenden, 2015). It will depend on the particular circumstances and complexities of each individual case as to whether an online shaming campaign is actionable.

By Lawyers now publishes a comprehensive legal guide – Defamation – Protecting Reputation, to enable practitioners to confidently handle defamation disputes, with or without recourse to litigation.

Sources

Breen, P. (2016). Protecting Reputation: Defamation practice, procedure and precedents. The Manual.

Burgess, C. (2013). Criminal defamation in Australia: Time to go or stay. Murdoch UL Rev., 20, 1.

Fischer, M. (2015, July 30). From Gamergate to Cecil the lion: Internet mob justice is out of control. VOX. Retrieved February 20, 2016, from http://www.vox.com/2015/7/30/9074865/cecil-lion-palmer-mob-justice

Hudson, L. (2013, July 24). Why You Should Think Twice Before Shaming Anyone on Social Media. Wired. Retrieved March 08, 2016, from http://www.wired.com/2013/07/ap_argshaming/

Kohm, S. A. (2009). Naming, shaming and criminal justice: Mass-mediated humiliation as entertainment and punishment. Crime, Media, Culture, 5(2), 188-205.

Love, J. (2013, September 12). Sharing or oversharing online? The American Scholar. Retrieved February 26, 2016, from https://theamericanscholar.org/sharing-or-oversharing-online/#.Vt4wY9D1fhx

Ronson, J. (2015). So you’ve been publicly shamed. Picador.

Wolfenden, E. (2015, July 21). Online public shaming: Fair game or misdirected blame? Retrieved February 29, 2016, from http://bakerlove.com.au/online-public-shaming-fair-game-or-misdirected-blame/

We’ve got Bundles!

by

Some of the most popular guides on By Lawyers are now available in bundles of three at a special discounted rate of $199 plus GST per month. That’s almost one whole guide free!

The bundles also include the Practice Management Guide (normally priced at $89 plus GST per month) as an extra bonus.

There are bundles to suit all your needs. Have a look at the list of available bundles now.

If you subscribe to a bundle, and have a current monthly subscription you want us to cancel, please let us know.

If you have any questions, please do not hesitate to contact us at support@bylawyers.com.au.

Annual Subscriptions

by

Annual subscriptions are now available on By Lawyers. Annual subscriptions include Conveyancing, Family Law and Companies, Trusts, Partnerships and Superannuation.

The Conveyancing guide is available for New South Wales, Victoria, Queensland, South Australia and Tasmania.

If you don’t want to pay $89 plus GST a month, you can now pay upfront for the whole year for $899 plus GST. That means you’re getting almost two months free!

If you have a subscription and want to make the switch, please let us know. We’ll be happy to cancel your current monthly subscription even if your six months is not up yet.

To subscribe annually to one of these publications, please visit our website.

If you have any questions, please don’t hesitate to contact us. You can either email us at support@bylawyers.com.au or call us at 02 8273 7500.

The legal technology revolution and the small law firm

by

In reviewing many of the topics of discussion in any major business publication during 2015 and early 2016 it is easy to see that ‘digital disruption’ is posing significant threats and opportunities to almost every industry. The World Economic Forum has described the current period as a ‘Fourth Industrial Revolution’ which will see widespread innovation and greater adoption of technology in almost every profession.

The legal services industry is already being re-shaped by technology in a variety of formats that extend beyond document automation and practice management software. The role of the lawyer is being transformed; both routine and more complex analytical tasks can now be performed by artificial intelligence technologies such as IBM’s ROSS and Lex Machina. ROSS is capable of reading and analysing over one billion legal documents per second to produce plain English answers to complex legal questions that include relevant citation, while Lex Machina uses databases and modelling software to accurately estimate the odds of winning a patent suit.

The focal point of the advances in legal technology is the client, who is poised to benefit greatly as they are empowered by a wealth of information to demand legal services of higher quality delivered at a greater speed and lower cost. Services such as the Google funded Rocket Lawyer, Legal Zoom and donotpay.co.uk take client agency even further by enabling clients to create their own legal documents and appeal parking fees online.

Although the widespread use of advanced technology such as ROSS is still far on the horizon, many firms are currently using technology to enhance their practices. Adopting technology is an essential move in creating a firm that is able to adapt to changing market conditions.

As technology is a considerable investment for a small law firm there are a number of things that should be considered before choosing which systems to implement. Legal technology that is not properly leveraged can cause disruptions, security concerns and hinder firm performance. By taking the approach used by leading legal technology start-ups and keeping the ultimate goal of delivering greater client value in mind when evaluating practice management technology, it becomes easier to ensure that a firm achieves maximum return on investment.

Client value

In the traditional model of the legal profession, the lawyer is characterised as an educated professional who sell’s their expertise and time to clients in six-minute increments. However, many experts have observed that this model does not deal with client experience.

In an article for Lawyers Weekly John Chisholm argues that a client is actually buying intellectual capital from a lawyer: a client is seeking outcomes, solutions and peace of mind.

Legal expertise is assumed and a lawyer that is able to build a relationship with their client and take an active role in managing their client’s concerns and financial constraints is much more likely to have their services used again and be recommended to friends and family.

Using technology to enhance value for clients

Here are four main considerations for small law firms looking to get the most out of legal technology and enhance the ability of their practice to serve clients.

Mobility

A practice management system that is accompanied by a strong smartphone app which allows you to access critical client information at any time in any location is essential for delivering a high level of service quality to clients. A lawyers who is able to answer client questions and concerns and act on urgent issues at any time or place will most likely be perceived by clients as accessible and motivated.

Efficiency and user interface

The primary aim of all practice management software is to improve firm efficiency however if only a select number of staff members in a firm can actually use the software then the firm will inevitably experience bottlenecks in workflow. Usability and intuitiveness are key to ensuring that all staff members time and skills are properly deployed.

Content

Content is an important area that is often lacking in many legal practice management systems however it can be a key way to deliver excellent service to clients. Quality content allows small firms to expand into areas of practice that would have previously been avoided, minimising the number of clients lost to outside referrals. High quality content can also be used as a way to enhance a firms existing precedents.

Support

A system that is supported properly can save many wasted hours waiting for a call back from tech support. Proper support and resources can also assist firms in getting the most out of their software system.

Content support is just as important as tech support and is often overlooked in practice management systems. Being able to access a network of experienced practitioners providing guidance in difficult legal matters can save a firm hours of research time and ensure lawyers can be confident that they are providing their clients with the best possible solutions and outcomes.

Sources

Diving in head first – Stephanie Garber– Blog post 06 October 2015 – Lawyers weekly

Robot invasion – Story by Felicity Nelson and Stephanie Garber – 19 January 2016 – Lawyers Weekly

Robot doctors, online lawyers and automated architects: the future of the professions? – Tom Meltzer – 16 June 2014- The Guardian Technology

 

Avril Cauchi,
Senior Copy Editor, By Lawyers
21 January 2016

 

 

The cheque is in the mail – but was it express, priority or regular?

by

With the recent changes to mail delivery speeds practitioners should consider just how quickly they want mail recipients to receive documents.

snail-mail-vs-email

From 4th January Australia Post introduced the choice of three different delivery speeds when sending a letter:

1. Express post – which is next business day guaranteed;
Special envelope and mailed in the yellow post box or in the post office itself.

2. Priority post – one to four business days – depending on the delivery destination;
Regular envelope, regular stamp now $1, and a priority label 50c, mailed in the red post box or in the post office itself.

3. Regular post – up to two business days longer than priority post, which means delivery could take up to six business days.
Regular envelope, regular stamp mailed in the red post box or in the post office itself.

Makes email and electronic exchanges look good!

Connect with us