Unlocking risk allocation and equitable conversion : reform of the passing of risk in the sale of land

The principles relating to the passing of risk under a contract for the sale of real property would seem to have been long settled. The rule under the general law is that the risk of loss of the subject matter under a contract for the sale of real property passes to the buyer upon the creation of a valid and binding contract. This article considers the origin of that rule, how it developed with the growth of equity, and advances the view that it is anomalous in a modern context of property dealings. In doing so, the article adverts to the variety of statutory mechanisms used to subvert the rule, few of which are of practical value. It concludes that the rule is outmoded in many respects and suggests a number of reforms which might be implemented nationally to bring consistency and simplicity to the issue of damage or destruction of improvements which are the subject of a land contract.

Unfair terms in residential land contracts : will the Australian consumer law improve a buyer’s bargaining position?

The prohibition on unfair contract terms in standard form consumer contracts has the potential to significantly impact on the terms of contracts for the sale of land. The definition of ‘consumer contract’ includes contracts for the sale or grant of an interest in land to an individual wholly or predominantly for personal or domestic use. Therefore, a contract for the purchase of a residence for personal occupation by the buyer, as opposed to a purchase for investment purposes, will be a consumer contract potentially attracting the application of the unfair terms provisions. Significant consumer protection mechanisms already exist in most state jurisdictions requiring disclosure of relevant matters to the buyer and providing remedies for the provision of misleading conduct. Minimal evidence of unfair terms in land contract was presented to the Productivity Commission Inquiry into the Australian Consumer Policy Framework raising the question as to whether there is an identified problem of unfair terms in real estate contracts and if so, whether the same economic and ethical rationales justify regulatory intervention. This article examines what effect if any the introduction of the unfair contract provisions will have on the enforcement of residential land contracts and the viability of previously accepted conditions if challenged as being “unfair terms”. The article concludes that despite the existence of several potentially unfair terms in some land contracts, the intervention of the rules of equity to overcome perceived hardship or unfairness to buyers from strict enforcement of terms means the unfair terms provisions are only likely to operate on terms untouched by those principles. In the authors’ view the scope for operation of the unfair terms provisions will be limited to terms untouched by the principles of equity and consumer protection legislation making it unlikely that there will be any significant realignment of the contractual obligations and rights of buyers and sellers of land.

Regulation of land access for resource development: A coal seam gas case study from Queensland

A number of regulatory statutes provide for agreements with landowners which are given extended effect, that is, are binding upon the landowner’s successors (‘statutory agreements’). Several Queensland statutes require a project proponent to enter into a statutory agreement with a landowner before a resource development activity can be carried out on private land or by accessing private land. Provisions of Queensland���s Petroleum and Gas (Production and Safety) Act 2004 make certain types of statutory agreements binding upon successors and assigns of the landowner, but do not clearly prescribe the nature and contents of an agreement, nor require that the agreement be recorded on the land title or petroleum register. If statutory agreements are to be used for such purposes, their purpose and content should be more clearly defined by statute and they should be recorded on a searchable register.

Property law and practice in Queensland : being a commentary on the Property Law Act 1974

A Commentary on the Property Law Act 1974 Queensland

Sale of Businesses in Australia (2nd ed.)

The greater volume of businesses sold in Australia each year are small to medium enterprises. The administration of business contracts presents far different challenges than, for example, contracts for the sale of goods alone or contracts for the sale of land. The subject matter comprises both real and personal, and tangible and intangible property. Other considerations that do not affect those other commonplace contracts include dealing with employees who are both remaining and departing, taking account of restraints of trade, and the phenomena of the passing of property being different in respect of different forms of property being transferred in the same contract. In keeping with the format of the previous edition, the book is written with the busy practitioner in mind. It deals with the formation of business contracts, all aspects of disclosure both contractual and statutory, the role of agents, and detailed consideration of the different types of subject matter of small business contracts including, the lease of the premises, intellectual property, goodwill, licences, book debts and plant and equipment. It has up to date treatment of income tax implications of the sale and the impact of the latest Commonwealth legislation on dealing with employees of a business on sale. Consistent with the last edition, the book has chapters on time of the essence and completion, personal securities, restraint of trade clauses, special conditions and remedies for breach by both parties and misleading or deceptive conduct by the seller. In relation to personal securities, whilst the current State and Territory based law on Bills of Sale and other Chattel Securities has been the subject of commentary, the proposed national reform agenda has also been commented upon although that legislation is not due until May 2010 at the earliest

Joint Ventures Law in Australia (3rd ed.)

Following on from the 2nd edition published in 2005, this new edition updates its predecessor and adds considerable new material as a result of changes in the law generally and commercial approaches to financing joint ventures in particular. Of special note, Financing of Joint Ventures has been completely re-written with considerable additions to take account of the new legislative regimes such as the Personal Property Securities. The impact of climate change legislation has been covered, specifically carbon pricing with additional material on structuring generally and particularly in relation to large joint ventures with governments through Public Private Partnerships. A new Chapter has been added called Resources Joint Ventures and undertakes a thorough analysis of a typical resources joint venture and is heavily cross referenced into the chapter on Default which has also been updated. In addition, International Joint Ventures now includes additional material on structuring and dispute resolution and Joint Ventures and the Competition and Consumer Act has been substantially re-written to take account of 2009 legislative amendments on cartel conduct, and the impact of changes wrought by the Competition and Consumer Act 2010. All other chapters and material has been updated to accommodate other legislative changes and new case law over the seven years since the last edition.

Common law obligations of good faith in non-fiduciary joint ventures

This chapter is devoted to the issue of non-fiduciary common law obligations of good faith, as they may arise in the performance and enforcement of joint ventures. In recent times a rush of commercial contractual claims involving good faith has signified the need for a separate chapter examining this issue. Although most of these decisions have arisen in commercial contexts other than joint ventures, the decisions, nevertheless, warrant careful consideration to the extent that they cast light on the likely contours of the common law good faith obligation as it may apply in the joint venture context.

Default, deadlock and remedies

The primary purpose of this chapter is to examine the effectiveness of common default provisions and the range of common law and equitable remedies available to a joint venture partner in the event of default by a co-venturer. Because of the various joint venture vehicles such as trusts, corporations, partnerships and others, it is proposed to deal only generally with these questions.

Joint ventures and the Competition and Consumer Act

The purpose of this chapter is to analyse the way in which joint venture agreements can fall within the competition provisions of the Competition and Consumer Act 2010, and the circumstances in which authorisation may be available for joint venture collaborations.

Intellectual Property and Joint Ventures

Following upon the success of the 2nd edition published in 2005, this new edition not only updates its predecessor but also adds considerable new material in consequences of changes in the law generally and commercial approaches to financing joint ventures in particular. Of special note are the following: Financing of Joint Ventures has been completely re-written with considerable additions to take account of the new legislative regimes such as the Personal Property Securities, the impact of climate change legislation, specifically carbon pricing with additional material on structuring generally and particularly in relation to large joint ventures with governments through Public Private Partnerships. A new Chapter called Resources Joint Ventures undertakes a thorough analysis of a typical resources joint venture and is heavily cross referenced into the chapter on Default which has also been updated. International Joint Ventures now includes additional material on structuring and dispute resolution. Joint Ventures and the Competition and Consumer Act has been substantially re-written to take account of 2009 legislative amendments on cartel conduct, and the impact of changes wrought by the Competition and Consumer Act 2010. All other chapters and material has been updated to accommodate other legislative changes and new case law over the seven years since the last edition.

Lifting the joint venture veil : liability of related entities for misleading conduct of agents engaged by joint venture partners

At common law, a corporation may be liable vicariously for the conduct of its appointed agents, employees or directors. This generally requires the agent or employee to be acting in the course of his or her agency or employment and, in the case of representations, to have actual or implied authority to make the representations. The circumstances in which a corporation may be liable for the conduct of its agents, employees or directors is broadened under the Australian Consumer Law (ACL) to where one of these parties engages in conduct “on behalf of” the corporation. As the decision in Bennett v Elysium Noosa Pty Ltd (in liq) demonstrates, this may extend to liability for the misleading conduct of a salesperson for the joint venture to parties who are not formal members of the joint venture, but where the joint venture activities are within the course of the entity’s “business, affairs or activities”.

Assignment of lease between lessees as joint tenants-is lessor’s consent required?

The decision of Lockrey v Historic Houses Trust of New South Wales [2012] NSWSC 654 raises an interesting issue about the necessity of seeking the consent of the lessor where there is an assignment of a lease between joint tenants who already hold the lease when one joint tenant sells the business operated on the leased premises to the other joint tenant. A secondary issue raised by the proceedings concerns whether the lessor’s consent was unreasonably withheld under the processes under Retail Leases Act 1994 (NSW) (“the Act”) upon the grounds of lack of provision of information as to the remaining lessee’s financial standing.

Termites did not undermine sale

The New South Wales Court of Appeal decision of Wood v Balfour [2011] NSWCA 382 presents an interesting factual matrix relating to the obligation of a seller to disclose significant latent defects in quality of title to a buyer, in this instance, severe termite damage. It offers insights into the difficulty of a buyer proving the existence of the element of deceit in the making of a representation with respect to quality and reinforces the importance of the rule caveat emptor as being an article of faith for every buyer of real estate.

Seller compensated for loss caused through buyer’s misconduct

The decision of Roberts v Juniper [2012] QDC 140 relating to the obligation to rectify damage caused to property and pay mesne profits for use of a property occupied by a buyer under a contract of sale which was later terminated raises interesting points for consideration by property lawyers.