Australia: Residential focus - 26 August 2016

Last Updated: 4 September 2016
Article by Christine Jones
Most Read Contributor in Australia, September 2017

Recycling of pre-purchase inspection reports

A recent amendment to the Property Stock and Business Agents Regulation 2014 has established a system where prospective buyers will be informed about available property reports (e.g. pre-purchase, pest inspection) when requesting a sales contract. It creates an obligation on a licensed real estate agent to maintain a written record of any report of which the agent is aware in respect of the property under sale. The agent must disclose the record to any person requesting a copy of the contract for the sale of the property. The record must include the date on which the property was inspected; whether the person who requested the report was the client, a prospective purchaser or the agent; the contact details of the person who prepared the report; whether the report is available for repurchase and whether the person who prepared the report is insured under a policy of professional indemnity insurance.

The regime has some attraction as enabling prospective homebuyers easier, faster and cheaper access to reports which have already been commissioned, however, it should be noted that any prospective homebuyer who is repurchasing a report is accepting a risk that the property has changed between the date of inspection and the date of repurchase.

It remains to be seen whether inspectors will make reports available for repurchase. Whilst at first blush it is an additional source of revenue, inspectors may take the view that there is too much risk of debate as to whether defects or conducive conditions should have been apparent at the time of preparation of the report, or manifested in the intervening period.

Even if participants in the industry elect not to allow repurchase, one function of the record to be maintained by agents will be to put a prospective homebuyers into contact with an inspector who has already carried out a report. If that inspector is then engaged to reinspect then there must be savings.

NCAT update

Although it is a decision in a consumer matter, Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 is instructive as to:

  • whether reasoning can be subject of appeal;
  • the source of NCAT's jurisdiction to grant relief in the case of failure to comply with consumer guarantees under the ACL; and
  • the doctrine of precedent in the Tribunal.

As to the first issue, the Appeal Panel found that an expression of doubts or opinions which does not involve making an order does not amount to a decision and any expression of doubts or opinions cannot be the subject of an internal appeal under Section 80 of the NCAT Act. This is especially so whether doubts or opinions were expressly not relied upon in reaching the decision and making the orders actually made.

As to the second issue, this attracted the intervention or the relevant Minister. The Tribunal below grappled with provisions in different acts and how to reconcile them, namely the remedies in Part 5-4 of the Australian Consumer Law (NSW) (ACL) and the remedies under the Consumer Claims Act (CC Act). The Tribunal below reconciled the provision on the basis that there was a legislative intention to deal with the topic under the ACL and not otherwise. The Tribunal then came to the conclusion that it did not have jurisdiction under the CC Act to determine an action under Section 259 of the ACL.

The Appeal Panel held that the Tribunal has jurisdiction to grant relief under the CC Act in respect of claims lodged prior to 1 October 2015, or Pt 6A of the Fair Trading Act (FT Act) in respect of claims lodged after that date.

The basis of the Appeal Panel's reasoning was that it was possible to give both pieces of legislation a construction that allows both to operate harmoniously and that this flows from the natural meaning of the text. Further, the Appeal Panel did not accept that the remedies established by Part 5.4 of the ACL were more detailed and specific than those that flowed from the FT Act, nor that the scheme under the ACL was a code. Accordingly the ACL is not exhaustive and its remedies are not the only remedies that may apply in situations of a failure to comply with a consumer guarantee.

As to the final issue, the Appeal Panel indicated that it considered it appropriate for any members sitting at first instance in the Tribunal to consider themselves bound at least to follow decisions of the Appeal Panel on questions of law.

In the media

MBA: Building conditions continue to ease

Building industry conditions and expectations continued to ease in the June Quarter 2016 across both the residential and the non-residential sectors. Most of the indicators in Master Builders National Survey are sitting at or around the neutral point (10 August 2016 Building Conditions Condinue to Ease.

UBS: Australia's housing construction boom has a couple of years to run yet

For the second month in a row, Australian building approvals tumbled in June, adding to evidence that Australia's residential building boom is nearing, or perhaps at, its cyclical peak. At 233,246, the number of building approvals over the past year is now 3.2% below the record-high of 241,016 struck in the year to October 2015 (02 August 2016). More...

Helping thousands of first homebuyers

Official figures show the NSW Government is continuing to support thousands of people in realising their dream of buying a home, with the number of first homeowner grants rising by almost 11 per cent over the last financial year (11 August 2016). 11 August 2016: Helping thousands of first homebuyers.

Home approvals record to boost supply and tackle affordability

More than 70,000 NSW homes were given the green light in the 2015-16 financial year as the State's strong housing pipeline grew to record-breaking levels (02 August 2016). More...


Australian Bureau of Statistics

02 August 2016 - Building Approvals, Australia, Jun 2016 (cat no. 8731.0).

Practice and courts

Simplified NSW Housing Code – Draft Changes On Exhibition

The Department of Planning and Environment is exhibiting draft changes to the NSW Housing Code and inviting council submissions by 12 August 2016 Simplified Housing Code.

NSW: Public Exhibition of Proposed Changes to Mine Subsidence Districts: consultation

The community is encouraged to submit feedback on the proposed changes. Further information can be found at Submissions on the proposed changes close 31 August 2016. Read the Q & A - Proposed changes to Mine Subsidence Districts.

RICS' NSW CPD scheme for A1-A4 certifiers now recognised

The Royal Institution of Chartered Surveyors' (RICS) continuing professional development (CPD) scheme for NSW is now recognised in the Building Professionals Board's Accreditation Scheme (12 August 2016). More...


MSP Consulting and Building Constructions Pty Ltd v Karkoulas (No 2) [2016] NSWCATAP 183

APPEAL – Civil and Administrative Tribunal – costs – no special circumstances –application is dismissed.

Pettigrew v Gateway Fence Installations Pty Ltd [2016] NSWCATAP 181

APPEAL – home building – manufacture and installation of fence – failure to comply with s 7AAA of the Home Building Act– consequence of such failure – contract not unenforceable - dispute as to oral terms – factual errors as to the nature of the case - incorrect evidence led to error about important fact – error of law in asking the wrong question - substantial miscarriage of justice.

Eden Constructions Pty Ltd v Grigor [2016] NSWCATAP 182

Building case – claim for quantum meruit – not justified on evidence.

Hutchison Construction Services Pty Ltd v Fogg (No 2) [2016] NSWCA 190

COSTS – limited success on cross-appeal – cross-appellant obtains larger judgment, but most grounds fail – no order as to costs of cross-appeal - Civil Procedure Act 2005 (NSW), s 98.

It is agreed that Mr Fogg is entitled to a judgment of $1,002,734.18, and that the appellant should pay the respondents' costs of the appeal; Mr Fogg pay the costs of Hutchison Construction Services Pty Ltd in respect of the application for costs of the appeal and cross-appeal.

The Owners Strata Plan No. 84751 v Karimbla Construction Services Pty Ltd (No 2) [2016] NSWCATAP 177

COSTS: Conduct of appellant and its solicitor leading to adverse costs order; solicitor accepts she ought indemnify the appellant.

The Owners – Strata Plan No 77475 v Walker Group Constructions Pty Ltd & Anor [2016] NSWSC 1127

REFEREES - nature of proceedings on challenge to Referee's Report

DAMAGES - where plaintiff relied upon expert's advice in respect of the scope of works to rectify defects - where defendants had warned plaintiff that scope of works was exploratory, speculative and not urgent - where findings made that the work carried out was not urgent - where works found to be unnecessary and excessive - where Referee found that defendants not liable for such work.

Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186

CONSUMER LAW – whether the Tribunal has jurisdiction to grant relief in the case of failure to comply with consumer guarantees arising under Australian Consumer Law (NSW) – Tribunal may have jurisdiction under the Consumer Claims Act 1998 when claims "consumer claims"

CONSUMER LAW – whether the Tribunal has jurisdiction to grant relief in the case of failure to comply with consumer guarantees arising under Australian Consumer Law (NSW) based on s 28 or Pt 3 of Sch 4 of Civil and Administrative Tribunal Act 2013 – no jurisdiction derived from these provisions

APPEAL – whether reasoning can be the subject of an appeal – only "decisions" can be the subject of appeal under Civil and Administrative Tribunal Act 2013, s 80

PRODEDURE – Tribunal procedure – Precedent – whether doctrine of precedent applies in the Tribunal – Members at first instance should consider themselves bound by decisions of the Appeal Panel on questions of law.



Regulations and other miscellaneous instruments

Property, Stock and Business Agents Amendment (Property Reports and Exemption) Regulation 2016 (2016-463) – commenced on 15 August 2016

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.

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Christine Jones
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