Tribunal

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<div class="author">GUEST OBSERVER </div>
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<div class="author">In a recent matter, the partition of land before it was subdivided, and the timing of registering strata lots, resulted in a decision where the owner of the land was not considered to be a developer under the Home Building Act (the Act).</div>
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<div class="author">As such, the owner bears no liabilities regarding statutory warranties in the Act. So what happened, and what are the lessons to be learnt?</div>
What are statutory warranties?
Statutory warranties are warranties that a person is entitled to under the contract with a builder/tradesperson. Even if the warranties aren’t written into the contract, under the law they still apply to the work being done on a home. Statutory warranties are in effect for six years for major defects and two years for all other defects, commencing from the date of completion.
The Act states that anyone who is the immediate successor in title to an owner-builder, a holder of a contractor licence, a former holder or a developer who has done residential building work on land is entitled to the benefit of the statutory warranties as if these parties were required to hold a contractor licence and had done the work under contract with that successor in title.
What happened in this instance?
In 2007, Trilogy Capital (Cremorne Developments) Pty Ltd (TD) and Trilogy Capital Services Pty Ltd (TC) bought land in Cremorne as tenants in common.
Development consent was obtained to build a mix of commercial and residential buildings. TD contracted with a building and construction company, Southern Cross Constructions, to undertake the work.
After the Occupation Certificate for the residential work was issued in October, TD and TC applied to North Sydney Council for two strata subdivisions, dividing Lot 1 into 7 commercial lots and Lot 2 into 17 residential lots. Around the same time TD and TC transferred their respective holdings to each other at the bargain basement price of $1.00 so TC became the full owner of Lot 1 and TD owned all of Lot 2. The strata subdivision was registered at the end of November.
In December strata plans were registered - 79706 for TC’s commercial lots, and 79707 for the residential lots owned by TD.
Work proceeded but things went pear-shaped in 2013 and the Owners Corporation of the residential lots commenced proceedings in the NSW Civil and Administrative Tribunal against the builder. Southern Cross was placed into liquidation so the Owners Corporation pursued TD as the developer. Unfortunately for the Owners Corporation, TD was also in trouble and it too went into liquidation. With only one horse left in the race, the Owners Corporation went after TC in an attempt to rectify the defective works.
So who is a “developer”?
According to the Act; an individual, partnership or corporation is a developer if residential work is undertaken on land they own – even if they haven’t physically been involved in the development. They are also classified as a developer if the work is done on behalf of another person - for example, on behalf of a party to a joint venture agreement with the owner for the development of the land. The person on whose behalf the work is actually done is also a developer.
It’s important to note that the work undertaken must be done in connection with an existing or proposed dwelling in a building or residential development where at least four of the dwellings are or will be owned by the individual, partnership or corporation.
In this matter, the tribunal had to determine whether TC was a 'developer' within the meaning of the Act and as such liable for a breach of the statutory warranties. It also has to establish whether the Owners Corporation was the 'immediate successor" in title.
The outcome
The Owners Corporation argued that the residential dwellings existed by 29 November, 2007 – at which point in time, TC was still a 25% owner of both lots as tenant in common and as such, owned four or more of the residential lots.
TC didn’t dispute the previous ownership however, said that by the time the Owners Corporation became successor in title to whomever owned the residential lots in December, TD was the only owner.
The tribunal member agreed with TC, ruling that statutory warranties weren’t applicable. The Owners Corporation was unsuccessful in appealing the decision to the Appeal Panel which reaffirmed the opinion of the tribunal that TC was in fact, not a developer. The Appeal Panel cited the fact that the strata home units couldn’t be owned until after the strata plan had been registered and TC was never intended to have any ownership after this registration had taken place. 
Whilst the decision is in no way definitive it may allow 'developers' to argue that they are not bound by the statutory warranties where there has been a partition of land or a transfer prior to the registration of the strata plan.
Nick Kallipolitis is principal, Coleman Greig Lawyers and can be contacted <a href="https://www.colemangreig.com.au" target="_blank">here</a>.
 
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jchancellor-FAypfDUnLy

Property 101: Tribunal finds Cremorne landowner not liable for building defects

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The Real Estate Institute of New South Wales, after a two year absence and intense lobbying, has welcomed the recommencement of tenancy cases being heard in Parramatta.
Announced on Friday, Attorney General Greg Smith said that the area would once again host regular sittings, this time of the new super tribunal - the New South Wales Civil and Administrative Tribunal, more commonly referred to as NCAT.
This will happen from 30 June 2014, and will see NCAT sit in Parramatta three days each week as a service for tenants and landlords.
This has been welcomed by the president of the REINSW, Malcolm Gunning, who said that it was needed for Sydney's west. Estimations are currently that up to 40 issues would be heard per day in Parramatta.
“We were very concerned when old Consumer, Trader and Tenancy Tribunal (CTTT) stopped operating in Parramatta in early 2012," said Gunning.
“Resolving disputes in Parramatta is a win for everyone in the property industry, especially landlords and tenants who will no longer face the costs and time restraints of having to travel to the Sydney or Penrith Register to have their case heard."
“Our efforts over the last two years to highlight the importance of tribunal hearings in Parramatta have been vindicated by this decision,” he said.
NCAT is the replacement to the CTTT system, that is said to simplify the "complex and bewildering" system, according to Smith.
“The NSW Civil and Administrative Tribunal (NCAT) will be a one-stop shop for almost all state tribunals, ranging from relatively small bodies such as the Chinese Medicine Tribunal through to the much larger Consumer, Trader &amp; Tenancy Tribunal,” said Smith.
It deals with tenancy disputes, customer complaints, applications for guardianship and a number of other issues.
After operating from 2 January 2014, NCAT conducted 28,000 hearings in 100 days.
Parramatta hearings will be held in a room at the Commonwealth Law Courts building.
“This is great news for Western Sydney and consolidates Parramatta’s position as the state’s largest legal hub outside of Sydney’s CBD," said Smith.
“It follows confirmation that the Court of Criminal Appeal will sit in Parramatta for two weeks in July and August, with the Chief Justice of NSW Tom Bathurst to be among the judges presiding over the hearings.”
Regular Supreme Court sittings may also be a possibility, with Chief Justice Bathurst examining this in the future.
“While the old Consumer, Trader and Tenancy Tribunal sat in Parramatta until early 2012, many of the tribunals that have joined NCAT have never conducted regular hearings in Sydney’s west,” said Smith.
“NCAT will provide the people of Western Sydney with quick and cost effective access to justice.
“Tribunal proceedings are typically less formal than a traditional court hearing and often achieve earlier resolutions.”
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REINSW lobbying pays off, tenancy cases to again be heard in Parramatta

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Only a few days ago <a href="https://www.urban.com.au/news/30937-western-australia-building-company-to-pay-10-000-penalty-after-misleading-city-of-geraldton" target="_blank">Property Observer reported about a builder misleading the City of Geraldton</a>, copping a total of $10,000 in fines. This time, it's the City of Stirling who claim to have been misled.
The West Perth builder John Joseph Dryka will pay $10,000 in fines and $2,000 of costs for misleading conduct under the Building Services (Registration) Act 2011, according to the State Administrative Tribunal.
The proceedings, initiated by the Building Services Board, were finalised at the end of March. Essentially, the builder was found to have misled the council, as well as an insurer, as to the estimated value of a Scarborough property's building work, that would involve constructing a three-storey dwelling.
The building licence and home indemnity insurance, that he applied for in December 2007 and November 2007 respectively, were to the value of $850,000. The contract he entered into, however, was $1,799,996.
He then failed to update the local government and insurers of the true value.
Building Commissioner Peter Gow said that being a registered builder is a statement that you have qualifications and experience enough to provide an acceptable service. It also means that the builder is accountable for compliance with building laws and standards.
“Providing building services is an important job – if it’s not done correctly it can put public safety, consumers’ wellbeing and the reputation of the building industry at risk," said Gow.
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Another WA builder fined for misleading council

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A man who took out home renovation work without a licence, as well as breached home building legislation, has been ordered to pay $40,000 in fines and costs, after facing the Parramatta Local Court this month.
Buddy Charbel Challita, a 42 year old from Greenacre, was convicted ex-parte on 2 May, fined $6,000 for unlicensed contracting of specialist work, $18,000 for thrice demanding/receiving payment before the work had commenced and $18,000 for thrice contracting residential work without an insurance certificate.
Challita also had to pay professional and court costs, totalling $2,095, costing him $44,095 in overall.
He had applied to Fair Trading for a contractor licence in 2009. This was refused as he had a bankrupt status.
Despite this, in April 2013 he contracted with an East Hills home owner to create two new bathrooms, a laundry and a kitchen. The amount of the work would be $33,420. Under New South Wales requirements, this would need a licence. No home warranty insurance was in place.
He also received a $4,000 deposit from that property owner – this is above the 5% maximum allowed under the Home Building Act. After paying these sums, three months passed with little work undertaken. The property owner was then required to pay for other contractors to complete the work.
Acting Fair Trading Commissioner, Rob Vellar, said that the whole idea of the Home Building Act is to protect consumers from these situations.
“Unlicensed building and commencing work without Home Warranty Insurance in place can not only have a potentially adverse impact upon the future re-sale value of a property,” said Vellar.
“It can also been downright dangerous. Always check your builder is appropriately licensed before entering into any contract for home renovations.”
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Unlicensed home renovator and builder ordered to pay more than $40,000

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Heading to tribunal, or VCAT in Victoria, can unsurprisingly fill tenants, property managers and landlords with dread.

VCAT deputy president, head of review and regulation Heather Lambrick said that the best way, truly, to win at VCAT is not to come in the first place.

"Every case that comes before VCAT has a losing party. Everybody comes in the door thinking that they're going to win the case, that they're going to walk out victorious [and] that they're going to be really happy with the outcome ... Sadly, that's not the case," said Lambrick at a recent Taking it to VCAT information session at the William Cooper Justice Centre.

In fact, settlements are the best way to sort out an issue. Talk to the other side, don't keep secrets and try to resolve the issues prior to taking it to tribunal. Hear are <a href="/expert-insights/buying/28371-four-investor-tips-to-keep-you-out-of-tribunal" target="_blank">four tips for keeping you out of tribunal in the first place</a>.

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If, however, you do end up at tribunal, then she notes there's one thing that lets people down: a lack of preparation.

You might not need legal representation, in fact she notes that many have represented themselves and have won at tribunal, however you must prepare adequately. If the concept of some of the preparation explains below fills you with dread, then it might be time to seek some preliminary assistance.

While some are well-placed to handle their own case, due to their intimate knowledge with it, of course some can't see the woods for the trees. Best to identify which camp you are in early.

"If you haven't prepared your case don't expect to win," she explained.

"You may not be a lawyer, but you're expected to prepare. They can only judge based on what is presented."

So how do you effectively prepare for VCAT?

Here are some fundamental tips.

Understand what it is that you are going to VCAT for.

Answer to yourself the following questions:

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<li>Why am I coming? 
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	<li>Why am I making the application in the first place? 
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	<li>What am I hoping to achieve?</li>
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If you don't really know what it is your hoping to achieve "you're not going to be able to persuade me that I should give you what you're hoping to achieve," she explains.

You need to have the idea clear in your mind and then prepare to get from A, where you are now, to B, what you want to achieve.

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Know the relevant law

Lambrick notes that while some believe the tribunal members "make it up as they go along", the truth is that VCAT is a creature of statute. Meaning, for every action they take there is a piece of legislation behind it.

You aren't expected to be a lawyer, or "know every case in the history of the universe". However, you are certainly expected to know the legislation that covers you dispute and, preferably, which section of the legislation specifically.

If there isn't a piece of legislation to cover your dispute, then it's not an issue VCAT can assist with.

Isolate the issues

The majority of parties, surprisingly, agree on the majority of things about the case. For instance, the nature of the relationship, when a lease began, and similar details are often not in dispute.

Find out what it is you're really arguing.

"Don't spend a lot of time preparing what everyone agrees on - that's just background information," she explains.

Get the documents to prove your issues

You now have the issues on hand, about which you believe you are correct. The next step is proving it, perhaps with tools, photogrpahs, documents or a person who needs to give evidence. Decide which documents you need, and start to collect them.

Anticipate the other side of the argument

You've now decided on what your issues are and how you will prove your case.

However, she warns, "Cases aren't won on their strengths, they're lost on their weaknesses". Be aware of these weaknesses by preparing for the counter argument.

One way to get this done is to write yourself some lists.

Grab a piece of paper and put a line down the middle. She then recommends putting the 'pros' for your case and the 'cons' on the other side.

On the other piece of paper, you need to write down the evidence you have on your side. Consider the evidence they might also have, and see how it stacks up.

Everything you're planning to say at tribunal needs to be prepared for.

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Ensure you have everything with you

Bring your documents, and all your information in order.

Don't forget a pen and paper - it sounds silly, but it's crucial to bring these with you for noting down important points as they arise.

As this isn't an American TV show court, she laughs, there isn't the opportunity to say 'objection' at every turn. If the counter argument brings up a point you disagree with - write it down and wait your turn.

Ask for help if you need it

"If you're self-represented, we're here to help. We want the best possible case from each side," she explains.

If you don't know when you're supposed to talk, don't hesitate to ask and clarify.

Watch other cases

Sit in on a couple of tribunal cases - you'll find that it may help steady your nerves, she said, noting that it's not uncommon for first timers to be nervous coming to tribunal.

You'll quick learn some of the common customs.

For instance, she notes that the vast majority of hearings are held in rooms that are not as formal as you might expect. However, when the tribunal member comes into the room, the common courtesy is for everyone to stand.

The usual way to address the tribunal member is also "Sir" or "Madam".

You will also learn some lessons for future reference. Here's a<a href="/news/28191-landlords-must-be-aware-of-the-qimpliedq-tenancy-agreement-lessons-from-tribunal" target="_blank"> lesson from a previous Tribunal case</a>.

Stay calm and be polite

Throughout the process you may be encouraged to negotiate with the other side, and if you've been rude due to being nervous then you may limit your chances of a more favourable outcome.

For more tips on winning at VCAT, you can <a href="/news/vic/26317-tips-for-winning-at-vcat" target="_blank">read a property management perspective here</a>.
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How to win your case at tribunal: VCAT deputy president

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A Brisbane real estate agent has been ordered to pay $12,687 in fines and compensation by the Queensland Civil and Administrative Tribunal for operating without a real estate agent licence and the improper use of a trust account.
Damien Grimsey was fined $5,000 for trading unlicensed. He was disqualified from holding any form of real estate licence or certificate for seven years.
Grimsey was also ordered to pay $7,687 compensation to a client for failing to pass on an insurance claim payment.
The tribunal heard Grimsey stepped in to take over his father’s real estate business, State Invest Property Services, while his father was hospitalised.
Grimsey operated without a licence from July 2008 to November 2008 and May 2011 to January 2012.
After a receiver was placed in charge of State Invest Property Services, Grimsey opened another trust account under a similar name and sent notices to clients falsely stating that normal trading would shortly resume under the new trust account.
Fair Trading executive director Brian Bauer said that even in unfortunate circumstances, family members could not simply take over a licensed business.
“The property industry is licenced and regulated to protect the public and maintain a high level of professionalism,” Bauer said.
“Consumers have the right to expect their real estate agent is appropriately licensed, and has the training and knowledge to be able to carry out the job properly."
The law does allow a principal licensee to appoint a substitute licensee for a period of not more than 30 days providing certain conditions are satisfied under the Property Occupations Act 2014.
 
 
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Queensland 'agent' fined for taking over sick dad's estate agency

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Former Provident Capital director Michael O’Sullivan has lost his appeal against his disqualification, with the Administrative Appeals Tribunal (AAT) saying that he showed no “genuine contrition for his conduct or genuine insight into his corporate failures”.
The AAT upheld <a href="https://www.urban.com.au/news/40596-michael-o-sullivan-to-appeal-asic-ban-after-provident-capital-collapse" target="_blank">ASIC's decision</a> that O’Sullivan be disqualified from managing corporations for five years and from providing financial services for seven years.
The AAT qualified the five-year disqualification decision by permitting O'Sullivan to remain as a director of three private companies, provided that those companies only involve activities relating to his immediate family.
The AAT said: “The behaviour of Mr O'Sullivan has fallen below the standard that is expected and required of a public company director.” 
The AAT found his behaviour “involved either a subconscious or at times an attempt to camouflage or massage critical information and to even completely prevent that information from being disclosed on a timely basis”.
The AAT highlighted that “deficient disclosure [of information] was designed to obfuscate the real position” and that this behaviour “put at risk the funds of certain third party investors who were largely being kept in the dark about the precarious nature” of one of Provident's largest loans.
ASIC's commissioner John Price welcomed the AAT finding, saying: “ASIC is committed to taking action against directors who fail to exercise care and diligence in the management of company assets. 
“ASIC's powers to disqualify directors of failed companies and to ban individuals from providing financial services are important preventative measures to safeguard the public interest.”
O'Sullivan had previously been granted a stay of the disqualification order, pending the AAT's review of ASIC's decision.
He has 28 days to appeal this decision to the Federal Court.
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Michael O'Sullivan loses appeal against ASIC ban following Provident Capital collapse

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Gayla Currie, who worked for Century 21 Max Comben real estate agency in Perth, has been caught presenting more than 20 fake contracts for fake property sales.
The real estate agent has been banned from working in the industry for life after being found guilty of fabricating purchase offers on numerous properties.
The forged contracts pretended to be prospective buyers.
The punishment was imposed by the State Administrative Tribunal on Currie, who worked as a sales representative in 2015 and 2016.
Ms Currie began working for the agency as a sales representative in February 2015 and was supervised by Mr Comben. Ms Currie held a sales representative certificate from October 2012 to October 2015 but failed to renew her certificate of registration until February 2016. She continued her sales activities with the agency between October 2015 and February 2016, despite not holding a certificate of registration.
Currie’s employer and sales supervisor Maxwell Comben were also fined by the SAT for breaching the Real Estate and Business Agents Act.
The SAT found as supervisor, Comben had failed to notice that signatures on the offers were in Currie’s handwriting, finance letters from banks were forged, phone numbers were made up and none of the sales ever settled.
Consumer Protection commissioner David Hillyard said there had been a serious lack of proper supervision on Comben’s part.
"Property owners who put their trust in the agency have endured great inconvenience and financial disadvantage,” he said.
Max has been selling in the Real Estate industry for over 41 years and all of these 41 years have been in the local area.  Max Comden commenced selling in 1975.  Max has been inducted into the prestigious Century 21 Hall Of Fame which is the highest individual award offered by Century 21. He is a "Centurion" level salesperson putting him in the top 2% if sales people in the largest real estate system world wide.
Currie’s employer Sakar Pty Ltd, trading as Century 21 Max Comben, was fined $2,000 and sales supervisor Maxwell Comben was fined $3,000 by the SAT for breaching the Real Estate and Business Agents Act by failing to exercise due care, skill and diligence and continuing to employ a sales representative in the time period that the sales representative’s certificate of registration had expired and was therefore no longer valid. The agency and Mr Comben were reprimanded and ordered to also pay costs of $1,200.
The SAT findings:
<ul data-reactid="103">
<li data-reactid="104">Sixteen fake contracts of offer and acceptance to the owner of a Westminster property between May 2015 and February 2016;</li>
<li data-reactid="106">Two fake contracts of offer and acceptance to the owner of a Balcatta property in October 2015 and January 2016;</li>
<li data-reactid="108">Three fake contracts of offer and acceptance to the owner of a Morley property between December 2015 and March 2016; and</li>
<li data-reactid="110">One fake contract of offer and acceptance to the owners of a Stirling property in February 2016.</li>
</ul>
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