Law Society Bulletin by lawsocietysa

THE

BULLETIN THE LAW SOCIETY OF SA JOURNAL

VOLUME 41 – ISSUE 8 – SEPTEMBER 2019

INSIDE

Heritage protection under new planning laws Proposed land tax aggregation laws Complaints against builders

BUILDING & PROPERTY LAW

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This issue of The Law Society of South Australia: Bulletin is cited as (2019) 41 (8) LSB(SA). ISSN 1038-6777

CONTENTS BUILDING & PROPERTY LAW 10

FEATURES & NEWS

Making & handling complaints against builders – By Consumer & Business Services

REGULAR COLUMNS

Event wrap-up: Legal Profession Dinner

Prasad Direction abolished by the High Court By Kristie Molloy & David Stiles

Heritage protection under the Planning, Development and Infrastructure Act – By Paul Leadbeter

The worker’s Liens Act, statutory charges & insolvency: Good security? By Travis Shueard & Alice Lynch

Socia media, jurors & the right of an accused to a fair trial By Jemma Holt

Is there a need for reform to protect owners and sub-contractors? By Nicholas Graham

Vale: Damon Ind

Does living apart preclude ‘living with’ when applying for declarations of domestic partnership? By Mark Taylor

Examining proposed land tax aggregation laws for SA By Elias Farah

The non-jurisdictional error of law on the face of the record & the cases before the High Court By Dr Auke Steensma

Executive Members President: A Nikolovski President-Elect: T White Vice President: R Sandford Vice President: M Frayne SC Treasurer: F Bell Immediate Past President: T Mellor Council Member: E Shaw Council Member: S Hooper Metropolitan Council Members T Dibden M Tilmouth M Janus A Lazarevich S Hooper T Vozzo V Gilliland F Bell M Mackie M Boyle M Smith E Shaw R Shaw J Stewart-Rattray J Marsh C Charles Country Members S Minney (Northern and Western Region) P Ryan (Central Region) J Kyrimis (Southern Region)

KEY LAW SOCIET Y CONTACTS Chief Executive Stephen Hodder stephen.hodder@lawsocietysa.asn.au Executive Officer Rosemary Pridmore rosemary.pridmore@lawsocietysa.asn.au Chief Operations Officer Dale Weetman dale.weetman@lawsocietysa.asn.au Member Services Manager Michelle King michelle.king@lawsocietysa.asn.au Director (Ethics and Practice) Rosalind Burke rosalind.burke@lawsocietysa.asn.au Director (Law Claims) Geoff Thomas gthomas@lawguard.com.au Manager (LAF) Annie MacRae annie.macrae@lawsocietysa.asn.au

Junior Members R Piccolo

Programme Manager (CPD) Natalie Mackay Natalie.Mackay@lawsocietysa.asn.au

Ex Officio Members The Hon V Chapman, Prof R Sarre, Prof M de Zwart, Prof T Leiman

Programme manager (GDLP) Desiree Holland Desiree.Holland@lawsocietysa.asn.au

From the Editor

President’s Message

Young Lawyers: Survey sheds light on wellbeing & salaries of young lawyers

Wellbeing & Resilience: Breaking the stress cycle – By Toni Vozzo

Tax Files: No deductions for vacant land – By Paul Tanti

Family Law Case Notes

Risk Watch: Details, details, details – they matter – By Grant Feary

Bookshelf

Gazing in the Gazette

THE BULLETIN Editor Michael Esposito bulletin@lawsocietysa.asn.au Editorial Committee A Bradshaw P Wilkinson S Errington T Shueard D Sheldon J Arena G Hagias The Law Society Bulletin is published monthly (except January) by: The Law Society of South Australia, Level 10-11, 178 North Tce, Adelaide Ph: (08) 8229 0200 Fax: (08) 8231 1929 Email: bulletin@lawsocietysa.asn.au All contributions letters and enquiries should be directed to The Editor, The Law Society Bulletin, GPO Box 2066, Adelaide 5001.

Views expressed in the Bulletin advertising material included are not necessarily endorsed by The Law Society of South Australia. No responsibility is accepted by the Society, Editor, Publisher or Printer for accuracy of information or errors or omissions. PUBLISHER/ADVERTISER Boylen Level 3, 47 South Terrace, Adelaide SA 5000. Ph: (08) 8233 9433 Fax: (08) 8212 6484 Email: admin@boylen.com.au Studio Manager: Madelaine Raschella Layout: Henry Rivera Advertising Email: sales@boylen.com.au Printer Lane Print Group 101 Mooringe Ave, Camden Park SA 5038. Ph: (08) 8376 1188

FROM THE EDITOR

From a baby to a Master: A toast to our high-achieving peers MICHAEL ESPOSITO, EDITOR

his month’s message is replete with congratulations. Firstly, a huge congratulations to President Amy Nikolovski and her husband Tony, who welcomed their beautiful baby boy on 14 August. Nikola Morris Nikolovski came into the world weighing 3.7kg and measuring 55cm. Amy, who had been pregnant for the entirety of her presidency before becoming a mother for the first time, is the first Law Society President to give birth during the year of her presidency. This is hardly surprising given she is only the fourth woman in the Society’s 140-year history to be president. It goes without saying that this has been a huge year for Amy, both professionally and personally, and August has no doubt been one of the momentous of her life. In addition to giving birth, she also received the Mary Kitson Award, presented at the Legal Profession Dinner on 2 August, for her contribution to gender equality. Fellow award recipients announced at

the Dinner were Brittany Armstrong, who was named Young Lawyer of the Year, while Raffaele Piccolo and Her Honour Judge Penelope Kari received the Bulletin Article of the Year awards. The Society warmly congratulates these highly deserving award winners. We have a full wrap-up with plenty of photos of the event in this month’s edition. Last but not least, a hearty congratulations to Elizabeth Olsson who was appointed as a Master of the District Court. Master Olsson has been on the Bulletin Committee for almost 24 years, serving as Chair for over 22. It was bittersweet to receive her notice of resignation from the Bulletin Committee last month, as she really had been the driving force behind the evolution of the Bulletin over the past two decades. On behalf of the Bulletin Committee, I thank Elizabeth for her immeasurable contribution to the Bulletin and wish her well in her new role. B

IN THIS ISSUE

LEGAL PROFESSION DINNER Wrap-up & photo gallery of the profession’s night of nights

Landmark decision in asbestos case

n Adelaide man has been awarded a record compensation payout of just over $3 million after being diagnosed with a rare form of mesothelioma caused by exposure to asbestos dust, including during renovations on his first home. Mathew Werfel, 42, was diagnosed with the terminal cancer after discovering a lump in his groin in 2017. Mr Werfel was first exposed to asbestos as a teenager, while working for a fencing contractor after leaving school. He was subsequently exposed during home renovations, including when he sanded and painted the walls of his first home, which he didn’t realise was constructed from asbestos cement sheets. In addition to awarding compensation for pain and suffering, future economic loss, medical expenses, and loss of life expectancy, Judge Leonie Farrell imposed exemplary damages on the company, saying

4 THE BULLETIN September 2019

the court needed to issue a deterrent for corporate actions that put commercial gain ahead of people’s lives. “Part of the conduct complained of in this case … is still occurring, that is the lack of warning to the general public concerning the ongoing risk of the dangers of [James Hardie’s] product in thousands of Australian homes,” Judge Farrell said. Mr Werfel’s solicitor, Turner Freeman Lawyers partner Annie Hoffman, said the SAET decision has significant implications for “third wave” asbestos victims — those exposed to in-situ asbestos products in homes, workplaces, and the community. “This case confirms that James Hardie’s duty of care didn’t end when it sold those products, it continues even decades later as tradespeople, homeowners, and others are exposed to those building materials,” Ms Hoffman said. B

PRASSAD DIRECTION ABOLISHED High Court sets aside controversial jury direction

VALE: DAMON IND Beloved lawyer and animal rights activist honoured

PRESIDENT’S MESSAGE

Flexibility is key to managing juggling act AMY NIKOLOVSKI, PRESIDENT, LAW SOCIETY OF SOUTH AUSTRALIA

t’s hard to believe that three quarters of my presidency has already been completed. As we head into the final quarter there is still so much to be done! As you’d no doubt be aware, I have been pregnant for the entire term of my presidency. I am happy to announce my husband Tony and I welcomed our son Nikola Morris Nikolovski on Wednesday 14 August. Little Niko weighed in at a respectable 3.7kg (8 pound 3 ounces in the old scale) and a rather long 55cm. We are thinking we may have a future ruckman in our hands! I have taken six weeks off from my official duties following the birth of Nikola. Many thanks to Immediate Past President Tim Mellor and President Elect Tim White for attending, chairing and hosting various

events and meetings on my behalf while I get settled in with a newborn. I am still however happily writing articles and settling submissions and will be back from 23 September, when the real juggling act will begin! I am about to experience the life of so many of our members; juggling young children and a career in the legal profession. I must say that during my pregnancy I had nothing but support from the profession, even when I got teary during Judge Jo-Anne Deuter’s Special Sitting (I was 23 weeks pregnant). I hope the great support will continue upon my return to work not just at the Society but to practice. The Bullying, Discrimination and Harassment Survey results indicated that

a number of women and parents faced discrimination while on maternity leave or returning to work from parental leave, and I am hopeful that we can stop this stigma in the workplace and that flexibility will be seen to be beneficial to all parties. We also have some exciting celebratory events coming up in which I hope you can join me, including: • a lunch celebrating 125 years of women’s suffrage in South Australia with guest speakers The Hon. Justice Judith Hughes, her Honour Judge MaryLouise Hribal and Marie Shaw QC on 31 October at The Hilton Adelaide; • a birthday party to celebrate 140 years of the Law Society of South Australia on 15 November at The Treasury. I hope to see you there. B

Former Bulletin Committee Chair appointed as District Court Master

lizabeth Olsson has been appointed as Master of the District Court, replacing Master Mark Rice who resigned his commission earlier this year. Master Olsson commenced her role in the District Court on 12 August. Master Olsson has had a distinguished career in the law spanning more than 30 years, including as Senior Associate for Mellor Olsson since 2014. She has practised extensively and with distinction in a range of areas, including employment law, civil litigation, personal injury, consumer law, and family law. She represented victims of the 1983 Ash Wednesday bushfires in their personal injury claims. Master Olsson’s immense contribution to the Law Society was recognised in 2017 when she was presented with the Society’s most prestigious award, the Brian Withers Award, for her service to the Society.

Master Olsson served as Chair of the Bulletin Committee for almost 22 years, and even after stepping down as Chair continued as a Member of the Bulletin Committee until her appointment as a Master forced her to resign. Master Olsson steered Society’s flagship publication through a number of iterations, overseeing a publication that is widely respected and appreciated by the profession for its informative, engaging and relevant content. She also served on the Civil Litigation Committee for eight years, Industrial Relations Committee for three, Accident Compensation committee for two and Legal Technology Committee for one. She has also been a passionate and tireless supporter of the arts, particularly theatre, and is a long-serving member of the Gilbert and Sullivan Society of SA. Attorney General of SA, The Hon

Elizabeth Olsson

Vickie Chapman, said: “I have no doubt her ability to think on her feet and keep calm under pressure will be invaluable in her new role.” “I congratulate Ms Olsson on this new opportunity and would like to thank Mr Rice for his significant contribution to the District Court over the last 18 years.” B September 2019 THE BULLETIN

EVENTS

PHOTOS: PAGES 8-9 >

Chief Justice of Australia holds court at profession’s night of nights MICHAEL ESPOSITO

ore than 300 people gathered to celebrate the achievements of the legal profession and hear guest speaker, The Hon Chief Justice Susan Kiefel AC, at the Law Society’s Legal Profession Dinner on 2 August. Society President Amy Nikolovski, in welcoming guests, remarked that it was fitting that the first female Chief Justice of the High Court was the guest speaker at an event where the State’s first female Attorney General was in attendance and in a year that marked the 125th anniversary of women’s suffrage in SA. Ms Nikolovski herself is only the fourth female president of the Society,

and, at 38 weeks pregnant at the Dinner, was certainly the first president in the Society’s 140-year history to be with child during the course of her presidency. Chief Justice Kiefel’s wryly humorous speech detailed some particularly telling interactions with colleagues and peers that were indicative of some of the more traditional attitudes that some male practitioners had towards women in the law. While Her Honour’s speech made some pointed observations about the experience of being a woman in the law, her timing and delivery was calibrated for maximum comic impact, and the speech

YOUNG LAWYER OF THE YEAR: BRITTANY ARMSTRONG

was received with a rousing reception from delighted guests. Ensuring the laughter continued throughout the night, Alex Ward performed his MC role with his usual panache and witty irreverence. The Society is grateful to the City of Adelaide’s Ten Gigabit Network and Notable Imprint for being Major Sponsors of the Dinner, Supporting Sponsor Peter Shearer Menswear and Young Lawyer of the Year Award Sponsor PEXA. The Society would also like to thank its major sponsor Bank SA, Imperial Measures Distilling for sponsoring the Gin Bar on the night and wine sponsor Wine Direct. B

MARY KITSON AWARD: AMY NIKOLOVSKI

Young Lawyers Committee Co-Chair Erica Panagakos (left), The Hon Justice Tim Stanley, Young Lawyer of the Year winner Brittany Armstrong, PEXA representative Daniel Roesler, and Young Lawyers Committee Co-Chair Georgia Hagias).

Brittany Armstrong was an Associate at the District Court before joining Shaw & Henderson as a Criminal Lawyer. Brittany has excelled in this role, working on complex criminal trials and appeals with exceptional skill. Brittany is passionate about equality before the law and regularly does pro bono work to ensure that those who would otherwise not have access to proper legal representation are afforded their rights. Brittany is particularly interested in youth justice and the relationship between disadvantaged youth and crime. She is a strong advocate for a more effective child protection and child welfare system. Brittany recently developed a CPD about doli incapax (the presumption against age of criminal responsibility for children aged 10-14), but has been a powerful voice for increasing the age of criminal responsibility to 14. Brittany has been heavily involved in the Ice Factor program founded by Marie Shaw QC. She has coordinated numerous fundraisers, organised the Ice Factor Spectacular (a charity dinner with more than 500 guests), and organised for 200 teenagers to undergo modelling training.

6 THE BULLETIN September 2019

Mary Kitson award winner Amy Nikolovski with her husband Tony Nikolovski

Amy Nikolovski is the youngest ever female President of the Law Society and is also the youngest person to be made an Equity Partner at Duncan Basheer Hannon (age 35). By sheer example, Amy continues to advance the interests of women lawyers. Amy was a Member of the Society’s Gender Equity Working Group and was instrumental in garnering support for the gender equity reforms undertaken by the Law Society in 2015. In all her actions she reminds people of unconscious bias and the challenges that women face. She is Chair of the Society’s Bullying, Discrimination and Harassment Working Group; and the Equality, Diversity and Inclusion Committee. She is also a Member of the Society’s Council and Executive and numerous other committees, in addition to being a Director of the Law Council of Australia and the Society’s representative on the Law Council’s Equal Opportunity in the Law Committee.

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EVENTS

Law Society President Amy Nikolovski (left), The Hon Chief Justice Kiefel AC, and the Hon Chief Justice of SA Chris Kourakis

Daniel Pallaras (left), Stephen Pallaras QC, Genevieve Lewis, and Arman Abrahimzadeh OAM

Brooke Hall-Carney (left), Gavin Carney, Nick Gormley (Notable Imprint), and Louisa Gormley

Magistrate Anna Jackson (left), Kym Jackson, The Hon Justice Judith Hughes

Henry Ringwood (left), Elizabeth Olsson, and Pamela Wilkinson

John Ward (left), Guy Biddle, and Amanda Trudgian

Raffaele Piccolo (right) with Bulletin Committee Chair Alison Bradshaw

BULLETIN ARTICLE OF THE YEAR AI in Criminal Sentencing: a risk to our human rights?, By Raffaele Piccolo In his award-winning article, Raffaele Piccolo explores the prospect of artificial intelligence machines being used to deliver sentences to convicted criminals, and the implications this technology might have for human rights.

SPECIAL INTEREST BULLETIN ARTICLE OF THE YEAR Can women really have it all? A perspective from a barrister & mother, By Penelope Kari Her Honour Penelope Kari, who worked as a barrister, when her article was published, struck a chord with her honest account of life as a full-time lawyer and mother.

Emma Schulz-Boylan (left), Michael Rydon, Adam Hamilton, Margaret Cusenza, Fumi Baughan, and Erin Puckridge

8 THE BULLETIN September 2019

Samuel Leeson (left) Elizabeth Carroll-Shaw, Lucy Caruana, Anne Mignone, and Rowan Tape

EVENTS

Glen Pearce (left) and Shery Farbod

Amanda Ward (left) and Alex Ward

Christine Hanna (left) and David Hanna

Kerryn Hawkes (left) and Holly McCoy

Dami Sheldon (left), Michael Janus, and Franco Camatta

Richard Wharldall (left), Peter Humphries, and Dr Rachel Hurst

Rebecca Sandford and Sheena Riordan

Mussa Ahmadi (left), Michael Alder, and Matthew Sun

Ellen Gordon (left), Jenny Paglia, and Paul Gordon

NSW Law Society President Elizabeth Espinosa (left), Member of the Law Council Executive Caroline Counsel, and Amy Nikolovski.

Immediate Past President Tim Mellor (left), President Amy Nikolovski, The Hon Judge Tony Rossi, and Dr Lillian Rossi

Charlie Belperio (left), Marisa Belperio, Mark Anderson, Erica Panagakos, Rachel Jolly, Beverley Clarke, Madeline Porter, Alysia Panagakos, Steven Polyichanin, and Brenton Drechsler.

September 2019 THE BULLETIN

BUILDING & PROPERTY LAW

Making & handling complaints against builders CONSUMER & BUSINESS SERVICES

s the State’s consumer watchdog, Consumer and Business Services (CBS) is responsible for regulating South Australia’s building, plumbing, gas fitting and electrical industries. CBS administers the following building-related laws, alongside a raft of other legislation aimed at protecting South Australian consumers: • Building Work Contractors Act 1995 • Plumbers, Gas Fitters and Electricians Act 1995 • Australian Consumer Law (adopted under the Fair Trading Act 1987) There are over 55,000 registered building, plumbing, gas fitting and electrical licences in SA – and this represents approximately 77% of CBS’ occupational licences. The building industry is a key focus for the agency as it has a significant effect on South Australian consumers, both in terms of dollars and emotional impact. Building disputes can also be quite complex and substandard work can pose a risk to public safety.

building contract and to communicate any particular preferences, changes or concerns. Builders are responsible for building the home in line with the approved plans and contract documents. There are a number of key things to consider before and during the building process.

TYPES OF ENQUIRIES AND COMPLAINTS

USING A LICENSED BUILDER

Unsurprisingly, building disputes are consistently in the top three categories of complaints received by CBS. In the first six months of this year alone, CBS has received more than 1940 enquiries, and 223 formal complaints. This includes complaints relating to shoddy work by plumbing, gas fitting and electrical tradespeople, as well as other building issues. The most common complaint received last year related to solar panel installations with more than 130 complaints received from unhappy customers. Other complaints included grievances around new home constructions, home additions and renovations, concrete foundations and other concrete services, bathroom and laundry renovations, and fencing.

It’s crucial to ensure the builder holds a current Building Work Contractor’s Licence, and their supervisor holds a Supervisor’s Registration. If the builder is using subcontractors, these tradespeople must also be licensed. The Licensing Public Register on the CBS website contains details of all licensed builders in South Australia.

AVOIDING ISSUES WITH BUILDERS When building a home, it’s important to understand the rights of consumers and builder responsibilities. Consumers are responsible for paying for the building work stated in the

10 THE BULLETIN September 2019

CONTRACTS There must be a written contract for any building work costing $12,000 or more, which will usually contain a number of documents including drawings and specifications. The contract must: • be in writing • be legible • set out all of the agreed terms in full • include the name and licence number of the building work contractor and contractor’s business partners • be signed by both the consumer and builder. When signing a new home contract in South Australia, there is a cooling-off

period of five clear business days. This can be longer if the builder has failed to supply a Form 1 notice outlining consumer rights and obligations, or fails to take out building indemnity insurance.

PROGRESS PAYMENTS Builders are entitled to request payments when work is complete and ready for the next stage – these are known as “progress payments”. This builder must ask for these in writing (eg via invoice) and they must be outlined in the building contract. Consumers should never pay for work in advance and builders can be penalised for demanding money before completing work.

VARIATIONS There can still be changes made to the plan once the contract is signed. These variations need to be agreed between the consumer and builder, and recorded as an addendum to the building contract so the builder can request payment for the work once completed.

DEPOSITS There is a maximum amount a builder can take as a deposit: • $1,000 maximum for a contract valued between $12,000 up to $20,000 • 5% of the contract price for contracts $20,000 or more. Consumers should always be aware of paying any deposits in excess of 10% of the contract price.

BUILDING & PROPERTY LAW

BUILDING INDEMNITY INSURANCE If building work costs $12,000 or more and requires local council approval, building indemnity insurance is required. This protects consumers if the builder becomes bankrupt, disappears or dies and cannot complete the work or fix any defects under the five-year statutory warranty.

WARRANTIES Builders often speak of a threemonth maintenance period and will ask consumers to wait three months to either bring defects to their attention or address the issues. This can work well as the builder doesn’t have to go back and forth as new problems are found, and the consumer won’t be constantly contacting the builder. Consumers don’t have to wait these 3 months however and can continue to raise issues after. There are certain warranties (known as “statutory warranties”) included under any building contract: • The building work must be carried out properly to meet all statutory requirements, accepted trade standards and agreed plans and specifications. • Materials supplied will be good and proper materials. • Unless the contract states a time frame that the work will be completed, the work will be done with reasonable diligence. • The building will be reasonably fit to live in. • The work and materials used will be fit for any purpose or result specified. If the building project doesn’t comply with these, consumers should discuss this with the builder. The owner has up to five years from the date of completion to lodge an action for a breach of these warranty conditions. Consumers can also claim for up to 10 years under the Development Act 1993 for any defective work that does not comply with the Building Code.

builder, outlining all concerns in writing. If this fails to resolve the dispute, there are several options for disgruntled consumers.

CONTACT CBS The Advice and Conciliation team within CBS provides free advice and information to help consumers reach an agreement with the trader. There are some circumstances where CBS is unable to provide further assistance: • if the matter relates to a builder or project outside of South Australia • if the matter is currently before Court. CBS encourages concerned consumers to contact them early so they can provide the right advice about their rights, who to contact and what to do next.

COMPULSORY CONCILIATION CONFERENCES If the parties cannot agree on a solution, the Commissioner for Consumer Affairs can call for a conciliation conference. This will happen where CBS believes the trader has some responsibility to provide redress and is usually the final step before the consumer proceeds with civil legal action. Businesses must attend and can be fined up to $10,000 if they do not attend without a reasonable excuse. Before calling a conference, the Commissioner will consider: • the nature of the problem and what can be proven • the number of complaints against the business • how the business handles customer complaints • any legal issues. In these conferences, CBS will work to ensure the outcome is as fair as possible for both parties. CBS has no power to force the parties to enter into an agreement. If traders and consumers do sign an Instrument of Agreement, they must comply with all terms of the agreement – if they do not, this can be enforced in the Magistrates Court.

MAKING A COMPLAINT ABOUT A BUILDER

COMPLIANCE AND ENFORCEMENT

Despite best intentions, consumers and builders may find themselves in a dispute. The first step in resolving any disagreement is to speak directly to the

Even if the matter is resolved for the consumer, the issue may be referred for further investigation if a breach of legislation is identified.

Sometimes the nature of the alleged conduct, the number of consumers affected or repeated incidents means further action needs to be taken. The Compliance and Enforcement team will investigate and may end up taking enforcement action. The enforcement action will depend on the level of harm and seriousness of the breach. The Commissioner has a range of options at his disposal when a breach is identified including: • formal warning letters • expiation notices • public warnings • disciplinary action • prosecution.

PROSECUTION Over the past 12 months, 15 builders and tradespeople have been prosecuted in the Magistrates Court and ordered to pay significant fines and legal costs. In one case, an unlicensed builder who failed to complete work and caused additional damage to property was fined $175,000 and ordered to pay back more than $58,000 in compensation to clients. While CBS does take businesses to court, CBS cannot provide legal advice to consumers about pursuing their own civil case.

MORE INFORMATION CBS encourages the public to report any concerns about unlicensed operators in the building and trades industry. Over the past few years, a “Dob in an unlicensed tradie” campaign has helped stamp out numerous unlicensed tradespeople. CBS also undertakes a proactive monitoring program to help keep the industry compliant. This includes inspectors visiting building sites, as well as monitoring advertisements in newspapers and online. The CBS website has a range of useful resources for consumers about building and working with tradespeople. The “Building, extending and renovating a home consumer guide” provides comprehensive details for those thinking about building or renovating. Consumers are also encouraged to check the Licensing Public Register on the CBS website: https://www.cbs.sa.gov.au/ find-a-licence-holder B September 2019 THE BULLETIN

BUILDING & PROPERTY LAW

Heritage protection under the Planning, Development and Infrastructure Act PAUL LEADBETER, SENIOR LECTURER, ADELAIDE LAW SCHOOL

t seems that no one is ever completely happy with the regulatory systems put in place by government to regulate the use and development of land1. To some extent this reflects the fact that planning of land use and its development is a dynamic process with change to the regulatory scheme and associated planning policy being influenced to varying degrees by changing demographics, technology changes and different infrastructure needs as well as the need to address economic2 and environmental concerns3. Further influencers of change include changing trends in lifestyles and housing choice and pressure from interest groups such as the development industry and resident action groups. There had been concerns expressed over many years by both the development industry and community groups about the South Australian land use planning system which operated under the Development Act 1993. This led to an extensive and lengthy review by an Expert Panel on Planning Reform appointed by the State Labor Government in February, 2013. In its final report delivered in late 2015 it concluded that: “Our planning system should provide communities with a clear understanding of the policies that will guide development, while ensuring that unnecessary costs and delays for applicants and assessing authorities are minimised. It is critical to the competitiveness of the state, but our current planning system is not up to this task.” The then State Labor Government took on the task of drafting new planning legislation taking on board the majority of the Expert Panel’s recommendations. On 1 April, 20174 a new Planning, Development and Infrastructure Act 2016 (the PDI Act) came into partial operation with the intention being that the PDI Act, (which will eventually repeal the Development Act 1993 and thereby end the 25 year old planning system and policies implemented under that legislation), would be fully operational by the end of June, 2020. Provisions in the

12 THE BULLETIN September 2019

PDI Act are being gradually implemented along with key policy documents, the most important of which is the Planning and Design Code5. The Planning and Design Code (the Code) effectively replaces the old council area development plans and sets out zones, policy areas, definitions of land uses and land use classes, and the specific rules and policies that will govern the use and development of land within particular zones6. The Code is being developed by the State Planning Commission and is to be released in three phases. The first phase is that applying to all land that is not within a council area and it came into operation on 1 July, 2019. It is understood that drafts of the second phase of the Code (dealing with regional council areas) and the third phase (dealing with Metropolitan Adelaide) will be released for comment in October, 2019 with actual implementation of them some months later.7 This article looks at how the PDI Act addresses the issue of development control and heritage. In the first half of 2019, concerned local councillors, community action groups like the Community Alliance and the National Trust of SA have campaigned strongly for better heritage protection under the PDI Act believing that the new Planning and Design Code is not going to offer the same level of protection for places with heritage value as the existing Development Act 1993.8 The State Planning

Commission, which has the responsibility for developing the Code provisions that address heritage disagrees9.

WHAT IS “HERITAGE”? “Heritage” is basically all that one generation inherits from another. It can include (and is most commonly thought of) as structures and objects but it also extends to gardens and landscape (such as reserve areas), and traditions. Susan Tonkin has argued that each generation decides what should and should not be kept from earlier generations and what can be discarded10. In the 1970’s when heritage protection legislation first commenced in Australia, much of the focus was on protecting grand public buildings, churches and the large grand homes of the wealthy colonists in each state11. In more recent times the dwellings of workers in the colonies have been seen worthy of protection, together with examples of early industrial buildings and sites and more recent buildings of significant architectural merit or interest12 or where significant events occurred or a prominent South Australian may once have resided13. It should be noted that, disappointingly, there is no direct reference to heritage or the need or desirability of retaining or protecting heritage places in the Objects of the PDI Act.14 The Principles of good planning15 which seek to further the objects of the Act do refer to built form being durable and designed to be adaptive

BUILDING & PROPERTY LAW

The old Z Ward for the criminal insane (left); St Andrews Church in Walkerville (right). Photos: National Trust SA

in the sense of building reuse but that provision essentially speaks to buildings being constructed today.16 There is also a requirement that the Minister ensure that a State Planning Policy be developed by the Commission that specifies policies and principles that are to be applied to encourage and support the adaptive re-use of buildings and places.17

LISTING OF PLACES OF HERITAGE VALUE South Australia has had legislation providing for the listing of places of state heritage value for 42 years18 and since the commencement of the Development Act 1993, the listing of places of local heritage value via amendments to council development plans. Both state and local heritage places will continue to be recognised under the PDI Act with the identification and listing of state heritage places and areas remaining under the Heritage Places Act 1993 and local heritage places being able to be designated in the Planning and Design Code following a process set out in section 67 of the PDI Act. The same criteria are applicable for listing places of local heritage value in both the PDI Act and the Development Act 1993. The listing of places as state or local heritage places means that any proposal to undertake development in relation to those places will undergo a level of scrutiny not experienced by many other forms of development. Under the PDI Act, “development” in relation to a state heritage place includes the demolition, removal, conversion, alteration or painting of, or addition to, the place, or any other work that could materially affect the heritage value of the place.19 This provision is identical to that contained in

the Development Act 1993. However, the definition of development as it relates to local heritage places varies from that presently found in the Development Act. Instead of listing a range of activities that would comprise development in relation to the local heritage place, (as it does for state heritage places), it simply refers to “any work (including painting) that could materially affect the heritage value of the place…”20. It then states that the heritage value must be specified by the Planning and Design Code either generally in relation to local heritage places or in relation to the particular local heritage place. This definition makes the provisions within the Code extremely important. Unfortunately, as noted above, Phases 2 and 3 of the Code are not yet available. However, in May, 2019 the Department of Planning, Transport and Infrastructure released a Practitioner Overview of Heritage and Character in the New Planning System21 (the Practitioner Overview) which provides some indication of the proposed approach in the Code. It suggests that the Code will provide that demolition of a local heritage place will only be considered if a building has little heritage value, is structurally unsound or has public safety issues or is economically unviable to repair. For some of these criteria it notes that support from a suitably qualified person would be required,22 as well as a heritage impact assessment.23 It also notes that adaptive reuse policies will be strengthened to make adaptive reuse easier.24 Alterations and additions will be code assessed (performance assessed) and certain alterations which do not affect heritage values, such as the demolition of a modern lean-to at the rear of a building will be

“deemed to satisfy” which will mean they must be granted consent.25 The defining of the heritage values in the Planning and Design Code is going to be of significance in terms of determining how much protection will continue to be accorded to local heritage places under the PDI Act. Arguably the protection accorded to state heritage places under the PDI Act will be less than under the current Development Act. Both the demolition and alterations or additions to a state heritage place will be Code assessed (Performance Assessed)26 which means the development proposal has to be assessed against the Code, applying flexible broad policies rather than more prescriptive criteria. There will not be any non-complying classification as there is at present for development involving state heritage places. Arguably, it leaves state heritage places more vulnerable to demolition. Note also that any development that is “in the State Heritage Place Overlay or State Heritage Area Overlay” under the Code27 and specified in the Code as being in a class to which the referral provision applies28 must be referred to the Minister responsible for Heritage who has the power to direct the planning authority to refuse consent or attach specified conditions to any consent given.29 There are 17 state heritage areas, around 2,300 state heritage places and 7,000 local heritage places currently identified in South Australia and the Practitioner Overview indicates that these will all be carried across into the Code.30 At present many council development plans also have Historic (Conservation) Zones and Historic (Conservation) Policy Areas and there has been a Planning Bulletin issued by Planning SA in 2001 which sets out the guidelines for the establishment of such zones and areas.31 It would appear that these zones and policy areas will be transitioned into the Code and depicted as “Local Heritage Areas”32. Of some concern is the requirement in s67(4) of the PDI Act which requires that the creation of any new heritage character or preservation zone or subzone must be approved by 51% of property owners within that area. The Greens have introduced a bill into the Legislative Assembly seeking to repeal this provision. September 2019 THE BULLETIN

BUILDING & PROPERTY LAW

CONTRIBUTORY ITEMS-WHAT WILL BE THEIR STATUS? Controversy exists in relation to those items which are not to be transferred into the Code, namely, “contributory items”. Contributory items are not referred to in the current Development Act and there is no definition of them. They are items that have been “designated for the contribution they make to the historic and architectural character of a particular area and are located primarily in Historic Conservation Zones”.33 That designation is made by local councils through the identification of contributory items in their development plans. Contributory items are not the equivalent of local heritage places but have heritage features which contribute to the historic quality of the Zone or Policy area.34 There are around 12,000 contributory items identified in Development Plans at present, the majority of which are residential buildings and located in existing Historic Conservation Zones. The National Trust maintains that those 12,000 items represent just 1.8% of the total 741,748 separate and medium density dwellings in the state.35 Further, until 2012 the Government was recognising and not preventing the practice of including contributory items in development plans. The Practitioner Overview proposes that within the proposed local heritage areas overlay the existing Contributory Items will be protected not by being specifically listed but by appropriate code provisions which recognise the importance of keeping places which contribute to the existing heritage or character values of the area. There will be performance-based provisions against which applications for demolition and alterations and additions to buildings must be assessed. The details in the Practitioner Overview are vague as to what considerations will be made for demolition approval. It will include consideration of the value the building makes to the streetscape, the proposed replacement building, contextual analysis outcomes, (whatever that means) and how well the theme is represented36. So much depends on how these criteria are set out in the Code, hence a lot of the concern presently being expressed. For example, it is not clear what is meant by representation of “the theme”. Where will the theme be described? Does it

14 THE BULLETIN September 2019

mean that representation of that theme must be assessed for the Local Heritage Area where the building is located or more broadly? If there is already one late Victorian bluestone cottage in the area will that be deemed sufficient enabling others to be demolished and replaced with new buildings?

CONCLUSION Similar rules to those which presently apply under the Development Act will apply to state and local heritage listed places under the PDI Act. While there is less certainty about what will happen with the proposed local heritage areas, and more particularly those places previously designated as contributory items situated within them, it does appear on the information presently available that there will be less protection for those items. We await the release of drafts of Phases 2 and 3 of the Code to confirm what the precise new rules will be. Adelaide has a unique built heritage. It would be disappointing if the new planning legislation and its Planning and Design Code undermines that position. Paul Leadbeter teaches law at the Adelaide Law School and is a Consultant to Hilditch Lawyers. He is also a Councillor of the National Trust of South Australia. B Endnotes 1 Since 1967 South Australia has had 4 different systems of regulation, the Planning and Development Act,1967, Planning Act ,1982, Development Act,1993 and now the Planning, Development and Infrastructure Act, 2016. 2 For example, the decline in South Australia’s traditional industrial base of manufacturing motor vehicles and white goods created a need for new sources of work and employment with often different land use requirements as well as the release of large tracts of land for redevelopment. 3 Environmental concerns are many and varied but the pressing need to try and prevent the further decline in biodiversity, and to address the potential impacts of climate change across the state are at the forefront. 4 Some might say, an unfortunate choice of proclamation date! 5 Planning Development and Infrastructure Act,2016 s 65 6 Planning, Development and Infrastructure Act 2016 s66 7 SA Planning Portal, https://www.saplanningportal. sa.gov.au/planning_reforms/implementation 8 National Trust South Australia, Heritage Living Autumn `2019, ‘Headed for Disaster’ p5 9 See for example the material contained in the Community Guide to Heritage and Character in the New Planning System: https://www. saplanningportal.sa.gov.au/__data/assets/pdf_ file/0006/545748/Community_guide_to_heritage_ and_character_in_the_new_planning_system.pdf

10 Susan Tonkin, ‘Essay: What is Heritage?’ Commonwealth Dept. of Environment and Energy, undated, https://www.environment.gov. au/system/files/pages/f4d5ba7d-e4eb-4ced9c0e-104471634fbb/files/essay-whatisheritagetonkin.pdf 11 Such as Ayers House, Home of Sir Henry Ayers onetime SA Premier, and Beaumont House, built for Augustus Short, the first Anglican Bishop of Adelaide. 12 For example, the Former MLC Building at 185 Victoria Square and the home in more recent years to a number of members of the legal profession is on the State Heritage register, in part because it was Adelaide’s first skyscraper(at 12 storeys) and also the first example of a new building technique, curtain wall construction. 13 Such as the humble dwelling in which Sir Hubert Wilkins, Explorer and Aviator lived as a child at Mt Bryan East. 14 Planning, Development and Infrastructure Act, 2016 s12 15 Planning, Development and Infrastructure Act, 2016 s14 16 Planning, Development and Infrastructure Act, 2016 s14(c)(ii) 17 Planning, Development and Infrastructure Act, 2016 s61 18 Currently this protection and the listing process is found in the Heritage Places Act, 1993 19 Planning, Development and Infrastructure Act, 2016 s3 20 Planning, Development and Infrastructure Act, 2016 s3 21 Available at: SA Planning Portal https://www. saplanningportal.sa.gov.au/__data/assets/ pdf_file/0007/545749/Practitioner_overview_of_ heritage_and_character_in_the_new_planning_ system.pdf 22 Ibid at p5 23 A heritage impact assessment is defined in the Glossary to the guide as ‘An assessment undertaken by a heritage expert which identifies the impact of the proposed development on heritage values’ see p9 24 Adaptive reuse is defined in the Glossary to the guide as the process of repurposing buildings for viable new uses and modern functions, other than those originally intended, to address present-day needs, action and sustainable investment. See p9 25 Planning, Development and Infrastructure Act, 2016 s106 26 Planning, Development and Infrastructure Act, 2016 s107 27 This will presumably be a list of all State heritage places and areas. 28 It is unclear exactly to what this requirement relates. Until the Code is available, we will not know. 29 Planning, Development and Infrastructure (General) Regulations 2017 Schedule 9 Table 3 Clause 3 30 SA Planning Portal, Practitioner Overview n21 at p3,4,5. 31 SA Planning Portal, Practitioner Overview n21 at 6 32 SA Planning Portal, Practitioner Overview n21 at 6 33 National Trust South Australia, Heritage Living, Autumn 2019,’What are Contributory Items and Historic Conservation Zones?’ p.6 34 Botten, Jamie, ‘Heritage and the Law’, a paper presented at the Heritage and Planning SÁ Styletraining Seminar 18 July 2011, p 4 35 National Trust South Australia, n33 p6 36 SA Planning Portal, Practitioner Overview n21 at 7

PROMOTION

Managing the Financial Settlement Schedule

outh Australian legal practitioners continue to embrace digital settlements, having now processed over 10,000 transfer transactions through PEXA. Key to PEXA’s functionality is the Financial Settlement Schedule (FSS). This contains electronic financial transaction directions for all source and destination line items. All payments are disbursed automatically at settlement, meaning you’ll no longer spend time waiting for cheques to clear. These guidelines will assist you when completing the FSS, otherwise known as calculating your cheque directions in the “old” language. 1. The Purchaser’s representative (Incoming Proprietor) needs to ensure they account for all lodgement fees for which they are responsible. This includes the lodgement fees for the new mortgage. 2. Both parties need to ensure that one

of their payments (you can think of it as one of your cheques) is the PEXA fee, which generates automatically. Think of it as one of the cheques you’re requesting to hand over to PEXA at settlement. Further, these steps will help you check your FSS balances and ensure you’re not collecting or providing too much money. • Stamp early – two days prior to settlement. • Sign off on your figures when you have completed them, don’t wait until they balance with the other side. • In the days leading up to settlement, check whether all parties have accepted the settlement date and time, especially if banks are involved.

WHAT’S AHEAD FOR THE FSS PEXA has received feedback from its members requesting more guidance when completing inter-dependent tasks in time

for settlement. In response to this, PEXA is developing an enhanced FSS summary that will assist in the calculation and confirmation of the financial components of settlement. This will guide practitioners through the calculation of the Total Funds Required to Settle and prompt Mortgagees to provide loan proceeds and indicative loan payout figures. Closer to the day of settlement, fees and charges will be added, allowing for confirmation of final figures and auto calculation of shortfall and surpluses amounts. You can learn more about using the FSS in PEXA by watching our free instructional webinar at your leisure https://community.pexa.com.au/t5/ Webinars/bg-p/Webinars

BUILDING & PROPERTY LAW

THE WORKER’S LIENS ACT, STATUTORY CHARGES & INSOLVENCY: GOOD SECURITY? TRAVIS SHUEARD, ASSOCIATE & ALICE LYNCH, LAW GRADUATE, CHARLTON ROWLEY

s is well known among South Australian building and construction lawyers, the Worker’s Liens Act 1893 (SA) (the Act) provides avenues for contractors and sub-contractors to recover monies owing for work undertaken. The Act allows a contractor to place a lien over real property which was the subject of the work. This lien prevents the registration of dealings on that property until the lien has been discharged through the payment of an amount equal to the contract price owing to the Court or Lands Titles Office.1 Worker’s liens are the more regularly used method of recovery under the Act. What is less well-known (or used) is that the Act also allows for the attaching of a charge over monies owed to subcontractors. This, in effect, allows a subcontractor to circumvent the usual contractual hierarchy of creditors. It also confers the benefits of a subcontractor becoming a secured creditor in the event of insolvency, providing a level of certainty in recovery for subcontractors who often bear the financial brunt of any fallout between the principal and main contractors.

PURPOSE OF THE ACT Before delving into the mechanisms of the statutory charge, it is worth briefly revisiting the Act’s purpose and being clear that the Act has two individual methods of recovery: liens and charges. The purpose of the Act is ostensibly to allow workers and contractors relatively

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straightforward pathways to recovering monies owed for work performed. This is similar to the Building and Construction Industry Security of Payment Act 2009 (SA), though the Security of Payment Act is more commonly used in South Australia due to its streamlined process and “pay now, argue later” method of recovery. The Act is clear that there are two different mechanisms of recovery available to the worker/contractor; liens and statutory charges. Each mechanism has its own method of enforcement and remedy. These two remedies do not conflate because a party has either a lien or a charge South Australian case law has made clear that a worker’s lien-holder cannot “arrogate” to himself the rights of a charge-holder unless he/she also holds the statutory security of a charge given by the Act (or vice versa).2 In In Re RGP Constructions Pty Ltd (In Liquidation); Ewing v Hallett Brick Industries,3 Walters J stated that the separate mechanisms of enforcement (being charges and liens) also lends itself to the “priorities and pro-rata distribution of payment”4 system set out in section 8 of the Act.5 Conflating the two remedies would undermine this priority payment system.

STATUTORY CHARGE OVER MONIES The operation of the statutory charge is set out in section 7 of the Act. Section 7(2) of the Act stipulates that a subcontractor may have a charge:

“…on any money payable to the contractor or subcontractor with whom he shall have contracted for that portion of the contract price payable to the first mentioned sub-contractor in respect of work done or materials furnished or manufactured…”.6 In practical terms, if the contractor has been paid an amount by the principal for amounts carried out by the subsubcontractor, but the main contractor has not yet paid that amount to the subcontractor, the sub-subcontractor can claim a charge over those monies pursuant to section 7 of the Act. The main contractor must then pay those monies straight to the sub-subcontractor. As a result, a sub-subcontractor with a statutory charge under the Act has the benefit of “leapfrogging” over the typical contractual hierarchy to claim monies from the main contractor. This avoids the sub-subcontractor from having to waiting on payments “flowing down” from the subcontractor. Once this statutory charge has been attached to the monies by the sub-contractor, proceedings must be commenced within 28 days after the wages or contract price would become due.7 This is a strict timeframe – the charge will lapse if proceedings are not commenced within this time. Once commenced, the proceedings cannot be discontinued without an order by the Court, consent from the defendant or an order that the claimant has an extension of time to bring a fresh action.8

BUILDING & PROPERTY LAW

Just as with the imposition of a lien, the requirement to commence proceedings in order to recover the monies owed means that attaching a charge under the Act will lead to further significant costs for the claimant. This should be a consideration for practitioners when acting for subcontractors who often face cashflow problems.

STATUTORY CHARGES AND SECURED CREDITORS As mentioned, a claimant to a statutory charge over monies under the Act is also a secured creditor in the event that the subcontractor goes insolvent. Case law explains how this security arises. In the High Court decision of Stapleton v F. T. S. O’Donnell, Griffin and Co. (Q) Pty Ltd,9 the sub-contractor in question had provided written notice (within the meaning of the Queensland equivalent legislation) of a charge upon moneys payable under the contract by the building owner to the contractors. Proceedings had been commenced, as required, to enforce the claim of a charge. Therefore, the charge to which the subcontractor became entitled to had attached to the moneys payable to the contractors once the owner had received notice of the charge from the subcontractor. This created a security in favour of the subcontractor.10 In explaining the mechanisms of secured creditorship through a statutory charge, McTiernan J stated that the Act creates rights over such moneys in the

hands of the employer as well as in personam rights. In doing so, the Act does more than just preserve the property in medio until the rights of the claimant are determined. The Act requires the contractor or employer to retain an amount payable to the contractor to meet a claim – this, in effect, ensures that such money is kept separate for the benefit of the sub-contractor.11 It should be noted that while the money is kept separate for the benefit of the sub-contractor as security, section 8’s priority and pro-rata payment system negatives the idea that “a workman, contractor or sub-contractor can reap advantage by prompt payment subsequent to attachment of the charge”. 12 It is not for the charge-holder to enforce, or to accept, payment, otherwise than under and in accordance with the provisions of the Act.13 It is important to note that this security ceases if the claimant does not commence proceedings within 28 days – a charge should not be issued without the client being prepared to commence proceedings soon thereafter to enforce their claim to the charge.

PREFERENTIAL PAYMENTS Finally, another added benefit of the statutory charge is that in the event of insolvency, due to the contractor being a secured creditor, any payment made in satisfaction of this charge cannot be classified as a preferential payment within the meaning of section 588FA of the Corporations Act 2001 (Cth).

This benefit is of course only if the claimant has complied with the Act in respect of the charge: in Ewing v Hallett, the appellant did not issue proceedings under section 7(3) of the Act in order to enforce a charge. As a result, the payments which had been made to the appellant were found to be preferential payments under the (then) Companies Act.14 B

Endnotes 1 Worker’s Liens Act 1893 (SA) s 16. 2 See, for example, In Re RGP Constructions Pty Ltd (In Liquidation); Ewing v Hallett Brick Industries Ltd [1982] 31 SASR 170, 174; Cladding and Roofing Contractors Pty Ltd v Canetti Constructions Pty Ltd [2013] SASC 102. 3 In Re RGP Constructions Pty Ltd (In Liquidation); Ewing v Hallett Brick Industries Ltd [1982] 31 SASR 170, 174. 4 Ibid 175. See also Metropolitan Brick Co v Hayward [1938] SASR 462 (Cleland J). 5 Priority of payments being the liens/charges of workers for wages, the liens/charge of subcontractors and then the liens contractors. 6 Worker’s Liens Act 1893 (SA) s 7(2) (emphasis added). 7 Ibid s 7(3). 8 Ibid. 9 Stapleton v F. T. S. O’Donnell, Griffin and Co. (Q) Pty Ltd (1961) 108 CLR 106. 10 Ibid. 11 Ibid 118-119. 12 Metropolitan Brick Company v Hayward [1938] SASR 462, 476. 13 Ibid. 14 In Re RGP Constructions Pty Ltd (In Liquidation); Ewing v Hallett Brick Industries Ltd [1982] 31 SASR 170, 176.

September 2019 THE BULLETIN

BUILDING & PROPERTY LAW

Industry Turmoil causing concern: is there a need for reform to protect owners and sub-contractors? NICHOLAS GRAHAM, PARTNER, COMMERCIAL & LEGAL

he building and construction industry has recently been thrust into the spotlight with the defects of Mascot and Opal Tower garnering attention on a national level, while closer to home the ever increasing number of failed builders continue to dominate headlines. The consequences of these issues can affect not only the builders in question, but may also leave owners or developers with incomplete or defective homes or apartments and sub-contractors ailing and unable to recover their own costs and expenses. It ought to be considered whether current legislative protections for home and apartment owners are sufficient to safeguard against defective or incomplete building works. Yet any legislative reform must be balanced against the genuine commercial interests of builders in an already challenging industry.

PROTECTIONS FOR OWNERS The main source of protection in the statutory framework in South Australia for home owners is the statutory warranties in the Building Work Contractors Act 1995 (SA) (the Act). These warranties imply into all domestic work contracts that: • The building work will be performed in a proper manner to accepted trade standards and in accordance with the plans and specifications agreed to by the parties; • All materials to be supplied by the contractor for use in the building work will be good and proper; • The building work will be performed in accordance with all statutory requirements; • The work will be performed with ‘reasonable diligence’ unless the contract stipulates a period within

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which the building work must be completed; • The house will be reasonably fit for human habitation where the work consists of the construction of a house; and • If a particular purpose for the dwelling is made known to the builder, that the work and materials will be reasonably fit for that purpose or could be reasonably expected to achieve that purpose. Where statutory warranties are breached, orders can be made ranging from the builder performing work to remedy the breach, the payment of compensation or even the engagement of another builder at the builder’s cost to remedy the breach where it is found that the builder is unlikely or unable to perform the remedial work to a necessary quality. Proceedings must be commenced within five years after completion of the building work with no possibility of an extension.1 There are, however, other avenues that can be pursued by an owner if outside of the statutory warranty period and common questions asked relate to whether the building work was ever complete, or if it was, when it was actually completed. If there is defective building work that does not comply with the Building Code, then a claim may be considered under the Development Act 1993 (SA) after the expiry of warranty period in the Act or by the exercise of rights under the Australian Consumer Law. Where the builder dies, disappears or becomes insolvent, the statutory warranties and any contractual relief generally may not be available. Given the present concern with builders falling over, it is evident why the statutory warranties may not offer sufficient protection to

owners when it is needed most, leaving affected owners to seek relief through the builder’s building indemnity insurance policy. But if a builder did not obtain that policy in compliance with the Act, an owner is exposed to the cost of the repairs. Owners of apartments have recourse under the statutory warranties for certain work, however it is for the body corporate to initiate action to address any defects in the common property.

BUILDING INDEMNITY INSURANCE Under section 34 of the Act, a building work contractor must not perform domestic building work unless covered by a valid insurance policy and a certificate evidencing the taking out of that insurance policy is shown to the owner in a form that complies with the Building Work Contractors Regulations 2011 (SA) (the Regulations). Building work is broadly defined and encompasses anything from excavation to demolition and, of course, construction and renovations. A valid insurance policy protects the current and future building owner for the statutory warranty period if: • Faulty work has not been rectified or work has not been completed; and • The builder disappears, dies or is insolvent. The insurance policy must insure any person who is or may become entitled to the benefit of a statutory warranty under the Act against the risk of being unable to enforce or recover under that statutory warranty due to the insolvency, death or disappearance of the builder. However, not all owners are protected by the requirement for the builder to obtain an insurance policy. For example, minor domestic building works as defined in the

BUILDING & PROPERTY LAW

Regulations as work costing under $12,000 and domestic building works which do not require approval under the Development Act 1993 (SA) are expressly excluded from this requirement. This leaves an obvious category of home owners unprotected. Regulation 18 specifies that the lowest amount that the insurance policy is to cover is $80,000 which meant that insurers or the underwriting State Government do not cover affected homeowners for losses exceeding this amount. In mid-2017, the South Australian Government announced that QBE Insurance would become the sole provider of building indemnity insurance in South Australia and that the insurance indemnity limit would rise to $150,000, presumably as the result of an agreement between QBE and the State Government.2 Although this increase was much needed, it nevertheless remains the case that this cover may not be sufficient to meet financial losses given that industry data indicates that the average cost of building a new home was $317,389 in 2018.3 Furthermore, builders are only required to obtain an insurance policy prior to the commencement of work, yet are legally entitled to a deposit of $1,000 for work costing under $20,000 and up to 5% of the total build price for work exceeding $20,000 following the execution of a building contract. As illustrated by the recent collapse of Coast to Coast Homes, the delay between the payment of the deposit and the commencement of works leaves owners particularly vulnerable to losing their deposit from any insolvency event or disappearance of the builder before the insurance was in place.

REFORM TO THE PUBLIC REGISTER? It is often said that prevention is better than a cure and so due diligence remains the best strategy for home owners and sub-contractors to identify and avoid suspect builders with a history of defective or incomplete work.

Under the Act, all building work contractors must be licensed to undertake building work and must have that building work supervised by a registered and approved supervisor. A list of registered builders, their directors (if a corporate entity) and nominated building work supervisors, along with any building conditions, disciplinary action and suspensions against them are publicly searchable through Consumer and Business Services’ Occupational Public Register. Yet it would appear that the public has little knowledge of the existence of the Public Register which also catalogues various other registered license holders, such as security and investigation agents and second-hand motor vehicle dealers. Across other jurisdictions, Western Australia has taken significant steps to regulate builders with the establishment of a Building Services Board. A function of the Board is its responsibility to maintain a separate Register of Builders which must be available for inspection by members of the public at the Office of the Building Commissioner during normal business hours and online from a website maintained by the Building Commissioner.4 Although WA’s Register of Builders currently does not contain information that is not otherwise provided in South Australia’s Public Register it is interesting to note that under Division 6 of the WA legislation, building services providers are already obliged to provide written notice to the Board of any changes in address, eligibility, financial difficulty, disciplinary action or criminal offending. Naturally, the inclusion of these notices in the Register of Builders there would be a sensible amalgamation which could significantly increase an owner’s ability to properly assess the risks and liabilities associated with certain builders during the due diligence process. Perhaps changes to allow sub-contractors to better assess the financial capacity of the builder to make payments and complete works

prior to commencing any sub-contract work should be made. Similar proposals were outlined in an October 2018 report to the Minister of Commerce in WA, including the establishment of a “demerit point” system to be included on the Register of Builders specifying instances of builders who “demonstrate poor payment practices and contractual deficiencies”. The report went on to say that the State Administrative Tribunal should be empowered with the ability to suspend or cancel the registration of any builder who accrues three demerit points within three years. Although implementing WA’s existing and proposed regulatory frameworks may be a sensible basis for reform here in South Australia, it is crucial that any changes are balanced against the builder’s legitimate cash flow management policies and commercial interests and do not unreasonably increase the regulatory red-tape burden. Nevertheless, with the significant current public interest in the building industry, we will watch with interest as to whether the State Government turns to reform its regulation of the industry to better protect the interests of owners and subcontractors. Owners and subcontractors should proceed with caution but that wariness in the market is causing pressure on an already under fire industry. Well considered and measured policies could greatly increase transparency in the building and construction industry providing a much needed increase in public confidence during these challenging times, potentially leading to better outcomes for industry participants. B Endnotes 1 Building Work Contractors Act 1995 (SA) s 32(5)-(6) 2 QBE Insurance (Australia) Limited, Domestic Construction Residential Builders SA - Building Indemnity Insurance Policy (29 November 2016, effective 1 July 2017) 3 ‘Window into Housing 2019’ document published by the Housing Industry Association 4 Building Services (Registration) Act 2011 (WA) s 30.

September 2019 THE BULLETIN

CRIMINAL LAW

Prasad Direction abolished by the High Court of Australia KRISTIE MOLLOY, BARRISTER, LEGOE CHAMBERS & LAW LECTURER, FLINDERS UNIVERSITY AND DAVID STILES, ACADEMIC, FLINDERS UNIVERSITY INTRODUCTION

n 20 March, 2019 the Full Bench of the High Court of Australia in a joint judgment unanimously held:1 “The direction commonly referred to as the ‘Prasad direction’ is contrary to law and should not be administered to a jury determining a criminal trial between the Crown and an accused person.”

A Prasad direction is “directing a jury in a criminal trial that it is open at any time after the close of the prosecution case to acquit the accused if the jury considers the evidence is insufficient to support a conviction.” 2 Defence counsel makes an application to the judge (in the absence of the jury) at the end of the prosecution case that, whilst the prosecution has technically satisfied the evidential burden, the evidence is so weak, tenuous, vague or inconsistent that (even taken at its highest) a trier of fact or jury could not properly convict upon it. If the Court grants the application, the trial judge will give a Prasad direction to the jury. This usually results in the jury handing down an acquittal shortly thereafter. The High Court makes it clear that a “no case to answer” application is still valid and available in all matters. Defence can make this application at the close of the prosecution case. If the trial judge agrees that there is no evidence to prove an element of the offence then the trial judge will direct the jury to return a “Not Guilty” verdict.

THE JUDGMENT Background The defendant was charged with the murder of her de-facto partner. At

20 THE BULLETIN September 2019

the close of the prosecution case in the Supreme Court of Victoria, defence counsel sought the Prasad application on the grounds that the prosecutor was unable to negate the defendant was acting in self-defence. The Court agreed over the prosecutor’s objection and issued the Prasad direction. The jury advised they wished to hear more evidence. At the close of the defence case (but prior to addresses) the trial judge again reminded the jury of the continuing operation of the Prasad direction. At this time, the jury returned with “Not Guilty” verdicts of both murder and manslaughter. The Director of Public Prosecutions (Vic) appealed on the question of law as to whether the Prasad direction was contrary to law and should not be administered. The Director acknowledged Chief Justice King’s obiter dictum comments in R v Prasad that “[i]t is within the discretion of the judge to inform the jury of this right”, challenging only the discretion rather than the existence of the right itself.3 The majority of the Court of Appeal held that it was not contrary to law, rhetorically asking “why would it be unlawful for a judge to inform the jury of a right which it was conceded they could legitimately exercise?”4 Issue in the Appeal Special leave to appeal to the High Court was granted to the Director of Public Prosecutions on the grounds that the Prasad direction was contrary to law. The Director also successfully withdrew her concession as to the existence of the right. The High Court accepted that the practice of giving such a direction when a trial judge considered the evidence was tenuous had existed “since at least the middle of the last century”.5 However, the

Court also held that the “recognition of the practice does not carry with it the acceptance that the jury in a criminal trial possess a “long-standing right under common law” to return a verdict of not guilty of their own motion at any time following the close of the prosecution case.”6 After considering the authorities, the Court held that “the origin of the right, as distinct from the development of the practice, is obscure”.7 It considered the recognition of the practice by the Courts in Australia and England demonstrated that the right was only exercisable at the invitation of the trial judge and the jury had no right to return a “not guilty” verdict of their own motion after the close of the prosecution case. As such, the Court stated the Prasad direction was an invitation only rather than a long standing common law right possessed by the jury.8 The High Court cited the dangers of giving a jury a Prasad direction, including risks the jury will react adversely to the perceived pressure to acquit or influenced by the perception that the trial judge considers the verdict should be an acquittal.9 Rationale for the Decision The High Court held that:1. “The exercise of the discretion to give a Prasad direction based upon the trial judge’s estimate of the cogency of the evidence to support conviction is inconsistent with the division of functions between judge and jury and, when given over objection, with the essential features of an adversarial trial.”10 2. “The prosecution is entitled to have a full opportunity to explain the way its case is put, and to have a verdict from the jury that is based on the application of the law as explained by the judge to their factual determinations.”11

CRIMINAL LAW

3. Inviting a jury to stop a trial without hearing final addresses “and without the understanding of the law and its application to the facts that only the judge’s summing-up at the end of the trial can give them, is to invite the jury to decide the matter from a basis of ignorance which may be profound. If evidence taken at its highest is capable of sustaining a conviction, it is for the jury as the constitutional tribunal of fact to decide whether the evidence establishes guilt beyond reasonable doubt. A jury is not fully equipped to make that decision until and unless they have heard all of the evidence, counsel’s addresses and the judge’s

summing-up. Anything less falls short of the trial according to law to which both the accused and the Crown are entitled.”12

CONCLUSION Defence counsel can still make a “no case to answer” application if prosecution fail to provide any evidence for all the required elements. However, defence will no longer be able to make a Prasad application at the end of the prosecution case if the evidence raised is tenuous, weak or vague. The High Court has made it clear that if there is any evidence “capable of supporting a verdict of guilty, the matter must be left to the jury.”13

Juries must not be invited to return a “Not Guilty” verdict without hearing the entirety of the case. B Endnotes 1 Director of Public Prosecutions Reference No 1 of 2017 [2019] HCA 9 (20 March 2019) at [58]. 2 Ibid, at [1]. 3 (1979) 23 SASR 161 at 163. 4 Director of Public Prosecutions Reference No 1 of 2017 [2019] HCA 9 (20 March 2019) at [15]. 5 Ibid, at [16]. 6 Ibid, at [17]. 7 Ibid, at [18]. 8 Ibid, at [32]. 9 Ibid, at [52]. 10 Ibid, at [56]. 11 Ibid, at [53]. 12 Ibid, at [57]. 13 Ibid, at [56].

YOUNG LAWYERS

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Young Lawyers Survey sheds light on wellbeing & salary trends YOUNG LAWYERS COMMITTEE

22 THE BULLETIN September 2019

A key aim of the survey was to provide young lawyers, and the profession, with an insight into average salaries based on practice areas, gender, and years of experience. The survey broke salaries down into bands of pay (in $10,000 increments). While salaries were generally between $50,000 and $80,000 per year, some practitioners reported working full time and receiving salaries between $30,000 and $40,000. Some of these practitioners reported having not received a salary increase since commencing practice, and in some cases had been in practice for more than three years. Fortunately, these results comprised a minority of responses. Most employees

received salaries in line with the average across the sector. Some differences were seen in remuneration between types of firms and areas of practice. The greatest gender equality in pay was seen in the public sector. While starting salaries at Criminal and Family law firms were comparable to commercial firms, as practitioners increased in experience in criminal and family law their salaries became less competitive with those received by practitioners with comparable experience in areas including commercial, in-house, and public sector. The following tables indicate the peak pay bracket that average salaries fell within (and so the average salary may be up to $10,000 beneath that shown). Where no result is shown insufficient responses were received to provide useful data. Salary satisfaction was mixed amongst Young Lawyers, as shown below.

WOMEN

FAMILY

CRIMINAL

PUBLIC SECTOR

MEN

IN-HOUSE

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0

REGIONAL

GRADUATE SALARIES

SUBURBAN

The survey attracted valid responses from 402 members. Of the responses, 64% came from female practitioners and 34% were from male practitioners. Approximately 37% of responders had been admitted between 1 and 3 years, and approximately 37% of responders had been admitted between 4 and 10 years. A majority, 85%, were admitted practitioners, while the remainder were either not admitted, students or employed as law clerks. Twenty-nine per cent of responders were employed at law firms with 20-plus practitioners, and 26% of responders were employed at law firms with 2-5 practitioners. Approximately 15% were government employed, while the remainder were either in house counsel or sole practitioners. Seventy-four per cent of responders were based in the

REMUNERATION

BOUTIQUE

COMPOSITION OF RESPONSES

Adelaide CBD, while 17% were based in metropolitan Adelaide and 8% were based in regional SA.

MEDIUM FIRM

n March 2018 the Young Lawyers’ Committee invited members of the legal profession under the age of 35, or within the first five years of practice, or a student of a South Australian University Law School, to participate in the inaugural Wellbeing and Salary Survey. The survey was designed to provide young lawyers with a greater understanding of their position in the profession, and to highlight issues associated with health and wellbeing. In particular, the survey was conducted to gain a greater insight into: • Remuneration and salary; • Workplace arrangements; • Job seeking behaviours; • Rates of workplace bullying; • Stress levels.

LARGE FIRM

Building Consultants Project Managers

F ISHE R BRENNAN CON SULTING

LITIGATION AND PRE-LITIGATION ADVICE AND EXPERT REPORTS EXPERT WITNESS SERVICES - CONSTRUCTION Magistrates Court District Court Supreme Court

FISHER BRENNAN CONSULTING PO Box 690 Unley SA 5052 Guy Fisher

COMMERCIAL AND RESIDENTIAL PROPERTY DISPUTES

guy@fisherbrennan.com.au

ALTERNATIVE DISPUTE RESOLUTION:

0427 303 811

Facilitated Negotiation Mediation Expert Determination

Fisherbrennan.com.au

PROPERTY CONDITION REPORTS: Practical Completion End of Lease – Defects And Making Good Dilapidation Surveys

Guy Fisher, Principal, Fisher Brennan Consulting With over 30 years’ experience in the construction industry, Guy has procured and delivered multiple commercial and industrial facilities up to $100m both as a consultant and an award winning contractor. His professional background includes extensive tier one experience in the Defence, Laboratory and Education sectors. Having worked on both sides of residential and commercial construction, he brings a unique insight into both the risk and opportunity inherent in construction projects. Additionally, Guy has direct experience in facilities management, delivering services both in-house and as a consultant. Guy has a thorough understanding of the process of property development and whole of life considerations in facility ownership.

Qualifications

Significant Projects

•

Bachelor of Construction Management

•

Air7000 2B (SA)

•

Member of the Australian Institute of Building (MAIB)

•

Flinders University at Tonsley (SA)

•

Aquatic Centre Rectification (SA)

•

Master Builders Association - Certified Construction Professional (CCP)

•

Hardened and Networked Army (SA)

•

Member of The Society of Construction Law Australia

•

QUT Medical Engineering Research Facility (QLD)

•

QUT Z Block Expansion (QLD)

•

Member of the Association of Building Consultants

•

Brisbane Immigration Transit Accommodation Centre (QLD)

•

Associate Member - Resolution Institute

YOUNG LAWYERS

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PERFORMANCE REVIEW

FAMILY

CRIMINAL

IN-HOUSE

WOMEN

PUBLIC SECTOR

MEN

REGIONAL

SUBURBAN

BOUTIQUE

LARGE FIRM

120,000 100,000 80,000 60,000 40,000 20,000 0

MEDIUM FIRM

1-3 PQE

4-10 YEARS PQE 120,000 100,000 80,000 60,000 40,000 20,000 0

The survey asked responders whether they had an annual performance appraisal process. Two out of three young lawyers who responded have had a performance review (66%). Those working in larger firms were most likely to have a performance appraisal process, with a 95% yes response rate. Those working within the public sector were also highly likely to have an annual performance appraisal process, with an 85% yes response rate. Less than half of young lawyers working in small law firms had a performance appraisal. Full time workers (74%) were more likely than part time workers (49%) to have a performance appraisal. Young lawyers that have an annual salary review process, were more likely to have received a salary increase within the last 12 months (78%).

FAMILY

CRIMINAL

IN-HOUSE

WOMEN

PUBLIC SECTOR

MEN

REGIONAL

SUBURBAN

BOUTIQUE

MEDIUM FIRM

LARGE FIRM

SALARY REVIEW PROCESS

41%

24%

22%

SATISFIED

EXTREMELY SATISFIED

12%

Young lawyers were asked whether their firm had a salary review process, of which 42% indicated that they did. Interestingly, responders with a higher salary were more likely to take part in an annual salary review, which suggests that young lawyers who are employed at firms with a formal salary review process in place are more likely to receive salary increases. 62% of young lawyers had received a salary increase in the last 12 months and 12% say that they have never received a salary increase. Of those that did have a salary review process, 50% were dissatisfied with the review process, and 30% were satisfied with the process.

OVERTIME DISSATISFIED

NETURAL

Q: HOW SATISFIED ARE YOU WITH YOUR REMUNERATION? BASE: RESPONDENTS WHO PROVIDED A VALID RESPONSE, N/A INCLUDED BUT NOT SHOWN (N=397)

24 THE BULLETIN September 2019

Of those that participated in the survey, 13% were expected to undertake substantial out of hours or weekend work. Twenty-five per cent saw this as a

YOUNG LAWYERS

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regular occurrence and 38% stated that they were occasionally required to perform such work. Twenty-three percent of respondents did not undertake such work. By comparison, 7.95% of respondents in the Western Australian survey always undertook three or more hours of work over a weekend, whilst 28.41% never did.

50%

20%

17% 13%

PARENTAL LEAVE Whilst 40% of respondents understood that their employer offered parental leave in line with government minimum standards, one in five employers offered parental leave above the minimum government requirements. Thirty-six per cent of respondents were unsure about the parental leave offered at their place of employment.

DISSATISFIED

SATISFIED

EXTREMELY SATISFIED

Q: HOW SATISFIED ARE YOU WITH THE SALARY REVIEW PROCESS? BASE: RESPONDENTS WHO PROVIDED A VALID RESPONSE (N=391. UNSURE AND N/A INCLUDED BUT NOT SHOWN)

32%

FLEXIBLE LEAVE Of the one in four respondents that have sought flexible arrangements, 80% believe that their request was appropriately addressed. Almost three quarters of respondents have never sought flexible working arrangements.

NETURAL

28%

27%

9% 4%

STRESS & BULLYING Only four percent of respondents were not stressed at all, whilst 32% were reasonably stressed and nine per cent were very stressed. The results demonstrated that sole practitioners had the highest levels of stress. Factors contributing to higher stress levels were workplace bullying and working in a regional area. Ten per cent of respondents who conduct weekend work consider themselves stressed. Whilst just over half of respondents have personally experienced bullying, almost two thirds have observed bullying, either in their current, or previous workplace. Six out of ten female practitioners experienced bullying, as

NOT STRESSED AT ALL

SLIGHTLY STRESSED

REASONABLY STRESSED

QUITE STRESSED

VERY STRESSED

Q: ON AN AVERAGE DAY, HOW STRESSED DOES YOUR JOB/STUDY MAKE YOU FEEL? BASE: RESPONDENTS WHO PROVIDED A VALID RESPONSE, N/A INCLUDED BUT NOT SHOWN (N=399) have four out of ten males. Fourteen per cent of those that were bullied, or observed bullying stated that it was a daily occurrence. Almost half of those bullied stated that it occurred rarely, whilst one third of those that observe bullying stated that it was a rare occurrence. Those on lower incomes tended to experience more bullying, whilst those working in firms of over 20 employees were less likely to experience bullying. Fifty-nine per cent

of respondents experiencing bullying in their current workplace are either quite, or very stressed as compared to 27% not experiencing bullying. The Young Lawyersâ&#x20AC;&#x2122; Committee will be releasing a more detailed report with respect to the findings of the Survey, which will include a number of recommendations to the Law Society with respect to supporting young lawyers in South Australia. September 2019 THE BULLETIN

PROPERTY LAW

EXAMINING THE PROPOSED LAND TAX AGGREGATION LAWS FOR SA ELIAS FARAH, PRINCIPAL PARTNER, COMMERCIAL & LEGAL

he South Australian State Government announced on 18 June 2019 that measures would be taken to help close and prevent “loopholes” that exist which enable owners of multiple properties to pay less land tax. Put simply, the intention of the State Government is to aggregate (i.e. group) land held by common owners and beneficiaries regardless of who actually owns the land (i.e. the legal entity). This article is intended to assist readers to better understand the proposed measures, will consider what the pending draft legislation may look like, and how such a change may affect the South Australian real estate market.

WHY THE HYPE? For the past two months, there has been much discussion, speculation and, in some cases, resentment in our local real estate market in relation to the State Government’s proposal. At the present point, land tax is assessed for the most part based on the concept that each legal entity is assessed separately from other land that may be owned by the same or related entities or persons. So for example, that means land wholly owned in your name is assessed separately to land owned in the joint names of you and your partner (or another person), and again is assessed separately to land owned in a company that you may control or be a shareholder in, and again is assessed separately to a family trust or unit trust that you may hold a beneficial or fixed interest in. The reason why separate assessment is important, as opposed to grouped assessments (better known as “multiple holdings”), is because the rate of land tax

26 THE BULLETIN September 2019

applied varies and increases substantially the higher the value of total land holdings you have in an assessment. This is illustrated later within the article. It should be noted that utilising these separate assessments, disregarding antiavoidance laws for the time being, is not illegal and is in fact clearly outlined by RevenueSA on their website. Naturally this creates incentive for landowners to utilise different entities (and mixes of entities) when deciding to buy new properties, and this has developed as a common practice for some time now, to reduce one’s land tax assessments and increase net cashflows from property ownership. This is essentially the “loophole” that the State Government now wish to close, and concern of stakeholders revolves around a real estate market which fears it will be stung by an uncommercial rise in land tax costs.

WHY THE CHANGE? The State Government says that it wants to facilitate competitiveness within the tax system, ensuring equity amongst taxpayers, intending to supplement, correct, and control the law by being fair and impartial. They consider that closing these “loopholes” in land tax does just that. Importantly, the State Government’s land tax reform proposal is part of a wider State Budget proposal responding to an estimated loss of $2.1 billion in GST revenues. They estimate that the aggregation measures will raise approximately $120 million over the first three years, with some $40 million of additional revenue expected to go directly into the State Government coffers in the first year. In considering these figures, it

has been widely speculated that the State Government has significantly underestimated the additional land tax revenue, some saying it could actually be in excess of $100 million per year.

FURTHER DETAIL ON THE PROPOSAL The proposed changes are detailed in the 2019-20 South Australian Budget that was recently released on 18 June 2019. The State Budget papers are available at https://statebudget.sa.gov. au/#Budget_Papers For those who wish to obtain greater insight and detail on the proposed measures, we direct you to pages 8-9 of the Budget Speech, pages 42-43 and page 168 of the Budget Statement, and pages 4-6 of the Budget Measures Statement.

WHAT ARE THE PROPOSED CHANGES? Outside of the State Budget papers, there has not been a great deal of information provided regarding how exactly the aggregation and surcharge measures will be implemented. At the time of writing this article, the draft legislation had not yet been distributed for comment by industry stakeholders. On the current available information, the changes are likely to cover the following: • Legal changes that allow various related entities to be grouped together for land tax purposes; • Properties will be aggregated based on a land owner’s interest in every piece of land they hold rather than only aggregating properties held in the same ownership structure; • RevenueSA will receive further authority and standards to determine the “true owner” of every parcel of land regardless of whether they are

PROPERTY LAW

acting together or have a controlling interest; and • An additional surcharge rate will be charged on land owned in trusts where the trust beneficiaries are not disclosed or identified. Aggregation standards will identify the “true” multiple holdings for each individual owner, be it land held in sole

name, joint names, in companies or in fixed interest trusts. In those cases where individual owners cannot be effectively identified, such as a discretionary family trust, it is proposed that they would have to pay a “surcharge”, being an additional rate of land tax, effectively dissuading anyone from trying to avoid grouping.

These reforms will effectively group properties to the extent a common ownership can be identified, and will diminish incentives to own properties in other entities (such as trusts) if there is no other substantive benefit other than the minimisation of land tax. Although the draft legislation remains a work-in-progress, the proposed measures

COMPANIES

VICTORIA

NEW SOUTH WALES

SOUTH AUSTRALIA

HOW WILL RELATED COMPANIES BE GROUPED?

•

It is likely that RevenueSA will be given similar discretion as both VIC and NSW have, but with guiding standards similar toVIC.

•

The Commissioner of State Revenue, at its own discretion, may treat two or more related corporations as a single corporation and group corporations.

ÆÆ All companies separately; ÆÆ Companies jointly; and

Each claim is on a case-by-case basis and will apply the following factors:

ÆÆ Any 2 or more companies jointly and the remainder separately.

ÆÆ Intention to avoid land tax; ÆÆ Degree of relatedness within the company;

The Chief Commissioner may assess:

•

There is no guiding criteria or factors for the Chief Commissioner to consider.

•

As per Victoria.

•

Likely to be same as VIC and NSW.

•

As per Victoria.

•

Likely that a similar broad authority will be provided to RevenueSA.

ÆÆ The degree of control by the Directors of the day-to-day operations of each related corporation; ÆÆ Use of the land; and ÆÆ Other relevant factors that will support the determination to group in any given case.

HOW ARE ‘RELATED COMPANIES’ IDENTIFIED?

•

Controls the composition of the Board of Directors.

•

Holds or controls 50% or more of issued share capital.

DOES A ‘CONTROLLING INTEREST’ EXIST IF A PERSON OR TWO OR MORE PERSONS ‘ACTING TOGETHER’ CAN CONTROL THE COMPOSITION OF A BOARD OF DIRECTORS OF THE COMPANY?

•

Does not limit the circumstances in which the composition of a company’s board is taken to be controlled by a person or persons.

UNIT TRUSTS

VICTORIA

NEW SOUTH WALES

SOUTH AUSTRALIA

HOW WILL TRUSTEES OF UNIT TRUSTS BE SUBJECT TO LAND TAX?

•

Trustees of unit trusts are subject to higher rates of land tax. This is distinguished as surcharge rates.

•

As per Victoria.

•

Likely to be same as VIC and NSW.

•

However, a trustee will be assessed at general rates if the Commissioner is notified of the unit holders.

WHAT OCCURS WHEN A COMMISSIONER HAS BEEN NOTIFIED OF THE UNIT HOLDERS?

•

The unit holders will be assessed on their interests in the land, which is held in the unit trust.

•

As per Victoria.

•

Likely to be same as VIC and NSW.

•

The unit holder’s interests are aggregated with all other interests on other taxable land they hold.

•

The trustee of the unit trust remains assessed for land tax.

IS THE UNIT HOLDER ENTITLED TO A REDUCTION?

•

To avoid double taxation, the unit holder may qualify for a reduction of their land tax liability to the extent land tax is paid by the trustee of the relevant unit trust.

•

As per Victoria.

•

However, if the unit holder’s land tax assessment is greater than the portion paid by the trustee (i.e. due to the individual’s multiple holdings being in a higher band of land tax), the unit holder will remain liable to pay the balance.

September 2019 THE BULLETIN

PROPERTY LAW

DISCRETIONARY TRUSTS

VICTORIA

NEW SOUTH WALES

SOUTH AUSTRALIA

HOW IS THE TRUSTEE OF A DISCRETIONARY TRUST ASSESSED?

•

Trustees of discretionary trusts are subject to higher rates of land tax, being the surcharge rate.

•

As per Victoria.

•

Likely to be same as VIC and NSW.

CAN THE HIGHER SURCHARGE RATE BE REDUCED TO A GENERAL RATE IF A NOMINATED BENEFICIARY IS IDENTIFIED FOR THE TRUST?

•

At the time of introducing the land tax reforms (1 July 2005), trustees of discretionary trusts were afforded a period of 6 months to nominate a specified beneficiary for land held by the trust.

•

There is no scope to nominate a beneficiary as recipient of the land tax assessment for discretionary trusts in NSW.

•

Where so nominated, the trustee is assessed at general rates only.

•

That nominated beneficiary is deemed to be the owner of the land, and that trust land is added to the beneficiary’s other land holdings for a grouped assessment.

All discretionary trusts in NSW will be assessed at the surcharge rates.

It is unknown but likely that S.A legislation will afford discretionary trusts a similar period to VIC to nominate a beneficiary and avoid surcharge rates.

IS THE NOMINATED BENEFICIARY ENTITLED TO A REDUCTION?

•

To avoid double taxation, the nominated beneficiary may qualify for a reduction of their land tax liability to the extent land tax is paid by the trustee of the trust.

•

N/A.

•

S.A likely to match that of VIC.

•

However, if the beneficiary’s land tax assessment is greater than the portion paid by the trustee, the beneficiary will remain liable to pay the balance.

WHAT ABOUT FUTURE LAND ACQUIRED BY A TRUST (NEW OR EXISTING)?

•

Any land acquired by a trust after the 6-month period (1 January 2006) cannot nominate a beneficiary and will be subject to surcharge duty.

•

Surcharge rates apply.

•

S.A likely to match that of VIC.

•

This includes land acquired after 1 January 2006 by a trust which has a nominated beneficiary prior to 1 January 2006.

•

Commissioner may permit a beneficiary nominated after 1 January 2006 if such nomination replaces a prior beneficiary who has either died or otherwise revoked their nomination. The Commissioner has discretion to determine if a subsequent nomination is just and reasonable.

LAND TAX RATES

VICTORIA

NEW SOUTH WALES

SOUTH AUSTRALIA

WHAT IS THE TOP MARGINAL LAND TAX RATE?

•

3.7% (at present), being for land holdings above $5,000,000.

•

Note: It is proposed that top marginal rate may reduce by 0.1% annually from FY2021 onwards until it reaches 2.9% from 1 July 2027.

WHAT IS THE SURCHARGE RATE PAYABLE FOR CERTAIN TRUSTS?

•

Trusts pay the general rate applicable for their land holding, PLUS a surcharge rate.

•

The surcharge rate is a higher fixed charge plus an additional 0.375% up to $1.8m.

•

The surcharge begins to phase out from $1.8m, and from $3m it is the same as the general rate (which is a fixed charge plus 2.15%).

It is difficult to predict whether they will propose a flat surcharge rate (as per NSW) or an additional surcharge rate above the general rate (as per VIC).

COMPARISON OF ANNUAL LAND TAX PAYABLE, BASED ON A COMBINED LAND HOLDING OF SAY $5,000,000.

•

$69,975 (noting at this level land tax is same regardless if trust or otherwise).

2.25% plus a fixed charge of $24,975, being for land holdings above $3,000,000.

28 THE BULLETIN September 2019

2%, being for land holdings above $3,846,000.

•

It is simply a 1.6% flat rate up to the premium land tax threshold of $3,846,000.

•

2% for land value thereafter.

•

$72,104 (assuming no surcharge).

•

$84,616 (assuming surcharge for trusts).

$150,070 (based on current rates and excluding surcharge rates).

•

Note: land tax rates for holdings valued $1.3m to $5m will reduce from 3.7% to 2.9% from 1 July 2020. Estimate of land tax payable will drop to $120,544 (again excluding surcharge rates).

PROPERTY LAW

are likely to be like those reforms previously introduced in New South Wales and Victoria (Victoria being the first State to introduce land tax aggregation laws).

ANALYSIS OF THE PROPOSED FRAMEWORK Below is a comparison between the relevant aggregation land tax laws of New South Wales and Victoria, and the writer’s impression on what may be introduced in South Australia.

IMPACT OF THE FRAMEWORK AND CONSIDERATIONS As illustrated above, assuming the State Government does not introduce additional surcharge land tax for land values of say $5 million, the land tax payable by a South Australian landowner from 1 July 2020 will be some $35,928 and $50,569 higher than the equivalent landowner in Victoria or NSW respectively. These calculations already factor in the approved reduction that commences from 1 July 2020, whereas now the difference is much higher, being some $65,454 to $80,454. The existing framework and significantly higher land tax payable by

South Australian landowners explains why many have strived to separate their landholdings as separate assessments where possible. With a national average top marginal land tax rate of 1.92% across all States and Territories (excluding NT which has none), our current top rate of 3.7% provides a significant issue for the State Government and landowners to overcome. Needless to say, the proposed reduction to 2.9% by 2027 is not likely to be enough. Of further importance is the State’s current “Revaluation Initiative” whereby the Valuer-General has been provided with funding and mandate to comprehensively review the market value of all land in SA for rating purposes. The first cycle of this revaluation commenced in FY2020 across three Council areas (Walkerville, Unley and Adelaide Plains) and will continue to expand into other Council areas over the coming 1-2 years. This revaluation towards market rates presents its own issue for landowners, as it will doubtless lead to higher valuations and rate assessments as well as disputes around true market values. The proposed land tax aggregation laws overlapping with

this revaluation initiative presents further challenges and costs for landowners to grasp.

PASSING THE LEGISLATION To effect the proposed changes, the State Government will make amendments to the Land Tax Act 1936 (Act), which if passed, will come into effect on 1 July 2020. There is no draft legislation in circulation yet. It has been said that the draft legislation is likely to be circulated at some point in September 2019, and that it will be provided to key industry stakeholders for comment. There is no indication of how long this consultation period may be or when the Bill is expected to be introduced to Parliament. The measures are not universally popular even within the State Government MPs. The Parliamentary Opposition has not taken an official position to support or oppose the proposed land tax aggregation measures.

CONCLUDING COMMENTS For the time being, it is clear that the proposed land tax aggregation measures present significant concern to the South Australian real estate industry. B

MEMBERS ON THE MOVE TIFFANY IRVING

rope Hamilton Lawyers have appointed Tiffany Irving as a solicitor practising principally in commercial litigation. Grope Hamilton Lawyers’ managing partner, Mark Hamilton, said: “Tiffany will be assisting the firm’s partners, but will play a special role assisting the firm’s property and construction disputes partner, Rino

Marrone, with his practice.” Grope Hamilton has also appointed law graduate, Jim Coffey, as a paralegal assisting partner, Tony Kerin, with his civil litigation practice. Jim is shortly to be admitted as a solicitor in South Australia. Sam Ure has recently taken a room in Hanson Chambers for six months

JAMES COFFEY

whilst Anna Wells is on maternity leave. Sam is a barrister of 10 years call at the Victorian Bar and returned to South Australia in early 2019. Sam practises in commercial litigation, tax and administrative law. Sam can be contacted at Hanson Chambers on 8212 6022 or by email on ure@hansonchambers.com.au September 2019 THE BULLETIN

BUILDING & PROPERTY LAW

THE NON-JURISDICTIONAL ERROR OF LAW ON THE FACE OF THE RECORD AND THE CASES BEFORE THE HIGH COURT OF AUSTRALIA DR AUKE STEENSMA, BARRISTER AND SOLICITOR, STEENSMA LAWYERS

n January, 2017, Robert Fenwick Elliott, and the author of the seminal work, 10 Days in Utopia,3 stated that the state Supreme Courts did not have jurisdiction to review the determinations of adjudicators under security of payment (SOP) legislation4, relating to non-jurisdictional error of law on the face of the record. The statement has created considerable controversy for counsel and legal practitioners. The Lexus Nexus Concise Australian Legal Dictionary, defines “error of law on the face of the record” as; “a ground of judicial review available where a nonjurisdictional error appears on the face of the record of an inferior court.”5 As Fenwick Elliot noted, two cases considered by the High Court of Australia (HCA) to determine if the security of payment (SOP) legislation would bar judicial review on the grounds of an error of law on the face of the record. On 14 February, 2018, Kiefel CJ, Bell, Gageler, Keane, Nettle, Gordon and Edelman JJ of the HCA, dismissed two appeals that came from the enjoined cases from NSW; Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor,6 and the

30 THE BULLETIN September 2019

other; Maxcon Constructions Pty Ltd v Vadasz (No 2),7 from South Australia. Probuild concerned a payment claim submitted by Shade. After rejection by Probuild the claim progressed to adjudication. The adjudicator determined in favour of Shade. Probuild later alleged a denial of procedural fairness, and that an error of law in the determination was made by the adjudicator. At first instance primary Judge, Emmett J, held that “the Court’s supervisory jurisdiction permitted a review of nonjurisdictional errors of law on the face of the record”8 and the determination. Shade appealed. They argued “that there was no power to intervene in a case where the only errors identified were non-jurisdictional errors of law.”9 On 23 December, 2016, Bathurst CJ, Beazley P, Basten, Macfarlan & Leeming JJA, of the NSW Supreme Court Court of Appeal handed down their judgement. They held unanimously that “the Security of Payment Act did not permit a review of an adjudicator’s decision other than for jurisdictional error.”10 Probuild then sought leave to appeal in the HCA claiming:

The NSW Court of Appeal erred in holding that the NSW Supreme Court’s power to make orders in the nature of certiorari for error of law on the face of the record is ousted in relation to determinations under the Security of Payment Act.11 Two months later, the Full Court of the Supreme Court of South Australia, dismissed an appeal sought by Maxcon Constructions Pty Ltd v Vadasz (No 2) (2017) 127 SASR 193. The case related to a payment claim against Maxcon, determined in favour, of one Vadasz. The contract was for the “design and construct piling for an apartment building.”12 However, unbeknown to Maxcon, at the time of the contract agreement, Mr Vadasz was an undischarged bankrupt. The adjudicator concluded that the contract between Maxcon and Vadasz included retention provisions that the adjudicator determined were “pay when pay provisions”. The adjudicator found that the retention provisions were prohibited pursuant to s 12(1) and s 12(2) (c) of the Building and Construction Industry Security of Payment Act 2009 (SA).13 The adjudicator held the provisions as void,

BUILDING & PROPERTY LAW

There is no real immediate prospect of non-jurisdictional error of law sufficing as a ground for challenge under the West Coast model any more than the East Coast model. Construction Law Barrister Robert Fenwick Elliott 3 January 20171

Being an adjudicator under the Building and Construction Industry Security of Payment Act 2009 (SA) is like walking around with a target on your back. Construction Law Barrister Martin Frayne SC 9 February 20172

and therefore, Maxcon did not have an entitlement to the retention sum. Maxcon initiated proceedings in the Supreme Court of South Australia. Stanley J held “that there was no jurisdictional error (or other error of law) made by the adjudicator.”14 Maxcon then commenced

an Appeal before the Full Court of the South Australian Supreme Court. The Full Court quorum consisting of; Blue J, Lovell JJ and Hinton J, dismissed the appeal (with Hinton J dissenting). The Full Court held that there was no jurisdictional error. It held that there had

been an error, but that error was an error of law on the face of the record. They held that the authority for “proposition that the remedy of certiorari15 was impliedly excluded under the Act”.16 Maxcon then appealed. The appeal was made on the following ground: that the

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Full Court had made an error by applying the NSW case of Shade Systems Pty Ltd v Probuild Constructions (Aust) Pty Ltd (No.2). They concluded that the Building and Construction Industry Security of Payment Act 1999 (NSW) prevented judicial review on the ground of error of law on the face of the record. Vadasz “contended that the adjudicator had made no error of law”.17 The determination as to whether the Acts allowed the issue of judicial review on the ground of error of law on the face of the record, would move to the HCA. Both cases were granted special leave by the HCA. They were enjoined on 12 May, 2017. The hearing was held on 9 November, 2017, adjourned until Tuesday, 14 November, 2017. The HCA handed down the decision on 14 February, 2018. The HCA held in Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd18: The only question in this appeal is whether the scheme established by the Security of Payment Act for claims for, and payment of, progress payments ousts the jurisdiction of the Supreme Court of New South Wales to make an order in the nature of certiorari to quash a determination by an adjudicator for error of law on the face of the record that is not a jurisdictional error. The answer is yes: the Security of Payment Act does oust that jurisdiction.19 The HCA further added in Maxcon Constructions Pty Ltd v Vadasz20: However, it is important to add that, for the reasons explained in Probuild, the Supreme Court of South Australia may grant relief (whether in the nature of certiorari or otherwise) for jurisdictional error by an adjudicator appointed under the Security of Payment Act; but the provisions of the Security of Payment Act, like the provisions of the New South Wales Act, oust the Supreme Court’s jurisdiction to make an order in the nature of certiorari to quash an adjudicator’s determination for error of law on the face of the record that is not a jurisdictional error.21

CONCLUSION The decision appears to have been well received by adjudicators. Adjudicators

32 THE BULLETIN September 2019

operate in an environment in which Andrew Wallace termed; “decision is an interim one and given that it is often made in a “pressure cooker” environment under extremely tight timeframes,22 trying to achieve what Lord Ackner coined in the House of Lords, the ‘quick and dirty fix”.23 Adjudication requires independence and involves analysis of copious quantities of documentation that make up the application and the response,24 and has, in most states, 10 business days to make often challenging determinations. To make the issue more complicated, most adjudicators come from the building and construction industry, not lawyers. They usually have backgrounds as civil engineers, project managers, architects, and builders. For example in WA in 2017-18, there were 84 registered adjudicators of which 57 (or 68%) were non-lawyers, and 27 (32%) lawyers.25 In the NT in 2017-18, there were 42 registered adjudicators of which 25 (or 60%) were non-lawyers, and 17 (40%) lawyers.26 The HCA rightly recognises that non-lawyer adjudicators may apply the incorrect law, or make incorrect conclusions of the facts presented to them. The HCA concluded in Probuild:27 The Security of Payment Act did not authorise adjudicators to take unlawful steps by making errors of law. What it did do, by implication based upon a background legislative assumption, was to immunise from judicial review any non-jurisdictional error of law on the face of the record. It is unlikely that those who initially championed security of payment legislation saw adjudication in terms of legal purity as opposed to what Lord Ackner coined in the House of Lords, the “quick and dirty fix”.28 The former Building Commissioner of Western Australia, Mr Peter Gow affirmed; “The adjudicator may have much more freedom to balance cost and time against legal purity”.29 Non-jurisdictional error of law on the face of the record “would imply an expectation from the Judiciary that an adjudicator would have the same legal qualifications as a lawyer has.”30

Had the HCA held differently, Frayne SC would have been further vindicated by his assertion. However, common sense prevailed. The HCA decision confirmed that Fenwick Elliott, was correct; “there is no real immediate prospect of nonjurisdictional error of law sufficing as a ground for challenge under the West Coast model any more than under the East Coast model”.31 Dr Steensma specialises in Construction Law and ADR. He is an Arbitrator (Gde 3), Adjudicator (WA & NT), Mediator (NMAS), and Expert Determination Practitioner. He has been a member of the Society’s ADR committee since 2017. The Author would also like to thank Professor Philip Evans for his guidance in this paper. B Endnotes 1 Robert Fenwick Elliott, Maxcon in The Shade, (03 Jan 2017), https://feconslaw.wordpress. com/2017/01/03/maxcon-in-the-shade/#_ ftnref2 2 Resolution Institute - SA Chapter CPD - Recent case law affecting adjudication Security of Payment (SOP) Acts in SA and other states, 9 February 2017 in Adelaide. Guest presenter Martin Frayne SC. 3 Robert Fenwick Elliott, ‘10 Days in Utopia’ (Proceedings of the Institute of Arbitrators & Mediators Australia, Glenelg, South Australia, 02 June 2007), 5. 4 Building and Construction Industry Security of Payment Act 1999 (NSW); Building and Construction Industry Security of Payment Act 2002 (Vic); Building and Construction Industry Payments Act 2004 (Qld) (later Building IndustryFairness (Security of Payment) Act 2017 (Qld); Construction Contracts (Security of Payments) Act 2004 (NT); Building and Construction Industry (Security of Payment) Act 2009 (SA); Building and Construction Industry Security of Payment Act 2009 (ACT); Building and Construction Industry Security of Payment Act 2009 (Tas). 5 Peter Butt, et al, LexisNexis – Concise Australian Legal Dictionary, (LexisNexis Butterworths, Chatswood NSW, 4th Ed, 2011), 34. 6 [2016] NSWCA 379. 7 [2017] SASCFC 2. 8 High Court of Australia, ‘Short particulars, Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (S145/2017), http://www. hcourt.gov.au/assets/cases/08-Sydney/s1452017/Probuild_SP.pdf, 1. 9 Ibid. 10 High Court of Australia, ‘Short particulars, Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd & Anor (S145/2017), http://www. hcourt.gov.au/assets/cases/08-Sydney/s1452017/Probuild_SP.pdf, 1. 11 Ibid. 12 High Court of Australia, ‘Short particulars, Maxcon Constructions Pty Ltd v Michael Christian

BUILDING & PROPERTY LAW

Vadasz (Trading As Australasian Piling Company) & Ors (A17/2017), http://www.hcourt.gov.au/ assets/cases/01-Adelaide/A17-2017/Maxcon_ SP.pdf, 1. 13 Building and Construction Industry Security of Payment Act 2009 (SA), s 12 which states: 12—Effect of “pay when paid” provisions (1) A pay when paid provision of a construction contract has no effect in relation to any payment for construction work carried out or undertaken to be carried out (or for related goods and services supplied or undertaken to be supplied) under the contract. (2) In this section— money owing, in relation to a construction contract, means money owing for construction work carried out or undertaken to be carried out (or for related goods and services supplied or undertaken to be supplied) under the contract; pay when paid provision of a construction contract means a provision of the contract— (a) that makes the liability of 1 party (the first party) to pay money owing to another party (the second party) contingent on payment to the first party by a further party (the third party) of the whole or a part of that money; or (b) that makes the due date for payment of money owing by the first party to the second party dependent on the date on which payment of the whole or a part of that money is made to the first party by the third party; or (c) that otherwise makes the liability to pay money owing, or the due date for payment of money owing, contingent or dependent on the operation of another contract.

14 High Court of Australia, ‘Short particulars, Maxcon Constructions Pty Ltd v Michael Christian Vadasz (Trading As Australasian Piling Company) & Ors (A17/2017), http://www.hcourt.gov.au/ assets/cases/01-Adelaide/A17-2017/Maxcon_ SP.pdf, 1. 15 the Lexus Nexus Concise Australian Legal Dictionary, fourth edition defines ‘certiorari’ as; ‘a type of prerogative remedy issued by a court to bring before it the decision or determination of a tribunal or inferior court to quash it on the ground of nonjurisdictional error of law on the face of the record, or for jurisdictional error or denial of procedural fairness. (p 83). 16 High Court of Australia, ‘Short particulars, Maxcon Constructions Pty Ltd v Michael Christian Vadasz (Trading As Australasian Piling Company) & Ors (A17/2017), http://www.hcourt.gov.au/ assets/cases/01-Adelaide/A17-2017/Maxcon_ SP.pdf, 1. 17 Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 A17/2017, [4]. 18 [2018] HCA 4 (14 February 2018) S145/2017. 19 Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4, [2]. 20 HCA 5 (14 February 2018) A17/2017. 21 Maxcon Constructions Pty Ltd v Vadasz [2018] HCA 5 , A17/2017, [5]. 22 Andrew Wallace, Final Report of the Review of the Discussion Paper – Payment Dispute Resolution in the Queensland Building and Construction Industry (Building Services Authority, 2013), 221. 23 Becky Davey, Upcoming changes to the law applying to construction contracts, (2011), website: <http://www. lexology.com/library/detail.aspx?g=b5b0f0e63a09-4fd0-866a-a6b5e00109d2 > 24 In 2014, the author, as an adjudicator to a payment claim dispute, received an application for adjudication that was encumbered by some

27 28

23 lever arch folders of A4 and A3 documents. It contained 7977 pages. The total quantum of the submissions by both parties was 34, A4 & A3 size folders, and contained 11906 pages. This is still a record in Western Australia. Government of Western Austrlia, Department of Mines and Industry Regulation and Safety (Building Commission), (2019), Find an adjudicator, website<https://www.commerce. wa.gov.au/building-commission/findadjudicator>. Government of the Northern Territory Construction Contracts Registrar, (2019), List of registered adjudicators, website<https://nt.gov. au/property/building-and-development/makea-complaint-or-settle-a-dispute/constructioncontracts-and-resolving-disputes/list-ofregistered-adjudicators> Probuild Constructions (Aust) Pty Ltd v Shade Systems Pty Ltd [2018] HCA 4, [108]. Becky Davey, Upcoming changes to the law applying to construction contracts, (2011), website: <http://www. lexology.com/library/detail.aspx?g=b5b0f0e63a09-4fd0-866a-a6b5e00109d2 > Peter Gow, ‘The Construction Contracts Act in Western Australia’, (2008) The Arbitrator & Mediator, The Institute of Arbitrators & Mediators Australia Vol 27. Number: 2 (Date: Dec 2008), 33. Auke Steensma, ‘A statutory review of adjudicators’ determinations under the Construction Contracts Act 2004 (WA) by the State Administrative Tribunal and the Courts of Western Australia’ (PhD Thesis, Curtin University, 2018), p 291. Robert Fenwick Elliott, Maxcon in The Shade, (03 Jan 2017), https://feconslaw.wordpress. com/2017/01/03/maxcon-in-the-shade/#_ ftnref2

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SOCIAL MEDIA

Social Media, Jurors and the Right of an Accused to a Fair Trial JEMMA HOLT, RESEARCH FELLOW, TASMANIAN LAW REFORM INSTITUTE

he right to a fair trial is a central pillar of our criminal justice system. An accused is entitled to a trial before an impartial jury that makes its determination in accordance with evidence that has been properly admitted and tested during the course of the trial. A current concern is how to preserve an accused’s right to a fair trial at a time when social media and other internet platforms are omnipresent in our everyday lives.

USE OF SOCIAL MEDIA AND OTHER INTERNET PLATFORMS The majority of Australians are continuously online and engaged; at home, at work and in-between on our smartphones. If individuals continue this behaviour when they are jurors sitting in a criminal trial they thereby risk adversely affecting the accused’s right to a fair trial.

GETTING A ‘HANDLE’ ON THE PROBLEM Commentators have coined many terms which refer to the phenomena of jurors inappropriately using social media or internet platforms during a criminal trial and the consequences for the accused’s right to a fair trial: googling jurors; internetsurfing jurors; trial by google; google mistrials; E-jurors; do-it-yourself or DIY jurors; the twitter effect; internet-tainted jurors; digital injustice; wired jurors; and rogue jurors. There is no single expression that encapsulates the full range of possible juror misconduct of this kind. In 2013, a juror in New South Wales Googled “murder” and “manslaughter”, admitting to her fellow jurors, whilst reading material from her iPhone: “I’m having trouble determining the difference between murder and manslaughter”.1 It is solely for the trial judge to direct jurors on matters of law. When jurors go online to conduct enquiries on legal terms and concepts, the reliability and accuracy of the source is unknown. There is also the risk of obtaining information from another jurisdiction on a jurisdictionspecific matter. Further, it relies on the

34 THE BULLETIN September 2019

juror correctly identifying the legal term/ concept in the first place and, thereafter, not straying once online. Jurors have also been found to conduct internet searches on “expert” topics, regardless of whether an expert witness had given evidence in the trial: e.g. on retention of body heat in an infant (NSW, 2007)2, and methylamphetamine production (WA, 2016)3. Obvious issues arise as to the accuracy and reliability of such technical information that is sourced by jurors from unknown online sources. Moreover, the use that an unskilled and unassisted juror makes of such information in the context of the trial is completely unknown, including whether the juror disseminates the information to fellow jurors as an in-house jury room “expert”. Jurors have also, on occasion, conducted online investigations into defendants and witnesses. In South Australia in 2016, two jurors sitting in a blackmail trial against multiple defendants were discovered to have conducted online searches on the accused which disclosed past outlaw motorcycle gang affiliations.4 Such information was legally irrelevant, inadmissible and highly prejudicial to the case being tried. Similarly, jurors have

also obtained information via the internet on an accused’s prior convictions and previous allegations against an accused, including those for which the accused was acquitted. For example, in New South Wales in 2002, multiple jurors in a murder trial, alleging the accused had murdered his first wife, were discovered to have conducted internet searches to obtain information about previous allegations that the same accused had murdered his second wife (for which he was previously tried and acquitted).5 This information could significantly prejudice the accused in the eyes of the jurors so that they could not decide guilt or innocence in a dispassionate manner. Jurors’ online searches have also located information about the history of the particular prosecution, including the fact that the present trial is a retrial and the reasons behind this, such as a hung jury or a successful appeal against conviction. For example, in a 2014 murder trial in Western Australia, a juror’s girlfriend conducted online searches in relation to the accused and located information about the history of two previous trials, which she then passed onto her partner, who, in turn, shared the information with his fellow

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jurors.6 Such information can mislead jurors and affect their ability decide the case on a proper basis. Online communications between sitting jurors is potentially problematic for many reasons, including simply because such online ‘banter’ is capable of distracting jurors from the trial itself. For example, in New South Wales in 2013, multiple jurors on a long-running fraud trial became Facebook friends. Their online communications included posts such as a digitally altered photo of one of the jurors wearing a judge’s wig.7 Jurors have also been found to publish material on the internet and social media platforms which suggests that they may

have already made their mind up about the guilt of the accused, including in circumstances where they are yet to be empanelled on a particular trial. In 2010, a potential juror in Victoria posted on his Facebook page, ‘everyone’s guilty,’8 and in 2016 a juror who had been empanelled in a West Australian murder trial posted on Facebook the day the trial was due to commence, ‘At Perth District Court, guilty!’9 Jurors have also published material that discloses prejudice in relation to certain types of offending. For example, in 2016, a juror sitting in a sexual offending trial in Broken Hill, posted on Facebook the day before the guilty verdict was returned: ‘When a dog attacks a child it is put

down. Shouldn’t we do the same with sex predators?’ This post was accompanied with a photograph that showed images of rooms and implements by which lawful executions are carried out.10 The same concerns apply to jurors with apparent sympathetic biases. In 2014, a juror in a murder trial in New South Wales conducted online research to locate a photograph of the victim. The juror viewed a media photograph depicting the victim’s parents holding a photograph of the victim. The juror explained: ‘I just wanted to see his [the deceased’s] face … that poor boy and I just wanted to see his face without any injuries, anything, just see him … put a face to the name.’11

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Posts like these potentially bring the justice system into disrepute because they suggest that justice is not being done and similarly it is not seen to be being done. Whether or not a juror’s use of the internet/social media is representative of genuine bias, prejudice, and/or predetermination is not the entirety of the matter. The requirement of impartiality on the part of jurors may be adversely affected by both actual and perceived irregularities. Significantly, when jurors publish material about jury service on the internet or social media, they have no control over what material they may receive by way of a response. Even apparently innocuous material posted by jurors, or the simple act of a juror ‘tagging’ their location as the courthouse, may elicit unsolicited and inordinate replies capable of interfering with the juror’s impartiality (or being perceived as capable of doing so).

GOING VIRAL? There has been some limited research conducted in this area in Australia and overseas, however, the prevalence of juror misconduct of this kind remains largely unknown and unknowable. Whilst the detection of juror misconduct of this kind may be rare, this does not necessarily mean that such misconduct is, in fact, rare. Rather, all indications are that juror misconduct of this kind is under reported, at least to some extent, and that the reported cases represent the bare minimum of cases of misconduct of this kind. It is not a phenomenon that is peculiar to larger jurisdictions and high-profile criminal trials.

‘DROPPING THE PIN’: WHERE TO FROM HERE? The Tasmania Law Reform Institute is currently researching jurors’ use of social media and other internet platforms during criminal trials. The Institute released an Issues Paper on 21 August, which seeks to: • assess, as far as is possible, the nature and gravity of this phenomenon;

36 THE BULLETIN September 2019

• explore how and why juror misconduct of this kind occurs and the causes and/or motivations that underlie juror misconduct of this kind; • canvas the laws and practices which currently exist to safeguard against juror misconduct of this kind as well as those that exist to remedy and/or otherwise deal with such misconduct after it occurs; and • examine the operation and efficacy of these measures as well as the possible alternatives. The TLRI invites submissions on this topic until 4 October 2019. All submissions will inform the Institute’s final report which will ultimately consider whether reform of the current laws and practices is justified and, if so, what form that should take. The Issues Paper is available at: https://www.utas.edu.au/lawreform/publications/ongoing-lawreform-projects2 Jemma Holt is currently working as a Research Fellow at the Tasmania Law Reform Institute and prepared the Issues Paper jurors’ use of digital media during criminal trials. The Paper is the result of joint research and collaboration between the Tasmania Law Reform Institute and South Australian Law Reform Institute. Jemma also works part time as a Prosecutor at the Office of the Director of Public Prosecutions in Hobart. She has previously worked as a Prosecutor at the Office of the Director of Public Prosecutions in Adelaide and the Crown Solicitor’s Office in Adelaide. She is returning to practice in Adelaide in 2020. B Endnotes 1 The juror later told fellow jurors that, based on her research, the difference between the two involved ‘malice’: R v JP (No 1) [2013] NSWSC 1678; R v JP (No 2) [2013] NSWSC 1679. The juror was discharged, and the trial proceeded to verdict. 2 R v Folbigg [2007] NSWCCA 371. The misconduct was discovered after the jury had been discharged. On appeal, it was held that irregularities had occurred, but the appeal was dismissed. 3 In Western Australia in 2016, a juror in a drug-

related trial researched methylamphetamine production online. See Heather McNeill, ‘Calls to Overhaul WA Jury System After Juror Dismissed for Facebook Post’. WA Today (online, 13 October 2016) <https://www.watoday.com.au/ national/western-australia/calls-to-overhaul-wajury-system-after-juror-dismissed-for-facebookpost-20161012-gs0wwa.html>. 4 Registrar of the Supreme Court of South Australia v S; Registrar of the Supreme Court of South Australia v C [2016] SASC 93. Both jurors were dismissed and the balance of then jury discharged. Both jurors were subsequently convicted of contempt, had convictions recorded and were fined $3000 each. 5 R v K (2003) 59 NSWLR 431. 6 See Joanne Menagh, ‘Judge “almost speechless with rage” after third Ronald Pennington trial for 1992 murder aborted’, ABC News (online, 31 July 2014) <https://www.abc.net.au/news/2014-0730/judge-27speechless-with-rage27-after-thirdtrial-for-1992-mur/5636388>. See also R v K (2003) 59 NSWLR 431. 7 Brenden Hills, ‘Jury Getting off Their Facebooks’, The Daily Telegraph (online, 12 May 2013) <https://www.dailytelegraph.com.au/ jury-getting-off-their-facebooks/news-story/ 26e2549a7d9063ae9dae0e2a27683dce>. The judge became aware of this conduct two months into the trial after being alerted by the trial prosecutor. The judge ordered a court officer to examine the material to see if it included any prejudicial material. It was ultimately concluded that the material was not such so as to warrant the jury being discharged. 8 Andrea Petrie, ‘No-show juror in hot water over “stupid” action’, The Sydney Morning Herald (online, 17 April 2010) <https://www.smh.com. au/national/noshow-juror-in-hot-water-overstupid-actions-20100416-skli.html>. The juror was referred for potential prosecution. 9 See Heather McNeill, ‘Calls to Overhaul WA Jury System After Juror Dismissed for Facebook Post’. WA Today (online, 13 October 2016) <https://www.watoday.com.au/national/ western-australia/calls-to-overhaul-wa-jurysystem-after-juror-dismissed-for-facebook-post20161012-gs0wwa.html>. 10 Michaela Whitcourne, ‘Social media post sparks probe into jury conduct in sex crime trial’ The Sydney Morning Herald (online, 15 April 2019) <https://www.smh.com.au/national/nsw/ facebook-post-sparks-probe-into-jury-conductin-sex-crime-trial-20190414-p51dz4.html>. See also Agelakis v R [2019] NSWCCA 71: On 29 March 2019, the NSW Court of Criminal Appeal ordered an investigation into the alleged juror misconduct, pursuant to s 73A of the Jury Act 1977 (NSW). 11 R v JH (No 3) 2014 NSWSC 1966, [8]. Juror dismissed, trial proceeded to verdict.

IN HONOUR

Vale Damon Ind: A passionate lawyer & animal rights champion

mpathy for the underdog and an unwavering commitment to fair play underpinned Damon Ind’s approach to law. He has been widely described by colleagues and magistrates as a compassionate man, going out of his way to help defendants who were trying to represent themselves and showing mercy to people facing allegations of terrible crimes. Driven by the belief that our legal system is weighted against people who are already oppressed, Damon had ambitions to become a magistrate. He felt that was the role in which he could make the most positive impact on his community. Sadly, he did not live to fulfil this ambition. The much-loved lawyer, known equally for his larrikin nature and deep respect for the law, suffered a fatal heart attack outside the Stepney offices of his employer, RSPCA South Australia, in June. He was 47 years old. Damon launched his 14-year legal career after graduating with a law degree from Flinders University in 2005, commencing practise at the Salisbury offices of Nicholls Gervasi Lawyers. His employment in Adelaide’s northern suburbs continued with a move to Dixon Gallasch Barristers and Solicitors at Elizabeth South in 2007. It was here that Damon cut his teeth in the area of criminal defence, working under the mentorship of Brett Dixon, who Damon referred to fondly as his Atticus Finch. During these two years Damon became a familiar face at the Elizabeth Magistrate’s Court, managing client files and acting as defence counsel in summary, minor and major indictable matters. It was inside the Magistrate’s Court that Damon met and fell in love with fellow lawyer Jessica Kurtzer. Friends and family have described the couple as soulmates. A reputation for preparing thorough, accurate briefs and establishing solid rapport with diverse clients helped

Damon secure employment in Adelaide firms Michael Woods and Co Barristers & Solicitors and Tindall Gask Bentley Lawyers, before he moved into the role of Prosecutor for SA Police. This switch to the other side of the bench was not all smooth sailing for Damon, whose empathy and compassion for some defendants at times ran counter to the expectations of him in the prosecution role. After nearly two years with SA Police’s Special Prosecution Unit, Damon left the complexities and constraints of law to work as a tiler at a friend’s business. It was the opportunity to take on a position that united two of his life’s great passions – animals and the law – that lured Damon back into legal practice in 2016. As RSPCA South Australia’s sole legal counsel, he fronted court to give voice to the voiceless animal victims of cruelty and neglect. Disappointed that the law didn’t appear to take animal welfare as seriously as he believed it should, he was determined to raise the bar for RSPCA to be considered a significant prosecuting authority. Like many people, he struggled to understand the cruel treatment some people inflicted on animals that they owned and claimed to love. Colleagues who on occasion attended court with Damon recall he brought both kindness and a sense of calm to proceedings, irrespective of what the allegation against a defendant was, or who was on the other side. Despite the often heavy nature of the animal cruelty cases he prosecuted, outside of Court Damon has also been remembered as an immensely positive thinker with a contagious passion for life and “the ultimate practical joker”. Always generous with his time, Damon provided pro-bono legal advice on many occasions to colleagues and friends and also gained a reputation for multiskilling as RSPCA South Australia’s office handyman and removalist.

Damon and Scooby

Outside of work, Damon’s priority was spending time with Jessica and his two sons from a previous marriage, Harrison and Samuel. Weekends away with Jessica and his sons, fishing and camping, were a favourite escape from the demands of the courts and the cases he dealt with. Football was another of Damon’s enduring passions. He played 189 games for Hectorville football club and was heavily involved in the club community, filling coaching and mentoring roles. He was proud to be named Best and Fairest in the over 35s division in 2016. Harrison’s membership of the “Heccies” junior football team was a source of much spoken pride, as he watched his eldest son play with both determination and fairness. Damon is survived by his partner Jessica, sons Harrison and Samuel, mother Pam, brother Travis, sister-in-law Joanna and his rescue dog, Scooby, who regularly came to work with him at the RSPCA. B September 2019 THE BULLETIN

TAX FILES

No deductions for vacant land PAUL TANTI, PARTNER, THOMSON GEER

he Federal Government has introduced a bill which denies tax deductions for some taxpayers who own vacant land. Treasury Laws Amendment (2019 Tax Integrity and Other Measures No. 1) Bill 2019 (Bill) was introduced into Parliament on 24 July, 2019. If passed in its current form, the new measures will apply from 1 July, 2019, regardless of when taxpayers acquired the land. The Bill denies some taxpayers deductions for the cost of holding vacant land. These costs will include interest, other borrowing costs and other holding costs such as rates and taxes. The Explanatory Memorandum to the Bill states that the purpose of the new measures is to deny “taxpayers who have been claiming deductions for the costs associated with holding vacant land when it is not genuinely held for the purpose of gaining or producing assessable income” (EM paragraph 3.4). The Bill does not apply to all taxpayers. Those taxpayers which are exempt are: • corporate entities; • superannuation funds which are not self-managed superannuation funds; • managed investment trusts; and • public unit trusts. Therefore, the provisions effectively apply to individuals, self-managed superannuation funds and closely held trusts (both discretionary trusts and unit trusts). These entities will be subject to the new provisions even if they have a corporate trustee, Proposed section 26-102 will deny losses or outgoings relating to holding land if “there is no substantial and permanent structure in use or available for use on the land, having a purpose that is independent of, and not incidental to, the purpose of any other structure or proposed structure”. If this provision denies the taxpayer a deduction, the deductions will only be available to the extent that the land is in use or available for use in carrying on a business conducted by the taxpayer, persons related to the taxpayer or an entity that is connected with the taxpayer. For these purposes, related persons include affiliates of the taxpayer, the spouse of the taxpayer and any of the taxpayer’s children who are under the age of 18.

38 THE BULLETIN September 2019

The “affiliate” and “connected with” provisions are similar to those which are contained in the active asset requirement in the Capital Gains Tax Small Business Concessions. The new provisions apply to land on a “Certificate of Title basis”. Therefore, land comprised in one title may meet the requirements whereas an adjoining property, which is intended for the same use but may not contain a substantial and permanent structure, may result in deductions being denied for that property. For example, if a house is situated on one title and a shed or garage is being constructed on an adjoining title, the land on which the shed or garage is situated will not satisfy the “independent purpose” requirement. Garages and sheds and the like do not have an independent purpose, but rather have a purpose which is incidental to or related to the residential premises (EM paragraph 3.23). If the buildings on the land are residential premises which are being constructed or substantially renovated, deductions will not be allowed until the premises are available for use. This means they must be lawfully able to be occupied and are actually leased, hired or licenced or available for lease, hire or licence. This will effectively deny deductions during the planning, construction and renovation phases of building or renovating residential premises. The buildings on the land must be

substantial. The term “substantial” refers not only to the size of the structure but can also include value or some other criteria of importance to the relevant property (EM paragraph 3.18). The substantial characteristic must be a feature of the building on the land and not of another structure which is situated on other land. If deductions are denied for a particular property on the basis there is no substantial and permanent structure in use or available for use on the land with an independent purpose, deductions will only be available to the extent the land is in use or available for use in carrying on a business. Whether a business is being carried on will always be a question of fact. In determining this issue, the treatment of the land for other tax purposes will be relevant. Therefore, the taxpayer’s treatment of the gains from the proposed property as income or capital, its registration for GST purposes and whether it considers itself to be carrying on a business will all be relevant to the question of whether the taxpayer (or its affiliates or connected entities) is carrying on a business. Taxpayers who are subject to these provisions should review their landholdings to ensure that, to the extent possible, they satisfy the requirements for deductibility for holding costs in the 2020 financial year. B

WELLBEING & SUPPORT

Breaking the stress cycle TONI VOZZO, CHAIR, WELLBEING & RESILIENCE COMMITTEE

t its core, “legal work is mental work”1. Good mental health is therefore an essential part of lawyering as it affects a lawyer’s ability to be productive and make responsible decisions for their clients. It is part of a lawyer’s ethical duty of competence. Studies suggest that having at least two weeks off and taking two good breaks a year is optimal for breaking the stress cycle. In 2009, Canadian researchers reported that taking vacations helped to buffer the detrimental effects of excessive job demands among a sample of almost 900 law firm lawyers renowned for working in highly stressful work settings. They also found that participating in active and social leisure activities or taking a vacation are important in reducing the prevalence of depression.2 Yet for many lawyers it can seem difficult to get away, to leave the team and your matters behind. “Vacations have the potential to break into the stress cycle. We emerge from a successful vacation feeling ready to take on the world again. We gain perspective on our problems, get to relax with our families and friends, and get a break from our usual routines.”3 (Added emphasis.) I was fortunate to escape the miserable cold winter to spend two weeks this July on Rhodes, the largest of Greece’s Dodecanese islands. Rhodes is known for its spectacular beaches, ancient ruins and medieval Old

Town. Was it a successful vacation? Ναί (actually means “yes” in Greek). I emerged from the vacation in a positive state of wellness, slightly heavier and suntanned with lots of photos of great scenery and capturing good times. I did a number of my favourite things: I spent quality time with family and friends; I walked around a foreign city and immersed myself in the culture and history; I ate good food (I consumed calamari many ways including grilled, stuffed, fried and crumbed…all delicious); I shopped ‘til I dropped; I swam in the clear, calm and warm Aegean; I read fiction. I generally did nothing that required much brain power. I re-energised. But like many lawyers on vacation, I continued to closely monitor what was happening on my matters on the other side of the world. I did not completely disconnect. How could I? My two children were more than 13,000 kilometres away so I was therefore always going to have my iPhone close to hand. But apart from the kids, I intended to monitor my work emails because despite my best efforts to plan and put in place appropriate arrangements to deal with my matters during the vacation, things just happen beyond my control – Judges seem to have a sixth sense for when solicitors go on leave and relist cases unexpectedly! To be clear, I had no intention of

spending any substantive time reading or replying to emails. I also limited the time I spent checking emails – being in a different time zone where half the Australian working day is over before you wake up helps too! I did NOT feel guilty about “monitoring” my work emails. Some people can turn off the mobile data and suspend all contact with work. I’m just not one of those people. Knowing what was happening (at a high level) allowed me to relax and enjoy the down time. Nevertheless, when you take a decent break from your usual routines, whether it’s somewhere as beautiful as Rhodes, closer to home, or even at home, it can make a positive difference to your state of wellbeing. So if you want to be a better lawyer, do things that you enjoy. Spend time with your friends and family, get away from the office, and don’t feel guilty for taking regular vacations or staycations. It’s ok to check emails, but try limiting this to a short time during the day that fits in with your holiday plans or routines. Endnotes 1 Taking a Summer Vacation Will Make You a Better Lawyer (Yes, Really) by Allison Wolf http://www. slaw.ca/2011/08/03/taking-a-summer-vacationwill-make-you-a-better-lawyer-yes-really/ 2 Joudrey A, Wallace JE: Leisure as a coping resource: a test of the job demand- control -support model. Hum Relat. 2009 3 https://www.psychologytoday.com/au/blog/ fulfillment-any-age/201006/the-importancevacations-our-physical-and-mental-health

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FAMILY LAW

Does living apart preclude ‘living with’ when applying for declarations of domestic partnership? MARK TAYLOR, EDMUND BARTON CHAMBERS

he answer to the question posed in the headline turns, unsurprisingly, on the facts and circumstances of each case. This article focuses primarily upon the court’s interpretation of “living with/ living together.” The factual and temporal requirements of domestic partnership declarations will not be addressed but remain crucial considerations for a practitioner applying for declaratory relief. Section 11A Family Relationships Act 1975 (FRA) states that: “A person is, on a certain date, the domestic partner of another if— … (b) the person is, on that date, living with the other in a close personal relationship and [the temporal requirement- not discussed in this article.]” A close personal relationship means: “… the relationship between 2 adult persons … who live together as a couple on a genuine domestic basis…”

INTRODUCTORY POINTS • A court is not relieved of its obligation to assess an application even if all affected parties are unanimous in their view of the purported relationship.1 • Interstate authority demonstrates the interpretive approach of other Australian courts. • The common judicial interpretation of a de-facto spouse has been used by way of analogy in South Australia.2 • Though interstate and analogous authority may be useful in assessing the method by which the judiciary interpret such applications, practitioners must be aware of the varying definitions and eligibility criteria. • A court will analyse the relationship in the round to identify the true nature of the relationship by weighing up the various non-exhaustive statutory

40 THE BULLETIN September 2019

factors3 to determine that the applicant was “living with the other in a close personal relationship”4 on a certain date. • The Briginshaw5 principle applies to such applications: a court must be convinced “…on the balance of probabilities but with due regard to the gravity of the consequences of making the declaration sought.”6 • In Simonis v Perpetual Trustee, it was held that“the expression under consideration constitutes a single composite expression of a comprehensive notion or concept, and therefore has to be approached by considering the expression as a whole and not in several parts.”7 To account for the infinite scope of relationships, “living with” has been interpreted widely. In 1919, the English Court of Criminal Appeal held that a husband and wife were “… living together, not only when they are residing together in the same house, but also when they are living in difference places… provided the consortium has not been determined.”8 In Australia, the High Court required both a physical separation and the destruction of the consortium vitae of the relationship to demonstrate that a couple was living “separately and apart.”9 In an earlier case, the House of Lords contrasted

partners being located in different places with situations where there has been a “rupture”10 in matrimonial relations. More recently, the South Australian Supreme Court held that cohabitation (as it was defined then) “does not necessarily imply that they are always living together under the same roof, and there may be states of cohabitation where they see as much of each other as they can, and yet are not separated because there has not been any real suspension of their ordinary conjugal relation.”11 It is contended that the above considerations provide a sensible starting point as to how a court might interpret one person living with another. Whilst living apart does not necessarily preclude living together, the central question is whether there has been a determination, rupture or destruction of the relationship in question. An attempt to rely upon a narrow interpretation of “living with” was expressly rejected in Victoria, the phrase “… should not be construed on narrow, formal, pedantic or merely geographical criteria but should be considered taking into account the human reality of the personal, emotional and cultural complex.”12 Partners may be physically separated for a range of reasons whilst still maintaining a close personal relationship; it would be wholly

FAMILY LAW

improper to preclude declarations in such circumstances and would “place people claiming under [the Domestic Partnership] provisions at the very disadvantage which the provision is designed to remove.”13 Recently “living together” was considered in the light of the “peripatetic lifestyle” of an airline pilot14 and his partner. The couple spent their limited contact time at a wide range of locations. In making the declaration, the court considered the longterm plan of sharing a house and the public presentation of the couple to be important. It was held that although the test of “living together” is not primarily locational, it has an important locational element.

SITUATIONS TO CONSIDER In practice, there are numerous issues that one might encounter in regard to one person “living with…” another. The writer has encountered the following situations in various contexts: Two partners took a “break” in their relationship. Was the applicant “living with…” the deceased in a close personal relationship? Like Ross and Rachel, applicants must be conscious if they took a “break” in their relationship: “Where one partner determines not to live together with the other and in that sense keeps apart, the … relationship ceases even if the separation is merely to enable one party or the other to decide whether the relationship should continue.”15 There is evidence that a couple separates but hours before the death of a partner. Are they “domestic partners” at the date of death? The answer would depend on when the couple separated. If separation took place on the same calendar day, the declaration could still be made as the legislation requires the declaration to relate to a “certain date.”16 If, however, the separation occurred before or at 23:59.59, and the deceased died at, or after, 00:00.00 (so technically the next day), the court would technically be unable to make the declaration at the date of death. What if one partner spent time in hospital due to health issues or moved away to work?

As long as the applicant could convince the court that they have satisfied the factual and temporal basis for a domestic partnership, it is unlikely that the above situations would preclude a declaration. Both the applicant and the deceased own separate residential properties. Would this affect the merits of a declaration application? This is a common issue and one that is frequently targeted in cross-examination. Whilst not a determinative factor, multiple residences might dilute the contention that the relevant persons were “living together.” Conversely, it has been held that “the maintenance of separate residences is necessarily inconsistent with parties having a de facto relationship.”17 If such issues are live in a contested application, it is imperative that they are carefully considered and addressed before trial. The applicant and the deceased only live together in the same residence for a small part of each week. Is an application for a declaration likely to fail? There are several cases that consider this question; it is “clearly established … that the fact that, for example, the parties live in the same residence, for only a small part of each week does not exclude the possibility that they are “living together as a couple on a genuine domestic basis...”18 Addressing this issue will be specific to the facts of each case. For example, repeated visits by an applicant to the residence of a deceased for a “singular purpose, without more…” was deemed insufficient to satisfy the court of the existence of domestic partnership. The couple was forced apart by circumstance such as drug addiction, child protection intervention or fear for the safety of a person. Could those parties still be deemed to live together? This question is very much determined by the unique circumstances of a particular case. The court would consider the nonexhaustive statutory factors carefully. Evidence to support such a declaration could include: • Written evidence of the reasons for separation;

• Telephone records showing frequent calls; • Receipts for purchases or taxis near to the other partner; • Text and email messages; • Photographs; • Oral evidence of other witnesses. The applicant maintained “singlestatus” for Centrelink or other meansrelated benefits during the lifetime of the deceased. Does this mean that a declaratory application will fail? Evidence of lies within, or inconsistency with, official documents such as Centrelink applications are not uncommon; nor are they strictly determinative.19 Practically, proving a propensity to deliberately mislead government agencies would reflect poorly upon the misleading party. Evidence of such conduct may create more serious problems for an applicant.

FINAL REMARKS Though it may appear at first blush that an Applicant did not “live with” their partner, there might be circumstances that explain the separation without determining the relationship. Living apart does not necessarily preclude living with and practitioners must carefully consider the unique circumstances of each case. B

Endnotes 1 R v Bong [2013] SASC 39 2 M, S v Public Trustee [2017] SASC 71 3 Section 11B(3) FRA 1975 4 Section 11A(B) FRA 1975 5 Briginshaw v Briginshaw (1938) 60 CLR 336 6 Re Fagan (1980) 23 SASR 454 amongst others 7 (1987) 21 NSWLR 677 8 R v Creamer [1919] 1KB 564, 569 9 Main v Main [1949] 78 CLR 636 10 Nugent-head v Jacob [1948] AC 321, HL 11 Re Fagan (dec’d) (1980) 23 SASR 454, 464 12 Re Estate of Sigg (dec’d) [2009] VSC 47 13 Re Estate of Sigg (dec’d) [2009] VSC 47 14 Re Hawkins [2018] NSWSC 174 15 Hibbertson v George (1989) 12 Fam.L.R. 725 16 Section 11A FRA 1975 17 Jonah v White [2011] FamCA 221 18 Jonah v White [2011] FamCA 221 19 Aranas v Berry [2002] NSWSC 355

September 2019 THE BULLETIN

FAMILY LAW CASE NOTES

Family Law Case Notes ROB GLADE-WRIGHT, THE FAMILY LAW BOOK CHILDREN – THRESHOLD HEARING ON RICE & ASPLUND – APPLICATION DISMISSED

n Mahoney & Dieter [2019] FamCAFC 39 (7 March 2019) the Full Court (Alstergren DCJ, Ryan & Kent JJ) dismissed the mother’s appeal against dismissal of her application for variation of a final parenting order made by the Family Court Division of the District Court of New Zealand (NZ) and registered in 2018 in Australia where the father lived with the parties’ child pursuant to that order. The order, made after a finding that the mother posed a risk of harm, removed the child from the mother’s care and permitted the father to relocate with the child from NZ to Australia, the mother to spend supervised time with the child during school holidays in NZ. The mother later obtained a medical report that she was mentally stable, and applied to the Family Court of Australia for the child to spend unsupervised time with her (and ultimately live with her in NZ). Austin J dismissed the application as the mother had failed to establish a sufficient change in circumstances to warrant reconsideration of the order. On appeal, the Full Court said ([10]): “In describing the reason for the child’s removal from the mother’s care … the [NZ] court explained that: ‘ … The transfer was necessary for the welfare and safety of [the child] because of the mother’s intense fixed and wrong beliefs about the father’s behaviour … These beliefs are not related to his parenting … If [the child] learns about these beliefs the damage to her will be adverse and lifelong.’” The Court continued ([12]): “At the final parenting hearing the mother attributed the cause of her

42 THE BULLETIN September 2019

parental difficulties … to … a brain injury and hypothyroidism, which she had addressed. However, the evidence before the [NZ] court revealed that the mother continued to hold fixed and wrong beliefs about the father’s behaviour … (including that the child was conceived through rape). ( … )” The Court concluded ([39]): “A proper reading of the [NZ] judgment demonstrates that … the decision turned not on whether or not the mother had a mental illness, but that [her] fixed beliefs … whatever their genesis or label, posed a risk of harm to the child. … ”

CHILDREN – MOTHER’S SECRETLY TAKEN VIDEO OF HAND OVERS ADMISSIBLE – HER AUDIO OF FATHER’S PRIVATE CONVERSATIONS WITH THE CHILDREN INADMISSIBLE In Coulter & Coulter (No. 2) [2019] FCCA 1290 (15 May, 2019) Judge Heffernan heard the father’s application to exclude the mother’s secretly made video recordings of the father’s attendance at her home for hand overs and two audio recordings of conversations between him and the children. After referring to a court’s discretion (under s 135 the Evidence Act 1995 (Cth)) to exclude evidence if its probative value is substantially outweighed by the risk of prejudice, being misleading or wasting time or (s 138) exclude improperly or illegally obtained evidence unless the desirability of admitting it outweighs the undesirability of doing so, the Court said ([10]): “I am satisfied that it was not improper for the mother to make the video recordings of the two hand overs. … Hand overs occur in circumstances where the mother has a legitimate

interest in her personal safety … and in preventing the children from being exposed to conflict and unpleasantness between the parties. At the time that the mother made the video recording, it is her evidence that she had been having ongoing difficulties of that sort with the father. The mother had an ongoing concern about the father’s apparent obsessiveness with matters personal to her and his abusive, coercive and controlling behaviours and past episodes of violence. She was in the process of seeking an intervention order against him to deal with those issues. … Recording his behaviour was not improper in that context, even allowing for the secrecy with which it was done. In considering the question of impropriety, I also give weight to the conclusion … that the conduct in recording the hand over was not contrary to a relevant Australian law. [11] In my view, it was improper of the mother to make secret audio recordings of private conversations between the father and the children. It involved a significant breach of trust with respect to the children, who were entitled to privacy in their conversations with their father irrespective of any motives he may have had to enlist them in his dispute with the mother. The Court found ([12]-[23]) that the video was not illegal but that the audio contravened the Listening and Surveillance Devices Act 1972 (SA) and that ([24][25]) discretion should be exercised to exclude the audio recordings because the desirability of admitting that evidence (as relevant to the mother’s case of parental alienation) was outweighed by the undesirability of doing so, having regard to the children’s right to have private conversations with their father. B

RISK WATCH

Details, details, details – they matter GRANT FEARY, DEPUTY DIRECTOR, LAW CLAIMS Checking the details are correct is vitally important for all practitioners. Not doing could land your client, and you in hot water.

his month we take a look at another recent case from the South Australian Supreme Court which contains important Risk Management lessons. The case – Monsere Pty Ltd v RDM Nominees Pty Ltd [2019] SASC 126 – shows the critical importance of taking care to ensure that all details are correct and the potentially serious consequences of not doing so. The defendant (RDM) sent a Statutory Demand to the plaintiff (Monsere) on 19 March 2019 in relation to a debt RDM claimed was owed by Monsere. Monsere asserted that there was a genuine dispute and an off-setting claim in relation to the debt claimed by RDM. Monsere instructed its solicitors to make an application pursuant to s.459G of the Corporations Act 2001 (Cth) for the Statutory Demand to be set aside. Such an application must be made within 21 days of the service of the Statutory Demand, otherwise the company to which the Demand is directed will be deemed to be insolvent. The Corporations Rules 2003 (SA) provide that an application to set aside a Statutory Demand “must be in accordance with Form 2”. Form 2 is used for a number of different types of applicants and contains a number of parts. One part (Part B) provided for the details of the return date of the application to be filled in and another part (Part C) was a section to be completed if the originating process was seeking an order that the company be wound up in insolvency on the ground that the company had failed to comply with a Statutory Demand. The Court noted that it was common for the wording under Part C to be deleted if it was not applicable. Part C – which

contained spaces for the insertion of the details of the service of the Statutory Demand (i.e. something which had already occurred) – was not applicable in this instance because the relief sought was to set aside a Statutory Demand and not wind-up a company. Upon filing of a Form 2 the Registrar must fix a time, date and place for hearing and endorse those details on the document at Part B. What occurred in this case is that on 5 April 2019 (four days before the 21 day period expired) the solicitor for Monsere attended at the Registry himself to file the set-aside application. The Registry Staff filled in the date, time and place of the hearing at Part C of the Form 2, not at Part B. The solicitor did not notice that the Registry Staff had written the return date (“30 April 2019 at 2:15pm”) in the wrong part of the document and did not check that the document was correctly filled out. After attending at the Registry Monsere’s solicitor served the documents himself on RDM’s solicitor. RDM then disputed that an application to set aside the Statutory Demand had been filed because the application did not comply with Form 2 and s.459G by reason of the fact that it did not bear the return date at Part B. RDM said that because the matter was not one to which Part C applied, the date written in Part C could not be read as the return date for the hearing, and that strict compliance was required. Monsere submitted that in the circumstances of this matter, where Part C of the Form was not engaged, and where the date at Part C was a future date, it should have been obvious to RDM that the Registry had made a mistake and that the date in Part C was actually the return date. Monsere submitted that there was therefore substantial and sufficient compliance with the requirements of the Act. Judge Bochner examined a number of the authorities on s.459G, although

she acknowledged that none of them specifically related to a situation where the date was on the wrong section of the Form. It was clear from previous cases that it was fatal to the validity of the application if no return date at all appeared on the document, whether or not it was fault of the applicant – see for example Bache Business and Printing Services Pty Ltd v SA Hub Productions [2009] SASC 369 and Cooloola Dairys Pty Ltd v National Foods Milk Ltd [2004] 211 ALR 293. Judge Bochner concluded that: “It was not for the defendant [RDM] to attempt to ascertain the true meaning of Part C; the time and date for the hearing must be evident on the face of the document, without requiring the defendant to make any assumptions. In my view, this case cannot be distinguished from Cooloola Dairies, despite the factual differences both cases required the defendant to guess, make an assumption or take some other step to ensure that it was aware of the hearing date for the application”. Monsere’s application to set aside the Statutory Demand was therefore dismissed thereby exposing Monsere to being wound up. It is understood that Monsere may be appealing this decision. Even if an appeal is lodged and is successful it is abundantly clear that it would have been better for Monsere and its solicitor had the proper details of the return date been checked and the document corrected before service on RDM. Much of what practitioners do depends greatly on getting the details correct. This case shows that not doing so can cause significant problems. In cases where the solicitor is not primarily responsible for the error the “buck” will often stop with the solicitor. Even when things are busy (perhaps especially when things are busy) stop, take a moment to check and double-check that you have the details correct. September 2019 THE BULLETIN

BOOKSHELF

MILITARY LAW IN AUSTRALIA Abstract from Federation Press Military Law in Australia covers contemporary legal practice in a military context. It is written by a stable of experts drawn from the profession, including a judicial officer, barristers, legal practitioners within

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LEGAL AND EQUITABLE PROPERTY RIGHTS

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CONTRACT AND THE AUSTRALIAN CONSUMER LAW

J Carter & L Chang The Federation Press 2019 PB $69.95

Abstract from Federation Press Contract and the Australian Consumer Law analyses the way the Australian Consumer Law has modified contract law. In particular, provisions in the Australian Consumer Law in relation to consumer guarantees for goods and services, unfair contract terms, misleading or deceptive conduct and unconscionable conduct

are considered and analysed. The book discusses recent cases on these topics and extracts guiding principles from the legislation and the cases. The text is intended to be read from cover to cover so as to present a birdseye view on the operation of the legislation in the context of contract law.

UNDERSTANDING BUSINESS LAW

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44 THE BULLETIN September 2019

Abstract from LexisNexis Understanding Business Law covers a range of business law topics including contract law, sale of goods, employment law, consumer law, business structures, property (including intellectual property), civil wrongs, debt recovery and financial transactions. The authors use case examples and real-life scenarios to illustrate

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GAZING IN THE GAZETTE

3 JUL 2019 – 2 AUG 2019 ACTS PROCLAIMED Residential Parks (Miscellaneous) Amendment Act 2019 (No 1 of 2019) Commencement ss 6-19; 21; 22; 26; Sch 1 clauses 3-6: 12 August 2019 Gazetted: 4 July 2019, Gazette No. 31 of 2019 Statutes Amendment (Domestic Violence) Act 2018 (No 38 of 2018) Commencement ss 7; 11; 12: 1 September 2019 Gazetted: 18 July 2019, Gazette No. 33 of 2019

ACTS ASSENTED TO Statutes Amendment (Child Exploitation and Encrypted Material) Act 2019, No. 13 of 2019 (amends Child Sex Offenders Registration Act 2006, Criminal Law Consolidation Act 1935, Evidence Act 1929 and Summary Offences Act 1953 Gazetted: 11 July 2019, Gazette No. 32 of 2019 Statutes Amendment (SACAT) Act 2019, No. 14 of 2019 (amends Mines and Works Inspection Act 1920, Pastoral Land Management and

A MONTHLY REVIEW OF ACTS, APPOINTMENTS, REGULATIONS AND RULES COMPILED BY MELLOR OLSSON’S ELIZABETH OLSSON.

Conservation Act 1989, Residential Parks Act 2007, Retirement Villages Act 2016 and South Australian Civil and Administrative Tribunal Act 2013) Gazetted: 11 July 2019, Gazette No. 32 of 2019 Victims of Crime (Offender Service and Joinder) Amendment Act 2019, No. 15 of 2019 Gazetted: 11 July 2019, Gazette No. 32 of 2019 Parliamentary Committees (Petitions) Amendment Act 2019, No. 16 of 2019 Gazetted: 11 July 2019, Gazette No. 32 of 2019 Criminal Law Consolidation (Assaults on Prescribed Emergency Workers) Amendment Act 2019, No. 17 of 2019 (amends Criminal Law Consolidation Act 1935, Criminal Law (Forensic Procedures) Act 2007 and Summary Offences Act 1953) Gazetted: 1 August 2019, Gazette No. 37 of 2019

APPOINTMENTS Judge of the Industrial Relations Court of South Australia Peter Dennis Hannon

Gazetted: 25 July 2019, Gazette No. 34 of 2019 Chairman of the Electoral Districts Boundaries Commission (from 19 July 2019) The Honourable Justice Patricia Kelly, a Judge of the Supreme Court of South Australia Gazetted: 26 July 2019, Gazette No. 36 of 2019 Adelaide Cemeteries Authority Board Director: from 2 August 2019 until 1 August 2023 Joanna Louise Andrew Gazetted: 2 August 2019, Gazette No. 38 of 2019

RULES Magistrates Court Rules 1992 Amendment 75 Gazetted: 4 July 2019, Gazette No. 31 of 2019 Magistrates Court Rules 1992— Corrigendum Amendment 74 Gazetted: 25 July 2019, Gazette No. 34 of 2019

REGULATIONS PROMULGATED (3 JULY 2019 – 2 AUGUST 2019) REGULATION NAME

REGULATION NO.

DATE GAZETTED

Associations Incorporation Act 1985

185 of 2019

4 July 2019, Gazette No. 31 of 2019

Advance Care Directives Act 2013

186 of 2019

11 July 2019, Gazette No. 32 of 2019

Teachers Registration and Standards Act 2004

187 of 2019