Legal Ease

To make matters worse I believe we now live in a country where the tough decisions are avoided and the popular vibe rules

CBA argue that rate rises within the range they expect will cool demand and put the infl ation genie back in the bott le. I think they may be right. I’ve got a vibe. The property market is correcting. How corrected, who knows. What we do know for sure is that politicians want to get involved in home ownership. Some would have the government (taxpayers) do a joint venture in fi rst home ownership while others would allow access to super. Make no mistake, the access super option also involves taxpayers. Less super at retirement equals more reliance on taxpayer funded pensions. Of course, if house prices rise substantially over the working life of the fi rst home buyer and that buyer downsizes into retirement the whole thing just might work without imposing on the long-suff ering taxpayer. Sounds a bit like government sponsored speculation or is it just the vibe? Mortgage defaults will explode. How big an explosion? Well actually, not very big at all. Australian borrowers do something that very few other borrowers do worldwide. They pay off debt faster than the credit contract says, and they build up advance payments for a rainy day. So far as statistics tell us only Canada has a similar borrower profi le. In fact, new research from the Australian Prudential Regulation Authority (APRA), released recently, shows that Australian mortgage holders are on average 45 months ahead on their repayments. This is up from 32 months recorded prior to the pandemic. Investment decisions will be more critical than ever. How critical? Very! Here’s where I caution you not to rely on anything I say and to seek appropriate professional advice. I’m not a fi nancial advisor, just a simple bloke who’s made and lost a few bob punting on various get rich quick schemes. It’s probably important to make one underlying confession from the get go. Most of the investments I’ve made over the years that relied on lots of analysis and many spreadsheets have performed modestly, while those decisions made more from a fundamental understanding of the asset, some emotion and the vibe have done signifi cantly bett er. The lesson I’ve learned is that the more analysis required the less likely the investor has an understanding of the opportunity and asset class. So, if you’ve got a few dollars sloshing around in these troubled times might I suggest looking at asset classes you know, or industries you can study and understand prett y easily. It’s really important to know enough to sort the fact from the fi ction. As an example, I know a bit about fi nance and economics but bugger all about anything else. What amazes me is that when I read commentary and research in the press from so called fi nance experts a lot of it is simply not accurate. For example, a senior economist at one of the major banks recently talked about fi xed rate expiry refi nance risk. Thing is, if you’ve got a 25year home loan and you come off a fi xed rate aft er the fi rst three years there is no refi nance risk. You simply convert to variable or take another fi xed rate option. This is not a refi nance and to suggest to mortgage holders that they have such a risk is either reckless or, at best, careless.

Bott om line. Do your research, make sure the maths works but don’t ignore the vibe.

Authors beware!

It is widely known that bodies corporate have, for the most part, failed in attempts to terminate Caretaking and Letting Agreements in Schemes in Queensland.

Generally speaking, tribunals (such as QCAT) have rejected claims that alleged substandard caretaker performance is a legitimate basis for termination.

This can lead to resentment by certain body corporate members, who publicly express their disappointment or anger, and become what is colloquially termed ‘keyboard warriors’. They then engage in internet lett er writing campaigns. Yet, unit owners may be surprised to know that the BCCM Act provides only limited protection from civil actions for damages for defamation. Many of the publications, that we have seen, are unguarded, defamatory, and open the door for claims that could result in substantial legal fees and damages. Recently, in the Supreme Court of Queensland decision of TLL Investment Pty Ltd v The Body Corporate for the Grange CTS 30993, an alleged author of an internet lett er, sent to unit owners, was linked to a defamatory publication. If the matt er goes to trial, and is determined against the author, this could result both in damages and legal fees, of tens of thousands of dollars. In this case, the author had, over the course of the proceedings, engaged three fi rms of lawyers, and had in other periods been self-represented. In another case in which we are involved, publications have been made about a party in a strata scheme, which has resulted in complex and expensive defamation proceedings; all of which might have been avoided if the publishing parties had sought advice and taken greater care before making statements. In these times, with the prolifi c use of the internet and social media, people may unthinkingly make allegations with wide circulation, before considering the consequences of their statements. The broader the circulation, the greater the damages may be. Where bodies corporate have been unsuccessful in litigation, that does not entitle authors to carelessly make disparaging and damaging statements in retaliation. If a person feels so motivated to publish comments, then advice should fi rst be taken, and there should be care to ensure that there will be no legal consequences arising from publication.

Peter George,

Partner, Litigation Management & Consulting, Short Punch & Greatorix Lawyers