Hones News

Developers and Off-the-Plan Buyers

Developers and Buyers for Off-the-Plan properties, check these important changes to the conveyancing laws passed by the State government in November. The new laws bring in stronger protection for purchases who buy property off-the-plan, and also impose on developers greater obligations for disclosure. A link to the Registrar General’s page noting some of the changes, as well as expansions to electronic land transactions is:


This is worth a read.

Key elements of the disclosure for off-the-plan contracts is the need for:

  • A copy of the proposed plan of the building as well as details of easements and covenants;
  • For strata and community properties, the proposed by-laws;
  • A schedule of finishes where building work is required as part of the contract.

New Additions to the Hones Lawyers Family

This year is proving to be a very exciting one for the Hones Lawyers family.  We are expanding our family.  Not only are we expecting one new addition, but two!

One of our solicitors, Peter Clarke and his wife are currently expecting baby number two any minute now.  Peter and Laura already have a beautiful four-and-a-half-year-old daughter and are most definitely looking forward to their new baby adding more fun to their growing family.  Whether the baby is a boy or a girl remains a secret, however we are certain both Peter and Laura will be over the moon to finally meet their new baby.  We are all excited for Peter and Laura and wish them both the best with their new baby.

In addition to that, Shiya Pan, our beloved Conveyancing Assistant, will be commencing her maternity leave in a couple of weeks in preparation for the arrival of her first baby.  Shiya is due to have her little boy in April and we all couldn’t be more excited to meet him.  Although we will miss Shiya for the six months she will be away, we would love nothing more than for her to be ready for the arrival of her first baby and to revel in motherhood as she gets to know her baby boy.  We would like to wish Shiya and her partner all the best in their new roles as parents and we hope this special time is filled with love and joy.

5 Common Misconceptions People Have When There’s A New Development On The Block

He who cannot put his thoughts on ice should not enter into the heat of dispute.” – Friedrich Nietzsche

There are few things that get people more hot under the collar than a new development proposed next door.  Whether it’s a single dwelling, a block of apartments or a commercial use, even Nietzsche would probably have had difficulties keeping his emotions in check if he felt that his lifestyle was about to be altered – for the worse – by a new development in his street.

Whether you’re the one carrying out the development or an existing resident who’s about to be impacted, it can be a turbulent time.  Feelings are fraught, tempers are frayed and neighbourly relations can quickly sour when the spectre of development rears its much-maligned head within a stone’s throw of someone’s treasured home and castle.

It’s a common situation that’s happening almost every day on any street in any suburb.  So you’d think that, by now, everyone would be reasonably clear about the rules and regulations that apply.  But, judging by the inquiries we receive, the matters we act in and the cases decided by the courts, there are still many myths, misconceptions and misunderstandings about what the legal position actually is whenever new development is proposed.

Here are 5 of the most common areas of confusion that we encounter as property, local government and town planning lawyers:

  1. If a council approves development a neighbour has a right of appeal

This is a prevalent belief that is the cause of unnecessary anxiety on the part of someone planning to construct a new building and gives false hope to neighbours.  As a general rule, only the person who lodged the development application can appeal from the decision of the council.  There are a few very limited circumstances (for certain specified types of development) in respect of which a neighbour has a right of appeal if the council approves a development, even if it is next door.

  1. A neighbour is entitled to input into the design of an adjoining development

While neighbours can certainly lodge their objections with the council, their opinions and preferences will not necessarily prevail, even if negative impacts can be demonstrated.  The council is required to take the objections into consideration but can decide not to implement the requested amendments.

  1. If a development does not comply with the council planning controls it will be refused

Not so.  The planning system in New South Wales incorporates a level of flexibility which means that strict compliance with all development standards is not necessary.  Even if there are a number of non-compliances with planning controls, while in some situations this may be indicative of an unsuitable development design the number of non-compliances is not, of itself, determinative.  In assessing the proposal, it’s necessary for the council to take into consideration the nature and extent of each of the non-compliances and the impacts which flow from them.

  1. If a design change would reduce or remove an impact then the council must require it to be done

Sometimes, a relatively minor change to a design would have the effect of diminishing or removing completely an impact on an adjoining home.  While it might make a lot of sense to do this, the council is not under a duty to require that change to be made.

  1. Once a development has been approved there is nothing that the neighbours can do

In very limited circumstances, legal proceedings can be commenced to have a development consent declared invalid.  On its face, this appears to contradict the first point which states that there is no right of appeal for neighbours.  However, this is not the same as a right of appeal.  In order to succeed in proceedings of this nature, you must be able to establish that there was a legal flaw in the approval process.

Whenever change is proposed, it’s understandable that people can become concerned about what the possible impacts might be.  But, as with any situation where there are conflicting interests, it’s essential to properly understand the facts and know your rights before you make any decisions.

Whether you’re a developer, a neighbour or a concerned local resident, no matter which side of the fence you’re sitting on, it’s always important to know where you stand.

This article does not constitute legal advice.

Susan Hill, Special Counsel with Hones Lawyers, is an Accredited Specialist in Local Government & Town Planning Law.  She has been a solicitor for over 30 years, with extensive experience in Land and Environment Court matters.

5 reasons you should see a lawyer

5 Reasons You Should See a Lawyer

For a big percentage of people, when they think about lawyers they instantly link them to problems.  But if you’ve got a development project in the pipeline then early engagement with your legal team could add even more value to your bottom line.

If you predicted that most people would rate the enjoyment factor of a visit to a solicitor’s office at about the same level as a trip to the dentist then you’d be on a pretty safe bet!

A glance into our waiting room on any day of the week would quickly confirm why there’s such a negative mindset out there.  Nine times out of ten, clients are sitting in our offices because they’ve encountered a legal situation that’s just about guaranteed to be nothing more than a long, drawn-out headache.  They’re focused on the day that it will finally be finished so that they can leave it behind them and get on with their lives.

Continue reading…

Getting the appropriate compensation matters

Compensation matters

The acquisition process for a number of the State Governments key new rail station sites has begun in earnest for the new Sydney Metro City and Southwest rail line.

Hones Lawyers are currently acting for a number of (soon to be) dispossessed landowners and lease holders. Thus far the compensation being offered falls well short of appropriate compensation – in some case not even including any allowance for disturbance costs or down turn in business because of having to relocate.

Getting the appropriate compensation matters – it can be, and often is, is a question of life and death for a business – in many cases even more so for a small family operated business.

When an organisation the size of the State Government knocks on your door and tells you they are purchasing your property at a certain price, most individuals feel confused as well as significant stress and pressure. While selling your property to the government may be impossible to avoid, the level of compensation for your property asset is not necessarily fixed per the government offer.

Unfortunately a simple negotiation is rarely successful in these State Government property acquisitions and legal representation is necessary. To fight such cases, Hones Lawyers have over the years, put together teams of some of Sydney’s best consultants in the sphere of land compensation and compulsory acquisitions. Our teams are solely focussed on gaining fair compensation for our clients and normally includes some of the best barristers, valuers, town planner and business loss analysts in the country.

It is going to be an interesting time ahead as there seem to be many unhappy landowners and lease holders contacting us at Hones Lawyers already. Contact us if you are soon to be dispossessed and would like to discuss your options.

Tree disputes under the Trees Act of NSW

Tree dispute under the Trees Act

Hones Lawyers assisted owners in Castle Cove in their application under the Trees Act of NSW.

The Trees Act provides the opportunity for a party to apply to the Land and Environment Court in circumstances where a tree or trees on an adjoining property create damage, severe obstruction to views or severe obstruction to solar access.

Our Clients were faced with a most significant problem in that adjoining owners planted Bamboo on an adjoining property which, over time, spread onto our Clients’ property resulting in substantial damage to existing gardens and paved areas on our Clients’ property. Unfortunately, previous efforts by our Clients to resolve the significant problem of the Bamboo infestation with the adjoining owners had failed.

Accordingly, our Clients had no choice but to seek our services to lodge a Trees Act application before the Land and Environment Court seeking various orders requiring the adjoining owners to remove the Bamboo from our Clients’ property, remove the Bamboo on the adjoining property within 3m of the common boundary, undertake maintenance for a lengthy period to ensure that the Bamboo did not return and payment of costs for repair of damage to our Clients’ property.

In a very recent decision by Commissioner Fakes of the Land and Environment Court, our Clients were successful and Court Orders reflecting the above were made.

Strata Schemes Development Act

Strata Schemes Development Act 2015

New jurisdiction for the Land and Environment Court.

The new Strata Schemes Development Act 2015 (the “Act”) has been passed by Parliament and is expected to come into effect after July 2016.

These laws present a profound transformation in strata law. Presently, strata schemes can only be terminated by way of agreement of all lot owners, however the new laws will allow the re-development or sale of strata schemes without the unanimous agreement of owners.

Part 10 of the Act sets out the new regime. Our reading of the Act shows it is complex with a number of steps to be followed, with each step allowing the process to be halted or changed depending on the outcome of that step, and the fact that every application for a forced sale or re-development of a strata scheme will require an order from the Land & Environment Court means that the involvement of strata specialists early on in negotiations is paramount.

The steps in the process can be summarised as follows:

Step 1 – Opt In (Existing freehold schemes must opt in to the scheme by way of ordinary resolution at a general meeting of the owners’ corporation).

Step 2 – Submit a Strata Renewal Proposal (Anyone, including developer who is not a present lot owner, may give a strata renewal proposal to an owners’ corporation).

Step 3 – Strata Committee to Consider (Within 30 days of receipt of the strata renewal proposal, the strata executive committee must consider the proposal at a committee meeting).

Step 4 – General Meeting to Consider (If at the committee meeting it is determined that the strata renewal proposal warrants further consideration then a general meeting of the owners’ corporation must be convened. This meeting should take place within 30 days of the committee meeting).

Step 5 – Establish a Strata Renewal Committee (If at the general meeting it is decided that the strata renewal proposal warrants further investigation then a strata renewal committee (SRC) must be elected by the owners)

Step 6 – Prepare a Strata Renewal Plan (This must be prepared by the committee elected at Step 5. The committee may engage third parties to assist in the preparation of the strata renewal plan (SRP).

The SRP will be for either the collective sale of the strata scheme or for its re-development.

The different plans can be described as follows:

A collective sale is the sale of all lots within the scheme. A collective sale plan must include details such as the name of the purchaser or details of the proposed sale of the overall site by auction or tender. The plan must provide for the purchase of each owner’s lot for no less than the compensation value for the lot. Additionally the amount paid for the sale of the lost and common property must be apportioned amongst the owners of the lots in accordance with their unit entitlements. The L&E Court will have the discretion to vary the unit entitlements where the existing allocation is unreasonable.

A re-development plan is a more complex beast, as this plan must allow for the sale of dissenting owners lots, along with (for example) a different tailored or potentially more complex arrangement applying to the lots of supporting owners (such as ownership of a lot in the new strata scheme). This plan must include details such as the name of the proposed developer, financing arrangements, any planning approvals, requirements for vacant possession and details of the terms of settlement for each owner who supports the scheme. The plan must provide for each dissenting owner’s lot to be purchased for (at least) the “compensation value” for the lot.

The requirement for the payment of “compensation value” as a minimum amount is a significant safeguard. It is more than just market value, as it also includes such amounts as extra payments equivalent to those in a compulsorily acquired sale of land. These payments must compensate the owner for the special value that the property might have, the out of pocket expenses incurred as a result of a forced sale, such as relocation and expenses associated with the acquisition of a new property, and some compensation for the disadvantage of losing a principal place of residence (a difficult component to value, not unlike “non-economic loss damages” in a personal injury case).
As you can see, involvement of experts at this step is critical to the success of the plan.

Step 7 – General Meeting to Consider the SRP (Once the SRP is deemed ready for consideration, a general meeting must be convened to consider the SRP. It may be decided that the SRP requires more work, in which case it must be sent back to the SRC. Alternatively, if it is decided that the SRP is to proceed, then a special resolution must be made to formally present the SRP to the owners for their consideration. This special resolution requires at least 75% to vote in favour.

Step 8 – SRP Formally Given to Owners (The owners in support of the SRP may then give the SRC’s appointed officer a “support notice”. This notice must be signed by both the owner and each registered mortgagee or covenant charge of the owners’ lot. It must be given no earlier than 60 days and no later than three months after receipt of the SRP.

This timing is of the essence, as the SRP will lapse if at least 75% of the owners do not provide support notices within the timeframe provided. This means that small schemes with only a couple of lots will require unanimous agreement before they can be terminated under these provisions.
Car parking and storage areas are not included in the 75% calculation.

Step 9 – SRP recorded on title (LPI must be notified if 75% support for a SRP is achieved within the 3 month period. The fact that a SRP is in existence will then be noted on the title of the common property.

From this point on, once recorded, the support notice will bind future owners of the lots.

Step 10 – General Meeting to Discuss Court Application (A GM of the owners’ corporation must then take place. This meeting will decide whether to apply to the L&E court for an order to give effect to the SRP).

Step 11 – Application to L&E Court (Dissenting owners and their registered mortgagees and covenant charges must be notified of the application and may lodge an objection with the Court. If the SRP provides for a re-development rather than a collective sale then the local council can also file an objection.

Unless otherwise ordered by the court, the costs of a dissenting owner are payable by the owners corporation (similar to a s88K where the costs of the burdened lot owner are payable by the beneficiary of the easement). The owners’ corporation cannot then levy a contribution towards these legal costs upon the dissenting owner/s.

Step 12 – Mediation in the Court (The court may order mediation to ascertain whether agreement can be reached between the parties).

Step 13 – Court Orders Made (The court may make an order giving effect to the SRP if it is satisfied as to the following:

  • Whether the SRP has been prepared in good faith
  • Whether the necessary processes have been followed

If the plan is for a collective sale:

  • The proposed distribution of the proceeds of sale apportioned to each lot is not less than the “compensation value” of the lot; and
  • The terms of the settlement under the plan are just and equitable in the circumstances.

If the plan is for a re-development:

  • The amount to be paid to a dissenting owner is (at least) the larger of
  • The compensation value of the owners lot;
  • An amount equal to the value to the dissenting owner if that owner had been a supporting owner;
  • The terms of the settlement order under the plan (as those terms apply to any dissenting owner) are just and equitable in the circumstances.

Step 14 – Sale in Accordance with the Court Order (If the Court makes an order giving effect to a “collective sale” SRP, all owners must sell their lots.

If the court makes an order pursuant to a “re-development” SRP, the dissenting owners must sell their lots.

The court may also order that compensation is paid to a tenant whose lease is terminated as a consequence of the SRP being given effect.

Every single SRP must go to the L&E Court by way of an application seeking orders authorising the implementation of the SRP. This is the case even if the dissenting owners are passive or all owners are in agreement. The court must be satisfied that all necessary procedural steps in the process have been carried out properly. This will require careful management from the initial stages by the developers, the owners’ corporation and their advisers to ensure that all requirements are met.

We strongly suggest that you speak to us first for advice and assistance every step of the way for your strata developments needs.

New Swimming Pool Legislation

New swimming pool legislation

All properties with a swimming pool or spa being sold or leased on or after 29 April 2016 will need a valid certificate of compliance or a relevant occupation certificate. A relevant occupation certificate is one less than three years old which authorises the use of the swimming pool. In the event of a sale, the certificate must be attached to the contract for the sale of land.

Where a certificate of compliance cannot be obtained, the vendor will be able to transfer the responsibility to obtain a certificate of compliance to the purchaser. The responsibility is transferred by attaching a certificate of non-compliance to the contract for the sale of land. The purchaser will then have 90 days from the date of settlement to rectify defects listed in the certificate of non-compliance and obtain a certificate of compliance.

In addition to a certificate of compliance, certificate of non-compliance or relevant occupation certificate, a certificate that the swimming pool is registered must also be attached to the contract for the sale of land.

Failure to attach the certificates may allow the purchaser to rescind the contract for the sale of land within 14 days of exchange, unless settlement has already occurred.

There are some exceptions, including strata or community schemes comprising more than 2 lots, and if the contract is an off the plan contract.

A certificate of compliance can be obtained from the local council or an independent accredited certifier who is registered with the Building Professionals Board. Further information can be found on the Swimming Pool Register website at

We suggest you allow plenty of time to obtain a certificate of compliance as anecdotal evidence suggests that around 95% of pools fail at the first inspection. With many councils it can take up to 90 days before a pool becomes compliant.

Expansion of Unfair Contract Protection to Small Business Contracts

Businesses and lenders beware – expansion of unfair contract protection to small business contracts

On 12 November 2015 legislation was passed which extends the unfair contract protections to include small business contracts (see the Treasury Legislation Amendment (Small Business and Unfair Contract Terms) Act 2015). This will affect provisions of the Australian Consumer Law (ACL) and the Australian Securities and Investments Commission Act 2001. The changes take effect from 12 November 2016.

Will any contract be covered?

  • No. The changes to the ACL will apply to standard form small business contracts if:
    the contract is for a supply of goods or services, or a sale or grant of an interest in land; and
  • at the time of entering into the contract, at least one party is a business that
    employs less than 20 people; and
  • the upfront price payable under the contract is no more than $300,000 or if the contract is for more than 12 months it is for no more than $1 million.

What is a standard form contract?

A standard form contract is one where there is no negotiation between the parties and it is provided on the basis that it is either accepted in whole or not all.

A contract will be presumed to be a standard form contract if a business alleges it is one and it will then be up to the other party to prove otherwise.

What is an unfair term?

A term is unfair if it:

  • “would cause a significant imbalance in the parties’ rights and obligations arising under the contract”; and
  • “is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term”; and
  • “would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on”. (see section 24 of the ACL)

Terms that may be deemed unfair could include:

  • a term that permits one party (but not another party) to avoid or limit performance of the contract;
  • a term that permits one party (but not another party) to terminate the contract;
  • a term that penalises, or has the effect of penalising, one party (but not another party) for a breach or termination of the contract.

Further examples of potentially unfair terms can be found in section 25 of the ACL but it is by no means an exhaustive list.

What does this all mean?

If a court or tribunal determines that a standard form small business contract includes an unfair term then that term will be void and not binding on the parties. The balance of the contract will continue to operate to the extent that it can without the unfair term.

What you can do to become ready

If you haven’t already done so, it is time to start reviewing any standard form contracts you have that may be considered a small business contract and take steps to ensure they comply with the new legislation.

Case of McCudden v Cowra Shire Council

McCudden v Cowra Shire Council

Mr McCudden has been the occupier of land in the Cowra Council area and for more than 4 years he has conducted a shelter for abandoned and unwanted cats on the land on a non-commercial basis. Complaints have been made to the Council by the neighbours. An inspection revealed that the number of cats reported to have been kept on the land range between 174 and 200.

On 6 August 2015 the Council issued an order to Mr McCudden under s124 of the Local Government Act 1993 requiring that no more than 33 cats be kept on the land at any one time and the order also sought to constrain the manner in which the cats were to be kept on the land. Mr McCudden appealed to the Court in respect of Council’s order pursuant to s180 of the Local Government Act and then sought by way of Notice of Motion the determination of a number of questions in relation to the validity of the Order and the jurisdiction of the court to hear the appeal.

The order stated in Schedule A:

  1. Reason why this order has been given:
    1. you are the occupier of the Premises;
    2. cats are being kept on the Premises in inappropriate numbers and inappropriate conditions; and
    3. the welfare of the cats is being significantly compromised as a consequence of:
      1. the cats being kept in groups that are excessively large and therefore socially dysfunctional,
      2. the cats not having appropriate space and adequate resources to display normal and preferred behaviours, and
      3. insufficient human resources (carers) being available to properly care for the cats.

The Applicant argued that there was only one reason stated by the Council for the giving of the order, namely that set out in sub-paragraph 1c of Schedule A which is directed to the welfare of cats. The argument relied upon by the Applicant was that the order should be construed by reference to the ordinary canons of construction as they apply to the interpretation of subordinate legislation.

The Court accepted that the principles of construction applicable to subordinate legislation are appropriately applied to the proper construction of a statutory notice or order of the kind before the Court as that an order given under s124 falls within the definition of an instrument as defined in s3 of the Interpretation Act 1987 (NSW). His Honour found that:

  1. the Applicant’s interpretation failed to accommodate the principle that the order is not to be interpreted as if it was drafted with the precise language expected of a statute,
  2. the order is not required to be so drafted in order to have legal effect, and
  3. that the consequences of accepting that the order given by the Council is an “instrument” within the meaning of the Interpretation Act has the result that the proper construction of such an instrument necessitates greater regard to practical considerations and it is not appropriate to construe such an instrument by subjecting its language and structure to that applicable to the interpretation of an Act of Parliament. His Honour cited with approval the remarks of Stein JA in J & J O’Brien Pty Ltd v South Sydney City Council 121 LGERA 223 where his Honour identified the necessity for the order to be read as a whole for the purpose of discerning the reasons “for the exercise of the council’s statutory discretions”.

At paragraph 48 of the judgment of the Court of Appeal there is a reference to the decision of the Land & Environment Court in Van Haasteren v South Sydney Council 109 LGERA 252 and it was observed to be that, if that decision is “authority for a proposition of general application, it goes too far and should not be accepted without qualification in cases where the statement of the circumstances enlivening the power is sufficient without more to make plain to the recipient the basis and reason for the decision to issue the order.”

Craig J applied the decision of O’Brien and found that the reasons, in accordance with the decision of the Land & Environment Court in Shannon v Lithgow City Council (1995) 88 LGERA 253 with respect to an order given in accordance with Order No 18 under s 124 of the Local Government Act, requiring the occupier of premises “to reduce the number of dogs being kept on the premises to an appropriate number of four (4) dogs”, in context, indicated sufficient reason for the purpose of s136 of the Act. The context considered were the terms of the order as a whole. His Honour’s conclusion was that “reading the Council’s Order as a whole and doing so in a manner that has “regard to more practical considerations”, one can adequately discern for the purpose of s136 of the Local Government Act, reasons why both the numbers of cats and conditions in which they were being kept were inappropriate and how the welfare of cats, reduced in number to 33, could appropriately be addressed.”

The argument submitted by the Applicant that, having regard to the scope, purpose and object of the power being exercised by the Council, together with the meaning and context of Order No 18 and s 124, the welfare of cats cannot be a relevant consideration and that therefore the order was beyond the power of the Council.

The Court analysed s7, s8 and ss21-23 of the Local Government Act and, in particular made reference to s8(1) whereby Council may properly “manage, develop, protect, restore, enhance or conserve the environment of the area” for which the Council is responsible and s7(e) of the Local Government Act, which requires that a Council, when carrying out its responsibilities, do so having regard to “the principles of ecologically sustainable development”, an element of Council’s charter under s 8 of the Local Government Act. His Honour found that on examination of the Environmental Planning and Assessment Act and the Council’s role and functions thereunder, there was no reason to believe that the word “Environment” would be used differently in the Local Government Act and the EPA Act or the Protection of the Environment Administration Act and, for those reasons, the welfare of animals was relevant to a Council’s consideration when determining to give the order that it did under s124 of the Local Government Act.

The Applicant also contended that the reasons given were inadequate as the reasons required by s136 must make intelligible the true basis for the decision to give the order relying on the decision of the Land & Environment Court in Stutchbury v Pittwater Council 105 LGERA. However His Honour found that the reasoning in Stutchbury could not stand in the face of the decision of the Court of Appeal in O’Brien and that Stutchbury is inconsistent with the decision in O’Brien.

Stutchbury, Van Haasteren and Lederer & Ors v Sydney City Council [2001] NSWLEC 272 found that the requirement for reasons can never be satisfied by statement of the circumstances enlivening the power to give an order under a statutory provision equivalent to s124. His Honour found that the reasons in the order given to Mr McCudden were sufficient and declined to follow Stutchbury, Van Haasteren and Lederer.

His Honour found that an order given under s124 of the Local Government Act which apparently meets the requirements for giving that order under the table to the section, but in respect of which no reasons sufficient to satisfy the requirements of s136 have been included in or accompany that order, is not, on that account, a nullity.

The Court also found that an order, so given, persists so as to found the jurisdiction of the Court to hear and depose of an appeal to the Court.

His Honour also found that even if the absence of reasons is assumed, the order is not, on that account, invalid and retains its force sufficient to ground an appeal.