Nappy Crisis

Section 106 of the Strata Schemes Management Act 2015 (SSMA) was always going to be something that impacted on the landscape of Lot Owners and the Owners Corporations, in relation to tenants. Since 2012, Owners Corporations have had no risk associate with damages suffered by landlords, because of various cases decided in the Supreme Court.

Seiwa’s case (2009) laid down a principal that the Owners Corporation must maintain and repair common property.  In Seiwa, because the Owners Corporation had not maintained and repaired the common property, the Owners Corporation was required to pay damages suffered by the Lot Owner for this failure.  In 2012, in a case Thew, the Court of Appeal overruled Seiwa’s case.  They held that the Owners Corporation must maintain and repair the common property, but that they did not have to pay any damages if they had failed in their duty to a Lot Owner. 

For five years, Owners Corporations had impunity – they were able to refuse demands for payment of damages by Lot Owners.  Interestingly, one of the trends that developed within the industry, was that strata managers tended leave property managers “in the dark”, in trying to resolve issues between landlords and their tenants.  As a result of the failure of the Owners Corporation to maintain and repair the common property, the landlords were being left to deal with termination of leases for failure to maintain and repair the common property and pay damages claimed at NCAT.  The innocent landlord was left with no remedy.

This has now changed under the new legislation.  Section 106(5) allows any Lot Owner to claim damages for loss suffered for the failure of their Owners Corporation, to maintain and repair common property. 

Consider this. Early one morning, a tenant arose from his sleep.  As he moved through his unit, he discovered, very quickly, that he was stepping through shit (literally)!  His toilet was affected from what is commonly known as “reflux”.  In other words, when somebody flushed their toilet upstairs, the refuse was flowing out of his toilet, onto his floor and float through his home. 

The tenant reported it to the property manager immediately.  The property manager contacted the Owners Corporation for assistance.  The Owners Corporation did not provide the necessary assistance. 

The problem was further complicated because it was identified by experts, that pipes had been blocked by a nappy which had been flushed from another toilet.  In other words, the nappy was stopping the flushing from coming through and pushing it up towards the toilet of the unsuspecting tenant.  The Owners Corporation felt that they were not liable for the actions of one of their (unidentifiable) Lot Owners.

The tenant sued the landlord at NCAT.  Remember, the tenant only has an action against the landlord, but not against the Owners Corporation. 

Although in a different division of NCAT, the landlord simply joined the Owners Corporation to the action.  The landlord quoted S.106(5) and suggested it was the Owners Corporation’s responsibility.

The Court found in favour of the tenant and required the Owners Corporation to pay the $7,000 worth of damages.

This is not only new, it is set to become a far more regularly trodden path, within NCAT.  It is a profound change to the way disputes of this sort, will be resolved.

 The changes we predict are: –

  • It will become a general practice for Property Managers to join Owners Corporations to actions were the common property has caused the issue; and
  • NCAT will fight against Owners Corporations where there is a common property fault; and
  • Strata Managers will be required to advocate for their Owners Corporations, since NCAT is unlikely to let Solicitors to represent the Owners Corporation.



This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538



Contract Execution

My mates at Fair Trading used to say to me “You were once a respected Administrative Lawyer, you’ve now become a celebrity who represents Real Estate Agents”.  Harsh comments from my previous colleagues, but I always respond ….. “the one thing I can promise you about real estate is that every day I get up and go to work, I learn something new”

This article is dedicated to the God Academus, who has provided me with new learning in the areas of Contract execution.

For many years I have taught, as have others, that no one can execute a Contract for Sale of Land except the entity purchasing or a person holding a Power of Attorney, on behalf of the purchasing entity. 

However, an incident occurred about eight weeks ago which caused me to reconsider my view. 

A solicitor arrived at an auction, advising that he was going to bid and sign on behalf of his client.  The auctioneer conducting the auction raised his concerns in regard to how a solicitor might execute the contract on the persons behalf without a power of Attorney, but because he was a solicitor, the auctioneer acquiesced, and the solicitor duly executed.  The solicitor provided them with a copy of a section under the Conveyancing Act 1919, that supported his position. 

By the way, I write this article well and truly after the contract has settled, in case of any questions about the validity of execution of the contract.

Section 23C of the NSW Conveyancing Act 1919 states:-

CONVEYANCING ACT 1919 – SECT 23C

Instruments required to be in writing

23C Instruments required to be in writing

(1) Subject to the provisions of this Act with respect to the creation of interests in land by parol:

(a) no interest in land can be created or disposed of except by writing signed by the person creating or conveying the same, or by the person’s agent thereunto lawfully authorised in writing, or by will, or by operation of law,

(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by the person’s will,

(c) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same or by the person’s will, or by the person’s agent thereunto lawfully authorised in writing.

(2) This section does not affect the creation or operation of resulting, implied, or constructive trusts.

(3) For the purposes of this section, a requirement for writing may be satisfied in electronic form and a requirement for writing to be signed may be satisfied by electronic signature.

What a lot of gobble! What it did seem to say, is that a land dealing can be executed by a person who is the agent of, or acting on behalf of the person, who obtained the benefit of the land.

This wasn’t enough to make me feel any better.  I therefore reviewed the parts that related directly to residential conveyancing in NSW.

Section 52A of the Conveyancing Act 1919 states that a vendor must produce a contract in writing which contains a number of prescribed forms.  Section 54A of the same Act states the contract must be executed on or “on behalf of” the vendor and the Purchaser.  Yes, I would prefer that it simply said any person who is authorised to sign on behalf of another, can sign the Contract for Sale, but it does not.

After reviewing Section 23C and 54A, we are firmly of the view that a person who is authorised in writing to execute a Contract for Sale on behalf of another, can execute that contract.

This means that: –

  • Bidders at Auctions can be authorised to execute the Contract on behalf of the Purchaser.  The bidder’s authority could provide the authority for such power; and
  • A person can sign a private treaty contract on behalf of another provided a written authority can be provided.  This can simply be a note provided by the prospective purchaser.

Although the provisions of the legislation don’t provide it, we don’t believe there is any problem with the purchaser executing the authority to exchange, to bind the contract.  Due to the person given power to execute the contract under the Conveyancing Act 1919, the person is given the power to bind the parties to an agreement.  Hence, by signing the authority to exchange, they have agreed to the binding of the purchaser to the agreement to purchase the property.

This does not allow any person to sign a Transfer on behalf of the vendor.  A transfer on behalf of the purchaser can be signed by a Solicitor or the holder of a Power of Attorney, and these provisions do assist Solicitors in finalising the conveyancing process.  This is good news!  Agents will be able to change their bidder’s authority to allow the person signing the bidder’s authority to authorise the person to execute the contract on their behalf.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Re-let

Reversing a Domestic Violence Termination

It was only two months ago that the new Domestic Violence Termination laws commenced, with regard to the Residential Tenancy Act, 2010. 

However, within that short space of time, what has emerged is an interesting “reversal” which no one had expected!

A husband and wife were in a hostile environment.  The parties argued regularly, and it reached the point where the Owners Corporation issued a Breach of By-law Notice on the landlord, regarding the conduct of the two tenants. 

The wife finally took the step of deciding to leave the premises, alleging domestic violence.  She obtained the prescribed form from her Doctor (GP) and attached it, as required by the legislation, to the notice of termination, and served it on the property manager.  The notice of termination, valid as it was, had the effect of terminating her tenancy, immediately.

Within a very short period of time, the husband was jailed due to his unlawful conduct.  We are not aware precisely why he was jailed or whether it even related to the domestic violence.  Nonetheless, result was the perpetrator of the domestic violence was effectively removed from the scene of the apartment. 

The wife then decided she would stay! 

She reasoned that her husband had now gone to jail and therefore the domestic violence had stopped, and she was no longer an ongoing victim of domestic violence.

Importantly, the Act allows for termination but not the withdrawal for such termination. 

It allows for terminations of tenancies where a time period is provided, but there is no time period provided by an “immediate” termination.  In fact, the termination under the new Domestic Violence legislation, provided the wife with the immediate relief of her tenancy obligations, but holds the husband to his obligations under the Residential Tenancies Agreement.  Hence, the wife was requesting that her termination be revoked and that she take-over the obligations of the perpetrator.  Clearly, no one ever thought this situation might arise!

It did go to NCAT; the parties did enter into discussions regarding how to resolve the matter.  Logic prevailed and she was allowed to stay.  She has now taken over all the obligations of the husband to pay the rent until the end of the term. Ultimately, all parties resolved their differences and sanity prevailed.  One only worries about what will happen though, if the husband is released from jail, before the end of the tenancy agreement?



This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538



Punters Points

Cooling Off Period for Agency agreements

Very few people know that after you sign up a Real Estate Agent, a prospective Vendor or Purchaser has a 24 hour cooling off period (ie. until 5pm on the working day).  This means that, if you change your mind immediately about your agent, you can get out of the agreement. 

In all states of Australia, an agent is not entitled to their commission unless they sign a contract with their Vendor.  The Contract is referred to as different things in different states and jurisdictions but can normally be referred to as Agency Agreement or Agents Authority.  For our purpose here, we will refer to it as an “Agency Agreement”.

In NSW and ACT, Agency Agreements come with a cooling off period.  The legislation in NSW and ACT state that any Vendor (Principal) can withdraw from an Agency Agreement, up to 5pm the next working day, including Saturdays.  There needs to be no reason for pulling out, just that the consumer wants to.

How do you do this?

  • Write a letter merely stating that the Vendor (Principal) wishes to rescind the Agency Agreement in question; and
  • Send it by fax, email or hand deliver it.

This Cooing Off Period is printed on the front of all Agency Agreements, but owners seem to never read this particular area.  You are also given a Consumer Protection Guide in NSW and ACT, however, equally, no one appears to have time to read all the documentation.

Presently, Leverage is looking after an owner who did not read the Agency Agreement or Consumer Protection Guide. 

The person talking to the Agent held a Power of Attorney, representing their parents.  An Agent came in to do an appraisal of the property and presented an Agency Agreement.  Without reading it, the holder of the Power of Attorney signed the Agency Agreement and left it with the Agent. 

After talking to the family, the holder of the Power of Attorney was convinced not to proceed with the specific Agent.  On the same day as executing the Agency Agreement, they rang the Agent and said they did not wish to proceed with the Agency Agreement.  The Agent said, “that’s okay, I wouldn’t force you to stay with me when the family doesn’t agree”

The holder of the Power of Attorney went on to ask, “is there anything else I need to do, to terminate the Agreement?” – to which the agent responded, “No…this telephone call is enough”.

The holder of the Power of Attorney appointed another agent and the property subsequently sold. 

The first Agent has now fronted up and said that you sold the property whilst we had an Exclusive Agency Agreement in place.  You therefore need to pay us the commission under our Agency Agreement.

The Agent who did no work, was aiming to rely on their Agency Agreement as a means of getting paid for doing nothing.  Worse still, were this to occur, it would not void the second Agency Agreement and the owner may end-up being liable to pay double commission.

Whether the first agent is successful or not is one thing – but, what is far more pertinent, is that it could have been avoided, if the owner had known about the cooling off period and had given notice in writing.

Remember, you have until 5pm on the next working day to relieve yourself of an agent!  It must be done in writing and cannot be done orally.



This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538



Don’t Forget the Australians

My two great uncles died at Gallipoli! I knew neither of them because both died in the early days of the war.  My great Uncle George was shot on 27 April 1915.  He only lasted two days!  My other great Uncle never made it off the beach.  Neither of them had children or left a wife behind, but they were both volunteers to a cause that they believed in.

There is a village in France that still carries signs 101 years after the war which states, “Remember the Australians”.  During the 1st World War, which is referred to as the great war, Australians were put into France to push the Germans back into their own country.  There are poppies which show across the Soames which represent where many of our volunteers lay after battles against the enemy. 

In 1917/1918 Australians were put in Northern France to protect villages that were threatened by the enemy.  At a great cost, the villages were protected and were allowed to return to their normal life. Villers-Bretonneux was saved purely by the volunteer Australian Army. 

I heard a story where a person was on a European Tour.  They pulled in at a service station to fill up, and upon entering the service station, the attendant asked where he came from.  The tourist indicated that he was from Australia, touring through North France.  His payment was rejected from the Service Station owner and he was advised that in these parts we remember Australians.

The question should not be whether we should have ever been there, but whether we did good when we were there.  Undoubtedly, the Australians did good there!

On Anzac Day, we remember those volunteers who fell in wars across the world.  Many question whether we should have been there, but on Anzac Day we remember the good they did whilst they were there.  For those who did not grow old, we honour you for the good you have done!



This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538



The First Pit Stop

We have now reached the one hundred and seventh day of the year.  How quick have we reached the first pit stop! I blinked after Christmas, and Easter is here.

Once upon a time, Easter was on the calendar as a holy festival for Christians.  These days, its just a pit stop from the hustle and bustle of Australian business life.  And what a pit stop!  It starts on 19 April and ends on 28 April.  Running on the back of Easter, we have Anzac Day and another weekend.  Leverage’s commitment to family has meant that we have determined to shut our office down on 26 April, so our staff can have two long weekends and to celebrate Easter and Anzac Day.

Easter seems to represent two completely different perspectives; on one hand, it’s just a holiday for most, but for others, it represents a solemn and important day on the Christian calendar.  This is so reflective of modern society.

The week leading up to Christmas on the sporting news, we had two individuals which stand out over all others; First we have had a person who has appealed to the Federal Court regarding being stood down with full pay while his criminal proceedings occur.  Secondly, we have a man who has committed no act of violence against any person but has made an inappropriate post which has insulted certain parts of our society.

For the sports, it is the issue of brand.  There is no conversations of values or standards which should be set by those people who are in those organisations, but whether the conduct itself affects the brand.  Both the possible criminal and the insulter have been deemed to affect the business brand of their various codes and have been stood down.  As an employer, if a person in our business did something to affect our brand, we would have no hesitation dismissing them.

Two things have stood out during this debate;

  1. Talk back radio has been filled with conversations regarding both the activities.  Most of them, however, have been regarding the post by the greatest try scorer in super rugby history.  No-one has gone to his defence, believing his career should be wiped out for life.  On the other hand, notwithstanding the gravity of the offence, society is split regarding whether the rugby league player should be stopped whilst being heard in the Court.  Somebody said to me the other day, “the world has gone mad where the person who harms is defended and the person who comments inappropriately is vilified!”
  2. Although Easter and Christmas are holidays to celebrate Christian festivals, most take it as a holiday.  I note there is no discussion regarding the relevance of these holidays in Australian society whilst we wish to rid ourselves of Australia Day.  If we are secular and the Christian calendar is no longer relevant, should Christmas and Easter therefore be a public holiday?  Public holidays are meant to celebrate a purpose which is important to society; if it is no longer important, it should be treated as a normal day and the holiday be dispensed.  Interestingly enough, I see no requests by any other religion or any of the doom day???  Regarding Christianity about getting rid of the holidays; any excuse for a holiday!

Easter Sunday is supposed to represent a resurrection.  Forgiveness of our sins and a pathway for renewal.

Let’s hope for all of us Sunday brings a renewal and positivity to life.  Let’s hope that the business, health and family Gods smile on all of us on Easter Sunday and we are all revitalised.

From us here at Leverage, we hope that everyone is revitalised, and you have an excellent and safe Easter.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Michael’s Got CRAFT

Politicians are like the manipulative child: “Granny I love you,” knowing that money will follow.

The populace polly will promise something if they can get a vote. Kiss babies, give money or come up with an idea that they think everyone loves. To do this, they must rely on short term memories of the electorate. Guess what, they are usually right because we do forget far to quickly.

Michael Daley, the could have been potential premier, was either doing this or he’s suffering from a dose of CRAFT. You know that disease when you can’t remember anything..?

The Labor Party, has outlined its policy to remove real estate from Fair Trading. It may be a good idea if Government mia maintains control. It is however, political hypocrisy, the Labor Government that Mick was a member of, put it into Fair Trading.

In 1995, Fair trading didn’t exist. Real estate was regulated by the Office of Real Estate Services [ORES]. ORES was a highly effective agency.

Labor determined to create Fair Trading, amalgamating Consumer Affairs, ORES, Building Services Corporations and others under the one banner. The then Commissioner suggested that each of the units remain independent and Fair Trading become an overarching administrative body. He was sacked for this suggestion.

So Labor abolished ORES, created Fair Trading, and now attack the Government over its own invention.

Mick you were the Treasurer, it was your party that created Fair Trading, and now you wish to ride on the coattails of the REI’S criticism of the now government. Why not admit that  your party got it wrong and now you are going to rectify your error?

Quite rightly, polly’s treat us like mushrooms. Where is the press to remind us. So much for investigative journalism.

Michael has CRAFT and we have caught the cold.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Termination of Leases under the ADVO Laws

If you haven’t heard of the amendments to the Residential Tenancies Act 2010 (RTA), which will give tenants a free pass from obligations under the Residential Tenancies Agreement, you must have been hiding under a rock. On 28th February 2019, a tenant who is a victim of domestic violence will be able to terminate a Residential Tenancy Agreement immediately without penalty.

The amendment provides that a person who is a victim of domestic violence, including their child, is immediately released from their obligations under the Residential Tenancies Agreement without penalty provided that:

  1. The victim serves on the Landlord/Agent the termination in the prescribed form;
  2. The domestic violence is proven by attaching one of the following:
  3. Evidence of a conviction by the perpetrator;
  4. An injunction from the Family Court of Australia;
  5. An interim or permanent apprehended domestic violence order against the perpetrator;
  6. A letter from a Medical Practitioner setting out that the person is a victim of domestic violence.

Fair Trading has produced a fact sheet setting out all the requirements that relate to the amendment. All landlords or agents should carefully read this notification. Link

Governments should protect weaker parties against violence, the threat of violence or the fear of violence. Those who are truly the victims of domestic violence should be able to remove themselves from points of danger immediately.

The intentions behind this legislation are completely valid. Unfortunately, two things often happen with this type of legislation:

  • It always goes too far and provides too many leniencies;
  • There is always punishment inflicted on the innocent party, that being the landlord.

Apart from some flaws in the limitations in the attached documents, persons who hold convictions, injunctions or apprehended domestic violence orders, is sufficient evidence for a person to be released from the point of danger. The medical practitioners however create an extraordinarily low bar; provided the practitioner signs the standard prescribed form that requires only two things, the person has a free pass from obligations under the Residential Tenancies Agreement. Those two things are:

  • The Practioner has consulted with the victim;
  • The victim appears to be the victim of domestic violence.

To place faith in the profession which is been found guilty of freely prescribing drugs which cause addiction, is tempting fate. There is always a doctor who will complete a form that gives the tenant what they seek. Remember, domestic violence is not just about committing an act of violence; it’s about threat, abuse, intimidation or offensive behaviour. This particular part of the legislation will become a field day for the professional tenant.

Spare a thought for the landlord who relies on rent to pay the mortgage for often their largest investment. For some strange unidentifiable reason, governments believe that the only persons who own an investment property are those who are wealthy. Many of these properties are bought by self-funded retirees and rely on the income to fund their retirement. Taking away that ability will place the pressure back on the government purse to fund the persons retirement. These circumstances may lead to the punishment of an innocent landlord who has done nothing wrong. The victim can leave without penalty, the co-tenants who haven’t perpetrated the offence have a two week grace period, the co-tenants can apply also to terminate the agreement, and the perpetrator is left to pay the rent.  If a prudent agent how has determined a person’s capacity to pay the rent as being the accumulation of the income of all the tenants, are suddenly left with a person who is incapable of paying the rent, ultimately, the perpetrator will be punished by falling into arrears and being terminated under the Agreement.

There are many more view points that we can have regarding the defects with this regulation but opposing it or becoming disgruntled does not assist our landlords. The industry needs to get its shit together and find a way to best defend your landlord.

A couple of things we need to do before the 28th February 2019;

  1. Inform your Landlords; considering the impact on the landlord, you need to provide advice to your landlords regarding the new legislation. It is our suggestion that you send them a copy of Fair Trading publication so that Fair Trading becomes the carrier of bad news and not yourself. The moment the new laws commence, we believe that people will move immediately to take advantage of these new laws. Don’t leave yourself open to an influx of termination notices before you appraise your landlords of the problem. By advising your landlord, it shows that you are across the issues.
  2. Malicious injury; Leverage had cause last year to speak to a non-bank mortgagee who provides 100% finance. His advice is that, there were no more defaults at 60% loan value ratio to 100% loan value ratio. He said however, their greatest problem was in family law disputes. He said that where a relationship broke down and led to a mortgage not being paid, considerable damage was done to the property. What this information provides to us is that, where there is domestic violence, usually becomes malicious injury to the property. It is important that all property managers check the landlords insurance policies to ensure that they have malicious injury cover. If some of your landlords don’t, you should suggest rent cover insurance; Leverage has attempted to make contact with a number of landlord rent cover insurers regarding ADVO terminations. EBM aka rent cover are the only ones who have written back to us regarding clear information. EBM have identified that they have an ADVO option and this could be selected by your landlords. We suggest two things:
    a. You contact your insurer to identify whether they have ADVO cover and how it is taken up;
    b. Advise all your clients to take up the ADVO option.
  3. Application forms; although the legislation prevents the recording of ADVO terminations and/or giving out information regarding ADVO terminations, there is nothing stopping a prospective agent from seeking information regarding whether a person has ever terminated a Residential Tenancies Agreement on the basis of an ADVO termination. The question could be;
    • Have you at any time in the past two years terminated a Residential Tenancy Agreement on the basis of an Apprehended Domestic Violence?

You are not certain of everyone replying accurately, but it is an attempt to protect your Landlord’s interest.

  1. Tenant Ledgers; Staff should be trained in reading a Tenants Ledger. It can become very clear from a tenants ledger that monies, which were normally paid on time, suddenly weren’t paid at all. One of the questions that can then be posed to an agent is whether the penalties under the Residential Tenancy Agreement were ever chased. If you receive a negative answer, you’ll know why.
  2. Termination; when receiving a termination notice from a victim of domestic violence, you could have a form in your office which essentially acts as an acknowledgment, and the form should include the following:
    • Name of the DVO
    • Name of the Perpetrator
    • An acknowledgment that they have terminated under the Domestic violence provisions of the Residential Tenancy Act 2010
    • A confirmation that all co-tenants and the perpetrator have been served with notices of the Residential Tenancies Act.
  3. Special conditions; We have considered a number of different options for special conditions to be included in the Residential Tenancies Agreement. We see no value in any special conditions that will assist the landlord. Please note that, it is dangerous to include any special conditions because at this stage, we don’ know how the landlord insurers are going to deal with the domestic violence. Before developing any special conditions we need two things;
    a. Determine how big the problem is;
    b. See how the insurers deal with the DVO’s.

Before the critic’s get to me about not supporting these laws, I want to reiterate:

We agree with the domestic violence amendments!

We don’t agree with a doctors certificate, which can be obtained too easily by persons who are not victims of domestic violence!

Irrespective of this view point, these rules are here to stay and we must adapt to them to manage an effective rent roll.

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Is There an Alternative to 26th January?

In last year’s newsletter on the eve of Australia Day, I posed the question regarding whether there was an alternative date to consider rather than the 26th of January each year for the celebration of our nation. At that time, I could not find any feasible alternative which had any value. The simple principle is that, any date chosen must have historical relevance and historical accuracy.

I’m neither connected or opposed to Australia Day being 26th January each year. What I do see is dissension regarding the date, and most of all a heap of bullshit spoken. Let’s deal with that bullshit!

Persons in favour of the 26th of January as our date of celebration talk about it being the birth of a nation. That in itself is mythical. The 26th of January did not give rise to the birth of a nation, it gave rise to the creation of a convict settlement in Sydney Cove. At best it gave birth to the state of New South Wales.

As history shows, by the 1890’s, Australia had six different colonies, each with separate sovereign governments reporting to England; NSW, VIC, QLD, Central Australia, WA and TAS. These all had separate legislative councils and operated distinctly from each other. In fact, at the turn of the 1890’s, Australia could have ended up six separate nations until Henry Parkes posed the concept of nationhood.

To say that you cannot change a day is also unfounded. Just because we’ve always celebrated Australia Day on the arrival of Captain Arthur Phillip in Sydney Cove, doesn’t mean that better dates can’t be chosen on the calendar. If it is divisive, it should only be allowed to be continually divisive if it has historical truth.

The 26th of January was the birth of NSW. It should be celebrated as that. Interestingly enough, every other state in Australia has its own Foundation or Federation day, leaving NSW to celebrate its Foundation Day with the rest of Australia. The 26th of January should be considered as NSW Settlement Day. It should still be considered significant. It was the start of European arrival in Australia and it led to significant benefits for the country. It may have affected the 300 or so indigenous nations in Australia at the time, but it is still significant.

The indigenous referring to Australia Day as Invasion Day is both divisive and quite frankly untrue. There was no invasion, there was a creation of a settlement of convicts which led to conflict between the parties in Australia. That conflict never entered into a war and to consider that it was an invasion is completely untrue.

Yes, the arrival of Europeans did have significance on the indigenous cultures. In some cases, we have reason to feel regret for the behaviour of our forefathers. This should not derogate from the benefits to the country that European settlement brought to the Australian nation.

The only reason Australia Day should be changed is if there is historical accuracy which gives credit to the change. We believe there is!

In the early 1890s, Henry Parkes organised a number of national conventions to create Australia. New Zealand even attended the first three conventions and then decided to go its own way. ‘In’ referendums ran in 1899 and 1900, there was an agreement to create a Commonwealth Government of Australia and all colonies to join as separate states in that federation.

On the 9th of July 1901, Queen Victoria signed the Australia Constitution Act, giving birth to the Australian nation. The Australian Commonwealth was then created on 9 July 1901. The true birth of a nation happened on 9th July 1901. This has true historical significance and accuracy regarding the birth of a nation.

In America, their national celebration is on 4th July, which was the American Independence Day from Great Britain. We are now seeing some significant parallels between what I am suggesting and what America did do. They didn’t celebrate the landing of the Mayflower as their national day, but their Declaration of Independence.

Should our indigenous have a day? Absolutely! The original people who lived on this land have a right to celebrate their history as much as European arrival in Australia. Why not fully depart from our ties to England and dispense with the Queen’s Birthday? It’s not even her birthday, that’s in April. We have a long weekend called the Queen’s Birthday without any real significance. The indigenous don’t have a date when they arrived in Australia 40,000 years ago. But why not make the June long weekend a celebration of indigenous culture. This is during the footy season, which has already embraced indigenous contribution to the various Australian Football codes.

I’m probably going to be shot for the suggestion because I’ve agreed with neither party as to the keeping or getting rid of the 26th of January Australia Day date. Nevertheless, why not:

  • Make Australia Day 9th July, and call it Federation Day;
  • Make the June long weekend an indigenous celebration; and
  • The 26th of January becomes the celebration of NSW, one which has been sorely missed.

We are one nation of 25 million people. It’s about time we behaved like one, and not servicing just minorities or majorities. In 231 years, we have come further than most nations in that period of time. Why not celebrate everything about Australia in a true historical context.

 

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538

Co-regulation: Fantasy or Reality

The soap opera that starred Tim McKibbin of the REI and Mat Keene, Minister of Fair Trading, late last year was a plot straight from the Game of Thrones. Two princes of the property industry at loggerheads over policy whereby a pretender was attempting to dethrone the incumbent prince. The pretender being Tim McKibbin and the prince being Matt Keene.

The world outside the real estate industry could not have given the time of day for the debate. The word ‘coregulation’ was familiar to them as a technical term for a plant or some foreign disease. In a marketplace where people are unable to obtain finance, the biggest investments were plummeting in price and the Christmas period drew the focus of the average punter, leaving the debate to the egotistical.

What happened: a discussion paper was published in 2016 that considered the concept of coregulation. Coregulation was industry bodies having shared responsibility for regulation of the industry and monopolising the continuing professional development marketplace. It was essentially a carrot given to peak industry groups to support the reforms. It was founded in the belief that coregulation would create a better consumer market place.

Somewhere in 2018, the likely REI principality became shaky. The governments promise of making REI the governor of the province of real estate became questioned. The concept of coregulation fell off the agenda and caused a rift between REI and the NSW Government.

Minister Keene indicated that it was the government which was best placed to conduct consumer protection. REI struck back by recommending that Fair Trading should no longer administer the industry. It should be some other organisation. The REI took their bat and ball home and had said if we cannot be king, nor should you.

We, for some time, avoided wading into the turbulent waters of coregulation. My personal opinion is that, an industry group which is funded by business can never impartially regulate the industry. I will, however, attempt to traverse the difficult waters of this argument in as simple a manner as I can.

In short, REI wanted to be involved with the coregulation of the industry. They wanted to set the educational standards and ultimately be the licencing body for the industry. They would also take over the role of discipline and leave criminal behaviour to the Office of Fair Trading. The REI would therefore be the licencing and disciplinary authority for the industry.

The Property, Stock and Business Agent’s Act 2002, soon to become the Property and Stock Act 2002, will regulate three industries:
1. Real Estate, which includes business brokers;
2. Strata Management; and
3. Stock and Station.

What we did not understand about the model was whether REI became the governor of all the industry. Hence, they were the licencing and disciplinary authority for all three industries or were we going to have three governors:
• The REI governing real estate and business broking;
• Strata Community Association regulating strata management; and
• The Australian Livestock and Property Institute regulating stock and station.

Obviously the other two peak industry groups would not want the REI to administer all the industry. Hence, if you wanted to hold more than one licence, you would need to contact each of the industries. You would need to be a member of all three groups if you wanted to have each of the licences. Moreover, you would have to comply with each of the codes of conduct, which may not be consistent with each other. In fact, a coordinated approach to education would completely be abandoned, causing absolute confusion in the industry. What you would obtain is a new level of red, green and blue tape to add to the overregulation already in our industry.

The rhetoric around coregulation is that it would create a better industry with higher standards. This is policy mumbo jumbo, it’s never facilitated by reality. No one had been able to indicate why industry regulation would provide better standards than allowing government to regulate the industry.

Let’s have a look at some comparative systems. The legal system is regulated by the Law Society. It is an association of membership which has a monopoly within the legal fraternity. It grants the licences and has the power of discipline. There is an Office of Legal Services Commissioner who also has the power to investigate and discipline those who breach professional standards.

The Law Society is governed by large law firms. The rank and file of the small legal firms throughout the industry are not considered at the top level. When applying for a licence, your application will be placed before the board, where your competitors will determine your future. History has shown that the Law Society has refused to grant people licenses who they consider as not fitting the industry. They may not have done anything wrong, but they don’t fit the category of people that the industry want.

If you ask any solicitor, the Law Society hasn’t represented their interest and believe it is only representing the big end of town. Moreover, the industry is not heard by government.

In 1995, finance brokers licences in NSW were deregulated. The industry was given the right to self-regulate. This gave birth to organisations like the Mortgage Finance Association of Australia (MFAA). You could not work within this industry unless you were an MFAA member and comply with their standards. By 2010, the Commonwealth Government introduced the National Consumer Credit Protection Act which required persons undertaking credit to obtain an Australian Credit Licence. Self-regulation for 15 years was a monumental failure.

Let’s look at the current private certification debacle. In 1992, there was a proposal in the liberal government to introduce private certifiers. Due to the opposition by the then Consumer Affairs Minister Peter Collins, this system did not come to fruition. In 1997, the Carr government then introduced private certification.

Peter Collins was right! If you introduce private certifiers, they can only create a business by serving developers. Once they serve developers, their independence is obliterated. This has been highlighted in the Opal building in Olympic Park. Private certifiers looked after the developer which ultimately did not look after the occupants in the future. Is this the type of industry we want?

Frederick Hilmer, who published a report on National Competition policy indicated that regulations should be there for the purpose of the environment, the economy, safety and the consumer. Can an industry body that represents a trade ever fully represent the consumer? First, it is the government authority vested with the responsibility of regulating a marketplace that only hears all sides of the argument. Secondly, personal interest will always provide a guide for decision making. Regulation should never ever be made that does not protect the consumer or provides an equal playing field for competitors.

It is somewhat fantastic that we even think about the REI as the centralised body. It only holds about 15% of the industry as a member. If you are a member, you’re allowed to display the REI logo in your office. What do you do to get that? Pay a membership fee. When the REI had an opportunity to propose greater standards, they did not. They merely took the money to provide an accreditation which is not demonstrable of a higher standard. Moreover, should an organisation that represents only 15% of the marketplace, now have the ability to control the whole marketplace?

REI is a business. It provides training, superannuation, and other services to the real estate industry. A business should not be put in control of the whole marketplace, because they can only operate to benefit themselves.

The saddest point is that the industry has lost a voice. The REI was introduced in the main part to represent the industry to government. It was there to provide a balance against consumer complaint and unreasonable expectations of the marketplace. It was there to provide us, the industry, with protection against government decision making. If they are the coregulators, they become a pawn of the government and the voice of the industry is lost.

None of us should criticise Tim McKibbin for his campaign to become the Prince of the real estate kingdom nor should we be upset about the REI trying to become the property government. The REI has self-interest, so why not try!

Coregulation: fantasy or reality? It’s a fantasy because coregulation will just mean alternate regulation by an industry body or bodies.

Unfortunately, what will be lost in the debate is Mr McKibbin’s submissions that we should have an industry body that just looks after property. Throughout the 90s, the Office of Real Estate Services and the Real Estate Services Council regulated the industry. I worked on both the inside and outside and would indicate that this was a model which operated. Whether it needs to be a separate office of an individual department is a separate question but an organisation which is dedicated to real estate, strata, stock and station and other aspects of the property industry is necessary within the industry. The issue of consumers in relation to small consumer complaints and motor dealers do not marry with the professional industry. This debate has been lost in the jousting in the game of thrones.

 

This article was written by Bailey Compton, Principal Solicitor & Director at Leverage Group.

To get in touch with Bailey, please email info@leveragegroup.com.au or call 1300 438 538