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Commercial Law

Unconditional Contracts – The Importance of Disclosure and Completing Searches

By | Commercial Law

When entering into an unconditional Contract for the sale of a property, a Seller may be led to believe that they have no obligations to disclose any matters affecting the property.

Similarly, a Buyer entering into an unconditional Contract may think that completing property searches is an unnecessary expense.

If you have signed an unconditional Contract for the sale or purchase of property in Queensland, you should be aware that there are still:

  1. obligations imposed on a Seller to disclose certain information relating to the property; and
  2. searches that may give a Buyer rights to claim compensation or terminate the Contract.

What is an “unconditional Contract”?

A Contract for the sale or purchase of property will be “unconditional” if there are no terms or conditions in the Contract that must be satisfied or fulfilled on or before the settlement date.  For example, a Contract for a property sold at auction is “unconditional” as it is not subject to the Buyer obtaining:

  1. satisfactory building and pest reports for the property;
  2. satisfactory enquiries and searches in relation to the property being purchased; and/or
  3. sufficient finance approval to purchase the property;

Similarly, a Contract that is subject to the above conditions will become unconditional when such conditions are satisfied or fulfilled.

I have signed an unconditional Contract for the sale of my property. Do I still have to disclose anything to the Buyer?

Although a Contract may be unconditional, a Seller still has obligations to disclose certain matters affecting the property being sold.  In particular, a Seller must disclose to the Buyer:

  1. Any encumbrances affecting the property and which will remain in existence after settlement. Encumbrances are matters which burden and impede the property and/or the title to the land.   For example:
    1. Easements which burden the land (granting someone other than the registered owner/s a right to use and/or benefit from the land);
    2. Easements in favour of a Local Government or other Authorities (Easements in Gross);
    3. Unregistered encumbrances such as drainage, stormwater and/or sewerage lines running through the land;
  2. Whether the property being sold is subject to any tenancies or Lease arrangements that will continue after settlement;
  3. Whether the property being sold is the subject of any current or threatened claims or disputes (including court proceedings and/or neighborhood, fencing or tree disputes in QCAT).

I have signed an unconditional Contract to purchase a property. Do I still need to complete any searches?

Although a Contract may be unconditional, in most instances the standard conditions of a Contract and/or legislation provide a Buyer with a right of termination or claim for compensation if certain matters affecting the property and/or the Seller/s are discovered. For this reason, the following searches can be invaluable when purchasing a property:

  1. Title search: A title search discloses particulars of the Seller and the land which are recorded in the Queensland Land Titles Register (including the registered owner, the registered property description and all registered interests over the land being sold).  If the Seller/s and/or the property described in the Contract are not accurate, the Buyer may have a right to terminate the Contract. For example, a Buyer will have a right of termination if:
    1. The Contract contains an error in the description of the property and as a result, the Buyer will suffer significant expense and/or loss (that is, the Buyer will be materially prejudiced);
    2. The Contract does not disclose the existence of a registered encumbrance affecting the land; and/or
    3. At settlement, the Seller named in the Contract is not the registered owner of the land
  2. Registered Plan search: A registered plan search will provide an image of the Plan which is registered with the Queensland Land Titles Register when the Lot (a unit within a building or the land being purchased) was created.  If the location of or the area of the Lot is not accurately described in the Contract, or if there is an error with respect to the boundaries of the property, and if the Buyer will be materially prejudiced as a result of such inaccuracy or error, the Buyer will have a right to terminate the Contract or claim compensation.
  3. Contaminated Lands Register (“CLR”)/Environmental Management Register (“EMR”) search: If the property being purchased is recorded on either the CLR or EMR and the Seller has not disclosed this prior to entering into the Contract, the Buyer will have an immediate statutory right to terminate the Contract or at the very least, a right to claim compensation.  A Buyer’s right of termination exists regardless of the terms and conditions contained in the Contract.
  4. Local Government and other statutory authority searches: These searches will provide general information in relation to the property including rates, town planning and building approval details.  Although not all adverse search results will give the Buyer a right to terminate or claim compensation, a Buyer will be afforded rights if the following matters arise:
    1. If there is a notice or order (issued prior to the Contract date) requiring the Seller to pay money or complete work on the property, then the Seller is responsible for complying with such notice or order. If the Seller does not comply prior to settlement, the Buyer will be entitled to claim any costs and expenses arising from such notice or order as a debt against the Seller.
    2. If there is a proposal to alter or locate transport infrastructure on the property and such proposal has not been disclosed in the Contract, the Buyer will have a right to terminate the Contract.

NDIS-Funded Service Providers’ Criminal Screening Obligations

By | Commercial Law

With the roll-out of the NDIS in Queensland, it is important that service providers who receive NDIS funding are aware of their criminal screening obligations regarding their staff and volunteers. The criminal history screening requirements are required as a safeguard to protect persons with a disability from increased risk of exploitation, violence, abuse and neglect.

Under the Disability Services Act 2006 (Qld) (“the Act”), a non-government service provider who receives funding from the Queensland Department of Communities, Disability Services and Seniors or the Federal National Disabilities Insurance Scheme (“NDIS”) may only engage persons to perform services on behalf of the service provider who have undergone a criminal history screening and received a positive notice and Yellow Card.

Responsibility to comply with the criminal history screening and Yellow Card requirements rests with the service provider, not with the individuals engaged by the service provider.

Who needs to undergo a Criminal History Screening?

The requirement for a criminal history screening applies to all “engaged persons” of the Service Provider. Engaged persons includes all employees, volunteers, contractors, executive officers, board members and management committee members, whether paid or unpaid, and irrespective of whether or not they will be personally working with persons with a disability.

Service providers have an ongoing obligation to undertake further criminal history screenings of persons engaged by the service provider every 3 years.

Who is exempt?

Service Providers are not required to obtain criminal history screenings for the following persons, who are exempt under the Act:

  • Clients;
  • Tradespersons who are not employees;
  • Persons providing services only to children, who hold a valid Blue Card; and
  • Registered Health Practitioners (including chiropractors, dentists, doctors, nurses, occupational therapists, optometrists, osteopaths, pharmacists, physiotherapists, podiatrists and psychologists).

Risk Management Strategies

Under the Act, all service providers must develop and implement a written Risk Management Strategy for persons engaged by the service provider. The purpose of the Risk Management Strategy is to establish practices and procedures regarding persons with a disability which:

  • Promote their wellbeing; and
  • Protect them from abuse, neglect and exploitation.

Service providers must review and implement their Risk Management Strategy each year.

What about Unfair Dismissal Laws?

The requirements of the Act override a service provider’s obligations under the Fair Work Act 2009 (Cth). It follows that a service provider cannot be sued for unfair dismissal if it terminates an employee who does not comply with the criminal history screening requirements under the Act.

At Delaney & Delaney, we have extensive experience in advising clients in the disability sector regarding their legal obligations. We can help service providers navigate the laws regarding criminal history screenings to ensure compliance with the law.

What You Need to Know About Commercial Litigation in Queensland

By | Commercial Law, Litigation

Commercial Litigation

Our Solicitors practice in Commercial Litigation helping to resolve disputes between companies, or individuals and companies. Given that a company is considered a legal entity and, therefore, can sue and be sued at law, companies can become embroiled in litigation for many reasons. They can commit both civil and criminal offences. Companies can play almost all the legal roles that a person might normally play. For example, a company may wish to sue an entity or individual for monies owning to the company, or, a company itself could be sued for monies it owes to another person or company.

Pursuing or Defending a Claim in Court

In most litigation, the person making the claim (the plaintiff) files an “originating process” in the Court. An originating process is a document setting out the details of the complaint/claim and the remedy being sought. This document starts the process in the court system.  Once an originating process has been filed there is usually a specific period during which the filed documentation must be given to (“served upon”) the person that the claim is against (known as the “defendant”). Once the defendant has received the documents, the Court then provides a time period during which the defendant can file a defence.

Once the matter is in the Court System the parties must comply with a number of requirements prior to trial. There will be times where the parties will need to appear before the Court on a “mention”. These appearances before the Court give the Registrar, or a Judge, an opportunity to see where the parties are up to in their negotiations or preparation for hearing.

The Court may require the parties to attend a Settlement Conference (Magistrates Court) which is conducted by a Registrar and may result in resolution of the matter. Some Courts may require the parties to attend Mediation or a Case Appraisal Conference in an attempt to reach early resolution.

If the matter has not resolved and is proceeding to trial then the parties will attend a “Directions Hearing”. At the Directions Hearing the Judge or Registrar provides times and dates for trial material to be filed and served, including affidavits and all evidence to be relied upon.

Due to the fact that company resources are expended when pursuing or defending a claim in Court, the benefits of reaching a swift resolution often outweigh pursuing the full amount of a claim.  Consent Orders may be agreed to by the parties and filed in an appropriate Court to finalise proceedings. These Consent Orders, once filed in Court, become Orders of the Court and should there be a breach of the Consent Orders, parties may be brought back before the Court, penalties may apply or an order requiring specific performance of the Orders may be made.

Court Monetary Limitations

If you run a company that is seeking to recover monies from another entity and want to pursue the matter in Court, it is important to remember the monetary limitations to which the individual courts are subject. Currently the monetary limits are as follows:

Queensland Civil and Administrative Tribunal (QCAT) with monetary disputes of up to $25,000.00;

Magistrates Court deals with monetary disputes of up to $150,000.00;

District Court deals with matters from $150,000 up to $750,000.00; and

Supreme Court deals with all matters in excess of $750,000.00.

Alternative Dispute Resolution in Commercial Law

In an attempt to keep commercial matters out of the Court system, to avoid tying up company resources for a number of years, Delaney & Delaney can guide you through the alternative dispute resolution avenues, such as mediation and arbitration, to allow speedy and cost effective solutions.  Some contracts between companies include clauses whereby parties agree to attend binding arbitration or mediation, should disputes arise.

Parties can engage, by consent, in these processes or they may be required to attend alternative dispute resolution by the Court process.

Delaney & Delaney can assist parties through mediation and arbitration.

Some common types of commercial claims

Debt Recovery

In debt recovery proceedings, the plaintiff files a claim to compel the payment of money owing to it by the defendant. A successful plaintiff can also commonly recover interest on the unpaid amount up to the date of payment, together with a portion of their legal costs.

Damages

In a damages claim, a plaintiff seeks compensation from the defendant for losses caused to the plaintiff as a result of the defendant’s wrongful conduct. An example of a damages claim is where a buyer defaults under a contract to purchase land. The seller may elect to sue the buyer for its losses caused by the buyer’s default, including agent’s commission, legal fees, and any reduction in the purchase price if they resell the property to another buyer.

Specific performance

In a claim for specific performance, the plaintiff seeks to compel the defendant to perform a contract as per its terms. There are a number of criteria which must be met in order to succeed in a claim for specific performance, and a court will only order specific performance if it is satisfied that damages are not a sufficient remedy for the plaintiff. An example of a specific performance would be where a buyer under a contract to purchase land defaults and refuses to settle. The seller may sue the buyer to perform the contract as per its original terms.

Injunction

A plaintiff may apply to the Court for an injunction to prevent a Defendant from doing an act which is causing, or is likely to cause, detriment to the Plaintiff: for example, if a defendant is about to publish defamatory claims about the plaintiff, the plaintiff can apply to the court for an injunction preventing the defamatory publication.

The above is a basic overview of some types of commercial litigation. If you are contemplating making a claim, Delaney & Delaney can help you to: understand whether your claim is worth pursuing; enter negotiations with the other party with a view to resolving the matter out of court, and advise you on whether an alternative dispute resolution service would serve you better. We can also prepare your originating process or defence and represent you at Court throughout the matter.

If you require legal advice about your specific circumstances, please contact a member of our commercial law team who will be happy to assist you.