New form of contract of sale of real estate

From 1 March 2012, there is a new form of contract of sale of real estate for use by lawyers in Victoria, brought about by the amendment of the general conditions in the Estate Agents (Contracts) Regulations 2008.

The current form of contract has been extant since September 2008.

I recently provided advice to a purchaser who had signed an old form of contract, which had been prepared by a practising lawyer in Victoria in 2010. The issue was whether General Condition 9.1 of the contract was void for uncertainty. That general condition provided: 

‘The general conditions in Table A of the Seventh Schedule of the Transfer of Land Act 1958 apply if the land is under the operation of that Act.’

The problem is that Table A was repealed in 2009. The contract therefore purported to include conditions contained in a statutory schedule which did not exist. 

Pursuant to s.70 of the Land Legislation Amendment Act 2009 (Vic) (Act 80 of 2009), a transitional provision was inserted into the TLA (see s.130) to deal with contracts that erroneously referred to the repealed schedule.  The transitional provision states as follows:

‘On and from the commencement of s.71 of the Land Legislation Amendment Act 2009, any reference to Table A of the Seventh Schedule to this Act in a contract is taken to be a reference to Table A of that Schedule as in force immediately before its repeal’.   

Therefore, the reference to the repealed schedule was still effective to import the Table A conditions into the contract of sale.  

In my opinion, and with all due respect, it is incumbent on lawyers in practice in Victoria to keep up to date with the current Regulations as they relate to contracts. 

The use of the pre-2008 contract is almost inexcusable, especially in view of the imminent change on 1 March 2012.

W G Stark
Hayden Starke Chambers

Are there any recent cases dealing with the Severance of joint tenancies in February 2012?

I recently presented an update of my paper to the Northern Suburbs Solicitors group.

After I presented my paper on 6 October 2011, Vickery J decided Stassinopoulos v Stassinopoulos [2011] VSC 647 (on 12 December 2011), relying in part on Hargrave J's decision in Sacks v Klein [2011] VSC 451, which my paper analysed.

Vickery J confrimed that a joint tenancy can be severed even after the right of survivorship has taken effect (by the death of the joint owner of the land).

The facts in Stassinopoulos were eerily similar to Sacks v Klein; in each case 2 brothers owned the land as joint tenants, and the surviving brother had taken the estate at the expense of the deceased brother's surviving spouse.

In each case, the judge found in favour of the widow and severed the joint tenancy.

W G Stark
Hayden Starke Chambers

High Court refuses to consider a mortgagee's duties on sale of mortgaged land

On 25 August 2011, I wrote a blog about the Victorian Court of Appeal decision in MBF Investments Pty Ltd v Nolan [2011] VSCA 114.

As I noted, the Court clarified the application of s77(1) of the Transfer of Land Act 1958.

In summary, the Court of Appeal found that a mortgagee must act must act fairly towards the mortgagor, and in a way that does not unfairly prejudice the mortgagor when exercising its power of sale. However, a mortgagee is not required to place the interests of the mortgagor above the interests of the mortgagee in recovering the debt.

The borrower in that case, Mr Nolan, applied to the High Court for special leave to appeal the Court of Appeal’s decision. Late last year, the High Court refused special leave to Mr Nolan.

As a result of the High Court's refusal, the law in Victoria about a mortgagee's duty to a borrower upon the sale of land under section 77 of the Transfer of Land Act 1958 is as set out by the Court of Appeal.

W G Stark 
Hayden Starke Chambers