You need to take the good with the bad

When acting in litigation, it is essential to take detailed instructions about any circumstances that weaken your client’s case in addition to those that support the case.

In one claim, the practitioner acted for a claimant in a claim under Part IV of the Administration and Probate Act 1958 (Vic) against the estate of her deceased de facto partner. The deceased had an infant child from a previous marriage.

During the dispute, the de facto asserted a constructive trust interest in land belonging to the deceased and an interest as purchaser under a contract of sale signed by the deceased.

The practitioner knew there had been some litigation between the deceased and the de facto but did not investigate further. That litigation had in fact been resolved on the basis the de facto relinquished any claim on the land. The defence filed by the deceased’s estate in the Part IV proceeding supported this. It should also have been clear to the practitioner the de facto’s interest as purchaser was illusory as she had no means to complete the contract.

The parties eventually reached settlement and returned to the court for approval of the compromise. However, the judge was concerned that after costs were paid out of the estate to the parties’ legal representatives, little would be left for the infant and ordered the parties to renegotiate the settlement. Under the new settlement, the practitioner agreed to pay the costs incurred by the estate because of allegations that the proceeding was unnecessarily drawn out or had no proper basis.

If the practitioner had fully investigated the history of dealings between the de facto and the deceased, and properly considered the de facto’s ability to rely on the contract of sale, he would have realised how weak the de facto’s claim was much earlier.



Avoid the section 32 traps

Every year LPLC sees conveyancing claims where the cause of the claim is defective section 32 disclosure. To properly advise clients practitioners need to understand the vendor disclosure obligations in the Sale of Land Act 1962 (Vic).

Reviewing relevant cases, attending seminars about conveyancing and reading relevant texts are other things practitioners can do to increase their knowledge.

Recent defective disclosure case

In McHutchison v Asli [2017] VSC 258 the vendor’s conveyancer recorded in the section 32 statement that sewerage was ‘connected’ to the property.

Section 32H of the Sale of Land Act 1962 (Vic) requires a vendor to state which services are ‘not connected’.

The property was serviced by a septic tank so the section 32 statement should have provided that sewerage was ‘not connected’.

Justice Digby was not convinced the vendor acted honestly and reasonably, and orders were made for the return of the deposit with the vendor to pay the purchaser’s legal costs.

The LPLC LIJ article from October 2014 Old claims, new laws contains details of a claim where the same error was made by a practitioner.

To avoid these basic mistakes firms need to ask their vendor clients the right questions and explain to them the difference between mains sewer connection and septic tank use. See our Sale of land – questions for vendors.

It also helps if firms are using the most up to date precedents so that the information is properly disclosed. The pre-October 2014 LIV form of the section 32 statement required a vendor to state whether a service was connected or not and where connected, to provide the name of the authority. The current LIV form asks the vendor to state which of the services are not connected.

Risks for the bank of mum and dad

Practitioners asked to act in transactions where parents lend money to their children to help them buy a house should stop and think about the transaction. Who are they acting for? Who else could think the practitioner is looking after their interests?

If you are acting for the child in the purchase of the property you should recommend that the parents obtain their own independent legal advice and tell them you cannot advise them.

Alternatively, if you are asked by parents to document a loan to their child you need to make it clear you are not acting for the child and recommend the child get their own legal advice.

You should also recommend the loan document you draw covers all the things that an arm’s length transaction would cover even if the parents just want a basic document covering the terms they had discussed with their child.

You should discuss the importance of having proper security for the debt. There may be circumstance beyond the control of their child that affects whether the parents’ loan is protected. The child’s domestic relationship may break down and the equity they have in the property may be lost in property settlement. The child may become bankrupt and lose the property. In the event of the parents’ death or insolvency there could be beneficiaries or trustees in bankruptcy who complain you did not act appropriately.

Keep a record of your advice and the client’s response and instructions.

Financial transactions within families can be fraught with difficulty often because the arrangements are handled in an informal way and then the parties have a falling out. Don’t take for granted that the happy family today will continue on that way.

Key Risk Checklist: Sale of land – questions for the vendor

Sale of land – questions for the vendor



☐  Please circle yes or no as applicable.

☐  Please provide the additional information as indicated e.g. a copy of your title(s).

☐  If you do not know the answer or are unable to provide the additional information please insert the words ‘not known’.

☐  Please sign where indicated at the foot of the final page and forward this completed list and all necessary information to the sender.





1. Please provide a copy of the title(s) to the land and the address.
Who has control of the certificate(s) of title to the land being sold?
If you hold the original paper title(s) you must provide them to us prior to settlement to be handed by us at settlement to the purchaser’s representative.
The paper title(s) must be destroyed or made invalid and an electronic title created when the transaction is conducted electronically.
If you do not hold the paper certificate(s) of title, please provide contact details of the person who has the title(s) ie your bank.
The address for the land is –
2. Are you the registered proprietor of the land?
If not, please provide documentary evidence of your right to sell. For example a copy of the contract of sale.
Proof of identity is required in accordance with the Model Participation Rules issued by ARNECC.
You need to provide us two proof of identity documents and one must be a current photo ID.
Please also sign and return the attached client authorisation form if the sale will be conducted electronically.
3. Are any car spaces, storage lots or other areas included in the sale?
Please provide the plan of subdivision lot numbers for any such areas included in the sale.
Are any car spaces subject to a congestion levy?
Lot No:
– If yes please provide details


4. Are you aware of any failure to comply with any restrictions imposed by any easement, covenant or right?
For example a garage that is built over a sewer pipe.
5. Is there access to the property by road? Yes/No
6. Have you received any demand, notice, order, requirement, proposal, declaration or recommendation of a public authority or government department affecting the land?
For example, an order from VCAT, a street construction charge, or a notice about works and/or subdivision by an adjoining owner.
If yes, please provide details.
7. Is the land insured? Yes/No
If yes, please provide full particulars of your insurance cover.
8. What is the current use of the land?
For example a dwelling or shop.
9. Are you in occupation of the land? Yes/No
10. Please provide a copy of any tenancy agreement for the land and any disclosure statement issued to retail tenants.
11. Will the sale of the land trigger payment of the Growth Areas Infrastructure Contribution? Yes/No
12. Do you know of any obligation on the owner or occupier of the land to give notice of any contamination of the land? Yes/No
13. Are you aware of any fencing dispute with your neighbour(s)? Yes/No
14. Are you aware of any encroachments that affect the land? For example a neighbour’s shed and/or retaining wall is partly built on your land. Yes/No
15. Have you received notice of any intended compulsory acquisition of any part of the land such as for road widening? Yes/No
16. Is the land in a bushfire prone area? Yes/No
17. Are you aware of any easements that affect the land that are not shown on the title, title plan and/or plan of subdivision? Yes/No

Planning information and building works

18. Have any planning permits been issued or refused?

Please provide a copy of any planning permit(s) and building permit(s) issued for the land. What is the expiry date for the permit(s)?



19. Is the land affected by any planning overlays?
For example is any part of the land heritage listed and/or subject to public acquisition overlay.
20. Has an occupancy permit or certificate of final inspection been issued? Yes/No
21. How old is any building on the land?
22. Have you done any owner-builder works? For example renovated a bathroom.
Do you propose to do any owner-builder works before settlement?
According to Consumer Affairs Victoria you are an Owner Builder if you:1.       intend to use your own skills to build, extend or renovate a home that you live in or intend to live in or
2.       intend to manage tradespeople to do work on a home that you live in or intend to live in
3.       are a registered builder who builds, extends or renovates a home on their own property.For more information go to:
or contact Consumer Affairs Victoria on
1300 55 81 81 and/or the Victorian Building Authority on 1300 815 127.
23. Have safety switches and smoke alarms been installed? Yes/No
24. Are you aware of any breach of any planning and/or building permit(s) issued for the land? If yes, please provide particulars.
A building and defects inspection report is required for owner builder works and insurance may also be required.
25. Is there a swimming pool/spa on the land?
If yes – has it been fenced?

Rates and taxes

26. Please provide a copy of the current council rates notice, water rates notice and land tax notice for the land.
If land tax is payable is it payable at the usual rate or the trust rate and until what date has it been paid?………/…………./…………
Copy notices attached:
Please select:
Usual rate / Trust rate
27. Have you considered the Capital Gains Tax (CGT) consequences of the sale of the land? Yes/No
28. Have you considered the GST treatment of the sale of the land?
For example is the price ‘plus GST’, ‘GST inclusive’ and does the margin scheme apply or is the sale a going concern or the sale of a farm.
Usually the sale of new residential premises, commercial premises and vacant land are sold on a ‘plus GST’ basis.
29. Have you considered the duty (formerly known as stamp duty) consequences in regards to the sale of the land?
An exemption might apply – for example if you are transferring the land to a spouse.Note also that usually no exemption applies when transferring to family members.


30. Please circle the services listed below which are not connected to the land:
Water (are water  tank(s) in use) – Yes/No
If yes – provide details:
(is a septic tank in use) – Yes/No
If yes – provide details:
‘Connected’ is not defined in the Sale of Land Act 1962 (Vic).   A service is connected where at the date the purchaser signs the contract of sale the service can be used.
Name of supplier:
31 If water tanks have been installed are they included in the sale? Yes/No
32. Have solar panels been installed? Yes/No
eg. solar panels for hot water supply

Owners corporation

33. Is any owners corporation ‘inactive’?
If active, please provide owners corporation contact details.
Does the owners corporation have insurance? (s.11 of the Sale of Land Act 1962 may apply)



34. What goods are included/excluded from the sale?
Goods are also known as ‘chattels’. Goods are not fixed to the land. Goods usually included in the sale of land are ‘window furnishings, dishwasher, light fittings and clothes line’.
List included goods:
List excluded goods:
35. Are the goods included in the sale affected by a security interest on the Personal Property Securities Register (Cwlth)? Yes/No
  About you  
36. Does the land owner have an Australian Business Number (ABN)? Yes – ABN……………………
37. Are you acting as an attorney for this sale? Yes/No
If yes, please provide a copy of the Power of Attorney.
38. For a corporate vendor, who is authorised to give instructions, sign the contract/vendor’s statement/transfer?
39. Are you acting as an executor, trustee, guardian or administrator in regards to ownership of the land? Yes/No
40. Please provide the date of birth of each person registered on the title (ie the vendor) and any person to be registered on the title.
We are required by law to provide this information to various government agencies and may be required to provide to a purchaser’s representative for the purpose of checking the Personal Property Securities Register.
41. Is the property the subject of a specific gift under your Will? Yes/No
42. Are you a foreign resident?

A foreign resident means a person who is not a resident of Australia for the purposes of the Income Tax Assessment Act 1936 (Cwlth)


If yes, a purchaser may be required to withhold and remit to the Australian Taxation Office 10 per cent of the market value (usually the price) for contracts entered into until 30 June 2017 and 12.5 per cent  for contracts entered into from 1 July 2017.

43. Is there anything else you want to tell us about your land that you think may affect a sale? Yes/No
If yes, please contact us to discuss

Selling agent

44. Have you appointed a selling agent?
If you are not using a selling agent have you given any proposed purchaser the prescribed due diligence checklist?
A penalty may apply for the failure to give this checklist.
If yes please provide:
45. Has an auction date been set? Yes/No
If yes, please provide date
46. Have you agreed to sell the land to your selling agent or the agent’s employee or relative?
Refer to section 55 and 55A of the Estate Agents Act 1980 (Vic) for the process to be followed.
47. Do you have an electronic signature?
If yes, will you sign the section 32 statement using your electronic signature?

About the purchaser

48. Is the purchaser related to the vendor? Yes/No
49. Is the purchaser a subsidiary/holding company in relation to the vendor? Yes/No
50. Is the property owned by a trust?If so, is the purchaser likely to be a beneficiary of this trust? Yes/No
51. Have you granted any option to purchase the land? Yes/No
52. Does any tenant or other person have a right of first refusal to buy the land? Yes/No
53. Will the purchaser be given occupation or possession before settlement?
If a terms sale an additional vendor’s statement is required.


54. All keys, access cards any alarm pin number(s) must be handed over at settlement.
55. The purchaser is entitled to inspect the land on one occasion usually during the week prior to settlement.
56. Where would you like correspondence sent after settlement?
57. Do you agree to us deducting our legal fees from the settlement proceeds? Yes/No
58. Do you agree to a valuer inspecting the land on behalf of the purchaser prior to settlement? Yes/No

Any questions

59. Please attach a list of any questions you have in regards to the sale.

Signed by or on behalf of the vendor

Client authorisation form to be completed and attached

Risk video bite – Family law financial agreements

Presenter: Alex Macmillan, Claims Manager, LPLC