NECS - National Project Team held May 08

The NECS National Project Team meeting held The Stakeholder Working Group meeting followed a decision last November by the National Steering Committee of industry and jurisdiction representatives to establish a National Project Team (NPT). The NPT will be made up of industry and government specialists to advise on the key features and functions of NECS and its supporting business practices. Each of the team members will be encouraged to establish forums and networks of others in their industry sector interested in contributing to the detailed design of NECS. The representative of the State and Territory land registries will work closely with the existing State Project Teams in bringing forward detailed advice and recommendations for consideration by all the representatives on the team. In this way, the detail of NECS and its business practices ultimately endorsed by the National Steering Committee will be fully supported by all key stakeholder groups. The team is expected to start work early in May on confirming and further detailing the definition of NECS and its supporting business practices.

The co-operative creation of the National Project Team and the widespread support for the national process evident at the open meeting of stakeholders marks another important milestone for NECS. Endorsement of a single national electronic conveyancing system In a News Release dated 27 March 2008 the Commonwealth Attorney General, The Hon Robert McClelland MP reported on the meeting of the Standing Committee of Attorneys-General (SCAG) that day where electronic conveyancing was on the agenda. Mr McClelland noted that he had used the SCAG meeting to secure the commitment of all jurisdictions to the concept of a single national electronic conveyancing system. The concept has also received support from the Council of Australian Governments (COAG). “We will now work to develop an appropriate corporate structure for moving a national electronic conveyancing system forward,” Mr McClelland said.

Hübbe, Ulrich (1805 - 1892) advocate for system of registration of title

HÜBBE, ULRICH (1805-1892), journalist, farmer, teacher, interpreter, land agent and legal scholar, was born on 1 June 1805 in Hamburg, the third son of Heinrich Hübbe (1771-1847), notary and registrar of the Hamburg Admiralty. He was educated at Johanneum Gymnasium and read law at Jena and Berlin in 1826-30 and at the University of Kiel (D.U.L., 1837). He had held a junior post in the Prussian Civil Service but became a barrister in Hamburg where he helped religious groups, including one led by Pastor Fritzsche, to migrate to South Australia. After the great fire in Hamburg in 1842 he went to England and with aid from G. F. Angas sailed in the Taglione, arriving at Port Adelaide on 15 October. He leased 560 acres (226.6 ha) in the Barossa Valley and tried to sublet it. He did not succeed and on 29 June 1843 was gaoled for insolvency. After discharge he was naturalized and opened schools at Kensington in 1847 and Buchfelde in 1851. In 1855 he returned to Adelaide and taught languages, of which he was reputedly fluent in eleven.

In 1856 the press became interested in methods of transferring and encumbering real property. Hübbe advocated the system of registration and indefeasibility of title used in Hamburg and other Hanse towns. He was brought to the notice of R. R. Torrens who in 1857-58 piloted through the parliament the original Real Property Act, which simplified the registration of land titles now used throughout Australia and many other countries. Hübbe assisted Torrens in several ways. At Angas's expense he published in 1857 The Voice of History and Reason Brought to Bear Against the Absurd and Expensive Method of Encumbering Immoveable Property, which encouraged the movement for reform, criticized the first draft of Torrens's measure and translated the Hanseatic system of land registration and transfer. He advised Torrens and his supporters in the passage of the bill and was responsible for important changes in its second and final readings. Although spurned by Torrens, he helped to defend the Act from attacks by the legal profession and by Boothby and Gwynne in the Supreme Court. He was secretary of a committee formed for that purpose of the Land Titles Association in 1874. He also wrote pamphlets defending the Real Property Act from its opponents, particularly Gwynne.

In 1857-66 Hübbe was government German interpreter at £100 a year and was compensated with £75 when he lost office. He applied for many other government posts without success but retained his interest in law reform. He ardently supported the abolition of primogeniture which was effected in 1867 and gave evidence to the royal commission on Real Property, Intestacy and Testamentary Causes Acts in 1873. He proposed a consolidation of statutes passed in, or applicable to, South Australia with tables of amendments and repeals, drafted a bill to make succession on intestacy uniform and suggested an index and epitome of the colony's laws; all these failed to attract official interest. He abandoned teaching and, after acting as a land agent, interpreter and translator, became editor of the Neue Deutsche Zeitung in October 1875, but resigned in April 1876. His eyesight failed and he lived with his daughter, Isabel, in Spalding and later moved to White Hut where both his wife and daughter were teachers. In 1884 friends petitioned the House of Assembly for a grant because of his indigent circumstances and his unpaid contributions to the Real Property Act. He was later given £250. Always of a literary bent he wrote a few minor poems and an unpublished epic on the progress of German civilization towards free trade. When he finally went blind, he learned to read by Dr Moon's raised-type method and presented copies of the gospels to the Blind School for the use of fellow Germans.

Though deeply religious, Hübbe disagreed with Kavel on such matters as mixed marriages, but he joined the Adelaide Lutheran congregation in 1855, became a lector in 1857 and by 1867 was a leading member of Bethlehem Church. He opposed the abolition of the Bible in schools; though tolerant towards other denominations he was anti-authoritarian in both church and state. He gave much advice and help, both secretarial and legal, to his fellow Germans in the colony and was active on committees for protecting German interests. His main importance, often underestimated, lies in his contributions to the Real Property Act. Anthony Forster was one of several who later claimed that without Hübbe's help the Act might never have been passed.

In 1847 Hübbe had married Martha, daughter of John Gray of Glasgow and widow of Colonel Fuessli, a Swiss officer and early migrant to South Australia. Of their four children, a son was a captain in the 3rd South Australian Bushmen's contingent in the Boer war in 1899 and was killed in action. Hübbe was reputedly learning to speak Gaelic when he died at Mount Barker on 9 February 1892. He was buried in Hahndorf cemetery, predeceased in 1885 by his wife.
Select Bibliography

A. Brauer, Under the Southern Cross (Adel, 1956); Parliamentary Debates (South Australia), 1884; Parliamentary Papers (South Australia), 1884 (112); ‘The Real Property Act’, Proceedings of the Royal Geographical Society of Australasia: South Australian Branch, 32 (1930-31); E. Tilbrook, ‘The Hübbe Memorial at Clare’, Proceedings of the Royal Geographical Society of Australasia: South Australian Branch, 41 (1939-40); Lutheran Almanac, 1934, 1968; Register (Adelaide), 29 Aug 1884; Observer (Adelaide), 11 Oct 1884. More on the resources

Author: David St Leger Kelly

Print Publication Details: David St Leger Kelly, 'Hübbe, Ulrich (1805 - 1892)', Australian Dictionary of Biography, Volume 4, Melbourne University Press, 1972, pp 436-437.

Source Australian Dictionary of Biography

Torrens, Sir Robert Richard (1814 - 1884)

TORRENS, Sir ROBERT RICHARD (1814-1884), public servant, politician and land titles law reformer, was born in Cork, Ireland, son of Colonel Robert Torrens and his first wife Charity Herbert, née Chute. Educated at Trinity College, Dublin (B.A., 1835), in 1836 he became a landing waiter in the Port of London. In 1839 he married Barbara Ainslie, widow of George Augustus Anson and niece of Mungo Park. On 12 December 1840 in the Brightman they arrived in South Australia; Torrens became collector of customs, probably through his father's influence as chairman of the colonization commission for South Australia; his salary was £350 (later £500). He lived handsomely, yet within a few years had acquired substantial assets.

Torrens soon established a pattern of unorthodoxy in his office. In his first year he was censured for reducing wharfage rates without authority, for carelessness with pay lists, for unauthorized absence and for not supporting some of Governor (Sir) George Grey's policies. Grey reported that Torrens had not shown that 'cheerful acquiescence in my views which I have received from the other Government officers'. In 1841 controversy surrounded Torrens's arrest of the Ville de Bordeaux when he became involved in an extravagant chase to prevent her escape. But he probably acted correctly, for in November the vessel was forfeited to the Crown though the Treasury later had to compensate the French owners.

Torrens was often censured for irregularities. In 1845 he was sued successfully by crew members of the Hanseat for false imprisonment, and in 1848 was involved indirectly in a pitched battle fought for control of the Emma Sherratt and directly in libel actions arising therefrom. He was reprimanded the same year for discourtesy to the advocate-general for declining the advocate's help in a legal action; the advocate-general declared that it was a pleasure to be relieved of the duty. His chief clerk Henry Watson complained about him to the English authorities but a board of inquiry neither condemned nor cleared him. George Stevenson lampooned this result and Torrens assaulted him in the street; lengthy civil and criminal proceedings ended with Torrens paying £250 damages, being convicted of common assault, but 'winning' a libel verdict of one farthing damages. He was appointed colonial treasurer and registrar-general in 1852, and in these offices, too, he was often censured by the governor. In 1851-57 he was a nominated member of the Legislative Council and he became a member of the Executive Council in 1855. Next year he joined in the land titles registration crusade.

The South Australian Register published an outline of a Torrens bill on 17 October 1856. Other bills were being publicized, indicating that the development of registration of title to land was not Torrens's achievement alone but the culmination of an evolutionary process. Intense interest was generated, for in South Australia titles were in an unsatisfactory state and, as he put it, land was no longer 'the luxury of the few', therefore 'thorough land reform … [was] essentially “the people's question”'. He stood for Adelaide in the House of Assembly elections of 1857 and, almost entirely because of his espousal of land titles reform, topped the poll. Treasurer from 24 October 1856 to 21 August 1857, he published a further draft of his bill on 14 and 15 April and introduced it as a private member's bill in yet a third form on 4 June. He was premier from 1 to 30 September, but no action was taken on the bill until 11 November, when the second reading was carried. Despite very strong opposition, mainly from the legal profession, it passed through both Houses and was assented to on 27 January 1858.

The basic principles of what was to become known outside South Australia as the Torrens system were: land titles no longer passed by the execution of deeds but by the registration of dealings on a public register; once registered the title of a purchaser became indefeasible unless he was guilty of fraud; and innocent dealers with interests in registered land were guaranteed either their interest in the land or monetary compensation therefor. Torrens explained the system's operation in The South Australian System of Conveyancing by Registration of Title (1859); although he 'claimed authorship' of the system, it is clear that many people and influences helped considerably, including Ulrich Hübbe, Richard Bullock Andrews, George Fife Angas, Anthony Forster, William Burford, and, later, R. D. Hanson. Torrens conceded the significance of the opportune arrival 'on the eve of the day appointed for the [bill's] second reading' of the report of the English royal commissioners, 1857, which recommended the adoption of registration of title to land in England.

Torrens resigned his seat in 1858 on becoming registrar-general under the Real Property Act at a salary of £1000. From that year to 1862 he helped to turn the Act into a workable and working system, manipulating public opinion and organizing meetings and petitions to parliament. He also travelled to other colonies successfully advocating the adoption of the system. These endeavours in 'the Cause', as Torrens so often calls it in his writings, undermined his health and amid enthusiastic farewells he sailed for England on leave without pay.

He lectured on the system in England, Scotland and Ireland in the next three years and vacillated about returning to South Australia. When nominated as a candidate for the borough of Cambridge in 1865, Torrens resigned as registrar-general; failing to be elected that year and also the next, he complained bitterly about 'intimidation practised by Heads of the Colleges' and bribery which turned voters against him. He won the seat in 1868. He had entered politics in England largely to sponsor his titles system; but despite some slight success in Ireland, the South Australian methods could not be applied because land holding was not 'the people's question' in England.

Torrens largely withdrew from public life when he was not re-elected in 1874 and, although he continued as a director of several companies, spent most of his time at his country home, Hannaford, near Ashburton. He was created K.C.M.G. for his services 'especially in connection with the Registration of Titles to Land Act' in 1872 and was made G.C.M.G. in 1884. Leaving personal estate sworn for probate at £17,292, he died of pneumonia at Falmouth on 31 August 1884, aged 70, and was buried in Leusdon churchyard on the edge of Dartmoor. His wife (d.1899) is buried with him.

Despite his tempestuous career in South Australia Torrens was not quite the charlatan that Governor Sir Dominick Daly called him. He had a propensity for arousing animosity and sometimes undying hatred. When the attorney-general (Sir) William Bundey moved in the House of Assembly in 1880 that a pension of £500 should be granted to him chaos broke out in the House. After bitter personal attacks on Torrens the proposal was dropped. He had been happy to use the full pressure of public opinion to achieve land titles reform, but he opposed an elected legislature and the secret ballot. The mainspring of the last thirty years of his life was his espousal of land titles reform. He did not acknowledge publicly the assistance that he received, but it was his dedication, bordering on zealotry, for 'the Cause' that initiated the Real Property Act in South Australia and the spread of the Torrens system to other Australasian colonies. It has sufficient identifying features to be regarded as an important legal reform that is indigenous to Australia.

There is a portrait in the National Gallery of South Australia, Adelaide, and a fine drawing by C. Hill in the South Australian State Archives.
Select Bibliography

D. J. Whalan, ‘The origins of the Torrens System and its establishment in S.A.’, Law Council of Aust, Souvenir … XIV Convention in Adelaide (Adel, 1967); D. J. Whalan, ‘The origins of the Torrens System and its introduction into New Zealand’, G. W. Hinde (ed), The New Zealand Torrens System Centennial Essays (Wellington, 1971); R. Mitchell, ‘The Torrens System of land titles — its development in the land of its birth’, Commonwealth and Empire Law Conference Record, vol 1 (1955); D. Pike, ‘Introduction of the Real Property Act in South Australia’, Adelaide Law Review, 1 (1960); D. J. Whalan, ‘Immediate success of registration of title to land in Australasia and early failures in England’, New Zealand Universities Law Review, 2 (1967).

Author: Douglas J. Whalan

Print Publication Details: Douglas J. Whalan, 'Torrens, Sir Robert Richard (1814 - 1884)', Australian Dictionary of Biography, Volume 6, Melbourne University Press, 1976, pp 292-293.

Source Australian Dictionary of Biography

Internet = Communication

"the internet is a communications medium, and the focus should be on the ease of communication…" Quote Mike Masnick

From a conveyancing perspective, we have to start using the internet as a communications tool. You don't have to scratch the surface too deeply to realise the paths of communications that exist between clients and lawyers, clients and agents, clients and lenders, lawyers and agents, lawyers and lenders, land registries and statutory authorities.

The answer is to identify the transactions that occur repeatedly in every property transaction and to replicate and emulate them online. At the same time, you have to identify the risks and safeguard the parties as best as possible and provide insurance mechanisms to compensate for any loss that might occur.

Today, what is the alternative?

Banks crack down on borrowing rules

Home buyers face tougher questions and even knockbacks when applying for a mortgage as banks and non-bank lenders secretly tighten rules on who qualifies
Leaked circulars show a series of banks and non-bank lenders have tweaked eligibility criteria on some home loans in the wake of rising repossessions, growing mortgage stress and a funds shortage.
An investigation by The Daily Telegraph reveals changes include increased loan-to-valuation ratios, more proof of income and the tightening of so-called 'lo doc' loans, for which borrowers need only provide a minimum of documentation.
As well as Westpac and St George, others that have sent out emails with changes include Adelaide Bank, ING Direct, AMP Banking, Newcastle Permanent and Suncorp.
The latest economic data shows the economy is slowing, including house prices in Sydney falling in the first three months of 2008 and falling new car sales.
But Federal Treasurer Wayne Swan warned that underlying inflation was high and would take time to contain -- a hint there could be more rate rises to come.
As well as rising repossession rates, problems in sourcing funds overseas due to the US subprime mortgage crisis is also taking a toll on non-bank lenders.
Among the biggest changes in eligibility criteria, Adelaide Bank tightened its credit policy to cap loan-to-valuation ratios at 90 per cent for principal and interest loans and 80 per cent for interest-only loans.
In its circular to brokers on 25 March, Adelaide Bank also expects evidence that a home loan applicant has 5 per cent of the value of the property in savings.
An Adelaide Bank spokesman confirmed the bank had decided it was "prudent in the general economic climate" to review its credit policy.
On 23 April, Westpac informed brokers of credit policy changes for lending to investors for CBD locations and luxury properties.
AMP Banking confirmed that on 2 April it added .2 per cent to any loan above 95 per cent of the property's value, reflecting the higher risk profile.
ING Direct on 24 April changed its Lo Doc Credit Policy to demand evidence of an ABN for two years and registration for GST.
Newcastle Permanent recently increased the amount of net disposable income -- income available after household living expenses -- it wants a customer to have.
Previously it was content to have a ratio of 1.25 of net disposable income to mortgage repayments, now it wants 1.35.
St George confirmed yesterday that on 7 April it modified the eligibility criteria for its No Deposit Quick Start Home Loan product, including increasing the interest rate margin, to discourage customers requiring debt consolidation.
Some small lenders have withdrawn from the the home loan market altogether, including Macquarie Banking, which on 7 March announced the removal of all mortgage products to new residential customers.
The director of the nation's largest mortgage broker, Australian Finance Group, said it was almost impossible now to find any lender offering a 100 per cent loan.
He said the biggest changes were in the so-called "non-conforming" loan sector, so-called lo doc loans, where borrowers would now be offered just 75 per cent of a property's value, compared with 85 to 90 per cent early last year.
Bluestone Mortgages, a leading operator in the non-conforming sector, said its maximum loan to valuation ratio was now 80 per cent.

Kelvin Bissett
The Daily Telegraph
23 May 08

Commonwealth 'must lead debate'

Chris Merritt | May 23, 2008

THE commonwealth, rather than Victoria, should be taking the lead in the debate over the future of electronic conveyancing, according to shadow attorney-general George Brandis.

"There has been a lot of rhetoric from the Rudd Government about this but there has been silence in terms of practical solutions," Senator Brandis said.

He was concerned at attempts to exclude the Law Council of Australia and the Australian Bankers Association from the process of developing the new system.

If these two groups were not involved, there was a risk that the future of e-conveyancing would be determined by a debate among bureaucrats about what system worked best for them.

Instead, governments should be designing a system based on what worked best for those groups involved in conveyancing, Senator Brandis said.

"It is time for the commonwealth Attorney-General to show leadership."

Electronic conveyancing had long been on the agenda of the standing committee of attorneys-general and had been "effectively stalemated since before the change of government".

"This is a classic issue of co-operative federalism in which the commonwealth can take a lead by co-ordinating the policy position of the states and territories."

It would test the Government's claim that the federation would work more co-operatively because Labor was in office in every jurisdiction, Senator Brandis said.

Alternate news story

May 22, 2008 (The Australian - ABIX via COMTEX) -- -- George Brandis, of the Liberal Party of Australia, is the Australian shadow attorney-general. He argues that the Australian Government should take the lead in the debate over the future of electronic conveyancing in Australia. He believes that the state of Victoria should not be allowed to dictate the terms of this debate. Brandis said that the Law Council of Australia and the Australian Bankers' Association must be involved in the process of developing an electronic conveyancing system across the nation. Brandis wants the Australian Government to step up and show leadership.

White Elephant

LAWYERS have an obvious and direct interest in the struggle to develop a national system of electronic conveyancing.

Conveyancing might not be glamorous, but it still provides a solid income base for most of the nation's small law firms.

But the broader community should also be watching this debate. It will reveal a great deal about the type of Government Kevin Rudd is running.

This issue has already revealed a lot about the Government of Victoria - and much of what has come to light is not flattering.

The rest of the nation can learn a great deal from the Victorian experience. It is the perfect example of how not to build an e-conveyancing network.

The state Government has alienated the key players in the conveyancing industry. Instead of giving the business users of conveyancing what they wanted, the Government designed a system that ignored the financial interests of solicitors and the major banks.

It simply overlooked the fact that conveyancing is primarily a commercial transaction. The involvement of government bureaucrats in land titles offices is a second-order issue.

Until there are significant changes to Victoria's system, any solicitor who uses it is extremely courageous.

The Law Institute of Victoria, quite responsibly, refuses to recommend that solicitors use this system because of concerns about increased potential liability. The LIV's concerns, which are backed up with advice from its insurer, have been validated by a separate legal opinion from law firm Clayton Utz.

The banks, also acting responsibly, want a national system so they can cut transaction costs. They informed the Government about this well in advance. They now refuse to use the Victorian system, which is known as ECV, because they have not seen enough progress on a national system.

Instead of addressing those reasonable concerns, the state Government is persisting with efforts to spread versions of this disaster to every state.

They simply don't get it. If they want their system to succeed, they need to stop driving the banks crazy by continuing to push for a network of state-based e-conveyancing systems. State-based systems might suit bureaucrats in state land titles offices, but the primary users of conveyancing - the business users - want a seamless national system. So give it to them.

It would also be sensible if the Government finally got around to addressing the concerns of solicitors. Liability issues concerning ECV first came to light last year.

Until the concerns of the banks and solicitors are addressed, any state that adopts ECV is at risk of importing the same sort of strife that now afflicts Victoria.

When ECV was launched, the Government said it would cut hundreds of dollars from the cost of each conveyancing transaction. It has actually done the reverse.

With the exception of just one transaction, which went through last week, every conveyancing deal that has been processed in Victoria since the launch of ECV last November has been based on paper.

But from a government perspective, who cares? The money is rolling in to state Government coffers. In the run-up to the launch of ECV, the Government increased its fees on paper-based conveyancing, which is the only system generally available.

Again, Victoria ignored the protests from the Master Builders and the Law Institute.

For the taxpayers of Victoria, ECV is a disaster. It has cost them $40 million to develop and has produced next to nothing. It is associated with fee increases, boycotts and increased risks for solicitors.

But the Government is still bleeding money over this white elephant. In an effort to persuade other states to adopt ECV, the Government has recruited Bob Carr to its cause. It has has now paid for two meetings chaired by Carr at the offices in Melbourne and Sydney of Mallesons Stephen Jaques.

Those efforts, however, are beginning to take on an air of desperation.

This is the can of worms that has now been inherited by federal finance minister Lindsay Tanner, who has responsibility for solving this problem.

Tanner knows that the best outcome is a national system - not one that stops at state borders. But to achieve that outcome, he faces some tough decision-making.

Will the commonwealth's approach to electronic conveyancing be skewed by a desire to help the Labor Government of Victoria avoid embarrassment? Or will the Commonwealth swallow hard and tell the Victorians that their system, despite costing $40 million, will not be adopted by other states. If Tanner is truly committed to a national e-conveyancing system, the Victorian state-based system must be sacrificed.

Any government that signs off on a network of state-based ECVs will be seen by history in the same light as the geniuses of colonial times who signed off on inconsistent rail gauges.

Victoria has blown $40 million, and the sooner everyone recognises that fact the sooner the nation will have a truly national e-conveyancing system.

The alternative is to surrender to the forces of parochialism and allow state systems to dominate. That, inevitably, would need to be accompanied by a law forcing banks and solicitors to use a system that has all the attractions of the plague.

Chris Merritt | Prejudice | The Australian | May 23, 2008

Scheme is still on track, says Tanner

FINANCE Minister Lindsay Tanner knew all about the events in Sydney last week that threatened to derail the push for a national system of electronic conveyancing.

"I was aware of the meeting," he says.

But Tanner, who is overseeing a working group aimed at delivering a national e-conveyancing scheme, is still confident that there will soon be a successful outcome.

And what he means by "successful" is not merely an agreement. Tanner wants the right agreement - one that provides an e-conveyancing system that does not stop at state borders.

"It is extremely important that we don't end up with an electronic rail-gauge problem," he says.

But he believes it is also extremely important that the final system accommodates the needs of all the major players.

He says the states will have a key role because they operate the land title registries. But he also recognises that the interests of lawyers and bankers need to be addressed.

"From the point of view of the banks, clearly they are very keen to ensure that we don't get a rail gauge problem with different and incompatible systems operating in different states.

"I support their view very strongly.

"Getting this right will be an extremely important thing for the efficiency of property transactions, which is a significant part of our economy."

Tanner, along with small business minister Craig Emerson, is responsible for a working group of officials that is preparing options for the future structure of e-conveyancing. Many of the members of this group are state treasury officers.

Tanner says the Government has been monitoring developments but the reports he has been receiving suggest there is no reason for the commonwealth to interfere.

"When there is work being done and progress is happening we are not interfering in a heavy-handed way; we are just monitoring very closely what is going on.

"The first step is to try to have the parties directly involved thrash out an agreement.

"I am optimistic that is going to happen.

"My understanding is that a lot of good progress has been made but the process is not quite completed."

But Tanner has also made his own position very clear.

"I have actually expressed my view very strongly in a couple of the meetings about this issue.

"It is really important. This is one of the really significant reforms that we need to ensure is implemented. I am very keen to make sure that it happens."

Chris Merritt | The Australian | 23 May 2008

States reject Victoria's e-conveyancing plan

STATE governments have overwhelmingly rejected moves by Victoria to prevent solicitors and bankers from being directly involved in developing a national electronic conveyancing system.

The Victorian plan was rejected last week at a meeting in Sydney after it drew support from just one other state - Queensland.

Had it gone ahead, responsibility for building the proposed national e-conveyancing system would have shifted immediately to a committee of state government officials.

This would have sidelined the National Electronic Conveyancing Office, whose steering committee includes representatives from the Law Council, Australian Bankers Association, Australian Institute of Conveyancers and officials from federal and state governments.

The Victorian push would also have delivered a series of state-based systems instead of the national system favoured by the federal Government and business.

Victoria's plan was rejected at a meeting on May 12 in the offices of Mallesons Stephen Jaques that was chaired by former NSW premier Bob Carr.

Victorian officials had urged their interstate counterparts to accept a series of conditions before Victoria would share the intellectual property underpinning its state-based electronic conveyancing system.

Victoria's draft agreement found little support.

The original document, headed National Co-operation (Electronic Conveyancing) Agreement, covered 21 pages. Provisions covering about 15 pages were deleted at the insistence of the other states.

After the deletions, the meeting supported the establishment of a new legal entity to run electronic conveyancing. This replicates a decision that had already been taken by the steering committee of the National Electronic Conveyancing Office, the organisation charged with building the national system.

The name of the draft document was changed to "Agreement for national entity for electronic conveyancing".

The final resolution, which was certified by Mr Carr on May 14 as a correct record of the meeting, makes no mention of intellectual property and refers only to the establishment of a new legal entity.

However, Victorian Environment Minister Gavin Jannings, who is responsible for electronic conveyancing, issued a statement yesterday portraying this as an agreement to share intellectual property.

"At the meeting of state and territory and commonwealth officers on May 12, all states and the federal attorney-general's department agreed to a co-operation agreement for sharing the intellectual property in Victoria's electronic conveyancing system," Mr Jennings said.

"This continues the good progress that has been made towards a national approach to electronic conveyancing.

"This agreement will be considered by COAG as part of its progress towards a national outcome."

When told that this appeared to be at odds with Mr Carr's certified record of the meeting, a spokesman for Mr Jennings said "the big picture" was that there had still been agreement to move forward to the establishment of a national system.

Some of those at the Sydney meeting were disappointed that the Victorian Government had failed to deliver on an undertaking to produce an alternative business model for e-conveyancing.

Instead, Victorian officials had wanted the other states to first accept a new governance structure that would have locked them in to developing state-based versions of Victoria's system, which is known as ECV.

The role of the banks and other private sector users of conveyancing would have been downgraded to advisory groups.

Had Victoria succeeded, it would have eliminated the key industry group that is insisting that e-conveyancing be developed as a single national system.

The major banks fear that unless e-conveyancing is established as a seamless national system, big savings in the cost of property transactions will be at risk.

They are boycotting Victoria's ECV system out of concern that there has been insufficient progress on developing a national system.

The rejection of Victoria's conditions for the transfer of ECV's intellectual property is the latest in a series of setbacks for the state's system.

A preliminary review of ECV by information technology consultant Unisys found that it would need significant modification and enhancement to be suitable for NSW.

A legal opinion by Clayton Utz partner Mark Sneddon has identified potential gaps in compensation arrangements for those who lose money due to mistakes by ECV.

In March, the Standing Committee of Attorneys-General and Council of Australian Governments endorsed the need for e-conveyancing to be rolled out as a national system.

Despite's COAG's decision, the draft agreement presented to last week's meeting shows that Victoria was still seeking a series of systems that would differ from state to state.

One of the conditions that was rejected said "although the jurisdictions intend to aim for as much consistency as possible in the system as it operates across all jurisdictions, it is acceptable for there to be differences."

Another provision says "ECV Technical Solution will be the basis of the system recognising that jurisdictional differences are to beaccommodated through customisation".

Simon Libbis, executive director of the National Electronic Conveyancing Office, said he hoped COAG would now be able to push ahead with the work his group had done over the past 2 1/2 years.

"I hope they can move it forward and smooth over the jurisdictional differences that seem to be bogging us down," Mr Libbis said.

The draft agreement shows the Victorian Government was prepared to transfer the intellectual property in ECV for $3.7 million if it went to a new legal entity owned jointly by the states and structured along lines set down by Victoria.

ECV cost the Victorian Government about $40 million to develop. It has been used for one property transaction since its launch in November last year and has been accompanied by a sharp increase in government fees for paper-based conveyancing.

The draft agreement also implies that the Victorian Government might not own all of the software that supports ECV.

The other states refused to accept a provision in which they were asked to acknowledge that "in order to implement the system it may be necessary to procure hardware, software and services including ... third-party software with which the system's software has been designed to work such as digital signatures and database software".

If the other states had accepted Victoria's terms, the draft agreement says the state government would have identified the relevant third parties and introduced them to the other states.

The other states also refused to accept a condition that would have required them to accept that one company would be responsible for the electronic clearance and settlement of all payments associated with electronic conveyancing.

The draft agreement would have required the other states to give priority consideration to the company that currently operates the ECV clearance system.

That company is Austraclear, a wholly owned subsidiary of SFE Corporation.

The draft agreement would have required the other states to "collaborate in good faith, in the first instance, to assess the suitability of Austraclear to provide equivalent services in connection with the system".

On March 26, the Council of Australian Governments said electronic conveyancing was one of 12 areas in which "breakthroughs" had been achieved in regulatory reform.

Two days later, the Standing Committee of Attorneys-General said it "noted that COAG has agreed to the development of a national electronic conveyancing system".

The nation's attorneys-general also said they "noted the need for a national system to eliminate the costs and complexities of dealing with eight different systems".

Last weekend, federal Attorney-General Robert McClelland told a gathering of law firm managing partners that the decisions taken at COAG and SCAG would reinvigorate the e-conveyancing project.

"This initiative has the potential to generate benefits for all parties to land transactions," he said.

"A national system would again cut red tape. The legal profession, banks and consumers should all expect reduced costs."

Chris Merritt, Legal affairs editor | May 23, 2008 | The Australian

Stamp Duty Sucking the Life out of Markets: domain.com.au's real estate blog

Stamp Duty Sucking the Life out of Markets: domain.com.au's real estate blog

THIS IS A VERY GOOD THREAD ON THE ISSUE

Like Dracula, our state governments know they are sucking the life out of the property industry through the continuation of unfair stamp duty on residential property but they just can't help themselves.

Let's get one thing straight. I am not an advocate of abolishing stamp duty for affordability reasons. I just think it is this country's worst tax and it stymies investment.

While a tax review is on the table, state governments should immediately commit to working towards the abolition of stamp duty. Don’t forget, we were led to believe they would do this when they negotiated the GST intergovernmental agreement. They won’t agree voluntarily. You see, the states are hooked on over $5 billion of stamp duty revenue.

The level of stamp duty on homes is out of control. In major states the median priced home will attract stamp duty of over $20K. This compared to less than $5K per property 15 years ago.

Now before you point out that wages have also increased and that the comparison is unfair you should consider this. While stamp duty has increased by a factor of four fold since 1993, wages over the same time are only up 75%. Growth on stamp duty takings have been lapping wages for some time.

State governments have received massive, effortless windfalls from hapless home buyers. If this tax was in any way equitable it would have - over that time - been indexed to wages or inflation, not house prices. That is why compared to the average wage, stamp duty is now obscene. After all, in 1993, the ordinary home buyer would only have needed 18% of their annual wage to foot the average stamp duty bill - today that figure is a tick under 50%. How can any state government reasonably justify charging the average home buyer 50% of their annual income for a home purchase? Simply, they can’t.

The real victims here are ordinary families who need to move homes to accommodate growing families. It’s not like they can use the growth in the value of their homes to subsidise the stamp duty. They need that money to pay for the next house that is most likely no less expensive. In fact, we make these families borrow more money from the bank just to pay this most ridiculous of state taxes.

First-home buyer hopes fade

Hope is fading for first-home buyers battling to enter the housing market, with a report out today showing housing affordability at an all-time low.

The Housing Industry Industry Association-Commonwealth Bank first-home buyer affordability index fell by 3.5% for the March quarter as a surge in interest rates raised the barrier to home ownership for thousands of Australians.

The affordability index, which measures the costs of first-home financings over the average wage, fell from 106.9 in the December quarter to a low of 103.1 in March, 11% lower than a year ago and the worst since the index began in 1984.

The results are "terrible," said HIA Chief Executive for policy, Chris Lamont. "The index has been setting the wrong record for last 18 months."

"Despite some modest stabilisation, the fact is that there is a deficit in supply," Mr Lamont said. "The old adage of supply and demand isn't occurring because supply isn't keeping up."

He warned of a growing divide between the housing-haves and the housing may-never-haves.

Neil Laws, president of the Real Estate Institute of Victoria, agreed with the grim assessment.
"I can't find an upside to the fact first-time home buyers are struggling and will continue to struggle," said Mr Laws.

In 1970, the typical home price was 4.1 times an average salary, according to the HIA, a ratio that has now blown out to almost nine times.

Affordability deteriorated in all capital cities except Sydney and Hobart, which were stable, the report stated.

Residents of Brisbane and Canberra suffered the largest price increases.

Monthly loan repayment on a typical first-home mortgage in Australia jumped 4.4% to $2,799 from $2,681, according to HIA.

Mortgage repayments account for 29.1% of total first home-buyer income, a one percentage point increase over the December quarter.

The report comes after a 1.7% fall in the December quarter for the index, driven lower by an interest rate rise by the Reserve Bank in November.

Adding to the cost of housing are taxes and charges, which added $110,000-$115,000 to the typical house and land package in Sydney, Mr Lamont said.In Victoria, that figure is about $57,000.

czappone@fairfax.com.au

The Age | Chris Zappone | May 21, 2008

As homes foreclose in U.S., squatters move in

By Jason Szep

BROCKTON, Massachusetts (Reuters) - They enter through a broken first-floor window each night to sleep on a moldy bed in the abandoned four-family house at 827 Main Street, part of a new generation of squatters emboldened by America's housing foreclosure crisis.

"For squatters, foreclosed homes like this are like a camp-ground with free camping," says real-estate broker Marc Charney, a foreclosure specialist, as he enters the home in Brockton, Massachusetts, and shines a flash-light at a mattress where homeless people have been sleeping each night.

Squatting is on the rise across the United States as foreclosures surge, eviction notices mount and homes go unsold for months, complicating the worst U.S. housing slump in a quarter century and forcing real-estate brokers to enlist the help of law enforcement and courts to sell empty houses.

In some regions, squatting is taking on new twists to include real-estate scams in which thieves "rent out" abandoned homes they don't own. Others involve "professional squatters" who move from one abandoned home to another posing as tenants who seek cash from banks as a condition to leave the premises -- a process known by real-estate brokers as "cash for key."

"There are people who move in and know exactly who to contact and say 'If you want this house, why don't you come out here and offer me cash,'" said Detective Erin Camphouse of the Los Angeles Police Department's Real Estate Fraud Unit.

"It's just cheaper for the banks to do that rather than going into the courts," she said. "The squatters are getting sophisticated and turning it on these banks who own the properties."

She cited another case in which a Los Angeles man recently "leased" three abandoned homes to unsuspecting renters through Craig's List, the online classified advertising company. The renters paid first and last month deposits, moved their belongings in and lived in the homes for several months.

"In one case, there were loose ends of rehab on the house that needed to be done and the crook wasn't coming through or wasn't completing it. So they offered to do it instead of paying rent. They put down tiles and carpet and all that kind of stuff. And it wasn't until the sheriff put the lockout notice on the door that they realized something was wrong."

POSING AS TENANTS

New Jersey real-estate broker Bill Flagg is in a different type of legal tussle with occupants of a foreclosed home who refuse to leave in Plainfield, a city of 47,829 people.

"We know the people are squatters. But we have had the cops there. We had the electricity shut off and the cops wouldn't put the people out. We have to go to court to get them out. They claim to be tenants," Flagg said.

Such cases of squatters posing as tenants are on the rise, said Bill Collins, president of the New Jersey chapter of the National Association of Real Estate Brokers.

"These people claim that they have a lease but they can't find it. And the property owner has been removed from the property or been foreclosed on, so they have no interest in confirming if this person is a valid tenant," he said.

"So now you have squatters who are assuming that they are tenants and have rights to some degree to stay in the property until we can go through the court system to get them out.

"And they have caught wind that what most of these banks are doing is giving cash for keys, so cash for eviction -- anywhere from $1,000 to $1,500. So here you have a squatter who goes into a property, takes up residence, tells you that he is a tenant, goes to court and says that he is a tenant.

"Who can prove otherwise?"

California real-estate broker Steve Smallson said he finds about three squatting cases a month, compared to none last year, in his region of Woodland Hills, a middle-class district of Los Angeles. That includes a case in April involving a foreclosed home worth $1 million where police were called after neighbors reported squatters filming pornography in the house.

The problem is compounded in some states by the weakening economy and its effects on America's homeless, who number about 744,000 each night according to the National Alliance to End Homelessness, an advocacy organization in Washington.

"The rise of squatting is a natural consequence of these properties sitting there empty caused by the whole foreclosure crisis," said Steve Berg, a vice president at the alliance.

(Reporting by Jason Szep; Editing by Eddie Evans)

Reuters | May 20, 2008

Growth of online house auctions prompts probe

Author: Eli Greenblat
Date: May 19, 2008
Publication: The Age

Concerns have been raised with the State Government about how public auction laws apply in cyberspace.

Technology is racing ahead of outdated legislation, with vendors and agents in other states already using online negotiation systems, such as eBay and 2bid2.com.au, to auction property.

eBay has recorded 33 sales in its real-estate section this year and last month sold a Sydney apartment with harbour views for $1.49 million.

Another website based in Queensland has a dozen online auctions listed — its first sale was a Sunshine Coast home that went under the electronic hammer for $890,000 — and is looking at expanding in Victoria.

A spokesperson for Consumer Affairs Minister Tony Robinson confirmed that the Government had directed Consumer Affairs Victoria to investigate the practice.

The Real Estate Institute of Victoria, which helped push for the review, says it is concerned that consumers have little or no protection when they conduct sales online.

"We asked the minister to consider that when auctions go online that the legislation is there to protect consumers and protect both parties in the transaction," REIV chief executive Enzo Raimondo said.

"We want to make sure that all the safeguards and protections of the legislation that apply in physical auctions and the disclosure of notices and requirements agents make are transparent to the online environment."

At present, bids for property on eBay are not binding in Australia. Other sites have different policies depending on where they are based, but there is no consistency nationally.

Mr Raimondo said he did not know of any Victorian properties sold at an internet auction, but he expected it was only a matter of time.

It was popular elsewhere, he said, "because people are long distances away and may not physically attend". It was also more likely in the case of properties with particular appeal to overseas buyers.

The practice is bigger in the US, where sites such as eBay have thousands of listings, including beachfront property in Florida and California, as well as plots of land and ranches across the Midwest.

In Australia, eBay has 150 items in its real estate section, most in regional Australia. It has a piece of land in West Gippsland listed, as well as a three-bedroom house in Melton.

In the three months to May, 33 items on eBay's real estate section were sold with an average sale price of just over $312,500.

The founder of Queensland-based 2bid2.com.au, Michael Davoren, said he believed online auctions would be highly attractive to some buyers and sellers.

"It changes pressure, not that harsh pressure that people experience when there is an auctioneer yelling at them and a real estate sales person babbling away in their ear," he says.

"They can be sitting in their loungeroom at home making decisions sensibly and without that sort of pressure."

He said his company, which operates under Queensland legislation, was totally transparent with complex software designed to keep out "dummy bids" and ensure the credibility of the transaction.

All bidders must register with the site before an auction takes place.

"We have more details (on bidders) than you would on a Saturday afternoon out the front of a property in Melbourne.

"It will grow fairly quickly, and we will launch in New South Wales within a month and then in Victoria very quickly after that."

Launched six weeks ago, 2bid2.com.au has sold two properties over the internet.

Stamp Duty Sucking the Life out of Markets

Like Dracula, our state governments know they are sucking the life out of the property industry through the continuation of unfair stamp duty on residential property but they just can't help themselves.

Let's get one thing straight. I am not an advocate of abolishing stamp duty for affordability reasons. I just think it is this country's worst tax and it stymies investment.

While a tax review is on the table, state governments should immediately commit to working towards the abolition of stamp duty. Don't forget, we were led to believe they would do this when they negotiated the GST intergovernmental agreement. They won't agree voluntarily. You see, the states are hooked on over $5 billion of stamp duty revenue.

The level of stamp duty on homes is out of control. In major states the median priced home will attract stamp duty of over $20K. This compared to less than $5K per property 15 years ago.

Now before you point out that wages have also increased and that the comparison is unfair you should consider this. While stamp duty has increased by a factor of four fold since 1993, wages over the same time are only up 75%. Growth on stamp duty takings have been lapping wages for some time.

State governments have received massive, effortless windfalls from hapless home buyers. If this tax was in any way equitable it would have - over that time - been indexed to wages or inflation, not house prices. That is why compared to the average wage, stamp duty is now obscene. After all, in 1993, the ordinary home buyer would only have needed 18% of their annual wage to foot the average stamp duty bill - today that figure is a tick under 50%. How can any state government reasonably justify charging the average home buyer 50% of their annual income for a home purchase? Simply, they can't.

The real victims here are ordinary families who need to move homes to accommodate growing families. It's not like they can use the growth in the value of their homes to subsidise the stamp duty. They need that money to pay for the next house that is most likely no less expensive. In fact, we make these families borrow more money from the bank just to pay this most ridiculous of state taxes.


For information on property prices go to www.homepriceguide.com.au

Michael McNamara is the General Manager of Australian Property Monitors, publisher of www.homepriceguide.com.au
Posted by Michael McNamara

Domain Blog

Bank merger will provoke wails

IF THE Westpac/St George merger proceeds, Gail Kelly will head Australia's largest bank. Questions now are being raised as to whether Kelly's job history leaves her, and Westpac, in a sticky legal situation.

Westpac intends to keep St George as a distinct entity within the Westpac group – a strategy to keep St George's customers and shareholders on side by maintaining its brand identity and branch network, while still seeking savings by merging back office operations and saving on funding costs.

It is a credible strategy. Westpac has surplus back office, especially mortgage processing, capacity. And the sub-prime crisis has increased the cost of funding for single-A rated St George far more than it has for the double-A rated Westpac. Westpac is highly confident the merged entity would retain Westpac's higher rating and thus enjoy its much lower cost of funds.

Courier Mail | Ross Buckley | May 15, 2008


THE Finance Sector Union officials fear that up to 2000 jobs could be lost at the St George Bank's Montgomery Street, Kogarah, operations under the bank's proposed merger with Westpac.

And Kogarah Councillor John Mikelsons said it could led to the closing of the bank's Montgomery Street premises altogether, causing a disastrous flow-on effect for local businesses.

The FSU meet staff yesterday to discuss the implications of the merger with the union's national director for campaigning and bargaining, Chris Gambian saying the union is expecting significant reductions of staffing levels.

"There are a number of concerns with the merger, first and foremost the impact it will have on jobs in the bank's Kogarah operations,'' he said.

"The back office area is of particular concern. Back office functions include workers in mortgage processing, call centres, collections, cheques, anything that is not in the bank's branches.

"This area will have some duplication between the two banks.

"Montgomery Street, Kogarah, is under severe risk where there are 2000 people working in that area.

"If they take a couple of thousand workers out of the area it will have an enormous impact on the community and local business.


The Leader | 20 May 08


FINANCE Sector Union officials originally booked a meeting with Kogarah Chamber of Commerce to talk about the outsourcing of jobs at St George Bank.

But by the time the meeting date arrived, there was a bigger issue at stake the proposed merger of St George and Westpac.

FSU official Chris Gambian told the chamber the union was bracing for significant staff reductions at the bank's Montgomery Street, Kogarah, headquarters if the merger went ahead.

St George Bank chief executive Paul Fegan has said a merger would increase opportunties for staff but also admitted jobs would be lost.

"The reality is there will be some job losses but ...we have no specific detail,'' Mr Fegan said.

Between 2000 and 3000 people work at the bank's Kogarah branch and any major reduction in the workforce would have a significant impact on Kogarah's economy.

So when the union asked the chamber to support its "Save the Dragon'' campaign, it got a unanimous vote in favour.

"Westpac has said it would maintain a St George corporate identity at Kogarah, but we don't believe it,'' Mr Gambian said.

"This is not a merger, it's a takeover. At the end of the process, everyone will be holding Westpac shares. The history of similar takeovers indicates that eventually the St George brand will be phased out.

"Over time it won't make any sense to have a Westpac and St George branch in the same suburb and the bigger brand will prevail.

"It happened to Bank of Melbourne, despite what Westpac said at the time and it will happen to St George.''

Mr Gambian said that if the merger went ahead the new group would have 30,000 employees. Industry analysts predict that 5000 of these jobs could be cut.

"The first jobs to be affected would be back office functions workers in call centres, processing and support jobs, mortgage processing and collections,'' he said.

St George Bank chief executive Paul Fegan has said a merger would increase opportunties for staff but also admitted jobs would be lost.

"The reality is there will be some job losses but ... we have no specific detail.''

Despite that, Mr Gambian said the union believed the fight to stop the merger could be won on competition grounds.

"This is not a done deal, but it will be a hard fight,'' he said.

But he urged members to remember the Qantas private equity bid and the sale of the Snowy River hydro electric scheme. Both of these projects had fallen over because of community disapproval.

Mr Gambian urged members to write to the Treasurer Wayne Swan, who will have the final say in whether the merger proceeds.

St George supports the merger, which puts a value of about $18 billion on the bank. The NSW-based bank's backing was considered essential by Westpac, as 60 per cent of St George investors are small retail shareholders.

Fairfax Digital seeks growth

MASSIVE growth in online transaction revenues has prompted Fairfax Digital chief Jack Matthews to consider more acquisitions in the field.

Fairfax Digital is split into three divisions - media (editorial-based websites), transaction sites and classified sites such as domain.com.au.

Revenue growth from Fairfax's transaction-based websites - RSVP, Stayz, EssentialBaby and InvestSmart - was second only to that of the group's classified websites, Mr Matthews told a recent media briefing.

"We are not looking to spend hundreds of millions on acquisitions, but are looking at select acquisitions that allow us to diversify revenues or extend existing businesses," he said.

The Australian | Jane Schulze | May 19, 2008

Settlements Crisis - Survey Presentation

Victoria processes world’s first electronic settlement

On 12 May, the Victorian Government’s Electronic Conveyancing system (EC) became the first system in the world to process an electronic settlement, transfer, mortgage and lodgement of title. The transfer was successfully completed on behalf of their clients by two Melbourne conveyancing firms, GLN Conveyancing Services Pty Ltd and Rainbow Conveyancing Pty Ltd, in conjunction with Bendigo and Adelaide Bank, who completed the mortgage. “We knew it would not happen overnight, but it has happened and is the first of many more to come,” said Gayle Nancarrow of GLN Conveyancing and the Vice-President of the Victorian Division of the Australian Institute of Conveyancers (AIC).

EC News | May 16, 2008

GE Money to shed Melbourne processing jobs

THE home-lending arm of GE Money is closing part of its back-office processing operation in Melbourne and moving the work to Sydney, which could involve the loss of up to 50 jobs.

The company confirmed yesterday that it was in negotiations with affected staff whose work will be transferred to what will become GE's sole mortgage processing centre by mid-June. It is thought the cuts could affect up to 10 per cent of the division's 550 staff, although the company refused to confirm the actual number of jobs under threat.

The impact could eventually be offset by an increase in the number of staff in Sydney, although GE indicated it had no need to boost numbers for the rest of this year.

GE Money is part of the giant US financial services combine that also owns the Wizard home loans business.

Moving the processing work to Sydney does not affect Wizard, which is run as a separate division to GE Money's other mortgage operations.

The company emphasised that the move to reduce its in-house processing operations from two centres to one was unrelated to the fall-out from the global credit crunch, which has resulted in funding costs rising dramatically throughout the home loans industry.

Neither was liquidity an issue, it said, given that the Australian division borrows directly from GE's main treasury in New York to fund its three main specialist home loan products, two of which are sold directly under its own name.

However, its savings drive comes at a difficult time for the wider mortgage industry. Non-bank lenders, in particular, have either been driven out of the market or have drastically cut back on their business because of the need to increase interest rates in the face of the credit crisis.

Prominent Australian casualties of the credit crunch include the RAMS mortgage lender, now a relaunched division of its new owner, Westpac bank. The Origin home loans origination business run by ANZ has in effect been closed and Macquarie Mortgages is also in the process of being shut down.

Danny John | The Age | 8 May 08

I.T. in practice: Tackling the digital divide

Practices which ignore digital technology are at risk.

The commoditisation of legal services is a continuing challenge for small to medium-sized practices.

It creates dual pressures as clients have an expectation that services will be delivered faster (and cheaper), and that those services will be comprehensive in terms of easily applicable legal expertise.

While experienced practitioners know that a significant part of legal service delivery revolves around the correct strategies, methods and timing of applying legal knowledge, many clients believe that the legal knowledge alone is the essential deliverable.

Lawyers may understand the extent of these underlying complexities, but clients – or potential clients – have service expectations that are built around their own generic information mining experiences.

Expectations about the timing of service delivery are also affected by personal web history.

When it is possible to locate and purchase a cereal packet plastic toy from the 1970s in less than 20 minutes, why is it not possible for a lawyer to download a ready-to-go template for a Magistrates’ Court statement of claim in the same amount of time?

In many respects, the digital divide within the legal profession appears to be taking on age-based characteristics.

Older practitioners (with exceptions of course) tend to rely on their personal relationships with longstanding clients to carry them through without having to swim in the deep pond of committed technology exposure.

Signposts of this are such things as manual, or near-manual internal systems; most notably an absence of practice management and document management systems.

Other signposts are a lack of knowledge about the extent and quality of legal tools and information available on the web, as regularly reported in this journal for many years now.

A key question about being on that side of the digital divide is “Does it really matter?”.

Well, yes – it does. It can adversely affect staff retention and motivation, valuation of the practice as part of an exit strategy, profitability and client retention.

The digital divide is not an insurmountable barrier, and with a planned strategy involving several key areas, significant advances can be made, even for the small practice.

Each practice will have its own “hit list” of technology objectives, but it is suggested that the ones which have the highest level of client visibility or service delivery will have a downstream effect that will add to the impetus for change.

A good example lies in the billing process that a practice uses. Turning this into an “e-billing” system is usually possible, regardless of the current technology in use.

A staff member will need to be made responsible for the basics of this project – possibly liaising with the practice management software support staff, acquiring a PDF document generator, collecting the email addresses of client accounts payable staff, revising form layouts, and dealing with the timing of the rollout.

After the initial processes are complete, other staff members should become involved in the e-billing processes so that it becomes ingrained in the fabric of the practice – it becomes part of its “corporate knowledge”.

As an alternative, a practice may wish to experiment first with a system that is not “client-facing”. An example may be the bank interface.

A colleague related the story of a client who has the last cheque book the firm ever used mounted in a frame and sitting in its reception area, being used as a marketing tool to show clients that they are dealing with a firm that is comfortable with technology.

Moving away from the cheque and deposit books, and into the full suite of online banking tools will introduce efficiencies while retaining tight control over funds.

Again, a list of tasks would need to be formulated, mostly revolving around acquiring supplier banking details, and encouraging clients to deposit directly into the practice’s bank account(s).

Methods for dealing with larger funds transfers will also need to be discussed with the bank, and (again) software support staff may need to be engaged to discuss automatic statement transfers, or remittance runs.

The introduction of new technology is not an event; it is a process.

Firms which are successful in this area have post-implementation reviews to use lessons learned as they launch into the next project, and also look at completed projects from time to time to see whether further advances can be introduced.

“To do” List

• Identify the top three areas where technology could be introduced or improved, and consider what effects may result for clients.
• Confirm that any ethical and practice (e.g. trust account) obligations will still be satisfied through the adoption of technology.
• Specify which staff member will be responsible for any technology initiative introduction.
• Expect hiccups along the way, and support troubleshooting measures.

Law Institute Journal Victoria (2008) 82(1&2) LIJ, p. 86

Author ADAM REYNOLDS is the principal of Proficio, an independent IT consulting firm.

NAB reveals cost of technology upgrade

Mahesh Sharma | May 10, 2008 | The Australian

NATIONAL Australia Bank will spend up to $1 billion overhauling its legacy banking systems, after spending the past 18 months detailing the project rollout.

In a few months the bank will announce full details of the project, which will see it replace its core banking systems with newer, more agile technologies.

It expects to replace the legacy systems over four to five years and will absorb the expense within its current annual investment spend of $800-900 million.

"It could be a very substantial spend -- $800 million or a billion dollars -- but it is our intent that we will accommodate that spend within this run rate," said NAB Group chief financial officer Mark Joiner at yesterday's results announcement.

A critical focus of NAB's planning to date has revolved around strategic partnering options to support the delivery of the project and effective management of execution risks, NAB said in its half-year report.

Commonwealth Bank of Australia recently announced its four-year, $580 million core banking modernisation project, and claimed a significant first-mover advantage by tying up the technology resources required for the massive project. NAB spent $43 million on compliance projects, including the Anti-Money Laundering/Counter-Terrorism Financing Act and Basel II legislation, over the half but did not provide an exact breakdown.

It also identified technology outsourcing and offshoring, mainly involving back-office functions, as factors that helped reduce operating expenses.

In March, NAB outsourced some of its legacy banking applications to Indian technology companies, a move affecting more than 260 jobs, but the impact of this wouldn't be seen until the bank detailed its full-year results.

The news emerged as the bank reported its financial results for the half year to March 31, 2008.

Several areas within the business experienced a rise in technology expenditure.

Spending on data communication and processing for the period was $58 million, up a quarter compared with the same period in 2007.

The group's spending on computer equipment and software was up 12 per cent to $139 million and overall software capitalisation jumped 16 per cent to $902 million.

NAB said increased software investment contributed to a 2.7 per cent rise in its goodwill and other intangible assets, which was $5.4 billion for the half year.

This investment underpinned several of the group's strategic initiatives, including the consolidation of its local distribution network, and revamping the front and back-office technology platforms in Britain, as well as supporting nabCapital's Strategic Investment Program (SIP).

REIV calls for stamp duty reform in Victorian State Budget

REIV CEO Enzo Raimondo has called on the Victorian State Government to initiate a program of stamp duty reform in tomorrow’s budget.

Mr Raimondo said that the government should introduce indexation to the stamp duty rates to ensure that Victorian home buyers are not forced to pay proportionally more as the price of a home increases.

"Current stamp duty rates mean that the state government charges proportionally more in stamp duty the higher the sale price, meaning that many buyers face the prospect of bracket creep as prices increase.

"House prices, like the prices of other goods and services naturally increase over time and home owners should not have to pay extra in tax because of that.

"In March 2007 homebuyers paid the equivalent of 4.2 per cent of the sale price in stamp duty on a median priced home but in December 2007 they paid 4.5 per cent.

"The unfair tax scales have resulted in stamp duty revenue increasing from a budgeted amount of 1.85B in 2003-2004 to actual revenue of just under $3B in the 2006-2007 financial year. Twelve months ago Treasury forecast that they would raise $2.8B and that was revised up to $3.5B.

"Tomorrows budget will reveal just how much extra the state has actually raised.

"With housing affordability at its worst for 30 years the unexpected increases in revenue create an opportunity to alleviate the problem for many first home buyers by increasing the first home buyers grant.

"It is also clear from the recent 2020 summit that the Federal Government wants to see reform of state taxes and Victoria should lead the way as it has done in the past.

The REIV has also asked the State Government to treat investment properties equally to encourage more investment in real estate and increase availability of rental accommodation.

"The need is illustrated by the fact that the rental vacancy rate in Melbourne remained at a 25 year low of 0.9 per cent in March.

"The main way to increase the availability of rental accommodation is through increased private investment. The current rates discourage investment by charging up to $2800 more in stamp duty.

"The Federal Government is providing subsidies to private investors and unless the state removes the higher stamp duty charges we will face a situation whereby the Federal Government gives and the State takes away," Mr Raimondo concluded.

REIV Newsletter | 6 May 08 |

Straight-faced grab for revenue

VICTORIA should rename itself the average state: in better shape than the dud duo of NSW and South Australia but not as hot as the resource-rich pair of Queensland and Western Australia.

Sound familiar? Victoria's Goldilocks spot in the national economy mirrors Australia's place in the world economy.

That makes John Lenders's first Victorian budget the canary in the coal mine for Wayne Swan's debut next Tuesday.

Lenders has the problem closest to Swan's: a slower economy and a bigger budget surplus.

Victoria's gross state product is forecast to rise by 3 per cent in the coming financial year, yet the surplus for the coming financial year is $827.5 million - a lucky escape when you consider that a year ago the forecasts for 2008-09 had the economy growing at 3.25per cent, and the surplus at $434.2 million.

A slower economy yielding double the surplus for the government would, in ordinary times, signal a serious error in fiscal policy. But Lenders is not hacking into spending. The seeming mismatch between growth and surplus boils down to the same thing Swan has: windfall tax revenues from the surreal economy.

For Lenders, it's the Melbourne property market; for Swan, it's the record prices China and others are willing to pay for our commodities. With money coming from forces beyond your control, the Victorian and federal treasurers should be judged not by the size of their surpluses but by the quality of their spending and investment decisions.

To make sense of what Lenders did yesterday, and to use it as a benchmark for Swan, let's recall what Peter Costello used to do with windfalls from the surreal economy. Every bonus tax dollar flowing into federal coffers over the past three years was returned to voters as either a tax cut or increased government spending.

The commonwealth Treasury wasn't exaggerating when it compared the final term of the Coalition government to Gough Whitlam's splurge in the early 1970s. Whitlam, like John Howard, saw a boom in the terms of trade as a licence to expand government.

But Howard at least allowed his treasurer to keep the budget in surplus. Lenders is no Costello, and his boss, John Brumby, is no Howard. They took one look at Victoria's revenue windfall and said, "Let's hang on to it".

Sure, the local press will trumpet yesterday's tax cuts. But apply the Costello test and you'll see the Victorians didn't return the latest round of tax-bracket creep to business and home buyers.

Land tax was running $375million higher in 2008-09 than was forecast a year ago. But Lenders gave back less than one dollar in three of this amount - $122million - as a tax cut. Stamp duty receipts were $1.029 billion higher than projected a year ago. Again, the tax cut was only a fraction of this sum - $150 million, or less than 15 per cent of the total.

These numbers weren't in yesterday's budget papers. You had to remember to bring last year's forward estimates to compare the two. This is not to criticise Lenders's priorities. The higher surplus is being invested in infrastructure. It is better there than in the pockets of public servants.

The pity is that Lenders did not want to paint himself as Scrooge. His pitch to Victorians was too complacent by half. The message wasn't tighten your belt, but enjoy the scraps. Swan won't make this mistake. The fiscal buck stops with the federal Treasurer. To justify a large surplus, Swan must do what Lenders wasn't forced to: cut government spending.

Swan has a harder sell. He will be taking from voters in the same breath as he delivers the tax cuts he promised at the last election.

All Lenders had to do was keep a straight face while he pocketed the bulk of Victoria's revenue windfall.

ALYSIS: George Megalogenis | May 07, 2008 | The Australian

Stamp duty on land transfer

Stamp duty is payable on any transaction that results in a change of beneficial ownership of land and associated real assets.
Properties bought as a principal place of residence attract a lower marginal rate for certain dutiable values. Effective on or after 2008-09 Budget day, there will be an adjustment of approximately 10 per cent to the general rate of stamp duty and principal place of residence concession thresholds while leaving all tax rates unchanged.

The new rates of duty are shown in Table 4.4.

Table 4.4: Duty on land transfer

General land transfer duty rates

Value of property transferred Duty payable
Up to $25 000 1.4% of the value of the property
$25 001 - $130 000 $350 plus 2.4% of the value in excess of $25 000
$130 001 - $960 000 $2 870 plus 6% of the value in excess of $130 000
$960 001 and over 5.5% of the value of the property

Land transfer duty rates for principal place of residence purchases

Value of property transferred Duty payable
Up to $25 000 1.4% of the value of the property
$25 001 - $130 000 $350 plus 2.4% of the value in excess of $25 000
$130 001 - $440 000 $2 870 plus 5% of the value in excess of $130 000
$440 001 - $550 000 $18 370 plus 6% of the value in excess of $440 000
$550 001 - $960 000 $28 070 plus 6% of the value in excess of $550 000
$960 001 and over 5.5% of the value of the property
Source: Duties Act 2000

Victorian first homebuyers who qualify for the government’s $7 000 First Home Owner Grant are also eligible for a $3 000 First Home Bonus for homes valued up to $500 000.
The value of the bonus increases to $5 000 for purchases of newly constructed homes, and is available until 30 June 2009.
The 2008-09 Budget provides for an additional $3 000 First Home Bonus for eligible first homebuyers purchasing newly constructed homes in regional Victoria, for contracts entered into on, or after, 2008-09 Budget day and will also be available until 30 June 2009. This brings the total assistance for such purchases to $15 000.
In addition, first homebuyers that qualify for the bonus on or after budget day are also eligible for the concessional rate of duty for principal places of residence (PPR). This replaces the current requirement for first homebuyers to elect between the two. For a first home buyer purchasing a home at the median first home buyer price ($317 000) the extension of the PPR concessions and the threshold adjustments equate to a $2 460 saving. These arrangements are summarised in Table 4.5.

Table 4.5: First home buyer support

Established homes New homes
Metropolitan Regional
First Home Owner Grant $7 000 $7 000 $7 000
First Home Bonus (a) $3 000 $5 000 $8 000
Access to principal place of residence
concessional rate
Yes Yes Yes
Source: Department of Treasury and Finance
Note:
(a) For homes valued up to $500 000 and for contracts entered into before 1 July 2009.

First homebuyers with families have the option of a full duty exemption in lieu of the First Home Bonus when they purchase property worth not more than $150 000, with a partial exemption available for property worth not more than $200 000.

This budget also introduces a stamp duty exemption for homes transferred into special disability trusts in recognition of the particular nature of the arrangements for persons with a severe disability.
The budget also increases the thresholds for duty concessions on property purchases for pensioner and concession cardholders. A full stamp duty exemption will now apply to property purchases valued up to $330 000, while a partial exemption will apply to purchases valued over $330 000 up to $440 000.

Furthermore, a corporate reconstruction exemption will provide relief to certain stapled real estate investment trusts in circumstances that are consistent with the Commonwealth Government’s arrangements with respect to capital gains tax rollover relief. This will allow Australian Listed Property Trusts to become more competitive in off-shore markets and achieve stronger returns for Australian investors. It further supports this government’s objectives of cutting red tape and strengthening Victoria’s financial services sector.

Stamp duty revenue is expected to have grown unusually strongly by $913 million or 30.8 per cent in 2007-08 over 2006-07. The growth in revenue in 2007-08 is due to both increases in the volume of transactions and the average value per transaction. The increase in volumes may in part be attributable to changes by the Commonwealth Government to superannuation laws which appear to have generated extra buying and selling of properties, with some of the revenue accruing in 2007-08.
The increase in average value per transaction in 2007-08 is consistent with growth in property prices over the year. Solid economic growth, including significant growth in household financial wealth as well as strong population growth, have contributed, but changes in these ‘fundamentals’ cannot fully explain the increase in property prices.
It is expected that over the forward estimates period growth of property prices will re-align with economic fundamentals, as well as respond to the more recent interest rate rises and financial volatility. In particular, the increases in mortgage interest rates from August 2007, and the shock to financial wealth resulting from the decline in equity prices since November 2007, may relieve the upward pressure on property prices. The decline in auction clearance rates experienced so far in 2008 suggests that a re-alignment of the property market is already underway. The estimates assume that this correction towards fundamentals will occur over several years, and that property prices will stabilise over the estimates period.

The increase in interest rates, the neutral outlook for prices, and the absence of one-off superannuation impacts, suggest that there will be an initial easing in volumes, before modest growth returns towards the end of the forward estimates period. Before allowing for the measures announced in this budget, stamp duty revenue is expected to be broadly unchanged in 2008-09 and experience a small decline in 2009-10, before increasing slightly over the remainder of the forward estimates period.
The revenue impact from changes to the thresholds result in an expected decline in stamp duty in 2008-09 of $138 million (or 3.6 per cent) compared with the 2007-08 revised estimate.

Victorian State Budget | 6 May 2008

Kelly studies plan to move 3000 Westpac jobs overseas

WESTPAC is expected to shift the work of up to 3000 of its back-room staff to overseas locations such as India over the next three years in an accelerated plan to cut costs being put together for new chief executive Gail Kelly.

The outsourcing blueprint is said to be at an advanced stage but has yet to be presented to Mrs Kelly as she prepares today to front her first financial results conference at Westpac since replacing her predecessor David Morgan at the beginning of February.

The move comes as the bank is due to unveil half-year profits of about $1.8 billion this morning and will form part of a wider plan to sharpen Westpac's front-line offering to its 7 million customers.

A focus on customer service was the hallmark of Mrs Kelly's five-year reign at her former employer, St George Bank, as she sought to challenge the branch network dominance of the "Big Four" institutions.

Back-office duties such as information technology services, transaction work and unsecured lending are said to be at the forefront of the tasks which Westpac will look to offer third-party global providers with their major processing centres in India and China.

In recent years, Westpac has joined its rival banks such as ANZ, National Australia Bank and St George in offloading such operations as mortgage processing, the provision and servicing of tens of thousands of computers and telephones to Australian-based suppliers like EDS, IBM and Telstra.

Nonetheless, it has been reluctant to fully embrace the move to send work overseas, having been conscious of the backlash of customers concerned about the security of their personal banking information and a concerted campaign by unions aimed at protecting Westpac's 28,000 jobs.

It also continues to rule out any of its frontline services such as call centres being either based abroad or handed over to foreign providers. The same also applies to actual personal data.

However, the combination of the arrival of Mrs Kelly after Dr Morgan's nine-year tenure and the pressure on Westpac's cost base caused by the fall-out of the global credit crisis has prompted a root-and-branch review of the services it offers.

As yet, no decision has been made on where the most likely candidates for outsourcing will be based. The bank is also likely to give a commitment that no actual jobs will be lost and intends to offer alternative work to the people who will be affected.

The review, though, has raised new questions over the future of some of the work at its major operations centre in Concord, Sydney, which was the subject of a successful campaign 18 months ago by the Finance Sector Union to prevent 300 out of the 1000 administrative jobs being sent to India.

Westpac said at the time that the plan did not meet its "financial and stakeholder criteria" and that it would not save as much money as originally thought.

The latest push to cuts costs comes as Westpac's new retail banking boss, Peter Clare, this week revamps the management team that saw the abolition of two key senior jobs.

He has also poached a top executive from Commonwealth Bank, Jason Millett, as his new strategy chief to help drive the changes in the division, which includes Westpac's 800-plus branches.

Danny John and Matt O'Sullivan | 1 May 08 | The Age

Property industry urges stamp duty reform

REFORM of crippling stamp duty and creation of an economic climate conducive to improving housing supply top the wish-list for the property industry in the lead-up to Victoria's state budget tomorrow.

Leading property groups, such as the Master Builders Association of Victoria, the Real Estate Institute Victoria and the Housing Industry Association have included these policy ideas, and a host of others, in their submission to the State Government.

The building and construction sector is a large contributor to the Victorian economy, with its share of state output measured at about 12% of the state's gross domestic product.

It is estimated that the sector employs about 170,000 people directly and generates output of more than $27 billion.

A common theme is growing concern over stamp duty paid by new home buyers.

REIV chief executive Enzo Raimondo called on Treasurer John Lenders to initiate stamp duty reform.

He said the Government should introduce indexation to stamp duty rates to ensure that Victorian home buyers were not forced to pay proportionally more as home prices increased. "Current stamp duty rates mean that the State Government charges proportionally more in stamp duty the higher the sale price, meaning that many buyers face the prospect of bracket creep as prices increase," Mr Raimondo said.

The MBAV noted the near constant growth of property tax (especially stamp duty on conveyancing), as well as poor follow-through on Melbourne 2030, expensive sustainability regulations and continued uncertainty in planning decisions were all undermining housing affordability.

Executive director Brian Welch said that along with development charges, land tax and payroll tax, stamp duty dampened the investment climate.

The HIA wants a whole-of-government approach to ensure higher-density residential development is economically feasible.

Eli Greenblat | May 5, 2008 | The Age

National licence for truckies

AUSTRALIA'S truckies will come under one national registration and licensing scheme from July next year, with every other driver in the country likely to follow suit soon after.

The nation's transport ministers yesterday agreed to cut the red tape and costs associated with eight different registration systems for Australia's fleet of 375,000 heavy vehicles.

The changes will also impose the same standards to qualify for a licence on the one in 10 drivers who are truckies, federal Transport Minister Anthony Albanese said.

"This long overdue reform is about delivering on the Rudd Labor Government's commitment to modernising our century-old federation and building a seamless national economy for the 21st century," he said.

The remaining nine out of 10 Australian drivers are also in line for similar changes. The transport ministers will consider a report in November on how to bring them under a single registration and licensing system.

At present, drivers have to get a new licence each time they move state, with licence conditions - especially age and other limits on learner-drivers and P-platers - changing at the border.

Registration fees charged also vary widely, as do the manner of their calculation, between jurisdictions.

Other, more difficult recommendations presented at the meeting, including those aimed at cutting the transport sector's emissions, were referred for further investigation.

Western Australia's plan for a mandatory carbon emissions standard for vehicles and low carbon fuels rated a mention in the final communique.

The communique skirted around the controversial issue of congestion taxes on city car drivers. The ministers agreed only on the need for a "comprehensive study" on the matter.

Siobhain Ryan | May 03, 2008 | The Australian

This story represents the first step to national vehicle licences and national vehicle registration?

BTW what has this got to do with property?

The question remains whether any of us will see a National Property Register in our lifetime. I asked a colleague if there was the political will to do so, on a scale of 1 to 10 how hard would it be? He said, yes technically it would be possible, and degree of difficulty - probably a 5

ECV 'suits Queensland'

THE Queensland Government believes Victoria's state-based electronic conveyancing system is suitable for Queensland's needs.

Queensland is still refining its approach to governance arrangements for a national e-conveyancing system.

But the state Government is working with Victoria to determine how the Victorian system, known as ECV, could be introduced to Queensland.

Natural Resources and Water Minister Craig Wallace said Queensland was working with Victoria to determine "how ECV technology might be used to extend electronic conveyancing to Queensland".

The Government is also working with Victoria on how the experience of using ECV in Victoria could improve the national business model for e-conveyancing. "Queensland has consistently maintained that it wishes to see a national electronic conveyancing system," Mr Wallace said.

"The outcome, being sought by industry and governments, is that the system operates in a seamless and interoperable way across Australia, with users having a common interface.

"Such a system might be supported by one single central computer system or be supported, behind the access portals, by one or more computer systems.

"Any differences in conveyancing processes and practices in various states can be resolved through technology providing a common interface for users."

Mr Wallace said the proposed national e-conveyancing system had always been promoted "on the basis that differences could not be eliminated but their impact could be managed successfully".

Chris Merritt | May 02, 2008 | The Australian

Revolt against Victorian e-system

VICTORIA'S move to control the future structure of electronic conveyancing has suffered a series of setbacks that could undermine its goal of sidelining the industry's non-government players.

Victoria's plan, for a network of state-based electronic conveyancing systems, has been rocked by two independent reports and a revolt by the private sector players in the conveyancing industry.

Lawyers, bankers and other private sector interests confronted senior Victorian government officials on April 18 at a heated meeting in Sydney.

They warned that a network of state-based e-conveyancing systems, modelled on Victoria's ECV system, was unacceptable.

The Law Council of Australia and the Australian Bankers Association have written a joint letter to the federal Government, urging it to have nothing to do with any plan for electronic conveyancing that does not address the concerns of business users.

A Single National System

The major banks fear that unless e-conveyancing is established as a seamless national system, big savings in the cost of property transactions will be at risk.

At last month's meetings of the Council of Australian Governments and the standing committee of attorneys-general, all of the state governments publicly committed themselves to developing a "single national e-conveyancing system".

But Victorian officials told their interstate counterparts this month they had been holding talks with Queensland about adopting a version of Victoria's state-based system.

Despite COAG's decision, one of the most senior Queensland Government officials, Neil Lawson, has since tried to have the word "single" deleted from future references to the proposed structure of the e-conveyancing system.

However problems associated with developing state-based e-conveyancing systems have since been identified by information technology consultant Unisys and national law firm Clayton Utz.

IT review

Unisys conducted a preliminary review of Victoria's ECV system at the request of the NSW Government and found a number of problems.

NSW Lands Department director-general Warwick Watkins told the Victorian Government about the result of the Unisys review on April 3.

"The result of this work is a preliminary view that the system would require significant modification and enhancement to be suitable in NSW," Mr Watkins wrote.

The review was carried out using an ECV "demonstration system". At the insistence of the Victorian Government, private sector users of conveyancing were excluded from the review.

In a letter to the secretary of Victoria's Department of Sustainability and Environment, Mr Watkins wrote that he would have preferred to include industry representatives in the assessment.

The State Guarantee and Liability

Concerns have also emerged about what appears to be a gap in compensation arrangements for those who suffer losses because of problems with state-based e-conveyancing systems.

A legal opinion by Clayton Utz, which has been obtained by The Australian, warns that the Victorian system appears to be relying on the state's Torrens Assurance Fund to compensate people for any losses caused by the system.

It says equivalent funds around the nation had been designed to compensate losses arising from mistakes at the state land registries and, in some cases, mistakes by lawyers or conveyancers.

But it says there is a series of limitations on the coverage of these funds and most losses that may arise solely from the acts or omissions of an "electronic lodgment network operator" are unlikely to be come within the Torrens Assurance Fund system.

It gave the example of losses arising from a delay in settlement or registration of a property transaction that is caused by the operator of the electronic network rather than incorrect entries in the land titles register.

The opinion, by partner Mark Sneddon, says this view is based on Clayton Utz's risk assessment and experience with the Torrens Assurance Fund provisions in NSW and Victoria.

The opinion, marked privileged and confidential, says the national business model that has been approved by private-sector users and all state governments, would enable an independent electronic lodgment network operator "to compensate a wider range of losses".

This would be achieved without requiring state and territory governments to underwrite the legal liabilities of the system operator, the opinion says.

Concern about increased potential liability is the main reason why the Law Institute of Victoria has refused to recommend that solicitors use the ECV system.

The concern arose before ECV was launched last November. It has not been resolved despite talks between the state government and the Legal Practitioners Liability Committee, which provides professional indemnity insurance for the state's solicitors.

The Victorian system is also being boycotted by the major banks. As a result, private sector conveyancing in Victoria remains paper-based despite government expenditure of about $40 million on ECV.

The Clayton Utz opinion was commissioned by the National Electronic Conveyancing Office, an organisation made up of government and business representatives that is responsible for building the national e-conveyancing system.

The opinion was commissioned after Victorian government officials told their interstate counterparts in Melbourne last month that they had advice from Mallesons Stephen Jaques that raised concerns about increased potential liability for state governments associated with the single national system that NECO proposes to build.

That two-day meeting in Melbourne excluded lawyers, bankers and other business users of conveyancing. It took place in the Mallesons offices and was chaired former NSW premier Bob Carr.

The Victorian Government issued a press release after the meeting outlining a proposed new structure for e-conveyancing that it said had been endorsed.

Instead of the single national system that had already been approved, that press release outlined a system in which the states would adopt versions of ECV that would be customised to include differences between the states.

When the Clayton Utz opinion was discussed at the April 18 meeting of NECO's steering committee, Fiona Delahunt of Victoria's Department of Sustainability and Environment sought to have it withdrawn.

The minutes of that meeting, which have been obtained by The Australian, state: "Fiona Delahunt expressed concern at the process by which this advice has been obtained and requested that it be withdrawn.

"She expressed her view that it misrepresented what Mallesons had said and that it should not have been commissioned before Victoria's work was completed," the minutes say.

The minutes also show that Australian Bankers Association director Ian Gilbert asked Ms Delahunt to make available the Mallesons advice that had supported the views that Victorian government officials had expressed to their interstate counterparts.

"Fiona Delahunt said that the advice was a presentation that included a PowerPoint presentation that she agreed she could make available to the committee and that written advice would be sought from Mallesons," they say.

The minutes also show that Victoria is now insisting that the structure for e-conveyancing be changed to accord with that outlined in the Victorian Government's press release after the Melbourne meeting.

"In response to an inquiry from industry members, Fiona Delahunt confirmed that the nine issues outlined in a press release after the March meeting (of state government officials in Melbourne) are Victoria's conditions for the transfer of ECV to the jurisdictions," the minutes say.

IP

The intellectual property underpinning ECV has long been seen as a potential basis for the single national e-conveyancing system that has been endorsed by NECO.

But the minutes suggest that Victoria will not allow other states to use its intellectual property unless they agree to build state-based systems modelled on ECV, instead of a single national system. Ms Delahunt's statement about Victoria's conditions for making ECV available triggered a discussion that the minutes describe as "lively".

The word National has more than one meaning

The minutes also suggest that the government of Queensland, like Victoria, may be having difficulty embracing COAG's decision to establish a "single national" system.

One of the most senior Queensland Government officials, Neil Lawson, asked for the word "single" to be deleted whenever reference is made to building a national electronic conveyancing system.

The request by Mr Lawson, who is executive director of the Queensland department of natural resources, led to an examination of the statements by COAG and the standing committee of attorneys-general endorsing a single national system.

Mr Lawson asked that the minutes record the fact that Queensland does not support the national business model that has been endorsed by other NECO members. But it still supported a "national" model, he said.

Chris Merritt, Legal affairs editor | The Australian | May 02, 2008