Conveyancers need solicitors support in Queensland

Chris Merritt, Legal Affairs editor | August 29, 2008 | The Australian

THE great unknown in the conveyancers' battle to break into Queensland is whether they can find solicitors who will be willing to front their businesses.

To come within the requirements of the Queensland Legal Profession Act, every incorporated legal practice must have a solicitor director who supervises all the legal work.

"It can't just be for show. It has to be genuine," Legal Services Commissioner John Briton said.

These solicitors are not required to hold any equity in the business, but they must hold a principal-level practising certificate.

"This means they are the sort of people who could be sole practitioners or principals in law firms," Mr Briton said.

If a solicitor agrees to become the solicitor-director, the incorporated legal practice would also need to meet the normal regulatory requirements that apply to law firms. It would need to have the same level of professional indemnity insurance that is compulsory for legal practices.

"The way we look at this is that an incorporated legal practice is a law firm that just happens to be a company, not a partnership," Mr Briton said. "So an incorporated legal practice that does conveyancing is no different to a partnership that employs conveyancers who are not legally trained.

"That is quite proper so long as they are supervised or the lawyer is doing the component of conveyancing that counts as legal work," he said.

There is, however, some uncertainty about exactly how much of each conveyancing transaction is legal work.

If the role of the solicitor-director in supervising the legal work of an incorporated legal practice turned out to be a sham, the lawyer concerned could be banned from practice. Without a solicitor-director, an incorporated legal practice would be unable to continue to practice law -- which includes providing conveyancing services.

Mr Briton said conveyancing was an area that drew a lot of complaints against solicitors.

"The firms that get into trouble about conveyancing are generally small practices that do high-volume conveyancing," he said.

Mr Briton said the incorporated legal practice structure would make it possible for conveyancers "to jump the border" and work in Queensland provided they met all the regulatory requirements imposed on incorporated legal practices.

They would be unable to do business in the same way they currently work in other states, he said.

"They will need to accept that a solicitor will be calling the shots when it comes to legal work," Mr Briton said.

2007 Victorian Stamp Duty Scandal

One of the franchise offices of LJ Hooker in Hampton Park, a suburb of Melbourne, is currently involved in a class action that has been taken out by over 200 former customers, who allege that the previous owner of the branch (which is now owned by the previous owner's wife) backdated sale contracts which has landed the customers with over $1.3 million in additional stamp duty charges. The matter is currently before the Federal Court of Australia and list LJ Hooker Corporation as one of the defendants, along with the former owner of the franchise. The Victorian Department of Justice (Consumer Affars) is also investigating the actions of the parties involved.

Herald Sun [2]

Herald Sun [3]

Jenman [4]

Source Wikipedia

Conveyancing system better for consumers

Chris Merritt, Legal affairs editor | August 22, 2008 | The Australian

THE Law Institute of Victoria says consumers will benefit from the licensing system for non-lawyer conveyancers.

Institute chief executive Michael Brett Young said the scheme would ensure that community safeguards would be extended to cover conveyancers as well as solicitors.

"These people now have to have trust account requirements, education requirements, fidelity and insurance requirements -- it's just better for the community," he said.

Before the licensing scheme was introduced, consumers had no way of knowing if conveyancers were insured and up to date on the law, he said.

"Conveyancers now have to meet the high standards that lawyers have been meeting forever. They are better regulated than they were previously."

But, he said, consumers should still take their conveyancing business to solicitors.

"Lawyers have had five years at university, they have done articled clerks' courses, they have been trained and have a lot more legal education.

"They are better trained than conveyancers and people would still be safer taking their work to solicitors," Mr Brett Young said.

The Australian Institute of Conveyancers said its members already handled about half of the conveyancing transactions in Victoria.

This compares with 95 per cent in South Australia, 85 per cent in Western Australia and 30 per cent in NSW.

Finance Minister Lindsay Tanner said conveyancers would have a key role in designing the planned national electronic conveyancing system.

The new entity that would control the national system would have a skills-based board that would include directors with banking, conveyancing, information technology and other relevant commercial skills, as well as directors with knowledge of state and territory processes concerning land registries, duties and taxes, he said.

The creation of this board was a matter for the states, he said.

Competition hots up

PREJUDICE: Chris Merritt | August 22, 2008 | The Australian

IN Victoria, the war between conveyancers and solicitors is almost over. But in Queensland, it's just about to start.

As the Law Institute of Victoria has found, the tide of reform has made it impossible to maintain the traditional monopoly that solicitors in some states once enjoyed over conveyancing.

In Victoria, the process has been remarkably painful -- not just for the Law Institute, but also for consumers of legal services. They might not know it, but every time they left their money on deposit in a solicitor's trust account, the interest was being skimmed off to help pay the bills for the Law Institute's litigation-fest against trailblazing conveyancer Lydia Maric.

That exercise -- which is perfectly in accord with state law -- was entirely counterproductive: it did little for the public standing of the Law Institute and might even have persuaded the state Government to accelerate the pace of reform.

Sooner or later, similar change will come to Queensland. But in that state, the level of pain for the legal profession will be much greater. And the reason is that the profession in Queensland has a much greater task ahead of it in adjusting to a competitive marketplace.

In Victoria, solicitors had long been accustomed to competing with conveyancers. The argument in that state was all about how much competition should be allowed.

But in Queensland, where solicitors "compete" among themselves, the arrival of conveyancers could be expected to send shock waves through the profession. But those fears might be unfounded.

The Victorian experience should give comfort for Queensland solicitors whose practices rely on conveyancing.

In Victoria, the fact that conveyancers now compete on an equal footing is actually an advantage for lawyers. Before the change, conveyancers were simply unregulated. As a result, some of them were skilled professionals and others were shonks who chose not to comply with basic requirements such as professional indemnity insurance.

The new system in Victoria means solicitors and conveyancers both face a similar compliance burden and that should have the effect of evening up their cost of doing business.

All conveyancers with a licence must have PI cover. The arrival of licensed conveyancers in Victoria has also coincided with outrageous increases in government charges on paper-based conveyancing, aimed at driving business to the state's flawed, but cheaper, electronic conveyancing system.

So if anyone was thinking that licensed conveyancers were about to drive down the cost of conveyancing and squeeze the state's lawyers, they should think again. The state Government has already put the squeeze on everyone -- solicitors, conveyancers and all their clients.

But consumers in Victoria still benefit from the new system because the licensing arrangements will quickly drive out the marginal players -- a development that should please both the Law Institute and the Australian Institute of Conveyancing.

But what about Queensland? Conveyancers have been trying to enter that market for decades, but this time they have some powerful allies.

It will probably come to a head in December at the next meeting of the Council of Australian Governments. COAG would be extremely embarrassed if the protectionists in Queensland force it to water down its promised push to eliminate inconsistent licensing of trades.

But unless the federal Government -- the force behind the current reform push -- is able to bring the protectionists into line, its promise of a seamless national economy will be exposed as mere rhetoric.

At the very least, the Queensland Government needs to accept that conveyancers from other states have a legal right to ply their trade anywhere in the Commonwealth.

If the state Government continues to prevent Queensland conveyancers from doing the same, its folly will be clear to the world once conveyancers from other states offer their services to Queenslanders.

Property portals: the 50 most powerful websites

A UK property portal research company, Global Edge, along with the US site ranking company, SEOmoz, have team together to rank 50 of the most popular English language property portal sites around the world.

Original Link - Property Portals: The 50 most powerful websites

Property Portals: The 50 most powerful websites

Rank	Site	Areas covered	Domain strength
1	Zillow.com	US	74%
2	Trulia.com	US	73%
3	Realtor.com	US	71%
4	Realestate.com.au	Australia	67%
5	Propertyfinder.com	UK & overseas	65%
6	FindaProperty.com	UK & overseas	62%
7	Primelocation.com	UK & overseas	61%
8	EscapeArtist.com	US & overseas	55%
9	Rightmove.co.uk	UK & overseas	53%
10	Globrix.com	UK	50%
11	HotProperty.co.uk	UK & overseas	45%
12	Daft.ie	Ireland & overseas	45%
13	Properazzi.com	Overseas	41%
14	ThinkProperty.co.uk	UK & overseas	41%
15	Green-Acres.com	Overseas	40%
16	Kyero.com	Spain	40%
17	MyHome.ie	Ireland & overseas	40%
18	TheMoveChannel.com	Overseas	39%
19	ThinkSpain.com	Spain	37%
20	Look4aProperty.com	UK & overseas	36%
21	FrenchEntree.com	France	35%
22	Viviun.com	Overseas	35%
23	French-Property.com	France	34%
24	Holprop.com	Overseas	34%
25	Propertyworld.com	Overseas	34%
26	BulgarianVenture.com*	Bulgaria	33%
27	EuropeanProperty.com	Overseas	33%
28	Property-Abroad.com	Overseas	33%
29	Zoomf.com	UK	33%
30	HomesGoFast.com	Overseas	32%
31	WorldofProperty.co.uk	Overseas	32%
32	HomesandProperty.co.uk	Overseas	31%
33	SunshineEstates.net	Overseas	31%
34	InSpain.tv	Spain	30%
35	FrenchPropertyLinks.com	France	29%
36	PropertyShowrooms.com	Overseas	29%
37	Spanish-Living.com	Spain	29%
38	PropertyMagnate.com	Overseas	29%
39	Escapes2.com	Overseas	28%
40	YourKeyToSpain.co.uk	Spain	28%
41	HomesWorldwide.co.uk	Overseas	28%
42	IdealSpain.com	Spain	26%
43	KeyItaly.com	Italy	26%
44	HomesOverseas.co.uk	Overseas	25%
45	AMLASpain.com	Spain	23%
46	PropertyIndex.com	Overseas	23%
47	Newskys.co.uk	Overseas	21%
48	Nestoria.com	UK	20%
49	Medhead.com	Overseas	18%
50	Libercasa.co.uk	Overseas	17%

QBE buys PMI Mortgage Insurance for $1 billion

Katherine Jimenez | August 15, 2008| The Australian

QBE Insurance is set to become the biggest mortgage insurer in Australia after securing a deal to buy PMI Mortgage Insurance for more than $1 billion.

QBE last night revealed it had signed definitive agreements to acquire PMI Mortgage Insurance in Australia and New Zealand and had entered into an in principle agreement to acquire PMI Mortgage Insurance Asia.

Sale talks between the two parties have been under way for several weeks, following a decision by PMI's struggling parent company a few months ago to refocus capital on its American operations and begin a sale process for the Australian operation. The Australian operation is considered to be the jewel in PMI Group's crown, with an AA minus rating.

"The purchase of PMI in Australia and Asia is in line with QBE's strategy of diversification," said highly regarded QBE chief Frank O'Halloran, who will consider his future at the end of the year.

"The acquisitions have been structured to allow us to meet or exceed our minimum profit requirements even in the event of extremely adverse economic conditions over the next three years."

Under the deal, QBE will pay 80 per cent in cash at completion of the transaction from existing capital and $300 million in short-term funding.

The balance will be paid in the form of a promissory note payable in three years at an accumulating interest of 3.8 per cent a year.

The promissory note, together with accumulated interest, will be paid to PMI only "if the claims ratio on policies in force is less than 50 per cent of the US GAAP unearned premium liability of $525 million at June 30, 2008".

The note will be reduced by $1 for each $1 the claims ratio is more than 50 per cent. QBE said PMI would contribute $50 million to the cost of reinsurance protection above the unearned premium liability.

The acquisition is expected to be profitable in the first year.

PMI writes about 40 per cent of the residential mortgage insurance market in Australia and is expected to generate gross written premiums of $200 million in 2008, including $5 million through its New Zealand branch.

That result is $63 million less than the previous year, largely due to the fall in lending, and is also down on the $218 million reported in 2003. Net tangible assets (US GAAP) at June 30 were $969 million.

PMI Asia is projected to deliver gross written premium of $12 million.

Mr O'Halloran made a point of saying that PMI had a 40-year track record of consistent profitability in lenders' residential mortgage insurance.

"In the 15 years to June 2008, which includes two significant downturns in the Australian housing market, gross incurred claims were $345 million against gross earned premium of $1.68 billion."

PMI Australia and PMI Asia booked an operating profit after tax using US GAAP of $109 million in 2007.

QBE said it would provide support to PMI Australia and PMI Asia to maintain Standard & Poor's AA- rating. It does not expect the acquisition to have a significant effect on its capital adequacy.

The acquisition is due to be completed next month and is subject to regulatory approval.

Shares in QBE closed down 40c to $25.50 before the announcement.

State's $40m e-conveyancing system in the auditor's sights

Chris Merritt, Legal affairs editor | The Australian | August 15, 2008

THE Victorian Auditor General is considering a performance audit of the government's $40 million electronic conveyancing system.

The system has been used for just one property settlement since its launch last year and is set to be superseded by a planned national system.

The auditor general is considering adding the e-conveyancing system to the list of projects that will be subjected to a performance audit next financial year.

A preliminary examination of the system has been launched in response to suggestions from Opposition frontbencher David Davis.

Mr Davis said the system's only real impact had been to increase the cost of paper-based conveyancing in Victoria in order to drive business to the electronic system.

Because the main private sector players in conveyancing had refused to use the system, Victorians had been hit with increased charges of $6 million a year, Mr Davis said.

Unless the state government reversed its fee increases, Victorians would be paying the extra charges until the national system was in place in 2010, he said.

"The government will pocket a $12 million windfall from everyone who buys and sells property," Mr Davis said.

The Law Institute of Victoria called last month for the original fee structure for paper-based conveyancing to be restored because Victorians were not using e-conveyancing.

"They're making a windfall gain," Law Institute of Victoria chief executive Michael Brett-Young said.

The involvement of the auditor general's office comes soon after The Australian revealed that an employee of the company that helped build the system was running the government agency responsible for e-conveyancing.

James Walker, who is still an employee of computer consultant Ajilon, is one of a number of private consultants running the system.

Another Ajilon employee, Rick Dixon, is the electronic conveyancing project manager in the department of Sustainability and Development.

Mr Davis said he was concerned about the state government's growing use of "alliance-type contracting" between the government and private companies.

"The Government claims that works well in some areas but the auditor has pointed to problems" in other projects, he said.

"There's a fuzziness about what is being purchased and what is being delivered," he said.

Austraclear Electronic Conveyancing Settlement Facility

ASX Austraclear (Austraclear) is the provider of the Austraclear EC Settlement Facility for Electronic Conveyancing (EC) in Victoria. This settlement service is separate from the traditional Austraclear system.

The Victorian EC system allows for the electronic processing of property settlement transactions in Victoria and Austraclear facilitates the related financial settlements on a real time basis via the Reserve Bank Information and Transfer System (RITS). For regulatory reasons a financial institution user of the EC Settlement Facility must apply for admission to Austraclear as a Payment Provider. Only an approved Payment Provider can directly make or receive property settlement related payments through this platform.

There are two types of payment provider within the EC Settlement Facility - an Electronic Conveyancing Participating Bank (ECPB) and a Non-ECPB. The primary difference between the two categories is that ECPBs have an Exchange Settlement Account with the Reserve Bank of Australia while Non-ECPBs do not.

For further information on the Austraclear EC Settlement Facility or on becoming a Payment Provider; please contact Rohan Delilkhan, Senior Manager Interest Rate Markets at Rohan.Delilkhan@asx.com.au.

The following are the current approved Payment Providers in the Austraclear EC Settlement Facility:

* Bendigo Bank Limited
* CUSCAL Limited
* MECU Limited

Big banks spend up on technology overhauls

Mahesh Sharma and Michael Sainsbury | August 07, 2008 | The Australian

THE National Australia Bank has lit the fuse on a five-year, $1 billion program to overhaul its technology platforms and will launch a major assault on internet banking in a bid to take market share from its big four rivals before the end of the year.

The move is part of sweeping changes to Australia's second-largest financial services group.

It is being pushed through the organisation by its board, which is led by Michael Chaney and last week appointed Cameron Clyne as chief executive from November 1.

NAB is the second bank, after the Commonwealth, to commit to replacing its 40-year legacy core banking systems, and the first phase of the project will deliver an online platform to a new business division, Star Direct.

NAB will spend about $30 million to launch a direct banking service, Star Bank, which will deliver customer services solely by internet and call centre.

Star Bank offerings will be launched later this year, with the aim of strengthening NAB in the direct banking market.

"We know there are customers more oriented to a direct branch service that is more innovative and direct," NAB retail executive general manager Andrew Thorburn said.

"This service will help us get to those customers."

Chief information officer Michelle Tredenick said the bank's systems weren't equipped to handle heavier workloads.

"Our platforms are able to deliver what we need right now but they're not sufficient to underpin our future growth strategy," Ms Tredenick said.

NAB has selected US software group Oracle to develop and deploy the infrastructure to support Star Bank over the next five years.

This is the first phase of the bank's plan to deploy next-generation platforms across the business.

Oracle will work with NAB to design and plan the two remaining phases of the core banking overhaul.

Earlier this year NAB finance chief Mark Joiner said the bank would spend about $1 billion overhauling its core banking platforms, and this would be included in its technology budget over the next five years.

Ms Tredenick would not disclose how much Oracle was being paid for the first phase and early development work on the billion-dollar project.

Oracle was preferred over Indian outsourcer Infosys for the job, and Ms Tredenick hosed down reports that there had been internal conflict over the contract.

"We've had all my business colleagues, a technology sub-committee chaired by Andrew Thorburn, and the board and group executives involved," she said yesterday.

"It has been an incredibly inclusive process and this is a unanimous decision.

"There has been no conflict in our organisation."

The Commonwealth Bank is several months into a four-year, $580 million core banking modernisation project to speed the development of new online products and their deployment to the market.

The bank declined to say what stage the project was at.

ANZ has announced an overhaul of legacy systems in its Asian operation, and their replacement with the Infosys Finacle platform.

It is planning to expand this platform to its local operations.

Westpac has said it will not rush into any project at this stage.

The second and subsequent phases of NAB's core banking overhaul will be rolled out in parallel. Planning for the following stages was expected to take another six months, NAB said.

The bank was using Indian outsourcer Infosys to introduce business process outsourcing as part of its sustainable outperformance strategy, Ms Tredenick said.

"One of our key sustainable outperformance strategies is to make sure we're very well buttoned up on our quality of service initiatives.

"As part of that we've been doing processing work with a number of companies, including infosys, and some of that has been business process outsourcing," she said.

ECV - Still another lickin - but keeps on tickin

Mr D. DAVIS (Southern Metropolitan) -- My matter is for the Minister for Environment and Climate Change and concerns the ongoing issue of electronic conveyancing. Members will be aware, to refresh their memories with some background information, that the government introduced a plan for electronic conveyancing four to five years ago, that this plan has moved forward and something in the order of $40 million has been spent on the program.



But in fact only a single conveyancing transaction has been achieved. This is an extraordinary expenditure for what is a very modest, in fact pathetic, outcome for the community. Equally, there are national moves occurring in this area, but the state government has stood out from the national moves and has pushed forward with a Victorian model of electronic conveyancing. At a recent meeting of attorneys-general and related ministers nationally there was an agreement that there would be a national approach to this issue, and the Victorian government demanded that its system be the national system. Of course that has not been accepted; the best I think the Victorian government can hope for is that its system might be in some way cannibalised for such an outcome.

Given that background, my matter for the minister today is to ask him to order a halt to this extraordinary and outrageous waste of government money -- the $40 million -- that has been spent particularly on consultants. I want to single out a firm, Ajilon. It is a major international firm which has been involved with this project from the start and has played a significant and senior role in it.

This firm on its website says: Our approach is simple -- we make sure we understand your business then work alongside you as an extension of your team, using our expertise and proven methodologies.

I have to say that has not been the case on this occasion. That firm has been paid many millions of dollars but has not delivered the results for the Victorian community. As I say, only a single full conveyancing transaction has occurred and around $40 million has been expended on this proposal. I have to say the Australian made the point very well in its editorial recently. I would like the minister to not only call a halt to this outrageous waste of government money but to order an investigation into this waste as well, with a particular focus on the governance issues within the Department of Sustainability and Environment and the excessive closeness of Ajilon employees to a number of employees in the Department of Sustainability and Environment.



This is a scandal of the first order and it should be stopped. I suggest that $40 million is too much; the music has got to stop. Someone has to tell these consultants they have milked enough out of the system, and I call on the minister to halt the contract and order an inquiry.

Hansard

Electronics - A sign of the times

Electronic Signatures do carry the same weight as those written by hand

A fundamental concept in relation to a contract of sale of land is that the contract must be in writing and signed by the parties (or at least "the party to be charged").

This requirement can be traced back to the Statute of Frauds of 1677 and can now be found (if you know where to look) in s126 of the Instruments Act. The requirement that a contract be signed was designed to prevent fraud by stopping one party to an agreement claiming or denying that an enforceable contract existed in situations of uncertainty. By requiring a signature the law created certainty.

The world has come a long way in three centuries and we are now in the electronic age. Indeed, in relation to contracts for the sale of land, we are now in the age of electronic conveyancing. The long-awaited EC system has been operating since November 2007 and conducted its first settlement in May 2008.¹

Independently of any title registration system, there are commercial transactional providers, such as eBay, that facilitate buying and selling of assets as valuable as aeroplanes and, as reported recently in the press, are now facilitating the sale of real estate. Communication between representatives such as estate agents, lawyers and conveyancers is now consistently undertaken electronically and the question of whether a contract of sale of land that has been signed and exchanged electronically is enforceable will no doubt occupy the attention of a Victorian court in the not too distant future. The question therefore will be: is a contract of sale of land enforceable if it is signed electronically?

A preliminary distinction needs to be made between a digital signature and an electronic signature. A digital signature involves an encryption device and implies the existence of an authentication network standing behind the signature. This is the process used in electronic conveyancing for execution of the transfer and involves a trusted third party signing the transfer of land on behalf of the parties. This no doubt satisfies the requirements of the Statute of Frauds. An electronic signature, on the other hand, stands alone and acts purely as a representation of the signature of the party. It is not made by hand, as is the case of a traditional signature, but rather is formed by the placing of the hand on a key, or even conceivably by voice recognition software generating the appropriate keystrokes. Does a party who "signs" an email that in all other respects constitutes an enforceable contract of sale of land become bound by that electronic signature?



At common law (including the Statute of Frauds) the answer is "no". But s126 of the Instruments Act was amended in 2004 ² to provide that its requirements "may be met in accordance with the Electronic Transactions (Victoria) Act 2000". This Act in turn provides in s9 that the requirement of any law for a signature is "taken to have been met in relation to an electronic communication if":
• the signature identifies the person and indicates approval of the information;
• the method of communication was appropriate in the circumstances; and
• the person has consented to the use of electronic communication.

Thus it may be concluded that where two parties to a contract communicate with each other electronically then, subject to any other underlying contractual limitations, any agreement that they reach in relation to the sale of real estate will be binding on them when they have each sent to the other an electronic communication (email) that includes an electronic representation of their signatures. This would be satisfied by the mere typing of the name of the party at the end of the communication and certainly by the inclusion of a more formal "signature box".

However, it is relatively rare for parties to communicate directly in relation to the negotiations for the sale of real estate. Usually estate agents will be involved and party representatives such as lawyers and conveyancers. Parties will not be bound by the actions of these participants in the process unless those third parties are authorised in writing by the party.³ However, such an authorisation could itself be communicated electronically.

Thus, not only will a party who electronically signs a contract be bound to that contract, a party will also be bound if the party's representative has been electronically authorised to sign on behalf of the party and does in turn electronically sign the contract. It is certainly possible to conduct the whole contractual process in cyberspace.

A few cases in Australia and England have considered these issues and there are no doubts that arguments can be raised on the way.⁴ However, essentially it appears that even concepts - such as the importance of signed documents - going back as far as the 17th century are capable of adapting to the electronic age.

1. Land Exchange, EC News, May 2008.
2. Section 9 Transfer of Land (Electronic Transactions) Act 2004.
3. Section 126 Instruments Act.
4. Christensen, Duncan & Low, "The statute of frauds in the digital age", Murdoch University Electronic Journal of Law, Vol 10 No 4 December 2003.

Russell Cocks is the author of 1001 Conveyancing Answers

This Article first appeared in the LIJ August 2008 and has been reproduced by kind permission of the Author