Caveats - Black v Garnock

WARNING - PURCHASER LOSES PROPERTY

In more recent times purchasers of real estate have not, with ordinary course, seen the need to lodge a caveat on the vendor’s title. Caveats put the world on notice of a purchaser’s interest but they also largely place an embargo on a vendor dealing with his or her own land prior to completion of the purchase.

The Case: Black v Garnock (2007) 237ALR1

However on 1 August of this year, the High Court delivered a short, sharp jolt to standard  conveyancing practice in the decision of Black v Garnock, reminding purchasers to take steps to protect their interests. In Black v Garnock, the Appellants (Mr Black and others, a firm of accountants), obtained a judgment in the District Court for a sum of money against Mrs Smith, the vendor. Rather than being bankrupted by the Appellants, Mrs Smith promised them she would sell her farmland to raise funds to satisfy her debt to them.

A few months after the District Court judgment, Mrs Smith entered into a contract for sale of her farmland with the Garnocks and the Luffs, as purchasers. Upon being informed by Mrs Smith that they were likely to receive only a small sum from the proceeds of sale of the farmland, the Appellants obtained a Writ of Execution against her. The Writ was in favour of the Sheriff and empowered the Sheriff to sell Mrs Smith’s farmland to satisfy the debt to the Appellants. Notably, the purchasers were not put on notice that the Appellants intended to register the Writ. However, the purchasers’ solicitors were aware that the Appellants’ solicitors intended somehow to “stop the sale.”

In accordance with normal conveyancing procedure a title search was carried out by the purchasers’ solicitors on the morning of settlement, although a couple of hours before actual completion. Noting no prior encumbrances, the purchasers went ahead with completion of the sale. However, after settlement, the purchasers were unable to register their transfer because the Appellants had registered their Writ in the time between the purchasers’ final search and completion.

The High Court ultimately had to weigh the effect of the Writ of Execution which was registered by the Appellants on the Torrens Title for the farmland against the rights of the purchasers who settled with no knowledge of the Writ.

In a 3:2 decision, the majority of the High Court held in favour of the Appellants, adopting slightly different reasonings.

Two of the majority judges held that although the recording of a Writ did not create an interest in land, it is capable of registration and therefore gives the Sheriff rights to deal with a property subject to any encumbrances on the register. As no caveat was lodged on behalf of the purchasers, the Sheriff’s interest prevailed over the purchasers’ interest and the Sheriff was entitled to sell the property to obtain his money. It was not relevant that the purchasers had exchanged contracts for sale of the land prior to the issue of the Writ. 

The third majority judge noted that the purpose of the Torrens Title system of land is simplification of conveyancing. The system effectively allows anyone to deal with a property entirely on the face of what is recorded on the Register.  Put simply, the Torrens Title system is based on the principle that what is recorded on the Register is, “the first and last word on all relevant titles and interests.” The judge emphasised that the purchasers could have lodged a caveat, and had they done so, it would have prevented the later registration by the Sheriff as well as having served as a notice to all of the prior interest of the purchasers.

Lessons for Purchasers & Lenders

The decision may seem unduly harsh from a purchaser’s perspective, particularly given that the Appellants and the Sheriff were aware at the time of registration of the Writ that the purchasers had contracted to buy the land. However, it was open to the purchasers to take steps, by way of caveat to secure their position. 

If it seems harsh for a purchaser, spare a thought for a lender. A lender has no caveatable interest prior to settlement, so it cannot lodge a caveat. The authorities need to find a solution to this dilemma. And quickly.

The Property Law Committee of the Law Society of NSW is currently engaged in discussions with the Department of Lands and the Attorney General’s Department regarding the practical implications of Black v Garnock. However, in the meantime, the case highlights the need for a cautionary approach to conveyancing transactions.    

Purchasers who do not wish to suffer the same fate as the purchasers in Black v Garnock should take the following steps:-

• Ensure a caveat is lodged immediately after exchange; and
• Ensure a final search is carried out as close as possible to the time of settlement.

In the case of lenders, it is recommended that they do final searches immediately prior to settlement and register immediately after settlement.

Failure to follow these steps will be at the peril of the incoming parties, including lenders.

Source Pigott Stinson

 

More from the Opposition - no holding back David Davis

12 November 2008 COUNCIL

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INFORMATION AND COMMUNICATIONS TECHNOLOGY: GOVERNMENT PROJECTS

Mr D. DAVIS (Southern Metropolitan) -- I am pleased to be able to make a contribution to the debate on the motion that has been brought to the chamber today by Mr Rich-Phillips, and I compliment him on his timely and balanced motion. It is a motion that does draw openly and directly on the work of the Auditor-General over the recent period. I want to put on the record my compliments to the Auditor-General for the very important series of reports that have come down that deal with these areas of ICT (information and communications technology) project implementation by this current Labour government. Nine years into this government and we have an enormous list of projects, and I do not need to detail them all. Mr Rich-Phillips and others have looked at particular details in those projects. But it is important to note that today we do not see the Minister for Information and Communication Technology in the chamber; we see the Acting Minister for Information and Communication Technology, who is trying to get a grip on this portfolio, trying to get a grip on this out-of-touch area of government activity that has cost the community an enormous amount of money. The motion of Mr Rich-Phillips is timely, balanced and sensible, and points to a major area of government failure over the last nine years. Again I put on record the importance of the Auditor-General's work in forensically ensuring that these matters come to public and parliamentary notice.

My comments today, beyond what I have just said, will be restricted to the electronic conveyancing issues, which I have raised in the Parliament on a number of occasions previously.

The Acting Minister for Information and Communication Technology will know that in his other role as Minister for Environment and Climate Change he has responsibility -- and I am sure some days he rues the fact that he has this responsibility -- for electronic conveyancing.

To be fair to him, he inherited this white elephant, and I say advisedly it is a white elephant. It is worth putting on record that this project is now tens of millions of dollars -- in all probability more than $40 million -- in the red. It has been mismanaged comprehensively by the department, and there are real questions of probity as to how this process has been undertaken.

I have indicated in the Parliament before that there are serious questions about the involvement of Ajilon, which is indeed a major international contracting company that has, in my view, an unhealthy position in the way it is operating with the Department of Sustainability and Environment.

I make the point that Mr Rick Dixon from that firm is sitting in a position where not only is he in a managerial role in the department but he is also involved with the Ajilon firm, which is a successful tenderer to that department as well. It is hard to think of a more difficult position to be in in terms of avoiding the appearance of a conflict of interest, and it would be hard to avoid the appearance of a conflict of interest in such a situation where you are both in a managerial role and also a contractor for a major contract with that section of the department.

I note that the decisions that have been made by the Council of Australian Governments (COAG) to move towards an electronic conveyancing system nationally are important. I believe this is the way to go nationally. There are enormous transaction costs that can be reduced by the implementation of a successful electronic conveyancing system that is compatible across jurisdictions.

To implement such a system you need to have major buy-in from the stakeholders in the transactions involved in conveyancing -- in this case, hopefully, electronic conveyancing -- and they are the banks particularly, but also building societies and credit unions as well, and solicitors and conveyancers.

The truth of the matter is that this government has not been successful in winning the confidence of the banks in this country, it has not been successful in winning the confidence of the Law Institute of Victoria and solicitors, and there are major concerns about the liabilities that may arise from transactions that occur where there is no satisfactory insurance behind them. The advice to many solicitors is 'Do not take part in the Victorian system because of the insecurity of your legal indemnities and your insurance support in particular'. That is a major concern. The government has not got these factors right. It is important in implementing these systems to ensure that you have the support of the major players.

Ultimately the system will only be used in the way that we would all desire if it does have support across major industry groups.

What is the government's solution to that? It is to belt those who have to pay conveyancing costs across the head. It says, 'We're going to lift the price of paper conveyancing, although we know that there is only one transaction in Victoria that has occurred as a full electronic conveyance transaction' -- one! -- 'at a cost of $40 million for the project'. What a white elephant, what a disaster, and what a disgrace. The minister now has two hats with which to manage this responsibility -- as Acting Minister for Information and Communication Technology on the one hand and as Minister for Environment and Climate Change on the other.

He is now in a position where he can certainly intervene to stop this remarkable merry-go-round of activity where consultants order more work from a consultancy with which they are connected, they grow richer by the day, the money is pumped in by the community and there is no output. One transaction -- $40 million! What a disgrace. The minister should hang his head in shame. Let me just ask the minister how many things he could have used that $40 million for. Health, education or transport? Which of those would have been better to have spent the $40 million on?

Let me now move to the national system. That same group of consultants who have got their grip and their teeth into the department in Victoria -- some might say it in a more prosaic way than I have explained it, and God knows what transactions have transpired outside the department on this matter -- now want to get their teeth into the national system as well. It is a disgrace, and it should be stopped.

The Council of Australian Governments has said we are going to go to a national system, and that is supported. There should be a national e-conveyancing system, as the national newspaper and others have indicated very strongly, but it should be a clean system. It should not be a corrupt system, it should be a system that is seen to be clean, and it should be a system that the community in all states can have confidence in. I, for one, do not have confidence in the system in Victoria, and that is a very sad fact, given the expenditure of more than tens of millions of dollars of community money.

That same group of consultants now wants to try to ramp the department up to go into bat at the national level. They now want to get their mitts on the money across the nation.

Let me tell you -- and I think some of my federal colleagues have begun to make this point clearly too -- that it is unlikely that the national system will jump at such an offer. I do not think the state governments around the country and the national government are going to be willing to fund at a national level an expansion of a system where only one transaction has been delivered for $40 million.

I think it is worth quoting very briefly the editorial in the Weekend Australian of 12-13 July 2008, and then I will conclude. The heading is 'Nation building' and the subheading is 'Lessons from Victoria's wasted conveyancing efforts'. I will quote several paragraphs from this because I think it is important. It points to the transaction costs that can potentially be saved and the benefits for the national economy. It reads:

The decision of the Council of Australian Governments to build an electronic conveyancing system that spans the nation is by no means glamorous. But history will see it differently.

This is the modern equivalent of the nation building projects of previous generations. It might not have the cachet of a Snowy Mountains scheme, but just like that great project of the 1950s, electronic conveyancing will benefit all succeeding generations.

Industry groups estimate that if this single initiative is implemented properly, it will cut the cost of buying and selling homes by $250 million a year.

That is not just for one year; it is for next year, the year after that and the year after that.

Economic efficiency is about lowering the transaction costs in the economy, and that can be successfully done with an electronic conveyancing system, but not a white elephant like we have got in Victoria. The editorial goes on to say:

The Victorian government appears to have wasted $40 million by building a system that does not comply with the basic requirements of the main players in conveyancing ...

This is the direct result of two mistakes that should be avoided by those who build the national system.

The first mistake was the refusal to accept that conveyancing is primarily a commercial transaction, not a filing procedure for land title bureaucrats.

Those at Land Victoria have a lot to answer for on this.

This is a long-term blunder in management of land procedures that should have been done correctly.

The second mistake was to cede control of the system to private consultants. The Victorian experience shows that those skilled in computer technology are of most value when their role is confined to implementing public policy decisions -- not making them. Responsibility for the national system must remain in the hands of those who are responsible to voters, not shareholders.

To avoid the fate of the ECV --

Electronic Conveyancing Victoria --

the national system should be designed around the business needs of the private sector.

By endorsing the principle of a single national system, COAG's working party is off to a flying start.

I agree. It is something that should be supported, but there are traps for young players. In Victoria this government -- the Bracks and Brumby governments -- has fallen deep into the pit.

 

What next for NECS - lead view from LIXI CEO

The National Electronic Conveyancing System aims to improve property-based transactions and the lodging of land title dealings for registration, by making the transfer of data more efficient.

The National Office of NECS has signed an agreement with the non-profit organisation, Lending Industry XML Initiative (LIXI), which develops standards for movement of electronic data within the Australian lending industry.

The agreement will allow each jurisdiction to become a member of LIXI in their own right, working with LIXI on the standards.

LIXI chief executive officer, Erik Fenna, said LIXI can get land registry and revenue offices to agree on data standards, which is the major obstacle.

“We can. That is one of the real core aspects of LIXI’s role, which will be in less than twelve months.

“We have to have data standards agreed by mid 2009, which is based on the Council of Australian Governments (COAG) timeline of having NECS up and running in 2010.”

Fenna said there is still a lack of support from the main beneficiaries, such as the major brokers and lenders.

“Lenders always give me the message, that unless there is a measurable cost benefit to them, no project will make it to the top of the list.

“There is a cost benefit to them here, but without measuring it, I can’t see it making it to the top of the list either. The cost savings to the parties are once the interfaces have been designed and implemented.

“Lenders have to be involved to make sure it’s right; Commonwealth Bank is heavily involved.”

Fenna said some states are contributing more than others, with New South Wales currently contributing the most.

“Victoria is contributing the least because they built a Victorian conveyancing platform themselves; that is being analysed for suitability nationally, but inherently, being a single state system, it can not be used as is.”

Fenna said the conveyancing legal aspects sit with the titles and revenue offices.

“As I understand it, the responsibility for accurately documenting those requirements is with the various state offices, so the titles and revenue offices, the people who are associated with the legislative and regulatory aspects of the conveyancing.

“They are critical parties to the NECS system design, as they bring in other people, subject matter experts to deal will various components of that.”

The Sheet - John Phillips - 13 Nov 08

E-conveyancing funds not wasted, says Victoria

Chris Merritt, Legal affairs editor | November 07, 2008 | The Australian

THE Victorian Government believes the millions of dollars it has spent building a state-based electronic conveyancing system have not been wasted.

The system stands a good chance of being used nationally, it says.

The e-conveyancing system, which cost about $40 million to develop, has been used for just one property settlement since its launch last November and is about to be replaced by a national system.

Victorian Environment Minister Gavin Jennings told state parliament last week the money that had been spent on the state system was not a "sunk investment".

This was because the software and intellectual property that had been developed for Victorian transactions also had been developed with the intention that the Victorian system would become the national system, Mr Jennings said.

He said there were "very good prospects" of the Victorian system, which was known as ECV, being endorsed as the national system.

"We think this is intellectual property and a system that will be in a prime position to be adopted as a national model," Mr Jennings told parliament.

"We are very happy for the model that has been established in Victoria to be considered through the Council of Australian Governments process."

He was responding to questions from Opposition frontbencher David Davis about what steps he had taken to ensure that "the obvious conflict of interest" inside his department "will not lead to further losses on top of the tens of millions" that had already been spent on the project.

While the Victorian system has been in place for a year, most conveyancing in the state is still undertaken using traditional paper-based systems.

Increases in government charges have failed to drive transactions to the new system, because the Government has been unable to persuade the Law Institute of Victoria that the system is safe to use.

The LIV has advice that ECV could expose solicitors to increased potential liability.

The major banks have also refused to use ECV because they do not wish to encourage the use of state-based e-conveyancing systems.

The Council of Australian Governments has agreed that the organisation that will run the proposed national system will assess ECV and "to the extent that it is suitable" use it as the basis for the underlying software for the national system.

The federal Opposition's legal affairs spokesman, George Brandis, told the Senate estimates committee last month there were serious and credible allegations that the process of selecting the national e-conveyancing system had been "corrupted by a conflict of interest within the state of Victoria".

Senator Brandis's allegations were based on reports in The Australian about the links between the Victorian Government and computer contractor Ajilon, which managed the development and implementation of ECV.

Ajilon managing director Giles Nunis said the company's consultants had attended inter-governmental meetings at the request of the Victorian Government to provide briefings onECV.

"Ajilon is not aware or has taken part in any future tender discussions by any state or federal government for the development of an electronic conveyancing system," Mr Nunis said.

In the Victorian parliament, Mr Davis said an Ajilon employee held a decision-making role in Mr Jennings' department.

Mr Davis asked if all tenders between the department and Ajilon had met conflict of interest provisions and been subject to reports by probity auditors. He also asked for any reports to be made public.

Mr Jennings said he had been involved in "sustained conversations" with his department about the probity of of its decisions.

"I continue to be advised by the department that it has satisfied probity considerations through its probity control group," Mr Jennings said.

The department's tendering procedures satisfied the standard procedures that would be expected across the government, he said.

But the additional requirements that had been referred to by Mr Davis were not standard practice and had not been undertaken.

"The department is well satisfied with the probity processes that have been in place -- that a conflict as alleged does not exist," Mr Jennings said.

"In fact there is great confidence within the department in this matter.

"This continues to be the advice that I have sought to verify, to validate, and I continue to be provided by my department in relation to this matter."

Conflict conveyed

HERE'S one to watch. The Victorian Government has confirmed it has an enormous financial incentive in having its flawed electronic conveyancing system transformed into the promised national system.

If that happens, it might save some financial embarrassment for the state Government. But without a radical overhaul, Victoria's system would expose the nation's solicitors to avoidable potential liability.

Davis to Jennings in Victoria State Parliament

Mr D. DAVIS (Southern Metropolitan) -- My question is to the Minister for Environment and Climate Change. What steps has the minister taken to ensure that the obvious conflict of interest in having Mr Dixon from Ajilon holding both a departmental decision-making role and also a contractor role, being contracted to deliver the Electronic Conveyancing Victoria project -- will not allow further losses on top of the tens of millions of dollars already lost on this project?

 

Mr JENNINGS (Minister for Environment and Climate Change) -- I thank Mr David Davis for his question. It has been quite a while coming. I know he has taken his lead from one of his preferred leadership members of the federal Parliament, Senator Brandis, in relation to this.

 

Mr D. Davis -- I think it is the other way round in relation to this.

 

Mr JENNINGS -- Is it? Thank you. Senator Brandis made an outstanding contribution in the federal Parliament last week on this matter -- it was outstanding in a variety of ways. He showed himself to be a modern man by having a photo of himself in the Australian last week holding a book about Robert Menzies. Not even Peter Costello's book could be held in his hands in his office last week, which shows how contemporary he is.

 

The PRESIDENT -- Order! I remind the opposition that we do not tolerate stunts in here. If it wants to engage in a stunt, I will respond accordingly.

 

Mr JENNINGS -- The President gave me the benefit of the doubt because I was responding to a question from the other side. In fact it was not a premeditated engagement, I have to say. I note that this is an issue that Mr Davis has asked questions about before. In fact I have responded on a number of occasions, and my substantive answer continues to be that I deny the imputation within the question that we have wasted taxpayers money in relation to this important program. Whilst significant software and intellectual property has been developed to establish an e-conveyancing system that will support the processing of settlements, discharging of mortgages and other aspects of the settlement process for land transactions in the state of Victoria with the intention -- and in fact there are very good prospects for it -- of it becoming a national system, we dispute the notion that this investment on behalf of the people of Victoria is a sunk investment. We think this is intellectual property and a system that will be in a prime position to be adopted as a national model, and we are very happy for the model that has been established in Victoria to be considered through the Council of Australian Governments process. It will go through a variety of benchmarks and gateways in terms of decision-making processes, which include establishing a governance arrangement for a national system under the COAG model. The report-backs have actually been established for this matter to come back and be considered next year. In relation to the article Mr Davis is relying on -- he can be very grateful that he shares the afterglow of Senator Brandis in relation to this; obviously they are a tag team act and he can be a beneficiary of it in his brief moment in the sun on this issue -- and the question about whether this scheme is now being considered by the commonwealth and being prepared to be adopted by other jurisdictions across the nation, in fact attention was drawn to the contributions of various officers of the Department of Sustainability and Environment because of their standing in terms of the development of this program. In relation to another aspect of his question, first of all it is very important to lay the foundation for where econveyancing is travelling nationally. Then I will consider the last aspect of the question, which is in fact the probity considerations and the appropriateness of decision making that has actually occurred within the department. I can assure Mr Davis and the house that I have had sustained conversations with my department about the matter Mr Davis has raised in relation to the contractual arrangements that have led to the development of this system. I continue to be advised by the department that it has satisfied probity considerations through its probity control group that has involved the relevant aspects of the department's structure and decision-making process in relation to contracting arrangements. I continue to be advised that the department is well satisfied with the probity processes that have been in place, that a conflict as alleged does not exist, and in fact there is a great confidence within the department in this matter. That continues to be the advice that I have sought to verify, to validate, and I continue to be provided by my department in relation to this matter.

 

Supplementary question

 

Mr D. DAVIS (Southern Metropolitan) -- I thank the minister for his answer but I do not think it clears up some of the issues involved and therefore I ask: have all tender processes involving the Department of Sustainability and Environment that have awarded a contract to Ajilon Pty Ltd met conflict-of-interest provisions and been subject to full reports by probity auditors; and if so, will he publicly release the probity audits for those contracts between the DSE and Ajilon?

 

Mr JENNINGS (Minister for Environment and Climate Change) -- The answer that I gave was a pretty fulsome answer despite the interjections from Mr Guy, who just wanted to ping me on one word; in fact I gave the complete answer. So in the first instance I gave the complete answer, now Mr Davis has again -- because he is very good at certain contrivances and manipulation of the phrasing of certain questions or propositions he puts to the Parliament; and I will not go beyond describing them as being very good at manipulating phrasing -- where he impugns that the probity process that I have described includes a range of activities that he has now roped in as if they were standard practice, and he knows them not to be. In fact, in terms of the advice that I rely on in relation to the probity controls and tendering arrangements, they satisfy the standard procedures that would be expected across the government, and the additional requirements that are embedded in the question have not been undertaken -- and Mr Davis would have accepted that and understood that to be the case, before he asked the question.

Tasmania: Vendor Disclosure still not enacted

Cassy O'Connor MP

Thursday, 30th October 2008

For Comment: State Parliamentary Offices of the Tasmanian Greens, (03) 6233 8300

Link

The Tasmanian Greens today condemned the Bartlett Government’s disregard for the right of home buyers to know whether properties they intend to purchase are harbouring asbestos in places like ceilings, flooring, wall sheeting, window frames, gutters, pipes, water tanks and insulation.

In Question Time today Greens Shadow Health spokesperson Cassy O’Connor MP asked Consumer Affairs Minister, David Llewellyn, what possible justification the Bartlett Government had for not enacting Part 10 of the Property Agents and Land Transactions Act 2005 which provides for vendor disclosure to provide protection for home buyers, ensuring they are not exposed to deadly asbestos in the process of renovating and removing the material from properties they purchase.

“In the end, the Minister’s convoluted answer came down to the government placing a higher level of importance on cost considerations than it does for public health,” Ms O’Connor said.

“Vendor disclosure – where the seller of a property is required to disclose information about the property to the purchaser or potential purchaser - was a key recommendation of the Tasmanian Law Reform Institute report to the Tasmania Government in September 2004.” [1] 

“The Law Reform Institute recommended a model that was designed to strike a fair balance between the rights and interests of vendors and purchasers by providing the purchaser with sufficient information to make a fully informed decision, while requiring vendors to provide only information that they know, ought to know, or could reasonably obtain.”

“This provision was included in the legislation which passed in 2005, yet the vendor disclosure provision was never enacted after the real estate industry lobbied the government, claiming it would negatively affect the industry.”

“What price peace of mind, of being sure they are not exposed to asbestos fibres and potentially a terminal lung disease, for Tasmanian home buyers?”

“All Tasmanians who purchase properties should be entitled to know whether they are buying a huge potential problem, and more importantly, whether they will be exposing themselves or other family members to asbestos fibres that can cause terminal mesothelioma decades later.”

“Because the State Government has refused to enact Part 10 of the Act, that protection under the law does not exist. The Tasmanian Greens believe this is immoral.”

“Tasmania already lags far behind other Australian jurisdictions in terms of asbestos law. We are the only state, for example, where asbestos disease sufferers can only file one compensation claim and where payments to victims are about half what they are interstate.”

“As it stands under the current legal regime, a mesothelioma sufferer is likely to die before their claims for compensation are resolved.”

“Sadly, I believe, it comes down to a warped set of priorities on the Tasmanian Labor Government’s part, leaving victims and potential victims with inadequate protections under the law,” Ms O’Connor said.
 
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[1] ‘Vendor Disclosure’, Law Reform Institute Final Report No. 5, September 2004 

Which way is property heading?

north, south or sideways?

Well we all know the share market has tanked and the property market is probably off at least 10% and turnover even more. But what is it with the property market? There is and has always been so much disinformation about the real state of the real estate market. We hear a lot about auction clearance rates. What are you meant to read into a clearance rate of 82% now down to 57%. Where's the real barometer of property prices like the ASX and share price futures index which gives live data feeds minute my minute, second by second on prices and volume. The public is out of luck when it comes to property. The property buying public is craving for smart up to date property information such as property price indexes, suburb by suburb, sector by sector, property by property. The conspiracy theory is agents like it this way and dont want such market information in the hands of the public. There wouldn't be much reason to have agents otherwise. Excellent property data valuation is available, and its available instantly. Valuation data by suburb, by street, even individual property is available and tracked but its not freely available. Such valuable data is available to subscribers only. No prize for guessing who pays.

The traditional government reported data is just way out of date. Reliable and accurate data from the Land Registry is several months old by the time it is published. Hardly relevant except from a historical rear view perspective. But again the government data is not readily published. No, its packaged onto a CD and sold. You can generally pick up the quarterly CD for around $50+.

When the property markets are going up, everyone is talking the market up. But when markets are pointing south, the talk is a lot less subdued, and always a number of commentators are still talking the market up. My argument is I just dont know what's happening. I can look at the ANZ Bank share price or BHP or any stock and I can see todays price, yesterdays price, look at New York overnight and have a pretty good idea which way ANZ or BHP will be heading for the day. We all know its not quite the same with property, but there is a world of difference between the market reporting of shares vs property.

Does it matter? It seems to matter to the governing regulators of the ASX that companies have to comply with their obligations of continual disclosure of market sensitive information. But that hasn't stopped the equity markets crashing!

The question remains. What would happen if quality property valuation data was readily, instantly and freely available to everyone? What affect would it have on the real estate industry for general real estate agents and for that matter for panel valuers to the big banks? For that matter, would property start to be traded online?

That said, it is not hard to see all sectors of the property industry colliding and meshing on the internet.

• Property trading online
• Vendor Disclosure online
• Contracts digitally exchanged online
• Real time property valuations
• Mortgages digitally signed by clients
• Conveyancing online
• Property settlements online
• National property registration online

The selling models and technical tools to trade property online have been around for years whether by auction or bid / offer. For any online selling model to succeed the vendor and buyer still require

1. Access to quality up-to-date valuation property data;
2. Instant access to all valid legal information, title search, plans, covenants, planning, outgoings, building reports etc;
3. Ability to enter into a legally binding contract and security of payment of deposit; and
4. the option for vendors and buyers to engage professional advisors to represent them in the negotiation phase

The missing ingredient is undoubtedly the public does not have ready access to quality valuation data. The problem is the organisations that own and collect this data and provide the key reports are not charities. That said, in the US companies such as zillow.com are providing free real estate information including homes for sale, comparable homes, historical sales and home valuation tools. Have a look at this spacial view of price changes in the US over the last 12 months. It clearly shows how California and Florida have tanked 20% over the last 12 months. Link to zillow market report

In respect to the legal information being conveyed electronically, well that is exactly what 247legal does. 247legal carries on the business of digital conveyancing services to the Australian legal and conveyancing industry - online vendor disclosure, digital contracts and electronic settlement services to the legal and finance industry.

Its a lots closer than we think or in other words it is simply just a matter of time.

Accusations rock moves for hi-tech conveyancing

Chris Merritt, Legal affairs editor | October 24, 2008 : australian

MOVES to establish a national electronic conveyancing system have been rocked by accusations that the project may have been corrupted by a conflict of interest within the Victorian public service.

The accusations, made in the Senate estimates committee this week, triggered moves by the federal Government to shore up the integrity of the e-conveyancing project.

The secretary of the Attorney-General's Department, Roger Wilkins, told the committee that government agencies would ensure the process of developing the national e-conveyancing system had integrity.

The Attorney-General's Department and Department of Finance would need to assure themselves that they were not "falling into any traps" and that "things were above board", Mr Wilkins said.

He was responding to Opposition legal affairs spokesman George Brandis, who said there were serious and credible allegations that the process of selecting the national e-conveyancing system had been "corrupted by a conflict of interest within the state of Victoria".

Senator Brandis's allegations are based on reports in The Australian about the links between computer company Ajilon and the Victorian Government.

Ajilon, which built the state Government's $40 million e-conveyancing system, is a possible tenderer to build the national system. Senator Brandis told the committee that a meeting had taken place last month between Ajilon consultant Rick Dixon and federal government officials who are developing a plan for the national e-conveyancing system.

Mr Dixon is also electronic conveyancing manager within the Victorian Department of Sustainability and Environment.

On September 23, he provided a briefing to officials from federal Treasury and the federal Government's business regulation and competition working group.

The Council of Australian Governments has given the BRCWG responsibility for developing the plan for the national e-conveyancing system. Mr Dixon's meeting with this group took place at least three months before the establishment of a new "entity" that will be responsible for calling tenders to build the national system and deciding whether part of ECV's software can be used for the national system.

Documents obtained by The Australian show that Mr Dixon's talk concerned ECV and raised the question of how this system could best be "leveraged". The Victorian Government issued a statement yesterday that played down Ajilon's role in ECV.

Climate change minister Gavin Jennings, who is responsible for ECV, said the state Government believed the system "provides the basis for a national approach to electronic conveyancing". 

Body: "Ajilon won a public tender to provide services and specialists to deliver an e-convey-ancing system for Victoria. 

"The Ajilon company is engaged for consulting services and are not the developers of the system. 

"They have no commercial or other intellectual property interests in the EC system," the statement said. 

In parliament, Senator Brandis had asked whether the federal Government was concerned about what he described as "the obvious conflict of interest" in Victoria. 

People with a commercial interest in ECV were also employees of the state government "which is seeking to implement and recommend to COAG the same system", he told the estimates committee. 

He asked Mr Wilkins if the Government would investigate the affair but Mr Wilkins said "investigate might be too strong a word". 

"We will have a good look at it," Mr Wilkins said. 

The fate of the Victorian system has been in doubt since July when COAG took control of moves to build a national system and decided it would operate in all states, including Victoria. 

COAG decided that ECV's software would be assessed by a new national entity that would be jointly owned by state and territory governments. 

But instead of being dominated by government officials, this organisation will be run by a board that will be chosen for its technical skills. 

Under the COAG plan, it is this group that will assess ECV and "to the extent that it is suitable" use it as the basis for the underlying software of the national system. 

In parliament, Senator Brandis asked if the Attorney-General's Department would be concerned if the implementation of the plan for a national e-conveyancing system favoured the Victorian system when there were credible allegations of "a plain conflict of interest". 

That conflict was between "the promoters of the system in their capacity as entrepreneurs and the responsible state government department which employs some of those self-same entrepreneurs". 

Victorian Opposition frontbencher David Davis, who is responsible for the scrutiny of government, called for state Environment minister Gavin Jennings to dismiss Ajilon employees from his department. 

"There is an inherent conflict of interest in being a paid-up consultant in the department of Sustainability and Environment and also a manager," Mr Davis said. 

"Gavin Jennings should sack these consultants to clear up any doubts or confusion, or the perception of a conflict of interest." 

Solicitors have boycotted ECV since it was launched late last year because the state Government has been unable to address their concerns that the system exposes them to extra potential liability. 

Those concerns are based on advice from Victoria's Legal Practitioner's Liability Committee -- a statutory organisation that provides the first compulsory layer of professional indemnity insurance for the state's solicitors. 

The major banks, which strongly oppose separate state-based e-conveyancing systems, have also refused to use ECV. 

Senate questions ECV and Ajilon role

COMMONWEALTH OF AUSTRALIA

Proof Committee Hansard

SENATE

STANDING COMMITTEE ON LEGAL AND CONSTITUTIONAL
AFFAIRS

ESTIMATES

(Supplementary Budget Estimates)

MONDAY, 20 OCTOBER 2008

CANBERRA

Page 134

 

 

Senator BRANDIS-Mr Wilkins, I want to ask you about electronic conveyancing. In particular, I want to ask you about the announcement following the July COAG meeting that-I am paraphrasing here-the Commonwealth would move to superintend and implement a national electronic conveyancing system in relation to all property transactions across the nation by 2010. You are familiar with this issue?

Mr Wilkins-I am familiar with it, but you are probably better to get an answer from one of my officials, who understand it much better than I do.

Senator BRANDIS- Certainly, Mr Wilkins. All I want is the answer. I do not mind who answers the questions as long as they are the best witness.

Senator Chris Evans-I think we might have strayed back. 

Mr Wilkins- We are now on 1.8, I think.

Senator BRANDIS-No. Whatever. Mr Popple, you, of course, I assume, since you have come to the table, are familiar with the announcement that was made by the Prime Minister and Mr Tanner following COAG. You would, I dare say, be aware of the controversy concerning the suitability of the Victorian based electronic conveyancing system as the basis for the proposed national system? You are aware of that controversy?

Dr Popple-Yes. I am aware of that.

Senator BRANDIS-I daresay that you have followed the articles written by the journalist Chris Merritt in the Australian in recent months to expose the difficulties and conflicts involving ECV, the Victorian government's electronic conveyancing system. Are you familiar with Mr Merritt's articles?

Dr Popple-Yes, I am.

Senator BRANDIS-What is the attitude of the Australian government towards the adoption of ECV system as the template for a national system?

Dr Popple-I do not believe the Australian government has an opinion about the appropriate template for a national system. The Australian government, through the COAG process-particularly at the July meeting, which I believe is the meeting you were referring to­

Senator BRANDIS-The 2 July meeting, yes.

Dr Popple-The 2 July meeting was part of the COAG process encouraging the states and territories to agree to an appropriate model for the implementation of a national electronic conveyancing system. Out of that meeting a timeline for implementation was agreed­

Senator BRANDIS-Culminating in 2010.

Dr Popple-That is right-a new system in March 2010. The Commonwealth's involvement is to encourage that process, because it is primarily a matter for the states and territories, given their responsibilities for land registration.

Senator BRANDIS-Is the Commonwealth not aware that, for example, the New South Wales government has expressed considerable misgivings about whether the ECV system is an appropriate national template or an appropriate basis for a national system?

Dr Popple-We are aware of many of the criticisms because we have been involved, particularly on one steering committee, for some while now, but the point I am making is that the route that COAG has chosen to take involves setting up a new entity to consider these issues and others, to make a decision about how best to proceed and then to implement a system along those lines.

Senator BRANDIS-Are you aware that a man called Rick Dixon provided briefings to the federal Treasury and the federal business, regulation and competition working group? On 23 September, in circumstances in which they had been authorised by COAG to oversee the introduction of the national e­conveyancing system, Mr Dixon made a presentation in relation to ECV

Dr Popple-I am not aware of that.

Senator BRANDIS-Well, that happened. Are you aware that Mr Dixon is a principal of a computer consultancy called Ajilon which built the ECV system?

Dr Popple-I think I recall reading something like that in one of those articles in the Australian that you referred to, but I am not otherwise aware of that.

Senator BRANDIS-Are you aware that employees of Ajilon hold a number of senior management positions in the Victorian state government, in particular in the Department of Sustainability and Environment, which is the Victorian department responsible for the development of the electronic conveyancing system in that state?

Dr Popple-Again, I am aware only from what I have read in that newspaper.

Senator BRANDIS-Since Ajilon is a contractor to the Victorian government for the development and implementation of the ECV system, and as Mr Dixon and other people interested in the company Ajilon are also on the payroll of the relevant department of the Victorian state government, and as the COAG process has endorsed ECV as a potential template-I am not saying it has a concluded view-for a national electronic conveyancing system, is the Commonwealth not concerned about the obvious conflict of interest involved in those with a commercial interest in the ECV system being employees of the state government which is seeking to implement and recommend to COAG the same system?

Dr Popple-I could not possibly comment on the Commonwealth's view on that. The Attorney-General's Department was not involved in arranging the presentations you talked about. It relates to a state government operation and, as I said before, the only knowledge I have of this, sadly, is what I have read in that newspaper.

Senator BRANDIS-On the basis that the allegations made by the journalist appear on their face to be specific and credible, would the Attorney-General's Department not be concerned if the implementation under its auspices, and under the auspices of SCAG, of a national electronic conveyancing system, favoured a system developed in a particular state-that is, Victoria-in circumstances in which there are credible allegations of a plain conflict of interest between the promoters of the system in their capacity as entrepreneurs and the responsible state government department which employs some of those self-same entrepreneurs?

Dr Popple-The proposal is that the system will be built not under the auspices of SCAG, or under any of the attorneys-general departments, but under the COAG process. I can only suggest that the appropriate organ of the Commonwealth government to ask those questions of would be those that were responsible for the COAG working group-and I think that is the Department of Finance and Deregulation.

Senator BRANDIS-You came to the table, Dr Popple, because you were the officer present who knew about this matter. It had its genesis in the SCAG agenda, did it not?

Dr Popple-It did, but it has taken on a life beyond that since then.

Senator BRANDIS-I understand that, but SCAG continues to have a close interest in the development and implementation of a national electronic conveyancing system, albeit through the COAG process, does it not?

Dr Popple-I am sure that is correct, but it is the COAG process that is being adopted at the moment.

Senator BRANDIS-Indeed, and it is not unknown for a policy proposal germinated within one department, or within one federal and state group of like departments, to find its way onto the COAG agenda. Since this germinated through the SCAG process, and there are now serious and credible allegations that the development and selection of a particular system is not only unsuitable in the eyes of at least one state government but also corrupted by a conflict of interest within the state of Victoria between the entrepreneurs and the Victorian state government department, what steps will the Commonwealth Attorney-General's Department take, as the auspicing authority through the SCAG process, to ensure that these issues of conflict of interest and potential corruption are addressed? What due diligence will you undertake?

Mr Wilkins-Can I answer that question, Senator? I am not quite sure what due diligence we would undertake, but certainly we would need to look at these newspaper articles and, in the context of deciding to go forward, clearly the agencies-which include probably the Attorney-General's Department, the Department of Finance and Deregulation and other state agencies-would need to assure themselves that they were not falling into any traps of the sort you are talking about in terms of conflict of interest and that things were above board. So that would clearly need to be part of the process. Precisely what steps are involved in that I do not know, but you can be assured that the agencies would make sure that there was integrity around the process and that there were no concerns of this sort before they proceeded with anything along those lines. As I say, I have not had a chance to look at it, but we will certainly be bringing it to attention in the process.

Senator BRANDIS-Thank you, Mr Wilkins; that is really the assurance I was seeking. May I take it that it is implicit in that assurance that the Attorney-General's Department will take the trouble to investigate these allegations so as to reassure itself as to these matters?

Mr Wilkins-'Investigate' might be too strong a word. Senator BRANDIS-Well, have a good look at it.

Mr Wilkins-Yes, indeed-we will have a good look at it.