ACT CERTIFICATE OF REGISTRATIONrealestatecertificateofregistration.com.au/module... · 2017. 2. 14. · WEB. PHONE. 1300 367 412 1.2 Sources of Law There are several main sources

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1. THE LAW AND REAL ESTATE

1.1 What is Law?

A simple definition of law is “a set of rules imposed by those in authority”. In modern society, law is a bit more complex

than that, but the principle is still the same. Law in Australia is the set of rules and principles recognised and applied by

the Commonwealth and state governments in the administration of justice.

Law has been described as ‘a rule or set of rules made by Parliament. [Laws made by Sate and Territory Parliaments

(also known as ‘legislation’) include acts and statutory instruments.]’

The law is not static. Just as relationships between people or between people and the Government are not fixed

permanently, so the law changes by responding to the current social and political values of the dominant culture.

As societies become more complex so too does the law. It governs our private relationships through contract, tort,

property, succession, trust and family law as well as our public relationships with the State through criminal, constitutional

and administrative law.

ACT CERTIFICATE OF REGISTRATION

INTERPRETING LEGISLATION


1.1.1 Australian Parliaments and powers to Legislate

Australia is a federation of six States which, together with three self-governing Territories, have their own constitutions,

parliaments, governments and laws.

Each state and territory has a parliament as well. These all have the power to create laws over the area that they

govern. In the Australian Constitution, the Commonwealth or Federal Parliament was given certain powers to legislate

exclusively in certain areas. All other powers not nominated in the constitution remain vested with the States. Section 51

of the Australian Constitution states the Federal Parliament has exclusive power over the following areas: -

• Trade and commerce with other countries, and among the States

• Taxation, but so as not to discriminate between States or parts of States

• Borrowing money on the public credit of the Commonwealth

• Postal, telegraphic, telephonic, and other like services

• Lighthouses, lightships, beacons and buoys

• Astronomical and meteorological observations

• Quarantine

• Fisheries in Australian waters beyond territorial limits

• Census and statistics

• Currency, coinage, and legal tender

• Banking, other than State banking, also State banking extending beyond the limits of the State concerned, the

incorporation of banks, and the issue of paper money

• Insurance, other than State insurance, also State insurance extending beyond the limits of the State concerned

• Weights and measures

• Bills of exchanging and promissory notes


• Bankruptcy and insolvency

• Copyrights, patents of inventions and designs, and trade marks

• Naturalisation and aliens

• Foreign corporations, and trading or financial corporations formed within the limits of the Commonwealth

• Marriage

• Divorce and matrimonial causes, and in relation thereto, parental rights, and the custody and guardianship of

infants

• Invalid and old-age pensions, unemployment benefits, sickness and hospital benefits etc.

• External Affairs and Immigration and emigration

• Conciliation and arbitration for the prevention and settlement of industrial disputes extending beyond the limits

of any one State

• Matters referred to the Parliament of the Commonwealth by the Parliament or Parliaments of any State or

States, but so that the law shall extend only to States by whose Parliaments the matter is referred, or which

afterwards adopt the law

As a result, the Commonwealth can legislate on Commercial matters that cross state boundaries but cannot legislate

on commerce that happens solely within state borders.

Such constraints can create problems, because to have uniform legislation means that each and every state must be

prepared to pass similar legislation or pass their powers over to the Commonwealth Government.

Those powers not vested in the commonwealth remain with the states. It is possible to have two bits of legislation that

cover the same area. In Industrial Relations, there is federal law and state law. In recent times, the states have handed

over some of their industrial relations powers to the Federal Government.

Another area relinquished is taxation. Both the Federal Parliament and the state parliaments can raise income tax for

their own purposes. Because such duplicity was creating problems, the state, in 1932, handed over their powers to raise

income taxes to the Commonwealth Government. This lead to the creation of the Grants Commission which, on a

regular basis, provides formulae on how those taxes raised will be divided between the states.


1.2 Sources of Law

There are several main sources of law in Australia. There is legislation that is made by parliaments and there is case law

or common law, based on the decisions of judges in the superior courts.

1.2.1 Common Law

The legal system in Australia was inherited from the British so the laws we have in Australia evolved from the English

system of law. This system originally stemmed from what was known as common law, was traditionally based on

common custom and was unwritten. Effectively, it was law that was not equity, statute, ecclesiastical (church), or civil

(i.e. Roman).

Common law is a body of legal principles that have been collated from decisions made by judges over hundreds of

years. These decisions have given rise to a set of basic principles that have been used over time to guide decisions in

similar future cases.

The legal Services Commission in South Australia supplies this explanation of how common law works:

“Over hundreds of years judges have been deciding cases. Their decisions have developed a body of legal principles

known as ‘common law’ or ‘case law’ that is declared by judges.

When a case comes before a court, the parties to the action present the evidence they need to support their case. The

judge listens to the evidence, decides what evidence is relevant and what facts have been proved, decides what law

is relevant, and applies that law to the facts in making a decision which is binding on the parties.

The kind of case that a particular court decides depends on the jurisdiction of that court. In other words, its authority

to determine particular issues. The courts are arranged in a hierarchy, based on the kinds of issues being decided, with

appeals from lower courts going to a higher court.

A party to a case that is not satisfied with the court’s decision may appeal to a higher court for a reconsideration of

the decision. If an appeal is not made within the time allowed, the matter is finalised and the case usually cannot be

reopened. If it is made within time, the higher court hearing the appeal can affirm (agree with) or reverse, also called

overrule, (go against) the lower court’s decision.

The law declared by the judge in the reasons for the court’s decision directly affects the parties to the case. That law

will also affect, indirectly, people bringing actions involving similar legal principles before other courts in that jurisdiction,

because of the doctrine of precedent.


Precedent means that judges are bound to follow interpretations of the law made by judges in higher courts, in cases

with similar facts or involving similar legal principles. For example, a decision of a judge in a State Supreme Court (the

State’s highest court) is binding on judges making decisions in similar cases in all State courts, but not on a judge in a

Federal Court (which has a Federal jurisdiction) or in the Supreme Court of another State (the State Supreme Courts are

at the same level in the hierarchy of Australian courts).

Some of the rules that make up the doctrine of precedent are:

• a judge follows the law declared by judges in higher courts in the same jurisdiction in cases with similar facts

• a court must give reasons for its decision in a case. The reasons should include an explanation of why the court

has chosen to follow, or not follow, a previous decision which is similar to the case before it. When an earlier

decision is not followed, it is said to be distinguished from the earlier case.

• most courts are not bound to follow their own earlier decisions although they often do. For example, the highest

court in Australia, the High Court, while not bound to follow its own earlier decisions, does so in most cases.

• the decisions of courts outside Australia are not binding on Australian courts, although they can be used to

assist or guide Australian courts in making decisions on new facts. If, for example, a matter before an Australian

court is unusual or difficult, judges and lawyers might look to overseas decisions for guidance or comparison.

• the decision of the highest court within a particular jurisdiction is final. The highest court is the court to which the

final appeal lies. The High Court is the highest court in the Australian court system.

Territory Court System

The Australian Capital Territory court system is made up as follows: -

• The Australian Capital Territory Civil & Administrative Tribunal (ACAT)

The ACAT provides a forum for the determination of a wide range of civil disputes, requests for review of

administrative decisions and professional and occupational disciplinary matters up to a jurisdictional limit of

$10,000.

• The Magistrates Court

The Magistrates court, handles less serious criminal matters and civil disputes up to a jurisdictional limit of

$250,000 however it cannot hear cases in which the title of land in in dispute. Any amount in dispute under

$10,000 is dealt with by the ACAT (see above).


• Supreme Court

The Supreme Court is the superior court in the ACT and hears and determines criminal and civil matters of a

serious nature, including appeals from the Magistrates Court and the ACAT.

The areas of civil law dealt with by the Supreme Court include:

• contracts and torts,

• equity (such as matters involving trusts),

• probate (matters involving the validity of wills and the functions of executors of wills, or administrators if the

deceased person died without a will)

• admiralty (matters involving ships),

• commercial (such as building disputes).

The Supreme Court may also hear matters under Commonwealth laws where the Supreme Court has been vested with

federal jurisdiction. The Supreme Court has powers that are not available to lower courts. For example, the Supreme

Court has power to issue a prerogative writ to a lower court or to a government officer if the court or officer has made a

decision that is outside their jurisdiction, has failed to perform their duty, or has made an error of law.

Other/Specialist ACT Courts include:

• Coroners Court

• Children’s Court

• Industrial Court

• Family Violence Court

• Jervis Bay Court

• Galambany Court


Federal Court System

There are four principal federal courts:

• High Court. The High Court of Australia is the final court of appeal in Australia. The Court has a Chief Justice

and six other judges. One of the High Court’s principal functions is to decide disputes about the meaning of

the Constitution. For example, if the validity of an Act passed by the Commonwealth Parliament is challenged,

the High Court is responsible for ultimately determining whether the Act is within the legislative powers of the

Commonwealth. The High Court is also the final court of appeal within Australia in all other types of cases,

including those dealing with purely State matters such as the interpretation of State criminal laws.

• Federal Court of Australia. The Federal Court of Australia came into existence on 1 February 1977. It sits in

each State and, as necessary, the Australian Capital Territory and the Northern Territory. The Court has such

original jurisdiction as is invested in it by laws made by the Commonwealth Parliament including, for example,

in relation to matters in which a writ of mandamus or prohibition or an injunction is sought against an officer

of the Commonwealth Government, and matters arising under Commonwealth laws, including bankruptcy,

corporations, industrial relations, taxation and trade practices laws. The Federal Court of Australia hears appeals

from the decisions of single judges of the Court and decisions (except family law decisions) of the Federal

Magistrates Court. It also hears appeals from some decisions of State and Territory Supreme Courts.

• Family Court of Australia. The Family Court of Australia is a specialist court dealing with family and child support

disputes.

• Federal Magistrates Court of Australia. The Federal Magistrates Court commenced operation in July 2000. It was

established to deal with less complex disputes under Commonwealth laws. Its jurisdiction includes family law and

child support, administrative law, bankruptcy law, discrimination, workplace relations and consumer protection

law. It shares its jurisdiction with the Family Court of Australia and the Federal Court of Australia.

• There are also commissions and tribunals, including the Human Rights and Equal Opportunity commission, the

Australian Industrial Relations Commission, the Social Securities Appeal Tribunal and the Administrative Appeals

Tribunal.

Where the two systems overlap, which they do from time to time, Australia’s ultimate court – the High Court- has the

authority to make the final decision. The High Court is the final court of appeal for the Commonwealth and state court

systems, and its decisions apply to the whole of the Commonwealth.

Overseas decisions are not binding in any Australian court, however, they can be used is cases where there is no

precedent in Australia or that kind of matter has not been dealt with before. A Judge of Magistrate may refer to

overseas decisions, as they could provide guidance.


Some common law principles that relate to property transactions include:-

• The right to quiet enjoyment

• Adverse Possession, which promotes the best use of land and assists with disputes over property boundaries

• Fixtures running with the land, which is central to the sale and transfer of land

• Trespass

1.2.2 Contract Law

The law of contract is the law that arises from a promise or set of promises that form an agreement between two or

more persons and that create obligations which a court will enforce. This means that an aggrieved person can take

action in a court for any breach of the terms on an agreement.

To create certainty, contract law sets out the basic foundations of any contract regardless of its complexity and

substance, as an offer, acceptance and consideration (the value of the promise).

In Australia, contract law is primarily regulated by common law, but increasingly, statutes are supplementing the

common law of contract, particularly in relation to consumer protection. An example is the Agents Act and Agents

Regulations, laying down what must be included in a contract for an agency agreement in ACT and stating what must

happen to make it enforceable.

For information on Australian contract law, visit www.australiancontractlaw.com

1.2.3 Equity

Equity is the name given to the set of principles that supplements rules of law where their application would operate

harshly. Equity Law is used in countries that operate under the common law system and is aimed at making the

common law system fairer. Where equity law and common law contradict, equity law will prevail.

1.2.4 Law of Torts

Tort law is law that addresses civil wrongs not arising from contractual obligations. It allows a person who has suffered

legal damages to receive compensation from a person who is legally responsible (or liable) for those damages. Tort law

relies on the proving of negligence. Many of the principles of tort law are embodied in Consumer Protection Legislation

and the Agents Act, and this removes the need to prove negligence on the part of the aggrieved party.


1.2.5 Statute Law

Statute Law is law made by Parliament and is expressed in Legislation. Legislation can be enacted by any properly

constituted Parliament. For example, the Trade Practices Act 1974 was enacted by the Commonwealth Parliament

while the Agents Act was enacted by the ACT Legislative Assembly. It has since been superseded by the Competition

& Consumer Act 2010.

Section 51 of the Australian Constitution lists the areas which the Commonwealth Government has power to legislate

and most of those powers are listed later in this Learner’s guide.

While parliaments make legislation, it is the court’s that interpret that legislation. Courts cannot change legislation or

challenge it. However, they can find legislation to be unconstitutional. In NSW recently the Supreme Court has found

that the legislation passed by the NSW government that allowed it to seize the proceeds of crime was found to be

unconstitutional and therefore of no effect.

The real estate industry of ACT is heavily regulated by legislation which governs much of the day to day operations of

real estate agents and agencies.

1.3 Legislation

Legislation comprises of several parts, being: -

• The principal or primary legislation or Acts of Parliament

• Subordinate or secondary legislation or statutory rules such as regulations, orders, determinations and

approvals or other instruments that are made under the authority of an Act to support that Act.

1.3.1 Types of legislation

Legislation can either happen by a primary or principal Act of Parliament or an amending Act of Parliament. While a

new principal act sets up a new legislative framework, an amending act makes amendments or fine- tunes an existing

Act by amending the principal act. In 2003 the ACT government, instead of amending the existing Act governing the

operations of Real Estate Agents in ACT, totally re wrote the Act and made it a new principal Act, even though the new

act contained many clauses that had existed before. Therefore, the Agents Act 2003 replaced the Agents Act 1968 as

well as the Auctioneers Act 1959.

Every Act and every regulation is given a number when passed which recommences each year.


1.3.2 Making Law in the ACT

In 1989 the ACT became a self-governing Territory as per the Commonwealth Act: Self-Government Act 1988. Unlike

States such as NSW and VIC, the ACT does not have two houses of parliament. Instead the Legislative Assembly was

formed in 1989 and has the power to make laws ‘for the peace, order and good government of the Territory’.

As with other parliaments within Australia, the Legislative Assembly make laws known as Acts, which are the primary

form of law in the ACT. While the Self-Government Act, provides broad law-making powers, the specific topics dealt

within an Act, and the way in which the Act is to operate may all be the subject of intense debate and lobbying in the

Legislative Assembly and the community as a whole.

Instruments made under Acts

Apart from their direct operation as sources of rights and obligations, Acts also authorise the making of other laws

(mainly regulations) and instruments of various kinds (for example, providing for appointment of people to positions

or determining fees and charges). In this way the law on a subject may be divided between the Act (key features of

the proposal), regulations (more meticulous rules which may need to change quickly) as well as other instruments to

operate in particular circumstances. Because the power to make regulations is given or delegated by the Legislative

Assembly, they are sometimes referred to as a delegated legislation or as ‘subordinate laws’. Although regulations are

the most common type of subordinate laws, other examples are rules of court and by-laws.

1.4 Legislation and the Property and Agency Industry

1.4.1 Commonwealth Legislation

Throughout this Certificate of Registration course there is reference to various legislation that directly affects the real

estate industry. Some of that legislation is Commonwealth Legislation, such as:

• Competition & Consumer Act 2010

• Do Not Call Register Act 2006

• Financial Services Reform Act 2001


Most of these acts have supporting legislation or regulations. They each regulate an aspect of business conducted

across Australia, and consequently apply to real estate operations and agents in ACT. Agents need to be able to

source legislation that applies to their sphere of operations. This can be done in several ways.

Commonwealth Acts and Regulations can be obtained electronically on the internet or purchased in printed form.

The advantage of electronic copies is that they include any amendments and are updated as and when legislation

changes. Printed Acts are kept up-to-date by subscribing to a service that provides update bulletins. These must be

read alongside the printed Act to ascertain the current law.

There are several sites available to access Commonwealth legislation on the internet. The Australian Attorney-General’s

Department site www.comlaw.gov.au contains all Commonwealth legislation and regulations that are current. Another

site, which includes all legislation current in Australia, plus all written judgements by courts and tribunals, is a site

conducted by UTS and UNSW Faculties of Law. It can be accessed at: www.austlii.edu.au.

How to Access Commonweath Legislation

On the ComLaw home page, www.comlaw.gov.au, type in the name of the legislation you are looking for in the

‘Quick Search” box near the top of the screen. If you type in the Competition & Consumer Act 2010, you will

get a list that includes the Act and its Regulations and Determinations. You could narrow your search by adding

Regulations if that is what you want.

The other site, www.austlii.edu.au , is the Australian Legal Information Institute web site which has all Australian

legislation organised by Commonwealth and each state and Territory, along with law Journals, Judgement

Summaries etc. It is a one stop shop for anything legal in Australia and should be bookmarked in every agent’s

browser.


Australian Capital Territory Legislation

As in all states and territories, agents in ACT are subject to specific laws that require them to be licensed or certificated

in order to practice their profession.

The laws also regulate how they conduct their businesses in undertaking real estate transactions. However, as well as

specific laws, agents and agencies need to comply with general business laws as well that cover fair trading, building,

property sales and tenancy, discrimination issues, industrial relations, occupational health and safety and any other laws

that may impinge on their work as an agent.

Some of the ACT legislation that covers or directly affects agents includes but may not be limited to:-

As in the case of Commonwealth, copies of the Act and Regulations legislation are available either electronically on

the internet, or in printed form.

The official site that has all ACT legislation is the ACT Government site http://www.legislation.act.gov.au/

However, as mentioned prior, http://www.austlii.edu.au is also a great resources for this information.

Within these sites, you have the ability to search for specific legislation if you know the title, or you can search for

keywords which will provide results that will feature legislation relevant to those words. The more specific you are with

your search the more likely you are to find the legislation you are after.

• Agents Act 2003

• Fair Trading (Australian Consumer Law) Act 1992

• Agents Regulations 2003

• Information Privacy Act 2014

• Discrimination Act 1991

• Residential Tenancies Act 1997

• Traders (Licensing) Act 2016

• Leases (Commercial and Retail) Act 2001

• Work Health & Safety Act 2011

• Crimes Act 1900

• Unclaimed Money Act 1950

• Civil Law (Property) Act 2006

• Civil Law (Sale of Residential Property) Act 2003

• Unit Titles Act 2001

• Unit Titles (Management) Act 2011

• Rates Act 2004


2. INTERPRETING LEGISLATIVE REQUIREMENTS AFFECTING REAL ESTATE OPERATIONS

2.1 The Structure of ACT Legislation

All Acts provide evidence of their age and currency. It is imperative that when making reference to a particular Act,

that you only refer to the current publication of said act. Therefore you should access legislation via the appropriate

websites such as www.legislation.act.gov.au or www.austlii.edu.au . Reference to the information provided on these

websites can be found throughout this module.

It is also important that you ensure the year of the Act is provided after the name of an Act as this gives it context e.g.

The Residential Tenancies Act in NSW has the same title as ACT but a different year e.g. in NSW there is ‘Residential

Tenancies Act 2010’, whereas in the ACT it is ‘Residential Tenancies Act 1997’). This avoids reference to the wrong piece

of law. Below is the front page of the Agents Act 2003 (included is an explanation of what each feature means). It is

best practice to only access the PDF version online (do not save it as a document on your computer or print it for future

reference).


If we look for the Agents Act 2003, on www.act.legislation.gov.au, this is what we find. Make sure you go and find the act

on the website for yourself as at the time of you reading this, the Act may have changed from the version shown below.

It is always best practice to access the most current version of any piece of legislation you are looking into.


Key

1. At the top of the page we have the title ‘Agents Act 2003’ and just below it, ‘A2003-20’. This tells us (as is with the

front page of the Act also) that the Act was initially passed in 2003 and it was the 20th bill to be enacted that year.

2. Under the column: ‘version’, we see that the current copy was last updated for amendments on 27th April 2016.

We can also see the previous version too. It shows that the previous version was current only for a short time, 1st

April 2016 – 26th April 2016. By clicking on ‘+ Show all available point-in-time versions’, we can also view all previous

versions of the Act. Generally however, you will only be required to have access to the current version.

3. You can download a PDF or RTF of each version under the column: ‘Formats’.



As you can see by accessing the Act, this document as is the case with many pieces of Government legislation, is quite

big. This current version is 146 pages long in fact. When using or referring to the Act it is important to know why you are

referencing it in the first place, e.g. if you are looking for information on ‘Trust Accounts’, you will want to go to ‘Part 7’.

Furthermore, if there is a specific area on ‘Trust accounts’ you are looking into, e.g. Closing a trust account, you would

want to access Section 106: ‘Closing trust accounts’, which can be found within Part 7.

Fortunately, for the most part these documents contain links, meaning you can click on the name of a Part or Section

within the contents pages and you will be taken to that specific area within the document, rather than having to scroll

through potentially hundreds of pages.

2.1.1 How to refer to an Act of Parliament

When referencing law or a requirement in an Act, it is common practice to state the Section Number and name and

date of the Act, e.g. Section 77 of the Agents Act 2003. It is not necessary to state the name of the Section or that it is

included in Part 3, Division 3. Alternatively, a reference can be made to a specific requirement in a section by stating

the Subsection, paragraph etc.

Two examples of this:

• Section 77(1) of the Agents Act provides that an agent commits an offence if the agent acts as agent for the buyer

and seller of the same land at the same time.

• Section 49(1)(b) of the Agents Act provides that an individual is eligible to be registered if the commissioner for fair

trading is satisfied that the individual has the qualifications required under section 50 for the registration.


2.1.2 Numbering

When amendments are made to the Act, they may involve adding new parts to sections. If a new part is added

between two existing parts, divisions, sections or sub sections it will be given the number of the preceding part, division,

section, subsection plus a letter of the alphabet.

If an amendment removes a part, division, section, subsection, the section will remain but the details omitted and the

words added “Repealed”.

2.1.3 Structure of Regulations

Regulations have almost the same structure as an Act, although there may be different information in some

components. Regulations have an Introduction, which sets out the name, date, Number, Version, last date of any

amendments, a table of the Provisions, a list of schedules and endnotes. There also may be a list of definitions where a

word or phrase is used in the Regulations that is not found in the main Act.

Keep in mind that Regulations are not enacted by Parliament. Rather they are developed by Government Departments

on instructions from the Minister and then assented to by the Governor-in Council. Much of the detail of an Act is in the

regulations, as it allows the government of the day to make changes, not inconsistent with the Act, without having to go

to Parliament for approval.

The Act may give the Minister the power to make Regulations regarding a certain matter, such as Licensing

requirements for real estate agents. The Act confers the power, and then the Minister can make day to day changes if

necessary by regulation.

2.2 Interpreting Legislation

Ideally, legislation is drafted in plain English and should be straightforward in its meaning. The aim of all drafters of

legislation is to use words that are clear in their meaning, thus keeping the need of interpretation to a minimum.

However, in some cases, there will be vagueness in the words that have been used and a decision will need to be

made on how to interpret the legislation. This happens because words can sometimes be ambiguous or their meaning

changes over time. It must be remembered that when legislation is drafted not all developments can be foreseen.

Changes in culture, technology or practice makes the application of existing laws difficult, so interpretation sometimes is

required.


2.2.1 Interpreting legislation – some guidelines

When interpreting Acts and Regulations, agents have to deal with common problems, including:

• Ambiguous words

• Broad phrases

• The need for words to be implied

• Printing and drafting errors

Clayton Utz, a major law firm, has produced a pamphlet on interpreting legislation. Some extracts are set out below:-

The text of the legislation

• The first step in interpreting legislation is to identify the particular section to be applied, and to establish the plain

and natural meaning of the words in that section. The normal meaning of words is best ascertained by using a

Standard English dictionary. Sometimes, a special meaning is given to words by the “definition” section of an Act, or

the words will have acquired a legal or technical meaning.

• Commonly, within government, internal manuals are prepared that interpret and explain the legislation

administered by agencies. Manuals can be very useful as a distillation of agency experience and as a paraphrase

of the legislation.

Caution, however, is required in using a manual instead of the text of legislation. Manuals, like the legislation they

explain, are often drafted without foreknowledge of the infinite variety of situations to which the legislation may have to

be applied. Importantly, too, a court or tribunal which is called on to interpret the legislation in the context of resolving

a dispute will pay little regard, if any, to the text of the manual. An example we have provided for you is ‘The Renting

Book’ which accompanies the Residential Tenancies Act 1997.

INTERPRETATION IN CONTEXT

Many words, phrases and sentences in legislation will have different shades of meaning. In deciding which meaning,

or range of meanings, to choose, regard should be made to other features of the Act – such as the title, headings,

structure, and surrounding sections. These other features of the Act can be used to clarify, but not distort, the meaning

of particular sections.


LEGISLATIVE PURPOSE AND OBJECTIVES

Underlying every Act is a purpose or range of objectives that the Act is designed to attain. Sometimes these will be

stated expressly, usually towards the front of the Act. Otherwise, the purpose or objectives are to be identified by

implication from the topic, structure and provisions of the Act. The individual parts of the Act should be interpreted with

a view to promoting these broader themes.

The purpose or objectives can, however, be an indeterminate or elusive feature of an Act, and their importance should

not be overstated. There may even be conflicting themes or objectives in an Act. Look at the freedom of information

legislation, which is designed both to facilitate openness and to protect privacy and confidentiality. Ultimately,

therefore, primary emphasis should be given to the words of the legislation that is being applied.

THE HUMAN RIGHTS DIMENSION

There is a growing emphasis in the Australian legal system on human rights issues, especially the impact of government

decision-making on individuals. This trend cannot be ignored when legislation is being interpreted. It can be relevant

in deciding which shade of meaning should be chosen: ordinarily, the preferred meaning is that which results in least

detriment to individual liberty, rights or privileges.

Furthermore, when a discretionary power is being exercised, the decision-maker is required to have regard before

making a decision to the way in which the decision may impact adversely on any individual.

PRESUMPTIONS AGAINST DETRIMENTAL ACTION

Legislation frequently authorises action that is detrimental or adverse to individuals and corporations. Typical examples

are the powers conferred upon government agencies to revoke benefits and licences, confiscate or quarantine

property, enter private premises, close down business operations, and put a stop to harmful activity.


Legislative provisions of that kind are normally interpreted narrowly or strictly. That is, the narrowest shade of meaning

will be given to the legislation, unless it is unambiguously clear that detrimental or adverse action was to be authorised.

There are presumptions of interpretation that augment this principle and these will apply to all legislation unless the

presumption is unambiguously overridden or rebutted by the legislation.

Thus, specific wording is needed in legislation before it can:

• Impose a penalty, such as a fine

• Authorise a financial charge or tax

• Restrict a person’s freedom of movement or action

• Authorise a government official to enter private property, or to confiscate private goods

• Require a person to provide information that is self-incriminating

• Dispense with natural justice in making an adverse or detrimental decision, or

• Operate retrospectively i.e. Apply facts or events that occurred before the legislation (or an amendment to the

legislation) commenced operation.

SUBORDINATE LEGISLATION

The interpretation of subordinate legislation (eg. regulations) is governed by the same principles that apply to other

legislation. The main additional principle is that a subordinate rule must be interpreted consistently with the Act under

which it was made. Words and phrases have the same meaning in both the Act and the rule, and the subordinate rule

cannot extend or alter the scope or objectives of the Act. In the absence of any contrary statement in the Act, the

subordinate rule cannot conflict with or override any other Act of Parliament.

REGULATION OF GOVERNMENT

Legislation will usually state whether it “binds the Crown”, that is, whether government agencies and personnel are

themselves required to comply with the legislation. If there is no statement to that effect, it is presumed that the

legislation does not inhibit activity by a minister, department or other official, unless the objectives of the legislation

would be distorted or undermined by giving that immunity to them.


This presumption does not normally apply to statutory authorities and government companies, that is, they are

presumed to be bound by all legislation. Generally, too, it is presumed that government officers are bound to comply

with any provision that has a criminal law penalty attached to it.

Commonwealth legislation can bind a State or Territory government agency and if so, will override any inconsistent

State or Territory legislation.

State legislation, similarly, can bind a Commonwealth agency, provided there is no inconsistent Commonwealth

legislation, and that the State legislation regulates but does not prevent the Commonwealth from discharging its

governmental functions.

Source: http://www.claytonutz.com/industry/government_services/docs/GDMG_InterpLeg_Jan05.pdf

2.2.2 Judicial Statutory Rules

There are four rules that have evolved over time for statutory interpretation of Acts and Regulations. Of these, the plain

meaning and purposive approach are favoured in Australia. The four rules are:

• The plain meaning or literal rule. Unless a definition in the Act of Regulation says otherwise, the plain or usual

meaning of the word should be used. This meaning can be established by using a standard dictionary (such as the

Oxford or Macquarie Dictionary), and/or a legal dictionary.

• The golden rule. This applies if the plain meaning rule leads to an inconsistency or absurdity. In this situation, the plain

and usual meaning can be modified to ensure consistency or sense.

• The mischief rule. This rule requires that attempts be made to determine the intention and/or purpose of the

legislation.

• The purposive approach. This interprets text in a way that is consistent with the purpose of the legislation. It relies on

the purpose or objective provisions in the legislation.

Where there are several meanings to choose from, the preferred meaning should be the one that results in least

detriment to the rights and privileges of an individual.

It is often useful when trying to interpret some parts of legislation to look for previous rulings from a court when

interpreting legislation rather than just rely on your reading of the legislation. This precedent will guide future judicial

decisions and so is a reliable interpretation.


The Australian Legal Information Institute website (www.austlii.edu.au) maintains a collection of court and tribunal

judgements, commentaries and summaries on the law. Reference to this site can be invaluable in understanding how

courts interpret certain parts of legislation. At the site, you can search for particular cases, but also search particular

words or phrases. The results of a word or search phrase will free up every piece of legislation or judgement contained

on the site that includes that word or phrase.

2.3 Interpretation Problems

With real estate law becoming more complex and many different Acts regulating how real estate agents conduct their

business, reference to law should occur on a regular basis. However, interpretation problems can emerge coupled with

the agent not being aware of court rulings that could affect interpretation. If an agent is having trouble understanding

or interpreting legislation they should seek further advice. Often others have come across the same problem, so third

party advice can be very helpful. However, a word of caution, any advice received must be examined by the recipient

to ensure that it complies with their obligations under legislation. The courts will not accept as a defence that you relied

on third party advice when that advice is wrong or not complete. If that advice is wrong, you can be successfully

prosecuted, even though you were not aware of your mistake. Rule 1 on the Rules of Conduct requires an agent to

know and understand all Acts and regulations that affect or is relevant to an agent’s business dealings.

Where do you get third party advice? Sources include:

• Colleagues and peers in the industry

• Industry associations (REI, EAC etc.)

• Attending information sessions run by Government

• Attending Industry meetings, and asking questions

• Seeking professional advice from experts in the field.

• Read industry journals

• Through CPD, attending sessions that deal with current legal issue

• Consult an industry expert.


NOTE: There are very few, if any, solicitors that know and understand every act of parliament and how courts have

interpreted them. Obtaining advice from someone who specialises in the area, generally guarantees good quality

advice that can be relied upon. Remember the old adage, cheap legal advice in the short term may be the most

expensive in the long term.

It is always your responsibility to ensure that all your actions and words do not breach any legislative requirements.

Agents should also be aware that knowledge of legislation cannot be used to confuse, deceive or deny rights that the

people they deal with may have.


3. STAYING UP TO DATE

3.1 Why is law changed?

Legislation, once enacted, can be amended to cover new situations that arise, or to establish clarity when problems

of interpretation are discovered. Ensuring that you are always abreast of any changes is extremely important if your

operations are to stay within the law.

The most common reason why legislation changes, includes:

• Changes in Government policy. This is most likely to happen when there is a change in government or after an

election.

• To solve an identified problem. The original impetus to change the Agents Act and the Auctioneers Act was a

perception that there were too many instances of misappropriation of trust funds or the improper use of trust funds

by agents. When the issue was looked at in detail, it was discovered that large sections of the Act needed to be

amended to meet changing circumstances, therefore a new Act was made.

• In response to changes in technology.

• Consequential amendments that flow from the enactment of other laws.

• Sun-setting regulations. In some cases, regulations may expire after a period of time, and there will be a need to

review them and introduce new regulations.

• To correct errors, faults or omissions in existing legislation.

• To correct unintended consequences of legislation.


3.2 How is Law changed?

The process used to change law is basically the same as when law is made. In fact, the amending Act is a new Act, but

it relates to the Act that it is amending. To amend an act an amending Bill needs to be raised in Parliament. The title of

the amending bill will have the words “Amend” or “Amendment” in it.

e.g. Red Tape Reduction Legislation Amendment Bill 2016.

In the preamble of the Bill, it will state that the purpose of the Bill is to amend legislation for red tape reduction, and for

other purposes. Once it is passed and assented, it will be known as the Red Tape Reduction Legislation Amendment Act

2016.

The process for amending Regulations is similar to amending Acts, however, as with all Regulations, is done by the

Governor-in-Council.

To find any amending Acts or Regulations one can go to the previous sites mentioned to access a copy.

3.3 Finding out if the Law has changed

It is essential that agencies and agents have in place strategies to ensure that they are kept fully up to date with

legislation changes.

One of the most effective ways of doing this is to subscribe to a government or industry newsletters or regularly attend

information sessions. Another effective strategy is to regularly visit the web sites of the main regulatory bodies, such as

the ACCC, ORS/Access Canberra and the ACT Legislation Register website. All of these sites have areas that highlight

legislation changes.

Parliamentary Sites in ACT and the Commonwealth have details of bills that are being considered by the respective

parliaments and the passage of the Bill can be tracked right through to Royal assent.

In addition, industry associations keep members abreast of such developments and regularly run training courses and

information sessions to keep agents up to date with developments.


3.4 Compliance Strategy

For a real estate business to remain compliant, an agency compliance program should be implemented. This is basic

business risk management at work. The compliance strategy should ensure that the agency and their agents are

complying with all relevant legislation and codes of conduct.

The strategy should include the following:

• Having a nominated person responsible for the compliance strategy

• A system developed to track and communicate legislative changes

• Identifications of potential risks in compliance

• Establishing effective Policies and Procedures that ensure compliance

• Having a system that makes all legislation and Compliance manuals available easily to all staff

• Having established procedures to monitor and review compliance

• Having a training regime in place that all staff are aware of their compliance obligations

• Having a checking and review process to ensure all staff are complying with compliance policies and instructions.

For any compliance program to be successful in a business, it must be supported at all levels of management. The

creation of a culture supporting compliance and then providing the necessary training and resources is essential for staff

to understand and comply with their obligations.


4. COMPLYING WITH INDUSTRY RULES OF CONDUCT

The Agents Regulations 2003 mandate rules of conduct to be followed by all agents. These rules are contained in

Schedule 8 of the Regulations. They are mandatory and must not be breached.

The ORS web site (Access Canberra) provides further information in relation to the Rules (the ‘Agents Practice Manual’

is very useful in this regard). In fact, several papers setting out guidelines to be followed have been published that

have the purpose of educating agents to their responsibilities under the Act and Regulations. These guidelines are very

important and agents should be fully aware of them as they set out what the ORS expects of agents. If the guidelines

are breached, then it is easy for the ORS to prosecute or issue on the spot fines. They have informed agents what to

expect and if breached makes it hard for an agent to mount a defence.

Guidelines that have been prepared to date include:

• Requirements for licensees in regard to supervision

• Guidelines re the substantiation of the selling price of a property

• Advertising Guidelines

• Misrepresentation Guidelines.

In addition the ORS web site (access Canberra) has a great deal of information about the duties and responsibilities of

agents as well as information in regard to the rules of conduct. All agents should be familiar with this site and consult it

regularly. Added to the Regulations and the rules of conduct, all industry organisations will have rules of conduct that

their members must follow. These rules and codes cannot replace the legislated rules of conduct, but rather add to

them. Such rules and codes can be found by going to the organisations web site.

Any agency business should work in the rules of conduct into their Policies and Procedures manual to ensure that all

staff are compliant. Regular training of staff should occur to ensure they are fully conversant with the rules and the

consequences if they breach them. Such strategies will go a long way to ensure compliance and protect agents when

things do go wrong because of circumstances beyond their control.

Documents

ACT CERTIFICATE OF REGISTRATIONrealestatecertificateofregistration.com.au/module... · 2017. 2. 14. · WEB. PHONE. 1300 367 412 1.2 Sources of Law There are several main sources