Page 3936 - Week 13 - Wednesday, 1 December 2021
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may only make an order allowing rescission if satisfied that it is just and equitable to do so. The Supreme Court must consider the circumstances of the buyer and the seller when making a decision. I would like to take a moment to discuss these circumstances in detail as they have been carefully developed in order to provide as much balance between buyer and seller considerations as possible.
Under the provision, the court must consider the terms of the off-the-plan contract, including whether a term of the contract is intended to avoid the consumer protections intended by the inclusion of part 2A. The court must consider whether the seller has acted unreasonably or in bad faith and whether factors beyond the seller’s reasonable control have affected the seller’s ability to complete the contract or the viability of the seller’s business. For example, this could be a disruption to the supply of building materials, a significant increase in the cost of goods and services, an inability to obtain or retain finance for the development, changes in the law affecting the development or conditions placed on the relevant development approval that require major changes to the development.
The court must also consider any reasonable steps taken by the seller to avoid a rescission event or to minimise the effect of the event on the seller’s ability to complete the contract. The court must consider whether there is a reasonable prospect of the seller completing the contract. For example, this could be looking at the extent to which a development has been completed.
The court must consider whether the unit or land under the contract has increased in value and the effect of the rescission on the buyer, such as the ability of the buyer to enter the housing market after rescission of the contract. The court must consider whether the buyer has been performing their obligations under the contract. Further, the court must consider the effect of completing the contract on the seller and any other matter that the court considers to be relevant. The provision also allows for any other matter for the court’s consideration to be prescribed by regulation.
The bill has a retrospective commencement date. If passed, the amendments will be taken to have commenced when I presented the bill to this Assembly on 9 November 2021. Section 74 of the Legislation Act 2001 determines that this will be from the beginning of the day of commencement. As I said during its introduction, I believe that the circumstances warrant the inclusion of retrospective effect to avoid opportunistic rescission between introduction and debate of this bill.
I would like to make it very clear that, while it is not the usual practice for a bill to commence before it is notified on the ACT Legislation Register, it is necessary in the circumstances. Given recent activity in the market, there is a clear and urgent need for buyer protection to commence as soon as possible. The government is responding to real-time changes in the Canberra property market.
Through transitional provisions, the amendments apply to off-the-plan contracts that are in force at the time of commencement. The amendments will not affect rescissions that have already taken place prior to 9 November 2021. The proposed amendments do not change the rights and liabilities that parties to a contract had prior to commencement of the amendments.
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