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Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.*
*
The scope of the conveyancing work that can be performed by
licensed conveyancers is extended to encompass all real and personal
property transactions, including the sale or lease of land, the sale of a
business (including goodwill and stock-in-trade) a n d the grant of a
mortgage or other charge. At present conveyancing work is limited to
residential land transactions. Existing restrictions on the drawing up of
mortgages and obtaining consents to subdivision, building and
development are also removed.
* Amended in committee--see table at end of volume.
*
Existing provisions that require licensed conveyancers to have fidelity
insurance (to protect clients from defalcations) are replaced with
provisions requiring licensed conveyancers to contribute to the Real
Estate Services Council Compensation Fund and providing for
defalcations to be compensated from that Fund. That Fund is currently
the fidelity fund for licensees (such as real estate agents) under the
Property, Stock and Business Agents Act 1941. The existing
requirement that licensed conveyancers have professional indemnity
insurance is not affected.
*
Provision is included that will permit multidisciplinary partnerships
involving licensed conveyancers but only with the consent of the Real
Estate Services Council ("the Council") and subject to any
regulations that may be made restricting multidisciplinary
partnerships. Partnership between a licensed conveyancer and a real
estate agent or other agent under the Property, Stock and Business
Agents Act 1941 will not be permitted.
*
The licensing and regulatory functions conferred by the existing Act
on the Conveyancers Licensing Committee, the Association of
Property Conveyancers and the Law Society Council are transferred to
the Real Estate Services Council (to be exercised by the General
Manager of the Council). The membership of that Council is
expanded by one part-time member to include a person nominated to
represent the licensed conveyancing industry. As a consequence of
this transfer of functions, the existing 2-stage licensing process
whereby the grant of a certificate of eligibility is a precondition to the
grant of a licence is simplified and replaced with a l-stage process.
The Conveyancers Licensing Committee is abolished.
Consequential savings and transitional provisions are enacted and
consequential amendments are made to other Acts.
The name of the Real Estate Services Council is changed to the Property
Services Council.
Explanatory note page 2
Clause 1 sets out the name (also called the short title) of the proposed Act.
Clause 2 provides that the proposed Act will commence on a day or days
to be proclaimed.
Clause 3 provides that certain words and expressions used in the proposed
Act are defined in the Dictionary at the end of the proposed Act. Important
definitions include conveyancing business, Council, professional
misconduct and unsatisfactory professional conduct.
Clause 4 defines the expression conveyancing work. As explained above,
the expression will now include all real and personal property transactions,
including the sale or lease of land, the sale of a business (including goodwill
and stock-in-trade) and the grant of a mortgage or other charge. At present
conveyancing work is limited to residential land transactions. Existing
restrictions on the drawing up of mortgages and obtaining consents to
subdivision, building and development are also removed.
Clause 5 explains who is a disqualified person for the purposes of the
proposed Act. A disqualified person may not hold a licence under the
proposed Act. Disqualified persons include corporations, bankrupts,
disqualified legal practitioners and persons who have been convicted of an
offence involving dishonesty.
Part 2
Licensing
Division 1
Preliminary
Clause 6 provides for the effect of a licence under the proposed Act. A
licensee is not liable for an offence under Part 3A (Unqualified practitioners)
of the Legal Profession Act 1987 in respect of conveyancing work done in
accordance with the proposed Act and regulations and the conditions of his
or her licence.
Clause 7 sets out the qualifications for a licence under the proposed Act.
This includes a requirement that the licensee be covered by an approved
policy of professional indemnity insurance, unless exempted by the
regulations from the need for professional indemnity insurance.
Explanatory note page 3
Explanatory note
Clause 8 sets out the requirements for an approved policy of professional
indemnity insurance.
Division 2 Procedure for obtaining a licence
Clause 9 provides for the making of applications for licences under the
proposed Act to the Council.
Clause 10 provides for the determination of applications by the Council.
The Council may refuse to grant a licence on any of the grounds on which
the Council may suspend or cancel a licence (see clause 13).
Clause 11 provides that a licence may be granted subject to conditions.
Possible conditions include a condition prohibiting the licensee from
carrying out conveyancing work otherwise than as an employee, a condition
requiring the licensee to undertake further studies and a condition limiting
the type of transactions that the licensee may work on.
Clause 12 provides for the duration of licences. A licence has no effect
during any period in which the licensee does not have any professional
indemnity insurance that is required.
Clause 13 sets out the grounds on which the Council may suspend or
cancel a licence. These include failure to comply with licence conditions and
failure to comply with requirements contained in the proposed Act.
Division 3 Appeals
Clause 14 provides that an appeal may be made to the Commercial
Tribunal in respect of a decision of the Council to refuse a licence, suspend
or cancel a licence or impose a condition on a licence.
Part 3 Conveyancing practice
Division 1
General
Clause 15 provides that a contravention of a provision of the Division may
constitute unsatisfactory professional conduct or professional misconduct but
does not constitute an offence unless a penalty is specified in respect of the
provision.
Clause 16 provides, that Part 11 of the Legal Profession Act 1987 applies to
fees charged by a licensee in the same way as it applies to costs charged by
solicitors.
Explanatory note page 4
Clause 17 allows regulations to be made in respect of the conduct of a
conveyancing business.
Clause 18 provides that a licensee must not share the receipts of a
conveyancing business with another person who is not a licensee unless the
Council approves it and that sharing does not contravene the regulations.
The clause sets out circumstances in which the Council may not approve a
sharing of receipts.
Clause 19 provides that a licensee must not be in partnership with another
person who is not a licensee unless the Council approves the partnership and
the partnership does not contravene the regulations. The clause sets out
circumstances in which the Council may not approve a partnership and
provides that a partner who is not a licensee is not, by reason of being a
partner in a business that includes a conveyancing business, liable for certain
offences under the proposed Act and the Legal Profession Act 1987.
Clause 20 provides for the making of regulations prohibiting licensees
from conducting other businesses.
Clause 21 restricts the employment of disqualified persons by licensee. It
also makes it an offence for a disqualified person to seek employment or
payment in connection with a licensee's conveyancing business unless the
person has informed the licensee of his or her disqualification.
Clause 22 restricts the sharing of staff by licensees with real estate agents
and legal practitioners.
Clause 23 contains general requirements as to advertising by licensees.
Clause 24 provides that the regulations may establish guidelines (or adopt
Law Society guidelines) as to the manner in which a conveyancing business
should be conducted.
Division 2 Trust money and controlled money
Clause 25 sets out how a licensee is to deal with money received by the
licensee, in the course of conducting a conveying business, on behalf of
another person. Contravention of the requirements constitutes professional
misconduct.
Clause 26 requires a licensee to keep proper accounting records in respect
of money received on behalf of another person. Contravention of accounting
requirements constitutes professional misconduct.
Clause 27 provides for the auditing of licensee's records.
Explanatory note page 5
Clause 28 provides that unclaimed money held by a licensee is to be paid
to the Treasurer for payment into the Consolidated Fund.
Clause 29 requires banks to pay a prescribed rate of interest on certain trust
accounts held by licensees into a statutory fund kept under the Property,
Stock and Business Agents Act 1941.
Clause 30 limits the liability of a bank in respect of trust money held by a
licensee in an account at the bank.
Division 3
Inspection of trust accounts and investigations
generally
Clause 31 provides that the Council may appoint trust account inspectors
to inspect the accounts or investigate the affairs of a licensee.
Clause 32 gives inspectors the power to require the production of records
and information.
Clause 33 requires an inspector to provide a copy of his or her report on a
licensee to the licensee and the Council.
Clause 34 provides that in circumstances where an inspector's report
evidences serious misconduct by the licensee, the licensee may be required
to pay the cost of the inspection or investigation to the Council.
Clause 35 requires the appointment of an inspector and matters relating to
an inspection or investigation to be kept secret.
Clause 36 makes it an offence to interfere with an inspector in the exercise
of his or her functions under Division 3.
Part 4
Claims arising from failures to account
Clause 37 defines PSBA Act (the Property, Stock and Business Agents Act
1941).
Clause 38 allows claims to be made against the Compensation Fund
established under the PSBA Act in respect of a failure to account by a
licensee.
Clause 39 requires licensees to contribute to the Compensation Fund
established under that Act.
Explanatory note page 6
Part 5 Management and receivership
Division 1
Preliminary
Clause 40 contains definitions of terms used in Part 5.
Clause 41 defines associate of a licensee. An associate includes a partner
of a licensee, an employee or agent of a licensee and a corporation in which
the licensee has a beneficial interest.
Clause 42 explains the meaning of failure to account by a licensee.
Division 2
Management
Clause 43 allows the Council to appoint a manager for a licensee's
conveyancing business in certain circumstances.
Clause 44 provides that a manager must be a person who is a licensee or a
solicitor who holds an unrestricted practising certificate.
Clause 45 sets out the powers of a manager.
Clause 46 provides that management of a licensee's business can continue
during receivership.
Clause 47 provides that an act done by a manager in the course of
managing a licensee's business is taken to have been done by the licensee.
However, the licensee is not personally liable for any acts of the manager.
Clause 48 allows a manager to be reimbursed by the Council in respect of
damages and costs recovered against the manager in relation to the exercise
of his or her functions under the proposed Act. It also limits the liability of
the manager and the Council for acts or omissions by the manager or
Council in the exercise of functions under the proposed Act.
Clause 49 provides for the payment of a manager's expenses.
Clause 50 requires a manager to report to the Council on the management
of a licensee's business.
Clause 51 applies Division 2 of Part 3 (trust account requirements) to
accounts kept by a manager.
Clause 52 allows regulations to be made with respect to accounts kept by a
manager in connection with the conduct of a conveyancing business.
Clause 53 provides for the return of money held by a manager in
connection with a licensee's business to the licensee after termination of the
management of the licensee's business.
Explanatory note page 7
Clause 54 makes it an offence to interfere with a manager in the exercise of
his or her functions under Division 2.
Division 3 Receivership
Clause 55 allows the Supreme Court to appoint a receiver in respect of all
or any of the property of a licensee on application of the Council.
Clause 56 provides that receivership may extend to the property of an
associate of the licensee.
Clause 57 provides that an application for the appointment of a receiver
may be heard in closed court.
Clause 58 provides for the service of a copy of a court order for the
appointment of a receiver on the relevant licensee or associate.
Clause 59 allows a receiver to take possession of receivable property of a
licensee or associate.
Clause 60 requires a person who has information relating to receivable
property to give that information to the receiver if required by the receiver to
do so.
Clause 61 allows a receiver who believes that money held in a bank
account is receivable property to serve on the bank an order prohibiting
operations on the bank account. A bank must comply with such an order.
Clause 62 contains offences relating to improper dealings with receivable
property.
Clause 63 allows a receiver, in certain circumstances, to recover
compensation from a person who improperly took or received receivable
property.
Clause 64 allows a receiver or the Council to certify certain matters
relating to receivership.
Clause 65 allows a receiver to take proceedings in relation to any
receivable property as if the receiver were beneficially entitled to the
property.
Clause 66 permits a receiver to deal with receivable property in any
manner in which a licensee or associate could deal with it.
Clause 67 sets out certain other general powers of a receiver.
Clause 68 provides that a receiver may give notice to any person that any
claim the person has to receivable property must be submitted to the receiver
in accordance with the notice. The receiver may disregard any claim not
made in accordance with the notice.
Explanatory note page 8
Clause 69 provides that a receiver may give notice to a licensee that any
claim the licensee has to a lien for costs on receivable property must be
submitted to the receiver in accordance with the notice. The receiver may
disregard any claim not made in accordance with the notice.
Clause 70 allows the Supreme Court to make an order for the examination
of a licensee by a receiver.
Clause 71 contains requirements as to how the receiver should deal with
receivable property under the control of the receiver that has not been dealt
with in accordance with Division 3.
Clause 72 allows a receiver to invest receivable property in any manner in
which trustees are authorised to invest by the Trustee Act 1925. Income
received from an investment is receivable property.
Clause 73 allows the Council to reimburse a receiver for any damages or
costs recovered against the receiver by reason of the exercise of his or her
functions under the proposed Act.
Clause 74 provides for the payment of the expenses of a receiver by the
Council.
Clause 75 provides that the Supreme Court may, on application by the
relevant licensee, review the expenses of the receivership.
Clause 76 provides that the receivable property of a licensee or associate is
not liable to be taken in execution of any judgment, order or other process of
any court or tribunal.
Clause 77 provides that an application may be made to the Supreme Court
for a direction as to the performance of the receiver's functions.
Clause 78 provides that the Supreme Court may give directions to a
receiver.
Clause 79 requires a receiver to report on a receivership to the Supreme
Court and the Council.
Clause 80 provides for the termination of the appointment of a receiver by
the Supreme Court and the transfer of receivable property to a new receiver.
Clause 81 makes it an offence to interfere with a receiver in the
performance of his or her functions under Division 3.
Explanatory note page 9
Part 6 Disciplinary Proceedings
Clause 82 applies Part 10 of the Legal Profession Act I987 to licensees in
the same way as it applies to solicitors. (Part 10 deals with professional
misconduct and unsatisfactory professional conduct by solicitors.)
Clause 83 provides for the composition of the Legal Services Tribunal
when conducting a hearing into a complaint against a licensee.
Part 7 Miscellaneous
Clause 84 sets out the powers of the Council in relation to the exercise of
its functions under the proposed Act and Part 10 of the Legal Profession Act
1987.
Clause 85 allows the client of a licensee to apply to the Supreme Court for
a bill of costs in relation to any conveyancing work done by the licensee and
for the return of any of the client's documents.
Clause 86 requires auditors appointed under the proposed Act to be
registered company auditors under the Corporations Law.
Clause 87 requires the Council to maintain a register of licensees, which is
to be open to public inspection.
Clause 88 provides that the Council may certify whether or not a person is
a licensee and the conditions of his or her licence.
Clause 89 requires proceedings for an offence against the proposed Act or
the regulations to be taken before a Local Court. Proceedings may be
brought within 12 months after the date of the alleged offence.
Clause 90 allows the Supreme Court to make an order restraining a person
from breaching the proposed Act.
Clause 91 contains a general regulation making power.
Clause 92 repeals the Conveyancers Licensing Act 1992.
Clause 93 gives effect to Schedule 1, which contains amendments to other
laws.
Clause 94 gives effect to Schedule 2, which contains savings, transitional
and other provisions.
Clause 95 provides for the review of the proposed Act by the Minister after
5 years from the date of assent to this Act.
Explanatory note page 10
Schedules
Schedule 1 makes consequential amendments to other Acts and to the
regulations under the existing Act.
Schedule 2 contains savings, transitional and other provisions.
Dictionary
The dictionary defines various words and expressions used in the proposed
Act.
Explanatory note page 11