Contract Law Analysis: Property Ownership, Caveats & Site Conditions

This report provides a comprehensive analysis of construction contract law, focusing on property law aspects such as adverse possession, estates and interests in land, and the necessity of lodging caveats. It delves into the use of standard form contracts, particularly examining latent site condition clauses from both the principal's and constructor/builder's perspectives, referencing the Abigroup Contractors Pty Ltd v Sydney Catchment Authority case. Additionally, the report discusses implied terms in construction contracts, including those implied by statute, common law, and construction custom and usage, with case examples like Probuild Constructions v DDI Group and ACT Cross Country Club Inc. v Cundy. Finally, it explores the advantages and disadvantages of litigation as a dispute resolution method in construction, outlining the typical steps involved in the litigation process.

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Contents
1) Property Law...........................................................................................................................................1
The law of adverse possession.................................................................................................................1
Estates and interest in land (legal only not equitable ownership)............................................................3
The need or reasons to lodge a caveat......................................................................................................4
2) Most commercial and domestic construction contracts make use of Standard form contracts.............5
Discuss the latent site condition clauses from the viewpoint of the principal. (4.5 marks)......................5
Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) [2006] NSWCA 282...............6
Discuss the latent site clauses from the viewpoint of the constructor/builder. (4.5. Marks).....................6
3) Discussion of implied terms in construction contracts...........................................................................7
Terms implied by statute.........................................................................................................................8
Probuild Constructions (Aus.) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151.................................9

Terms implied by the common law.........................................................................................................9
ACT Cross Country Club Inc. v Cundy [2010] FCA 782......................................................................10
Terms implied by construction custom and usage.................................................................................10
Con-Stan Industries v Norwich Winterthur Insurance (Aust) Ltd...........................................................11
4) Discussion of the advantages and disadvantages of litigation..............................................................11
Advantages of the litigation process......................................................................................................12
Disadvantages of the litigation process..................................................................................................13
Litigation steps or process.....................................................................................................................14
Reference:.................................................................................................................................................15
1) Property Law
The law of adverse possession
Adverse possession is a right of the title of ownership over the land which can be claimed if any
property or land has been unoccupied for a long time and any person occupied it. Possession
over the land or the property is not merely a corporeal activity. The person who was holding the
possession over the land must have the intention of acquiring the title and possession. The Action
of the possessor refers to the intention of the party who is in the possession over the property. It
was an additional obligation that possession be limited, with the intention to entitlement the title
of the land meant that the applicant held in reserve the capability and the right to eliminate other
parties from the property. (Burns, Fiona, 2011)
There are some rules and regulation are made by the law under section 38 of Limitation Act,
1969 for acquiring the unoccupied land if that person met with all rules and regulation, in that
case, the title of a property is transferred to the person who occupied a long time unoccupied land

or property. The law of adverse possession in Australia was adopted from the idea of British
common law. Acquiring the ownership of the land by adverse possession instead of registration
is the exception of the Torrens title indefeasibility (Esmaeili, 2016).
For acquiring the title or ownership of a land in adverse possession, another party has to prove
that he has a continuous possession over the land for a 12years and the possession was
uninterrupted and exclusive possession and the possession over the land was not with the
permission of original owner or consent of the real owner. In South Australia and Victoria time
period for the adverse possession is 15 years. When adverse possession is proved by the party, in
that case, the title of the property will be transferred to another party and the title of property of
the real owner will be stub out. And for acquiring the title on the unoccupied property of Crown,
another party has to serve 30 years possession over the property which is mentioned under the
Limitation Act, 2005.
In the Case of McFarland vs. Gertos (2018) NSWSC 1629, another party was Mr Gertos. He
has the possession over the land since 1998 and the possession was exclusive and uninterrupted.
And the possession was not on the consent of the real owner. The case of Mr Gertos fall in the
category of adverse possession and the title of a property is transferred to Mr Gertos. Adverse
possession is the claim of the person who has possession over the unoccupied land and the
limitation period is in the favour of that person. And the burden of proof is on the hand of the
original owner for proving that there was no uninterrupted possession over the property or the
possession over the land is with the consent of the original proprietor.
For claiming the adverse possession, any person who wants to prove definite possession over the
unoccupied property, the person who claimed for adverse possession has to prove that possession
over property must be vulnerable, nonviolent and not by strength. It must not be with the
permission of the proprietor. It means a noticeable and successful territory or switch by a person
who proposes to act similar a proprietor (Hepburn, 2013).

Estates and interest in land (legal only not equitable ownership).
Estate and interest in land is fundamentally the legal right of a person over land and property.
Laws regarding the land and property are mentioned in the Land Registration Act 2002.
Registration of land is very important for the ownership of the person over land and property
except for those lands and property which are not sold or transferred for a long time. Amendment
in the land registration act 2002 Act clearly stated that the rights, duties and interest of an
individual over land will be affected if the title or ownership of the land or property not
registered by the owner. Legal interest is a comprehensive, perpetual and unconditional legal
right of the person who has registered his ownership over land or property. As per the Land
registration act 2002, it is obligatory for the person who has a legal right over land or property to
serve a notice regarding the interest to the registered holder of the land act. The purpose of a
notice is to securing the legal interest of the owner and registers it in the notice of every
individual (Goymour et al. 2018).
The following legal types also create a legal interest which essential be documented in ordinance
to stimulate in law:
 A rent-charge that is the payment of charged land and yearly or periodic amount
to a rent- charge proprietor but in this charge, rent amount of the leased property
does not include.
 A charge by a method of lawful debt.
 A right of entrance exercisable over or regarding a legal duration of years
unqualified or as an addition to a legal rent charge.
For the protection of legal interest over land or property, Registration of title over land or
property is very important.

The need or reasons to lodge a caveat.
Liberal Meaning of the Caveat is a warning. In a legal term, Caveat is used as a warning by the
person who has an interest in the title of property or land for the other party who is probing the
land or the property. Caveat is lodged by the caveator (a person who has an interest on the title of
property or otherwise), after lodging the caveat on the title no other person can deal with the
property or land until the caveat is removed by the person who has an interest in the land, by the
court or otherwise by registration or dealing. A caveatable interest rises when any person has a
legal or justifiable interest in the property or land. If any party lodge caveat on the title of the
property or land without any caveatable interest, a caveat can lapse by the court or by any
original owner or another person who has a caveatable interest over the land or property
(Esmaeili, 2016).
Any person claiming an interest on the title of property or land is permitted under section 89 of
Transfer of Land Act and according to section 53 of Property Law Act that the interest on the
property or disposed of on the property or land have to be filed in the writing (Libbis, 2018).
If there is land or a property in which one party has an interest and party wants to protect his
legal position and any further dealing on the land, they have to file a caveat in the court. Without
the permission of court the same person cannot file or lodge a caveat in relation to his same
interest over the land or property (section 191(k) of Real Property Act 1886).
A caveat is a method of statutory injunction mentioned in the provisions of Real Property Act
1900. Caveat is of two types’ absolute caveat and permissive caveat, in the absolute caveat no
party is allowed to do any consequent dealing or registration on the title of the land or property
and in the permissive caveat with the permission of caveator another party can further deal on it.
In the Case of Salbiah Bte Adnan v Micro Credit Pte Ltd (2014) SGHC 249, a borrower
husband and wife lodged the caveat on the title of land for securing the interest in the sale
proceed of the property to refund all loans granted. If borrower will not pay the loan time to time
in that case lender has a caveatable interest in the property so the lender can file the caveat in the
court for securing his interest.

For lodging a Caveat on the title of land there must be a reasonable cause if without reasonable
cause caveat is lodged by any person he/ she will be liable for the punishment. So the person
who lodges a caveat over property he/ she must know to his/her caveatable interest (Zhou, 2015).
2) Most commercial and domestic construction contracts make use of
Standard form contracts.
This Australian Standard was organized by Committee OB/3, General Conditions of Contract. It
was sanctioned on behalf of the Council of Standards Australia on 24 December 1992 and
circulated on 31 December 1992.
A Standard form of contract is the consequence of cooperative determinations of numerous
people with a variety of perception on by what means such agreements have activated in the past
and in what manner they should activate in the future. All standard form of agreements is
responsible for a definite date for proprietorship. Failure to provide proprietorship is a breach of
express terms of the contract and also a breach of implied terms of the common law in the
nonexistence of express terms (Chappell, 2015).
Discuss the latent site condition clauses from the viewpoint of the principal.
(4.5 marks)
Latent conditions are typically allocated by a procedure of fluctuating or distribution the
possibility. In the past, the principal frequently assumed the possibility of latent conditions,
because they time and again had more information about the site. In current years the exercise
has been to transferal that possibility to the builder. Alongside with this modification, there are
now improved anticipations of the builder's capability.

A good methodology to distributing possibility from a principal's perspective is to deliver the
builder with as considerable info as conceivable short of in case a contract as to the precision of
that info and comprise an responsibility on the builder to mark its own inquiries regarding the
site and any info about the site in case by the principal. Anywhere this happens it is obligatory to
regulate the method any geotechnical statistics delivered to prospective builders would be or is
capable observing in specific any inadequate space of the intelligence which are delivered
(Charrett, 2018).
Abigroup Contractors Pty Ltd v Sydney Catchment Authority (No 3) [2006] NSWCA 282
The principal, Sydney Catchment Authority (SCA) departed to tender for the building of a
spillway for Warragamba Dam. Consequently, it is significant for principals who are looking for
a permit on the possibility of latent conditions to the builder to create definite they trace and then
deliver the builder with all info the principal has on the site. By not tendering all the obtainable
info it is probable that the principal may be originated to have involved in ambiguous and
deceiving behaviour.
In view of a construction scheme, the principal is frequently tackled with judgments concerning
how to compact with a latent condition, or to what extent provides info and allow site access. If
info is intentionally withdrawn from parties to the construction contracts, in that case, this
intentionally withdrawn of information will stretch an effective entitlement for misrepresentative
and dishonest behaviour.
Discuss the latent site clauses from the viewpoint of the constructor/builder.
(4.5. Marks)
A latent site clause condition is a corporeal state on or near the site that might not sensibly have
been projected by a proficient contractor at the stage of the offering. For example, in the AS-
2124-1992 building contract, clause 12 describes latent conditions and provides a process for the
builder to inform the agreement administrator of the specific latent condition come across, any
additional charge and further period induced to the builder in distributing by it.
Latent site clause conditions are essentially well-defined at clause 12.1 as corporeal
circumstances on or below the site or its backgrounds which fluctuate substantially from the

corporeal circumstances which should rationally have been predicted by the builder at the stage
of the tender, if the builder had:
Inspected all facts prepared presented by the principal and all info pertinent to the
possibilities, risks and contingencies that is available by rational analysis and also
reviewed the site and its backgrounds. The Design and Construct Contract AS 4300-1995
offers that latent clause will not enable the builder to ask extra charge or additional time
without giving written notice to the administrator regarding the latent condition.
The builder will bear the risk of latent condition on the other hand building contracts address the
risk of the latent clause. And as the party who was bears the risk and responsibility of latent
condition is determined by the orientation of the contract.
It is attractive progressively communal for builders to undertake the preponderance of the
possibilities as complete site examinations such as geotechnical investigations are attractive
communal exercise throughout the tender process.
In Australia, most standard agreements are used in marketable construction, which is the basis of
some support to construction builders. Because builders and contractors have a ‘latent
conditions’ clause and an appliance to entitlement for variants to the agreement value if assured
stuff are contented and an accurate practice is monitored. It is superior for the contractor and
builder that they monitor the agreement practice rather than depend on on the indefinite state of
the common law.
Subclause 12.2 of AS21241986 obliges that when the latent condition of the site comes into the
knowledge of Contractor; the Contractor shall immediately before the corporeal circumstances
are concerned, provide transcribed notice thereof to the Administrator.
3) Discussion of implied terms in construction contracts.
A Construction agreement can be prepared in the express or implied form of the contract. Parties
to the contract cannot probably anticipate each exigency that may ascend or modify the process

of an agreement so that breaks are unavoidably absent in the contractual terms of the contract.
Terms of the construction contract may be implied constructed on the circumstance, law
(common law or statute) or by custom and usage (Mason, 2016).
Terms implied by statute
Implied terms to the construction contract are those which are understood by both parties to the
contract and court even the terms are not discussed by the parties at the time of formation of a
construction contract. Parties to the contract cannot probably anticipate each exigency that may
ascend or modify the process of an agreement so that breaks are unavoidably absent in the
contractual terms of the contract so that some implied terms to the construction contract are
stated by the statute.
In the construction contract, there are two terms which are used while making the contract,
implied term and express terms of the contract. An implied term in construction contract does not
be subject to the definite intention of the parties but be subject to the rule of law are the statutory
implication of the terms in the contract.
Some implied terms are indicated by the parties and others are stated in the statute these are:
The part 2 of Housing Grants, Construction and Regeneration Act 1996 applies to the
construction contract if there is any dispute between the party provisions of part 2 of this act
gives right to the parties to refer dispute for the adjudication unless parties to the contract made
other agreement related to the payment to the contract and consideration for the contract.
Supply of Goods and Services Act 1982 implies the implied term in the construction contract
that goods for the supply must be in acceptable eminence and the delivery of goods must be in
reasonable time and place with all due care. The implied terms may be navigated or varied by
express agreement and if the payment is done late by the parties there is implied term in the
contract they have to pay the interest of the late payment unless there is already mentioned any
other remedy for the late payment in the contract made by the parties (Furst and Ramsey, 2015)

Probuild Constructions (Aus.) Pty Ltd v DDI Group Pty Ltd [2017] NSWCA 151
In this case court considered the prevention standard and discovers that a responsibility of
integrity or good faith may be pragmatic to the pleasure to lengthen time in construction
contracts and suggested in this contract that reasonable time for the completion of contract is
implied term of statute but if the parties not requested for the extension of time and they have a
good faith condition in that case oblique responsibility of integrity must not be unreliable with
the express terms of the contract.
Terms implied by the common law
Some terms and the conditions are implicit by the common law in the contract where the terms
are obligatory without the compliance of such terms, rights conversed by the contract may be
degraded and these terms are used in a just and reasonable manner. Some terms and conditions
which are implicit by the common law to the construction contract and parties to the construction
contract:-
That contractor or the other person who is performing the contract will use all due care and
proficiency at the time of the enactment of construction contract and must be accomplished in a
equitable manner which is obligatory for the enactment of such contract.
In the contract, if there is a need to supply goods, material or any other service, the party
supplying the goods must supply the good quality of materials or any other service and the goods
or materials must be equitably appropriate for the resolution of the contract.
In the construction contract where an employer is bound to give the proprietorship of the site to
the service provider in that case submission of the site must be accomplished within a reasonable
time for such contract.
It is the implied duty of the employer that employer will collaborate with the contractor in such a
manner that contractor can perform the work with the continuity and in a reasonable manner and

employer is reasonably bound that he cannot make hurdles for the contractor in the performance
of his work and cannot prevent the contractor from doing any work on his site. A Contractor has
also an implied duty that he will accomplish his work with due care and in a reasonable way
which is a equitable fit for the purpose of the agreement.
In the construction contract, there is an implied term by the common law that if the payment to
the contract was not made in a reasonable time according to the contract, in that case, the other
party will pay the interest as per the requirement of the contract (Bailey, 2014).
ACT Cross Country Club Inc. v Cundy [2010] FCA 782
In this case, parties to the construction contract had come into a reimbursement arrangement
which legalized defendant to consolidate the Canberra Marathon in 2010. But the administrative
body denied allowing the occurrence except for the parties to the contract affirmed in the text
that their argument or case had been flustered. The Federal Court believed that it is the implied
duty of Club to notify the roads administrative body that the argument had resolved.
Terms implied by construction custom and usage.
In a building contract, some terms are implied by custom or usage. The nature of custom or
usage may change from time to time according to social, commercial, economic or other factors.
Consequently, it is not important that if the custom or usage applies in the case it must be applied
in the different case also (Bailey, 2014).
Implied terms in the construction contract are applied conferring to the custom and usage in a
market in which the parties to the construction contract are operating with each other. For the
application of custom and usage in the market, it is important that custom must be definite,
disreputable, rational, renowned as legally obligatory and stable with the express terms.
In the construction contract, the requirement for the application of custom and usage educates
not the only a query of law but also raises the question of circumstance. For the validation or
applicability of the custom in the specific contract of the parties, parties have to prove that the

custom commonly recognized by the market in which the parties to the construction contract are
operating. And if any third party makes a rational investigation regarding that custom they can
easily get the access of that custom in such market. In the construction contract where any usage
or custom is recognized for the contract, it is implied that if in such market that implied term of
custom and usage is followed by the person related to the contract must follow these expressions
as implied terms to the contract. The dimension of the marketplace never affects the applicability
of the custom or usage.
But these custom and usage are implied in the trade or any course of dealing or a contract is very
challenging to prove.
Con-Stan Industries v Norwich Winterthur Insurance (Aust) Ltd.
In this case High Court concise the situation regarding the implication of terms by custom or
usage in the construction contract. The Court stated that for the implication of the custom and
usage in the contract it is important that such custom or usage was widely known and if any new
party enters into a contract at such place where the custom and usage are applicable they can
easily get in contact of these custom and usage. The implied term of the custom and usage must
be certain, reasonable and uniform. For the implication of the custom and usage in the contract, it
is important that the terms of the custom and usage are not contradicting with the express terms.
If in a certain area the custom and usage prevails or this much certain in that case even the
person not known to that custom or usage can also bound by such custom or usage.
4) Discussion of the advantages and disadvantages of litigation.
In general, litigation is of two types Civil or Criminal litigation and the rule of criminal and civil
litigation occasionally stated as civil procedure and criminal procedure. Civil Litigation or
procedure only applies if the civil laws are involved and criminal procedure applies if the civil