SPECTRUM SPEAKS
DECEMBER2025 | VOL. 18
2025 has been a year of contrasts for the construction industry. While the sector finally began to show encouraging signs of recovery, ongoing regulatory changes and project delays continued to place pressure on builders, contractors, and consultants. Against this backdrop, Spectrum Group has remained focused on helping our clients navigate uncertainty with confidence.
In this quarter’s newsletter, Spectrum Lawyers shares practical insights drawn from recent case studies, including lessons learned on Completion Stage and emerging legal considerations around AI adoption. Spectrum Coach reflects on the key trends in New Home Sales throughout 2025 offering businesses the opportunity to consolidate their learnings and plan strategically for the year ahead.
Looking forward, 2026 is shaping up to be an exciting year for Spectrum Group as we continue to expand our team:
As the year draws to a close, we extend our sincere thanks to our clients and colleagues for their ongoing support throughout 2025. We wish you all a restful and well-deserved break over the festive season.
Please note our closure dates:
Spectrum Coach: Closed from 12 December 2025, reopening 5 January 2026
Spectrum Lawyers: Closed from 19 December 2025, reopening 12 January 2026
- IN THIS MONTH’S ISSUE:
- What works constitute excluded “External works” – the County Court takes a closer look
- Case Note: Owners Corporation 1 Plan No PS630504G v J & G Knowles and Associates Pty Ltd [2025] VCAT 967
- Understanding Final Claims, Completion, and Payment Risks in Residential Building Projects
- Do you have an AI Policy: Protecting Integrity in the Age of Innovation
- Understanding Shinohara & Shinohara [2025]: A Turning Point in Family Law Property Settlements
- Reflecting on the Year in New Home Sales: Wins, Lessons & Setting Strong Goals for the Year Ahead
What works constitute excluded “External works”
– the County Court takes a closer look
By Donna Abu-Elias & Christiano Staropoli
A Victorian County Court decision clarifies that essential services like waterproofing, drainage and sewerage form part of a home notwithstanding the broad “external works” exclusions and engaging the Act’s implied warranties and builder liability despite subcontractors.
Overview:
Wang v Moutidis [2025] VCC 1156 concerns whether a builder remained liable for serious waterproofing and drainage defects despite a contract clause excluding “external works or decking”.
The Court held that essential services such as waterproofing, sewerage and drainage form part of the home and were not excluded. The implied warranties under the Domestic Building Contracts Act 1995 (Vic) were breached. Judgment was for the plaintiff with $244,323.58 plus costs.
Background:
A two-story home with a basement in Ringwood was constructed by Mr Moutidis. The home was constructed during 2016-2018 and purchased by Mr Wang in 2019. After moving in, Mr Wang observed water ingress into a basement bedroom and the garage, mould, defective basement waterproofing, and below-ground drainage/sewerage issues. This included blocked AG pipes and vents below finished ground level. The contract contained handwritten special conditions, detailing that “no external works or decking is included in this contract.” Despite that the existence of serious water ingress and mould was accepted, the builder denied liability. It was argued that those items were excluded under “external works” and done by subcontractors.
What the Court had to decide:
The Court was required to determine whether waterproofing, sewerage and drainage works formed part of the builder’s contractual scope notwithstanding a handwritten special condition stating that “no external works or decking is included in this contract.” Framed against the statutory regime in the Domestic Building Contracts Act 1995 (Vic), the questions included whether the implied warranties in section 8 were engaged and breached.
The Court considered the case of Fraser v Mason [2019] VCAT 1009 to discuss the content and operation of section 8 warranties in domestic building disputes. This also included whether those warranties could be enforced by a subsequent purchaser under section 9. The case of Waddell v JG King Project Management Pty Ltd [2018] VCAT 1531 confirms the ability of a subsequent owner to enforce the section 8 warranties under section 9.
The Court also had to address the builder’s attempt to shift responsibility to subcontractors and landscapers despite not explicitly outlining external accountability within contracts. Accountability involving the proven defects (water ingress into the basement bedroom and garage, mould, a missing or deficient membrane, blocked AG pipes, and vents set below finished ground level). These defects reflected non-compliant or inadequate performance of works within the builder’s scope.
Finally, the Court needed to decide the appropriate remedy if liability was established, including the cost of rectification and any allowance for loss of amenity.
Decisions and Rationale:
The Court held that “external works” is to be read narrowly and does not extend to essential services that constitute the fabric and function of a home. On the facts, waterproofing to the basement walls and the property’s sewerage and drainage were integral to habitability and thus part of the house, irrespective of whether the components sat outside the external face of the structure. By contrast, the expression “external works” naturally captured items such as landscaping, paving, retaining structures, driveways and fencing.
In reaching that conclusion, the Court read the contract as a whole and in its documentary setting. The plans, specifications and building permit documents contemplated below ground rooms, basement wall waterproofing and perimeter drainage. The progress payment schedule reflected a full domestic build rather than a limited scope. Had the parties intended clear and unambiguous words to determine the subcontracted work delegating responsibility, the court may have applied a different interpretation.
Because the disputed works fell within the contract, the statutory implied warranties in section 8 applied. Those warranties include that the work will be done properly, that the home will be fit for occupation, and that the work will comply with the plans and specifications and with the law. The Court held those warranties were breached. The defect findings (water ingress and mould, a missing or deficient membrane to basement walls, blocked AG pipes around the basement, and vents set below finished ground level) were inconsistent with compliant execution of the waterproofing and drainage required by the contract and permit documentation.
The builder’s attempts to avoid liability by pointing to subcontractors or landscapers were rejected. Liability under the statutory warranties attaches to the builder for the work required by the domestic building contract, regardless of who physically performs it. Nor did subsequent landscaping excuse the underlying deficiencies. Although ground levels had later been raised, the builder had already certified completion and obtained the occupancy permit, which the Court treated as confirmation of responsibility for compliance at handover.
On liability, the Court ordered judgment for the plaintiff, including rectification costs and an amount for loss of amenity, for a total of $244,323.58, together with the plaintiff’s costs.
Practical implications for Builders and Advisers:
This decision confirms that broad, catch-all exclusions such as “no external works” will be read narrowly and will not displace responsibility for essential building functions. Waterproofing, drainage and sewerage form part of the home’s basic fabric and remain within the builder’s scope unless clearly and unambiguously carved out in the contract, and in a way that aligns with the plans, specifications and permit documentation.
Because liability under the Domestic Building Contracts Act 1995 (Vic) attaches to what the domestic building contract requires, builders remain responsible for these elements, even where subcontractors or third parties performed aspects of them.
For contract drafting and project delivery, the message is practical. If exclusions are intended, they must be precise and consistent with the project documents. Any vague language is insufficient. Before certification or obtaining an occupancy permit, builders should be satisfied that waterproofing and drainage are compliant.
Given that subsequent purchasers can sue on the implied warranties, builders and advisers should maintain strong risk controls across the life of the project. This involves supervision of subcontractor work, clear documentation of scope and exclusions, photographic records of critical stages (such as membranes and drainage), warranty and compliance statements from trades, final inspections focused on levels and drainage paths, and orderly handover materials so future owners can verify what was done.
Overall, since the builder remains liable to the homeowner under the implied warranties even if work is performed by others, builders should still tighten their subcontractor arrangements to ensure accountability and recourse. In practice, that means using clear, written subcontract agreements that mirror the contract’s plans/specifications and permit requirements. Further to this, subcontractors should provide warranty and compliance statements. Back-to-back obligations, supervision logs, and documented signoffs will help ensure that when a defect traces to a subcontracted element, the responsible subcontractor has expressly assumed that responsibility in writing. Therefore, enabling the builder to pursue contractual remedies without displacing the builder’s statutory liability to the homeowner.
Spectrum Group communications in this newsletter are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from such communications.
Case Note: Owners Corporation 1 Plan No
PS630504G v J & G Knowles and Associates Pty
Ltd [2025] VCAT 967
By Grace Beale & Rebecca Connolly
Introduction
The recent VCAT decision in Owners Corporation 1 Plan No PS630504G v J & G Knowles & Associates Pty Ltd [2025] VCAT 967 (OC v Knowles) deals with a situation that commonly arises but is often misunderstood. Apartments were sold “off the plan,” defects later emerged and the Tribunal was required to determine who held responsibility. In doing so, the Tribunal clarified whether statutory warranties can be enforced by an Owners Corporation that was not a party to the original contracts and how claims brought by individual lot owners many years after completion must be treated.
The Tribunal approached the matter in a structured and methodical way. Throughout its reasons, it referred to several well established authorities, each serving a distinct role. One line of authority guided how to characterise the contracts, another defined the standard for proving defects, a third addressed the measure of rectification damages and another confirmed how the limitation period must be applied. Each authority was used for a specific purpose and shaped the Tribunal’s findings.
To understand this decision, it is important to see not only what findings were made, but why. The Tribunal’s logic was driven by principles drawn from relevant case authorities and from the applicable legislation, particularly the Domestic Building Contracts Act 1995 (Vic) (DBC Act) and the Building Act 1993 (Vic) (Building Act). It treated the Owners Corporation’s claim and the Individual Lot Owners’ claims differently because they were governed by different legal rules.
This review steps through the Tribunal’s reasoning and the interaction between the contractual framework, technical evidence and established legal principles.
Background
The apartment development at the foundation of this dispute, consisted of four (4) multi-storey residential buildings in Sydenham. Sales contracts were entered into in 2009 and 2010 while construction was still ongoing and occupancy permits were issued between February and May 2011. When the plan of subdivision was registered, the Owners Corporation (OC) became responsible for the common property.
Over time, serious issues emerged, including roof membrane failures, water ingress at the base of block walls and missing fire collars at penetrations. The Tribunal undertook a site inspection as part of the final hearing and was assisted by extensive expert evidence presented in the form of a Scott Schedule. The Tribunal accepted that some defects could only have originated at construction, and were not attributable to ageing, maintenance or later deterioration.
At its core, the dispute required the Tribunal to decide whether statutory warranties continued to operate and could be enforced by the OC, whether the defects had been proven to arise from construction rather than later deterioration, whether the Individual Lot Owners’ claims had been commenced within time, and to what extent rectification costs were recoverable.
The Proceedings
The OC proceeding (BP2006/2020) was brought against J & G Knowles & Associates Pty Ltd (Knowles), the Developer/Vendor. The OC argued that although the agreements were described as “contracts of sale,” their substance required Knowles to complete construction. On that basis, the OC claimed that the statutory warranties imposed under section 8 of the DBC Act operated and that, pursuant to section 9, those warranties flowed to the OC as successor in title once the plan of subdivision was registered.
The Individual Lot Owners proceeding (BP313/2021) commenced with a total of seventy (70) applicants. At the outset of the hearing, many were removed under section 60A of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) for not complying with Tribunal directions. The principal questions raised by the remaining applicants concerned whether they were within the ten (10) year statutory limitation under section 134 of the Building Act and whether any alleged defects could be technically attributed to construction origin rather than later deterioration.
Mr John Knowles, the registered builder and sole director of Knowles, was also joined personally. His involvement raised a separate question, whether liability for statutory warranties could extend to a director, or whether any other basis for personal liability existed, such as negligence or piercing the corporate veil.
Role and Weight of Expert Evidence
Expert evidence was the backbone of the OC’s case. The Scott Schedule was detailed, linking each alleged defect to cause and to rectification scope. Importantly, the Tribunal did not assume defects were construction related and it required expert reasoning that explained why.
For the roof waterproofing, moisture ingress and missing fire collars, the Tribunal accepted the expert evidence and found the defects to be construction origin. For other alleged defects, such as natural ageing, ventilation issues, or maintenance conditions, the expert evidence was not convincing enough and the Tribunal declined to deduce causation.
The Tribunal relied on the expert costing as a reference point but not as a final answer. The Tribunal’s approach was that experts identify what the work costs in practice, while the Tribunal determines what is legally recoverable.
In contrast, the Individual Lot Owners’ evidence was found to be insufficient. They could not demonstrate that alleged outcomes were caused by construction, rather than ventilation, wear or later deterioration. Expert evidence ultimately determined the outcome in both proceedings. It enabled the OC to establish construction origin defects while its absence in the Individual Lot Owners’ cases led the Tribunal to dismiss their claims.
How the Tribunal Reached Its Decision
The Tribunal’s reasoning was grounded in well established case law and applied statutory provisions, each informing a distinct stage of the legal analysis.
The starting point was contractual characterisation. In Shaw v Yarranova Pty Ltd [2006] VSCA 291 (Shaw), the Court of Appeal held that contracts are defined by their substance and not merely their label. Applying that approach in this matter, the Tribunal examined the agreements not as simple contracts of sale but as arrangements under which Knowles undertook construction obligations. This finding was reinforced by Mirvac (Docklands) Pty Ltd v Philp [2004] VSC 301 (Mirvac), where a vendor who retained responsibility for delivering completed construction was treated as a builder. Taken together, Shaw and Mirvac supported the Tribunal’s conclusion that the agreements fell within section 3 of the DBC Act, and that Knowles was the builder for statutory warranty purposes.
The next stage of reasoning concerned breach. For this, the Tribunal applied the structured approach described in Clarendon Homes Vic Pty Ltd v Zalega [2010] VCAT 1202 (Clarendon). Clarendon required proof of defect, proof that the defect originated in the construction work and proof that it amounts to a breach of warranty. The Tribunal used that method to work through the Scott Schedule item by item, accepting defects supported by persuasive expert evidence and rejecting those where causation could not be established.
Once a breach was found, the Tribunal had to assess what damages could lawfully be recovered. Here, the High Court’s decision in Bellgrove v Eldridge (1954) 90 CLR 613 (Bellgrove) guided the measure of rectification. Under Bellgrove, only costs that are necessary and reasonable to achieve compliance can be awarded. Applying that principle, the Tribunal did not accept either of the OC’s global costing figures. Instead, it dissected the rectification scope and awarded only $209,945.67 as the amount required to meet the Bellgrove test.
The limitation issue in the Individual Lot Owners’ proceeding was resolved by applying Lendlease Engineering Pty Ltd v Owners Corporation No 1 [2022] VSCA 105 (Lendlease). Lendlease confirms that the ten (10) year limitation period imposed by section 134 of the Building Act operates strictly and is not open to judicial extension. Given that occupancy permits issued in early 2011 and individual lot owner claims were commenced in February 2021, they were statute barred. For the few claims arguably within time, applying the Clarendon test again, the Tribunal found insufficient proof of construction origin causation and dismissed them on evidentiary grounds.
These authorities operated within the relevant statutory framework. The Tribunal applied section 3 of the DBC Act to characterise the agreements, section 8 to identify the warranties and section 9 to confirm that those warranties transferred to the OC as successor in title.
Section 134 of the Building Act dictated the outcome of the Individual Lot Owners’ claims and section 137C of the Building Act, which imposes warranty obligations on owner-builders, was acknowledged but did not ultimately need to be relied upon because liability had already been determined under the DBC Act.
Spectrum Group communications in this newsletter are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from such communications.
The interplay between these authorities and the relevant statutory provisions dictated the outcome of both proceedings. By applying them in a structured sequence, the Tribunal was able to determine the contractual character of the arrangements, whether statutory warranties were enforceable, which defects were proven to arise from construction, what rectification was legally recoverable and how the limitation period affected Individual Lot Owners’ claims. That framework led the Tribunal to reach different outcomes in BP2006/2020 (OC proceeding) and in BP313/2021 (Individual Lot Owners proceeding) and is summarised below.
Outcome
The Tribunal’s decision produced materially different results. In BP2006/2020, the Tribunal found that Knowles undertook the construction obligations and was therefore the builder for the purposes of the DBC Act and the OC was entitled to enforce the statutory warranties as successor in title under section 9 of the DBC Act. Having applied the Clarendon causation framework and the proportionality principle in Bellgrove, the Tribunal awarded $209,945.67. This sum represented only the rectification work that was necessary and reasonable to achieve compliance (permitted by Bellgrove), rather than the broader rectification scopes initially asserted by the OC. Issues of costs and interest were expressly left open with liberty to apply.
In BP313/2021, the Tribunal arrived at a fundamentally different conclusion. The limitation provision in section 134 of the Building Act was decisive. Applying Lendlease, the Tribunal confirmed that the ten (10) year period operates strictly and cannot be judicially extended. As the occupancy permits were issued in early 2011 and the claims were commenced in February 2021, most claims were required to be dismissed as statute barred. For the limited number of claims arguably still within time, the Tribunal again applied the Clarendon approach and dismissed them because the expert evidence did not establish that the alleged defects originated during construction. No individual lot owner recovered damages.
The Tribunal also held that the director, Mr Knowles, held no personal liability. The statutory warranties arise out of the contractual arrangements and attach to the corporate builder, not its director. There was no pleaded negligence basis for personal liability and no factual or legal justification for piercing the corporate veil. The outcome was that the company was liable, but the director was not.
Conclusion
The decision in OC v Knowles reinforces several important principles in building disputes. Statutory warranties do transfer to an OC once registration occurs. Defects must be proven through reliable expert evidence that establishes construction origin causation. Rectification costs will only be recoverable where they satisfy the proportionality principles in Bellgrove, and the ten (10) year limitation period under section 134 of the Building Act is applied strictly with no allowance for extensions. The Tribunal also made clear that liability attaches to the corporate builder, not to its director and that personal liability will not arise unless supported by a separate statutory or tortious basis.
Understanding Final Claims, Completion, and Payment Risks in Residential Building Projects
By Maria Fokianos
In residential construction, payment disputes at the end of a project are far more common than you think.
A typical scenario occurs when the builder has performed the works in accordance with the contract and reached completion, owners frequently resist paying the final claim by a perceived entitlement to withhold funds often citing alleged defects, incomplete items, or delays. For many builders, this is where uncertainty sets in: What should the builder do next? More importantly, how can a builder safeguard their position to ensure that they are paid?
These questions do not always have straightforward answers. The underlying contract, statutory requirements and the conduct of both parties all influence the available options. A nuanced understanding of contractual rights, notice requirements, dispute mechanisms, and practical risk-management strategies is essential.
What is “Completion”?
“Completion” is a commonly contested concept in domestic building contracts.
Under most domestic building contracts, the definition of Completion is not vague at all, it is highly prescriptive. Completion occurs when the Building Works are substantially complete and reasonably fit for their intended use. The law does not require the works to be flawless or free from every minor defect or omission. Nevertheless, owners commonly argue the opposite, which often leads to avoidable conflict.
In reality, the test is practical: Can the home be used for its intended residential purpose? If the answer is yes, then Completion is generally achieved, even if minor touch-ups remain.
The Notice of Completion: A Critical Step Often Overlooked
Once the builder is satisfied that Completion has been reached, the contract requires the builder to issue a formal Notice of Completion. This is not just an administrative nicety, it is a contractual trigger point with real legal consequences.
The Notice must:
- Confirm that the Works have reached Completion; and
- Require the owner to attend a final inspection within 7 days.
The builder must also attach:
1. The Final Claim; and
2. The Occupancy Permit (OP).
This is where many disputes emerge. Builders sometimes send a casual email saying the job is “done” or inviting the owner to walk through, but without the necessary formality.
A notice that does not actually state that the works have reached Completion and does not require the owner to attend a final inspection within 7 days may be invalid. Owners can and do use this as leverage, arguing that the builder has not properly triggered their completion obligations under the contract.
What if the Owner refuses to pay the Final Claim?
Even when a builder has complied with every contractual requirement, issued a valid Notice of Completion, attached the Occupancy Permit, and delivered substantially complete works, disputes can still arise. A common flashpoint is an owner refusing to pay the Final Claim or refusing to take possession.
When this happens, the contract provides the builder with several pathways. Each option carries strategic considerations that builders should weigh carefully, both commercially and legally.
1. Charging Interest
Under most domestic building contracts, the builder is entitled to charge interest beginning 7 days after the Final Claim becomes due and payable.
While this right is clear, builders should think practically as interest can strengthen the builder’s position, but it rarely resolves the dispute on its own. Instead, it often becomes part of broader commercial negotiations.
2. Reaching a Commercial Agreement
In many cases, a negotiated outcome is the most cost-effective and time-efficient resolution. Common approaches include:
-
Clarifying Defects: Engage an independent building consultant to assess alleged defects. An impartial report can help cut through emotion and provide a realistic scope of rectification works.
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Negotiating a Settlement: Builders and owners may agree on a reduced or adjusted amount for the Final Claim. Any agreement should be properly documented in a Deed of Settlement and Release to prevent ongoing disputes.
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Offering Undertakings: Builders may undertake to complete minor outstanding items during the defects liability period, which can reassure owners without compromising the builder’s legal position.
Commercial agreements can preserve relationships and avoid months of delay in formal dispute resolution.
3. Lodging a BPC Application
When negotiations break down, the next step is to apply to Building and Plumbing Commission (BPC). This is not optional as BPC is a mandatory prerequisite before commencing VCAT proceedings.
Under section 44(2)(e) of the Domestic Building Contracts Act, a domestic building work dispute includes situations where an owner allegedly fails to pay money for work performed under the contract.
BPC should be used when:
the owner persistently refuses to pay
the owner disputes Completion without valid contractual grounds
communication has deteriorated to a point where direct negotiation is no longer productive
A BPC certificate then unlocks the ability to escalate the matter to VCAT if necessary.
Spectrum Group communications in this newsletter are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from such communications.
Do you have an AI Policy: Protecting Integrity in the Age of Innovation
By Donna Abu-Elias & Christiano Staropoli
Artificial Intelligence (AI) is rapidly transforming how organisations operate. Once considered futuristic, AI technology now features in day-to-day business workflows drafting documents, analysing data, assisting with decision-making, automating administrative tasks, and enhancing customer engagement.
The benefits are undeniable: improved efficiency, reduced costs, and increased creativity. However, the use of AI also introduces new legal, ethical and operational risks that must be carefully managed. With privacy laws tightening and regulators increasingly focused on digital governance, businesses must implement a structured approach to AI usage.
A well-drafted AI policy ensures innovation does not compromise compliance, confidentiality, or professional integrity.
Why Your Business Needs an AI Policy
Even the most advanced AI systems are not fully reliable. They can:
Produce inaccurate, outdated or misleading information
Introduce bias or discriminatory outcomes
Generate inappropriate or unprofessional content
Misinterpret requests, leading to unintended results
Mishandle confidential or personal information if prompts contain identifiers
Create compliance risks if disclosure of AI involvement is required
In regulated sectors such as legal, financial, health and government, the risks are elevated due to strict rules regarding client information, data handling and professional accountability.
An effective AI policy helps businesses:
Maintain compliance with privacy, contractual and regulatory obligations
Protect client information and commercial confidentiality
Ensure accuracy and professional standards are upheld
Avoid reputational damage linked to inappropriate or unverified outputs
Provide staff with clarity and confidence in when and how AI may be used
This approach demonstrates responsible governance and strengthens client trust.
Permitted Uses – Where AI Adds Real Value
AI tools can significantly enhance internal productivity when used appropriately. They are most effective for:
Brainstorming ideas, planning projects and assisting strategic discussions
Drafting outlines, internal summaries and administrative documents
Enhancing readability and structure of materials already created by humans
Supporting initial insight development prior to formal research
Organising information and automating repetitive workflow tasks
In some industries, AI may also generate products or marketing materials
However, human verification and approval must always occur before external distribution.
AI should assist – not replace – skilled human judgement.
The Golden Rules of Responsible AI Use
To safeguard your organisation, every use of AI should comply with these core principles:
1. Appropriate Purpose: Confirm the task is suitable for AI support
2. Confidentiality: Never enter client-identifiable, sensitive or privileged information into unsecured tools
3. Verification: Independently review all facts, legal references, figures and attributions
4. Compliance: Follow relevant disclosure obligations and professional standards
5. Human Oversight: A suitably qualified team member retains responsibility for the final output
6. Transparency: Maintain auditability, including recording: AI tool used; date and purpose; person responsible for reviewing/verifying
These rules ensure AI enhances rather than undermines business processes.
Implementing an Effective AI Governance Framework
To properly manage AI risk within your organisation, consider adopting the following measures:
1. Written AI Policy: Define:
2. Staff Training: Provide practical education and scenario-based examples to reinforce safe usage
3. Monitoring and Review: Technology and regulation change rapidly. Update policies regularly to reflect emerging risks
4. Usage Documentation: Require file notes or logs to demonstrate accountability and support audit readiness
5. Vendor Due Diligence: Only approve AI systems that meet minimum privacy, security and contractual safeguards
How We Can Help
Adopting a well-governed approach to AI is more than a compliance requirement, it is a strategic advantage. By implementing appropriate safeguards now, your organisation can confidently pursue innovation while protecting legal and ethical standards.
Whether your organisation is beginning to explore AI tools or already using them widely, now is the time to ensure the right protections are in place. We can assist your business with:
Drafting or updating a customised AI governance policy
Training sessions for employees and leadership teams
Reviewing compliance with privacy, confidentiality and regulatory obligations
Advising on disclosure requirements and risk management strategies
To discuss how we can help you establish a compliant and future-focussed AI framework, please contact our office.
Spectrum Group communications in this newsletter are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from such communications.
Understanding Shinohara & Shinohara [2025]: A Turning Point in Family Law Property Settlements
By Hannah Smith & Alyssa Staropoli
Introduction
The Full Court’s decision in Shinohara & Shinohara [2025] FedCFamC1A 126 (Shinohara) marks one of the most significant developments in family law since the commencement of the Family Law Amendment Act 2024. For the first time, the Court has provided clear appellate guidance on how property settlements must now be approached under the amended section 79. This case reshapes long-standing practice and offers important lessons for separating couples navigating financial settlements.
Case Summary
The parties were in a six-year relationship with two children. During and after separation, they sold several properties and used approximately $592,768 of the proceeds on legal fees and expenses. Historically, these sums could have been “added back” to the property pool as notional assets.
However, the trial judge excluded the add-backs and limited the divisible pool to assets that still existed. This approach reflects the amended section 79, which now requires the Court to identify only the parties’ actual legal and equitable interests at the time of the hearing. The section no longer permits the reconstruction of the pool using notional or assumed property, and instead directs the Court to assess contributions and future needs using an expanded list of statutory factors.
On appeal, although the Full Court found procedural fairness issues, it confirmed that under the 2024 reforms, courts may now divide only existing property. Spent funds can no longer be reinstated as notional assets. The Court recalculated the division accordingly, awarding 67.5% to the wife and 32.5% to the husband.
Why This Case Matters for Our Clients
The Shinohara decision directly affects how current and future property settlements will be handled:
Only actual, existing property will be divided: Clients should be aware that money already spent, whether on legal fees, renovations, debt repayment, or lifestyle expenses, cannot be restored to the asset pool. What remains at the time of hearing is all the Court can divide.
Post-separation spending will be closely scrutinised: Although add-backs are abolished, the reason money was spent still matters. Wasteful, excessive, or unilateral spending may reduce a party’s final entitlement. Conversely, reasonable or necessary expenditure may strengthen your position.
Accurate financial records are now essential: Bank statements, receipts, invoices, and explanations for major transactions will play a critical role. Without evidence, the Court cannot properly consider whether spending should influence contributions or future-needs assessments.
The overall fairness of the outcome remains central: Courts will now adjust percentage entitlements, rather than the asset pool itself, to account for financial conduct. This requires well-prepared submissions and careful presentation of your financial history.
Early legal advice is more important than ever: Because financial conduct carries increased weight under the new regime, seeking advice early helps prevent missteps and ensures your position is properly protected from the outset.
Conclusion
Shinohara represents a fundamental shift in Australian family law: add-backs are gone, evidence is critical, and the focus is now on the real asset pool and the fairness of the overall division. For clients, this means proactive record-keeping, thoughtful financial decision-making after separation, and early legal guidance are essential.
Spectrum Lawyers & Consultants is ready to assist you in navigating this new landscape with clarity and confidence.
Spectrum Group communications in this newsletter are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from such communications.
Reflecting on the Year in New Home Sales: Wins, Lessons & Setting Strong Goals for the Year Ahead
By Fred Abu-Elias
As the year draws to a close, the new-home sales industry enters its natural moment of pause a chance to look back at the wins worth celebrating, the challenges that tested our resilience, and the skills we sharpened along the way. Reflection isn’t a “nice to have” in sales; it is the catalyst for meaningful growth. And for new-home sales professionals, growth is everything.
Celebrating the Wins
Every sale, every relationship built, and every family you’ve helped move into their dream home are wins worth acknowledging. Even in a fluctuating market, the victories matter:
Breaking into new communities or product types
Improving your close rate
Enhancing customer experience or communication
Strengthening relationships with builders, brokers, or lender partners
Building pipeline consistency despite market shifts
These wins aren’t accidental, they’re the direct result of discipline, adaptability and your willingness to show up every day.
Acknowledging the Losses (and Turning Them Into Lessons)
Losses, missed opportunities, prospects that went cold, or deals that fell through are inevitable. What separates high performers from everyone else is the ability to extract value from them.
Ask yourself:
What objections did I struggle to overcome this year?
Where did I lose prospects in the funnel?
Did I maintain consistent follow-up, or did I let some opportunities slip?
Was my product knowledge deep enough to instil confidence?
Did I manage my time effectively?
Losses sting, but they sharpen your instincts and they highlight where focused improvement can bring the biggest leap forward next year.
Setting Intentional Goals for the New Year
Goal-setting shouldn’t be vague (“sell more homes”), it should be strategic, measurable and aligned with your KPIs.
Examples of powerful, high-impact sales goals:
Increase conversion rate by 5–10% by strengthening discovery questions and improving follow-up structure
Boost traffic-to-appointment set rate through better online engagement and clear value messaging
Reduce contract fall-throughs by ensuring financial pre-qualification and expectation-setting early
Build a 90-day pipeline worth your monthly sales target
Follow up with every prospect within 24 hours, no exceptions
What You Need to Do Differently to Reach the Next Level
This is the heart of your growth plan. If you want different results, your actions must change too.
1. Master Your Product and Market Knowledge
Top performers know their:
Floor plans
Inventory
Incentives
Competitors
Local market trends
Example: Spend 15 minutes each morning reviewing inventory updates and competitive offerings.
2. Upgrade Your Follow-Up Strategy
Many deals are lost simply due to inconsistent follow-up.
Do differently:
Implement a structured 3-10-30 follow-up plan (3 days, 10 days, 30 days).
Use multiple touch points: phone, text, email, video messages.
3. Practice Objection Handling Weekly
Roleplay with teammates or record yourself practising.
Focus on objections like:
“The interest rates are too high.”
“We want to wait.”
“We’re still shopping around.”
Growth example: Turn every objection into a question to uncover the real barrier.
4. Sharpen Your Discovery Skills
Better questions lead to more meaningful conversations, which lead to deeper trust and higher conversions.
Upgrade from:
“What are you looking for in a home?”
To:
“What problem are you hoping a new home will solve for you?”
5. Own Your Digital Presence
Sales is no longer only face-to-face.
Improve:
Your social media activity
Your response time to online leads
Your availability on digital platforms
Example: Commit to posting two pieces of value-based content per week.
How to Commit (and Stay Committed) to These Goals
Setting goals is easy. Sustaining them is where most people fall short. Here’s how to set yourself up for success:
1. Write your goals down and make them visible
A goal you can’t see is a goal you’ll forget.
2. Break each goal into weekly habits
Instead of “sell 5 homes per month,” think:
25 follow-up calls per week
10 new appointments
5 realtor outreach messages
3. Track your KPIs weekly, not monthly
Monthly reviews happen too late. Weekly tracking allows for quick course correction.
4. Hold yourself accountable (or get an accountability partner)
Commit your goals to:
Your manager
A colleague
A mentor
Even your social audience
Accountability builds consistency.
5. Celebrate micro-wins to keep motivation high
Final Thoughts: The Year Ahead Is Yours to Define
The new year is a blank slate. Your performance will be shaped not by chance, but by intention. Look back with appreciation, learn from the missteps, and step forward with a clear strategy, renewed mindset, and unwavering commitment. This year, aim not just to hit your KPIs. Aim to become the version of yourself who makes hitting those KPIs inevitable.
Spectrum Group communications in this newsletter are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from such communications.