Rally Feb 09 - News Coverage.

John Brumby Talks About Desalination . MUST SEE

The Conviction of John Talia

by Neil Jenman Consumer Advocate

A former Ray White franchise agent, John Michael Talia, has been convicted of obtaining property by deception.

Last Thursday (August 14, 2008), after the guilty verdict was read out in the Victorian County Court, John Talia was remanded in custody. Locked up.

Well done prosecutors. It's about time that agents who rob the naïve and the elderly were properly punished - and the proper punishment for agents such as John Talia is a criminal conviction and a stint behind bars.

John Talia's crime was a simple and common real estate crime. He bought the home of an elderly man for less than its real value.

The elderly man's home was worth $300,000, but Talia, in his role as a real estate agent for Ray White in Doncaster (operating under the network slogan of "The Right Advice") made sure that the man received the wrong advice.

Talia arranged for the elderly man to be tricked into thinking his home was worth between $135,000 and $155,000. Talia then offered him $145,000.

You can almost see it now, John Talia pretending to be the friendly, fair-minded agent and offering to "meet half-way" (between the two false figures of $135,000 and $155,000) and then, being the big-hearted fella and agreeing to pay an extra $5,000.

John Talia paid $150,000 for a home that was worth $300,000. The way that he did it makes John Talia a crook.

For years, I have been saying that agents who do what Talia did are thieves. They should be arrested, charged, tried in a court, convicted and then locked up.

But, no, to the best of my knowledge, John Talia is the first agent in the history of real estate in Australia to be locked up for doing what many agents have been doing for decades - buying the homes of owners (often the most elderly and ill) for less than the real value of the homes. In other words, stealing homes.

I believe, every year, crooked agents "steal" the homes of hundreds of elderly home-owners.

Sure, some cases aren't as blatant or severe as the case of John Talia (some, though, are worse). Some agents buy cheap homes in company names or in the name of a mate or a relative.

Taking advantage of sellers who don't know what their homes are really worth is one of the easiest crimes to commit in real estate. At best, it's "insider-trading", at worst, it's stealing. There is never any moral excuse no matter how many times it's laughed off or excused as "business being business". Theft is theft.

Crooked agents have known for years that the chances of getting caught are almost nil (to my knowledge, no government authority checks the sales records looking for 'sus' sales - i.e. houses sold by people with names like Ruth or Dorothy or Harold or Alfred and bought by people with modern sounding names and then re-sold almost immediately for a whopping profit).

Agents know that, even if they are caught, they can usually bluff their way out of any major scandal (I have never heard of a real estate network enacting severe punishment when one of its agents is caught stealing).

The real estate industry generally protects its own, no matter what they do. And so crooked agents have continued to prey on poor unsuspecting owners.

But, thanks to those who prosecuted John Talia, a lot of dodgy agents will be quietly quivering right now. They'd have to know that, "there but for the slackness of our real estate laws, go I".

It's time to go after all agents who do (and have done) what John Talia did.

It's time that John Talia had some company in custody.

REIV Ethics Disgrace

Published 14 March 10 by Peter Mericka B.A., LL.B
Real Estate Lawyer
Qualified Practising Conveyancer Victoria
Director Lawyers Real Estate Pty Ltd

There is little doubt that the real estate industry in Victoria is the most corrupt in Australia. This is largely due to the power and arrogance of the Real Estate Institute of Victoria (REIV). The recent dismissal of Mr. John Keating from the REIV ethics committee is an example of the contempt the REIV has for ethical conduct, and for consumers generally.

In a front page article appearing in The Age newspaper, titled "Real estate rebel gets axe" (The Age, Saturday 13 March, 2010 p.1) journalist Marika Dobbin reports that a long-serving member of the REIV's ethics committee has been dumped "because of his struggle against misleading price quotes".

This incident highlights the ongoing problem concerning the role of the real estate agent and the role of the accredited property valuer.

Estate agents are NOT valuers

The ongoing squabble over real estate appraisals can be summed up by referring to this sentence in Marika Dobbin's article:

"Mr. Raimondo said the industry did not have a problem with underquoting, saying it was difficult to predict prices in the current market."

The problem with real estate agents is that they receive no training whatsoever in valuing real estate. I have examined this problem in detail in a submission to the Estate Agents Council titled Modernising The Estate Agents Act 1980.

(See also "The Pricing Dilemma - An Agent's View" by real estate agent Chris Warren, in which Warren concludes, "The only solution to my mind is for every owner to arrange their own independent valuation from a registered valuer. Then they have a price given to them in writing by a professional not involved in the sale of their property.")

If, as REIV CEO Enzo Raimondo believes, it is difficult to predict prices in the current market, then why do real estate agents act beyond their competence? The answer is quite simple: real estate agents need to pass themselves off as valuers in order to control real estate transactions.

It's all about controlling the sale transaction


By seizing control of the sale price, the real estate agent is able to control the vendor. Here's how it works:

1. The REIV and real estate agents in general pretend that it is the role of the real estate agent to estimate the value of the vendor client's property. (In fact, real estate agents have neither the qualifications nor the competence to provide property valuations - hence Raimondo's plea that it is "difficult to predict prices".)

2. Real estate agents use the opportunity to provide free appraisals as a means of winning listings. The free appraisal is a foot in the door for the real estate agent. (See our article "Free Valuation? Just A Foot In The Door!"

3. The opportunity to estimate the price of a vendor's property is also an opportunity to overquote the value (in order to win the listing and a commission) or to underquote the value (in order to ensure a quick sale and a quick commission).

4. Establishing a vendor's expectations sets the scene for the real estate agent to crow about having "exceeded vendor's expectations" if the property sells for more than the estate agent's appraisal. If the appraisal figure is too high, the vendor can be conditioned by the estate agent (who by this stage has firmly established him/herself in the mind of the vendor as the "expert" on real estate prices).

Most of the deceptions and manipulation strategies used by real estate agents against unsuspecting consumers are linked to the real estate agent's control of price information.

Inherent conflict of interests

There is always a conflict of interests when the real estate agent takes a role in estimating or advising on the value or price of real estate. This is because the real estate agent has an interest in the vendor's property, which extends to an interest in the bringing about of a sale - any sale, at any price. Consider these facts:

1. Interest in the client's property. Through the execution of an Exclusive Sale Authority, the real estate agent effectively becomes a part-owner of the vendor's property - usually to the extent of 2%-3% payable as commission.

2. Estate agent's interest not realised without a sale. The Exclusive Sale Authority gives the real estate agent a set period within which a sale must take place, otherwise the agent's 2%-3% stake in the vendor's property disappears. The vendor may also disappear, and appoint another agent.

3. Sale becomes the paramount goal of the agent. No sale, means no commission. Thus, any sale at any price will mean that there is at least some commission payable. The only obstacle between the real estate agent and the commission is the vendor who refuses to sell during the currency of the Exclusive Sale Authority.

4. Controlling the price allows the agent to bring about the much needed sale. The real estate agent works on the vendor to establish him/herself as the "expert" on pricing. The vendor, having accepted the estate agents initial "appraisal" as to the value of the property, has nowhere to turn when the same real estate agent revises the appraisal downwards. Thus, the real estate agent is able to use price manipulation as a conditioning tool against the vendor. Real estate agent journals and training courses are full of articles on how an agent can condition the vendor into accepting an unacceptably low price for a property, and some of them are very sophisticated and highly convincing.

REIV as real estate rogue

The REIV never advises consumers to call upon the expertise of professional valuers. In fact, the REIV goes to great lengths to convince consumers that it is the role of the real estate agent to estimate the value of real estate.

So powerful is the REIV, through its ability to procure political lobbyists, and to call in favours from those whose role it is to regulate the industry, that it has managed to have legislation passed that actually requires real estate agents who have no training and no qualifications in property valuing to provide appraisals to vendors. (This outrageous state of affairs is examined in Modernising The Estate Agents Act 1980.)

The REIV cannot have it both ways

On one hand, the REIV promotes its untrained, unqualified members as having the skills needed to provide accurate property valuations. However, it then bleats about the difficulties associated with predicting market prices when consumers complain about incompetence or deception.

If the REIV were serious about ethics it would acknowledge the need for an independent assessment of property value, and advise consumers to obtain a valuation from an accredited property valuer.

The removal of John Keating from the REIV ethics committee has rendered the title "REIV Ethics Committee" an oxymoron.

Adverse Possession or Squatters Rights

Adverse possession is a concept in law which concerns title of a real property.


In common law, adverse possession is the process by which title to another's real property is acquired without compensation, by holding the property in a manner that conflicts with the true owner's rights for a specified period. Circumstances of the adverse possession determine the type of title acquired by the disseisor (the one who obtains the title as a result of the adverse possession action), which may be fee simple title, mineral rights, or other interest in real property.

Adverse possession's origins are based both in statutory actions and in common law precepts, so the details concerning adverse possession actions vary by jurisdiction. The required period of uninterrupted possession is governed by the statute of limitations. Other elements of adverse possession are judicial constructs.

History

At common law where entitlement to possession of land was in dispute (originally only in what were known as real actions) the person claiming a right to possession could not allege that the land had come into their possession in the past (in older terminology that they had been "put into seisin") at a time before the reign of Henry I.[1] There was thus a cut off date going back into the past before which the law would not be interested. There was no requirement for a defendant to show any form of adverse possession.

As time went on, the date was moved by statute first to the reign of Henry II[2] and then to the reign of Richard I.[3] No further changes were made of this kind.

By the reign of Henry VIII the fact that there had been no changes to the cutoff date had become very inconvenient and a new approach was taken whereby the person claiming possession had to show possession of the land a certain number of years (60, 50 or 30 depending on the kind of claim made) before the date of the claim.[4] Later statutes have shortened the limitation period in most common law jurisdictions.

Purpose and moral basis

Adverse possession exists to cure potential or actual defects in real estate titles by putting a statute of limitations on possible litigation over ownership and possession.

Because of the doctrine of adverse possession, a landowner can be secure in title to his land. Otherwise, long-lost heirs of any former owner, possessor or lien holder of centuries past could come forward with a legal claim on the property. The doctrine of adverse possession prevents this.

Adverse possession is based on the doctrine of laches, which states that failing to assert a right or claim in a timely manner can prejudice an adverse party. This doctrine is defined as neglecting to do what should or could have been done to assert a claim or right for an unreasonable and unjustified time causing disadvantage to another.[5]

This means the law may be used to reward a person who possesses the land of another for a requisite period of time. Failure of a landowner to exercise and defend his property rights for a certain period may result in the permanent loss of the landowner's interest in the property.

An example of this would be if a landowner saw that his neighbor had begun building a house on the first landowner's land, due to an error in determining the intervening property line. If the landowner waits until the house is completed and then sues his neighbor because the house is on the first landowner's property, he has wrongly gained a house on his land at his neighbor's expense. The same principle also applies to other work that improves the land from a wild state.

Requirements for adverse possession

The adverse party is called the "disseisor", meaning one who dispossesses the true owner of the property.

Adverse possession requires, as a minimum, the following five conditions being met to perfect the title of the disseisor (some jurisdictions further require the possession to be made under a claim of title or a claim of right and/or other requirements listed below):

Actual possession of the property

Open and notorious use of the property

Exclusive use of the property

Hostile or adverse use of the property

Continuous use of the property

Actual possession: the disseisor must physically use the land as a property owner would, in accordance with the type of property, location, and uses. Merely walking on land, or hunting, does not establish actual possession.[6] His actions must change the state of the land, as by clearing, mowing, planting, harvesting fruit of the land, cutting timber, mining, fencing, pulling stumps, running livestock and constructing buildings or other improvements.

Taxes: paying taxes does not establish actual possession, but may be admitted by some courts as evidence of claim of right. For example, if the true owner regularly pays taxes on the land, even while a disseisor has taken actual possession of the land by his regular use and improvement of it, the true owner's payment of taxes does not affect the disseisor's actual possession. However, if the disseisor were to pay taxes over the same period that he was using and improving the land, the court might find that his payment of taxes was evidence that he believed he had a "claim of right" to the land.

Open and notorious: the disseisor's use of the property is so visible and apparent that it gives notice to the legal owner that someone may assert claim. It must be of such character that would give notice to a reasonable person. If legal owner has knowledge, this element is met; it can be also met by fencing, opening or closing gates or an entry to the property, posted signs, crops, buildings, or animals that a diligent owner could be expected to know about.

Exclusive: the disseisor holds the land to the exclusion of the true owner. Renters, hunters or others who enter the land with the permission of the true owner fail to have exclusive possession. (Note: There may be more than one adverse possessor, taking as tenants in common, so long as the other elements are met.)

Hostile or adverse: objective view--used without true owner’s permission and inconsistent with true owner’s rights. Bad faith or intentional trespass view--used with the adverse possessor’s subjective intent and state of mind (mistaken possession in some jurisdictions does not constitute hostility). Good faith view--a few courts have required that the party mistakenly believed that it is his land. All views require that the disseisor openly claim the land against all possible claims.

Continuous: the disseisor must, for statute of limitations purposes, hold that property continuously for the entire limitations period, and use it as a true owner would for that time. This element focuses on adverse possessor’s time on the land, not how long true owner has been dispossessed of it. Occasional activity on the land with long gaps in activity fail the test of continuous possession. Courts have ruled that merely cutting timber at intervals, when not accompanied by other actions that demonstrate actual and continuous possession, fails to demonstrate continuous possession. If the true owner ejects the disseisor from the land, verbally or through legal action, and after some time the disseisor returns and dispossesses him again, then the statute of limitation starts over from the time of the disseisor's return. He cannot count the time between his ejection by the true property owner and the date on which he returned.

Popular mnemonic devices for use in memorizing the elements of adverse possession are: An ECHO (Actual, Notorious, Exclusive, Continuous, Hostile, Open), A Hooker ON Every Corner (Actual, Hostile, Open, Notorious, Exclusive, Continuous) and a HELUVA problem (Hostile, Exclusive, Lasting, Uninterrupted, Visible and Actual).

In addition to the above basic components of an adverse possession action, some courts require (by common law or statute), some or all of the following activities:

Claim of title or claim of right. The Supreme Court of the United States has ruled that the mere intent to take the land as one's own constitutes "claim of right". Other cases have determined that a claim of right exists if the person believes he has rightful claim to the property, even if that belief is mistaken. A negative example would be a timber thief who sneaks onto a property, cuts timber not visible from the road, and hauls the logs away at night. His actions, though they demonstrate actual possession, also demonstrate knowledge of guilt, as opposed to claim of right.

Good faith (in a minority of states) or bad faith (Maine Rule; however, not used in Maine anymore)

Improvement, cultivation, or enclosure

Payment of property taxes

Not under force of arms. Dispossession by armed invasion does not establish a claim of adverse possession against the true owner.

Summary

The disseisor must openly occupy the property exclusively, keeping out others, and use it as if it were his own.

Some jurisdictions permit accidental adverse possession as might occur with a surveying error. Generally, the openly hostile possession must be continual (although not necessarily continuous or constant) without challenge or permission from the lawful owner, for a fixed statutory period to acquire title.

Where the property is of a type ordinarily occupied only during certain times (such as a summer cottage), the disseisor may need to have only exclusive, open, and hostile possession during those successive useful periods, making the same use of the property as an owner would for the required number of years.

Effect of adverse possession

A disseisor will be committing a civil trespass on the property he has taken and the owner of the property could cause him to be evicted by an action in trespass ("ejectment") or by bringing an action for possession. All common law jurisdictions require that an ejectment action be brought within a specified time, after which the true owner is assumed to have acquiesced. The effect of a failure by the true landowner to evict the adverse possessor depends on the jurisdiction, but will eventually result in title by adverse possession.

In some jurisdictions (such as England and Wales), the title of the landowner will be automatically extinguished once the relevant limitation period has passed. This process now applies to only unregistered land.

In other jurisdictions, the disseisor acquires merely an equitable title; the landowner is considered to be a trustee of the property for the disseisor.

Adverse possession extends to only the property actually possessed. If the original owner had a title to a greater area (or volume) of property, the disseisor does not obtain all of it. The exception to this is when the disseisor enters the land under a color of title to the entire parcel, his continuous and actual possession of a small part of that parcel will perfect his title to the entire parcel defined in his color of title. Thus a disseisor need not build a dwelling on, or farm on, every portion of a large tract in order to prove possession, as long as his title does correctly describe the entire parcel.

In some jurisdictions, a person who has successfully obtained title to property by adverse possession may (optionally) bring an action in land court to "quiet title" of record in his name on some or all of the former owner's property. Such action will make it simpler to convey the interest to others in a definitive manner, and also serves as notice that there is a new owner of record, which may be a prerequisite to benefits such as equity loans or judicial standing as an abutter. Even if such action is not taken, the title is legally considered to belong to the new titleholder, with most of the benefits and duties, including paying property taxes to avoid losing title to the tax collector. The effects of having a stranger to the title paying taxes on property may vary from one jurisdiction to another. (Many jurisdictions have accepted tax payment for the same parcel from two different parties without raising an objection or notifying either party that the other had also paid.)

Adverse possession does not typically work against property owned by a government agency.

The process of adverse possession would require a thorough analysis if private property is taken by eminent domain, after which control is given to a private corporation (such as a railroad), and then abandoned.

Where land is registered under a Torrens title registration system or similar, special rules apply. It may be that the land cannot be affected by adverse possession (as was the case in England and Wales from 1875 to 1926), or that special rules apply.

Adverse possession may also apply to territorial rights. In the United States, Georgia lost an island in the Savannah River to South Carolina, when South Carolina used fill from dredging to attach the island to its own shore. Since Georgia knew of this yet did nothing about it, the U.S. Supreme Court (which has original jurisdiction in such matters) granted this land to South Carolina, although the Treaty of Beaufort (1787) explicitly specified that the river's islands belonged to Georgia.[7]

England and Wales

In England and Wales, adverse possession has been governed by the Limitation Act 1980, the Land Registration Act 1925 and the Land Registration Act 2002. Different rules are in place for the limitation periods of adverse possession in unregistered land[8] and registered land[9].

For unregistered land, the Limitation Act of 1980 states that a squatter must remain in adverse possession for 12 years[10], at which point the paper owner's title to the land is extinguished.

For registered land, adverse possession claims completed before 13 October 2003 (the date the 2002 Act came into force[11]) are governed by section 75(1) and 75(2) of the Land Registration Act of 1925. The limitation period remains the same (12 years) but instead of the original owner's title to the land being extinguished, the original owner holds the land on trust for the adverse possessor.[12] The adverse possessor can then apply to be the new registered proprietor of the land.[13]

The position of a registered landowner was significantly improved by the Land Registration Act of 2002. Where land is registered, the adverse possessor may apply to be registered as owner after 10 years[14] of adverse possession and the Land Registry must give notice to the true owner of this application[15]. This gives the landowner a statutory period of time [65 business days] to object to the adverse possession, and if they do so the application fails. Otherwise, the squatter becomes the registered properietor according to the land registry. If the true owner is unable to evict the squatter in the two years following the first application, the squatter can apply again after this period and be successful despite the opposition of the owner. The process effectively prevents the removal of a landowner's right to property without his knowledge, while ensuring squatters have a fair way exercising their rights.

Where a tenant adversely possesses land, there is a presumption that he is doing so in a way that will benefit his landlord at the end of his term. If the land does not belong to his landlord, the land will become part of both the tenancy and the reversion. If the land does belong to his landlord, it would seem that it will be gained by the tenant but only for the period of his term.[16]

Squatter's rights

Adverse possession is sometimes called "squatters' rights." If the squatter abandons the property for a period, or if the rightful owner effectively removes the squatter's access even temporarily during the statutory period, or gives his permission, the "clock" usually stops.[citation needed] For example, if the required period in a given jurisdiction is twenty years and the squatter is removed after only 15 years, the squatter loses the benefit of that 15-year possession (i.e., the clock is re-set at zero). If that squatter later retakes possession of the property, that squatter must, in order to acquire title, remain on the property for a full 20 years after the date on which the squatter retook possession. In this example, the squatter would have held the property for a total of 35 years (the original 15 years plus the later 20 years) to acquire title.

Depending on the jurisdiction, one squatter may not pass along continuous possession to another squatter, known as "tacking", until the adverse possession period is complete. Tacking is valid only if the conveyance of the property from one adverse possesser to another is founded upon a written document (usually an erroneous deed), indicating "color of title." This concept is known as privity, a requirement for tacking under some statutes. If tacking requires privity in the jurisdiction, a squatter claiming adverse possession without a foundation on a written document (claim of right) may not tack previous periods of adverse possession onto his own for purposes of running out the statutory period. [17] A lawful owner may also restart the clock at zero by giving temporary permission for the occupation of the property, thus defeating the necessary "continuous and hostile" element.[citation needed] Evidence that a squatter paid rent to the owner would defeat adverse possession for that period.

Comparison to homesteading

Adverse possession is in some ways similar to homesteading. Like the disseisor, the homesteader may gain title to property by using the land and fulfilling certain other conditions. In homesteading, however, the possession of the property is not hostile; the land is either considered to have no legal owner or is owned by the government. The government allows the homesteader to use the land with the expectation that the homesteader who fulfills the requirements necessary for the homestead will gain title to the property.

The principles of homesteading and squatter's rights embody the most basic concept of property and ownership, which can be summarized by the adage "possession is nine-tenths of the law," meaning the person who uses the property effectively owns it. Likewise, the adage, "use it or lose it," applies. The principles of homesteading and squatter's rights predate formal property laws; to a large degree, modern property law formalizes and expands these simple ideas.

The principle of homesteading is that if no one is using or possessing property, the first person to claim it and use it consistently over a specified period owns the property. Squatter's rights embodies the idea that if one property owner neglects property and fails to use it, and a second person starts to tend and use the property, then after a certain period the first person's claim to the property is lost and ownership transfers to the second person, who is actually using the property.

The legal principle of homesteading, then, is a formalization of the homestead principle in the same way that the right of adverse possession is a formalization of the pre-existing principle of squatter's rights.

The essential ideas behind the principles of homesteading and squatter's rights hold generally for any type of item or property of which ownership can be asserted by simple use or possession. In modern law, homesteading and the right of adverse possession refer exclusively to real property. In the realm of personal property, the same impulse is summarized by the adage "finders/keepers" and is formalized by laws and conventions concerning abandoned property.

Adverse possession of easements

Adverse possession grants only those rights in the disseized property that are 'taken' by the disseisor. For example, a disseisor might choose to take an easement rather than the entire fee title to the property. In this manner, it is possible to disseize an easement, under the legal doctrine of prescription. This must also be done openly but need not be exclusive. Prescription is governed by different statutory and common law time limits to adverse possession. It is common practice in cities such as New York, where builders often leave sidewalk space or plazas in front of their buildings to meet zoning requirements, to close public areas they own periodically to prevent the creation of a permanent easement that would cloud their exclusive property rights.

If a property owner interferes with an easement upon his property in a manner that satisfies the requirements for adverse prescription (e.g. locking the gates to a commonly used area, and nobody does anything about it), he will successfully extinguish the easement. This is another reason to quiet title after a successful adverse possession or adverse prescription: it clarifies the record of who should take action to preserve the adverse title or easement while evidence is still fresh.

For example, given a deeded easement to use someone else's driveway to reach a garage, if a fence or permanently locked gate prevents the use, nothing is done to remove and circumvent the obstacle, and the statutory period expires, then the easement ceases to have any legal force, although the deed held by the fee-simple owner stated that the owner's interest was subject to the easement.

Strictly speaking, prescription works in a different way to adverse possession. Adverse possession is concerned with the extinction of the title of the original owner by a rule of limitation of actions. Prescription, on the other hand, is concerned with acquiring a right that did not previously exist.

Non-common law jurisdictions

Some non-common law jurisdictions have laws similar to adverse possession. For example, Louisiana has a legal doctrine called acquisitive prescription, which is derived from French law.

In Roman law, usucapio laws allowed someone who was in possession of a good without title to become the lawful proprietor if the original owner didn't show up after some time (one or two years), unless the good was obtained illegally (by theft or force). Stemming from Roman law, adverse possession is recognized for instance in Romanian property law which establishes two time periods for the acquisition of property: 30 years and 10–20 years depending on the bona fidae of the possessor and the location of the parties involved.

Rally Contract Winner - Wonthaggi Desal Plant

Tim Holding CGU rap

Water savings shown to be absurd mirage

The Brumby government's irrigation upgrades won't come close to delivering.

THE Productivity Commission report on the mechanisms for recovering water in the Murray-Darling Basin was released last week.

The report confirms what every honest irrigator and independent irrigation expert knew from the beginning - that the Brumby government's $2 billion dollar Food Bowl Modernisation Project, used to justify taking 75 gigalitres for Melbourne from the already stressed Murray Goulburn Basin, was based on a premise so absurd it amounted to a lie.

The food bowl project was based on the idea that lining the existing irrigation channels with plastic would prevent water seepage. It ignored the fact that seepage ends up in the river as part of the environmental flow, and that seepage is more important than run-off in maintaining river flows.

This did not stop the government claiming that the project would generate an additional 225 gigalitres of water - 75 gigalitres each for irrigators, Melbourne and the environment.

The state government has spent $1 billion, mainly on the north-south pipeline, to bring water to Melbourne at the expense of irrigators who are already only receiving a fraction of their water allocations and, for many, not enough to keep their herds, trees and vines alive, let alone productive.

The state government also expects to get $1 billion from the Commonwealth to complete the project, subject to ''due diligence''. The Commonwealth may or may not decide to pay up because there are few, if any, external water savings that spill over for the environment.

In the words of the Productivity Commission, the state government is "subsidising irrigation infrastructure projects that do not provide benefits additional to those accruing to irrigators … [it] is a poor use of taxpayer funds, relative to irrigation licence buybacks''.

But the commission has exposed only the beginning of Victoria's water problems.

Water buybacks by the Commonwealth add to the net supply of environmental flows. Water licences bought by the superannuation funds and banks from distressed irrigators don't. The latter are buying licences for speculative purposes. The water from the licences is channelled through managed investment schemes for plantation agriculture based on irrigation.

These investment schemes are the antithesis of environmentally friendly agriculture. The finance comes from the compulsory 9 per cent superannuation levy. This is effectively a tax, except that instead of financing public schools, hospitals and transport, and other public goods, it is used to finance speculation in global financial markets, property, privatised infrastructure projects and tax-driven deals that are still being promoted - despite the recent demise of Great Southern and Timbercorp with losses of $3 billion to about 61,000 investors.

Macquarie Bank has an almond investment scheme that advertises that it has purchased high-security water licences to source water directly from the Murray River. The scheme offers up to 98 per cent tax deductions of up-front cost and 100 per cent of all ongoing costs, supported by a Tax Office product ruling.

Better still, Macquarie will lend investors the capital. Finance options include an investment loan for up to 100 per cent of the application amount and subsequent payments up to October.

The lack of policy coherence within and between governments beggars belief.

Water licences in the Murray Goulburn Basin can be bought for about $2300 a megalitre. This is less than half the cost of water being appropriated from the basin and then it has to be pumped over the Great Divide and filtered before it can be delivered to Melbourne households.

If the Victorian government was serious about adding to Melbourne's water supplies and not making conditions in the already stressed Murray Goulburn Basin worse, it would look at conservation, recycling and even new dams - which would provide water at about the same price or less than the current wholesale price of $850 a megalitre.

But no. The Victorian government is in thrall to the powerful interests behind the Wonthaggi desal plant (the French water multinational, Suez, the construction giant, Thiess and Macquarie Bank).

These interests have been able to stitch up a deal with the government, without any cost benefit analysis or a serious environmental impact statement and, it seems, without any money (because the government guarantees their borrowings). The desal water will cost at least $5000 a megalitre. This means that Victoria won't have the money for basic health, education and public transport infrastructure for at least three generations over the life of the desal plant, without massive increases in taxation - or unless Victoria becomes a client state of the Commonwealth like Tasmania and the Northern Territory.

The alternative is to break the contract. Victorians won't know what this will cost until the full details of the contract, signed last July, are made public. This should be done now so there is a full, open debate about Victoria's options before the state election scheduled for November 27.

Kenneth Davidson is a senior columnist.
kdavidson@dissent.com.au
Source: The Age
April 5, 2010

Insider trading: Rivkin's estate agent sentenced

February 11, 2005 - 2:21PM

A prominent Sydney real estate agent embroiled in the Rene Rivkin insider trading affair has avoided a jail term.

Robert Bart Doff was convicted in the NSW Supreme Court of one count of insider trading, which carries a maximum penalty of five years' jail.

He was charged after buying Qantas shares in April 2001, using the same inside information available to his client, disgraced former stockbroker Rene Rivkin.

Rivkin was sentenced to nine months' periodic detention for insider trading after buying 50,000 Qantas shares on the same day as Doff.

But Justice Graham Barr said Doff's offence was less serious than Rivkin's and ordered him to perform 350 hours of community service.

Justice Barr said Doff's "overall criminality is so far less, and his personal attributes so more favourable than Mr Rivkin's, that he ought to receive less than a custodial sentence".

Doff bought 20,000 Qantas shares in the name of his company, Jetoten, within three hours of learning of a planned merger between Impulse Airlines and Qantas.

Doff came by the information as he negotiated the sale of Rivkin's multi-million dollar Bellevue Hill mansion to Impulse chief Gerry McGowan.

At a meeting at Doff's Laing and Simmons Real Estate agency at Double Bay, Mr McGowan told Rivkin on the phone he was awaiting Australian Competition and Consumer Commission (ACCC) approval for the merger before he could commit to the property deal.

"Mr McGowan's reluctance to disclose the information showed that it was confidential, as did his warning not to trade in Qantas shares," Justice Barr said.

"I am satisfied that (Doff) heard the warning."

The judge said there was no evidence Doff knew Rivkin was buying the shares, and vice versa.

"The action he took and the speed with which he took it show that he made his own shrewd assessment, to much the same effect," he said.

Although Doff was of good character and was well regarded in the community, he had shown no remorse, Justice Barr said.

"Even so, I doubt whether he will offend again, given the experience that the charge and the trial have been for him and the effect that the events are likely to have on his business and private life and reputation."

While Doff was not an experienced stockbroker like Rivkin, the judge said he had a professional obligation to deal confidentially with private information.

The conviction automatically disqualifies Doff, who managed three companies, from managing a corporation.

But handing down his sentence, Justice Barr also considered the possibility that the NSW Director of Fair Trading might challenge Doff's fitness to hold a real estate licence.

On top of the community service order, Justice Barr fined Doff $30,000.

He also ordered him to pay $37,255 - the balance of Jetoten's proceeds from the offence, less the fine - to the commonwealth under the Proceeds of Crime Act.

Doff refused to comment outside the court.

Real estate insider trading

From Money Magazine, April 2003

Property has its own form of insider trading where unscrupulous real estate agents buy a client’s property under true value and quickly sell it for a big profit. Terry Ryder reports.

Few Australian home owners are aware of the prevalence – and dangers – of real estate insider trading. Insider trading occurs when the real estate agent appointed to sell a home ends up buying it at a bargain price, or selling it cheaply to a friend or family member who quickly re-sells at a juicy profit. The practice, legal as long as the agent discloses the buyer’s identity, has caused immeasurable emotional and financial damage to sellers.

Some court cases have resulted, usually in instances where the agent has not made the necessary disclosures or has gained an advantage through misleading conduct.

Agents usually get away with it because the real estate laws in most states allow agents to buy their clients’ properties. So long as they disclose that they are the buyer, they can buy the home they are appointed to sell – even though their fiduciary duty is to obtain the highest possible price for their client.

Dr Simon Longstaff, executive director of the Sydney-based St James Ethics Centre, says ethical considerations should preclude any possibility of a salesperson buying a client’s property or selling it to a relative or associate.

Longstaff suggests all state governments should consider making it illegal. “But short of that happening, any group of people concerned about the welfare of their clients would prohibit this as a matter of self-regulation.”

Denise Brailey, president of the Real Estate Consumer Association, agrees real estate insider trading must be outlawed. “In the interests of consumer protection you should never have a situation where the agent is buying a house for themselves or a family member, when it’s one of their own listings. But wherever you have real estate you have unscrupulous agents who are prepared to trade their principles and their ethics for a quick personal gain.”

Anyone thinking of selling their home, regardless of the circumstances, must engage an independent valuer to assess the property’s true worth before they sell. It’s important to stress independent – this must be a qualified valuer who has no association with the real estate agency who will be selling the property.

Full interview of 4.8 billion cost admission

$50m of desal costs 'hidden'

The Age
Written by: PETER KER

April 2, 2010

The Brumby government has been accused of hiding $50 million of extra desalination costs, after major works linked to the Wonthaggi plant were not included in the official $3.5 billion construction price tag.

Water from the desalination plant will be stored at Melbourne's Cardinia Reservoir, and water authorities will spend $50 million upgrading the reservoir to ensure it can properly receive, manage and distribute the massive flows that will start arriving in December next year.

The works would not be required if the desalination plant were not being connected to Cardinia. The $50 million will be spent on a connection between the dam and the 84-kilometre water pipe from the Wonthaggi plant, as well as new pumping equipment to share the excess desalinated water with nearby Silvan Reservoir.

Despite the clear link to the desalination project, Melbourne Water and the Brumby government confirmed the works would not be included in the official desalination costs.

Department of Sustainability and Environment spokeswoman Mandi Zonneveldt said the $50 million was excluded because it was a ''completely separate project''. ''Melbourne Water is best placed to manage the integration of desalinated water into Melbourne's water supplies,'' she said.

In a statement, Melbourne Water conceded the works were associated with desalination, but said they would remain separate in a budgetary sense.

''Work at Cardinia Reservoir is obviously related to desalination, but it is regarded as a separate project.''

Opposition Leader Ted Baillieu said the revelation was the latest instance of the government deceiving Victorians over the desalination project.

''This $50 million hidden cost will be paid for through increased water bills for families. John Brumby has blown so much money in mismanaged projects that every Victorian household is being hit by bigger and bigger taxes and charges,'' he said.

The exact cost of the project has long been contested. Originally described as a $3.1 billion project, the government upgraded that price to $3.5 billion when it signed its public private partnership contract with builder Aquasure.

But those sums represent the capital cost of building the factory and associated infrastructure. The actual cost after lending and other costs is closer to $5 billion.

The claims of financial trickery in Victoria comes as a new international report revealed the amount of drinking water sourced globally from desalination has hit a new high.

A report by British group Global Water Intelligence says that close to 10 per cent of global drinking supplies are now sourced from desalination and other forms of purification.