Principal:Robert W. Locke

Solicitors:

Mehssa SpencerJoanna GoldsworthyDaniel Campbell

ABN: 70 429 802 566

ROBERT LOCKESolicitor & Attorney

CONSUME IS&N

104 DEC 20U

15 Bourke Street,TAMWORTH NSW 2340

All correspondence to:P 0 Box 1952, TAMWORTHOR DX: 6140 TAMWORTH

Telephone: (02) 6766 4700Facsimile: (02) 6761 2638

Email: rwl@robertlocke.com.au

Our Ref:DCC: 140337Your Ref:

FILE No:

DOC:

MARS/PRISM:

The Adjudications ManagerAustralian Competition & Consumer CommissionGPO Box 3648SYDNEY NSW 2001

2 December 2014

Dear Sir or Madam,

RE: FRESH PROPERTIES & DEVELOPMENTS PTY LIMITEDNOTIFICATION OF EXCLUSIVE DEALING

We advise that we act on behalf of Fresh Properties & Developments Pty Limited.

Please find the enclosed Form G and supporting submissions and documentation. Alsoenclosed, is a cheque in the amount of $100.00 by way of payment of the relevant fee.

In the event that you have any queries in relation to this matter please do not hesitateto contact the writer.

Yours faithfullyROBERT LOCKE,

^f-^fe^er: Daniel CampBell

Mobile: J3421 920930dancampbell@robertlocke.com.au

Liability limited by a Scheme approved under Professional Standards Legislation

Form G

C^^IMM'PS^10.4 DEC 2014

l5N|

Commonwealth of Australia

Competition and Consumer Act 2010 - subsection 93 (1)NOTIFICATION OF EXCLUSIVE DEALING

To the Australian Competition and Consumer Commission:

Notice is hereby given, in accordance with subsection 93 (1) of the Competition andConsumer Act 2010, of particulars of conduct or of proposed conduct of a kindreferred to subsections 47 (2), (3), (4), (5), (6), (7), (8) or (9) of that Act in which theperson giving notice engages or proposes to engage.

PLEASE FOLLOW DIRECTIONS ON BACK OF THIS FORM

1. Applicant

(a) Name of person giving notice:(Refer to direction 2)

Fresh Properties & Developments Pty Ltd ACN 601 194 478 ABN 28 601194 478 ("the applicant")

(b) Short description of business carried on by that person:(Refer to direction 3)

Residential land development

(c) Address in Australia for service of documents on that person.

c/- Robert Locke, Solicitor15 Bourke Street, Tamworth NSW 2340

2. Notified arrangement

(a) Description of the goods or services in relation to the supply or acquisitionof which this notice relates:

The proposal relates to the supply of land in a residential housing estatelocated at Gunnedah, New South Wales ("the Estate")

(b) Description of the conduct or proposed conduct:(Refer to direction 4)

"The Purchaser must prior to settlement of this Contract enter into a buildingcontract with Fresh Constructions Pty Limited (ACN 146 156 863) ABN 58146 156 863 ("the Builder") engaging the Builder to construct a residentialdwelling on the land in accordance with the plans and designs approved by thevendor."

Page 1 of 4

3. Persons, or classes of persons, affected or likely to be affected by thenotified conduct

(a) Class or classes of persons to which the conduct relates:(Refer to direction 5)

i. Purchasers and potential purchasers of residential land in the Estate.

ii. Businesses providing building services for the construction of newresidential premises in Gurmedah.

(b) Number of tho se persons:

(i) At present time:

Nil.

(ii) Estimated within the next year:(Refer to direction 6)

Potential sales have been estimated at 20 during the first year of the Estate

(c) Where number of persons stated in item 3 (b) (i) is less than 50, their namesand addresses:

Not applicable.

4. Public benefit claims

(a) Arguments in support of notification:(Refer to direction 7)

The public benefits emanating from the proposed conduct outweigh thelikely public detriment from the proposed conduct. Please refer to thesubmission annexed to this form.

(b) Facts and evidence relied upon in support of these claims:

Please refer to the submission annexed to this form.

5. Market definition

Provide a description of the market(s) in which the goods or servicesdescribed at 2 (a) are supplied or acquired and other affected marketsincluding: significant suppliers and acquirers; substitutes available for therelevant goods or services; any restriction on the supply or acquisition ofthe relevant goods or services (for example geographic or legal restrictions):(Refer to direction 8)

The primary market relevant for the purposes of the proposed conductwould be the market for residential land in Gunnedah. The other marketrelevant to the proposed conduct is that for the acquisition and provisions ofresidential (new home) building services in Gunnedah.

6. Public detriments

(a) Detriments to the public resulting or likely to result from the notification, inparticular the likely effect of the notified conduct on the prices of the goods

Page 2 of 4

or services described at 2 (a) above and the prices of goods or services inother affected markets:

(Refer to direction 9)

No material detriment identified due to the availability of alternativeproducts (land) in the market. Please refer to the submission annexed to thisform.

(b) Facts and evidence relevant to these detriments:

Please refer to the submission annexed to this form.

7. Further information

(a) Name, postal address and contact telephone details of the person authorisedto provide additional information in relation to this notification:

Daniel Urquhart (Managing Director) c/- GJ Gardner Homes Tamworth,

Shop 13A Tamworth Home Space, Cnr The Ringers Rd & Greg NormanDrive, Tamworth NSW 2340

Telephone: (02) 6765 2634 Fax: (02) 6765 5828

Dated...^Z<^

Signed by/on behalf of the applicant

^^/' /...'^.^....^/:.f.^a^.......(Full Name)

C^l^lp^N104 DEC 2014

Fresh Properties & Developments Pty Ltd ACN 601 194 478 ABN 28 601 194 478Director

Page 3 of 4

DIRECTIONS

1. In lodging this form, applicants must include all information, including supportingevidence that they wish the Commission to take into account in assessing theirnotification.

Where there is insufficient space on this form to furnish the required information,the information is to be shown on separate sheets, numbered consecutively andsigned by or on behalf of the applicant.

2. If the notice is given by or on behalf of a corporation, the name of the corporationis to be inserted in item 1 (a), not the name of the person signing the notice, andthe notice is to be signed by a person authorised by the corporation to do so.

3. Describe that part of the business of the person giving the notice in the course ofthe which the conduct is engaged in.

4. If particulars of a condition or of a reason of the type referred to in section 47 ofthe Competition and Consumer Act 2010 have been reduced in whole or in part towriting, a copy of the writing is to be provided with the notice.

5. Describe the business or consumers likely to be affected by the conduct.

6. State an estimate of the highest number of persons with whom the entity givingthe notice is likely to deal in the course of engaging in the conduct at any timeduring the next year.

7. Provide details of those public benefits claimed to result or to be likely to resultfrom the proposed conduct including quantification of those benefits wherepossible.

8. Provide details of the market(s) likely to be affected by the notified conduct, inparticular having regard to goods or services that may be substitutes for the goodor service that is the subject matter of the notification.

9. Provide details of the detriments to the public which may result from the proposedconduct including quantification of those detriments where possible.

Page 4 of 4

Annexure A

Submission in support of Notification

.AUST.CQMPETITIONCONSLMER;C.5MM%Sl8N

0 4 DEC m

The Applicant has contracted to purchase land located approximately 2.5 kilometres from the

central business district of Gunnedah in North West NSW upon which a residential housing estatedevelopment will be situated ("the Estate"). Contracts for the purchase of land exchanged on 16October 2014 and settlement occurred on 17 November 2014.

Gunnedah, located in the Liverpool Plains, is a town of approximately 8000 people, with theGunnedah Shire(comprising Gunnedah and the villages of Curlewis, Breeza, Carroll, Mullaley andTambar Springs) having a population of approximately 12,000 people. 2011 Census data by theAustralian Bureau of Statistics (ABS) showed that Gunnedah Shire's population increased by 4.7%over the five-year period between the 2006 and 2011 Census, growing by 541 residents, to a totalpopulation of 12,066 as at 9 August 2011.The Gunnedah area is a fertile agricultural region and is asignificant producer of cotton, coal, beef, lamb and pork and the town functions as a district centreand a highway service centre.

Development consent has been granted by Gunnedah Shire Council for 27 residential blocks. Thesubdivision has been staged with lots 5 to 17 forming stage 2 of the subdivision and lots 18 to 31

forming stage 3. Stage 1 has already been subdivided. A plan showing the Estate in its proposed finalform is attached to this submission.

The Estate is to be a master planned community with key design concepts being:

1. Varied but complementary housing types; and

2. The maintenance of consistency and integrity of the design of the Estate through to thecompletion of the Estate.

The land on which the Estate is situated contains Class-E black soil. Class-E soil is extremely reactiveand buildings constructed on Class-E soil should be constructed in accordance with approvedengineering detail to minimise the risk of damage due to soil movement.

In order to ensure that residential construction within the Estate is undertaken and completed inaccordance with the key design concepts for the Estate and to ensure that homes are built without

the risk of damage due to soil movement, it is proposed that a sole builder, with experience inconstructing buildings on Class-E soil be engaged to undertake all residential building work withinthe Estate.

The Applicant will therefore supply blocks of land in the Estate to potential purchasers subject tocertain conditions including the following contract provision:

"The Purchaser must prior to settlement of this Contract enter into a building contract with FreshConstructions Pty Limited ACN 146 156 863 ABN 58 146 156 863 ("the Builder") engaging the Builderto construct a residential dwelling on the land in accordance with the plans and designs approved bythe vendor "

It is proposed that all residential land sold within the Estate will be sold on a "house and land

package" basis whereby the Applicant supplies the land and the Builder will build the residence uponthe land in accordance with the key design concepts for the Estate.

Relationship between the Applicant and the Builder

The Applicant and the Builder are closely associated but are not related body corporates.

The directors of the Applicant are Daniel John Urquhart and Mark Joseph Mclnnes.

The directions of the Builder are Daniel John Urquhart and Natalie Joy Urquhart.

Brief summary of the Market

With this submission, we further lodge extracts from the Gunnedah Economic Performance Report

2014 ("GEPR") which was commissioned by Gunnedah Shire Council and adopted by Gunnedah Shire

Council at its Ordinary Meeting of Council on 19 March 2014.

This report contains the most recent publically available information in relation to housing demand

and availability in Gunnedah.

Market for Land

The Estate is situated approximately 2.5km south of Gunnedah Post Office. The market for the

Estate is considered to be the market for residential land in Gunnedah.

The GEPR notes that the predominant form of housing in Gunnedah is detached houses (paragraph

9.1). The GEPR further indicates that the Gunnedah Shire Local Environmental Plan has zoned land inGunnedah to provide an approximate 1000 additional residential lots (paragraph 22.3). Master-

planned residential estates in Gunnedah (at the time of publication of GEPR) include:

. Mornington Heights: 309 lots approved - stage 1 has been developed and sold, with stage 2

(approximately 40 lots) currently on the market. The GEPR indicates that there are around

220 lots remaining to be developed and released.

. East Gunnedah: 335 lots comprising a mix of medium density, standard residential lots andlarger rural-residential lots, with the first stages of the subdivision underway.

. Gallen Estate: 147 lots approved, with approximately 20 lots currently for sale.

. Kamilarroi Road: 32 large rural-residential lots.

. Bellevue Heights Estate: 10 large rural residential lots (paragraph 22.3).

It is submitted that the Applicant's proposed conduct will not detrimentally impact upon prospective

purchasers in the market for residential land in Gunnedah as the proposed development of 27 lots

comprises a relatively small proportion of the total residential land available within Gunnedah from

time to time. As noted above, there are a number of other residential developments in and around

Gunnedah offering prospective purchasers alternative locations and development styles, ensuring

that prospective purchasers who choose not to purchase will have other adequate options available

to them.

Market for residential (new home) building services

The market for residential (new home) building services in Gunnedah is strong and has experienced

strong growth, with 103 new residential buildings approved to be built in the Gunnedah area in the

2012-2013 financial year (GEPR paragraph 9.2), compared to 78 new residential buildings approved

to be built in 2012 and 69 new residential buildings approved in 2011 (ABS).

The New South Wales government has introduced a number of measures (including the New HomeGrant, First Home Owner Grant (New Home) and First Home-New Home stamp duty exemption (for

first home owner) to stimulate the construction of new homes.

The GEPR notes that based on the Business Audit undertaken by Gunnedah Shire Council, there are

11 builders present in Gunnedah (paragraph 17.2); however, the GEPR notes that there are a

number of building companies and contractors from Tamworth that are also supplying into the

Gunnedah area.

The availability of residential land outside the Estate means that there will be no material impact

upon competition in the market for the provision of residential (new home) building services due to

the proposed conduct.

Benefits from Conduct

Consistency in key design features

The Estate is to be a master planned community with key design concepts being:

1. Varied but complementary housing types; and

2. The maintenance of consistency and integrity of the design of the Estate through to the

completion of the Estate.

Departure from these design features might cause purchasers of land in the Estate (who have

purchased land in reliance on said design features) a loss of amenity and/or financial loss. Packagingland and residential building works together into a "house and land package" is believed to be the

best way that the design integrity of the Estate can be maintained for the benefit of purchasers in

the Estate.

Whilst adhering to the key design features of the Estate, it is proposed that approximately 90 varied

but complementary building designs will be available for purchasers. The wide range of building

designs not only provides purchasers with choice but it also means that there will be a variation in

housing styles within the Estate, thus minimising repetition which could result in a loss of amenity to

purchasers.

Restriction of construction of duplexes within the Estate

The Applicant proposes to designate certain lots within the Estate for single residences only and to

allow the construction of duplexes only upon certain lots.

Covenants restricting the construction of duplexes are not necessarily effective. Clause 1.9A(1) of

the Gunnedah Local Environment Plan 2012 provides:

"For the purposes of enabling development on land in any zone to be carried out in accordance withthis Plan or with a consent granted under the Act, any agreement, covenant or other similarinstrument that restricts the carrying out of that development does not apply to the extent necessary

t-o serve that purpose."

This provision has the effect of allowing covenants to be overridden by subsequent developmentconsents. In Lennard v Jessica Estates Pty Limited [2008] NSWCA 121 it was held that a restrictivecovenant was rendered ineffective by a clause in the relevant local environment plan, enacted undersection 28 of the Environmental Planning and Assessment Act 1979 (NSW) that said that any

agreement or instrument prohibiting a land use permitted under the LEP does not apply to theextent necessary to allow that use to occur.

The consequence of this is that purchasers of land benefited by a restrictive covenant cannotassume that the covenant will be enforceable. This disadvantages purchasers who have purchased in

reliance upon said covenant and who may suffer financial loss and/or loss of amenity by theconstruction of a duplex on adjoining land. Furthermore, the construction of duplexes upon land notdesignated accordingly may place a greater burden on infrastructure than is currently anticipated.

Construction of houses in accordance with approved engineering detail to minimise risk of damagedue to soil movement

The land on which the Estate is situated contains Class-E black soil. Class-E soil is extremely reactive

and there may be extreme amounts of ground movement as a result of soil conditions and moisturechanges. Buildings constructed on Class-E soil should be constructed in accordance with approved

engineering detail to minimise the risk of damage due to soil movement.

Construction of a house on class-E soil by an inexperienced builder may result in significant

structural damage to the house. It is important that the house is built in such a way to protect itfrom soil movement that might otherwise cause the foundations to sink, buckle or crack. The cost of

repairing damage caused by soil movement can be considerable.

It is proposed that a single builder with experience in constructing buildings on Class-E soil beengaged to undertake all residential building work within the Estate to ensure that the risk ofdamage to houses in the Estate is minimised. The builder, Fresh Constructions Pty Limited ACN 146156 863 ABN 58 146 156 863 ("the Builder"), is highly experienced in constructing buildings on land

containing reactive soils. Furthermore, the Builder's experience of building within the Estate enablesthe Builder to have detailed knowledge of the soil conditions within the Estate, allowing the Builderto accurately inform prospective purchasers of the issues associated with the land (such as thehighly reactive soil) and how said issues impact upon the construction of buildings upon the land.

Improved logistics and reduced costs

Benefits that arise from a sole builder constructing residential homes on the Estate include:

. The builder will be able to negotiate better prices from suppliers due to the volume of work

being undertaken.

Minimal relocation of plant, labour and supervision between sites on the Estate; and. Greater co-ordination of the movement of trades between the sites.

This in turn will mean greater savings for purchasers in respect of their building and associated costs.

Limited Public Detriment

Whilst noting that there will be a reduction in the number of effective competitors for theconstruction of new homes within the Estate, the availability of residential land outside the Estate

means that there will be no material public detriment arising from the proposed conduct.