Articles

For individuals with overseas assets, it has been necessary to prepare a separate Will in each jurisdiction where assets are held. If this did not occur, there was a risk of uncertainty as to whether their Australian Will would be effective and enforceable overseas. This commonly resulted in greater costs and complexity, both in implementing the separate Wills and in having the estate administered.

However, Wills executed overseas are recognised under New South Wales law because of the Convention Providing a Uniform Law on the Form of an International Will 1973 (“the Convention”). In this regard, Australia ratified this convention on 10 September 2014 which came into force on the 10 March 2015.

For a Will to have effect under the Convention a Will must be executed in a manner that complies with both New South Wales law and the Convention. While the requirements are not too dissimilar from the current requirements for executing a Will, there are some key differences. These differences are:

  • There must be two independent witnesses for signing the Will, but also a third ‘authorised witness’. The authorised witness must be a Lawyer or Notary Public.
  • The will-maker must declare their Will in the presence of the witnesses and authorised witness;
  • The authorised witness must ask the will-maker if they also wish to make a declaration regarding the safekeeping of the Will;
  • The authorised witness must complete an execution certificate, in the form set in Article 10 of the Convention and attach it to the Will. The certificate may contain the will-maker’s declaration as to where the will-maker proposes the Will be kept for safekeeping; and
  • Wills executed in compliance with the provisions of the Convention will be recognised as valid in all signatory countries, regardless of where the Will is executed, the location of assets, or primary residence of the deceased.

All possible estate administration problems may not be resolved by having an International Will, which has been validly executed. For example, anyone seeking to obtain a grant of probate of an International Will in New South Wales must still satisfy its probate requirements. Notwithstanding this, in many instances, a Will executed in accordance with the Convention, should enable a quicker, cheaper and less complicated administration of estates of persons with overseas assets.

If you have international assets, you should check with your solicitor if the country where your assets are located is a signatory to the Convention. A full list of Convention countries is available on the Convention’s website at http://www.unidroit.org/status-successions .

Notwithstanding the fact that the country where your assets are located is not a Convention country, there are still ways of managing your estate planning.

This article is for general information only and is not intended as legal advice. If you need specific help contact our office.

From 1 July 2019, the NSW Government mandated the use of eConveyancing which is the digital completion of conveyancing transactions including transferring property ownership from a seller to a buyer, to streamline the conveyancing process for buyers and sellers; lawyers and conveyancers; and financial institutions.

To conduct an eConveyancing transaction, buyers and sellers must use the service of a lawyer or conveyancer who is registered with an Electronic Lodgement

Network Operator (ELNO) provides the platform by which eConveyancing may be conducted. The first such operator was Property Exchange Australia Limited (PEXA).

For a practitioner to conduct a client’s conveyance using the electronic platform, the client must first provide written authorisation in the form of a Client Authorisation .

Through the Client Authorisation , the client expressly authorises the signing of documents on its behalf, the lodgement of documents such as transfers for registration, the financial settlement of the conveyance and anything else necessary to complete the transaction.

In conjunction with the Client Authorisation, taking reasonable steps to identify the client is a keystone of eConveyancing. The verification may be undertaken by the practitioner or may be provided by a Subscriber Agent. There are a number of commercial providers of verification of identity services.

The transition to eConveyancing by the NSW Land Registry Services has been in progress since 2013. Originally, transactions were conducted using manual processes and documents such as parties to a transaction having to attend in person to complete the transaction by the hand-over of funds in exchange for title documents followed by registration.

Under the mandate, the following documents must be lodged electronically (alone or in combination):

  • Transfers
  • Mortgages
  • Discharges of mortgage
  • Caveats
  • Withdrawals of caveat
  • Transmission applications
  • All refinancing documents.

As a result, NSW LRS cannot and will not accept these documents for paper lodgement from 1 July 2019. The Office of the Registrar General is the government agency leading the implementation of the mandate.

As it is not possible to provide a paper certificate of title in an electronic workspace for settlement, a new approach is required. Paper titles will be phased out over time, replaced with virtual digital titles.

This article is for general information only and is not intended as legal advice. If you need specific help contact our office.

Do you think that you have been treated fairly in a Will? If not, you may be entitled to make a family provision claim under the Succession Act 2006 if you are an ‘eligible person’

A family provision claim is commenced by way of an application to the Supreme Court of New South Wales for a share or a larger share from the estate of a deceased person.

You can make a family provision claim if you:

  • are an ‘eligible person’, and
  • have been left out of a will, or
  • did not receive what you thought you were entitled to receive.

A family provision claim must be commenced within 12 months of the date of death of the person whose will you wish to challenge.

An ‘eligible person’ includes:

  • the wife or husband of the deceased;
  • a person who was living in a de-facto relationship with the deceased (including same-sex couples);
  • a child of the deceased (including an adopted child);
  • a former wife or husband of the deceased;
  • a person who was, at any particular time, wholly (entirely) or partly dependent on the deceased, and who is a grandchild of the deceased or was at that particular time a member of the same household as the deceased; or
  • a person with whom the deceased was living in a close personal relationship at the time of the deceased person’s death.

Before making an order, the court will consider the following:

  • the relationship between you and the deceased person;
  • any obligations or responsibilities owed by the deceased to you;
  • the value and location of the deceased’s estate;
  • your financial circumstances;
  • whether you are financially supported by another person;
  • whether you have any physical, intellectual or mental disabilities;
  • your age;
  • your contribution to increase the value of the deceased’s estate;
  • whether the deceased has already provided for you during their lifetime;
  • whether any other person is responsible to support you;
  • your character;
  • any applicable customary law if the deceased was Aboriginal or Torres Strait Islander;
  • any other claims on the estate; and
  • any other matter the court may consider as relevant.

If you are an eligible person and you think you are entitled to make a claim on the deceased estate or you are unsure whether you are entitled to make a claim, you should contact our office.

This article is for general information only and is not intended as legal advice. If you need specific help contact our office.

Section 588FL of the Corporations Act 2001 is a very powerful section when it comes to businesses registering a security interest under the Personal Property Securities Act 2009 , and in brief, provides as follows:

  • If a secured creditor fails to register its interest on the Personal Property Securities Register (“the PPSR”) on the earlier of within 20 business days of the
  • Security agreement being created or 6 months before the debtor company is wound up, then
  • The security interest will vest in the insolvent company and the secured creditor loses its goods.

A security interest is an interest in personal property provided for in a transaction that, in substance, secures payment of money or performance of an obligation.

In the case of Relux Commercial Pty. Limited (In Liquidation) v Doka Formwork Pty. Limited [2014] VSC 570 the defendant Doka learnt the hard way what failure to register its security interest on the PPSR meant. This failure resulted in Doka losing most of the equipment is owned and had rented and delivered to Relux, due to that company going into liquidation.

The chronology of events was as follows:

  • Prior to 1 January 2014: Doka delivers most of the equipment into Relux’s possession.
  • 20 February 2014: Doka registers a security interest in its goods on the PPSR.
  • 26 February 2014: Doka delivered more equipment to Relux.
  • 31 March 2014: Doka made another equipment delivery to Relux.
  • 7 April 2014: Relux went into administration.
  • 16 May 2014: Relux was placed in liquidation.

In order for Doka to protect itself, it would have had to register its security interest within 20 business days of delivery of the first lot of equipment. As it stood, Doka was able to protect only that part of the equipment that was delivered after the security interest was registered.

The lesson to be learned from this case is to register your security interest on the PPSR as soon as possible or within the time limited by section 588FL, remembering that the time within which to register starts to run from the date that the security agreement creating the security interest is created.

To maximise your right to enforce the retention of title provisions in your trading terms, you must register the security interest that is created by your trading terms on the PPSR.

Seek professional guidance on how to protect your business assets by using the PPSR.

This article is for general information only and is not intended as legal advice. If you need specific help contact our office.

You can borrow money through your Super Fund. This is called, a limited recourse borrowing arrangement which is a specific type of borrowing arrangement that allows a Small to Medium Superannuation Fund (“SMSF”) trustee to borrow for investment purposes. To qualify, the borrowing must be established under an arrangement that satisfies the following criteria:

  • The borrowing must be used to purchase a single asset.
  • The asset must be held on trust for the SMSF.
  • The trustee must have the right to acquire the legal ownership of the asset after making one or more payments.
  • The rights of the lender, or any other person, against the trustee in relation to a default on the borrowing must be limited to the asset acquired with the borrowing.
  • The asset must not be subject to any charge other than that provided in relation to the borrowing.
  • The asset must not be replaced with another asset other than in certain specific circumstances.

This arrangement is permitted pursuant to section 67A of the Superannuation Industry (Supervision) Act 1993.

Under the limited recourse borrowing rules, the asset acquired with the borrowing must be held on trust so that the trustee of the SMSF acquires a beneficial interest in it. This means that the SMSF trustee will not be permitted to hold the legal title of the asset and that a separate trust will be required to be established to hold the asset until repayment is made. However, the SMSF will be entitled to all the income, such as rent, generated by the asset.

Once the loan has been repaid the legal title of the asset can be transferred to the SMSF.

Once an asset has been acquired under this type of arrangement the trustee will not generally be permitted to replace that asset with another asset other than in certain limited circumstances. For example, if an SMSF trustee acquired 100 shares in a company it would not be permitted to sell those shares and then use the proceeds to acquire shares in a different company under the same borrowing arrangement. In this case, the trustee would need to use the proceeds to extinguish the loan and then establish a new borrowing arrangement to acquire the shares in the different company.

The Federal Government has confirmed that a superannuation trustee who enters into a limited recourse borrowing arrangement for the purpose of purchasing an asset is to be treated as the owner of the asset for income tax purposes.

Before setting up a limited recourse borrowing arrangement an SMSF trustee should review and understand the risks involved.

Seek professional guidance should you be considering this kind of arrangement.

This article is for general information only and is not intended as legal advice. If you need specific help contact our office.

If you’re about to receive an inheritance from an estate and you’re on an age pension, your life and your finances may be about to change.

The Age Pension
Eligibility for a pension and the amount of that pension is measured against your assets and your income. The test that results in the lower pension (or even no pension) will be the one that will be applied by Centrelink.

Inheritance
An inheritance can affect your entitlement to a pension. The value and nature of the inheritance is the key. Limits have been set for income and assets. If you exceed those limits, then you will not be entitled to a pension or only entitled to a part pension.

The law requires you to notify Centrelink of any changes to your financial situation within 14 days of the change. As it can take some time to finalise an estate, your receipt of the inheritance may be delayed.

Generally, you do not need to notify Centrelink about your inheritance until you receive it. As well, it is generally accepted by Centrelink that, on average, you will probably not be able to receive your inheritance for up to 12 months after the person’s death.

The 14-day period commences running upon receipt of your inheritance. If there is a delay in, you are receiving your inheritance longer than say 12 months you may need to explain the delay to Centrelink

What not to do when you receive an inheritance
None of the following tactics will work in preserving your pension entitlement.:

Ignore it

  • Some people simply don’t do anything about administering the estate and distributing it;
  • The administration of an Estate must be completed as soon as reasonably possible, especially when a Grant of Probate or Letters of Administration are involved as the Executor or Administrator as the case may be has a duty to the Court to administer the estate in a timely manner;
  • The duty is on the recipient of the pension to notify Centrelink of any change or potential change in the person’s assets or income.

Delaying

  • Delaying the inevitable does not work, for the reasons set out above.
  • Also, Centrelink is aware of this strategy.

Make a Gift

  • Giving away your inheritance doesn’t work because of what is known as the Centrelink deprivation rules;
  • It means that, while you may give it away, Centrelink says you have still got it and it will still be part of your assessable assets for at least 5 years.
  • You are only entitled to give away $10,000.00 per year up to a maximum of $30,000.00 in the first 5 years

Refusal to accept it

  • Refusing to accept the gift does not help you either as it is the same as making a gift of it.

The purpose of the pension is to support those who do not have sufficient resources to support themselves. If you receive an inheritance which will support you, then, the need for the pension evaporates.

This article is for general information only and is not intended as legal advice. If you need specific help contact our office.

A restraint of trade clause is meant to prevent a valued employee from taking up employment with a competitor or a client following the termination of their employment.

Such clauses are common in many employment contracts. However, by operation of section 4 of the Restraints of Trade Act 1976 (NSW), restraints of trade are invalid if they are “against public policy”. It is an accepted principle of law that all restraint of trade clauses are against public policy unless they are reasonable in their geographical scope, restraint period and the enforcer of the clause has a “legitimate commercial interest” being protected by the clause.

The recent case of Quantum Service and Logistics Pty Limited v Schenker Australia Pty Limited [2019] NSWSC 2 considered the general principles of enforcement of restraint of trade provisions. That case involved an employee who ceased employment with a supplier (Quantum) who tried to take up employment with a client of the supplier (Schenker). That employee had worked on-site with the client for a number of months. Interestingly, the supplier and the client had also entered a service agreement which prevented employees of either party taking up employment with the other. In an interim judgment, Justice Robb ordered the employee of Quantum be restrained from commencing employment with Schenker on the basis that, at the preliminary stage of the hearing, the restraints of trade were reasonable in the circumstances and intended to protect the legitimate commercial interests of Quantum, namely the protection of their confidential information. Justice Robb has reserved his final judgment for the case to proceed to a final hearing and for the parties to properly prepare their cases.

The above case highlights a number of important considerations for businesses in considering the structure of their business and the terms of employment contracts. The key points to remember are:

  1. If your business has trade secrets or confidential information (which all businesses do!), you need to ensure your employment contracts are properly drafted to ensure the protection of those secrets and information;
  2. Restraint of trade clauses need to be reasonable in the circumstances (by sufficiently limiting the geographical scope and restraint period) and must be closely aligned to protect a legitimate commercial interest. It is not reasonable to stop employees from taking up employment with a competitor for no genuine commercial reason;
  3. Act quickly. If you need to enforce a restraint, enforcing it before the employee takes up their new employment provides you with more options in ensuring the restraints are properly enforced; and
  4. Review your existing employment contracts and ensure that employees who possess confidential information, trade secrets or any other information vital to your business have adequate restraint provisions in their contract.

Although restraint of trade clauses are readily determined to be unenforceable by a Court, a properly drafted restraint of trade clause is a simple and cost-effective way to protect the legitimate commercial interests of your business.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

The tort of defamation exists to protect an individual’s reputation (or in certain circumstances, a company’s reputation) by restricting the conveying of false information through any written medium, photographs, broadcasts and the internet which are likely to injure the person’s (or company’s) reputation or standing in the community. However, an action for defamation must also be balanced against an individual’s right to freedom of speech. There is no “one size fits all approach” to applying the law of defamation. Such cases are not simple and are heavily determinant on the individual facts of each matter.

An action for defamation is only sustainable against an individual or a company with the equivalent of less than 10 full-time employees. If your company has more than the equivalent of 10 full-time employees, an action for defamation may not be accepted by a Court.

One could argue that the law of defamation stifles free speech and muzzles the inquisitive journalist. On the contrary, it puts the onus on the journalist to get their facts right before publication. The clarion call of “publish and be damned” is no defence in an action for defamation.

Defamation can be damaging to your reputation and may have implications on your work or profession or business. While the law protects your reputation and can restrict defamatory material from being published, the damage may already be done once defamatory material has been published and left unattended.

So, in an ever-changing technological world, where more businesses are moving their operations online and using social media to promote their business, the tort of defamation is a consistent risk for individuals and small businesses. Consumers have instant access to businesses online ventures and social media. Negative online commentary is all too common and is a simple way for consumers to provide almost instant feedback to businesses.

But what can you do if you think you have been defamed whether online or otherwise.

  1. Respond to the comment and confirm any facts relevant to the matter. If you can reach a commercial solution with your customer this will demonstrate your commitment to customers. If you resolve the complaint online, your other customers will see that commitment!
  2. For defamatory material published on social media and if the review/recommendation/comment/post is false, fraudulent or without merit, you should report it to the social media provider. The review/recommendation/comment/post may be removed by the provider.
  3. If your other clients are willing, have them provide you with positive reviews. It’s your overall rating that matters!
  4. If none of the preceding steps works, do not dally, you must seek urgent legal advice as a limitation period for commencement of an action in Court and there are certain elements that you must be able to prove.

Remember, although a Court may award damages to compensate you for the damage suffered to your reputation, the best solution may be to deal with the alleged defamation using the above steps. Given the length of time for court matters to be heard, an award of damages will not be granted until long after the defamatory materials have been published and no doubt that will bring further cost, expense and stress.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

These terms may be a mystery to the inexperienced. Tag-along rights are a contractual obligation used to protect a minority shareholder (usually in a venture capital deal). If a majority shareholder sells their stake, then the minority shareholder has the right to join the transaction and sell their minority stake in the company.

Tag-along rights effectively oblige the majority shareholder to include the holdings of the minority holder in the negotiations in order to facilitate the possibility that a tag-along right is exercised.

Drag along rights on the other hand enables a majority shareholder to force a minority shareholder to join in the sale of a company. The majority owner doing the dragging must give the minority shareholder the same price, terms, and conditions as any other seller.

This is designed to protect the majority shareholder. Because some buyers are only looking to have complete control of a company, drag-along rights help to eliminate minority owners and sell 100% of a company’s securities to the buyer.

Such control over transfer of shares implies that, as a general rule, traditional shareholders rights on transfer of shares, such as rights of first refusal, need to be recognised to the management after deep consideration of the particularities of each transaction, as they may jeopardise an exit opportunity for the private equity (PE) investor.

Tag-along rights are appealing to PE companies when they hold a minority stake in a company and do not seek to become a majority shareholder. Such rights allow them to co-sell their stake, when the majority shareholder or the key directors/officers decide to sell theirs, without being obliged to stay in the company with a new third party or without the key individuals who manage (and/or control) the company. These rights are of key importance in case that, for any reason, the PE company is not prepared to exercise its rights of first refusal.

When a shareholder seeks to sell its interest to a third party, tag-along rights enable a PE investor to co-sell its stake in the company under the same conditions as the selling shareholder.

So that these rights may be better enforceable in cases of dispute it is considered advisable to include them in a company’s constitution. To ensure the enforceability of these agreements in cases of disputes, it is advisable to always consider their inclusion in the Constitution of a company.

These rights should be considered when you propose to invest in a company. When in doubt, consult your legal advisor. Good luck

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

Case study – John and Bill
John and Bill are neighbours. There is currently no fence separating John and Bill’s properties. A fencing contractor has told John that a retaining wall needs to be built under the fence to support any dividing fence between the properties. John would like to know if he can ask Bill to pay for half the cost of the retaining wall as well as the fence and whether he needs to get approval from his Local Council to build the retaining wall.

Under the Dividing Fences Act 1991 (NSW) the owners of neighbouring properties must equally share the cost of building a sufficient dividing fence between their properties. A retaining wall is part of a “dividing fence” if it is necessary for the support and maintenance of the fence.

What is a retaining wall?
A retaining wall is a structure to support or hold back earth. A retaining wall is often found between properties where the ground is at different levels, and:

  1. provides structural support for the higher property;
  2. maintains the surface of the higher property at its present level;
  3. forms an essential part of the higher property; and
  4. prevents the movement of land between the higher and lower properties.

Who should pay?
Both you and your neighbour would usually equally share the cost of building, repairing or maintaining a retaining wall if the wall is necessary for the support and maintenance of a dividing fence between your properties.

If the retaining wall does not support and maintain the dividing fence the situation is different. In this case, the cost of repairing and maintaining the retaining wall will be at the cost of the lower property owner. The responsibility for the cost of building, repairing or maintaining a retaining wall may be determined by looking at various factors such as:

  1. the reason why building or repairing a retaining wall is necessary
  2. the actions of the parties involved and
  3. what is reasonable in the circumstances.

If you are not sure whether a retaining wall is necessary to support or maintain the dividing fence, you should seek legal advice.

What if we cannot reach an agreement?
It is important to talk to your neighbour if you have a problem about a dividing fence.

If you and your neighbour cannot reach an agreement about who should pay for the retaining wall you can try mediation. Mediation is an informal process, where an independent person (the mediator) can help people resolve their dispute.

If after trying mediation, you and your neighbour still cannot reach an agreement, you should serve your neighbour a Fencing Notice. If after one month of serving the Fencing Notice, you and your neighbour still cannot reach an agreement, either of you can apply to the Local Court or the NSW Civil and Administrative Tribunal (NCAT) for Fencing Orders.

If you go ahead and build the fence without an order you cannot legally pursue your neighbour for half of the cost. The court order protects you in this regard.

Council approval
Amongst other requirements, if the retaining wall is higher than 600 mm and it is built on the boundary of two properties, you will need to lodge a development application with your local council for development consent.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

In most peoples’ minds, Bankruptcy conjures up images of financial ruin and oblivion. The laws of bankruptcy were not legislated for such a purpose. In fact, those very laws were designed to give those persons who, through choice or compulsion, go bankrupt, an opportunity to “clear the slate” and start over. Whether you like it or not, Bankruptcy does have a social stigma.

The objectives of bankruptcy include the following:

  1. The distribution of the bankrupt’s property to creditors;
  2. Relief to the bankrupt from the burden of paying creditors’ debts and providing an opportunity for a fresh start;
  3. To ensure an independent investigation is undertaken into the bankrupt’s dealings, transaction, property and affairs. This investigation should identify the causes of bankruptcy and any improper conduct;
  4. To act in the public interest by preventing a reckless bankrupt from continuing to trade.

Sometimes people go to extraordinary lengths to avoid bankruptcy and if it can be avoided by making arrangements with creditors to repay debt by a structured arrangement which does not cost an arm and a leg to facilitate, then that is a preferable option.

The downside of going bankrupt is the fact that you remain bankrupt for a minimum of 3 years and maybe longer if any objection filed opposing your discharge is accepted by your Trustee.

There are numerous debt restructuring companies out there who make money from trying to facilitate for you to re-structure your creditor arrangements. If you need additional advice in relation to your options when faced with debts that appear overwhelming consult a specialist solicitor who will give you impartial advice as you are paying for that advice.

Bankruptcy is administered under the Federal Bankruptcy Act 1966 .

For a person to be made bankrupt, a creditor must first serve a Bankruptcy Notice which is based upon the allegation that the person has committed what is called “an act of bankruptcy”. The debtor has a right to satisfy the Bankruptcy Notice within a certain period of time by payment of the debt claimed. If the debtor fails to do so, the creditor is entitled to file a Creditor’s Petition for the issue of a Sequestration Order which is the order which commences the bankruptcy.

The Bankruptcy Notice is issued by the Official Receiver in Bankruptcy on the application of a creditor. Without setting out what these are in detail, suffice to say they are actions which are designed to defeat or delay claims by your creditors against any assets you may have.

You can bankrupt yourself if you choose by the filing of a Debtors’ Petition. Before filing a Debtor’s Petition, a debtor can present a declaration of an intention to present a Debtor’s Petition, but cannot do so if a Creditor’s Petition has already been presented against the debtor.

Once you are made bankrupt all proceedings against you to recover debts issued by creditors cease.

The effect of the Official Receiver accepting the declaration is to freeze enforcement of debts by creditors during the stay period which is 21 days commencing from acceptance of the declaration.

There are a number of ways to come to terms with your creditors if you do get into trouble. These are:

  1. Personal Insolvency Agreements under Part X of the Bankruptcy Act. This process is to sanction arrangements between a debtor and their creditors.
  2. Debt Agreement. This is a binding agreement between a debtor and their creditors where creditors agree to accept a sum of money which the debtor can afford.

Both of the above agreements occur outside the bankruptcy process and protect the debtor from the stigma and regulation of Bankruptcy. However, under a personal Insolvency Agreement, the debtor must put their affairs in the hands of a Controlling Trustee, who makes the arrangements.

Before venturing down the Bankruptcy path get legal advice so you have the opportunity of making an informed decision about your financial future which will also include your whole family and do not leave it too long before doing so. The sooner your financial problems are dealt with the less painful the solution will be.

It’s not just you; it can happen to anyone, so act early.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

Defamation exists to protect an individual’s reputation (or in certain circumstances, a company’s reputation) by restricting the conveying of false information through any written medium, photographs, broadcasts and the internet which are likely to injure the person’s (or company’s) reputation or standing in the community. However, an action for defamation must also be balanced against an individual’s right to freedom of speech. There is no “one size fits all approach” to applying the law of defamation. Such cases are not simple and are heavily determinant on the individual facts of each matter.

An action for defamation is only sustainable against an individual or a company with the equivalent of less than 10 full-time employees. If your company has more than the equivalent of 10 full-time employees, an action for defamation may not be accepted by a Court.

One could argue that the law of defamation stifles free speech and muzzles the inquisitive journalist. On the contrary, it puts the onus on the journalist to get their facts right before publication. The clarion call of “publish and be damned” is no defence in an action for defamation.

Defamation can be damaging to your reputation and may have implications on your work or profession or business. While the law protects your reputation and can restrict defamatory material from being published, the damage may already be done once defamatory material has been published and left unattended.

So, in an ever-changing technological world, where more businesses are moving their operations online and using social media to promote their business, the tort of defamation is a consistent risk for individuals and small businesses. Consumers have instant access to businesses online ventures and social media. Negative online commentary is all too common and is a simple way for consumers to provide almost instant feedback to businesses.

But what can you do if you think you have been defamed whether online or otherwise.

  1. Respond to the comment and confirm any relevant facts. If you can reach a commercial solution with your alleged defamer. This is, by far, the least expensive solution. If you resolve the complaint online, your other customers will see that commitment!
  2. For defamatory material published on social media and if the review/recommendation/comment/post is false, fraudulent or without merit, you should report it to the social media provider. The review/recommendation/comment/post may be removed by the provider.
  3. If your other clients are willing, have them provide you with positive reviews. It’s your overall rating that matters!

A claim in defamation is not straightforward. For example, a Victorian man successfully sued Google in 2012 claiming that a search of his name brought up stories about an unsolved shooting causing damage to his reputation and leading him to be ostracised in his migrant community.

If it can be proven that you have been defamed, the court may award you damages and compensate you for the damage done to your reputation resulting from the defamatory statements or illustrations.

Before January 2006, the law governing actions in defamation varied from state to state across Australia. From 1 January 2006, the Uniform Defamation Laws were implemented to ensure continuity across all states and territories. The uniform laws define defamation as:

  • The publication of any false imputation concerning a person, or a member of their family, whether living or dead, by which (a) the reputation of that person is likely to be injured or (b) they are likely to be injured in their profession or trade or (c) other persons are likely to be induced to shun, avoid, ridicule or despise them; and
  • Publication of defamatory matter can be by (a) spoken words or audible sound or (b) words intended to be read by sight or touch or (c) signs, signals, gestures or visible representations, and must be done to a person other than the person defamed.

The legislation which applies in New South Wales is the Defamation Act 2005 (“the Act”). The Act came into force on 1 January 2006. The Act relates to the tort of defamation at general law.

Prior to commencing defamation proceedings, the relevant jurisdiction to hear the matter must be correctly identified. Once the jurisdiction of the court has been effectively invoked, it has ‘accrued jurisdiction’ to determine the whole ‘matter’ or controversy between the parties.

The defences available include the defence of justification, absolute privilege, honest opinion, qualified privilege, offer of amends, illegality and triviality. The Act preserves the defences available for defamation at general law and in some cases extends the defences available including justification, absolute privilege, qualified privilege and comment.

If none of the preceding steps works, do not dally, you must seek urgent legal advice as a limitation period for commencement of an action in Court and there are certain elements that you must be able to prove.

Remember, although a Court may award you damages to compensate the damage suffered to your reputation, the best result may be to deal with the alleged defamation using the above steps. Given the length of time for court matters to be heard, an award of damages will not be granted until long after the defamatory materials have been published and no doubt that will bring further cost, expense, and stress.

Please call us if you have any questions in relation to this article.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office .

Although the changes to the Act came into force on 15 March 2015, few people understand it has been changed and what effect it has on their rights when entering into a residential building contract with a builder.

What are the Key Changes?
Statutory Warranties:

  • The Act previously required work to be performed “in a proper and workmanlike manner” – the legislation now requires that work is to be “done with due care and skill” .
  • The term “structural defect” is replaced with the concept “major defect” in order to cover significant defects that may not be structural in nature: in other words, the range of defects covered by the former “structural defect” enforcement regime has broadened generally.

A “major defect” is defined in section 18E, which deals with breaches of statutory warranties by the builder, of the Act generally as:

A defect in a “major element of a building” that has been caused by defective design, defective or faulty workmanship, defective materials, or a failure to comply with the structural performance requirements of the National Construction Code (or any combination of these), and that causes, or is likely to cause:

  1. the inability to inhabit or use the building (or part of the building) for its intended purpose, or
  2. the destruction of the building or any part of the building, or
  3. a threat of collapse of the building or any part of the building.

A “major element of a building” is defined generally to mean:

  1. An internal or external load-bearing component of a building that is essential to its stability, or any part of it (including but not limited to foundations and footings, floors, walls, roofs, columns and beams), or
  2. A fire safety system, or
  3. Waterproofing, or
  4. or any other element prescribed by the regulations.

The limitation period for commencing proceedings for an alleged breach of a statutory warranty is now 6 years for a major defect, and 2 years for non-major defects.

The shorter limitation period for non-major defects has been the subject of protests by owners’ corporations because of the tighter time frame for claims to be made on defects that previously fell within the meaning of “structural defect”.

Defences
The defences available to a builder, to a claim for breach of a statutory warranty have been expanded. It is a defence for the builder to prove that the deficiencies of which the owner complains arise from:

  1. Instructions given by the owner, contrary to the advice of the person who did the work (being advice given in writing before the work was done), or
  2. Reasonable reliance by the builder on written instructions (given before the work was done or confirmed in writing afterwards) by a professional acting for the owner, who was independent of the builder.

Duties of Claimants
A person relying on the benefit of a Statutory Warranty now has obligations:

  • to mitigate loss (to reduce the loss and not to increase it);
  • to make reasonable efforts to give written notice to the builder within 6 months after the breach becomes apparent;
  • not to unreasonably refuse a builder or sub-contractor access to the site to rectify any defective work;
  • and failure to comply may be taken into account by a Court or Tribunal.

These provisions increase the options available to builders to defend claims.

Extension of Statutory Warranties
The statutory warranties are implied in all contracts for the construction of residential buildings.

This increases the chances that sub-contractors will be liable to the builder or principal contractor for a breach of the statutory warranties.

Resolution of Building Disputes
The changes include broadening the rectification orders that can be made by the relevant tribunal to allow for staged rectification with deadlines by which specified works are to be completed. Builders are able in certain circumstances to apply to have these deadlines extended.

The amendments require courts and tribunals to have regard to having the party responsible for the defective work carry out rectification of the defective work.

If the fault lies with a sub-contractor, that contractor should attend to the rectification, rather than it being the responsibility of the builder.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

Corporate Marriages can work, but when they don’t you need to have a well-prepared Shareholders Agreement, rather than a divorce lawyer.

If you are thinking of setting up a company with other people and then using that company to operate a business, it is essential that you have a Shareholders Agreement in place from day one. The Shareholders Agreement is really like a corporate rule book for:

  • How the company will run;
  • How the profits of the company will be divided;
  • How decisions will be made; and
  • What happens in a deadlock and the directors or shareholders just can’t agree.

You may not look at the rule book from play to play but when you don’t agree with a call, it is the rule book that has the final word. That is how a shareholders’ agreement works too.

You and your fellow shareholders/directors will make the day to day decisions about the company and its business, but at some point, you may not necessarily agree with each other’s ideas. That is when you can refer to the shareholders agreement for a ruling.

One party to the marriage wants out
A shareholders’ agreement should always set out the rules for when a shareholder wants to sell their shares. The shareholder can either sell to the remaining shareholders or to a third party. It is usual for a shareholders’ agreement to set out pre-emptive rights. That is, if a shareholder wants to sell to a third party it must first offer its shares to the other shareholders. This right of pre-emption is a protection for the remaining shareholders so that they can keep the same “partners” rather than introducing a new person i.e. the third party who buys the shares.

However, if the other shareholders don’t want to buy the shares, the shareholder wanting to sell can then sell to a third party.

Irreconcilable Differences – You have a deadlock
When the relationship between shareholders breaks down and the company cannot be run effectively, you have a deadlock.

This is when the shareholders agreement is invaluable. In a deadlock situation, the shareholders agreement will set out the rules under which a shareholder can request the other shareholders to buy their shares and allow them to leave the company.

This may be a mandatory provision so that the other shareholders have to buy them out.

But if the shareholders no longer want to be involved in the company and they just want to get out of the relationship altogether, they can apply to the court for a winding up order and the company will be wound up and deregistered. A liquidator is appointed to make sure all the debts are paid and then any surplus is distributed to the shareholders in accordance with the shareholders agreement.

The decision is in your hands
Just remember, the shareholders of a company are the owners. They can make decisions every day if they agree to, without ever having to look at the shareholders agreement. They can even, if they all agree, make decisions that contradict the shareholders agreement.

It’s only when there is a disagreement that you need to look at the rule book – and when things have reached that point you had better be sure the rules work.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

The public will identify a certain quality and image with goods and services bearing your trademark. If you are thinking about a new product or service and you want to establish an image for it, you should also be thinking about a distinctive trademark under which to market.

It is important to note, however, that not all trademarks can be registered. A trademark is not registrable if it is not capable of distinguishing your goods or services from the same or similar goods or services of other traders in the marketplace.

Every-day language and vocabulary should remain available for all to use. Granting monopoly rights in words such as geographical names, common surnames and trade expressions would deprive others of their right to use these words in the relevant industry.

The following points are examples of words or phrases used on their own, i.e. not with accompanying logo or other words. These are types of words that other traders are very likely to need to use and consequently would be very difficult to register as trademarks:

  1. Descriptive words and phrases on their own e.g. “THE BEST APPLES”. Obviously, other apple farmers have a legitimate need to be able to say that they grow the best apples too.
  2. Short combinations of numbers and letters (such as QL 9 or F-55 etc) are often used as serial numbers. Combinations of two letters (such as VP or HS) are commonly used as initials. Both would face significant difficulty in achieving registration. Common acronyms (such as CD-ROM or LED) or abbreviations (such as AUTO BILLPAY) are also difficult to register.
  3. Common surnames such as “JONES” or “SMITH” would have problems achieving registration, as there are many Jones and Smiths in the Australian population who need to be able to use their name in relation to the goods or services they are providing. However, an unusual surname such as “GREGAN” or RUDNICKI has a higher likelihood of achieving registration.
  4. Words or phrases that other traders would need to use can often be registered if they are accompanied by or combined with other unique words or symbols. For example, the phrase “SYDNEY PLUMBING” would be difficult to register on its own.

Obviously, you don’t want to start using a trademark that another trader is already using on goods or services that are similar to your own. This could lead to customers being confused between the two trademarks and could even lead to the other trader taking legal action against you.

Even if you meet the registrability requirements and your application is examined and accepted, registration is not guaranteed. Every accepted application is advertised in the Official Journal of Trademarks, after which there is an opportunity for others to oppose registration of your trademark.

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

More often than not, directors, particularly those operating in Small to Medium Enterprises (“SMEs”), are not aware that they could be personally liable for their company’s tax debts in certain circumstances. This lack of awareness unnecessarily exposes assets outside of their company that are owned by the director personally, including the family home.

Historically the Director Penalty Notice (“DPN”) legislation was first introduced in 1993 when the Australian Taxation Office (“ATO”) gave up its statutory priority for the then Group Tax, now Pay-As-You-Go (“PAYG”).

When DPNs were introduced the Superannuation Guarantee Charge (“SGC”) was only 3%. It is now 9.5%. The view is that an employer should not use employee funds as working capital for the company. This is becoming more evident in the recovering actions the ATO is commencing.

DPNs have always imposed a personal liability against directors for unpaid PAYG. However, such exposure could not commence being recovered (or enforced) against the director unless the ATO had issued a DPN to them. Such DPNs gave directors 21 days to effectively avoid personal liability if either:

  1. They appointed a Voluntary Administrator; or
  2. They appointed a Voluntary Liquidator; or
  3. Otherwise arranged for payment of the liability.

The ATO has been and continues to be concerned about the level of phoenix activity, as well as employers not complying with their SGC obligations. As a result, on 29 June 2012 changes were made to the DPN legislation. Some changes are still not well understood by professionals and directors, including the fact that certain changes operate retrospectively.

The ATO can issue a DPN in respect of either unpaid PAYG or SGC (for SGC amounts after 30 June 2012). The ATO must still issue a DPN and wait until the expiration of 21 days from the issue date in order to be able to commence proceedings. Personal liability will not occur if, within 21 days of the issue date (not the date of receipt), the directors comply with any of the above conditions.

However, where 3 months or more have elapsed since the due date and the PAYG or SGC liability remains both unreported and unpaid, then there is no relief from personal liability by subsequently placing the company into Voluntary Administration or Voluntary Liquidation. This is known as the “lockdown rule” and has been put in place to ensure that directors are at least reporting their obligations so the ATO knows how the debt is accumulating. It is now more critical than ever that company’s report their obligations on time, even if they may not be in a position to necessarily pay the liability.

Importantly new directors being appointed to an SME should be aware that they can become liable under a DPN for unpaid liabilities which were due prior to their date of appointment. So, make sure you understand what you are getting yourself into!!!

This article is for general information only and is not intended as legal advice. If you need specific help, please contact our office.

After a couple of months of planning, we are delighted to announce the launch of our new website. We hope you like its fresh new look.

We’ve designed the website to allow you to find the information you need quickly and easily.

We will continue to publish useful information about our work and various legal issues, so please do check back with us for updates.

We value your opinion
What do you think of our new website? We welcome your comments and feedback so please feel free to contact us to let us know what you think.

Suggestions for new information or topics are also very welcome.

Many thanks for your ongoing support and we look forward to hearing from you!

Joseph Grassi & Associates

Do you have more questions? Get in touch to arrange an initial consultation with us

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