Everingham Solomons are still accepting applications from Tamworth, Quirindi, Gunnedah or Manilla students for the Sir Adrian Solomons Memorial Law Bursary.
The Sir Adrian Solomons Memorial Law Bursary has long provided financial assistance for the successful applicant during their first year of university as well as an opportunity to gain valuable paid work experience in our offices periodically throughout the duration of their studies.
This year, for the first time Everingham Solomons will also be making a cash donation to the school of the successful applicant to assist in maintaining the excellent educational standards that our region can offer.
All Principals of local High Schools have been contacted and advised of the details. Interested students should liaise with the Principal or Careers Advisor of their school, who will assist them in making a formal application for this Bursary. Alternatively interested students can contact Monica Brooks for an information pack.
We emphasise that the selection process does not depend solely on academic merit. We appreciate that students come from a variety of backgrounds and accordingly the selection process concentrates on the attributes of the student as a whole, rather than solely academic achievement.
The Bursary has gained widespread interest since its inception and continues to provide a valuable opportunity for current Year 12 students wishing to pursue a legal career. The Bursary is also open to students currently undertaking a gap year who will be commencing university study in 2019.
Everingham Solomons view the Bursary as a continuing commitment to young people in the communities of Tamworth, Quirindi, Manilla and Gunnedah and we encourage interested students to apply. Applications will be accepted until 28 September 2018.
Everingham Solomons are pleased to announce that once again a Tamworth, Quirindi, Gunnedah or Manilla Year 12 student wishing to undertake university study in Law will have a valuable opportunity to receive the benefits of our Law Bursary.
The Sir Adrian Solomons Memorial Law Bursary has long provided financial assistance for the successful applicant during their first year of university as well as an opportunity to gain valuable paid work experience in our offices periodically throughout the duration of their studies.
This year, for the first time Everingham Solomons will also be making a cash donation to the school of the successful applicant to assist in maintaining the excellent educational standards that our region can offer.
All Principals of local High Schools have been contacted and advised of the details. Interested students should liaise with the Principal or Careers Advisor of their school, who will assist them in making a formal application for this Bursary.
We emphasise that the selection process does not depend solely on academic merit. We appreciate that students come from a variety of backgrounds and accordingly the selection process concentrates on the attributes of the student as a whole, rather than solely academic achievement.
The Bursary has gained widespread interest since its inception and continues to provide a valuable opportunity for current Year 12 students wishing to pursue a legal career. The Bursary is also open to students currently undertaking a gap year who will be commencing university study in 2019.
Everingham Solomons view the Bursary as a continuing commitment to young people in the communities of Tamworth, Quirindi, Manilla and Gunnedah and we encourage interested students to apply. Applications will be accepted until 28 September 2018.
An easement is, put simply, the right of one landowner to use land belonging to another.
In the recent Supreme Court case of Pullen v Smedley, the court was asked to take a close look at the rights and obligations of rural landholders affected by easements.
Pullen had a particular type of easement known as a right of way across Smedley’s farm. It was Pullen’s only way of accessing the main road. Along the right of way there were five sets of gates designed to allow cattle to be rotationally grazed around Smedley’s farm.
A dispute arose because Smedley wanted the gates to be kept shut, whereas Pullen wanted them open so he didn’t have to get in and out of the car ten times before he hit the main road.
As is often the case the neighborly relationship broke down and a number of other issues were raised. Pullen complained about the Smedley’s cattle grazing the right of way and Smedley complained about Pullen constructing a gravel road along it without approval and using fill containing asbestos.
The court, after considering the issues, sided mostly with Smedley, holding that:
It was a trespass for Pullen to construct a substandard road without approval and the dumping of asbestos constituted an offence under environmental legislation.
The fact that Smedley’s cattle grazed and crossed the right of way was not an actionable interference, so the grazing could continue.
Neither the presence of the gates along the right of way, nor the insistence that they be kept shut, constituted any real or substantial interference with Pullen’s use of the right of way.
Accordingly, like many before them, Pullen was sternly ordered to ‘leave the gate as you found it.’
If you have any enquiries relating to rural property, contact Everingham Solomons because Helping You is Our Business.
Up to the late middle ages, business was pretty steady. One family owned a cow, another owned a goat, there was mutual jealousy and so they were swapped. In time, money was used to facilitate more complex exchanges. All in all, relatively few people were involved and there wasn’t a huge need for capital.
Around the 1600s though, people started exploring the world. Trade followed exploration and trade was very profitable so naturally the great families of the era liked to keep it to themselves.
However, there were two essential problems:
firstly, intercontinental explorers were thin on the ground and trade required the wealthy to give some bold upstart a great deal of money and send him to some remote corner of the world; and
secondly, trade exploration required a lot of capital and given the risks, often more than one family was willing to contribute on their own, so there was a need for joint investment from unrelated parties.
A system was needed to record who was trustworthy and who held whose money, so the monarch assumed the right to allow these early joint stock companies to operate. One of the earlier companies to receive a Royal Charter was the British East India Company which developed a reputation for oppressing India over a few centuries, so they changed their name to the Honourable East India Company to clear things up.
Through the colonial period, trade increased nations’ GDP which even the royal families saw as a good thing so slowly the regulation of companies was lowered and stock certificates came to be traded amongst progressively more common people.
The industrial revolution increased business size and technicality to unprecedented levels and the essential problems were heightened:
investors didn’t have the foggiest understanding of Carnegie’s Steel or Rockefeller’s oil, and while they didn’t like these risks, they didn’t want to forgo their profits either; and
companies had become so big, that they required the continual diversified funding of a large number of investors to continue expansion and operation.
Thus emerged the concept of limited liability. To get people to invest it was seen as necessary to create a law that:
separated the shareholders from the company itself; and
provided that shareholders could only be liable for the company’s risks up to the amount of share capital they had initially purchased.
That remains the essence of a limited liability company today, and explains why a right to sue a company does not include a right to sue its directors or shareholders. Without the rule, which sometimes seems harsh, our economy could not have developed as it has.
If you have any commercial law enquiries, contact Everingham Solomons because Helping You is Our Business.
A company is its own legal entity. While it doesn’t have a pulse, just like a person, a company can enter into contracts, incur debts, sue and be sued in its own name.
The directors of a company however must be living, breathing people. They are the people that control the company. Although the company is able to do things in its own name, it does so at the will of the directors.
Because a company is a separate entity from the directors that guide it, normally a company’s debts are repaid only from the company’s assets. The company’s creditors do not have access to the directors’ personal assets to repay the company’s debts. Understandably, this causes frustration for the creditors where the company is broke but its directors appear wealthy.
One of the few exceptions to this rule comes from section 588G of the Corporations Act which makes it an offence for a director to causes a company to incur a debt knowing that the company cannot repay it. The offence is known as insolvent trading.
If a director causes or allows the company to trade whilst insolvent , the creditor, the company liquidator, or ASIC can sue the director personally to have the director repay the debt either to the creditor or the company.
The proceedings against the company director are not only compensatory. They can be criminal in nature as well. ASIC has the power to prosecute directors for insolvent trading with the penalties including fines up to $220,000 and imprisonment for 5 years. The director can also be disqualified from acting as a director in the future.
A word of warning however: Insolvent trading cases are relatively rare. They are legally complex and expensive to pursue. Very few company liquidations result in insolvent trading prosecutions.
The practicality of dealing with companies is that creditors should be diligent in investigating the company’s creditworthiness and should often take written guarantees from the directors or shareholders behind the company.
If you have any commercial litigation enquiries, contact Everingham Solomons because Helping You is Our Business.
Forge was a company in the business of building power stations and had contracted with the Western Australian government to build one at Port Hedland. Forge leased four turbine generators from General Electric and put them in the power station.
Shortly after the turbines were installed, Forge went broke and its liquidator took the generators to sell. General Electric, as the owner, appealed to the court. Forge’s liquidator argued that the lease fell within the auspices of the Personal Property Securities Act (PPSA) which required such leases to be registered. As the lease was not registered, upon liquidation the PPSA provides that title to the leased goods passed to the liquidator.
Of course, General Electric didn’t want to give up the turbines and argued that the PPSA didn’t apply. One of the arguments was that the generators were fixed to the land, rather than being a good detachable from the land (which would have excluded the arrangement from the PPSA).
On that issue the court looked at the usual matters that separate a good (an item separate to land) from a fixture (an item that becomes part of the land, like a house). The court looked at the extent to which the generators were bolted down, plumbed in and the purpose for which they were placed on the land. The court concluded that they were goods rather than fixtures and accordingly that the PPSA applied. General Electric lost the generators.
The case highlights the problems that arise in leasing and financing goods, particularly goods that may become fixtures. Semi fixed plant like stock yards, pumps, fuel tanks, fit-out items, storage containers, and large stationary machinery are pressing examples.
If there is any doubt as to whether a particular piece of plant is a fixture, the secured party should register a PPSA interest and also have the mortgagee of the land disclaim any interest in the plant.
If you need help with any commercial leasing or financing arrangements, contact Everingham Solomons Solicitors because Helping You is Our Business.
Security agreements are a safety mechanism for business. The most well-known security agreement is a mortgage. A mortgage is commonly applied to land. The essence of a mortgage is that if you don’t repay the bank, they can sell your land to repay themselves.
But security agreements of a similar effect apply to personal property as well – that is, property other than land. Security agreements over personal property are important where you sell goods on trading credit or a vendor finance basis.
A well drafted security agreement will give the person wearing the credit risk a right to repossess and resell the goods supplied on credit (and often any other goods held by the debtor).
One of the beauties of the security arrangement is that it does not normally end with those original goods provided on credit. It can continue in the proceeds generated by those goods.
To take a simple example, if you sell a vehicle to a first buyer on a secured credit arrangement, and, the first buyer on sells the vehicle to a second buyer, you have a number of choices against both buyers if your security documents are in order.
Firstly, exercising your power of attorney over the first buyer’s bank accounts you may be able to directly access the cash proceeds of the sale.
Alternatively, if the first buyer took the cash out of the bank and purchased a boat with those same monies, you may be able to repossess the boat.
If the first buyer was involved in an accident and wrote off the vehicle, you may be able to access the insurance proceeds directly from the insurer.
Separately, you may be able to take and repossess the vehicle directly from the second buyer, now in possession of it.
However, your interest in the proceeds ceases once the proceeds are no longer identifiable or traceable. To take proceeds you must be able to follow an item of property directly as it is transformed into other items of property. There must be a close and substantial connection between the two pieces of property so that the property rights in the original, flow through to the subsequent.
Enforceable personal property securities are accordingly very useful to businesses. If we can help with any security arrangements, contact us at Everingham Solomons Solicitors because Helping You is Our Business.
The Personal Property Securities Act 2009 (Cth) (hereafter called ‘PPSA’) is dangerous for people (hereafter called ‘owners’) that, as part of their business, lease or loan goods to others (hereafter called ‘lessee’).
When goods are loaned or leased for a term of more than one year, or, an indefinite
term – that is any length of time, no matter how short, without a firm end date – the owner of the goods may unknowingly be creating a deemed security interest in the goods which requires registration under of the PPSA.
The problem is of course that the average person has no idea that they are creating a deemed security interest and therefore no idea of the need to register it.
Often, the first time the owner of the goods becomes aware of a problem is when someone else asserts a right to take the goods directly from the lessee. The logical exclamation from the owner is likely to be ‘But, I own it!’ Well, hard as it may be to believe, that may not matter.
The PPSA provides that where the owner doesn’t register their deemed security interest:
upon insolvency the goods become the property of the insolvent person, and therefore open to be taken by a liquidator;
upon sale to a third party, the third party takes free of the security interest, that is, free from the interest of the owner; and
in terms of priority, the unregistered security interest ranks below a registered security, which makes the property open to be taken by a secured creditor’s receiver.
Why on earth, you might ask, did someone come up with such a law? Well, it is to aid secured lending by addressing what would otherwise be problems with apparent ownership.
When a financier loans money, they do so after making an assessment of the value of assets that the borrower has. If you look like you own a lot of assets because you lease or have been loaned a lot of assets, then the rationale is that, in absence of the true owner declaring their ownership through registration, the financier should be able to access the assets if the borrower defaults.
If you need assistance with any commercial problems, contact Everingham Solomons because Helping You is Our Business.
Most of us understand the importance of reducing a commercial contract to writing.
However, even then, two parties will sometimes take different views on what the written words of the contract actually mean.
When courts investigate the meaning of words written in a contract, they call the exercise ‘contractual interpretation’. When you draft your own contract it’s important to follow the same principles that a court would apply if it were asked to interpret the words.
Firstly, the contract is considered objectively. That is, the parties themselves are not asked what they intended by the words, rather the question is what a reasonable third person, reading the contract would take the words to mean. The pre-contractual negotiations will often be irrelevant, as will the course of conduct after the formation of the contract.
Secondly, where the contract is in writing, effect should almost always be given to the written words. If a contract is silent on what is to happen in certain circumstances, then the loss lies where it falls. Courts will not add words to a contract unless it is necessary for the contract to work on the most fundamental level, or, the words to be implied are so obvious that they ‘go without saying’.
Thirdly, the contract should be read as a whole. That is, if two possible interpretations of a term arise, effect should be given to the interpretation that best aligns with the flavour of the rest of the contract.
Lastly, contracts are interpreted in the context of the relevant background. That is, if two interpretations of a contract arise, the one that seems most likely in the context should be adopted.
Merely putting something in writing is not always enough. Many commercial disagreements arise, because contracting parties have differing views on what the actual words mean. For that reason it’s always good practice to have important contracts drafted by a professional and to seek professional advice on the likely meaning of the words.
If you need assist drafting or understanding a commercial contract, contact Everingham Solomons because Helping You is Our Business.
A trust is a relationship between people (including companies) about property. One person, the trustee, holds the legal title to property for the benefit of other people, the beneficiaries. The trust itself is not a legal entity, rather just a set of accounts held by the trustee for the beneficiaries. Both the trustee and the beneficiaries may hold separate ‘personal’ property which is not subject to the trust relationship.
The development of the trust as a legal concept was all very chivalrous. About 600 years ago, before women were allowed to own property, men would go off on crusades, and bearing in mind they may never return, transferred the ownership in their property to another ‘trusted’ man to hold ‘on trust’ for their wife and infants.
Where a trust enters into commercial enterprise, the third-party deals only with the trustee. It can’t see the trust relationship or the beneficiaries. The trustee is liable to pay its debts but is entitled to reimburse itself out of the trust property for debts incurred for the beneficiaries.
As beneficiaries, people think they can’t be held liable for trust debts. They often think this because a limited liability company, acting as the trustee, stands between the beneficiaries and the debt.
That thinking however, has proven not always to be correct. In Ron Kingham Real Estate v Edgar, a corporate trustee controlled by Mr Edgar owed money to Ron Kingham. To prevent Ron Kingham being paid, Mr Edgar arranged for the corporate trustee to distribute all the trust property to the beneficiaries of the trust, predictably, Mr and Mrs Edgar.
The court found that the trustee was entitled to be reimbursed for the debt not only from the trust property (which had been depleted) but also from the assets held personally by Mr and Mrs Edgar. Through subrogation to that right, Ron Kingham was able to stand in the shoes of the corporate trustee and sue Mr and Mrs Edgar directly.
There are other decisions similar to the Ron Kingham case which are authority for the idea that the beneficiaries of all forms of trusts, including large investment trusts, can be held personally liable for trust debts.
If you have any queries relating to discretionary or fixed trusts, call Everingham Solomons Solicitors because Helping You is Our Business.
Everingham Solomons are still accepting applications from Tamworth, Quirindi, Gunnedah or Manilla students for the Sir Adrian Solomons Memorial Law Bursary.