Through the employment of staff an employer has exposure for the actions of an employee that bind the employer. This long established legal principle is referred to as Vicarious Liability.
Vicarious Liability is a liability imposed on one person for the wrongful act of another on the basis of a legal relationship existing between them. This extends to an employer being liable for the wrongful act of an employee.
An employer has long been found to be liable for the harmful acts of an employee if they are done within the course of their employment. A simple example of this would be an employers liability to pay damages in circumstances where an employee in the course of their employment has negligently caused harm to another person.
A recent High Court decision has explored the possibility that an employer could also be held responsible for the actions of an employee when they have gone beyond their normal course of employment and have engaged in intentional and criminal acts.
The recent High Court decision of Prince Alfred College Incorporated v ADC [2016] HCA 37 dealt with a horrific systematic sexual abuse of school children performed by an employed master of a boarding school.
Whilst the victim did not succeed ultimately due to limitation issues, the High Court’s decision has opened the door for liability of employers for the criminal acts of employees in certain circumstances.
In the Prince Alfred College case the High Court looked at the role the employee was appointed to, the special position he was placed in with respect to the victim and the high level of authority, power, trust and control that was delegated to the employee. This combined with the vulnerable position of the victim, presented a factual scenario whereby the occasion for wrongful conduct was as a result of the employee’s role.
Whilst this is not an absolute rule in respect of the criminal acts binding an employee it does present an indication for employers in scenarios whereby they have highly dependent and vulnerable people under their care, such as schools, hospitals, aged care facilities, disability providers and alike.
Employers need to ensure that they have proper systems and polices in place to maintain supervision of staff and ensure transparent reporting systems.
At Everingham Solomon’s we have the skills and expertise to assist you with your employment needs because Helping You is Our Business.
I know it’s hard to accept but if you think “I’m young and healthy, I’ll worry about estate planning when I’m old and sick”, you are WRONG!
You drive a car, travel overseas, and you are not permanently encased in balls of cotton wool which means it is not just granny that needs to be thinking about protecting her interests.
If you want a say in how your assets are divided after your death, you need a Will. If you don’t have one, the succession legislation will make that decision for you.
If you want to nominate the person/s who will manage your financial and legal affairs should you get stranded overseas or otherwise require assistance, you need a Power of Attorney.
If you want to nominate the person/s who will make health and lifestyle decisions, such as where you live and what medical treatment you receive, in the event that you cannot make those decisions for yourself, you need an Appointment of Enduring Guardian.
If you are mentally incapacitated, for example, suffering from paranoid delusions, or in a coma, and you don’t have a Power of Attorney or Appointment of Enduring Guardian, the Tribunal will appoint someone to assume that role.
You can only make a Will, Power of Attorney and Appointment of Enduring Guardian while you have capacity to understand the nature and effect of the document, so the time is now. Don’t wait until it is too late.
The friendly solicitors at Everingham Solomons have the knowledge and experience to assist you with all of your estate planning needs because Helping You is Our Business.
A Willmaker died in 2015 leaving a Will where she left her estate to two of her children to the exclusion of one daughter. The reasons for excluding her daughter were written into the Will with the following sentence reciting that the Willmaker considered the excluded daughter “to be a compulsive liar and her lies have hurt me severely over the years”. An application was made to the Court by the excluded daughter for the offending sentence to be excluded from the Will on the grounds that the words were of an offensive or libellous nature.
A Court has the power to omit a word or words from a Will in order to protect Court processes from abuse and to prevent unnecessary harm being caused to the subject(s) of the words but this power is to be exercised “on a case-by-case basis and with great care”.
The Court was of the view that the words used in this Will were words calculated “to wound the feelings, arouse anger or resentment in the mind of a reasonable person”. However the words used by the Willmaker did have a testamentary purpose. The words were used to explain why the Willmaker failed to make any provision for her daughter. The Court formed the view that the words used in the Will did not “represent an attempt by the deceased to use her Will as a vehicle for libel. Rather, she has sought to explain the reasons for the disposition of her estate and the exclusion of her daughter from her bounty”. Accordingly the Court refused the application to exclude the offending sentence from the Will.
The lesson to take from this case is for Willmakers to consider recording their reasons for making or not making certain gifts in their Will, not in the Will itself, but by way of a letter or statutory declaration that is separate to the Will. A Will becomes a public document once probate is granted. To avoid Willmakers airing their dirty laundry publicly and in an effort to avoid antagonising a would-be litigant, more often than not, the preferable approach is for a Willmaker to record their reasons separate to the Will. That way, the relevant letter or statutory declaration need never see the light of day unless the Will is contested.
At Everingham Solomons we have the expertise to assist you with all your estate planning needs, because Helping You is Our Business.
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Electronic signature processes are increasingly being used by businesses and financial institutions. They offer convenience and potential cost savings particularly where documents might need to be signed by people in various different locations.
There are a number of digital platforms available but most involve –
The documents to be signed being uploaded to the cloud;
The intended signatory being notified by a link to access the document; and
The intended signatory opening the link and following on line instructions with the end result being that a signature is inserted into the document.
The generally accepted legal view is that legally binding documents can be created and executed in this manner however a recent New South Wales Court of Appeal case highlighted the problems that can arise.
The case concerned a guarantee purportedly signed by a company director via a particular e-signature platform. The guarantee was in favour of a supplier of goods to the company. Ultimately the company defaulted and the supplier sued the director under the guarantee.
The director successfully resisted the claim. He claimed that he had not used the platform to sign the guarantee and had no knowledge of the guarantee. Effectively, he argued that the platform had been used to forge his signature by someone who accessed the platform using his password.
The supplier had no reason to suspect that there was any irregularity with the guarantor’s signature. It argued that a decision against it would throw doubt upon the ability of creditors to rely upon electronic signatures at all but the Court said that was a matter for the legislature to address if it considered there was a sufficient public interest in doing so.
The moral of the tale is that businesses need to be careful in using electronic signature platforms and look for platforms with inbuilt security features that enable signature verification in the event of a dispute about authenticity.
At Everingham Solomons we have the experience to help you with your questions about proper execution of documents because Helping You is Our Business.
Distributed ledger technologies utilising “blockchains” are set to change the legal industry and the industries in which our clients operate. The cryptocurrency Bitcoin is an early application of this technology.
Please go online and look for the TED talk by Don Tapscott: “How the blockchain is changing money and business“.
DAOs – Decentralised Autonomous Organisations – are a fascinating example, and just may be the way businesses are run in the future. DAOs are organisations run mainly through computer coding and smart contracts. A DAO’s records and program rules are securely held on a blockchain for all stakeholders in the organisation to access, review and verify.
Take a General Manager of a DAO who is tasked by the Board with purchasing a new fleet of vehicles. She simply uploads her recommendation to purchase the vehicles to the DAO on her smartphone or tablet. The Board considers the recommendation and vote, again on their smartphones or tablets. The coding and smart contracts of the DAO are triggered once a Board majority is reached. The DAO automatically sends out the purchase order to the vehicle dealer, which then sends back its invoice. That is recognised and confirmed by the DAO, which requests the deposit funds from its bank and those are paid to the dealer. When the vehicles are ready for delivery, the dealer notifies the DAO and it directs its bank to pay the balance of the funds to the dealer, and confirms the delivery instructions. The DAO adjusts the organisation’s accounting records and asset register. The DAO minutes the Board’s resolution. The DAO informs the General Manager and the Board that the transaction is complete. The entire record of the transaction is recorded on the DAO’s blockchain.
These activities normally involve multiple levels of human interaction, reporting, cross-checking and paperwork. The DAO requires only minimal interaction at the outset by the General Manager and the Board. Imagine the efficiency and productivity gains that may be achieved. It’s all a bit frightening as well on a number of levels, much like people must have felt 100 years ago with the invention of motor cars! The social, ethical, legal and regulatory consequences to this technology are still to be developed.
Everingham Solomons will be monitoring these exciting developments for our own business and also for our clients because Helping You is Our Business.
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As a general rule, a small business employer is not required to pay redundancy pay, as set out in the National Employment Standards however there are some circumstances where you may be legally required to make these payments.
A “small business employer” is defined under the Fair Work Act as an employer who employs fewer than 15 employees at the time of the redundancy. This includes all employees you employee, the employee who is being dismissed, and any other employee who is being dismissed or terminated.
A casual employee is not to be counted unless they are employed on a regular and systematic basis.
Notwithstanding the National Employment Standards, you may still be obliged to pay redundancy because of the specific terms of a modern award or an enterprise agreement. Examples of modern awards which prescribe redundancy pay for small business employers includes the Joinery and Building Trades Award, Timber Industry Award, Manufacturing and Associated Industries and Occupations Award.
In such circumstances the scale of redundancy pay is usually less than that prescribed by the National Employment Standards.
There are also other employees who are not entitled to redundancy payment, whether they are employed by a small or large business in the following circumstances:
an employee with less than 12 months continuous service;
a casual employee;
an employee who is terminated because of serious misconduct;
the employee is employed for a specific task or for a specified period of time or season and is terminated at the completion of the task or time period;
a training arrangement that applies for a specific period of time; and
the employee is an apprentice.
The bottom line is that the majority of small business employers are exempt from paying redundancy pay however there are certain modern awards where a small business employer is required to pay an employee redundancy pay.
At Everingham Solomons we have the expertise and skills to help you with all of your business’s legal needs and requirements, becauseHelping You is Our Business.
It is very common for the owners of a business operating through a company to have to provide a personal guarantee of the debt owed to the bank by the company. The Code of Banking Practice requires banks to give notice of particular features of guarantee and indemnity documents to business owners before such documents are executed. Often, however, that process is rushed in order to get a particular transaction over the line.
In a recent case from Victoria, a senior business banking manager presented a sophisticated business owner with various finance documents, including a guarantee and indemnity. The banker spent 15 to 30 minutes discussing the documents with the business owner and then pointed him to where they were to be signed. The business owner did not read the documents before signing. He thought he was only guaranteeing a portion of the company’s loan, not the full $8 million. The banker did not tell him he would be liable for the full amount if the company defaulted.
When the company later defaulted on the loan and the bank sued the business owner for the debt, he brought a counter-claim on the basis that the Code had been breached. The Court scrutinised the process the banker had followed and found that he did not comply with the Code. The guarantee and indemnity was held to be void, and the business owner was able to avoid liability for the $8 million.
What does this mean for you, the everyday business owner? It probably means that bankers will go to extra lengths to provide you with finance documents earlier to read and they will likely double and triple check with you that you have read and understood them. More likely, bankers will become more insistent that business owners obtain independent financial and legal advice on business banking documents before they are signed.
Our team at Everingham Solomons is well equipped to advise business owners on the legal aspects of financing your business because Helping You is Our Business.
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How do you go about leaving unequal provision of your children in your Will?
Most people either don’t make a Will because they think their wishes won’t take effect or they execute a poorly drafted document which can burden their Executor with having to defend a Family Provision claim with no evidence of why they did what they did.
A Family Provision claim is an application made by an eligible person (spouse, child, dependent etc.) to the Supreme Court seeking that they receive a greater share of your estate to adequately provide for their proper education, maintenance and advancement in life.
You cannot prevent an eligible person from bringing a Family Provision claim. What you can do is attempt to insulate your estate by executing a Statutory Declaration to accompany your Will.
A Statutory Declaration setting out your reasons for distributing your estate in the manner outlined in your Will can:
Reduce the likelihood of a claim being made because it explains your reasoning; and
If a claim is made, reduce the likelihood of it succeeding because it provides the Court with insight into your wishes, information which is not otherwise available and is of invaluable assistance in determining the outcome of proceedings.
The friendly and experienced Solicitors at Everingham Solomons can assist you with all of your Estate Planning needs because Helping You is Our Business.
Making a valid Will is one of the most important things a person can do to protect their loved ones. Over time a Will needs to be reviewed and updated so that it properly reflects life changing events. It is imperative that a Willmaker takes proper professional advice to ensure the Will reflects their wishes and is in conformity with the law. The pitfalls of not doing so are highlighted in a recent Western Australia case.
The Willmaker died leaving a ‘will kit’. The Willmaker was survived by a daughter. The Will left the estate to the daughter who was still a minor at the time of her mother’s death with conflicting trust provisions.
The Executor of the Will applied to the Court for direction as to whether the daughter should receive her interest in the estate upon reaching the age of 18 or 25 years. The Court took into account evidence that the deceased clearly intended that her daughter should not receive the estate until she turned the age of 25 years.
The Court noted “On numerous occasions when dealing with so called homemade Wills, I have observed they are a curse. Homemade Wills which utilise what is sometimes known as a ‘will kit’ are not much better. This case proves the point. The disposition effected by the Will is not complicated and no doubt the testator had clearly in mind what she intended to achieve. But the way the Will is drafted is difficult, and the parties have been put to the trouble and expense of coming to the court seeking directions as to its proper interpretation. If the Will had been drafted by a competent legal practitioner, this problem would not have arisen and the parties would have been spared a great deal of trouble and expense”.
The Court determined that the Will provided for the whole of the deceased’s estate going to the daughter and being postponed only until she reached 18 years of age. Upon attaining 18 years of age, the daughter was entitled to the estate and the trust was at an end.
The inevitable result was an expensive court case over a Will that ultimately failed to carry out the Willmaker’s wishes. All of this could have been avoided if the Willmaker had consulted a lawyer and signed off on a Will which reflected her wishes.
At Everingham Solomons we have the expertise and experience to assist you in making a Will that is tailor made to meet your personal wishes and deals with your particular circumstances Because Helping You is Our Business.
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A class action bought by credit card, consumer and business deposit customers of a bank in relation to dishonour fees, late payment fees and the like has failed in the High Court.
We have all experienced these fees and felt annoyed at having to wear such a large amount for what seems to be a minor default on a credit card or bank account. The customers in this case argued that the fees they paid were not a reasonable estimate of the actual costs to the bank of their default. They argued that the fees amounted to the imposition of a penalty by the bank and were unenforceable. The customers demanded the bank repay those amounts to them and others in the class of customers.
Experts were called by both sides as to what actual costs were caused to the bank by events that triggered the fees. The customers argued that only a narrow range of costs were incurred by the bank. The bank’s expert included a broader range of costs.
The customers succeeded initially, the Federal Court finding that the fees charged by the bank were a penalty. On appeal the Full Federal Court disagreed. The High Court then settled matters by finding that the fees were not penalties; the bank was entitled to be compensated for a broad range of costs caused by the triggering events.
At Everingham Solomons, we have the experience and expertise to assist you with legal advice on your relationship with your bank, one of your key business partners because Helping You is Our Business.
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Through the employment of staff an employer has exposure for the actions of an employee that bind the employer. This long established legal principle is referred to as Vicarious Liability.
