As lawyers, when it comes time to closely examine the terms of a commercial contract, we often hear “Yes, that’s what the words say but what we really meant was…”. It is an uncertain and risky business practice to have commercial contracts in place in which the words do not reflect the intentions of the parties.
The High Court has recently restated the legal principles around determining the meaning of the terms of commercial contracts in the Mount Bruce Mining v Wright Prospecting case. The proper approach can be summarised as follows:
Look at the text in disputes, the entire text of the contract, any contract, document or statute referred to in the contract, and look at the purpose of the contract.
Look at those things objectively – what would the reasonable business person understand the terms to mean.
Don’t look at the surrounding circumstances where the words of the contract are unambiguous or could have only one meaning.
Only look outside the contract to identify the commercial purpose or objects of the contract, or to determine between a choice of construction of the words in the contracts.
Again, do that objectively without recourse to evidence of the parties’ actual intentions and expectations.
So, most of the time what the parties actually meant will not even be considered and the parties will be held to the words they have used in the contract. The key is to be clear with the words in the contract and to ensure that they reflect your intentions for the deal.
At Everingham Solomons, we work with you to ensure the words in your contract reflect your intentions because Helping You is Our Business.
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Often married or de-facto couples separate but do not effect a property settlement until many years later. This can make dividing assets more complicated.
The Family Court of Australia effectively adopts a 5 step approach in regard to dividing assets by way of property settlements. The court will only consider making orders in relation to a property settlement if it is fair and reasonable to do so.
The court must firstly identify and value the assets and liabilities of the parties.
It then must consider the financial and non-financial contributions made by the parties, such as who paid the mortgage and outgoings, who cared for the children and who made unpaid contributions to a business partnership or improvements to property for example.
The next step is to consider what are called “section 75(2) factors”, such as the health and age of the parties and their earning capacities.
Lastly, the court must be satisfied that it is fair and reasonable, or a “just and equitable” settlement for both parties.
The issue of assessing contributions can be made more complicated when those contributions are made in the latter stages of the relationship or even after the relationship has broken down.
The recent full court of appeal case of Trask & Westlake 2015 concerned a husband’s significant post separation earnings some 4 years after the parties had separated. The total asset pool of the parties was worth $9 million but the husband accrued assets worth about $2 million post separation.
Throughout the marriage the husband worked and furthered his career as a result of the wife raising the parties’ four children. During the marriage, the parties had agreed to “embrace” these roles, which had led the husband to become extremely successful in his career as recognised by his tangible financial assets. The wife in turn was unable to develop her career or earn significant income.
The husband acquired further assets post separation, due to his employment. The husband argued that the Court should have given greater weight to his post separation contributions and making an adjustment in his favour.
The Court did not agree, making an order dividing the assets in 60:40 in favour of the wife.
The Court determined that both parties made equal post separation contributions, with the husband making direct financial contributions, and the wife contributing to the home and welfare of the family in a non-financial way. Furthermore, an assessment of contributions could not be based on applying calculations.
The wife’s contributions, whilst not “tangible”, were held to be no less significant than the husband’s financial contributions. The wife’s contribution as a (single) parent and homemaker, were not only considered to continue despite the ending of the marriage, but had allowed the husband to gain experience and knowledge and take advantage of opportunities throughout his career, leading to the acquisition of the husband’s assets during, and also, after the marriage.
At Everingham Solomons we have the expertise and experience to assist you with parenting orders and any other family law matter because Helping You is Our Business.
In September 2015, the Supreme Court of NSW delivered its judgment in Capogreco v Rogerson. It’s an interesting case and perhaps a timely deterrence for would-be horsemen, tempted to act hastily in the shadow of the Melbourne Cup.
The proceedings centered around a race horse called Arlington. Arlington was originally purchased by Gerry Harvey as a yearling for $1.55 million and then syndicated. One of the syndicate owners, a Mr Rogerson, sold a 25% share to Mr & Mrs Capogreco for almost $500,000.
Apparently, it came as some surprise to Mr & Mrs Capogreco when the great expectations that they held for Arlington were not realised. Arlington raced in both Australia and New Zealand and did not achieve much success in any Group 1 races, save for a modest third in the Randwick Guineas.
At some point the owners’ syndicate took the reins and made the decision to sell Arlington. There was a separate issue in the proceedings as to whether or not the Capogrecos consented to the sale, but in any event, Arlington sold for $60,000. The Capogrecos, in a deal they’d rather forget, therefore retained $15,000 of their $500,000 investment.
Clearly disgruntled, the Capogrecos were chomping at the bit to get into court. Never better than an each way bet, the Capogrecos boldly claimed that they purchased Arlington on the basis of a misleading representation made by Mr Rogerson, that, ‘it was a safe investment’. Mr Capogreco said that Mr Rogerson led him to believe that he was ‘100% guaranteed’ to make money out of Arlington.
The court found that the Capogrecos were experienced business people and had some experience in horseracing. Not surprisingly then, the Supreme Court viewed the evidence and claims of the Capogrecos with much doubt. Mr Rogerson passed the post first by a long margin and the claims made by the Capogrecos for misleading and deceptive conduct were dismissed.
At Everingham Solomons Solicitors, we have the expertise and experience in all types of commercial litigation. If you’re involved in a commercial dispute, contact us because Helping You is Our Business.
Under section 110 of the Road Transport Act 2013 it is an offence to:
drive a motor vehicle;
occupy the driving seat of a motor vehicle and attempt to put the motor vehicle in motion; or
occupy the seat in a motor vehicle next to a learner driver who is driving the vehicle,
with a prescribed concentration of alcohol (PCA) present in breath or blood.
The statutory penalties for PCA offences are as follows:
For a low range offence (reading between 0.05 and 0.08) a maximum fine of $1,100 and a minimum disqualification period of 3 months.
For a mid-range offence (reading between 0.08 and 0.15) a maximum fine of $2,200 imprisonment for a maximum of nine months and a minimum disqualification period of 6 months.
For a high range offence (reading of 0.15 or above) a maximum fine of $3,300 imprisonment for a maximum of 18 months, a minimum disqualification period of 12 months and minimum interlock period of 24 months.
The penalty imposed by the Court will vary depending on a range of factors, including but not limited to, criminal history/traffic record, the considerations outlined in s21A of the Crimes Sentencing Procedure Act 1999, and the appropriateness of other sentencing options.
If you require advice or representation regarding a PCA offence the experienced solicitors at Everingham Solomons can assist you because Helping You is Our Business.
Since 1 January 2014 the Fair Work Commission has had powers to make orders to prevent workplace bullying.
Workers who believe they are being bullied can apply to the Fair Work Commission for assistance.
A worker is deemed to have been bullied, while at work if:
An individual or group of individuals repeatedly behaves unreasonably towards another worker, or a group of workers of which the worker is a member; and
That behaviour creates a risk to health and safety.
A worker is defined broadly as including employees, contractors, sub-contractors, outworkers, apprentices or trainees and work experience students. The Fair Work Act does not apply to volunteers and members of the Australian Defence Force.
Whilst the amendments to legislation is relatively new, it is worth considering that past acts of bullying can be considered by the Fair Work Commission. In an Application by Kathleen McInnes [2014] FWCFB 1440, a respondent raised a jurisdictional objection to an Application on the basis that the Fair Work Commission should only consider bullying conduct after 1 January 2014. In this case, the Applicant had alleged that she had been bullied over a six-year period between 2007 and 2013.
The Fair Work Commission rejected the Respondent’s jurisdictional objection stating that past behaviour may be taken into account because the legislation is ‘basing future action on past events, rather than changing past rights and obligations’.
The type of Orders that the Fair Work Commission can make can include but are not limited to, ordering:
a person not to contact the worker alone;
an employer to regularly monitor workplace behaviour;
that certain behaviour stop;
that the employer provide information, support and training to workers; and
that the employer review its workplace bullying policy.
In this regard, orders can be made against the employer, co-workers and/or visitors to the workplace. Contravention of a Fair Work Commission order can result in a fine of up to $10,200 against the offending party.
These amendments to the Fair Work Act has significantly increased an employer’s exposure to claims in respect to bullying.
Everingham Solomons encourages businesses to be proactive in their approach to potential claims, by ensuring that their code of conduct, anti-bullying policy, risk management and investigation and claims process is relevant and up-to-date.
Everingham Solomons has the expertise to review policies and procedures regarding workplace behaviour and the complaint processes, because Helping You is Our Business.
A Willmaker died in 2014 leaving a Will he had made in 2009. The Willmaker was survived by his adopted son Rodney, 3 adult daughters, 2 grandchildren Kerryn and Roxanna and his ex-wife Rae.
The only asset of the Willmaker at the date of his death were two shares in a company. The most substantial asset of the company consisted of NSW farmland and was valued for probate purposes at $2 million. Located on the Property were two substantial dwellings – one a home in which the Willmaker had lived in for many years and a second dwelling in which Rae had resided in since 1984.
By his will the Willmaker appointed Ornella as his Executrix. Ornella was not related to the Willmaker but had been a great source of support to the Willmaker over many years. The 2009 will contained a number of typographical errors and inconsistent clauses. The main issue for the Court was how to construe the inconsistent clauses of the Will in an effort to try and give effect to the Willmaker’s wishes.
The Will contemplated the sale of real estate with a division of 7/10 of the real estate to one group of family members and a division of the remaining 3/10 to another group of family members on the one hand, but on the other hand specified that the sale of the real estate was not to include the two dwellings because the dwellings were to be gifted to Ornella. The dwellings could not be excised from the real estate without subdivision. However it was not permissible for the real estate to be subdivided. As a result the gifts to the real estate to the two family groups would be stymied.
An application was made to the Court to construe the Will. The Court found on a true construction of the Will, the Property must be sold and the proceeds of sale distributed in designated proportions and divided between family members named in the Will but as the subdivision was not permitted the gifts of the dwellings to Ornella failed.
Whilst the Willmaker’s desire may have been to “keep things simple” by preparing a Will in his own words unfortunately the outcome in this case was anything but simple because the family were forced to make an application to the Court to construe the terms of the Will.
At Everingham Solomons, we have the expertise and experience to assist you with all your Estate planning needs including helping you prepare a Will that suits your individual circumstances because Helping You is Our Business.
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On 1 January 2016 the current First Home Owners Grant (New Homes) Scheme (‘the grant’) of $15,000 will reduce to $10,000. The reduction in the grant is one further step in a general pattern of diminishing government incentives for first home buyers.
Applicants will likely be eligible for the grant if:
they are a natural person over 18 years of age;
they have not previously owned a residential property jointly, separately or with some other person in any state or territory of Australia, and occupied that property for a continuous period of six months;
the property being purchased is:
a home that has not previously been occupied or sold as a residence;
a vacant block of land on which the applicant builds a new home; or
a home that has been unoccupied since it has been substantially renovated.
the value of the property does not exceed $750,000;
neither the applicant nor their partner have previously received the grant;
they agree to live in the property for a continuous period of six months, commencing, for new homes, within 12 months from the date they are registered on the title, or, if building a home, the construction completion date;
one applicant is an Australian citizen.
In order to be eligible for the full grant of $15,000 a first home buyer must exchange contracts for the purchase of the property on or before 31 December 2015.
In addition to the grant payment of $15,000, a purchaser of a new home or vacant land on which it is declared a new home will be built may also be eligible for stamp duty exemptions under the First Home _(New Homes) Scheme (‘the exemption’).
The joint effect of the grant and the exemption can be substantial. Subject to the eligibility requirements, a first home buyer that purchases a new home for, say, $300,000 could receive the grant of $15,000 and avoid the prescribed stamp duty of about $9,000 on the purchase price, equating to total benefits of about $24,000.
In circumstances where a 10 per cent, or $30,000 deposit is usual, the benefit gained from the first home incentives makes up about 80 per cent of the deposit.
So, if you’re a first home buyer and after a new home, it makes sense to get in before 1 January 2016. For more information on buying a home, call Everingham Solomons because Helping You is Our Business.
It is not uncommon for parties to a contract such as the sale and purchase of a business or a landlord and tenant of commercial premises to enter into Heads of Agreement prior to any contract being entered into.
If the Heads of Agreement are signed both parties, are the parties bound?
This has resulted in many disputes being submitted to the Courts for determination.
Normally Heads of Agreement are entered into as a gesture of good faith and a promise to proceed with the transaction. Usually Heads of Agreement are not meant to bind the parties to the terms of the agreement.
If you are entering into a Heads of Agreement you need to be explicit as to whether or not that document is intended to bind the parties. Normally Heads of Agreement will specifically state that the parties are not bound and will only be bound when contracts prepared by the respective parties’ solicitors have been approved and the parties sign them.
Heads of Agreement are usually symbolic of the mutual intention to proceed as usually the parties have not considered or documented the finer details of the agreement and are indicating their intention to proceed subject to accountancy and legal advice, whilst allowing them the opportunity to make necessary enquiries, conduct due diligence and allowing the solicitors from each party to negotiate and draft the precise terms and conditions of the substantive contract.
When parties enter Heads of Agreement it is usually a sign of commitment to enter into further legally prepared documentation at a later time. Whilst most of the time these agreements are not binding on the parties, they can be in certain circumstances.
If you are unsure as to the binding nature of Heads of Agreement you should obtain legal advice. At Everingham Solomons we have the expertise to assist you with all of your business and legal matters because Helping You is Our Business.
The Personal Property Security Register (PPSR) is an increasingly prominent tool for businesses, particularly for those that supply goods on credit or that lease/hire out goods to other businesses. But many businesses still do not understand the PPSR or how to apply it effectively.
The PPSR is an on-line noticeboard on which a person, who obtains an interest in another’s personal property as part of a transaction that secures payment or the performance of an obligation, can register their interest for the world to see. Personal property does not include land and fixtures but does include things like motor vehicles, household goods, plant and equipment used by a business, the inventory of a business, intellectual property and company shares.
By way of example, a supplier of equipment to a business that retains title to the equipment until it is paid in full will want to properly register a security interest on the PPSR over that equipment in the hands of the business until it is paid. If the business becomes insolvent, the supplier will only need to appoint a liquidator of the business to the PPSR in order to establish its title to the equipment.
Changes to the legislation behind the PPSR came in to effect on 1 October 2015 that particularly impact on those businesses that lease out goods that are required to be registered on the PPSR by serial number – motor vehicles, watercraft and aircraft most commonly. Until last week, a lease of a motor vehicle for more than 90 days would require registration on the PPSR if the lessor wished to properly protect its interest in the motor vehicle. Relevantly, the definition of “motor vehicle” captures a broad range of items that might not normally be considered to be motor vehicles.
From 1 October 2015, only leases of motor vehicles for effectively more than 1 year will have to be registered on the PPSR to properly protect the lessor. That change simplifies matters for the lessors of such goods but adds some uncertainty to those involved in a business sale who might be seeking to understand which assets of a business are in fact secured to or owned by a third party.
The PPSR is not easy to understand. At Everingham Solomons, we can assist you understand its application to your business because Helping You is Our Business.
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There are criminal penalties and civil remedies for defamation and the laws apply to all forms of communication, including social media.
Under s529(3) of the Crimes Act 1900, it is an offence to publish, without lawful excuse, a matter defamatory to another person knowing the matter to be false, and with intent to cause serious harm, or being reckless as to whether such harm has been caused.
The offence of defamation carries a maximum penalty of 3 years imprisonment.
In accordance with the Defamation Act 2005 defamation is a tort for which damages can be recovered. As indicated in the case of Mickle v Farley in which the NSW District Court awarded damages in the sum of $105,000 for defamatory comments posted on a social medial site, you must think before you post.
Contrary to popular belief freedom of speech and freedom of expression does not give you immunity to make unfounded or baseless accusations or allegations.
For example;
you cannot vindicate someone’s reputation
ridicule
or accuse someone of committing a crime.
The things you post on social media must either be true, or a comment based on fact.
If you need advice in relation to a defamation matter, the experienced solicitors at Everingham Solomons can assist you because Helping You is Our Business.
As lawyers, when it comes time to closely examine the terms of a commercial contract, we often hear “Yes, that’s what the words say but what we really meant was…”. It is an uncertain and risky business practice to have commercial contracts in place in which the words do not reflect the intentions of the parties.
