Passing ownership of assets to a disabled beneficiary can have the undesired result of reducing the beneficiary’s government pension.
The introduction of the Special Disability Trust (SDT) in 2006 was the Australian Government’s response to this problem.
SDTs can be established in a Testator’s Will and allow assets to be left to a disabled beneficiary without having adverse effects on their Centrelink entitlements.
SDTs may also be set up whilst you are alive and the restrictions and concessions applicable will be the same as those that apply to SDT’s created by a Will.
Who is eligible?
SDTs are only available to beneficiaries who meet the definition of “severely disabled” as defined in section 1209M of the Social Security Act 1991.
What are the benefits?
1. Asset Test Exemption
The assets of a SDT up to the value of $609,500.00 (indexed annually) will not be included in the beneficiary’s asset test;
Income from the assets of a SDT will not be included as income of the beneficiary; and
The principal home of the disabled person is not counted in the asset test.
2. Gifting Concession
Gifts up to the value of $50,000.00 to a SDT by a person who:-
is an immediate family member of the severely disabled beneficiary; and
is receiving an eligible form of social security pension; will not affect the giftor’s social security payment.
Summary
Whilst SDTs are potentially beneficial for persons with severe disabilities and their families, they are not suited to everyone.
For more information on whether a Special Disability Trust is right for you, please contact the experienced team at Everingham Solomons because Helping You is Our Business.
Most franchise agreements contain terms to the effect that the franchisee is entitled to an “exclusive territory” where the franchisor will not compete for business or allow another franchisee to operate in that area.
Several recent court decisions have reviewed the obligation of franchisors to ensure the franchisee’s territory is not encroached upon by the actions of the franchisor itself or other franchisees.
A case involving a video hire store concerned whether the franchisor’s online sales breached the exclusive territory of the franchisee. The franchisor argued that as it had not opened a “bricks and mortar” store in the franchisee’s territory, it had not breached its obligation of non-competition. The Court held that there is no distinction between online and shopfront trading, and found that not only had the franchisor breached the exclusive territory, but had also failed to act in good faith.
A separate case was brought by a building contractor company against its franchisor, after making various complaints to head office over a 2 year period that it believed a neighbouring franchisee was poaching jobs in its territory. The franchisor had told the franchisee that it did not tolerate such behavior by other franchisees, and would take the necessary action to prevent the breach continuing. When nothing happened, the franchisee was forced to take the matter to court.
The Court discovered that the franchisor had in fact entered into an agreement with the neighbouring franchisee, allowing it to take on certain jobs in the area. Similar to the earlier case, the franchisor argued that there was no breach of the exclusive territory as the neighbouring franchisee had not opened a showroom in the territory. The Court held that the franchisee’s exclusive territory had been breached by the selling activities of the neighbouring franchisee, and the franchisor had breached its obligations in permitting this to occur. The franchisor was ordered to pay damages for lost profit and sales to the franchisee.
These recent decisions bode well for franchisees that are suffering as a result of franchisors’ lack of concern for their territorial rights – franchisors should now be aware that they may be liable for lost profits if they do not preserve their franchisee’s exclusive territories.
If you are a franchisee and believe that your exclusive territory has been breached, contact the team at Everingham Solomons where Helping You is Our Business.
When dealing with difficult debtors are you or is your company having to;
Enter into payment plans?
Make stop work threats?
Threaten commencing legal action? or
Accept payments outside the normal trading terms?
These might be perceived as normal industry practice in order to get paid, but, as a creditor you should know the real risks that moneys received in these circumstances could very well be clawed back and repaid to a liquidator.
It is an affronting prospect that a creditor has to hand back monies earned for hard work to a company that may still owe them even more money. The classic examples are sub-contractors that have cash flow problems themselves having to pay back money to the larger building company when liquidators are appointed.
If a creditor receives a payment from a company within 6 months of that company going into liquidation (winding up) then that payment could be deemed an Unfair Preference Payment under the Corporations Act. It is deemed to be “Unfair” because the creditor has received more than it would have as a normal unsecured creditor in the winding up of the company.
There are Defences available. A creditor may be able to prove that it was a party to the transaction in good faith and had no reasonable grounds to suspect that the company was trading whilst insolvent (Good Faith Defence) or that it was part of an ongoing business relationship (Running Account Defence).
As with any potential legal problem prevention is the best cure. To minimise the risk of a later Preference Claim individuals and companies should;
Listen to your industry if you hear that a company is not paying its bills on time or struggling do not supply them;
Request money up front or at the time of supply;
Have clear terms of trade and stick by them;
For larger clients offer to enter a running account whereby an agreed monthly amount is paid.
If you have been the subject of an Unfair Preference Claim by a liquidator contact Everingham Solomons dispute resolution team. Our team is committed to providing the most time and cost efficient outcome when advising on Unfair Preference Claims or your debt collection needs because Helping You is Our Business.
Retail Leases are covered by the Retail Leases Act 1994 (‘The Act’). The Act sets out a number of requirements that Landlords must follow when a Retail Lease is prepared, to ensure that the Lease is enforceable against a Tenant. They include:-
A Landlord must not advertise a retail shop for lease unless he has a copy of the proposed Lease in his possession. Maximum penalty for Landlords = $5,500.00.
A Landlord must make a copy of the proposed Lease as well as a copy of a Retail Tenancy Guide available to prospective Tenants as soon as negotiations are entered into. Maximum penalty for Landlords = $5,500.00.
A copy of a Lessor’s Disclosure Statement (LDS) must be provided to a Tenant at least 7 days before the Lease is entered into. If a Tenant does not receive a LDS within this time frame, or if the LDS is incomplete or contains information that is materially false or misleading, the Tenant may terminate the Lease at any time within 6 months after the Lease was entered into (unless a permitted exception applies). Landlords should further note that any requirement for a Tenant to contribute towards the Landlord’s cost of any finishes, fittings etc. is not enforceable if it is not disclosed in the LDS.
If a Landlord requires a particular standard of fit-out to be carried out by a Tenant, the relevant information relating to the standard required must be contained in a Tenancy Fit-Out Statement and provided to a Tenant at the same time as the Lessor’s Disclosure Statement, or included in the Lease itself.
A Tenant is not obligated to carry any of the Landlord’s fit-out requirements if they are not contained in a Tenancy Fit-Out Statement.
It is not good enough to simply have all of the Lease terms and conditions contained in the Lease itself.
To ensure that a Retail Lease is enforceable against a Tenant, a Landlord must ensure that all procedures prescribed by The Act are followed and that all required documents are provided.
For assistance in ensuring that your Retail Lease is enforceable, please contact the experienced team at Everingham Solomons because Helping You is Our Business.
Click here for more information on Abbey Huckstep.
Nobody wants to end up in a business dispute. They distract from your core purpose as a business person – running a viable business that gives you, your employees and your respective families their livelihoods. Business disputes are expensive and stressful for all involved. Sometimes though your business is under serious threat from your business partners, suppliers, customers or even your employees, and you just have to take decisive action.
Questions and statements then abound. What do I do next? I feel like a bunny in the headlights! What does the contract say about this mess? Where is the contract? It was just a handshake deal! Why aren’t they doing what they said they would do? It’s unfair! Where is that email that proves what I am saying? What is this going to cost me? How do I stop my customers from finding out about this? Do I need a lawyer? And so on…
For most businesses some kind of a dispute (whether big or small) is inevitable. Like all business issues, it is best to be prepared in advance. Some of our business dispute resolution tips are:
Manage your documents – find that key contract, purchase order, invoice, or email at the click of a mouse or the pull of a filing cabinet drawer
Compile your facts and evidence – put your documents in subject and date order – earliest to latest, highlight the parts that are most relevant, have your key witnesses write down their versions of events
Meet with your lawyer as soon as you can – he or she will put your mind at ease, explain processes and next steps, advise you on crucial deadlines and the like
Keep calm and remain objective – be in a good frame of mind to make decisions and try to see both sides
Avoid thinking that “It’s a matter of principle now…” that can only be resolved in one way
Embrace early dispute resolution methods like settlement conferences and mediation – often cheaper and less stressful than going to court
Think of creative solutions – look for a ‘win-win’ outcome or, even better, a restored business relationship
At Everingham Solomons, we have the expertise to assist you with all issues relating to business disputes because Helping You is Our Business.
Click here for more information on Keiran Breckenridge.
Many businesses register intellectual property rights to protect their products, logos and brands. You might think that once the IP rights have been registered, there is nothing further to do, however this can be a trap with serious ramifications.
As discovered in a recent case involving a large well-known US camper van company, failing to take action on IP infringement can be costly.
The case involved an Australian business utilising the name and a similar logo to that of the US company. The Australian business began using the name and logo in the late 1970s, however it wasn’t until 1985 that the US company discovered the “copy-cat”.
Trading on the goodwill and reputation of another business is known as “passing off”. Passing off is usually designed to mislead and deceive consumers, and is also a breach of IP rights – by registering a trademark, the owner has a legally enforceable right to exclusive use of the trademarked item.
In this case, the passing off was clear. The big issue was why it took the US company until 1992 to challenge the use of its name and branding by the Australian business, and until 2010 to commence court proceedings.
Whilst the US company submitted various reasons for its delays, ultimately the court found that the US company had “sat on its hands” and done nothing to prevent the Australian competitor from continuing to use its name and logo. The court therefore allowed the Australian business to continue using the name and logo.
The case is a warning to all holders of IP that registration does not of itself provide protection – IP owners need to regularly review any potential infringements of their intellectual property, and act quickly if there is any sign of passing off.
If you need assistance with IP protection, contact the team at Everingham Solomons. We are well equipped to assist you with all your intellectual property enquiries because Helping You is Our Business.
Click here for more information on Rebecca Greenland.
The Privacy Amendment (Enhancing Privacy Protection) Act 2012 amends the existing Privacy Act 1988.
When?
New laws taking effect from 12 March 2014.
Who is effected?
The new laws effect businesses and most government bodies that collect and transfer personal information in Australia.
What are the main changes?
Of the 13 newly introduced Australian Privacy Principles (APPs), the most significantly changed are as follows:-
APP 1 (open and transparent management of personal information): Entities must ensure that they manage personal information in an open and transparent way. Entities must have a clearly expressed and up to date privacy policy which deals with a number of prescribed matters.
APP 4 (unsolicited personal information): If an entity receives unsolicited information, the entity must, within a reasonable period, determine whether it could have legally collected the information itself, and if not, the entity must, as soon as practicable, destroy or un-identify the information.
APP 5 (notification of collecting personal information): The requirements regarding notifying an individual of the collection of personal information have been greatly expanded.
APP 7 (direct marketing): An organisation must not use or disclose personal information collected about an individual for the purpose of direct marketing, unless one of the various prescribed exceptions apply.
APP 8 (cross-border disclosure of personal information): Before an APP entity discloses personal information about an individual to an overseas recipient, the entity must take such steps as are reasonable in the circumstances to ensure that the overseas recipient does not breach the Australian Privacy Principles. In certain circumstances, an entity may now be deemed to be liable for a breach of the APPs by an overseas recipient of personal information disclosed by the entity.
Non-compliance
Non-compliance with the new legislation risks civil penalties of up to $1.7 million for corporations and $340,000 for individuals.
How to Proceed
In light of the impeding changes in the law, now is the time for businesses to be familiarising themselves with the new APPs and reviewing and updating their privacy policies accordingly.
For advice on whether of not your business’ privacy policy complies with the new law, please contact the experienced team at Everingham Solomons because Helping You is Our Business.
Click here for more information on Abbey Huckstep.
Both companies and individuals need to be prepared for the end of the PPSA Transitional Period which is rapidly approaching.
What is the PPSA?
The Personal Property Security Act (PPSA) came into effect on 30 January 2012, aiming to regulate interests in ‘personal property’. That is, property other than real estate.
Who does the PPSA Apply to?
Essentially, the PPSA may apply to any of the following parties:-
sellers or buyers of personal property;
lessors or lessees of personal property;
persons supplying goods on retention of title terms (e.g. hire arrangements); or
financiers taking security over personal property.
What is the PPSA Transitional Period?
When the PPSA came into effect, any person with an existing security interest in personal property was granted a two year transitional period in which to register his or her interest on the newly established Personal Property Security Register (PPSR).
During the two year transitional period, the interests of secured parties were deemed to be “temporarily perfected”. Essentially, this meant that their interest took priority over competing interests in the same property.
What do I need to do?
From 31 January 2014 onwards, any unregistered security interest will loose its status as “perfected” and secured parties will be at risk of loosing their priority and ultimately, the title to their property.
Now is the time to perfect your security interest and protect your personal property. Depending on the nature of your property, perfection can be achieved by either registration, possession, or (when applicable), control.
For advice on how to perfect your security interest and for assistance in registering on the PPSR, please contact the experienced team at Everingham Solomons, because Helping You is Our Business.
Click here for more information on Abbey Huckstep.
Often, if you consult a contractor to do any sort of work, you will be provided at the outset with either an estimate, or a quote. The two are very different.
If you have been given and have accepted a quote, a contract is created. The contractor can only charge the quoted amount for the work done.
If you have been provided with an estimate on the other hand, a contract is not created. Two essential elements of a contract are that:
the terms are certain; and
there is an intention to create a legally binding relationship.
A quote fulfills both of the above elements, whilst an estimate fulfills neither.
Often people are lured into a contract by a favourable estimate, only to later be charged a higher amount. If this has happened to you there are a number of possible remedies, but they are not based on the contract.
The first remedy is in misrepresentation, or misleading and deceptive conduct. If you have been lured into a contract by a misrepresentation, then you can apply to have the contract set aside. If however, you have received the benefit of the contract, you will still have to pay the reasonable amount for the work done, but nothing in excess of that.
The second remedy is the equitable remedy of estoppel. Estoppel is a rule of law that says that if one party makes a representation, and it is relied on by another party to their detriment, the first party cannot act in a manner contrary to the representation.
For an estoppel to arise, the representation made must be sufficiently clear and certain. A party is unlikely to be estopped unless there can be little dispute about the effect of the representation.
If you have a query relating to invoices, quotes or estimates, please contact Everingham Solomons, because Helping You is Our Business.
The Retail Leases Act 1994 attempts to correct the power imbalance traditionally existing between landlords and tenants. This is seen in relation to market rent reviews.
When rent is to be reviewed by reference to current market rent in a retail lease, either the landlord or tenant must suggest a new rental to the other party in writing at least 60 days before the rent review date.
If parties are unable to reach an agreement at least 30 days before the new lease is due to commence, the Retail Leases Act states that current market rent will be determined by a specialist retail valuer. The valuer can either be agreed to by the parties or appointed by the Tribunal.
Parties have 14 days from the date that they receive notice of appointment of the valuer to make written submissions about what they believe the current market rent is and why.
Considerations the valuer should consider include:
the rent that the landlord could expect to receive if the premises was unoccupied and put onto the open market;
the advantages and disadvantages of the property as a whole; and
the tenants use of the premises.
The valuer has one month from the date of acceptance of the role to decide what the current market rent is. The decision made is final and binding.
Obtaining an independent valuation is a time consuming and expensive process, (the cost of which is born by the parties equally) and should be used as a measure of last resort.
It is particularly important to be proactive in a market review situation from a Landlord’s perspective, as if negations fail and neither party seeks a valuer to be nominated before the next rent review date passing, the rent will not change.
At Everingham Solomons we have the expertise to assist both landlords and tenants when carrying out a rent review, as well as with any other retail lease concerns.
If you have any questions regarding retail leases, please do not hesitate to contact the experienced team at Everingham Solomons because Helping You is Our Business.
Overview
