Company Directors must act honestly. No ifs, no buts.

In April 2011, the founder of a substantial property development group was convicted of dishonestly using his position as a director of companies in the group to obtain an advantage for himself to the tune of about $2.8million. He was sentenced to a term of imprisonment of three and a half years. Last year, the NSW Court of Criminal Appeal affirmed the conviction.

The director in question used his position as a director to sign some cheques from one company in the group to another, which then paid him personally an amount, which was wrongly characterized in the books as “commission and management fee”  for introducing two properties to the group that were available for acquisition. … Read More

The Needle and the Damage Done

The law is that a person who causes the death of another by an illegal and dangerous act or by criminal negligence is guilty of manslaughter.

On 9 February 2007, David Hay died in Belmore, Sydney after taking methadone supplied to him by a woman called Natalie Burns. She or her husband or both may have helped him inject.  A few hours before, Mr Hay had taken olanzapine and cannabis. Methadone is very dangerous when taken with other drugs. Mr Hay showed signs of an adverse reaction to the methadone shortly after taking it and Mrs Burns, rather than helping him in any way, told her husband to throw him out of her flat. … Read More

The Elephant in the Room

The Australian managing Director of Rio Tinto, David Peever says that the Fair Work Act is the elephant in the room when it comes to the productivity debate in Australia.

Heather Ridout, who used to be the head of the Australian Industry Group and is now on the Reseve Bank board said on a recent Q & A programme that the “Fair Work Act gives 120 new rights to unions and nothing to employers”. On the same programme,  Judith Sloan, an economist and commentator suggested that it was ironic that the Act assumes that the right of unions is paramount when it comes to work place contracts but only 13% of the private work sector belong to unions.… Read More

What a Nuisance

No, not the winner of the 1985 Melbourne Cup but invasions of a person’s  interest in the beneficial use and enjoyment of his land.

Nuisance is a branch of the law, which defines obligations of neighbourliness.

The nuisances with which farmers are probably most familiar are fire and noxious weeds.

The risk of fire at harvest time is well known to farmers.  A fire that gets away during a harvest on wheat country can destroy hundreds of acres of crops.  Losses can run to the hundreds of thousands of dollars.  If the owner of the land where the fire started had not properly assessed the risk of the fire and taken reasonable steps  to protect against it  then he will be liable for the loss of his neighbour’s crops.… Read More

Where there’s a Will

There’s usually a relative, sometimes one who is hurt and sad because he or she has been left out of the Will or otherwise treated unfairly.

The hurt can be undone. Under the Succession Act 2006 (NSW), the Supreme Court can rewrite an unfair Will on the application of wives, husbands, de factos, children, former wives or husbands, dependents, grandchildren or members of the household of, or those living in a close personal relationship with the deceased.

An applicant for relief must show a need by reference to his or her age, health, financial situation, earning capacity and the like.  An applicant must be  “deserving”  that is to say to have had such a relationship with the deceased that it might be expected that he or she would benefit under the Will.… Read More

Illegal Downloading Update

In a judgment handed down on 20 April 2012 in Roadshow Films v iiNet, the High Court unanimously found that iiNet did not  breach copyright when its  customers carried out illegal downloading via their iiNet accounts because, while iiNet may have known of the illegal downloading, it did not authorize”  that conduct by its customers.  Well, of course it didn’t and the Court, which, with great respect,  is made up of eminently sensible men and women with better than room temperature IQs  was not fooled for a moment by the tortured arguments advanced by the copyright owners.

So, the copyright owners continue in a terrible flap about illegal downloading. … Read More

Restraint of trade clauses – Are they worth the paper they are written on?

The starting point is that restraint of trade clauses are prima facie invalid because they infringe public policy, which holds, quite understandably, that a person should not be able to stand in the way of another person earning a living.

However, under the Restraints of Trade Act 1976 (NSW), a restraint clause will not be invalid if it was reasonable in all the circumstances at the time that it was made.

When deciding the validity of a restraint clause, the Court will ask whether the person seeking to impose the restraint (usually an employer or the incoming purchaser of a business) has a legitimate interest to protect and whether the restraint amounts to reasonable protection of that interest.… Read More

A Terrible Thing Happened After the Auction!

The strictness of the law relating to the sale of real estate in NSW can have devastating consequences for a successful purchaser at an auction.

It is possible for a purchaser to be the highest bidder after the reserve has been reached or the auctioneer announces that the property is on the market, have it knocked down to him or her and then end up with nothing. It is terrible because the purchaser will have gone to great trouble and spent money on preparing for the auction but, more than this, it is terrible because the joy of being the winning bidder is snatched away so quickly.… Read More

Illegal Downloading

There is a great deal of illegal downloading of copyright material via the internet worldwide.  It has been going on for years. The copyright owners are in a terrific flap about it. They call it “theft”.  There will be a great deal less of it, in Australia at least, if the copyright owners are successful in their appeal to the High Court in the case of Roadshow Films Pty Limited v iiNet Limited.

Films and other works the subject of copyright can be downloaded through unauthorised file sharing on the BIT Torrent system, the operation of which is pretty technical but the effect of which is that anyone with a computer and access to the internet can download and enjoy all manner of copyright protected works without paying a cent other than the subscription fee to the internet service provider.… Read More

Sexually Transmitted Debt

There is a lot of it going around and it can have a lethal affect on one’s financial health.

The Australian Law Reform Commission defined “sexual transmitted debt” as:

“the transfer of responsibility for a debt incurred by a party to his/her partner in circumstances in which the fact of the relationship, as distinct from an appreciation of the reality of the responsibility of the debt, is the predominant factor in the partner accepting liability”.

Probably, the most common way of catching sexually transmitted debt is by signing a guarantee at the request of one’s partner without thinking about it or taking advice. … Read More