The tension between business risk and responsibility dates from ancient times.
Plato said –
“Good people do not need laws to tell them to act responsibly
while bad people will find a way around the laws.”
It’s a bit broad brush to categorise as “bad” people who structure their affairs to avoid personal liability however it’s fair to say that the catalyst for the creation of the Company business structure was to shelter individual controllers from personal responsibility when things didn’t go as planned and sometimes even when they went exactly as planned.
The fundamental concept behind structuring a business through a Company is “limited liability”. That means that the controllers of a company will generally not be responsible for the obligations of the Company. This was traditionally justified on the basis of promoting business activity and innovation which was perceived as being for the overall public good.
Societal changes particularly over the last fifty years have seen the potential liabilities of Company directors increase significantly. Consumer/creditor protection has been a factor in this but protection of public revenue streams from various forms of taxation has also been significant.
For quite some time, company directors have had potential liabilities for income tax debts of their Company. Those same obligations however have not existed in relation to GST liabilities and that has resulted in a very significant loss of public revenue from companies controlled by unscrupulous directors. That is about to change.
Legislation just passed gives ASIC increased powers to combat conduct by directors intended to defeat creditors and also allows the Commissioner of Taxation to make Company directors personally liable for their Company’s GST liabilities in a range of circumstances. The latter provisions take affect from 1 April this year.
At Everingham Solomons we have the expertise and experience to help you with these issues because Helping You is Our Business.
If you own a Family Trust that owns residential land in NSW or intend to purchase residential land and/or premises using your Family Trust, please note that Revenue NSW considers a Family Trust to be automatically subject to the foreign person surcharge on stamp duty and Land Tax.
The surcharge for land tax is 2% above the usual charge of 1.6%.
The surcharge for a foreign Person purchasing land is 8% of the purchase value.
Land Tax is charged every year so it is a particularly penal and unfair provision. It takes the annual land tax charge to 3.6% per year. If you had land with a land value of the $400,000.00, your annual land tax bill would be $14,400.00!
Stamp duty on the purchase of a $400,000.00 property would increase from $13,432.00 to $ 45,432.00, a 32,000.00 penalty!.
Most Family Trusts deeds, have a very broad definition of a “beneficiary”. Revenue NSW has taken the view that if the definition in your Trust Deed could possibly permit a benefit to be paid to a foreign person (even if that has never occurred or is never likely to occur), it will deem the Trust to be automatically subject to foreign person surcharge on stamp duty and/or Land Tax.
You may or may have already received a letter from Revenue NSW advising that your Family Trust may be subject to the 2% land tax surcharge.
There is however a way to avoid the surcharges, provided you don’t have foreign persons as beneficiaries.
Most Family Trust Deeds permit the terms of the Trust Deed to be amended. The solution is to exclude foreign persons as potential beneficiaries of your Trust.
Each terms of each Discretionary Trust Deed are different and accordingly a thorough reading of the Trust needs to be undertaken to enable the amendments to be made to protect your interest.
At Everingham Solomons, we have the expertise to assist you in all of your legal matters because Helping You is Our Business.
One of the disputes workers compensation clients will encounter with insurance companies is whether treatment is reasonably necessary following a workplace injury. The relevant section of the Workers Compensation Act 1987 NSW is section 60. If the dispute is before an Arbitrator in the Workers Compensation Commission they will need to consider the following before deciding on whether treatment is reasonably necessary or not, as noted in Rose v Health Commission (NSW) (1986) 2 NSWCCR 32:
a) The appropriateness of the particular treatment;
b) The availability of alternative treatment, and its potential effectiveness;
c) The cost of the treatment;
d) The actual or potential effectiveness of the treatment; and
e) The acceptance by medical experts of the treatment as being appropriate and likely to be effective.
In the matter of Laing v Sydney Catholic Schools Limited [2020] NSWWCC 19 the timeliness of surgery was considered. The worker had injured her left knee at work on 23 March 2016 and had been advised that a total knee replacement would be required. However no surgeon had requested approval to perform the surgery from the insurer and no medical expert advised that the surgery was required now. It was anticipated surgery would be required at some point but there was no evidence to state that surgery was required right at this point. The Arbitrator could not rule in favour of the worker based on the evidence before her therefore the insurer was successful in disputing the claim.
If you have been injured and the insurer has denied your claim for surgery please contact our office for advice because Helping You is Our Business.
Click here for more information on Libby Campbell.
Employment Contracts can contain Restraint of Trade clauses which affect the post-employment obligations of employees to their former employer.
Employees who are contemplating new employment in a similar area either for a competitor or related industry should first review the status of their post-employment obligations.
Often new employers require that an incoming employee warrant that they are not bound by any restraints.
When reviewing whether or not a restraint is valid the starting point is Section 4(1) of the Restraint of Trade Act 1976 which provides:
“A restraint of trade is valid to the extent to which it is not against public policy, whether it is several terms or not”.
A basic interpretation of this section is that a person has the right to pursue their chosen profession in the area in which they live.
This is reflected in the Court’s interpretation of restraint as articulated in the judgment of Vanderall Products Ltd v McLeod [1956] RPC185:
“An employer is not entitled to be protected against mere competition, a legitimate interest in the employer which may be subject of protection by covenant are in the nature of proprietary interest”.
An employer is entitled to protect their property. Such property includes client lists, intellectual property and trade secrets.
A restraint however can still be valid in circumstances where the parties have agreed to the restraint in writing and it is reasonable given the seniority and public perception or “face of the business” that the employee held whilst employed.
This position was articulated in the judgment of Cactus Imaging Pty Ltd v Glen Peter [2006] NSW SC717:
“It is plain that employer’s customer connection is an interest which can support a reasonable restraint of trade. Such a restraint is legitimate if the employee has become vis-à-vis, the “human face” of the business, namely the person who represents the business to the customer.”
In these circumstances it is merely a matter of interpretation as to restraint, time and geographic area as to what is reasonable.
Everingham Solomons has the specialist knowledge to assist in the interpretation of reasonable enforceable restraints for either a potential exiting employee or drafting the necessary Employment Contracts for a prudent employer.
If you require assistance, please contact Everingham Solomons because Helping You is Our Business.
It is widely known that Australia is in the midst of a terrifying Bushfire season which have had a devastating effect on our residents, wildlife and fire services and others, physically, mentally and financially. The old Australian adage about how when times are tough, mateship prevails has proven to be true and in typical fashion the people of Australia have rallied. We have seen unprecedented levels of donations well into the hundreds of millions of dollars, to assist the victims, fire services, charities and wildlife agencies.
While many of these organisations are legitimately accepting donations to assist those in need, we have also seen an increase of scammers defrauding people by claiming to be assisting those affected by the bushfire disaster.
If you have been a victim of a scam, it is unlikely that you will be able to get your money back. This is because it is usually very difficult for authorities to find the people guilty of these offences and charge them. However if you think you have been scammed, you should make a report to the police as soon as possible. They have jurisdiction to follow up these reports providing that the scammers are in Australia. If the scam originated outside of Australia, then there is very little the Police can do for you. You should also report it to Scamwatch which is a government run website that warns citizens of the latest scams.
As mentioned above it is unlikely you will be able to recover your money from a scammer. You may be able to recover it if your bank can stop the money transfer, so contact them immediately. They may also be able to stop the scammers from taking any more of your money, by blocking transactions.
Some tips to ensure you are donating to a legitimate charity or organisation:
1. Do not donate to a charity you cannot verify. You can search for registered charities and not-for-profits online at https://www.acnc.gov.au/charity.
2. Avoid donating on charity platforms that don’t verify the legitimacy of the fundraiser.
3. Avoid giving your credit card details to anyone who cannot be verified.
4. Donate to established known charities with verifiable fundraising goals.
It is important to report scams, even if you cannot get your money back to prevent other people from falling victim to the same scam.
Everingham Solomons have experienced Solicitors who can assist you with your legal problems because Helping You is Our Business.
It is said, “The only constant in life is change”. How true, particularly in law where legislation seems to be constantly changing.
For those of you who are looking to develop residential property or purchase new residential property you need to be aware of the new requirements which came into effect on 1 December 2019.
A developer is now required to provide a Disclosure Statement which should be attached to the Contract.
The Disclosure Statement needs to include:-
• A draft plan of the property prepared by a Registered Surveyor showing the lot number, location and area;
• A draft floor plan and location plan of the property;
• Any proposed bylaws, development Contract (including strata development contract) and management statement; and
• Schedule of finishes to be included in the property.
Also of particular note are the following changes:-
• The Cooling Off period for a purchase “off-the-plan” has been extended from 5 business days to 10 business days;
• If there are any material changes to the subject property the developer is required to serve a “notice of change” which may trigger a
right for the purchaser to rescind or claim compensation of up to 2% of the purchase price from the developer. The purchaser may only
rescind if the change was such that the purchaser would not have entered into the off-the-plan Contract and they would be materially
prejudiced by the change;
• The purchaser is not required to settle earlier than 21 days after receiving copies of the registered plan and other documents
associated with the plan; and
• The deposit paid by the Purchaser must be held in a Trust Account or Controlled money account (investment) by a Real Estate Agent,
Licensed Conveyancer or Legal firm pending completion and cannot be released to the developer.
The above seem to imply that the legislation relates to strata unit developments. That is not the case as the legislation also includes vacant land which is capable of having a residence constructed on it.
Everingham Solomons can assist whether you are a purchaser or developer because Helping You is Our Business.
With the devastating bush fires Australia has faced in recent times, it is a timely reminder to check and ensure that your smoke alarms are installed in accordance with the legislation and more importantly that they are in good working order. The Law in relation to smoke alarms in New South Wales is pretty clear. There is a requirement for all buildings in which people sleep to have working smoke alarms installed. Firstly, how do you make sure they are working? NSW Fire and Rescue recommend testing smoke alarms once a month (press and hold the test button) and changing the batteries every 12 months. Now, are they compliant? The Environmental Planning and Assessment Amendment (Smoke Alarms) Regulation 2006 sets out the what types of smoke alarms are acceptable and the requirements for installation in different types of buildings. The Legislation stipulates that working smoke alarms must be installed in every level of your home. You are also required to ensure smoke alarms are installed and working in any rental properties you might have. The requirements for smoke alarms does not only apply to residential property, strata properties, caravans and motorhomes are also required to have working smoke alarms. It is an offence not to comply with the Legislation, and fines can be pretty hefty! But the offences don’t stop there. It is also an offence to remove or interfere with a smoke alarm. Fines of up to $550.00 can apply to offences regarding smoke alarms. Everingham Solomons have experienced Solicitors who can assist you no matter your legal question because Helping You is Our Business.
Wrong! This is one of the biggest misconceptions people have when talking about Superannuation. Superannuation is not an asset of your estate, and as such is not distributed in accordance with your Will. Superannuation is distributed by, and at the discretion of, the Trustee of your Superfund.
Most people have provided their commercial superfund with a non-binding beneficiary nomination, however while it gives the Trustee an idea of who you would like to give the benefit of your superannuation, they are in no way bound by this nomination.
You can however override the discretion afforded to the Trustee of your Superfund by completing a Binding Death Benefit Nomination (BDBN) It is important to ensure that the BDBN is valid. This included having the BDBN signed by two witnesses, be made out in writing to the Trustee and contain a declaration.
In addition to this, your nomination of a beneficiary must be someone who is considered a dependent, ie spouse or child. In the absence of a dependent person or at your election, you can nominate your Legal Personal Representative to be the recipient of your death benefit. In these circumstances, the superannuation will essentially become part of your estate and distributed in line with the wishes set out in your Will. It is important to note that some BDBN’s expire after a period of three years. So it is recommended that you review them regularly
.
In the absence of a BDBN, the Trustee is required to search for any potential dependent persons, then assess the capacity of the dependent, take into consideration any non-binding nominations and then decide on the distribution to take place. This process can be quite drawn out and the wishes of the deceased are not always upheld.
What if you have a self-managed super fund (SMSF)?
You can still bind the Trustee by completing a BDBN. Unlike other Superfunds a BDBN does not necessarily expire after a period of three (3) years. This however is governed by the rules set out in your Superannuation Fund trust deed. If necessary these rules can be amended so that a BDBN does not expire.
It is important to thoroughly consider your estate plan while you still have capacity to do so. Everingham Solomons have experienced Solicitors who can assist you to plan what happens to your estate or review what you have in place because Helping You is Our Business.
So, you have sold your property and have decided to purchase another. It may sound simple, however the process can be rather cumbersome and there are various matters which require your careful consideration. For instance, should your purchase Contract be made conditional upon your sale? Do you have a cash deposit available for your purchase or are you relying on your sale proceeds? Can you obtain early access to your purchase property to ensure vacant possession of your sale property is provided on settlement?
The Conditional Contract:
If you are relying on your sale proceeds for your purchase, it is important to make your purchase Contract conditional upon completion of your sale. This will permit you to withdraw from your purchase, usually without penalties, in the event your sale does not proceed to settlement. This, of course, is subject to the vendor in your purchase being agreeable to entering into a conditional Contract, as a conditional Contract does provide some uncertainty to the vendor that the purchase may fall over if issues arise in your sale.
Early Release of Deposit:
If you do not have sufficient funds available for a deposit in your purchase, you may be able to obtain early release of the deposit in your sale to use as a deposit in your purchase. Alternatively, you could seek to pay a reduced deposit or use a Deposit Bond in lieu of a cash deposit. Ultimately, this would be subject to either the purchaser in your sale being comfortable with the early release of the deposit or the vendor in your purchase being agreeable to accepting a reduced deposit or a Deposit Bond.
Vacant Possession and Early Access:
Most Contracts require that you provide vacant possession of your property on settlement and that you cannot begin moving into your new property until settlement has occurred. For properties which are significant distances away, this may not be of concern when transit times are factored into the settlement timing. However, for properties within close proximity, you may find yourself at your new home with an entourage of removalists waiting for settlement to occur. Accordingly, with the vendor’s approval, you may be able to obtain early access to the property or part of the property i.e. garage to begin moving items into the property prior to settlement.
At the outset, discuss your plans with the real estate agent in your sale and purchase to ensure they, and the other parties, understand your position at the time of negotiating the sale and purchase. Also, discuss your plans with your solicitor to ensure the appropriate conditions are incorporated into the Contracts. To make the move from your existing home to your new home as smooth as possible, contact the property team at Everingham Solomons, because Helping You is Our Business.
Click here for more information on Jessica Wadwell
With the festive season in full swing and enthusiastic employees awaiting a party to unwind from their work responsibilities, employers should be aware that liability for workers compensation claims is still applicable. This is regardless of whether the annual Christmas party is held privately or publicly, at a location or premises different to their usual place of business.
In the case of Suzanne Elizabeth McCoy v State Super Financial Services Australia Limited [2018] NSWWCC 77 which was decided in 2018 the applicant worker was planning to attend her work Christmas party at a local hotel in the same town as her employment. She was tired from the day’s work and the year that had been. She lived approximately 40 minutes from the town and was intending to consume alcohol at the function so had booked a motel for the night with her husband, which would also avoid a long trip home after the party. She finished work at 5pm, her husband then picked her up from work and went to the motel. They then got ready for the party at the motel and then left the motel at 5:45pm to ensure they arrived on time for the party at 6pm. They were hurrying to get to the party. It was the worker’s perception that she was required to attend the party on time. While making their way to the party the worker tripped on a raised paver and injured her right ankle. The right ankle injury led to significant complications including symptoms suggestive of Complex Regional Pain Syndrome.
Liability was disputed by the workers compensation insurer. The insurer did not dispute the injury occurred but they did dispute whether the injury arose in the course of her employment, whether the injury arose out of that employment, whether the applicant’s employment was a substantial contributing factor, whether the applicant was making a journey, and whether there was a real and substantial connection between her employment and the injury.
The Arbitrator found for the worker in respect to her making a journey claim and that there was a real and substantial connection between the worker’s employment and the fall causing injury, namely she was tired from the day and year, as well as her perception to attend the work party on time which lead to her hurrying.
If you have a query whether a journey claim is a compensable workers compensation claim please contact Everingham Solomons because Helping You is Our Business.
Click here for more information on Libby Campbell.
The tension between business risk and responsibility dates from ancient times.
If you own a Family Trust that owns residential land in NSW or intend to purchase residential land and/or premises using your Family Trust, please note that Revenue NSW considers a Family Trust to be automatically subject to the foreign person surcharge on stamp duty and Land Tax.
One of the disputes workers compensation clients will encounter with insurance companies is whether treatment is reasonably necessary following a workplace injury. The relevant section of the Workers Compensation Act 1987 NSW is section 60. If the dispute is before an Arbitrator in the Workers Compensation Commission they will need to consider the following before deciding on whether treatment is reasonably necessary or not, as noted in Rose v Health Commission (NSW) (1986) 2 NSWCCR 32:
Employment Contracts can contain Restraint of Trade clauses which affect the post-employment obligations of employees to their former employer.
It is widely known that Australia is in the midst of a terrifying Bushfire season which have had a devastating effect on our residents, wildlife and fire services and others, physically, mentally and financially. The old Australian adage about how when times are tough, mateship prevails has proven to be true and in typical fashion the people of Australia have rallied. We have seen unprecedented levels of donations well into the hundreds of millions of dollars, to assist the victims, fire services, charities and wildlife agencies.
So, you have sold your property and have decided to purchase another. It may sound simple, however the process can be rather cumbersome and there are various matters which require your careful consideration. For instance, should your purchase Contract be made conditional upon your sale? Do you have a cash deposit available for your purchase or are you relying on your sale proceeds? Can you obtain early access to your purchase property to ensure vacant possession of your sale property is provided on settlement?