A grandfather testator made a Will in which he left his estate to his only daughter (the defendant). The plaintiffs were the only grandsons of the testator, who owned, controlled and operated considerable pastoral holdings near Walgett. The plaintiffs commenced court proceedings against their mother as the executor of their grandfather’s estate, claiming that they were entitled to the entirety of their grandfather’s property, to the exclusion of their mother. Affronted by their conduct, the defendant made the decision to leave her sons out of her own Will. The result would have been, absent a court order or a change of heart by the mother, the plaintiffs would never receive the inheritance they long aspired to receive. It was left to a Court to determine the outcome of the family provision claim made by the plaintiffs against their grandfather’s Will.
Within the family group, the plaintiffs and their parents were all partly dependent upon the testator. He acted as a father figure to the plaintiffs, especially after their parents separated in 1992. He paid for the grandsons’ education. He provided the grandsons with paid work and accommodation on his properties. He shaped and directed their lives after school and to a considerable extent, groomed them for what he expected would be their eventual inheritance. “In the case of both young men, he encouraged them in the expectation that they would inherit the properties. In the circumstances in which they were brought up, the plaintiffs understandably developed an unhealthy sense of entitlement. But there were no promises and there was no agreement”.
The testator made Wills in 1987 and 2002. In both Wills, the testator left his estate to the defendant and provided for the properties to go to the plaintiffs only if his daughter pre-deceased him. The testator “never intended to leave the properties directly to them [the grandsons] while ever his daughter was alive and well, living on the properties and operating them”.
“It should be understood that the position under our law is that grandchildren have no claim as of right to the beneficence of grandparents…Nor should it be assumed that generosity by a grandparent to a grandchild, including by the payment of school fees, automatically converts the relationship into one of obligation to provide for the grandchild on the death of the grandparent”.
In order to make a family provision claim, a grandchild must be a person “who was, at any particular time, wholly or partly dependent on the deceased”. It is not enough for a grandchild to simply put their hand up for a greater share in an estate. Additionally, grandchildren must be able to demonstrate to a Court that “having regard to all the circumstances of the case (whether past or present) there are factors which warrant the making of the application”.
When determining an application for family provision, the Court noted it is appropriate to have regard to “perceived prevailing community standards of what is right and appropriate. This may be an imprecise, variable and contestable standard”.
Ultimately the family provision claim was not successful as the Court formed the view that the factors relied upon by the plaintiffs did not warrant the making of the family provision claim.
In family provision claims, there are principles that emerge from the cases which take into account prevailing community standards of what is right and appropriate but ultimately each case depends on its own facts. At Everingham Solomons, we have the expertise to assist you with all matters relating to deceased estates, estate planning and Family Provision claims, because Helping You is Our Business.
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New legislation that comes into force shortly will ensure that both landlords and vendors looking to sell properties with a swimming pool have undertaken all works necessary to make the pool compliant with safety regulations.
From 29 April 2015, all properties with a swimming pool or spa pool that are sold or rented must have a valid swimming pool certificate of compliance.
The laws apply to pools associated with private dwellings (houses, townhouses & strata and community schemes), moveable dwellings, motels and backpacker, B&B and farmstay accommodation.
The definition of “swimming pool and spa pool” includes in-ground, above-ground, indoor and portable pools that are capable of being filled with 300mm of water. Bathroom spas that are used as baths and emptied after use are not included.
The legislation makes it a requirement that a Vendor attach a swimming pool certificate of compliance to the contract for sale that certifies the pool and pool barrier meet safety requirements. The certificates are issued by Council or a private certifier and are valid for 3 years.
This new requirement makes the swimming pool certificate of compliance a prescribed statutory document for sale of real estate, requiring the Vendor to order and pay for the certificate (& any necessary works to upgrade the pool, such as fencing repairs or installation of resuscitation signage), rather than the Purchaser arranging an inspection of the pool at its cost as part of pre-purchase due diligence.
Failure to attach the swimming pool certificate of compliance to the sale contract will entitle the Purchaser to withdraw from the purchase without penalty, having the deposit refunded to them.
Real estate agents also risk a fine of up to $11,000 for marketing a property with a pool for sale without holding a valid swimming pool certificate of compliance.
Landlords must provide tenants with a valid certificate of compliance at the time of entering into a residential tenancy agreement. Failure to do so can result in a fine of up to $2,200.
Vendors selling or landlords renting units in a strata scheme will need to approach the owners corporation for a copy of the swimming pool certificate of compliance – there is no requirement for each individual property owner to obtain their own compliance certificate when the pool is located on common property.
To ensure your sale or lease complies with the new swimming pool legislation, contact the experienced Property Team at Everingham Solomons where Helping You is Our Business.
This is an option for enforcement of a judgment when the judgment debtor is a company and the judgment debt exceeds $2,000.00.
A creditor’s statutory demand for payment must be made in the prescribed form and must be accompanied by an affidavit from or on behalf of the creditor stating that the judgment debt is owing. On service of the demand the options for the judgment debtor company are as follows:
Pay the creditor the judgment debt; or
Bring an application in the Supreme Court of New South Wales to have the demand set aside.
If the judgment debtor company does not respond to a statutory demand within 21 days of service, it is deemed to be insolvent under the Corporations Act. After expiry of the 21 days an application can be made for the winding up of that company in the Supreme Court of New South Wales.
When a company is deemed insolvent and an order is made for its winding up, the Court appoints a Liquidator to undertake investigations into the affairs, books and conduct of the company, and potentially its directors. From this the creditors are to be paid depending on other debts of the company.
For a debtor company to set aside a creditor’s statutory demand it must raise that there is a genuine dispute in relation to the debt which is the subject of the statutory demand. The test for a genuine dispute is not a high one for the debtor company to meet. Because of this it is advised that only uncontroversial debts or judgments be the subject of any creditor’s statutory demand.
This is an efficient and effective way to pursue a debt against a company. Any Company served with a creditor’s statutory demand should take it seriously due to the ramifications of a winding up order.
From experience it is the leverage of a creditor’s statutory demand that can yield results in a creditor receiving monies owed under a judgment by a company.
As with any litigation the enforcement of judgments should be taken with a commercial view. You may well not receive all or any of the monies owed to you under a judgment.
If you hold a judgment against a company or your company has received a creditor’s statutory demand for payment, you should contact a solicitor for advice.
At Everingham Solomons, our dispute resolution team is committed to providing the most time and cost efficient outcome when pursuing enforcement of judgments because Helping You is Our Business.
The Family Court and Federal Circuit Court have the jurisdiction in Australia to make orders in relation to division of matrimonial assets between separating spouses and de-facto partners.
When the Courts are asked to make a determination in regards to dividing matrimonial assets, the courts use a number of steps:
Firstly they identify and assess the assets and liabilities of the matrimonial pool;
There is a consideration of contributions made by the parties, being both financial and non-financial, direct and indirect;
The next step relates to “section 75(2) factors” which include a non-exhaustive list of further considerations such as the parties’ ages and health status, whether a party cares for children, and the future needs and earning capacities of the parties;
Finally, the Courts are required to make an order which is appropriate and fair, also known as being “just and equitable”.
The case of Morrison & Morrison [2014] concerned parties who separated after 23 years of marriage and who had a 14 year old child. The husband was the primary breadwinner however the wife had care of the child throughout the marriage. The child spent no time with the husband post separation.
The asset pool was $920,000 and the husband had the greater earning capacity working as a public servant, the wife worked in a part time capacity. Accordingly there was a large disparity in their earning capacities.
During the hearing of the matter the husband was suspended from his employment and subject to criminal proceedings in which he was facing a custodial sentence. In this respect the wife had no prospect of receiving any child support in the future from the husband.
The Court found that in considering the wife’s future needs, these were directly affected by the husband’s potential goal sentence and inability to pay child support in the foreseeable future as well as his nil involvement in parenting the child of the marriage.
Ultimately the Court made adjustments in the wife’s favour and she was entitled to 62.5 percent of the asset pool due to her care of the child and limited earning capacity. Although the outcome of the husband’s criminal proceedings could impact on the future earnings of the wife, the court was required to make orders to finalise a property settlement because it was just and equitable to do so.
At Everingham Solomons we have the expertise and experience to assist you with a property settlement and any other family law matter because Helping You is Our Business.
Many businesses gloss over the Personal Property Securities Act 2009 (Cth) (PPSA). How is it relevant to my business? Doesn’t it have something to do with people’s personal property – their furniture, TVs, iPads, watches and the like?
In fact, the PPSA is more relevant to the property of businesses than it is to the goods used in people’s households for domestic use. Personal property is essentially all property except for land and items affixed to the land. It includes the plant and machinery of a business, and its inventory. It includes the crops and livestock of a farming business. Personal property can include more intangible items like intellectual property, shares and accounts.
Essentially, the PPSA allows the holder of a security interest in personal property that is in the hands of another to register that interest on the Personal Property Securities Register (PPSR) and protect that interest against the world at large.
Take the example of Jane’s Jewellery Store. To get her business started, Jane borrowed from XYZ Bank and, to secure that loan, Jane gave a charge to XYZ over the whole of the business. XYZ promptly registered its charge over the business as a security interest on the PPSR.
Jane’s carpenter friend, Adam, supplied and fitted some new cabinetry in the jewellery store. Jane could not pay, so Adam said that he would proceed with the work but retain title to the cabinetry until Jane paid him. Adam did not register a security interest in the cabinetry on the PPSR against Jane’s business.
Jane’s jewellery designer friend, Mary, supplied items of jewellery on consignment to Jane for sale in the store. John rented a cash register, a computer and a safe to Jane. Neither Mary nor John registered their security interests on the PPSR against Jane’s business.
Months later, Jane’s cash resources dried up, and she was forced to put her business into liquidation. XYZ, the only party with a registered security interest, took possession of all the personal property within the business and sold it to repay the debt owed by Jane. By failing to register their security interests over the personal property they had supplied, each of Adam, Mary and John surrendered their security interests to Jane’s Jewellery Store on its liquidation and the priority security interest of XYZ prevailed. Adam, Mary and John were left only with money claims against an insolvent business.
If you can see yourself in this scenario, contact us at Everingham Solomons for personalised advice because Helping You is Our Business.
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Effect of Willmott Growers Group v Willmott Forests
In Willmott Growers Group v Willmott Forests (“the Willmott case”) the High Court has confirmed that a liquidator can disclaim a lease if a landlord company is liquidated.
Facts of the case
Willmott Group (“Willmott”) leased land to a tenant for a period of 25 years.
Willmott subsequently became insolvent and was wound up.
Willmott’s liquidators disclaimed the lease in accordance with the Corporations Act (“the Act”).
Result
The High Court found that the liquidator was entitled to disclaim the lease.
The tenant lost its rights in regards to the land and was left only with a claim as an unsecured creditor in the liquidation.
Effect of Willmott on tenants
Tenants may be disadvantaged if their landlord enters into liquidation;
Banks may be reluctant to hold leases as security due to the potential for leases to be disclaimed, resulting in it being more difficult for a tenant to obtain finance;
Tenants may lose the benefit of certain assets brought onto leased land if such assets cannot be relocated when a lease comes to an abrupt end (i.e. the Willmott case involved the planting of trees on the leased land which the tenant lost the benefit of when the lease was disclaimed).
Possible Solutions for tenants
Unfortunately, there is nothing tenants can do to prevent their landlord from being wound up and, should this occur, a liquidator can disclaim a lease. With that said, it may be beneficial to creditors for a liquidator to keep a tenant in place.
Some possible safeguards available to tenants include:-
Negotiating a condition of the lease by which the landlord grants a registerable mortgage over the land to the tenant to secure payment of damages if the lease is ever disclaimed. This would ensure that tenants have priority as secured creditors in a liquidation scenario.
Including a clause in the lease to the effect that title in any property, fixtures or fittings bought on to the land by the tenant will not pass until the landlord has paid the tenant the market value for such property, fixtures or fittings. Registration of a security interest on the Personal Property Securities Register may also be necessary.
Obtaining personal guarantees from the director/s of the landlord company.
It is worth noting that section 568B(3) of the Act allows the Court to set aside a disclaimer of lease “if satisfied that the disclaimer would cause, to persons who have… interests in the property, prejudice that is grossly out of proportion to the prejudice that setting aside the disclaimer would cause to the company’s creditors.” This section was not argued in the Willmott case but is an avenue available to be utilised by tenants in future cases.
For assistance in relation to your leasing issue, please contact the experienced team at Everingham Solomons, because Helping You Is Our Business.
An interesting case arose recently in the High Court of Australia (‘HCA’) when a loyal employee took on his former employer, one of Australia’s largest banks.
Mr Barker had been employed by the Commonwealth Bank of Australia (CBA) for about 18 years in its financial services sector, which was being restructured.
On 2 March 2009, Mr Barker was told by his bosses that the bank had decided to make him redundant. The bank was going to try and find Mr Barker another suitable position within the bank (‘the redeployment’), but failing that, he would be terminated four weeks later (‘the notice period’). Mr Barker was told to spend the rest of the day cleaning out his desk, but not to return to work the following day, or for the remainder of the notice period. At the same time Mr Barker’s access to his work email account and his work voicemail messages was blocked.
On 20 March 2009, members of the bank’s management sent correspondence to Mr Barker’s work email, seeking to assist Mr Barker with the redeployment. Having no access to his work email, Mr Baker did not receive that correspondence until it was passed onto him later on 26 March 2009.
Having received notice of the possible redeployment initiative only days before his scheduled termination, Mr Barker argued that he had lost the chance to participate in the redeployment process.
Mr Barker was covered by a written employment contract (‘the contract’) and his termination had largely been conducted in accordance with it. Mr Barker argued however, that although it did not appear in the writing of the contract, the court should imply into the contract a term that the bank would maintain trust and confidence with [Mr Barker] (‘the term of trust’). Mr Barker further argued that, because of the failure on the bank’s behalf to properly notify him of the redeployment initiatives, the bank had breached the term of trust, which he asserted to be implied.
Mr Barker won his argument in front of a single Judge of the Federal Court of Australia (‘FCA’), but the bank appealed to the full court (seven Judges) of the FCA, where Mr Barker won again. The bank then appealed again to the High Court of Australia (‘HCA’), which is the last right of appeal in the Australian court system.
Mr Barker lost in the HCA. The HCA said that the term of trust could not be implied into the contract because it was not necessary for the contract to act effectively. The fact that such a term may have made the contract more reasonable, was not enough to force its implication.
If you have an employment law question, contact Everingham Solomons because Helping You is Our Business.
People change jobs for a variety of reasons, from not getting on with the boss to career advancement. Usually notice is given by the employee and they will work with their employer to train a replacement. But how should an employer react when an employee abandons their position?
Abandonment of employment arises where an employee:
is absent from work
without a reasonable excuse
for an unreasonable period of time
without having advised their employer why
The employee is, by their actions (or lack thereof), demonstrating an intention to no longer be bound by the terms of their contract of employment.
Abandonment of employment is a repudiation of the employment contract, however the contract isn’t terminated until the abandonment is accepted by the employer.
If you find your employee has gone “absent without leave”, employers should:
attempt to contact the employee (by phone, email or through work colleagues)
if contact cannot be made verbally, a letter should be sent to the employee’s home address by registered mail requesting the employee contact the employer as soon as possible
if the employee does not attempt to contact your office, or is unable to provide a satisfactory “excuse”, you must assume that the employee has abandoned their employment. The abandonment will be taken from the date the employee last attended work.
It is important for employers to note that:
an absence for a day or two cannot be considered abandonment (most Modern Awards provide that an absence of more than 3 days without consent is required)
if an employee’s leave application is unreasonably withheld, and the employee proceeds to take leave, abandonment does not apply
If you are an employer and you require assistance in determining whether you can terminate an employee for abandonment of their role, contact the employment Law team at Everingham Solomons where Helping You is Our Business.
With the temperatures rising, and Christmas just around the corner, the annual office Christmas parties are now in full swing.
For both employers and employees this presents a welcome relief from their yearly work commitments and a time in which an employer can show appreciation for the year’s hard work to their employees.
What should be remembered, however, is, put simply, the Christmas party is a ‘workplace’, regardless of when and where it is held.
Employers can be liable for the actions of their employees at work-related events, such as seminars, conferences, work functions and Christmas parties.
In the spirit of the season, Everingham Solomons now presents a ‘do’s and don’ts’ for both employees and employers for office Christmas parties.
Do’s
Turn up! It is a great opportunity to interact away from the office environment, it builds morale and strengthens relationships.
For employers, leading up to the Christmas party, remind your staff that it is a workplace event and that you expect their behavior to reflect this. Remind staff of any existing office policies and procedures, particularly in relation to sexual harassment and bullying.
As alcohol will normally be served at office events, employers should organize travel arrangements, such as a taxi or courtesy bus to ensure their employees get home safely.
Choose your karaoke song wisely.
Dust off your worst Christmas themed tie and wear with pride
Enjoy yourself and get to know your work colleagues in a more relaxed environment.
Don’ts
Employees and employers should refrain from posting photos of the Christmas party on social media to avoid embarrassing pictures of themselves or colleagues entering the Twitter-sphere!
Avoid religion and politics. These are hard topics to approach sober, but with a drink or two can lead to an inflamed situation.
Do not do something that you know you would not be allowed to do in the office. Remember the policies of bullying and harassment apply!
Do not harass your boss for a pay rise! The Christmas party, and a few drinks in, is not the time to campaign!
Know your limits. Alcohol will be served and you do not want to be “that guy” or “that girl”, your hard earned respect from colleagues can be eroded quickly.
For Employers do not dismiss a post-Christmas party complaint, take it seriously and investigate as you would an office incident.
Merry Christmas
Everingham Solomons wishes everyone a safe and merry Christmas and please don’t drink and drive.
Remember, an incident or dispute arising at or after a Christmas party where alcohol was served is not a valid defence or excuse.
From Terry Robinson and the Directors of Everingham Solomons
A recent NSW decision has ignited the debate amongst those who oppose fettering a testator’s right to testamentary freedom against the proponents of current legislation which seeks to protect the family of the deceased by providing for members of the family who would otherwise be left without adequate provision. A recent case saw an applicant bring a successful family provision claim against her former lover’s estate.
The deceased died in 2011 aged 65 years. The deceased left a Will made in 2006. The Will provided for the estate to be divided equally between the deceased’s wife, son and daughter. The estate was worth over $6 million. No provision was made in the Will for the applicant who was the former de facto spouse of the deceased.
In order to make a family provision claim a person must be an “eligible person” as defined by legislation. In NSW the categories of eligible persons generally consist of a spouse of the testator (including de facto spouse) at the time of the testator’s death, a child, a former spouse, a dependent grandchild or a dependent member of the testator’s household or a person with whom the testator was living in a close personal relationship at the time of the testator’s death.
In this case the applicant was an eligible person because she was a person who was, for a time, wholly or partly dependent on the deceased and a member of his household.
The de facto relationship between the applicant and the deceased lasted about 8 years and ended 30 years before the death of the deceased. There was a child of the relationship. After the relationship ended, both re-partnered but there was no property settlement.
The wealth accumulated by the deceased came long after the relationship between the applicant and the deceased had ended. When the applicant returned to Australia in 2006 after working abroad, she turned to the deceased and he provided her with assistance.
The Judge stated “At first blush, one naturally hesitates to find factors warranting a family provision application in a case involving a de facto relationship 30 years distant from the deceased’s date of death, coupled with a divergence in the lives of the former de facto partners as they re-partnered and pursued different economic paths”. Against this the Judge noted “as life unfolded, there was (in social terms) a reconciliation” between the applicant and the deceased; “their estrangement was not, in that context, absolute or complete; the deceased remained solicitous of the welfare” of the applicant “in part, but not only in part, because he recognised her as the mother of his son; he encouraged her to return to Australia in 2006; and, when she did so, he provided her with assistance”.
In making an evaluative judgment, the Court made provision out the deceased’s estate to the applicant in the sum of $350,000.
At Everingham Solomons we have the expertise to assist you with all matters relating to family provision claims, because Helping You is Our Business.
A grandfather testator made a Will in which he left his estate to his only daughter (the defendant). The plaintiffs were the only grandsons of the testator, who owned, controlled and operated considerable pastoral holdings near Walgett. The plaintiffs commenced court proceedings against their mother as the executor of their grandfather’s estate, claiming that they were entitled to the entirety of their grandfather’s property, to the exclusion of their mother. Affronted by their conduct, the defendant made the decision to leave her sons out of her own Will. The result would have been, absent a court order or a change of heart by the mother, the plaintiffs would never receive the inheritance they long aspired to receive. It was left to a Court to determine the outcome of the family provision claim made by the plaintiffs against their grandfather’s Will.
