National Buildplan was a construction company involved in arranging construction of many large building contracts throughout Australia. A large number of those projects are Government funded infrastructure jobs, many of which are in the north west of New South Wales.
National Buildplan went into administration on 8 April 2013 and more than likely will end up in liquidation.
The collapse has left local contractors out of pocket for many millions of dollars.
We are yet to see the full effects of the insolvency which will involve contractors retrenching staff, contractors unable to pay their own debts resulting in further retrenchments and the closure of contractors’ businesses, some of which have already closed.
After the collapse of a number of high profile construction companies, the New South Wales Government commissioned the Collins Report last year.
The key recommendation was the establishment of a Statutory Construction Trust for projects greater than $1 million. The idea was that the Statutory Trust would receive the progress payments from the principal and the trustee would pay the sub-contractors direct.
Sadly the recommendations of the report have not been implemented however it is hoped that the anguish that our local contractors and employees are now suffering will motivate the Government into taking swift action to reform the building and construction industry.
I also ask, how long has the Government, which includes the Government departments who are administering contracts such as Health Infrastructure and Public Works, known that National Buildplan was in financial trouble?
There is evidence to suggest that various Government departments were well aware of the potential insolvency a number of weeks ago having met the company to discuss these issues.
Further anecdotal evidence suggests that National Buildplan were rejected as a potential tenderer for a large Government infrastructure job more than two months ago based on its perceived risky financial position.
What did the Government think when sub-contractors walked off the Nepean Hospital job on two separate occasions based on non payment.
Surely the Government should have taken notice and immediately reviewed the financial position of the head contractor and taken action to protect the sub-contractor’s payments. After all, it was the Government who commissioned the Collins Report .They were fully aware of the risk that a subcontractors takes in such contracts.
Is the Government not required, prior to the tender and during the construction process to monitor the financial health of its head contractors? Was this done?
It is time for the sub-contractors, their workers and families to take a stand on this issue and seek a Government rescue package for the sub-contractors who are left stranded and to change the laws to prevent this situation happening again.
At Everingham Solomons we have the legal expertise to help with all your legal problems because Helping You is Our Business.
Good faith clauses are finding their way into more and more commercial contracts. Traditionalists amongst lawyers will tell you that they are meaningless and that the only provisions which belong in a contract are precise statements of what each party must do, at what price, when and what happens if they don’t do what they are supposed to. Warm and fuzzy motherhood statements, they say, do not belong in contract documents, which should be bullet proof.
But good faith clauses are fighting back. Late in 2010, the New South Wales Court of Appeal decided a case involving a heads of agreement between Macquarie International Health Clinic Pty Limited and Sydney South West Area Health Service, relating to the development by Macquarie of a private hospital and a car park on Royal Prince Alfred Hospital land, which required the parties to act with the utmost good faith to one another.
After the agreement was signed, Area Health created a strategic plan which did not propose any development consistent with the agreement with Macquarie. Area Health never mentioned this to Macquarie and was nailed under the good faith clause because disclosure would have made a substantial difference to Macquarie’s expectations under the heads of agreement.
The Court said that the good faith promise must be construed having regard to the terms of the contract and the circumstances known to the parties in which it was entered into. It said that a contractual obligation of good faith embraces an obligation on the parties to cooperate in achieving the contractual objects, compliance with honest standards of conduct, and compliance with standards of conduct that are reasonable having regard to the interests of the parties. It said that a contractual obligation of good faith does not require a party to act in the interest of the other party or to subordinate its own legitimate interest to the interest of the other party but it does require it to have due regard to the legitimate interests of both parties.
So, parties entering heads of agreement, letters of intent, memorandum of understanding or formal contractual documents should be careful about good faith clauses. If you require advice in relation to the negotiation or preparation of contract documents, the commercial team at Everingham Solomons can assist you because Helping You is Our Business.
Under the National Employment Standards (NES), employees have an entitlement to a paid day off on a public holiday unless it is reasonable to ask an employee to work. Many businesses remain open over public holidays and need employees to work. This can lead to confusion and disputes over whether or not it is reasonable to ask an employee to work on a public holiday.
Requests to work on a public holiday
The factors set out in the NES to determine the reasonableness of a request to work (or the reasonableness of a refusal to work) on a public holiday are:
the nature and operational requirements of the workplace
the type of work required to be performed
the employee’s personal circumstances (eg family responsibilities)
any reasonable expectation that public holiday work is required
entitlements to be compensated for working on the public holiday
the type of employment of the employee (ie full-time, part-time or casual)
the amount of advance notice provided to the employee to work on the public holiday, and
the amount of advance notice given by the employee if refusing to work on a public holiday.
What does this mean for employers?
Employers requiring employees to work on public holidays should:
consider the reasonableness of the request
provide as much notice as possible to avoid an employee claiming that the request was unreasonable, and also
consider any obligations that may arise under industrial instruments such as enterprise agreements or modern awards that regulate employees’ entitlements on public holidays
The Employment Law team at Everingham Solomons is well equipped to assist you with all your workplace relations issues because Helping You is Our Business.
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Sometimes when parties separate and they have children, one or both of the parents may be required to spend supervised time with their children. This may be for a variety of reasons, primarily it is to ensure that children are not exposed to any form of risk.
When a Court has made final orders, it is almost impossible to change them unless there has been a significant change in circumstances as outlined in the leading case of Rice and Asplund (1979) FLC 90-725.
The question may be asked, what happens when a Court has made final orders for one of the parents to only spend supervised time with the children? Can the issues leading to the supervision be re-addressed and changed at a later time?
This issue was the subject of debate in the matter of Slater & Light [2013] FamCAFC 4. This was an appeal from the Federal Magistrates Court concerning a decision whereby a father was to spend supervised time with his children. It was determined at that time that the father posed an unacceptable risk of emotional harm to the children.
The problem for the father was that the orders provided that he could only have supervised visits with the children. There were no other orders for the father, whether he was rehabilitated or not. He was not to spend unsupervised time with the children.
On appeal, the Family Court had to determine whether the Federal Magistrate, had the intention that the orders were to be final with no prospects of changing them.
Whilst the Court found that the order for supervised time was justified in the circumstances, they did not agree that an indefinite supervision order was the correct outcome. The reason is that it did not allow the father the opportunity to apply to vary the orders due to the matters outlined in Rice and Asplund.
Further, the Court did concede that there had been a time delay between the initial hearing in 2011 and the time of the appeal. In that regard, they ordered a re-hearing of the matter with updated expert evidence about the time that the father should spend with the children.
If you need advice in relation to parenting orders, you should contact Everingham Solomons because we have the experience and expertise to assist you because Helping You is Our Business.
In business deals, sometimes one party just won’t pay up.
As a creditor (person who is owed money) one option that is available is to pursue the debtor (person who owes the money) through the court system for payment.
Unfortunately however, sometimes debtors don’t respond to court proceedings. The issuing of a statement of claim, entering of judgment and enforcing of an order can be a long, and cumbersome exercise. The debtor gets to keep your money in his pocket for months while you jump through the hoops.
If, however, the party that owes you money is a corporation, there is another very, very effective alternative available to you.
It is called the statutory demand and it works like this:
You send a simple and inexpensive document requesting payment to the debtor company. If the debtor company does not pay the debt within 21 days, the company can be almost immediately wound up – The company’s life is over. Trading stops, an administrator is appointed and all the company’s assets are sold off to pay you.
If the debtor company has even a half serious business they will not want this to happen. It’s not a good outcome for it’s business.
Of course, the debtor company can always object to the statutory demand by refuting the legitimacy of the debt. But, they have a very strict 21 day deadline in which they are entitled to do so. They will also have to pay a filing fee of about $2,500 to give a Supreme Court Judge the pleasure of listening to their argument.
It’s the perfect medicine to wake up a sleepy debtor that will not respond to any other prodding for payment.
If the creditor’s entitlement to the debt is straightforward, it will be futile and incredibly expensive for the company to resist. A smart debtor will simply pay up rather than being wound up.
A statutory demand is a simple document but must be drafted meticulously. It must be verified, sworn and served in accordance with complicated Corporations Rules.
If a statutory demand contains any defect it can be set aside by the court and the creditor can be ordered to pay for the debtor’s inconvenience.
In order to make sure your statutory demand is done correctly the first time, contact Everingham Solomons, because Helping You is Our Business.
Most casuals know from week to week whether they will be offered more work. That however does not mean that only those employees that do not know, would be treated as casual.
It is the informality, uncertainty and irregularity that gives rise to the characteristics of being a casual.
In the recent decision of Williams v McMahon Mining Services Pty Limited [2009] FMCA 511 the court held that as the employee’s work were performed according to a stable organised and certain roster, with certainty of working hours throughout the term of employment, he was not a casual worker.
There is however no one characteristic that makes an employee a casual and each case needs to be looked at on an individual basis.
Another older case is Licensed Clubs Association of Victoria v Higgins (1988) AILR497 where the court examined the following factors to determine what the ongoing relation was:
the number of hours worked each week;
whether a roster system is published in advance;
whether the employment pattern is regular;
whether the employee has an expectation of continuity of work;
whether the employer requires notice before an employee is absent or on leave;
whether the employee works to consistent starting and finishing times.
Implications for getting it wrong are significant. Apart from fines, there are also entitlements to personal leave, notice of termination, redundancy pay, annual leave and protection from unfair dismissal.
Employers should carefully consider when engaging a casual employee whether the employee can be considered a true casual. Employers should also review the employment contracts they use, particularly for casual employees, to ensure that they reflect the true legal relationship created.
The Employment Law team at Everingham Solomons is well equipped to assist you with all your workplace relations issues because Helping You is Our Business.
Independent contractors are usually self-employed and accordingly are their own boss – providing their own tools, deciding which jobs to take on, being paid to achieve a result and bearing the risk of non-payment.
Employees on the other hand are paid to work certain hours for an agreed wage, and are usually entitled to paid leave.
A common distinction between contractors and employees is the documentation used to engage the worker – an employee will usually be provided with an employment agreement for ongoing services; an independent contractor will usually enter into a contract specifying the nature of the work to be carried out during a particular period. The difference is sometimes small and it can be difficult to ascertain whether a person is a contractor or employee.
Whilst a difficult distinction, contractor versus employee is an important one for businesses to make.
A recent Federal Court case has held that signing contracts indicating an independent contractor relationship is not sufficient to shirk responsibility if the real nature of the relationship is that of employer/employee.
The case involved a number of insurance sales representatives who signed contracts to provide independent contractor services. The sales representatives however were trained by the insurance company, supervised and directed by the insurance company, and worked closely with the insurance company. The Court held that the insurance company’s ability to control the sales representatives placed them into the category of employee rather than contractor. The decision resulted in more than $500,000 in accrued annual and long service leave being paid to the insurance representatives by the company.
To avoid a costly claim for back pay or other entitlements such as superannuation or long service leave, contact the employment law team at Everingham Solomons where Helping You is Our Business.
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Last year the NSW New Home Grant Scheme was introduced to stimulate the construction of new homes in NSW and remains open today to non-first home buyers and investors alike. Eligible purchasers can receive a $5,000 grant towards the purchase of a new home, a home off the plan and the purchase of vacant land on which a new home will be built.
To take advantage of the $5,000 grant, purchasers must fall into one of these categories:-
The value of the new home must not exceed $650,000; or
The value of the vacant land (upon which a new house will be built) must not exceed $450,000.
This means that a purchaser seeking to purchase a new home will be eligible if the agreement provides for the purchase of land that is the site of a new home which is complete and ready for occupation. A new home is a home that has not been previously occupied or sold as a place of residence, and includes a home that is a substantially renovated home. Whether a home has been substantially renovated needs to be determined in the particular circumstances because it is a defined term under the legislation.
Likewise an off the plan purchase is also eligible for the grant. An off the plan purchase involves a contract for the purchase of land intended to be used as the site of a new home, which is to be built before completion of the agreement.
And finally, a purchaser of vacant land that is intended to be used as the site of a new home and which is not an off the plan purchase may also be eligible for the grant if the value of the land being purchased does not exceed $450,000 and the laying of foundations for the home must commence within 26 weeks of settlement of the purchase of land.
The grant will not be available to purchasers if the new home, or the land on which the new home is located or to be built, is intended to be used for any purpose other than residential such as commercial, industrial or professional.
The above scheme should not be confused with the First Home—New Home scheme. If you are eligible for a stamp duty exemption/concession under the First Home – New Home Scheme, you cannot receive the $5,000 New Home Grant.
If you are considering buying a new home or vacant land to build your new home on there are conditions that apply and you should come and see our experienced property team who can help answer all of your questions, because Helping You is Our Business.
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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 andmanagement fee” for introducing two properties to the group that were available for acquisition. The truth of the matter was that the director had made no such introduction. The truth was that the payments were distributions to the director of unrealised capital profits thought by the director to have accrued but not the subject of any formal valuation or accounting entries.
At the time that the payments were made, the group was profitable, the companies were solvent, and the payments had the approval of the sole shareholder (the director) and had been disclosed to the chief financial officer. Moreover, the payments did not directly disadvantage any third party and the director had obtained advice from Price Waterhouse Coopers in relation to the payments and how they should be recorded in the books of the company.
The director said that he had been engaged on a full time basis with the group for over two years. He had made an initial investment of about $750,000 and had raised a considerable amount of money. He had not received any return nor paid himself any wages. He said that the payments, which were made to him were “fair” in those circumstances.
None of that was an answer to the prosecution’s case. All that was important was that the manner of payment to a related party of the group’s funds was not truthfully recorded in the group’s books of account.
So, it is of critical importance that directors of companies discharge their duties as directors with complete honesty. If you need help with matters of corporate governance, the commercial law team at Everingham Solomons would be happy to help because Helping You is Our Business.
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. Her husband told Mr Hay that it was time to go. Mr Hay, although not at all well, got up and left. He was found dead in a nearby toilet block the next day.
Mrs Burns was charged with, and stood her trial for manslaughter in the District Court. She was convicted. She appealed. The NSW Court of Criminal Appeal upheld her conviction. Right result? Wrong. In September last year, the High Court quashed the conviction. The Court found that the act of supplying the methadone, whilst illegal, was not dangerous. The risk of injury arose when the drug was consumed. The cause of death was the consumption of the drug not the supply. Further, the Court said that a failure to help where help would have saved the life of another can be manslaughter but only within confined categories requiring particular kinds of relationship. The relationship of drug dealer and customer is not one of those relationships.
Mrs Burns walked free although His Honour Justice Heydon, in the minority on the point, said that she should be sent for a new trial to determine whether she helped Mr Hay inject, which, in His Honour’s opinion, might constitute the dangerous act causing death.
What a piece of work is the needle? Drug addiction rendered Mrs Burns’ soul as dead as Hamlet’s father and her heart as empty as a scarecrow’s pockets.
If you have a case for the High Court or any other Court, the litigation team at Everingham Solomons can help you because Helping You is Our Business.
National Buildplan was a construction company involved in arranging construction of many large building contracts throughout Australia. A large number of those projects are Government funded infrastructure jobs, many of which are in the north west of New South Wales.
