Retail Leases: The Importance of Disclosure

ATHThe Retail Leases Act (NSW) applies to all retail leases in NSW. The definition of retail lease  encompasses any agreement under which a person grants another person a right to occupy a premises for the purpose of using the premises as a retail shop.

At it’s core, the Retail Leases Act is a piece of consumer protection legislation for small business . It is designed to address perceived imbalances in power that may exist between landlords and small business tenants.

As well as regulating particular terms of retail leases, the Act emphasizes the fundamental importance of disclosure before a retail lease is entered into.

Under the Act, it is illegal for a landlord to advertise property for a proposed retail use without first having:-

  1. A draft lease prepared; and
  2. both the draft lease and of any applicable retail tenancy guide ready to provide to prospective tenants.

Failure to meet these disclosure obligations will not only delay a transaction when a tenant is found, it will in fact constitute a breach of the Retail Leases Act, potentially resulting in liability for both landlords and their leasing agents. The current penalty imposed under the Act can be up to $5,500.

Failure to fulfill disclosure obligations can be both costly and time consuming for landlords and their agents.

At Everingham Solomons we have the expertise to assist both landlords and tenants in regards to the above disclosure issues, as well as 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.

Click here to learn more about Abbey Huckstep.

Organ Donations – Should it be in your Will?

TRIt is not uncommon for a client to want to record their wish to become an organ donor in their Will. Is this the best way to notify family and doctors that you wish to donate your organs?

Unfortunately, by the time family members have turned their minds to firstly finding and then reading the deceased’s Will, their organs are unlikely to be of any use.

There are only very limited circumstances in which human organs can be ‘harvested’, and an extremely limited time window of opportunity to do so.

Only people who have suffered brain death, that is, their brain has died whilst the rest of their body has continued to function usually on a ventilator, are capable of donating organs.

If you wish to give the “gift of life” upon your death, the first step is to register your wishes by signing up to the Australian Government’s new Organ Donor Registry. Visit www.donorregister.gov.au. The registration process is easy.

You should also discuss your wishes with your loved ones, because doctors will rarely use a person’s organs if the grieving family members do not agree to it. According to statistics, less than 60% of grieving families give consent for organ donation to proceed. 43% of people say that they weren’t sure what the deceased person wanted.

According to the website there are about 1600 people on organ donor waiting lists in Australia, and they will spend on average between 6 months and 4 years waiting for the right organ donors to come along.

Previously the process for recording your intention to be an organ donor was different in every state. The new register is Australia wide and provides a one stop shop where people can easily and quickly confirm their intentions.

Doctors in emergency rooms across Australia have 24 hour access to the register so that they can begin the search for potential organ recipients from the earliest possible moment.

If you have previously registered on another register, it is important that you register on the National Organ Register so that your information can be linked to your Medicare number.

So the answer to the above question, is that organ donation is best recorded on the National Donor Register, rather than in your Will.

If you need any assistance in a legal matter, contact Everingham Solomons because Helping You is Our Business.

Click here for more information on Terry Robinson

Damages Under Commercial Leases – Part II

<CCLast week we looked at a landlords rights under a commercial lease where the tenant left the property and stopped making rental payments mid way through a lease.

Our firm brought the matter before the Tamworth Local Court before the lease term expired.

In short there were three periods in which the court had to consider the landlord’s right to damages under the lease.  To recap they were as follows:

  1. the time between the tenant ceasing to make rental payments and surrendering the keys;
  2. the time between the tenant surrendering the keys and the date the matter was brought before the court; and
  3. the time between the court date and the end of the lease which was not due to expire for a further six months.

In the first period, the tenant simply owes the landlord the rent not paid, as discussed last week.

In regard to the second period, the landlord could recover the unpaid rent because he was entitled to be compensated as though the contract had been completed without default.  During this period however, the landlord needed to show that he had taken reasonable steps to mitigate his loss. This meant demonstrating that steps had been taken to encourage other tenants to lease the empty premises.

The third period is legally tricky.  For that period, the court could not be sure that the landlord would continue to advertise the property or that the premises would remain empty.

There is no NSW case law on the point.  We researched and relied on a Western Australian case of Luxer Holdings v Glentham which stated that:

Where the matter is decided in court before the term of the lease expired, the normal damages are the total rent that would otherwise have been paid, less any amount the landlord has, or is likely to obtain, as profits from the use of the premises until the date the lease would have otherwise expired.”

We were able to prove that the landlord had taken all possible steps to mitigate its loss up to the date of the court hearing and that it was unlikely that the landlord would obtain any profit from the premises between the date of the court hearing and the expiry of the lease.

Our client was awarded the full value of the rent that he would have been paid had the tenant stayed in place until the end of the lease.

Should you wish to discuss any aspect of commercial leasing please contact Everingham Solomons, because Helping You is Our Business.

Click here for more information on Clint Coles.

Damages Under Commercial Leases – Part I

CCAn interesting legal point arose recently in a case that I conducted in the Local Court.  The question centred around the damages that a landlord is entitled to recover from a commercial tenant that breaches a lease.

Six months into the lease the tenant stopped making rental payments. Nine months into the lease, the tenant surrendered the keys to the premises and moved out.

Court proceedings were brought by the landlord and when the matter came before the Tamworth Local Court, about six months of the original lease term remained yet to expire.

The court had to consider whether the landlord was able to recover from the tenant, rental payments for three separate periods:

  1. the time between the tenant ceasing to make rental payments and surrendering the keys;
  2. the time between the tenant surrendering the keys and the date the matter was brought before the court; and
  3. the time between the court date and the end of the lease which was not due to expire for a further six months.

Leases are contracts. There are two general contractual principles which have relevance.

Firstly, where a contract is unlawfully terminated by one party, the other party is entitled to recover damages so as to place him or her in the position that he or she would have been in, if the contract had been completed .

Secondly, the aggrieved party must take reasonable steps to mitigate his/her loss.  You cannot claim for a loss that you have not attempted to avoid.

In respect to the first period of time, the application of the law is relatively simple. The tenant owes the landlord money just like a debt. The landlord cannot mitigate their loss because the tenant was still in the premises.

Establishing the landlord’s rights to damages in the second and third periods is a little more complex and requires further explanation which will be explored in an article next week.

If you have any questions regarding commercial leases, please do not hesitate to contact Everingham Solomons because, Helping You is Our Business.

Click here for more information on Clint Coles.

When a Good Reason Just Isn’t Enough

jmhThe Christmas/New Year period provides employees with an opportunity to celebrate the year that has passed. Employees can ‘forget’ the appropriate conduct required of them, particularly when alcohol is involved and when functions are held offsite and outside normal working hours. As a result, employers may now been dealing with the ramifications of any incidents which occurred during this period.

Recent Decision

An employee was involved in a physical assault (head-butting another employee) at a Christmas function. An investigation into the incident was not finalised until April in the following year, but by this time another allegation of assault had been made against the same employee.

In response to the second incident, the employer concluded that the second alleged assault (which was denied by the employee), together with the head-butting incident at the previous Christmas party, established a pattern of unacceptable misconduct. The employer dismissed the employee for serious misconduct.

When considering the employee’s subsequent unfair dismissal claim, Fair Work Australia found that:

  1. No proper investigation had been undertaken.
  2. The relevant manager displayed manifest bias.
  3. The manager had pre-determined his views before hearing from the employee.
  4. The manager ambushed the employee with the allegations and he unreasonably refused to allow the employee to have a support person of his choice attend the investigative interview.

All of these actions resulted in the employer failing to provide procedural fairness to the employee. Fair Work Australia decided the employee’s termination was unfair and awarded compensation.

Proper investigation is the key

To minimise the effect of any claims for unfair dismissal, you should take steps to properly investigate the incident and provide procedural fairness to employees during the process.

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.

Click here for more information on Jessica Simmonds.

Youth Sexting – The Legal Implications

MKG-newSexting refers to the sending of sexually explicit material by way of a phone or some other electronic means.

Whilst sometimes it may be malicious, often it may be an attempt at humour or where somebody has not thought through the consequences of their actions.  (Which teenagers do not have a mortgage on.)

It is an offence to distribute the images and store the images.  The criminal law implicates both the sender and the receiver of the images and whether there is consent by both parties is immaterial.

For instance a person who is under 16 takes a photograph of themselves and sends it to another person.  Both the person who sent the image and the person who received it, even though it may not have been requested, would be charged.

What’s more the person who receives it would also be placed on the sex offenders’ registry.  It is immaterial if the person who received it was 15 or 16 years old.  Once a person is on the sex offenders’ registry you are required to tell the Police where you live, where you work and in short where you are at all times, including, if you go on holidays.

An example of this might be if a 15 year old girl takes a provocative photograph of herself and forwards that on to her 15 year old boyfriend.  One of the parents seeing the image then alerts the Police.  Both children would be charged and the receiver of the image put on the sex offenders registry.  The sex offenders registry is reserved for pedophiles not sex offenders. Once on the sex offenders registry working in a school or coaching a soccer team on the weekend would be impossible.

In this digital new age where only five years ago texting didn’t exist, the grown ups are trying very hard to make the laws and grapple with new technology, however the consequences are not always as expected.

If you should have any concerns in respect to criminal matters, we can help because Helping You is Our Business.

Click here for more information on Mark Grady.

Rural Land Contracts – Search Before You Sign

RHGWhen buying a rural property, it pays to do your homework. Rural conveyancing is a complex area in which purchasers need to take care to ensure they know exactly what they are buying.

The general principle of “caveat emptor” – buyer beware – applies to all land purchases, but has particular significance for rural properties. Not only is a farm a home, but also a business. Failure on the part of a purchaser to adequately investigate the property can have not only functional implications, but often monetary consequences too.

It is generally advisable for purchasers to conduct pre-purchase searches or enquiries prior to entering into the contract – once contracts are exchanged, the purchaser is locked into the deal and it will be too late to withdraw if a problem arises.

Some common searches include:

  • Livestock Health & Pest Authority – provides information regarding chemical residue and stock diseases.
  • Crown Lands – ascertains whether there is any land within the boundaries of the farm that does not belong to the Vendor and for which a rental may be payable to the government.
  • Mineral Resources – with mining and gas installations becoming ever more common, this search identifies whether any exploration or drilling licences affect the property.
  • Water entitlements – the implementation of water sharing plans is changing the nature of water licences, whereby water entitlements that were once attached to the land can in some situations now be severed from the land and sold separately. The distinction is important not only for the purchaser’s use of the water, but also as it alters the conveyancing process in terms of ensuring the purchaser receives legal title to use the water.
  • Building entitlements – the introduction of new local environmental plans is changing Council requirements regarding the lot size on which dwellings can be constructed. A farm may have no value to the purchaser if they cannot build their home on the property.

There are a plethora of other enquiries which can be made, however the searches will differ depending on the location and proposed use of the property.

Whilst the searches require money to be expended prior to securing the purchase, it is worthwhile outlaying some funds to ensure the property will meet all of the purchaser’s requirements.

If you are considering buying a rural property, contact the experienced team at Everingham Solomons where Helping You is Our Business.

Click here for more information on Rebecca Greenland.

Yours, Mine and Ours

Lesley McDonnellPurchasing property can be both an exciting and daunting experience. Exciting because on the one hand you have found the property you have been searching for and you start dreaming of what you will do to transform the house into your home. In what can seem like the daunting side to your property purchase is the point at which you first lay eyes on the contract for sale of land. The contract requires you to make some important decisions. When you purchase property with your spouse or partner, you must decide how you will buy the property together. You can purchase either as joint tenants or as tenants in common. The distinction between the two is an important one because it can have an impact on future life events for example a relationship breakdown or death.

If you purchase property as joint tenants, this means that upon your death, your interest in the property automatically passes to your spouse/partner. This is despite any provision in your will to the contrary. This is because your interest in the property does not form part of your estate and it is not available for distribution to the beneficiaries of your will. Many married couples own property as joint tenants. Also a joint tenancy may exist where property is held in trust.

By contrast,  if you purchase as tenants in common, then your individual share in the property can be gifted in your will. Furthermore the respective shares in the property may be held equally (e.g. 50/50) or in some other proportion (e.g. 60/40, 75/25 or 80/20 etc). Sometimes couples may choose to own property as tenants in common if for example there are children from a previous marriage for whom they wish to make provision upon their death. Also investors often buy property together as tenants in common.

If property is owned as joint tenants there is a process by which that property holding can be unilaterally severed by one party. The other party is given notice of this before it occurs. There are circumstances where this can be an appropriate course of action.

Being aware of your options can assist you in making a more informed choice when it comes to buying your next property. At Everingham Solomons we have the experience to assist you with all your property needs because Helping You is Our Business.

Click here for more information on Lesley McDonnell

BYO Device

jmhIt is becoming more common for employers to be asked by employees to connect their personal devices such as smart phones, laptops and tablets to the employers’ IT systems. The convenience, flexibility and potential productivity gains make allowing an employee to ‘bring your own device’ (BYOD) appealing.

However the use of BYOD, including in non-work hours, can present a number of risks for employers, if the arrangements are left unmanaged.

Factors to consider with BYOD arrangements

Employers need to consider whether it is appropriate to allow employees to access work systems from a personal device which may not have the security, and controls that company devices have. In order to protect a business’ interests it may be necessary for IT to have access to the personal device in order that confidential or sensitive information can be wiped in the event that the device is corrupted or lost.

Additionally, unmonitored connection of a business’ IT systems to personal devices could lead to breaches in confidentiality, unauthorised disclosure of confidential information and use of personal information that is contrary to privacy laws.

Employers may be able to avoid this by implementing measures that require employees to use passwords and report lost devices where confidential or sensitive information is available on the device.

There may also be surveillance issues for employers in certain circumstances when BYOD arrangements are entered into.

The value of appropriate policies

If employers wish to protect their legitimate business interests and guard against inappropriate employee conduct, appropriate policies are essential.

Policies should be put in place to cover BYOD arrangements where:

  • employees are required by the business to use their own device such as a smart phone or tablet in the performance of their job; or
  • an employee wishes to use their device to receive work related data and information via their own device.

The Employment Law team at Everingham Solomons is well equipped to assist you to prepare appropriate policies for your workplace because Helping You is Our Business.

Click here for more information on Jessica Simmonds.

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.

Calls by industry leaders for a more flexible, productive and fair work place relations system are becoming more strident.

Perhaps the Government has heard the calls.  There are amendments proposed to the Fair Work Act involving an overhaul of the costs provisions.  Under the proposed changes, Fair Work Australia will have new powers to make cost orders against Applicants who bring “unreasonable claims”.

At the moment, it is most unlikely that, if an applicant fails in Fair Work Australia, he or she will have to pay the employer’s costs.  This is because the employer must make application for costs swiftly and, more importantly, must demonstrate that the applicant’s proceedings were manifestly untenable or brought vexatiously.

It is understood that, under the costs regime proposed, an employer will be able to recover its costs if the applicant’s claim is unreasonable.  This is still not the way things work in other litigation concerning breach of contract or statutory obligation, where costs  follow the event unless the circumstances are exceptional.

The commentators suggest that the proposed changes to the costs regime will provide some relief for small business.  It is hoped that it will enable litigation in Fair Work Australia to be conducted more efficiently and drive early resolution.

Costs aside, the best way for a small business to protect itself from unmeritorious claims is to implement fair and compliant dismissal processes.  The employment team at Everingham Solomons can help with dismissal issues because at Everingham Solomons Helping You is Our Business.

Click here for more information on Mark Johnson.