Deposit Bonds can be quite useful when buying Property. When you exchange on a Contract of Sale to Purchase property, you will usually be required to make payment of a Deposit, usually in cash, which is 10% of the purchase price.
There are circumstances where this can be tricky though. Maybe your assets are invested and you require some time to access them or perhaps your bank is issuing you a loan which will cover 100% of the purchase price, but your loan funds are not available until settlement.
So, what do you do in these situations? The Vendor will still require payment of the Deposit before you enter the Contract.
Usually, a convenient way to address this situation is to have a Deposit Bond issued. A Deposit Bond is essentially a guarantee from a provider that they will make payment of the Deposit, if a purchaser defaults on the Contract. It is a promise to pay.
Some of the perks of Deposit Bonds are that there are multiple providers of Deposit Bonds in NSW, and they usually can be obtained fairly quickly. But there is usually an upfront fee associated with the issuing of a Deposit Bond.
Each provider will have specific criteria you will have to meet to become eligible for a Deposit Bond, which usually will be that you have an asset base in which they can secure the Bond against.
However, you cannot simply assume that a Bond will be accepted by the Vendor in your transaction. You will need to ensure that the Contract of Sale allows you to make payment of the Deposit by way of Bond.
The other big consideration is that the Deposit that you paid by way of using a Deposit Bond isn’t really paid. It is a promise to pay made by the provider. The amount that you are securing with a Bond will become payable at settlement of your transaction. So, the Bond is really only a temporary placeholder for the Deposit. You will still need to have the full amount payable, in cash, available at settlement.
If a Purchaser defaults on the Contract of Sale in which a Bond has been used in lieu of a cash Deposit, and the Vendor becomes entitled to retain the Deposit, the Vendor can then “cash in” the Bond with the provider. The Purchaser will remain liable to the provider to reimburse the amount of money owed to them.
This generally means that while there are a few extra hoops for the Vendor to jump through to collect a forfeited deposit, from the Vendor’s perspective accepting a Deposit Bond instead of a cash Deposit when you are selling, is relatively low risk.
If you have questions about Deposit Bonds, or purchasing property in general, contact Everingham Solomons because Helping You is Our Business.
It is not uncommon in businesses that an employee can also simultaneously be a Shareholder and Director of a company. The matter of Agha v Devine Real Estate Concord & ORS [2021] NSW CA 29 dealt with this situation.
This case considered restraints in circumstances where there was a Shareholders Agreement and an Employee Agreement for Mr Agha. Both of the documents contained clauses in relation to Restraint of Trade as well as clauses protecting confidentiality. An issue that needed to be considered was which restraint applied out of the two documents as they provided different periods and overlapping areas of restraint.
The post-employment restraint period under the Employment Contract was for a maximum of twelve months whereby the restraint in the Shareholders Agreements was for a period of three years.
The brief facts of this case were as follows:
Mr Agha gave notice to Devine Real Estate that he was going to resign from his employment, sell his shares and resign as a Director.
Devine Real Estate discovered shortly thereafter that Mr Agha had sent confidential information to his personal email address and entered into an Employment Agreement with a competitor, Bell Property.
Devine Real Estate then brought proceedings in the Supreme Court which were later put on appeal by Mr Agha.
Both the primary judgment and the Court of Appeal agreed that the more extensive restraint in the Shareholders Agreement was valid and enforceable. Given Mr Agha’s seniority and position as a past shareholder it was reasonable.
Further, Mr Agha was in breach of soliciting existing clients within a restraint area whilst working for a direct competitor.
The case of Agha v Devine Real Estate Concord highlights the need for properly drafted Employment Agreements but also Shareholders Agreements. It is important that employees, Shareholders and Directors are aware of the post-employment obligations as an employee as well as any restraints contained in relevant Shareholders Agreements and the duties owed by a Director to a company.
Should you need assistance in relation to these issues, Everingham Solomons has the expertise to assist, because Helping You is Our Business.
People commonly operate a business through a private company. A typical structure involves the business participants as being both directors and equal shareholders of the company.
When a company is created, there are basic rules that govern its affairs, however these rules do not address commercial decisions a company must make. For so long as everyone gets along, this type of basic company arrangement works well.
However, if there is a breakdown in the relationship between the business participants, problems can emerge. For example, the business participants may be unable to reach agreement about the future of the business. This type of situation is commonly called a “deadlock”.
If a deadlock emerges, people are often surprised to hear that there are limited options to resolve a deadlock. For example, there is no mechanism by which one shareholder can require another to sell their shares to them. Further, the Courts are reluctant to involve themselves in commercial disagreements between shareholders.
However, there is a solution – it is called a “Shareholders Agreement”. A Shareholders Agreement is a contract between shareholders in a company and its purpose is to provide greater detail about the operation of a company and resolution of deadlocks. For example, a Shareholders Agreement can contain mechanisms that require shareholders to sell their shares or buy those of another shareholder.
The key takeaway is this: if you a starting a company with others, you should enter into a Shareholders Agreement. It will provide certainty and assist in resolving deadlocks, which allows you to focus on your business. If you would like further information regarding a Shareholders Agreement, Everingham Solomons would be pleased to assist as Helping You is Our Business.
Click here for more information on David Southwood.
An AVO is an Apprehended Violence Order. The relevant legislation that applies to AVOs is the Crimes (Domestic and Personal Violence) Act 2007 (NSW) (“the Act”).
Under the Act, there are two types of AVOs. The first and more common type is an Apprehended Domestic Violence Order (ADVO). An ADVO applies when the parties in question are in or were previously in a domestic relationship. What constitutes a domestic relationship is outlined in section 5 of the Act, but suffice to say the definition of a domestic relationship is very broad.
The second type of AVO is an Apprehended Personal Violence Order (APVO). An APVO applies when the parties in question are not connected by way of domestic relationship. A common example being two neighbours in dispute.
AVO matters are very common in the Local Court. For instance, in 2020 NSW Courts issued 37,981 final AVOs, with 33,830 being ADVOs, whilst 4,151 were APVOs. There is no doubt that an AVO can be a very useful tool to protect victims from violence. However, a short coming of the relatively easy application process for AVOs is that applications for AVOs are open to being abused. This sometimes leads to very minor incidents between parties ending up in Court, where these minor conflicts would be better resolved through less formal means.
When it comes to dealing with an AVO there are three main options. Firstly, the defendant can consent to the AVO on a “without admissions” basis. In plain English, this means agree to the AVO being made against them without admitting that they have done anything wrong.
A second option is to try to seek a mediated solution to the issue, commonly by way of written undertakings between the parties as to future conduct.
A third option is to oppose the making of the AVO and have the matter set for hearing. At the hearing it is for the applicant to prove to the Court on the balance of probabilities that he/she has reasonable ground to fear violence, stalking or intimidation on the part of the defendant. If the applicant can prove this, the AVO will be made by the Court. If the applicant can’t, the AVO application will be dismissed.
A final matter to consider upon the successful defence of a AVO is the recovery of costs. Costs in AVO matters are governed by s 99A of the Act. Costs are only to be awarded in AVO matters if the Court finds the application was frivolous or vexatious. Costs in AVO applications run by Police have further elements that must be satisfied.
If you have any AVO related queries please contact the experienced team at Everingham Solomons as Helping You is Our Business.
Covid-19 has forced a lot of industries to adapt to a new way of business and the legal industry is no different. Limits to face-to-face contact has forced the development of technologies and laws to allow for remote witnessing of legal documents.
During the pandemic the NSW Parliament introduced temporary legislation to allow for the signing and witnessing of documents via ‘audio-visual link’ (AVL). It proved so successful that the recent passing of the Electronic Transactions Amendment (Remote Witnessing) Bill 2021 has now cemented the temporary measures into law.
AVL witnessing operates by the witness observing the client sign a document in real time over AVL. The witness then confirms having witnessed the signing by the client by either signing the document as soon as practicable after witnessing or signing an exact copy of the document. The witness further endorses the document by specifying the method of AVL signing.
Being a regional firm based in Tamworth and Quirindi and servicing the entire North West region, Everingham Solomons is welcoming this opportunity to better serve our clients. The ‘tyranny of distance’ has long been a frustration and now we are seeing the measures introduced to endure the pandemic producing long-term benefits for our clients.
People living in regional or remote areas, or those that may suffer from illness or mobility problems can now benefit from this choice and flexibility.
Everingham Solomons understands the need for access and flexibility because Helping You is Our Business.
Click here for more information on Jessica Wadwell
If you want them for your own…… more than they could ever know…… then you should know there has been recent changes in sexual consent Laws in NSW.
NSW Parliament has recently passed consent reforms to assist with the prosecution of sexual offences in NSW Courts in attempt to clarify and make the approach more “common sense”.
So what are the changes?
The new reforms require for there to be consent to sexual activity, a person must now expressly say or do something to communicate consent.
It further puts the onus on the parties to do or say something to find out if the other person consents to sexual activities.
The reforms aim to overcome Defendants of sexual assault charges from being able to suggest they have ‘reasonable grounds’ to believe that the other person had consented to the sexual activity, without taking steps to establish consent. Defendants will now be required to prove they took steps to ascertain that consent was given by the other person.
Under the new law, a person cannot reasonably believe that the other person has consented simply because they did not say “no”.
The legislative reform does not amend the requirement that consent must be free and voluntarily given. Nor does it stop a person from withdrawing their consent at any time.
And just as a brief reminder while we are on the topic of consent, the legal age of consent for sexual activity in NSW is 16 years. A person cannot give consent if they are under that age. A person also cannot give consent if they are asleep, unconscious, drunk or affected by drugs.
If you require legal assistance, contact the Solicitors at Everingham Solomons because Helping You is Our Business.
Solicitors Trust Accounts are regulated by the Legal Profession Uniform Law (NSW), Legal Profession Uniform Law Application Act 2014, the Legal Profession Uniform Law Application Regulation 2015 and Legal Profession Uniform General Rules 2015.
These laws are in place to regulate the conduct of money held in Trust for clients. Such money might include funds required to settle property purchases, to pay stamp duty, probate filing fees, for distributions in deceased estates, for debts recovered, for settlement of claims, or funds required to pay legal expenses.
Trust accounts are subject to external examination every year, as well as periodic random audits by the Law Society’s Trust Department. These external examiners and auditors will check transactions through the Trust accounts to ensure they comply with the Regulations.
Solicitors are required to have written instructions to transfer funds from the Trust account. Often these instructions are incorporated into the Costs Agreement the firm enters into with the client.
Contrary to a common misconception, Solicitors do not earn any interest on clients funds held in their Trust account. In this state, all interest earned on funds in Solicitors Trust accounts are paid directly to the Law Society of New South Wales.
Clients may direct, if a significant amount is involved for a lengthy period, that their Solicitor deposit their Trust funds into a Controlled Money account to earn interest whilst funds remain under the control of the Solicitor.
On completion of a matter where Trust transactions have occurred, a Solicitor is required to provide a Trust Statement to the Client. On 30 June each year, subject to some exceptions, a Solicitor is required to provide Trust Statements to all Clients where there has been Trust transactions within the preceding 12 months.
Should you have any queries about Trust accounts, we would be happy to discuss them with you because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
A Binding Death Benefit Nomination (BDBN) is a document that allows you to decide who will receive a benefit from any Superannuation you have accrued at the time of your death. Making a BDBN is an essential part of estate planning. A lot of people are not aware that their superannuation will not automatically be distributed through their Will. If you have seen a solicitor to create or update your Will, it is also worthwhile making a BDBN.
There are three main traps to look out for when making a Binding Death Benefit Nomination:
1. Make sure the nomination you have made is in fact binding. Superfunds will often offer binding and non-binding options. If you only have a non-binding nomination your superfund is not bound to follow your directions and they can use their discretion to decide how your superannuation is divided among your family. If you want to take the decision out of the hands of your superfund and ensure your wishes are followed, check the type of nomination you have made to confirm that it is binding.
2. The second trap of BDBNs is that they often lapse every three years. Some superfunds do offer non-lapsing nominations that are also binding. However, just like making a Will, your BDBN also needs to be reviewed every few years. A Binding Death Benefit Nomination that has expired is not enforceable, so it is important that you actively review the nomination and keep it up to date.
3. Not everyone is eligible to be nominated as a beneficiary of your superannuation. You can only nominate someone that is:
a. a dependant;
b. someone who is in an interdependent relationship with you (such as a partner or spouse);
c. your children, including:
i. stepchildren (provided the relationship between the child and their natural parent is not severed by death or divorce);
ii. adopted children; and
iii. adult children; or
d. your legal personal representative (such as the executor of your Will)
If you nominate your legal personal representative your superannuation will be directed to your executor(s) who must distribute it in accordance with your Will. This is the only way to direct your superannuation to someone that does not fall into one of the above categories.
When you make your BDBN your superfund will not know if the people you have nominated fit into one of these categories and will automatically assume you have made a valid nomination. Only once the BDBN comes into effect will the superfund consider your nominations. Anyone nominated that does not come under one of the above categories cannot receive a benefit from your superannuation and your nomination will be invalid.
If you need assistance or advice regarding Binding Death Benefit Nominations or other estate planning issues contact a solicitor at Everingham Solomons because Helping You is Our Business.
As international travel is set to resume after, nearly a two-year pandemic induced hiatus, we turn our attention to the law regarding traveling or removing a child from Australia. Unlike the words penned by virtuoso John Denver in his famous 1966 song, it is not as simple as “I’m leaving on a jet plane” and certainly not “I don’t know when I will be back again.”
Under the provisions of the Family Law Act, parents have a presumption of equal parental responsibility. This presumption remains until a Court orders otherwise.
When separated parents wish to travel internationally with their child or children, they must be aware of the Family Law Act 1975 Section 65Y, which prohibits a parent/guardian from removing a child from Australia unless:
1. It is done with the authorisation and written consent of each of the parents/guardian; or
2. A Court Order has been made to allow such to occur.
Violation or breach of Section 65Y is a criminal offence. The penalty can be imprisonment for up to three years.
The exemptions to Section 65Y depend on the circumstances but generally only occur when the person removing a child from Australia:
1. Believes it is reasonably necessary to prevent the child being subject to family violence; and
2. The conduct is reasonable in the circumstances as the person perceives them.
As previously mentioned, if a parent or guardian cannot agree and written consent is not granted, an application to the Court must be made. Such Court must have jurisdiction to make Orders in accordance with the Family Law Act. The Court will consider, when adjudicating on an application for international travel, inter alia the following:
1. If it is in the best interest of the child to travel internationally;
2. If there a risk of a child’s relationship being disrupted or terminated with the non-travelling parent during the time of travel; and
3. If there a risk that the child will be detained in a foreign country or, not being returned to the child’s primary place of residency.
It is my intention to write a further advertorial where I will examine the remedies available to prevent a parent from removing a child from Australia or, in extreme circumstances, commencing proceedings to return a child from an overseas country.
For advice and assistance on all matters associated with Family Law disputes, contact Everingham Solomons where Helping You is Our Business.
Knock Knock,
Who’s there?
The Police.
The Police who…..Oh.
Despite the terrible, knock knock joke above, there are times when the Police are legally allowed to enter your home without an invitation. And sometimes they don’t even knock!
The Legislation that gives Police their power of entry is the Law Enforcement (Powers and Responsibilities) Act 2002.
The Legislation allows legal entry to a property in the following circumstances:
1. By invitation.
2. In an emergency.
3. In the event of a breach of the peace.
4. To arrest or detain a person.
5. To exercise a warrant.
By invitation
It is not necessary for more than one occupant to extend an invitation into the house. If one occupant allows entry, and Police suspect that the safety of one occupant is at risk, they are able to stay, despite the lack of invitation from other occupants.
Remember however, if the Police are invited into your home, and they see something illegal, that gives them the power to search the premises. This may lead to further issues for you, so be careful if you extend the invitation.
In an emergency
Police may enter a property if they believe that a person has sustained significant physical injury or there is an immediate risk of significant physical injury. They must only enter if they have reasonable grounds to believe that.
In the event of a breach of the peace
If there is or is likely to be a breach of the peace the Police may enter a Property. They can also enter if it is necessary to end or prevent a breach of the peace.
To arrest or detain a person
Police are allowed to enter a property to carry out an arrest. They can do this with a warrant, or in circumstances where they reasonably believe a person avoiding detainment may be.
To exercise a search or arrest warrant
It should be noted that the Police can carry out a search warrant without you being home, pending the terms of the warrant. This kind of warrant is referred to as a covert warrant, and they must be given the specific covert powers when the warrant is granted.
But unlike those pesky house guests that just won’t leave, the Police are required to only stay as long as is reasonably necessary for them to carry out their specific duties.
Contact Everingham Solomons if you need assistance with the police because Helping You is Our Business.
Deposit Bonds can be quite useful when buying Property. When you exchange on a Contract of Sale to Purchase property, you will usually be required to make payment of a Deposit, usually in cash, which is 10% of the purchase price.
It is not uncommon in businesses that an employee can also simultaneously be a Shareholder and Director of a company. The matter of Agha v Devine Real Estate Concord & ORS [2021] NSW CA 29 dealt with this situation.
People commonly operate a business through a private company. A typical structure involves the business participants as being both directors and equal shareholders of the company.
An AVO is an Apprehended Violence Order. The relevant legislation that applies to AVOs is the Crimes (Domestic and Personal Violence) Act 2007 (NSW) (“the Act”).
Covid-19 has forced a lot of industries to adapt to a new way of business and the legal industry is no different. Limits to face-to-face contact has forced the development of technologies and laws to allow for remote witnessing of legal documents.
Solicitors Trust Accounts are regulated by the Legal Profession Uniform Law (NSW), Legal Profession Uniform Law Application Act 2014, the Legal Profession Uniform Law Application Regulation 2015 and Legal Profession Uniform General Rules 2015.
A Binding Death Benefit Nomination (BDBN) is a document that allows you to decide who will receive a benefit from any Superannuation you have accrued at the time of your death. Making a BDBN is an essential part of estate planning. A lot of people are not aware that their superannuation will not automatically be distributed through their Will. If you have seen a solicitor to create or update your Will, it is also worthwhile making a BDBN.
As international travel is set to resume after, nearly a two-year pandemic induced hiatus, we turn our attention to the law regarding traveling or removing a child from Australia. Unlike the words penned by virtuoso John Denver in his famous 1966 song, it is not as simple as “I’m leaving on a jet plane” and certainly not “I don’t know when I will be back again.”