June 15, 2013

Dodgy Building Work Does Not Need to be Tolerated

The Home Building Act 1989 (‘the act’) is a set of laws designed specifically to help residential homeowners who have received sub-standard building work. 

The act can help almost any homeowner from almost any form of bad building related work

The act provides protection to homeowners who have constructed a new home, including cases where the home was built with structural defects, with poor quality materials or in a way that departed from the building plans.  However, the act is not limited to new buildings and also applies to renovations and home additions as well as any isolated specialist work, like plumbing, electrical work, tiling and cabinet or kitchen making.  Basically any work related to building or altering a residential dwelling will be covered under the act.

In certain circumstances, the act even helps the purchaser of a used home to rectify poor building work supplied to the home’s previous owner.

The act helps homeowners in two main ways.

Firstly, it ensures that all tradesmen are insured.  This means that if a tradesman is ultimately found to be liable for a building problem, and becomes insolvent or disappears, that there will be an insurer in the background who can pay for the inadequate work to be rectified.

Secondly, the act gives each homeowner a warranty as to the quality of the building work that they receive from the tradesman.  The warranties are very broad but basically mandate that:

  1. the work will be of good tradesman quality;
  2. the work will be done in accordance with the plans;
  3. the materials used will be good, new and suitable;
  4. the work will be done on time; and
  5. the work will be fit for the purpose that it was designed for.

The majority of claims made under the act are heard in the Consumer Trade and Tenancy Tribunal (‘CTTT’).   This is a real benefit for homeowners.  The process is much cheaper and is informal.  Applying to the CTTT is not as slow, expensive or as intimidating as going to court.

Just like with most legislation, time limits and warranty periods apply.  If those periods lapse before the homeowner makes a claim, the homeowner can lose the right to recover their money or have the work rectified.

If you have any questions about the quality of building or construction work, contact Everingham Solomons, because Helping You is Our Business.

Click here for more information on Clint Coles.

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June 8, 2013

Changes to Superannuation

Most people will probably be aware of the changes to superannuation guarantee contributions but what do these changes mean for employers?

All employers need to be aware that the changes to the superannuation regime will increase employers’ superannuation obligations. Starting from 1 July 2013 the compulsory contributions rate will increase from 9% to 9.25%.

Superannuation regime

The changes introduced by way of the Superannuation Guarantee (Administration) Amendment Act 2012 means that compulsory superannuation guarantee contributions will increase over a seven year period, from the current rate of 9% to 12%.

The increases will be gradual, as follows:

Income year                           Charge percentage

Starting 1 July 2013-2014          9.25%

Starting 1 July 2014-2015          9.5%

Starting 1 July 2015-2016          10%

Starting 1 July 2016-2017          10.5%

Starting 1 July 2017-2018          11%

Starting 1 July 2018-2019          11.5%

Starting 1 July 2019-2020          12%

Removal of the Upper Age Limit

The Act also has an impact for employers when it comes to paying superannuation guarantee contributions to employees over the age of 70. Currently, employers are not obliged to make payments in respect of employees who are age 70 and over. However, from 1 July 2013 employers will be obliged to make superannuation contributions for all their employees. The changes will also ensure that employers will be able to claim income tax deductions for superannuation guarantee contributions made to employees aged 70 and over from 1 July 2013.

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.

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Filed under Business Law, Employment Law, Weekly Columns

June 1, 2013

The Transition to Retirement Living

The transition to retirement living can be a rewarding one. Along the way some important decisions need to be made.  One of those decisions may include moving into a retirement village. In an effort to help make that decision process easier for prospective residents, new laws come into effect on 1 October this year. It is timely to look at those changes and retirement living more generally. 

Under the law, a retirement village is defined as being a complex containing residential premises that are predominantly or exclusively occupied by retired persons who have entered into a village contract with an operator of the complex. A retired person “means a person who has reached the age of 55 years or has retired from full-time employment”.

Up until this point in time there have been various forms of retirement village contracts.

From October there will be three main changes. Firstly, village operators will be required to use a new standardised village contract. Secondly, prospective residents will receive a general enquiry document that explains the services and facilities available to them in the village. Thirdly, a new simplified disclosure statement will be given to prospective residents before they sign a village contract.

According to the Minister for Fair Trading Anthony Roberts: “These reforms will make the move into a village easier and less stressful for retirees and their families”. The new standardised contract “will allow prospective residents to compare apples with apples when making the important choice of which retirement village to move into”.

After making an initial enquiry with an Operator of a retirement village, a prospective resident will be provided with a two page general inquiry document. The document provides general information about the village including the village type, costs to enter the village and village facilities.

The new version of the disclosure statement provides more detailed and specific information including financial arrangements particular to the village and unit.

The new standard contract covers matters such as what residence rights are involved, entry costs, the settling-in period, recurrent charges, services and facilities, alterations and additions, repairs and maintenance, sharing of capital gains, and departure fees.

As an added measure of protection for residents and their families, the legislation still provides for a settling in period and cooling off period.

Making the move into a retirement village has significant financial and legal implications.  Taking the time to properly know and understand the village contract is essential to ensuring that the choice of retirement village is the right one for you. The experienced team at Everingham Solomons can help guide you through the process because Helping You is Our Business.

Click here for more information on Lesley McDonnell

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Filed under Weekly Columns, Wills & Estates

May 25, 2013

Jurisdiction of the Family Courts in International Property Cases

Property proceedings under family law which concern assets held overseas may be subject to Australian law regardless of property rights acquired under the foreign law where the property is located.

Whether an Australian court has the jurisdiction to make orders concerning international assets arises from section 31(2) of the Family Law Act (1975).  It states that the jurisdiction of the Family Court “may be exercised in relation to persons or things outside Australia and the territories”. 

The first step the Australian court must take is to apply the legal test known as “forum non conveniens” which requires it to ask whether the proceedings before it are clearly inappropriate, and whether they are oppressive or vexatious to the parties involved.  The court considers the general circumstances of the case and takes into account the true nature and full extent of the issues involved. 

For example, the court considers whether the foreign court will recognise the Australian court’s eventual orders; costs incurred; the connection of the parties to either jurisdiction; as well as the parties ability to understand and participate in the proceedings locally or overseas.

In the case of Vaden v Vaden [2007] FMCAfam 744, the parties were British citizens recently residents in Australia but whom had been married in the United Kingdom and owned a property there registered in the wife’s sole name.  The wife wished to return to live in the former matrimonial home but the husband wanted to be declared a trustee owner of the UK property in order to obtain a rental income.  The court held that the proceedings commenced in the Federal Magistrates Court of Australia should be stayed as any judgment made here may not be enforced by a British court.

Although in Vaden v Vaden the court declined to deal with the UK property, parties must be aware that assets located overseas will not necessarily fall outside the jurisdiction of the family law courts in Australia.  Hence, the unique circumstances of each case and the appropriateness of the Australian court to hear the matter, will ultimately determine which jurisdiction – either local or international – has the power to make the final decision regarding the property in dispute.

At Everingham Solomons we have the expertise and experience to assist you with all legal matters associated with Family Law because Helping You is Our Business.

Click here to learn more about Sophie Newham.

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Filed under Family Law, Weekly Columns

May 11, 2013

Liens

Generally speaking, a lien allows a person to retain possession of another person’s property until the costs or monies have been paid for it.

There can be a statutory lien which gives a person the right to hold the goods until the seller’s monies are paid.

Under the common law there can be a general or particular lien.  A particular lien which is more common refers to a person holding goods for work done on those goods until accounts have been paid.  Examples of this are a mechanic holding a car until a bill is paid or a solicitor holding a file until their account is paid.

A general lien however allows the person to hold the goods until all sums payable are satisfied.  Again to use the prior analogy, mechanics holding a car for bills paid for that car as well as another car, or a solicitor holding a file regarding family law for work done on that file and a conveyance file.

An interesting case on this topic is Stapley v Towing Masters Pty Limited (trading a Dynamic Towing) [2009] NSW CA 382.  This involved a tow truck driver claiming a lien over a vehicle.  The case was bought by an insurer who argued that a tow truck driver did not have lien over the vehicle. 

The facts in short are that the truck driver picked up a vehicle and was asked by the driver’s insurer to drop it to a service centre so that the insurer could assess the damage.  When they went to deliver it the insurer refused to pay their account, so the tow truck driver took the car back to its depot and claimed a lien over it.

At first instance the court held that the tow truck driver was entitled to exercise a lien over the car as he was a common carrier.

The Court of Appeal however held that the tow truck driver was not a common carrier and therefore was not entitled to the lien.  This matter turned on the facts and whether the tow truck driver was a common carrier and held himself out to pick up all jobs at reasonable rates without reservation.

If you should have any queries about goods being held until payment, please do not hesitate to call us at Everingham Solomons because Helping You is Our Business.

Click here for more information on Mark Grady.

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May 4, 2013

Planning for Stamp Duty Changes

When GST was introduced in 2000, part of the then agreement between the Commonwealth and the States for the sharing of GST revenues proposed the abolition of various state taxes relevant to business.

As might have been anticipated, most State Governments including NSW have not been particularly prompt in doing that. Finally, there is good news the business on this front.

Effective 1 July 2013 NSW stamp duty on –

  • Purchase of shares in private companies;
  • Mortgages; and
  • Purchase of business assets other than land,

is to be abolished.

The abolition of these duties was originally proposed to take effect from 1 July last year however that was deferred in the 2012 State Budget to this year. Most experts are waiting on this year’s State Budget, scheduled to be released on 18 June, before relying upon the proposed changes taking effect.

Traditionally June is a peak activity month for business sales and purchases. This year however the “carrot” of reduced or eliminated stamp duty and the uncertainty until after the State Budget may recommend that some business transactions be deferred into the new financial year.

There are anti-avoidance provisions already in the stamp duty legislation to stop the exemption applying to transactions which finalise after 1 July but result from legally enforceable arrangements entered into before that time. This means that there is limited scope to put a legally binding deal in place before 30 June and then claim the benefit of the stamp duty exemption if settlement takes place after 1 July.

This will be one of the issues that vendors and purchasers will need to grapple with in the period leading up to the end of the financial year. Sellers will naturally wish to complete transactions whereas some purchasers may wish to defer until the new financial year.

At Everingham Solomons the business law team has the experience and expertise to provide advice on all sale and purchase of business matters and associated stamp duty issues because Helping You is Our Business.

Click here for more information on Ken Sorrenson.

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Filed under Business Law, Weekly Columns

April 27, 2013

Inheritance: a financial contribution to the relationship or not?

Property proceedings before the Family Court are often complex and can go beyond simple tangible property and financial assets.  One such area of complexity relates to receiving, or potentially receiving, an inheritance during the course of a marriage or de-facto relationship.

Despite clear intentions set out in a will to leave property to a particular party, it is possible to argue before the Family Court that such an inheritance should be considered an asset of, or contribution by, both parties – not just a contribution made by the party who received the inheritance.

Ultimately, there are a number of factors which the court takes into consideration.  For instance, the court may look at the timing of the inheritance (i.e. prior to co-habitation, during the relationship or immediately after separation); the length of the relationship; the size of the inheritance; and whether the non-recipient party could be said to have made a contribution to it.

In the interesting case of White and Tulloch v White (1995) FLC 92-640, the full bench of the Family Court considered a husband’s claim that his estranged wife had an expectation of inheriting a substantial amount of property upon the death of her mother, and that this should be a factor when assessing the asset pool.  The Family Court determined that an expectant inheritance could not be a seen as a financial resource as the wife could not control or be certain that she would receive such property under her mother’s will, because the mother could revoke her will or completely alter how her estate was to be distributed upon her death, at any time.

There is no hard and fast rule when it comes to how the court will view an inheritance in relation to the financial contributions of the parties.  Whilst the Family Court in White and Tulloch v White said that a prospective inheritance could not constitute a financial resource, it can still be taken into consideration under the very wide provision of s75(2)(o) of the Family Law Act (1975).  This provision requires the Court to bear in mind “any fact or circumstance which, in the opinion of the court, the justice of the case requires to be taken into account”.  In other words, the Court will consider facts or circumstances (of a largely financial nature) when assessing the financial pool, which therefore may include a potential or expectant inheritance to one the parties.

Clearly it is always advisable to have a carefully written will which sets out your intentions in relation to the distribution of your estate.  However due to the often unpredictable nature of the law you must also be mindful that the contributions made within a marriage or de-facto relationship may extend to inheritances and even to property not yet in your hands.

At Everingham Solomons we have the expertise and experience to assist you with all legal matters associated with Family Law because Helping You is Our Business.

Click here to learn more about Sophie Newham.

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Filed under Family Law, Weekly Columns

April 20, 2013

National Buildplan (in Administration) … Who is Responsible?

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.

Click here for more information on Terry Robinson

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April 13, 2013

Good Faith Clauses in Commercial Contracts

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.

Click here for more information on Ken Sorrenson.

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Filed under Business Law, Weekly Columns

April 6, 2013

Public holidays and Employment

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.

Click here for more information on Jessica Simmonds.

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Filed under Employment Law, Weekly Columns