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Some Super Changes

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

11 August 2017

Here we go again….!

Several significant changes to the superannuation rules became effective from 1 July 2017.Do you really need to know about them?  Yes, you do!

Not only will the changes impact on your plans for your superannuation and retirement, but they will very likely also impact on your estate planning objectives and arrangements.

Ok, So What Has Changed?

In summary, the new rules after 30 June 2017 in relation to pensions include the following:

1. A person cannot start a pension with an account balance supporting a pension of over $1.6m (or continue such a pension after 30 June 2017).

2. This limit is called a person’s “transfer balance cap”.

3. When a person starts a pension after 30 June 2017, they will have a “transfer balance account”. This will track key events in relation to the person’s pension, to see if the person exceeds their transfer balance cap (either on starting the pension or at a date on starting an additional pension).

4. If someone exceeds their transfer balance cap, they will need to take action to rectify the problem (that is, by commuting part of their pension).

5. If the person does not take action, the Commissioner of Taxation can force the fund to rectify the problem (by issuing a “commutation authority”).

6. The rectification action that can be taken will involve commuting some or all of the pension to a lump sum.

7. Except in relation to pensions resulting from the death of a member, such a commutation can generally be retained in the superannuation system.

What Does This Mean For Me?

What this means in practical terms is that where the death benefit exceeds the recipient’s transfer balance cap (currently set at $1.6 m), then any excess must be cashed out as a lump sum. This will impact in particular on those wishing to keep benefits in superannuation by reverting or paying a pension to their dependants upon their death.

How Will This Affect My Estate Planning Decisions?

There are a number of ways in which these changes may impact on estate planning decisions. For example:

1. It will be necessary to review and possibly update death benefit nominations and Wills;

2. It may be necessary to review and update Self Managed Superannuation Fund Deeds to bring them up to date with the new legislation and to allow estate planning objectives to be achieved. For example, often older Deeds do not allow for non lapsing Binding Death Benefit Nominations;

3. Where members of a superannuation fund have balances exceeding the transfer balance cap, they may need to consider setting up a  Self Managed Superannuation Fund for their pension interest and retaining their remaining accumulation interest in their existing fund. However, care will need to be taken as this could trigger tax issues and accordingly appropriate tax advice should be sought to determine the tax implications of each strategy. A good estate planning strategy can sometimes be a disaster from a tax planning perspective; and

4. Where a death benefit is required to be paid as a lump sum this may force the sale of non-liquid assets where there are insufficient liquid assets to satisfy the lump sum. In such a situation a strategy needs to be developed to prevent this occurring.

These are examples of some of the impacts the new superannuation rules will have on estate planning strategies, but in individual circumstances there are likely to be other impacts as well.

Conclusion

Estate planning is not a set-and-forget process. Rather it is an ongoing evolving process, which must necessarily respond to changes in individual personal, financial and other circumstances, as well as to changes in the law.

The changes to the superannuation rules will have far reaching effects for those who hold, or who anticipate holding, significant funds in superannuation. Therefore, for those who are, or might soon be, affected by these changes it becomes critically important to respond and carefully review your estate planning arrangements and strategies. This review may necessarily extend to reviewing business structures and business succession arrangements.

Those who choose to ignore the new superannuation rules and/or who choose not to regularly review their estate planning and business succession arrangements do so at their own peril. They also do so at the peril of their families and loved ones with potentially significant detrimental financial consequences.

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When there is no Original Will, there is still a Way!

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Daniel Yazdani, Solicitor at Bowen Buchbinder Vilensky Lawyers

21 July 2017

You have invested a lot of time and money into having a carefully crafted Will prepared as part of your estate planning.

What happens if some time later you look for your Will and you cannot find it?

This question has been frequently asked. But why is finding the original Will important? The answer is: your original Will is required to be provided to the Supreme Court of Western Australia as part of your Executor’s Application for a Grant of Probate of your Will.

What happens if an Executor can only find copies of the signed Will?

Although it is procedurally more difficult, a copy of a Will can (in certain circumstances) be admitted for a Grant of Probate.  In these cases, the Supreme Court must be satisfied that the copy of the Will reflects the last Will of the deceased person concerned.

If only copies of a Will can be found in the deceased’s personal effects, the starting point is to contact the deceased’s lawyers to see if they have retained the original Will in safe custody. If that fails (or if it is unclear who the deceased’s lawyers were), the following steps should be taken:

1. contact the Public Trustee to see if the Will is stored in their “Will Bank”;
2. publish a notice of a lost Will in the West Australian Newspaper;
3. contact the Law Society of Western Australia and publish a notice for a lost Will in the legal profession’s monthly newsletter;
4. contact the deceased’s bank to see if the original Will was stored in the bank’s safe.

If the above searches have been undertaken and the original Will has still not been found but copies of the Will (which are believed to be the last Will of the deceased) are available, then the Executor will need to apply to the Supreme Court of Western Australia for a Grant of Probate of the lost Will.

In order to obtain a Grant of Probate of a lost Will, the Court must be satisfied of the following:

1. that there actually was a valid and signed Will;
2. this Will revoked all previous Wills;
3. that the legal presumption that the Will was destroyed by the Will-maker with the intention of revoking it has been successfully rebutted;
4. that the terms of this Will are clear and established.

How to Avoid this Problem?

As soon as you have signed your Will and any other estate planning documents (such as your Enduring Power of Attorney, Enduring Power of Guardianship, Advanced Health Directive and any Superannuation Death Benefit Nomination Forms), you should store the originals in a secure location.

Whilst it is not required for you to provide a copy of your Will to your Executor and/or loved ones, it is recommended that you should at least inform them of where the original Will is stored. Your lawyer who has drafted the Will should also keep a signed copy of your Will in his or her records.

By taking the right steps to ensure the safe storage of your estate planning documents, and by letting the right people know where to find such documents, you will save your loved ones considerable time, stress and unnecessary expenses in the administration of your estate.

Please contact Daniel Yazdani at dyazdani@bbvlegal.com.au if you wish to discuss this matter further or wish to go discuss your estate planning objectives.

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The Sham Of It All!

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

21 June 2017

Surely I can save money by terminating the employment of a worker and then re-engage them as an independent contractor?

Not so fast….

Recently the Federal Court of Australia imposed a significant financial penalty against a company after that company was found to have breached the sham contracting provisions of the Fair Work Act 2009 (Cth) (“the Act”).

Section 357 of the Act protects genuine employees from “sham” arrangements in which they are portrayed as being independent contractors whereas in reality they are genuine employees.

Genuine employees are entitled to a range of rights and benefits (including sick leave, holiday pay and superannuation) whereas independent contractors do not enjoy these same benefits.

A sham self-employment contract arises in circumstances where a person is engaged to undertake certain work and/or provide certain services ostensibly as an independent contractor when the true situation is that they are not actually an independent contractor at all but an employee.

Cases where employers have misrepresented employees as being independent contractors have become more prevalent primarily because there is a financial benefit in doing so.   It is often less expensive to engage an independent contractor than to engage the services of an employee and, further, very often there are not the same risks associated with terminating an independent contract as there are in terminating the services of an employee.

On 2 December 2015 the High Court of Australia handed down its decision in the matter of Fair Work Ombudsman v Quest South Perth Holdings Pty Ltd (2015) HCA 45, which was a case in which in 2009 Quest South Perth Holdings Pty Ltd, through the services of an independent  staffing agency, terminated the employment of two housekeepers and then immediately re-hired them but allegedly as independent contractors to perform the same duties.  The Fair Work Ombudsman commence legal proceedings against Quest South Perth Holdings Pty Ltd alleging that this arrangement was in breach of the sham contracting laws set out in Section 357 of the Act.

Initially the proceeding commenced by the Fair Work Ombudsman in the Federal Court of Australia was unsuccessful. However, in a subsequent Appeal to the High Court of Australia, the Court held that Quest South Perth Holdings Pty Ltd had breached the sham contracting provisions of the Act by misrepresenting an employment relationship with the the two housekeepers as that of independent contracting. The High Court of Australia said that the two housekeepers continued to perform precisely the same work for Quest South Perth Holdings Pty Ltd in precisely the same manner as they had always done. The Court said that in law, the two housekeepers had never become independent contractors.

The Federal Court of Australia when it initially rejected the argument of the Fair Work Ombudsman found that the sham contracting provisions of the Act had not been breached because the arrangements had been made through the services of a third party (an independent labour hire firm) and not directly between Quest South Perth Holdings Pty Ltd and the two housekeepers. However this finding was rejected by the High Court of Australia and the fact that the arrangement was conducted through the services of the labour hire firm did not mean that the sham contracting provisions of the Act had been circumvented and not breached. Indeed the High Court of Australia went on to say that the misrepresentation by Quest South Perth Holdings Pty Ltd was exactly the type of activity which was intended to be caught by Section 357 of the Act.

The High Court of Australia referred the matter back to the Federal Court of Australia for it to impose appropriate penalties.  The Federal Court of Australia has recently dealt with the issue of penalty and imposed  a fine of  $59,000 against the company for breaching the sham contracting provisions of the Act.

This case highlights the difficulties faced by those who engage the services of workers and those workers themselves in determining whether a particular relationship is one of employer and employee or, alternatively, one of principal and contractor. This distinction can have significant financial and other consequences for all involved.  The Courts have developed a series of key indicators to assist in determining whether a particular relationship is one of employer and employee or, alternatively, one of principal and contractor.   None of these indicators is alone determined in a true and ultimately it is for the Court to decide based on all of the evidence before it.

Perhaps the more significant feature of this decision is that it highlights that the sham contracting provisions of the Actcannot be avoided by utilising a labour hire firm through which to engage the worker.

In order to minimise the risk of being caught in a sham contracting situation, employers should:

  1. ensure that the relationship with their workers is what they have assumed them to be.   If in doubt, they should seek competent legal advice;
  2. ensure that they do not misrepresent the nature of relationship to workers otherwise they will face prosecution and potentially significant penalties, for breaching the Act;
  3.  if engaging workers through a third party such as a labour hire firm, continually examine the relationship and implement risk management strategies.   If an employment relationship is later found to exist instead of one of contractor, the employer can be liable for significant back payment of entitlements in addition to any penalties that may be imposed for breaching the Act.

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The Cost of Separation – Certainty of Mind and Certainty of Legal Fees

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By Rhonda Griffiths, Special Counsel at Bowen Buchbinder Vilensky Lawyers

10 April 2017

Along with the disruption and uncertainty surrounding a marriage breakdown separating couples have to also consider whether or not they need to engage a lawyer.

Although there are many services available for couples, in particular through the Family Relationship Centre system, in most cases it becomes very obvious that both parties need to have some legal advice.

The Process of Separation
There is always one party who knows they are going to be leaving the relationship before the other. That often causes great distress when a party realises that the other one has ceased contributing to their relationship and is out the door, or wants you to leave.

The law does not give any pathway for separation. Parties enter a relationship voluntarily and entirely without any government intervention. It is entirely their personal decision.

It is always advisable for legal advice to be obtained before the physical separation, particularly if there are children involved.

While separation is a personal decision, it may have immediate legal consequences. So the first service that lawyers can offer a person when they separate is to give them initial advice.

Mediation
Mediation can be held before Court proceedings commence. If a mediation is successful, in that the parties come to an agreement about the matters in dispute, a couple can avoid Court altogether. The couples must however prepare and lodge a Form 11 Application for Consent Orders with the Court.

Mediation can also take place during Court proceedings as part of the Court’s programming of cases to ensure that, before a case is programmed towards a trial, the parties have had the opportunity of considering an agreement.

Issuing Court Proceedings
If the mediation processes have failed or there is something urgent that needs to be attended to, Court documents will be required to set out properly what your case is about with the kind of information that the Court requires (that will not necessarily be what you would like to talk to the Court about).

Court documents have been prepared to make it possible for people to fill in the forms themselves without legal support. However, most people find the forms daunting and unfamiliar.

There is no substitute for having a competent family lawyer assist with the preparation of your Court documents. That process will also identify the orders you want the Court to make and will enable you to be advised and tutored about what to expect in your Court case and how you can assist in your case.

Once The Court Documents Have Been Lodged, What Happens Next?
Once Court documents have been filed in the Court, parties face considerable delays before their case finally comes to trial. Many cases, especially those involving children, require assistance from the Court in the early stages of the proceedings in settling urgent interim issues.

Once parties have obtained some interim orders and assistance from the Court often a case does not have to progress past that point and in many instances mediation at this stage will be successful.

Where financial matters are involved parties have to take steps to establish valuation of assets and to consider what the issues in their case are that may require accounting and legal assistance.

Readiness Hearing and Trial
A readiness hearing is a date the Court allocates by which time parties need to have prepared their trial documents, issued all necessary subpoenas, and generally be ready for a trial. A great deal of work needs to be done at this time and a Fixed Fee can be offered for this stage of the proceedings and for the trial.

The majority of cases filed in the Family Court end by agreement before a trial actually commences.

Costs of Getting Legal Advice
Many lawyers provide Family Law services on a time cost basis, meaning that when you engage them, they will work for you from the beginning of your matter until the end, sending usually monthly accounts, charging you for every 6 minutes of time spent on your matter. This includes every email, telephone call, letter and meetings. Lawyers are obliged to advise clients you at regular points in the service period what is the estimate of the legal costs of the service will be. However, this is not a quote and does not bind the lawyer if the services turn out to cost more than the estimate given by the Lawyer.

At Bowen Buchbinder Vilensky we provide Fixed Price services. This involves an assessment of what work is required at various stages of your matter and providing a fixed fee for that service. The fixed fee is agreed to in advance before any work commences which provides certainty and peace of mind.

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Owning Properties in Different Countries – Heirs and Places

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By Daniel Yazdani, Solicitor at Bowen Buchbinder Vilensky Lawyers

9 February 2017

In today’s globalised world, an increasing number of people own real estate in more than one country at any one time.

As a result, there has been an increase in the number of people who have both an Australian Will and a Will in a foreign country to dispose of real estate owned by them. The intention (subject to the manner in which the Wills are drafted) is usually for the foreign Will to dispose of real estate in that foreign country and for the Australian Will to dispose of all other assets of that person.

However, if you first make an Australian Will that only deals with your assets in Australia, and later make a second foreign Will that states that it revokes all previous Wills and deals solely with your real estate in that other country, what is the status of your Australian Will? Has your Australian Will been revoked by the later foreign Will?

This interesting predicament has been considered by the Australian Courts, which have set out principles to reduce the uncertainty that this creates and have determined that the question of whether a later Will revokes an earlier Will ultimately depends on the intention of the Will-maker: did he or she intend to revoke the earlier Will?

In Australia, in so far as real estate is concerned, such issues are generally referred to the law of the place where that real estate is situated (the legal principle of ‘lex situs’).

It has also been recognised since the 19th century that a general revocation clause in a Will (e.g., ‘I hereby revoke all Wills heretofore made by me and declare this to be my last Will’) is not sufficient of itself to revoke a prior Will if the Court is satisfied that the Will-maker did not intend by the later Will to revoke the earlier Will.

In determining the intention of the Will-maker, the Courts will look at a variety of factors, including:

  • whether the Australian Will deals only with your Australian estate;
  • whether the foreign Will deals only with your real estate in the foreign country;
  • whether the later Will is sufficient by its terms to cause a revocation of the earlier Will (which is a question of interpretation of the foreign Will by the Courts);
  • whether the foreign Will was ever intended to affect the Australian Will (which is to be determined as a matter of evidence according to Australian probate law);
  • whether the foreign Will was made in the language of that country and not in English; and
  • the terms of both Wills and the circumstances of their execution and signing.

The practical significance of this is that, if you own assets in Australia and also own foreign real estate, it is imperative that you obtain competent estate planning advice so as to avoid the risk that, at a later time, either your Australian or your foreign Will is deemed to have been revoked, when your intention and estate planning objectives may be clearly otherwise.

Should you have any questions or require further advice, please contact Daniel Yazdani at dyazdani@bbvlegal.com.au.

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Enduring Power of Attorney – Registering Your Interest?

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers

24 January 2017

The Australian Law Reform Commission (“ALRC”) has been conducting a review into elder abuse.

One of the proposals that the ALRC is considering is the establishment of a national register of Enduring Powers of Attorney (“EPAs”). The purpose of this register system is to reduce opportunities for appointed attorneys, or other people who may not be legally appointed, from using the power created in EPAs as a “licence to steal” from their elderly parents or friends. The proposed register will apply to enduring documents, (ie documents that survive the creator’s loss of mental capacity) including EPAs and Enduring Powers of Guardianship (“EPGs”).

There have long been calls for a national register of EPAs as there is presently no way of checking the validity of such a document when an elderly person’s relative, friend, or carer attempts to withdraw or transfer money to undertake the transaction in the name of the donor under the power of the EPA.

Arguments against the ALRC’s proposal for a national register of EPAs include debate about how effective a preventative measure, such a register, will be and whether or not developing such a registration system will increase the overall cost of having an EPA.

What is an EPA?

An EPA is a legal document that enables a person to appoint another trusted person to make financial and/or property decisions on their behalf in circumstances when they themselves are not in a position to make those decisions or undertake those actions. An EPA can be executed by anyone over the age of 18 and can be either of broad general effect or can be restricted to certain transactions only.

The benefit of an EPA is that unlike an ordinary Power of Attorney, it will continue to operate even if the donor (the person giving the power) loses mental capacity. However, an EPA ceases to be of effect on death of the donor.

An EPA does not permit an attorney to make personal and lifestyle decisions, such as decisions (for example) as medical treatment or residential decisions. The authority of the attorney is limited to decisions about the donor’s property and financial affairs.

EPAs can be revoked but there are certain formalities to be complied with in order to do so.

How does an EPA Differ from an EPG?

An EPG is a legal document that authorises another person to make important personal, lifestyle and treatment decisions on your behalf should you ever become incapable of making such decisions yourself. This person is known as an Enduring Guardian.

An Enduring Guardian can be authorised to make decisions about things such as where you live, the support services you have access to and the treatment you receive. Unlike an attorney appointed by an EPA, an Enduring Guardian is not authorised to make property or financial decisions on your behalf.

EPGs typically permit the Enduring Guardian to:

  • decide where you live, whether permanently or temporarily;
  • decide with who you wish live;
  • make treatment decisions on your behalf to any medical, surgical or dental treatment or other health care (including palliative care and life-sustaining measures such as assisted ventilation and cardio-pulmonary resuscitation); and
  • seek and receive information on your behalf.

What Happens if you don’t have an EPA or EPG?

Many people run successful businesses and companies that have in place detailed policies and procedures to manage the company. What is most surprising is that these same people often have not implemented the same planning for their own family and personal affairs.

The cost of failing to have a proper succession plan, including a current Will, EPA and EPG can be significant. In particular:

  • There is an obvious economic cost that results from families scrambling to obtain a valid legal authority to act on behalf of someone who does not have capacity; but also
  • It is the human and emotional cost that can often be more significant and telling.

There are examples of children who during their parents lifetime become impatient and seek to claim their perceived inheritance before they are lawfully entitled to receive it. This often has disastrous consequences for the parents and has the real potential to destroy families. It is therefore vitally important that a carefully worded EPA and EPG are put into place as part of an overall Estate plan and that the correct people are chosen to receive these powers. It is also important to ensure that affected people are aware of the existence of an EPA and EPG and who are the recipients of these powers.

Those who do put into place a detailed and carefully considered succession plan which includes an EPA and/or an EPG will benefit from the knowledge and peace of mind that if they do not have sufficient mental capacity then they have appointed others in whom they trust and in who they have confidence to successfully navigate the circumstances at hand for them. If a national registration scheme, such as that contemplated by the ALRC, comes into effect in the near future, this will likely enhance the confidence in EPAs and provide a level of comfort to those who will be affected by them.

If you would like to discuss obtaining an EPA or EPG or to discuss you estate planning circumstances, please do not hesitate to contact us.

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What’s to Know About a Commercial Lease?

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers

2 December 2016

When first entering into a lease of commercial premises the task may seem daunting as well as confusing.

A lease is a legally binding contract (carrying significant legal consequences if its terms are breached) which creates certain rights and obligations between a landlord and a tenant in respect of a particular property. A commercial lease is used where the main use of the property is for business purposes.

It is critically important for prospective tenants to be aware of, and to fully understand, all of the important terms and conditions of the proposed lease. Entering into a lease without doing so can lead to significant and potentially fatal financial consequences.

Most, if not all, commercial leases contain several key terms which must be well understood before any prospective tenant finally commits to entering into the lease. These include:

Rent
What is the rent that you will be expected to pay? When will it fall due and payable (i.e. each month or each fortnight)?

Generally rent is calculated based on the area (per square metre) of the premises being leased. Sometimes reaching agreement as to the area that is being leased and for which rent is payable is not a straight forward exercise.

Rent Increase
Equally as important as ascertaining what is the actual rent payable, is understanding when rent increases are due and how they are to be calculated. Rent usually increases annually during the term of the lease determined either by a fixed percentage, market-value or possibly with respect to the Consumer Price Index (CPI). In the event that the lease provides for a market value review (as opposed to fixed increases) a market value review is required to take place at the expiry of the initial term and at expiry of any option to renew the lease.

Security/Bank Guarantees
In some instances, a landlord may ask for some form of security from the tenant or proposed tenant in order to cover a situation where the tenant fails one of the key obligations under the lease, such as failing to pay the rent. Sometimes the security required is a payment equal to 3 or 6 months’ rent and in some instances this is sought to be further guaranteed by some form of a bank guarantee. If such a security is sought in the lease, then the lease should also set out clearly the terms as to when the security payment will be returned back to the tenant. Similarly, if the tenant is a company then it is common for a landlord to require one or more of the company directors to provide a personal guarantee that the company will meet all of its obligations under the lease, including the obligation to pay rent.

Term (Duration)
Another key term of the lease is the duration of the lease itself. The lease document should set out clearly the length of the lease as well as any further options to renew the lease and any particular terms or preconditions that may be required relating to the renewal of the lease. Where a lease provides for one or more options for the tenant to renew the lease, it is essential that the tenant be aware of both when each option must be exercised and how it must be exercised (i.e. what form of written notice is required to validly exercise that option to renew the lease). Failing to exercise each option by the prescribed date and/or in the prescribed manner will (unless otherwise agreed) result in the lease ending and either no further lease being offered to the tenant or a new lease being offered but potentially on less favourable terms. This, of course, can be financially disastrous to a small business.

If you would like to discuss your commercial leasing circumstances please do not hesitate to contact us on 9325 9644.

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The Importance of a Sole Director Having a Will

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By David Vilensky, Director at Bowen Buchbinder Vilensky Lawyers

17 October 2016

Companies that have a person registered as both the sole director and sole shareholder could be taking a big risk if the director dies without leaving a Will.

The company could have difficulty continuing to operate or it could be wound up.

Under the Corporations Act, if a single director of a company dies, the executor or personal representative appointed to administer the deceased’s estate may appoint a new director to the company having obtained a grant of Probate from the Supreme Court. The transitional director has all the powers, rights and duties of the deceased director and can keep the company functioning until shares are transferred to beneficiaries who may then appoint new directors. But if there is no valid will, a relative or other person would have to apply to the Supreme Court for letters of administration to manage the estate. This generally takes longer than an application for a grant of Probate.

While an option would be for the Public Trustee to be appointed to administer the estate, this procedure could take several months. A trading company in this situation would be unable to proceed with financial arrangements, might lose valuable work or incur penalties because it is unable to complete contracts.

It is therefore vitally important that a sole director who is also the sole shareholder of a company makes a valid Will. The Will can even nominate who the testator wishes his or her executor to appoint as a replacement director.

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Leasing Incentives – the Disincentive is in the Detail!

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers

29 September 2016

A recent survey by  Property Council of Australia found that the Perth office vacancy rate rose from 19.6 percent to 21.8 percent in the six months leading up to July.  This high vacancy rate has resulted in an increase in lease incentives being offered by landlords to prospective new tenants and to existing tenants whose leases are due to expire.

In a significant turn around to the recent past, the commercial rental market today is very tenant friendly and we are seeing (among other things) a resulting drop in effective rents.

Incentives

A lease is a legally binding contract which sets out the respective rights and obligations to both the landlord and the tenant in respect of the use by that tenant of a property owned by the landlord. The terms of a lease are negotiated between the landlord and the prospective new tenant and there are sound reasons why leasing incentives are offered.

Landlord’s reasons to offer incentives

  • Landlords can choose between their premises becoming or remaining vacant or accepting a lower rent or offering other incentives
  • Landlords can achieve a rent that provides some or all of the cash flow to pay for ongoing holding and operating costs (and possibly pay off development costs)
  • Landlords can encourage tenants to take up longer lease terms (the longer the term, the higher the incentive)

Tenant’s reasons to accept incentives

  • Tenants will seek to maximise the benefits that can be obtained when entering into a lease;
  • Tenants may have the choice as to whether to pay a higher rent and receive an incentive or pay a lower rent and receive no incentive
  • Landlords may offer an incentive to fund some or all of the fit-out costs or (in some other way) free up the tenant’s finances to enable the tenant to meet those fit-out costs.

Lease incentives can take one, or a combination, of the following forms:

  1. Rent free period or reduced rent period;
  2. A cash payment to the tenants or other in kind payments;
  3. A free office or other fit-out, whether paid directly by the landlord or by way of reimbursement to the tenant for fit out expenses; and
  4. The landlord assuming the tenant’s liabilities under an existing lease (i.e. lease legacy or lease tail).

So, What’s the Disincentive?

Negotiating the terms of a lease and any incentives to be offered or gained is often an extensive and robust process. At the conclusion of this process it is vitally important that both parties have a very clear common understanding as to the agreed key terms of the lease  and  exactly what incentives have been agreed to by the parties. Failure to achieve this will almost certainly result in misunderstandings, disputes and ultimately expensive protracted litigation.

Settling the wording of a lease is also a critical step in the process of securing a viable long-term tenancy for any property. This includes ensuring that all agreed incentives offered by the landlord are carefully and accurately recorded in the lease document. This is as much for the protection of the landlord as well as the tenant.

In addition, careful consideration must also be given to what other implications of the agreed incentives may exist.  For example:

  • Are there any tax implications?
  • Are there any government approvals that must be first obtained?
  • Has an agreement been reached as to what is to happen to any of the assets from which the tenant has benefited and for which the landlord has paid once the lease comes to an end?

Sometimes, where a tenant accepts certain incentives offered or agreed to by the landlord, the effective rent payable by the tenant is significantly reduced  and the Landlord may wish to keep this information confidential in order to preserve other tenancy arrangements with other tenants and/or to preserve the value of a building’s capital value. Such a confidentiality requirement can be recorded in the lease itself or, alternatively, as a separate Deed.

Whilst there are many incentives on offer to prospective tenants which are very attractive, it is essential that prospective tenants fully explore and understand the incentive being offered, whether it is a real benefit to the tenant’s business and what are all of the implications and obligations in accepting such an incentive. It is also essential to both the landlord and the tenant that the incentive agreement be fully and properly recorded in writing as part of the lease so that both parties have a clear understanding of the nature and full extent of the agreed incentives.

It is strongly recommend that all lease agreements be carefully reviewed by a lawyer before being signed by either the landlord or the tenant to ensure that it appropriately records all of the required terms and conditions including any incentives that may have been agreed to by the parties during the negotiation process.

Should you require any further information or assistance in relation to your leasing arrangements please contact Les Buchbinder or Giuseppe Graneri on 9325 9644.

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Choose Now Whilst You Can! – Your Future Decision Makers

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By Laura Di Cristofaro, Associate at Bowen Buchbinder Vilensky Lawyers

26 August 2016

Most of us are aware that a Will is a document that captures our wishes for the disposition of our assets (amongst other matters) once we die. It is not common knowledge, however, that there are also documents that one can execute in order to preserve our wishes for when we are still alive.

These documents are called an Enduring Power of Attorney, Enduring Power of Guardianship and Advanced Health Directive (sometimes called a Living Will).

For anyone who is addressing their estate planning objectives (and that should be all of us) it is important to consider the protection of your person and estate during your lifetime, as well as considering what happens to your assets once you die. To only execute a Will, and not consider what measures you take to protect the estate during your lifetime, is only addressing part of your estate plan.

Enduring Power of Attorney

An Enduring Power of Attorney allows you to appoint a person that you trust implicitly (usually a spouse or a child) to have authority to deal with your financial affairs.

This means that your ‘attorney’ (the person you appoint) has the authority to deal with your assets as if they were standing in your shoes. Your attorney may access your bank accounts, investments and (if you lodge the document with Landgate) deal with your real estate, if you ever lost the capacity to do so yourself.

Although this may not seem rational in reality, provided that your attorney is a reliable person to be given such a power, it is an important document that may assist you in times of emergency. If you were ever in a position where you could not make decisions for yourself, and you have outstanding financial obligations that need to be addressed, your attorney may step in and address those requirements on your behalf.

An Enduring Power of Attorney will provide you peace of mind in knowing that in a time of crisis, your financial obligations are being attended to by someone you trust and in whom we you have confidence.

Enduring Power of Guardianship

This document is similar to an Enduring Power of Attorney, however it relates to health and lifestyle decisions only. When you have capacity, you are able to make decisions relating to your own health and treatment and lifestyle decisions. For example, where you live, what medical treatment you undertake or what entertainment you will enjoy, etc.

Should you become incapacitated, you will have selected the person whom you trust to make these decisions on your behalf.

Although you may think that this document is unnecessary and when the time comes your family will be able to make those decisions for you, it is important to remember that decisions of these nature are particularly personal and you must consider reasonably whether it would be prudent to appoint particular people to preserve your wishes regarding your health and lifestyle.

Advance Health Directive

An Advance Health Directive is a document in which you set out, in advance, what treatment decisions you choose in certain circumstances where you cannot communicate those decisions at the time. The types of treatment decisions set out in these documents relate to the situation where you may be on life support or in a vegetative state. You may set out that you consent to, or do not consent to, treatments such as resuscitation, artificial feeding, blood transfusion, and similar treatments.

Your treatment decisions in your Advanced Health Directive must be followed by a medical practitioner and you therefore control the way you are treated in the event that you require life sustaining measures to be kept alive.

If you wish to discuss any of the above documents as part of your estate plan, please contact Laura Di Cristofaro of our office at ldicristofaro@bbvlegal.com.au.

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Before Taking the Plunge: What are Pre-action Procedures?

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By Rhonda Griffiths, Special Counsel at Bowen Buchbinder Vilensky Lawyers

9 August 2016

Googling Pre-action Procedures will bring up formal documents that have been published by the government relating to Family Law called “Before you File” (the link to the Family Court of Western Australia version is at the end of this article).

Pre-action Procedures set out what couples are directed to do by the law to avoid going to court about their settlement, if possible.  Couples are expected to engage in family dispute resolution.

If a person doesn’t take part in the processes described in the Pre-action Procedures documents, there are consequences that range from having a legal fight when they should have been able to avoid it, to having to pay legal costs for the other party’s lawyer.

Many couples have it clear in their minds that they don’t want to go to court but are not sure how to avoid that process.

This article is about three steps to set you on the way to a successful settlement.

Your particular case: which process to use?

The first step is to provide my client with a clear picture of the processes that can be considered in their particular case.

There will be discussion about the options of mediation and collaboration and negotiation outside of those processes.  These are different approaches to a negotiated settlement.  Both mediation and collaboration is designed to empower the parties with the skills of their professional advisors and in mediation, the mediator.  Negotiation (without mediation or collaboration) is a less formal process.

The ethical approach of the professionals, the lawyers and other experts, provides support for what can be a difficult process to be as smooth and comfortable as possible.

For some couples, some water needs to go under the bridge before they can deal with issues.  Often one partner will become frustrated at the speed at which the other wants to proceed.

Often legal advice is required urgently to deal with immediate practical problems or issues, even though it may be some time before settlement can be contemplated.

The first step towards a successful settlement is assessment of the best approach to take.

Time lines: how much time should be spent?

The second step is to establish the time line that is going to suit the situation and circumstances.  Before the settlement process can properly get underway there has to be “disclosure”. The Pre-action Procedures document lists what paperwork each party has to provide to the other.

It may seem odd to be giving your ex documents that they may already have or have seen, and confronting to give over documents to the other party that they have never seen before.

Disclosure is about ensuring that there is a level playing field for the couple.  One spouse or partner is usually across the financial details more than the other.

Until there is proper disclosure and the opportunity for reflection and advice about the disclosure, a person shouldn’t be asked, confronted or challenged to say what they want.

In a successful settlement process, it is not so much about what a person wants, as having the opportunity to find out and understand what is reasonable and fair in the particular circumstances and to explore all the options that are available.

Couples who have an out of court settlement can generate options that may not be available to parties in contested litigation.

For whatever reason, a time line necessity may require fast tracking of Pre-action Procedures and a limited time for settlement negotiations before litigation, while a last resort, has to be considered.

Disclosure and Resources

The third step in preparation for settlement is to achieve disclosure and to access relevant resources.

Disclosure usually takes some time and can be complex and time consuming.  Valuations are usually needed. Consideration may be given to instructing financial advisors to assist in establishing the asset pool.

There are services and resources that can assist in preparation of a couple for engagement in their negotiation and settlement processes.

As part of the preparation to be able to engage properly, I encourage my clients to access relevant services and often to seek counselling support, having in mind that most people go through a difficult adjustment during this time.

Finally

Any person in the circumstance of considering a separation from their partner should access legal advice even if they are still uncertain about the future of their relationship.  As lawyers we are duty bound to assist you to consider whether marriage and relationship counselling might help you.

We can also reality test your circumstances with you and talk about what might happen, without you making any final decisions.  Because separation is a complex and difficult step, advice about the way to separate can be of great assistance.  It can support a process that will ultimately lead to a final settlement by agreement.

The Family Court of Western Australia website www.familycourt.wa.gov.au provides downloadable access to the brochures with the link as follows: www.familycourt.wa.gov.au/B/brochures.aspx

Brochure 2 in Children’s matters: Before you file- Pre-action procedures for Parenting Cases

Brochure 2 in Financial cases: Before you file-Pre-action procedures for Financial Cases

If you would like any further information in relation to this topic please feel free to contact the author to discuss the matter further.

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Slap on a Caveat!

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers

2 August 2016

A reoccurring issue that I deal with relates to people or businesses that are looking to register a caveat against the Certificate of Title (“Title”) to land. A caveat when registered against the Title to the land will generally prevent ownership of the land from being transferred into another person’s or entities name. More often than not, such people are looking to register the caveat against the Title because the registered owner of the property owes them money and they are trying to stop the land  from being sold so as to secure payment of the debt owing to them.

Unfortunately, a caveat cannot be registered against a Title simply because the registered owner of the land owes money to the person or entity seeking to register the caveat or for some other reason that person wishes to prevent the transfer of ownership of the land into the name of a third party.

In order to be entitled at law to register a caveat against the Title of land owned by another person or entity you must have what is referred to as a ‘caveatable interest’ in the land.

So, What Exactly is a Caveat?

As I mentioned above, a caveat is a document registered on a Title to land, that prevents dealings (such as buying, selling or mortgaging the land) with the land. A person who registers a caveat is known as a “caveator”. The caveat itself does not create an interest in the land or give the caveator the power to sell the land. Rather what it does do is to act as a:

  • warning that the caveator has some form of interest in the land; and
  • an  injunction to prevent any dealings in relation to the land.

Importantly, in Western Australia a person who registers a caveat against a Title to land without having a valid a ‘caveatable’  interest in the land  becomes  liable to pay compensation to any person who suffers financial  loss as a consequence of the caveat being registered against the Title to that land. Such compensation may amount in some cases to many thousands of dollars, such as where a sale of land is lost because the caveat is registered against the Title unlawfully.

Therefore, whilst the actual process of registering a caveat against the Title to land is a relatively straight forward one, the consequences of doing so if you do not have a clear caveatable interest in that land can be very significant and sometimes financially fatal.

When do I have a caveatable interest?

There are different kinds of interest in land that will satisfy the requirements of a “caveatable interest’ in the land. The following kinds of interest in land have been accepted by the Courts as caveatable interests:

  • as purchaser under a contract to acquire the land;
  • as grantee of an option to acquire the land;
  • as tenant of the land;
  • as the holder of an equitable mortgage in relation to the land; and
  • as chargee of the land;

A caveatable interest in land can arise in several different ways including by agreement. The latter is very important in commercial transactions because it is possible in many circumstances for parties to a contract to agree to the creation of a caveatable interest in one or more nominated pieces of land to secure a debt thereby providing the creditor or potential creditor with the ability to secure debt against tat land by way of a valid caveat

Is there More Than One Kind of Caveat?

There are different kinds of caveats and so it is important that if you are intending to register a caveat against the Title to land  that you also ensure that the correct kind of  caveat is lodged in the circumstances. There are 3  kinds of caveats that can be registered against the Title to land  in Western Australia. These are caveats that prevent dealings relating to the land:

  1. absolutely (absolute caveat);
  2. until after notice is given to the caveator that the caveat has been registered against the Title to the land (notice caveat); and
  3. unless the caveat registered is expressed to be subject to the claim of the caveator (subject to claim caveat).

Each of these kinds of caveats have different characteristics and benefits depending on the situation at hand. Care needs to be taken in selecting the most approprate caveat for the situation at hand.

Conclusion

Registering a caveat against a Title to land can often provide a swift and cost effective way of securing an existing or anticipated future debt. However, unless there is a valid caveatable interest in the land and  the correct kind of caveat is selected the exercise can quickly turn into a financial disaster. If the validity of the caveat is challenged then the caveator must either withdraw the Caveat voluntarily (thereby losing the security for the debt) or take a potentially significant financial risk in maintaining the caveat registered against the Title to the land and hope that he/she/it is found to have a valid caveatable interest in the land in question.

It is highly recommended that competent legal advice be obtained before proceeding to register or attempt to register a caveat against the Title to land to ensure that a valid caveatable interest exists and that the correct kind of caveat is selected to register against the Title to the land. It is also highly recommended that competent legal advice be obtained before entering into any significant commercial transactions to ensure that either:

  1. you  are aware of, and agree to, the creation of a caveatable interest in a Title to land registered in your name or one of your business entities; or
  2. a valid caveatable  interest is in fact created in Title to land if as a creditor or potential creditor you wish to secure debt against Title to land.

If you would like any further information in relation to this topic please feel free to contact the author or another one of our lawyers to discuss the matter further.

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The Curse of Homemade Wills

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By Daniel Yazdani, Solicitor at Bowen Buchbinder Vilensky Lawyers

15 July 2016

In today’s economy, people aim to save and avoid unnecessary costs and expenses. Some consider that one such unnecessary expense is instructing a solicitor to draft your Will. This suggestion may stem from the belief held by some that we are all able to write our own Wills (particularly if our affairs are simple) without any legal assistance or we can simply purchase a cheap ‘will-kit’ from the post office or local newsagency, in which all that has to be done is to fill in the blank spaces and to sign it.

There are, however, numerous risks associated with this course of action. These risks were clearly identified in the recent decision of the Supreme Court of Western Australia in Rogers v Rogers Young [2016] WASC 208. In this case, the Testatrix (‘Will-maker’) utilised a ‘will kit’, which is a type of homemade Will that can be purchased from most post offices and newsagencies. In her Will, the Will-maker gave the residue of her Estate to her daughter (her only child), and stated that in the event that her daughter were to predecease her, then the Will-maker’s nieces and nephews were to inherit her Estate. However, the Will also stipulated that, if at the time of her death any beneficiary of the Will was under the age of 18 years, then that beneficiary’s share would be held on trust for that beneficiary’s support, welfare and education until they reach the age of 25 years. As it turned out, at the time of the Will-maker’s death, her daughter who was to inherit her Estate was 16 years old (thereby being a minor). This meant that, on the face of the Will, a trust would need be administered for the daughter’s benefit until she reaches 25 years of age. However, as was mentioned in this case, it has been settled law since the middle of the 19th century that if the beneficiary of a trust is over the age of 18 years and has an absolute vested and indefeasible interest in that trust, then he or she can request that the trust be terminated and the trust property be transferred to him or her.

Given the legal uncertainty which arose from the Will, the Executor of the Will made an application to the Supreme Court, seeking directions from the Court as to the proper interpretation of the Will pursuant to s 45 of the Administration Act 1903 (WA) and s 92 of the Trustees Act 1962 (WA).

Ultimately, the Court held that the daughter acquired an absolute vested and indefeasible interest in the trust property upon reaching the age of 18 years and not 25 years, despite the apparent intentions of the mother that her daughter should not receive the residuary estate until she has reached the age of 25 years.

In this decision, the Court made the following damning observation about homemade wills:

On numerous occasions when dealing with so-called homemade wills, I have observed they are a curse. Homemade wills which utilise what is sometimes known as a ‘will kit’ are not much better. This case proves the point. The disposition effected by the will is not complicated and no doubt the testator had clearly in mind what she intended to achieve. But the way the will is drafted is difficult, and the parties have been put to the trouble and expense of coming to the court seeking directions as to its proper interpretation. If the will had been drafted by a competent legal practitioner, this problem would not have arisen and the parties would have been spared a great deal of trouble and expense.

This case, therefore, highlights the problems that arise if people decide to draft their own Wills, namely:

  • Uncertainty as to the meaning of certain words or clauses in the Will, which leads to a dispute as to its proper interpretation;
  • The time and expense of having to go to Court in order for the Court to determine the correct and proper interpretation of the Will;
  • The risk that the Court might declare that the clause in question (or possibly the entire Will) is void or inoperable, giving rise to a partial or full intestacy, which means that that part of the Estate which was dealt with under the inoperable clause will now have to be determined under the intestacy rules in the Administration Act 1903 (WA); and
  • The risk that the testamentary wishes of the Will-maker may not be given effect to.

It is therefore self evident that the benefits of avoiding the ‘curse’ by having an experienced estate planning lawyer draft your Will and effectively arrange your estate planning objectives greatly outweighs the potential consequences of not doing so.

Please contact Daniel Yazdani at dyazdani@bbvlegal.com.au if you wish to discuss this matter further or wish to go through your estate planning objectives.

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Marriage Breakdown – Keeping it in the Right Perspective

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By Adam Spashett, Senior Associate at Bowen Buchbinder Vilensky Lawyers

20 June 2016

Separation and relationship breakdown is one of the most difficult situations that a person can find themselves in, even if it is not apparent from the outset.  Unfortunately, the majority of cases involve litigants who are usually at one of the most vulnerable points of their life.

It is of utmost importance to maintain perspective and composure in legal disputes. This is particularly in the case in family law matters.

In the case of parenting disputes involving the care and custody of children, lawyers are increasingly being retained to assist a party where the primary issue of dispute between the parties relates to their level of communication and understanding of their respective situations. Obviously, there are those cases where, due to issues such as family and domestic violence, addiction, use of illicit drugs, or mental health issues, the parties are unlikely to be able to effectively communicate with each other concerning their dispute.

It is important in all cases that the parties assess their ability to effectively communicate with each other, even on the smallest of levels, and take steps to address those issues.

There are also an increasing number of parenting matters where the parties have engaged one or more other professionals to assist them in resolving their legal dispute. In particular, the use of family counselling to provide therapeutic intervention for the parties themselves (and with the children if that is what is recommended as necessary and agreed by the parties) seems to be steadily rising.

The Family Court has the power to order family counselling in certain circumstances.

There are a variety of private and public services that are available for parties to consider that are available to teach strategies, not only individually, but as parents together, to assist in improving their communication and understanding.

It is also particularly helpful for parties to consider individual counselling in this regard, if they consider that they need assistance in maintaining their perspective, or indeed to assist them in dealing with issues that may pose a risk to the children.

It is also important to consider issues of a practical nature, which will impact the legal ramifications of their dispute.

A good example is in financial and property settlement cases involving clients who retain lawyers on the basis that an agreement has been reached with their spouse in the absence of legal, or other professional, advice. The current economic climate, and particularly the real property market, has created numerous problems with parties who are attempting a series of complex property transfers and refinancing in order to implement their agreements.

In the midst of all the tension and angst and possible relief of the parties in agreeing in principle, it is necessary for the parties to consider, as the initial step, whether or not the property transfers are able to proceed by giving due consideration to the practical hurdles and consequences, such as the overall ability to refinance and possible capital gains tax consequences on investment properties. This may mean that retention of property in a settlement may not be possible.

The above issues also highlight the importance of taking professional advice in your legal dispute at an early stage.  An experienced family lawyer will be able to raise these issues with you, and discuss with you options to address these issues and the benefits and detriments to you in your family law case.  They should also be able to assist by referring you to other professionals to provide assistance in family counselling, or the accounting, taxation or other financial advice that may be required.

It is important to seek such advice early on in the piece as this will greatly benefit you in your negotiations with the other side, whether they are conducted directly, or with the assistance of legal representation.

For a further discussion and advice in your legal dispute, and the practical implications, please contact me to discuss your individual circumstances at aspashett@bbvlegal.com.au.

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Blended Complications – Tetris for Estate Planners

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By Daniel Yazdani, Solicitor at Bowen Buchbinder Vilensky Lawyers

27 May 2016

Today, there are increasing numbers of blended families, which often causes confusion and concern when decisions must be made as to who will be provided for in a Will and in what proportions. The definition of a child in the eyes of the law obviously includes biological children. However, it also includes adopted children. Therefore, any such “child” has standing to bring a claim against their deceased parent’s Estate.

An example of a child’s right to adequate provision under a parent’s Will is the decision of Mead v Lemon [2015] WASC 71 which saw the Supreme Court of Western Australia determine that $25 million was adequate provision for mining heiress Olivia Mead – the daughter of mining magnate Michael Wright (“the deceased”) – who commenced proceedings in the Supreme Court under the Family Provision Act 1972 (WA) for further provision from her late father’s Will.

In this case, the deceased died on 26 April 2012. The deceased married four times in his life. He had three children from one marriage and Olivia (his youngest child) was the result of a relationship the deceased had with Olivia’s mother. Olivia’s mother and the deceased never married.  In the deceased’s Will, Olivia was to inherit $3 million (subject to strict conditions), compared to her half siblings who stood to inherit approximately $400 million each. The Executor of the Will has appealed the Court’s decision to award Olivia $25 million and the matter is currently before the Court of Appeal.

This case highlights that making appropriate provision for your children is a crucial consideration in the estate planning process. It also demonstrates that, failing to make adequate provision for your children – even though you may not have had a close relationship with them – may result in those disinherited children bringing a claim against your Estate.

Another issue arising from blended families is the provision for stepchildren.  Until recently, stepchildren were unable to make a claim under the Family Provision Act. The recent amendments to the Family Provision Act provide that a stepchild can make a claim in specific circumstances and usually in circumstances where the stepchild was financially dependent on the stepparent, or where the stepchild’s biological parent left his or her entire estate to their new spouse or partner, who in turn does not leave adequate provision for that stepchild.  Accordingly, even though a stepchild may not be a “child” in the eyes of the law, he or she may still be able to bring a claim against your Estate.

The fact that your children and other close family members can challenge your testamentary wishes highlights the reason why it is crucial to seek sound legal advice when dealing with your estate planning and business succession planning. The benefits of carefully and effectively arranging your estate planning far outweigh the dire consequences of not doing so and leaving important matters unaddressed.

Please contact Daniel Yazdani at dyazdani@bbvlegal.com.au if you wish to discuss this matter further or wish to address your estate planning objectives.

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Who Inherits Prince’s Diamonds and Pearls?

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By Laura Di Cristofaro, Solicitor at Bowen Buchbinder Vilensky Lawyers

9 May 2016

Despite achieving the status of music royalty, Prince’s untimely death at the young age of 57 years has once again highlighted the simple fact that no one can avoid the fallout from dying without a Will.

Whilst hard to believe that a superstar of Prince’s status would not execute a single document to say who inherits his wealth,  his family have filed papers to declare that Prince died without a Will. This means that Prince died ‘intestate’ and his family and the Courts are left to deal with the resulting mess that is likely to take years to sort out – not a legacy that Prince is likely to have wished to leave behind.

So, what happens to Prince’s ‘Little Red Corvette’ and other assets?  That will be up to the law in Minnesota… but what would happen if Prince lived right here in Western Australia and held his assets here?…

If Prince lived in Western Australia, there is a formula imposed by section 14 of the Administration Act 1903 that dictates who inherits the estate and in what proportions. Although each person’s intentions are different, it is very unlikely that this formula will mirror exactly what each person wishes to happen to their estate and therefore will most likely be problematic.

For example, if Prince died leaving a wife and children, the wife would receive a statutory legacy of $50,000 and one third of the remainder of his estate. The other two thirds would be divided between his children. Interestingly, the statutory legacy of $50,000 (which represented the median house price in the 1980s – definitely a ‘Sign o’ the Times’) has not increased since 1982.  For many widows or widowers left behind, $50,000 plus a third of the estate is simply not enough to maintain the same standard of living that the widow or widower may have become accustomed to whilst the deceased was alive.

If a beneficiary is not sufficiently provided for by the section 14 formula, their only recourse is to commence proceedings under the Family Provision Act 1972, which normally incurs significant legal costs and entails lengthy delays in finalising the estate.

By delaying the crucial exercise of making a Will, you run the real risk of dying intestate.  It is unfortunate when fighting over money takes precedence over mourning the loss of a loved one. To actively attempt to avoid disputes with respect to your estate, everyone should have (at the very least) a basic estate plan, including a valid and up to date Will.

Please contact Laura Di Cristofaro at ldicristofaro@bbvlegal.com.au if you wish to discuss your estate planning objectives.

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Business Succession – My New Business Partner

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers

27 April 2016

When starting a business the last thing that many new business owners give consideration to, or sufficient consideration to, is what will happen in the future when the new business owner or an existing joint business owner either wants to exit the business or, through death, illness or disablement, is forced to exit the business.

A recent Succession Report prepared by Pitcher Partners in conjunction with Swinburne University revealed that 51% of business owners do not have a business succession plan in place.

An important part of any business succession planning is putting in place as early as possible an agreement between the business owners setting out an agreed process for what is to happen when one of the business owners wishes (or is forced) to exit the business and, importantly, what is to happen to that business owner’s interests in the business.

Can’t I give my interest in a business to someone else in my Will?

Business owners are in many instances able to bequeath or gift their business interests to someone of their choice under a Will.

However, this method of business succession has a number of pitfalls, the most significant of which is that it may well leave the surviving business owners in a business arrangement with a person or persons with whom they are not familiar and with whom they may not wish to have an ongoing business relationship.

For this reason it is important for businesses to have an agreed business succession plan in place. A commonly used way of achieving this is through the use of a Buy/Sell Agreement.

A Buy/Sell Agreement will take precedence over the Will because the deceased’s business interests will be transferred in accordance with the Buy/Sell Agreement and will not form part of the deceased’s estate.

What is a Buy/Sell Agreement?

A Buy/Sell Agreement is in effect part of a business succession plan. It is a contract that provides for the future payout or sale of a business owner’s interests to his or her business partner(s) on the happening of certain events. Typically these events include such things as the disablement or death of one of the business owners. A Buy/Sell Agreement will also often set out an agreed mechanism for the succession of one business owner’s interest in the business to the remaining owners of the business or to a third party.

Buy/Sell Agreements are also frequently linked to insurance policies which are put in place where a trigger event will (or is likely to) have a significant financial impact on the business.

If you own a business and you’re concerned about how the death, disablement or retirement of one of your business partners may have on the operation of your business, then a Buy/Sell Agreement can assist you. Not only does it allow you to purchase your business partner’s share if any of these things trigger events were to happen, but it can also help you avoid your ex-business partner’s spouse or children moving into your business.

However, business owners must seek competent accounting advice in relation to any capital gains tax implications before entering into a Buy/Sell Agreement.

Are all Buy/Sell Agreements the same?

Standard-form legal documents written with generic terms and conditions often do not take into account the particular circumstances in a given case and therefore risk being ineffective in the particular circumstances and are often unclear and confusing.

In particular, the risk with standard-form Buy/Sell Agreements is that the document:

1.will not be prepared for your particular  business with all of its unique circumstances and your specific needs; and

2. may in the end be found to be legally unenforceable making the whole exercise a waste of time and money.

Therefore, it is advisable, and makes commercial sense,  to have a Buy/Sell Agreement prepared specifically for your personal and business circumstances by a lawyer experienced in preparing such documents.

What are the main advantages of having a Buy/Sell Agreement?

Buy/Sell Agreements:

1. provide certainty for the business owners by reducing the risk of succession disputes;

2. reduce the risk of the transfer of an outgoing owner’s interest in the business being undervalued with devastating financial consequences;

3. reduce the risk of the business suffering significant financial loss , or even having to be wound up, because no agreed mechanism is in place to deal with business succession thereby resulting in all the business owners suffering financial harm.

There are many good reasons to have a current business succession plan in place for your business and to include a carefully and properly prepared Buy/Sell Agreement as part of that business succession plan.

If you would need business succession planning advice or have any questions about Buy/Sell Agreements for your business, please do not hesitate to contact Les Buchbinder on 08-93259644 for further information.

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The Will to Challenge

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By Laura Di Cristofaro, Solicitor at Bowen Buchbinder Vilensky Lawyers

31 March 2016

Modern life (and the complexities that come with it) mean that we must consider our estate planning very carefully.   With the increase in conflicting moral obligations to spouses, de factos, children, step children and other loved ones, even the most careful Willmaker may find that there is someone who feels that they should have received more.  Where a person dies without a Will, it is also a real possibility that someone may feel that the laws of intestacy do not leave them with adequate provision from the deceased’s estate. 

The aim of the Family Provision Act 1972 (WA) (the Act) is to make provision for the maintenance and support of the dependants of a deceased person where those dependants do not receive an adequate inheritance from the deceased’s Will (or by section 14 of the Administration Act 1903 (WA) if the person died without a Will). 

The following classes of people may apply to the Court for further provision:

  • a spouse or de facto partner;
  • a child;
  • a parent

and, in certain circumstances:

  • a grandchild;
  • a stepchild; or
  • a former spouse or former de facto partner.

The claim must be made within six months of a Grant of Probate or Letters of Administration being made by the Court.

The Court has a wide discretion to determine what is fair and adequate provision and will consider a number of factors, such as the claimant’s:

  • financial position;
  • lifestyle;
  • medical needs;
  • relationship with the deceased,

as well as other factors such as the:

  • needs of other beneficiaries;
  • size of the deceased’s estate; and
  • moral obligation to provide for the claimant.

The existence of the Act highlights the importance of ensuring that your Will is always valid and up to date in order to protect the rights of your beneficiaries.  It also highlights the importance of seeking advice from an experienced estate planning lawyer in order to ensure that all measures are taken to protect your estate from potential legal fees after your death – an ineffective Will can be expensive to your estate!

The existence of the Act also highlights the importance of seeking appropriate legal advice if you were a dependant of a deceased person and do not believe that you have received an adequate or fair share of their estate.

Please contact Laura Di Cristofaro of our office at ldicristofaro@bbvlegal.com.au if you would like to have a discussion about Family Provision claims or your estate planning requirements.

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What is the Net Asset Pool?

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By Adam Spashett, Senior Associate at Bowen Buchbinder Vilensky Lawyers

10 March 2016

Following on from my colleague’s article “What Do You Mean It’s Not Mine?”, I have reflected upon one of the more basic, yet most important, question in family law property settlement – what makes up the net asset pool?

Simply stated, the net asset pool is all of the parties’ assets minus their liabilities.

That sounds simple enough, but what exactly is an asset, a liability, or a financial resource, is sometimes not so simple.

Identifying and Valuing the Net Asset Pool

The asset pool includes assets which are:

  • owned by either party prior to the marriage;
  • accumulated during the marriage; and
  • acquired post separation.

The Family Court can deal with an asset which is:

  • registered in the sole name of a party;
  • registered in joint names; and/or
  • registered in the name of a company or trust which a party controls or in which a party has an interest.

The Court also has regard to the financial resources of a party, such as any benefits which may flow to a party from a trust.

There are often disputes between parties as to:

  • the identity of assets;
  • the value of assets; and/or
  • assets which may have been dissipated either before or after separation.

The Court recognises the concept of an “add-back” or “notional property”.  This means that the Court can “add-back” into the net asset pool those assets which:

  • formed part of the asset pool but have been spent (for example, funds in a joint account spent on a party’s legal costs);
  • have been gifted to a third party;
  • have been recklessly wasted by one of the parties (for example, gambling or extravagant expenditure); and/or
  • have not been disclosed or are unaccounted for.

In determining the net asset pool, it is necessary to consider any contingent or latent tax liabilities which may arise upon the division or transfer of assets.  Transfers of assets between parties, pursuant to orders of the Family Court are normally exempt from stamp duty and parties can claim capital gains tax rollover relief.  However, where other assets are transferred, such as sale or transfer of shareholdings, or superannuation splits, different considerations may apply.  Parties should obtain independent financial or accounting advice in relation to these matters.

The relevant date for the determination of the net asset pool is the date when the Court hears the application.  If parties negotiate a settlement, the appropriate valuation date will be at the time of a settlement.  Many litigants do not appreciate that assets acquired pre-marriage or post separation can also be brought to account by the Court.

What is an Asset for the Purposes of Property Settlement?

Some of the more common assets are

  • real estate
  • motor vehicles
  • personal property (artwork, jewellery, furniture, antiques and personal possessions of value)
  • shareholdings in publicly listed or private companies
  • savings/deposits
  • superannuation (save and except in de facto property cases in Western Australia)

The following may also be deemed an asset of a relationship

  • goodwill of a business
  • interest in a partnership, franchise or other business
  • property held overseas or interstate
  • surrender value of a life insurance policy
  • patents and copyrights
  • antiques and artwork
  • lump sum redundancy/long service leave payments, provided they have already been received
  • lotto winnings or other windfalls (such as insurance payments and inheritances in certain circumstances)
  • contingent assets such as loan accounts in family trusts
  • vested interest in an estate, such as a life interest in property
  • frequent flyer points
  • water rights for rural properties
  • livestock

The assets taken into account by the Family Court include those owned by either party prior to the marriage, accumulated during the marriage or acquired post separation.

The Court also has regard to the resources of a party, which may include the following

  • benefits which may flow from family or discretionary trust or other entity
  • benefits received as a company director (company car, computer, phone)
  • inheritance shortly to be received
  • superannuation (in de facto property cases in Western Australia)

What is a Liability for the Purposes of Property Settlement?

Some of the more common liabilities are

  • mortgages
  • credit cards
  • personal loans (car loans and hire purchase leases)

The following may also be deemed a liability of the relationship

  • current outstanding taxation liabilities including income tax liabilities and capital gains tax
  • tax liabilities which may arise upon the division or transfer of assets
  • capital gains tax to be incurred from the sale of a property or shareholdings
  • outstanding land tax
  • HECS/Fee Help debt
  • monies owed to family entities

Ultimately what forms part of the net asset pool varies on a case by case basis.  A careful analysis of your financial position is prudent.  You may also need to speak with your accountant to help you prepare a schedule of your assets and liabilities.

For advice about property settlement please contact me to discuss your individual circumstances at aspashett@bbvlegal.com.au.

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What Do You Mean It’s Not Mine?

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By Laura Di Cristofaro, Solicitor at Bowen Buchbinder Vilensky Lawyers

25 February 2016

With the increase in sophisticated financial plans and the heightened awareness of the benefits of asset protection strategies, what seems like a simple question actually requires careful consideration – what do you own?

This question is important when considering your estate planning objectives. Is it your vision for your children to take over the family business? Have you taken out life insurance to ensure that your spouse can pay the mortgage? Who will take control of your family trust after your death? When you own, or have an interest in, what are commonly referred to as ‘Non-Estate Assets’, additional planning is required.

An ‘Estate Asset’ is an asset owned personally in your name.  You may transfer ownership of Estate Assets in your Will to your preferred beneficiaries.  An Estate Asset includes any asset that you own solely in your personal name or (if with someone else) as a tenant in common.  Estate Assets can include real estate, personal belongings, shares, investments and/or cars.

If you do not own an asset in your personal capacity (i.e. in your name) then that asset is a ‘Non-Estate Asset’. Non-Estate Assets include:

  • assets owned with someone else as a joint tenant;
  • assets owned by a Trust;
  • superannuation or life insurance proceeds (subject to binding nominations and trustee discretion); and
  • assets owned by a company.

It is not possible to transfer ownership of a Non-Estate Asset by your Will as technically it is not yours to give away.  For example, company assets belong to all of the shareholders of a company, trust assets belong to all beneficiaries of that trust and superannuation does not automatically form part of your estate.

So, how do you deal with Non-Estate Assets and achieve your estate planning objectives? It is crucial to seek appropriate legal and financial advice with respect to succession of these entities and distribution of the relevant assets. Your lawyer and financial adviser will often work together with you in order to create a strategy to reach your goals and ensure that your legacy is passed on in accordance with your wishes.

If you would like to discuss your estate planning objectives, please contact Laura Di Cristofaro of our office at ldicristofaro@bbvlegal.com.au.

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You Have Decided to Separate… Now What?

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By Adam Spashett, Senior Associate at Bowen Buchbinder Vilensky Lawyers

12 February 2016

Separation and divorce can and do occur at any time.  No matter what your circumstances are, whether you and your partner have mutually agreed, or if you have seen it coming for a long while, or it was completely ‘out of the blue’, separation will be one of the most difficult times of your life.

What makes separation even more difficult is when you and your partner have joint assets and/or children.

When you have decided to separate or divorce, getting confidential legal advice from an experienced family lawyer, and from a wills and estate planning lawyer, is unlikely to be at the forefront of your mind.  However, engaging a family lawyer on a confidential basis will ensure that you are provided with specific legal advice tailored to your situation.  It does not mean that you are committed to anything, and in most cases you will walk away with knowledge and understanding of what is ahead of you, and what your entitlements may be.

Each and every case is unique.  There will be cases where the parties will amicably negotiate and reach agreement, those where only a partial agreement will be achieved, and those where there are pressing or urgent issues which require immediate intervention.  Parties with complex financial arrangements will likely require additional services to assist them in achieving a resolution.

Outlined below are some things to keep in mind:

Financial Matters/Property Settlement

In regards to joint bank or share trading accounts, if things are amicable, perhaps a broad discussion about usage will suffice.  If there are accounts with significant funds, consider changing them so that both signatures are required to transact. Most banks will assist parties to make such changes.  Where you are both working, consider having your salaries paid into separate accounts in your sole name as a first step towards practical financial independence.

Cancel secondary credit cards if you suspect a vindictive shopping spree may be on the horizon. If possible, give some notice beforehand to limit the potential conflict likely to be caused.

If you are living under the same roof for the time being, think about setting up a PO Box for your personal mail.  If you’re moving out, be sure to redirect all of your mail and advise your lawyers, accountants, or other service provider to change your mailing address.

If you have a prolific online presence, be sure to change all of your passwords for everything, even if you think your significant other doesn’t know them.  Some of my clients will now set up a separate email address following separation.  It is wise to change all internet banking and other passwords, and ensure that any electronic devices that might synchronise passwords, emails, text messages, etc, cannot be accessed by your former partner.  The same goes with pin numbers for bank and credit cards.

Get some advice from a wills and estate planning lawyer.  Changing your Will to reflect your new circumstances is important. Keep in mind that unless the will is drafted ‘in contemplation of a divorce’, a divorce order will invalidate it.

Consider contacting your superannuation fund to change the nominated beneficiary. Whilst superannuation does form part of the estate (unless there is a Binding Death Benefit Nomination), the Trustee of the fund does not have to pay the funds to your estate in the absence of a Binding Death Benefit Nomination.  Similarly with Life Insurance and nominated beneficiaries.

Once your financial and property division has been agreed, be sure to have it properly documented by an experienced family lawyer.  This will ensure that all loose ends are tied up, and that consideration has been given to all aspects of your respective financial positions.  You agreement can be documented by way of a Form 11 Application for Consent Orders in the Family Court, or a Binding Financial Agreement.  Your family lawyer will advise you on the benefits and detriments of both options.

Parenting Matters

It is in everyone’s best interests, including, most importantly, the children, to present a united front to the children, being supportive of them and each other as parents whilst you guide them through this big change in their lives.

Creating or enabling conflict and exposing the children to such behaviour is looked on poorly by the Family Court.

If you parenting matters look as though they might become contentious, try to keep your own record of what arrangements have been put in place, and your discussions with your former partner.  Saving your emails and text message conversation is also handy.  In stressful times such as these, memory often falters, so records of your arrangements, including who the children spend time with and for how long, etc, may assist the parties in the future.

Try to agree with your partner on a routine, and then stick to it.  If the arrangements for the children are agreed, be sure to write them down clearly and concisely, so everyone is on the same page.

There are numerous private and government agencies who provide counselling, mediation services, and other helpful programs.  These service providers can help you negotiate with your former partner, and enter into a parenting plan.

You should also seriously consider documenting your agreement by way of a Form 11 Application for Consent Orders, which provide much greater certainty to the arrangements for the children.

Our Family Law team is happy to assist with any queries you may have.

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Landlords – Back to Basics

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers 

2 February 2016

The starting point for all Landlords should be ensuring that they have an appropriate and well drafted lease for their commercial premise. It is a crucial step for Landlords as a poor lease or a bad leasing decision can be a costly mistake. The lease is central to the goodwill, value and future sale of a business.  A well drafted lease can avoid or assist the Landlord in resolving disputes that they may have in the future with tenants.

In Western Australia, the Commercial Tenancy (Retail Shops) Agreements Act 1985 regulates many retail shop leases. Landlords should understand their rights and obligations in relation to the lease and what procedures to follow in the event of any disputes.

In October 2015, the commercial leasing vacancy rate in the Perth CBD was 19.6%. This figure was expected to grow in early 2016 as final completions of new developments came onto the market and leasing space that was taken up during the boom, was handed back as businesses have downsized.

At its meeting today, the Reserve Bank of Australia’s Board decided to leave the cash rate unchanged at 2.0 per cent. The reasoning behind the decision was that recent information suggested the global economy is continuing to grow, though at a slightly lower pace than expected. This is the ninth month in a row that Australia’s official interest rate has remained unchanged at a record low 2 per cent.

The ramifications for Landlord’s entering into a bad or hastily drawn lease in this current climate is that they may find that they have an invalid lease or they may experience significant disputes and as well as potential litigation in later years as a result. When interest rates do start to rise in the coming years, we are likely to see a large number of disputes concerning rent reviews.

Legal and commercial advice should therefore be obtained before:

  • making any commitments to lease, take on an assignment or incur any other obligations;
  • signing an offer to lease or any other lease related document;
  • payment/receipt of any deposit or other monies; or
  • occupying the leased premises.

If you are a Landlord looking to lease in this competitive market, you should begin by considering your leasing requirements with the main goal to develop a profitable business. Once you have identified your leasing requirements (i.e. the lease term, annual rent, rent reviews, etc) you must then seek to include as many of these requirements as possible when negotiating the terms of a new lease or the renewal of a lease with the tenant.

For more information or to discuss your commercial leasing objectives and needs, please feel free to contact Les Buchbinder at lbuchbinder@bbvlegal.com.au.

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My Will is My Business – the Essential Connection

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By Laura Di Cristofaro, Solicitor at Bowen Buchbinder Vilensky Lawyers

20 January 2016

We are constantly reminded of the importance of having a Will. The reality is, no adult is too young to make a Will and we must all confront our reluctance to plan for our succession.  Whilst the majority of us want to ensure that we provide security to our loved ones and our own legacy, many people never get around to actually doing anything about it.

So, what happens if you never execute a Will? Well, there are risks…

The most obvious risk is the complete loss of control of the distribution of your estate. If you die intestate, your estate is distributed in accordance with State Government Legislation. This means that your wishes or intentions have no relevance – the laws of intestacy dictate who gets your estate. Not only do you not have a say in who receives your estate, but you also lose control of imposing terms and conditions, such as age restrictions for beneficiaries to control their inheritance, implementing testamentary or special disability trusts or considering a fair and reasonable distribution between beneficiaries.  This gap between what the law says and what you might have wanted for your beneficiaries may quite possibly result in disharmony between beneficiaries and hardship for your administrator, as they try to navigate through administering an intestate estate.

Without giving thought to your estate planning, you also do not have a chance to properly consider binding death benefit nominations for your superannuation, Enduring Powers of Attorney for your financial affairs or Enduring Powers of Guardianship for your health and lifestyle needs.

Beyond considering your personal estate is the need to consider any assets that your business entities may own.  There is a wide misunderstanding about who owns assets that form part of any business entity.   If you operate as a sole trader, your business assets are your personal assets and accordingly do form part of your estate. On the other hand, assets owned by (for example) a trust or company belong to those separate legal entities and not to you personally.

The question then is, how do you ensure that your loved ones benefit from your business assets? Those persons in control of your business entity decide how the assets are dealt with.  It is therefore important to pass control of these entities to the right people, so that your intended beneficiaries eventually do receive the benefit of those assets.  This entails giving careful consideration to such mechanisms as gifting shares in a company or giving units in a unit trust to your intended beneficiary, or appointing that beneficiary as the successive appointor of your family trust.  If you die intestate and do not take the opportunity to give thought to whom or how you will pass control of these entities, you may leave your business (and possibly your family’s source of income) floundering.

As a shareholder of a company with multiple shareholders, it is vital to remember that if one of your fellow shareholders passes away and the shareholders haven’t addressed a succession plan for the company, then you could end up being in business with whomever inherits the deceased’s shares.  This may be his or her spouse, children or even someone entirely different. This can lead to significant disharmony and in turn could also lead to the company suffering financial loss and other prejudice because of a lack of proper management.  By implementing a business succession agreement (and the right insurances if necessary) or a shareholders agreement, one is able to ensure that they know exactly who they will be doing business with in the future and ensure the positive ongoing operation of the company and its officers.

It is quite clear – estate planning goes hand in hand with good business planning!

For more information or to discuss your Will and estate planning objectives and needs, please contact Laura Di Cristofaro at ldicristofaro@bbvlegal.com.au.

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Served With a Violence Restraining Order (“VRO”)? – Now What?

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18 December 2015

Often over the past few years a client will come to see me because they have been served with an interim violence restraining order.

The client is now prevented from returning to the home (once) shared with their partner, cannot return to the family business, and cannot spend time or communicate with the children.

The situation is usually made worse because their communications are now limited, or even prevented altogether, by operation of the orders.

What You Should Do First

Read the interim order that has been served on you.  Then read it a second and third time.  The orders are in plain language and are generally easy to follow.

Despite what you may think, for the most part, there are reasons that the Order was granted.  Do not be tempted to simply contact the person protected to “talk through it” – this is the first (and sometimes most costly) mistake one can make.  Emotions can run high at this time, but it is important to remain clear, calm and collect.

Do not contact the protected person unless you are absolutely sure that the interim order provides an exception (usually Part B to the interim order on the bottom of the first page).

Sometimes, there is an exception to allow some level of communication between the parties only concerning their children (and usually only by email/text message, and only during certain hours of the day).  Increasingly, I am seeing interim orders made without that exception.

Sometimes, other exceptions are made which allow the restrained party to attend the property (usually under supervision of the police) to remove personal items, or for the purposes of operating a business.  If these exceptions do not apply, it may be necessary to take further action.

What You Should Do Next

Contact a lawyer immediately to get legal advice about the effect of that interim order.

The clock is now ticking.  There are timeframes within which you must respond, otherwise the interim order can be made final without further notice to you.  There are also relevant documents you can obtain from the Magistrates Court which tell you what was said to the Court to get the interim order.

What About Your Parenting & Financial Matters?

Speak with a lawyer about your situation.

You may need a variation of the interim violence restraining order to return to the home for any reason, even to speak with or contact your children.

You may also need to make an urgent application to the Family Court for interim financial orders, such as injunctions for the preservation of assets, the interim operation of a business, or interim spousal maintenance or costs to proceed with your case, or seek injunctions for the preservation of assets, the interim operation of a business, or interim spousal maintenance or costs to proceed with your case.

Again, your emotions may be running high, and sometimes anger and frustration can take over.  It is important to know your rights, responsibilities and options.

The Family Court is unable to hearing an application for parenting orders unless at the time of filing you are able to provide a certificate from a registered Family Dispute Resolution Practitioner, or an Exemption Form.  Parties may only seek an exemption under certain circumstances.

It is important to know the jurisdictional limits of each Court, and again should get advice from a family lawyer about any urgent application, or exemption.

There is a great deal of interplay between family law matters and violence restraining orders.  A violence restraining order may, or may not, be sufficient grounds to apply for an exemption, or make an urgent application.

What Next?

Competent, specific and measured legal advice from an experienced lawyer is invaluable.  It will end up saving you time, effort, and even money in the long run.

It is important to obtain legal advice regarding both the violence restraining order application, and any Family Court applications, from a lawyer competent in both jurisdictions.

Our Family Law team is happy to assist with any queries you may have.

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David vs Goliath – Small Business to Benefit against Unfair Contracts

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By Les Buchbinder, Director, with the assistance of Giuseppe Graneri, Associate at Bowen Buchbinder Vilensky Lawyers

4 December 2015

In light of new laws recently passed, small businesses have more protection against unfair contracts.  Taking effect on 12 November 2016, following a 12 month transition period, the new laws will supplement the existing law on unfair contract terms for consumers.

The new laws apply to standard form contracts between businesses where one of the businesses employs less than 20 people and the contract is worth up to $300,000 in a single year (or $1 million if the contract runs for more than a year).

To fall under the legislation the following must apply:

  • the contract is a standard form contract, meaning (generally) the contract is pre-prepared by one party and provided to the other party on a “take it or leave it”, “one size fits all” basis with no effective opportunity to negotiate its terms;
  • the contract is entered, renewed or varied after commencement of the substantive provisions of the Bill, being 12 months after Royal Assent.  The amendments in the Bill will apply to the contract as renewed or the terms as varied on and from the renewal day or the variation day (as applicable), in relation to conduct that occurs on or after that day; and
  • the contract is a contract for the supply of goods, services, land, financial products or financial services.  In the case of the Australian Consumer Law, a small business contract must be a contract for a supply of goods or services, or a sale or grant of an interest in land.

The Australian Competition and Consumer Commission (ACCC), Australian Securities and Investments Commission and state and territory offices of fair trading will be enforcing the legislation.

As examples, the following contractual terms are likely to be caught by the legislation:

  • enabling one party (but not another) to avoid or limit their obligations under the contract;
  • enabling one party (but not another) to terminate the contract;
  • penalising one party (but not another) for breaching or terminating the contract; and
  • enabling one party (but not another) to vary the terms of the contract.

Small businesses should be aware that it is only the unfair part of a contract that will potentially be struck out, the rest of the contract remains.

If you have a contract that may fall into this category and would like to discuss this further please contact Les Buchbinder at lbuchbinder@bbvlegal.com.au.

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What Happens if you Die Just Before Signing your Will?

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By Daniel Yazdani, Solicitor at Bowen Buchbinder Vilensky Lawyers

18 November 2015

The recent WA decision of Re The Estate of Allan John Young [2015] WASC 409, which was handed down on 3 November 2015, deals with the interesting question of what happens if a person unexpectedly dies before signing his or her Will. Is the unsigned document valid? Can the unsigned document be admitted to Probate, thereby allowing the Executor to administer the Estate as per the Will?

Briefly, the facts of the case were that Allan Young (‘the deceased’) lived in Hopetoun, WA and had his Will prepared by lawyers in Perth. Just a few days before his unexpected death, he spoke with his accountant and said words to the effect: “I have read the documents and I am happy with it as long as you are happy.” The accountant replied that he had no problems with the Will. On 21 May 2014 – the day before he died – he spoke with one of his neighbours whom he would see daily. He told her that he had decided to sign his new will, saying: “I suppose I’m going to sign this will … I will get it finished.” The next day, he died.

Given that the deceased had not signed the Will, it did not satisfy one of the fundamental statutory requirements in the Wills Act 1970 (WA) – namely, the need for the deceased to sign the Will and have his signature witnessed by 2 people. Thus, the only way in which this unsigned Will could be admitted to Probate was if it satisfied the requirements of being an ‘Informal Will’ under s 32(2) of the Wills Act 1970 (WA). In order to be admitted as an Informal Will in WA, the Court must be satisfied that the deceased intended the document to constitute his last Will.

In the end, the Supreme Court was satisfied that the document in question was an Informal Will and ordered that the Informal Will be admitted to Probate.

This interesting case highlights a number of points, including:

  • A Will should be signed as soon as possible after it has been prepared and settled;
  • The importance of having a validly signed and current Will – this will minimise the costs arising from court proceedings to try and prove a document as an Informal Will;
  • Whilst Informal Wills can be admitted to Probate in some circumstances, there needs to be clear and cogent evidence that the draft Will or other documents reflect the deceased’s testamentary intentions; otherwise it is unlikely that such a document will be admitted to Probate. Therefore, in some instances, the failure to have a validly signed Will (even if it has been drafted) will result in an intestacy and the Estate being divided up according to the intestacy rules in the Administration Act 1903 (WA).

For more information on this subject or to discuss your Will and Estate Planning requirements, contact our Daniel Yazdani at dyazdani@bbvlegal.com.au.

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Ending Your Marriage with Dignity

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

2 September 2015

You may have seen the selfie which has “gone viral” showing a smiling Canadian couple, Sharon and Chris Neuman, posing outside the Calgary Court Centre after filing their divorce.

The Neuman’s attitude to their marriage break up is to be complimented.  They have young children and have expressed how important it was that they were able to end their marriage in a way that would allow them to continue to be partners in parenting their children.  They understood how important it is for children that their parents are able to get along together after divorce.

I tell my client’s that what I would like to achieve for them at the end of a marriage where there are children is a situation where while they may not have a marriage, they still have a family. They are parents to their children who undoubtedly love them both.  They will be the parents of these children for the rest of their (the parents’ lives) lives.  There will be graduations and birthdays and engagements and weddings and grandchildren.

If they can end their marriage with dignity and consideration for what is best for their children, they will have achieved a good outcome from what might, if handled differently, have been a very unhappy situation.

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Happy Wife, Happy Life – Observations by a Family Lawyer

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

1 September 2015

Research suggests marriages last longer if the husband is the one who is miserable…

In a recent article in the Weekend Australian (July 18-19 2015), Bettina Arndt the well known sex therapist, journalist and clinical psychologist took a look at social science research into marriage and marriage breakdown.  She outlined how research has been used by media and other interest groups to paint men as “the bad guys” and how conclusions drawn from research which portrays negative images of men always captures the attention of the media.  She argues that the annual Household Income and Labour Dynamics in Australia (HILDA) survey had been inaccurately interpreted and poorly reported in the media upon its recent release.  Arndt argued that the media really only reported half the research, and that was the half least complimentary to males.  HILDA reported that males whose wives work outside the home either full time or part time are less satisfied with their relationships than those whose spouses do not work.  The conclusion the media and commentators drew from this was that men prefer to have, “… their little ladies safely installed behind the white picket fence.”   Arndt however, ventured the opinion that these findings more likely reflected the wisdom of the old saying: “Happy wife, happy life”.  The reason most women are out of the workforce is because they are mainly the mothers of very young children.  The research suggests that both parents are happy in the relationship in those circumstances.

Arndt went onto say that the “stay at home mum” carries the burden of child rearing and studies such as the HILDA survey showed that the hours a wife spends on home duties and child rearing inevitably exceeds the hours a man puts into to similar duties.  What is ignored is that the man is the sole bread winner and the contribution he makes as bread winner is a contribution to the family which is being ignored in the exercise.  Frequently when “in the home” and “out of the home” work is added together, the hours a man puts into paid and unpaid work is roughly equivalent to the hours the wife puts into unpaid housework and child rearing duties.  It frequently works out that each party contributes about 70 hours a week.

Marriage rates in Australia have been dropping.  Increasing numbers of couples live in defacto relationships whose numbers are up from 1.5 million in 1996 to 2.9 million in 2012.  The latest HILDA data shows that cohabitating couples tend to be happier than married couple.  Yet about 90% of married couples are still together after 4 years compared 74% of defacto couples.  After 11 years the figures are 80% for married couples and 57% for defactos.

John Gottman, one of America’s foremost marriage researchers conducted a survey tracking newlyweds and following them up for six years to see which marriages were happy and stable and which ended in divorce.  They were surprised at the outcome but that outcome led them to sum up with this advice to men “If you want your marriage to last for a long time … just do what your wife says.  Go ahead, give into her.  The marriages that did work all had one thing in common – the husband was willing to give into the wife.  We found that only those newlywed men who are accepting of influence from their wives are ending up in happy stable marriages”.

From this you could conclude that men know they can’t afford to have unhappy wives because it affects their own life happiness if their wives are miserable.

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The Legal Effect of Recognition of Same Sex Marriage

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By Adam Spashett, Senior Associate at Bowen Buchbinder Vilensky Lawyers

19 August 2015

Well it seems that we will be heading to an election on the issue of same sex marriage.

There is presently a very heated debate throughout our community regarding the recognition of same sex unions by allowing those couples to enter into a marriage.

Whatever side of the fence one decides to sit, there are various implications to such recognition: socially, religiously, and legally.  There are many opinions and assumptions being touted throughout the media, both in support of, and against, the concept of same sex marriage.

The question is though, what is the likely legal effect of such recognition upon the breakdown of a relationship?

In Western Australia, the “recognition” of same sex couples for the purposes of Family Law, is by way of recognition of de facto relationships.  The Family Court of Western Australia has the power to deal with married couples under Federal legislation, and de-facto couples (including same-sex couples) under State legislation.

Non-married couples who satisfy certain criteria are referred to as “de facto”, which (literally translated from Latin) means “from fact”.  Essentially, it is a term used to describe the reality of such a union: whilst the parties cannot be legally married, the fact is, they are in a “union”.

There are some particular jurisdictional requirements.  Specifically, in relation to “property adjustment orders” and “[de facto] maintenance orders”, the parties must first be in a “de facto relationship”.  Where this is disputed, the Court must find that there is a de facto relationship before it may make an order.  Before making an order in de facto property cases, the Court must be satisfied:

1) that one or both of the parties to the application were living in Western Australia on the day the application is made; and

2) that:

a) both parties have lived in Western Australia for at least one third of the duration of their de facto relationship; or

b) substantial contributions have been made in Western Australia by the applicant.

Where the existence of a de facto relationship is agreed (or determined by the Court), the Court may make such an order only if satisfied that:

1) there has been a de facto relationship for at least 2 years; or

2) there is a child of the de facto relationship under 18 years and failure to make the order would result in serious injustice to the partner caring or responsible for the child; or

3) substantial contributions have been made, and failure to make the order would result in serious injustice.

The Court also has the power in de facto cases to make various other orders in relation to property matters, such as injunctions, as they have in the case of married parties.  However, in Western Australia, no provision has been made for de facto couples to divide their superannuation entitlements.  Therefore, superannuation is treated as a financial resource, rather than as an asset available for division.

From the Western Australian Family Lawyer’s perspective, the ultimate effect of a legislative change to allow same-sex couples to marry will be limited; same-sex couples who decide to marry can do so.  If they subsequently decide to separate, they will be subject to the Federal legislation.  Alternatively, if same-sex couples decide not to marry (and subsequently decide to separate), they will be subject to the State legislation.

It is a timely reminder that parties to such disputes should seek the advice of a competent Family Lawyer who will provide advice as to any jurisdictional issues. Our Family Law team would be happy to assist with any queries you may have.

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Why Companies Must Follow Their Own Policies in Handling Workplace Complaints

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

6 May 2015

In December 2014, the Federal Court of Australia handed down a decision (Romero v Farstad Shipping (Indian Pacific) Pty Ltd (2014) FCAFC 177) which has important implications for the way that companies handle staff complaints.

The starting point in this particular case was that an employee of Farstad Shipping, who was second Officer of a supply ship, fell out with the Captain during a 12 day voyage in 2011.  After disembarking, she sent an email to Farstad outlining  concerns about the way that she had been treated.  Farstad had several workplace policies including those concerning workplace harassment and discrimination, and documented procedures about how such complaints were to be handled.  While the employee’s email was not intended as a formal complaint, Farstad treated it as such.

At the same time, the ship’s Captain complained to Farstad about the employee’s competence and temperament (later shown to be unfounded).  The company no longer treated the employee’s email as private and the dispute quickly escalated so that Farstad found itself investigating both the employee’s concerns, as well as the Captain’s claims of incompetence.

Worried that Farstad seemed to be giving far more weight to the Captain’s allegations than her own, the employee lodged a complaint with the Australian Human Right’s Commission.  When no resolution was achieved, she took the matter to the Federal Court of Australia.

Initially, this claim failed.  The primary Judge rejected a claim of sex discrimination.  Importantly, he held that Farstad’s workplace policy did not constitute part of her contract of employment and, in any event, Farstad had not departed sufficiently from its own policy enough to have breached it.

The employee took this decision further on appeal, where the primary Judge’s decision was found to be wrong.  The Appeal Court concluded that the Policy did in fact form part of the employee’s contract of employment; that Farstad had not complied with its own Policy; and that the contract of employment had been breached by Farstad.  The employee was therefore entitled to relief, including damages.

This decision by the Federal Court of Australia highlights a number of important matters, but in particular

  1. Where an investigation into a complaint made by an employee is undertaken it must be undertaken in accordance with existing formal policies of the company and must be undertaken in a proper and thorough manner and be properly documented in compliance with the policies in accordance with the Rules of Natural Justice; and
  2. Where a company does have in place a formal Policy in relation to the making of complaints by one employee against another and that Policy is not followed or adhered to by the employer then a breach of the Policy by the employer may constitute a breach of the employment contract, thus giving rise to the employee having any entitlement to compensation or other relief.
  3. Where there is more than one complaint being investigated, then it is essential to treat those investigations separately.

As awareness of harassment and discrimination cases continues to rise, companies also need to be highly vigilant in the way they manage employee complaints.  While this article outlines a few of the general principles, legal advice for specific cases is always advised.  Should you wish to discuss such a case, please contact Les Buchbinder on 08 9325 9644.

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Getting a Divorce – What happens if She Empties the Joint Account?

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

30 April 2015

A question that we family lawyers are often asked is: what happens if she empties the joint account and spends it? Does she have to give it back, or is it taken into account in some way?

When a couple separates, and emotions are often highly charged, their behaviour can be unpredictable.  What happens if she spends their money on a new car?  Or he spends it on a holiday with his new girlfriend?

First, a distinction can be made between money used to buy an asset, like a new car, versus money spent on a holiday.

In the case of the car, it is an asset to be included in the pool of matrimonial assets for division between the parties.  So no, the money hasn’t evaporated.

However, if the money is spent on a holiday with the new girlfriend, it’s gone. It is not available to for division between the parties.

What does a judge do? Can the cost of the holiday be  notionally added back to the pool of assets?  Unfortunately, there is no certain answer to that.

Up until 2012, a Family Court judge may have notionally “added back” to the matrimonial pool of assets the money spent on the holiday with the new girlfriend, treated it as an early distribution of assets and taken the money from the share the husband would otherwise have received.

But in 2012 the High Court in the case of Stanford and later in 2013 the Full Court of the Family Court in the case of Bevan dealt with the issue of (“add-backs”).

Instead of ruling that “add-backs’ should always be applied, what the Courts  said is that where the money has been spent, where an asset or property no longer exists, the judge must “take it into account” in arriving at a just and equitable outcome for both parties.  Family Court judges therefore have a wide discretion to take all the facts and circumstances of every case into account to arrive at a just and equitable outcome for both parties.

This stipulation that a judge “take it into account” introduces a level of uncertainty and unpredictability which generally did not exist previously.

The law changes constantly. Sometimes the changes bring certainty  and sometimes uncertainty. It is an unfortunate fact of life that the consequences of one party’s bad or unreasonable conduct cannot always be fairly recompensed in a settlement or court judgment.

What can we learn from this?    More than anything, that if you are considering separating, or if separation has occurred, get  prompt advice from a competent family lawyer.

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Why Liquidators Must be Independent – and Seen to be Independent

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By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

(with assistance from Henry Burke)

21 April 2014

Liquidators and administrators should be aware that they are required to be independent, and may be disqualified from that role even if they only appear not to be independent. In ASIC V Franklin [2014] FCFCA 85, which was a recent appeal by ASIC to the Full Court of the Federal Court, ASIC successfully applied to have three experienced insolvency professionals disqualified as liquidators for precisely this reason.

Facts

In early 2013, Walton Group engaged Mawson Group (“Mawson”), a business advisory and corporate restructuring firm, to assess its restructuring options.

In late September 2013, Walton Group sold off a significant part of its business to entities created in July and August 2013 and owned and/or directed by persons closely connected with Mawson. This business included construction contracts, intellectual property, business records, plant equipment and stock.

Shortly after these transactions had taken place, Mawson referred Walton Group to accounting firm Lawler Draper Dillon (“LDD”) to undertake a voluntary administration of the Walton Group. Mawson had commenced referring other insolvency work to LDD since about February 2012, and the revenue from this referral relationship comprised about $750,000 in the 2012/2013 financial years.

The Corporations Act requires the administrators of a company to give a ‘declaration of relevant relationships and indemnities’ (“DIRRI”) to creditors, which enables them to resolve at a first creditors’ meeting whether they wish to retain or replace the administrators over concerns of independence.

The LDD DIRRI document stated that “… [Walton Group was] referred by .. Mawson Group, who refers us insolvency type matters from time to time. Referrals from solicitors, business advisors and accountants are common place and do not impact on our independence in carrying out our function as administrators. Other than this, there are no other known relevant relationships …”.

LDD selected insolvency professionals Glenn Franklin, Stirling Horne and Jason Stone to undertake the voluntary administration of Walton Group. Mawson was influential in the selection process.

On 8 November 2013, the creditors resolved to undertake a voluntary liquidation of Walton Group. It was agreed by the administrators at least by 15 October 2013 that liquidation would require them as liquidators to investigate six of the pre-administration transactions and eight links between the parties to those transactions and Mawson. This was in order to ascertain whether they might have been voidable or uncommercial transactions.

On 16 December 2013, ASIC commenced to have Franklin, Horne and Stone removed as liquidators on the ground that there was a reasonable apprehension of bias of the liquidators.

Decision

The judge decided that a reasonable fair-minded observer might reasonably decide that because of the respondents’ interest in not jeopardising future income, they might not discharge their duties with independence and impartiality. The fact that Mawson influenced the selection of the administrators added to this concern.

On this basis, the judge held that the liquidators should be removed as liquidators of Walton Group.

Summary

 Insolvency practitioners should be careful when they consider the possible conflicts that might arise out of referral relationships. If there is even any appearance of bias in this relationship, they should consider seeking legal advice as to the possible impact that this relationship has on their ability to act independently during the insolvency process.

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What You Risk by Not Finalising Financial Arrangements When You Separate

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

26 March 2015

Something I’ve seen a lot of lately is people finding themselves in all sorts of problems as a result of not properly ending the financial relationship with their former spouse or de facto partner when they separate.  These situations seem to arise in one of three ways:

  1. The couple never discussed, or never finished discussing, the division of their assets and simply moved on with their lives;
  2. They discussed it and came to an agreement but never formalised it; or
  3. They discussed it, agreed, and formalised that agreement, but not in the proper way.

When this happens, it often leads to difficulties with ownership of property or exposure to liabilities.  But the big problems typically arise when they’ve gone their separate ways, then one person:

  1. Enjoys a windfall like a lotto win, gift or inheritance, or begins to make a lot of money from business venture; or
  2. Suffers a significant loss, such as a poor investment in shares, property or some unsuccessful business venture.

In these circumstances, there is a very real risk that a person could, quite properly, apply to the Family Court to try to ‘level the playing field’.  While the Court would take the source of the gain or loss into account, it typically applies a very broad brush approach.  If financial arrangements are not finalised in the correct way, the Court might well order an adjustment one way or the other.  Even if the Court decides it should not make an order, there would be significant legal costs incurred by both sides.

The only way to avoid this from happening is to enter into consent orders or a binding financial agreement following the breakdown of a marriage or a qualifying de facto relationship.  No other agreements or documents will prevent the Court from dealing with your matter.

For binding financial agreements to satisfy legislative requirements, each party must have received, among other things, independent legal advice.  This is not the case with consent orders though.  In relatively simple matters these can be prepared by the parties themselves with minimal help from lawyers.

To enter into consent orders you need to down load a Form 11 Application for Consent Orders from the Family Court of Western Australia website www.familycourt.wa.gov.au.  These are completed by both parties, then executed in the presence of a qualified witness (eg a lawyer or a JP).  They are then filed in the Court at a cost of $155.

The long and the short of it is this: if you want to be financially independent moving forward after the breakdown of a marriage or de facto relationship, putting an end to your financial relationship is an absolute must.  Those who neglect to deal with this, do so at their peril.

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What is a Binding Financial Agreement, and Why is it Useful?

Damien Bowen

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

20 March 2015

A Binding Financial Agreement (BFA) is an agreement between two parties in which they set out how assets are to be dealt with in certain circumstances.  There are three types of BFA :

  1. An agreement made before a couple marries, setting  out how their assets will be divided if the marriage comes to an end (a Pre-Nuptial Agreement).
  2. An agreement made during a happy marriage  setting how  assets will be divided if the marriage comes to an end; and,
  3. An agreement made after divorce recording how they have agreed to divide their assets.

These three types of BFA are also available for people in de facto relationships, whether straight or gay, where:

  1. They are about to start living together;
  2. Are living together; or
  3. Are separated.

To be binding:

  1. The agreement must be in writing;
  2. Each party must have independent legal advice before they sign the agreement;
  3. The parties and their lawyers must all sign the agreement.
  4. One party holds the original and the other the copy.

BFA’s can only deal with property and spouse maintenance.The definition of property is very wide and  encompasses house, furniture, cars, a business, shares, investments, intellectual property rights, patents, jewellery and artwork, superannuation and entitlements in trusts and estates.

Typically, BFAs have the following uses:

Before marriage.  In cases where there is a wide disparity in the wealth of the two individuals, a BFA can essentially get this disparity out of the way of the relationship, by resolving, up-front, how assets would be divided should the relationship come to an end.

During marriage.  In cases where one of the couple benefits from, say, a major inheritance, a BFA can help remove tensions about what would happen to assets should the relationship come to an end.

After separating.  A separating couple can agree on how they are dividing their assets using a BFA, rather than through proceedings in the Family Court, as a quicker and less stressful way of resolving matters, so that they can move on with their lives.

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Privacy Law for Schools – Does your School Pass the 10 Point Data Security Checklist?

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

25 February 2015

Changes to Australia’s Privacy Act in March 2014 have important implications for all government agencies, including schools, in the way that they collect, store and manage personal information.

Schools should consider the following 10 points relating to personal information and sensitive information which comes into their possession.

  1. Risk assessment – identifying the security risks to personal information held by the school and the consequences of a breach of security;
  2. Privacy impact assessments – evaluating in a systematic way, the degree to which proposed or existing information systems align with the good privacy practice align with good privacy practice and legal obligations;
  3. Policy development – developing a policy or a range of policies that implement measures, practices and procedures to reduce the identified risks to information security;
  4. Staff training – training staff and managers in security and fraud awareness;
  5. The appointment of a responsible person or position – creating a designated position within the school to deal with issues of data security and data security breaches as well as in relation to issues of confidentiality.   This position could have responsibility for establishing policy and procedures, staff training, audits and investigating and responding to alleged breaches or suspected breaches;
  6. Technology – implementing privacy and security technologies to ensure that personal information held by the school, or secured including through such measures as access control, copy protection, intrusion protection and robust encryption systems;
  7. Monitoring and review – monitoring compliance with the security policy, periodic assessment of new security risks and the adequacy of existing security measures and ensuring that effective complain handling procedures are in place;
  8. Appropriate contract management – conducting appropriate due diligence with services (especially data storage services) are contracted particularly in terms of IT Security policies and practices that a service provider has in place and their monitoring compliance with these policies through periodic audits;
  9. Notification as a reasonable security safeguard – this follows from the above measures, especially with regard to policy development and monitoring review.   Whilst it is not a requirement under the Act to notify anybody of a data breach, as part of the obligations to keep personal information secure, it would be prudent to do so.   In some instances it may even be a reasonable or necessary step in the protection of information against mis-use, loss, unauthorized access, modification or disclosure;
  10. Policies and protocols should be developed in relation to what information will be collected by the school from parents and students and possibly any other relevant third parties (such as doctors, hospitals etc) and set out how such information is to be stored and secured, who is to be provided access to it and in what circumstances.   Such policies should also prescribe forms to be completed by parents and guardians of students authorizing the school to release specific or necessary information in urgent or emergency circumstances (such as to a hospital or a doctor) and, where necessary, to provide any necessarily required personal or sensitive information to known third parties.  This will provide clarity to the school, school management and staff and parents as to what information is and is not able to be collected or released by the school and in what circumstances.

All privacy and confidentiality policies, protocols and documents should be carefully and regularly reviewed and updated as required.   Furthermore, there should be a reasonably robust enforcement process implement to ensure that the established policies and protocols are observed because failure to do so can prove extremely stressful and expensive.

The above list is general in nature.  For specific advice on how the Privacy Act may affect your school, contact Bowen Buchbinder Vilensky Lawyers at (08) 9325 9644 or email us at info@bbvlegal.com.au.

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You Want a Divorce? Things to Keep in Mind

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By Anna Westphal, Solicitor at Bowen Buchbinder Vilensky Lawyers

10 February 2015

For many people, the finality of ending a partnership that was intended for life can invoke various conflicting and unexpected emotions. Dealing with these emotions is tough enough without having the added delays and stress caused by not knowing about the divorce process.   Many individuals (and couples) apply for a divorce themselves, while others choose to engage a lawyer. Whichever way you go, what are some of the key points you need to keep in mind?

Some General Requirements

  • You and your spouse need to be separated for at least 12 months before you can apply for a divorce. Make sure you are clear on the actual date of separation, as one party may object to the divorce if the date is ambiguous. You do not need to be divorced to settle financial and child care arrangements.  See the blog by my colleague, Damien Bowen on exactly this point.
  • Before granting a Divorce Order, the Family Court (‘the Court’) needs to be satisfied that your marriage has broken down irretrievably and that there is no reasonable likelihood of you and your spouse resuming married life.
  • If you and your spouse have been living separated under the same roof, you may need to provide the Court with additional supporting information (eg Affidavit from a third party).
  • You can apply for a divorce on your own (sole application), or together with your spouse (joint application).
  • You need to make sure you and/or your spouse satisfy certain citizenship requirements.
  • If you and your spouse have been married for less than two years, you will need to attend counselling or seek permission of the Court before you can apply for a divorce.

Attendance at Court

If you apply for a divorce on your own and have children under the age of 18 years, you will need to attend at the Court for a Divorce Hearing. If you apply for a divorce jointly with your spouse and you have children under 18 years of age, you will not need to attend Court (unless you wish to do so). The Court will usually want to make sure that proper arrangements have been made for the children, specifically in relation to their physical care and financial support. If you are required to appear at a Divorce Hearing, the Registrar may ask you questions in relation to your children. If you apply for a divorce on your own and you do not have children under the age of 18, you will not be required to attend Court.

 Service

If you apply for a divorce on your own, the Court will want to make sure that your spouse has been served with your divorce application correctly. Your spouse must be personally served at least 28 days before the allocated Court date if they are within Australia, and at least 42 days before if they are outside Australia.

If you cannot find your spouse or they avoid service of your divorce application, you may need to apply to the Court to dispense with service or for ‘substituted service’. If granted, the latter will allow you to serve your spouse through other means (eg through family members).

Timing

If the Court grants a Divorce Order, it does not come into effect until one month and one day after the Order is made. It is important to remember that you cannot get re-married until the Divorce Order has come into effect. The Court may shorten this time period in special circumstances.

Other

Once your Divorce Order comes into effect, you have only 12 months to commence proceedings in the Court for Orders in relation to property and spousal maintenance. After this time, you must seek leave from the Court to do so. It would be prudent to speak with a family lawyer in relation to your entitlements.

A Divorce Order invalidates an existing Will unless it is made in contemplation of divorce. It would be wise to speak with a lawyer practising in Wills and Estates once you and your spouse separate. Morgan Solomon is an experienced Wills and Estates lawyer in our firm and will gladly assist you if you wish to speak to someone about this.

The above points are a general guide only and do not cover all factors that must be considered when applying for a divorce. The Family Court of Western Australia provides useful information on their website, including a ‘Divorce Kit’ (see: http://www.familycourt.wa.gov.au/). Applying for a divorce may be fairly straight forward if care is taken, but complexities may arise. If you find the divorce application process difficult or confusing, feel free to speak to any of the family lawyers in our firm.

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You Don’t Have to Wait Till Divorce to Sort Out Your Financial Arrangements

Damien Bowen

By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

28 January 2015

When a married couple decides to part ways, they cannot apply for a Divorce until they have been separated for twelve months.

Some people mistakenly believe this means that important decisions about property and money and children must be left in limbo for the year that they are separated. But this is not the case.

They do not need to be divorced, or separated for 12 months, before they can conclude a financial settlement or formalise arrangements for their children. If they are not able to agree on these issues, they can commence proceedings in the Family Court.

Whether the separating couple have been married or have lived in a de facto relationship, or are straight or gay, they can negotiate and record a settlement agreement about property, spouse maintenance, arrangements for the children and child maintenance.

Agreements can be recorded in two ways.

The most usual way is to formalise settlement agreements by consent orders. Consent orders are obtained by the couple making a joint application to the Family Court for orders in terms of what they have agreed. The documentation lodged at Court contains information which enables a Family Court Judge or Magistrate to approve the orders. It is advisable for the parties to each obtain their own independent legal advice in relation to the agreement and the orders they are asking the court to make.  While legal advice is not an essential requirement, there is the potential for exploitation or manipulation when one of the couple is in a weaker position than the other and has no one to protect his or her interests.

The second way to formalise settlement agreements (but for financial matters only – not children) is with a Binding Financial Agreement (BFA). A BFA must be signed by both parties; each party must have independent legal advice about how the agreement affects their rights and whether it is in their interest to sign the agreement. There is no Court oversight of a BFA.

For couples wanting to go their separate ways and get on with their lives, consent orders or a BFA provides the basis on which they can do this. In the case of married couples, they can achieve a settlement even though they may not yet be legally divorced.

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Key Amendments to the Privacy Act: How They Affect your Business

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky

16 January 2015

Amendments to the Privacy Act were made in March 2014.  Even though some time has passed since then, I am still often approached by client companies and their advisers asking what the amendments mean to them.

If your organisation has a turnover of $3 million or more, or is a Government agency, it is an Australian Privacy Principle entity (APP) to which the amendments apply

I hope you find the following summary of key amendments helpful.

Storage

Personal information must be handled in an open and transparent way.  Your organisation must have an up to date policy outlining management of personal information such as the kinds of information you collect and hold; how you hold it; what you use it for; how an individual may access Personal Identifying Information; and other such matters.

You must provide individuals with the option of dealing with your organisation anonymously or using a pseudonym.

Sensitive information must only be collected with an individual’s consent and if the collection is reasonably necessary for one or more of your organisation’s functions or activities.  Examples of sensitive information are: race or ethnic origin; political opinions; religious beliefs or affiliations; sexual orientation; health record; biometric information; and others.

Personal Identifying Information cannot be used or disclosed for any purpose other than the reason for which it was gathered, without the consent of the individual.  A company cannot, for example, gather information purportedly for a health survey, then use it to market products to people.

Process

APP entities must notify individuals about the access, correction and complaints processes in their privacy policies.  These must include an opt-out mechanism in relation to direct marketing.

Individuals must be granted access to the personal information an organisation holds on them.  Where such information is incorrect, they should take reasonable steps to ensure it is accurate, up to date, complete, relevant and not misleading.

Protection

Organisations must take ‘reasonable steps’ to protect Personal Identifying Information from misuse, interference and loss and unauthorised access, modification or disclosure.  What are ‘reasonable steps’?  The kinds of issues that would be reviewed include how the information is stored (hard copy or electronically); the likely harm to the data subject if a breach occurred; and the size of an organisation.

Cloud computing

The increasing use of storage via cloud computing, often using providers based in foreign jurisdictions, also has implications for APP entities.  This is an important and highly relevant subject on which I’ve already published a blog earlier this week addressing this.

Summary

Changes to the Privacy Act have important implications for all Australian organisations which store personal information, and which have turnovers of more than $3 million, or  are Government agencies.  The information is this blog is necessarily general in nature.  For specific advice on how these amendments may affect your organisation, it is best to seek advice from a lawyer with specialist experience in this practice area.

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Cloud Storage – What is the Legal Position in Australia?

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By Leslie Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

13 January 2015

Many of us use cloud storage routinely these days as a quick and inexpensive way to keep and share photos and documents.  Increasingly, private and public sector organisations are using cloud storage too.  But it’s important to know that there are legal implications in the way that organisations store personal information.

Changes to the Privacy Act made in March 2014 are directly relevant to all Australian organisations with a turnover of $3 million or more, or which are Government agencies.  Such an organisation can be described as an Australian Privacy Principle  (APP) entity, to which the Privacy Act applies to the way that the organisation gathers, stores and uses personal information.

On the specific subject of using cloud facilities to store information, organisations should be aware of the following.

The Privacy Act applies to Cloud service providers whether they are located in Australia or overseas.  For example, a Cloud provider must give users access to their personal information upon request, must take reasonable steps to secure personal information from mis-use, interference  or unauthorised access, and must delete information that is no longer needed for the purpose for which it was originally collected.

People may be concerned that the offshore locations where data is stored may not have privacy laws similar to those in Australia.  Organisations who use such Cloud servers should be aware of amendment APP8 which regulates the disclosure or transfer of personal information to a different entity (including a parent entity) offshore.  APP8 requires that before disclosing personal information to an overseas recipient, an Australian organisation must:

  • Take reasonable steps to make sure that the overseas recipient will not breach the APPs and the Australian organisation will be accountable for such a breach; or
  • Make it known to the relevant individual(s) that his or her information will not be protected by APPs after the disclosure to the overseas recipient and obtain the individual’s consent to the disclosure OR form a reasonable belief that the overseas recipient is subject to laws substantially similar to the APPs.

What is a ‘reasonable belief’?  The obtaining of independent legal advice by an organisation in regards to foreign privacy protections will provide a strong basis for a ‘reasonable belief.’

Summary

If your organisation is an APP entity and you are thinking of using a cloud storage provider, be aware that you are responsible  for ensuring compliance with Australia’s Privacy Act.  If the cloud provider in question is based off-shore, you would be well-advised to seek legal advice to ensure that the provider is subject to laws substantially similar to those which operate in Australia.

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The Statistical Facts About Marriage and Divorce

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

5 December 2014

The media is fond of whipping up emotions about the state of marriage and divorce.  Every emerging trend tends to be scrutinised as possible evidence to support often wildly contradictory arguments, for example, that “marriage has become irrelevant” or “marriage is the new cool;” that “people can’t afford to get divorced because of the economy” or “narcissism is driving divorce rates higher.”

Time for a cold shower in the form of the statistical facts about marriage and divorce in Australia.

Marriage rates steady for the past 60 years

The number of people getting married each year, per thousand of the population, has remained comparatively steady.  Marriage rates were around 7 per 1000 for most of Australia’s history, with a peak during the Second World War, when troubled times saw marriage rates spike at 12 per 1000.  Since then, figures returned to their long term average, trending downwards since the 1980s to around 5 people per 1000 by 2010.

Yes, 5 per 1000 is a fair bit lower than 7 per 1000, but given the profound changes our society has experienced over time, what strikes us most about these figures is the enduring significance of marriage, through both good times and bad.

One third of marriages end in divorce

One in three marriages ends in divorce, a figure which has been stable for decades.  The number of divorces increased dramatically after 1975, when the Family Law Act was promulgated.  Since then, divorce rates have declined steadily, with a small kick upwards in the 2000′s until present when the number of divorces is down in all States except WA.   Why is WA the exception?  This calls for speculation.  One explanation may be the number of FIFO workers in WA. They are earning good money but long absences can be destructive of family life, particularly if there are children.

Writing in the New York Times a few days ago, journalist Claire Cain Miller made a point about marriage and divorce in America which I would say holds true in Australia too:

“Despite hand-wringing about the institution of marriage, marriages in this country are stronger today than they have been in a long time. The divorce rate peaked in the 1970s and early 1980s and has been declining for the three decades since.”

The rise of de facto relationships

Perhaps the most noteworthy trend of all has been the increase in the number of de facto relationships over the last 25 years. In 1986 5% of couples lived in de facto relationships; now 16% of couples do. An increasing number of people are living together before marriage.  Perhaps its “try before you buy”, but while, in 1975, 16% of people marrying had been living together previously, by 2008 that figure had risen to 77%.

Do more people separate after Christmas?

Is it true that there’s a post-Christmas spike in divorce after yet another unpleasant experience of enforced jollity with the spouse and in-laws?  The ABS does not publish statistics on this trend, so it is mainly anecdotal.  But my personal experience over more than 30 years in family law is that there is a definite seasonality about divorce, with a peak after Christmas and the New Year, and a trough during winter.

Summary

In short, whatever the ups and downs of any particular set of statistics, the trends set by celebrities and excited chatter in opinion columns and blogs, marriage has always been a stable social institution in Australia and continues to be so.  Two out of three people who get married will never need to concern themselves with the details of divorce.  But for the one in three who do, we’re here to help make it as civilised and painless as possible.

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A Jack-of-All-Trades Lawyer is a Master of None

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By Morgan Solomon, Director at Bowen Buchbinder Vilensky Lawyers

28 November 2014

From time to time we hear horror stories of how badly lawyers let down their clients.  But few seem to be on the scale of a Kansas-based lawyer, Dennis Hawver, who the Kansas Supreme Court unanimously ruled to disbar earlier this year.

By way of illustration, during a 2005 murder trial, attorney Dennis Hawver described his client as ‘an experienced and highly street-smart and intelligent criminal,’ as well as ‘a professional drug dealer,’ and ‘a shooter of people.’  He chose to run an argument that if his client had already killed two women in 2003, he would not have left the third alive to be the sole witness at the trial. With representation like that, who needs a prosecutor?

In closing arguments on the same case, Hawver tried using ‘reverse psychology’ and suggested the killer should be executed!

Hawver’s client was found guilty and sentenced to death.  Fortunately for his client, the murder conviction was subsequently overturned and a retrial ordered on the grounds that (unsurprisingly) Hawver had failed to represent his client properly.

It turned out that Hawver had never previously tried a capital murder case, was unfamiliar with court guidelines and, in essence, had no idea how best to represent his client.  At a subsequent disciplinary hearing seeking to disbar him, Hawver appeared in a white, powdered wig and costume dressed as Thomas Jefferson, an American Founding Father.  He had previously said the idea of losing his license to practise law left him untroubled as he had planned to grow vegetables in an aquaponics garden.

This is an extreme example, no doubt, but there is a moral to the tale:  when seeking legal advice, choose someone who specialises in the relevant practice area.  Before engaging a lawyer, make sure they have a track record in successfully representing clients.  And that they are currently active in the required practice area.  There are reasons why lawyers specialise – a jack of all trades, when it comes to the law, is a master of none.

For more about the Dennis Hawver story, click here: http://www.news.com.au/finance/work/the-biggest-lawyer-fail-of-all-time/story-fnkgbb6w-1227133346405

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Time Limits & Family Court Proceedings– Has the Ship Already Sailed?

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By Anna Westphal, Solicitor at Bowen Buchbinder Vilensky Lawyers

22 September 2014

Separated from your partner and want to stick your head in the sand? Not always a good idea. It is important to be aware of the time limits in the Family Court for commencing proceedings for property and spousal maintenance. Missing limitation dates could cause you unnecessary stress, paperwork, and legal fees. You may also suffer financial prejudice. The limitation dates discussed below are in relation to property and spousal maintenance applications only.

De Facto Couples
De facto couples have two years from the date of separation to commence proceedings in the Family Court. If this limitation date has passed, leave must be sought from the Court to start proceedings. Whether or not an application for leave is successful will depend on the circumstances of the particular case.

Married Couples & Divorce
When a married couple separates, their time limits are dependent upon divorce. Married couples cannot obtain a Divorce Order until they have been separated for a period of twelve months. A Divorce Order does not take effect until one month and one day after the Order is made (unless the Court orders otherwise). They then have twelve months from the date that their Divorce Order takes effect to start proceedings. As with de facto couples, leave must be sought from the Court to start proceedings after the time limitation date.

Summary
It is important to appreciate that every Family Law case is different. The relevant legislation provides the legal framework, but circumstances are rarely black and white. If your relationship has come to an end and you are in doubt as to when you ‘legally’ separated, or about your financial circumstances and entitlements, make an appointment to see a lawyer and get some advice. The website for the Family Court of Western Australia also has useful information for those dealing with a relationship breakdown (see: http://www.familycourt.wa.gov.au/).

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Why You Should Never Think of Insurance Renewal Notices as ‘Routine’

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

5 September 2014

When most of us receive renewal letters from our insurers for our house, car or healthcare, we usually focus on the cost of the renewal and ignore the rest of the document.  But spending just a few minutes checking the details and reflecting on what has happened since the last renewal document can mean all the difference between dealing with life’s inevitable challenges with relative ease, or suffering serious financial hardship.

Omitting to mention changes is different from material non-disclosure.  But how are they different?

Omission

Let’s say you buy an expensive new item of jewelry or furniture. When your contents insurance renewal paperwork arrives, because you made the purchase nearly a year ago and don’t spend much time thinking about new capital items, you forget to list it on the renewal document.

Some weeks later there is a burglary.  Apart from having to deal with repairs and disruption, when you put in your claim for the expensive stolen items, the insurer rejects the claim because they were not nominated on your Policy Schedule.

Maintaining an inventory of all items to be listed on a contents insurance policy may seem a tedious task, but it’s an important one.  Forgetting to mention an item on your Policy is, in insurance speak, an ‘omission.’  Material non-disclosure is rather a different matter.

Material Non-disclosure

Let’s use an example from private medical insurance, when a person forgets to mention the fact that he consulted a medical specialist about a back injury a few years before taking out a policy.  Having not had any back problems for years, perhaps it doesn’t even cross his mind when he completes the paperwork.

Fast forward to a weekday afternoon when some routine activity at work results in the person suddenly and unexpectedly putting his back out.  What at first impression seems to be a minor injury seems a lot more problematic after medical examination – he is told by doctors he may need extensive treatment.

If he subsequently makes an insurance claim, the insurer will request a full medical report, including historical records.  The chances of having the much earlier back injury discovered are high – at which point the insurer could reject his claim on the basis that he failed to disclose significant information that was material to whether or not the insurer would have taken on the risk in the first place.  Or, if the insurer had been willing to take on the risk, it would have been for a substantially higher the premium.

After years of faithfully paying their insurance premiums could you be forgiven the sin of omission?  I’ve seen insurance companies reject claims by loyal clients of many years standing.  Whatever the policy wording, insurers do have the discretion to waive potential defences to claims made under insurance policies and nevertheless pay out the claim.  But I wouldn’t count on it!

Renewal notices should never be seen as a routine chore.  They deserve quality time and proper consideration.  Contrary to popular belief, the two words I never want to hear a client say is ‘if only!’

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How Best to Submit an Insurance Claim?

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

26 August 2014

What’s the best way to submit an insurance claim.  In three words: through a lawyer.  Of course, if it’s a straightforward and relatively minor claim – for example, when you discover someone has reversed into your car, denting the passenger door and causing a couple of hundred of dollars worth of damage – there is probably no need or point involving a lawyer.

But for larger and more complex matters, legal advice can make all the difference because the wording of an insurance claim is extremely important.  I want to make it abundantly clear than under no circumstances should an insurer be lied to or deceived.  But getting advice on what information must be included in any claim form submitted to an insurer, and how to word this information, is critically important.

I have been involved in cases where significant disability claims have been paid out, while others, that seemed identical, were not.  The difference in outcomes was likely caused or contributed to by the way the claim form was completed.

If an insurer rejects your claim, that’s not the end of the road.  You can seek legal help to have a letter written to the insurer demanding a full explanation of the basis of rejection of the claim.  The grounds on which the claim has been rejected may be able to be contested and other arguments raised in support of your case.

If the insurer still refuses to accept the claim in part or in whole then, you may then have the option to commence legal action against the insurer for breach of the insurance contract and/or on other grounds, which the insurer will be required to defend.

Whilst current statistics suggest that around 70% of these kinds of disputes are settled during the course of the litigation and mediation process that occurs before going to trial, given the protracted nature of the process and the potentially high legal costs associated with it, you would be well advised to use the services of a fixed price fee lawyer. Doing so provides more peace of mind about costs, and also helps ensure that the momentum of the action is maintained.

In summary, for the quickest and cleanest result, when submitting an important insurance claim, get help from a fixed fee lawyer.

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The Benefits of a Shareholders Agreement

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By David Vilensky, Director at Bowen Buchbinder Vilensky

8 August 2014

People who join together to form a company should consider entering into a shareholders agreement.  In essence, a shareholders agreement is a de facto partnership agreement and it supplements the constitution of the company.

A shareholders agreement protects the respective rights of each co-owner if their relationship were to turn sour.  The alternative could be a legal deadlock from which there will be no winners.

If your preferred entity is a unit trust, unit holders of a unit trust (the equivalent of shareholders of a company) can similarly enter into a unit holders agreement to supplement the unit trust deed.

A shareholders agreement provides a clear statement of how the co-owners plan to operate the company.  There is no such thing as a ‘standard’ shareholders agreement.  They are tailored to suit the particular business and needs of the participating shareholders and directors.  However, usual provisions in a shareholders agreement include:

  • Contingency plans that will be triggered by defined events, such as death or divorce or a take-over offer from a third party;
  • The terms on which one co-owner can buy out the interest of another, and the basis on which the business will be valued for that purpose;
  • A stipulation of a non-competitive period so that if one co-owner leaves they are unable to approach customers or suppliers or compete in the same market for a certain period;
  • Agreement as to the allotment of further shares;
  • Rights relating to the appoint of directors;
  • Amendments to the company constitution;
  • Agreed procedure for the sale of shares;
  • Signing of cheques drawn on the bank account of the company;
  • The employment by the company of any of the directors of the company;
  • Properly tailored dispute resolution processes;
  • Allocation of roles and duties in the business operated by the company;
  • How the company is to be funded.

Shareholders agreements and unit holders agreements provide a valuable resource in resolving disputes and clearly determining the rights of parties.  These in turn create certainty and stability in business relationships.

If you would like advice or assistance in this area please contact David Vilensky, Craig Hollett, Morgan Solomon, Tegan Short.

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Pay Now, Argue Later: Principals Must Follow an Adjudicator’s Decision

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By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

22 July 2014

One of the main purposes of Western Australia’s Construction Contracts Act 2004 (WA) is to make sure that progress payments keep flowing.  Historically, this has caused significant financial hardship to contractors who sometimes had to wait for years to be paid – in the meantime, having to finance the cost of running their own businesses themselves.

The Construction Contracts Act has a system of rapid adjudication if a payment dispute arises, which is conducted without any oral hearing, and in which the Adjudicator makes a determination.  That determination may require the principal to make payment to a contractor of disputed invoices, which means the debt is payable. The contractor may then enforce the determination under the Civil Judgments Enforcement Act 1004 (WA).

Alternatively, if the principal is a company, the contractor can issue a Creditors Statutory Demand.  The risk of a Creditors Statutory Demand can be the potential for a principal  to set it aside on the basis that a “genuine dispute” exists about the existence or amount of the debt.    In such an application, the principal must establish there is a bona fide dispute which is not spurious, hypothetical, illusory or misconceived.

The Western Australian Court of Appeal recently considered such a situation following two separate determinations by an Adjudicator under the Construction Contracts Act 2004 (WA).

The Court of Appeal drew an analogy to the way in which tax debts are treated – i.e., you may dispute the amount you owe the tax office, but you must pay first and argue later.  The Court of Appeal said that even though the principal had commenced District Court proceedings disputing the liability to pay the debts which were the subject of the adjudication, this did not give rise to a genuine dispute which would be capable of setting aside the Creditors Statutory Demand.

This case provides a clear direction to contractors who can take advantage of these provisions to receive payment, even while there may be a dispute continuing with the principal.  This is a very different situation from the one they’ve faced in the past when they had to wait until the conclusion of any Court proceedings before they can hope to see any payment, often with crippling financial consequences.

This case has important implications both for principals and contractors.  As always when signing contracts, seeking legal advice in the short term can save a great deal of financial and emotional energy later.

The full decision of Diploma Construction (WA) Pty Ltd v KPA Architects Pty Ltd [2014] WASCA 91 is available on the Supreme Court website (http://decisions.justice.wa.gov.au/supreme/supdcsn.nsf/judgment.xsp?documentId=5EE18FD9166D886E48257CC40013285E&action=openDocument&SessionID=DRZT6Y89A4).

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You’ve Told Him It’s Over… Now What?

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By Patricia Schrape, Associate at Bowen Buchbinder Vilensky Lawyers

25 June 2014

Whether it comes out of the blue for one of you, or you’ve both been avoiding the elephant in the room that is your broken relationship for months or years on end, the moment when it is finally acknowledged that the end is here can be a mighty big relief.

But what to do to extricate two separate lives from one which has been forged jointly?

If you haven’t done so prior, you should strongly consider getting confidential legal advice from an experienced family lawyer. Seeing a lawyer doesn’t mean you are committed to anything, and in most cases should be able to provide you with a good idea of what is ahead of you and what your rights and entitlements may be.

Obviously every couple have factors which will be more or less pressing, and the degree of animosity will determine how urgently action needs to be taken, but below are some things to keep in mind:

Finances/Property

  1. Think about joint bank or share trading accounts – if things are amicable, perhaps a broad discussion about usage will suffice. If there are accounts with significant funds, consider changing them so that both signatures are required to transact. Also consider each of you having your salary paid into accounts in your sole names, a first step towards practical financial independence;
  2. If you are living under the same roof for the time being, think about setting up a PO Box for your personal mail. If you’re moving out, be sure to redirect all of your mail;
  3. If you have a prolific online presence, be sure to change all of your passwords, even if you think your significant other doesn’t know them;
  4. Same with pin numbers for bank and credit cards;
  5. Cancel secondary credit cards if you suspect a vindictive shopping spree may be on the horizon. If possible, give a little notice before doing so to avoid their experiencing the embarrassment of a refused transaction and that embarrassment turning into wrath towards you;
  6. Change your Will to reflect your new circumstances, keeping in mind that unless the Will is drafted ‘in contemplation of a divorce’,  a Divorce Order will invalidate it;
  7. Contact your superannuation fund to change the nominated beneficiary for your super – superannuation does not form part of a deceased estate, so your Will can’t deal with it;
  8. Once your financial and property division has been agreed, be sure to have it legally documented so that all loose ends are tied up and everything is properly finalised. This can be done via Family Court Consent Orders or a Binding Financial Agreement.

Parenting

If you and your partner have children, this often introduces a whole other kind of complexity to the end of your relationship.

It is in everyone’s best interest to present a united front to the children, being supportive of them and each other as parents whilst you guide them through what will invariably be a big change in their lives. Try to agree with your partner on a routine, and stick to it.

Sometimes, however good the intentions, issues arise in relation to children.

There are numerous private and government agencies who provide counselling, mediation services and other helpful programs.

If things regarding the children look like they may become contentious, try to keep a record of arrangements – who they’re spending time with and for how long etc. In stressful times such as these, memory often falters.

Should the situation deteriorate, lawyers can assist in negotiating arrangements, and if necessary bring proceedings in the Family Court.

If the arrangements for the children are agreed, be sure to write them down clearly and concisely, so everyone is on the same page. You should seriously consider getting Family Court Consent Orders, which provide much greater certainty.

A final note on Facebook and social media. As much as your hundreds of friends and followers may happily provide support to you in this difficult time, it is usually best to stop altogether, or carefully limit usage. A tipsy posting about an estranged partner can all too easily get back to them and cause all manner of grief.

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Bowen Buchbinder Vilensky’s team of family lawyers is comprised of Partner Damien Bowen, Senior Associates Catriona Kilgallon and Sam Fahey, Associate Patricia Schrape and Solicitors Vince Bradley and Anna Westphal. You are welcome to telephone to make an appointment with any one of us.

 

What to Consider When Becoming a Mortgage Guarantor

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By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

13 June 2014

Rising house prices affect many of us directly and all of us indirectly.  In cases where the parents of grown-up children see their kids getting first jobs, starting out in life, and facing the seeming impossibility of buying even a modest unit, it’s only natural to want to help.

Those parents who can afford to, often help their kids with a loan, soft or otherwise.  A recent survey in the UK shows that 1 in every 4 first home buyers borrows money from family or friends to help secure a place on the property ladder.  Loans to your children should be properly documented to protect you if your child and their partner, current or future, later separate and a question arises about whether your loan was a loan or a gift in the division of their assets.

But many parents are not in a position to give their kids a major financial leg-up.  In cases like these, where Mum and Dad have little spare cash, but do have equity in the family home, they may think about standing as guarantor to help their kids get that vital first home loan.

While the motivation to help is well-understood, the consequences of being a guarantor are not always understood as well.  Here are a few suggestions of things to consider if you are thinking about becoming a guarantor:

  • Take independent legal advice first.  You need to know what exactly you’re getting into, your rights and the possible consequences for you if your child defaults on their loan.   You don’t want to be in the position of having paid your mortgage faithfully every month for decades, only to have the bailiffs coming round to seize goods, or your property, because your kids get into financial trouble.  You also need to know if and how you can be released from your guarantee in the future.
  • Be sure that you know whether the guarantee is for a capped amount or the full amount of the loan.  A partial guarantee reduces your risk, and may be all your kids need to get the loan.
  • Have an agreement with your kids that creates an escape clause for you so that if your kids start earning a lot more, and/or the value of the property rises, they agree to refinance, and remove you as guarantor.  Regularly review this situation with your kids, at least on an annual basis.
  • Promptly seek legal advice if your child and their partner separate and you are a guarantor on their loan. The last thing you want to do is find yourself still guarantor to a loan for a property inhabited by your child’s ex and their new partner!
  • If you do guarantee the loan, avoid putting a caveat on your  own property .  Even if your kids don’t get into trouble, a caveat could frustrate your own plans to downsize or sell later.
  • Make sure you accept the lender’s offer to receive copies of all correspondence and documentation to the borrower.  You don’t want to find out that your kids have fallen behind on their loan only months after the event when a process server knocks on your door and serves you with a writ of summons.

Remember, you are not the first parent to go down the path of being a guarantor for a child.  There are many factors to consider and a lawyer used to working with mortgages can help you reach a positive outcome – which includes your peace of mind!

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Two Things to be Sure of When Designing Your Wedding

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers

13 May 2014

Australia is a relaxed country to get married in.  Your wedding ceremony can be on a beach, in a treehouse or even, as some prefer, in an aquarium surrounded by tropical fish.  Long gone are the days of churches or registry offices being the only options.

Despite the more relaxed approach to venues, from a legal perspective there are still a couple of things you need to be sure of for the marriage to be valid.

Registered marriage celebrant

You can only be married by a registered marriage celebrant or a registered Minister of Religion of a recognised denomination.  You and your spouse-to-be may both be Elvis Presley tragics, but unlike Las Vegas, hiring an Elvis look-alike to perform the deed won’t cut it legally in Australia – unless, of course, your Elvis impersonator also happens to be a registered marriage celebrant.

It isn’t often that I come across someone whose marriage is invalid because of who married them.  But this can happen when people think the rules about getting married have all been thrown out.  Finding a registered marriage celebrant is easy if you go online.

Using the right words

The Commonwealth Marriage Act requires the celebrant to explain to the bride and groom the nature of a marriage relationship.  The celebrant must use these words or words to the same effect:

” I am duly authorised by law to solemnise marriages according to law. Before you are joined in marriage in my presence and in the presence of these witnesses, I am to remind you of the solemn and binding nature of the relationship into which you are now about to enter. Marriage, according to law in Australia, is the union of a man and a woman to the exclusion of all others, voluntarily entered into for life”

Once this explanation is given, the husband and wife to be must, in the presence of the celebrant and the witnesses say to each other the following word or words to the same effect:

” I call upon the persons here present to witness that I [a] take you [b] to be my lawful wedded wife (or husband).”

It is very common these days for husbands and wives-to-be to make up their chosen promises – the time-honoured “love, honour and obey” having declined in popularity.   Making pledges more personal can certainly enrich the ceremony and make it more meaningful for everyone involved.  The important thing is to ensure that the wedding vows don’t get left behind in the romantic haze.  From a legal perspective they are all important!

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There’s a Mistake on Your PPSR Registration: What Now?

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By Craig Hollett, Director at Bowen Buchbinder Vilensky Lawyers

5 May 2014

The Personal Property Securities Act 2010 (“PPSA”), which came into effect in January 2012, has had a big impact on many Australian businesses.  PPSA legislation created the Personal Property Securities Registrar (“PPSR”), a national, online register, requiring interests in personal property to be registered.    Such interests may be as small as a plasma TV bought on hire purchase from Harvey Norman or as major as a multi-million dollar commercial property lease.

 So, what happens when someone makes a mistake filling in a PPSR online form?  The PPSA says that a mistake will make a registration ineffective if it is ‘seriously misleading.’  But the term ‘seriously misleading’ has not been defined.

As it happens a mistake was made in NSW when, instead of entering a company’s ACN, its ABN was used.  When the case came to court (Future Revelation Ltd v Medica Radiology and Nuclear Medicine Pty Ltd [2013] NSWSC 1741) Justice Brereton said, in his decision, that it is well known the PPSA is modelled on and derived from similar legislation in Canada and New Zealand.  The Court therefore looked to a Canadian decision to assistance in defining the term ‘seriously misleading.’

Canadian case law suggests that the test for whether a mistake is “seriously misleading” is whether it will result in the registration not being disclosed upon a search.  In Future Revelation, such a search would have identified clearly enough the secured party, even though its ABN and not ACN was stated.  The judge’s view was very clear that this defect was not seriously misleading or indeed for that matter misleading at all.

This is unlikely to be the last word on this issue as the application in Future Relevations was made urgently on an ex-parte basis and the situation could well differ should this matter return to the Court for further argument or if a similar matter is brought before the Court.

The important lesson to take away from this decision is the importance of checking and double checking information contained on the PPSR at the time of registration to ensure this sort of issue does not arise, because it may render the relevant security interest ineffective.

If an error is discovered, then it may be possible to amend the registration (see http://www.ppsr.gov.au/ForBusiness/Howtoregister/Pages/default.aspx) and a party affected by an incorrect registration can demand the registration be amended (see http://www.ppsr.gov.au/AsktheRegistrar/PracticeStatements/Documents).

Remember: when in doubt, consult a lawyer.  Most of us don’t charge for an initial phone conversation to decide if your own query needs further action.

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The Disturbing Rise of Elder Abuse

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By Morgan Solomon, Director at Bowen Buchbinder Vilensky Lawyers

Article as published in The Australian on 12 April 2014

One of the most disturbing trends to exercise lawyers in recent years is the financial abuse of elderly people.  The rise of the largest, wealthiest, and most vulnerable generation of seniors in our history has been accompanied by a dramatic growth in cases where frail, older people are being ripped off by the very people to whom they have entrusted their financial affairs.  This is typically the son or daughter to whom they assigned an Enduring Power of Attorney (EPA).

The following statistics provide some sobering context:

  • Victims of financial and other abuse tend to be late retirees, living alone, and in 33% to 69% of cases suffering from dementia;
  • Australians aged 65 and older will grow from 12% of the population in 2001 to 21% by 2031;
  • Wealth available for inheritance will rise from $8.8 billion in 2000 to over $70 billion by 2030;
  • There are already over 300,000 Australians suffering from dementia.  That figure is expected to rise to 400,000 in 10 years and 900,000 by 2050.

“Strip mining”

So prevalent has financial abuse already become that it has even generated its own nomenclature.  “Strip mining” is the most serious, where there is clear intent by the perpetrator to strip a person of their assets of value, sell their house and contents, transfer cash and savings, control their superannuation, and then move the older person to a pensioner facility.  “Dump and run” is a similar ruse, where the family siphons off an older persons assets and then has them  placed in residential care, then they stop visiting and paying the care fees.

It is because of cases like these that the Standing Committee for Legal Affairs for the Parliament of the Commonwealth has described the Enduring Power of Attorney as ‘the most abused legal document in Australia.’

Grey areas

Not all examples are so clear cut.  What of the case of the elderly person who pays her friend $200 a week to do her grocery shopping, but regularly receives only $50 worth of items?  Can the financial gouging be counter-balanced to some extent by the benefit of regular contact with a friend who would not otherwise visit the very isolated person?

Similarly, what if an elderly person establishes a relationship with someone else who moves in with them and appears to be enjoying their wealth?  This doesn’t automatically constitute a case of financial abuse – although the children of the person may not see it that way as they watch their inheritance rapidly evaporate.

Legal remedies

In the past, lawyers were typically involved in estate litigation only after a person had died, the diminished size of their estate was revealed, and other beneficiaries began to question the conduct of the person to whom the EPA was assigned.  But as the stakes grow higher, and opportunity for financial abuse expands, more clients are flagging financial abuse as it occurs in what is becoming known as ‘’pre-death disputes”.

The way that lawyers handle these concerns varies from state to state.  In New South Wales and Queensland, for example, not only can their State Administrative Tribunals strip someone of an EPA, but they can also attempt to claw back the assets that were taken.  In Western Australia, while the State Administrative Tribunal only has the power to strip someone of an EPA, and very limited ability to claw back assets, other common law and equitable remedies are available.  These include claims for unjust enrichment, negligence, conversion, breach of fiduciary duty, restitution, undue influence and Unconscionable Dealing.

Perhaps a heartening trend in all this woe is the recent willingness of the Courts to expand and enlarge the prospects of success against a person who has abused their trust and financially taken advantage of an elderly person.  The Courts, being well aware of the changing landscape of increasing vulnerability, increasing wealth and increasing numbers of people taking advantage of the elderly, are more willing to overturn Wills written under unfair pressure, claw back assets transferred unconscionably and punish those who engage in such acts.

Prevention is better than cure

But prevention is always better than a cure.  Taking legal proceedings against a family member who has abused their mother or father is not only difficult and expensive, it is almost always very emotionally taxing too.  Far better to make an early intervention to help protect an elderly person who appears vulnerable.  Many of the abuses could be prevented by not allowing a predator to prey on the elderly in silence.

As Australia’s population ages, it is incumbent on all of us with elderly relatives to keep a watchful eye on their well-being.  Our awareness of the vulnerability of the young in our society, must be matched by our concern for the old.

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Pitfalls of Construction Adjudication

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

11 April 2014

 Disputes are more common in the building and construction area than in most other sectors of the economy.  Poor workmanship, time constraints and demands for payment for extras falling outside of an original contract, are just a few of the typical reasons for disputes.

When the WA Government passed the Construction Contracts Act in 2005, the aim was to enable disputes to be fast-tracked through an Adjudication process, rather than for disputing parties to have to wait to go to Court.

While Adjudication has been a great step forward in many ways, there is one major pitfall: if a claim is made against your organisation, you have only fourteen days to respond.  These are calendar days, not business days, and no concession is made for public holidays.  For example, if you receive a claim on 22nd December, you have until the 5th of January to respond.

The short response period may not always be a problem, at most times of the year, and for simple cases.  But it’s a very different matter in disputes which involve major construction project payments or where there are significant factual or legal complexities involved, and these need to be dealt with  unexpectedly when key staff are on leave.

My advice to companies which may find themselves having to respond to Adjudication claims is threefold:

1. Put in place procedures for making your organisation aware, as soon as practicable, of a claim for Adjudication having been served and for dealing with it swiftly.  This may involve educating staff as to the processes involved and the importance of the timeframes under the Act as well as having contingency plans in place as to how the response is to be dealt with if, for example, critical staff members are absent or there is a risk that a claim for Adjudication may be served just prior to or over a public holiday period or when for some other reason the business may be temporarily closed.

2. Get your documentation/software in order. As a Respondent, it is up to you to supply the Adjudicator with a copy of any relevant documents in support of your response.  Most often this happens by email.  The onus falls on you to make sure that documents are delivered to the Adjudicator in a way that they can be opened and read (compliance with Electronic Transactions Act 2011 (WA).  It seems incredible, but there are situations where Respondents fail simply because the documents they thought they had delivered to the Adjudicator either never arrived, or could not be opened by the Adjudicator.  If you don’t get your documentation and software in order, your side of the story may simply never be heard.

3. Take legal advice  The detail of a claim or response is critical.  The very wide range of contracts used in the construction industry today underlines the importance of looking at each case individually.  The best time to get legal advice is before offering or signing a contract.  The next best time is the moment you suspect there are grounds for a dispute!

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The Momentum to Fixed Fee Pricing is Growing

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By David Vilensky, Managing Director at Bowen Buchbinder Vilensky Lawyers

26 March 2014

Dr George Beaton is a name familiar to anyone managing a professional services firm in Australia, especially law firms.  A high profile thought leader, businessman and academic, when George speaks, people usually listen.  And the latest research coming out of Beaton Capital is quite damning: law firms, says George, are consistently rated by their clients lowest when it comes to cost consciousness.  In clients’ own words, when it comes to “spending our money as carefully as if it were their own” most laws firms are continuing to fail.

George’s research shows that since the GFC, clients are shopping around more for legal services.  For individual law firms, improving perceptions of cost consciousness is critical.  Those able to exhibit a strong awareness of costs will be more profitable, not less, due to the low correlation between price and client perceptions of cost consciousness.  This important point is worthy of reflection.

The findings of George’s study were published by Australasian Lawyer magazine earlier this month (http://www.australasianlawyer.com.au/news/law-firms-failing-to-capitalise-on-greatest-opportunity-beaton-185302.aspx).  About the same time, as it happens, Sydney-based Hive Legal was launched on the premise of a value pricing approach to work.  Three senior practitioners from two major law firms have broken away to start up their own firm based on this fundamentally different pricing model.  Their move reflects how increasing numbers of my fellow professionals are coming to accept the inefficiencies, unfairness and inherent conflict of interest arising from time billing.  As the momentum builds we are going to see more partners, like those at Hive Legal, realize that change is unavoidable.

As though to underline the growing momentum, readers of the Australian Financial Review were recently treated to the headline ‘Excessive costs draw wrath of judiciary.’  The article outlined how , in the legal battle against Indian billionaires Radhika and Pankaj Oswal, five senior counsel, six junior counsel and five firms of solicitors attending a one day hearing submitted six volumes totalling 2700 pages of material in support of an application for leave to appeal.  The six volumes included large chunks of duplicated material, showing that even the lawyers themselves weren’t sure what was in the material they had submitted.

The Court of Appeal declined the request and ordered each applicant to pay the respondent’s costs and ordered the applicant’s solicitors to indemnify the applicants for 50 per cent of the respondent’s costs because of the “unnecessary or excessive content” of the application books.

Justice Clyde Croft of the Supreme Court described this as a “watershed moment.”  According to the Financial Review: “Justice Croft pointed to other cases which demonstrated judges were increasingly wielding their case-management powers, frustrated at excessive time- and cost- wasting by lawyers deliberately drawing out proceedings.”

Drawing out proceedings.  Vast teams of fee-earners.  These are the hallmarks of time billing, and it’s not just clients who are getting fed up with it – judges are too!  These are exactly the reasons why Bowen Buchbinder Vilensky adopted fixed fee pricing years ago.  Our clients spoke.  We listened.  The momentum to fairer methods of billing is growing.

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First Things First: Children’s Passports

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By Patricia Schrape, Associate at Bowen Buchbinder Vilensky Lawyers

28 February 2014

When marriages and relationships break down, there can be very little trust left. This is often amplified when the people in question have children. When relations between parents are extremely dire, particularly when there is extended family overseas, many people start thinking of a worst case scenario and their minds turn to their children’s passports.

If your child does not have a passport

  • An application for a child’s passport must be completed and signed by all the people who have parental responsibility for the child. Unless there is a Court Order stating otherwise, this means the child’s parents as stated on their birth certificate.
  • If you are concerned that your child’s other parent may make a false application for a passport (ie forge your signature) you can submit a Child Alert Request to the Department of Foreign Affairs and Trade (DFAT). This will put a ‘flag’ on your child’s name for a period of 12 months, so that DFAT are aware of the parental conflict should a passport application be received.

If your child has an Australian passport

  • If you have possession of your child’s passport, then there is little that the other parent can legally do to remove them from Australia.
  • If the other parent has possession of the passport, and will not provide it to you, you can request that the passport be held by a third-party for safe-keeping. In some cases family lawyers will hold the passport/s and give an undertaking (a very serious kind of promise) that they will not release it without the consent of both parents. In some circumstances the passports can also be held by the Family Court of Western Australia.
  • If the other parent has possession of the passport and you have a very real concern that they may take the children overseas, you can make an urgent application to the Family Court asking for an order that the child’s name be placed on the Airport Watch List by the Australian Federal Police. Being on the List means that the child cannot leave Australia under that passport.

If you have concerns about your child’s passport, or other related issues, the Family Law solicitors at BBV are able to provide advice regarding your specific circumstances.

NB – in the above comments references to ‘child’ relate to Australian citizens under the age of 18 years who have never married. For the full legal definition of child for Australian family law purposes see the Family Law Act 1975 or Family Court Act 1997. If your child is a dual citizen and has a passport/s from countries other than Australia, there are numerous additional considerations.

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Keeping It Private – Are You Ready For The Privacy Law Changes?

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

19 February 2014

We see more and more cases of unwanted  and unlawful access by third parties (hackers) to business computer systems and the personal and confidential  information held in them. This can result in significant harm to those individuals whose personal and confidential information held in the computer system is accessed and later misused. This can, for example, be where a hacker steals a person’s online identity and later accesses Bank accounts to steal money or incurs debt in the name of the victim or it may be less sinister in the form of the negligent disclosure of personal information to third parties.

The Federal Privacy Act addresses these issues and seeks to protect the public from such loss and harm. There  are a number of significant changes to the Federal privacy laws which will come into effect on 12 March, 2014. Significantly, these changes include (but are not limited to):

  1. The introduction of uniform privacy principles to regulate the handling of personal information by Australian government agencies and businesses. These will impact on most businesses  which will need to ensure they are compliant;
  2.  Increased enforcement  powers for the Privacy Commissioner to, among other things, accept enforceable undertakings, seek civil penalties of up to $340,000 for individuals and $1.7 million for companies in the case of serious or repeated breaches of privacy and  conduct  assessments of privacy performance for both Australian government agencies and businesses.
  3. The recognition of external dispute resolution schemes, changes to credit reporting laws and the introduction of codes of practice.

Businesses will need to ensure that they comply with the new regime by 12 March, 2014.

In doing so, businesses will need to consider whether they handle “personal information”  or “sensitive information” as defined in the new Act.  If they do, then they will need to ensure  that “reasonable steps”   are taken to implement the new practices, procedures and systems requirements.

These steps should  include:

  1. Reviewing and/ or updating the businesses  privacy policy;
  2. Updating the businesses privacy statement on any website that it operates;
  3. Reviewing  practices, procedures and systems for the collection, use, disclosure, updating, notification and storage of information
  4. Implementing  practices, procedures and systems to allow others  to interact with businesses  anonymously;
  5. Updating existing staff training and other business operation manuals to cater for the new practices, procedures and systems, and to identify and manage privacy risk
  6. Carefully reviewing and, if necessary, amending business contract and subcontract documentation to ensure compliance with the new regime;
  7. Reviewing and identifying if there are any risks to the directors and officers of the business for possible  breaches of the new laws. This should factor in the Privacy Commissioner’s increased powers and the penalties that may be imposed on those guilty of breaches of the new privacy laws as well as the fact that a breach of the new privacy laws; and
  8. Undertaking a review of the existing insurance cover of the business to identify any remedy gaps in cover.

These new changes (especially the penalties) will force businesses to be more attentive to data protection and to preventing the inadvertent release of electronic personal information of customers, third parties and even employees held on computer systems under their control.

Failure to do so could prove damaging to reputation and very expensive!

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Can I Record my Telephone Conversations for Use in Court?

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By Leslie Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

11 February 2014

A recording of a telephone conversation can be useful to help to resolve a dispute in Court.  Are there any restrictions on me doing so?

There are only a very limited number of occasions when a private telephone conversation can be secretly recorded lawfully .

An article in the West Australian Newspaper on February 11 2014 referring to criminal charges against Perth Lawyer Lloyd Rayney accusing Mr Rayney of aiding or abetting in interfering with his late wife’s telephone lines before her death highlights this question.

There are both Federal and State laws which control the recording of telephone conversations.

At a Federal level, recording a telephone conversation may contravene the Telecommunications (Interception and Access) Act 1979.  This Act expressly prohibits the interception, without the knowledge of the person making the communication, of a communication passing over a telecommunications system.

At  State level, in Western Australia the Surveillance Devices Act 1998   regulates the use of listening devices, optical surveillance devices and tracking devices. Under this Act it is an offence to use, install or maintain:

  •  listening devices to record or listen to a private conversation;
  • optical surveillance devices to record visually or observe a private activity; or
  • tracking devices to determine the geographical location of a person.

This Act does not prevent employers, for example,  from using surveillance devices in the workplace, as long as they are not being used to record private conversations or private activities.

A breach of the Federal or State laws may amount to an offence and result in prosecution action being taken against the person or persons recording the conversation (and those knowingly participating in doing so) by the relevant Federal or State authorities and the imposition of significant fines and the recording of a criminal conviction against the person.

Additionally, a breach of these laws may (depending on a variety of considerations including the particular Court jurisdiction concerned)  render the recording itself inadmissible into evidence and therefore unable to be relied upon in Court.

The temptation to secretly record telephone conversations for later use as evidence must be resisted. Failure to do so can not only result in the whole exercise becoming futile (because in the end the recording may be excluded for being considered by the Court) but it may well leave you exposed to being prosecuted and fined a significant sum for a breach of the Federal and/or State laws controlling the recording of telephone conversations.

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Pre-Nups: Are They Useful?

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By Damien Bowen, Director at Bowen Buchbinder Vilensky Lawyers, and Accredited Family Law Specialist

10 February 2014

Binding Financial Agreements (BFAs), better known as ‘pre-nups,’ are a useful but no means watertight solution to protecting the wealth of you and your children.

In the past it was usually richer, older men marrying younger, asset-free women who wanted a BFA.  These days I’m finding it is just as likely to be younger FIFO workers, male or female, who have accumulated significant savings and/or investments by working very long hours in remote locations.  They now find themselves in relationships with partners who do not have the same assets and earning capacity as them and they are seeking protection for the assets they have worked very hard to accumulate.

BFAs signed before a couple gets married serve the purpose of setting out the division of assets in the event of them divorcing, or for de facto relationships on the termination of that relationship.  A BFA can also be used during an otherwise happy relationship to set out what happens if the relationship breaks down.

BFAs can also be used when a couple who are divorcing or separating are able to come to an agreement about a division of assets as an alternative to court orders.  This can provide an effective short cut, enabling couples who are able to agree on a split of assets, to move on with their lives, rather than get involved in the litigation process and maybe having to wait many months for a judge to decide on the division of assets for them.

But BFAs are not straightforward.  Asking your girlfriend or fiancé to sign a legal agreement spelling out the division of assets in event of divorce or separation is not an area where the law and human relationships sit comfortably.  This will no doubt remain the case unless BFAs become more commonplace.

A second and a very important concern is that Courts across the country have set aside BFAs for a variety of reasons.  These include if there has been a material change of circumstances, such as the birth of a child; if one or both parties did not receive competent, independent legal advice before the BFA was signed, and  other reasons.

Being aware of these reasons is critically important to ensure that, when drafting a BFA, the risk of it being challenged is seriously reduced.

My view is that while a carefully drawn and correctly executed BFA may not guarantee a complete and irrevocable solution, if it is used in conjunction with other legal protection, it can serve as a powerful protection of one’s assets.

Click here for the full article in the BBV Media page.

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Bullying in the Workplace – Part 2

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By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

 10 February 2014

In response to my blog post last week highlighting some new changes to the law regarding bullying in the workplace, I received several enquiries which in effect asked what type of conduct can amount to bullying in the workplace.

Whether the particular conduct concerned amounts to bullying depends in each case on the context and circumstances.

Generally speaking under the Fair Work Act 2009 bullying occurs when a person or a group of people in the workplace repeatedly behaves  unreasonably towards another person or group at work, and that behavior creates a health and safety risk.

It is really important to recognize that reasonable management actions done in a reasonable way do not constitute bullying.

Bullying happens when someone repeatedly behaves unreasonably towards another person or group of people and that behavior creates a risk to health and safety.

Bullying behaviour may take different forms. It may involve, for example,  aggressive or intimidating conduct or unreasonable work expectations, including too much or too little work, or work below or beyond a worker’s skill level.

However, in order for it to be bullying the behaviour must be repeated and unreasonable and must create a risk to health and safety.

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Bullying in the Workplace

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By Leslie Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

7 February 2014

In 2013 the Fair Work Act 2009 was amended to provide the Fair Work Commission (the Commission) with the power to make orders to prevent bullying in the workplace.

As from 1 January 2014 a worker in a business or undertaking that it is covered by the Act is able to apply to the Commission for an order to prevent them from being bullied at work.   Such an application can be made by a worker who ‘reasonably believes that he or she has been bullied at work’.   A worker is ‘bullied at work’ if, while at work, an individual or group repeatedly behaves unreasonably towards the worker and that behaviour creates a risk to health and safety.

The Commission has confirmed it had received 44 applications during the first month of the new anti-bullying jurisdiction.    However, of these 6 were withdrawn.

Given the anecdotal evidence of the prevalence of bullying in the workplace it will be very interesting to see whether the number of applications remains constant or even increases.   It will also be interesting to see what impact the Commission has in rooting out Workplace bullying through this new process.

The real question is, what is unreasonable behaviour and when can a worker ‘reasonably believe’ that he or she is being ‘bullied at work’.

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How Routine Form Filling can Become a Legal Issue

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By Leslie Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

25 January 2014

Many companies delegate the filling in of ‘routine’ paperwork to junior staff.  This includes firms such as accounting practices, financial planners and others who may have comprehensive quality control policies, targeting complex and financially significant matters. Ironically, the more mundane matters can sometimes cause the greatest heartache.

One matter which came to the attention of an Australian court concerned a situation where accountants miscalculated the amount of depreciation allowable as a deduction and the mistake was then carried through in succeeding years.  The error resulted in an overstatement of the tax payable and no refund could be obtained for taxes that were paid more than 3 years ago because they were statute barred.   The client successfully sued the accountants, who were  found not only to have been negligent but also to be in breach of their contract. A significant amount of damages were awarded against them.

In a different case, a client provided a partially completed handwritten insurance proposal form which needed to be submitted to the insurance company.   It was later entered by his financial planner via an online platform.  In undertaking this task and providing answers in all the required fields, the employee of the financial planner who filled in the form inadvertently failed to notice  that the client had in the previous 2 years been declined by a number of other insurers.   A subsequent investigation revealed that the insurance policy that was issued to the client by the insurer was in fact based on material non-disclosure.  Instead of being paid out by the insurer, the client found himself being pursued by it for money they had already paid to the client on the grounds of material non-disclosure and fraud.   His response, in turn, was to take steps to recover the losses suffered from his advisers for negligence, breach of contract and potentially misleading and deceptive conduct,  because of the way they dealt with his proposal form.

While most professional service companies are aware of their duty of care obligations to avoid claims of Professional Negligence, it’s also helpful to bear in mind potential exposure to breach of contract. In particular, remember that your exposure to legal or disciplinary action does not always arise from the most complex or financially sophisticated aspects of your work.  Proper quality control processes are critical to ensure that routine form filling does not expose one to legal liabilities.

Click here for the full article in the BBV Media page.

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Beginning of the End for the Reverse Burden of Proof?

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By Leslie Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers, and Darryl Koh, Solicitor at Bowen Buchbinder Vilensky Lawyers

20 January 2014

In January 2014, Australia’s new Attorney General, George Brandis, announced that the Australian Law Reform Commission (“ALRC”) will review laws that threaten “traditional rights, freedoms and privileges”.  In workplaces especially, the reverse onus of proof is a huge burden for employers.  These laws include the Commonwealth Fair Work Act’s “general protection” provisions, which prevent employees from being dismissed or subjected to detrimental conduct on the basis of certain rights, entitlements or attributes. For example, an employer can’t take adverse action against an employee because of their industrial activities or an attribute such as their race, sex or age. Similarly, if an employee fails to perform to expectations or needs to be disciplined or made redundant, the burden of proof is on the employer to prove that this action was not in some way discriminatory. For an employer to be entangled in such proceedings and to shoulder the heavy burden of proof will necessarily require the employer to spend time, money and other resources which can otherwise be channeled towards more productive endeavours.

Several States and Territories such as Queensland, NSW, Tasmania, South Australia, the ACT and the Northern Territory have adopted the Commonwealth-initiated model Work Health & Safety Act (“WH&S Act”). However, the WH&S Acts still retain features of the reverse burden of proof in prosecutions particularly in the area of discrimination. In WA, the WH&S Bill has been introduced in the WA Parliament and is currently under debate. There are 4 key areas in which WA has highlighted that it does not agree. One of these key areas is the reverse burden of proof in prosecutions for offences involving discriminatory-type offences.  WA considers that its inclusion is in part contrary to the purpose of harmonising the Commonwealth, State and Territorial WH&S Acts.

It will be interesting to see what the ALRC proposes when it releases its report and how it relates to WA’s concerns regarding the reversal of the burden of proof issue.

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