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Family Law and co-parenting in difficult times

The coronavirus (COVID-19) has brought additional stress and uncertainty to many families involved in co-parenting which, by its nature, can be stressful enough.

School closures, state and territory border closures, additional pressure on healthcare workers and providers of essential services, job loss and isolation all pose significant challenges to those families with shared parenting arrangements. This is a time to put conflict aside and take a practical and sensible approach to co-parenting.

If you or your children are in danger, please contact your local police immediately.

Parenting orders – managing in difficult circumstances

  • As always, the safety, welfare and best interests of the children should remain a priority. If court orders are in place, it is expected that they be complied with which includes facilitating time spent by the children with each parent pursuant to those orders.
  • Where strict compliance is not possible, or compliance puts the safety of the child at risk, the parties should wherever possible, communicate to identify practical and reasonable solutions.
  • Ideally, an agreement to vary the arrangements of existing orders should be in writing, whether by text message, email or other app.
  • Parents and caregivers can facilitate negotiations through their lawyers and applications to vary consent orders may be filed electronically with the Court.
  • Where an agreement cannot be reached, one party may seek leave of the court electronically to vary the orders.

 Co-parenting arrangements generally – practical tips and considerations

  • Be proactive – although agreed parenting arrangements may not have changed dramatically yet, anticipate that they may need to, and communicate now to put a plan in place. Obstacles to consider include school closures or extended school holidays, different changeover venues (with some venues now closed), potential lockdowns and additional demands on one or both parents such as health care workers and essential services employees.
  • Traditional work arrangements between parents may in fact reverse as full-time employees find themselves out of work and part-time and casual workers, for example nurses, become more in demand.
  • Compromise is key – accept that parenting arrangements will likely need to change during these circumstances, at least for the short or medium term. Having said that, parties should not manipulate the current crisis to leverage additional time spent with children when this is clearly not necessary.
  • With many travel plans cancelled, parents and caregivers may need to re-think planned activities with children. There are numerous resources online providing creative ways to keep little minds occupied during these times.
  • If one parent or caregiver is missing out on scheduled time with a child due to the current crisis, be generous in facilitating communication between that parent and the child – consider using apps such as FaceTime, Skype or Zoom, in addition to the usual phone contact.
  • Talk to your children about the current situation and try to remain calm and positive. How you explain what is happening to your children will depend on their age, level of maturity and the individual circumstances.
  • Be creative and resourceful but try to maintain, as far as practicable, regular routines such as personal hygiene, healthy meals and bedtimes.

Family Court arrangements

The Family and Federal Circuit Courts continue to operate but have made significant changes to their processes. How the Courts continue to function may no doubt change as the situation evolves.

Presently, only urgent matters will be conducted through face to face hearings for which strict in-court protocol to manage risk will be maintained.

Most other court hearings and events will be by telephone or video conferencing with some non-urgent matters to be postponed.

Documents will be filed electronically with registry services to be provided remotely by telephone or online.

We are here to help

The coronavirus pandemic is an evolving situation with a number of health and business orders issued at federal, state and territory levels. Government directions, advice and laws have, and will likely continue to change as new information and developments arise. It is important to stay informed of these updates through reliable sources.

Effective co-parenting means putting differences aside and working together to make decisions and care arrangements for children that are in their best interests.

We understand that this is a difficult and distressing time for many. Our firm infrastructure facilitates remote working conditions to serve our clients and assist them through these difficult circumstances. We will continue to provide advice and assistance through telephone and video conferencing across all areas of family law.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

GST and residential property transactions

The responsibility for remitting Goods and Services Tax (GST) to the Australian Taxation Office (ATO) generally falls on the party making the ‘supply’. In a property transaction, this has traditionally meant the vendor or developer (supplier), unless the contract provides otherwise.

From 1 July 2018 purchasers of ‘new’ residential property must deduct the GST from the purchase price of the property and remit this directly to the ATO on or prior to completion.

These reforms are designed to strengthen compliance with GST obligations and specifically address concerns involving some property developers making taxable supplies and failing to remit the GST collected on those sales to the ATO.

The changes are implemented through the Taxation Administration Act 1953 (Cth) which operates Australia-wide and therefore potentially affects all purchasers, vendors / developers of residential property.

What types of transactions are affected?

The reforms apply to ‘new residential premises’ or ‘potential residential land’. Property that is ‘new residential premises’ means property that:

  • has not previously been sold as residential premises; or
  • has been created through substantial renovation of a building; or
  • has been built to replace demolished premises.

‘Potential residential land’ is land that is permissible to be used for residential premises but does not contain any buildings that are residential premises (i.e. houses or strata units). Inclusion of the term ‘permissible’ means that if the local government zoning allows a mixture of residential and commercial use, then that land is still considered ‘potential residential land’.

For the most part, the reforms essentially apply to all off-the-plan residential property purchases and vacant land in a new subdivision.

The changes commenced on 1 July 2018 and affect all relevant contracts, however contracts entered before 1 July 2018 are excluded if the purchase price is paid before 1 July 2020.

What do purchasers of new residential property need to do?

If you have entered or enter a contract for new residential property which is caught by the provisions you will need to withhold and pay the relevant GST from the contract price to the ATO on or before ‘supply’ (which in most cases will be the settlement date). Generally, the GST amount will be:

  • 1/11th of the contract price; or
  • 7% of the contract price if the margin scheme applies.

Vendors / developers will need to provide written notice of their GST obligations and, if GST is payable, this component must be withheld from the contract price and remitted to the ATO. The contract price does not include settlement adjustments such as council and water rates.

Submitting GST withholding payments

Two ATO on-line forms are used to facilitate the remittance process:

  • Form 1 – GST property settlement withholding notification
  • Form 2 – GST property settlement date confirmation

Each form provides details of the contact person, the property, the GST withholding amount and the parties to the transaction (purchaser and vendor / developer).

Purchasers are responsible for submitting these forms which can be completed by their conveyancer or lawyer who will make the necessary adjustments in the settlement statement and remit the amount to the ATO on behalf of the purchaser at settlement.

Forms are submitted after the contract has been entered into and a supplier gives written notification to the purchaser that a GST amount must be withheld from the contract price. The first form advises the ATO of the transaction and pending GST requirement and generates a unique payment reference number. The second form confirms the settlement date and is submitted at the time of settlement when payment has been made to the ATO.

What do vendors / developers need to do?

Vendors / developers must not sell residential premises or potential residential land without written notification to a purchaser about the requirement to withhold and remit GST from the contract price. If there is no requirement to withhold GST this must be clearly stated on the notice.

If a GST amount is required to be held, the notice must include the supplier’s ABN details, the correct entity for payment of the GST, the settlement date and the amount payable.

The notification may form part of the contract for sale or be provided separately.

The GST is paid direct to the ATO by the purchaser on settlement and applied as a credit towards the supplier’s GST account.

The supplier then reports the GST withheld on its next Business Activity Statement (BAS) and will be entitled to a refund if the amount paid exceeds the actual GST liability for the relevant period.

Consequences for vendors / developers

The regime has significant implications on vendors / developers who should ensure processes are in place to deal with the changes.

  • Existing contracts should be reviewed to determine if they will fall within the provisions and therefore require the appropriate notification (for example, contracts that are already on foot but will not settle until after 1 July 2020).
  • New and pro-forma contracts should be reviewed and amended in line with the provisions and, where relevant, include positive obligations for purchasers to remit the GST to the ATO, noting that credits will not be able to be claimed unless / until the GST component has been remitted.
  • Failure to notify a purchaser in accordance with the regime is a strict liability offence and developers face penalties of up to (currently) $21,000 for individuals and $105,000 for corporations. Consequently, systems should be updated to ensure the inclusion of the appropriate notices for the supply of residential land.
  • The provisions effectively prevent developers from interim access to the GST component of a settled contract, which was previously available until the BAS was lodged and assessed for the relevant period. This could impact available working capital and developers may need to review their cashflow requirements to manage the provisions.

Conclusion

The reforms are aimed at improving the integrity of the property development industry and ensuring suppliers comply with their tax obligations. They add additional steps to the conveyancing process for residential property transactions, however can be managed through appropriate processes and systems.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Where do the kids live after separating? The concept of shared parental responsibility

Many couples are able to agree on arrangements for the ongoing care of their children after they separate. These arrangements can be documented through parenting plans or formalised in consent orders without the need to attend Court.

Generally, parents are required to make reasonable attempts to resolve disputes about their children and, where agreement cannot be reached, must attend compulsory dispute resolution.

The Family Law Act 1975 (Cth) (the ‘Act’) provides a presumption of shared parental responsibility when considering the future arrangements for children. This concept however is sometimes misinterpreted as meaning that the children will spend the same amount of time with each parent.

This article provides an overview of how children’s matters are decided and explains the concept of shared parental responsibility.

How are children’s cases decided?

When negotiating children’s matters, the parties should take into consideration the way the Family Court would determine such matters should parenting issues not be resolved.

The overriding principles considered by the Court are that the best interests of the child are paramount. Essentially, this means that:

  • children should know and have the benefit of a meaningful relationship with both parents;
  • children should be protected from physical and psychological harm and harm resulting from them being subject to family violence;
  • children should receive parenting that allows them to reach their full potential;
  • parents should cooperate in determining what is best for the children;
  • unless a child is at risk, parental responsibility should be equally shared and children should have the right to spend time on a regular basis with both parents and other people significant in their lives.

What is shared parental responsibility?

The presumption of equal shared parental responsibility comes from ss 61DA and 65DAA of the Act. Section 61DA provides that ‘when making a parenting order in relation to a child, the court must apply a presumption that it is in the best interests of the child for the child’s parents to have equal shared parental responsibility for the child’. The presumption is subject to exceptions such as where there are issues of family violence or abuse.

Equal shared parental responsibility means that each parent should be jointly and equally responsible for significant long-term matters concerning their children such as making decisions about their health, welfare, religious and cultural upbringing and education.

The principle of shared parental responsibility has often been misconceived with separating couples believing that it is a ‘given’ that a child or children will spend equal time living with each parent after separation. This is not the case – living arrangements are decided with the main objective of the best interests for the child and a practical approach to what is realistic in light of the family dynamics, work commitments and other responsibilities.

Section 61DA specifically states that the presumption of shared parental responsibility ‘…relates solely to the allocation of parent responsibility [and not] the amount of time the child spends with each of the parents.’

How are living arrangements determined?

The amount of time a child spends with each parent will depend on a number of factors.

In considering whether a child should spend equal time with each parent, the Court must be satisfied that it is in the best interests of the child to do so and that such arrangements would be reasonably practical. If equal time living arrangements are not appropriate, then the Court will consider the child spending substantial and significant time with each parent.

In addition to the matters already outlined above, the following will be relevant in determining the best interests of the child:

  • any views expressed by the child;
  • the nature of the existing relations between the child and his or her parents as well as any other significant people such as grandparents and other relatives;
  • the extent to which each parent has already participated in the child’s life;
  • the likely effect on the child or any significant change in circumstances;
  • the age and maturity of the child;
  • any cultural matters that should be considered.

Factors taken into consideration regarding the practicalities of an equal time arrangement include:

  • how far apart the parents live;
  • the proximity of each residence to the child’s education centre or child care;
  • the parents’ capacity to implement equal time arrangements;
  • the parents’ willingness and ability to communicate, resolve conflict and deal with any issues that may arise;
  • the availability of the parents both physically and emotionally with consideration to work commitments, commitments to other family members and before and after school care options.

Conclusion

Shared parental responsibility means working with your ex-partner to make important decisions about your child’s life.

The Family Court has significant discretion and will take a comprehensive approach to determine what is in a child’s best interests when deciding living and other arrangements.

Court proceedings should be a last resort to determine children’s matters and separated couples should be cooperative and flexible to ensure that the children’s best interest are the paramount consideration.

By resolving disputes through mediation, separating couples can avoid the cost and anguish of attending Court in circumstances that are usually already fuelled with emotion.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Can I be sacked for breaching company policies?

The circumstances unique to each case must be considered in determining whether it is lawful to terminate an employee for conduct that contravenes company policy.

Generally, however, if a breach of policy results in unlawful conduct such as bullying, harassment or discrimination, then the decision to terminate the offending employee may be justified.

Having in place well drafted policies and codes of conduct and adopting a systematic and fair approach to investigating workplace complaints is essential for employers.

These were important factors in recent Fair Work Commission proceedings in the case of Peter Carroll v Karingal Inc (2016) FWC 3709 when a breach of workplace policy as grounds for termination was affirmed.

The facts of the case

Mr Carroll worked at Karingal as an audit and risk manager supervising several other employees, two of whom made complaints against him.

The allegations were that Mr Carroll was controlling, ‘micromanaged’ the workplace and belittled his employees (particularly with respect to the complainants’ inferior English skills). He was often aggressive towards his employees with a stifling approach to supervision.

Mr Carroll also introduced various spreadsheets requiring his employees to record detailed activities. These were considered excessive, unwarranted and encroached upon the employees’ already limited time to perform their duties.

Upon receiving the complaints, Karingal requested an independent enquiry and arranged for Mr Carroll to work from home whilst investigations took place. Throughout the course of investigations, Mr Carroll had the opportunity to read and comment in detail on the report presented by the investigator.

The report found that the cumulative effect of Mr Carroll’s behaviour towards the complainants constituted a breach of Karingal’s code of conduct, work, health and safety policies and bullying and harassment policy.

Mr Carroll was terminated and consequently made application to the Fair Work Commission for unfair dismissal.

Unfair dismissal claim

The employer / employee relationship is largely governed by the Fair Work Act 2009 (Cth) which sets out minimum standards of employment and, amongst other things, provides protection to employees against discrimination and unfair dismissal.

Section 385 of the Act provides that a dismissal is unfair if:

  • the dismissal was harsh, unjust or unreasonable; and
  • the dismissal was not consistent with the Small Business Fair Dismissal Code (if relevant); and
  • the dismissal was not a case of genuine redundancy.

Significant to this case, was whether the dismissal was ‘harsh, unjust or unreasonable’. In such matters the Court will need to consider (amongst other things):

  • whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); and
  • whether the person was notified of that reason; and
  • whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; and
  • any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; and
  • if the dismissal related to unsatisfactory performance by the person – whether the person had been warned about that unsatisfactory performance before the dismissal…

As there was no argument about Mr Carroll’s performance, Karingal relied on Mr Carroll’s conduct as justifying the dismissal, claiming that he engaged in ‘serious and sustained bullying of staff under his management and supervision, which adversely affected their health, safety and welfare.’

This conduct was in breach of Karingal’s ‘Code of Conduct, its Work, Health and Safety Policy and its Bullying and Harassment Policy’.

The Code of Conduct was said to establish the required standards of its employees with an onus on ‘managers to ensure that they maintain a positive environment free of bullying, harassment and other forms of discrimination.’

Mr Carroll acknowledged that he was aware of these documents which provided that breaches would be ‘addressed either informally, through counselling methods, or formally’.

The Commission’s determination

The complainants provided evidence, and the Commission accepted, that Mr Carroll’s behaviour made them feel threatened and intimidated, causing stress and anxiety and having an effect on their safety and welfare.

The Commission found that the complainants and Mr Carroll were all credible witnesses and that Mr Carroll was ‘well-intentioned’ and believed ‘he was doing his best by his employer and his staff’. Notwithstanding, the Court found that Mr Carroll’s conduct did in fact constitute bullying in breach of Karingal’s Code of Conduct and, as a consequence, his termination was lawful.

Key take outs from the case

It is important for employers to have well-written policies which may be used as models for appropriate behaviour in the workplace. Codes of conduct and workplace safety policies (which include protocols for bullying and harassment) are important documents and may be critical in evidencing the required conduct of employees.

It is difficult to sustain the lawful termination of an employee for behaviour of which he or she was unaware. Accordingly, all policies and codes of conduct must be made available to employees. Ideally, this should occur on or before induction and whenever updates are made.

Obtaining the employee’s acknowledgement of having received the document (for example by requesting the employee sign acceptance of the document) is a wise way to confirm the document was brought to the attention of the employee.

Employers must ensure that policies are reasonable and implemented in a manner that protects employees from treatment that might be considered harsh, unjust or discriminative.

Karingal’s documented policy and codes of conduct supported its defence against the unfair dismissal of Mr Carroll. These documents set out the required standards of behaviour from employees, including managers, and the implications (informal or formal) they would face for breach.

Given Mr Carroll’s acknowledgement that he was aware of the policy, it might also be assumed that Karingal had in place an effective system to ensure employees received such documents.

Engaging an independent investigator, providing Mr Carroll opportunity to comment on the reports and following a fair process during the enquiry also weighed in Karingal’s favour.

Conclusion

A serious breach of company policy, particularly when the conduct results in behaviour that is unlawful, can be grounds for termination.

Employers should ensure that they have well-written policies and codes of conduct so that employees understand what is expected of them in the workplace. These should be brought to the employee’s attention and reviewed regularly.

Employers should also adopt fair and consistent procedures for dealing with workplace complaints and incidents to ensure employees have the benefit of an impartial hearing if allegations are made against them.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

De facto relationships and Will contests

All jurisdictions in Australia provide statutory rights for eligible persons to contest an unfair Will if they can show that they have been left without adequate provision by the testator.

In Queensland, an eligible person includes:

  • a spouse of the deceased;
  • a de facto partner (whether same or opposite sex) who had been in a continuous relationship with the deceased for at least two years at the time of death;
  • a former spouse who was maintained by the deceased and not remarried, or is the parent of a minor child of the deceased and dependent at the date of death;
  • a child, stepchild or adopted child of the deceased;
  • a parent who was dependent on the deceased or the parent of a surviving child under the age of 18 years of the deceased, or other person under the age of 18 years who was wholly or substantially dependent on the deceased.

If a family provision claim is successful, the Court can order an adjustment to the terms of the Will to satisfy the claim.

When contesting a Will, a de facto partner must first establish the existence of the de facto relationship with the deceased, then show that he or she has been left without adequate provision. Claims are assessed based on a range of factors and the unique circumstances relevant to each case.

What is a de facto relationship?

It is generally expected that testators have a moral duty to provide for the proper maintenance and support of their spouse or de facto partner.

A de facto relationship exists where a couple of the same or opposite sex and who are not legally married or related by family, live together in a genuine domestic relationship.

Factors considered in establishing a ‘genuine domestic relationship’ include the length of the relationship, the care and support of children, the nature and extent of a common residence, the existence of a sexual relationship, financial interdependence, property acquisition and ownership, and the public perception of the relationship.

What must an applicant prove in a family provision claim?

An applicant must prove that, at the time of considering the application, he or she has been left without adequate provision for his or her proper maintenance, education and advancement in life. A claim may be made because the applicant was completely left out of the Will or that, in light of the applicant’s financial needs, the inheritance proposed is insufficient to support those needs.

The deceased’s moral obligation to provide for the applicant, the value of the estate and the competing financial needs of other entitled persons are all considerations.

Family provision claims often involve the contested interests between a de facto partner and the deceased’s child or children from a former relationship. Every case is different, however the typical matters that a Court considers in such claims include:

  • the length of the de facto relationship;
  • the respective financial and non-financial contributions of the applicant and the deceased to the estate assets;
  • the personal circumstances of the applicant such as his or her education, employment, age, health and special needs;
  • the financial position and financial needs of the applicant;
  • the personal circumstances, financial position and financial needs of the deceased’s children or other beneficiaries or applicants;
  • whether there were joint assets that already transferred to the applicant after the deceased’s death;
  • whether the applicant received any benefit from the deceased’s life insurance or superannuation payments.

Case study                                                        

Lawrence v Martin [2014] NSWSC 1506 considered a claim by a de facto partner who had been left out of the deceased’s Will. Although their relationship had lasted for 16 years, the deceased had not updated his Will since divorcing his former spouse in 1999. The Will left his entire estate to his (then) spouse, and then to his two sons of that marriage. The effect of the divorce was that the wife was precluded from benefiting under the Will. Consequently, his estate worth around $1.6 million, was left equally to his sons.

On the testator’s death, the applicant received a life insurance benefit of $229,000 and the interest in their jointly held family home was transferred into her sole name. The home was worth around $1.5 million with a mortgage of $78,000.

The applicant claimed provision of $660,000 from the estate and the Court took account of the following:

  • that the applicant had already received a substantial life insurance benefit and the transfer of the family home into her name;
  • that the applicant had made substantial financial contributions to the family home and assets of the deceased;
  • that the applicant and the deceased were interdependent financially;
  • that the relationship was genuine and long lasting with the applicant making substantial contributions towards the deceased’s welfare;
  • that the applicant, aged 60, would likely cease work over the ensuing years resulting in a substantial reduction in income;
  • although in reasonable health, the applicant suffered some limitations due to neck, back and shoulder issues;
  • the intentions of the deceased which declared a desire to leave each of his sons a house;
  • the financial position and needs of each son, one of whom suffered a bipolar condition making it difficult to sustain long-term employment, as well as other health issues.

In balancing the competing needs between the applicant and the sons and in consideration of all the circumstances, the applicant was awarded $350,000.

This case illustrates the factors unique to each claim that must be considered when balancing the competing needs of the applicant and other beneficiaries.

What if there is no Will?

When a person dies intestate (without leaving a Will), the estate is distributed according to a statutory formula set out in legislation. The distribution follows the deceased person’s next of kin and the priority is generally the spouse and children (if any). A ‘spouse’ includes a married or domestic partner. Accordingly, the non-existence of a Will does not prevent a de facto partner claiming provision from an intestate estate.

Conclusion

A de facto partner may make a family provision claim if the proposed distribution under a Will or intestate estate does not make adequate provision. Strict time limits apply for bringing such claims and it is wise to obtain early legal advice.

Most family provision claims can be settled between the legal representatives of the applicant and estate which will avoid costly Court proceedings.

To reduce the possibility of a family provision claim it is important to obtain good legal advice when preparing your Will and to ensure that your Will is regularly reviewed.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Mortgage stress – when you can’t pay your home loan

Life throws us obstacles now and then and it’s not uncommon for some of these to challenge our financial security.

Mortgage stress – when we struggle to meet our home loan repayments, probably affects more people than you think.

A mortgage is essentially a ‘statutory charge’ in favour of a lender over property held in the borrower’s name. The mortgage secures the repayment of the money loaned and the associated loan contract gives the lender the right to repossess and sell the property if repayments are not made.

Missing a mortgage payment however does not necessarily mean you will lose your home. A mortgage is a long-term commitment and your lender will generally work with you to remedy the situation.

This article provides guidance on what to do when you can’t meet your loan repayments and an overview of your rights and your lender’s responsibilities if a solution cannot be found and repayments remain unpaid.

I’ve missed a loan payment, what do I do?

Let your lender know. This is the most important first step. Contact your lender and let them know you are aware of the situation and plan to fix it. Better still, if you know in advance that you will not be able to make a payment when it is due, be proactive.

Banks and building societies have specific areas that deal with loan defaults. As it is in both parties’ interests to get things back on track, they are generally happy to assist. The quicker you act, the more likely you will be offered a solution and the more options you will have.

Most lenders have hardship programs in place to assist borrowers facing financial difficulties.

If your financial problems are short-term and you are genuine in your attempts to repay the loan, you may be able to arrange to temporarily defer payments, take a repayment holiday, extend the term of the loan, or refinance. Each case is assessed on its own merits and your lender will usually assist you provided the usual checks are in place to ensure you (and they) are not likely to be financially worse off.

 

Your lender may require a statement of financial position to assess whether you will be able to come to a suitable arrangement for repaying your loan.

Don’t panic and talk to your lender before you consider short-term, high risk alternatives such as using credit cards, taking out personal loans or borrowing from friends.

What rights does the lender have when I can’t pay my mortgage?

By holding a registered mortgage over your property, a lender (mortgagee) has a statutory right to take certain action if you default in your loan repayments. A power of sale is generally written into the loan contract and allows the mortgagee to sell the property to recover the mortgage debt and associated costs.

The loan contract sets out additional matters such as the right to charge a higher rate of interest when the account is in arrears (default interest), the right to charge additional fees and to be reimbursed for the costs of chasing you for loan payments.

If you can no longer comply with the terms and conditions of the loan the lender can:

  • exercise power of sale, take possession of the property and / or foreclose on the property, selling it to recover the debt together with interest and associated costs such as agent’s fees, legal fees and any costs of insuring and maintaining the property;
  • if the proceeds of sale do not cover the debt due, sue each of the borrowers personally for the balance.

What are my rights?

A mortgagee will usually exercise its power of sale rights after a default continues for a period of one month (unless some other time is stated in the mortgage). The mortgagee must ensure due process is taken before exercising these rights.

All borrowers (mortgagors) must be given formal written notice and allowed 30 days to remedy a default before action is taken. Notices must be correctly served on each defaulting mortgagor to the addresses specified in the mortgage documents.

The mortgagee must act in good faith towards the mortgagor. This means that the mortgagee must take reasonable steps to sell the property at market value or for the best price reasonably possible in the circumstances.

The value of the property should not be sacrificed and a mortgagee may be liable for loss suffered due to the mortgagee acting recklessly or carelessly during the selling process.

When the property is sold the proceeds of sale are distributed in a specific order of priority.

Conclusion

If you are experiencing financial difficulty, particularly with paying your mortgage, it is important to be proactive and up-front. Contact your lender, be frank, and try to make a workable plan to get things back on track.

If you have received a default notice from your lender you should seek legal advice immediately. Your lawyer can explain the process and ensure your rights have been properly protected and may also be able to liaise with the lender on your behalf to assist in formulating a resolution.

If you believe you have been unfairly treated by your lender or have not been given due process, you can lodge a dispute with the Financial Ombudsman Service.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

I was just having fun – rights and responsibilities at the office Christmas party

There are many stories in the media about inappropriate behaviour at work functions – the more public the ‘offender’, the more likely the incident will attract ongoing attention.

Work Christmas parties provide a great opportunity to mix with fellow colleagues and bosses, reflect on the year’s activities and get to know each other on a more personal level.

With each social function however, employers and employees have certain rights and responsibilities. Understanding these and working together should ensure everybody’s welfare is protected and avoid some of the pitfalls that can arise from poorly managed events. Issues can range from the embarrassment of having ‘one too many’ to serious claims of sexual harassment, bullying and discrimination.

So, while preparing to let your hair down for the end of year celebrations, it’s a good idea to brush up on some essential work function responsibilities so that your next event is not too eventful.

Laying down the law

Despite a work function being held off work premises and out of normal working hours, workplace laws still apply and an employer’s duty of care for its employees remains as if they were at work.

Accordingly, without resorting to becoming the ‘fun police’, it is appropriate for employers to remind their employees about acceptable behaviour, codes of conduct, workplace and social media policies, responsible alcohol consumption and the prohibition of illicit drugs. This reminder should be in writing, issued before the event, and may accompany the invitation.

Employer’s liability

Employers may be liable to compensate an employee if, through a negligent act or omission, they fail in their duty of care to prevent injury and the person suffers harm. This liability extends to work functions and events.

Employers are also vicariously responsible for the behaviour of their employees both in the workplace and at work functions. Vicarious liability is a type of secondary liability whereby a superior (employer) is responsible for the actions of a subordinate (employee). This arises from the common law principle that the employer has a right, ability or duty to control the employee.

An employer can therefore be liable for harm suffered by a worker (such as discrimination, harassment including sexual harassment, and bullying) due to the inappropriate conduct of an employee. The effects of too much alcohol or simply forgetting that the work function is deemed a workplace can often fuel behaviour leading to these issues.

Employee behaviour and misconduct

Employees who behave inappropriately at a work function not only reflect poorly on themselves and their employer but may risk losing their job. An employee can be formally disciplined and, if the behaviour is severe enough, may be dismissed.

Although there are laws to protect employees from unfair and harsh dismissal, several cases have established that misconduct, in some circumstances, is sufficient grounds for termination. Misconduct includes drunkenness, dishonesty, breach of confidence and insulting / objectionable language – all actions that may be exacerbated by a few too many drinks or in a social context.

Social media

Employees should ensure they comply with their work social media policy – just because it’s a party does not mean that the posting of inappropriate images and / or comments will not breach policy. Whether or not a social media policy is in place, the best advice is, if in doubt, don’t.

Top tips for a smooth event

The following checklists for employers and employees should help keep everybody safe and ensure that your next event is enjoyable and runs smoothly for all.

Employers

  • Consider your employees’ religious and cultural beliefs, family and caring responsibilities, and travel requirements when planning, to foster an inclusive non-discriminatory event.
  • Remind employees before the function that workplace policies and codes of conduct will apply, a breach of which may result in disciplinary action.
  • Note that a mere reminder about workplace policies is insufficient if employees do not have access to, and have not had training in, such policies.
  • Set specific starting and finishing times, reminding employees that a decision to ‘party-on’ after the event will not be condoned by the employer.
  • Ensure sufficient food, non-alcoholic beverages and water are available.
  • Liaise with function centre management to ensure that responsible service of alcohol rules will be upheld and that a key employer will be notified of any employee or guest in danger of excessive alcohol consumption.
  • Provide employees with access to safe transportation after the party and ensure that they start their journey home from the event safely.

Employees

  • Be respectful of others, their opinions and beliefs and conduct yourself appropriately. Try to avoid topics that are likely to become heated and, if discussions get too controversial, walk away and get on with enjoying the party.
  • Make sure you are familiar with company policies and codes of conduct.
  • Drink sensibly and eat well to slow alcohol absorption.
  • Look out for your colleagues and guests and ask for assistance if you believe somebody’s welfare might be compromised.
  • Don’t get drawn into office gossip or behaviour that may be perceived as offensive, lude or explicit.
  • Be mindful about social media – apart from checking on the children and calling a taxi to get home safely, why not just leave the mobile aside and get on with enjoying the night.

Conclusion

Well-planned end of year work celebrations can be very rewarding and build morale within the workplace. By following some simple steps employers and employees can ensure the party is inclusive and fun for everybody, while keeping professional and personal reputations intact and avoiding legal complications.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Affordable break-ups – the sensible approach to dividing property

If you have recently separated, one of the concerns you will probably have is the size of your legal bill after your property matters are sorted.

Below are our top tips for keeping your family law property costs down without skimping on sound legal advice.

Tip 1 – do the groundwork yourself

A specific process is used when negotiating a property settlement. The first step is to identify the parties’ assets, liabilities and financial resources. This information is critical to determine the division of your property.

Compiling your financial information early in your matter and presenting it in an organised fashion has many benefits. It can be used at any stage – from negotiations, during dispute resolution and if necessary, for Court proceedings. As well as having a snapshot of your asset pool to assist in negotiations, you will likely save on costs associated with others having to arrange the information on your behalf.

When listing assets include their approximate value. Most local agents will provide a written market appraisal for real estate at no cost. For motor vehicles, you can visit www.redbook.com.au and obtain a printout of private sale figures for particular models.

Remember to include all assets – those that are jointly and individually held as well as those that are held with a third party. Assets comprise real estate, motor vehicles, furniture, art, antiques and collectables, shares, investments, superannuation, cash and business interests.

When listing liabilities include mortgages, loans, overdraft facilities and credit cards and for financial resources include wages, and income from other sources such as rental properties, dividends, business and company interests. Bank statements, share information and superannuation statements can easily be downloaded from the internet.

If relevant, financial returns for companies or partnerships should also be included and, if possible, the last three years’ tax returns for each party.

Tip 2 – Don’t avoid or put off getting legal advice

The sooner you know your rights the better. Many separating couples attempt to finalise their own property settlement or avoid settling their financial matters altogether. This is dangerous for several reasons. Failing to close joint accounts or to transfer assets is messy, leaves the parties vulnerable to future claims and makes it difficult for them to move on. It may also preclude them from getting credit with a subsequent partner and opens the potential for dispute.

Do It Yourself property agreements made in the absence of legal advice, often contain ambiguous provisions and are unenforceable. Without a complying Financial Agreement or Consent Orders (see below) parties are generally unable to access important stamp duty and tax concessions when it comes to transferring real estate from one to the other.

Family law is discretionary, and no two cases are the same. Investing in an initial interview with a family lawyer will provide guidance as to a likely settlement outcome and a basis from which to start negotiations.

Your lawyer will recommend any urgent measures you may need to take to protect property, advise you of your legal rights generally, and discuss the financial and other implications of a likely settlement. Your lawyer will explain the impact that your separation has on your Will and provide guidance on reviewing your estate plan.

Money spent early after separation on sound legal advice can return significant savings down the track.

Tip 3 – If possible, avoid going to Court

Generally, Court proceedings should be an option only when urgent orders are critical, the matter is highly complex, or when one or both parties are intractable, and a settlement is impossible.

Court proceedings exhaust time, money and emotions, and can usually be avoided. Most matters can be (and are) resolved and legally finalised by entering into a Financial Agreement or Consent Orders.

A Financial Agreement is a legal contract between the parties that sets out how their property matters will be resolved.

The agreement may provide for the closing of bank and loan accounts, the payment of money by one party to the other, the retention by one party of certain property such as a motor vehicle or furniture, transfer of the family home in exchange for a sum of money or the marketing and sale of real estate and distribution of the proceeds.

The parties are expected to cooperate in good faith and to uphold their obligations under the agreement and fulfil all requirements.

Financial Agreements are not approved or registered in Court – to be enforceable they must comply with the formalities prescribed by legislation. Each party will need to obtain independent legal advice before signing the agreement.

Consent Orders are considered more formal than Financial Agreements because they must be approved by a Registrar of the Court. An application for Consent Orders must include full financial disclosure by both parties and will be approved if the Court is satisfied that the orders are just and equitable.

Consent Orders will provide for the same types of matters as a Financial Agreement and can also include orders concerning any children of the relationship.

Tip 4 – Don’t stress the small stuff

You should never forfeit your legal rights however there are times when it is practical to agree to disagree, let things slide and move on. When emotions are involved it’s easy to get bogged down in minor issues that get in the way of a resolution and ultimately have little impact on the outcome.

For example, the difference argued in the value of a motor vehicle can soon be depleted by the costs of disagreeing, particularly if lawyers are instructed to get involved. Formal valuations cost money and are justified in many cases, however unless the motor vehicle is an irreplaceable classic, a middle-range figure obtained from Redbook should usually suffice.

Of course, there is little you can do if your ex-partner is antagonistic and fails to relent but maintaining composure should eventually prevail.

Conclusion

In between an informal or non-existent property settlement and a protracted battle where the parties refuse to budge, lies a fair and effective resolution that keeps legal fees in check.

These are just some of the ways you can use your time and resources wisely to help finalise your matter cost-effectively.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Interview questions you can’t ask

An employer’s potential liability for workplace discrimination arises before the first interview and exists whether or not a decision is made to hire a person.

A job interview is integral to the recruitment process and provides an opportunity for the employer to ask questions, check credentials and determine a prospective employee’s suitability for a position. It also provides reciprocal opportunities for candidates to find out more about the role and the organisation and to assess their interest in the position.

Naturally, both parties want to find the ‘right fit’ however the employer is largely in control of the interview process and may go about finding the right person in the wrong manner.

By asking a candidate certain ‘illegal’ questions during the interview process, employers risk breaching Commonwealth and / or State laws aimed to protect individuals against discrimination in the workplace.

So, what are illegal questions?

When interviewing a candidate for a position, the primary focus of the questions asked should be to assess the applicant’s inherent ability to perform the key functions of the role.

Employers should avoid asking questions about certain unlawful factors for which a candidate’s answer could be construed as determinative to the success, or otherwise, of his or her application. These include questions about age, gender, sexual preference, ethnicity, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion or social origin. Essentially, these matters are considered irrelevant in determining a person’s capacity to perform the role.

Even the most ‘innocent’ questions (such as those that might be asked during the course of social conversation) could be considered unlawful during a formal interview. The following are some examples:

  • How do you manage work with three children?
  • How old are you?
  • Does your disability prevent you from carrying out your job?

These questions have something in common – they are questions that might be asked of a particular category of applicants (those with children, over 50 years of age or with a disability) that would not necessarily be asked of other applicants.

Other questions that may result in a discrimination complaint include:

  • What is your religion?
  • Where were you born?
  • Are you working at the moment?
  • Have you had a workers’ compensation claim?

These questions are unnecessary when determining an applicant’s ability to carry out the duties required of the role and should be avoided. Deciding that an applicant is unsuited for the position based on an answer to one or more of these questions may result in discrimination action.

Asking the right questions

Potential claims for discrimination can be minimised by re-thinking your approach to how questions are asked and having a detailed job description to refer to during the interview process. This helps keep the interview on track and ensures only the essential requirements of the position are addressed.

Organisations are encouraged to implement a set of standard interview questions that focus on the key skills and requirements of the position. This may include asking applicants to demonstrate how their skills and personal qualities make them an ideal choice for the role. An effective way to achieve this is to ask for examples of how the applicant has achieved certain outcomes or reacted to particular situations in previous roles. For example, you might ask, ‘please explain how you managed an irate customer during your time as service representative with XYZ’.

Following are some examples of discriminatory questions, together with an alternative approach that can be used to obtain the necessary information from a candidate.

  • Injuries / physical disabilities – it may be necessary to discuss an applicant’s injuries or physical condition to determine objectively whether he or she would be able to safely perform, without personal risk or risk to others, the duties required.

Rather than asking directly about his or her condition, the interviewer should go through each element of the job and, where relevant, discuss what adjustments to the workplace might be required to assist the applicant perform these duties. Appropriate questions may include:

‘Are there any reasons why you may not safely be able to lift 5 kg?’

‘Are there any specific adjustments we would need to make so you could carry out the duties required?’

This demonstrates that the employer has genuinely considered the applicant who may be an ideal fit, with a few minor modifications to the workplace.

  • Age – asking an applicant his or her age is unlawful particularly if the employer is assuming that the person, due to age, lacks the energy, drive or technical ability to carry out the role. Basing questions on the applicant’s skills, experience and inherent ability to perform these tasks, rather than querying their age will help minimise a discrimination complaint. An appropriate question would be:

‘Tell me about your computer experience…what types of programs have you used?’

  • Family commitments – it is unlawful to discriminate against a candidate based on his or her family circumstances. Rather than asking applicants if they have children or family commitments, simply ask whether they are able to commit to the hours / days required of the position. For example:

‘The job will occasionally require you to work evenings and weekends – would this conflict with other commitments?’

  • Religion / race – it is unlawful to rule out an applicant whom you assume will be unable to work weekends due to religion, race or culture. If the job requires weekend work, simply point out the required days and ask the applicant whether he or she would have any issues working these days.
  • Currently working – asking an applicant if he or she is currently working could be perceived as discrimination on the grounds of employment, unemployment or receiving a pension. Instead, ask when the applicant would be available to start work.

Conclusion

Avoiding workplace discrimination starts before the recruitment process and continues throughout the employment relationship (including opportunities for career progression), during workplace investigations and termination processes.

Framing questions appropriately to minimise potential action for unfair discrimination and to give candidates an opportunity to demonstrate whether they can perform the job requires sound procedures and ensuring those involved in the recruitment process are aware of their obligations.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.

Take care when buying a property off the Plan

The term “buying off the plan” usually refers to purchasing a property that is not yet registered as a separate lot with the government department responsible for land title registrations, or not yet built.

Buying off the plan can refer to the purchase of a block of vacant land that is part of a subdivision, or a house or unit being built for sale where the land on which it stands is not yet registered as a separate title.

Selling property “off the plan” allows a land owner to develop the land in a less-expensive way, as the developer can negotiate lending rates with its bank at a lower rate if some of the land, houses or units are already sold to buyers. This is advantageous to a developer and can be attractive to a prospective purchaser who buys into an “off the plan” property in the early stages of the development.

There are however risks for the buyer of property “off the plan” and a diligent purchaser should take care when entering into this type of purchase contract.

The contract

A contract for the purchase of property “off the plan” does not have a precise completion or settlement date due to the incomplete nature of the building project and the subsequent separate registration process for the title to the land or new building.

“Off the plan” contracts generally include several clauses that are different to those in a standard contract for a registered lot. The major difference is the timeframe for the owner to complete the subdivision or the building on the land.

A standard contract will have a precise date for settlement to occur (either an exact date in the future or a completion period say “60 days after the contract is dated”). An “off the plan” purchase contract will still have a timeframe but it is usually stipulated that settlement will occur within a number of days following completion of the building project and registration of a separate title for the property being purchased.

Off the plan contracts also often include a provision called a “sunset clause” which establishes a period within which the contract must be completed – say within 24 months of the date of the contract. This means that completion or settlement can be anytime in that 24 month period after the signing of contracts, subject to the land becoming registered as a separate title or the building works being finished. If the date passes the parties can terminate the contract.

If you are buying a block of land “off the plan” in a subdivision the contract will usually include a clause allowing a variation in the area of that land that you will purchase on completion of the purchase, often because the local council and the land title registering authority have the final say on the area of the lots in the subdivision and may require the land owner/developer to change the areas. This reduction is usually capped at “not more than 5% of the area” in the contract and does not normally occur, but if it does your land area may be reduced but the purchase price is not reduced if the areas are changed.

When houses or units are sold “off the plan” the dwelling is not fully built or construction may not have even started until after you enter into the contract. The usual concerns with this type of purchase are that the progress of the building and the standard of the building work may be different to what you as the buyer contemplated. Remember you cannot see the finished product when you buy “off the plan” as the work will be done after you have signed the contract.

Often the developer will have a demonstration or “display home” to inspect showing you a model of how the buildings should look once completed, or they may have design guidelines and artist’s impressions of the building. These may not resemble exactly the finished building as some changes may be made during construction and you need to ensure that the contract provides some protection here. It is essential that you check the details of features, fixtures and fittings such as the stove, range hood, dishwasher, etc. and ensure that the quality of all finishes is clearly specified in a schedule that should be attached to the contract.

Market fluctuations

You should keep in mind that like the economy, property market conditions fluctuate and with long-term building projects such as luxury high-rise units, the value of the units may change prior to completion of the building and your contract. The price you agreed to pay stays the same regardless.

Paying a deposit

Your deposit could be tied up for some time between signing the contract and settlement.

Paying a deposit by way of a Deposit Bond (not always available in all states) or bank guarantee may be a better choice than a cash deposit when buying “off the plan”. If you terminate the contract your bond or guarantee can be cancelled and you do not need to take steps to recover your cash deposit.

You should always seek legal advice if a request is made to release the deposit to the owner before the sale is settled. If you do pay a cash deposit you should stipulate in the contract who is holding the money and where it is being held, if possible it should be deposited in an interest bearing account by the stakeholder (often the real estate agent).

The developer’s financial position

Construction companies and land developers who become insolvent or go bankrupt during construction can leave a trail of destruction behind them. Rising building and material and labour costs may force a site closure and you may be locked into a contract for a home that is not finished within the timeframe you expected.

In some states the builder will be required to have insurance which may provide some compensation for defective work or loss due to a bankrupt builder. You should seek legal advice to see what protection is offered before signing a contract.

While an early buyer “off the plan” has the best choice of the land or homes available in a project and has a longer time to on-sell the property for potential profit, the strategy is not without risk. There are many factors to consider before entering into a contract and our property experts can help guide you through this process.

If you or someone you know wants more information or needs help or advice, please contact us on 07 3281 6644 or email mail@powerlegal.com.au.