Archive for the ‘Newsletters’ Category

Commercial leases – Responsibility for repairs and maintenance

A commercial lease is a legally binding contract that gives a tenant certain rights over a property for a set period of time subject to the terms and conditions set out in the lease. A commercial lease is used when leasing property used primarily for a business.

You should never sign a lease without understanding all of its terms and conditions. If you don’t understand what you are agreeing to you could experience serious financial and legal problems.

General terms

It is rare to find a commercial lease that is prepared by the tenant. It is almost always the landlord that prepares the lease when commercial premises are rented and the terms of the lease will generally strongly favour the landlord. Once the lease is signed the tenant is required to comply with the terms and conditions of the lease during their occupation of the landlord’s premises.

The lease sets out the obligations of the landlord and the tenant and the rights of each during the term of the lease and any options for lease that are exercised after the initial term of the lease has expired.

Commercial leases usually have longer terms than residential leases. This gives the tenant, usually a business, a longer security of tenure and allows them to transfer the lease if they sell the business before the lease has expired. This can be appealing to a buyer of that business to already have the lease in place.

Repairs & maintenance of the premises

The legal obligations of a landlord and tenant in regards to maintenance and repair of the premises are set out in the lease.

In most commercial leases the tenant is responsible for the rented premises including walls, floors, fixtures and inclusions and the landlord requires the tenant to repair and maintain the premises during the lease term.

This will usually not include “fair wear and tear” on the premises, repairs to structural parts of the building or other expenditure of a capital nature (air conditioning, walls and the landlord’s plant and equipment).

The landlord is generally responsible for repairing and maintaining major structural aspects of the building including the roof and the building systems contained in it such as common areas and lifts.

Items such as air-conditioning, cool-rooms, heating fixtures and wall partitioning should be carefully defined in the lease to avoid costs and disagreements as commercial leases are often silent on items such as air-conditioning and cool-rooms which are capital items but used by a tenant in their day-to-day business.

Fixtures such as refrigeration and plant and equipment should be repaired by the landlord but a tenant should ensure that this is written into the lease as it is not an automatic obligation.

Avoiding disputes – common scenarios

The majority of disputes that arise between landlords and tenants and the issue of who is responsible for repairing or maintaining the premises arise out of interpreting the terms of the lease, in particular what is meant by “maintenance” and “repair” and sometimes what is “structural”.

Structural repairs include repairs to the building support system and foundations, flooring and ceiling structures, column support, walls and roof but not partition walls, internal stairways, decorative features such as carpeting and sometimes plumbing depending on the building.

A “repair” is generally defined as an act necessary to fix something that has been damaged, whether accidentally or as a result of continued use. If a tenant or their staff or customers damages part of the premises the tenant is always responsible for the repairs needed to reinstate the item. It is when an item, say a latch on a cool-room door that is used frequently, wears out and requires repair that the landlord and tenant may not agree about who should fix it.

The landlord may say that the latch was damaged due to the tenant’s lack of care or proper or regular maintenance and the tenant may say that it was faulty or had reached the end of its useful life. Disputes may arise and cost the parties time and money so it is best to ensure that the lease is specific in the areas where the potential for disagreement exists.

“Maintenance” is generally considered to be the taking of some action to delay wear and tear or deterioration or breakage of an item. For example cleaning and servicing of plant and equipment or proper disposal of waste and garbage. The common exception from “wear and tear” is where non-structural items such as carpeting have deteriorated over time and should be replaced by the landlord.

If a lease specifies that the tenant clears the drains, for example, and there is a plumbing issue the landlord may say that the reason the drains failed was that the tenant did not do proper maintenance. The tenant may say that the plumbing is old and needs updating and then a dispute exists about who is to fix the costly plumbing problem.

Both parties can lessen the likelihood of dispute by undertaking a full inspection report of the premises and both signing off on the report. This will establish and document what condition the premises was in prior to entry of the tenant and should be carried out and updated yearly.

A commercial lease should contain clear obligations and well-defined standards for the repair and maintenance of the premises under the lease to reduce the risk of dispute and misunderstanding between the parties.

The law is not always clear in this area particularly with regards to repairs and maintenance obligations. Even where legislation may say that a repair is the landlord’s obligation the lease (written by the landlord) can change this and make the tenant responsible. Each party should therefore ensure that they receive their own legal advice to ensure their best interests are protected in the lease.

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.

How binding is a Binding Financial Agreement?

A financial agreement is a contract that deals with the division of a couple’s assets after they separate, or in the event that they separate. They may be made before or during a marriage or de-facto relationship, or after it breaks down.

Financial agreements are also referred to as binding financial agreements, pre-nuptial or post-nuptial agreements and cohabitation agreements. They do not require court approval.

Although any couple may enter a financial agreement, they are often used when one or both parties have previously been married or in a substantial relationship, have children to a former partner, or where one party brings significant assets into the relationship. Generally, the financial agreement will attempt to protect existing assets or anticipated inheritances, ensure children from past relationships inherit from their parent, and take account of unequal contributions.

How binding are these agreements?

Some people may be cautious about entering an agreement to finalise their property affairs without approval or intervention by the court. Certainly, there are cases where such agreements have later been set aside for various reasons.

A financial agreement is a legal contract so is presumably binding provided the statutory technical requirements are met and certain circumstances did not exist during the making of the agreement that could have it set aside.

Technical requirements

Financial agreements must comply with the relevant provisions of the legislation.

Both parties must sign the agreement and before doing so, obtain independent legal advice regarding the effect of the proposed agreement on their rights, and its advantages and disadvantages.

A legal practitioner must also provide the client and other party with a signed statement to the effect that such advice was provided. Each party must receive a copy of the financial agreement signed by both parties and their respective lawyers.

The court may order an agreement binding despite non-compliance with one or more of these formalities if it would be ‘unjust and inequitable if the agreement was not binding’. For example, in Ryan and Joyce [2011] FMCAfam 225 the Court upheld the validity of an agreement that cited the wrong section of the legislation.

When will a financial agreement be set aside?

Disputes regarding financial agreements generally arise when a party fails to honour his or her obligations and the other person applies to the court to enforce the agreement. The non-complying party may argue to have the agreement set aside on one or more of the following grounds.

The agreement was obtained by fraud

The court may set aside a financial agreement that was obtained by fraud such as non-disclosure of a significant asset. Parties should be honest in their dealings and give proper disclosure of their assets, financial resources and estimated values. Being transparent will reduce the risk of having an agreement set aside.

The agreement was made to defeat the interests of creditors or another party

An agreement may be set aside if made with disregard to the interests of a party’s creditors or to defeat or defraud the interests of the other party or a person with whom one of the parties had pending property matters.

There are material changes in circumstances

A material change in circumstances that creates hardship for a party, or affects the welfare of a child of the relationship may cause the agreement to be set aside. Similarly, circumstances that make it impracticable to carry out all or part of the agreement may invalidate it, for example, a person’s bankruptcy, the disposal of a party’s assets or an illness or injury that permanently affects a party’s earning capacity.

The agreement is void, voidable or unenforceable under contract law

As with all contracts, a financial agreement may be set aside under common law and equitable principles, for example, on grounds of uncertainty, duress, undue influence, unconscionability, misrepresentation, mistake, incapacity or public policy.

Many disputes concerning financial agreements involve allegations of undue influence and / or unconscionability. The following two cases are examples.

In Thorne and Kennedy [2017] HCA 49, an eastern European woman and wealthy Australian property developer with assets worth around $24 million, met through a website offering potential brides. The woman moved to Australia and the couple married. Shortly before the wedding the woman, who had few assets, no family connections, and spoke little English, was presented a financial agreement with an ultimatum to sign it or the wedding would not proceed. She received advice stating that the agreement was ‘entirely inappropriate’ and should not be signed but felt compelled to do so.

The marriage ended, and the woman applied for the agreement to be set aside seeking a financial settlement of $1.24 million. The man died before the matter resolved and his two children as executors defended the claim against the estate. Initially, the woman was successful on the basis that the agreement was signed under duress. On appeal to the Full Court of the Family Court, however the decision was reversed. The matter was taken to the High Court which determined that the agreement should be set aside on the grounds of unconscionable conduct and duress in circumstances where the woman was at a considerable disadvantage.

Saintclaire and Saintclaire [2015] FamCAFC 245 saw a different result. The wife argued that she had been unduly influenced when signing the financial agreement on the basis that she had been diagnosed with post-natal depression, was in debt, and the husband was abusive and threatening (it was noted that these claims were general and unparticularised). The wife was initially successful in having the agreement set aside however this decision was overturned on appeal.

The court noted that negotiations concerning the financial agreement had been on foot for around seven months. The wife had credit card debts of $100,000 the extent of which had only been disclosed later in negotiations. The wife had consulted a lawyer throughout the entire process and had successfully sought amendments to the agreement including a cash payment to her of $100,000. When the agreement was signed, the wife’s post-natal depression had resolved, and she was optimistic about her financial future. There was no evidence to suggest that the wife did not want to sign the agreement. Despite her personal debt, she was an experienced financial planner whose income had been around $300,000 before having children. In the circumstances, the court considered that the negotiations surrounding the agreement were not unconscionable nor was there undue influence.

Conclusion

A financial agreement will be binding provided it complies with the provisions of the relevant legislation, the parties make full disclosure, and the agreement is not made contrary to general principles of contract law.

There is no one-fit solution when it comes to making a financial agreement and an informed decision should be made with the assistance of an experienced lawyer. Once in place, a financial agreement made before or during a relationship should be reviewed regularly to take into account changes in personal and financial circumstances.

This article is intended to provide general information only. You should obtain professional advice before you undertake any course of action.

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.

Foreign Divorces – are they legal in Australia?

In certain circumstances a divorce granted overseas, even of a marriage performed in Australia, can be recognised here. In this article we look at the factors that the Court will take into account before recognising a foreign divorce.

Divorce in Australia

Briefly, in order for a married couple to get divorced in Australia they, or one of them, must prove that they have been married for at least two years, that they separated 12 months before filing the divorce application and have lived apart since then, and that there is no reasonable likelihood of the couple living together again.  In addition, at least one of them must be an Australian citizen, regard Australia as their home and intend to live here indefinitely, or ordinarily live in Australia at the time of filing the divorce application as well as for the preceding 12 months.

If the couple have minor children, the Court must be satisfied that proper arrangements have been made for the children’s care, welfare and development, taking into account things such as their maintenance, education, living arrangements and time with both parents.

Remarriage

Australian law does not permit polygamous marriage. So, if a married person wishes to remarry in Australia, he or she must first be divorced, having received a final divorce order from the Court.

Australian divorce orders become final one month and one day after the Court hears and grants the divorce.

Foreign divorce

But what if a person obtains a divorce in another country? In what circumstances will that divorce be recognised by Australian law so that those parties, or one of them, could remarry in Australia?

The first step in determining whether a foreign divorce will be recognised as valid in Australia is whether that foreign divorce was effected according to the law of that foreign country. If not, then the foreign divorce cannot be treated as valid in Australia.

Then the Court must look at whether the applicant for the foreign divorce, the respondent or both of the parties were domiciled or ordinarily resident in or nationals of that foreign country at the time the foreign divorce proceedings were commenced. The Australian Court is likely to recognise that the foreign divorce, if it is valid in the relevant overseas country and if the respondent to the divorce application was a national of or domiciled or ordinarily resident in that foreign country at the time the divorce application was started.

If those factors do not apply to the respondent, the foreign divorce could be recognised in Australia if the applicant for the foreign divorce was domiciled in the overseas country at the time he or she files for divorce, or if he or she was ordinarily resident in that country at the time of starting the divorce proceedings and had been ordinarily resident there for the previous 12 months, or was at that time a national of that country. In some circumstances it would also be relevant that the parties last lived together in that foreign

country.

Finally, in order for a foreign divorce to be recognised as valid in Australia, the Australian Court must be satisfied that both parties were afforded natural justice. That is, were each of them made aware of the application and given an appropriate opportunity to respond to it and, if appropriate in that foreign country, to appear and be heard at the hearing of the divorce application?

What about the laws of a third country?

When an Australian Court recognises a foreign divorce as valid in Australia, either of the parties to that former marriage may then remarry in Australia (so long as they are not still married to someone else at that time). That is the case even if the foreign divorce would not be legal or recognised as valid in some third country.

Summary

Australian law does not permit polygamous marriage. Therefore, someone who has been previously married (whether in Australia or elsewhere) must first obtain a divorce (or divorces if there was more than one earlier marriage) before he or she can remarry in Australia.

Australian law will recognise foreign divorces as valid in certain circumstances, taking into account factors such as whether the foreign divorce was obtained in accordance with the laws of that overseas country, of which country the parties were each citizens at the time the divorce proceedings were started and in which country the parties were each living at that time.

If you need assistance or advice on how to proceed 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.

Coming to Australia – finding the right visa and navigating the pathways

Although Australia’s immigration laws are complex, there are many visas providing eligible applicants an opportunity to live, study, and / or work in Australia. Many visas provide pathways to permanent residency and allow the visa holder to bring eligible family members.

Understanding different visa categories and working with an immigration professional can help identify the most appropriate visa type, and implement strategies towards achieving your immigration goals.

Choosing the right visa – working with an immigration professional

Immigration lawyers use knowledge of the legal system and their understanding of immigration processes and policies to find the most appropriate visa type suited to their clients’ skills, qualifications, and personal circumstances.

Essentially, visas are grouped into categories or classes that share common factors and have specific eligibility criteria applicable to each subclass. All visas have conditions attached which must not be breached by a visa holder. An immigration lawyer can assist in determining your eligibility for a visa and explain the relevant conditions.

Information provided by a potential visa applicant is cross referenced with the criteria required for various classes to narrow down options and identify the most suitable pathway. Often, a number of pathways are explored before determining the most appropriate.

If the criteria for a desired visa type cannot immediately be met, a strategy may be implemented so the applicant can meet the criteria in the future. In the meantime, it may be possible to apply for a different visa type or a bridging visa with the objective of applying for the required visa once the eligibility criteria can be met.

Popular visa types

Following is an overview of popular visa categories demonstrating the range of visas that may allow migration to Australia. Each visa type is subject to change and everybody’s circumstances are unique, so it is advantageous to work with an immigration specialist to find the most feasible pathway.

Skilled Visas – employer sponsored

If you want to work in Australia and have the necessary skills and qualifications, a range of work visas may be appropriate for temporary or permanent residency.

The Australian Government recognises the economic value that skilled individuals bring to the country and has implemented programs to address skills shortages and assist employers fill genuine vacancies. In some cases, the grant of a provisional (temporary) visa may lead to eligibility for permanent residency.

The Temporary Skill Shortage (subclass 482) visa allows employers to bring skilled workers into Australia to fill vacancies that cannot be filled locally. Applicants must have the skills, qualifications and experience specified for a selected occupation on one of the skilled occupations lists. These lists are regularly reviewed. The employer must be an approved business sponsor and employ the visa holder in the nominated position. There are presently three streams:

  • The short-term stream grants a visa for a maximum two-year duration (or 4 years under International Trade Obligations) with a once-only renewal option.
  • The medium-term stream targets long-term skills gaps and grants a visa for up to four years with an opportunity to renew indefinitely whilst the occupation remains on the list. This visa offers a potential pathway for permanent residency after three years provided the visa holder meets the eligibility criteria and has complied with all visa conditions.
  • The labour agreement stream applies to employers who have entered into a labour agreement, and grants a visa for up to four years, with an opportunity to renew and to seek permanent residency, subject to eligibility, after three years.

The Employer Nomination Scheme (subclass 186) visa allows skilled workers who are nominated by an Australian business for an eligible occupation, to live and work in Australia permanently. Visa holders may enter under a Temporary Residence Transition stream, Direct Entry stream, or Agreement stream.

The Regional Sponsored Migration Scheme (subclass 187) visa allows skilled workers who are nominated by an approved Australian business operating in a regional area to live and work in Australia permanently under a Temporary Residence Transition stream or Direct Entry stream.

Business Innovation and Investment Visas

The Business Innovation and Investment (subclass visa 188) provides opportunities for experienced business operators, entrepreneurs or investors with significant assets to establish and operate a business or manage investment activity in Australia. These visas are very complex and only those invited by a state or territory government, after the successful submission of an expression of interest, may apply.

Business innovation visas may be appropriate for those with good business skills wishing to operate an existing business or establish a new business in Australia. Applicants should have sound business experience, adequate financial resources and assets and the business must be considered to be of economic benefit by the nominating state or territory. Holders of business innovation visas can live in Australia and operate their business for four years and may be eligible for a permanent visa afterwards provided the business is viable, has achieved specific targets related to growth and performance and all other criteria is met.

Investor visas require visa holders to invest in complying Australian investments of substantial amounts (from $1.5 million to $15 million) for a minimum of four years. The terms and types of investments are very specific, and applicants must have a genuine intention to reside in the state or territory in which the nominating agency is located.

Partner Migration

Partner visas allow married or de facto partners of an Australian citizen, permanent resident or eligible New Zealand citizen to travel to and live in Australia. Successful applicants are initially granted a temporary visa and, provided there is a continuing long-standing relationship (and other criteria are met) the grant of a permanent visa follows, usually after two years of the initial application. Applicants for partner visas must be sponsored and meet health and character requirements.

For partners intending on marrying, a prospective marriage visa may be granted. This is a temporary visa remaining valid for up to nine months. Once granted the applicant should enter Australia and marry within that time. After marriage, the applicant may apply for a partner visa.

Student Visas

Student visas are available for people wishing to study in Australia. These include Vocational Education and Training Sector, Higher Education Sector and Post-Graduate Research Sector visas allowing students to stay in Australia whilst studying fulltime.

Conclusion

The Australian immigration system is constantly changing with numerous visa types and various eligibility criteria to work through when lodging an application.

Immigration matters can be complex, and it is important to have a good relationship with an experienced professional who will assess your circumstances and provide advice and guidance to find a workable pathway towards your immigration goals.

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.

The benefits of Testamentary Trusts

Having worked hard over the years to accumulate wealth, most people want to ensure that their assets are available for future generations and not squandered by a frivolous beneficiary or accessible to an unintended recipient.

If you have acquired reasonable assets, have a blended family, or at-risk beneficiaries, then having a testamentary trust in your Will may significantly benefit those inheriting from your estate.

You may have heard of a testamentary trust in the context of financial or estate planning. But what is a testamentary trust, why do people have them and, more importantly, how can a testamentary trust benefit your family?

What is a testamentary trust?

A testamentary trust is a trust contained in a Will that comes into effect after the Will-maker (testator) dies. A trustee, pre-appointed in the Will by the testator, manages the trust which is usually established as a ‘discretionary trust’.

The discretionary nature of the trust means that the trustee may choose how and when the deceased’s assets are distributed to the beneficiaries. The beneficiaries or classes of beneficiaries are pre-determined in the Will and trust.

The flexibility and control in distributing assets to beneficiaries has many potential benefits and can ensure assets are retained for future generations. This flexibility and control is key to accessing the benefits available through a testamentary trust.

Favourable taxation treatment

Determining when and how income and assets are distributed from a testamentary discretionary trust can have a significant impact on how beneficiaries are taxed.

Income can be divided between beneficiaries to take account of their individual tax thresholds and financial circumstances.

For example, children under 18 years receiving distributions from the trust can generally access the adult tax-free threshold (presently $18,200), rather than being taxed at the (higher) flat rate which would normally apply to minors who receive ‘unearned income’. This can result in considerable tax savings with tax-free or minimally-taxed income distributions used to pay for children’s education, health and other expenses.

The flexibility to retain assets rather than transferring them at the time of the testator’s death can also be advantageous. The trustee’s discretion to choose the recipient of a major asset (such as real estate) and when that asset should be transferred can take into account Capital Gains Tax (CGT) issues and, with careful planning, avoid or postpone a liability for CGT. The same principle applies in determining if and when to sell an estate asset.

Protection of assets

A testamentary trust is ideal for protecting assets from going to those who were not intended to benefit from the estate, such as an ex-partner of the testator’s child or a creditor of a bankrupt beneficiary. Provided the trust is structured properly, in many cases assets will not be available to these third parties and can be preserved for those with whom a testator intended to share his or her wealth.

This protection is available because assets held in a testamentary trust are not ‘legally’ owned by any individual – in other words the beneficiaries have no ‘proprietary’ interest in the assets. Accordingly, the assets are not considered a resource of the beneficiary and may be exempt from a claim by an ex-partner in family law proceedings or a creditor of a bankrupt beneficiary.

By way of practical example, if a beneficiary was facing bankruptcy a trustee could refrain from making a distribution from the trust to that person, as doing so would only make the asset accessible to a creditor. By retaining the asset in trust, it is protected and does not constitute available property of the bankrupt beneficiary.

The protection described above also applies to ‘at risk’ or vulnerable beneficiaries such as those with disabilities, gambling or drug addictions. In these cases, distributions can be carefully monitored and managed.

Testamentary trusts for blended families

In some circumstances, a modest estate may also benefit from a testamentary trust. This may be so where the testator is part of a blended family, particularly if it is expected that estate assets are likely to increase over time.

The typical challenges faced by a testator within a blended family are the competing interests of past and present partners, biological children and step-children. Whilst it is likely that a testator wants to provide for the current partner, there may also be his or her own children from a previous relationship, step-children and / or children from the present relationship to consider.

The flexibility of a testamentary trust, enables the testator to include a set of provisions to apply if the current partner survives him or her, and an alternate set of provisions which will apply if the current partner does not survive the testator.

The trust can be drafted to provide immediately for the current partner (through a right of residence and income) whilst preserving assets for residual beneficiaries (such as the children). The objective here is that the testator’s assets can be immediately utilised by a first-generation beneficiary, whilst being preserved for future (residual) beneficiaries.

Summary

A testamentary trust provides flexibility in distributing your estate and enables wealth to pass to future generations. Beneficiaries may benefit from considerable tax savings and the trust can effectively safeguard assets from third party claims and protect at-risk beneficiaries.

A trust however, is a complex structure requiring effective management and administration. If you are considering having a testamentary trust in your Will, you should seek legal advice to ensure it is properly structured and the perceived benefits outweigh the likely costs of ongoing management.

The trustee will have a key role in the ongoing control of your estate assets. Care must be taken in appointing an appropriate person or entity. Although it is common to appoint the executor or a major beneficiary, this may not be in your best interests. A discussion with your lawyer setting out your family circumstances and objectives will assist in making the right choice.

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.

Have you been terminated? Understanding unfair dismissal claims

Most employer/employee relationships are now governed by the Fair Work Act 2009 (Cth) which sets out minimum standards of employment and provides protection for employees against unfair or unlawful dismissal.

If you believe you have been unfairly or harshly treated in your workplace, you may be entitled to make a claim through the Fair Work Commission.

This article provides an overview of unfair and unlawful dismissal in the workplace. The information is intended to be general only, and we recommend obtaining legal advice relevant to your circumstances.

Termination and unfair dismissal

Termination of employment occurs through the voluntary resignation of a worker or dismissal by the employer on the grounds of redundancy or for other reasons.

When terminating an employee, employers must act in a fair and appropriate manner, otherwise the termination may constitute an unfair dismissal. An unfair dismissal is a dismissal that was:

  • harsh, unjust or unreasonable;
  • inconsistent with the Small Business Fair Dismissal Code;
  • not a genuine redundancy.

If you have been dismissed from your workplace and believe the circumstances surrounding your termination were harsh, unjust or unreasonable, you may be entitled to take action against your employer to enforce your rights. Remember, a ‘dismissal’ may also include situations where you felt compelled to resign due to certain conduct engaged in by your employer. This is known as ‘constructive dismissal’.

In considering whether a dismissal is harsh, unjust or unreasonable, the Commission will consider a range of matters including:

  • whether there was a valid reason for the dismissal, including issues of the safety and welfare of other employees, and whether the worker was notified of that reason;
  • whether the worker was given an opportunity to respond to issues of capacity or conduct;
  • whether the worker was unreasonably refused to have a support person present during discussions regarding the dismissal;
  • whether issues of unsatisfactory performance, if relevant, were raised before the dismissal.

The size of the employer’s business and an absence of human resource personnel and how that may have impacted the dismissal processes followed may also be taken into account.

A legal advisor can help determine whether the circumstances leading to your dismissal may have been harsh, unjust or unreasonable.

An employee will not be considered to have been unfairly dismissed if the termination was due to a genuine redundancy.

What is a genuine redundancy?

A genuine redundancy occurs when:

  • the employer no longer requires the employee’s job to be done by any other person, or the employer becomes bankrupt or insolvent;
  • the employer has complied with any consultation obligations relevant to an enterprise agreement or award; and
  • it would not have been reasonable for the employer to redeploy the employee within the enterprise or other associated entity – the employer must ensure there is no suitable alternative position available.

A genuine redundancy can generally be shown by the introduction of new technology which replaces human labour, the discontinuance of the business operations, relocation of the business interstate or overseas, or the restructuring of an organisation.

Subject to the employee’s length of service and type and conditions of employment, the employee may be entitled to receive redundancy pay.

If a purported redundancy is not genuine, then the employee may pursue a claim for unfair dismissal. Depending on the circumstances, a redundancy that is not genuine may be shown, for example, if an employer advertises the same position immediately after terminating an employee.

Who is protected from unfair dismissal and what are the remedies?

If the Commission is satisfied that a person protected under the Act has been unfairly dismissed it may order reinstatement (to the previous position or another position with no less favourable terms) or the payment of compensation.

Employees are generally protected from unfair dismissal if they are covered by a modern award, an enterprise agreement or earn a salary below the (indexed) high income threshold (currently $153,6000) and have:

  • completed 12 months’ employment with a small business (a business with fewer than 15 employees); or
  • completed 6 months’ employment with a larger business.

Note, small business employers are provided additional protection from an unfair dismissal claim if the dismissal is consistent with the Small Business Fair Dismissal Code.

Although the primary remedy for unfair dismissal is reinstatement, this may not be feasible in the circumstances. In such cases compensation may be awarded in accordance with the thresholds set out by legislation.

Other protections – unlawful dismissal

Sometimes a person may not meet the criteria required to pursue an unfair dismissal claim however there may be other options available to enforce their legal rights.

A worker may take action against an employer for certain unlawful activities (adverse action) under the general protection provisions of the Fair Work Act or for discriminatory conduct, harassment or bullying.

Discrimination may be on grounds of race, colour, gender, sexual preference, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, ethnic, national extraction or social origin.

A claim may be pursued in circumstances where employment is terminated for a range of unlawful reasons such as temporary absences related to illness or injury, union membership, making a complaint or participating in an inquiry or legal proceedings against an employer, or absences during parental leave.

Each matter must be assessed in light of the relevant circumstances. We recommend that all employees experiencing issues in their workplace keep written records of incidents, discussions, negotiations and performance reviews.

Conclusion

If you are confronting a workplace issue, it is natural to feel vulnerable and confused. If you have been terminated and are unsure whether the termination was lawful, or if you are facing disciplinary action in your workplace, obtaining professional advice can help you to understand, and protect your legal rights.

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.

Divorce, de factos and superannuation splitting

Once a couple is separated, their superannuation (Super) is treated as property under the Family Law Act 1975 (Cth) (FLA) and the value of the couples’ Super benefits will be taken into account when determining a property settlement.

Super is held in trust and differs from other types of property, there are rules that govern when a party is able to access their Super funds. Laws regarding Super splitting apply to both married and de facto couples equally, except in Western Australia (WA).

Super splitting can be a complex area of law and you should ensure you know exactly where you stand regarding Super entitlements after separation or divorce.

Valuing your superannuation

The Family Law (Superannuation) Regulations 2001 (Regulations) provides different methods for valuing Super interests. The methods provided in the Regulations can be confusing, overwhelming or inappropriate for some Super interests. This is why we strongly recommend you seek advice from an experienced family lawyer on the best valuation method available for your type of Super fund.

If you want to obtain information about your Super for valuation purposes, you will need to do the following:

  • Complete a Form 6 Declaration;
  • Complete a Superannuation Information Request Form;
  • Send both forms to the trustee of the fund.

These forms can be found on the Family Court website. Your Super fund may charge a fee for processing the forms. Your lawyer is also able to complete the forms on your behalf, which is recommended as family lawyers have experience in filling out Super Information Kits. This will ensure the forms are completed correctly at first instance, helping you save time and money.

What factors are considered when determining the value of the superannuation split?

Financial contributions are not the only factor considered when assessing the value of a Super split. Non-financial contributions such as care of children of the relationship and the family home may also be considered. The Family Court may also consider the financial position of both parties after their divorce or separation when determining the value of a Super split.

Splitting your superannuation

Before negotiations commence in relation to the splitting of Super, it is vital to speak to a lawyer who can help you place a “payment flag” on both parties’ Super accounts. This will prevent any party withdrawing money from the accounts before the accounts have been valued.

Splitting super does not necessarily convert the amount split into a cash asset.  After the agreed amount has been transferred to a parties’ super account, it must remain there until a condition of release of Super is satisfied, for example preservation age reached, severe financial hardship or terminal illness.

In WA, further legislation to give effect to a scheme for superannuation splitting for parties in a de facto relationship is yet to be passed. Once this occurs, parties who have been in a de facto relationship will be eligible to seek Super splitting only if:

  • they are separated;
  • have not made a BFA; and
  • there are no final Family Court Orders existing between them.

Married couples in WA are able to obtain super splitting orders which are subject to Commonwealth laws when determining a Super split.

Methods used to split superannuation

There are a few methods in which Super can be split. The method applied will largely depend on whether both parties can come to an agreement on the amount of Super that will be included in the property settlement.

Super may be split as part of a binding financial agreement (BFA). If your BFA did not provide for a Super split, it is still possible to add a Super agreement to the BFA after your relationship has ended. If there is no BFA in place and both parties have agreed to a Super split, they can file an application for Consent Orders with the Family Court.

The Family Court will review the parties’ Consent Orders to ensure they are fair and reasonable. The Consent Orders will then be made into a Court Order, which means the orders are then legally binding on both parties.

If parties are unable to reach a mutual agreement on splitting their Super, the Family Court will determine the division of the Super split by considering a range of factors. This type of Court Order is known as a Financial Order.

As is clear from the above discussion, splitting Super can become a complex task. This is why we recommend seeking further advice and guidance from an experienced family lawyer.

Conclusion

Couples who are going through divorce or separation proceedings can feel stressed and overwhelmed, especially when it comes to property division. Super splitting is usually a complex area of property division, especially when parties cannot reach a mutual agreement.

There are various and complex methods of valuing and splitting Super funds under the Regulations, some people may also discover that none of the valuation methods are suitable for their Super account. After the agreed amount has been transferred to a party’s Super account, it must remain there until a condition of release of Super is satisfied.

If you want to ensure you receive the correct amount of a Super split, we strongly recommend you seek legal advice from one of our experienced family lawyers.

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.

When are you entitled to motor accident compensation

If you are injured as a result of a motor accident caused wholly or partly by another driver, you may be entitled to compensation.

The Motor Accident Insurance Act 1994 (Qld) establishes a compulsory third party (CTP) insurance scheme which covers liability for personal injuries arising out of certain motor accidents to compensate injured parties who were not at fault or only partly to blame for their injuries.

When we refer to a motor accident most of us think about collisions involving two or more motor vehicles. However, there are a range of other incidents that may lead to injury, entitling an innocent person to claim compensation.

This article explains how CTP insurance works and the types of accidents for which compensation may be payable to those injured due to the negligence of others.

The attribution of liability for a motor vehicle accident can be complex and technical and strict time limits apply for claiming compensation. If you or somebody you know has been injured in a motor accident it is important to obtain prompt legal advice.

What is CTP insurance?

CTP insurance is mandatory for all registered motor vehicles used or intended to be used on a public road. An owner cannot register a motor vehicle without first obtaining CTP insurance, which covers the owner for legal liability for the injury or death of a person arising from the negligent use of the vehicle.

Essentially, CTP insurance applies to the relevant motor vehicle so that any act that causes injury through its negligent use (whether by the registered owner or other person with control of the vehicle) is covered.

Legal liability is placed on the registered owner and / or driver (who is indemnified through insurance) even in situations where the owner is not the ‘real’ wrongdoer. In practice, this ensures that an innocent person injured within the scope of the Act may be compensated no matter what the circumstances – for example, where injuries are sustained by a person during a collision with a stolen vehicle being negligently driven by a thief.

 

 

What is a ‘motor accident’?

The CTP scheme is fault-based, which means that compensation is not payable unless an injured road user can show that the injury was due (or partly due) to the negligence of another person.

The Act has broad application in terms of the circumstances that may lead to a compensable injury. Section 5 states that the Act applies to ‘personal injury caused by, through or in connection with a motor vehicle if…the injury –

is a result of:

  • the driving of the motor vehicle; or
  • a collision, or action taken to avoid a collision, with the motor vehicle; or
  • the motor vehicle running out of control; or
  • a defect in the motor vehicle causing loss of control of the vehicle while it is being driven; and
  • is caused, wholly or partly, by a wrongful act or omission in respect of the motor vehicle by a person other than the injured person.’

This means that a collision between two vehicles need not have occurred. Injuries sustained by a person taking evasive action due to the negligence of somebody else, or in circumstances involving an out of control or defective motor vehicle, may entitle that person to compensation.

Effectively, a claim may be made by:

  • a driver of a motor vehicle (whether or not the driver is the owner);
  • a passenger (whether or not an injured passenger is related to an at-fault driver);
  • motor cyclists and pillion passengers;
  • cyclists, pedestrians and other road users.

A motor accident claim may also be made by persons witnessing an accident, family members who observe injuries or death, and dependants of injured persons.

For example, in Caffrey v AAI Limited [2019] QSC 7, a senior constable who sustained psychiatric injuries after responding to and witnessing the aftermath of an accident was awarded damages by the Court.

The plaintiff provided first aid and comfort to the driver of a motor vehicle moments before he died from catastrophic injuries after colliding with a tree. The constable also comforted and assisted the deceased’s parents who subsequently arrived at the scene.

The matter proceeded to court after failing to settle in accordance with the provisions of the Act. However, in its deliberations, the Court acknowledged that the circumstances gave the plaintiff a ‘prima facie entitlement to recourse under the statutory scheme’ having met the criteria in s 5(1)(a) and (b) of the Act.

What is a motor vehicle?

A ‘motor vehicle’ is a ‘mechanically propelled vehicle’ and a vehicle for which registration is required and includes a trailer.

Unless the motor vehicle accident from which the injury arises occurs on a road, it does not include a tractor, backhoe, bulldozer, end-loader, forklift, industrial crane or hoist, or other mobile machinery, an agricultural machine, a motor vehicle adapted to run on rail or tram tracks or an amphibious vehicle.

Uninsured or unidentified motor vehicles

A person may sustain injury on a road or in a public place due to the negligence of a driver in circumstances where the driver and / or motor vehicle is unidentified (as in the case of a ‘hit and run’ accident), or where the motor vehicle is uninsured. In these circumstances a claim may be made on the ‘nominal defendant’.

The nominal defendant is a body established under the Act and funded through registration contributions. An injured person relying on making a claim against the nominal defendant must make proper searches and enquiries to establish that the vehicle / driver could not be identified.

The National Injury Insurance Scheme

The National Injury Insurance Scheme Queensland (NIISQ) introduced in 2016 provides necessary and reasonable care and support to people who have sustained catastrophic injuries in a motor vehicle accident, irrespective of fault. The NIIS no-fault scheme has specific eligibility requirements.

Conclusion

A person may be entitled to compensation for injuries sustained through various incidents involving a motor vehicle. Time limits apply for claiming compensation and sometimes liability for an accident is unclear, so it is important to seek professional assistance to clarify your legal position and entitlement to compensation.

This article is intended to provide general information only. You should obtain professional advice before you undertake any course of action.

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.

The process of obtaining probate

Probate is a grant made by a Court that ‘proves’ the Will of a deceased person and vests title to estate assets in the executor/s, allowing the executor to deal with the deceased’s estate.

As the legal personal representative of the deceased, the executor must determine the assets and liabilities, liaise with debtors, creditors and beneficiaries, sell, transfer and distribute assets and finalise the estate in accordance with the Will.

The executor is often guided by a lawyer who provides professional advice to minimise liability and to deal with any complications or claims made on the estate.

If the deceased died without a valid Will or the Will appointed an executor who is unable to fulfil that position, an interested person (usually a spouse, partner or child) may apply for letters of administration.

This article explains the process of obtaining a grant of probate where there is a valid Will, and what is involved in administering the estate. The information is general only and we recommend obtaining professional advice relevant to your particular circumstances.

Is a grant of probate necessary?

There is no statutory requirement to obtain probate and a grant may not be necessary for small estates. Property held jointly may be transferred to the name of the surviving owner/s by lodging the appropriate documents with the relevant authority.

Banks, financial institutions and share registries may release small amounts without probate on production of the death certificate and proof of those entitled to the funds, and an indemnity releasing them from future claims. The relevant enquiries should be made with each entity.

Unless the estate is small, simple and there is no risk of a claim being made against it, an executor will generally seek an application for a grant of probate. A lawyer can advise whether a grant of probate is necessary or recommended.

Process

A notice of intention to apply for a grant must be published at least fourteen days before the application is made to the Supreme Court. The notice is required to warn interested parties (creditors, family provision claimants) of the application and provides an opportunity for the relevant claim or objection to be lodged.

The following documents are filed with the Court:

  • Application for Probate;
  • Original Will and death certificate;
  • Affidavit in support of Application;
  • Affidavit of Publication and Service.

The affidavit sets out the relationship between the deceased and the executor, identifies the Will and death certificate and, if relevant, vouches for the deceased’s signature on the Will. The affidavit may include specific information to explain irregularities, such as different spellings of names or the death of a beneficiary.

Sometimes additional documents will need to be prepared to explain unusual circumstances and an estate lawyer can advise in this respect.

Once probate is granted, the executor may commence administration of the estate.

Dealing with assets held outside of Queensland may require the grant to be ‘resealed’ in the relevant jurisdiction. This is a procedural matter in which a copy of the original grant, together with a summons and supporting documentation is filed with the relevant Court in the jurisdiction where those assets are held.

Protecting executors

Executors may be liable for losses sustained by beneficiaries through negligence or delay in administering an estate but must also ensure that all claims are considered before distributing estate assets. To protect an executor from liability for potential claims by creditors, a notice is published providing a specified timeframe for a party to notify the estate of any claim prior to its distribution.

The possibility that a family provision claim may be made on the estate must also be considered. In such cases it may be prudent to wait for six months after the date of death before distributing assets.

An estate lawyer will explain the most appropriate means of protecting you as executor, from liability.

Administering the estate

The Will should be examined to ensure the distribution is in accordance with its provisions. Understanding the correct interpretation of a Will’s terms can be confusing and an estate lawyer will assist with explaining the proper construction of the Will.

The executor and beneficiaries should receive appropriate legal or financial advice when transferring / receiving assets to ensure that stamp duty, capital gains, land tax and other taxes are considered.

Executors should also be mindful of their duty to protect and preserve estate assets and to ensure that appropriate insurance, where relevant, is in place.

Estates that include business interests will require additional attention – the business may need to be wound up, or the interests sold or transferred to a beneficiary.

Prior to distributing assets, the executor will need to be certain that:

  • the debts of the estate have been ascertained and paid in accordance with the statutory order for payment of debts;
  • funds are retained in the estate for contingent expenses such as taxes and other fees;
  • all beneficiaries have been identified and provision (if relevant) made for holding a minor beneficiary’s share in trust;
  • the estate is not distributed until all creditors are identified and the requisite timeframe has expired for an eligible person to make a family provision claim;
  • a proposed distribution statement has been prepared and approved, particularly where there are multiple beneficiaries;
  • beneficiaries who are receiving insurable assets have arranged insurance cover in their own names before cancelling existing policies.

Conclusion

Applying for probate and administering an estate is an important function, and for many executors and beneficiaries, the process can seem tedious and daunting.

However, these processes are in place to ensure that executors and beneficiaries are protected and that the testamentary wishes of a deceased person are properly carried out.

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.