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COVID-19 Rent Relief

COVID-19 Rent Relief

By | Articles, Property Law

As you are all aware, we are all anxiously awaiting the announcement of the Government’s rent relief package which is expected as part of the third stimulus package, as a result of the COVID-19 crisis.

We understand that tenants are now coming forward requesting rental relief in the form of reduced rental and/or no rental for a certain period of time due to the economic crises we are currently facing. At present it is too early to know how best to fix the situation until we have a better idea of how long this crisis will last and what other relief will be forthcoming. We do suggest that where assistance is given, it is given on a case by case basis for now.

It is imperative for all Landlords and Tenants to support each other as best they can in this crisis. However, any discussions on rent abatement, short-term agreements to defer some rental and any negotiations be put on hold until we know the full extent of the Government and financial institution relief package which should roll out in the next few days and weeks. Landlords and Tenants will then be able to make an informed decision and enter into negotiations which will benefit both the Landlord and the Tenant for the foreseeable future.

It is important to remember that where the tenants have been in substantial arrears prior to the onset of the COVID-19 pandemic, those rental arrears would not form part of any relief provided but would remain in place.

Further, it is important to note that where an agreement for rental reduction or rental abatement is being offered, you might also consider reaching an agreement with your current tenants to extend the lease term and exercise options early. Any variations to Leases or agreements reached should be documented by way of the appropriate Deeds to safeguard both Landlords and Tenants.

Both Simon and his Commercial/Property Team are here to help guide you step by step through this trying time and we will be sending  further emails to you explaining the options and obligations for both Landlords and Tenants once we are in receipt of the full information from the Government in the coming days/weeks.

In the meantime, please do not hesitate to email or phone either Simon or Lisa with any queries or concerns you may have.

Stay safe!!

Body Corporate Levies

Frequently Asked Questions About Levies & the Impact of COVID-19

By | Articles, Body Corporate

The Queensland Government recently reported that “Bodies Corporate and their committees have a statutory obligation to act reasonably”, which includes balancing the statutory obligations of a Body Corporate with the rights of owners and occupiers (and the broader community). As the uncertainty surrounding COD019’s impact on the nation, and the world, continues OMB Solicitors address three frequently asked questions about current levy recovery procedures.

Whilst Bodies Corporate and residents must consider the impact of COVID19 on their buildings, including implementing appropriate steps to limit transmission of the virus, Committee’s need to continue making decisions (i.e. by way of VOCM) to ensure the obligations of the Body Corporate are met.

  1. How might a Committee deal with a failure of a lot owner to pay levies considering the impact of COVID19?

Given the social and economic impacts of COVID19, Committees need to draw an appropriate balance between compassion for individual circumstances and maintaining a scheme’s healthy financial status. In this regard, it is likely that Committees may be faced with increased hardship and payment plan requests from lot owners. It is important, during these times, for Committees to consider each matter on a case by case basis and (if necessary) ask lot owners to provide evidence of financial hardship (i.e. redundancy letters or a Statement of Financial position) prior to making a decision.

Whilst there is no obligation on a Committee to waive any portion of the debt, circumstances may arise which warrant a waiver of interest or a payment plan that would see the debt satisfied within a reasonable period of time.

In this regard, any payment plan requests need to be considered having regard to the lot owner’s payment history, the future needs of the scheme, how many lots are in the scheme and how the payment plan request may impact upon the day to day running of the scheme i.e. paying for insurance, caretakers or other essential expenses.

If an owner has been in arrears for a significant period of time and prior to March 2020, then the Committee ought to consider a separate strategy of the management of that debt (in consultation with its legal advisors).

  1. How is OMB Solicitors dealing with levy recovery processes during the COVID19 Pandemic?

OMB Solicitors have implemented several strategies in dealing with levies moving forward. These strategies include:

a compulsory telephone call from our experienced staff to all owners referred to levy recovery to ensure a specific examination of the individual circumstances, which will result in an appropriate management of the debt;

providing additional advice to the Committee prior to the institution of legal proceedings (if such proceedings are necessary), including advice on hardship and payment plan requests;

increasing the timeframes for debt management and exploring the financial options with each individual lot owner; and

discussing with the Committee how to manage and meet its financial obligations during the COVID19 Pandemic.

  1. Should the Committee refer a lot owner to levy recovery given the COVID19 Pandemic?

The short answer is yes.

As advised by the Queensland Government, it was confirmed that a Body Corporate must maintain common property in good condition (including the cleanliness of such common property). Accordingly, to ensure the Body Corporate can meet its financial obligation of insurance, repair, maintenance and cleanliness – contributions must continue to be paid by owners.

Whilst there is legislative change with respect to enforcement of Judgments (i.e. bankruptcy and Statutory Demands), unfortunately there are no amendments to the regulations governing how a Body Corporate recovers a levy from a lot owner (at this stage). Accordingly, Committees are doing their best to manage the impact upon the financial circumstances of their scheme by operating “business as usual” with the overriding considering of addressing the effect of the virus on lot owner’s individual circumstances.

A message from OMB Solicitors

During these times of uncertainty, OMB have implemented an action plan to ensure all levy recovery matters are actioned in a timely and appropriate fashion. We confirm that we are currently running business as usual and are taking steps to continue to minimise any disruption.

Over the last 2 years, OMB has invested heavily in technology which allows us to seamlessly work remotely if required and have been operating electronic Body Corporate files for approximately 12 months.

As this pandemic is ever evolving, our action plan and our levy recovery processes are fluid and will continue to adjust as we monitor the situation via the Australian Government Department of Health and World Health Organisation.

At OMB Solicitors we are all doing our part to minimise the risk of infection including practicing social distancing. In conjunction with this, we ask that all meetings are conducted via phone call or video conferencing. Should an onsite meeting be required, we further request that you advise if you have previously been in contact with the Coronavirus or have travelled within the last 14 days prior to the meeting.

 

Force Majeure

Force Majeure: How does an ‘Act of God’ Clause Affect Your Contract

By | Articles, Property Law

On 30 January 2020, the Director General of the World Health Organisation declared the novel coronavirus COVID-19 (“Coronavirus”) outbreak around the world a “public health emergency of international concern”.

We recognise in this difficult time, many of us may be also concerned with our ongoing contractual obligations and how the unforeseeable event of Coronavirus may affect the contracts that we are parties to. In this article, we shall provide insights on what is a force majeure clause and how the Coronavirus may affect contractual obligations.

What is Force Majeure?

Force majeure is a legal concept designed to provide remedies for parties affected by an unavoidable or unforeseeable event. Common examples of force majeure events include earthquake, explosion, natural disaster, terrorism and war.

Eventhough force majeure is a civil law concept, force majeure clauses are used in Australian contracts because of its similarity to the doctrine of frustration in common law. The doctrine of frustration applies when the performance of a contract must be radically different from what was intended by the parties.

Does Force Majeure apply to the Coronavirus outbreak?

The Coronavirus is a recent new global crisis, therefore it is not likely that contracts will include express clauses referring to the event of a Coronavirus outbreak. Whilst in China, the government has issued thousands of Force Majeure Certificates for businesses relying on force majeure clauses in contracts, it is still uncertain whether the Australian government will provide similar provisions. The questions that should be addressed are:

  1. Is Coronavirus considered a force majeure? This will largely be determined by a particular clause and that specific drafting of the clause.
  2. What notice is required to be given to enact the force majeure? It is often essential that correct notice be given pursuant to the specific clause.
  3. What relief can be obtained? Often if the appropriate clause applies, the relief may be temporary for the period of time that the event occurs.
  4. Is there an obligation on either or both parties to mitigate their loss?

If there is no force majeure can the common law help?

Without new government provisions, the test required in common law is to analyse the risks the parties agreed to take and the precise wording in the contract. In addition, the party relying on the clause will need to prove to the court that the event is beyond the reasonable control of the party seeking relief.

In Australia, frustration may be applicable in the following circumstances:

  1. A change in law rendering performance illegal. In the current situation, if the law requires the quarantine of a personal service provider, the service provider will be frustrated by such unexpected event as not quarantining and performing personal services to other individuals will be considered illegal.
  2. Physical destruction of the subject matter of the contract. In the situation of Coronavirus, an example would be if goods are contaminated and required to be destroyed. In such event, if the goods are being traded, the destruction of the goods may render the contract frustrated due to unexpected events.
  3. Restraint by injunction. In the landmark case of Codelfa Construction Pty Ltd v State Rail Authority of NSW, construction work noise affected the local residents and work shifts needed to be reduced as a result of injunctions. The majority of the court considered that the contract had been frustrated. In the current situation, if the government restrains trade by injunction due to infected personnels, this may give cause to frustration in contract.

It is important to note that irrespective of the magnitude of the Coronavirus outbreak, parties to a contract are still under an obligation to provide notice if the party seeks to rely on a force majeure clause or the doctrine of frustration under common law.

Force Majeure in Property Contracts

In Queensland, there is no automatic right to pull out of a contract even in the event that a property is damaged. In addition, most Queensland property contracts indicate that “time is of the essence”, this means time limits must be strictly observed in all circumstances and there is no automatic right for a party to extend dates because of delays.

Property Purchase and Sale Contracts

In the standard Real Estate Institute of Queensland Contract for Houses and Residential Land (“the Contract”), clause 6.2 provides a Suspension of Time clause for events when a party is unable to perform a Settlement Obligation solely as a consequence of a Delay Event. Such Event is defined in clause 6.2(8)(b) to include:

  1.  A tsunami, flood, cyclone, earthquake, bushfire or other act of nature;
  2. Riot, civil commotion, war, invasion or a terrorist act;
  3. An imminent threat of an event in paragraphs (i) or (ii); or
  4. Compliance with any lawful direction or order by a Government Agency.

If you are currently negotiating a real estate contract, it is important for a special clause to be inserted in regards to Coronavirus/a pandemic.

If the contract has already been signed, it is important to note that you are only entitled to an extension if the other party agrees to an extension. In the current circumstance, if you become aware that there may be a potential delay due to the outbreak, it is important to communicate with the other party as soon as possible and negotiate a new settlement date.

Conclusion

Given that there is no clarity yet as to when the Coronavirus outbreak will be contained, it is important for parties under contractual obligations to prepare for circumstances where the relevant contractual obligations may be affected. Consult with us for advice appropriate to your situation.

If you are in current contract negotiations, you should certainly consider including a force majeure clause that will protect you from the consequences of being unable to perform contractual obligations due to Coronavirus and other similar biological disasters.

Short Term Letting

Short Term Letting – Body Corporate

By | Articles, Body Corporate

The advent of short-term stay platforms such as Airbnb and Stayz have been a boon both for those looking for extra accommodation options in popular locations and those looking to make some extra income from letting out a spare room or granny flat in their residence, or their entire property.

But this evolution of the internet’s ‘gig’ economy has also brought with it some pertinent legal challenges. For example, what are the implications of short-term letting when you own a property within a body corporate?

Bodies corporate are perhaps naturally predisposed to resisting the trend to short-term letting, worried about the overall effect of itinerant people passing through the property, a concern perhaps enhanced by some media horror stories of properties short-term let by people who use them for raucous, all-night parties.

A couple of court decisions in recent years have helped clarify the issue of whether a body corporate can, through its by-laws, ban owners from letting part of their property through a platform such as Airbnb, which we’ll look briefly at in this article.

The case of Hilton Park CTS 27490 v Robertson

In this 2017 Queensland Civil and Administrative Tribunal (QCAT) case, the position of owners within bodies corporate was clarified when the Tribunal ruled that unit owners were legally entitled to offer their units for short-term rentals. QCAT stated that any attempt made by the body corporate to restrict owners from using their property in this way through a by-law or by other means was invalid and was not enforceable.

The decision relied on s 180(3) of Queensland’s Body Corporate and Community Management Act 1997 (“BCCMA Act”), which essentially states that by-laws cannot restrict the type of residential use of the lot if the lot may lawfully be used for residential purposes. In addition to the above, as the term ‘residential’ has not been clarified or defined, it is to be broadly interpreted and so permits any residential use of the lot.

The decision in this case remains the law for properties which fall under the BCCMA Act.

More recently in 2019, the general view of banning short term letting was challenged by the Fairway Island GTP v Redman and Murray decision, where the body corporate successfully banned short-term letting through the use of a by-law.

The case of Fairway Island GTP v Redman and Murray

In this decision handed down in the Queensland Magistrates Court, a Hope Island resort on the Gold Coast successfully relied on one of its by-laws to ban short-term letting through platforms such as Airbnb by its lot owners.

The key difference with the decision in the Hilton Park case of 2017 is that the resort in question in this case remained governed by earlier legislation, the Building Units and Group Titles Act 1980 (Qld) (“BUGTA”), rather than the BCCMA.

Significantly, BUGTA does not place the same statutory restrictions on by-laws as the BCCMA, the latter ensuring that a by-law cannot be oppressive or unreasonable having regard to the interests of all owners or occupiers of lots and the use of the common property.

The implications

The vast majority of Queensland’s 50,000-plus strata schemes are governed by the BCCMA and so the decision in Hilton Park remains the more applicable law. But the decision in Fairway Park has emboldened managers of strata schemes to urge the state government to reconsider the ability of bodies corporate to restrict short-term letting by unit owners.

The Strata Community Association (Qld), for example, which represents more than 1.2 million Queenslanders who live in apartments, units, townhouses and other strata title property, welcomed the Fairway Park decision for restoring the power of the body corporate to make a by-law that “protects community interests”.

Additionally, some legal commentary has suggested that future applications by bodies corporate regarding short-term letting under the BCCMA may rely on the Magistrate’s interpretation of the term ‘residential’ under BUGTA in the Fairway Park decision.

For the majority of owners in Queensland, though, bodies corporate cannot prohibit the letting of your property through platforms such as Airbnb and Stayz through by-laws.

If you are unsure of the status of your property under the current law, and are interested in either undertaking, or preventing, short-term letting within the property, contact OMB Solicitors today. We are experienced, expert legal professionals on all matters relating to body corporate and strata management. Call our body corporate team today on (07) 5555 0000.

Defamation in Strata

Defamation in Strata. What You Need to Know

By | Articles, Body Corporate

Anyone who has had dealings with strata management and bodies corporate will know that in worst-case scenarios, they can become minefields of petty politicking and administrative overkill. Often, relations between managers and owners/tenants can become so acrimonious as to lead to legal action between the parties, as a number of high-profile court cases demonstrate.

The focus of this article is on the legal action of defamation, where either tenants/owners or strata managers have sued for statements they believe damage their personal or professional reputation.

It’s helpful to begin with a quick look at what constitutes defamation and what the law does to protect those who believe they’ve been defamed. Defamation is designed to protect people from false or damaging statements being made about them that may cause harm to their personal or professional reputation. A successful action for defamation can provide compensation for financial and other losses resulting from a defamatory publication of any kind.

What constitutes defamatory material? Emails, articles, blogs, novels, poems, photos, songs, cartoons, drawings, paintings, online reviews, social media posts and more can be defamatory. Material that is defamatory can also be broadcast or spoken, i.e. on a TV or radio show, or in a public presentation.

Case example 1

In Walden v Danieletto, a Queensland case decided in 2018, Mr Walden, a lot owner, owed overdue levies to the body corporate. He paid this online the day before a general meeting of the body corporate but because the amount he paid did not exactly match the amount owing, the system operated by the body corporate manager – Mr Danieletto – did not pick up the payment.

As a result, the body corporate manager declared at the general meeting that Mr Walden was “unfinancial”, a finding also entered into the minutes.

Mr Walden took exception to this declaration on four grounds, saying it imputed that he was a delinquent payer; could not afford to pay his body corporate levies; had financial difficulties; and was insolvent.

Mr Walden commenced defamation proceedings against Mr Danieletto claiming his reputation had been damaged to the amount of $100,000. The action failed in the Magistrates Court, the judge finding that Mr Walden had not been defamed and that, even if he had been, the matter was trivial and the defence of qualified privilege (that is, Mr Danieletto’s acts were committed in the performance of a legal or moral duty, were properly exercised and free from malice) applied. The magistrate found there had not been malice on the part of the body corporate manager, he’d just been doing his job.

“Do people hate or ridicule one another about overdue bills?” posited the magistrate in explaining why Mr Walden had not been defamed. “Do these cause people’s estimations of one another to be lowered where neither the amount, the period they are late, or the reason are known? Clearly not. Ordinary people accept that other ordinary people are neither infallible or perfect.”

Mr Walden appealed the decision and again lost, with the District Court judge upholding the original decision and again finding that:

  • Reputational harm could not have occurred because the matter was so trivial.
  • The actions of the body corporate manager were reasonable in giving members of the body corporate information about which they had an interest in receiving.
  • The owner had commenced numerous proceedings against the body corporate and if other owners were poorly disposed towards him, it was more likely to be because of this than anything the body corporate manager did.

Case example 2

In the 2019 NSW case of Murray v Raynor, apartment block tenant Ms Murray won an appeal against a NSW District Court decision finding that she had defamed My Raynor, chair of the block’s strata committee, in an email she sent to fellow tenants in response to Mr Raynor’s emails to her insisting that she lock her mailbox.

Mr Raynor was awarded $120,000 in defamation damages, including an amount for aggravated damages, after the District Court judge found Ms Murray had no defence to Mr Raynor’s claim that her email implied he was a “small-minded busybody”.

However, this matter went on appeal to the NSW Court of Appeal where the original decision was set aside on the basis that a defence of qualified privilege was available to Ms Murray. The court also found the award of aggravated damages to Mr Raynor was “manifestly excessive” for an email that was addressed to 16 other people. The decision has also cast doubt on the statutory cap on damages for non-economic loss in defamation cases where aggravated damages are awarded.

In conclusion

As is clear from the cases cited here, the bar is quite high in order to prove you have suffered reputational damage in the context of strata matters.

Understanding the most common defences to defamation can help you understand whether commencing an action against someone you believe has published or said something defamatory about you is a good place to start. Legal professionals experienced in this area of the law can help explain these defences, which may include that:

  • the publication was an honest opinion, rather than statement of fact;
  • the publication was of public concern or substantially true;
  • the publication was obligatory for a legal, social or moral reason;
  • you are unlikely to have sustained any real harm to your reputation;
  • the person you claim defamed you did not know or ought not to have known that the published material was defamatory;
  • the publication was made in a privileged context (parliament, a court, a tribunal, etc).

OMB Solicitors has specific experience in acting for both clients who have been defamed and also defending clients that have been accused of defamation. We have a good understanding of the alternative dispute resolution requirements contained in Queensland’s Defamation Act, as well as how to progress a matter through the court system if the matter cannot be resolved through mediation.

If you consider that you have been defamed or you find yourself in a situation where someone is alleging that you have defamed them, then OMB Solicitors can help. Contact us today on (07) 5555 0000.

First Family Law Appointment

Your First Family Law Appointment

By | Articles, Family Law

One of the most challenging — and rewarding — aspects of practicing family law is helping clients through some of the most challenging times of their lives. More often than not, they are going through separation and/or divorce, and need help with financial or parenting matters. In some cases, they are seeking legal advice about both. Accordingly, we do everything necessary to ensure that our clients understand their legal options. We also ensure that they have the information they need to make informed decisions.

This process begins at your first appointment. Since being prepared for this meeting will help alleviate your stress and anxiety, we’ve decided to share some insight into what usually happens at this time. Keep reading to learn more.

What to expect

When you schedule your first meeting, we’ll ask you to provide some basic information about yourself and your case. We may also ask you to provide additional details on an intake form when you come in. However, the initial consultation is your first chance to share your story directly with one of our family lawyers. Specifically, you’ll have an opportunity to tell him or her what prompted you to seek legal advice, and how you’d like the matter to be resolved.

This is also an important chance for you to share any specific questions or concerns with the lawyer. To make the most of it, consider making a list of any such matters before the meeting. That way you can simply bring it with you, so you won’t feel as stressed about remembering everything during the actual meeting.

In addition to answering your questions, the lawyer will provide some basic information about relevant legal processes, your legal rights and so on. He or she will also ask some follow-up questions about your case. With all of the information you have provided in hand, he or she will assess your situation and advise you accordingly.

Afterwards, you’ll be able to ask any questions about the advice and information you’ve received.

Helpful paperwork

Knowing what you should bring to your first meeting with a family lawyer can also help lessen any stress or anxiety you experience before meeting a family lawyer. The type of paperwork we’ll need depends on your specific circumstances.

For example, if you are seeking legal advice about financial issues related to divorce or separation, gather some basic information about any individual and joint assets. These may include bank statements, along with documents reflecting ownership of your home, vehicles and so forth. Paperwork related to your superannuation, income and any other financial resources.

On the other hand, if you are seeking legal advice regarding parenting issues associated with separation or divorce, we’ll need different material. Bring any written records you’ve kept about relevant issues or concerns such as custody, child support, and visitation. Copies of any journal entries you’ve made or are making about how the breakdown of your marriage has affected your children will also be helpful. This will ensure that your lawyer is fully informed regarding your circumstances and concerns. It also saves a lot of legwork if we need them for the preparation of future court documents.

In either case, you shouldn’t stress over bringing everything to the initial consultation. There will be other opportunities to provide additional documents if necessary, and we will let you know what we need.

Bringing someone with you for moral support

Another question prospective clients often have prior to their first meeting with a family lawyer is whether they can bring someone along for moral support. The answer is, of course you can.

We fully understand that you are going through a stressful time, and you may feel overwhelmed. Accordingly, you are welcome to bring a friend, relative, colleague or anyone else that can help you feel more at ease. Having said that, it is important that anyone you do bring understands that anything we discuss at the first meeting is strictly confidential.

You should also be aware that you don’t have to bring anyone with you if you don’t want to. It is entirely up to you.

Cost

Perhaps the single most important concern people have about meeting with a family lawyer is how much it will cost.

For your convenience, the family law team at OMB Solicitors offers an initial half hour free consultation. This is when we’ll go over most of the matters detailed above.  At this stage, we’ll also give you a comprehensive breakdown of the costs involved.

As a follow-up, we also offer a full untimed family law consultation for $400 plus GST, where we will try to get any additional information needed to provide you with an initial letter of advice, and a detailed letter to the other party.

You can schedule an initial consultation by clicking the link on our family law page. You can also do so by sending email to: info@omb.com.au.

Enduring Power of Attorney

Enduring Power of Attorney: The Difference Between Appointing an Attorney ‘Severally’ Versus ‘Jointly’ in Queensland

By | Articles, Wills and Estates

When people come to plan out their affairs for the later stages of their life, they are generally encouraged to nominate an enduring power of attorney.

This is a legal document used to appoint a person to make important decisions about their property and/or financial affairs should they lose capacity to do so on their own. By doing so, you can have some control over how your financial affairs are conducted once you lose personal capacity, rather than a public guardian or the courts where no enduring power of attorney exists.

The attorney you appoint can manage your bank accounts, pay bills and other debts, and sell or buy property and assets on your behalf.

Who should you appoint as an attorney?

An attorney should be a responsible person you trust, and preferably someone with an understanding of, and experience in, managing sometimes complex financial matters. They may be a family member, a close family friend, or a trusted professional such as an accountant, financial adviser or lawyer.

Importantly, you can also appoint more than one person with enduring power of attorney. When doing so, these attorneys can act:

  • Jointly and severally: the attorneys can make decisions together or separately;
  • severally: they can make decisions independently of the other attorneys;
  • jointly: the attorneys must agree on all decisions.

It’s important to seek the benefit of legal expertise when appointing more than one attorney. The people chosen need to be able to cooperate with each other and have the interests of the principal – the person who appointed them – uppermost in their mind when fulfilling the role.

Why appoint more than one attorney?

There are numerous reasons a person may appoint more than one person with power of attorney. Perhaps one or more of the people you appoint travels a lot, or perhaps you just want a ‘checks and balances’ approach that joint or several attorneys can bring to their roles in managing your affairs.

Joint attorneys, it must be remembered, need to both agree in order to act, including doing such things as attending a bank together if signatures are needed or to withdraw funds from the principal’s account. This setup can act as a safeguard that both will act without self-interest when it comes to managing your affairs. Conversely, jointly appointed attorneys can sometimes lead to conflict and inconvenience, particularly where, for example, two siblings who do not get along hold the roles and cannot agree on the details of managing your financial affairs, or are not always available to make joint decisions.

Attorneys appointed jointly and severally can make decisions independent of each other, which can lead to mistrust and conflict if there is disagreement on how each of them has acted. Suspicion by one attorney of financial abuse by another could – in a worst case scenario – lead to litigation in order to stop one of the parties acting any further.

There is also the issue of appointing a person who is older or of similar age to you, who may either die or lose capacity before you do. In the case where one of your attorneys dies or cannot continue in their role, what happens next depends on how the attorneys were appointed. Where attorneys were appointed jointly and one of them is either unwilling or unable to carry out the role, the enduring power of attorney will automatically cease. One of the advantages of appointing attorneys jointly and severally, or severally, is that the power continues despite one of them being unable to act. The other attorneys continue to make decisions under the power on your behalf.

When does an enduring power of attorney end?

People of any age can make an enduring power of attorney so long as they have the mental capacity to understand the nature and effect of the power when they sign the document.

An enduring power of attorney ends:

  • By revoking it (so long as you have mental capacity at that time);
  • at the time of your death;
  • when only one person was appointed as your attorney and dies or is unable to continue;
  • when you have appointed two or more attorneys to act jointly and one of them dies or can no longer act as your attorney.

Enduring power of attorney may also end due to bankruptcy and other legal reasons. In these cases legal advice should be sought.

If your enduring power of attorney has ended and you no longer have the mental capacity to make a new one, the Guardianship Tribunal may be able to make orders so the enduring power of attorney can continue. For example, if your enduring power of attorney has ended because a jointly appointed attorney has died, the Tribunal has the power to reinstate the enduring power of attorney so that it can continue in your best interests.

The importance of legal advice

Appointing an enduring power of attorney is an important decision to be made as part of the estate planning process. As we’ve outlined here, there are pros and cons to empowering more than one person to be an attorney who can manage your financial affairs.

Consulting experienced estate planning lawyers with years of experience in this area of the law is a wise course of action. At OMB Solicitors we can expertly advise you on the benefits and the potential pitfalls when it comes to enduring power of attorney, particularly the issue of appointing more than one attorney. Contact us today on (07) 5555 0000.

Sun Rise Images With Girl

What Effect Does Domestic Violence Have on a Property Settlement

By | Articles, Family Law

As police, advocates, social workers, and mental health professionals all can attest, domestic violence takes a tremendous toll on victims. In addition to lasting physical and emotional scars, it often creates financial hardship as well. In some cases, this is because the physical injuries inflicted by perpetrators render the victim incapable of working or unwilling to do so. In some cases, the victims can and do work, but the abuse they’ve suffered affects their job performance. This in turn can lead to disciplinary action or termination. Finally, domestic violence can also make it harder for the victim to find gainful employment.

Even so, the ways in which domestic violence affects property settlements in divorce can vary greatly depending on the specific circumstances of each case. In this article, we’ll take a closer look at this complicated, yet important issue.

A benchmark case

The Full Court of the Family Court set legal precedence for the consideration of domestic violence as a factor in property settlement claims with its ruling in In the Mar­riage of Ken­non. In this particular matter, the divorcing couple had been married for four years and did not have any children.

The court ruled in pertinent part: “… where there is a course of vio­lent conduct by one par­ty towards the oth­er dur­ing the mar­riage which … [has] had a significant adverse impact upon that par­ty’s con­tri­bu­tion to the marriage, or, … [has] made his or her con­tri­bu­tions significantly more ardu­ous than they ought to have been, … [this can be tak­en] into account in assess­ing the par­ties’ respec­tive con­tri­bu­tions with­in s 79.

The court added that there must be evidence that the vio­lence “occurred during the course of the mar­riage and had a dis­cernible impacton the victim’s contributions in order to be “relevant.”

When all was said and done, the court did amend the property settlement in the wife’s favour because of the extent to which domestic violence affected her contributions. However, the specific percentages associated with the adjustments are unknown.

Because the decision set a legal precedence, adjustments to property settlements based on similar findings are now called “Kennon” adjustments.

Quantifying the effects of domestic violence

In ensuing cases, the court has tried to calculate values for adjustments based on the impact that the domestic violence had on the victim’s contributions. In a case styled as Kozovs­ka & Kozovs­ki, the court adjusted the assets meant for the wife by 10 percent. They did so  based on the domestic violence she endured at her husband’s hands,  and the resulting impact on her con­tri­bu­tions. In another case, Dixon & Dixon, the assets allocated to the wife were adjusted by 20 percent. This adjustment was also attributed to the impact the domestic violence she endured had on her contributions.

Another case in point

For clarification, let’s consider another case.

In this particular matter, the husband and wife were both in their 40s and had been together for nine years. The wife had two kids, both of whom were teenagers, from a prior relationship. The couple’s asset pool consisted of a house valued at $470,000. Both parties claimed that they made initial contributions, although the husband disputed his wife’s assertion on this point. The parties also disagreed on the use and the amount of compensation received after the husband was injured in a serious motor cycle accident.

However, the real issue at the crux of the matter was the wife’s assertion that she and her children were victims of ongoing violence throughout the relationship. The husband denied any physical violence occurred. After the couple separated, the husband breached the Intervention Order his wife sought because of the domestic violence. He ultimately went to prison for more than three years for violating the Intervention Order and other offences. Soon after he got out of prison, he again breached the Intervention Order by calling and threatening his wife.

Based on the evidence presented, the court awarded a 7.5 percent adjustment to the wife. This was because the domestic violence perpetrated by her husband made it harder for her to continue contributing to the household. The court also made a 10 percent adjustment in the wife’s favour because she was solely responsible for caring for the kids, and the effects of the abuse limited her ability to work.

There’s always an exception…

Of course, there are always exceptions to the “rules.” Take the matter of Bel­more & Bel­more , for example. In this particular Family Court case, the husband and wife had been married for more than 30 years and had several children. Of significance here is that the husband was convicted of a serious assault on his wife and punished accordingly, and there was evidence of additional domestic violence. Even so, the court did not feel it could justify an adjustment in favour of the wife based on Ken­non.

Here’s why. The most seri­ous assault, which result­ed in the hus­band’s incar­cer­a­tion, occurred after he and his wife separated. Only violence that occurs while the couple is together can be used as the basis for a claim for a property settlement adjustment based on Ken­non.

Clearly, this is an important but complicated issue. If you have been the victim of domestic violence, you are getting divorced and you are concerned about how the violence could affect your property settlement, getting the proper legal advice is essential. Contact us by phone, email  or through our website, today.

ARE YOU LEGALLY PROTECTED FROM BUSHFIRES?

Are You Legally Protected from Bushfires?

By | Articles, Property Law

This month Bushfires are raging across Queensland and destroying lives, homes and valuable properties along the way. The current situation across both Queensland and New South West is dire, with 50 bushfires burning in Queensland and 60 burning in NSW. At least three people have lost their lives to the fires and many others missing and injured. There are over 150 homes destroyed by blazes. Experts have warned that “this disaster is far from over and the worst may be yet to come with summer ahead.” With Christmas holidays just ahead, many Aussies may also travel for holidays, leaving their properties vulnerable to potential risks.

In this article, OMB Solicitors would like to discuss some of the important legal preparation Queenslanders should do.

Insurance

  • Make sure your insurance is up to date, and has the right cover for fire and flood.
  • If you are letting your property, you’ll need to let your insurance company know you’re no longer living there and arrange landlord’s insurance. Your tenant will probably want to get contents insurance and many companies require door and window locks to be of a certain standard.
  • If you are letting your property for short-term rentals (e.g. Airbnb, Stayz, Wotif etc.), you must check if your policy is compatible for this purpose. Certain policies may also distinguish between professionally managed properties or self-managed properties.
  • Consider obtaining Insurance advice about securing life, TPD and trauma insurances.
  • If your property gets damaged, be prepared to lodge an insurance claim soon after the event.

Emergency contacts

  • Keep a list of emergency contacts you may need for dealing with recovery from a disaster.

Important Documents

  • Prepare or update your Will and Enduring Power of Attorney. We recommend seeking proper legal advice from us when it comes to setting up a Will and/or Enduring Power of Attorney.
  • Prepare an important documents kit, including a description of your home and a list of your valuable belongings. Compiling passwords and keeping this with your estate planning documents is also a handy hint.

In the event of a disaster you can contact Gold Coast Lawyers at OMB Solicitors at 07 5555 0000 for legal advice. We are here to help.

Thinking a man

10 Ways to Improve Your Debt Recovery Process

By | Articles, Ligitation
One of the most frustrating aspects of running a business is not being paid on time for the goods and services you provide. Customers who don’t pay on time eventually cost your business time and money in chasing them to settle their bill, not to mention the impact on your cashflow.

While businesses in this situation certainly have legal rights that allow them to take action to collect from debtors, there are also many pre-emptive things a business can do to both reduce the prospect of indebted customers, and improve your internal processes for recovering debt. We’ve listed 10 essential points any business should consider when approaching the area of debt recovery.

  1. Know who your customers are

Many of the problems with customers who struggle to pay stems from a lack of initial due diligence on the part of the business that extends them credit. By first checking publicly available company information and otherwise gathering as much information as possible about the business you’re lending to, you can effectively ‘screen’ those who are likely to be able to repay from those who are not… and hopefully reduce repayment problems.

  1. Offer customers incentives for early or instant payment

A decision to offer a debtor a discount or some other incentive to pay you back early or on time obviously needs to be weighed against the costs of chasing them for payment. Many businesses will prefer to be paid back at a slight discount, maintaining cashflow, rather than spend time and effort chasing debts. If discounting payment is not an idea you wish to entertain, other incentives such as offering certain customers exclusive products or access can also encourage on-time payment

  1. Have clear, transparent and accessible contracts and terms

While it seems obvious, many businesses use contracts that are either too vague on key details, or alternatively too heavy with legalese for those to whom they extend credit to understand. The guidance of a legal representative with experience in debt recovery is often essential in helping a business draft a succinct, clear and transparent document which sets out payment terms, methods of payment, time limits, manageable credit limits and penalties for non-payment by those they extend credit to. This can avoid any ‘they said-he said’ disputes later, and prove crucial if legal action for debt recovery is later required.

  1. Provide different options for repayment

By diversifying the methods by which customers can pay, you can encourage them to honour their obligations rather than ignore or delay them. A payment plan or instalments might be better than not getting payment at all, but obviously this decision will depend on the size of your business and your cashflow position.

  1. Make someone in the business a ‘debt recovery officer’

Many businesses make the mistake of having more than one person responsible for chasing up late or non-paying customers. This can lead to confusion and duplication, particularly in larger businesses with many clients. Ideally there is one person, or a dedicated team leader, responsible for debt collection, streamlining the interaction of the business with debtors. In smaller businesses, if this seems too big a job for one person, external experts can be employed. Many law firms now offer specialist debt recovery services.

  1. Ensure there is a systematic invoicing process where you follow-up on late payments

Following on from point 5, a debt recovery officer should be managing a systemised process of invoicing and follow up of late payments. Whichever way this is done, the process should be accessible to all those involved in transactions between the business and clients. The process should also be clear and transparent for the customer, so they are aware of what the follow-up contact is in relation to.

  1. Communicate verbally with the debtor

This point follows on from 5 and 6 but again, also applies to anyone in the business who deals with customers. In these days of email and online portals, it’s easier than ever for customers who owe money to ignore or put off requests for payment until it suits them to pay. Sometimes a good, old-fashioned chat on the phone between, say, the debt recovery officer and the client, can lead to quicker payment. There’s still no substitute for dealing with a real human.

  1. Insist on a written payback commitment

While there may be a contract in place, and there have been polite requests for payment and even a friendly chat on the phone, you should also consider a written ‘payback’ commitment presented to the debtor when the debt becomes payable. Here the debtor acknowledges the debt, explains why it hasn’t been paid on time and promises to pay it back by a specific date in a return email or letter. This document, like a contract, will also assist if later legal action is required for non-payment.

  1. Keep a record of all contact details and communication with the debtor

A comprehensive and accurate record of all the ways the business has contacted the debtor should be kept. These days, various software tools make this easy to do. A record of the contact made with the debtor will be vital if legal action needs to be commenced against the debtor.

  1. Stop the account and take legal action

Obviously there comes a point where a business has tried everything to get a customer to pay, without success. At this stage the logical course of action for the business is to cut off service and/or credit to the client and consult a lawyer about the next steps to recover the debt/s.

OMB Solicitors has many years of experience in advising and guiding businesses on debt recovery actions. If any of the issues raised in this article provide you with questions or concerns, contact Gold Coast Lawyers today on (07) 5555 0000 or info@omb.com.au.

video will gold coast

Can I Do a Video Will?

By | Articles, Wills and Estates

Smartphones have put a video camera in the pocket of nearly every person you see, with widespread and profound impacts for various sections of society, including security, surveillance and in particular, the law.

In recent years the prevalence of mobile recording has resulted in a number of court cases debating whether a ‘video will’ made by someone who later passes away can be valid and enforceable. In Australia, for a document to be recognised as the will of a deceased person it must be in writing and signed by the testator (the will-maker) in the presence of two or more witnesses present at the same time. How then, can a video recording of a will be valid?

While the law is often slow to adapt to the legal impacts and implications of new technology, the courts have set down a number of important principles when it comes to video recording your will and more generally, what are termed ‘informal’ wills.

A recent case example

The case of Radford v White decided in the Queensland Supreme Court in 2018 provides a good recent example of this specific issue.

In this case, Radford was the de facto partner of Jay, a 39-year-old man who bought a new motorcycle. Before he picked up the motorcycle, Radford encouraged Jay to record a video in which he directed what he wanted to happen with his assets should he pass away. In the recording, Jay said the majority of his assets should go to Radford and that nothing should go to his “soon to be ex-wife”, White.

Later that day, Jay had a road accident on his new bike, sustaining serious injuries including a severe head injury. Although later discharged from hospital, 14 months later he passed away from an overdose of prescribed painkillers. Radford made an application to the court seeking an order that the video recording Jay had made be considered a valid will, while Jay’s ex-wife, White, opposed Radford’s application.

The court decided in Radford’s favour that the video recording did form Jay’s will. It found that:

  • the video recording was a ‘document’;
  • the document purported to state the testamentary intentions of Jay; and
  • Jay demonstrated an intention to complete the formalities of a will at a later date by stating in the video that he’d “fill out the damn forms later”.

The decision in Radford v White joined a number of other cases where it was found a document other than a written, signed and witnessed will can operate in that capacity for the deceased, including:

  • notes on a mobile phone (Re Yu [2013]);
  • Microsoft Word documents (Yazbek v Yazbek [2012]);
  • handwritten documents not signed or dated (Public Trustee v New South Wales Cancer Council [2002]);
  • letters to solicitors (Permanent Trustee Co Ltd v Milton (1996));
  • instructions to solicitors (Saltmer v Renrick Lawyers Pty Ltd [2018]);
  • audio recordings (Re Estate of Carrigan (dec’d) [2018]).

What are the risks of video recording your will?

Despite the decision in the court cases above, it’s not advised you rely on a video recording of your will or other informal means in order to have your wishes carried out after your death. A properly executed written will remains the surest way to ensure your instructions are adhered to when you’re no longer here.

By making a video will, you leave it in the hands of the courts to determine whether it is a valid expression of your wishes. If the court decides the recording is not valid (and there is no other will), you could be declared intestate and your assets and belongings be distributed by the state without taking account of your wishes.

In determining the validity of an informal will such as a video recording, a court will take into account:

  • That the video is an actual record of the testamentary wishes of the testator and must clearly address the disposal of their property and assets, in contemplation of death.
  • That the video shows an intention, without anything more, to operate as a will. This means it will be likely invalid if it is referred to in the recording as a draft or a letter of instruction, for example. It’s wording cannot also consist of mere wishes or requests.
  • That the video be a ‘document’. This is the easiest element to establish given courts have previously found that any disk, tape, soundtrack or other device in which sounds are embodied and also film, are considered a document.

It should be noted that the onus of proof that the video is the will of a ‘capable’ testator lies with the person (usually one of the beneficiaries) claiming it is the deceased person’s will. The court may read direct statements and notes by the deceased, and evidence about when and how the video was recorded, to make its decision.

Also note that if a statement in a video recording which purports to be the final will of the deceased conflicts with the terms of a written will in their name, the written version will prevail.

In conclusion

While there are judgments in Queensland and some other states which have supported the validity of informal wills in the form of video recordings, preferring this format to that of a written, properly executed will remains ‘Russian roulette’ in the eyes of legal experts in estates and wills. There is no guarantee a court will come to the same conclusion about a video will in a case based on similar facts.

In the end, to guarantee your instructions are carried out as you want them to be after your death, it’s best to make a proper will with the advice of legal experts experienced in estates and wills, such as OMB Solicitors. This way you don’t leave it to chance that your will is legally enforceable, avoiding a potentially costly mess for your beneficiaries. If any of the issues raised in this article provide you with questions or concerns, contact Gold Coast Lawyers today on (07) 5555 0000 or info@omb.com.au

Tips Before Renovating Your Unit

Five Top Tips You Need to Know Before Renovating Your Unit or Townhouse

By | Articles, Body Corporate

Living in a Body Corporate is unlike owning your own freehold land. As a member of a Body Corporate you are required to follow the rules and regulations applying to your Scheme. Consequently, any maintenance or improvements you wish to make to your unit or townhouse ought to be well thought out and planned to keep the Body Corporate, Committee, owners and occupiers happy – after all it is ‘community living’.

To assist you with dealing with your Body Corporate, we recommend that you implement the following five quick tips in your next project:

  1. Obtaining Body Corporate approval

Be proactive! In almost all cases, you will require Body Corporate approval before ripping out your kitchen or bathroom. Approvals can be sought from the Committee or at a General Meeting depending on the extent of the renovation. If the total renovation cost is under $3,000 and the renovation will not detract from the appearance of the building or will result in a breach of your duties as an owner or occupier (i.e. cause nuisance), then approval can be granted by your Committee.

In the event your unit renovation will exceed $3,000, you will need to submit a motion at the next general meeting where all owners can decide by ordinary resolution to approve the works. It is best to get this step completed early as your general meeting only comes around once a year.

  1. Prepare a Scope of Works

Speak with your Contractors and prepare a summary of the works which are going to be undertaken. Provide the Scope of Works together with your request for Body Corporate approval.

This will save you time when seeking Body Corporate approval i.e. it will avoid the “to-ing and fro-ing” and questions from the Committee.

  1. Check your By-Laws

We like to say “the By-Laws is your Bible” – don’t allow it to collect dust! The By-Laws may identify conditions required to be met in order to undertake the renovation. You can obtain a copy of your By-Laws from your Body Corporate Manager.

It is likely that some of the conditions in which the Committee impose on you to grant approval, will already be contained within the By-Laws (i.e. where Contractors can park, whether padding is required for the elevators etc).

  1. Engage Appropriate Contractors

It is important that you engage the appropriate licensed Contractors to ensure that the works comply with current building standards. It is likely that the renovation will not be approved in circumstances where you are recommending that the works are carried out by a lay person or the classic ‘handy man’.

  1. Communicate, Communicate, Communicate

It is always good practice to keep the Committee or on-site manager informed throughout your project. This is, of course, unless you want a battle on your hands.

It is also prudent to explain to the Contractors the requirements/conditions of the By-Laws in completing renovations at the scheme.

Contact Gold Coast Lawyers for more information.

risk of franchising

What are the Risks of Becoming a Franchisee?

By | Articles, Business Law

Many people have a desire to start their own business, chasing the dream of independence, control of their own destiny and, hopefully, riches.

But for many the risks associated with launching a new business are too great. This is where running a business as a franchisee is often seen as a viable alternative. By operating within a franchise you can avoid many of the issues which cause start-up businesses to fail, such as establishing a brand name and identity, forming new work practices, training and staffing.

There are also, however, risks and pitfalls involved in becoming a franchisee. Some of these are outlined below but in any event, before embarking on any franchise agreement, you should consult a legal professional with experience in this area to help clarify the best way forward.

What are the advantages of running a franchise?

A franchise arrangement involves a contractual agreement between a franchisor (the owner of the franchising business) and the franchisee – the person given permission to use the business’ name, procedures, business model, branding and marketing for an agreed period of time. Under the agreement the franchisee is given the right to offer, supply and distribute goods and services under conditions set out by the franchisor.

There are a number of advantages to running a business as a franchisee compared with starting a business yourself, including:

  • The franchise business will generally have an established reputation and image, proven management and work practices, access to national advertising and ongoing support. It’s often portrayed as running a small business inside a big business network. Poolwerx, Boost Juice and Coffee Club are some examples of successful Australian franchises.
  • Training in set-up and operation of the business will often be part of the agreement with the franchisor.
  • Securing finance from a lender may be easier if you’re setting up a franchise as the amount sought will often be less than if you start a business yourself.

What are the risks of taking on a franchise?

While there are some clear upsides to taking on a franchise agreement, there are some equally clear downsides which any prospective franchisee should very carefully consider. Consulting a lawyer with franchise experience is highly advisable in light of some of the concerns touched upon below.

Some of the disadvantages include:

  • The franchise agreement brings with it restrictions on where you operate, the products you sell and the suppliers you use.
  • The agreement will set out some fairly prescriptive terms on how you run the business, from staff uniforms to use of logos and design of a store, so be aware this leaves little room for the ideas and creativity you might bring to a business you personally own.
  • Bad performances by other franchisees in the network may affect your franchise’s reputation. This is a genuine and well documented problem that has occurred in some well known ‘chains’.
  • The franchise agreement will mean you share profits with the franchisor in an ongoing manner. There are also a number of other ongoing costs to be aware of, which might include franchise renewal fees, advertising and transfer fees, employee and management training fees, and other royalties.
  • At the end of the franchise agreement, the franchisor is generally under no obligation to renew the agreement… which can leave your business high and dry.

Set-up fees can also be a significant downside for a franchisee. Depending on factors such as the prominence of the franchisor’s brand and the location of the business, initial fees to set up can start as low as $5000 and go as high as $1 million in Australia. There is the risk, obviously, that this money will never be recouped if the franchise then underperforms.

The points above demonstrate that a process of due diligence before taking on a franchise agreement is strongly advised.

Beyond those risks, franchising arrangements are governed by an industry code of conduct within the Competition and Consumer Act and regulated by the Australian Competition and Consumer Commission, which can be found here. It sets out standards for disclosure, procedures for dispute resolution, good faith obligations, cooling off periods and procedures for ending franchise arrangements. Failing to comply with franchising industry codes could incur up to 300 civil penalty units (approximately $63,000).

In conclusion

It’s common for people who decide to take on a franchise arrangement to be changing careers, or running a business for the first time. This lack of experience makes it even more important to seek the advice and guidance of someone qualified in identifying both the risks and rewards of franchise agreements. Many firms retain experienced franchise lawyers who can help guide you through the process so get in touch today if you’re considering taking on a franchise business.

Contact our Gold Coast Lawyers today for more information.

family law mediation

Four Tips to Prepare for Family Law Mediation

By | Articles, Family Law

The cost, complexity and confrontation involved in going to court after the break up of a family unit is something most people would really like to avoid.

The whole process can add another level of trauma and stress on everyone involved, particularly children. The courts, as well, are struggling under the weight of the number of family matters coming before them for resolution.

This is why alternative methods of resolving disputes such as mediation have become more and more popular when it comes to family breakdown, making the process – when done in the proper way – quicker and less fractious.

There are some essential things to take into account before embarking on mediation of a family law dispute, set out in general terms below.

  1. Be prepared

Achieving a successful outcome – whether it’s mediation about parenting arrangements or finances – hinges on how well you’ve prepared before the discussion.

This includes issues ranging from working out who will pick up the kids from school and look after them on the day of mediation, to coming up with a list of your key priorities for discussion on the day and a firm idea of what you will regard as a successful outcome.

Preparing properly will be greatly aided by consulting a legal professional experienced in family mediation. Many lawyers these days are also qualified in conducting mediations and can help clarify and guide the process for you so that the discussion is not considered wasted time.

  1. Consider compromise

The key to successful mediation is finding common ground between the parties, not emphasising or heightening areas where you both disagree. This involves a degree of empathy on the part of both parties, requiring you to think about what your ex-partner, for example, will want to achieve from the mediation process.

Both of you need to be well aware of what you can and can’t live with, in terms of resolving the issues at hand. This will require negotiation, compromise and probably some imagination in order to overcome obstacles and areas of difference. Without the appropriate mindset, however, you’re unlikely to reach mediated settlement.

  1. Check your emotions

There are few things in life that can arouse high emotions like matters involving your family. And while it’s natural to feel stress and emotion in any attempt to seek resolution of all the issues surrounding a family breakdown, it’s equally important to control these feelings in the mediation process. Anger and anxiety can impair your thinking and the negotiations needed to achieve a result.

There are many ways to deal with such strong emotions, from writing down your feelings and reactions to try and externalise them, to talking to trusted family members or – on the day or days of mediations – asking to take a break if the discussions are becoming overwhelming.

Most importantly remember to approach mediation with a constructive mindset. Saying things designed to ‘destroy’ or assassinate the character of the other party is a sure path to failure of the process.

  1. Make sure you have support

Whether it’s your trusted legal advocate or someone closer such as a long-time friend that you choose as a support person, consider whether you need an extra hand at a family law mediation. If it’s a friend or family member, it’s important that they be someone who won’t express strong opinions or influence your decisions in the matter at hand. They are there as emotional reinforcement. Be aware this person may not be able to be present in the room during the mediation discussion due to the need for confidentiality.

The combination of an experienced family law mediator and parties who are prepared for mediation after consulting legal professionals with experience in this area can ensure a family break up doesn’t necessarily end up in court. If you have any questions about the issues raised above, contact our family lawyers Gold Coast today.

property settlement lawyers Gold Coast

Can I Still Do a Property Settlement in a Short Relationship?

By | Articles, Family Law

It’s an unfortunate fact of life that many relationships don’t last. And when a couple splits up, there are difficult questions around how assets that were part of the marriage or de facto relationship are to be divided.

This situation is often made more difficult when there is a property settlement to be decided after a short marriage – one considered to be five years or less – ends. While there is no set formula used by relevant courts to decide property settlements in short marriages or de facto relationships, different factors are taken into account compared with the circumstances surrounding the break-up of longer term couples.

How do property settlements work?

Where there is property to be divided after the dissolution of a relationship, the settlement is a financial order made under family law by a court which is considered “just and equitable” for both parties.

It should be noted that just and equitable does not automatically mean a 50:50 split. The contributions each party has made to the marriage are considered in deciding the property settlement, including both financial and non-financial, such as caring for children or maintaining the family home. The future needs of each party are also considered, with the court deciding the weight to be attributed to all of these factors.

Property settlements after a short marriage

Courts assess the factors outlined above in a different way when the relationship in question was five years or less.

While non-financial domestic contributions are considered roughly equal in value to financial contributions in longer marriages, this is not necessarily the case in short marriages. The financial contributions of both parties to a short marriage are likely to be given greater weight in any decision on a property settlement, particularly if the couple has no children (meaning neither party had the considerable domestic responsibility of childcare). Alternatively, the court may place an equal value on non-financial and financial contributions if the domestic duties were onerous.

If following separation one of the parties remains the primary carer of children from the marriage, the court may also make additional adjustment on his/her entitlements to the share of the settlement, regardless of the short duration of the marriage.

The initial contributions to the marriage by each party will also be more closely examined, including savings, an inheritance or a property. These are given greater weight in settlement of a short marriage because they likely still exerted a substantial effect on the union before it ended.

The result is that one party’s initial contributions to the marriage may be excluded from the property pool to be divided. If one party’s initial contributions are included in the pool of assets, adjustments may be made in favour of the other party.

If the parties kept their financial affairs largely separate during the short marriage, this will also be taken into account when determining the property settlement.

In conclusion

As mentioned above, each property settlement matter resulting from a marriage break-up will depend on the specific facts and circumstances of the relationship, particularly when the marriage is short.

It is advisable to discuss all the details of your matter with a specialist in family law in order to receive accurate and timely advice on property settlement outcomes in the unfortunate event of a relationship ending.

Contact our Gold Coast Lawyers today for more information.

gold coast lawyers

What You Need to Know About the New Cladding Laws in Queensland

By | Articles, Body Corporate

In 2018 this resulted in the Building and Other Legislation (Cladding) Amendment Regulation 2018 (Qld) coming into effect on 1 October 2018. The legislation and it’s operation is a data collection strategy which will recognise and evaluate the risks involved with cladding products on privately owned buildings in the state of Queensland.

There are a number of obligations under the legislation in which building owners (i.e. Bodies Corporate) need to be aware. These obligations and timeframes are outlined below.

Stages and obligations

Stage 1: Buildings must be registered if they are located in the ‘compliance zone’. A building is considered to be in the compliance zone if:

  • It is any of classes 2 to 9 (this includes residential and commercial buildings, excluding houses); and
  • between the period from 1 January 1994 but prior to 1 October 2018, a building development approval was issued to build the building or alter the cladding;
  • is of Type A or B construction (three storey buildings or taller).

A checklist can be found through the Queensland Building and Construction Commission (QBCC) website and will help to determine whether the building is one of those with non-conforming cladding. A time limit of 29 March 2019 was set for building owners to complete this checklist. If after registration it is identified that the building has a rendered surface finish or combustible cladding or you are unsure of the building materials, you will be directed to complete Stage 2.

Stage 2: Before 29 May 2019, a statement will be required from a building industry professional as to whether the cladding on the building is non-conforming. If you know for a fact that the building has non-conforming cladding, you can simply notify the QBCC directly and by-pass Stage 2.

Stage 3: Before 27 August 2019, buildings which are found to have combustible cladding, building owners must engage a qualified fire engineer to undertake a fire risk assessment to determine the overall fire safety of the building and whether rectification works are needed. The QBCC requires the name of the specific fire engineer by the above date and by 3 May 2021, the QBCC must have received the final report. If you fail to follow these rules, the consequences include a total range of 50 and 165 penalty units, amounting to around $6,527.50 and $21,540.75 in fines.

Obligation to disclose

If a building has non-conforming cladding, it does not necessarily have to be removed if other fire safety mechanisms adequately cover the fire safety requirement. However, the risk that it could still be considered a defect is an issue. A building with non-conforming cladding must be disclosed to interested buyers of the property as a defect they should be aware of. This should be done via providing a copy of the status of compliance with the process outlined above to every owner and tenant of the building, as well as be put on view in a visible area of the building. In the instance that non-conforming cladding is not disclosed, the situation might result in litigation for non-disclosure against all those involved with the selling of the building, including the sellers themselves, the sales agents and the lawyers involved with preparing the contracts for sale.

If an owner of building with non-conforming cladding sells the building prior to completing the above steps, it is required that before the settlement, the current owner provides copies of all relevant documents to the buyer, as well as a notice containing information about the extent to which the seller has complied with the obligations required. The seller must also provide a copy of the notice given to the buyer to the QBCC. From then on, the new owner will take on the responsibility to conform with the remaining regulations.

If you have any questions in relation to the obligations of the Body Caporate or the building owner to comply with this legislation, please do not hesitate to contact our Gold Coast lawyers.  

gold coast solicitors

The Most Commonly Asked Questions Regarding Parenting Rights Post Separation

By | Articles, Family Law

It’s 8:40 AM on the first Monday morning back at work for me after the Christmas New Year break. Whilst I stare at the 2000+ emails requiring my urgent attention, I receive a phone call.

I say to the receptionist ‘can you please take a message and I’ll get back to them later’. She tells me that the caller is in tears and needs to speak with someone urgently.

I take the call. His name is Steve. He told me that he has a young daughter called Amanda and has been married for 10 years. His wife’s name is Tammy. Steve told me that he works away in the mines in Mount Isa on fly in fly out basis. He spends 2 weeks at the mines and then comes back home for a week. He said this was the only job that he could get, and it earns good income for him and his family which is the only reason he took it.

He told me that when arriving back home from his last stint in Mount Isa for the year just prior to Christmas, his wife Tammy, and daughter Amanda, were gone. So was most of the furniture from their house, all Amanda’s and Tammy’s clothes, possessions and beds were gone. Even their king-size matrimonial bed was gone.

He said that he thought he and Tammy had been growing apart and she was becoming more distant from him, however he had no idea at all that this was going to happen.

He told me he spent Christmas on his own in an empty house sleeping on a blow-up bed on the floor. He has been self-medicating with alcohol and he is so depressed that he wants to end his life and for it to be all over. He said the only thing he is living for is to be able to spend time with Amanda again.

I told Steve that ringing me this morning is the best thing that he could have possibly done. I told him that I have been practising family law for over 30 years, that there is a light at the end of the tunnel, and by taking it step-by-step he will get there. I told him that what he’s feeling now is a completely normal reaction but will be nothing but a distant memory in the future.

I arranged an appointment for Steve to come and see me that afternoon. I referred him to a good counsellor to deal with his depression issues and explained to him that in a marriage of that length with a 5-year-old daughter are you not only grow up together, you grow together and become one. You’re like a nice big ripe watermelon until someone pulls out a cane knife and slices you write down the middle. Now one half of you is gone and where it was is very raw. You need time to heal and grow a scab over that cut which takes time.

Steve said to me he does not know where Amanda or his wife would have gone to, or why she left without giving him notice or reason.

Steve was concerned because he was a fly in fly out worker and wanted to know how we can find Amanda and Tammy, what his rights are as a parent post separation with respect to his children. He said, “now that she has done this and has taken Amanda away from me, there is no prospect of reconciliation between us whatsoever”.

He then turned to the family law questions that I knew were coming. I knew they were coming because these are the most common family law questions that I am asked following the separation of two parents with young children, particularly where one parent has taken the children away from the other and/or will not let the children spend time with the other parent.

Question 1: Steve asked, “what rights do I have with respect to my daughter Amanda?”

I told Steve that under the guiding principles of the Family Law Act 1975 (“the Act”), which is the main piece of legislation dealing with family law in Australia, there is a presumption that following separation both parents will continue to have equal shared parental responsibility for any children of the relationship.

I explained to him what equal shared parental responsibility means. It means that both parents have an equal parental right or ability to play a primary role in decision-making for any major issues for the children, such as schooling and medical issues, where the children will live, what the children’s names will be, and overseas travel until the children turn 18.

I told Steve that both he and his Tammy will continue to have joint parental responsibility for his daughter Amanda unless that is altered by the court which in his circumstances is not likely at this time.

Question 2: Steve then said, “if I have equal shared parental responsibility, does that also mean I am entitled to equal time with Amanda?”

The Act says if the parents have equal parental responsibility, the child’s parents are to consider firstly whether an order that the child spend equal time with the parents. Equal parental responsibility and equal time with both parents are very different things.

I explained to Steve that with respect to equal time, that is 50-50 or one week on one week off type arrangements, the court has recognised that such an arrangement can only work in limited circumstances.

  • The parents should be living close to each other and to the child’s school;
  • there must be no ongoing domestic violence issues between the parents and the child (particularly at changeovers) must not be subject to domestic violence;
  • there must be no risks of child abuse, alcohol or illicit substance abuse in the presence of the child,
  • there must be no emotional or other physical abuse to the child;
  • the parents must be able to communicate with each other regarding the child’s schooling and parenting without arguing after every second sentence;
  • it must be otherwise “reasonably practicable” for equal time to work;
  • most importantly (and this is a paramount consideration) the proposed equal care arrangement must be in the best interests of the child; and
  • (also, a paramount consideration) the child must be protected from physical or psychological harm from being subjected to, or exposed to abuse, neglect or family violence.

My advice to Steve was that in his case, if he continues to be a FIFO worker, equal time will simply not be practicable because of his work commitments. He then said to me ‘I would be prepared to leave that job move close to where Amanda is, if we can find her. Even if it’s in Timbuktu. She means that much to me.”

I said in that case, he will need to establish good communication with Tammy about parenting decisions, he should be close to Amanda’s school and Tammy’s new residence for practical reasons, and most importantly Amanda must not be subjected to or exposed to any domestic violence.

The domestic violence Steve told me about that did take place, particularly when his wife had been drinking had been exposed to Amanda. I told him that this must never happen again. There must also be good communication at changeover and no arguing or pushing each other swearing at each other or any emotional abuse.

It may turn out that his wife continues to drink and become violent, Amanda are may be safer living with Steve. I told him that the court would appoint a family report writer to prepare a family report to make recommendations to the judge as to what is in his daughter’s best interests.

I also told Steve that if Tammy and Amanda have moved out of the area to make it extremely difficult for Steve to spend any time with Amanda, we can ask the court for an order that they be relocated back to this area to maintain the status quo until the court can determine what is in the best interests of Amanda.

Question 3: What is substantial and significant time?

If equal time is not possible, then the court must consider the importance of the child having a meaningful relationship with both of the child’s parents and giving substantial and significant time to the parent with whom the child does not live. The old regime where the father would only get to spend time with his child every second weekend and half the school holidays is not considered to be substantial and significant time.

I explained to Steve that there is also an obligation on both parents to facilitate (make possible) and encourage the children to spend meaningful and significant time with the other parent. I told Steve that if it is at all possible, equal time should be considered.

Additionally, and particularly relevant in Steve’s case, is the fact that because Steve is a fly in fly out worker, a 50-50 equal shared care arrangement would not be possible because of his work commitments. Practicality needs to be considered as well.

I asked Steve if there had been any issues of domestic violence, alcohol abuse or illicit substance abuse by Tammy against him. He told me that Tammy was the heavy drinker, and after a few drinks she would become violent and occasionally would strike out and on one occasion she kicked him in the head. Steve denied that he provoked her to do this. He said she was psychopathic and out-of-control when she had drunk too much. Steve said that he is a mine worker and he drinks heavily himself, however he does not become violent like Tammy does. I asked him why he thought Tammy left, and he said that he suspects she is having an affair because he is hardly ever at home.

I told Steve that while many parents might think that think equal time is the best arrangement post separation, most of the time that does not turn out to be the case.

Equal parenting or week about arrangements can sometimes lead to extra pressure on the children, particularly once you factor in the children’s schooling and extra-curricular commitments, age, and any health issues.

Parents also need to factor in their own lifestyle, financial means and commitments which may impact on their ability to spend meaningful time with the child while in their care.

Week about arrangements, of their nature, may place too much of a burden on the child’s psychological state and ability to be apart from one parent more than the other. This is particularly the case for younger children who may still be dependent on their primary carer. Amanda falls just within this category, and I told Steve that if Amanda is safe living with her mother and she is not exposed to or neglected by excessive alcohol use and associated violence, then she will most likely remain living with mum. However, if Amanda is not safe in that environment, it may be turned out to be in Amanda’s best interests for her to live with Steve. I told Steve depending on how things go, in a year or so they made look at trying and equal shared care arrangement if the circumstances allow.

Both parents must also have the ability and capacity to properly care for the child and meet the child’s before equal time is simply assumed.

Question 4: how do I find Amanda and Tammy?

I told Steve that in these circumstances, where Tammy has left with the child she must perceive some conflict, threat or an emotional need to be away from him. Tammy will be likely even if we find her, to resist or restrict Amanda spending time with him.

Steve said he still has an email address for Tammy, although he doesn’t know if she still uses it. I said the best thing we should do immediately is to write to her in a civil and polite manner and ask her why she has left, where she has gone to, and what proposals she has for Steve to spend time with Tammy.

If there is no response to that letter (which will give a very short timeframe for a response), then we will have to issue legal proceedings for a location order and a recovery order (to force Tammy to relocate back to the area to maintain the status quo) and some interim parenting orders. We will also ask for the court to appoint a family consultant to prepare a report once Tammy and Amanda have been found.

Question 5: if we find Amanda and Tammy before issuing Court proceedings, what should we do next?

I told Steve that if we happen to find Tammy and Amanda’s whereabouts from communicating to her through her email or by other means, the first sensible step is to try to organise a mediation with Tammy. Mediation (referred to in the Act as “family dispute resolution conference”) this can be done through either government mediation services or private mediators. A mediation is required before court proceedings are issued, unless there are circumstances of extreme urgency or there is a risk of harm to the child being exposed to family violence or child abuse.

The benefit of mediation is that it provides both parties with the ability to discuss their concerns about parenting matters with an independent mediator, which may provide them with a better perspective on what is in the best interests of Amanda.

Amanda will not be included in the mediation, and I told Steve that when he starts communicating with Tammy it is very important for him and Tammy to not put Amanda in the middle of any parenting discussions where arrangements for Amanda are being discussed. This will put uncalled for emotional pressure on Amanda.

Question 6: Steve then asked me “what if mediation fails and I still cannot see Amanda?

I told Steve that if he fails to reach an agreement at mediation, the mediator will give him what’s called a section 60 I certificate authorising him to commence legal proceedings. I did say that in the circumstances of his case where Tammy took Amanda away without any notice or informed consent, and due to the domestic violence and alcohol issues, he probably falls within an exception to having to file a section 60 I certificate to get court proceedings underway. However, if there is a possibility that mediation might have worked, I always recommend trying that first.

Question 7: What are the benefits of issuing Court proceedings? Will I get Orders in place quickly?

Issuing Court proceedings in the family law courts can be an expensive and drawn out process, both financially and emotionally. Generally, at the 1st return date, which in urgent circumstances may be as quick as in one week, but in normal circumstances is probably 2 to 3 months away we can ask for some interim parenting orders and for a family report to be prepared. The matter is then generally adjourned for 6 to 8 months to enable the family report to be prepared. The family report writer will make recommendations to the judges to what is in Amanda’s best interests. 9 times out of 10 the judge will make orders along those lines. However, if he or Tammy disputes the recommendations the matter will be set down for trial which could be another 6 to 12 months away, or longer if the proceedings are in the family Court of Australia.

I have written another article which is on our website called “What if mediation fails”. In that article I explained the court process in more detail. I suggested that Steve read that article and all the other articles of our website dealing with the family courts and parenting matters, so he can get a good grasp of how everything works.

Question 8: How can I safely communicate with Amanda’s mother about Amanda?

Steve asked me what will be the best to communicate with Tammy about Amanda in circumstances where there will most likely be hostility. Phone calls can readily get out of control, and text messages can be misinterpreted.

I suggested to Steve that he and Tammy communicate by email only in what is known as the FYO RR method as follows:

I said to Steve “, so you wish to inform Tammy that Amanda now knows how to do backstroke, that her homework for the week has been finished, or that she has found a good friend next door to your house. But you also need ask Amanda if she knows what happened at school on Thursday because when you picked Amanda up from school she had a scratch on her face. You also want to know what her test results were. You also wish to enquire about the roommate she has, and if Amanda is safe around him.”

I said “using the FYO RR method you will communicate this by email in short bullet points under 2 headings, the 1st being FYO (for your information) and the second heading will be RR (response required). You will give her a week to respond. If Tammy is caught up with something and cannot respond within that week, Tammy will email you during that week to tell you that she needs an extension of time and will give you a time by which she can reasonably respond. If that time is reasonable you will allow it.

So, your email will look as follows:

Dear Tammy

RE AMANDA

FYO

  • Amanda has learnt how to do backstroke and did it well today. She is excited about that;
  • Amanda’s homework for the week has been completed;
  • Amanda has made friends with the girl next door. She is one year older than Amanda and her name is Vicky. They enjoy spending time together.

RR

  • do you know what happened at school on Thursday because when I picked Amanda up she had a scratch on her face. It’s not too deep but it looks like a nail scratch.
  • Can you please let me know the results of Amanda’s blood tests? I would appreciate it if you could send me a copy and let me know what the doctor said.
  • Amanda has informed me that you now have another person living in your house. Can you please tell me a bit about him to help satisfy me that Amanda, being only a young girl, is safe around him?

 You have one week to reply to the RR questions, which means that the deadline is 5 PM on Monday, 12 September 2019.”

Steve said he thought that was a great idea, and he would try down the track.

What was the result?

I took down all of Steve’s details and then prepared a letter to Tammy setting out a brief history of the relationship, the circumstances that Steve now finds himself in, and his proposals with respect to be able to spend time with Amanda. I won’t tell you what happened from here. I won’t tell you if we found Tammy and Amanda through that letter or if Steve had to go through the lengthy process of court proceedings. I also won’t tell you why Tammy left with Amanda, but I will tell you that she returned to rent a house near his. I also won’t tell you if she was forced to return by order of the court or if she did it voluntarily. No

I will however tell you that Steve now has a fantastic relationship with Amanda, and they get to spend a lot of fun time together. Steve takes Amanda to her swimming lessons, they go Kayaking together he assists her with her homework during the time that he has with her.

Steve and Tammy communicate very effectively about Amanda using the FYO RR method and Amanda is doing very well at school as a result.

Please contact our family lawyers Gold Coast at OMB Solicitors if you find yourself in circumstances like any of the above so that we can assist you to find yourself enjoying a happy relationship and spending meaningful time with your child, like Steve and Amanda now enjoy.

Please note that the names and circumstances in this article are completely fictitious, and every individual’s circumstances will differ. However, I have over my career found myself acting for people in very similar circumstances to Steve and in all cases a good outcome was achieved in the end for the child and her father.

Marriage Divorce Separation and Will

One of the Most Important Things You Need to Do Following Marriage or Divorce / Separation

By | Articles, Family Law

The Effect of Marriage on your Will

Marriage is a time of joy and commitment. However, by saying the words “I do”, you are also inadvertently saying the words “I do hereby revoke my Will“. For those who are preparing vows to be together until “death do us part”, you do need to think about what happen when death does, in fact, part you.

In Queensland, section 14 of the Succession Act 1981 (Qld) provides that Marriage automatically revokes a Will, unless the Will was expressly made in contemplation of the marriage.

If a Will is made in contemplation of marriage, the contemplation must clearly state the testator (Will maker) expected to marry the particular person and intended that the Will should not be revoked.

The effect of Divorce (or separation from a Civil Partnership / de facto relationship) on your Will

In Queensland section 15, 15A & 15B of the Succession Act 1981 (Qld) sets out the effect that divorce (or separation from a Civil Partnership / de facto relationship) has on a Will.

Unless a contrary intention is shown in the Will, a testator’s divorce (or separation from a Civil Partnership / de facto relationship) revokes the following:-

  1. Any beneficial interest the testator’s former spouse/civil partner/de facto partner had under the Will;
  2. Any appointment the former spouse/civil partner/de facto partner has as an executor, trustee, advisory trustee or guardian under the Will; and
  3. Any grant, made by the will, of a power of appointment exercisable by or in favour of the Will maker’s former spouse/civil partner/de facto partner.

The Will of the testator then takes effect as if the former spouse/civil partner/de facto partner had died before the testator.

However, in Queensland, a testator’s divorce (or separation from a Civil Partnership / de facto relationship) does not revoke—

  1. the appointment of the testator’s former spouse/civil partner/de facto partner as trustee of property left by the Will on trust for beneficiaries that include the former spouse’s/civil partner’s/de facto partner’s children; or
  2. the grant of a power of appointment exercisable by the testator’s former spouse/civil partner/de facto partner only in favour of children of whom both the testator and the former spouse/civil partner/de facto partner are parents.

Conclusion

Marriage and divorce/separation can have unknown and unintended consequences on your Will. The next document that you should sign after your Marriage Certificate, should be a new Will.

Similarly, if your marriage/relationship doesn’t turn out to be “happily ever after”, you need to give consideration to updating your Will.

Whether you are getting married or divorcing/separating, we recommend you contact our experienced Gold Coast lawyers team to discuss the legal implications and effects on your Will.

buying property tips for gold coast solicitors

5 Property Buying Tips You Need to Know

By | Articles, Property Law

On a list of stressful life experiences, buying a property consistently ranks near the top. And with good reason. It is a huge financial commitment.

Luckily, there are a few simple ways to make the process a little bit easier. Here are five property buying tips that can help reduce the stress of the experience.

Get proper advice from qualified professionals

Perhaps the single most important step you can take to ensure a trouble-free property buying process is to enlist the help of qualified professionals. A banker, accountant or lender can determine how much you can afford to spend. A real estate agent can help you find a property in that price range. And a lawyer can help you avoid making costly mistakes by identifying issues including, but not limited to:

  • Improper building additions or renovations that may have to be removed or changed at your expense.
  • Problems with current title deeds and legal ownership of the property that may complicate the deal or cause it to fall through.
  • Legal matters that can have adverse affects on property value and development.

A lawyer well versed in commercial and residential real estate can also help you avoid potential pitfalls by reviewing any and all relevant documents before you sign them.

Don’t let your emotions govern your decisions

When buying a property, falling in love at first sight is not always a good thing. If anything, it can sometimes be counterproductive. This is because the actual purchase is strictly a business and financial transaction, and should be handled as such.

While it is important to keep this in mind throughout the process, it is especially important when you inspect the property. Remember, sellers will sometimes use ‘smoke and mirrors’ such as cosmetic upgrades to conceal serious structural deficiencies. Even something as simple as a fresh coat of paint can hide significant damage. Sometimes, the current owner is simply unaware of significant issues with the house. In either case, you should be careful to look beyond the aesthetics.

Once you’ve done your own inspection, hire a professional inspector, who will easily identify both minor and significant issues. If need be, you can get an architecture report, which will also identify any outstanding issues and save you money in the long run.

Be sure to read the fine print

By their nature, real estate contracts are complex legal and financial documents. Even so, it is important that you read it thoroughly and ask your lawyer or other relevant professional about any aspects of the contract you don’t understand before you sign it.

By taking this simple step, you can easily identify potential issues that would otherwise be expensive or take a lot of time to address in the long run.

Identify land use and related issues early on

There’s nothing more aggravating than buying a property based on the assumption that you can make certain changes or use it in a certain way – only to find out afterwards that you can’t. That’s why it’s important to research (or have your lawyer research) any rules and regulations that dictate how the property can be used or changed. Examples include restrictive covenants or planning overlays.

Don’t assume the property valuation is accurate

Basically, there are three key issues at the crux of every residential and commercial real estate transaction:

  • the asking price;
  • what the buyer expects or is willing to pay;
  • what constitutes a fair/reasonable/acceptable offer.

Accurate valuation of the property is important because it affects all three of these issues. As the winning bidder at auction, or as a buyer who signed an unconditional contract, an accurate valuation ensures that you paid a fair price. On the other hand, an inaccurate valuation may cause you to pay more than what the property is really worth.  And because nobody wants to do that, it’s advisable to use an accredited professional to ascertain an accurate valuation.

In summary, purchasing a property can be an overwhelming experience, especially if you are doing it for the first time. But it doesn’t have to be. You can make the process easier by consulting qualified professionals, approaching it rationally rather than emotionally, reading contracts carefully and asking plenty of questions before signing them. Identifying land use issues early on and enlisting the services of an accredited valuer are also important steps you can take to achieve peace of mind.

To learn more about how we can help you purchase a property, contact our Gold Coast lawyers today.

will of a sole director

The Importance of Sole Company Directors having a Will

By | Articles, Wills and Estates

As adults, most of us are probably aware that dying intestate (without a valid will) can complicate matters for our families and loved ones. But did you know that dying without a will can also complicate things when it comes to your business matters? It’s true, especially if you are the sole director and shareholder of a company which operates your business.

Immediate concerns

Generally speaking the death of a sole director and shareholder who has not left a valid will has a significant impact on the company because:

  • it creates an immediate void in leadership;
  • there are immediate financial and logistical ramifications;
  • who takes over the directorship and how long will that that.
A closer look

Directors are in charge of managing a company’s business activities. Specifically they are tasked with:

  • acting in good faith and in the best interests of the company;
  • avoiding conflicts between the company’s interests and their own personal interests;
  • preventing the company from conducting business during insolvency;
  • taking certain steps to facilitate the process when the company is being wound up.

Legally, a proprietary company must have at least one director and he or she must live in Australia. Any company with publicly-sourced funded shareholders must have at least two directors, most of whom must live here. Any public company must have at least three directors (exclusive of alternate directors), and at least two of them must live here.

In most cases, if there are several directors and one passes away, there is minimal disruption. This is because the surviving director/s can simply step in to run the company on a daily basis. Or, in some cases, they will select one of their peers to do so on an interim basis, usually until the shareholders/members choose a permanent successor.

In companies where there are several shareholders, the death of one also tends to cause minimal disruption. This is because the directors can usually continue the daily management of the business until the shares are distributed to the beneficiaries of the will.

By leaving a will, a sole director can also ensure that there is a smooth transition in the company leadership and operations following his or her death. The reason is that section 201F of the Corporations Act 2001 permits the executor to appoint the successor. Put simply, the executor is authorised to address this matter quickly, thereby avoiding any prolonged disruption. Under these circumstances a replacement director can usually be appoint within 24-48 hours.

Whereas, if the sole director has not left a will, a relative must make an application to the Supreme Court to apply for a Grant of Letters of Administration and this usually take months thereby leaving the business in limbo. What is more, the Court decides who is granted Letters of Administration not the deceased director. Imagine the ramifications for the company if the bitter and estranged spouse was appointed, which is highly possible given their right of priority to apply, unless there is a divorce.

The effect on operations

During this time, operations may cease entirely. This usually happens when the lack of a duly authorised manager results in the inability to continue daily operations, including routine business and financial transactions. When this occurs for a protracted period, the results can be devastating. Among other things, employees who can no longer be paid will leave, and the company’s reputation will suffer.

Even if someone wants to buy the company, the lack of a recognised shareholder may hinder their ability to do so – or at least their ability to do so quickly. Without someone to authorise the transfer of shares, any sale would be put on hold pending the appointment of the deceased’s legal personal representative and the settlement of the estate.

Complications may also arise if the final decision to wind up the company is made so all beneficiaries can be paid out. Specifically, a lengthy delay may have an adverse effect on the company’s value compared to what it would have been if operations remained unhindered.

The significance of a valid will

Of course, a will isn’t valid unless it is:

  • signed by the person who made it;
  • appoints an executor (up to 4 persons)
  • witnessed in front of at least two other adults who are not beneficiaries;
  • made when the deceased was of sound mind, memory and understanding.
To learn more about making a valid will and the importance of having one if you are the sole director or shareholder of a company, contact the Estate Planning Partner, Richard Dawson, or our Gold Coast Lawyers team on 07-5555 0000 or estates@omb.com.au
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