We embarked the 2009 year with the economy being gripped by the GFC in most sectors. On a pleasing note in the later half of the year the economy was able to recover showing signs of a more optimistic outlook.
While some economists (IMF) have predicted that normal growth will not return for years into the future, Australia has come through the worst of the global recession in a stronger position than other advanced economies. The Australian economy appears capable of bucking the trend mainly on the back of our resources and the strength of our banking and financial sectors.
Most of our clients used the last part of the 2009 calendar year to focus on reducing debt, implementing Quality Management Strategies including contracts administration as well as looking at new areas of diversification and growth. This included joint ventures, acquisition of under valued assets and capital raisings.
Remarkably, most of our client’s faired well during the 2009 economic collapse and those that struggled were able to implement strategies and restructure that provided them with a soft landing.
Consolidated Lawyers had a busy calendar year including its participation in charity fundraiser’s , raising $5,000.00 for Westmead Children’s Hospital(city2surf), seminar’s focused on building and construction and investing in Australia, acting as legal counsel for the AIBC and the renovation and growth of its’ Sydney Office creating a state of the art premises.
I recently in October attended a large business to business corporate conference organised by Invest In Australia, held in New Delhi, India. The key note speaker at the conference was Peter Varghese, Australian High Commissioner to India. Consolidated Lawyers was proud to be a key partner at the conference which had over 250 attendees.
I was also invited by the Commissioner of FIEO to provide a presentation on the key opportunities in Australia alongside the Commissioner of New Zealand and the Trade Commission.
The importance of the bilateral relationship between business leaders of both countries was emphasized including the support of the federal government in strengthening the relationship between the two countries.
This issue of the newsletter will focus on the following:
>The new Succession Amendment (Intestacy) Act 2009;
>Contractor Licensing in the Construction Industry;
>There may be some optimism for considering bankruptcy;
>Legislative updates – Motor Accidents Compensation Act 1999;
>A Christmas reminder…..
I personally had a very satisfying year and enjoyed supporting and witnessing some of the great achievements of both our client’s and staff. I extend my warmest wishes to you all -Merry Christmas, Happy Holidays and a prosperous New year.
1.Congratulations to Theresa Assaker who was appointed a Director of Consolidated Lawyers Pty Ltd on 1 July 2009.
2.Welcome to Mark Yum and Paul Kramer, Paralegals who have recently joined our Commercial and Corporate Division in our Sydney office.
3. Our firm’s Managing Director, Bechara Shamieh recently traveled to India for the 2009 India Australia Investment Forum which was a great success.
4. 2009 CL City 2 Surf Fundraiser – Another successful Year:
As mentioned in the 2nd Edition of the CL E–Newsletter, Consolidated Lawyers has yet again successfully participated in the City 2 Surf Charity Challenge, raising well needed funds for our chosen Charity The Children’s Hospital at Westmead. We would like to take this opportunity to thank those individuals who were able to get behind the CL Team in their run for Charity and make a donation. Thank you also to the runners who participated in the event.
As part of our ongoing community involvement Consolidated looks forward to working with our clients and readers in raising further funds for Charity in 2010! Stay tuned for more details.
5. Bechara Shamieh has recently been admitted as a Public Notary.
What ever one’s position on the mandatory licensing for residential construction work scheme in New South Wales is a permanent fixture and has a blend of positives and negatives as does any human designed organisational system.
Unlike a road drivers licence where driving and not having any licence or only have a disqualified licence is an offence in itself, carrying out residential construction works has the incidence or impact of the penalty levied by the other party to the contract not levied by a fine payable to the government. This can in many instances be highly unfair as the other party to the construction contra t may not be unwitting, naïve, inexperienced home owner. The actual case may be that the other party is quite the opposite to that who has been just described – they may in fact be a commercial company who specializes in, or has a vast array of residential projects. The harsh penalty of non-payment which protects defenceless home owners from unscrupulous unlicensed contractors is also able to be relied upon by construction companies who know they are contracting with an unlicensed contractor and then refuse payment after the work has been done for reason of the work was done for them by and at the cost of the contractor but done without a licence.
We find that several subcontractor clients have been of the view that they can rely on the head contractor’s building licence and therefore carry out residential construction work with out the necessary licences. This is not the case.
The penalty of under section 10 of the Home Building Act 1989 (NSW) for not having a licence is that the contract is unenforceable. In relation to payment, this means that contractual rights given to the party claiming payment are not able to be relied upon, but the common law rights are able to be relied upon. In relation to common law rights, the most relevant are quantum meruit (as much as he has earned) and quantum valebat as much as he has been entitled to value). Broadly speaking there is two reasons why these common law rights should not be sought to be relied upon in the first instance.
1.All profit margins as agreed in the contract will not be enforceable. On a $1,000.000.00 project at 10%, this means that the non payment of the annual licence fee has really costed $100,000.00 in lost income.
2.The court will seek expert evidence on what is a reasonable cost, this will cost the expert witness fees ($2,000.00 - $10.000.00) and this will require coordination by your lawyer and preparation time to review the additional material by your barrister and increase the length and cost of the trial.
In relation to licences we recommend that the following checklist be adopted prior to signing any construction contract.
1.Is there any residential construction works?
2.Who is the contracting party for our side?
3.Do we hold the necessary licences for the residential construction works?
4.Is the licence held in the same name of the name of the party entering into the construction contract?
For more information about contractor licences contact David Foletta on (02) 9283 2566.
The new Succession Amendment (Intestacy) Act 2009 assented to on 9 June 2009 makes some significant changes to the current law in relation to inheritance of estates of people who die without leaving a will or leaving a will which does not adequately divest all or some of his/her property. A person who dies in these circumstances is known to die “intestate”.
Some of significant categories of changes that the new Act introduces are the following:
(1)Distribution of the estate between a spouse or partner and any children of an intestate
Currently, where an intestate dies leaving children and a spouse or partner, the spouse or partner is entitled to a statutory legacy, the deceased's personal effects, and half the residue of the estate. The intestate's child or children are entitled to the remainder unless it is required to secure an interest in the shared home for the spouse or partner.
The new Act provides that where an intestate dies leaving a spouse or partner and children of that relationship, the entire estate goes to the spouse or partner.
The Act provides for different arrangements where the intestate dies leaving a spouse or partner and children from another relationship. This recognises the fact that such children may not stand to inherit from the intestate's spouse or partner. In these circumstances, the estate is shared between the spouse or partner and the intestate's children. The spouse or partner will receive a legacy, the intestate's personal effects and half of the residue of the estate. All of the intestate's children share in what remains. This can also have the effect of denying the children of the relationship if any an inheritance in the event that their mother/ father who was the spouse of the intestate inherits along with the children from the previous relationship.
(2)Rights of the spouse where the intestate dies leaving children from another relationship
Where the intestate dies leaving a spouse or partner and children of another relationship, the surviving spouse will not, as is currently the case, be automatically entitled to the house at the expense of the intestate's children. Instead, the spouse or partner will have a special right to elect to take any part of the estate in satisfaction of their entitlement. If the selected part of the estate is worth more than the entitlement, the surviving spouse or partner will be required to make up the difference from their own resources. This will protect the interests of the intestate's children in such a situation.
(3)Statutory Legacy
The new Act increases the statutory legacy entitlement for a spouse or partner (where they are not entitled to the whole estate) from $200,000 to $350,000. There is an automatic indexing mechanism in the Act for increasing the legacy in accordance with changes in CPI from 2006 when the Committee settled on the figure of $350,000—and the date of
death of the intestate.
(4)Categories of Provision
The intestacy rules provide for an order of distribution among the family of a person who dies intestate. Currently, in New South Wales, the basic order of distribution is: first, spouse and children, second, parents, third, siblings, fourth, grandparents, and fifth, aunts and uncles of the intestate. If these categories are exhausted, the estate is bona vacentia and is paid to the Crown. The Act extends the categories to take in the cousins of the intestate. This is a compromise position across all Australian jurisdictions, and will mean a broadening of entitlements in New South Wales.
So while the new Act aims to address the changing trends and attitudes of society, intestacy remains the default method of distributing someone’s estate. Who inherits you will depend entirely on the circumstances which are current as of the date of death and not your individual intentions. To give effect to your testamentary intention it is vital to have a valid will in place.
The NSW Government has introduced a housing stimulus for people outside the first home buyer market, which cuts stamp duty payable by 50 per cent for people buying newly constructed properties with a value not exceeding $600,000.
So if you are buying a new home, you may be eligible for a 50% reduction in the duty payable on the purchase, and there is no limit on the number of new homes a person may purchase under HCAP.
However, the eligibility criteria is quite complex and we recommend you seek legal advice prior to purchasing a property especially to ascertain whether or not you’re purchasing a “new home”.
Sales or transfers of a new home will be eligible for consideration under HCAP provided that they are entered into on or after 1 July 2009 and before 1 January 2010.Other deadlines become relevant if you are purchasing a property Off The Plan.
Don’t delay, if you are in the market for a new home call one of our Property Consultants today. They will be ready to assist you with any enquires you may have.
Having difficulties paying your debts? Fearful of being made bankrupt by a creditor or feel like you have no option but to place yourself into voluntary bankruptcy?
Given today’s economic climate and the number of bankruptcies, whether they be voluntary or involuntary, the Government has proposed reforms to the current Australian Bankruptcy Laws which apply throughout the nation. The Attorney-General has stated that the proposed amendments will seek to give ‘those in financial distress, a more realistic opportunity to consider their options, reorganise their affairs and where possible, avoid bankruptcy’.
The Government acknowledges that the majority of bankruptcies are not individuals deliberately attempting to avoid paying their debts but rather, a result of a person’s inability to pay their debts due to their limited resources, that is, their income and/or assets.
The proposed amendments include but are not limited to:
1.increasing the minimum debt for which a creditor can petition for bankruptcy from $2,000.00 to $10,000.00;
2.increasing the stay period from when a declaration of intent to file a debtor’s petition is filed to when a creditor may commence action to recover debts from 7 to 28 days;
3.increasing the income, asset and debt thresholds to allow more people in financial distress to enter into voluntary debt agreements; and
4.strengthening the penalties for some offences and ensure these are in line with the penalties for other similar offences.
The proposed reforms will allow individuals to obtain advice and information about their options and possible alternative solutions, hopefully, preventing that individual from entering bankruptcy.
We note the amendments as outlined above are in draft only and have not been passed by the Government. We confirm the draft bill was open for public comment until 14 September 2009 and wait to hear further updates from the Government and/or Attorney-General for Australia.
The CTP scheme has always provided for an arrangement with NSW Health under which the scheme meets the public hospital and ambulance costs of persons injured in motor vehicle accidents who are CTP compensable.
The amendments introduced by the amendment Act extend the bulk billing arrangement to all persons injured in a motor vehicle accident regardless of fault and covers treatment provided on and after 1 July 2009.
Extension of the Early Notification Scheme
Currently, the lodgement of an Accident Notification Form entitles an injured person (who was not at-fault in causing the accident) to recover up to $5,000 in treatment expenses and loss of income in the first six months after the accident.
From 1 April 2010 the ANF benefit will be available to all persons injured in a motor vehicle accident regardless of fault. There is however no entitlement to the ANF benefit if the injury was caused through criminal conduct.
Indexation of Damages
Section 146 of the Motor Accidents Compensation Act 1999 requires the Minister to declare the maximum amounts for the following on or before I October in each year:
Øfor past or future economic loss in relation to persons who have been injured or killed as a consequence of a motor accident; and
Øfor non-economic loss to persons who have been injured as a consequence of a motor accident.
The amounts are indexed by reference to movements in average weekly earnings.
The amount of maximum loss of earning etc (net weekly earnings) as per Section 125 of the Act from 1 October 2009 increases from $3,584 to $3,749.
The maximum amount of damages for non-economic loss as per Section 134 of the Act from 1 October 2009 increases from $390,000 to $408,000.
The full details of these changes are contained in the Motor Accidents Compensation (Determination of Loss) Order 2009 which was gazetted on 25 September 2009 in the NSW Government Gazette No. 136 at page 5205.
Christmas and the New Year period is a time to spend with family and friends – not a time to get caught out. Just a reminder that double demerits will apply during the holiday period for seat belt, motorcycle helmets and speed related offences which applies to full-licensed and provisional drivers.
During the holiday season, it is a time to kick back and relax and for some, that may include drinking alcohol beverages. Remember, if you are going to drink then don’t drive. Even if you don’t feel like you have been affected by the alcohol and feel like you are capable of driving in a safe manner – it is not safe for either yourself or the public to drive. Sobering up takes a long time, even if you have only had one drink – no amount of water, coffee, food, activity or sleep will speed up the process so always have a designated driver or make alternate arrangements.
A number of you will be going on a family holiday or away with some friends over the holiday break so when driving for long distances, be smart – Stop Revive Survive. Take turns at driving and stop regularly at driver reviver sites. Again, no amount of coffee or energy drinks will maintain your concentration and keep you awake – you will only be endangering yourself, your family, your friends and the public.
As a Member of the Executive Committee, Treasurer and Chair of the CEO and Directors’ Forum, it is with pleasure that I cordially invite you to be part of the AIBC’s signature event of the year – the 2009 Australia – India Address.
This event promises to be a showcase of the strategic, economic and cultural synergies between two great nations. Australia is focused on taking its relationship with India to the front rank of its bilateral partnerships.
This is a timely and unique opportunity to hear firsthand, the insightful views of the Prime Minister of Australia, the Honourable Kevin Rudd, as well as the Prime Minster of India, the Honourable Dr. Manmohan Singh (via a pre-recorded video message).
In addition, there are a number of other VIP guests attending, which include but are not limited to the following persons:
The High Commissioner of India - HE Ms Sujatha Singh;
The Incoming Australian High Commissioner to India - Mr Peter Varghese;
The Consul General of India - Mr Amit Dasgupta;
Mr Nathan Bracken - Australian One Day Cricketer of the Year;
Honourable Barry O'Farrell - Leader of the NSW Opposition;
Ms Tania Zaita – Bollywood actress and Australian T.V. presenter;
Mr Anthony Byrne - Parliamentary Secretary to the Australian PM; and
A panel of current and past cricketing greats.
The details of this milestone event are as follows:
Venue: The Hilton Sydney
Address:488 George Street, Sydney
Date:Monday, 10 August 2009
Time:7:00pm for 7:30pm
Dress: Lounge Suit
There will be an auction on the night which will provide you with an opportunity to secure some great prizes. As per the AIBC’s flagship events of previous years, this event will be a sell out. Seats are limited and are selling fast; I recommend that you book early to confirm your place.
You may purchase tickets on a corporate level or on an individual basis as follows:
Corporate Table Sponsor (AIBC Non-Members) - $2,150.00 plus GST
Individual Tickets (AIBC Non-Members) - $180.00 plus GST.
Corporate Table Sponsors will have corporate logo signage on table and corporate sponsor mention on official menu.
Property Law – NSW First Home Owners’ Grant Extension
On 12 May 2009, the Australian Government announced changes to the Commonwealth’s First Home Owner Boost in the Federal Budget which we summarise as follows:
1. For contracts made between 14 October 2008 to 30 September 2009 (inclusive):
·first home buyers who purchase established homes will receive a boost of $7,000 that will double the grant to $14,000;
·first home buyers who build a new home or purchase a newly constructed home will receive an extra $14,000 to take their grant to $21,000.
2. For contracts made between 1 October 2009 to 31 December 2009 (inclusive):
·first home buyers who purchase established homes will receive a boost of $3,500 that will take their grant to $10,500;
·first home buyers who build a new home or purchase a newly constructed home will receive an extra $7,000 to take their grant to $14,000.
Please contact our Property Law expert, Mrs Margaret Chua on (02) 9762 0400 for further information.
Criminal Law - Change to Demerit Point Scheme
A new demerit point scheme for speeding offences was introduced on and effective from 1 July 2009. The demerit point scheme is now as follows:
Full Licence
ExcessSpeedRange No. of Points Amount of Fine Suspension Period
1 - 10 km/ph 1 $184.00 N/A
11 - 20 km/ph 3 $197.00 N/A
21 - 30 km/ph 4 $338.00 N/A
31- 45 km/ph 5 $647.00 3 months (min)
More than 45 km/ph 6 $1,744.00 6 months (min)
P1 Licence
ExcessSpeedRange No. of Points Amount of Fine Suspension Period
1 - 10 km/ph 4 $184.00 3 months
11 - 20 km/ph 4 $197.00 3 months
21 - 30 km/ph 4 $338.00 3 months
31- 45 km/ph 5 $647.00 6 months
More than 45 km/ph 6 $1,744.00 9 months
P2 Licence
ExcessSpeedRange No. of Points Amount of Fine Suspension Period
1 - 10 km/ph 4 $184.00 N/A
11 - 20 km/ph 4 $197.00 N/A
21 - 30 km/ph 4 $338.00 N/A
31- 45 km/ph 5 $647.00 3 months (min)
More than 45 km/ph 6 $1,744.00 6 months (min)
We confirm School Zone offences will continue to incur 1 extra demerit point and an additional fine level.
For further information or should you require any assistance, please contact our Mr. Bechara Shamieh, Mrs. Lara Wentworth or Ms. Melissa Hoffmann.