Recent news articles
This Christmas might be the last one before new short-term letting rules apply.
The NSW Government has announced its policy on short-term lettings and has asked for feedback from the public and industry participants by 16 November 2018.
Christmas is always a time for giving and receiving gift cards or vouchers. How many times have you received gift cards and then when you get around to using them they have expired?
Section 12 of the Succession Act 2006 (NSW) provides that a will is revoked by marriage unless that will was made in contemplation of marriage. Practically, a will made in contemplation of marriage usually contains an express statement to that effect. This was not the case in the recent Supreme Court case, Re Estate Grant, deceased  NSWSC 1031 and the Court needed to determine whether the testator had made his will in contemplation of marriage.
An interesting question has recently appeared in estate planning. Can an attorney under an enduring power of attorney make, alter or revoke a superannuation binding death benefit nomination (“BDBN”) for their principal if the principal lacks mental capacity? By analogy to wills some people may think that an attorney cannot do such acts. While it is settled in law that a principal cannot delegate to their attorney a power to make, alter or revoke a will, the recent Supreme Court of Queensland decision of
Re Narumon Pty Ltd  QSC 185 shows that in some circumstances an attorney may make or alter a BDBN.
As advised in our December 2016 Newsletter the Competition and Consumer Act 2010 (Cth) (“the Act”) has been amended to prohibit businesses from imposing excessive credit charge surcharges on consumers. These amendments came into effect for all businesses on 1 September 2017.
Surcharge purchaser duty and land tax surcharge (“the surcharges”) is currently operating in respect of a foreign person purchasing and owning a residential land in NSW.
Determining who is a foreign person is less straightforward than it might seem, particularly with respect to discretionary trusts.
If you have a customer who is tardy with paying your invoices then you’ll need to be careful you don’t SHOUT when demanding that they pay. The recent decision of Trenfield v HAG Import Corporation (Australia) Pty Limited (No. 2) in the Queensland District Court involved the question of whether a creditor reasonably suspected that a debtor was insolvent. The creditor wrote in an email to the debtor that they were unable to pay their debts and in a follow up email the creditor demanded payment “in a much larger font, which I suspect is the email equivalent of shouting”, so said Justice McGill in his judgment. In this case the shouting email worked against the creditor.
Employers and employees need to be aware that an employment contract can include “implied” terms which are not expressly written or spoken about between the parties. Two recent cases have addressed implied terms regarding suspension and “gardening” leave.
New legislation has been introduced to NSW Parliament which proposes to amend residential rental laws. The proposed amendments are the most significant changes to the laws in recent times and are likely in response to the increase in the number of renters in NSW.
Airbnb has undoubtedly changed the short-term leasing market in Australia and many Owners Corporations are unhappy with the change. In response, one Owners Corporation in Woolhara passed a by-law which had the effect of banning short-term letting in the building. In a landmark decision by the NSW Civil and Administrative Tribunal (“NCAT”), it held that the Owners Corporation did not have power to make such a by-law.
The recent increase in young buyers using funds from mum and dad was sharply in focus in recent NSW Court of Appeal decision which highlighted the importance of parents having a properly written agreement with their children, particularly in the case of marriage breakdowns. In Chaudhary v Chaudhary  NSWCA 222, a father signed a statutory declaration as part of a bank loan obtained by his son and daughter-in-law stating that the funds he advanced towards the purchase were a gift that would not be recalled. The father later paid the stamp duty and advanced a further amount, meaning that he advanced over $1.2 million in total as part of the transaction.
The NSW Supreme Court’s decision in Tay v Chief Commissioner of State Revenue  NSWSC 338 (“Tay case”) is an example of how distribution of the deceased’s estate to beneficiaries may create unfortunate tax consequences for the beneficiaries. Usually, a stamp duty exemption will apply to the distribution of an estate if it is done in accordance with the will of the deceased. In the Tay case, the beneficiaries under the will agreed to a particular manner of distribution of an asset which led to duty of $28 million.
Every director of an Australian company will be identified by a number in a Federal Government crack down on “illegal phoenix activity” – the name given to the practice of stripping and transfering assets from one company to another to avoid paying liabilities to creditors.
The purpose of the Director Identification Number (“DIN”), along with other measures, is to enable the Federal Government to identify directors and their relationships between various individuals and entities in order to deter and penalise phoenix activity.
In our December 2014 Law Report we discussed a recent High Court decision that found that builders of a strata-titled apartment complex did not owe a duty of care to the Owners Corporation or to purchasers in that strata scheme to avoid economic loss resulting from defective building works. Now the Court of Appeal in New South Wales has found that a local Council, as a principal certifying authority, did not owe a duty to avoid economic loss to a purchaser of property in respect of which the Council had issued an occupation certificate. The Court of Appeal found that the subsequent purchasers in this case were not “vulnerable” in that the purchasers could rely on statutory warranties under the Home Building Act and the purchasers could have protected themselves further by appropriate warranties in the sale contract in relation to latent defects.
The NSW Government recently released a public paper as a way to provide better regulation of the use of accommodation services like Airbnb and Stayz, which can be viewed here.
The NSW Government recently announced a number of measures in an attempt to improve housing affordability for first home buyers across the state. At present, first home buyers receive a stamp duty exemption on new homes valued up to $550,000 and vacant land up to $350,000 and concessions for new properties valued between $550,000 and $650,000 and vacant land costing between $350,000 and $450,000.
Esplins Law Report in July 2016 contained an article by Stephen Rush regarding the new non-resident withholding tax regime. The regime, in short, provided that whenever a purchaser buys property in Australia for a price of $2 million or more the purchaser must withhold 10% of the purchase price on settlement and immediately pay it to the Australian Taxation Office unless the vendor produces a clearance certificate. The amount of $2 million was set in place by the Australian Government so that the majority of transactions would be excluded from the regime (i.e. everyday Australians buying property in Australia). However, from 1 July 2017 the amount of $2 million will reduce to $750,000 which means that the majority transactions, especially in New South Wales, will be subject to the regime. Additionally, the percentage to be withheld by a purchaser has increased from 10% to 12.5%.
In November 2016 the Federal Circuit Court handed down a decision in Skene v Workpac Pty Ltd  FCCA 3035. The Court found that an employer must compensate its casual employee for annual leave to which, the employee was entitled despite his casual status and additional hourly payments made in lieu of that leave.
The Corporations Act 2001 (Cth) (“the Act”) imposes strict statutory and fiduciary duties on directors and officers of companies. The majority of the director’s duties create civil obligations and when breached a civil penalty is imposed. It is often overlooked that section 184 of the Act creates a criminal offence id a director recklessly or intentionally fails to exercise their directorial powers in good faith or for a proper purpose. The maximum penalty for contravening section 184 of the Act is 5 years imprisonment or a fine of $360,000 or both. Criminal proceedings against directors are not as uncommon as people believe, the ASIC’s six-monthly report covering July to December 2016 discloses that as at 1 January 2017 there are 9 criminal actions (and 22 civil actions) against directors and officers which are pending before the court.
Under new Personal Property Security Act (PPSA) amendments hirers or bailors are only required to register a security interest if the initial period, or the equipment is held, for two years or more.
The Personal Property Securities Amendment (PPS Lease) Act 2017 came into effect on 20 May 2017 and is aimed at reducing technicalities associated with short-term and indefinite period loans.
The Australian Government reduced the taxation impost on small taxpayers. However, the NSW Government has increased the land tax and stamp duty imposts on land own by some family trusts.
Executives of companies may now be held personally liable if they have failed to back-pay employees their workplace entitlements.
On 1 July 2016 several duties were abolished in New South Wales.
The Fair Work Commission (“FWC”) has amended the annual leave provisions in the majority of the Modern Awards.
Majority of changes to the strata management legislation commenced on 30 November 2016, remaining changes are anticipated to start on 1 July 2017. Some changes concern how an owner’s corporation (“OC”) will function and how strata properties will be managed. These changes will affect persons who own or rent strata units and developers of strata properties.
A 2015 study conducted by Mastercard found that Australians pay approximately $1.6 billion annually in credit card surcharges. In response to this study and a high number of consumer complaints, the Competition and Consumer Act 2010 (Cth) (“the Act”) has recently been amended to prohibit businesses from imposing excessive credit card surcharges on consumers.
The ban on excessive surcharges took effect for large merchants from 1 September 2016 and will apply to all businesses from 1 September 2017.
In our previous newsletter we informed you of the pending introduction of new rules to ensure compliance with swimming pool regulations. Well they are finally here with some changes. The new rules commenced on 29 April 2016.
The new rules apply to the sale or lease of any property that contains a swimming pool or spa pool other than a strata property with more than two (2) lots. The new rules are designed to ensure that all swimming pools and spa pools have compliant child-restraint barriers.
The Commonwealth Government’s Work Health & Safety Act 2011 (“WHS Act”) commenced in 2012, replacing the old occupational health and safety laws in New South Wales. In our December 2013 newsletter we introduced the new legislation and informed you of the new duties under the WHS Act and to whom they applied.
The WHS Act also created new and broad statutory enforcement powers, including the imposition of criminal offences for breach of statutory duties under the WHS Act.
In our December 2015 newsletter we wrote about the November 2015 amendments to the Conveyancing Act 1919 (NSW) regarding developers rescinding “off the plan contracts” under “sunset clauses” (as defined in that act).
The new section 66ZL of the Conveyancing Act allows the Court, on the application of a vendor, to make an order permitting the vendor to rescind an off the plan contract under a sunset clause only if the vendor satisfies the Court that making the order is “just and equitable in all the circumstances”. The Court is to consider:
When negotiating a deal by email or telephone you may find that you have entered unexpectedly into a legally binding contract.
In Stellard Pty Ltd v North Queensland Pty Ltd  QSC 119, the Queensland Supreme Court decided that a vendor and a purchaser of a petrol station business and the land concluded a legally binding contract for sale by exchanging emails and telephone calls, including via a selling agent.
From 1 July 2016 small business owners will be allowed to restructure their affairs and take advantage of new concessions introduced by Parliament to allow greater flexibility which may lead to substantial costs savings. Under the “Small Business Restructure Roll-over Bill” owners of a small business entity, ie. an entity whose annual turnover does not exceed $2 million, will be able to change their legal structure in which they operate their business without incurring a tax liability on that transfer. One way this new measure can be used is for small business owners to move the ownership of the business assets into a family discretionary trust structure which can provide ongoing and substantial tax savings.
The sale and purchase of property is about to become more complicated.
The Australian Government is endeavouring to ensure that non-residents comply with their taxation obligations when they buy and sell Australian property and make a profit. However, in doing so the Government has imposed significant compliance obligations on vendors and purchasers and, in the process, will collect detailed information about vendors and their affairs.