By Angus Edwards

The Full Family Court recently ruled against any notion of “special skills contributions” made by individual parties in Family Law property adjustments.  In fact, in the decision of Kane and Kane,  it was determined that the trial judge had made an error in the original assessment of the contributions of the parties, and that the claim of ‘special skill contributions’ could not be upheld.

Background to the case

In Kane and Kane, the husband (who had no investment training or qualifications) made a decision to invest the superannuation of both parties in certain shares while they were married.  Over a period of two years his decision proved to be very profitable for the couple, and the investment grew from $1million to $3million during that time. 

When the couple separated, the Judge hearing the initial property matter assessed the contributions of each party disproportionately, based upon what he considered to be the “special skills” of the husband when he was making those investment choices.

When the decision was appealed, the Full Family Court found that, rather than having any special skill, the husband had simply taken a calculated risk with the superannuation funds, which fortunately had gone in their favour.  The Court was also of the view that this, and other contributions of parties, could be influenced by external factors.

What was the outcome?

The first trial judge had divided the parties’ assets, including the superannuation, allocating 63% to the husband and 37% to the wife.  When this decision was appealed, Deputy Chief Judge Faulks found that the disproportionate division of property in favour of the husband “could not be justified”.

The effect of the final decision is that no form of contribution will be regarded as more significant than another.  The Court must consider all forms of contribution to a marriage or relationship, whether they be financial, non-financial or as home-maker or parent.  The message from this is that the contributions made by a party as homemaker or parent should not be undervalued either.

This decision will see the contributions of parties in cases where significant wealth has been built up during the relationship being assessed more equally.

For confidential advice on your Family Law property or parenting matter contact Angus Edwards at Kenny Spring Solicitors on ph: 02 6331 2911 or email him at [email protected].

Kenny Spring Team Members servicing this area of law:

By Rob Lewis
In 2013, legislation was passed to ensure that pool owners registered their pool on the NSW Government’s Swimming Pool Register.  The cut-off date for registration was 29 October 2013 and all pools were supposed to be registered by that date.

The next phase of legislation concerning pool ownership will come into force next year. 

From 29 April 2015, all Contracts for Sale of Land, as well as Residential Tenancy Agreements for properties in which there is a pool, must have certain documentation attached to ensure they are legally binding.

What does this mean for home owners?

If you  own a property  with a pool, including strata title properties, and are thinking of selling that property you need to be aware of the new requirements.   If your Contracts are expected to exchange on, or after, 29 April 2015 you will need to include with the Contract, either:

i)  a valid certificate of compliance issued by your local Council or an accredited certifier under the Act;
OR
ii) a relevant occupation certificate and evidence that the swimming pool is registered under the Act.

If the above documentation is not attached to the contract, the purchaser will have the right to rescind the contract within 14 days after the exchange.

What about rented property?

If you own a property with a pool and would like to lease the property as residential premises on or after 29 April 2015, then you must ensure that:

i) the pool is registered;
ii) the pool has a valid certificate of compliance; and
iii) a copy of the certificate of compliance is provided to the tenant.

Being aware of the new requirements will ensure that your sale or lease of property runs smoothly.  A little time spent ensuring that your pool is registered and complies with Council requirements in advance, will save you facing any issues down the track!

For more information on the Swimming Pool Register or how that might affect the sale of your property in the future, contact Rob Lewis at Kenny Spring Solicitors on ph: 02 6331 2911 or email him at: [email protected].

By Shane Robson

There is a common misconception that probation periods can only be set by employers in employment agreements and that this action will determine the employer’s right to dismiss an employee.

If your job is covered by the Fair Work Act 2009 (Cth) this is incorrect.

It is important to understand that the Fair Work Act overrides any employment agreement.  Having said that however, it does automatically include what some people would consider to be “probation periods” for employees.

The Fair Work Act creates minimum requirements that must be satisfied before an unfair dismissal action can be brought against an employer. These include the requirement that employees be employed for a period of 12 months (for businesses that employ less than 15 employees) and six months (for businesses that employ 15 or more employees).

Whilst these minimum requirements mean that an employee cannot bring an unfair dismissal action against an employer if their employment agreement is terminated, the employee can bring an action if there is unlawful termination (which would include a decision based on an employee’s race, sex, religion, pregnancy etc).

It should also be noted that in situations where employment contracts have been signed, the terms of the individual contract and their impact on the relationship between the two parties would also need to be fully appreciated before any actions could be taken.

For more information on employment agreements or your rights and obligations under the Fair Work Act, contact Shane Robson at Kenny Spring Solicitors on ph: 02 6331 2911 or email [email protected] .

by Patrick Coetsee
In July 2012, changes were made to the Directors Penalty Notice regime. The changes were introduced in an attempt to make sure that companies remain compliant with the reporting and remittance of their PAYG and Superannuation obligations. They also bring increased liability for companies and further personal exposure of directors.
  
Recently, the ATO has been following up organisations that are behind in the lodgement of their Business Activity Statements (BAS)and returns. The crackdown means that many companies and their directors face the possibility of prosecution or fines if they do not comply with their statutory obligations.
 
What happens if you are late lodging activity statements and returns?
If you are late in lodging returns or activity statements, you will incur penalties and will be charged a daily interest rate of 9.59% on any unpaid amounts
.
If your business receives an ATO compliance notice and still fails to lodge returns, you face the following possible consequences:
 
• An audit and possible further investigation from the ATO;

• The ATO may estimate your net assessable amount or taxable income, and the tax you owe without further warning;

• You, or your business, could be referred for prosecution without warning;

• If prosecuted and convicted you could be fined up to $8,500 or imprisoned for up to 12 months.  For a company the maximum fine is $42,500.

What do you need to do now?

All directors must make sure of the following:

• Any outstanding BAS and PAYG returns should be lodged as soon as possible;

• Pay all PAYG and superannuation charge amounts within the relevant time frames;

• Keep all BAS and PAYG returns up to date and lodged within three months of their due date.

If a BAS return is lodged but PAYG is not paid, the ATO is required to issue a Directors Penalty Notice. At the expiry of the 21 day notice period,  you could be held personally liable. A Directors’ personal liability for a company’s unpaid PAYG can be avoided if the company enters into Voluntary Administration, or has a Liquidator appointed before the expiry of the Director Penalty Notice.
 
If unpaid PAYG is not reported within three months of the due date, the Director will automatically be personally liable for any unpaid amounts, even if the company is placed into voluntary administration or liquidation after this date.

If you are a director of a business, it is very important that you understand your obligations and responsibilities in terms of lodging BAS and tax returns.  For more information on Directors Penalty Notices and your potential liability, contact Patrick Coetsee at Kenny Spring Solicitors on ph: 02 6331 2911 or email [email protected]. 

by Karena Nicholls
The June 2012 amendments to the journey provisions contained in the NSW Workers Compensation legislation removed the rights under s10(3A) to compensation whilst on a periodic journey unless the journey had a “real and substantial connection between the employment and the accident incident”. To date, all of the decisions have been favourable to employers.

On 25 March 2014, Deputy President Bill Roche delivered the latest decision in Dewan Singh & Kim Singh t/as Krambach Service Station v Wickenden (2014) NSWWCC PD13. Deputy President Bill Roche examined whether a worker would be entitled to compensation following a motorbike accident on the way home from work.

Facts

Ms Wickenden worked intermittently as a casual employee at the Krambach service station from July 2009. She usually worked a minimum of five hours per day, starting at 9.30am and finishing at 2.30pm for three days per week with additional days as required. She normally rode her motorbike from her home at Nabiac to and from work, a journey of approximately 15km each way. If she started and finished her work at the usual time, her journeys to and from work were in daylight.

From the middle of June 2012, the employer requested Ms Wickenden, in addition to her normal duties, participate in additional training in order to open and close the service station. During the training period which was to last three weeks, she worked from 7.30 am to 5.30 pm. On 5 July 2012, whilst still in the training period, Ms Wickenden closed the service station at the normal closing time of 5.30 pm and started her trip home in darkness.

Whilst riding her motorbike home she was involved in an accident when a car swerved onto Ms Wickenden’s side of the road and struck her motorbike. The other driver had swerved to avoid cattle which were on her side of the road.

Decision

Deputy President Bill Roche agreed with the Arbitrator’s original findings that there was no direct evidence that the other driver had failed to see the cattle because of the darkness. It was a matter of common sense and general human experience to reach a compelling conclusion that the darkness reduced the time that both Ms Wickenden and the other driver had to react and avoid collision. On that basis it was open for the Arbitrator to conclude that the time of the journey was a factor that contributed to the accident.

But was employment a real and substantial connection to Ms Wickenden’s accident? The Deputy President pointed out that simply because she was driving home from work in itself did not result in Section 10(3A) being satisfied. Driving home was not an employment activity and was simply an activity that is connected with employment in that it was something that the overwhelming majority of workers must do each day if they wished to work.

The Deputy President concentrated on the fact that Ms Wickenden’s employment required her to work later than her “normal” finishing time and to travel home in darkness. The danger encountered by Ms Wickenden arose from the danger of driving home in darkness on a narrow country road. Thereby, the employment, requiring her to work until it was dark, exposed her to a danger which contributed to the accident. As darkness played a role in the accident, albeit it may not have been the sole cause of the accident, the connection between employment and the accident was real and of substance. Ms Wickenden did not need to prove that employment “caused” the injury but whether there was a real and substantial connection to employment. This was a different and less demanding test.

The decision of Wickenden represents the first successful decision by a worker under the new journey provisions. The Deputy President was careful to stress that each journey case should be considered on its own facts and by reference to Section 10(3A). On the strength of Deputy President Roche’s reasoning, provided a worker can establish that an obligation of a worker’s employment caused a set of circumstances and those circumstances then played a role in the accident (albeit not the sole cause of the accident), the connection between employment and the accident would be real and of substance.

This favourable result of in the interpretation of Section 10(3A) will now result in workers who had previously had their cases declined seeking to challenge the declinature in the Workers Compensation Commission.

We would not be surprised if this case is appealed. We will just have to wait and see.

For employment related legal queries, please contact our Employment team on (02) 4221 9311.
The contents of The Kells Report are general in nature. We accept no responsibility to persons acting on the information without first consulting us.

Liability limited by a scheme approved under Professional Standards Legislation

by Mario Quintiliani (Co-written by Law Cadet, Sam Troutman)

The recent deaths of miners Phillip Grant and Jamie Mitchell following a collapse of a mine wall while working underground, were a tragedy. Investigations are still ongoing and no allegations of negligence by the mine operator corporation have been made. The current law in NSW means that even if the negligence of the corporation was found to have been the cause of the deaths, a successful criminal conviction against the corporation is unlikely.

Following high profile disasters in the United Kingdom (UK) due to the negligence of senior management, the UK parliament introduced laws that sought to redress the balance in corporate manslaughter cases to improve the prospect of conviction of corporations.

The success or failure of those UK laws may influence the parliament of NSW in its own consideration of how to address the issue of securing corporate manslaughter convictions.

Corporate manslaughter in NSW

A corporation can be found guilty of manslaughter by criminal negligence in NSW. A corporation can only act through the actions of individuals in the corporation. It has no mind of its own. To attribute mental elements of fault to a corporation, the courts in the UK developed the identification doctrine. The court must consider which individuals in the corporation represent its ‘directing mind and will’ and impute fault to the corporation through them. This means one of these individuals must be proven to have the ‘mental’ or ‘fault’ element of manslaughter by criminal negligence in order to secure a conviction of the corporation. Typically this will be the corporation’s directors, senior management, or persons acting under instructions from a general meeting of shareholders.

The changes made by the UK laws

The biggest problem with the identification doctrine is that it is very difficult to prove that a member of senior management of the corporation has the fault elements of manslaughter by criminal negligence. The decisions that caused the breach of the standard of care are often made by people lower down the corporation’s management chain. This is particularly the case in very large corporations. Law reform commissions in NSW have previously noted the difficulty associated with the identification doctrine and the need for reform.

To be guilty of corporate manslaughter under the UK laws , the management and organisation of the corporation’s affairs must:

•have caused a person’s death;

•amount to a gross breach of a ‘relevant duty of care’ that was owed to the deceased; and

•be a substantial element in the breach of the duty of care.

Under the UK laws there is no need to establish mental intent against a member of senior management specifically. The culture and overall practices of the corporation are the focus. If the practices of the corporation caused the breach of the duty of care and senior management had a substantial role in maintaining those practices, the corporation will be guilty of corporate manslaughter.

Implications for NSW

The UK laws have only operated for six years in the UK and already six convictions for corporate manslaughter have been secured, with fines ranging from £480,000 to £110,000. According to recent studies, 141 corporate manslaughter cases have been opened by the UK’s Crown Prosecution Service.

If the UK laws prove to be an effective way to facilitate convictions of corporations for manslaughter, a case may emerge for the introduction of similar legislation into NSW to ensure corporations are held to account for their negligence.

Need more information on your rights under current corporate legislation? Contact Kells Commercial team on (02) 4221 9311.

The contents of The Kells Report are general in nature. We accept no responsibility to persons acting on the information without first consulting us.

Liability limited by a scheme approved under Professional Standards Legislation.

by Amy Harper, Kells

In the December edition of the Kells Report we reported on the proposed changes to the Building and Construction Industry Security of Payment Act (NSW) 1999.

Those changes came into force on Monday 21 April 2014 and now apply to all contracts entered into after that date.

Just to recap, the key changes are:

1.  The removal of the requirement for a payment claim to state that it is made under the Act

This existing requirement was one that many contractors get wrong. Its removal will make it simpler for subcontractors to make valid payment claims under the Act.

Principals and head contractors will need to treat all payment claims as being made under the Act and comply with the strict timeframes for both putting on a payment schedule if disputing and making payment.

This requirement will however continue to apply for residential construction contracts connected with a residential construction contract between a head contractor and consumer (eg such as a contract between a builder and an electrician to do work where the builder has entered into a contract with a home owner).

2.  Due date for making progress payments

Before the changes, the due date for payment was as specified in the contract, or if there was no express provision, then 10 business days after the payment claim is made. This allowed the time for payment to be greatly in excess of 10 business days if there was inequality in bargaining power.

Now there are 3 different timeframes for payment established and any term of a contract that allows for payment later than these will be deemed void:
•payments to head contractors will be due 15 business days after service of a payment claim or an earlier date if specified in the contract.

•payments to subcontractors will be due 30 business days after service of a payment claim or an earlier date if specified in the contract.
•the existing timeframes for payment will be maintained for residential construction contracts connected with a residential construction contract.

If you have been negotiating a construction contract but will enter into it after 21 April, then be aware that these timeframes will apply regardless of what is stated in the contract.

3.  Payment claims to be accompanied by a supporting statement that all subcontractors have been paid

There was previously no requirement under the Act for a payment claim to have a statement attached confirming that subcontractors have been paid.

It will now be offence for a head contractor to serve a payment claim on a principal unless the claim is accompanied by a supporting statement to the effect that all subcontractors have been paid all amounts that have been due and payable. It will also be an offence to serve a statement that they know is false or misleading.

The maximum penalty in both cases will be $22,000.

4.   Investigation of compliance with requirement for supporting statement

There will be NSW Government officers who can require either the head contractor or associated persons to provide information or documents relating to compliance with the new provisions requiring supporting statements.

A failure to comply can result in a maximum penalty of $22,000 or 3 month’s imprisonment.

5.   Retention accounts

It is contemplated that there will be Regulations established which will require retention monies held by head contractors from subcontractors to be paid into a trust account operated by the Small Business Commissioner.

At this stage it does not appear that this obligation will extend to principals holding retention monies from head contractors, only head contractors withholding from subcontractors.

It is proposed that a failure to pay these retention monies into the trust account will attract a maximum penalty of $22,000.

There is currently no indication when the trust account requirements will be introduced.

Need more information on your rights under the Building and Construction Industry Security of Payment Act (NSW) 1999 or on construction contracts and other project documentation generally? Contact Kells on (02) 4221 9311.

The contents of The Kells Report are general in nature. We accept no responsibility to persons acting on the information without first consulting us.

Liability limited by a scheme approved under Professional Standards Legislation.