Issue 33 - October 2006

• Important reminder for 1 November 2006
• Applications by bankrupts to act as directors
• What constitutes sexual harassment?
• Family law & parenting issues
• Land tax update

The effective date for the new vendor disclosure requirements is fast approaching Important reminder for 1 November 2006

An article in the May edition of our newsletter included some information in relation to the requirement for all homes in NSW to have a smoke alarm installed. After the date of that article, the legislation was further amended to clarify the effective date for the changes to the vendor disclosure requirements.

In relation to any contracts for sale of residential properties situated in NSW entered into after 1 November 2006, the vendor must include the relevant statement in relation to the installation of a smoke alarm (and actually have those smoke alarms installed) and failure to do so will result in the purchasing being in a position to rescind the Contract.

All vendors and their real estate agents are advised to be very careful with any exchanges which are to take place as after 1 November 2006.

If you require any further information in relation to the new requirements, please telephone Rebecca Flynn or email rebecca@wmdlaw.com.au.

Can bankrupts be company directors? Applications by bankrupts to act as directors

The Corporations Act provides that undischarged bankrupts or those who have entered into personal insolvency agreements cannot act as a director or take part in the management of a company.

The Court has the power to grant leave to an undischarged bankrupt to take part in management of a company, subject to the Australian Securities and Investments Commission (ASIC) being notified of the application. Such leave, which can be granted both with or without conditions, is not available however, where the disqualification was imposed by ASIC (as opposed to an automatic disqualification due to the operation of the Corporations Act).

The court will not easily be convinced that the usual prohibition should not apply and will exercise its discretion with a view to balancing the considerations relevant to the bankrupt and the public policy behind the prohibition. In such an application, the applicant bears the onus of establishing that the Court should make an exception to the legislative policy underlying the prohibition. The policy behind the law is not one of punishment of the offending person but is to protect the public and among other things, to seek to ensure that investors, shareholders and others dealing with a company are not disadvantaged.

Hardship to the proposed director is not of itself a persuasive ground for the granting of leave although it is one of many factors which may be considered by the court in exercising its discretion. The court will have regard to the reason for the disqualification, the nature of his or her involvement, the general character of the applicant including his or her conduct in the intervening period since being removed from office or prevented from being in office, the structure of the company, its business and the interests of shareholders, creditors and employees.

Although such applications are not commonplace, an undischarged bankrupt may be granted leave to take part in the management of companies generally or, more frequently, in the management of a particular company. The disqualification imposed by the Act continues despite the Court grating leave and care must be taken to ensure that any conditions on the leave are complied with as failure to do so can result in the leave being revoked and the commission of an offence.

If you want further information regarding any insolvency or corporation relation matter, please telephone Craig Pryor or email craig@wmdlaw.com.au.

Will NSW follow QLD's approach? What constitutes sexual harassment?

The recent Queensland decision of K v S and N Company examined whether the declaration of love by an employer and an invitation offered to the employee to move into the home of the employer constituted sexual harassment. The Queensland Anti-Discrimination Tribunal found that it did.

The employee was engaged as a receptionist and worked from the employer's home. The employer often left a dozen red roses in the employee's working area. On occasion, the employer declared “I’m falling in love with you and would like you and your children to move in with me.”

The Tribunal found that the declaration of love and invitation to move in was telling the employee that he wanted a sexual relationship. As such, by implication it was a request for sexual favours, a remark with sexual connotations and it amounted to an unwelcome conduct of a sexual nature. This decision was made despite the Tribunal finding that the declaration was made without the intent to offend, humiliate or intimidate. The Tribunal also found that a reasonable person would have anticipated that the employee would have been offended, humiliated or intimidated by his conduct.

It remains to be seen whether Judges in New South Wales will find such comments constitute sexual harassment, but is a timely warning to all office members to be careful in how they approach and speak to fellow colleagues.

If you have any questions concerning harassment in the workplace, please telephone Kevin Dwyer or email kevin@wmdlaw.com.au or Joel Hiscox or email joel@wmdlaw.com.au.

Normal childhood behaviour can be misconstrued Family law & parenting issues

The following article was written by Gary Direnfeld, a Canadian social worker and expert on child development and parenting issues in the Canadian family courts:

“There is a quote attributed to Sigmund Freud, ‘Sometimes a cigar is just a cigar’. So too of childhood behaviour and incidents; they may be simply within the range of normal childhood life. However, in the context of high conflict separated parents, the simple explanation can get transplanted with extraordinary suspicions and theories.

As preschoolers, children take flight on playground equipment. They may be learning to ride their 2-wheeler. Hence, this is a time of childhood injuries, particularly bruises, bumped heads and broken arms. In the context of high conflict separated parents, a parent may be suspicious of child-abuse in view of injuries and use the situation to allege physical abuse or at least neglect. However, even in intact families, children can get hurt; bump their heads and fall from bikes and playground equipment.

As school aged children try to get their own way, they naturally try to pit parents against each other. They will use whatever strategy works. Kids may tell you that the other kids are getting or doing what is desired or they may tell you that the ‘other parent’ lets them do as requested. In intact families, parents simply call their children on manipulative behaviour or at least check with the other parent to determine if what the child is saying is true. However, in the context of high conflict separated parents, a parent may take what a child says at face value and believe that the parent is undermining their own parenting or the values of the child.

In the context of high conflict separated parents, normal childhood behaviour and incidents can take on epic proportions. Otherwise normal behaviour can lead to suspicion or be used against a parent to undermine care and custody. As one parent cries foul, the other cries parental alienation syndrome. The fight is on and heats up to the point of boiling over. The child is caught in the middle and their behaviour escalates as a result. Both parents then use the child’s behaviour as evidence of their own claim against the other.

Here is where a good assessment is so necessary. The assessor will tease out normal from abnormal childhood behaviour and incidents and determine how much of a child’s behaviour is attributable to just the conflict between the parents versus truly sinister behaviour deliberately aimed at harming or neglecting a child.

Parents beware though. Sometimes a cigar is just a cigar, despite suspicion.”

If you want any information or assistance in relation to parenting or other family and de facto relationship matters, please telephone Greg Dickson or email greg@wmdlaw.com.au.

2007 land tax threshold amended Land tax update

As was referred to in our June newsletter, the land tax threshold for the 2007 land tax is to be the average of the indexed amount for the new tax year and the previous 2 land tax years.

Last Friday, the NSW Government announced that the 2007 land tax threshold is $356,000.

This will mean that any person who owns land (other than their principal place of residence) will be liable for land tax at the rate of 1.7 per cent (plus $100) on the combined value of all the land owned (except their principal place of residence) in excess of $356,000. If your land tax liability is less than $100, then no land tax will be payable.

If you would like more information in relation to land tax, please telephone Rebecca Flynn or email rebecca@wmdlaw.com.au

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