Issue 39 - April 2007

• What are you really contracting for?
• NSW Security of Payment Act
• Protect your children and their entitlements
• New equity lending product
• The Verdict
• Estate Planning Seminar

Coming to terms with terms What are you really contracting for?

Who is responsible for entering into contracts for your business? Is that person qualified to do so and do they understand how important it is to read contracts correctly? Is there a more appropriate person to undertake that task? When would it be prudent to obtain legal advice on such contracts?

Suppliers of goods or services routinely provide potential customers with “Terms & Conditions of Trade” or similar with any order form or purchasing documentation. Such things covered in these “standard” documents are not so standard and include warranties, exclusions and indemnities. Do you really know what they mean? What about the terms “contra proferentem” or “force majeure”?

A party who has signed a written contract is bound by the terms of the contract, irrespective of whether they have made themselves aware of the terms. Sufficient notice of the terms of the contract must be given to the buyer. For this reason printing the clauses on the back of a receipt is inadequate as notice is not provided to the purchaser until after the contract is entered and payment made – that is, those terms do not form part of the contract as they were notified after it was entered into!

Have your own terms and conditions of trade been properly drafted to protect your business?

If we can assist you in relation to any contractual matter whether related to terms and conditions of trade or otherwise, please telephone Craig Pryor or email craig@wmdlaw.com.au.

A more effective solution to obtaining payment in the building industry  NSW Security of Payment Act

Since the Building and Construction Industry Security of Payment Act, 1999 (NSW) first commenced on 26 March 2000 it has undergone significant statutory amendment, and has now been further refined by many judicial decisions.  It continues to apply to any construction project in New South Wales, whether private or public sector.

Whilst this Act remains one of the most significant developments in construction law in recent times, by providing a statutory regime which operates in parallel to the contractual rights of the parties and traditional litigation procedures, it remains surprisingly not well known amongst many in the building industry.

Primarily, the Act established new rights for parties seeking payment for work they have done and the plant and materials they have supplied.  Under this regime, progress claims can be made under contractual contracts, even where no express provision for such progress claims are provided for in the contract. 

The Act has reformed the way that contractors, subcontractors, consultants and suppliers can recover payments.  It creates a statutory regime under which disputed payment claims can be adjudicated and provides a right for an unpaid builder or supplier to suspend work.

The Act also creates a statutory right to payment for all parties that contract to carry out construction work, or supply related goods or services, to receive all payments that are due, including final payments and retention monies.

Proper use of the Act may reduce the cost of doing business in the construction industry by providing a better alternative to costly and lengthy disputes over payment, which often involves the unreasonable withholding of payments.

Further amendments to the Act are anticipated within the next 6-12 months following a completion of a review.

For further enquiries about any building and construction related issues, or to discuss the effect of the Act on your business, please contact Louise Sullivan or Dean Groundwater or email louise@wmdlaw.com.au or dean@wmdlaw.com.au.

Do your testamentary arrangements provide adequately for your children? Protect your children and their entitlements

Many people make a will to distribute their property upon their death. Many appoint an attorney or enduring guardian to ensure their own affairs are looked after, in the event they are unable to look after them themselves. These documents can be used to provide for the care and protection of children in the event that their parents die or become incapacitated.

In your will you can nominate a guardian for your children and document your wishes regarding the care of your children in the event of your death.  By documenting your wishes for the care of your children in a will, you will have done all you can to ensure your influence in their lives continues.

While the Family Court is not under any obligation to appoint the guardian proposed in your will, the Court will have regard to your wishes in making any decision about the care of your children. The primary consideration for the Court is the best interests of the children and if you have taken the time to set out who you would like as your children’s guardian the Court would give consideration to those wishes unless there are compelling reasons to do otherwise.

Similarly, specific provisions can be made in your power of attorney to make provision for your children, in circumstances where for example as a result of an accident of illness you are incapacitated and require a third party to manage your financial affairs. You can specifically provide your attorney authority to utilise your finances for the benefit of your children.

In light of these considerations perhaps you should consider making or reviewing your will, power of attorney and enduring guardians to ensure your children are provided for.

If you require any further information in relation to the protection of your children or in relation to wills, appointment of guardians or attorneys or estate planning generally please contact Craig Pryor or email craig@wmdlaw.com.au.

Equity lending may assist borrowing capacity New equity lending product

We often have clients, particularly those involved in Family Law proceedings, who experience difficulty in funding the settlement which they have agreed to make to the other party and who may not be in a position to obtain finance through traditional sources. From 1 July 2007 a new equity lending product will be available which may be very useful to clients in these circumstances.

The unusual feature of the equity lending product is that it involves the lender providing a substantial advance without the need for payment of interest or the repayment of principal but on the basis that the lender will share in the capital gain which accrues on the property between the time of the advance and the time that the property is sold.  

The product is only offered to owner occupiers of residential real estate.  No compulsion to sell the property is placed upon the borrower until the end of the term of the loan which can be up to 25 years.  It is only when the property is sold that any payment has to be made to the lender.

This product could be particularly useful for people involved in Family Law property settlements who want to retain the matrimonial home but don’t quite have the borrowing capacity to pay out their husband or wife as part of the settlement. 

For more information concerning equity lending products please contact Greg Dickson or email greg@wmdlaw.com.au and we can organise a no obligation meeting for you with a provider of the equity lending product.

Your questions answered The Verdict

In this section, we answer your general questions in relation to any area of law. Obviously, we are not able to provide specific legal advice or advice in relation to a current legal matter. If you have a question you would like us to answer, please submit it by email to rebecca@wmdlaw.com.au.

Can I cut branches off my neighbours tree?

A common dispute between neighbours is overhanging branches and the short answer is yes, you can cut off those branches which protrude on to your property. However you cannot keep the branch or claim the cost of removing it. Despite this, we do not recommend taking it upon yourself to remove overhanging branches, without first discussing these issues with your neighbour.

Previously, if disputes could not be resolved amicably between neighbours there was no law dealing specifically with this issue and if you wanted to take court action it was often time consuming and expensive. Recent changes to the law in NSW have introduced a simpler, quicker and inexpensive means of resolving tree disputes.

If you are the victim of a nuisance caused by a neighbour’s tree, you may make an application in the Land and Environment Court under the Trees (Disputes Between Neighbours) Act 2006 for the court to order your neighbour to take certain steps to eliminate the nuisance of an invading tree.

The Court has wide powers to compel your neighbour to remedy existing damage or prevent future damage being caused to your property or person. You must however, have taken all reasonable steps to reach an agreement with your neighbour before seeking the assistance of the Court. The Court can order your neighbour to do the following:

Pruning, trimming or removing of the tree;
Installation of root barriers;
An award of monetary compensation to you with respect to damage caused to your property;
Can grant permission for entry to neighbouring land for the purpose of carrying out the orders made;
Can enforce the orders made with fines of up to $110,000 for non-compliance by your neighbour.
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Expressions of interest Estate Planning Seminar

We are often asked to advise our clients in relation to estate planning and succession issues. In an effort to ensure that our clients and readers of this newsletter are well informed about the options available, and the risks to be aware of, we are planning to host an estate planning seminar in the near future.

We propose that the seminar will cover the following areas:

Wills
Powers of Attorney and guardianships
Testamentary Trusts
Succession planning
If you would be interested in attending the seminar, please email Melissa Grant at melissa@wmdlaw.com.au with your expression of interest.
 

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