Issue 46 - November 2007

• Horse flu nothing to sneeze at
• Reforms to liquor licensing
• Collaborative law
• Caution for self-managed superannuation funds
• Au Fait - Delivering practical people solutions
• The Verdict

How has EI affected you? Horse flu nothing to sneeze at

The cheers for Efficient hung in the air after the sleek grey champion swooped from behind to lead the charge across the line in a Melbourne Cup that almost wasn’t.  To those in the know, many cheers were for the racing industry itself; driven to it’s knees by the highly contagious Equine Influenza (EI) epidemic that brought horses of all kinds to a standstill across the East Coast of Australia. The cost to Australia, the racing and pleasure horse industries and individuals has yet to be counted.

In late August at the Eastern Creek Quarantine Facility, one thoroughbred stallion just off a plane from Japan had the sniffles. By the first Tuesday in November, thousands of horses had been infected in the middle of the breeding and foaling season.  Mares have died, foals have slipped and racing has been cancelled in most areas jeopardising the livelihoods of myriad owners, breeders, trainers, riders, transporters, feed merchants, vets and others.

There is vaccine but the little available is dedicated to race horses, Olympic contenders and an attempt to isolate hot zones with vaccinated “buffer zones”.  No  “pleasure horses” can be moved and public anger grows as private horses are left to catch the disease.

Retired High Court Judge, Ian Callinan is conducting an independent inquiry into the spread of EI. As public anger grows over what is perceived by many to be a “too little too late” response. Legal opinion is divided about whether waiting for compensation or launching class action is the better response.

Raising the spectre of negligence, the Callinan Inquiry has been told a breakdown in decontamination procedures allowed the disease to escape quarantine. That remains to be determined but the companies responsible for the quarantine procedures and the Government are facing mass litigation and claims for compensation.

EI is in now Sydney and in the Shire and it's surrounds. Perhaps you have suffered loss as a result of EI. We are here to help you get back on your feet with practical advice about your compensation and litigation options. If you require any further information or advice, please contact Greg Dickson or Melanie Tilbrook or email greg@wmdlaw.com.au or melanie@wmdlaw.com.au.

Reducing the cost and complexity of liquor licensing & resolution of associated disputes  Reforms to liquor licensing

The NSW Government has released the draft Liquor Bill 2005 which is aimed at reducing the complexity and costs of liquor licensing and the resolution of related disputes. Some of the main changes include:

The Director of Liquor and Gaming will have the power to deal with license applications and disciplinary matters. This process will allow parties to resolve disputes without the need for a court hearing;
The Licensing Court will now be known as the “Liquor and Gaming Court”;
All applications for licences will be subject to a Social Impact Assessment Process, which will include an assessment of neighbourhood harm issues. Currently, only hotel and off-premises (retail) licence applications require this assessment to be completed;
The names of some licenses will be changed slightly – for example, Nightclub licences will be known as "hotel licences", bottle shop licences will be known as “packaged liquor licences” and wholesalers or brewers licences will be known as a “product/wholesaler licence”;
Bed and breakfast establishments will be given the ability to apply for a license;
Provisions relating to under age drinking, responsible services of alcohol and liquor harm minimisation have been strengthened; and
Standard trading hours for liquor trading have been set from 5am to midnight 7 days a week. However, any restrictions which already apply will continue to apply.
If you would like any further information on the proposed reforms and their impact or advice on liquor licensing, please contact Rebecca Flynn or email rebecca@wmdlaw.com.au.

A new approach to resolving family law and de facto disputes  Collaborative law

A lot of attention has recently focused on a new method of dispute resolution known as “collaborative family law practice”.  It is similar to mediation in that it employs non-adversarial techniques to reach settlement but there are many important differences.

In a collaborative practice, the clients themselves conduct settlement negotiations with the lawyers by their side so that ownership of the process is kept with the clients.  Most often these negotiations take place during 4-way meetings in which the lawyers act as advisers and structurers of the settlement rather than taking charge of the negotiation.

The parties are required to sign an agreement, prior to undertaking the collaborative practice, that, if agreement cannot be reached the lawyers for each party must withdraw and neither they nor any member of their firms may represent the clients in subsequent litigation.  This is designed to ensure that there is no “holding back” so that the parties are fully committed to reaching a reasonable settlement without negotiating and maneuvering for litigation advantage later on.

Collaborative law can be a useful tool in attempting to reach settlement but it is not suited to every dispute and the disadvantages, as well as the obvious advantages, of the practice must be carefully considered before committing to this method of negotiation.  The process requires a considerable commitment, for both clients and their lawyers, to work co-operatively to try to achieve a settlement.

For further information in relation to collaborative law or any advice or information concerning family or defacto law issues please contact Greg Dickson or email greg@wmdlaw.com.au.

Leasing property from a super fund Caution for self-managed superannuation funds

To increase forced savings and help fund retirement, members of self-managed superannuation funds, may consider selling property to the fund and leasing it back. This option works best as a long term plan, particularly if you have no intention of buying back the property.

The important aspects to keep in mind if entering into these transactions are that the purchase price of the property should be market value and you should enter into a written lease agreement on commercial terms with a market rent payable. These arrangements also have positive tax implications, as complying super funds will not lose tax concessions available to them, if the fund enters into this type of transaction.

Caution must however, be taken because under the Superannuation (Industry) Supervision Act (SIS), a trustee or manager of a regulated superannuation fund must not lend fund monies or give financial assistance using the resources of the fund to a member or a relative of a member of the fund. The draft self-managed superannuation funds ruling SMSFR 2007/D2, released by the Australian Tax Office quotes the rationale for the introduction of these provisions as being 'to prevent the use of superannuation savings as a means of providing current-day financial support to members.'

Failure to pay rent to the super fund, in accordance with the lease, may be deemed as financial assistance to a member and therefore a breach of the SIS. In addition, if the lease provided for interest to accrue on unpaid rent as a means of compensating the super fund, this may be deemed to amount to a loan to the member, also in breach of SIS. In any event, compensating the fund in this manner will not remedy the original breach by the fund in providing financial assistance to its members.

The consequences for such breaches are extensive. Under the SIS, a fine of up to $220,000 or 5 years imprisonment may be imposed. In addition, members who receive the financial assistance or loan may be banned from being trustees of a super fund and the super fund may lose its concessional tax status.

Prior to entering into these types of arrangements, it is important to seek legal and financial advice about the benefits and implications of these transactions in your particular circumstances. If you would like further information on superannuation funds and associated property matters, please contact Rebecca Flynn or email rebecca@wmdlaw.com.au.

HR for your small business Au Fait - Delivering practical people solutions

We often take the opportunity to introduce the readers of our newsletter to our clients and contacts who offer services which may be of interest or assistance to our readers. This month we introduce Au Fait.

Au Fait is a human resources consulting service, which was established by Samantha Fuller, to provide assistance to small and medium businesses who do not have an in house human resources manager or department.

We spoke with Samantha about the staffing and employment challenges which businesses can face. Samantha informed us that Au Fait can assist businesses by providing advice and assisting with simplifying the complexities of employment issues which may be encountered in the following areas:

recruitment;
retention;
employee performance;
policies; and
occupational health and safety.
Au Fait offers a 'HR Housekeeping Review', which involves a check of the HR policies, procedures and systems of a business and the development of an action plan which is tailored to the needs of the business.   If you would like any further information in relation to Au Fait's services or the HR Housekeeping Review (including details of the special offer being made by Samantha), you should contact Samantha Fuller by email samantha@aufait.com.au or visit the Au Fait website.

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.

My elderly father has a terminal illness and limited life expectancy. If he gifted monies to me prior to his death, will other family members be able to challenge this gift after his death?

Under the the Family Provision Act 1982 (the Act) , there are provisions which enable 'eligible' persons to make a claim to recover funds or other gifts disposed of by a person prior to their death, but only in certain circumstances. The disposal of those assets must fall within the category of 'prescribed transactions'.

Prior to establishing that a disposal of property is a prescribed transaction, the eligibility test must be satisfied. An 'eligible' person includes, a spouse, a child, a grandchild (living with the deceased prior to their death), and a person wholly or partly dependent on the deceased.

A 'prescribed transaction' includes transactions which:

took effect within 3 years prior to the deceased death, with the intention of denying or limiting the provision for an eligible person;
took effect within 1 year prior to the deceased death, at a time when the deceased had an overriding moral obligation to make adequate provision for an eligible person;
took, or is to take, effect on or after the date of death of the deceased.
If the Court is to make an order for provision in favour of an eligible person, the asset the subject of the prescribed transaction (for example money, property etc) can be declared 'notional estate' which must be returned to the deceased estate and used to meet the eligible persons claim under the Act.

For more information on Family Provision Act claims see our July 2005 newsletter or contact Craig Pryor or or email craig@wmdlaw.com.au. The prospects of any challenge on an estate depend on the particular circumstances of the case, legal advice should be sought at the time of entering into the proposed transaction and on receipt of an any claim on the estate.

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