APRIL 2011
INDEX
Australian Consumer Law: be aware of
single price disclosure
1
When you least expect it—Contamination
and property purchases
2
Trademarks: Understanding the
Benefits
3
Business Succession: Make haste
slowly
3
Family Law & Family Relationship
Centres
4
Diversity and Corporate Governance a key issue for all employers
5
Editorial
Welcome to our first edition of Discovery for
2011.
This edition will be of interest to all business
owners and employers and covers a range of
issues including the Australian Consumer Law,
which came into force on 1 January 2011;
contamination and property purchases;
understanding the benefits of trade
marks; business succession; diversity and
corporate governance through to Family Law
parenting disputes between separating
couples. All of these issues can affect your
business or your employees.
We trust you will find the information
contained in the articles of value and should
you have any queries, please do not hesitate to
give us a call.
David Wells
Managing Principal
Australian Consumer Law:
be aware of single price
disclosure
The Australian Consumer Law came into force on 1 January this year. This
new law (“the ACL”) restates and expands the range of consumer
protection afforded under the Trade Practices Act 1974. This Act is now
called the Competition and Consumer Act 2010.
One very important provision in the ACL relates to the obligation on
suppliers of goods or services “ordinarily acquired for personal, domestic or
household use or consumption” to state a single price for those goods or
services in particular cases. The Australian Competition and Consumer
Commission (“ACCC”) has recently been very active in enforcing the “single
price” provisions. The recent case of Australian Competition and Consumer
Commission v Le Sands Restaurant and Le Sands Café Pty Ltd in the Federal
Court is yet another reminder that the ACCC will enforce the requirement to
disclose a “single price” even if a particular price is only subject to a
surcharge on weekends and public holidays. In this case, the existence of the
surcharges was noted at the bottom of the menu by publication (in small
print) of the following statement: “10% surcharge on Sundays and 15%
Public Holidays”.
The bottom line is that if a weekend or public holiday price is subject to a
surcharge then there must be specific disclosure to the consumer of the
single price for the particular good or service on the weekend or public
holiday. The weekend and public holiday price must be disclosed with equal
prominence to the price charged on weekdays to the consumer.
What must be included in the “single price”? The ACL says that the single
price is the “minimum quantifiable consideration” for the supply of the
goods or services at the time of the representation about the price. All
“add-ons” that are to be charged by the supplier have to be included in the
single price. This includes any tax, duty, fee, levy or charge imposed on the
supplier. The supplier does not have to include any charge that is payable at
the option of the consumer
Penalties for breaching the “single price” provision are potentially very large.
In the Le Sands Restaurant case, the failure to state the single price for the
Sundays and public holidays surcharged items led to a pecuniary penalty of
$15,000 even though, as the Federal Court judge noted in his judgement,
the respondent had an “overall low level of culpability” and had “rectified
its menus relatively quickly” after being notified by ACCC of a complaint.
Geoffrey Horton
Special Counsel Commercial Group
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Discovery
ISSUE 33 APRIL 2011
When you least expect it – Contamination and
property purchases
Almost everyone in the property industry has a story to tell about a purchaser who neglected to do their due diligence prior to
purchasing a property and the disastrous consequences which followed.
What about Section 32?
Most people will be aware that Section 32 of the Sale of Land Act 1958 requires the vendor of a property to provide potential
purchasers with a document (called a “vendor statement”) disclosing certain matters about the property.
Purchasers should be aware that the disclosure obligations under Section 32 are fairly limited and there are a multitude of
potentially costly matters which are not required to be disclosed in the vendor statement. There is often little recourse for the
purchaser who is affected by such an issue, as most claims are trumped by the legal principle of caveat emptor – “let the buyer
beware”. Educating yourself about the property which you are intending to purchase will help avoid any nasty surprises down the
track.
In the first of a planned series of articles on property due diligence matters, we discuss one of the key issues to consider contamination.
How do I protect myself?
Section 32 does not require the vendor to disclose contamination in or on the property, unless that contamination has been the
subject of a notice or order from a relevant authority (such as the Environment Protection Authority) prior to the date of sale.
Unless the contract of sale provides otherwise, any existing contamination which is discovered after the contract is signed will be
the purchaser’s responsibility. This will include complying with any notice which may be issued by the EPA after the date of sale
and before settlement. The consequences can be costly!
There are two main ways to protect yourself against contamination risks when purchasing a property.
The first and most foolproof way is to engage an environmental consultant to carry out testing (including groundwater testing) and
provide a report of its findings before the contract is signed - or make the contact subject to such testing.
An alternative and less costly option is to negotiate the inclusion of provisions in the contract of sale under which the vendor
warrants that there is no contamination on the property and indemnifies the purchaser against any liability for any contamination
which may be detected. However, such provisions rely upon the purchaser actually being able to recover from the vendor if
contamination is detected – indemnities from a person or company incapable of payment are useless.
Buyer beware!
Our Property group was recently involved in a matter where contamination issues affected a residential property in Melbourne’s
inner eastern suburbs. The vendor demolished the existing house prior to listing the property for sale, and the purchaser bought
the property as vacant land. Some of the rubble from the demolition process remained on the land.
Several months after settlement, the purchaser began the process of building his new home and his contractors identified asbestos
amongst the rubble.
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ISSUE 33 APRIL 2011
Discovery
Trade marks:
Understanding the
Benefits
Trade marks are signs that serve to distinguish
one trader’s goods or services from another
trader’s goods or services. They are most
commonly names and/or logos, but can also
take on more unusual forms, such as colours,
shapes (e.g. the shape of alcohol or perfume
bottles), sounds or scents.
The registration of such trade marks is entirely
voluntary. So why register? The answer:
because registration brings with it numerous
benefits, some of which have only manifested
themselves in the last few years, with the
growth in e-commerce:
• Registration allows you to take
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Ultimately, the purchaser had to bear the significant costs of engaging
specialist asbestos consultants to remove the contaminated materials and
affected soil. Taking a closer look at the site before proceeding with the
purchase may have prevented this outcome.
Need advice?
In reality, many vendors will be reluctant to agree to include special
conditions which make them liable for issues arising with the property after
the day of sale. In any case, the protection offered by such provisions
depends to a large extent on the vendor’s financial resources. As a
purchaser, the best way to approach the issue is always to satisfy yourself
through your own investigations before the contract is signed.
The Property group at Moores Legal has experience advising both vendors
and purchasers in relation to managing contamination risk in the sale and
purchase of land. Our team would be happy to assist with any queries you
might have.
infringement proceedings against
somebody else using a similar trade mark.
Whilst an unregistered trade mark may only
be enforced in geographic areas where a
reputation in that trade mark exists, the
enforcement right of registered trade marks
extends Australia-wide.
• By using your own registered trade mark in
relation to the goods and/or services in
respect of which that trade mark is
registered, you are protected from thereby
infringing somebody else’s registered trade
mark.
• Registration serves as a warning to others
of your interest in the trade mark.
Frequently, organisations wishing to adopt
a new trade mark will undertake an
availability search of the trade marks
register to identify similar existing trade
marks. Generally, as the owner of the
registered trade mark you will never even
be aware that your mere registration has
dissuaded others from adopting similar
trade marks.
• Recently, many major websites including
Google, Facebook and eBay have adopted
policies allowing trade mark owners to
complain if their trade mark is being
misused. This may result in Google
AdWords advertisements being cancelled,
Facebook profiles cancelled or eBay
auctions terminated, simply on the basis of
a complaint by the trade mark owner. No
action through the courts is required. The
catch is: the complainant must be able to
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Andrew Boer
Principal
Head, Property Group
Kate Greenall
Lawyer
Property Group
Business Succession: Make
haste slowly
“Who will take over my Business?”. This is the critical and at times
daunting question faced by Business owners.
Depending on your structure and circumstances your options include usually
one (or at times a combination) of the following options:
1. pass to a business partner (if applicable);
2. to the next generation;
3. to a key employee/manager
4. trade/third party sale
Each option requires its own strategy and there are a number of
considerations in order to effect a smooth transition.
In the first of a four part series, we deal with each option and highlight
some tips and traps.
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ISSUE 33 APRIL 2011
Discovery
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demonstrate their interest in the trade
mark. Website operators insist upon trade
mark registration as proof of that interest.
• Registration of a trade mark makes the
domain name Uniform Dispute Resolution
Process (“UDRP”) available. If somebody
else registers in bad faith a domain name
that is the same as your trade mark, the
UDRP provides a cheap, fast and effective
remedy for having that domain name cancelled or transferred to the legitimate trade
mark owner.
• On the sale of the business, having the key
trade marks registered can increase the
business’ value.
Moores Legal can assist you with advising on
and registering your trade marks, as well as the
enforcement of those trade mark rights.
Business Succession: to a business partner:
Business owners use insurance funded buy/sell agreements to fund a future
exit from the business.
In a simple model:
• Each business partner or owner holds life insurance;
• The insurance payout more or less equates to the value of their equity in
the business;
• They agree in a “buy/sell agreement” that they will keep the insurance
proceeds (or their estate will keep them) in the event that they die or
become disabled.
• Under the agreement, the remaining business partner will take over the
deceased or disabled party’s interest in the business.
The Tax office has issued decisions upon which lawyers can rely in drafting
the agreements so they do not trigger a CGT event on signing.
Tax legislation also permits the receipt of insurance proceeds CGT-free in
certain circumstances.
Nils Versemann
Senior Lawyer
Commercial Group
A popular choice for insurance ownership is in superannuation. Parties are
attracted to the ability to receive proceeds tax free (if the right conditions
are met) AND claim deductions for premiums.
However, it’s not that simple.
Family Law & Family
Relationship Centres
Since 1976 when the Family Law Act
commenced operation, Australia has been a
world leader in compassionate and relatively
sophisticated methods of handling parenting
disputes between separating couples.
2010 marked the 4 year anniversary of the
introduction of Family Relationship Centres in
Australia. These were established for
separating couples to compulsorily visit to try
to settle their differences over children, before
they were permitted to go off to court to
litigate over their children. The concept was
sensible, and has been successful overall.
Interestingly, it was trumpeted by the Howard
government as a wonderful new initiative,
despite the fact that mediation, or counselling,
was also mandatory when the Family Law Act
started in 1976 but was de-funded in the
earlier years of the Howard Government.
The Tax office has recently issued a draft ruling (2010/D9) which makes it a
lot more difficult to claim a deduction for premiums for disability policies.
Business owners should make sure that any insurance-funded agreement in
which the policies are owned by super is only finalised after a legal review of
the super deed and the policy terms.
terms Please give us a call and we are happy
to talk about meeting your needs and getting your agreements right in
consultation with your other advisers.
Cecelia IrvineIrvine-So
Senior Lawyer
Commercial Group
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ISSUE 33 APRIL 2011
Discovery
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The Centres were established as part of the
2006 reform of the Family Law system which
continued the move away from the previous
adversarial model in favour of a model which
encourages cooperative parenting with equal
decision making and emphasises children's
rights to have a "meaningful relationship" with
both parents.
The amended Family Law Act provides that, in
most cases, parties cannot issue children's
proceedings unless they have a certificate from
a family dispute resolution practitioner which
states that the parties have made a genuine
attempt at mediation. There are exceptions to
this requirement, including urgency and a risk
of violence. Unless an exception applies,
parties must first attempt to resolve their
differences with the assistance of a trained
practitioner before heading off to Court.
The Centres mainly provide joint parenting
mediation sessions that focus on assisting
parents to agree on parenting arrangements
that are suitable for the children and
manageable for the parents. When
appropriate, Child Inclusive Practice sessions
can also be provided where children meet with
a practitioner. To encourage full
communication and cooperation by the
participants, the Act provides that all
communications with a practitioner are
confidential and cannot be disclosed in any
future proceedings. Currently, the first 3 hours
of mediation are free. From 1/7/11 clients will
unfortunately have to pay after the first hour.
The Centres also act as a gateway to a wide
range of local community services that
practitioners can refer parties to when
necessary. All Centres offer an information
session prior to commencing mediation where
parties can learn what they can expect from
the mediation service and what other resources
and services are available to them.
In February 2010, Monash University released
the results of a research project that used the
Frankston/Mornington Centre as a case study.
Of those clients who were surveyed, 80%
reported resolving their disputes by using the
Centre's services. Clients also reported
learning new techniques to communicate
effectively with each other and to engage in
post-separation parenting so as to minimise
conflict and prioritise the children.
Encouragingly, the clients spoke very well of
the mediators and the mediation process.
Diversity and Corporate
Governance—a key issue for
all employers
As the race for talent becomes increasingly challenging, many employers
have realised that there is a lot to gain from being an “employer of choice”.
One of the features that many employers of choice share is a willingness to
embrace diversity and in particular, gender diversity, not only at the levels of
junior and middle management but at executive and board level.
Diversity is not only the right thing to do but there are sound economic
reasons to support diversity in the workplace.
Diversity is also getting the attention of regulators and law-makers. For
example, listed companies need to be aware of the ASX’s new Corporate
Governance Recommendations on Diversity and in particular, Principle 3,
which requires listed companies to:
• publish a diversity policy;
• disclose measurable objectives for gender diversity;
• disclose progress towards achieving those objectives; and
• disclose the proportion of women in the whole organisation, including in
senior executive positions and on the board.
Many companies are already following these Recommendations and their
strategies and achievements serve as useful benchmarks.
More recently, the Federal Government announced the proposed Workplace
Gender Equality Act that will replace the Equal Opportunity for Women in
the Workplace Act 1999. The new Act will require employers of more than
100 employees to report annually from 2013 on gender composition of the
workforce and flexible work practices.
As a result, employers should get on the front foot and consider how they
might develop and implement a diversity policy. Some key issues for
consideration will be:
• Developing and articulating the business case for diversity and how
diversity is an economic driver and contributes to business performance;
• Obtaining the commitment of others to the program, from board level
to shop floor;
• Identifying forms of diversity to be addressed;
• Formulating a diversity policy and setting measureable objectives for
achieving gender (and, if appropriate, other forms of) diversity;
• Developing a range of structured programs and innovative strategies to
tackle diversity at all levels of the organisation;
• Working with other business units to ensure diversity is “owned” by all
and embedded in all aspects of the business;
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ISSUE 33 APRIL 2011
Discovery
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Family Relationship Centres play a vital role in
assisting families to resolve their disputes.
Parties should be referred to mediation as soon
as possible after separation if there is conflict
over parenting matters, especially because
there can be sizeable delays in the queue for
appointments.
• Formulating a way of linking achievement of measurable objectives to
individual’s KPIs;
• Ensuring that all policies, practices and procedures are diversity
compliant;
• Embedding diversity into corporate culture;
• Continuously monitoring and evaluating the program and reporting
outcomes.
For assistance and guidance on this topic, contact Frances Anderson of our
Workplace Relations team on 9843 2122 or by email on
[email protected]
Julia Dickson
Lawyer
Family Law
Frances Anderson
Senior Lawyer
Workplace Relations
Principals
We have a range of practitioners who are able to
assist with any minor queries or major issues you
may have. If you require further information,
please contact a member of our team.
Moores Legal is a law firm servicing companies and businesses,
Not for Profit organisations and individuals across Melbourne in
the areas of Commercial Law, Workplace Relations, Property Law,
Not for Profit Law, Aged Care, Elder Law, Estate Planning,
Superannuation & Structuring, Dispute Resolution, Family Law
and Personal Injury Law.
Murray Baird
Not for Profit
Andrew Simpson
Elder Law
Tim Adam
Personal Injury and
Employment Law
Allan Swan
Estate Planning, Superannuation & Structuring
Andrew Scott
Business and Sports Law
Jennifer Dixon
Estate Planning, Superannuation & Structuring
Stephen Winspear
Family Law
Andrew Sudholz
Commercial and Property
Law
David Wells
Commercial Dispute
Resolution
Peter Szabo
Family Law
Andrew Boer
Commercial and Property
Law
Special Counsel
Tim Connor
Personal Injury Law
Peter Andrew
Employment Law
Steven Sapountsis
Commercial Dispute
Resolution
Geoffrey Horton
Commercial Law
Terry Fraser
Aged Care
DISCLAIMER: This Discovery is of a general nature only. Specific legal advice should be sought rather than relying on this Newsletter.
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