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Balcony struck down by High Court

14 Oct 2016
Building and Construction law, Litigation
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Balcony struck down by High Court

A dispute over a 5 square metre balcony is probably the most expensive balcony feud ever in Australia. The High Court recently ruled in a dispute between the owner of a property and the body corporate itself.  The owner of the property wanted approval from the body corporate to allow the owner to build an additional balcony between his two existing  balconies in a Noosa Heads complex. This change would have effectively granted the property owner additional property, albeit common air space, for the property.

The rules and the body corporate legislation require that any change to a property that takes away body corporate property requires unanimous consent of all of the members of the body corporate before it can happen. In 2012 the body corporate members unanimously agreed to deny the balcony upgrade, sparking the property owner to try and overturned that decision through the courts. balcony The property owner went through the appeals process before ending up in the High Court.

In the High Court, the property owner argued that it was unreasonable of the body corporate to not allow the extension of the balcony. However, the High Court ruled that it was not unreasonable that the motion to deny the balcony upgrade was unreasonable.

The fight, which reportedly cost the parties somewhere in the order of $500,000.00, now means that body corporates will know that such changes can be blocked and gives certainty to the way that the courts in Queensland will interrupt these disputes. It is also a good lesson for people considering entering litigation; now the property owner has been left to foot a hefty legal bill all over his attempt to create a bigger boundary on his property.

At Streten Masons Lawyers we can assist your clients in all types of legal disputes – particularly body corporate disputes. Heading into expensive litigation processes can be incredibly costly for your business so getting advice is the best thing to do. Contact one of our lawyers today on (07) 3667 8966 or info@smslaw.com.au to find out how we can assist your clients.

References:
http://www.afr.com/real-estate/residential/martin-albrechts-balcony-plan-struck-down-by-high-court-20161012-gs0ce7

 

Building up to Bankruptcy

26 Jul 2016
Building and Construction law, Litigation
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Building up to Bankruptcy

How Insolvency Could Stop Your Construction Firm

 

If you are a licensed builder in a company that is winding up due to bankruptcy, there are a number consequences set out by the Queensland Building Services Authority (QBSA) which you should be aware of.

When a company can no longer satisfy its debt obligations and must be declared bankrupt, it is insolvent. An insolvent company may go through a winding up period, that is, the orderly wrapping up of affairs and closing down of a business, also known as an event.

When an ‘event’ occurs in a company where you hold the role of director, secretary, or influential person, you may be deemed an “excluded person” pursuant to section 56AC of the Queensland Building Services Authority Act 1991 (Act).

What are the consequences of this occurring?shutterstock_374312011

When one event occurs, you will become an “excluded person” for a period of five years unless you can make appropriate submissions to the QBSA to have you deemed to be a “permitted individual”. This application must be made to the QBSA within 28 days after you receive notice from the QBSA that they intend to deem you an excluded individual.

Where a second or subsequent event occurs you will receive a second or subsequent notice from the QBSA, who has the power to deem you an excluded individual for life. When an individual is excluded for life, this means they can never be a licensee, director, or secretary of a licensee company. Again, the individual only have 28 days to apply to the QBSA to be categorised as a permitted individual.

What should I do first?

Where you receive such an exclusion notice you should immediately contact your professional advisors so that steps can be taken to determine whether you should make an application. Your advisor will properly prepare the application on your behalf; there are a variety of factors which must be considered to comply with the requirements of the legislation and give you the best chance of succeeding in your application.

The QBSA has considered my application and it has been refused, what do I do next?

Where the QBSA decides that it will not categorise a person as a permitted individual, you are at liberty to apply for a review of that decision through the Queensland Civil and Administrative Tribunal (QCAT).

The QCAT member will then conduct a new review of the matter to decide if the QBSA decision should have been to categorise the person as a permitted individual. These are important and complicated applications and once again you should instruct competent lawyers to act on your behalf in the application.

Where can I find help?

At Streten Masons Lawyers we can help if you are currently owed money by a person who you fear may become a bankrupt.  We can also assist if you are owed money by a debtor and want to initiate bankruptcy proceeds against them. Contact Jeremy at Jeremy@smslaw.com.au or call on 07 5428 1111 to talk about how we can help your business.

By Jeremy Streten

 

When should I settle?

12 Apr 2016
Commercial Law, Litigation
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The old saying a bird in the hand is worth two in the bush has particular application when forced to decide on whether or not to compromise in legal disputes.

All too frequently the aggrieved parties – having lived and experienced the dispute – are adamant that their legal position is clear and obvious to all. They think that should the matter need to be decided by a judge they will be vindicated and they will ultimately be shown to be right.

litigation

As a result, one or both of the parties in a legal dispute will at one point or another need to perform a dispassionate cost benefit analysis of settling the matter early, or proceeding with legal action. Often this requires hard decisions as to the benefit of receiving (or providing) certain payments at an agreed date, rather than at an indeterminate point in the future if they proceed to court. This must be weighed against the inherent uncertainty of litigation.

While no two disputes are identical, and each has its own unique facts or causes, there are three key considerations that should be at the forefront of both parties’ minds when deciding on whether to compromise, and if so to what extent:

  1. How long will it take to resolve this matter if it does not settle?
  2. How much will it cost to continue and if necessary commence or continue legal action?
  3. What are the chances of the other party prevailing and the consequences?

While the above factors can apply to any settlement negotiation, they take on particular importance in circumstances where proceedings have been commenced.

In particular it is important to appreciate that court proceedings where contested and not settled early may take years to resolve. As a consequence of this, almost without exception, legal costs will continue to be incurred as the matter works its way through the various stages of litigation.

It may be that the above vindication is ultimately obtained in the form of a court judgment. Ordinarily costs will follow the event, meaning the unsuccessful party pays the successful parties costs; it is unlikely that such an order will cover all of the expenses the successful party has incurred.

Where the dispute concerns the repayment of outstanding monies, the risk of either liquidation or bankruptcy of the other party remains an ever present danger.

Ultimately, settling a matter is an exercise in trying to put a dollar value on chance. What is the likelihood of an adverse outcome to the litigation and what figures do you assign to that chance? This number is then weighed against the value assigned to concluding early.

At Streten Masons Lawyers we take a practical and commercial view to resolving disputes; we understand that in some instances litigation is the only way forward while in others negotiation will result in the best outcome for the client. We have experience in both proceeding to judgment and settling matters early and provide expert advice on the best course of action. If you are experiencing an issue and need litigation matters sorted, please email Jeremy at Jeremy@smslaw.com.au or call us at 07 3667 8966.

 

By Jeremy Streten

 

Engaging with Clients- who are the winners and losers?

12 Apr 2016
Commercial Law, Debt recovery, Litigation
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Engaging with your customers

The initial client phase of any business is an exciting time for the business Infographic moneyowner.  The feeling the business owner has when signing up a new client is what drives the business to keep going.  It is important to have certain legal documents in place at this phase to ensure the business is successful and will continue to be profitable in the future.

Your first engagement with a client may not seem to be particularly important but it is at that stage where the simple collection of the client’s details and having the client sign off on your terms and conditions can affect the future of your business.

Bringing new customers or clients in is the lifeblood for any business.  By not having correct procedures in the background of your business it can mean you are out of pocket in the future if the customer or client fails to pay you for your goods or service.

Lack of process may cause lack of cash

We recently sat down with a client who unfortunately was owed a considerable amount of money for goods that they had supplied on credit to a business.  The client had a credit application that they had new customers sign and some simple terms and conditions that they had changed over the years to incorporate various clauses that they had come across in use by other businesses.

Upon review of the documents (the contract between the parties) it was revealed that the customer was operating under a trust however none of the trust or trustee details were provided.  The personal guarantee was not signed.  The terms and conditions did not include default provisions (interest, administration fee or costs of recovery).

Due to the issues with the documents the costs for the client to pursue the debtor had increased dramatically and given the uncertainty around the entity of the actual customer the client decided to accept a less favourable payment arrangement from the debtor.

Process equals success

We recently spoke to a client who was running a successful wholesale distribution business.  All of their customers were on credit with payment due 30 days after the last day of the month the invoice was issued.

The client had a system setup whereby a new customer would complete the following documents:

  • Credit Application;
  • Privacy Notice;
  • Personal Guarantee;
  • Acceptance of Terms and Conditions.

The customer would either deliver the documents to our client or post the documents to the client.  Upon receipt of the documents the accounts department would review them.  A checklist was in place whereby each important part of the document was checked to ensure the forms were completed correctly.  If for instance the details were incomplete or the personal guarantee was not signed then this would be raised with the customer.

No goods were to be supplied unless this process was complete and confirmation provided by the accounts department.

Of course having a process in place does not mean that a business will not be faced with the situation where a customer has failed to make payment for a good or service.  The purpose of having the process in place is to ensure the business that they are in the best possible position should a customer not make payment.  The client had in place a follow up procedure for invoices where reminders were sent on regular intervals, and a telephone call would be made.

The client was able to use their process and documents to their advantage.  A customer had failed to make payment for invoices.  The invoices were 90 days past due.  The process of following up the invoices had resulted in no response from the debtor customer.

The next step in the customer’s process was to either speak to a solicitor or instruct a reputable commercial debt collection firm to assist in the debt collection process.  In this instance the customer retained the services of an excellent debt collection firm to start the next part of the debt collection process.

Demands from the debt collection firm proved unsuccessful and the debtor refused to commit to payment during telephone calls.  Due to the debtors continued failure the customer was forced to take the next step which is where a solicitor is retained (either through the collection agency or directly).

Legal proceedings were commenced against the debtor and against the guarantor for the amount outstanding and legal costs.  Due to the client’s terms and conditions which were agreed to by the debtor the recovery costs were able to be included in the debt owing and interest at a higher rate was able to be included.  The legal proceedings were required to be personally served upon the guarantor and as the client had the details from the initial engagement form investigations to find the guarantor were not required (saving on costs).

The pressure of the legal proceedings against the company and the guarantor meant that full payment was made for the entire amount outstanding including costs (both legal and recovery) and interest.

Whether your business is supplying goods or providing a service the initial engagement with your clients is an integral part when building a successful business.  If you want to ensure you have client engagement processes in place and be in the best possible place should a customer fail to pay you contact Craig Mason at Craig@smslaw.com.au or call 07 3667 8966 to discuss your needs.

The benefits of choosing QCAT

06 Oct 2015
Litigation
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The benefits of choosing QCAT

 

QCATIt can be confusing and at times overwhelming trying to work out how, or where, to proceed to protect your legal rights. It is therefore important to understand how the Queensland Civil and Administrative Tribunal (QCAT) operates, and when it might be right for you.

The QCAT as we know it today has been described as a ‘super tribunal’. This is reflective of the fact that the QCAT was developed to consolidate 18 previously separate tribunals into a single body with jurisdiction over a wide range of subject matters, from debt disputes to the review of decisions made by government bodies.

As the QCAT is a tribunal rather than a court, matters are considered and decisions made by members rather than judges. A member does not need to be a legal practitioner, they do need to be, in the opinion of the Minister, a suitably qualified person.

Differences between QCAT and Court actions

A key difference between a proceeding in QCAT and a proceeding in the courts is the principle that, in general, parties in the QCAT are not legally represented. This is a reflection of the efforts to make the QCAT process less formal than a court action. Should a party wish to have legal representation an application must be lodged with QCAT seeking leave, which may or may not be granted depending on the circumstances.

In addition, as QCAT is not a court, it is not bound by the rules of evidence which can at times be quite complex and present difficulties for self-represented litigants in court proceedings. Again this serves to simply the process.

Advantages of QCAT

In considering the matters before it, the stated aim of QCAT is to assist the parties to resolve the dispute in a manner that is impartial and fair, while at the same time providing those services in a timely and cost effective manner in a way that the courts cannot.

To keep matters proceeding toward a resolution in QCAT, the tribunal is much more involved in setting down timeframes for the parties. Where courts rely upon parties to comply with the timeframes set down in legislation, QCAT will issue what are known as ‘directions’. These direct the parties to perform certain actions, for example providing evidence to one another and QCAT by a certain date. As an effect, the matters in QCAT will often proceed on a much shorter timeframe and a much more orderly fashion.

A further advantage of QCAT is that as part of the procedure, parties will often be directed to attend what is known as a compulsory conference. This is, in effect, mediation where a Member assists the parties to consider the issues in dispute, offers a view on the risks of proceeding to a hearing and helps the parties explore alternative options to resolve the dispute.

This can result in the parties arriving at an agreement without having to spend the time or incur the costs of taking the matter to a contested hearing.

When QCAT may be right for you

The most common use of QCAT is for minor civil disputes, such as a debt dispute up to a limit of $25,000.00 – although any order of QCAT in relation to a debt dispute would still need to be enforced through the Courts. However, if you have been the subject of an adverse decision by a government body, such as a decision by the Queensland Construction and Building Commission in relation to a building licence, QCAT is a commonly used avenue to have the decision reviewed.

Streten Masons Lawyers has a wide range of experience in advising clients on the circumstances where it is appropriate to proceed in QCAT or the courts, and in advising on recovery of orders made by QCAT. For advice on pursuing your matter in QCAT or elsewhere, contact our office on (07) 3667 8966.

Matthew Foster – Solicitor

Business contracts

29 Mar 2015
Corporate law, Litigation
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Do you know who you are doing business with?

Business deal

A fundamental principle of contract law is that you can only enforce a contract against someone else who is a party to that contract. So ask yourself, do you know who it is that you are dealing with? More specifically who is actually making the promise, and on whose behalf is it being made? Because it may well be that when things go sour the person you wish to enforce the agreement against is not the person you can enforce the agreement against.

Three things to know about who you’re doing business with

  1. Are you still dealing with who you think you are?

Sadly it is not uncommon for companies to get into financial trouble. Often this is only temporary, and they manage to trade their way out of difficulty. Other times this is not possible and the company will shut down.

However, there is another possibility. Rather than ceasing to operate the company director may create a new business and commence trading under a business name similar to that of the old business. Suddenly you might find yourself unknowingly dealing with a new company, but with your agreement enforceable against the old one.

  1. Does the person you are dealing with have authority?

When making deals with other companies we aren’t always in contact with the business owner, particularly when dealing with larger firms. Rather, the point of contact when entering into an agreement is with an agent of the company.

Sometimes however, agents can get ahead of themselves; it’s possible that the ‘District Manager’ who just placed that large order for work to be done did not have the authority to enter into that contract. In this situation it is possible that the agreement will not be enforceable, or only enforceable against the agent and not the business owner.

  1. Are you dealing with a large commercial group?

Large commercial groups can often be comprised of any number of distinct companies, connected by a complex web of shareholdings and subsidiaries. This can create a situation where it is unclear who is making the promise and who you can enforce it against.

By way of example let us say Company A and Company B are part of a larger commercial group. An agent asks you to perform work for Company B without you ever appreciating that the agent is doing so as a representative of Company A.

If Company B is unhappy with the work, or just refuses to pay for the goods or services you supplied, who do you pursue for the debt? Unfortunately there is no hard and fast rule in this situation and who you actually have legal rights against may depend on all the circumstances.

2 steps you can take to prevent this from happening

Business and contracts can be a dynamic environment, and it’s not always possible to anticipate every eventuality. However, in the above scenarios sound familiar to you there are a few simple steps you can take to protect yourself.

  1. A phone call to the business

Often, if you are unclear whether the person you are dealing has authority to enter into that contract, or authority to act on behalf of that company, the quickest and most effective option is to give the other side a call. If you have any doubts, peace of mind can often be obtained by simply getting confirmation from someone you know does have the necessary authority. Of course it’s always better to get these things in writing and we can help with that.

  1. Get advice from a solicitor

If you still have doubts it is worth getting advice from a solicitor. We are highly experienced in untangling the corporate web to ensure that the company you are dealing with is who you think it is. If the circumstances require it, we can also help you work out who to commence legal action against.

How we can help

Contact our office on 07 3667 8966 for specialised advice on your rights and protections regarding your contracts.

Matthew Foster – Solicitor

Litigation

07 Dec 2014
Debt recovery, Litigation
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The ‘L word’: Why litigation isn’t as scary as you think

I want the truth

There is a word we lawyers like to use often and typically with plenty of zeal – litigation. For the rest of the public, though, the idea of suing someone has been sensationalised by a lifetime of movies and television. The truth is that quite little is known about how the process actually works in Australia.

For some people the idea of litigation is exciting, for many it can be daunting, but I can assure you that the reality is somewhat anticlimactic.

The boring truth is that for most claims that are filed, no one will see the inside of a court room. This is a fact that seems to baffle most people as they prepare for their day in court, however, the reality is that most of the work is done via an exchange of letters and documents. The pen truly is mightier than the sword.

For those of you who have a legal problem and are feeling uneasy about taking the next step, or for those thinking ‘I don’t need to take it that far’, here is an overview of the process that may alleviate some of your uncertainty –

1. Filing a Claim

The first step is to file a Claim and Statement of Claim in the relevant court. This can be done online now. A Claim details what it is you are seeking from the defendant, and the Statement of Claim is merely an explanation of facts as to why you should have it. There is a lot of legal jargon and formalities that have to be adhered to, but in essence that is all it is.

2. Service

Once the Claim has been filed it will need to be served on the Defendant. If it is a person, they will need to be personally served and we will get a process server to do it. Companies are a lot easier to serve as we can simply mail the Claim to their registered office.

3. Default Judgment

Once a Defendant has been served they will have 28 days in which to file a Notice of Intention to Defend and a Defence. If they fail to do so you are able to make an Application for Default Judgment. If they do file a Defence, there are a number of procedures that are required to go through including holding a settlement conference where negotiations can take place to obtain the best commercial outcome.

4. Enforcement

In the movies the judge will rule in your favour set to an inspirational soundtrack, the defendant will storm out in an outrage, and that is the end of the story. The reality is that obtaining Judgment is really the beginning. Just because you might have Judgment against someone doesn’t mean that they will automatically pay it. There are a few options that we can take to enforce a Judgment against a Defendant and they vary in severity from obtaining an arrest warrant to filing a creditor’s petition for bankruptcy.

5. Costs

One of the biggest issues that people worry about is the cost. This is a valid concern as no one wants to spend more money while chasing down money. You are able to claim scale costs from the defendant once you have obtained Judgment. Scale costs are prescribed amounts for each of the steps that your lawyer may charge you for in a proceeding. You will be charged the scale cost for each of these steps, however there will also be non-scale steps that may need to be taken. At the end of the day the decision to pursue someone in the courts should always be a commercial one.

This is of course is a simplistic overview of the process, and while at times it can get a little more complicated, overall litigation is not as dramatic or scary as it seems.

How we can help

If you are concerned about an issue and are not sure whether or not you should pursue it, feel free to contact us to discuss your options further.

Samantha Wooding

Solicitor