Shredding the Corporate Veil: Are you a Shadow Director?

Shredding the Corporate Veil: Are you a Shadow Director?

People are generally aware of the risk of personal liability as a director. For example, directors can find themselves personally liable for debts to employees, for tax debts and penalties owed to the Australian Tax Office or for breaches of The Corporations Act 2001 ("the Act").

However, the Act itself provides little guidance or limitation in defining who is a director. A director may be anyone who acts in a position of a director, or someone who gives instructions or expresses wishes and the directors of the company are accustomed to act in accordance with those instructions or wishes. The result is that a trusted company advisor can, unwittingly, become liable as if they were a formally-appointed director.

Bullying in the modern workplace – how far can it extend?

Bullying in the modern workplace – how far can it extend?

The Full Bench of the Fair Work Commission (FWC) has handed down an important interpretive decision concerning when a worker is bullied “at work”, for the purposes of the workplace bullying provisions under the Fair Work Act 2009 (the Act).

Current working practices now shadow the traditional workplace model, through increased mobility, work done outside of normal hours and the prevalence of social media.  As a result, in recent years courts have been required to make findings about what performing work now looks like in the modern era.

Updated SMSF deed and our new SMSF corporate trustee stakeholders agreement

Updated SMSF deed and our new SMSF corporate trustee stakeholders agreement

Sladen Legal has conducted a major review of our self managed superannuation fund (SMSF) documents including the SMSF deed, the SMSF deed update and the SMSF pension agreements. We are pleased to announce our new SMSF corporate trustee stakeholders agreement.

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Sladen Snippet – Draft legislation released for look through approach for LRBAs

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Sladen Snippet – Draft legislation released for look through approach for LRBAs

Treasury has released a draft bill to enact a “look through” approach to apply to limited recourse borrowing arrangements (LRBAs) for income tax and capital gains tax (CGT) purposes, with effect from 1 July 2007. Under a LRBA the asset must be held by the trustee of a separate trust (referred to below as a bare trustee). This has raised a number of issues in relation to how the tax laws interact with the holding of the asset, the super fund and the bare trustee.

The curtain falls on modern award transitional provisions

The curtain falls on modern award transitional provisions

From 1 January 2010, thousands of state and federal awards were subsumed into 122 modern awards as part of an award simplification process. To allow employers and employees time to adjust, many modern awards contained transitional provisions, allowing employers to phase-in new modern award entitlements over a period of time, including payments in relation to minimum wages, piece work rates, casual or part-time loadings, shift allowances and penalties payable for work done on Saturday, Sunday and public holidays. There were also transitional provisions in relation to accident make-up pay, district allowances, and higher redundancy pay.

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Sladen Snippet - Do recent Court decisions point towards leniency in the new SMSF penalty regime?

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Sladen Snippet - Do recent Court decisions point towards leniency in the new SMSF penalty regime?

Two Federal Court decisions from 2014, DCT v Lyons and DCT v Graham Family Superannuation Pty Ltd have demonstrated the Court’s relatively lenient approach to applying penalties under the Superannuation Industry (Supervision) Act 1993 (SIS Act) for cases involving multiple numbers of very serious breaches.

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Sladen Snippet - Related party LRBA loans must be benchmarked

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Sladen Snippet - Related party LRBA loans must be benchmarked

Further to the recent Australian Taxation Office (ATO) release of two ATO Interpretative Decisions, ATO ID 2014/39 and ATO ID 2014/40, as outlined in a recent Sladen Snippet, the ATO has released further information on what factors will be considered when applying the non-arm’s length income (NALI) rules to non-commercial limited recourse borrowing arrangements (LRBAs).

Supreme Court considers trustee’s responsibility in trust administration

Supreme Court considers trustee’s responsibility in trust administration

Discretionary trusts are commonly understood to be efficient structures for asset protection and tax minimisation, and are widely used in modern-day business.  What isn’t so well understood are the obligations of trustees in administering trusts, particularly with regard to providing reasons for their decisions to beneficiaries.

Avoiding work party pitfalls

Avoiding work party pitfalls

The end of 2014 is fast approaching and as we don our dancing shoes and toast to the successes of the year that was, employers need to remain mindful of the legal and HR risks that work parties can pose.

Whilst the end-of-year work party is a great way to reward staff and promote team bonding, the combination of alcohol and festive cheer can be a recipe for disaster. There are some precautions that employers can take to minimise the risk of a post-party ‘HR hangover’.

An updated Franchising Code of Conduct

An updated Franchising Code of Conduct

The Franchising Code of Conduct will be repealed and replaced with a new Code (Code) on 1 January 2015. The Code applies to all franchise agreements that are entered into, renewed or transferred after 1 January 2015 and will affect all businesses that are franchised.

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Sladen Snippet - ATO releases ATO ID’s on non-commercial LRBA loans

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Sladen Snippet - ATO releases ATO ID’s on non-commercial LRBA loans

The ATO has released two ATO Interpretative Decisions (ATO IDs), being ATO ID 2014/39 and ATO ID 2014/40 on the application of the non-arm’s length income rules (NALI) to non-commercial limited recourse borrowing arrangements (LRBAs).

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Sladen Snippet - Coronial finding into drowning of school boy

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Sladen Snippet - Coronial finding into drowning of school boy


On 27 October 2014 the Coroner’s Court of Victoria delivered its finding into the inquest on the death of Kyle Vassil.  The deceased was a 12 year old student who, on day one of a school camp, drowned in a dam a few meters from shore. Kyle was a competent swimmer who was swimming with other class members in the presence of supervising teachers and young camp leaders when he drowned.  The circumstances surrounding the death were tragic and no doubt traumatic for all persons involved.  The purpose of the Coronial investigation was to ascertain, if possible, the cause of death and the circumstances in which the death occurred.

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Navigating family law settlements

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Navigating family law settlements

This article discusses some of the taxation and trusts issues encountered when structuring family law settlements. Managing these issues appropriately through careful planning and the preparation of appropriate documentation can ensure the best financial and taxation outcome for clients

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Sladen Snippet: Business Restructure Roll-Overs Extended in New Tax Law

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Sladen Snippet: Business Restructure Roll-Overs Extended in New Tax Law

The Tax and Superannuation Laws Amendment (2014 Measures No 6) Bill 2014 (the Bill) was introduced to Parliament on 30 October 2014.

Schedule 1 of the Bill seeks to amend the Income Tax Assessment Act 1997 to extend the CGT roll-over relief afforded under certain replacement asset roll-overs to revenue assets and trading stock.

Women in Property Committee of the Urban Development Institute of Australia

Women in Property Committee of the Urban Development Institute of Australia

Sladen Legal is a proud sponsor of the Women in Property Committee of the Urban Development Institute of Australia (Vic Division) (UDIA).

Last night, Sarah Rizk, a Principal in Sladen Legal’s Property and Development Group and Chair of the Women in Property Committee, moderated a Minute Mentoring event jointly hosted by the Women in Property Committee and Outlook Committees of the UDIA. The aim of the event was to provide young and mid-level members of the UDIA access to senior people in the industry who they may not otherwise have a chance to interact with. The event launched a new series of events to be run by the Committees that will provide greater opportunities for “up and comers” in the urban development industry to make better, more valuable connections.

Supreme Court takes alternate approach to shareholder disputes

Supreme Court takes alternate approach to shareholder disputes


Many small to medium sized businesses face disputes between shareholders, who can often be family members.  These shareholder disputes can be very expensive to resolve and typically take the form of “oppression” claims commenced in the Supreme Court of Victoria, under the provisions of s 233 of the Corporations Act 2001 (Cth). Although individual disputes differ, they all have in common allegations that the affairs of a company have been conducted in an oppressive manner.

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Sladen Snippet - Changing the way wills can be contested

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Sladen Snippet - Changing the way wills can be contested

The Victorian government passed the Justice Legislation Amendment (Succession and Surrogacy) Act 2014  on 16 October, prior to going into caretaker mode leading up to the election.

The Act includes significant amendments to the laws governing the contesting of wills.

Since the removal of any relationship requirement between a claimant and a deceased person in 1996, the courts have dealt with a wide range of claims. These claims are not only by spouses and children of the deceased person, but also grandchildren, nephews and nieces, carers and even neighbours.

Grande – misleading and deceptive conduct case

Grande – misleading and deceptive conduct case

The Supreme Court of Western Australia recently found a director personally liable for misleading and deceptive conduct by reason of the director signing a Letter of Offer on behalf of the company, which contained certain representations. While the case dealt with provisions of the Fair Trading Act 1987 (WA), both the Fair Trading Act 1999 (Vic) and the Australian Consumer Law have equivalent provisions.

Trickle-down liability in the supply chain

Trickle-down liability in the supply chain

“If you’re contracting out, and the price seems too good to be true, someone’s probably getting ripped off. And if it turns out to be the workers, and it turns out you half knew that, then you are in danger yourself of having been involved in a contravention”

These comments were made by Natalie James of the Fair Work Ombudsman (FWO) last month after the workplace regulator settled its long running prosecution with retail giant Coles, in connection with the unprecedented ‘trolley collectors case’.  In an environment where outsourcing is prevalent and often complex, the prosecution of Coles has been a sobering reminder to the business community that lawmakers and regulators are sharpening their view on chain of responsibility.

Adverse action pinned down by the High Court

Adverse action pinned down by the High Court

The High Court of Australia has handed down its second significant decision on the interpretation of the adverse action provisions in the Fair Work Act 2009 (the Act).

In 2012 the High Court made a decision in the case of Board of Bendigo Regional Institute of Technical and Further Education v Barclay, which provided employers with guidance on what must be established to defend a claim that adverse action had been taken against an employee for a prohibited reason.  This case informed us that if the person who made the decision to sanction the aggrieved employee (such as a HR or operations manager) could provide cogent and credible evidence that no part of their decision involved a prohibited reason (such as participating in a lawful industrial activity), that would be sufficient to resist the employee’s claim.