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Sladen Snippet - Court awards indemnity costs where caveat lodged without proper grounds

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Sladen Snippet - Court awards indemnity costs where caveat lodged without proper grounds

On 23 April 2015, the Supreme Court ordered a party who lodged a caveat without proper grounds to pay the other party’s costs on an indemnity basis.  The defendant lodged a caveat on the title of a property claiming an interest pursuant to a purchaser’s contract. 

The plaintiff landowner stated that he did not enter into any contract with the defendant and moreover had never met the defendant or had any dealings with the defendant.  The Court ordered that the defendant pay the plaintiff’s costs on an indemnity basis because the Court inferred that the defendant, at no time, had any valid basis upon which he could claim a caveat over the property. 

Transferring Victorian property out of trusts and into SMSFs without duty

Transferring Victorian property out of trusts and into SMSFs without duty

Moving business real property out of trusts and into a self-managed superannuation fund (SMSF) can have significant tax advantages, but despite the significant potential of this, there are often impediments  in the form of possible tax and duty consequences of the transfer, especially where the property is held in a unit trust or a discretionary trust and limits are imposed by the non-concessional caps.

This article, written by Sladen Legal’s Melissa Brazzale and Phil Broderick, and published in the Tax Institute’s Journal, Taxation in Australia in March 2015, examines the ability to transfer Victorian business real property out of trusts and into a self-managed superannuation fund (SMSF) without triggering duty.

Sladen Snippet - Budget – Increased fines for breaching workplace laws

Sladen Snippet - Budget – Increased fines for breaching workplace laws

According to the latest budget handed down last night from Treasurer Joe Hockey, penalty units (ie. fines) for breaching federal laws are set to rise from $170.00 to $180.00 (per unit) from 31 July 2015.

 The maximum penalty for a breach of the Fair Work Act 2009 is:

  • 300 penalty units for a corporation; and
  • 60 penalty units for an individual.

Another Shark Tank IP lesson - business name registrations don’t protect your business – A Shark says so!

Another Shark Tank IP lesson - business name registrations don’t protect your business – A Shark says so!

Is the name of your business protected? Many businesses say yes because they have a business name registration or are a registered company. But those kinds of registrations don’t protect the business. Don’t just take my word for it, Shark’s Janine and Naomi from Shark Tank were at pains to explain this to one of the hopeful start up contestants during a pitch on the Channel 10 TV show.

There is so much confusion about protecting business names and it doesn’t just come from start-up businesses. I have seen well established businesses operating internationally that haven’t understood how to protect the name of their business.

Draft exposure legislation regarding ‘look-through’ CGT treatment to earnout arrangements released by Treasury

Draft exposure legislation regarding ‘look-through’ CGT treatment to earnout arrangements released by Treasury

The Treasury has finally released long awaited draft exposure legislation regarding ‘look-through’ CGT treatment to earnout arrangements (Draft Bill).

On 12 May 2010, the former Assistant Treasurer, Senator the Hon. Nick Sherry disseminated a media release announcing the previous Government’s intention to amend the law to provide look-through capital gains tax (CGT) treatment for qualifying earnout arrangements entered into as part of the sale of business assets.

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Sladen Snippet - VCAT imposes restrictions on recovery of costs of essential safety measures and repairs and maintenance by landlords

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Sladen Snippet - VCAT imposes restrictions on recovery of costs of essential safety measures and repairs and maintenance by landlords

The President of the Victorian Civil Administrative Tribunal (VCAT) issued an advisory opinion on 1 May 2015, responding to the Victorian Small Business Commissioner’s request as to whether a landlord of commercial premises can pass on the costs of Essential Safety Measures (ESM) and certain repair and maintenance obligations for retail premises to tenants.  Measures prescribed by building law for safety and fire protection are covered by the ESM.

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Sladen Snippet – The Federal Court rules against the use of agreed penalties

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Sladen Snippet – The Federal Court rules against the use of agreed penalties

On 1 May 2015 a unanimous judgement was handed down by the Full Court of the Federal Court, stating that in deciding the outcome of a case, the court would no longer receive or act upon any agreement as to penalties previously agreed to between parties.

This followed a recent High Court judgement, which held that the regular practice in Victoria of permitting the prosecution to make submissions on the available sentence range or outcome in criminal cases should cease. The High Court held that such submissions by a prosecutor were inadmissible on the basis that they were a statement of opinion not a submission of law.

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More good news for start-ups and entrepreneurs

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More good news for start-ups and entrepreneurs

On 6 May 2015, the Honourable Joe Hockey with the Honourable Bruce Billson disseminated a media release on Supporting start-ups and entrepreneurship. 

The media release announces new measures which will apply to small business and start-ups proposed to take effect from 1 July 2016.  These new measures will provide much needed relief for small business and start-ups and are another step towards ensuring that Australia provides the right environment for small business, start-ups and entrepreneurs.

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Sladen Snippet – insurance held in SMSFs for a buy-sell arrangement breaches the sole purpose test

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Sladen Snippet – insurance held in SMSFs for a buy-sell arrangement breaches the sole purpose test

The Commissioner of Taxation has concluded, in ATO ID 2015/10, that using a self managed superannuation fund (SMSF) to hold a life insurance policy for the purpose of a buy sell agreement breaches the sole purpose test and the prohibition against providing a member (or a relative) financial assistance.

So does this mean that superannuation funds cannot be used to hold insurance in buy-sell arrangements? Not necessarily. The position of the Commissioner would appear not to apply to insurance held in public offer superannuation funds and potentially does not apply to SMSFs that don’t have any formal buy sell arrangements.

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Sladen Snippet - Dividend access share arrangement did not affect access to CGT Small Business Concessions

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Sladen Snippet - Dividend access share arrangement did not affect access to CGT Small Business Concessions

The Administrative Appeals Tribunal (AAT) has held that the existence of a dividend access share (DAS) arrangement did not affect the taxpayer’s ability to apply the capital gains tax (CGT) small business concessions to a capital gain arising from the disposal of ordinary shares in the applicant company.

The primary issue considered in this case was whether the existence of the DAS caused the required small business participation percentage (SBPP) of 90% to be failed.

Sladen Snippet – ATO alert - transfers of shares in private companies to an SMSF could be treated as dividend stripping

Sladen Snippet – ATO alert - transfers of shares in private companies to an SMSF could be treated as dividend stripping

On 1 May 2015, the Australian Taxation Office (ATO) issued a Taxpayer Alert (TA 2015/1) in relation to dividend stripping arrangements involving the transfer of private company shares to a self managed superannuation fund (SMSF).

These arrangements essentially involve a private company with accumulated profits paying franked dividends to a new SMSF shareholder and the original shareholders benefitting as members of the SMSF from franking credit refunds to the SMSF. This could include, for example, the transfer by a member to their SMSF of shares in a corporate beneficiary that holds retained earnings sourced from trust distributions.

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Sladen Snippet - Charities: the importance of complying with regulatory obligations

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Sladen Snippet - Charities: the importance of complying with regulatory obligations

Charities have a number of ongoing reporting obligations, including the requirement to submit an Annual Information Statement (AIS) and annual financial report to the Australian Charities and Not-for-profits Commission (ACNC).

The reporting requirements depend on the size of the charity:

  • A small charity (which has annual revenue of less than $250,000) must submit an AIS and can choose to submit a financial report.
  • A medium charity (which has annual revenue of $250,000 or more, but less than $1 million) must submit an AIS and a financial report that is either reviewed or audited.
  • A large charity (which has annual revenue of $1 million or more) must submit an AIS and an audited financial report.

Insolvent trading and liability for shadow / de facto directors

Insolvent trading and liability for shadow / de facto directors

Overview

In the recent case of Featherstone v D J Hambleton as liquidator of Ashala Pty Ltd (Featherstone Case), the Queensland Court of Appeal considered the circumstances in which a shadow/de facto director may be caught under the insolvent trading provisions of the Corporations Act 2001. Section 588G of the Act deals with the liability of directors for insolvent trading by their company, which not only applies to directors, but also to any employee determined to be a ‘director’ of a company when the company incurs the debt.

A win for copyright owners – the Dallas Buyers Club

A win for copyright owners – the Dallas Buyers Club

In what has been hailed as a landmark decision, the Federal Court has ruled that a number of Australian internet service providers (ISPs) must hand over details of over 4,000 customers alleged to have illegally shared the film, Dallas Buyers Club. It is expected that they will now receive letters from Dallas Buyers Club requesting a settlement payment for copyright infringement.

While this is certainly a win for the rights holders, it is just one step in a process. It may also be a case of the bark being worse than the bite for Australian infringers.  Chief Executive of iinet, David Buckingham has described the decision as a ‘positive outcome’ which ensures that ‘customers will be treated fairly’.

The duty of company directors to avoid conflicts of interest: an illustrative case

The duty of company directors to avoid conflicts of interest: an illustrative case

Directors are required to act in the best interests of the company, and to fulfil this duty they must avoid conflicts between their own interests and the interests of the company. As a recent case illustrates, a failure to avoid perceived conflicts can lead to disputes with shareholders.

In the case of Hart Security Australia Pty Ltd v Boucousis & Ors, Hart Security Australia Pty Ltd’s (HSA) majority shareholders, the Hart Group, alleged that HSA’s sole director, Christian Boucousis breached his duty to avoid conflicts of interest.

SMSFs, trusts and property development: Part 2

SMSFs, trusts and property development: Part 2

In January 2015, the first part of a two-part article, written by Sladen Legal's Phil Broderick, was published in the Tax Institute’s Journal, Taxation in Australia. This article considered the tax and regulatory issues of SMSFs undertaking property development either directly or through structures such as trusts.

The second part of this article was published in Taxation in Australia in February 2015, examining various structures under which an SMSF can undertake property development, or invest in an entity which undertakes property development activities.

Moonlighting truck driver's dismissal unfair

Moonlighting truck driver's dismissal unfair

A delivery driver whose employment was terminated after he worked for his employer's customer during his annual leave, has been awarded $12,864 compensation after the Fair Work Commission found his dismissal was harsh, unjust and unreasonable.

Sladen Legal's Joanna Shields has written an article, published in the April edition of Prime Mover, which outlines the case of a moonlighting truck driver who was unfairly dismissed.

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Director’s breach of fiduciary duties results in a clawback of super contributions

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Director’s breach of fiduciary duties results in a clawback of super contributions

The decision of the Victorian Court of Appeal in Australasian Annuities Pty Ltd (in liq) v Rowley Super Fund Pty Ltd 1 (Rowley Super) concerns the ability of a liquidator to claw back contributions made to a superannuation fund where such contributions are made as a result of a director breaching his fiduciary duties to the corporate trustee of a discretionary trust.

Tax disputes - what not to do

Tax disputes - what not to do

Our previous article Tax disputes – what to do discussed some of the general stratagems taxpayers can employ when in dispute with the Australian Taxation Office (ATO).

As previously highlighted, quick and early professional advice, assessment of the nature and extent of a dispute and engagement with the ATO can lead to better ultimate outcomes.

Similarly, there are certain things that a taxpayer in dispute with the ATO should not do