Archives for June 2020

Interpreting release clauses in settlement agreements

Using a settlement agreement to extinguish a legal claim is common practice among most lawyers involved in litigation. These agreements have the benefit of providing certainty to parties and avoiding the costs and risks associated with litigation.  However, the decision in IBM Australia Ltd v State of Queensland [2015] QSC 342 (IBM v Queensland) is a reminder that lawyers need to exercise caution when drafting settlement agreements, and in particular compromise terms such as release clauses. [Read more…]

QBCC Home Warranty Insurance Claims – part 3

Part 5 of the Queensland Building and Construction Commission Act 1991 (Act) establishes a statutory insurance scheme, the purpose of which is in certain situations to provide basic assistance to consumers of residential construction work for loss associated with work that is defective or incomplete.

As part of the building process, the builder pays a premium to the Queensland Building and Construction Commission (QBCC) to insure the residential construction work, the amount of the premium being included as part of the contract price and paid to the QBCC before the residential construction work commences.  However, many consumers of residential construction work are uncertain about the exclusions under the QBCC Home Warranty Insurance scheme. [Read more…]

Division 7A ITTA 1936 (Cth) – compliance & consequences

Division 7 (sections 102V to 109ZE) of the Income Tax Assessment Act 1936 (Cth) (Tax Act) contains specific requirements for advances of moneys and loans between private companies and its shareholders or associates.  Section 109B of the Act describes three (3) classes of payments which will be deemed to be dividends: [Read more…]

What is a section 293 direction?

There are several reasons why a shareholder may require financial information, primarily they are denied access to the ‘accounts’ so as to make informed decision about the company.  The Corporations Act 2001 (Cth) (Act) provides various mechanisms for shareholders to obtain financial and accounting information about a company, to allow them to access full and complete information about the financial circumstances of the company that they hold shares in.  One such mechanism is referred to as a section 293 shareholder direction, which compels companies to provide requested financial reports as defined by section 293. [Read more…]

Director misappropriating funds found to be oppressive

Shareholder oppression usually occurs when a majority shareholder(s) misuses their power to oppress the minority shareholder(s).   The test for “oppression” is an objective one and is contained in Section 232 of the Corporations Act 2001 (Cth) (Act).   For instance, where a director is found to have breached their fiduciary duty because they have misappropriated funds or assets this can be considered as being oppressive conduct.  This was the case in Martin v Australian Squash Club Pty Ltd (1996) 14 ACLC 452 (Martin) when an executive director misappropriated and misused company funds and assets and was held to have breached his fiduciary duties. [Read more…]

Send this to a friend