What is a bare trust?

From time to time we encounter clients that have various types of assets held by a trustee (Trustee) that are purportedly held pursuant to a bare trust (Bare Trust).  There are several questions which usually arise in relation to the rights and obligations of the parties involved that inevitably end up with Dundas Lawyers considering the taxation issues, (in particular the capital gains tax implications, for the Trustee.

So just what is a Bare Trust?

A Bare Trust, as defined by the Butterworths Concise Australian Legal Dictionary[1] as

a trust where the trustee holds the property without any beneficial interest in the property and without any further duty to perform in relation to the trust, except to convey the trust property on demand to the beneficiaries of the trust or to deal with the property as directed by the beneficiaries”. [Read more…]

The ‘good faith’ defence to an unfair preference claim

This is the third article in our series on Unfair Preference payments.    The scenario that is common is that a business does the work or delivers the goods, invoices its customer and is eventually paid.   Three months later the business owner receives a letter from a liquidator demanding under threat of legal action that they be paid the money received on the basis the payment received was an unfair preference (Unfair Preference).  [Read more…]

Director Identification Numbers – more red tape?

The Exposure Draft of the Treasury Laws Amendment (Registries Modernisation and Other Measures) Bill 2018 (Exposure Draft) was released on 1 October 2018.   If enacted, the provisions contained in the Exposure Draft would amend the Corporations Act 2001 (Cth) and implement a regime including an identification number for directors and a single business register.  The Exposure Draft stems from the announcement made by the Federal Government in the 2018-2019 budget to “target organised crime and tax evasion” by implementing new measures.  Those measures include a new regime to “modernise the business registers program” and merge the Australian Business Register (ABR) with the Australian Securities and Investments Commission (ASIC) Register to make one platform administered by the ABR within the Australian Taxation Office (ATO).[1]  Within this new register, company directors will be required to have an identification number (Director Identification Number or DIN). [Read more…]

What’s an unfair preference claim?

You have done the work, the client is happy, you’ve invoiced them and are awaiting payment.  You have had a long-standing relationship with the client.   They contact you and asks, despite your usual credit terms, if they can pay the invoice off over time.  It’s not the first time it has made this request, but they have always come good with payment.  You agree and the invoice is eventually paid.  Three months later you receive a letter from a liquidator demanding (under threat of legal action) that you pay to them the money you received because the payment was an unfair preference (Unfair Preference)! [Read more…]

Notice requirements under a commercial lease

Commercial leases often contain an option for a further term and normally have strict notice requirements about how to exercise the option.  What could go wrong if a lessee fails to comply with the option notice requirements? [Read more…]

De-encryption Bill currently before Joint Committee

The much awaited Telecommunications and other Legislation Amendment (Assistance And Access) De-encryption Bill 2018 (De-encryption Bill) has been referred to the Parliamentary Joint Committee on Intelligence and Security (Joint Committee).  The Joint Committee has allowed three (3) weeks for submissions.  It is a very short time-frame for submissions considering the controversial nature of the Bill.  Submissions close on 12 October 2018 and a hearing will then be held by the Joint Committee one (1) week later.  The De-encryption De-encryption Bill (if passed) amends the Telecommunications Act 1997(Cth) (and various other acts) and has the stated aim of “establishing frameworks for voluntary and mandatory industry assistance to law enforcement and intelligence agencies in relation to encryption technologies via the issuance of technical assistance requests, technical assistance notices and technical capability notices….” [Read more…]

Body Corporate Meetings – proxy votes vs voting using a power of attorney?

If a lot owner of a body corporate is unable to attend a general meeting, it is not unusual for them to in essence “give” their vote by way of proxy to another lot owner.  However there are restrictions on the circumstances in which a proxy vote can be exercised.  Pursuant to section 103 of the Body Corporate and Community Management Act 1997 (Act) the regulation module applying to the community titles scheme may provide for, among other things, the way a proxy is appointed, how it can be used and the maximum period of appointment.

[Read more…]

What kind of documents can a liquidator get access to and from whom?

Liquidators have various tools available to locate the assets of a company in liquidation and to trace company monies they suspect may been “siphoned away”.  These tools include applying to the Court for the officers of the company and related entities to “deliver up” various documents and for those parties to then submit to public examination before the Court in respect of the company’s examinable affairs.  The recent Federal Court decision of Cathro, in the matter of Lidcombe Plastering Services Pty Limited (in liq) [2018] FCA 1138 (Cathro) considered the power to compel a related entity to produce documents relevant to the liquidation of a company prior to a public examination.     [Read more…]

Restraint of trade clauses in commercial contracts

A restraint of trade occurs where one party (Covenantor) agrees with another party (Covenantee) to restrict their liberty in the future to carry on trade with other persons who are not parties to the contract see: Petrofina (Gt Britain) Ltd v Martin [1966] Ch 146 at 180.

Restraints of trade clauses are prima facie void, however, the presumption can be rebutted if the restraint is justified because it is reasonable in the circumstances.    Note that there is a significant divide between restraints in commercial contracts and those in employment contract with the latter being widely accepted as only being enforceable for a far shorter period of time. [Read more…]

The legal relationship of agency

The importance of establishing whether a legal relationship of agency exists, and if so, to what extent, can be critical when ascertaining whether a person had authority to enter into an agreement on behalf of another person or entity.  The precise legal nature of the relationship may be important to the parties if either are attempting to enforce their rights under an agreement between them. [Read more…]

Dundas Lawyers
Street Address Suite 12, Level 9, 320 Adelaide Street Brisbane QLD 4001

Tel: 07 3221 0013

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