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…]

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.

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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…]

Safe Harbour granted to proactive Directors of an insolvent company who are not merely ‘living in hope’

Amendments to the Corporations Act 2001 (Cth) (Corps Act) introducing the safe harbour insolvency provisions come into effect on 1 July 2018.   Under section 588G of the Corps Act a director of a company may be personally liable for debts incurred by the company if at the time the debt is incurred there are reasonable grounds to suspect the company is insolvent.  The section 588GA safe harbour provisions aim to encourage directors to remain in control of a business in financial difficulty and to take reasonable steps, outside of a formal insolvency process, to restructure and / or allow it to trade out of its difficulties in anticipation that such action will achieve a better outcome for the company than immediately appointing an administrator or liquidator.  The provisions encourage directors to closely monitor the financial position of the business, engage early with financial distress and then actively take steps to either restructure the business or, if that is not possible, to move quickly to formal insolvency.   [Read more…]

Implications of non-compliance with the Building and Construction Commission Act (QLD) 1991

At common law there is no requirement for an enforceable contract to be in writing or for it to be accepted in the same way.  It is not uncommon for a contract to be wholly oral, or even partly written and partly oral.  Similarly, acceptance or entry into a contract (be it written, oral, or partly written and partly oral) does not have to be in writing but can be by conduct which evidences acceptance of the contractual offer made.

A simple example is a request for a quote to supply “widgets”, the supplier says they can supply the widgets but requires a 10% deposit and the buyer pays the deposit.  The buyer may not have spoken words to the effect that the quoted price has been accepted, but the conduct in paying the deposit evidences acceptance.  [Read more…]

Quantification of losses for breach of contract

A breach of contract can broadly be described as the failure to comply with any term of an agreement; some examples include a refusal to perform, incomplete performance, delay or unlawful termination.  Once it has been determined that a breach of contract has in fact occurred, the next question is how to determine the resulting loss and whether it can be recovered from the responsible party.  Whilst there is no hard and fast rule when attempting to quantify losses, there are certain principles which form part of the process of  assessing damages caused by a breach of contract.

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Legal issues of making financial forecasts in business

When a business is seeking to raise capital or advertise as being for sale financial forecasts are often made in a way so as to appeal to the target audience – investors or potential buyers.  In some cases however, the forecasts made do not translate into reality giving rise to potential legal consequences.  As forecasts are indicators often relied used by investors to make decisions on whether or not to invest, statements that are incorrect may amount to misleading and deceptive conduct under the Australian Consumer Law (ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)) and have potentially serious legal consequences. [Read more…]

Enforcing overseas judgments in Australian Courts

Globalisation and the advent of the internet has meant that it is becoming more common for businesses to contract with entities in different countries or jurisdictions.  In this article we consider the circumstances where parties to a cross-border contract are involved in litigation overseas, and the prevailing party seeks to enforce the judgement in Australia. [Read more…]

Interlocutory injunctions in patent disputes

An injunction is a Court order directing a person or entity to do a specific thing or refrain from doing something.  Whilst an injunction in itself can amount to final relief in litigious matters, it can also be sought on an interlocutory or temporary basis (Interlocutory Injunction).  This applies where a temporary remedy is sought to maintain the status quo until the larger legal issues can be heard at trial.

In matters relating to the infringement of a patent, an injunction may be sought by the patent owner (Applicant) to stop a defendant (Respondent) from doing the acts the patent owner alleges infringe the patent, until the Court has had the opportunity to determine whether or not the patent has been infringed.  In this article we consider Interlocutory Injunctions in patent matters and how the tests differ from non-patent matters. [Read more…]

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