SHAREHOLDER DISPUTES-The consideration of the practical implications of buying out another party and a when winding up may be preferred.

Shareholder disputes considerations

Shareholder disputes often arise in private companies where there is a breakdown in relationships between shareholders. Often these disputes arise from assertions of oppression of a minority shareholder and the court is asked to exercise its broad discretion to make orders under S233 of the Corporations Act 2001 either wind up the company or to order a buy- out.

The question as to whether or not a buy-out order is practicable or would only give rise to further complications and potential forensic challenges to and for the party in obtaining meaningful relief needs to be considered.

The general principles were summarised in Re Hollen Australia Pty Ltd, Robson J:

(1) Generally, the purpose of granting a remedy under s 232 is to bring an end to the oppression and to fairly compensate the person oppressed.

(2) Typically, the oppression can be ended and the oppressee properly compensated by the oppressor being ordered to acquire the oppressee’s shares at a fair value.

(3) Generally, the order should seek to put the company back on the rails and avoid the causes of conflict and oppression.

(4) Winding up is a remedy of last resort.

(5) Winding up a profitable and operating company is an extreme step and requires a strong case to be make.

(6) In choosing a remedy under s 233 the Court is exercising a discretion.

(7) In exercising that discretion, the Court should keep in mind the above principles.

(8) Bearing in mind those principles, circumstances may dictate that the most appropriate remedy to bring an end to oppression and to fairly compensate the person oppressed is a winding up.” (emphasis added).


In the recent decision of Snell v Glatis (No 2) [2020] NSWCA 166, the primary judge found oppression of the applicant shareholder and ordered that $66 million be paid within 30 days without any evidence as to Mr Snell’s capacity to raise those funds.

The primary judge relied on the absence of any evidence of hardship and the fact that compulsory buy-out was the plaintiffs’ preferred remedy. Her Honour expressly appreciated that “finding the sums sought by the plaintiffs to buyout their shares may well not be easy”, but nonetheless ordered a compulsory buy-out on the basis that it was the appropriate relief in order to prevent oppression in the future.

The Court granted the appeal and ordered the winding up of the Company.

Relevantly, the companies’ main assets in this matter were tenanted property and loans which may be more or less readily realised by a liquidator. The relevant companies were for the large part not actively conducting a business, but rather collecting rents on leased property and repayments of secured and unsecured loans, and the Court considered that winding up was a realistic means of securing to the plaintiffs their share of the value of the companies which would also prevent ongoing oppression.


The case highlights the fact that the context in which the particular company or companies operate together with their structure and history will always be relevant to the fashioning of appropriate discretionary relief and the usual view that winding up is a last resort (particularly for trading and solvent companies do not mean that that remedy should not be considered, in an appropriate case, even if neither party in fact seeks it.

If you are a shareholder of a company and have a dispute with other shareholders, and want assistance and advice to resolve the dispute, please contact us:

Australian Migration Program 2020-2021

Australian Migration Program 2020-2021

The Migration Program for 2020-2021 was finally “announced” on the night of the Federal Budget on 6 October 2020.

Traditionally, the program for the next fiscal year is usually announced in the April of the preceding fiscal year. But with the mayhem of the Covid-19 pandemic the Migration Program for 2020-21 was announced on Federal Budget night on 6 October 2020.

Even then the full migration program was not revealed until 2 days after the Budget night announcement.

This article proposes to do the following:
A. Provide the 2020-21 Migration Program;
B. Give a commentary on the proposed migration program; and
C. Discuss the programs that will be given priority.

A. Migration Program 2020-21

The Migration Program normally comprises two main programs: Family and the Skilled Programs. Traditionally the ratio has been one third Family and two thirds Skilled.

On Budget night this ratio was abandoned and the total Migration Planning Program for 2020-21 is similar to the Planning Program for the year before, 2019-20: 160,000 visas:

Family Program                                                                                                                                                77,300

  • Partner                                                 72,300
  • Parent                                                                   4,500
  • Other Family       500
  • Child (* Estimated – Not subject to ceiling)   3,000 *

Skilled Program                                                                                                                                               79,600

  • Employer Sponsored                                                                 22,000
  • General Skilled Migration                                                 28,900
  • Skill Independent                   6,500
  • State/Terr Nominated 11,200
  • Regional 11,200
  • Global Talent Independent                                                15,000
  • Business Innovation & Investment Visas 13,500
  • Distinguished Talent       200

Special Eligibility                                                                                                                                                    100

Total Migration Planning Program                                                                                                           160,000

Humanitarian Program (separate to the Migration Program)                                                          13,750

B. Commentary On Proposed Program

We will only comment on the Migration Planning Program.

Over the past few months the government has been indicating that migration numbers for 2021 will fall significantly.  Indeed on 1 May 2020 the Prime Minister said that Australia’s overseas migration intake will shrink by more than 85 per cent from the 2018-19 levels as a result of the coronavirus.

Was this mere political hype?  Perhaps he meant this more holistically when including other programs like Visitor, Student and Temporary Residence programs because the program as announced does not reflect those sentiments.

As mentioned already the overall migration planning level for 2019-20 is exactly the same as that proposed for 2020-21 even though the actual visas issued in 2019-20 was 140,366 and the program composition is different.  Hence, the suggestion that the “overseas migration intake” will shrink by more than 85% was probably an exaggeration.

But then the Treasurer Josh Frydenberg in his post-Budget address to the National Press Club on  7 October 2020 flagged that the Budget was premised on the assumption that Australia’s international borders would probably remain closed throughout 2021 when it was also assumed that a vaccine for Covid-19 would be available by that time.

How do we then reconcile that Australia would be able to achieve a migration program of 160,000?

The answer to this can be given in three parts:  firstly, this is only a planning level and as occurred in 2019-20 the actual program delivered could be considerably less than 160,000.  Secondly, many applicants for permanent residency are already in Australia on Student or other Temporary Residence visas; and thirdly, the Government can always provide exemptions and permit approved visa holders to enter Australia as exempt people, such as the recent relaxation for holders of provisional Business Innovation & Investment Visas.

For all the talk about a decimation of the migration program, the reality is Australia is a migration accepting country and there will always be cogent and strong reasons why Australia will need migration for some years yet to supplement the Australian population.  There are many factors for this reliance but the three key reasons are:

  • The low birth rate: In 2018, Australia’s birth rate fell to an all-time low of 1.740 babies per female of childbearing age.  This low fertility rate means Australia is not replacing its population.  According to the UN Population Division, a total fertility rate (TFR) of about 2.1 children per woman is considered the replacement-level fertility.
  • Ageing population: The Australian population is ageing.  In 2017 it was estimated that 15% of Australians (3.8 million) were aged 65 and over and the projection was that this proportion will grow steadily over the coming decades.  This can be attributed in part to a low fertility rate, but also that older Australians are increasing their life expectancy.  If the problem of an ageing population is not addressed, such as through an increased population, the consequences of the nation’s lower productivity will mean the burden of increased health and social security costs will fall on the younger population; and
  • Economic growth: Importantly, despite a recession, the consensus view among Economists is that migration does impact positively on economic growth.   Australia needs migration to grow its economy.

For all these and other reasons, Australia will have a migration program for some years yet!  Australia’s demography, fertility and economics will see to that.  The issue is the extent and composition of that migration program.

The total for this year’s Planning Program is no different from that of last year:  160,000, except that the program focus and priorities have changed quite significantly as the useful table below, sourced from Immigration Law News website, will show.

The traditional one-third Family and two-third Skilled Migration formula has disappeared, and the main program casualties are the General Skilled Migration (GSM) (subclass 189, 190 and 491) program and the suite of different Parent visas.

What is surprising was the significant increase in the Partner visa allocation which has grown by nearly 82% from the previous year, with the sting that applicants from July 2021 will need to demonstrate that they and their sponsors have functional English language skills.  The test applies equally to the Sponsor unless they are Australian citizens.

This increased Partner allocation can be due to Australian sponsors complaining about the long processing times for both onshore and offshore applications of up to 27 months!  Given the Partner Visa Application Charge is $7,715 (more if there are accompanying dependent family members), this is not an unreasonable complaint for the exorbitant fees paid.

Migration Planning Levels 2020-21 Analysis


What is the impact of the drop in the Parent and GSM allocations?

For Parent visas, undoubtedly the queue for finalising these applications will get longer.  The Department has stopped providing processing times for Parent visas, but anecdotally the processing time for Parent visas can now extend to more than 4 years.

The applicants and sponsors are understandably angry about this, especially when the exorbitant second Visa Application Charge of $43,600 per parent is applicable to Contributory Parent visas.  They are by far the largest group of applicants in the suite of Parent visas.

The above table will show the GSM allocation shrinking by more than 55% from 2019-20.  Inevitably this will mean that getting invitations will be even more competitive.  To receive an invitation for the Skill Independent visa in 2019-20 a minimum score of 95 points or higher was expected.  This could now be higher as the overall GSM allocations have shrunk considerably.

It is my prediction that the Medium and Short Term Lists of occupations will be reviewed, and the occupations there will shrink in view of the smaller GSM allocation.  The points test for GSM applicants will remain very competitive.  The role of nominating States and Territories will likely be reviewed too with a view to ensuring that their nominations are more targeted to the needs of their respective jurisdictions.

Given the high unemployment levels that have resulted from Covid-19, it is not surprising that Employer Sponsored Visas have also been reduced by nearly 27% from the Planning Level in 2019-20.  With this reduction, it can be expected that Immigration Case Officers will be assessing these Employer Sponsored cases critically to ensure that the market testing and the employer’s need for staff are rigorously assessed.

Clearly from the table, apart from the Partner Program, the other big winners are the Global Talent Independent (GTI) Program which has tripled in size (15,000), and the Business Innovation and Investment Program (BIIP) which has nearly doubled in size (13,500).  We will discuss this next.

C. Migration programs that will be given priority

The Covid pandemic has wrought much damage to the national economy.  It is therefore not surprising that the government has turned to the Global Talent Independent (GTI), and Business Innovation and Investment Programs (BIIB) to revitalise and spur the economy.

The purpose of the GTI is to seek highly-skilled migrants with exceptional, transferrable skills from around the world to work in a spectrum of future focused technological fields which can contribute to the development of an Australian technological future oriented economy.

This program was only announced by the government in August 2019 and by the end of June 2020 4,109 visas were granted.  The vision and success of this program has seen the government tripling the planning level for GTI in 2020-21 at the expense of the GSM allocation which has fallen by more than half because of Covid and the rising high unemployment.

If you are not familiar with the GTI, you might want to read two articles that we have written in our website – here are the links for them:

The eligibility criteria for GTI is simple but difficult to achieve.  For starters the applicant has to come from one of the following seven tech oriented sectors:

  • AgTech
  • Space and Advanced Manufacturing
  • FinTech
  • Energy and Mining Technology
  • MedTech
  • Cyber Security
  • Quantum Information, Advanced Digital, Data Science and IT

Then the applicant must show they have the talent, namely, they are:

  • internationally recognised with exceptional and outstanding achievements
  • still prominent in their field
  • an asset to Australia in their area of expertise
  • having no difficulty in obtaining employment or be established in their field in Australia
  • able to have a relevant organisation or individual in Australia who can endorse their attributes; and
  • having the potential or the ability to attract an annual Fair Work High Income Threshold (FWHIT) salary of AUD153,600.

Interestingly for relevant and exceptional Masters or PhD students in Australia who can demonstrate this talent and international recognition, the government has announced that there are places for such students in the program.

Our law firm has experience in assisting applicants for this program:  not only has our client received the invitation within a short time but her application was granted 11 days after its lodgement.

Even though the program has grown three fold, we expect that competition for these places will be more intense and assessments will be more difficult.  So candidates considering this should seek professional support in their bid for a GTI.

The other winner in the migration program is the Business Innovation and Investment Visa (BIIV) Program (13,500) which has nearly doubled in size from 2019-20.  This stance has been our assessment for some time and it is not surprising that our predictions have proven true.  It is a no- brainer for this initiative given the havoc that Covid has done to the economy.  The BIIV Program will not only bring new business and create much needed new employment, but it will also inject much needed new investment into the economy.

The government has considered this subject so important that it will establish a new whole-of-government Global Business and Talent Attraction Taskforce that will be established to attract international businesses and exceptional talent to Australia to support the post-COVID recovery and to create employment.

The backdrop to this is that the department had already undertaken a review of the BIIV in conjunction with Austrade in 2017.  As a continuation of that review the department has more recently initiated a public consultation on the BIIV process, and had requested input before 14 February 2020 on whether:

  • there are opportunities to streamline the Business Innovation and Investment program (BIIP) to maximise the value the program generates; and
  • increased investment thresholds and different investment types could provide better economic benefits to Australia compared to the current settings used for the Investor visa (IV) and Significant Investor visa (SIV).

This is code for announcing that there will be changes to the BIIV Program.  It was expected that these announcements will have been made when the 2020-21 Program was announced on 6 October 2020, but it was not.

But it can be safely assumed that the Government will soon introduce changes to BIIV along the lines of its public consultations brief in ensuring a more targeted approach to business proposals and a new focus on investments will be initiated to improve the economic outcomes of the BIIV Program (BIIP).

The Minister had said as much in his 6 October 2020 Press Release:

The BIIP will also be streamlined and reformed to ensure that investments are targeted at Australian venture capitals and emerging small and medium size businesses to support the economic recovery. 

We also know from the Budget that Visa application charges for BIIV will increase by an additional 11.3% (above regular CPI indexation) from 1 July 2021.

Given how Covid has played out in Australia vis-à-vis other parts of the world, Australia can pride itself as a good destination to migrate to and start a new life.

Our law firm has been assisting clients in their business migration application for more than six years with great results, and with expected changes to occur in the near future, we intend to continue this assistance and help applicants get their visas granted and to start new lives in Australia.

Contact the Migration Team

Our team of experienced migration lawyers at Rostron Carlyle Rojas Lawyers can assess your eligibility for these and other migration programs.

We will listen to you and we will provide comprehensive advice regarding your eligibility, address the important threshold issues, and guide and assist you in obtaining the necessary nomination and  invitation, and in preparing a decision-ready application.

Please contact any one of us in the Migration Team for assistance, or call (07) 3009 8444:

Insolvency reforms to support small business

Insolvency reforms to support small business

On 24 September 2020, Federal Treasurer the Hon Josh Frydenberg MP along with the Michael Sukkar MP, Minister for Housing and Assistant Treasurer, announced significant reforms to Australia’s corporate insolvency laws as part of the Federal Government’s economic recovery plan.

The reforms are said to be the most significant reforms to Australia’s insolvency framework in 30 years and draws on key features from US Chapter 11 style Bankruptcies.

The reforms will cover around 76% of Companies subject to insolvencies today, 98% of whom who have less than 20 employees.

THREE key elements of the proposed insolvency reforms:

  1. A new formal debt restructuring process for small businesses (with liabilities of less than $1 million) to provide a faster, less complex and cost-effective mechanism to restructure their existing debts.
  2. A new, simplified liquidation pathway for small businesses (with liabilities of less than $1 million) to allow faster and lower-cost liquidation, resulting in increased returns for creditors and employees.
  3. Complementary measures to ensure the insolvency sector can respond effectively both in the short and long term to increased demand and to the needs of small business.

Brief Overview and Summary of the Proposed Reforms

Who Will Be Able to Use the New Processes?

An Incorporated business (Pty Ltd company) with liabilities of less than $1 million.

*We note that the reforms do not currently appear to foreshadow changes to the personal insolvency regime (Bankruptcy laws).

When Will the New Processes Be Available for Small Business?

From 1 January 2021 (subject to the drafting and passing of legislation)

How is the New Formal Debt Restructuring Process Said to Operate?

  • The proposal adopts a ‘debtor in possession’ model. That means that the business can keep trading under the control of its owners/Directors, who is said to know the business best.
  • Directors of a small business facing financial distress approaches a Small Business Restructuring Practitioner.
  • The Small Business Restructuring Practitioner’s role is to:
    • Help determine if the company is eligible for the new debt restructuring process
    • Support the company to develop a plan and review its financial affairs
    • Certify the plan to creditors
    • Manage disbursements once the plan is in place
  • If the Small Business Restructuring Practitioner advises that the new debt restructuring process is the most appropriate option Company, the practitioner proposes a flat fee for the practitioner’s work in helping the business develop a restructuring plan.
  • The company Directors decide to accept the advice and pass a company resolution to appoint the Small Business Restructuring Practitioner.
  • Notably, it is proposed that all current employee entitlements must be paid before a plan can be put to creditors.
  • On commencement, unsecured and some secured creditors are prohibited from taking actions against the company, personal guarantees cannot be enforced against the Director(s) (or one of their relatives), and a protection from ipso facto clauses (that allow creditors to terminate contracts because of an insolvency event) apply (with the same protections applying as during voluntary administration).


  • 20 business-day period commences:
    • The Directors work with the practitioner to develop a plan to restructure the company’s debts and provide supporting documents for creditor consideration.
    • During this time, the Directors continue to control the business and can trade in the ordinary course of business.
    • The practitioner develops a remuneration proposal to cover their management of the plan once in place, which will operate as a percentage fee of disbursements made under the plan.
    • The practitioner certifies whether they consider the business can meet the proposed repayments and has properly disclosed its affairs.
    • The practitioner sends the plan and supporting documents to creditors.
  • 15 business-day period commences:
    • Creditors have 15 business days to vote on the plan, including the proposed remuneration for the practitioner.
    • If more than 50 per cent of creditors by value approve the plan, it is approved and binds all unsecured creditors.
    • Secured creditors are bound by the plan only to the extent their debt exceeds the realisable value of their security interest.
    • Related-party creditors are not entitled to vote.
    • If the plan is approved, the business continues and the practitioner administers the plan by making distributions to creditors according to the terms of the plan.
    • If voted down by creditors (being if more than 50 per cent of creditors by value do not approve the plan), the process ends and the Directors may opt to go into Voluntary Administration or to use the new simplified liquidation pathway proposed by the reforms.

How is the New Simplified Liquidation Pathway Said to Operate?

  • The simplified liquidation process will retain the general framework of the existing liquidation process with modifications to reduce time and cost associated with existing processes.
  • Time and cost savings with the new simplified liquidation pathway are said to be achieved through:
    • reduced investigative requirements,
    • reduced requirements to call meetings, and
    • reduced reporting functions.
  • Under the new simplified liquidation pathway, Directors appoint a liquidator who will:
    • Take control of the company.
    • Realise the company’s remaining assets for distribution to creditors.
    • Investigate and report to creditors about the company’s affairs and inquire into the failure of the company.
  • Key modifications to the existing liquidation process include:
    • Reduced circumstances in which a liquidator can seek to clawback an unfair preference payment from a creditor that is not related to the company.
    • Only requiring the liquidator to report to ASIC (under section 533) on potential misconduct where there are reasonable grounds to believe that misconduct has occurred.
    • Removing requirements to call creditor meetings and the ability to form committees of inspection.
    • Simplifying the dividend process and the proof of debt process.
  • The rights of secured creditors and the statutory rules as to the payment of priority creditors such as employees will not be modified.

Who Will Administer the New Processes?

A new class of Insolvency practitioner called a “Small Business Restructuring Practitioner” whose practice will be limited to the new simplified restructuring processes only.

  • Registered liquidators will also be able to manage the new process.
  • Significantly, we note that a Small Business Restructuring Practitioner will not take on personal liability for a company or manage its day to day affairs.
  • It is unclear what the requirements will be to qualify as a Small Business Restructuring Practitioner.

What Other Reforms Are Proposed?

  • Temporary insolvency relief for eligible companies waiting to access the new restructuring process.
  • When a company announces its intention to access one of the new processes, they will be entitled to benefit from the existing temporary insolvency relief for up to 3 months until the process commences.
  • Temporarily waiving fees associated with registration as a registered liquidator for approximately 2 years until 30 June 2022.
  • Making changes to allow for more flexibility in the registration of insolvency practitioners.
  • Making the key parts of the process set out in the Corporations Act 2001 ‘technology neutral’ so that external administrations can be carried out more efficiently.

As experienced insolvency and restructuring lawyers, Rostron Carlyle Rojas Lawyers look forward to reviewing the draft legislation along with any further clarification from the Federal Government on the technical details of the proposed insolvency reforms. That being said, the reforms to our corporate insolvency laws are certainly well overdue.

If you have felt the effects of the pandemic on your company or require assistance or clarification in relation to the current temporary relief for financially distressed companies, now is the time to get advice on how to structure your company’s affairs.

Speak with one of Rostron Carlyle Rojas Lawyers’ qualified restructuring and insolvency lawyers today, at:

QLD: 07 3009 8444
NSW: 02 9307 8900
Email: [email protected]

JobKeeper 2.0 Changes Effective 28 September 2020

The Federal Government’s JobKeeper Payment Scheme, which was announced in March 2020, is one of the most significant business stimulus packages offered by the Government in response to the COVID-19 pandemic. The scheme aims to keep Australians employed, in their pre-pandemic role with their employer.

The original JobKeeper Payment Scheme saw eligible employers receive fortnightly ‘JobKeeper Payments’ of $1,500 per eligible employee. However, from 28 September 2020, payments will decrease and employer eligibility restrictions will tighten. Further changes will also come into effect on 4 January 2021.

New Payment Rates

A new tiered approach will determine an employee’s JobKeeper Payment rate, generally based on their average hours worked.

Tier 1 rates apply to employees who worked 80 hours or more (including paid leave or paid public holidays) over the 4-week pay period preceding either 1 May 2020 or 1 July 2020. Tier 2 rates apply to those who worked less than 80 hours.

New JobKeeper Payment Rates

As per the original JobKeeper eligibility requirements, employees will be eligible if they:
• Are currently employed by an eligible employer (this includes those who have been stood down or re-hired);
• Were employed by the employer on 1 July 2020;
• Are full-time, part-time, or a casual employee who had been employed on a regular basis for longer than 12 months as at 1 July 2020;
• Are 18 years old, or at least 16 years old if independent;
• Are an Australian citizen, the holder of a permanent visa, a Protected Special Category Visa Holder, a non-protected Special Category Visa Holder who has been residing continually in Australia for over 10 years, or a Special Category (Subclass 444) Visa Holder; and
• Are not receiving a JobKeeper Payment from another employer.

The payments are considered taxable income and PAYG income tax must be withheld. It is at the employer’s discretion whether to pay superannuation on any wage increases stemming from the JobKeeper Payment.

New Eligibility Restrictions

Businesses seeking eligibility under the new JobKeeper Payment Scheme will be required to demonstrate an actual decline in turnover of 30% in the September 2020 quarter compared to the same period in 2019 (50% for those with an aggregated turnover of more than $1 billion and 15% for charities and not-for-profits). The further revised JobKeeper Payment Scheme that will come into effect on 4 January 2021 requires reassessment for the December 2020 quarter.

Applications for the JobKeeper Payment Scheme are open and businesses can apply directly via the ATO.

For employers and employees alike, JobKeeper and other stimulus measures are helpful and is undoubtedly a lifeline. For many others, the simple concept of recovering financially from the economic knock-on effect of COVID-19 seems unachievable and quite simply unrealistic.

If these measures have not been effective in assisting your business, and you are facing solvency issues, you should seek early advice from a qualified insolvency practitioner.

Contact our team of qualified legal advisers today.

Real Estate Agents Entitlement To Commissions

Real Estate Agents Entitlement To Commissions

Frequently, disputes arise as to whether an agent was the effective cause of sale and therefore entitled to commission on sale of a property .

In Outerbridge trading as Century 21 Plateau Lifestyle Real Estate v Hall [2020] NSWCA a real estate agent agreement appointed the agent on a non-exclusive basis. The agreement conferred a right to be paid commission where the agents were “the effective cause of the sale” and if a purchaser “has been effectively introduced” by them.

Following a sale of the property, by another agent, a dispute arose as to whether the first appointed agent was the effective causer of sale and entitled to payment of commission.

The buyer in this instance was introduced by first agent . An offer was made and rejected by the sellers. A further offer was made, and accepted “in principle” initially but then the acceptance was withdrawn. Further attempts to negotiate were unsuccessful as the agent went overseas on holidays.

The buyer then contacted second agent to look for other properties ,but then went back to look at the subject property, and revived negotiations ,increasing their offer by some $400,000 which was accepted and a contract was signed and a sale then completed . The second agent however-had gone into liquidation and

The issue for the appeal court was whether the first agent was the, or an, effective cause of the sale of the property.

The Court found against the first agent holding that the mere introduction of the buyer to the property is insufficient to amount to an effective cause of sale. The first agent appealed.

The issues on appeal were:

(i)  Whether the primary judge wrongly considered that the appellants’ contention that they were an effective cause of the sale was necessarily inconsistent with the second agent being an effective cause of the sale.

(ii)  Whether the primary judge erred in supposedly equating the importance of procuring finance with the task of providing the clarification on price desired by the purchaser.

(iii)  Whether the primary judge erred in failing to give consideration to whether the task of negotiating a sale could have been undertaken by the first agent.

(iv)  Whether the primary judge’s finding that the appellants were not the effective cause of the sale of the property was contrary to the weight of the evidence.

The Court held, dismissing the appeal:

As to issue (i): While the actions of more than one agent can answer the description of an “effective cause” of the sale of a property, a consideration of whether the first agent’s conduct was the effective cause of the sale nevertheless required a consideration of factors external to him that brought about the sale, including the conduct of the second agent.

As to issue (ii) : The primary judge did not treat the conduct of the second agent in securing the sale of the property as akin to the task of arranging finance. The task of providing clarification to the purchaser was referred to as part of the explanation of how a transaction that was effectively over after the first agent departed on holiday was later revived.

As to issue (iii) : The primary judge did not fail to give consideration to whether the task of negotiating the sale could have been undertaken by the first agent in circumstances where he was not capable of providing the purchaser with any clarification of the respondents’ price expectations because he was overseas and effectively uncontactable.

As to issue (iv) : A determination of effective cause requires a consideration and evaluation of all the circumstances surrounding a sale. The mere introduction of a purchaser that creates their interest in a property is usually, or at least sometimes, insufficient to be an effective cause. In this case the potential for a sale was effectively extinguished when the first agent departed overseas and became uncontactable. It was the second agent who revived and completed the sale.

Each case turns on its own facts, and determination of whether an agent is an effective cause of sale will invariably involve evidence of the terms of the agency agreements and the actual events of introduction, negotiations and offers and acceptance.

If you have a commission dispute as an agent or seller, please don’t hesitate to contact us for advice.

Federal Government announce extension to insolvency relief

Federal Government announce extension to insolvency relief

On 7 September 2020, Federal Treasurer the Hon Josh Frydenberg MP along with the Hon Christian Porter MP, Attorney General, Minister for Industrial Relations announced in a joint media release that the regulatory relief for businesses that have been impacted by the Coronavirus crisis will be extended to 31 December 2020. This will come as welcome news to directors of impacted businesses, as the temporary relief measures will further extend the moratoriums against personal liability of directors for trading whilst insolvent.

The Federal Government, claim that the measures will help prevent a further wave of failures before businesses have had the opportunity to recover from the effects of the pandemic. In their statement, their Honours say that, “as the economy starts to recover, it will be critical that distressed businesses have the necessary flexibility to restructure or to wind down their operations in an orderly manner.”

As insolvency and restructuring lawyers, Rostron Carlyle Rojas Lawyers have seen how this regulatory relief can be utilised to protect directors in re-arranging their company’s affairs. The temporary relief measures are extraordinary and unlikely to be replicated once the world moves back to business-as-usual. If you have felt the effects of the pandemic on your business, now is the time to get advice on how to structure your company’s affairs.

Speak with one of Rostron Carlyle Rojas Lawyers’ qualified restructuring and insolvency lawyers today, at:
QLD: 07 3009 8444
NSW: 02 9307 8900
Email: [email protected]

Important Legal Considerations when Buying or Selling Residential Property during the COVID-19 Pandemic

Buying or Selling Residential Property during the COVID-19

There is currently a great deal of uncertainty as to just how great of an impact the COVID-19 pandemic will have on the residential property market. With the real possibility of a second wave of the pandemic reaching QLD, there are also contractual issues which those who are currently engaged in the buying/selling process need to consider.

One of the most common questions we are receiving at the moment is ‘what happens if a party is unable to complete a Contract of Sale due to the impact of COVID-19?’ The answer will always depend on the individual Contract however given the vast majority of residential property sales are conducted using the standard form REIQ Contract, it is prudent to be aware of how this particular contract deals with the issue.

The REIQ Contract specifies that time is of the essence. This key concept means that by not completing the Contract (i.e. settling) on the due date, you may find yourself in breach of an essential Contract term, entitling the other party to terminate the Contract and sue you for damages.

The Contract does however contain a provision that will, in certain circumstances, suspend the parties’ obligation to complete the Contract and make time no longer of the essence. In order for these obligations to be suspended, a Delay Event must have occurred. A Delay Event is defined in the Contract as the following circumstances:

1. A tsunami, flood, cyclone, earthquake, bushfire or other act of nature;
2. Riot, civil commotion, war, invasion or a terrorist act;
3. An imminent threat of an event described in the above two paragraphs; or
4. Compliance with any lawful direction or order made by a Government Agency.

Whilst there may be a possibility in very limited circumstances for a COVID-19 related delay to fall within the scope of paragraph 4 above, in most instances the types of delays encountered as a result of COVID-19 are very unlikely to be classified as a Delay Event. Therefore, in most cases, a failure to settle on the due date as a result of COVID-19 will not prevent you from breaching an essential condition of the REIQ Contract and exposing yourself to considerable legal risk.

The simplest solution to avoid any unnecessary risk is to negotiate the insertion of a special condition into your contract prior to signing. An appropriately drafted special condition will ensure that the common COVID related delays will suspend your settlement obligations until such time as completion of the contract becomes possible.

Please note that the advice contained in this article is general in nature. If you are considering buying or selling residential property in these uncertain times, contact Rostron Carlyle Rojas Lawyers prior to signing a contract of sale. Our team will be able to review your contract, provide legal advice tailored to your individual circumstances and ensure you are adequately protected against the uncertainty posed by COVID-19.

NSW Government Announces Changes to Stamp Duty Thresholds for Eligible First Home Buyers

NSW Government Announces Changes to Stamp Duty Thresholds for Eligible First Home Buyers

In a bid to stimulate consumer spending, boost housing construction and create opportunities for employment as part of its COVID-19 Recovery Plan, on 26 July 2020 the New South Wales Government formally announced various changes to stamp duty thresholds for eligible first home buyers.

For the 12-month period commencing on 1 August 2020, the stamp duty thresholds for eligible first home buyers under the NSW Government First Home Buyers Assistance Scheme are to be temporarily changed as follows:

New Homes

– Full Stamp Duty Exemption for purchases of new homes valued at less than $800,000 (previous threshold being $650,000); and

– Partial Stamp Duty Exemptions for purchases of new homes valued between $800,000 and $1,000,000 (previous range being between $650,000 and $800,000).

Vacant Land

– Full Stamp Duty Exemption for purchases of vacant land (on which it is intended to build a home) valued at less than $400,000 (previous threshold being $350,000); and

– Partial Stamp Duty Exemptions for purchases of vacant land (on which it is intended to build a home) valued between $400,000 and $500,000 (previous range being between $350,000 and $450,000).

The changes offer eligible first-home buyers significant stamp duty savings as well as the potential to access a greater range of properties in New South Wales.

The temporary changes under the First Home Buyers Assistance Scheme are not anticipated to affect the existing First Home Owner Grant (New Home) scheme, under which the NSW Government offers $10,000 to eligible first home buyers (in addition to the concessions available under the First Home Buyers Assistance Scheme) who either:

– Are purchasing a new or recently substantially renovated home worth no more than $600,000; or

– Are purchasing land to build a new home, where the total price of the land and home is no more than $750,000.

Rostron Carlyle Rojas Lawyers have an experienced team of Commercial and Property lawyers committed to achieving superior outcomes for their clients.

For further information or assistance regarding the purchase of your first property, or in relation to property or commercial matters generally, please contact James Hatzopoulos at Rostron Carlyle Rojas Lawyers on (02) 9307 8900 or by email to [email protected]

Director identification numbers being introduced

Director identification numbers being introduced

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 (Cth) (Act) passed by the Federal parliament on 12 June 2020 with the effect that directors of Australian companies will soon be identified by a permanent unique number which will be known as a director identification number (DIN). The main purposes of the Act are to:

• ensure that all directors have their identity verified as part of the DIN(director identification number) application process (this includes alternate directors acting as directors, and other officers such as company secretaries as might be prescribed by regulations);
• ensure directors only have one DIN and preventing directors hiding behind aliases or variations of their name;
• prevent director identity fraud;
• apply a consistent regime across Australian body corporates, Aboriginal and Torres Strait Islander corporations, and registered foreign companies;
• further aid in the deterrence and penalisation of illegal phoenix activity; and
• impose criminal and civil penalties for non-compliance.

The Treasury Laws Amendment (Registries Modernisation and Other Measures) Act 2020 is one of five other acts which have been passed by parliament which will together introduce a single business register, allow for the governments technology to be modernised and address the issue of phoenix activity.

Whilst the Act is not yet in force it will come into force on the date fixed by proclamation or within two years from the day the Act receives assent. After the Act becomes operational:
• existing directors having to apply for a director identification number within a period of time to be announced;
• within the first 12 months (Transitional Period) of the new Act’s operation a person who is appointed a director will have 28 days to apply for a director identification number (DIN).
• after the Transitional Period ends, a director must apply for a director identification number prior to being appointed as a director or such time as specified by the registrar; and
• The resignation of a director will then only take effect from the date of notification and a director that fails to notify the ASIC of their resignation within 28 days may be held accountable.
• There will be criminal and civil penalties for applying for multiple DINs or misrepresenting a DIN  with the penalties for a director applying for multiple DINs or misrepresenting a DIN (director identification number) being up to $21,000 (100 penalty units) and/or 12 months imprisonment as at the date of this article.
This is in stark contract with the current process as ASIC does not take steps to verify the identity of company directors and will have a significant impact on:
• the time frame and costs to incorporate companies will be lengthened where the person to be appointed as a director does not already hold a DIN;
• clearly identifying the directorships an individual holds and removing the discrepancies and errors commonly seen in Government registers; and
• making the process of locating directors in insolvency matters by creditors, administrators and liquidators more efficient and easier.

If you have any questions regarding the introduction of director identification number (DINs) or other matters relating to your or duties as a director, please contact Rostron Carlyle Rojas Lawyers:

For Dreamworld, the nightmare continues!

Work Health and Safety Prosecutions- Dreamworld Litigation Case

Work Health and Safety Prosecutions

The recent announcement of charges being laid against Ardent Leisure Ltd, the operator of Dreamworld is a reminder of the consequences of injury and deaths in the workplace, and the failure to have and maintain safe systems of work.

Queensland Work Health and Safety Prosecutor has filed three charges against Ardent Leisure in the Magistrates Court, alleging the company breached the QLD Work Health and Safety Act (2011) (WHSA).

All three charges attract a maximum penalty of $1.5 million.

The prosecution arises from the 2016 Thunder River Rapids Ride tragedy, when the lives of four people were lost when the ride malfunctioned.
In a coronial inquest which followed, the findings of the coroner were damning of the operators:

Coroner James McDougall found the ride was clearly unsafe and “shoddy” record keeping was also to blame, and stated,

“It is clear from the expert evidence that at the time of the incident, the design and construction of the TRRR at the conveyor and unload area posed a significant risk to the health and safety of patrons,” said McDougall.
“This general ignorance of proper safety and adequate assessments was a recurring theme throughout Dreamworld in many of the Departments and reflects a systemic failure to ensure the safety of patrons and staff by the use of a proper safety management system, with the necessary engineering oversight of high- risk plant.”

Under the WHSA, there is a clear and non-delegable duty upon persons carrying on a business or undertaking (PCBU) to ensure the safety of their workplaces for workers and invitees.

This duty includes:
• Having proper and adequate maintenance systems in place
• Actual implementation and use of those systems
• Proper procedures for training of staff
• Keeping accurate and complete records of maintenance and training
• Conducting safety audits and assessments on a regular basis appropriate to the risk,
• Ensuring the design or layout of any operating plant and equipment is safe for users
• Compliance with specific codes
A breach of the duty can result is significant penalties.

The WHS Act provides for the following maximum penalties:

Work Health and Safety Act Maximum Penalties Table

It is an offence for a PCBU or a senior officer to negligently cause the death of a worker.

Where a PCBU or a senior officer is found to have committed industrial manslaughter, a maximum penalty of 20 years’ imprisonment applies for an individual applies, or a fine of up to $10 million for a body corporate.

Categories of offences

The three categories of offences for failing to comply with a WHS duty reflect different degrees of seriousness or culpability.

Category 1 – the most serious breaches, where a duty holder recklessly exposes a person to the risk of death or serious injury.

Category 2 – failure to comply with a health and safety duty that exposes a person to risk of death, serious injury or illness.

Category 3 – failure to comply with a health and safety duty.

The magnitude and seriousness of these penalties should leave no doubt that breaches of the duty can seriously impact upon an employer, and proper regard needs to be had for compliance.

If you conduct a business or undertaking, and have a workplace injury or death, and want legal advice or assistance, please contact us.

Related: What is the role of a litigation lawyer?