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Bradley Allen Love Lawyers is comprised of devoted teams covering a wide range of legal services. We have a strong focus on commercial and business law, property, local government, employment, dispute resolution, estate planning and litigation.

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  • Re-wrapping Red Tape: Changes to the Treasury Act

    Re-wrapping Red Tape: Treasury Laws Amendment

    As we start down the slippery slope towards the end of the 2017-18 financial year, conveyancers, solicitors, buyers and developers alike need to come to terms with the likely impact of the Treasury Laws Amendment (2018 Measures No.1) Act 2018 (Treasury Act) on real property transactions.

    With the Treasury Act commencing on 1 April 2018, buyers (yes… buyers!) rather than the developer (or the supplier) must now withhold and pay directly to the Australian Taxation Office the GST payable on a taxable supply that is made by way of sale or long term lease of:

    1. new residential premises; or
    2. potential residential land that is included in a property subdivision plan and which does not contain any building that is in use for a commercial purpose.

    However, the withholding regime will not apply to new residential premises which have been created through substantial renovations.

    The amount to be withheld by buyers will be equal to:

    1. 1/11th of the purchase price identified in the contract for sale;
    2. where there is no purchase price, 1/11th of the GST exclusive market value; or
    3. where the margin scheme applies, 7% of the purchase price (or GST exclusive market value where there is no purchase price).

    The amount must be withheld and paid to the Australian Taxation Office on the day on which consideration is first provided. In most circumstances, this will be on the day of settlement.

    The Treasury Act applies to all contracts under which any consideration (other than the deposit) is first provided on or after 1 July 2018, though there is an exemption for those contracts entered into before 1 July 2018 and under which the consideration is first provided before 1 July 2020.

    So what are the practical implications of the Treasury Act? Well, for a developer, they will still need to account for the GST amount in its BAS and will be entitled to a credit for the GST amount once paid by the buyer to the ATO. They will also need to give buyers notice specifying whether the buyer is required to withhold payment from the supply, and if relevant, the amount to be withheld and paid to the ATO.

    It would be prudent for developers to consider a review of their existing developments and future sales to ensure both administrative processes and contract terms facilitate the requirements of the withholding regime.

    Whilst the intention of the Treasury Act is to discourage GST avoidance, we expect the changes will be somewhat detrimental to developers and likely to lead to increased transaction costs.

    For property developers who require further advice on these reforms, please contact a member of our Real Estate Development team.

    Written by Benjamin Grady, Associate, and Julian Pozza, Lawyer.

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  • Expert Witness Survives Challenge

    Expert Witness Survives Challenge

    The acceptance of expert evidence by a commissioner of the Land and Environment Court was unsuccessfully challenged in a recent appeal.

    The appeal arose from an application to modify a development consent for the construction of a dwelling house. The consent, which was granted in 2001, incorporated a design for a driveway to access the dwelling and the modification application involved a significant reconfiguration of the driveway.  The driveway was steep and engineering evidence was called by both sides.

    The council’s evidence was given by its development engineer.  He held formal academic qualifications in engineering surveying but not in engineering but had extensive experience, spanning almost 40 years in local government, in domestic driveway design.

    His evidence was challenged by the applicant on two grounds.  One was that he did not have appropriate qualifications to give expert engineering evidence to the court as he had no formal engineering qualifications.  The other was that, as an officer of the council, he had a conflict of interests and could not be regarded as an appropriate person to give expert evidence to the Court.

    Both grounds of challenge were rejected by the court in a decision handed down last week.

    On the first ground, Moore J held that the qualification for a person to give expert evidence is not that they have a university-based qualification but that they can demonstrate that from their specialised training, knowledge or experience, they have obtained the necessary degree of specialised knowledge or skill to be regarded able to speak authoritatively about it.  In this case the council witness clearly had significant relevant experience and an appropriate and relevant qualification to give expert evidence on the technical aspects of the proposed driveway design. His Honour commented (at [72]) that:

    Indeed, to hold that the absence of a university-based qualification would disentitle Mr Clare from being accepted as an expert for the purposes of assessing Mr Doyle’s application would be intellectual arrogance of the highest order. It would also be bad at law!

    The court also rejected the second ground of challenge, saying that neither the expert witness nor the council as his employer had any pecuniary interest or other direct or indirect interest in the outcome of the proceedings.  Moore J said that a conflict of interests could arise which could prevent a witness from meeting the obligations for independence required of an expert witness where they might be perceived as having a direct or indirect pecuniary interest arising out of their employer’s role in particular proceedings.  The exclusion of such a potential witness may not be unreasonable in such a case, depending on the particular circumstances.

    However, his Honour observed that such a situation does not arise in the case of a council employee when the council’s position in the proceedings is consistent with the position adopted by the council employee.  The Court noted that a contrary position arises where the position adopted by the council is inconsistent with the approach recommended by the council officer and observed that, to avoid such a conflict, it was customary for councils to engage external experts when that situation occurred.

    For more information about this case, or on expert witnesses, please contact Alan Bradbury.

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  • Competition Consumer Act: Business Breakfast Club April Summary

    Competition Consumer Act: Business Breakfast Club April Summary

    UPDATE: On 6 November 2017, changes to the Competition and Consumer Act 2010 (Cth) took effect.

    This month at Business Breakfast Club, we discussed changes to the Competition and Consumer Act 2010 (the Act) which change the notification regime and extend the type of prohibited conduct. The changes make it easier for small businesses to obtain legal protection from potential breaches of the competition laws which usually prohibit businesses from collectively bargaining with a customer or supplier. In particular, we focused on the illegal practices of “concerted practice”, “cartel conduct” and “collective bargaining”. BAL Legal Director, Mark Love shared some of his insights on the topic. Mark touched on:

    Why do you need legal protection?

    Competitors who engage in collective bargaining may be in breach of the Act. The most effective way for businesses to collectively bargain without risk of breaching the Act is to lodge a ‘notification’ with the Australian Competition and Consumer Commission (ACCC) which identifies the proposed bargaining group and the type of conduct they intend to engage in. The notification process has been available since 2007, but has historically been viewed by the business community as not providing a substantive practical benefit. This is because the notifications were interpreted narrowly by the ACCC so it was still possible to breach the Act. Now, notification can be given for a class of persons both in relation to the beneficiaries of the bargaining group and the targets (customers or suppliers). However, with the broadening of the notification regime comes a third basis for infringement: concerted practice.

    Collective bargaining

    Collective bargaining is an arrangement whereby two or more competitors come together to negotiate terms, conditions and prices with a supplier or a customer. Essentially, collective bargaining tends to benefit smaller businesses who do not have the volume (of sales or purchases) alone to give them bargaining power. Permission to collectively bargain can be obtained through the notification or authorisation procedures of the Act provided there is some “public interest” in allowing the conduct.

    Cartel conduct

    Cartel conduct encompasses agreements between competitors to fix prices, divide markets, rig bids, or restrict outputs thus restricting competition.  To prove “cartel conduct” the ACCC is not required to prove that there has been a lessening of competition as a result of the conduct, rather the ACCC must demonstrate that:

    1. the persons concerned are in “competition” (whether for customers or suppliers);
    2. there is a relevant “purpose” to the arrangement or understanding; and
    3. there is a relevant contract, agreement or understanding to that effect.

    The Court considered “cartel conduct” in ACCC v Australian Egg Corporation Limited [2017] FCAFC 152. In that case, the ACCC alleged that Australian Egg Corporation Limited (AECL) and two egg producing companies, Ironside Management Services Pty Ltd (T/A Twelve Oak Poultry) and Farm Pride Foods Limited attempted to induce egg producers who were members of AECL ‘to enter into an arrangement to cull hens or otherwise dispose of eggs, for the purpose of reducing the amount of eggs available for supply to consumers and businesses in Australia’.

    Virtually every aspect of the ACCC’s case against AECL was found by the presiding judge to be true and based on largely uncontested facts, specifically the conduct of the parties at an industry summit brought together urgently to address the very issue of the oversupply of eggs and the damage that was apt to do to egg producers and the Australian Egg industry. However, despite the findings of fact the Court found AECL was not in breach of the Act because the conduct was something “less than a binding contract or arrangement”.

    Concerted practice

    As a result of the AECL decision, the Act now includes a third basis of infringement which is a hybrid of the cartel and collective bargaining provisions. Concerted practice is a form of coordination between competing businesses by which, without them having entered a contract, arrangement or understanding, practical cooperation between them is substituted for the risks of competition. There must be the purpose or likely effect of substantially lessening competition which has been held to be “whether the effect of the arrangement was substantial in the sense of being meaningful or relevant to the competitive process”.

    Q&A Corner

    Q. What are the risks associated with lodging a notification to the ACCC?

    A. Lodging a notification to the ACCC requires businesses to disclose information regarding the proposed conduct in a sufficiently precise manner. The ACCC can then consult with interested parties and assess the notification. As part of the notification, it is important that you:

    • outline the areas of competition likely to be affected by the proposed conduct;
    • describe the likely public benefits from the proposed conduct; and
    • specify the likely public detriments (including any adverse effect on competition).

    Some businesses may be reluctant to disclose this information as it may prompt the ACCC to carefully scrutinise the conduct of the businesses engaged in exclusive dealing. Further, once notification is lodged with the ACCC, it is published on the ACCC’s public register. Businesses must determine whether the risks associated with notifying the ACCC of the proposed conduct (the publication of business information) outweighs the risks of not obtaining the ACCC’s “blessing” for the conduct. Remember, breaches of the cartel, collective bargaining (and now) concerted practice provisions can result in criminal prosecution.

    The Business Breakfast Club is held on the second Friday of each month, the next one is on 11 May. If you would like to attend, please contact us to be added to the invite list.

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  • Investigations of Staff Misconduct Complaints

    Essential Guide to Local Government Law: Investigating Staff Misconduct Complaints

    Investigations of staff misconduct complaints, including workplace bullying can be difficult. It is important to carry out your investigations in a reasonable manner: below is a guide on how to best investigate staff misconduct complaints, including workplace bullying.

    Key instruments

    1. Local Government (State) Award 2017 (‘Award’).
    2. Local Government Industry Guidelines on Workplace Investigations under section 36 of the Award (‘Guidelines’)
    3. Model Code of Conduct for Local Councils in NSW (‘the Code’)
    4. Procedures for the Administration of the Model Code of Conduct (‘the Procedures’)

    Key questions to ask when a complaint has been made

    How serious is the complaint?

    • If the complaint is minor, dated, or there are mitigating factors, then it may be best dealt with at a management level. There is discretion under both the Award (clause 36) and the Procedures (at 5.2) to handle a complaint this way.
    • What will be achieved by escalating (or not escalating) the complaint? At law, the only legitimate purpose to invoke civil disciplinary proceedings is to protect the Council (and public confidence in it). Invoking proceedings to simply ‘punish’ an employee is unnecessary and impermissible.

    What process do I need to follow?

    • Establish if the complaint is most accurately characterised as a performance issue, a conduct issue, both, or neither, and adopt the corresponding process. You may need to get more particulars to answer these questions (i.e. who, what, how, where, when etc). If you think the complaint, if substantiated, might amount to a breach of the Code, identify with precision what particular section(s) of the Code are involved.

    Remember that there may be multiple processes to follow, and ensure your process complies with all applicable processes. Key potentially applicable processes include:

    • the disciplinary process set out at cl 36 of the Award (and the Guidelines);
    • the Procedures for Administration of the Model Code of Conduct; and/or
    • the Public Interest Disclosure process.

    Key considerations once a decision has been made to Investigate:

      1. It is important to follow all applicable procedures. Make sure you know who has what role.
      2. Remember that the employee has a right to be represented in any Investigation.
      3. Most Investigations regarding staff can be dealt with ‘in-house’, but consider whether Council needs assistance of an external body to carry out the Investigation. This is particularly advisable in cases concerning serious or complex allegations, sensitive subject matter, where an actual or perceived conflict of interest exists, or where Council doesn’t have the resources to conduct the investigation expeditiously.
      4. Any sanctions or disciplinary responses for proven misconduct must be only those necessary to ‘protect’ the Council (and public confidence in it). Disproportionate sanctions are impermissibly punitive.

    Key things to remember in all investigations:

    Procedural Fairness

    Procedural fairness is owed to the respondent, not the complainant.

    In essence, the rules of procedural fairness require:

      1. the person who may be subject to an adverse finding is ‘heard’ in a manner appropriate to the circumstances;
      2. the decision maker is able to bring an impartial mind to the question before him or her (and is seen to be able to do so); and
      3. decisions are made on the basis of logically probative evidence.

    In particular, the employee concerned has a right:

      1. to receive clear notice of all allegations and how, precisely, they might offend the Code;
      2. to receive all relevant information before responding to the allegations;
      3. to be given a fair amount of time to consider the allegations and supporting materials before being required to respond; and
      4. for their response to be received and genuinely considered before an adverse decision is made.

    Suspension

    In certain circumstances it may be appropriate to suspend an employee while an investigation is being carried out. However, suspension as a disciplinary tool should be used sparingly and only when it is necessary for the integrity of the investigation and protection of the Council.

    Work Health and Safety

    It is important to carry out your investigations in a reasonable manner so as to reduce the risk of mental health injuries to those involved.

    Need more help?

    Our Employment and Workplace Lawyers provide effective solutions to help manage your workplace and employees, while minimising your exposure to risks and issues. Where claims are made by employees, we are experienced advocates in all workplace jurisdictions, including the Fair Work Commission and the Federal Courts.

    For further advice on investigations into staff misconduct complaints, please contact Gabrielle Sullivan, Director of Employment and Workplace Relations, or Alan Bradbury, Director of Planning, Environment and Local Government.

    Read more Essential Guides to Local Government Law.

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  • 4 BAL Directors ranked in the 2018 edition of Best Lawyers - Australia

    4 BAL Directors ranked in the 2018 edition of Best Lawyers - Australia

    Four BAL Directors have been recognised for their legal excellence in the 2018 edition of the Australian Financial Review’s Best Lawyers Australia list. Produced by a peer review company and published by the Australian Financial Review, the list is compiled following an extensive evaluation process. The list includes more than 3,300 lawyers from 330 law firms nationwide, up from more than 3000 last year.

    The directors have been successful in the following practice areas:

    • Alan Bradbury – Government Practice, Planning and Environment Law;
    • John Bradley – Leasing Law, Real Property Law;
    • Mark Love – Commercial Law, Insolvency and Reorganisation Law, and Corporate Law; and
    • John Wilson – Labour and Employment Law, Occupational Health and Safety Law.

    This is the ninth consecutive year the Alan Bradbury has been acknowledged for his expertise. Managing Legal Director John Wilson makes his sixth appearance in the list, while Mark Love and John Bradley were again recognised for their respective practices.

    John Wilson congratulated his fellow Legal Directors on their achievements.

    “A listing in Best Lawyers is a considerable honour, reflecting as it does the praise of fellow practitioners in each speciality,” he said. “For three of my colleagues and I to be included speaks highly to the calibre of our team at Bradley Allen Love.”

    Best Lawyers is the oldest and most respected peer-review publication in the legal profession. A listing in Best Lawyers is widely regarded by both clients and legal professionals as a significant honour, conferred on a lawyer by his or her peers. For more than three decades, Best Lawyers lists have earned the respect of the profession, the media, and the public, as the most reliable, unbiased source of legal referrals anywhere.

    The full list is available here.

    BAL directors - best lawyers 2018

    Above: Mark Love, John Wilson, John Bradley and Alan Bradbury, – listed in The Best Lawyers in Australia© 2018

    ABOUT BEST LAWYERS

    Best Lawyers is the oldest and most respected attorney ranking service in the world. Since it was first published in 1983, Best Lawyers® has become universally regarded as the definitive guide to legal excellence. Best Lawyers lists are compiled based on an exhaustive peer-review evaluation. 83,000 industry leading attorneys are eligible to vote from around the world, and Best Lawyers® received almost 10 million evaluations on the legal abilities of other lawyers based on their specific practice areas. Lawyers are not required or allowed to pay a fee to be listed; therefore inclusion in Best Lawyers is considered a singular honour.

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  • Builders beware - owners given clarity on shoddy building work in off-the-plan apartments

    Builders beware: owners given clarity on shoddy building work in off-the-plan apartments

    A building dispute running for the better half of two decades between the owners of Units Plan 1917 and the developer, Koundouris Projects, appears to have finally come to an end on 16 February 2018 with the High Court refusing Koundouris’ application for leave to appeal against the decision of the ACT Court of Appeal in Koundouris v Owners – Units Plan No 1917 [2017] ACTCA 36.

    Originally heard in 2016, the matter concerns a claim by the owners of Units Plan 1917 against the builder, Mr Koundouris, in relation to the construction of the Lagani apartment complex and the various issues in the complex following its completion, including the existence and ongoing water leaking and damage in units and the cracking of masonry and facades. The matter heard was complex, particularly due to the various changes in legislation having taken place during the construction phase, and turned on the interpretation of the statutory warranties contained in the Building Act 1972 (ACT) (now repealed) and the Building Act 2004 (ACT). Though the primary judge held that Mr Koundouris had indeed breached these statutory warranties, it was the decision of the ACT Court of Appeal that provides greater certainty to unit owners, builders and developers alike as to the application of the statutory warranties in off-the-plan contracts for sale.

    The ACT Court of Appeal largely upheld the primary judge’s decision but made the following important distinctions:

    1. It is not necessary for a builder and developer to have a written contract in place for the statutory warranties to apply;
    1. The statutory warranties extend to the defined parts of the unit titled building, being load bearing walls, columns, footings, slabs and balcony’s;
    1. The statutory warranties operate both during construction and following completion;
    1. The source of an owners rights for breaches of the statutory warranties arise as the successor in title but can also arise for successive owners as the statutory warranties are implied in the contract for sale; and
    1. Unsuccessful repair works (where there is an inherent issue with the construction of the building) throughout the statutory warranty period may lead a builder to breach the statutory warranties repeatedly allowing a claim to be brought against the builder for an extended period of time.

    Though some might suggest that the decision of the ACT Court of Appeal may discourage builders from attempting to repair building defects for fear of inadvertently extending the limitation period under the statutory warranty, the decision makes clear that the intention of the statutory warranties are to protect the consumer from shoddy building work and that the provisions of the legislation should be interpreted accordingly.

    Written by Benjamin Grady and Alexander Paton. If you require further information or advice in regards to your rights and obligations concerning building defects, please contact us.

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