Unfair Contract Terms to Benefit Small Business

Unfair Contract Terms to Benefit Small BusinessUnder changes to the Federal Government’s Competition and Consumer Act, small business is set to receive the same protection against unfair contract terms that is currently enjoyed by consumers. Although the laws have not yet been passed, they formed part of the announcement of the Federal Budget and are expected to make their way through parliament in coming months. If they are passed, it will be a real windfall for small business because they will no longer be exposed to the corporate might of the multi nationals and larger companies when entering into standard form contracts.

Under the current legislation (which is planned to be extended to benefit small businesses) when contracts and trading terms are presented to them by big companies they contain terms which are considered to be unfair, as those terms will become void.

Terms that are considered to be unfair include those where the terms are not reasonably necessary to protect legitimate business interests, cause a significant imbalance between the rights of the parties  or which would cause an unfair financial or non financial detriment to the consumer if the big business attempted to enforce them. For example, a term in the fine print of a contract with a telecommunications company which reported to charge a sizeable “disconnection fee”, if the consumer changed providers within a certain period of time would potentially be viewed as a penalty and therefore be unfair and un-enforceable. Now, the same protections are planned to be extended to small business who may not be, strictly speaking, “consumers” but until now, unable to muster the economic clout to renegotiate terms of standard contracts.

It is anticipated that the changes will only apply to contracts entered into after the new legislation commences so if you are in small business, you will no doubt be hoping that that happens sooner rather than later!

Travis Schultz
Managing Partner
Schultz Toomey O’Brien
Ph: (07) 5413 8900
Fax: (07) 5413 8958

When is a Marriage a Marriage?

When is a Marriage a Marriage?It may be the 21st century way but the statistics tell us that more and more couples are deciding to live in de facto relationships rather than formalise their union as a married couple. And while there is no longer a social stigma attached to de facto relationships that may have been present a century ago, the status of a relationship can be of some legal significance where entitlements to government benefits, inheritances or even compensation is concerned.

Recently, the Queensland Court of Appeal had to consider the status of a de facto relationship when the de facto partner of Mr Shane Perry was killed in a motor vehicle accident. At issue was whether he was entitled to receive compensation under the Queensland compulsory third party insurance scheme. Under Queensland Law, a de facto partner is entitled to make a claim for compensation for loss of financial dependency and domestic services where their partner dies in a motor vehicle accident, but it must first be established that their relationship was one in which they lived together “on a genuine domestic basis”.

Mr Perry and his late partner had both previously been married and had been living together but maintained separate bank accounts. They held the view that they should keep their assets and bank accounts in their own names and hold them separately but otherwise live together in a relationship. When the case was first heard by the Trial Judge, it was found that the relationship was not one in which it met the requirement that they lived together “on a genuine domestic basis”, but the Court of Appeal overturned that decision finding that even though the couple were not in any hurry to pool their money resources, just because the couple chose to maintain their independence, did not mean that they were not involved in a genuine domestic relationship.

As a result, it was found by the Court of Appeal that Mr Perry was entitled to the benefit of the CTP scheme and damages were awarded.

The decision demonstrates the evolving nature of the Law and its adaption to changes in community standard which are very different in the 21st century to how they may have been generations before.

Travis Schultz
Managing Partner
Schultz Toomey O’Brien
Ph: (07) 5413 8900
Fax: (07) 5413 8958

Directors duties to be taken seriously

Directors duties to be taken seriouslyWith the changes to our tax system that are anticipated in the Federal Budget which will see higher personal rates of tax for high income earners and lower company taxes, it stands to reason that use of corporate vehicles to conduct businesses is likely to proliferate. After all, if corporate structures can be used validly to reduce a tax liability and provide a measure of asset protection, it would be sound financial and accountancy practice to use corporate vehicles to conduct business operations as often as possible. But what is often forgotten by those who set up companies to run their enterprise, is the duties that the directors become subject to under the Federal Corporations Act.

Quite apart from using care and diligence in managing the companies affairs, any director has an obligation to act in good faith and to act in the interest of the company (even of their own personal interests), to avoid conflicts of interest between their own and the company’s interests, to act honestly and to use the company’s intellectual property and confidential information for the benefit of the company and not themselves.

Whilst these obligations might seem to simply accord with common sense, they often become of greater importance when the company goes into liquidation or receivership. It is at that point in time that the action of the directors of the failed company become very closely scrutinised and if there has been any breach of duty, a director can be pursued personally.

Where a director of a company has known or ought to have known that the company was in financial difficulties and unable to pay its debts as they fell due, then under the provisions of the Corporations Act, a director can become personally liable for the debts incurred during the period that the company traded whilst is was insolvent.

So while the use of a corporate vehicle makes a lot of financial sense when running a business, it is critically important that directions appreciate and remain competent of the duties that they owe and seek professional advice if concerns arise about the performance of the business or potential conflicts of interest.

Travis Schultz
Managing Partner
Schultz Toomey O’Brien
Ph: (07) 5413 8900
Fax: (07) 5413 8958

Road Infrastructure is the Key

M1 TrafficThe Bruce Highway maybe rightly regarded as the most dangerous road in Australia, but quite apart from the safety issues the Bruce Highway between the Sunshine Coast and Brisbane desperately needs an upgrade to give our local economy a boost.

There is little doubt that the Sunshine Coast is well positioned to benefit from its idyllic lifestyle, picturesque beaches and proximity to Brisbane, but as it presently stands our tourism and hospitality sectors are suffering because of the inadequate modalities of transport to and from Brisbane. Where the Gold Coast is the beneficiary of a six and eight lane highway, a well connected rail network and now, light rail along the coast line, the Sunshine Coast remains tenuously connected to the City by a potholed and flea bitten four lane goat track which, during peak times, turns the one hour transfer into a three hour nightmare. Ask any commuter what their biggest bugbears are about the commute to Brisbane and they will be sure to tell you that it is the unpredictable nature of the trip which can take anything from an hour to three hours, depending upon the time of day and conditions. When you add to that the lack of any reliable, timely and efficient connections to railway stations and we’re a far less attractive option for a Coast commuter than the northern end of the Gold Coast.

The same can be said for the tourists who are regularly faced with a three hour trip back to Brisbane on a Sunday afternoon simply because of the log jam that is experience between the Caloundra turnoff and the Gateway Arterial.

It is true that road infrastructure is expensive and that with State and Federal cutbacks, funding is likely to remain scarce but unless we, as a community, start making some noise about this very important issue, I suspect that we will continue to lose ground to our well resourced and overexposed southern cousins who seemingly enjoy a privileged life when it comes to transport infrastructure.

Travis Schultz
Managing Partner
Schultz Toomey O’Brien
Ph: (07) 5413 8900
Fax: (07) 5413 8955

A lunch with Lisa Wilkinson

Lisa Wilkinson Speaking at the Sunshine Coast Business ExpoWell what an absolutely incredible and inspiring life this gorgeous lady has had. From starting off as ‘Girl Friday’ at Dolly to editor of the magazine at 21, editor at Cleo for 10 years and Today Show presenter for 7, really shows the strength and determination Lisa Wilkinson had to reach her dream job.

It wasn’t all smooth sailing for Lisa though. She worked long hours, weekends and holidays and postponed a long awaited European backpacking holiday with her girlfriends. However, this didn’t matter too much to Lisa because she knew where she wanted to go and how she needed to get there.

Lisa balances her work life and family life, even though it is quite gruelling getting up at 3am every morning, driving to the office, reading a number of briefs and newspapers whilst the makeup crew work their magic before her appearance at 6am, alongside  co-host Karl Stefanovic.

It truly was a wonderful story that Lisa was able to share with us all who attended the Sunshine Coast Business Expo and gives us more motivation and inspiration to follow our goals, our gut and to turn our dreams into reality.

By Casey McKenna, Marketing Officer

Sirromet Seven Scenes Signature Collection 2012 Merlot

Sirromet WinesIt’s that time of year that the State of Origin is on the front page of every newspaper and geographic loyalties are at their peak, yet for reasons I don’t quite understand, the average wine consumer forgets about their regional parochialism when they walk in the front door of their local bottle shop.

After all, it’s not as if we don’t have a decent wine industry in Queensland.  In fact, I’d go so far as to suggest that some of our Verdelhos and Merlots are as good, if not better, than those that hail from the light blue vineyards in the Hunter Valley.

Take, for example, the Sirromet Seven Scenes Signature Collection 2012 Merlot from the Granite Belt.  It’s slightly “forest floor” on the nose, but displays firm rhubarb and preserved plum flavours on the palate which develop an oaky tannic edge as the wine weaves its magic at the back.  It’s not the soft, understated style of Merlot that you’d find at Hawkes Bay or a typically cooler climate, but it’s the regional nuances that make it so enchanting.

Best of all, it’s only $30 a bottle and pours in a colour surprisingly similar to the Maroon jersey our team wear with pride as they run on at Suncorp Stadium.  Thumbs up!

Our wine reviewer, Travis Schultz, is managing partner of Schultz Toomey O’Brien Lawyers and lover of fine food and wine


Meet Casey McKenna

Casey MckennaPosition: Marketing Officer

How long you have been working here for? 8 months

What do you enjoy most about working at STO? My colleagues and the culture of the firm. Everyone is easy going and good to get along with. We all work hard to ensure we provide the best possible service to our prospective and current clients and referrers.

How do you spend your time outside of work? I spend the weekends with my husband, family and friends. I enjoy going to the beach, dining, photography, relaxing with a good book and planning my next travel adventure.

What is your favourite type of music? I listen to everything – country, rock, RnB, pop. Anything from the 70’s through to the 00’s

Connect with Casey via linkedin.

Family Law Settlements – don’t get caught out by proposed new tax ruling

From as early as July this year a Final Tax Ruling is likely to issue which will reverse the Commissioner’s views on the taxation status of private companies paying money or transferring property in satisfaction of property orders made under the Family Law Act.

The draft ruling released for comment in November last year provides that where private companies are joined as parties to Court proceedings and ordered to pay money or transfer property to a shareholder or an associate of the shareholder such as a spouse/partner, the payment or transfer will constitute an assessable dividend requiring the recipient to pay income tax on the sum received or value of property.

This is a departure from the ATO’s previous position which did not construe such transactions under s79 of the Family law Act to be dividends.

The impact of the draft ruling also applies when private companies are not parties to Court proceedings but where a Court order requires the parties to cause the private company to transfer property of pay money to a shareholder or associate.

It is proposed by the ATO that the Final Tax Ruling will apply to private company transactions under Family Court orders both before and after the date the Final Tax Ruling issues. Although the Commissioner has advised the ATO will not undertake active compliance activities in relation to Court orders made before this date, if asked for example in a private ruling the Commissioner’s view will be consistent with the new approach.

We will always recommend you seek out specialist financial advice with respect to your matrimonial matters but now more than ever if these changes could apply to your property settlement.

Raising our Cups for Cancer

Australia's Biggest Morning Tea in Support of the Cancer Council


Law firm locks in Biggest Morning Tea

With every clink of the coffee cup, the staff at Schultz Toomey O’Brien Lawyers are dipping into their pockets to help cure cancer.

The Birtinya-based firm will be among thousands of groups, friends, offices and schools taking part in Cancer Council Australia’s Biggest Morning Tea today.

The annual event encourages people to get together and raise a cup for a good cause.

Schultz Toomey O’Brien Birtinya marketing officer said the time-out for a good cuppa and slice of cake was much more than just a chance for her colleagues to have a break.

The cause is very close to her heart, as her mother continues to undergo treatment for melanoma cancer.

“So many people have been touched by cancer and hosting a morning tea is such an easy and fun way to bring people together while raising funds,” Mrs McKenna said.

“Mum’s diagnosis about three years ago has definitely brought our family together but has also changed a lot of things.”

“Mum has stopped working and dad has too to be her carer.”

“This event is just a small way of giving back to help find a cure for cancer.”

This year more than 6700 tea hosts around Queensland will gather in living rooms, community centres, businesses and schools to celebrate Australia’s Biggest Morning Tea to raise $2.5 million dollars for cancer research, education programs and patient support services.

It is not too late to host your own throughout May and June. Visit www.biggestmorningtea.com.au

If you would like to donate to help us reach our fundraising goal please visit http://qld.cancercouncilfundraising.org.au/stolaw

Harvey Norman Franchisees Fined for Misleading Customers

Customer at registerHarvey Norman Franchisees have been penalised and ordered by the Federal Court of Australia to pay a total of $60,000 for misleading customers about their consumer guarantee rights. The Australian Competition and Consumer Commission (ACCC) bought proceedings against nine Harvey Norman Franchisees which has led to penalties of $234,000.

The allegations made by the ACCC have differed for each franchisee and below are a few examples of what the misrepresentations have included:

  • the franchisee had no obligation to provide a remedy while the relevant product was still covered by the manufacturer’s warranty;
  • the franchisee had no obligation to provide consumers with a choice of remedy if the relevant product was supplied more than three months ago; and
  • the consumer would have to pay a postage and handling fee before the relevant product could be returned from the manufacturer. (Source: Findlaw.com.au, http://www.findlaw.com.au/news/7010/nine-harvey-norman-franchisees-penalised-for-misle.aspx)

All consumers are given a set of rights under The Australian Consumer Law which guarantees all goods purchased after 1st January 2011 guarantees that:

  • goods will be of acceptable quality;
  • goods will be fit for any disclosed purpose;
  • goods will match any description under which it is sold;
  • goods will have spare parts available for a reasonable time; and
  • all express warranties offered will be honoured.

(Source: The Australian Consumer Law, http://www.consumerlaw.gov.au/content/Content.aspx?doc=home.htm)