Residential investment – the key to growth

By Travis Schultz, Managing Partner

According to the 2011 Census figures, the Sunshine Coast now has a population of around 300,000 people, which is an increase of just over 10% since the last Census figures were taken in 2006. Many demographers are predicting that the Sunshine Coast will continue to see increasing growth, particularly with projects such as the Stockland’s Caloundra South development in the pipeline. And with a number of large scale projects like the new Kawana Hospital becoming a reality, there is probably good cause for a degree of optimism. While new jobs certainly means more people coming to the Coast and therefore more demand for retail and service sectors, I cannot help but worry about our accommodation dilemma. After all, before any workers are going to relocate to the Sunshine Coast for their employment, they will have to ensure that suitable housing is available.

Those fortunate enough to be able to buy their own home will no doubt benefit from the low cost housing options that these new projects will deliver but for those tied to the rental market, there is a degree of uncertainty. According to the 2011 Census figures, there are around 34,000 investment properties on the Coast. When you take out of the equation those that are reserved for holiday letting, it becomes apparent that the pool of rental properties is relatively limited. If the Coast is going to be able to support an influx of workers then more investment properties are needed. But with such high Government set costs to invest in the property sector, how can we be confident that property investors will be prepared to park their “hard earned” in the domestic property sector?

Perhaps it is time for our new State Government to show some initiative and remove some of the barriers to entry, like stamp duty and land tax that are currently making investment in real estate less attractive than equities, bonds and bank accounts.

Tomich Wines

by Travis Schultz

Tomich Wines may have their base at Woodside in the Adelaide Hills region of South Australia, but the family owned company also has strong ties to the Sunshine Coast as owners of The Creek Tavern at Mountain Creek.

Locally, it’s younger brother Sam (Tomich) who flies the flag for the family’s operations, but at home in the hills, older brother Randall is both vigneron and winemaker for the Tomich Wines Estate. And while it’s the regional champions of Pinot Noir and Chardonnay that bask in Tomich award winning glory, it’s some of their imported fruit from the McLaren Vale that recently grabbed the attention of my taste buds.

The Tomich “Grace & Glory” Shiraz 2010 is at the “consumer savvy” end of the spectrum, but the quality of the wine at a sub $15 price point will surprise you. In the glass it’s a bright, crimson edged purple that becomes almost black in the middle, while on the palate it’s a kaleidoscope of Christmas cake flavours that is richly textured and shows a touch of cocoa, mulberries and spice as it works its charm through to the finish. Classically McLaren Vale, but it’s got to be one of the best value for money Shiraz that you’ll find in the cellar.

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

Policy uncertainty a risk to investment

by Travis Schultz, Managing Partner

Australia is not only a great place to live but historically, it has also been an attractive place for foreign companies to invest. After all, Australia has a good credit rating, low sovereign risk and enjoys relative political stability.  You would think that in the current global economic climate, our politicians would be keen to ensure that we capitalise on this reputation of stability so as to use foreign capital to stimulate growth for the benefits of Australians. However, it seems our current generation of policy makers has relatively little concern for preserving this reputation given the recent string of policy back flips that have more twists and turns than an Olympic gymnast floor routine!

Take for example, the proposed “resource super profits tax” which came out of left field and caught foreign investors buy surprise. The embarrassment of that proposal was partially ameliorated by some quick back peddling by a new Prime Minister and its transformation into a “minerals resource rent tax”. But by then surely, the damage has been done. How could any major foreign corporation have confidence in investing hundreds of millions of dollars in mining infrastructure when there is such a significant risk of a Federal Government substantially changing the taxation goal posts on a whim?

More recently however, Australian economic credibility has been undermined by the Federal Government doubling the withholding tax rate for international managed investment trusts from 7.5% to 15%. This is the same tax that the Government slashed from 30% to 7.5% only four years ago. It probably matters little now what the tax rate is set at as it would be difficult for any foreign corporation to have confidence in making a decision to invest in Australia against such an uncertain taxation system. And regrettably the state of flux seems likely to continue given the likelihood of another new set of policies arriving with a change in Government at the next election.

Ramifications for no GST on “no shows”

by Travis Schultz, Managing Partner

A recent decision of the full Federal Court which found that Qantas was not liable to pay GST on “no shows”, will have wide ramifications for businesses who receive income as a result of cancellations by customers.

In the Qantas case, the Judges sitting as the full Federal Court had to consider whether GST was payable where a Qantas passenger had booked and paid for a fare on one of their planes and did not turn up. In their decision, the Federal Court determined that if no refund was provided, then there was in fact no supply by Qantas and GST was not payable on any “taxable supply”.

The Commission of Taxation has made an Application for Special Leave to Appeal to the High Court but if that Appeal fails, the Federal Government is going to have to re-write the legislation or otherwise there could be a wide range of small businesses that will benefit from cancellations and “no shows”, at the expense of the tax man.

Ariana Carter & Chloe Baldwin are September’s winning students

by Jennifer Swaine, Marketing Manager

The winning students, for the month of September, in the Schultz Toomey O’Brien Student Athlete Awards are Ariana Carter and Chloe Baldwin from Currimundi Special School.  Both girls were on hand this morning when Hot 91.1, who also sponsor the awards, held an Outside Broadcast (OB) at their school in honour of their efforts.

The girls, both aged 13, have been swimming for years and are set to represent Qld in the Junior Special Olympics in December.  However, like all athletes they have a hard training regime and train eight times a week, as well as doing squad.  The Junior Special Olympics will be held in December this year and the girls, the school and their families are trying to raise the $2,000 each they need to be able to compete.

This morning Trent Wakerley from Schultz Toomey O’Brien Lawyers was on hand with Grant Ferry from the Sunshine Coast Daily and Troy Deighton from Hot 91.1 to present the girls with $500 each.  The schools principal Mr Alwyn Green was also presented with a cheque for $1,000 that the school can put towards their sporting programs.

Hot’s fabulous breakfast duo Todd and Sami entertained the children, whilst broadcasting from the school and all the children and their families were able to enjoy a tasty BBQ breakfast supplied by Micks Meat Barn.

There is only one more month in this years competition, to become selected as a monthly winner.  In November the Sunshine Coast Daily will start the People’s Choice awards which will culminate in an end of year awards presentation which will be held at Birch Carroll & Coyle later in the year.

To enter the Athlete Awards click here to be taken to the entry form.

Take care when making representations

by Travis Schultz, Managing Partner

Marketing and promotion have become the cornerstones of commerce in the 21st Century, however, they can also be the achilles heel of businesses who make careless representations about their products and services.

Australia now has a national set of laws governing trade and commerce which are directed at protecting consumers but which also provide remedies to businesses who might otherwise suffer detriment as a result of the unfair conduct of a competitor.  The Australian Consumer Law replaces the old Trade Practices Act 1974 but contains many of the former provisions which prevent businesses from engaging in misleading or deceptive conduct in the course of their advertising.

In February this year, the Federal Court of Australia was prepared to use these consumer protection provisions to order an injunction against Coastal Contacts (Aus) Pty Ltd who had been making ostensibly misleading representations about the price of their products.  The application had been brought by a competitor, Specsavers Pty Ltd, against their online competitor who advertised, amongst other things, that they offered “free shipping” and that they sold “focus dailies lenses only $18.99” and that they could “save 70% on the cost of contact lenses” when in fact the representations were not true unless the consumer bought a sufficient volume of product.  There was, in fact, no free shipping unless a consumer spent over $99.00 and postage, handling and insurance was added to the price of products bought online.  As a result, injunctions were ordered against Coastal Contacts to prevent them from continuing to make these misleading representations.

The case highlights the care that businesses need to take when advertising and promoting their products and services as if there are any inaccuracies, the Courts have wide powers to not only grant injunctions, but to even award damages in appropriate cases.

Who’s in charge here? The challenges of shared parenting.

By Danielle Sturgeon, Lawyer

Parenting can be difficult at the best of times, but parenting with your ex-spouse can be downright impossible.  Despite the obvious difficulties facing parents who have separated, the law places great weight on a child’s right to have a relationship with both their parents, even after their parents have separated and even if the child spends more time with one parent than the other.  As a result of this focus, the law presumes that in most cases it is in the child’s best interests that there be ‘equal shared parental responsibility’ exercised by both parents.  But what does that actually mean?

Shared parental responsibility relates to ‘major long-term’ issues only and the legislation addresses parents who have shared parental responsibility for a child, ‘consulting’ the other parent and making a ‘genuine effort’ to reach a joint decision.

At the crux of this legislation is what the definition of ‘major long-term’ is.  In essence it relates to issues about the care, welfare and development of the child of a long-term nature and examples include decisions to be made regarding the child’s education, religion, cultural upbringing, health, the child’s name and changes to the child’s living arrangements that make it significantly more difficult for the child to spend time with one parent.   This definition however has been interpreted widely and an issue which often comes up is one parent arranging for the child to attend counselling without consulting the other parent.   At first glance, a decision like that made by one parent solely for the purpose of helping their child seems reasonable, however it can cause difficulties if the other parent is left out of the decision making process.  The reason is that the Court considers attendance of a health practitioner in relation to a long term health issue, including a counsellor, a decision which both parents should be involved in.

But what happens when you cannot agree?  The place to start is a Family Dispute Resolution (FDR) provider such as Lifeline, Centacare or Family Relationships Australia who can arrange for a mediation facilitated by a FDR practitioner who can aim to assist parents come together to make a decision which is in the best interests of their child.   Of course, it may be that parents cannot agree, even after proper consultation and a genuine effort by both parents to come to a decision, and a Court may be asked to make the decision.  However, every effort should be made to reach a solution prior to reaching that point as it would mean leaving an important decision, in relation to your child, to a complete stranger.

Gibbston Valley Pinot Gris 2010

By Travis Schultz

Central Otago in the middle of New Zealand’s South Island is internationally renowned for its world class Pinot, so it’s not surprising that at times, other styles from the region can fly under the radar.  And if ever there was a territorial style overlooked for its cheerleading big sister, it would be the Gibbston Valley Pinot Gris ($30 a bottle).

True to the French style of this wine, the 2010 vintage is lively on the nose and has up-front fruit which becomes more subdued as it crosses the palate, but with a textural chewiness that makes it just as good with, or without food.  It may be the cool climate, or just the skill of the winemakers (Christopher Keys and Sascha Herbert) but there’s a refreshingly clean and crisp finish to the wine that belies its varietal oilyness.  There’s the slightest hint of oak and lees contact, but the aromatics are almost palpable and its creaminess undeniable.

While it sticks in the craw to give a Kiwi Pinot Gris such a big wrap, this one is definitely worthy!

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

Open Gardens Australia – Ryhope Gardens Open day

By Travis Schultz, Managing Partner

The Australian Open Garden Scheme is a not for profit group who open up private gardens for the public to enjoy.  They have asked me to open up our garden once again this year and I have agreed to do so because the open garden also supports our chosen charity, Wishlist, who do so much for local families.

As you know, I was born with 10 thumbs, and none of them green, but previous owners of the 4½ acre property at Buderim carefully crafted magnificent gardens that take in over half of the property and make the most of the views of the Pacific to the East and Mount Coolum to the North.  Entry is $7.00 for adults, of which half goes to fund the Open Gardens Scheme and the other half goes to the charity of the owner’s choice and in this instance, that will be Wishlist.  The flyer and a couple of photos are attached so please pass this on to any family and friends who are either keen gardeners or who just like to get out of the house on the weekend.

Get your facts straight!

By Travis Schultz, Managing Partner

A recent case involving a claim against one of Sydney’s leading racehorse trainers has once again highlighted how important it is to make full and frank disclosure when a client or customer is relying on your skill and judgement. In Viera v. O’Shea, thoroughbred trainer John O’Shea was sued by a client who alleged that O’Shea had not made full disclosure when he recommended that his client take a 70% interest in an expensive yearling he had purchased at the Magic Millions for some $231,000.00.

When the matter hit the Courts, evidence was given that O’Shea’s client had asked him “is there anything wrong with the horse?, VET says he is ok?” to which O’Shea gave a positive response in the terms “there is nothing wrong with the horse”.

As it turned out, the expensive yearling had a pre-cystic lucency in the stifle in its left hind leg, which, once it developed into a cyst, meant that it could not be trained or raced for an extended period of time, thereby diminishing its value significantly.

Although O’Shea had succeeded in first instance, the NSW Court of Appeal recently allowed an Appeal, finding that O’Shea was liable for damages of over $255,000.00.

The Court found that O’Shea was aware of this condition because of the vet assessment he had undertaken and as result, he should have disclosed this to his client or warned him that the horse was not “without issues”.

Whether you’re a horse trainer, a lawyer, financial planner, accountant or any type of professional, where your client or customer relies on your skill and judgement and pays you a fee, care needs to be taken to ensure that your client is fully informed of all matters relevant to their decision as otherwise a failure to do so could become a rather expensive exercise.