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Double Whammy! When cost orders become a further debt

By Hayley Hitch a Solicitor of Matthews Folbigg Lawyers in our Insolvency, Restructuring and Debt Recovery Group

In one of our recent matters, proceedings were commenced against a debtor, and the relevant guarantor, in the Local Court of NSW for recovery of a debt, being non-payment of services rendered by our client to the debtor.

Local Court proceedings

The defendants were at all times self-represented in those proceedings and took steps to file defences, out of time (and without leave) and also failed to appear in Court on several occasions. This ultimately led to:

  1. the defences being struck out;
  2. cost orders being made against the defendants; and
  3. Judgment being entered in favour of our client in the vicinity of $40,000.

Multiple attempts were then made by one of the defendants to set aside the default judgment and the various cost orders.

The last of these applications was held by the Local Court to be an abuse of process and the Court strongly urged the defendant to obtain legal advice before taking any further action.
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Debt Collection – How not to

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group

Credit Managers and anyone responsible for debt collection or credit control in a business organisation should be aware of the right and wrong ways to collect a debt.

In a recent decision of the Federal Court of Australia in Australian Competition and Consumer Commission v ACM Group Limited (No 2) [2018] FCA 1115 the Court was critical of the actions by a collection agency in the pursuit of a debt.  By example, the Court held that the agency was relentless in telephoning a care facility on over 40 occasions to attempt to speak with a stroke victim patient whose telecommunications debt was unpaid, saying that high-pressure debt recovery techniques are inappropriate.

The Court was also critical of letters of demand that over capitalised statements such as “NOTICE OF INTENTION TO COMMENCE LEGAL PROCEEDINGS”.  It said that the continued dispatch to a customer of letters that use of the words “intention” and “may” to threaten legal action was conduct that was misleading and deceptive within the meaning of the Australian Consumer Law and unconscionable.
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Choose your words carefully – the consequences of non-payment of debts

Whether you own your own business, or are responsible for credit control in a large company, you must be careful what representations you make to debtors about the consequences of non-payment.

While you are allowed to accurately explain the consequences of non-payment, it can be tempting to overstate or even misrepresent those consequences. If you do, you may breach laws against unconscionable conduct. This can result in a Court ordering any payments made to be repaid to the debtor.

Examples of statements that have been found to constitute unconscionable conduct include:

  1. That the debt is recoverable, when in fact recovery was statute barred by the passage of time (see more here http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/vic/VSC/2004/49.html)
  2. That the debt has been, or will soon be, referred to lawyers for the commencement of proceedings (see more here http://www.austlii.edu.au/cgi-bin/sinodisp/au/cases/cth/FCA/2012/1164.html)
  3. That if a default is listed with a credit reporting agency, the debtor will not be able to obtain credit or will not get credit at a reasonable rate (see more here http://www2.austlii.edu.au/privacy/Privacy_Act_1988/index-Part-5.html)
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Record Keeping for a SMSF

Record Keeping for SMSF’s

Introduction (SMSF)
Most SMSF trustees are aware that record keeping is important to ensure their fund remains compliant and eligible for tax concessions, but few trustees understand the actual ramifications of what happens when you don’t keep the right records.

Record Keeping Requirements
The ATO website contains a great deal of helpful information for SMSF trustees including the records a fund must keep. See https://www.ato.gov.au/super/self-managed-super-funds/administering-and-reporting/record-keeping-requirements/

For example, copies of annual returns must be retained for at least 5 years but records of changes of trustees and minutes recording investment decisions must be kept for at least 10 years.

Wrong Turns – Real Life Examples

1. Maintaining the Chain of Deeds
A and B set up the AB Super Fund in 1987.  They are the trustees of the fund in their own capacity.

In 1990 and again in 1998 they updated the provisions of their SMSF trust deed.  Their accountant arranges this for them.

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Workers Compensation

Workers compensation claims time limits?

If you are injured at work, you should notify your employer as soon as possible after your injury, so the incident can be recorded and your rights to workers compensation are protected.
If time is needed to be off work because of the injury, you should see your general practitioner and any other doctor as soon as possible. The doctor can complete a certificate of capacity and this certificate can be given to the employer.
A workers compensation claim should be made as soon as possible and certainly within 6 months of the date of accident. Otherwise, there will be an explanation needed for the delay.
If you are thinking of making a workers compensation claim, please call us to arrange a Telephone Conference to discuss your compensation entitlements with one of our experts. Call 1300 773 529 or email a Personal Injury lawyer at info@matthewsfolbigg.com.au.
Our Personal Injury Lawyers can provide practical solutions and exceptional results in relation to your worders compensation claim on a No Win, No Fee basis.

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Important GST Withholding Legislation

On 1 July 2018, a new regime of GST withholding obligations comes into effect and is set to create considerable change to property transactions which property lawyers should be aware of.

Where a supplier (the vendor) makes a taxable supply of new residential premises or a subdivision of potential residential land by way of sale or long term lease, the recipient of the supply (the purchaser) is required to withhold an amount from the contract price and remit it to the Australian Taxation Office on or before settlement.

As a result, new vendor disclosure obligations apply to all Contracts for Sale of Land. This means property lawyers will need to revise the Contract for Sale to ensure vendors are not in breach of legislation. Failure to provide disclosure will result in penalties.

The amended legislation includes a transitional arrangement that excludes sale contracts entered into before 1 July 2018 as long as the property transaction settles before 1 July 2020. This will provide certainty for sale contracts that have already been signed.
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Giant new role for Matt de Boer!

Matthews Folbigg is excited to announce that they will again be the corporate sponsor of Matt de Boer of the GWS Giants in 2018! The former 138-game Fremantle Docker had a phenomenal 2017 season with the Giants even after battling with three hamstring injuries. “I still tried to lead and drive standards wherever I could in the meeting room and build relationships with players as well. Then I got fit and was able to play a role for the team,” he said when reflecting over the past year.

His efforts around the club have led to his promotion into the leadership group for 2018, “I’m excited to try and bring a certain level of effort and intensity to the role and try and do it justice… It’s about doing everything to be excellent. I’ve tried to make the most of every opportunity.”

We are very proud of Matt and his continued efforts over the past year and we are excited to see him on the field in his new role in 2018!

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PRIORITY PAID?

By Darrin Mitchell, Senior Associate at Matthews Folbigg in the Insolvency, Restructuring and Debt Recovery Group.

The Australian legal system has of late become a confusing morass of conflicting judgments on the order of priority of payment of creditors of insolvent trustees from trust assets. This has a significant impact on creditors, particularly employees, whose priority payment is no longer assured, by quirk of the structuring advice given to an employer without their knowledge or consent. Well the landscape was twisted again recently with a decision today by a five member panel of the Victorian Court of Appeal.

A number of States in the Commonwealth of Australia have issued judgments that differ in how to apply trust assets for trust creditors. In New South Wales, the 2016 decision of Brereton J in Re Independent Contractor Services (Aust) Pty Ltd (in liq) (No 2) held that the property of the trust was (perhaps unsurprisingly on one view) trust property. More surprisingly, his Honour found it was NOT company property distributable in the priorities provided for under section 556 of the Corporations Act 2001. His Honour relied upon the on the 1983 South Australian Supreme Court decision by then Chief Justice King in Re Suco Gold who held that trust assets are to be applied in accordance with the terms of the trust.
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