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Changes to Annualised Wages

Written by Sarah Camm

Important changes to annualised wage arrangements from March 1, 2020.

In February 2020 the Fair Work Commission made determinations that may affect salary arrangements in a wide range of businesses. Employers should carefully consider the changes and ensure that they are complying with their requirements, even where an employment agreement is in place.

What is an annualised salary?

Some employers have arrangements in place with their full-time employees, where their annual salary is calculated to compensate them for all of their entitlements and they do not receive, for instance, overtime, penalty rates or leave loading. The same arrangements cannot be made for part-time or casual workers, who are paid per hour. These arrangements should be agreed in advance, by way of an employment contract, and the annual wage must be high enough to cover the award entitlements.

What could go wrong?

When comparing their annualised wage arrangements with the entitlements they would otherwise have received, some employees have found that if they were simply paid their award wage and overtime payments, they would have been substantially better off. This means that they are being underpaid, resulting in employers having to make substantial back-payments to ensure that the employees received their entitlements.  

What are the changes?

From the first pay cycle after 1 March 2020, employers will be required to: –

  • set out in writing the entitlements that the annualised salary purports to include
  • nominate an ‘outer limit’, or maximum number of penalty or overtime hours the employee can work in a pay period without extra payment;
  • record an employee’s hours, including starting, finishing and break times;
  • have their employees sign their record of hours each pay cycle to confirm that it is accurate; and
  • monitor the arrangements, and conduct an annual reconciliation to ensure employees are being properly compensated for the hours worked.

While the changes do not affect the employer’s obligations or employee’s rights regarding minimum wages, they may lead to realisations of longstanding underpayments. Just Us Lawyers can help you review your employment contracts to ensure that they comply with the Fair Work Act, or can assist you to lodge a claim for unpaid wages.

Contact our experienced employment law team on 07 3369 7145 or via email to reception@justuslaw.com to make an appointment.

(Photo by Ross Findon, Unsplash)

Be on time! Or suffer the consequences

Unlike other Jurisdictions, such as New South Wales, those familiar with conveyancing understand that in Brisbane residential property contracts “time is of the essence”.

But what does that actually mean?  

This was considered by the Queensland Supreme Court of Appeal in the matter of Caprice Property Holdings Pty Ltd v McLeay.

The contract involved an expensive Gold Coast property. The contract was due and the parties had nominated 3pm as the time for settlement. The Buyer’s solicitors arrived and were informed that the release of mortgage would not be available for another 15 minutes. The Buyer declined to wait any more than five minutes and left. The Seller’s solicitor contacted the Buyer’s solicitors shortly thereafter and requested that the Buyer return stating that the Sellers had reserved their rights to settle any time up to 5pm. The Buyer’s solicitor did not agree to re-attend settlement nor did the Buyer attempt to make any other arrangements for settlement.

The Seller’s solicitor then sent a fax to the Buyer’s solicitor at 4.36pm holding the Buyer in breach of the contract as it had not effected settlement by 5pm. This fax was sent prematurely, in that it was not 5pm, and the Buyer was not yet in breach of the contract. The Buyers argued that this facsimile was intimidation because it was sent before 5.00pm, and they were, as a result, excused from having to settle.

The court disagreed with the Buyers. The court held that rather the Buyer’s refusal to return on the settlement date excused the Sellers from performing their obligations under the contract and the Buyer was in breach of the contract in failing to settle because time was of the essence.  As a consequence, the Sellers were fully entitled to terminate the contract after 5.00pm for the Buyer’s failure to comply with the contract.

The lesson to be learnt by the parties to residential conveyancing contracts is that it is always important to look at the terms of the contract before taking rash action – no matter how inconvenient the practices of the other party may be. Most standard contracts for the sale of residential property in Queensland provide that settlement must take place up to 5.00pm on the settlement day. Failure to make yourself available will entitle the other party to avoid the consequences of the contract, even if the failure is caused by the bank’s inability to get it’s act together.

If you are the Buyer, who is at fault, as a minimum you will forfeit your deposit. If you are the Seller, the Buyer can terminate without loss of the deposit and the agent will probably still be able to claim his commission from you.

It is essential that you be ready, willing and able to complete the sale at the time set out in the contract because in Queensland, as the term says, time really is of the essence!

For further information on conveyancing and how we can assist in pre-contract advice please contact our Conveyancing Team based at our Wilston office.  

For the best Conveyancing lawyers in Brisbane call/email Just Us Lawyers or complete our enquiry form for a quote today


When “sufficient to complete” is simply not enough

By Natalie Smyth

Purchasers entering into a Contract for the purchase of residential or commercial property in Queensland may require the Contract to be subject to obtaining satisfactory finance. Such a provision is often an important and essential term of the Contract entitling a purchaser to terminate the Contract in the event that satisfactory finance is not obtained.

In circumstances where the finance condition is vague or uncertain as to be meaningless, it can render the clause unenforceable and purchasers may find themselves in a situation where they are legally bound to complete the Contract in the absence of obtaining finance.

In the Fourteenth Edition of the REIQ Contract for the sale of Houses and Residential Land, in order for the Contract to be subject to the finance condition, all of the “finance amount” “financier” and “finance date” sections in the reference schedule must be completed. It is common practise for real estate agents in Queensland to complete the reference schedule of the Contract, and we often seen the phrase “sufficient to complete” next to the “finance amount” heading, as opposed to an exact dollar figure.

Failure to insert an exact dollar figure could be problematic in circumstances where a purchaser also requires finance to cover:-

  1. any potential transfer duty imposed on the transfer of property;
  2. title registration fees; and
  3. legal fees.

It could be argued that a purchaser who obtains finance for the balance purchase price has obtained an amount that is “sufficient to complete” the purchase. The fact that a purchaser, who requires finance to pay a stamp duty liability or legal fees, has only been able to secure finance for the balance purchase price, may find themselves unable to rely on the finance condition, as technically, those liabilities are extraneous to completion of the Contract.

What is the Court’s view?

In the High Court case of Meehan V Jones & Ors (1982), a purchaser sought specific performance of a contract of sale expressed to be executed subject to “the Purchaser or his nominee receiving approval for finance on satisfactory terms and conditions in an amount sufficient to complete the purchase.”

Facts of Meehan v Jones

The purchaser had obtained finance and had notified the Seller of his intention to proceed with the Contract, however, in the interim the Seller had found another purchaser and did not wish to proceed with the first Contract. Accordingly, the Seller sought to resist the claim for specific performance on the grounds that:-

  1. the finance clause was uncertain and therefore rendered the contract void; and
  2. That the clause, if certain, reserved to the purchaser a discretion or option to elect to carry out the contract, which rendered the contract illusory.

The Court’s decision

The High Court recognised that the finance clause in the Contract was potentially ambiguous in the sense that it failed to define the extent of the purchaser’s obligations with respect to the search for finance and the criteria to be used in the determination of whether such finance was in fact satisfactory, however, ultimately decided that the purchaser was entitled to specific performance of the Contract.

The Court held that the contract was not void for uncertainty because:

  1. “The courts should be astute to adopt a construction which would preserve the validity of the contract” (per Mason and Wilson JJ); and
  2. “It was only if the court was unable to put any definite meaning on the contract that it could be said to be uncertain” (per Gibbs CJ and Murphy J).

The Court was unanimous in holding that “subject to finance” clauses will not generally result in a contract for sale being held void for uncertainty, and the fact that a clause might contain some ambiguity will not preclude a court from ascertaining the intention of the parties with respect to the clause in question.

Further in the case of Clarke v Relstar Pty Ltd (1982), a contract expressed to be subject to the purchaser’s obtaining finance by a given date on terms wholly satisfactory to the purchaser to enable him to complete the transaction was held to be not void for uncertainty.

In the case of York Air Conditioning and Refrigeration (Australasia) Pty Ltd v The Commonwealth , Williams J commented, “If the court comes to the conclusion that parties intended to make a contract, it will if possible give effect to their intention no matter what difficulties of construction arise.”

Does this also apply to commercial contracts?  

Note 7 of the REIQ Contract for the purchase of commercial land and buildings provides: “the dollar amount of the loan being sought must be inserted in item U. Do not insert the words ‘sufficient to complete this purchase ‘or words of a similar effect.”  We understand the reason for this notation, is to avoid the situation described above, whereby a purchase may require an amount of finance that is above that required to complete the Contract.

As far as we are aware there is yet to be decision of  a court determinative of this issue..

Conclusion:-

  1. The courts will attempt to give proper effect to commercial transactions;
  2. If the courts can ascertain the intention of the parties with respect to the clause, and deduce a meaning from the clause, it will likely not be void for uncertainty;
  3. “subject to finance” clauses will not generally result in a contract for sale being held void for uncertainty; and
  4. the fact that a clause might contain some ambiguity will not preclude a court from ascertaining the intention of the parties with respect to the clause in question.

Despite Chief Justice Gibbs’ comment in Meehan v Jones with respect to “subject to finance” clauses, that their “natural effect is to leave it to the purchaser to determine whether or not the available finance is suitable to his needs,” in circumstances where a purchaser obtains finance for the balance purchase price, but requires a finance amount that is above that required to complete the contract (i.e for a stamp duty liability), in the absence of obtaining additional finance, the purchaser may still be bound to complete the Contract.  Accordingly, the phrase “sufficient to complete” is potentially ambiguous, and we therefore recommend that purchasers insert a specific dollar amount  (or a figure expressed as a percentage of the purchase price) next to the “finance amount” heading in the reference schedule that includes not only the balance purchase price, but also stamp duty costs, legal and title registration fees.

We recommend that you seek pre-contract advice from our team at Just Us Lawyers prior to signing any Contract for the Sale and Purchase of residential or commercial property in Queensland.

Just Us Lawyers – for the best Conveyancing lawyers in Brisbane call/email Just Us Lawyers or complete our enquiry form for a quote today


Finance Clauses, a way out or a way in to a legal minefield

By Natalie Smyth

Buyers of property often rely on Finance clauses to give them a way out of a contract to purchase a house they really can’t afford. But for the unwary they can be nothing more than a legal minefield entangling the parties in protracted litigation.

 A recent decision in the District Court of Queensland considered, inter alia, whether a conveyancing contract for the purchase of residential property in Queensland was subject to finance, and whether the Buyer could rely on the finance condition to terminate the Contract.

Whilst the decision was inconclusive (as the matter is still ongoing), it serves as good reminder for purchasers of residential property to obtain independent legal advice prior to entering into a Contract for sale.

Relevant Facts of Mewing v Duncan [2018] QDC 52

  • The parties entered into an REIQ Contract for the sale of a particular residential property on 20 November 2016.
  • On the third page of the schedule to the Contract in the finance section of the reference schedule after the heading “finance amount” were the words “Sufficient to complete”, and after the heading “financer” were the words “Buyer’s choice.”
  • There was no date inserted after the heading “finance date.”

The Fourteenth Edition of the REIQ Contract for the sale of Houses and Residential Land contains a notation next to the finance condition in the reference schedule of the Contract as follows:- “Unless all of ‘finance amount’, ‘financier’ and ‘finance date’ are completed, this contract is not subject to finance and clause 3 does not apply.”

Clause 3.1 of the REIQ Contract provides:- “This contract is conditional upon the Buyer obtaining approval of a loan for the finance amount from the financier by the finance date on terms satisfactory to the Buyer. The Buyer must take all reasonable steps to obtain approval.”

Accordingly, as all three sections in the finance section of the reference schedule of the Contract had not been completed, prima facie, the Contract did not appear to be subject to the finance condition.

Despite the deficiencies in the Contract, did the Court decide that the Contract was subject to finance?

The Buyer argued that she had told the agent (who had prepared the Contract) that it was to be subject to finance, and that she had relied on the agent to have completed the contract in such a way as to make it subject to finance. To this, the court remarked “if the [Buyer] relied on the real estate agent to complete the contract in such a way as to render it subject to finance, the applicants may be estopped from denying that the contract was subject to finance, regardless of the written terms of the document.”

The Court further remarked that “it is at least arguable that the agent was the agent of the applicants for the purposes of making representations as to the effect of the way in which they had completed the contract form, and if such a representation were made and were relied on by the respondent, it would be binding on the applicant.”

Despite the above remarks, the Buyer had not submitted sufficient evidence to the Court to substantiate that the agent had represented to the Buyer that the Contract was subject to finance and that the Buyer relied on that representation. Noting that the Buyer in this case was self-represented, the Court adjourned the matter to allow the Buyer an opportunity to submit further evidence to substantiate her case.

We are advised that the dispute between the Buyer and Seller remains unresolved. No doubt there is a contest regarding what representations the agent is alleged to have made on behalf of the seller.

Key Takeaways

  • It is important for Buyers to remember that real estate agents are appointed by the Seller and accordingly will act in the interests of their client. If an agent has made a representation to you, whether it be with respect to the property condition, or the terms of the Contract, we recommend that such representation be reflected in the Contract as a special condition or a warranty.
  • In the event that a situation arises whereby a Buyer may seek to rely on a representation made by an agent, it may be difficult, in the absence of written documentation, to produce sufficient evidence to substantiate that the representation was in fact made and relied upon by the Buyer.
  • Whilst it may be possible for a purchaser to rely on a representation made by an agent with respect to a particular contractual term, the best course of action is to obtain independent legal advice prior to signing the Contract to ensure that any such representations have been reflected in the Contract.

Had the purchaser in the above mentioned case engaged a solicitor to review the Contract prior to signing same, the deficiency in the contract with respect to the finance particulars could have rectified, and accordingly, the parties could have avoided the dispute as to whether the Contract was or was not subject to finance.

Separate to obtaining pre-contract advice or legal assistance throughout a conveyancing transaction, it is apparent from the facts of this case, that when parties become embroiled in litigation, they will certainly benefit from engaging the services of a solicitor to assist them with preparing evidence sufficient to establish and support their case.

If you would like to read the court’s judgement in detail – you can access the case via:-  https://www.sclqld.org.au/caselaw/QDC/2018/052

Other considerations

Notably in this case, the words “sufficient to complete” were used to describe the “finance amount” required to complete the transaction. In our next blog (due out on Friday 8 June 2018)  “When sufficient to complete is simply not enough”  we examine the Court’s view on the adequacy of this frequently used phrase.

What can we do to help?

If you are considering purchasing or selling a property in Queensland, in addition to acting in the conveyance, Just Us Lawyers can provide you with pre-contract advice, review a Contract that has been prepared by a third party to ensure its accuracy, and formalise representations made by a Seller or agent into special conditions or warranties that will form part of the Contract.

Just Us Lawyers – for the best Conveyancing lawyers in Brisbane call/email Just Us Lawyers or complete our enquiry form for a quote today

 


New Data Breach Laws and your responsibilities

BY SARAH CAMM

 

Amendments to the Privacy Act 1988 (Cth) are now in effect, introducing a mandatory notification scheme for data breaches.

 

What are the changes?

The scheme imposes notification and reporting obligations upon APP entities where they know or suspect there has been an eligible data breach, that is, a data breach involving personal information that is likely to result in serious harm to any individual affected.

So let’s unpack this a little.

 

Reporting obligations

The obligation imposed is to prepare a statement to report the breach to the Office of the Australian Information Commissioner (OAIC) and notify any individual affected. If it is not practical to notify individuals, the statement must be published on the entity’s website.

 

APP entities

Organisations and federal government agencies subject to the Privacy Act, which include:

  • NGOs, Government Agencies and Businesses with an annual turnover of $3 million;
  • Credit reporting bodies that hold credit information;
  • Health service providers who hold personal information; and
  • Tax file number recipients.

 

Know or suspect

The obligations under the amendments arise when the entity has reasonable grounds to suspect that there may have been an eligible data breach, even if there are not reasonable grounds to believe that the circumstances amount to an eligible data breach. The obligation on the entity in these circumstances is to commence and carry out an assessment within thirty days.

 

Data Breach

There are three main circumstances:

  1. Unauthorised disclosure: where an entity (including by its employee) makes information accessible or visible to a third party, whether intentionally or not.
  2. Unauthorised access: may be where a third party contractor or other person accesses information they are not permitted to access. This includes instances of hacking.
  3. Loss: for example where a phone, USB, file or hard drive is left on a bus, particularly if there is no password or encryption on the device where unauthorised disclosure/access is likely.

 

Likely to result

The risk of serious harm must be higher than a possible risk; it must be more probable than not.

This criteria is considered objectively, and the decision is whether a ‘reasonable person’ standing in the position of the entity, with the knowledge of the entity (not of the affected person) would consider that serious harm is more probable than not.

This depends on the nature of the information, and in a broad sense, the type of person the information may relate to. The entity is not however required to make external enquiries of the individuals affected.

For example, if the addresses of clients of a domestic violence victims support group are involved in a data breach, the entity would be aware that the persons involved are likely to be victims of domestic violence and therefore are likely to be at risk of serious harm where this information is disclosed.

 

Serious harm

While not defined in the Act, the phrase is likely to include physical, psychological, emotional, financial or reputational harm.

The Act contains a list of relevant matters to assist an entity in evaluating whether serious harm is likely, including:

  • The type/sensitivity of information involved;
    • Health/person information;
    • Documents used for identity fraud;
    • Location/contact information.
  • Whether there are any security measures protecting the information (such as encryption, passwords on phones and devices, codes), and the likelihood of these security measures being overcome;
  • The identity or class of persons who have obtained / might obtain the information and the likelihood that they want to cause harm;
  • The nature of possible harm; and
  • Any other relevant matters.

 

Any individual affected

As discussed above the entity is not required to look into the particular circumstances of the persons whose information may be compromised, however it is expected to make general enquiries to determine the matters outlined above. All of these matters, including the type of information, how long it was available and who accessed it are relevant.

The more people whose information was accessed and who may be affected by the breach, the higher the likelihood that one person will suffer serious harm.

 

Are there any exceptions?

There are a number of exemptions, most importantly that notification will not be required if the entity takes action to prevent serious harm before it is caused.

 

What are the penalties for non-compliance?

Failure to comply is considered an interference with the privacy of an individual and substantial penalties apply for entities who fail to comply with their reporting obligations. The OAIC can investigate complaints and, in the case of serious or repeated instances of non-compliance, apply to the Court for civil penalties of up to $2.1 million.

 

Is your business ready for the new Data Breach Notification laws? Do you need help evaluating a breach or drafting a compliant Statement to notify the OAIC and affected individuals? Just Us Lawyers can help your business organisation put policies into place to reduce the likelihood of Data Breaches and to help you evaluate and respond to a Data Breach if it occurs.


Second Marriages and Pre-Nups: A Cautionary Tale

BY SARAH CAMM

Some people think that they can have their wedding cake and eat it too.

The most common way of protecting assets for people entering new relationships after the break down of a previous one, particularly where there are children from a former relationship,  is to enter a “Pre- Nup” or Binding Financial Agreements (“BFAs”) as they are more correctly known. 

On 8 November 2017 the High Court of Australia handed down its decision in the case of Thorne v Kennedy. The decision has been hailed by some commentators as a landmark case, which spells the “death knell” for BFA’s.

However, in our view this is an overstatement.  Binding Financial Agreements will continue to be an important means of protecting family assets for the children of previous relationships. However, the decision provides a salutary warning for those intent upon imposing one sided agreements on their prospective partner with little consideration of their future needs and the capacity to properly provide for them in the event that the relationship breakdown.

The case revolves around the couple of “Ms Thorne” and “Mr Kennedy”. This is not their real names.

The couple met online. Ms Thorne was 36 years old at the time, lived in the Middle East, and had no substantial assets. About seven months into the relationship she moved to Australia to be with Mr Kennedy, a 67 year old property developer whose approximate wealth was between 18 and 24 million dollars.

Under the Family Law Act a BFA is only binding if each party receives independent advice. Nine months after moving to Australia and ten days before the wedding Mr Kennedy took Ms Thorne to see a solicitor regarding the pre-nup. Mr Kennedy waited in the car outside. This was the first time Ms Thorne was made aware of the contents of the agreement she was expected to sign. The solicitor provided written advice to Ms Thorne regarding the agreement. Her advice was that it was “the worst agreement that she had ever seen”, that it was “entirely inappropriate” and that “Ms Thorne should not sign it.”

Despite this, four days before the wedding Ms Thorne signed the agreement.

A second agreement was signed approximately four weeks after the wedding, which was in substantially the same terms and to which Ms Thorne’s solicitor gave the same advice, urging her not to sign it.

Just under four years after the wedding, Mr Kennedy separated from Ms Thorne.

Under the agreement, as they had separated after three years without children, Ms Thorne was entitled only to a lump sum of $50,000. After receiving advice by chance from someone at a hairdressers, Ms Thorne commenced proceedings. Mr Kennedy died during the trial and the trustees of his estate, his two children, were substituted as parties.

Ms Thorne was successful at trial, lost the Full Court appeal, and has now had her appeal upheld and the original decision reinstated.

The High Court held that the agreements were void because they were signed under circumstances of undue influence and unconscionable conduct. Both concepts are wide, and difficult to define, particularly as they overlap quite substantially. In general however, undue influence looks at the quality of the weaker person’s consent, while unconscionable conduct looks at the behaviour of the stronger party.

The majority found that terms which are “grossly unreasonable, even for agreements of this nature” which usually contain some imbalance, are an indicator of the presence of undue influence. However, this may not mean the death of all BFAs as some commentators have claimed.

The majority noted that the primary judge found, in this case, that the inequality of bargaining power went beyond merely a difference in financial circumstances, and included:

  • Ms Thorne’s visa status;
  • Ms Thorne’s reliance on Mr Kennedy for all things;
  • Ms Thorne’s emotional connection to the relationship, which she did not envision would end in separation;
  • Ms Thorne’s desire for motherhood;
  • Ms Thorne’s wish for her marriage to succeed;
  • The time pressure; and
  • The “publicness” of the upcoming wedding.

They held that undue influence involves pressure which deprives a person of their free choice, and that here Ms Thorne, for the above reasons, felt “powerless” and that she had “no choice” but to sign, and the agreements should therefore be set aside.

The majority and Nettle J went on to say that the agreements could also be set aside for unconscionable conduct, as Ms Thorne was at a special disadvantage in signing the agreements which Mr Kennedy not only was aware and took advantage of, but that he had partially created in particular through the timeframe he had imposed on her understanding and signing the agreements before the marriage.

Gordon J agreed that the agreements should be set aside but found that this could be on the basis of unconscionable conduct only. She said that undue influence did not exist here as Ms Thorne’s will was not overborne. Ms Thorne made a decision to enter into the marriage and was aware that in order to enter into the marriage she had to sign the agreement. The fact that her options were limited (sign the agreement and get married or do not sign the agreement and do not get married) does not mean she did not make a free choice to (a) get married, and (b) in order to have that marriage, sign the agreement.

The news stories shouting that this decision signals the “death knell” for BFAs are in our view both over-stating and over-simplifying the decision. The High Court expressly stated that fiancé-fiancée relationships do not give rise to a presumption of undue influence. In cases with less extreme circumstances, for instance, if Ms Thorne was aware of the contents of the pre-nup before moving to Australia and the agreement to distribute the property of the marriage was more even handed, a BFA or pre-nup may be upheld by a Court if challenged.

This article is not designed to act as or replace the provision of legal advice. To review the terms of your pre-nup or for specialist advice regarding the validity of your BFA contact Just Us Lawyers  for a quote today.


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