1.   How common is it for people to buy a commercial property investment using a company name?
This is very common. Whether the property is purchased in a self-managed superannuation fund, a trust or just in the company entity, this allows greater asset protection for the individuals involved.
 
2.  Why do people purchase property using a company entity?
There are various reasons why people purchase property in a company – two of which include asset protection and taxation.  By using a company, an individual is able to place a layer between them as an individual and any creditor. The company tax rate in Australia is 27.5%, which is generally less than the individual earning more than $115,000 per year.
 
3.  If you want to establish a company with the intention of purchasing a property through that vehicle, where do you start?  How long does it take to set up?  Why can’t I buy the property (say at an auction) and then work out what entity to place it in?  Do you require an ABN?
You can typically establish a company within 24 hours, provided you have all the necessary information readily available and the directors are present to sign the necessary documents.
It is generally unwise to sign a contract for the purchase of a property either at auction or otherwise and then request a change, because the seller may not agree. In addition, changing the contract could result in the payment of double transfer duty. There is a way to have someone purchase as an agent but that requires very specific advice.  Generally, it is safer to have the entity established before a contract is signed.
Requiring an ABN depends on the type of property you purchase and if the income from the property reaches the GST threshold of $75,000. If your GST turnover is less than $75,000, registering for GST is optional.
 
4.  Does GST apply on the purchase?
It depends on the type of property and what your plans are. Residential properties are input-taxed sales and do not include GST. However, if you have purchased the property with plans to develop it and on sell it, you may be liable for GST as it could be considered that you are carrying on a business. If you purchase a commercial property that is leased, you may satisfy the going concern exemption which means that GST would not be payable. If you purchased a vacant commercial property, it is very likely that GST would be payable. The issue of GST is complex, and it is important to seek professional advice beforehand.
 
5.  What are two pieces of advice you have for people considering to buy a property in a company?
As with all proposed property purchase decisions, you should do your homework.  Study the market thoroughly and obtain structuring advice from your solicitor and accountant.  Obtain the advice early in the process, as a company may not be the best structure after all, and there are a number of other considerations to make when buying commercial property.
 
6.  When shouldn’t you buy a property under a company?
If you are purchasing your principle place of residence (your home), you might not want to purchase that property in a company entity. That would prevent you from being able to claim any capital gain tax exemption on any increase in value realised on a future sale. You may also unnecessarily be required to pay land tax on the home. If you are concerned about buying your home in your personal name, there may be other strategies available.
 
7.  Who can you speak to for more information on your property buying options?
As a property lawyer with more than two decades of specialised experience in the real estate industry, you can speak to me or Bill Purcell, the other director in Bennett & Philp’s property team. Contact your accountant and introduce the accountant to your solicitor. The earlier you do that will result in direct cost savings.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
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Australian cities allowing the use of electric scooters for hire should refuse to license any scooter operator unless helmets are provided for riders.
Prominent Brisbane compensation lawyer Mark O’Connor says the Brisbane experience of e-scooters has shown they have brought a soaring rate of injuries to riders and are regarded by many as little more than an injury compensation lawsuit on wheels.
With reports that more scooter companies are launching in Australia, one of them not planning to provide helmets for riders, Mr O’Connor says this is a dangerous trend and city authorities should not allow it.
Lawyers have previously warned that unleashing hundreds of rental scooters to untrained users who can race along congested footpaths at speeds of up to 25km/h is a nightmare scenario.
Mark O’Connor, an Accredited Specialist in compensation law and a Director with Bennett & Philp Lawyers, says as more scooter companies seek to cash in on the ride share devices, there’ll be increasing congestion on the footpaths, creating even more safety hazards.
Brisbane was the first Australian city to trial electric Lime scooters and the commuter ride devices were then put on Adelaide streets too. Now Sydney, Canberra, and some regional centres are expected to introduce them within weeks.
One of the new operators is US-based Frog with the company stating it would not supply helmets because people keep stealing them and would instead rely on “riders bringing their own helmets” for their commutes.
Mark is alarmed at the idea and says city authorities should clamp down on it.
It’s known in Brisbane that many people use the scooters and don’t use the helmets but many people do wear them. It’s a vital safety measure.”
“The use of scooters is often a spontaneous decision. A person sees one on the street and decides to ride it to get them quicker to their destination. People often in those situations are not going to have a helmet on them.
“If Frog is so concerned about the loss of the helmets because people steal them then they should possibly put some sort of tracking tile in them so that they can recover them at the end of the day,” he says.
Mark believes the non-provision of helmets is almost inviting people to break the law and to put their lives and safety at risk. City authorities should not give a scooter company a permit to operate if it does not provide mandatory safety helmets for users.
One scooter rider has already died after a crash in Brisbane earlier this year and city hospitals have reported a big jump in injured riders seeking treatment.
Mark says the Pedestrian Council wants the scooters off Brisbane streets altogether with deep concerns about the risks they pose to pedestrians.
“The Pedestrian Council is especially concerned at the risk scooters pose to blind and visually impaired people. I’d add they are a menace to ambulant impaired people too who would find it hard to evade someone racing down the footpath on a scooter they can barely control,” he says.
Mark says the Pedestrian Council has told him it is very worried at the number of people riding without a helmet, even though this is a legal requirement for the ride’s use, and the number of people doubling others on the scooters.
“In a recent spot check the council’s chairman Harold Scruby reported around 60 per cent of riders observed at the Howard Smith Wharf area over a period had no helmets on and more than 10 per cent were doubling others. There were also sightings of children doubling others on the scooters even though children under 16 can only ride them with an adult accompanying them.
“The image of a child with no proper training trying to control a scooter at 25 km/h on crowded footpaths is frightening, even if they are with an adult. The injury risk to others is off the scale,” he says.
The Queensland Government reported more than 300 people were fined between December and mid year for e-scooter non-compliance, the majority of them for riding without a helmet.
Mark says the figures show the absolute need for helmets because scooters are now a menace on the streets and a nightmare on wheels to pedestrians.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
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Last Thursday, Geoff Armstrong and Charlene Rayner of our Wills & Estates team, volunteered their time at The Salvation Army’s Future Planning Seminar at the Pine River Corps in Lawnton. The focus of the seminar was on providing practical advice regarding retirement, estate planning and other end-of-life matters.
Geoff and Charlene’s presentation spoke about the importance of having a Will and their nature as well as the complexities involved. They were accompanied by other organisations also invited to speak, including White Lady Funerals, organ donation network, DonateLife QLD, and the Salvos’ Aged Care and Will & Bequests services.
Participants included Donate Life QLD (centre) and White Lady Funerals (right).
There was a healthy attendance by the Pine Rivers community who actively participated in the seminar testing our team’s knowledge of estate law. Geoff and Charlene answered various questions ranging from how to add a gift to an existing will to whether people should have superannuation clauses in their Wills.
Geoff discusses the importance of having a Will.
Despite the proximity of their profession to the funeral and end-of-life industry, Geoff and Charlene said they were fascinated by how much they learned from the other participants’ presentations. Of significance was White Lady Funerals’ discussion on pre-paid funerals and how the White Ladies assist families after the death of a loved one. Charlene also found DonateLife’s presentation on the challenges involved in successful organ donation highly engaging.
The morning ended with a shared lunch for all speakers and guests and a chance to mingle and ask any further questions.
Overall, the day was highly educational and rewarding. We’d like to thank Saman Mall from The Salvation Army for organising the seminar. We look forward to working with the Salvo’s again soon.
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Planning for the Future with The Salvation Army appeared first on Bennett and Philp Lawyers.

Women whose breast cancer was missed due to failings by the state-run screening provider may have only a narrow time window should they decide to pursue a compensation claim.
Revelations in court documents that early signs of breast cancer went undetected in more than 100 Queensland women because of failings by the state-run screening provider have raised awareness of Queensland’s strict laws governing medical negligence claims.
Brisbane injury compensation lawyer, John Harvey, says there is a very strict time limitation of 3 years in which to commence a claim in Queensland for a personal injury matter. If a breast screening failure occurred some years ago victims may not have the luxury of time to consider their situation.
John, a Special Counsel with Bennett & Philp Lawyers, says the issue came to light with a $1.2 million claim by Louise Perram-Fisk, who settled out of court for a claim against the state government and Metro South Hospital and Health Service, which runs the BreastScreen Queensland (BSQ) centre at Upper Mt Gravatt, which failed to detect her cancer which has since developed into a terminal illness.
Documents tendered to the Supreme Court claimed radiologists working for BSQ were given an unreasonably short time to review mammograms, analysing up to 170 breast screen images an hour.
John says it’s a tragedy that many women in Queensland were misdiagnosed following breast screening. Despite being given the all-clear, they were later diagnosed with breast cancer.
He also says with the revelations of misdiagnosis, any woman who thinks she is a victim of such misdiagnosis needs to seek urgent legal advice from a solicitor specialising in medical negligence law.
It may have been quite some time since the breast screening took place and there is a very strict time limitation of 3 years in which to commence a claim in Queensland for a personal injury.”
“Even in cases where the limitation period has already passed, there still may be a very limited opportunity to revive the claim in special circumstances,” John says.
Ms Perram-Fisk’s lawyers reportedly argued radiologists at BSQ were so overworked they missed breast tissue masses which later develop into cancer in more than 100 patients.
The court documents claimed one BSQ radiologist cleared 110 patients of cancer who were later diagnosed with the disease during the two years to December 2016. Radiologists were given up to 425 images to read in 2.5 hours, according to documents filed in court.
However John says of those women who were misdiagnosed and subsequently developed breast cancer, there may only be a few who have viable claims.
“First there will be the issue of whether the cancer was so far advanced that early diagnosis would not have improved their outcome. Secondly it is most likely only those who have suffered a severe disruption to their income earning capacity whose claims will be economically viable.
That is because general damages for pain and suffering are terribly low in Queensland and there are restrictions on claimants being able to recover their legal costs for smaller claims.”
“For all these reasons, it is imperative that those women who believe they may have been affected ought to seek legal advice as soon as possible while still legally able to seek redress,” he says.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Narrowing Claims Window for Victims of QLD Breast Screening Failure appeared first on Bennett and Philp Lawyers.

As an investor looking to the Australian market for opportunities, it is important to understand the duties, responsibilities, requirements and legislation that regulates Australian company law.
As a part of Meritas‘ Doing Business in Australia guide, our fellow affiliates of the Australia/New Zealand region have produced a comprehensive breakdown of the most significant aspects of business investment and operations in Australia. This section of the guide covers the area of Australian company law primarily looking at the regulatory scheme that governs companies operating in Australia, the different forms of companies, management and control of a company, and the various obligations and reporting requirements on a company operating in Australia. Download your FREE copy of the full guide at the base of the article.
Regulatory scheme

Corporations Act 2001: The Act governs companies and their incorporation, along with other major pieces of legislation that forms a uniform regulatory scheme for companies which applies in all Australian states and territories
Australian Securities and Investments Commission (ASIC): The federal body that is responsible for administering the Corporations Act. It functions as the regulator and enforcer of company law and is the principal registry and information source for company matters.

Australian Securities and Investments Commission Act 2001
Australian Securities and Investments Commission Guidelines

Australian Stock Exchange (ASX): In order to list on the ASX, companies must meet various stringent financial criteria set out in the ASX Listing Rules and satisfy comprehensive ongoing reporting requirements, in addition to satisfying the requirements of the Corporations Act.

Listing Rules of the Australian Stock Exchange Limited

Forms of companies in Australia

Incorporation: A company has a separate legal identity from its shareholders and directors. A company can own property, enter into contracts, and commence legal proceedings in its own name. It is the most common form of business organisation in Australia.
Proprietary company: Designed for a relatively small group of shareholders. It must have at least one director and one shareholder (who can be the same person). At least one director must ordinarily reside in Australia

Large proprietary company
Small proprietary company

Crowd-sourced funding
Other forms of companies

Management and control

Directors and officers: Management and control of a company are vested in the board of directors, who are appointed by the members. Directors of companies conducting business in Australia owe certain duties to the company itself, its shareholders and, in certain circumstances, other people associated with the company.
Directors’ duties: The directors’ duties arise under the general law, the Corporations Act and other legislation. Breaching these duties can have severe consequences, including subjecting directors to criminal or personal financial liability.

Reporting requirements
Companies conducting business in Australia are under various obligations to prepare financial statements, maintain accounts, lodge and report various records of its performance with various parties such as ASIC, the ASX and its shareholders. The extent of the reporting obligations will depend on the size and activities of the company and whether the company is a reporting entity.
Other schemes under the Corporations Act

Managed investment scheme: The Corporations Act regulates manages investment schemes that are defined to include any arrangement where an operator manages an investment made by one or more passive investors, other than through the issue of share or other securities in a company.

 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Understanding Australian Company Law as a Foreign Investor appeared first on Bennett and Philp Lawyers.

The recent Supreme Court decision in KDV Sport Pty Ltd v Muggeridge Constructions Pty Ltd & Ors [2019] QSC 178 highlights the importance of ensuring payment claims properly detail the works for which payment is sought.
Queensland’s security of payment legislation require payment claims to identify the construction work (or related goods and services) to which the progress payment relates. If the claim fails to do this, it will not be a valid payment claim under the legislation and the security of payment regime will not apply.
Facts
Muggeridge served a payment claim on KDV seeking payment for works associated with the construction of student accommodation. It subsequently obtained an adjudication decision in its favour for the sum of $802,198.59.
KDV applied to the Court for orders setting the adjudication decision aside on the basis that Muggeridge’s claim had not properly identified the work to which it related. It argued there was no ‘payment claim’ within the meaning of the legislation to enliven the adjudicator’s jurisdiction. It would follow that the decision was void and unable to be enforced by Muggeridge.
The payment claim served by Muggeridge was a one-page document with six columns. The first column was titled “trade breakdown” and listed 51 categories of work, as contained in a trade breakdown schedule in the contract. Examples of those trade breakdown categories include ‘concrete supply’, ‘electrical’ and ‘mechanical’. A “total claim % to date” column provided the percentage of each category of work that was said to have been completed. These entries were not supplemented by any particulars of the works within each trade breakdown that had been carried out, or supporting documentation in that regard.
KDV submitted that this was inadequate and that, even with the benefit of the background information known to it, the payment claim offered no meaningful information about what actual work had been claimed for.
Findings
Her Honour Justice Brown acknowledged that when evaluating whether payment claims sufficiently identify the work to which it relates, consideration needs to be given to the background knowledge of the parties, their past dealings and exchanges of documentation.
KDV was aware of the content of the trade breakdown schedule and the constituent parts that made up each category of work. However, the contract was sizeable with several components in the work to be undertaken. The order in which work was undertaken could be affected by many factors, such as the availability of materials, particular tradesmen or the weather.
Taking these matters into account, Her Honour found that Muggeridge’s references to completion percentages for the various categories of work under the contract failed to identify the work the subject of the claim. KDV could not ascertain with sufficient certainty the work for which payment had been sought.
Muggeridge’s position was not assisted by a series of mathematical errors and inconsistencies contained in the claim, with figures for many items unable to be reconciled. These errors contributed to the incomprehensibility of the claim.
As Muggeridge’s claim failed to meet the legislative requirements, the Court ordered that the adjudication decision be set aside.
Lessons
While the courts have been reluctant to analyse payment claims in an unduly technical manner, claimants still need to be careful when preparing their claims to make sure that the relevant work has been sufficiently identified.
The validity of any purported payment claim will ultimately be determined based on the specific factual circumstances (including party dealings) that apply to the matter at hand. However, as indicated above, claimants would be well advised to provide descriptions of work that contain more detail than the mere category of works completion percentages.
Contractors preparing claims for significant progress payments which may be disputed should consider engaging solicitors to assist with claim preparation.
You can read the full decision here.

 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Construction Security of Payment Claims: Properly Identifying the Work appeared first on Bennett and Philp Lawyers.

If your husband or wife dies without having made a valid Will you as the surviving spouse will automatically inherit their estate, right?
The answer is ‘it depends’.
If there are no surviving children (or grandchildren by substitution of any who have already died) then yes, the surviving spouse will inherit the deceased spouse’s estate in its entirety but not otherwise.
If there are surviving children, the surviving spouse must share the inheritance with them.
This can lead to some very difficult situations particularly where assets will have to be sold in order to raise enough cash to meet the children’s entitlements.
This very situation arose in a case involving the unexpected death of a husband who left a wife and a 12-year-old son surviving him. The husband died ‘intestate’ (ie. without leaving a Will). According to the laws of intestacy as laid down in the Succession Act, 1981 the husband’s estate was to be divided between the wife and the son. The matrimonial home was held solely by the husband at the date of his death and thus formed part of his estate. In fact, that was the only asset of his estate except for a small amount of cash.
The result was that the wife was forced by law to sell the home in order to meet the son’s entitlement under his late father’s estate. Another unwelcome feature of the situation was that according to law the son would be entitled to receive his money at the age of 18 years to do with as he wished.
It is imperative that everyone, and particularly married couples, people in relationships and those with dependants, make the time and effort to put in place a properly drawn Will. Without a Will your wishes may not be met and adequate provision for those loved ones and dependants may be found wanting.
If you would like to learn more about inheritance rights, or are in need of Wills and Estate advice, please contact our team today.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post What Happens If My Spouse Dies Without a Will? appeared first on Bennett and Philp Lawyers.

The logistics of starting a business from scratch can appear near impossible to navigate, including for online businesses, where the delivery may seem simpler but the planning is just as demanding.
The legal hurdles alone are enough to stress even the most determined online entrepreneur however with a little help, getting your business off the ground needn’t be daunting.
Here I have highlighted the crucial legal and operational steps you need to take to ensure your online business start-up is one that lasts:
1.    Make a Business Plan
It might seem obvious, but you should never start a business without first making a business plan, even if you are planning to operate online. As well as your overall proposal and objectives, ensure you include your research of the competition, your projected profit and loss, cashflow analysis, and a thorough marketing plan. Making a business plan will not only help you launch with confidence but is necessary to pitch to investors or apply for finance.
2.   Choose Your Advisors Carefully
Align yourself with trusted advisors for areas outside your expertise.  These should include a lawyer and an accountant. When choosing your advisors, it’s good to take recommendations, but do your research.  Most advisors specialise in particular industries or areas of practice, so identify the task you need help with and find the right person for the job.  Never rely solely on the advice of a mentor or collaborator, particularly in matters of law and tax.
3.   Select a Business Structure
It is important that the entity behind your business is appropriately structured and that your website or app reflects the correct entity to whom orders, complaints and enquiries should be directed to.  There are many business structures to choose from and there can be duty or taxes in restructuring once a business has commenced trading. See your lawyer or accountant to set up the right structure before you launch.
4.   Sign an Agreement With Your Business Partners
Often overlooked, this is a crucial step to minimise disputes that may arise if you are in business with others.  If you are working with collaborators it’s important to discuss and agree if they will be business partners, employees, contractors or investors. All businesses operating as a company should have a shareholders agreement in addition to their constitution, as you will likely need provisions regarding decision making, appointment of directors, buy and sell rights not usually addressed in constitutions.
5.   Protect Your Intellectual Property
Registering and protecting assets such as your business name and logo, novel product or idea, is imperative, particularly when trading online to millions of viewers at once.  If you are engaging a contractor to develop your website or app, check their terms of engagement to make sure you are not giving away any rights to the information you provide them or the intellectual property they create for you.
6.   Ensure Your Licences and Policies are in Place
It is important to check what licenses or policies you may require, even as an online retailer.  You will likely need at least a privacy policy and a data breach response plan.  Your privacy policy, disclaimers and other information for customers should be uploaded and available for viewing on your website.
7.   Choose How to Finance Your Business
When choosing how to finance your business, make sure you seek legal advice regarding offering shares or crowdfunding equity, both of which are regulated activities.  You should also seek legal advice on the terms of loans and investments proposals as even standard form documents vary between providers and you should not assume that it will address everything you need.
8.   Sign Employee Agreements
It is easy to fall into the trap of engaging employees and contractors without formal agreements when operating online.  Make sure you enter into employment agreements or contractor agreements with any collaborators you engage in that capacity. Take note that the law will class an independent contractor as an employee in certain cases. Seek legal advice if unsure of your obligations.
9.   Have Your Lawyer Prepare Your Terms and Conditions
Avoid buying low-cost terms and conditions online as many of these providers are not Australian legal providers and the terms are unlikely to meet the individual requirements of your business.  You should also not rely solely on the terms of online point-of-sale systems like Shopify, as they won’t cover everything that you or your website does or offers.  Although legal drafting can be expensive, having your terms and conditions prepared by an Australian lawyer is the only way to ensure your terms will be legally binding and effective when you need them.
10. Take out Insurance Cover
A benefit to online businesses is that you may not require premises or workers and can avoid related insurance, but there are other insurance policies that online businesses may want to consider depending on their type of business including product liability, defamation insurance, intellectual property insurance, cyber and data breach insurance.  Your lawyer can advise you on your legal insurance obligations, your litigation risks, or review a policy to advise you on its terms.
If you have any questions regarding the establishment and operation of a business, or are looking for legal advice for your current business, please get in touch today.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post 10 Simple Steps to Get Your Online Start-Up Humming appeared first on Bennett and Philp Lawyers.

Written by Tim Fitzgerald* and Michael Finney**
 
‘Swiss format’ or ‘Swiss-type’ patent claims have a general structure similar to the following:
Use of compound X in the manufacture of a formulation for the treatment of medical condition Y.
Swiss-type claims were originally approved by the Swiss Patent Office as a mechanism to allow for protection of a new therapeutic use of a known compound (i.e., second or further medical use), given prohibition of claims to methods of medical treatment.[1] The claim format was subsequently accepted at the European Patent Office (EPO) and affirmed in the Enlarged Board of Appeal decision G05/83.  In particular, the Enlarged Board held that it was “legitimate in principle” to allow Swiss-type claims where the formulation was for a specified new and inventive therapeutic application, even where the process of manufacture did not differ from known processes using the same active ingredient.
Under the provisions of the Convention on the Grant of European Patents 2000 (EPC 2000), claims in the format “Compound X for use in treating condition Y” (‘European use format’) are construed as use-limited for novelty purposes, and Swiss-type claims are no longer allowable in Europe.[2] Nevertheless, previously issued European patents containing Swiss-type claims have the potential to remain in force until at least 2031.[3] In recent years, there has been substantial judicial assessment of infringement requirements for Swiss-type claims of existing European patents, including in the UK.[4]
In Australia, claims to methods of medical treatment are permissible[5] and, accordingly, Swiss-type claims are not necessary to achieve protection for new uses of a known therapeutic.  Nevertheless, Swiss-type claims have long been considered acceptable under Australian patent office practice.  Notwithstanding this, for many years Swiss-type claims went largely without judicial consideration in Australia.  Since 2015, however, several Australian decisions have issued which provide clarification of the role of Swiss-type claims in Australia.  Here we provide a high-level overview of applicable findings within these decisions, and conclude with a summary of current Australian law regarding Swiss-type claiming.
Otsuka Pharmaceutical Co., Ltd v Generic Health Pty Ltd (No 4) [2015] FCA 634 (‘Otsuka’)
In Otsuka, a decision of the Federal Court of Australia, a single judge (Justice Yates) provided the first detailed judicial consideration of Swiss-type claims in Australia.  As a key element of the decision, His Honour considered whether Swiss-type claims should be construed as method claims or product claims, and concluded that the subject matter of a Swiss-type claim is “appropriately characterised as method or process“.[6] His Honour also prima facie accepted, although did not actively decide upon, established Australian patent office practice that novelty can be conferred for Swiss-type claims by the therapeutic use recited in the claim.
Justice Yates’ also expressed an obiter opinion in Otsuka in relation to infringement of Swiss-type claims.  His Honour’s stated position was that the manufacturer of the composition would be the direct infringer of a Swiss-type claim, which again accorded with prior assumptions under Australian practice.  However, his Honour went on to comment that, in determining infringement of Swiss-type claims,
[t]he question is whether, objectively ascertained, the medicament that results from the claimed method or process is one that has the therapeutic use defined in the claim“.[7]
His Honour further noted that
[t]he question is not really about how the alleged infringer markets its product, although, plainly, its conduct in that regard may well assist in determining, objectively, whether the accused product has the claimed therapeutic use“.[8]
His Honour’s obiter comments on infringement requirements were interpreted by some commentators as suggesting that a product will infringe a Swiss-type claim so long as it has therapeutic use that falls within the scope of the claims, regardless of the intended use of the product.  In conjunction with His Honour’s acceptance of the proposition that Swiss-type claims can achieve novelty based on the recited therapeutic use, this could be seen to lead to a confounding result.  Specifically, under these circumstances, a Swiss-type claim reciting a new use could be granted for a previously known composition, with the known composition then infringing the claim by virtue of it being effective for the new use.  It appeared unlikely that His Honour had intended for such a result.  Accordingly, after Otsuka, some commentators (including the writers) called for clarification of the role of intended use of the manufactured product for the infringement of Swiss-type claims, noting that similar issues had (at that time) recently been judicially addressed in the UK.[9]
Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) [2017] FCA 94 (‘Apotex’)
As for Otsuka, Apotex was an Australian Federal Court decision issued by a single judge (Justice Nicholas).  In Apotex, Justice Nicholas was asked to consider whether an offer made, during the term of a patent, to supply infringing products after patent expiry, would itself constitute infringement of the patent.  Relevantly, the patent in question (AU 714980) contained both an independent method of medical treatment claim and a corresponding independent Swiss-type claim.  Accordingly, His Honour assessed the question for each of these respective claim types.
Justice Nicholas noted that, under Australian law, it is an infringement of a patent claim to “exploit” the claimed invention within Australia during the term of the patent, and that Schedule 1 of the Patents Act 1990 (Cth) (henceforth, ‘the Patents Act’) defines “exploit” to include:
(a) where the invention is a product – make, hire, sell or otherwise dispose of the product, offer to make, sell, hire or otherwise dispose of it, use or import it, or keep it for the purpose of doing any of those things; or
(b) where the invention is a method or process – use the method or process or do any act mentioned in paragraph (a) in respect of a product resulting from such use.
In relation to the method of medical treatment claims, His Honour concluded that the method did not result in the making of any product, and therefore the reference in paragraph (b) to “any act mentioned in paragraph (a) in respect of a product resulting from such use” meant that the paragraph (b) provisions could not apply to this method of treatment claim.  However, in relation to the Swiss-type claims, His Honour identified that the method results in the production of a product (a manufactured medicament), and that part (b) of the definition of “exploit” is applicable.  With this in mind, His Honour concluded that the definition of “exploit” under the Patents Act encompasses an offer made, during the term of the patent, to supply a product manufactured according to a Swiss-type claim after patent expiry, and that the Swiss-type claim had therefore been infringed.
The decision in Apotex has confirmed that there can be clear benefits of including Swiss-type claims in Australian patents.  Importantly, this decision establishes that Swiss-type claims can offer a broader scope of protection than corresponding method of medical treatment claims, at least in relation to commercial offers by third parties.
Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129 (‘AbbVie’)
In AbbVie, three judges of the Australian Federal Court heard an appeal from a decision of the Australian Administrative Appeals Tribunal (AATA).[10] AbbVie dealt with a highly specific aspect of Australian law, relating to the possibility of relying on Swiss-type claims to obtain an extension of term for pharmaceutical patents.
Relevantly, Subsection 70(2) of the Patents Act deals with pharmaceutical patent extensions, and defines that a patent relating to a pharmaceutical substance may have its term extended by up to five years, where one or both of the following apply:
(a)  one or more pharmaceutical substances per se must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification;
(b)  one or more pharmaceutical substances when produced by a process that involves the use of recombinant DNA technology, must in substance be disclosed in the complete specification of the patent and in substance fall within the scope of the claim or claims of that specification.
In this case, AbbVie Biotechnology Ltd had applied for extensions of term for three Australian patents (AU 2012261708; AU 2013203420; AU 2013257402) on the basis of the inclusion of Swiss-type claims reciting a pharmaceutically active substance which is routinely produced by a recombinant DNA process (although this was not stated in the claim), attempting to rely on (b), above.  The Australian Commissioner of Patents had originally found that the Swiss-type claims were not valid basis for the requested extensions, however this decision had been overturned by the AATA.
The Full Court overturned the findings of the AATA, and reverted to the original position of the Commissioner of Patents.  In doing so, the Full Court approved the determination in Otsuka, supra, that Swiss-type claims are method or process claims, not product claims.  The Full Court elaborated that such claims are directed to methods of manufacturing a formulation or medicament using an active substance, not to the formulation or the active substance itself.  On this basis, the Full Court decided that the active pharmaceutical substance recited in the Swiss-type claims, while produced by recombinant DNA technology, did not “fall within the scope” of these claims, and that the circumstances as per subsection 70(2)(b) of the Patents Act were therefore not met.
AbbVie appears to clearly establish that Swiss-type claims cannot be relied upon for term extension of pharmaceutical patents in Australia.  More broadly, the Full Court’s decision appears to clarify that, even in the case of subsection 70(2)(b) of the Patents Act, a pharmaceutical substance itself (as compared to a method involving the substance) must be claimed in order for an extension to be obtained.
Apotex v ICOS Corporation (No 3) [2018] FCA 1204 (‘ICOS’)
Among a number of other considerations in ICOS, a single Federal Court judge (Justice Besanko) was asked to assess whether importation into Australia of an infringing product, wherein the product was manufactured outside of Australia, could result in infringement of a Swiss-type claim directed to manufacture of the product.  With reference to the definition of “exploit” as per Schedule 1 of the Patents Act (set out above), Justice Besanko concluded that such circumstances would represent importation of a product produced according to a claimed method as per part (b) of the definition, and could indeed constitute infringement.
Given that pharmaceuticals sold in Australia are frequently manufactured overseas prior to importation, Justice Besanko’s ruling would appear to be of substantial practical relevance.  That is, if the scope of Swiss-type claims had been found to exclude use of products that have been imported into Australia after being manufactured elsewhere, a large proportion of Australian pharmaceuticals would escape infringement of these claims on that basis alone.
Mylan Health (formerly BGP) v Sun Pharma (formerly Ranbaxy) [2019] FCA 28 (‘Mylan’)
Nearly four years after Justice Yates’ obiter comments in Otsuka, discussed above, Justice Nicholas provided the first formal consideration of the requirements for Swiss-type claim infringement in Australia, in the Federal Court decision of Mylan.  His Honour was required to determine whether sale in Australia of a pharmaceutical composition with suitable properties for use as recited in a Swiss-type claim would infringe the Swiss-type claim.
In arriving at his decision, Justice Nicholas was guided by their Lordships’ observations in the UK Supreme Court decision Warner Lambert Company LLC v Generics (UK) Ltd [2018] UKSC 56 (‘Warner Lambert’) which had issued the previous year.  In particular, His Honour accepted that Swiss-style claims should be construed as use-limited both for novelty and infringement purposes, where the scope of such claims relates to the therapeutic use to which the formulation is applied.  That is, the monopoly claimed was considered to relate to manufacture of a pharmaceutical composition for treatment of a particular medical condition.  His Honour further accepted that, in determining infringement of a Swiss-type claim, the intent of the manufacturer is relevant.  That is, for a Swiss-type claim to be infringed, it must be established that a manufacturer intended for the composition to be used for the recited condition.
Justice Nicholas elaborated on the concept of intent, drawing further from Warner Lambert in discussing concepts of “objective intent” and “subjective intent” of a manufacturer.  His Honour explained that assessing subjective intent would require establishing the state of mind of the manufacturer and whether, in fact, the manufacturer had produced the product for the purpose recited in a Swiss-type claim.  His Honour explained that, in contrast, assessment of objective intent would be performed using a legal framework to decide, under all of the circumstances, if it should be considered that the product had been produced for the recited purpose, whether or not this was consistent with the manufacturer’s actual state of mind.
In Mylan, whether an objective or subjective approach was adopted, Justice Nicholas concluded that the evidence presented would be insufficient to support a finding of intent for infringement purposes.  Accordingly, His Honour did not believe it was necessary to determine which approach to establishing intent was correct, although His Honour appeared to favour an objective approach.[11] It is further relevant to note that, in regard to establishing objective intent, His Honour stated, obiter, that relevant considerations could include .
approved product information (“PI”) for the product, any product labelling, and the nature, size and other pertinent characteristics of the market into which the product is to be sold“[12]
and that
[t]he fact that it may be reasonably foreseeable or even likely that a substantial portion of the product manufactured will be used to treat that condition is certainly not determinative at least not where the product is also used extensively in the treatment of other non-designated conditions.”[13]
These comments indicate that His Honour’s characterisation of objective intent differs from that discussed in Warner Lambert.  Indeed, Justice Nicholas’ concept of objective intent appears to incorporate elements of the “outward presentation test” propounded by Lord Sumption in Warner Lambert,[14] which was considered a separate test in that decision.
At the time of writing, Mylan has been appealed to the Full Federal Court, including in relation to infringement of the Swiss-type claims.  Furthermore, while awaiting the outcome of this appeal, interim injunctive relief was applied for.[15] Interestingly, the application for injunctive relief was heard by Justice Yates, responsible for the decision in Otsuka, which provided an opportunity for His Honour to elaborate on his obiter comments on infringement of Swiss-type claims in that case.
Essentially, Justice Yates noted that, in Mylan, Justice Nicholas had addressed the issue of intent with the benefit of the UK Supreme Court decision in Warner Lambert, and did not actively push back against Justice Nicholas’ finding that a manufacture’s intention in relation to therapeutic use of a product was relevant to infringement of Swiss-type claims.[16] Accordingly, Mylan appears to establish that intent is indeed relevant to infringement of Swiss-type claims.  However, the question of how to determine intent, in particular whether an objective or subjective approach should be used,[17] remains open.  The outcome of the Full Federal Court appeal is expected to provide further guidance in this respect.
Summary
As at writing, precedent is available in Australia for several significant issues relating to Swiss-type claims.  Critically, there appears to be agreement among all decisions issued that Swiss-type claims can be validly included within Australian patents; that these claims should be construed as method or process claims; and that the therapeutic use recited in a Swiss-type claim can confer novelty.
It has also been confirmed, in Apotex Pty Ltd v Warner-Lambert Company LLC (No 3) [2017] FCA 94, that the scope of a Swiss-type claim will differ from that of a corresponding method of medical treatment claim.  Relevantly, at least in respect of third party offers to supply products after the expiry date of a patent, Swiss-type claims can offer broader protection than method of medical treatment claims.
The potential for Swiss-type claims to be relied upon for pharmaceutical patent extension has also been judicially assessed, in Commissioner of Patents v AbbVie Biotechnology Ltd [2017] FCAFC 129.  It has been clearly established that such extensions cannot be obtained on the basis of Swiss-type claims, regardless of whether an active agent used in manufacture of the therapeutic composition is produced using recombinant DNA technology.
Furthermore, Apotex v ICOS Corporation (No 3) [2018] FCA 1204 has provided clarification that infringement of Swiss-type claims of an Australian patent does not necessarily require manufacture in Australia.  This is of substantial practical consequence given that pharmaceutical products are commonly imported into Australia after manufacture overseas.
Finally, Mylan Health (formerly BGP) v Sun Pharma (formerly Ranbaxy) [2019] FCA 28 provides initial precedent establishing that infringement of Swiss-type claims requires relevant intent on behalf of a manufacturer in relation to therapeutic use of a manufactured product.  The outcome of an appeal from this decision is expected to further clarify how intent is to be established, i.e., using subjective and/or objective approaches.
Of course, there will remain some uncertainty regarding the proper judicial approach to Swiss-type claims in Australia absent determinations by the High Court.  Nevertheless, decisions issued over the last five years have vastly increased the available judicial precedent in this area of patent law.
 
 

[1] Official Journal of the European Patent Office (1984) 11: 581-584.
[2] See, EPO Guidelines for Examination G-VI, 7.1.
[3] Or 2036 under Supplementary Protection Certificate provisions.
[4] Including the UK Supreme Court decision in Warner Lambert Company LLC v Generics (UK) Ltd t/a Mylan and another [2018] UKSC 56.
[5] Apotex Pty Ltd v Sanofi-Aventis Australia Pty Ltd [2013] HCA 50. As are claims to therapeutics in ‘when used’ format, which have essentially the same scope as method claims, see Wellcome Foundation Ltd v Commissioner of Patents (1980) 145 CLR 520.
[6] With no useful distinction existing between the descriptors “method” and “process”, in the context of patent claiming. Otsuka at [120].
[7] Ibid at [172].
[8] Ibid.
[9] Warner-Lambert Company, LLC v Actavis Group Ptc EHF & Others [2015] EWHC 72.
[10] Re AbbVie Biotechnology Ltd v Commissioner of Patents [2016] AATA 682.
[11] Mylan at [102].
[12] Ibid.
[13] Ibid at [103].
[14] Warner Lambert at [84].
[15] Mylan Health Pty Ltd v Sun Pharma ANZ Pty Ltd (No 2) [2019] FCA 505.[16] Ibid at [86].[17] And any relevance of “outward presentation” as per 14, above, in this context.
 
* Dr. Fitzgerald is a Senior Registered Patent & Trade Marks Attorney with IP Gateway Patent and Trade Mark Attorneys.
** Mr. Finney is a Senior Associate of Bennett & Philp Lawyers.
 
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It is the view of Geoff Armstrong, Special Counsel, at Bennett & Philp Lawyers that Mutual Will Arrangements should be implemented only after very careful consideration and possibly avoided altogether in some situations. Each spouse should realise that the arrangement will curtail their power to dispose of their own property freely during their lifetimes and on death.
Typically, Mutual Will Arrangements (‘MWA’) are used in blended family situations in an attempt to provide for a spouse while ensuring assets pass to the Willmaker’s children from an earlier marriage. The aim here is to keep control of one’s own assets to ensure that the children from the previous relationship are protected.
The gist of an MWA is to ‘lock-in’ provisions in Wills that have been made by the spouses. In effect, each spouse agrees with the other not to revoke the terms of the agreed Wills unless the other consents. Having agreed that, a subsequent revocation by a later Will made without the consent of the other will give rise to a claim for damages or specific performance by disappointed beneficiaries.
Wills made pursuant to an MWA should not be confused with Wills made by spouses which are merely reciprocal. In the former case, there is a definite contract between the parties binding each to the agreed terms of the Will. In the latter case, such a contract does not exist and reciprocation is in good faith only.
Ideally, MWAs should be specific as regards what assets are subject to its terms. Agreements referring to my estate etc are unsatisfactory. Some of the issues which have arisen in practice are as follows:

The Will is revoked by operation of law and not by a deliberate act of the Willmaker. For example, marriage revokes a Will unless specifically contemplated in that Will.
An MWA will need to be taken into account on divorce and will become redundant.
Long term provisions have become out of date.
The terms of the MWA are too wide – does it include assets acquired after the date of the contract or even after the date of the death of the first party to die?
Are assets inherited after the date of the contract from a third party caught by the MWA?
The MWA inadvertently includes non-property provisions eg. appointment of executors and trustees and guardians for children.
There is a claim on the estate which seriously impacts the effectiveness of the agreement – does this amount to a breach? An MWA cannot be made to defeat such claims.

Throw into the mix the difficulties of proving the existence of an oral MWA and it is easily understood how MWAs are potentially litigious and why they occupy a great deal of court time and haunt the dreams of estate planning lawyers. Such agreements are not for the faint-hearted.
Mutual Will Arrangements have a place where necessary and appropriate but require the input of sound and reliable legal advice. They should not be entered into lightly and must always be carefully drawn.
If you’d like to learn more about mutual wills, or are looking for Wills and Estates advice, please contact our team today.
 
 

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More and more frequently body corporate committee members are becoming embroiled in lengthy and often expensive defamation proceedings.  Serving as a member of a body corporate committee is an honorary position and body corporate committee members need to remember that the laws of defamation can have serious repercussions in relation to their communications in that capacity.
Individuals who serve as members of a body corporate often ignore or overlook the ramifications of making defamatory statements or publications. There also appears to be a common misconception among many who serve on body corporate committees that they are entitled to make defamatory statements with impunity or they are immune from actions for defamation by virtue of the provisions of the Body Corporate and Committee Management Act 1997.
The essence of a claim for damages for defamation is the utterance or written publication of defamatory words of or concerning another person, to a third party.  A publication is said to be defamatory if it is likely to cause ordinary reasonable persons to think less of the plaintiff or to shun, ridicule, despise or avoid him.  Words are said to be defamatory when an ordinary reasonable person would interpret them as having a tendency to cause damage to the plaintiff’s reputation or standing within the community.  It is important to note that a defamatory imputation need not have an actual adverse effect upon a person’s reputation.  The law looks only to its tendency and damage is presumed.  In other words, there is no requirement to show actual or direct financial loss in order to establish or sustain a cause of action in defamation.
All that a plaintiff must prove in order to bring defamation proceedings is:

that he/she is identified in the words or other material complained of;
that his/her reputation has been damaged as a consequence; and
that the words or material complained of has been published (i.e. to one or more other persons).

It is irrelevant that the utterance of words or the publication of them was not intended to be defamatory.  Whilst a lack of intention to cause harm may have some relevance to the assessment of damages arising from a defamation, it is not a defence to such a cause of action.
The Body Corporate and Committee Management Act 1997 contains provisions which afford body corporate committee members some limited protection.
On its face Section 111A, entitled, “Protection of body corporate and committee from liability for defamation” would seem to offer reasonable protection.  However, on closer examination the protection afforded by this section is very limited.  The section is expressed in the following terms:
111A   “Protection of body corporate and committee from liability for defamation”

  This section applies if:

  The committee for the body corporate for a community titles scheme publishes required material for a general meeting of the body corporate under the regulation model applying to the scheme; and
  The required material contains defamatory matter.

  Each of the following is not liable for defamation by the publication of the defamatory matter as mentioned in subsection (1):

  the body corporate;
  the committee, or a member of the committee, other than a member of the committee who submitted the motion or explanatory note containing the defamatory matter.     (our emphasis added)

  In this section –

committee or member of the committee, for a Community Titles Scheme for which a body corporate manager is engaged to carry out the functions of a committee for the body corporate and each of its executive members, means the body corporate manager.
 required material, for a general meeting of the body corporate, means any of the following required under the regulation model applying to the community titles scheme to publish for the general meeting –

a motion submitted other than by or for the committee for the general meeting;
the substance of a motion mentioned in paragraph (a);
an explanatory note for a motion mentioned in paragraph (a) prepared by the submitter of the motion”.

This section therefore affords very little protection to a member of a body corporate committee who is responsible for the submission of a motion containing a defamatory imputation or explanatory note pertaining to the same.
Section 101A   “Protection of committee members from liability” similarly does little to protect the interests of individual committee members.  It provides as follows:
101A   “Protection of committee members from liability”

A committee member is not civilly liable for an act done or omission made in good faith and without negligence in performing the person’s role as a committee member.
In this section –

act done or omission made, does not include the publication of a defamatory matter as mentioned in section 111A(1)”.
The Act however does contain provision which provides protection to those who become involved in an adjudication process as contemplated under the dispute resolution processes provided for under Chapter 6 of the Act.  Section 296(2) of the Act provides as follows:

  Subject to subsection (3), the like privilege that exists with respect to defamation for a proceeding before the Supreme Court, and a document produced in the proceedings, exists for:-

  an adjudication or a department conciliation session, specialist conciliation session or specialist mediation session; or
  a document or other material:

  sent or given to a person, or produced at a place –

  for enabling a dispute resolution recommendation to be made; or
  for an adjudication or a department conciliation session, specialist conciliation session or specialist mediation session; or

produced in an adjudication or at a department conciliation session, specialist conciliation session or specialist mediation session; or

  a statement made to the commissioner or a dispute resolution officer:

  for enabling a dispute resolution recommendation to be made; or
  for an adjudication or a department conciliation session, specialist conciliation session or specialist mediation session

The privilege conferred by subsection (2) does not extend to a publication made otherwise than:

at an adjudication or a department conciliation session, specialist conciliation session or specialist mediation session; or
as provided by subsection (2)(b) or (c)”.

In serving as an individual member of a body corporate committee it should be borne in mind that the Body Corporate and Committee Management Act affords very little protection in the event of a defamation claim.
In the event of a claim for damages for defamation, persons who in their capacity as members of a body corporate committee publish material which contains a defamatory reference to another lot owner or others must look to defend themselves pursuant to the defence provisions as provided under the Defamation Act or under common law. In those circumstances a defence of “substantial truth” under Section 25 or qualified privilege under Section 30 of the Defamation Act 2005 may potentially afford some protection.
If as a member of a body corporate committee you have concerns that what is intended for publication could potentially be construed as being defamatory it is strongly recommended that you seek advice from us prior to publication.  In doing so you potentially could save yourself significant personal and financial stress.
 
 

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Australia is a federation comprised of six states, two mainland territories and seven external territories and holds a population of approximately 25 million people. The federal government is based in the capital city of Canberra, however, the majority (over 70 per cent) of Australians live in the major cities on Australia’s coastline.
Australian company law provides many opportunities for investment in Australia. As a part of the Meritas Legal Guide for Business Investment and Expansion in Australia, the Australian Meritas firms have put together a list of ten primary aspects of Australian company law relevant to the foreign investor. Read the abridged version below for a concise understanding of the landscape of company law in Australia today.
 
1.  Regulatory Scheme
The Corporations Act 2001 regulates companies and their incorporation, the acquisition of shares, securities and the derivatives industry.
The Corporations Act, together with other major pieces of legislation, form a uniform regulatory scheme for companies which applies in all Australian states and territories.
 
2.  Australian Securities and Investments Commission (ASIC)
The Australian Securities and Investments Commission (ASIC) is a federal body responsible for administering the Corporations Act and has a broad range of powers and functions as the regulator and enforcer and is also the principal registry and information source for company matters.
ASIC has wide investigative powers under the Australian Securities and Investments Commissions Act in order to detect misconduct, gather evidence necessary to bring criminal proceedings, restrain unlawful conduct and initiate civil proceedings for offences under the Corporations Act.
 
3.  Incorporation (or “registration”)
A company has a separate legal identity from its shareholders and directors and can own property, enter into contracts, and commence legal proceedings in its own name. It is the most common form of business organisation in Australia.
Companies are incorporated under the Corporations Act which involves appointing directors (one of whom must be resident in Australia), issuing shares, nominating a registered office in Australia and, lodging copies of the company’s constitution with ASIC (although, there is no requirement for a company to have a constitution, unless it is a publicly listed company or one that is created for a specific reason).
When registered by ASIC, each company receives a unique nine-digit Australian Company Number (ACN) which must appear on all the company’s public documents (unless the company has an Australian Business Number (ABN) that consists of the company’s ACN, in which case it can display it’s ABN in lieu of the ACN. Foreign companies and certain other bothers required to register under the Corporations Act also receive identification numbers known as the Australia Registered Body Number (ARBN).
 
4.  Type of Companies
The two principal types of companies under the Corporations Act are public and proprietary companies limited by shares. Both types require a registered office in Australia where communication can be sent and where, in respect of a public company, the registered office must be open to the public. All companies must also have a “public officer” who is responsible for discharging obligations required by Australian taxation law. One of the directors of a company, the public officer of a company and the secretary of a public company must be ordinarily resident in Australia (however, the same person may fulfil these roles concurrently).
Public Company
A public company may offer its shares for sale or subscription to the public and there can be no restriction on the transfer of shares. It must have at least three directors, no fewer than two of whom must be ordinarily resident in Australia and it must have at least one shareholder. It is not necessary for a public company to be listed on the Australian Stock Exchange (ASX) but it must hold an Annual General Meeting (of its shareholders) at least once per calendar year and within five months of the close of the financial year in which the audited financial report of the company along with reports from the company’s directors must be presented.
Proprietary Company
Designed for a relatively small group of shareholders (not exceeding 50 non-employee shareholders), a proprietary company can place restrictions on the sale of its shares and is the most commonly used form of company in Australia.
It must have at least one director and one shareholder (who can be the same person) and have at least one director who ordinarily resides in Australia.
Proprietary companies are classified as either large or small proprietary companies, the latter of which qualifies for reduced financial reporting requirements if it satisfies at least two of the following criteria:

The company and the entities it controls, if any, must have a consolidated gross operating revenue of less than $25 million for the financial year;
The value of its consolidated gross assets and the assets of any entities it controls, if any, total less than $12.5 million at the end of the financial year;
The company and any entities it controls, if any, have fewer than 50 employees at the end of the financial year.

 
5.  Directors and Officers
Management and control of the company are vested in the board of directors, who are appointed by the members. Directors and others acting as directors, such as managers, owe the company itself and the shareholders certain which arise under the general law, the Corporations Act and other legislation. It is important to note that even if a person is not validly appointed as a director, they may be considered one if they act is they were a director or if the board generally acts in accordance with their instructions. The duties to which directors and officers are required to comply under the Corporations Act are:

To act with the care and diligence of a reasonable person;
To act in good faith and for a proper purpose;
To avoid conflicts of interest;
To avoid improper use of position;
To avoid improper use of information;
To avoid insolvent trading; and
To provide or disclose certain information, including financial information, to its shareholders.

Breaching these duties can have severe consequences, including subjecting directors to criminal or personal financial liability or, in some instances, to both.
 
6.  Reporting Requirements and Records
The extent of the reporting obligations depends on the size and activities of the company and whether it is a reporting entity. Companies conducting business in Australia are under various obligations to:

Keep various records and maintain various registers in respect of their activities
Maintain their accounts in accordance with generally accepted accounting principles consistently applied in Australia
Prepare annual financial statements and reports and distribute copies to their shareholders
Lodge copies of those statements with ASIC and, if applicable, the Australian Stock Exchange (ASX)
In some cases, prepare consolidated financial statements covering financial aspects of a group of companies
Procure the preparation of reports by the directors on the company’s performance
For some companies, have their accounts audited regularly by an independent auditor who is a resident in Australia
Disclose significant matters affecting their performance or prospects to ASIC and, if applicable, the ASX.

 
7.  Australian Stock Exchange (ASX)
Public companies may seek to raise funds from the public by listing on the ASX; an option that is also available in certain circumstances to companies incorporated overseas. The ASX quotes the shares of public companies and enables the trading of those shares.
Listing can be an expensive process and companies must meet various stringent financial criteria set out in the ASX Listing Rules, as well as satisfying comprehensive ongoing reporting requirements and further requirements under the Corporations Act. A detailed prospectus must also be issued to potential investors describing the company’s status and prospects.
The company must have a minimum of 300 non-affiliated security holders with holdings valued at a minimum of $2,000 each, and a free float of not less than 20%. The Company must also satisfy either the:

Profit test ($1 million aggregated profit from continuing operations over the past three years and $500,000 consolidated profit from continuing operations over the last 12 months

or

The assets test ($4 million net tangible assets or a market capitalisation of $15 million)

 
8.  Crowd-Sourced Funding
Australia has recently introduced legislation that allows (eligible) start-up and small business companies to raise capital by offering securities to a large number of investors without a prospectus.
 
9.  Managed Investment Schemes
Managed investment schemes regulated by the Corporations Act are defined to include any arrangement where an operator manages an investment made by one or more passive investors other than through the issue of shares or other securities in a company.
To register a managed investment scheme, the operator or manager must be an Australian public company that has an Australian financial services licence, authorising it to operate the registered scheme. There is a substantial cost involved in setting up, registering and running a licensed managed investment scheme and the operator’s constitution must make adequate provisions for matters prescribed in the Corporations Act and have a compliance plan setting out the measures that need to be applied to ensure compliance. There are some exemptions from the scheme rules for small-scale schemes or schemes that only have sophisticated investors, however, these exemptions have strict limits to their application.
 
10.  Acquisition of Businesses
A business may be acquired in one of two principal ways (each of which has its own advantages):

Its assets can be acquired (in which case the company itself is not acquired); or
The shares of the company which owns the business can be acquired.

Complex rules apply in relation to public companies. For instance, special take-over laws apply once a party has acquired a 20 per cent interest in:

A listed company; or
An unlisted company with more than fifty members.

In addition, taxation and stamp duty consequences must be carefully considered, not in some jurisdictions, stamp duty (which is a state tax) is simply called duty.
 
If you’re considering investing in Australia, or simply looking to learn more about Australia’s business landscape, find more information by downloading the full guide below.
 

Please be aware that the information on legal, tax and other matters contained in this booklet is merely descriptive and therefore not exhaustive. As a result of changes in legislation and regulations as well as new interpretations of those currently existing, the situations as described in this publication are subject to change. Meritas cannot, and does not, guarantee the accuracy or the completeness of information given, nor the application and execution of laws as stated.
 
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Following the Government’s decision to launch a Royal Commission into Aged Care Quality and Safety in October 2018, it is more important than ever to ensure your assets are protected as you consider your options now and into the future.
There are a number of proactive steps you can take to safeguard your assets when stepping into retirement. From making sure everything is in writing to researching what your choices are, many people don’t realise the extent of how much you can prepare yourself for the future.
It is paramount that legal advice should be sought before entering into any care agreement with your family. This isn’t because family cannot be trusted but, rather, it is to ensure that you have done everything you can to protect your interests at a time when you will be vulnerable, or you may have lost capacity yourself.
Our Wills & Estates team has created this free guide to help you understand what is needed for you to safeguard your assets as you enter retirement. The guide hits on four main points:

Seek legal and financial advice
Lock down family care agreements
Review your Power of Attorney
Maintain control of your finances

Everyone’s personal situation and financial position is different so, if you’d like to learn more about where you stand, please contact our team today and set yourself up for a future without a worry.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
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In a recent decision, the Brisbane Supreme Court has refused to set aside a prior settlement agreement for historic child sex abuse.
The decision is the first to consider section 48(5A) of the Limitation of Actions Act 1974 (Queensland) (‘the Queensland Limitation Act’) which states that a court may set aside a prior settlement agreement reached in relation to a historical child sex abuse claim if it is “just and reasonable to do so.”
TRG was a student of Brisbane Boys Grammar School (‘the school’) in the late 1980s. He was sexually abused by the schools then counsellor, Kevin Lynch in 1987 and 1988 at the age of 13 and 14. TRG left the school in 1989, whilst in grade 11.
Kevin Lynch resigned from his employment at the school in November 1988 and subsequently commenced employment at St Paul’s School in Bald Hills where he again worked as the school counsellor. In 1997 Lynch was charged with seven counts of indecently dealing with a student at St Paul’s School, following which he committed suicide.
In mid-2000, allegations began emerging that Lynch had sexually abused numerous students under his care. Shortly after that various former students commenced claims against the school for sexual abuse suffered at the hands of Lynch. In late April 2001 court proceedings seeking damages for sexual abuse against the school were commenced by around 50 former students including TRG.
Shortly after, claims by two former students were subsequently progressed as test cases. The school issued defences to those two claims stating, amongst other things, that if Lynch did sexually abuse the two (test case) students he did so without the knowledge of the school and not in circumstances where the school ought to have known of any danger, and that the claims were statute-barred by the (then existing) provisions of the Queensland Limitation Act.
The solicitors for the school filed an application in both claims for orders that certain parts of the claims be struck out and that judgement be given in favour of the school given the limitation periods for the two students to pursue their claims had expired. The solicitors for the two students responded by filing applications seeking orders under section 31 of the Queensland Limitation Act for an extension of the limitation period.
Those applications in the claims by the two former students were never heard as it was agreed between the parties to engage in a formal mediation process in relation to the (by that stage 64) former students (including TRG) who had commenced court claims against the school for sexual abuse by Lynch.
The mediations were overseen by a very experienced mediator and each former student and the school were represented by very experienced and competent barristers and solicitors.
In his court claim, TRG claimed damages flowing from the effects of his sexual abuse totalling $389,360. In a further statement of loss and damage, TRG claimed over $1 million in damages. TRG’s claim was based primarily on the assertion that the psychiatric and psychological damage caused by the sexual assaults upon him by Lynch had resulted in him being unable to pursue an intended career in medicine.
In mid-September 2000, TRG became aware of an allegation that the (now deceased) principal of the school at the time of the abuse upon him by Lynch had some prior knowledge of Lynch’s sexual predation of boys at the school. It is important to note that the relevant principal staunchly denied that allegation, including in his sworn evidence.
The two barristers acting for TRG provided written advice to his solicitors in late September 2002 regarding the prospects of TRG succeeding in his claim against the school and assessing the quantum of TRG’s claim (after relevant reductions/discounts) at between roughly $47,782 and $100,260.
TRG’s claim did not settle at the mediation but was informally settled soon after for the sum of $47,000 plus costs which were ultimately agreed at $12,000, i.e. a total settlement sum of $59,000.
Upon settlement of his claim, TRG signed a settlement agreement which contained various terms confirming any and all claims concerning his sexual abuse were resolved.
The settlement agreement contained a further provision stating that it was the intention of the parties:
… to fully, finally and absolutely settle according to the provisions of this agreement all claims, liabilities, disputes and differences as provided by this agreement.”
Section 48(5A) of the Queensland Limitation Act commenced in 2016. TRG filed the application to set aside the 2002 settlement of his child sex abuse claim in mid-June 2018.
In determining the application, the court had to decide whether it was “just and reasonable” to set aside that settlement agreement. In doing so the court closely examined the evidence held by and the communications between TRG and the school prior to the settlement of the claim, including concerning the likelihood of TRG succeeding in his claim at that time (i.e. in 2002) and the likely success of the limitation period defence at that time. The court also referred to the intention of the legislature when drafting section 48(5A) of the Queensland Limitation Act.
The court determined the starting point as being there is a binding settlement agreement between the parties which defines their respective rights and obligations. The court stated that being the case, the issue was then whether the prior (i.e. 2002) settlement should be disturbed and in determining that whether it is “just and reasonable” to do so, with the onus of proof being upon TRG and taking into account both parties interests, up to the date of the court’s decision.
Whilst the court referred to the various speeches and submissions made within the Queensland Parliament when debating the insertion of section 48(5A) into the Queensland Limitation Act, it relied upon established High Court authority that the starting point for determining the meaning of section 48(5A) must begin with a consideration of the text of the section itself and that historical considerations and extrinsic materials cannot be relied upon to displace the clear meaning of the text.
In finding that it was not “just and reasonable” to set aside the prior settlement agreement and therefore dismissing TRG’s application, the court identified the following factors as relevant to the exercise of its discretion:

TRG’s prospects of success in his claim (both at the time of the informal settlement in 2002 and as the law is presently);
The quantum (value) of TRG’s claim at present;
The effect of the existing provisions of the Queensland Limitation Act (i.e. prior to the insertion of section 48(5A)) on the quantum of the 2002 settlement;
The reasonableness of the mediation process in 2002;
The reasonableness or otherwise of the (2002) settlement figure;
The impact of delay (and any associated prejudice to the school) in setting aside the 2002 settlement agreement;
The costs thrown away (i.e. additional legal costs if the application were to succeed) of the school associated with the 2002 settlement;
Possible loss of insurance by the school;
Change of the law, noting that the law had already changed considerably between the informal settlement in 2002 and present date;
The offer of ongoing counselling to TRG by the school.
In TRG’s case, the court found that the informal settlement in 2002 “was the product of fair, arms-length negotiations between two parties on equal footing, both appropriately represented.”

The court further found that the settlement figure of $47,000 (plus $12,000 agreed costs) “was a fair settlement reflecting the factual and legal strengths and weaknesses of the parties respective cases properly assessed at that time by them.” and further found that the discounted informal settlement of TRG’s claim in 2002 was not materially contributed to by any consideration of the Queensland Limitation Act, as it then was.
Although numerous claims for historical sexual abuse are now being pursued, the case is the first to consider section 48(5A) of the Queensland Limitation Act. It provides a detailed analysis of the factors the court will consider when determining whether to set aside a historical settlement in a child sex abuse claim in Queensland.
It is a stark reminder that the high value of a claim in current terms and the purported impact of the previous limitation period defence under the Queensland Limitation Act (as it then was) are only two of several competing factors which the court will consider.
Ultimately, and unfortunately for TRG, his right to reopen his previously settled claim and pursue further damages for his childhood sexual abuse by Lynch appears at an end.
The court’s decision is a detailed one. Read the full version here.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Queensland Child Sex Abuse Victim Fails in Bid to Set Aside Prior Settlement and Reopen Claim appeared first on Bennett and Philp Lawyers.

As the second segment in our Estate 101 Series, our Wills and Estates team has put together an informative guide to help you understand what occurs during the administration of an Estate.
Estate administration is the process of finalising and distributing a deceased estate. Depending on the extent of the estate, and the care taken during the estate planning stage, this can be a lengthy and complex task, on average taking around twelve months.”
This guide answers various questions regarding estate administration including basic ideas such as “What is the role of an executor/administrator?” and “Who pays for the funeral expenses?“, as well as some more complex questions such as “What happens when someone dies without a will?” and “What is a family provision application?“.
If you have been nominated as an Executor or Administrator of an Estate, you will find this guide indispensable when it comes time to perform your duties. There are numerous tasks on the Executor/Administrator’s list of responsibilities including many that will need the assistance of a solicitor such as liaising with banks and share companies, and securing and insuring assets of the Estate. The role also includes some more menial tasks such as the delivery of personal items of the deceased to beneficiaries.
If you are an Executor/Administrator of an Estate currently going through administration, or have been nominated as the Executor/Administrator of an Estate and would like to learn more about the responsibilities of your role, please don’t hesitate to contact us today. Our experienced team will guide you through the administration process ensuring you understand every step of the process and have covered all the responsibilities of your role.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Estate Administration 101: Distributing a Deceased Estate appeared first on Bennett and Philp Lawyers.

A renewed call by insurers Suncorp and RACQ for Queensland to change its Compulsory Third Party (CTP) scheme to a no-fault system is nothing but a shameless attempt to boost insurer profits.
That’s the view of Brisbane injury compensation law specialist Trent Johnson who says insurers have resurrected their old campaign to blame lawyers for the volume of CTP claims.
“Insurers want to scrap the state’s fault-based CTP payouts scheme and replace it with a so-called no-fault scheme – in other words, caps on payouts for injured claimants, which have proved disastrous for claimants in other states such as New South Wales,” he says.
Trent Johnson, a Director with Bennett & Philp Lawyers, says the issue is back in the news after insurers Suncorp and RACQ told a Queensland parliamentary committee that a no-fault compulsory third party (CTP) scheme is what Queensland needs if the state is to put a stop to the widespread practice of “claim farming”.
Suncorp and RACQ Insurance representatives told the Parliamentary Economics and Governance Committee that measures the Government has taken to stop claims farming are not enough.
Queensland lawyers have long argued that interstate law firms, not constrained by Queensland regulations, have been touting for claims work encouraging motorists involved in minor bingles to chase payouts through the courts.
The interstate law firms are not bound by the caps on the sums Queensland lawyers can charge for fees to pursue such smaller claims.
A Suncorp executive told the parliamentary committee the best way to disrupt claims farming is to remove the financial incentive provided by a lump sum payment model by introducing a no-fault, defined benefit CTP scheme.
Suncorp argues that under a no-fault, defined benefits scheme, the focus is on rehabilitation, not compensation.
Trent says the real agenda is the insurers want a focus on profits rather than compensation.
Last year when RACQ’s 2018 profits of $64.4 million were announced Trent Johnson said it should make them back off from their scaremongering calls to change Queensland’s CTP scheme.
The fact that RACQ’s profits jumped from $26.7 million in 2017 to $64.4 million for 2018 should be proof enough that Queensland’s CTP scheme does not need any change.”
“Sadly however all the insurers have done is wait a few months then trot out their scaremongering campaign again,” he says.
In 2017 the insurance industry, with RACQ to the fore, ran a campaign blaming lawyers for a spike in Queensland Compulsory Third Party insurance claims.
Trent says the Queensland CTP insurers have again carefully avoided addressing the view of the Insurance Commissioner, Neil Singleton of the Motor Accident Insurance Commission, which runs the Queensland CTP scheme, who last year said that Queensland road users continued to enjoy a strong and sustainable CTP insurance scheme.
“In terms of key scheme metrics, CTP insurance premiums remained stable, the incidence of claims fraud identified by insurers remained very low and market research surveys showed that motorists and claimants are satisfied with the scheme – overall, it is a positive story”, he reported.
Trent says nothing has changed in Queensland and the state’s CTP scheme remains in good financial health with Queensland having almost the cheapest CTP insurance (which forms a large portion of Queensland vehicle registration fees) in the country but, as in the past, Queensland CTP insurers are using media pressure to white-ant the scheme to fatten their already excessive profits.
“The insurers – once again – brand the legal profession as the greedy villains in this exercise to generate fear and loathing and bring pressure on the state government to change our CTP scheme. The simple fact is that our scheme is in very good financial health, and those injured claimants who are legally represented recover far more than those who choose to pursue a claim on their own.”
“It’s ironic because the CTP insurers conveniently disregard the independent review of the Queensland compulsory third-party insurance scheme delivered to the Motor Accident Insurance Commission in December 2016, which expressed concerns over the high level of profits consistently being made by the Queensland CTP insurers. They are hypocrites” he says.
Trent says whilst Queensland CTP insurers have every right to make a profit, they should not be allowed to continue unabated profiteering from the scheme whilst simultaneously calling for measures such as guaranteed defined benefits which would only further increase their profits and decrease damages paid to deserving, injured claimants.
The insurance industry is happy to take Queenslanders’ CTP premiums but fight claims and makes people jump through hoops for motor vehicle injury claims.”
“Insurance companies do not roll over with injury claims. Everything is a fight with them. Despite their public utterances, their agenda is purely self-serving and profit-driven, and they regard properly compensating injury victims as a profit liability,” Trent says.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Greedy Insurers Still Pushing Calls for Drastic Changes to Queensland CTP Scheme appeared first on Bennett and Philp Lawyers.

Jeans for Genes was established in 1994 by Children’s Medical Research Institute (CMRI) and has evolved into one of Australia’s most iconic fundraising campaigns.
Donations from the campaign help to fund revolutionary research that helps diagnose, understand, and find cures or treatments for conditions affecting kids, including genetic diseases, cancer and epilepsy.
Since the campaign’s conception, national fundraising efforts have achieve a number of major breakthroughs for CMRI. Some of these amazing achievements are:

Established an ongoing ‘vector’ engineering program that is designing new ways to cure many genetic diseases using gene therapy.
Discovered a cure for genetic liver disease, with clinical trials about to begin.
Partnered with The Children’s Hospital at Westmead on the first-ever gene therapy clinical trial in Australia, which corrected SCIDX1-deficiency (boy in the bubbly disease).
Found a single genetic defect can cause cleft lip and palate
Discovered dozens of genes causing blindness and introduced genetic testing for these and other conditions, so families can be counselled.
Genetic identification of previously uncharacterised types of aplastic anaemia, which now helps children and teens survive bone marrow transplant to treat the disease.
Discovered a new class of drugs to treat the 1 in 3 epileptics not helped by current medication (now in pre-clinical trials).
Launched a world-first project to revolutionise cancer diagnosis and personalise treatment planning.

Firm Contributions
Every year at Bennett & Philp, we support Jeans for Genes through fundraising efforts organised by our de facto fundraising coordinator, paralegal, Penny Mole.
Each year, on the first Friday of August, Penny puts on a fundraising morning tea or similar event for the firm. Decked out in our favourite jeans, everyone is encouraged to participate in the day’s activities which may include a bake-off, trivia or, for a select few volunteers, selling Jeans for Genes merchandise on the streets of Brisbane CBD to help boost our donations. Penny can be found planning these activities multiple times a year as the firm celebrates Pink Ribbon Day, Daffodil Day, Red Nose Day and Bandana Day. Last year, the firm was proud to raise $105.00 for the Jeans for Genes cause.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Jeans for Genes appeared first on Bennett and Philp Lawyers.

Is planning your estate something you’ve been putting off for ‘later’? We know there’s usually more pressing things to do, especially when you’re fit and healthy, however, estate planning is something everyone should consider seriously, whatever stage you’re at in life.
When it comes to estate planning, many people will only think about the Will. And it certainly is important – if you don’t have a properly prepared and executed Will that has been made in line with your wishes and circumstances, the costs involved in administering your estate can be significant.
However, a Will is only one piece of the pie.
There are many other facets of estate planning which also require your attention such as asset protection and tax planning.
As a part of our Estate 101 Series, Bennett & Philp’s Wills and Estates team has put together this informative guide to to help you understand the value and importance of thorough estate planning. This guide covers various aspects of estate planning primarily focusing on which important documents should be considered during your estate planning process.
Help take the pressure of your loved ones and start planning your estate today. The more you put into preparation now, the more your loved ones will be grateful upon your eventual departure.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Estate Planning 101: Preparing for Your Eventual Departure appeared first on Bennett and Philp Lawyers.

The consequences of undertaking unlicensed work can often extend beyond investigation by the Queensland Building and Construction Commission (QBCC) and any associated fines, as Tony Mylne explains.
Despite the harsh penalties for unlawful building work, many contractors are still engaging in works that they aren’t licensed to carry out. Most of these contractors don’t realise that the financial consequences of unlicensed work will often extend far beyond the penalty provisions of the QBCC Act 1991 (Qld).
As a starting point, the infringing contractor will not be entitled to any payment under its contract but limited to a claim for “reasonable remuneration” as prescribed by the QBCC Act. Such remuneration will not include any amounts for profit and certain labour. The contractor may also find itself facing legal proceedings commenced by the client to recover amounts previously paid under the contract.
The infringing contractor will also be precluded from using the security of payment system and subcontractors’ charges regime to pursue payment from the client. This is because the underlying legislation in both situations requires a contractual basis for the payment being pursued.
Take, for example, the decision of the Supreme Court of Queensland in St Hilliers Property Pty Ltd v Pronto Solar Innovations Pty Ltd [2018] QSC 164. Pronto carried out piling works for St Hilliers on a project involving the construction of solar farms. A payment dispute arose, with Pronto issuing a purported payment claim and subcontractor’s notice of claim of charge for approximately $1.6 million. St Hilliers argued that Pronto was not appropriately licensed under the QBCC legislation and applied to the Court for a declaration that the payment claim was invalid and order that the charge was cancelled. His Honour Justice Daubney found that Pronto had carried out unlawful building work and made the orders sought by St Hilliers.
The decision serves as an important reminder to players in the building industry to properly consider their licensing position before signing up to new contracts. It is worth noting that similar consequences can also flow from a failure to comply with the licensing requirements of other legislation impacting the construction industry. For example, the Electrical Safety Act 2002 (Qld) and Professional Engineers Act 2002 (Qld).
Tony Mylne is a director in our Disputes and Litigation Team. Tony represented St Hilliers in the Supreme Court proceedings referred to above and frequently advises clients on building licensing issues and construction payment disputes.
If you require any assistance with licensing issues please contact us today.
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post The Risks of Carrying out Unlicensed Building Work appeared first on Bennett and Philp Lawyers.

The whole team here at Bennett & Philp would like to congratulate Director, Tony Mylne, for being recognised as a leading Litigation lawyer in the current edition of Best Lawyers list.
The addition of Tony to our Disputes & Litigation team back in February has been a welcome one. His presence in the firm has been highly valuable, bringing with him significant expertise litigating commercial, property, and construction disputes.
Being named in these lists is a mark of excellence and reflect the highest regard with which your work is held within the legal profession. You can check out the full list here.
Congratulations, Tony!
 
 

Individual liability limited by a scheme approved under professional standards legislation (personal injury work exempted).
The post Bennett & Philp Litigator Recognised by Peers appeared first on Bennett and Philp Lawyers.