If you supply services or goods combined with services and offer your customers warranties against defects, you will need to comply with new warranty requirements which came into effect on 9 June 2019.
The Office of Fair Trading explains that a warranty against defects is “a representation to a customer that if goods or services provided (or part of them) are defective, you will provide a remedy. A representation only counts as a warranty against defects if it’s made at the time the goods or services are provided.”
These warranties are voluntary but, if given, will apply in addition to any consumer guarantees which are mandated under Part 3-2 of Schedule 2 of the Competition and Consumer Act 2010 (Cth) (Australian Consumer Law or ACL).
The changes
From 9 June 2019, any document that ‘evidences’ a warranty against defects, such as a warranty card, warranty statement or any other document that sets out, or refers to, the terms of an express warranty against defects must comply with the prescribed form and content requirements.
What you need to do
You will need to include mandatory wording in all your warranty documentation, for example, your:

customer contracts;
terms and conditions/terms of trade;
marketing materials;
website;
receipts; and
product packaging.

Suppliers of goods only
The ACL already requires businesses who supply goods to consumers and offer a warranty against defects to include mandatory text in their documentation.
There will therefore be no change to the current mandatory text that traders use for warranties against defects when supplying goods alone.
Suppliers of services only
If you offer a warranty against defects when supplying services, you will need to display the following mandatory text with the service:

Our services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
· to cancel your service contract with us; and
· to a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to be compensated for any other reasonably foreseeable loss or damage. 
If the failure does not amount to a major failure, you are entitled to have problems with the service rectified in a reasonable time and, if this is not done, to cancel your contract and obtain a refund for the unused portion of the contract.

* Note that the above mandatory wording must be available with the service itself. It is not sufficient to refer your consumers to information on a website or in-store.
Suppliers of goods combined with services
If you offer a warranty against defects when supplying goods combined with services, you will need to display the following mandatory text with the goods and services:

Our goods and services come with guarantees that cannot be excluded under the Australian Consumer Law. For major failures with the service, you are entitled:
· to cancel your service contract with us; and
· to a refund for the unused portion, or to compensation for its reduced value.
You are also entitled to choose a refund or replacement for major failures with goods. If a failure with the goods or a service does not amount to a major failure, you are entitled to have the failure rectified in a reasonable time. If this is not done you are entitled to a refund for the goods and to cancel the contract for the service and obtain a refund of any unused portion. You are also entitled to be compensated for any other reasonably foreseeable loss or damage from a failure in the goods or service.

* Note that the above mandatory wording must be available with the goods and services. It is not sufficient to refer your consumers to information on a website or in-store.
Other warranty requirements
The ACL requires that you present your warranty documentation in a particular way and requires it to include specific information.  For example, your warranty documentation must also:

be written in plain language and legible;
be provided to your customers where the supply takes place, or at the time it takes place or be made available with the product;
include details of what your business will do if the goods or services are defective;
explain clearly what your customer must do when a defect arises;
set out your contact information;
state how long the warranty will apply for;
explain how your customer must make a claim under warranty;
state who is responsible for any expenses in making a warranty claim (e.g. postage); and
contain a statement that the warranty is additional to the consumer’s rights and remedies at law.

 
Contact us
The ACCC may impose penalties on businesses that do not comply with these requirements, therefore you should seek legal advice before offering a warranty against defects to ensure that you are complying with the ACL requirements.
Our commercial team can provide advice regarding your obligations and assist with reviewing or drafting your warranty documentation.
Please contact Helen Kay on *protected email* or call (07) 3009 6555 for assistance.

New laws were introduced on 11 March 2019, changing court procedure in matters involving an element of domestic violence where one party is self-represented. These new laws will have effect from 10 September 2019.
Previously, a litigant who was violent or abusive towards their former partner could cross-examine their former partner during family law proceedings. This would invariably lead many victims of abuse to settle their proceedings on unfavourable terms purely out of fear, or being put in a position where they are asked questions for hours at length from the very person who was violent towards them, which could arguably amount to abuse itself.
This recent amendment to the Family Law Act prohibits the perpetrator from cross-examining the victim, and requires that person to engage a solicitor to perform the cross-examination.
The amendments have attempted to strike a balance between protecting vulnerable family violence victims, and also protecting innocent parties from being unfairly disadvantaged in a procedural sense when unfounded allegations are made against them.
There must be more than just an allegation of abuse, and for this restriction to apply:

Either party must have been charged with, or convicted of, an offence involving violence (or a threat of violence) to the other person; or
A domestic violence order must apply to both parties (this must be a final order not a temporary order); or
The Family Court or Federal Circuit Court has made a personal protection restraint against one party in favour of the other; or
The court otherwise directs this restriction to apply.

If none of the above 4 factors apply, the court is required to ensure there are protections in place for the alleged victim of domestic violence, which could see for instance the cross-examination being conducted by video or audio link.
Interestingly, this restriction also applies the other way, such that it restricts a victim of abuse from directly cross-examining the perpetrator. Perhaps in most instances the victim would be unwilling or unable to do so, however this restriction could prove disastrous for an abuse victim who is unable to afford a solicitor, which would see them being unable to challenge the evidence of their former partner. The statistics show victims of abuse are usually in a more vulnerable financial position than perpetrators, which would see this restriction disadvantage victims more than perpetrators.
In some instances Legal Aid will assist with providing representation, however not all parties qualify for a grant of aid.
It is important to consider these new laws when deciding whether to challenge an application for a domestic violence order. It is common for Respondents of domestic violence applications to consent to an order to avoid a trial and the potential for a finding of fact being made against them, however doing so will have repercussions if they find themselves in a family law dispute.

 Jacinta Norris
Senior Associate
Ph:       +61 7 3009 6555
Email:    *protected email*

Highly experienced senior commercial and property lawyer Helen Kay has joined leading Queensland legal firm Creevey Russell Lawyers as a Special Counsel. Creevey Russell Partner Damian Bell said Ms Kay has extensive legal experience and has worked within top tier firms in the United Kingdom and Australia as well as running her own legal practice… Read more »

30 January 2019 will mark the 7-year anniversary of the Personal Property Securities Register (PPSR). The PPSR is described as the single, Australian register where details of security interests in personal property (i.e. property that is not land or fixtures to land (i.e. real estate and buildings)) can be registered and searched. According to Infotrack,… Read more »

The next round of changes to the Retirement Villages Act 1999 (Qld) will take effect on 1 February 2019 and will impact every Queensland retirement village. Changes have already been enacted including: requiring retirement village operators to pay a former resident’s exit entitlement no later than 18 months after the termination date; and introducing new… Read more »

Preparing your own  will without professional help can end up resembling a dodgy do it yourself building project – resulting in substantial extra costs instead of saving money, says leading legal firm Creevey Russell Lawyers. Creevey Russell wills and estates lawyer Rachel Greenslade said while courts in the age of technology and society’s desire to… Read more »

Leading Queensland legal firm Creevey Russell Lawyers is enjoying unprecedented growth across all of its practice areas as it celebrates its 10th anniversary. Creevey Russell Co-Founder and Principal Dan Creevey said it was an exciting milestone for the South East Queensland based full service law firm, which now has 28 staff across three offices. “There… Read more »

New legislation before the Queensland Parliament designed to improve the disciplinary system for the state’s police will provide more confidence for the public and certainty for police officers, says leading legal firm Creevey Russell Lawyers. Creevey Russell Principal Dan Creevey said The Police Service Administration (Discipline Reform) and Other Legislation Amendment Bill 2019 will, if… Read more »

Selling a business is a complex process and requires many boxes to be checked to ensure a smooth transition from one owner to another. The first and often overlooked stage is seller’s due diligence.
The purpose of seller’s due diligence is for the seller and their advisors to investigate the business, its assets and business relationships to make sure all issues, including some that may not have even been thought of, are ironed out before the business goes on market.
A buyer will almost certainly carry out a thorough due diligence of a business before they commit to buy it, usually during a due diligence period under contract, and you can guarantee that if there is a problem, their advisers will find it. Each issue with the business that is discovered will erode the buyer’s perception of the value of the business and doubt will start to creep in.
 
If you are considering selling your business in the near future we recommend reviewing and checking off the following legal factors:
 Is Your Business Name Registered?
Although this step may seem like a no brainer it is crucial to check your business name is registered and that it is registered to the current legal owner of the business.
If you have your Certificate of Business Name Registration this will not be an issue. If however you are unable to locate your certificate you can easily check on the ASIC Connect site.
Once you have searched your business name you will be able to check:

who owns the business name;
the company’s ACN (if owner by a company);
if it is currently registered; and
the registration renewal date.

If any of these details are not what you believe they should be, they will need to be rectified before you list your business for sale.
Are The ASIC Details Correct?
Another item to consider are the ASIC details of the company. To find out these details, you will require a Company search of your business. You are able to purchase a current company extract from ASIC Connect. The search will show you who the ABN is registered to.
By checking who the ABN is registered to you will also be able to see the directors of the business. You will need to consider if there are any directors listed who may not agree to provide personal guarantee to transfer the business. If you think there may be issues we recommend you engage a solicitor to advise you regarding removing their name(s) from the company register etc.
Like our business name, you will also need to check the ABN registration is current and that the business is listed for GST. If it is not, you may need to do so prior to putting your business on the market.
You will also need to know your ASIC Login details. This is important as you will need to be able to login to transfer the business name to the new owner at settlement.
What PPSR Charges Are Registered Against Your Business?
It is important to check the Personal Property Security Register (PPSR) for any third party interests that may be lodged against your business. A prudent search would include a search of your ACN, ABN and business name. Some of these charges you may not be aware of, or may be outdated and will need to be removed prior to the sale of your business.
It is vital to conduct and check the PPSR search as it may show items that will deter potential buyers. A long list will be off-putting to many buyers as it may lead them to think that a business is run on credit.
If obsolete security interests are registered against the business, for example in favour of a previous supplier, you or your solicitor will need to obtain releases.
Have You Got A List Of Plant And Equipment?
Prior to putting your business on the market you will need to compile a list of all of the business assets. The list will need to include all plant and equipment, furniture and fittings that will be handed over to the buyer at settlement. You should also consider preparing a separate list clearly identifying anything that is specially excluded from the sale, e.g. the owner’s motor vehicle(s) or pieces of art work located at the premises.
If any of your businesses equipment is rented or leased, and the buyer wishes to take over the lease or rental agreement, you will need to contact the owner and arrange for transfer at settlement. The buyer will need to review the equipment lease or hire agreement and a deed of novation may be required.
You must consider all of these things early on in the piece and be open and honest as it may also affect the value of your business.
Is Your Lease Ready To Be Transferred?
To sell your business you will need to provide the buyer with a current, valid registered lease. Along with a copy of the registered lease you will need copies of current invoice for rent and outgoings such as utilities.
If your premises are retail premises you will also need to provide various disclosure statements.
You need to review your lease and determine the transfer or assignment of lease requirements and the length of the term left to run (including any available further terms). If the lease term is too short this should be addressed.
You may also need to consider whether your landlord will be willing to consent to a transfer the existing lease to the buyer. If they are not you will need consent from them to prepare a new lease.  If this is required, a commercial lawyer will be able to assist you in the preparation of a new lease.
If on the other hand your landlord is willing to transfer the lease, a deed of consent to assign will be required. This will allow for a smooth transition of the lease from your name to the buyers.
Another item you will need to discuss with your landlord is the transfer and release from all obligations under the lease and any personal guarantees you have provided.
Recommendations
Overall, this checklist provides a broad overview of some of the main things you need to consider from a Legal Due Diligence perspective before putting your business on the market. We recommend discussing this with your broker and consulting a solicitor as this list is not extensive and requires experience in business sales.
There are other things that can be reviewed in a more in depth Seller’s Legal Due Diligence, depending on the nature of the business, for example:

the current employment contracts;
arrangements in place with suppliers;
client agreements; and
licences and permits required to operate the business.

As well as looking as the legal aspects you will also need to engage with your accountant to review the financial aspects of the business.
Please contact our Commercial Legal Team if you would like assistance with buying or selling a business or with any other commercial legal issue.
You may also be interested to read our article on Tips to Avoid the Main Issues that Can Derail a Business Sale.

Once you have made the decision to sell your business and found a buyer willing to pay the asking price it can be a huge relief. But there is a long road to travel between receiving the offer to purchase (which is usually made by way of a non-binding expression of interest through your broker), to the actual settlement of the business sale.
A business sale agreement still needs to be negotiated, agreed and signed by the parties to make the offer binding and then all the conditions in the contract need to be satisfied (or waived).
One of the main conditions will be the buyer obtaining suitable finance. This is outside the control of the seller and rests entirely on the buyer’s ability to finance the business purchase. There are however other conditions and issues that could arise within a business sale transaction which could lead to the buyer pulling out of the purchase either by not signing the binding business sale agreement or by rescinding or terminating the agreement.
A prudent seller should consider these issues, seek advice and take steps to avoid these issues derailing their business sale before going to market. Here are some top tips on what to watch out for and how to avoid these being an issue for your business sale:

Issue #1: buyer gets cold feet
People don’t like surprises, especially if you have a nervous buyer who does not understand all the nuances of buying (or running) a business.
There are obvious things that could lead a buyer to think that there is something wrong with your business, for example:

Finances not being readily available (‘What are they trying to hide?’). Make sure you have your last 3 years’ accounts, BAS statements and POS records ready to provide to a buyer who has signed a confidentiality agreement
The business name not being registered to the seller – if they are paying an amount for goodwill the seller will expect the Intellectual Property in the business to be robust.
Long lists of charges registered against the business on the Personal Properties Securities Register (PPSR) – this may indicate to a buyer that the business runs on credit or was struggling. (‘Who else do they owe money to?’).

Tips to avoid the issue: sort out any potential issues.
We regularly come across issues in a business sale that should have been addressed by the seller before the business went on the market (more commonly when the business is being sold privately without a broker). If you sell your business through a broker they will analyse the business beforehand and identify any matters that are likely to negatively impact upon the sale price or cause problems down the line. Engaging a commercial lawyer early on in the piece can also be useful in flushing out and addressing these issues, they can help you to:

Ensure that the business name is registered to the seller (for example where an old business partner has it in their personal name or it is simply not registered). The same goes for a trademark.
Discharge any old PPSR charges (for example from previous supply arrangements) so you don’t need to provide the buyer with covenants or delay settlement.
Ensure that all key contracts are documented – handshake arrangements have no value to a buyer so it is important to get all key customer and supply agreements in writing.
Ensure that you have everything you need to complete the business sale agreement, for example all schedules, as it is preferable to send across a complete first draft contract to the buyer.
Address any issues with your lease.

Issue #2: landlord won’t accept the new tenant
If you lease your business premises, the business sale agreement will need to be conditional upon the assignment of lease to the buyer. But what if the landlord won’t accept the new tenant? In that case, the conditions regarding landlord’s consent to assign the lease will not be satisfied and the contract will fall over.
Tips to avoid the issue: Understand the lease and communicate with your landlord

Speak to your landlord – If the sale is not highly confidential, have conversations with the landlord early on in the piece so that you are both on the same page.
Vet your buyer – Determine what the landlord’s priorities are and make sure that the buyer ticks their boxes (the higher offer might not be the better offer if the landlord won’t accept the buyer).
Review the lease: – Make sure that you are aware of all the assignment conditions in the lease and that these are notified to the buyer. For example, that they need to provide personal guarantees, a bond or a bank guarantee and how much that will be for (they will need to factor this into their financial analysis when determining whether they can buy your business or not).

Issue #3: The lease is too onerous
The buyer may decide after reviewing the lease that it is not ‘satisfactory’ and not to go ahead with the assignment.
This is likely to occur where the lease is onerous or if the lease term is too short and the landlord is unwilling to amend it to provide for further options to renew or grant the buyer a new lease for a longer term. This is likely to occur where:

The landlord does not want the buyer to become its tenant; or
Where the landlord has plans to redevelop the premises and there is no redevelopment clause in the lease.

Tips to avoid the issue: Make sure you understand your lease

Review your lease before listing your business for sale – conduct a seller’s due diligence and make a plan to address any issues.
Where you have a lease with only a short term left to run and no further options it is worth addressing this before you go to market.
Consider negotiating further option terms which are likely to be more attractive to a buyer and their financiers. (Don’t extend the initial term of the lease though because, if the sale does not go through you will end up being liable to pay rent for a longer term).
This may also be a good time to renegotiate other onerous terms in the lease. So, send to a commercial lawyer to report on what needs changing to make the lease more ‘commercial’ in the current climate.

Issue #4: buyer wants to renegotiate price
We have all come across buyers who have little regard even for a signed contract and use any opportunity to renegotiate the purchase price just before settlement.
The sad thing is that this often occurs where the buyer has or perceives that they have the bargaining power, for example where the sale has to go ahead quickly and they know that the seller will not:

be able to afford to fight them in court; or
want to waste any more time putting the business back on the market and trying to find a new buyer.

Tips to avoid the issue: Make sure that the contract stacks up:

Take a large enough deposit from the buyer to discourage a breach of contract.
Make sure that all conditions are drafted tightly enough to ensure that the buyer has little ‘wriggle room’ for example, if there is a due diligence clause make sure that it is tight enough to point to exactly want constitutes unsatisfactory due diligence. Do not leave it to the buyer to say that they are simply ‘not satisfied’.
When you need to rely on a clause in the contract you want to be sure that there is no ambiguity and that the interpretation finds in favour of the seller. The standard REIQ contract is not adequate to protect a seller, it needs well drafted ‘buyer’s’ special conditions.
Even before the contract is signed, having all the terms documented in a well drafted set of heads of agreement or terms sheet will help avoid this. Both parties will be on the same page and understand what the process of the business sale will be.

It is important to work with experienced business sale professionals when you sell your business to maximise the chances of success. We regularly assist with business sales and would be happy to assist you through the process.
If you require any assistance with your business sale or business purchase or need help with other commercial legal issues, please contact our commercial legal team:

 
Helen Kay
Special Counsel
Ph:       +61 7 3009 6555
Email:    *protected email*

Primary producers who have battled drought and flood along with continually challenging economic conditions have been dealt yet another blow with a Federal Court ruling against a pastoral holder who applied to upgrade her tenure to freehold.
Creevey Russell Lawyers Principal Dan Creevey said the refusal by Justice John Reeves in the Federal Court to grant an order by Sophie  Pate that native title did not exist over her cattle property near Carmila in North Queensland was “another nail in the coffin for primary producers” and should be appealed.
“Just when you thought it can’t get any harder for primary producers, the Federal Court has cast a shadow over the ability to obtain a determination that native title does not exist over country, and therefore the ability to freehold that property,” he said.
Mr Creevey said Ms Pate sought to upgrade her tenure to freehold and commenced a non-claimant application seeking an order native title did not exist over her property.
“The application was not contested and there wasn’t a native title claim filed in response, with the applicant arguing the court could infer no native title existed on her land,” Mr Creevey said.
“But Justice Reeves ruled even though the application was unopposed, the applicant must prove on the balance of probabilities that native title did not exist. He found to make an order that native title did not exist would be contrary to the objectives of the Native Title Act 1993.”
Mr Creevey said the Reeves judgment has foreshadowed a view on the Native Title Act which may result in a failure of the application no matter how strong the evidence that native title does not exist.
“The Court arrived at a conclusion in the Pate case that a negative determination of native title would prevent any future application for compensation against the State for loss of native title rights and would be contrary to the objects and purposes of the Native Title Act,” he said.
“The concern arising from this is that someone, somewhere may have an unexercised native title claim but that granting an application for a determination that native title does not exist will forever prevent that right being exercised.
“This is despite a section in the Native Title Act which provides expressly for the reservation of compensation claims against the state when non claimant application provisions are utilised.
“At the moment the Court has only expressed a qualified view on the state of the law but if that view is confirmed, freeholding of any country where native title has not been extinguished will not be on option.
“The opportunity to persuade the Court of a contrary view should not be missed but will require the joining of forces to promote a favourable outcome.”
Further Enquirers, please contact our Litigation Team:

 
Dan Creevey
Principal
Ph:       +61 7 4617 8777
Email:    *protected email*