A “going concern” is an Australian Tax Office (“ATO”) invention that allows the sale of a business to be a GST-free transaction. It is always highly desirable to both buyer and seller in a sale of business – it means no GST, and it gives certainty to both parties as to what they are paying and what they are receiving. However there are many rules and requirements for a sale to be a GST free going concern that need to be considered before you enter into a sale contract.

GST is often the last thing on your mind when you are negotiating the sale or purchase of a business. Whether the price you have negotiated is GST inclusive or exclusive can be easily forgotten in the excitement, or both parties will simply assume that business sales are GST-free without considering all of the elements of what is a “going concern”.

Some of the essential aspects of a going concern sale are:

1. Both seller and buyer must be registered for GST.
2. Your sale contract must expressly record that the sale is a going concern.
3. The seller must sell everything that is necessary for the continued operation of the business. Any exclusion can mean that it is not a going concern.
4. Selling everything means you must provide the premises from which you operate (unless you are a mobile business or operate from your home, but there are strict ATO rules on this category of business). If the business premises is leased, there must be an assignment of lease OR surrender of the existing lease then a new lease to the buyer. In limited circumstances, a new but similar premises can be found.
5. It may come undone where the seller has different entities owning different parts of the business – a seller should investigate their ownership structure with their lawyer well in advance of a sale.
6. The business must trade up until the settlement date. Any business closure in the lead up to the sale will nullify going concern – so beware if you plan to close to paint or renovate on handover.

If you are able to meet all of the above requirements, your sale should be a going concern, and there will be no GST payable.

Some handy rules to remember:

Always negotiate the price as GST EXCLUSIVE so that both parties know where they stand. Then if GST is payable, the seller still gets the agreed price. A contract that is silent will be GST inclusive, which will always be bad for a seller if there has been no consideration of GST.

And for a seller, there should always be a clause in your contract stating that if the tax office deems your sale NOT to be a going concern, then you can call on the buyer at any time to pay the GST.

It is not always possible to meet the above requirements – you might not want to sell all of your business assets, or the existing structure of your business may not allow it. It is easy to forget that GST in a sale between two registered entities is a tax neutral outcome, because the purchaser pays 10% GST and gets it back from the ATO and the seller collects the additional 10% with the purchase price and hands it over to the ATO. Each ends up in (virtually) the same position PROVIDED you correctly negotiate the price on a GST exclusive basis in the first place.

For the Buyer, however, it is often a question of cashflow. It is preferable to avoid coming up with the extra money which you must then wait to recoup on your next business activity statement. Sometimes a buyer can’t fund the additional money at all as they are already borrowing to their limit for purchase price and other business start up activities. So if you are concerned about having a “going concern” then you need to seek advice early in your negotiations.

An Independent Children’s Lawyer (ICL) is appointed by the Court under s 68L of the Family Law Act 1975 or upon application of a party to represent and promote the best interests of a child in family law proceedings.

The appointment of an ICL is usually limited to complex parenting matters where there may be allegations of abuse, neglect, family violence, mental health issues or high levels of conflict and dispute between the parents. If both parties are self-represented, a Court may also consider it appropriate to appoint an ICL.

The role of the ICL is to consider the views of the child and their best interests in the litigation. This may involve arranging for necessary or expert evidence to put before the court which may include medical, psychiatric and psychological records of the child and/or parents and documents from organisations such as schools, welfare agencies or the Police. The ICL may also assist in the coordination of the family report from a family consultant or an expert report. The ICL will acts as an honest agent in the proceedings if aiding settlement negotiations.

It is important to note that despite the responsibility to consider the views of the child and their best interests, this does not mean that the child is the decision-maker through an ICL. The extent to which a child’s views are considered is weighed against their age, development level and needs, cognitive abilities and emotional state. ICL’s do not take instructions from children but may ensure the court is fully informed of the child’s view and make suggestions with reference to their views and best interests.

ICL’s cannot conduct disclosure interviews, become a witness in the proceeding or conduct therapy or counselling with the child.

 

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What is a Section 60I Certificate?

Pursuant to the Family Law Act 1975, parties are required to make a genuine effort to resolve their parenting dispute through Family Dispute Resolution before commencing Court proceedings for a Parenting Order. This includes parties seeking to change an existing Parenting Order.

The Court confirms parties have complied with this requirement by requiring a certificate issued pursuant to Section 60I of the Family Law Act to be filed with the Initiating Application for Parenting Orders. This is called a Section 60I Certificate.

 

How can I obtain a Section 60I Certificate?

In order to obtain the certificate, the parties must attend Family Dispute Resolution with an Accredited Family Dispute Resolution Practitioner who is qualified to assist in resolving parenting disputes. This process may take place with the assistance of your Solicitor.

Accredited Family Dispute Resolution Practitioners are recorded on a Register accessed through the Attorney General’s website. Your Solicitor can also provide you with recommendations for experienced Practitioners in your area.

 

Can I be exempted from Family Dispute Resolution?

In accordance with section 60I(9) of the Family Law Act 1975, there are a number of exemptions to the requirement to participate in Family Dispute Resolution prior to commencing proceedings, which can include:

  1. Where the matter is urgent;
  2. Where one or more of the parties are unable to participate effectively in the mediation;
  3. Where the application relates to an existing and recent order; or
  4. Where the Court is satisfied that there has been family violence or child abuse, or that there would be a risk of either occurring due to a delay in applying to the Court.

 

What does the Certificate say?

A Section 60I certificate will record the details of the FDR Practitioner, the parties and some general outcomes from the Family Dispute Resolution process which include:

  1. If there was a refusal to attend;
  2. If the Practitioner considered the matter inappropriate for Family Dispute Resolution;
  3. If a genuine attempt was made to resolve the dispute.
  4. If a genuine attempt was not made to resolve the dispute.
  5. If the Practitioner considered the matter unable to continue through Family Dispute Resolution.

The specific information and proposals discussed at Family Dispute Resolution are otherwise confidential and unable to be used in Court proceedings.

An Australian patent is a written document that discloses your invention and, if granted, provides you with the exclusive right to exploit your invention in Australia. Depending on your type of invention or business model, it might be beneficial to seek patent protection in overseas jurisdictions.

There are two ways to file for a patent overseas, those being:

1.         Convention Applications; and

2.         Patent Cooperation Treaty (PCT) Applications.

Each approach has a different process that can be utilised to suit your individual patent needs. In practice, you would consider applying for a patent in those countries where you anticipate:

(a)        selling the products or services protected by the patent;

(b)        exporting the products or services protected by the patent; or

(c)        licensing the products or services protected by the patent.

 

Convention Applications

Convention Applications involve filing for a patent individually in each country you wish to establish patent rights.

While the patent process in most countries is generally the same as in Australia, each country has different requirements that you need to be aware of. Chamberlains can assist with overseas Convention Applications by obtaining quotes for an overseas patent agent (Overseas Associate) and preparing the necessary documents to engage the Overseas Associate.

Where patents are required in many jurisdictions, the Conventions Application method can quickly become complex and expensive, given the varying patent requirements of each country. When you are considering applying for three or more countries, we would recommend considering a PCT Application to simplify the process and minimise costs.

 

PCT Applications

The PCT is an international agreement administered by the World Intellectual Property Organisation (WIPO). A PCT Application involves lodging an application with the WIPO, allowing you to nominate and file for a patent in any of the 153 countries which are signatories to the treaties. A complete list of the countries available can be found here: https://www.wipo.int/export/sites/www/pct/en/list_states.pdf

 

PCT Process

The PCT process consists of two phases:

1.         International Phase

  • Priority Application is filed with the patent office. This application will establish a priority date which gives preference over other applications filed after this date.
  • PCT Application lodged with IP Australia as the Receiving Office (RO) within 12 months of the Priority Application. The RO will check the application for any mistakes. This usually takes 1-2 weeks.
  • The International Searching Authority (ISA) will conduct a search for any documents describing similar inventions to the one in your application. The ISA will then generate a report (ISR) and a written opinion (ISO) on your invention. This should be completed within 3 months of your application being lodged.
  • You can amend your application based on the findings of the ISA. Amendments must be made within two months of the ISR being issued.
  • 18 months from the earliest priority date, WIPO publishes the application and the ISR.

2.         National Phase

  • At 30 months from the earliest priority date, you apply to enter the national phase in your selected PCT signatory countries.
  • Your national phase application is treated a patent application in that country and undergoes the patent process as mediated by that country’s laws.

 

How Do I Start Applying for a Patent Overseas?

When applying for patents internationally, it is important to consider what approach will best serve your business and intellectual property needs. This can help ensure patents are registered in the simplest, quickest, and most cost-effective manner.

Speak to one of our friendly staff members at Chamberlains if you are interested in filing an international patent application. Our Patent Attorneys are able to determine the right method of application for you, obtained quotes for Overseas Associates, and draft and file the application on your behalf.

Nouri v Australian Capital Territory [2020] ACTCA 1 (13 February 2020)

 

The ACT Court of Appeal has upheld the primary judges’ findings that the appellant parents could not establish, on the balance of probabilities, that the hospitals failure to notify them that their child was to be born with certain medical conditions that may result in a significant disability stopped them from potentially terminating the pregnancy earlier in the process.

 

Background

Saba Nouri was born with severe disabilities (VACTERL Association). She requires 24-hour care and has caused the parents, Ms Nouri and Mr Shaor strain through the responsibilities of raising a severely disabled child in addition to their other children. Saba also has a twin (A), who does not suffer from these conditions.

 

Primary/Trial Judgement

Before the primary judge, the parents argued that Canberra Hospital should have provided them with certain medical information. Had they been provided this information; they would have selectively terminated the pregnancy of twin B and avoided significant costs of raising Saba. The respondent, who runs the Canberra Hospital denied any breach of duty and stated if there was a breach of duty then that breach did not cause the loss claimed.

The judge found that Canberra Hospital did breach its duty of care but that the appellants had failed to establish causation. This resulted in a judgment in favour of Canberra Hospital. Despite this, a contingent assessment of damages to the sum of $1,813,807 was conducted. This did not include any award of general damages on the basis they would be only recoverable until Saba reached 18 years.

 

Appeal Judgement

On Appeal, the parents challenged both liability and damages. For liability, the appellants suggested the date they had been informed of the possibility of a medical condition (trachealoesophageal fistula (TOF)) occurring was earlier than suggested by the primary judge. They contested causation, suggesting they would have been able to arrange Termination of Twin B earlier. For damages, the appellants suggested that general damages should have been awarded and that economic loss should be awarded past Saba’s 18th Birthday.

 

Breach of Duty

It was contested that the trial judge was mistaken for two reasons:

  1. In finding that 22nd of September was the earliest date when a duty to inform the parents of the medical condition TOF arose; and
  2. In rejecting that the cardiac condition did not feature in the breach debate.

In supporting these grounds of appeal the appellant parents suggested two breaches of duty:

  • There was a Breach of duty from the 8th of August arising from failure to disclose to the parents (Appellants) the possibility of an absence of a ductus venosus (a medical condition that can lead to heart failure) which may have prompted selective termination of the child;
  • The date of the breach of duty by the Canberra Hospital for not disclosing TOF should be pushed back from 22nd September (Medical evidence from the primary judgement suggested that based on the medical issues at the time, this was the date that would have necessitated a discussion with the parents) to the 6th of September (after a High Risk Meeting by doctors at the Canberra Hospital not disclosed to the parents) This would have given the parents more time to potentially terminate or selectively terminate the pregnancy.

Regarding the 8th of August, the Appellant judge determined that even if Dr Robertson from Canberra Hospital disclosed the absence of a ductus venosus, the advice would have been to monitor the heart. If they had requested a termination, this would have been strongly discouraged and could not be performed in Australia. The specific dates would have added an additional barrier against termination. Further, the idea that the early disclosure would have primed the appellants is too speculative for a differing conclusion on causation.

Regarding the 5/6th of September argument, expert evidence presented to the primary judge supported the idea that reasonable professional diligence did not require immediate disclosure. Immediate disclosure was an option, while non-disclosure did not amount to a breach of duty.

Therefore, the court rejected the above argument and decided there was no error in adopting 22 September 2011 as the date where reasonable care required the disclosure of the possibility of a TOF.

 

Grounds of Appeal going to Causation

There were several grounds of appeal on the issue of causation. The appellant court determined a single ultimate question, namely:

  • Did the appellants discharge the burden of proof by, showing on the balance of probabilities, that Ms Nouri would have terminated the pregnancy?

Observing there were several grounds of contention, the question cannot be answered favourably towards the parents by demonstrating for each issue that it is more likely than not that they all would have been overcome. Rather, it needs to be shown collectively, it is more likely than not they all would have been overcome.

In conclusion, the appellant judge found no error in the conclusion reached by the primary judge. Further, it was acknowledged that although there were significant obstacles to termination, it was theoretically possible with effort and determination. However, these headwinds meant the balance of probabilities is not in favour of her having achieved that outcome.

 

Ground of Appeal Going to Damages

The court acknowledged the two grounds of appeal raised by the appellants. First, the finding that the plaintiffs were not entitled to an award for general damages and second the primary judge not awarding economic loss including the cost of raising Saba beyond 18.

These grounds for appeal raised two issues with the court. The first is whether the parents of a disabled child are entitled to general damages to compensate them for the burden of raising a child with disabilities. The second being whether the parents raising a disabled child are limited in the damages that may be recovered for negligence to the period up until their child turns 18 or for the continued period where they are likely to be caring for their child.

The judge acknowledge case law that had awarded damages, but stressed in Neville v Lam (No 3) [2014] NSWSC 607 that to make an award would be inconsistent with the majority of judges in Cattanach v Melchior [2003] HCA 38; 215 CLR 1.

Further, the court acknowledged that awarding of damages past 18 is an open consideration and is determined on basis of policy considerations

Upon acknowledging these grounds, the court acknowledged these issues would not be determinative in the case at hand, and therefore stopped short of a conclusion. This allows room for a future case in which these conclusions will affect the outcome of the case.

 

Orders

Ultimately, the court dismissed the appeal with costs.

 

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In order to protect a design overseas, an application for your design must be made in each country you desire protection.

Each country has different requirements with variations in laws, fees, procedures, and timing. These can seem a little overwhelming at first, but at Chamberlains, we can help you file an application in Australia and facilitating filing an application for your design overseas.

 

How do I file overseas?

A design can be protected overseas by filing a design application in each country you wish to seek protection. The application may be either a:

  1. Convention Application

A convention application is a design application based on a previously filed Australian application. A convention application is filed in each country you wish to seek protection within six months of the filing date of your Australian application.

  1. National Application

A national application is a design application that is not based on an Australian application. Rather, a new application is filed in the country you are interested in by a local associate and establishing a priority date. For Example, you may only be interested in selling and making your products in the United States and therefore only desire design protection in the United States.

When applying for designs overseas, it is important to consider what approach will best serve your business and intellectual property needs.

Speak to one of our friendly staff members at Chamberlains if you are seeking overseas design protection.

1. Ministerial order revises industry operating hours

1.1. The New South Wales Government has announced they will temporarily axe stamp duty on new homes under $800,000.00 in an attempt to encourage growth in the construction industry and boost the economy broadly.

1.2. The changes implemented increase the threshold for stamp duty risen from the current cap of $650,000.00, and will only apply to new built homes and vacant lots

1.3. The move is predicted to see thousands of new home buyers save tens of thousands of dollars on new residential builds, and boost residential housing construction across New South Wales broadly.

1.4. Homes purchased at the median Sydney house price of a little over $1.1M attract nearly $50,000.00 in stamp duty. The Berejiklian Government’s move will likely save prospective buyers between $30,000.00 and $40,000.00.

1.5. The first homeowner grant will also continue to apply, which entitles homeowners purchasing their first property to $10,000.00 for homes worth not more than $600,000.00, or those constructing a new dwelling on land worth no more than $750,000.00.

1.6. The scheme will commence on 1 August 2020, and be in place for 12 months.

 

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What makes insolvency difficult to identify?

Often, it is difficult to determine whether a company is insolvent or is at risk of becoming insolvent. The case of ASIC v Plymin, Elliott & Harrison [2003] VSC 123 assists in determining the commonly seen key indicators that a company is insolvent, or is on the road to corporate insolvency.

The indicators of insolvency may be used not only to demonstrate insolvency after the fact, but also can assist as guides for companies to take early action. Improving company finances and operations can also help to prevent more serious consequences for directors which can arise in a liquidation scenario, such as insolvent trading and breaches of director’s duties.

What are the key indicators of insolvency?

ASIC v Plymin included the following key indicators of insolvency:

  • Continuing losses.
  • Overdue Commonwealth and State taxes.
  • Liquidity ratios below 1.
  • Poor relationship with present Bank, including inability to borrow further funds.
  • No access to alternative finance.
  • Inability to raise further equity capital.
  • Suppliers placing the company on COD, or otherwise demanding special payments before resuming supply.
  • Creditors unpaid outside trading terms.
  • Issuing of post-dated cheques.
  • Dishonoured cheques.
  • Special arrangements with selected creditors.
  • Solicitors’ letters, summons[es], judgments or warrants issued against the company.
  • Payments to creditors of rounded sums which are not reconcilable to specific invoices.
  • Inability to produce timely and accurate financial information to display the company’s trading performance and financial position, and make reliable forecasts.

How should companies use insolvency indicators?

A company should use the abovementioned indicators to monitor its performance and to determine whether or not urgent action must be taken to avoid insolvency. If insolvency is suspected, expert advice should be sought urgently on the options available in order to deal with the company’s financial issues and to safeguard against the consequences of a forced winding up.

A Divorce is a court order which terminates a marriage. To apply for a Divorce, you must first ensure that your their marriage is legal. The Marriage Act 1962, sets out a number of formalities and requirements for a marriage. Beyond the formal requirements during the ceremony, the Act requires that:

  1. neither party is lawfully married to another;
  2. the party’s consent to the marriage is real; and
  3. that the parties are of a marriageable age.

Generally, Divorce proceedings occur in the Federal Circuit Court of Australia, at a registry which is most convenient for both parties.

When making an order for a Divorce the courts are required to confirm or consider a number of factors as set out in the Family Law Act 1975.This includes:

  1. Existence of a Valid Marriage – A Marriage Certificate will be required and if your certificate is not in English, a Translation will be required.
  2. Domicile – s39(3) of the Act requires that either party to the marriage is an Australian citizen, is domiciled in Australia or is ordinarily a resident in Australia and has been a resident for one 1 year.
  3. Ground – Australia is a ‘no fault’ jurisdiction in relation to Divorce. There is one ground for Divorce and that is found in S48(1) of the Act, being that the marriage must have ‘broken down irretrievably.’ This is evidenced by twelve (12) months separation. Parties are not always required to separate physically to constitute a marriage being ‘broken down’ (s49(2)), however you may be required to provide additional evidence in support of the separation.
  4. Children – The Court must be satisfied that there are proper arrangements in place for any children of the marriage under the age of eighteen. If this is not the case, the Court can, with reference to section S55A(1)(b)(ii) decide that the Divorce should take effect even though it is not satisfied that there are such arrangements in place.
  5. Service – The application for Divorce must be personally served on the other party unless the Court Orders otherwise.

The Family Law Team at Chamberlains Law Firm is able to assist you with obtaining a Divorce. Please reach out to familylaw@chamberains.com.au if you would like information about our Team and fixed fee options for Divorce Applications.

We are often asked why the ‘Notice of Risk’ form is required to be filed when neither party is alleging risk or family violence in parenting matters.

Pursuant to s68N of the Family Law Act, the Court must aim to ensure that orders, injunctions and arrangements made, do not expose parties and children to family violence and that they are in the best interests of children.

In 2012, the Family Law Legislation Amendment (Family Violence and Other Measures) Act 2011 (Cth) commenced. This legislation expanded the definition of family violence in the Family Law Act. The Notice of Risk became a mandatory form used by any person who files an Application or Response seeking parenting orders after 12 January 2015 to combat the under reporting of family violence in family law matters.

If no issues of risk are identified on the form, the Court has a record of the position of each party in relation to allegations of child abuse or family violence from the commencement of the proceedings. If a notice is filed raising risk issues, the Registry Manager must, as soon as practical, notify a prescribed child welfare authority under section 67Z of the Family Law Act 1975 of the matters alleged.

If a party to family law parenting proceedings becomes aware of new facts or circumstances in relation to risk, abuse or family violence, they need to file a new Notice of Risk outlining these changes in addition to an Affidavit stating the evidence relied upon to support the allegations. This requirement assists with targeted intervention in matters where these issues are live.