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Is it a gift or a loan? How gifts and loans are treated in family law matters

Posted on , updated on by Sharon Knight

It is not uncommon for parents of a child to give their child a gift of money to purchase a property with their spouse/de facto partner, only to have their children separate after the purchase of the property.

How does the Family Court/Federal Circuit Court treat gifts and loans in family law matters when the parties have separated?

Generally, it depends on a number of factors such as:

  1. Was the gift made to both parties or to one person? If it was made to one person then it is likely that the gift would be considered a contribution on the part of that person to the relationship;
  2. How long ago was the gift given? The older the gift, the less weight is attributed to it in assessing contributions of the parties to the asset pool;
  3. Is there evidence of an intention for what the gift is for? It is recommended that along with the gift there is a letter or a note in writing stating what the gift should be used for. Keep a copy of it for your records;Is it a loan instead of a gift?
  4. If it is a loan which is repayable from the child to the parent, it is advisable to have a loan agreement or a financial agreement between the parents, the child and their spouse/de facto partner, stating the terms of what the repayments would be, when the final payment should be etc.

Some spouses/de facto partners have claimed that monies provided to them by their parents are a loan and therefore it is a liability instead of an asset. Generally these “loans” are repayable “on call”, but in reality, the parents would not expect repayment of these “loans” from their children.

The Court may not accept that a “loan” is a genuine loan unless it is properly documented and there is some evidence of repayment and security for the loan.

Speak with one of our lawyers today to enquire about your options on how to protect your gifts to your children!

This article provides information that is general in nature and is not a substitute for legal advice.

Statutory Demands: Another way to collect your debts!

Posted on , updated on by snsadmin

Not many people are aware of what a Statutory Demand is and how it can help them.

If your debtor is a company and you have supplied goods to them, you can issue the debtor with a Statutory Demand.

Instead of issuing proceedings in Court, you can serve a Statutory Demand on the debtor if:

The debt is OVER AUD$2,000; and
There is NO dispute over the amount owing and the supply of goods or services.
If you do serve a Statutory Demand, the debtor has 21 days to pay the debt. If the debtor disputes the Statutory Demand, it then can to apply to the Supreme Court to have the Statutory Demand set aside within that 21 day period.

If they do neither of the above – then there is a presumption that the company is insolvent – which places you into a position to wind them up (or put them into liquidation).

If the debtor wants to stay in business and there is no basis upon which it can apply to the Supreme Court to have the Statutory Demand set aside, this process is significantly cheaper than issuing a proceeding in Court.

How can we help?

After being provided with copies of the invoices, we can draft a Statutory Demand for you. You will have to swear on an affidavit to say the goods and the invoice(s) have been delivered and the money is still outstanding and there is no dispute as to the amount owed.

The first step is easy, call us on 9555-7233 or email us and we will begin the process for you.

This article provides information that is general in nature and is not a substitute for legal advice.

Expert evidence – in building disputes

Posted on , updated on by snsadmin
The following is the link to the VCAT Practice Note which sets out the requirements for expert evidence.
file:///C:/Users/RJH/Downloads/practice_note_vcat_2_expert_evidence-effective_1_october_2014_0.pdf
We recommend that every Owner undertaking building works (unless they are a qualified experienced builder or similar) engage someone with experience to act as “certifier” or “building consultant” to assure them, the Owner, that their builder’s work is in accordance with the contract, the plans and the specifications and the prior agreed and signed variations (“the contract documents”).
Many experienced people sign contracts without actually reading them – after all the contract documents are “standard” contracts – and often a builder will say – it’s a “standard contract” to help the Owners decide to sign it.
If you are an owner and you suspect or you know your builder has not built the house in accordance with the contract, the plans and the specifications, or has made alterations without getting signed variations beforehand you need to obtain expert help so you know what to do next.  The first thing is to arrange a building consultant who is worth hiring and get a report that complies with the VCAT Practice Note.
Apart from the above, for the Owner there at least 3 reasons why you engage an expert to assist you in assessing the building works carried out by any builder.
Some of the larger building companies suggest that their owners engage a building consultant to assist the owner (its good marketing and it shows the builder has nothing to hide.)
First and in most cases, the most important thing is if you are not a builder you would not know whether or not the building works match the contract documents in all respects.  You can give a list, prepared by your building consultant to the builder after the first Progress Claim – if there are any items – and then you both need to determine what has to be done to reach that stage of the building works for which the Progress Payment has been claimed and you can get the building consultant back to cross-check the items are done.  But you need to be very careful selecting your building consultant.
IF YOU ARE A BUILDER – Why would a builder encourage an Owner to pay for an independent building consultant?  Answer – Because you want your owners to trust you and it takes the stress away from you, the builder, dealing with the owner in respect to any items that are not defective nor incomplete and it gives the owner the comfort of dealing with someone other than the Builder who knows about building and the owner has the comfort that their builder is a good builder and does the work properly in the first place or rectifies anything he has missed without any problem.  But you do need a sensible building consultant, not one that will pump up every basis for dispute by inflating problems and giving legal advice (see below).
Secondly, if the building works do not match the contract documents you want to know as soon as possible, before it’s too late and your building consultant’s report should be VCAT compliant, because you want to give the builder an itemised list of all items of either defective or incomplete work with the detailed specification for rectification and your building consultant’s calculation of how much it will cost you to rectify the item if you have to get someone else to rectify that item. (Which amount you might be entitled to deduct from the contract price or claim from the builder or the building warranty insurer (in specific circumstances).
Thirdly, if the builder does not rectify or complete as per the report you have an itemised list with a cost (owner’s loss and damage) and you can take that complaint to the Domestic Building Dispute Resolution Victoria (DBDRV) for adjudication and direction and if the complaint is too complex for DBDRV then when DBDRV will issue a Certificate for you to take your complaint to VCAT – you are ready – having paid for #1, only report which has all you need in it to substantiate your allegations (because it’s from a qualified experienced person who knows) and it has a proper amount (not inflated by quote or guess work) identifying the value of the owner’s claim.
The internet link for DBDRV is: https://www.dbdrv.vic.gov.au/dispute-resolution-process
No one should have to pay a building consultant that will not do his job.  In a recent report we were given by an owner the building consultant said
“The level of description and location of defects will reflect assumed builder’s skill. Thus for example a general comment “fixing is below acceptable standard because of uneven door margins and architrave quirks” will mean that the builder is required to examine find and rectify every door and architrave that is defective. It is not intended or necessary that a building expert guides builder to every individual defect. Or in the case of items not complying with regulations it is sufficient to point out nature of the defect and the builder can verify compliance requirements for himself.”   We added the underlining.
Had the builder done the work properly in the first place the owner would not have needed a building consultant who tells the owner to rely on the defaulting builder to fix all the faults even though the building consultant has not bothered to list them! The owner already knows the builder cannot be relied on to identify all the “items not complying with regulations” and therefore it is NOT “sufficient to point out nature of the defect and the builder can verify compliance requirements for himself”.
From our point of view the most important thing we can assess from a properly prepared report is – is it worth having a dispute over.

We can make this assessment when the report has been provided to the builder or the owner by someone of worthwhile reputation, qualification and experience as a building consultant who has appeared as an expert witness at VCAT – AND whose evidence is accepted as reasonable and will usually be accepted by VCAT whether it is the builder complaining about an owner or an owner complaining about a builder.  It becomes a cost –v- benefit analysis.

The question is: What are the legal costs of a dispute compared to the costs of rectification and/or completion of all items listed in a VCAT compliant report.  Would you better off paying to fix any items and avoid proceedings?
From the one report you have all of the above possible options and you need to know your options.  Contact us at admin@hls.net.au if you need to make an application to DBDRV or arrange for a building consultant.

 

This article provides information that is general in nature and is not a substitute for legal advice.

What are the challenges for a Builder?

Posted on , updated on by snsadmin
The biggest challenge for any builder, big or small is maintaining a proper record of the progress of the works. Paperwork!
The easiest way to maintain paperwork records is to include in the contract a clause that allows for the Contract to be varied as provided for in the Electronic Transactions (Victoria) Act 2000 (ETA).
This means you have to read the Contract and ensure that the “Notices” clause provides for variation to the Contract by electronic communication.
The ETA permits the creation (formation) and variation of contracts using electronic transmission.  It says – “any transaction in the nature of a contract, agreement or other arrangement” is a transaction for the purposes of the ETA.
Another method is the use of IPADs that are capable of accepting writing with a stylus and which can be signed once the agreement is recorded. (We used to tell people to write the agreement in their hardcopy diary and both sign and date it as a record of their agreement – a signed variation in writing.)
REMEMBER – if using emails in communications between Owner and Builder do not continue any exchange of emails for more than two (2) A4 pages because the cost of printing repetitious emails for litigation is enormous and for the moment it is still necessary to print an email in most cases to be able to show it to a witness in the witness box and/or the judge or other adjudicator.  This will change as electronic record systems develop to a stage where large volumes of documents can be scanned, sorted into relevant and irrelevant and produced page by page to witnesses and simultaneously to others, such as opposition barristers, parties and/or the judge or other adjudicator.  This is currently available in matters involving large amounts but not in smaller amounts because it is uneconomical.
 

Email us your challenges at admin@hls.net.au .

 

This article provides information that is general in nature and is not a substitute for legal advice.

What will you pay? Costs Charged to Clients in Litigation matters

Posted on , updated on by snsadmin

 

 

NOTE You should always check the links we have provided for the most current Court Scales. The Court Scales usually change each January and July
Objective:
It is always our objective to obtain the best possible result for our client at the least possible cost to the client.
What Amount?  How is it calculated?
1. Apart from hourly rates for the lawyers, based on their individual professional experience, Hassall’s Litigation Services (HLS) charge clients in accordance with the Court Scale applicable to the Court in which the litigation is being conducted. We usually charge in accordance with the County Court Scale, see: the County Court website Link to County Court Site and https://www.liv.asn.au/PDF/Practice-Resources/LIV-Legal-costing/2015-Supreme-Court-Scale.

1.1

 In most litigation it is impossible to give a fixed fee without extensive qualifications and limitations to arrive at the fixed fee making the scope of work narrow and inflexible.  Most cases evolve as the matter progresses and the parties choose an option from a variety of available options.  We never know exactly how another party will react to what we do – so we are always trying to second guess another party’s response to arrive at the fixed fee.  By the time we get most disputes the opportunity for rational discussion has passed.

1.2

 NOTE: Most Clients need a monthly payment plan or a secured loan to pay the costs of proceedings and a Trial if it occurs. Please discuss this with your solicitor after the Assessment*, Preliminary Advice* and Cross-Checking* has occurred – see below for these items.

 

2. Legal Costs

(i)

 The term legal costs is used to include the total charges of the solicitor for the legal services, this being the solicitor’s professional fees, together with all the disbursements, which are the additional fees the solicitor has incurred, with the client’s consent, in acting for the client.

(ii)

 The disbursements include the fees paid to the barrister/s, the fees paid to the expert/s fees, for example, the reports of the medical expert and hospital reports and the like and all other disbursements, which can range from the cost of recording the proceedings in court and typing the transcripts to the smaller sundry disbursements, the photocopying fees and postage.  The Goods and Services Tax is also included in the legal costs, charged by the solicitor.

(iii)

 We will not incur the responsibility for payment of any disbursement unless and until the client has complied with our request to pay the deposit for our services and provided us with clear funds to pay for any disbursement*

 

3. NON – Court Scale

3.1

 For non-litigious matters we charge in accordance with the Practitioner’s (i.e. the solicitor’s) Remuneration Order, (being an Order of a Court) see: https://www.liv.asn.au/getattachment/Professional-Practice/LIV-Cost-Lawyers/Scales-of-Costs/20160912_PDF_LP_PRO2017FinalSigned_FINAL.pdf.aspx

3.2

 We charge in accordance with the County Court Scale in most matters because we are providing Litigation Services i.e. advice about whether or not to go to litigation, or whether or not to defend a claim against you or what is the best way to obtain a resolution to a problem without all the costs of a Court or Tribunal proceeding or at least minimising the costs of the proposed proceedings which can be done by making an offer.

 

4. Assessment* – KNOW YOUR OPTIONS
What are – Hassall’s Litigation Services
The objective we have at first contact/interview is to assess whether or not our client has a claim or a defence to someone making a claim against our client. We provide the first hour of service for free (phone, email, or conference) assessing the client’s documents and statements. The assessment usually takes up to 2 hours so clients end up paying for 1 hour to get an idea of where they stand, what they can and cannot do.
5. Preliminary Advice*
After or during the assessment we provide a Preliminary Advice about likely success (or otherwise) and the rough guesstimate of the legal costs you might incur.
Cost The client can end up paying nothing or for 1 hour or up to about $2,500 to the end of the Preliminary Advice stage of our services.
6. Cross-Check*
Sometimes when issues are complex we need your agreement to have us engage a barrister for the purposes of cross-checking our assessment and advice. The barrister we engage will be experienced in the area of the dispute, e.g. building & construction, divorce & family law, Wills & probate, often it is not necessary or there is no time to be wasted getting a case up and running or defending a claim against our client, if the barrister says the case is weak.
Cost A Barrister’s fee for Cross-Checking our Assessment and Preliminary Advice depends on the years of experience and the area of law in which the barrister practices. For general litigation matters we can usually (as at April 2017) get a Cross-Checking Advice for between $1,500 and $2,500.

 

7. Example – Building & Construction:
In a recent (March 2016- April 2017) building and construction dispute we were provided with 2 storage boxes of documents (mainly emails) to read, sort and index for reference to a building consultant and barrister, in addition to the time spent with the builder getting the “story”.

We engaged and had a building consultant inspect the premises and provided a report which identified the value of the defects and incomplete works to compare what the owner was claiming.

We used this material to copy and refer a brief of documents, including the 2 original reports (and subsequent commentaries), emails and contract documents with copy letters by us to our client and the owners’ lawyer, to a barrister for the cross- checking of our Assessment and Preliminary Advice, where the owners were claiming $153,000 in defects and incomplete works and the builder was claiming $50,000 in unpaid claims and variations.

The total dispute may might about $200,000.

The barrister agreed that it would be cheaper, in the long run for our client, the builder, to settle with the owner by giving up the claim for $50,000 and avoiding litigation if possible because the cost of the litigation would exceed the builder’s claim of $50,000, especially with each day at VCAT costing between $5,000 and $7,500 per day, for solicitor, barrister, expert witness and hearing fees.

We had put a scope of work on the matter after getting the boxes of documents and before any other work, of about $17,000 for us plus the building consultant at about $5,000 and a barrister at $2,500. For the cost of about $25,000, the builder has an expert witness statement prepared and clear options on how to approach and probably resolve a dispute of $200,000.

To finalise the dispute would be the next scope of works.  The builder was made aware of his options so he could make an informed decision.

 

8. Costs Agreement and Disclosure

8.1

 In Victoria a solicitor is required by law to make full disclosure to a client

“when or as soon as practicable after instructions are initially given in a matter, provide the client with information disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs; (section 174(1)(a) of the Legal Profession Uniform Law 2014.”

The Legal Profession Uniform Law 2014 (“LPUL”) is the Act which regulates the relationship between the solicitor and the client in respect to costs.

8.2

 The LPUL and the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015, made under the LPUL govern disputes between lawyers and clients regarding costs.

8.3

 Should a Lawyer comply with s.174(1)(a), above then sections 99, 172 and 200 of the LPUL apply to the dispute.  Section 99 says in sub-section (5) – that an order specifying the amount payable as legal costs “is to be based on VCAT’s assessment of what is fair and reasonable in all the circumstances” and s.172 says that “in charging legal costs, charge costs that are no more than fair and reasonable in all the circumstances and that in particular are proportionately and reasonably incurred; and proportionate and reasonable in amount.”

8.4

 In our experience when costs disputes end up at the Legal Services Commission, VCAT or the Costs Court the appropriate Court Scale of costs is the reference for what is proportionately and reasonably incurred and proportionate and reasonable in amount, as required by the LPUL and that is why we use it as the basis of our costs disclosure and the invoices we send to our clients for our legal costs.

 

9. Don’t Hesitate – Litigate!
Part of the Assessment process is that, we work with the client to assess the options available to either make a claim or defend a claim and as we give Preliminary Advice and/or had our advice Cross-Checked, we have to consider the implications and risks associated with the obligations under the Civil Procedure Act 2010, which requires your solicitor to sign a Proper Basis Certificate and the client to sign an Overarching Obligations Certificate, which can be found at: http://www.supremecourt.vic.gov.au/home/forms+fees+and+services/forms/4a+overarching+obligations+certification. Please ensure that you read it carefully.
10. Once all the options and obligations are canvassed and satisfied we then provide our client with further Litigation Services that they might require.
11. Please contact us at admin@hls.net.au to obtain introductory advice.

 

This article provides information that is general in nature and is not a substitute for legal advice.