An easier and clearer Personal Property Securities Act? The Government outlines proposed changes
On 22 September 2023 the Commonwealth government released the Personal Property Securities Amendment Bill 2023 and amending regulations for public consultation until 17 November 2023. The aim is intended to simplify the use of the law, in particular the registration process, and clarify its application, especially around enforcement priorities.
Diplomatic Immunity not available to former Indian High Commissioner to Australia for breaches of the Fair Work Act
In an interesting decision traversing both industrial relations and public international law, the Federal Court has found that the former Indian High Commissioner to Australia committed significant breaches of the Fair Work Act between September 2015 and May 2016.
Disputed Debts with the ATO – teamwork makes the dream work?
Sladen Legal’s Tax Practice Recognised In Doyles Guide Victoria 2023
Bowerman: an unusual case that may have unusual implications
AWE v Clough: The continuing clarification of what constitutes a personal property security interest and the requirements for rectification of out of time registrations
Baullo – Forgiveness of beneficiary loans trigger land transfer (stamp) duty for a distribution of a property from a trust
It has been a long held view of the State Revenue Office (SRO) that if beneficiary loans are forgiven in connection with a distribution of real estate from a discretionary trust to a beneficiary, then the duty exemption in section 36A of the Duties Act 2000 (Vic) will not apply and the transfer will trigger land transfer (stamp) duty.
Trust Law Principles And Challenging BDBNs
Another day another Victorian tax, prohibition against adjusting land tax and other (nasty) changes
Without consultation, the Victorian Government has introduced the State Taxation Acts and Other Acts Amendment Bill 2023 (Bill) which will make a number of significant changes.
Who gets it? Priorities under the PPSA: The case of Resilient v Spitfire Corp Ltd (in liq)1
Draft legislation released for “Div 296 tax” – an additional 15% tax on $3M+ super balances (including unrealised gains)
Further to previous announcements, Treasury has released draft legislation for the additional 15% tax on $3M+ balances. While the measure is called the “Better Targeted Superannuation Concessions”, the tax itself is destined to be known as the (uninspiring name of) “Div 296 tax”.
Sladen Snippet – Loans in breach of SIS Act unenforceable – End of the world or confined to its facts?
In Colaciello Super Pty Ltd v Christensen [2023] VSC 568 the Supreme Court of Victoria held that a loan in breach of sections 62 and 65 of the Superannuation Industry (Supervision) Act 1993 (SIS Act) was unenforceable under the defence of illegality.
UPEs as loans - end of an era?
Expansion of the Sick Pay Guarantee Scheme
The Victorian Government’s Sick Pay Guarantee Scheme (the Scheme) commenced operation in Victoria on 14 March 2022. Less than a year after its commencement, attention turned to whether the Scheme’s operation would be expanded as the first year was under budget and uptake by eligible employees was below anticipated levels (see previous article here).
When does a lease and bailment constitute a PPS Lease?
Court finds director personally liable for combustible cladding costs
On 24 August 2023, the County Court handed down its decision in Owners Corporation I Plan No PS 707553K and Ors v Shangri-La Construction Pty Ltd (ACN 130 534 244) and Anor [2023] VCC 1473.
This is the first successful compensation claim by the State of Victoria directly against a director of a building company for the rectification costs incurred in removing combustible cladding under the amendments to the Building Act 1993 (Cth).
Building Act 1993 (Vic) amendments
In 2019, the Victorian Government established Cladding Safey Victoria (CSV) as a commitment to oversee the removal of combustible cladding from apartment buildings and publicly owned buildings in Victoria.
Subsequently, a number of amendments were made to the Building Act 1993 (Vic) (Act) and reflected in section 137F of the Act such that:
where CSV pays for cladding rectification work from 19 November 2020, the Crown is subrogated all the rights and remedies the owner has against any person in relation to the installation or use of any non-compliant or non-conforming cladding; and
the Crown can enforce these rights against an officer of an entity who, at the time the cladding was installed, had either knowledge of the cladding used, or provided consent for its use.
Background
In 2015, Shangri-La Construction Pty Ltd (Shangri-La), completed the construction of an apartment complex in Hawthorn.
All consultants involved in the project, including the appointed fire engineer, agreed that it would be sufficient and compliant to install the expanded polystyrene (EPS) product, known as RMAX Orange Board (RMAX) on the building. The building surveyor subsequently issued a building permit in December 2014.
Post construction and following the Lacrosse and Grenfell fires, it was largely accepted by the industry that EPS was non-compliant and combustible.
In 2019, the owners corporation commenced proceedings in VCAT against Shangri-La for various defects and non-compliant cladding. However, Shangri-La went into liquidation and the claims against it were stayed.
The active parties in this proceeding were the State of Victoria and the director of Shangri-La, Mr Naqebullah.
Court’s findings
The State of Victoria sought orders that Mr Naqebullah, as an officer of Shangri-La, be made personally responsible for the rectification costs incurred by CSV.
Under section 137F of the Act, a defence to an enforcement action can be established if it is proven that an act or omission by an entity occurred without the knowledge or consent of an officer of the entity.
At the hearing:
Mr Naqebullah argued that he lacked knowledge that the RMAX product used was non-compliant and that the issues were beyond his knowledge and expertise, and he should therefore not be liable.
The court accepted Mr Naqebullah’s evidence that he was unaware that EPS was inappropriate to be used as external cladding, and only became aware of its problematic nature in 2016 or 2017.
In interpreting section 137F of the Act, the Court adopted a strict approach and considered the absence of further proof that Mr Naqebullah knew that EPS was problematic and non-compliant is not sufficient to negate that he had knowledge of EPS being used as external cladding on the building.
Mr Naqebullah’s “knowledge”, namely that EPS was used, is sufficient to exclude him from the benefit of the defence.
Mr Neqebullah was ordered to personally pay $1.2 million to the State in compensation.
Implications
Subject to any appeal, the outcome of this case may result in the State further pursuing directors and officers of building companies for compensation for expenses incurred by CSV in rectifying combustible cladding.
Key takeaways
If an officer of a building company possesses knowledge or consents to the cladding product used in a project (regardless of whether they knew the product is non-compliant)they may be found to be personally liable if the State enforces its rights against them.
Alicia Hill
Principal
T: +61 3 9611 0180 | M: +61 484 313 865
E: ahill@sladen.com.au
Ben Wyatt
Principal Lawyer
T: +61 3 9611 0115 | M: +61 409 173 928
E: bwyatt@sladen.com.au
Kelvin Tay
Senior Associate
T: +61 3 9611 0148 | M: +61 413 557 157
E: ktay@sladen.com.au
Objective of Superannuation Bill – waste of time or trojan horse?
Is a VSBC certificate valid if there has been no retail lease mediation?
A recent Supreme Court decision has made it clear that there is nothing in the Retail Leases Act that restricts the issue of a certificate by the VSBC until after a mediation has been conducted and the absence of a mediation does not invalidate a certificate. The VSBC can form a view that a mediation is unlikely to resolve a dispute based on the refusal of one party to participate in a proposed mediation and issue a valid certificate so that an aggrieved party can commence proceedings in VCAT.
Sladen Legal’s Succession Planning Lawyers Recognised In Doyles Guide Victoria 2023
Doyle’s Guide is a comprehensive and independent directory which showcases Australia’s best firms and lawyers. The 2023 listing of leading Victorian Wills, Estates & Succession Planning Law Firms details law firms practising within the areas of Wills, Estates and Succession Planning matters in the Victorian legal market who have been identified by their peers for their expertise and abilities in these areas.