Transfer of title by a non-owner

The general rule is that a seller of goods cannot obtain a better title to such goods than that of the person from whom they were bought.

The Sale of Goods Act (SOGA) says, in section 24 Sale by person not the owner

“when goods are sold by a person who is not the owner thereof, and who does not sell them under the authority or with the consent of the owner, the buyer acquires no better title to the goods than the seller had, unless the owner of the goods is by the owner's conduct precluded from denying the seller's authority to sell.”

There are some notable exceptions to this rule;

Estoppel

“Where the owner of goods is by their conduct precluded from denying the seller’s authority to sell”, the buyer obtains good title.

An owner may be precluded from denying a seller’s authority by reason of their (deceitful, negligent, fraudulent) conduct which, expressly or impliedly, constitutes an unambiguous representation to the buyer that the seller has his authority to make the sale.

Sale under a voidable title

Where the seller of goods has a voidable title, for example a title gained through fraud, but the title has not been avoided at the time of the sale, the buyer acquires a good title to the goods provided they’re bought in good faith and without notice of the seller’s defect of title.

A person who obtains goods by way of fraud can pass good title because their title is voidable, not void. Therefore a person who obtains goods by way of fraud can pass a title to a bona fide recipient who acts in good faith and presents value for the property.  The original owner then only has rights against the fraudster and not the new “owner”.

Sale by a buyer in possession:

The bona fide purchaser of goods from a buyer who obtained possession of the goods with the consent of the original seller obtains a good title to them

The original seller must have been lawfully entitled to sell the goods.

A purchaser from a buyer in possession only acquires a good title under the statutory provision where the purchaser receives the goods in good faith and without notice of the rights of the original seller of the goods.

o          The onus of proving such is on the purchaser.

o          Notice may be actual or constructive.

o          It is insufficient for the original seller to contend that by making further inquiries the purchaser could have discovered that the buyer in possession of the goods who sold them had no right to do so, unless of course there was something obviously suspicious such as to put the purchaser on inquiry.

Where the goods being sold are a motor vehicle subject to a security interest, the legal position of the bona fide purchaser will depend on whether the security interest has been registered in the national Personal Property Securities Register established under the Personal Properties Securities Act 2009 (Cth).

For more information contact our office on 1300 334 566

Vicarious liability – ‘Am I liable for damage caused by my employees?’

The relevant question to ask is whether the worker is an employee or an independent contractor. This involves consideration of a range of factors.

Not every factor will be relevant in every case, nor will all be given the same weight.  Control (that the employer has over the worker) remains the central element. 

Other relevant factors include:

1. Mode of remuneration;

2. Provision and maintenance of equipment;

3. Obligation to work;

4. Hours of work;

5. Provision of holidays;

6. Deduction of income tax;

7. Delegation of work by the employee;

8. Whether uniform provided;

9. Provision of training.

An employer is liable for the conduct of an employee committed in the course of employment.

If the person who committed the liability was an independent contractor and not an employee, then the employer will not be vicariously liable for that conduct unless a non-delegable duty exists.

Independent contractors

The person who employs an independent contractor will only be liable for that contractor’s conduct if the employer owed a personal duty of care to the victim and that duty was a non-delegable duty of care. A non-delegable duty is a duty of care which the court regards as being unable to be discharged or ‘outsourced’.

Example: An employer company hires an independent contractor to operate a forklift, taking pallets from a warehouse to an awaiting truck. The forklift driver, desperate to get home decides to speed things up. Manoeuvring at twice the usual speed, the contractor hits an employee of the company. The employee may bring an action against;

• The independent contractor for negligent forklift operation,
• The employer company for negligently failing to provide a safe working environment, notwithstanding that the employer is seemingly faultless.

Where there is no non-delegable duty, an employer is not liable for the conduct of an independent contractor, even if that party was undertaking duties for the employer.

The words used to describe the relationship are not definitive of the legal nature of the relationship (just because they name themselves principal and contractor does not mean the law sees it as such), it is a matter for the courts to decide objectively.

Where an employee is lent by one employer to another employer, the company who retains control will be vicariously liable. It is not sufficient that the new employer is in control of payment, if all other forms of control remain with the original employer.

Was the conduct committed during the course of employment?

If it is established that the person who committed the act was an employee then the next question to be addressed is whether the act was committed in the course of his/her employment.

An act or omission is still considered to be in the course of employment if it is either a wrongful mode of committing an authorised act or a wrongful act actually authorised by the employer

If an employee takes an opportunity during employment to use time or resources for personal purposes the employer is not liable. This is referred to as the “frolic” doctrine   If it is argued that the employee was on a frolic, both the purpose and extent of the deviation must be considered (for example, where a driver deviated slightly off route to get refreshment from a hotel, the employer was still held liable). If the employee is engaged on employer business and on personal business at the same time, the employer may still be liable.

An express prohibition by the employer of a wrongful act will not necessarily be a defence to the employer if the employee’s act was still a mode of doing what the employee was employed to do.

An employer may be vicariously liable for both intentional and unintentional acts committed by an employee.

For a more thorough consideration of this complex area of law, or if you would like to know whether you are an employee or an independent contractor, make an appointment to speak with one of our experts about your position and rights.

Land estates and Waste

The relationship between life tenants and persons with a vested interest as remainder can be quite complex, so let’s use some examples.

Margaret is a retiree who lives alone on her beautiful estate. Being concerned with the preservation of her family, in creating her Will she leaves her home to her daughter Julia for life and then to her granddaughter Emily. The property has a standing of approximately 300 trees, each centuries old with an estimated value of $10,000 each.

After her mother passes away, Julia decides to harvest the trees. She calls in bulldozers and has the entire reserve knocked down to make way for a giant swimming pool and tennis court. The value of the land falls greatly.

Given that Emily possesses a future interest in the estate, it may be possible for her to claim damages against her mother for this wanton act of waste.

Waste is any act which alters the nature of the land, whether for the better or for the worse. A tenant for life shall not commit voluntary waste. Voluntary waste is a positive act of injury to the property. For example:

•      pulling down or altering buildings,
•      opening a new pit or mine and
•      cutting timber

If the Will creating the life interest grants the interest “without impeachment of waste” or words to like effect, or the life tenant has a licence or other right to commit waste, then voluntary acts of waste which do not constitute equitable waste are permissible.

If the settlement or Will does not grant such a right and no right to commit waste has been granted to the life tenant, they will be liable in damages to the holder of the reversion or remainder interest. In this case, that person is Margaret’s granddaughter Emily.

To qualify Emily’s interest as a vested remainder and thereby give her access to a legal remedy, the following conditions must be satisfied;

1. 1.    The estate in remainder and the particular estate which precedes it must be created by the same instrument (the Will that gives Emily a future interest in the property must be the same Will which gives her mother the estate for life),
2.  The estate in remainder must become vested in possession immediately upon the termination of the prior estate (ie there must be no condition to be fulfilled before Emily can take the estate other than the termination of her mother’s interest),
3.  The person or persons who are to take the estate in remainder must be ascertained as at the date of the grant.

If something you have read here may apply to you or someone you know, make an appointment to speak with one of our experts.

New Federal Asbestos Legislation

If your workplace or commercial holdings were constructed prior to 31 December 2003, then the new federal asbestos laws will apply to you.

You will need a current Asbestos Register and current Management Plan to comply with legislation commencing 1 January 2012. You will also need to ensure your reviews are up to date.

If you do not have a current Asbestos Register or current Management Plan and have not had a review, Quality Building Management (QBM) can take steps to ensure you comply with legislation.

Bennett Carroll Solicitors have offices located in Brisbane and the Sunshine Coast

Freecall: 1300 334 566
Fax: (07) 3343 8664

Email: info@bcglaw.com.au

Website: www.bcglaw.com.au 

Transfer Documents

There's a small suite of documents and a clutch of processes that go with them, designed to transfer to the buyer the tangible and registrable assets that make up the business. In most cases it is the buyer's responsibility to create the documents that create these transfers, and you simply need to sign and return them.

You need to be aware however of the process.

Lease
In  some jurisdictions the Lease Transfer is made up of two documents; the Assignment of Lease itself, and a Deed of Covenant.

The Lease Assignment document (it may be called the Transfer or a Deed of Assignment depending upon the type of lease you hold), will be prepared by the buyer and sent to you to sign and return. That document effectively transfers any rights that you have in the Lease. You should not return it unless you receive a written undertaking from the solicitor to the buyer, that the document is not to be used pending settlement. If you do not receive this Undertaking, do not return the document. Do not accept this Undertaking from the buyer itself.An Undertaking from the solicitor is an enforceable undertaking able to be pursued both through the Courts and through the Solicitor's disciplinary body. An Undertaking from the buyer itself is worthless.

The Deed of Covenant is a document designed to create a direct link between the buyer and your landlord. It enables the landlord to sue and creates what is called "Privity of Contract". This document is prepared by the landlord's solicitor at your expense and is often done very slowly, and in fact may not be ready by settlement.

You should check as soon as possible on the cost of this document, as prices vary wildly. You do not have an opportunity to shop for prices, as the landlord will choose its own solicitor for it.

Your responsibility after the Contract is signed, (obligations vary slightly from Contract to Contract so check yours), is usually simply to take all reasonable steps to obtain the consent of the landlord to the Assignment. Chasing the documentation is the buyers responsibility.

Business Name, Website, Telephone and other services
Again it is up to the buyer to produce documentation for you to sign, but if you want to avoid ongoing responsibility for electricity, telephone, Internet and other services, it is important to take a direct hand in seeing that these services are cut off from the day after the settlement. This will take them out of your name. Remember, many of these services have security deposits, which should be adjusted off your final bill or returned to you.

Local Authority and State Government Licences
Most authorities maintain that these licenses cannot be "transferred" or "assigned", and have to be applied for freshly by the buyer.

Regardless of the wording used, the buyer will be responsible for obtaining licenses in its name for the continuation of the business.

One potential catch for a seller is where the Contract makes the purchase of the business subject to obtaining all of these licenses, and gives the buyer the opportunity to back out if those licenses are not obtained. It is implicit in that situation that the buyer will have to take all reasonable steps to secure that outcome.

Regardless, it will be important for you to be on top of the status regarding each of those licences, and in direct contact with the licencing authority to ensure that this is happening.

Requisitions on Licenses
Some of these licences have a requisitions regime.

Particularly in a food preparation business, the Local Authority License process often creates a situation where the local authority will indicate that the license can be assigned but only once several requisitions have been completed.

The Contract will usually specify but this is your responsibility, but sometimes will place monetary cap on the value of requisitions which with you have to comply after which it is the buyer's responsibility to pay. If you believe that requisitions are possibly or likely you should attempt to limit the monetary value of your contribution.

Bennett Carroll Solicitors have offices located in Brisbane and the Sunshine Coast

Freecall: 1300 334 566
Fax: (07) 3343 8664

Email: info@bcglaw.com.au

Website: www.bcglaw.com.au  

Personal Property Securities Register (PPSR)

This is a new Commonwealth law.  The commencement date is 30 January 2012

Þ           From this date Queensland's REVS (motor vehicle), Bills of Sale Register and Register of Cooperative Charges will be rolled into Commonwealth Register.  It will provide a one stop shop for all registered encumbrances over assets other than company charges and land.

Þ           Searching the Register (PPSR) requires either an account or can be accessed as a guest (pay as you go if guest user).

Þ           Search criteria will include grantor details, serial number of property (if applicable), and vehicles will be searchable by serial number

Þ           The law provides for penalties against misuse of information contained in PPSR

As a Buyer: -

Þ           This applies to personal property not including land or building or a fixture

Þ           Personal property includes cars and other vehicles, art, aircraft, intellectual property, contract rights, crops, livestock, machinery,

Þ           Search facility allows you to confirm any security interest in your proposed purchase to ensure no repossession by lender after purchase

As a Grantor (person granting the security over their property): -

Þ           The Grantor uses personal property to secure lending, business assets as security for lending (example given is that of fixed and floating charge), title retentions (leasehold rather than freehold), or leases personal property for extended periods of time (ie cars, equipment)

Þ           Grantor's details can be included in PPSR where no description can be provided for the personal property – organisations provide an identifier; individuals provide name and date of birth

Þ           If information listed in PPSR is incorrect, Grantor needs to contact Secured Party (Lender) to request amendment

Þ           Upon disposal of personal property, Grantor needs to contact Secured Party to obtain relevant discharge/release

As a Secured Party: -

Þ           A Secured Party has a secured interest in personal property of the Grantor such as fixed and floating charges, long term and finance leases, chattel mortgages (interest free purchases like TVs), title retentions, commercial consignment and factoring

Þ           The law has default and specific rules as to registering personal property with priority which take into consideration:

ü             control of personal property

ü             competition existing between security interest and statutory interest.

Bennett Carroll Solicitors have offices located in Brisbane and the Sunshine Coast

Freecall: 1300 334 566
Fax: (07) 3343 8664

Email: info@bcglaw.com.au

Website: www.bcglaw.com.au 

“Maintenance and Child Support Explained” Legal advice by Warren Tegg of Bennett Carroll Solicitors- Head of Family Law

http://www.youtube.com/watch?feature=player_embedded&v=-8rxJBwcMdQ.

Bennett Carroll Solicitors have offices located in Brisbane and the Sunshine Coast

Freecall: 1300 334 566
Fax: (07) 3343 8664

Email: info@bcglaw.com.au

Website: www.bcglaw.com.au  

Agents, their duties and secret commissions

When we hear the word agent our first thoughts are of real estate agents. However, an agent in a legal sense actually covers an expansive range of relationships between a person or company (an agent) and another (referred to as a principal) who has undertaken to serve their best interests.

Whether or not a relationship of agency exists is a question which the courts approach objectively[1]. There are many examples of established agency relationships. Here are a few;

·         Real estate agent and client

·         Solicitor and client

·         Employee and employer

·         Joint venturers (to each other)

·         The director of a company (to the company)

Scope of an agent’s duties

While the scope of the duties owed by an agent to their principal will vary depending on the type of agency, a fundamental duty of an agent is not to use their position to make a gain for themselves without the knowledge and assent of the principal[2].

An agent should consider if there is any personal interest in the matter which might conflict with the duty owed to the intended principal and, if so, he or she should decline to act as agent without the fully informed consent of the principal[3].

Profit from position and secret commissions

If an agent is aware of any circumstances which might influence their client’s decision to enter into a negotiation, and fails to disclose that information to their client, the commission may be forfeited[4].

If the agent does receive profit as a result of that non-disclosure, these profits are recoverable by the principal on learning the true facts[5].

Should an agent receive a secret commission or profit the principal may recover it as well as dismiss the agent[6].

Application to Real Estate

Let’s apply this to a real estate transaction, where agencies most commonly arise.

Perhaps you have heard of agents who desired to act for both a buyer and seller and to obtain commission from both. It is the duty of the agent to make full disclosure to both the buyer and seller of an intention to act for, and receive payment from, the other party. Both parties must be made fully aware of this intention and agree to the agent doing so[7]. In the event the agent does not tell both parties, or does not gain their consent, the commission will be lost.  These obligations apply in addition to any PAMDA or POA obligations.

---

[1] Garnac Grain Company Inc v HMF Faure & Fairclough Ltd

[2] Parker v McKenna

[3] Lintrose Nominees Pty Ltd v King

[4] Dargusch v Sherley Investments Pty Ltd

[5] Walden Properties Ltd v Beaver Properties Pty Ltd

[6] Fullwood v Hurley

[7] Fullwood v Hurley

“How to get started for Divorce Settlements” Legal Advice by Warren Tegg of Bennett Carroll Solicitors- Head of Family Law

http://www.youtube.com/watch?feature=player_embedded&v=cqROCZVWY9k

Bennett Carroll Solicitors have offices located in Brisbane and the Sunshine Coast

Freecall: 1300 334 566
Fax: (07) 3343 8664

Email: info@bcglaw.com.au

Website: www.bcglaw.com.au  

Have you had an employee take your business secrets elsewhere? Or perhaps you’re a frustrated employee who’s considering it? Consider this:

An action for breach of confidence has quite a wide scope. It may arise where an employee takes secrets from their boss to their competitor, or even where a partner in a married couple divulges secrets of their relationship. The basis for the action can come from a variety of legal realms, however the most common is through a provision in a contract of employment.

Elements

In order to maintain an action for breach of confidence, the person who brings the action must establish three elements;

1.     That the information has the necessary quality of confidence or secrecy;

2.     The information was imparted in circumstances importing an obligation of confidence;

3.     There was (or may be) an unauthorised use of the information.

Unless you are an expert, it can be quite a complex process to determine whether these elements are met. Most people will approach a lawyer after satisfying element three, however it is numbers one and two which create the most difficulty.

 Defences

If you are concerned because you may have disclosed confidential information, do not fret. There is a range of defences which may aid you. Defences to an action for breach of confidence include:

·         Consent of the confider

·         Disclosure for the purpose of complying with the law

·         Disclosure of a crime, wrong or misdeed

·         If disclosure is in the confidant’s interests

·         Disclosure in the public interest (for national security, public health, and things of this gravity)

Remedies

Remedies awarded in breach of confidence cases include:

·         Injunction to prevent either;

a)      the information being revealed in the first place, or

b)      further misuse of the information.

·         Monetary Remedies (either an account of profits or damages)

·         Formation of a constructive trust (where a defendant acquires some property by use of the confidential information, it may be held on trust for the plaintiff)

·         Orders for delivery-up and for destruction

If you are concerned that your confidential information is at risk, or if you are unsure what you should or shouldn’t tell your next employer about your current work, make an appointment to speak with us about your rights.