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

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  

CONTRACT NEGOTIATION – TACTICS & STRATEGY

Your approach to the contract negotiation process will depend upon a range of variables, some of which will be beyond your control.

The most obvious example of this is the attitude of the buyer who may employ a range of different approaches, and will have priorities and processes which will probably only be partially known to you.

Obviously, the buyer’s attitude approach and priorities, will have a major effect on how the negotiation proceeds, how far it gets, which contract variables are altered or conceded, and ultimately whether you get a deal at all.

There are several important things to remember when stepping into this process:-

1.             BEGIN WITH THE END IN MIND

As the seller, by setting the initial parameters for negotiation, you have some control over where the process begins.  Your broker (if you have chosen the broker well), should have been conditioning the buyer, and attempting to set expectations, throughout the purchase introduction process.  The broker (and you if there have been face to face negotiations), should have given a fairly clear indication of the variables in the contract which are important and/or non negotiable.  Having said that, most things are negotiable to some degree. Your initial approach and parameters, should be set up to allow some room for negotiation by the buyer, and give a reasonable expectation to the buyer of what you will and won’t accept, whilst at the same time being somewhere near reasonable.

You and your broker should have discussed this, and have a strategy in place.

2.             DECIDE WHAT’S IMPORTANT

It is exceedingly rare for the buyer of anything, let alone a business, to step up and immediately agree to every variable of the deal.  It is important for you to decide which variables are important and which ones are not.

There are essentially three categories and variables for you to consider:-

a.             Central and not negotiable

b.             Central and negotiable

c.             Throwaways

a.         Central and not negotiable

Examples of this category might be an absolute requirement for a guarantee from a purchase of company, or the requirement for the buyer to obtain a new Lease rather than an assignment of the existing Lease. The purchase of a business with the assignment of an existing Lease renders you liable for rent to the landlord, for the balance of the rental term.   If this is a significant amount and you have concerns about this ongoing liability, a requirement for a new Lease will rid you of this liability.  Likewise, where you have a purchaser that is a company, and you are uncertain as to its asset base or solvency, a guarantee from the directors (and, these days, the spouse(s) of the director(s)), is really quite essential.

b.         Central but negotiable

The purchase price is the most obvious example of this situation.  The amount you receive as the sum of your business, it’s critical for your future, but you can certainly expect the buyer to want to reduce the price. It is quite common for contracts to be received which have several prices crossed out, one after the other, before a final figure was reached.

c.         Throwaways

A good example of this is the restraint clause.

The buyer might well be extremely keen to see you out of the industry for a significant period of time.  If you are leaving the industry entirely, and have no plans to return, this is something you might throw away, in exchange for, for example, keeping the purchase price higher.  All this will need to be negotiated during the contract completion phase.

3.             THE ROLE OF THE BROKER

The broker will earn significant permission on the sale of your business. The brokers role is to find and introduce a buyer who is ready willing and able to complete.

The broker should also be assisting you with:-

a.             Conditioning the buyer to the important parameters of the deal, upon which you will not compromise;

b.             Relaying important information to you about the buyer’s priorities and attitudes;

c.             Manoeuvring the buyer towards a contract which best suits you.

Many people, buyers particularly, make the mistake of assuming or believing that the broker is an unbiased mediator between the parties.  This is untrue.

The broker quite literally and legitimately, is your agent, and, if he or she wants a commission, must act in you interests to get a contract together.

The other side of this coin however, is that the broker cannot act in a false or misleading way.  The broker is your agent and you will be responsible for any improper conduct undertaken on your behalf.  It is not a sustainable approach from either you or the agent, to attempt to hoodwink the buyer into buying a business, as, at some stage either before or after settlement, the true facts will come to light and you will be held accountable for the acts of your agent.

Having said all of this, an enthusiastic and skilled broker can create appropriate deals where each party “wins”, where, in many other circumstances, a deal will not materialise.

The broker is also a worthwhile circuit breaker between you and the buyer.  It is very often extremely worthwhile to be able to deliver information through a third party, and avoid directly having to answer questions on the spot.  Having the broker relay information, allows the possibility of time for thinking, and ensures the provision of appropriate information.

The broker is also (or should be), a skilled negotiator, focused solely on the sale deal.  Remember, in these circumstances, you will still have the business to run, and this must remain a focus.

4.             NEGOTIATION STYLES

The character, personality and approach of the buyer is a major variable in the contract negotiation process.

There is a large number of types of approach and list below is by no means exhaustive.

Some of the styles of negotiation which are often seen are as follows:-

1)     Direct clear and simple

2)     “Soviet style”

3)     “Chinese Style”

4)     Pushy

5)     Round and round

1)         Simple Clear and Direct

This is the buyer who displays a “what you see is what you get” approach.  The buyer presents a contract with variables that are somewhere within the bounds of what you consider to be a deal, and is willing to respond to a counter offer that you might make.  Responses to your proposals are returned in a timely way and the negotiation proceeds at a reasonable pace.  These are the easiest buyers to deal with.

2)         Soviet Style

Soviet style negotiation (named for the cold war negotiating style brought to prominence in 60’s and 70’s), opens with assumingly impossibly low offer and then proceeds at snails pace with tiny concessions away form that original position.

An example of this approach would be that if you have indicated a purchase price of, say, 20 with an expectation that you might settle it around 16 or 17, the Soviet style negotiator’s first offer will be 4, and might then proceed very slowly to 5 or 6.

In the face of an extremely low offer, particularly initially, the best options are:-

a)     withdraw from the negotiations and brand the offer ridiculous;

b)     Refuse to make a counter offer until the serious proposal is put forward

c)      Feign insult and go silent.

3)         Chinese Style

This style of negotiation, much applied in South East Asia, involves running a negotiation over long time frames.  Each issue dealt with one by one, and, similar to Soviet Style, concessions are small and well spaced apart.  This style of negotiator is looking for somebody who is impatient or desperate, and will attempt to make a “big concession” to bring the matter to a close.  Patience is the key with this style of negotiation and you must walk the line between keeping the matter going at a reasonable speed, and, at the other extreme, appearing needy or anxious.

The best response to this style of approach is to attempt to meet the size of the concessions being made, with the size of your own concessions, and try to be patient.  Making large concessions to attempt to prompt similar large concessions from the buyer, will not work with this type of buyer.  This may be frustrating but trying to force the pace will be interpreted as desperation, and you may well end up with deal parameters well below your expectations.

4)         Silent approach –

Some buyers will make an offer and then go silent

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  

CAR ACCIDENT – WHAT TO DO/ SAY AT THE SIDE OF THE ROAD?

1.          *  Move the vehicle out of the traffic.

2.          *   Slow down, take your time, secure the handbrake and put the car in gear.

3.         *     Safely get out of the car.

4.           *     Make an assessment of the attitude of the other driver.  If that attitude is aggressive,  retreat. 

5.        *       Do not, even if the accident is completely your fault, admit liability.  In some cases this can void your insurance. 

6.         *      Record details of the other driver and any passengers or witnesses – name, address, phone number, registration, make, model, driver’s licence number, name of insurer and motor vehicle owner.

7.           *     Make a note of any statements made, particularly statements referring to liability for the accident.  A contemporaneous note made at the roadside or shortly after, is very powerful if there is a dispute later.

8.           *      Report to a doctor if you have even the slightest symptoms of injury or illness.

9.           *      As soon as practicable, sit down and write a summary of what happened.

These actions, taken in a timely manner, can make all the difference to any claim made by or against you.

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

WHAT TO LOOK FOR IN A SOLICITOR- CONVEYANCING

Costs

Costs of conveyancing vary wildly from firm to firm.  Be assured that you get what you pay for. 

Ask questions about seniority of the people who will be acting on your file and what searches will be done. 

Ask whether you will get a copy of the searches and an explanation of the search results. 

Ask whether perusal of your mortgage documents from your bank is included in the conveyancing price. 

Ask whether unqualified staff or junior staff will be acting on your conveyance. 

Ask about the systems and procedures in place to ensure that nothing is missed on your file.

At Bennett Carroll Solicitors, you get more than you pay for.  Senior people, search results explained in an all inclusive price.  No junior staff, no unqualified staff, and a complete management system to ensure nothing is missed on your file.

Accessibility

Over 70% of complaints to the professional body governing Lawyers relate to inability to get a Lawyer on the phone or to get that Lawyer to return telephone calls. 

Ask whether the firm has a policy on accessibility and returning telephone calls when you have a question you want answered quickly.

At Bennett Carroll, we answer your questions and your calls.

Provision of information

Ensure that you are happy that you are going to receive up to date information as your matter progresses. 

Ask if there is a policy regarding copies of correspondence in and out being sent to you. 

At Bennett Carroll Solicitors, providing you with information and copies of correspondence is automatic.  You do not have to chase us for information.

The comfort factor

Make an assessment when speaking to each law firm of whether they have an approach which makes you comfortable.  Are you going to be able to work with these people?

At Bennett Carroll Solicitors, we are intent on taking away the stress and working closely with you to ensure complete satisfaction.

A language you can understand

Look at the style of communication used in these initial telephone calls.  Do they respond to your questions using your kind of language or is it “Legal Ease”?

At Bennett Carroll Solicitors, we talk commonsense no frills English that you can understand.

BELLIGERENCE VERSUS CO-OPERATION

Ask about their approach to resolving disputes over your matter.  Some firms will automatically take a belligerent, aggressive and obstructive attitude.  Others, whilst protecting your rights, will work in a co-operative manner to try and ensure that your Contract settles. 

At Bennett Carroll Solicitors, we protect your rights and work in a co-operative manner to ensure settlement at all times.

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