Civil Litigation & Trusts Disputes

Williams + Hughes Earns Recertification in Meritas, the Leading Global Alliance of Independent Business Law Firms

Williams + Hughes is pleased to announce that it has been awarded recertification in Meritas, a global alliance of independent business law firms. Williams + Hughes joined Meritas in 2014 and, as a condition of its membership, is required to successfully complete recertification every three years. 

Meritas is the only law firm alliance with an established and comprehensive means of monitoring the quality of its member firms, a process that saves clients’ time validating law firm credentials and experience. Meritas membership is selective and by invitation only. Firms are regularly assessed and recertified for the breadth of their practice expertise, client satisfaction and high standards of cybersecurity to keep legal information safe. Meritas’ extensive due diligence process ensures that only firms meeting the tenets of Meritas’ unique Quality Assurance Program are allowed to maintain membership. The measurement of the firm’s performance, based on input from clients, is reflected in a Satisfaction Index score, which is available online on the Meritas website.

“Our values of quality service and client satisfaction align with the Meritas mission to provide a safe and responsive global offering to clients,” said Damian Quail, Director. “We’ve successfully collaborated with colleagues in many jurisdictions around the world to solve client issues and help them seize opportunities outside of this market. We look forward to keeping those vital connections through membership in Meritas.”

The recertification process Williams + Hughes completed to maintain its membership status included exacting self-assessment, peer review by other law firms and client feedback.  

“Businesses trust the Meritas alliance of law firms for top-tier quality, convenience, consistency and value,” said Sona Pancholy, president of Meritas. “Williams + Hughes has demonstrated its commitment to world-class legal standards, and therefore has successfully earned its recertification in Meritas.”

For more information about our our membership in Meritas, please see here

About Meritas 

Meritas’ global alliance of independent, market-leading law firms provides borderless legal services to companies looking to effectively capture opportunities and solve issues anywhere in the world. Companies benefit from local knowledge, collective strength and new efficiencies when they work with Meritas law firms. The personal attention and care they experience is part of Meritas’ industry-first commitment to the utmost in quality of service and putting client priorities above all else. Founded in 1990, Meritas has member firms in 259 markets worldwide with more than 7,500 dedicated, collaborative lawyers. To locate a Meritas resource for a specific need or in a certain market, visit Meritas.org or call +1-612-339-8680

Meritas Welcomes DMAW Lawyers, Adelaide, to the Membership

Leading Adelaide commercial Firm, DMAW Lawyers has been selected to be South Australia’s representative firm for Meritas, the premier global alliance of independent law firms.

DMAW Lawyers will become an integral part of the Australia & New Zealand network of firms as well as the worldwide network of 191 law firms located across 96 countries.

This alliance will enhance DMAW Lawyers’ ability to support South Australian business interests both nationally and internationally.

DMAW’s Lawyer’s Managing Director, Mr Leo Walsh said “One of most attractive benefits of belonging to this network was the opportunity for our lawyers to participate in national and global conversations on business and legal issues. Not only does this expand our thinking, and add to our technical skills, but it help our lawyers build trusted, reliable relationships with lawyers in the regions that matter to our clients. Already we’ve participated in meetings with Insolvency experts across the country and with Senior Partners in Shanghai and Tokyo.”

Mr Mike Worsnop, Partner with Martelli McKegg in New Zealand and Co-Chair of Meritas ANZ: “We are delighted to have DMAW Lawyers join our group. Not only was their quality apparent but they’ve been very easy and responsive to deal with during our discussions.  They clearly demonstrated the type of service clients look for when using a firm in a different market.”

“DMAW Lawyers had to meet the rigorous requirements to become members of Meritas, the only law firm alliance with a Quality Assurance Program that ensures clients receive the same high-quality legal work and service from every Meritas firm.”

Meritas membership is extended by invitation only, and firms are regularly assessed for the breadth of their practice expertise and client satisfaction.

Ms Sona Pancholy, Meritas CEO: “In today’s environment having a commitment to a reliable network is more important than ever. Independent law firms, Corporate Counsel, Business Owners and their Commercial Advisors, all choose their portfolio of trusted legal relationships to match the issues and the markets they want to navigate. For 30 years, Meritas has cultivated a group of the best firms for this purpose.”

About DMAW Lawyers

DMAW Lawyers was established in Adelaide in 2002. The firm has ten Principals and a team of 50 staff. DMAW Lawyers focus on three areas of specialization being Corporate, Transactions, and Disputes for Business Clients.

Website: DMAW Lawyers

About Meritas

Founded in 1990, Meritas is the premier global alliance of independent law firms. As an invitation-only alliance, Meritas firms must adhere to uncompromising service standards to retain membership status. With 192 top-ranking law firms spanning 96 countries, Meritas delivers exceptional legal knowledge, personal attention and proven value to clients worldwide.  

Website:  Meritas 

In Australia and New Zealand, Meritas is represented by leading independent commercial law firms in each of these six major capital cities:

In Australia

Adelaide DMAW Lawyers

Brisbane Bennett & Philp

Melbourne Madgwicks Lawyers

Perth Williams+Hughes

Sydney Swaab  

In New Zealand

Auckland Martelli McKegg

COVID-19: Temporary relief for financially distressed individuals, companies and directors

The Australian Federal Government has announced temporary amendments to insolvency and bankruptcy laws, effective from 25 March 2020, to lessen the economic impacts of COVID-19 on individuals and businesses and to allow for business continuity. The legislation passed is called the Coronavirus Economic Response Package Omnibus Act 2020 (Cth) (the COVID-19 Legislation).

The new measures are intended to avoid unnecessary bankruptcies and insolvencies by providing:

• a safety net to help businesses to continue to operate during a temporary period of illiquidity, rather than entering voluntary administration or liquidation;  and
• a safety net to individuals to assist them with managing debt and avoiding bankruptcy.

The temporary amendments that will apply for 6 months from 25 March 2020 until 24 September 2020 include:

• increasing the threshold at which creditors can issue a statutory demand against companies from $2,000 to $20,000, and the time for responding to a statutory demand from 21 days to 6 months;
• relief for directors and holding companies from personal liability for new debts incurred during the period the company trades while insolvent (provided that the debt is incurred in the ordinary course of the company’s business);
• providing targeted relief for companies from provisions of the Corporations Act 2001 (Cth) (the Act) to deal with unforeseen events that arise as a result of the COVID-19 health crisis; and 
• a temporary increase in the threshold for a creditor to initiate bankruptcy proceedings from $5,000 to $20,000, and an increase in the time period for debtors to respond to a bankruptcy notice, as well as extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s position (both of which are extended from 21 days to 6 months).

Statutory Demands (companies)

A failure to respond to a statutory demand creates a presumption of insolvency under the Act, and the company may be placed into liquidation.  The Government has temporarily increased the timeframe for a company to respond to a statutory demand from 21 days to 6 months, thereby lessening the threat of actions that could push a business into insolvency.

The amendments will not prevent the right of creditors to enforce debts against companies or individuals through the courts.  However, creditors will not be able to rely upon a failure to pay to commence winding up proceedings until the expiration of the 6 month period, if the statutory demand is served on or after 25 March 2020. 

Insolvent Trading (companies)

The introduction of a new section 588GAAA into the Act provides temporary relief to directors from personal liability for insolvent trading in respect of debts that are incurred by their company if the debt is incurred:

• during the 6 month period from 25 March 2020;
• in the ordinary course of the company’s business;  and
• before any appointment of an administrator or liquidator over the company (during the 6 month period).

According to the Explanatory Memorandum to the COVID-19 Legislation, a director is taken to incur a debt in the “ordinary course of the company’s business” if it is necessary to facilitate the continuation of the business during the 6 month period.  This could include a director taking out a loan to move some of the business operations online or incurring the debt to pay employees during the COVID-19 pandemic.

While the new provision of the Act provides protection during the 6 month period, a person wishing to rely on the temporary safe harbour in a court proceeding in which unlawful insolvent trading is alleged will bear an evidential burden in relation to that matter.  This means producing evidence to support their reliance on the temporary safe harbour.   

A holding company may also rely on the temporary safe harbour provisions for insolvent trading by its subsidiary if it takes reasonable steps to ensure the temporary safe harbour applies to each of the directors of the subsidiary, and to the debt, and if the temporary safe harbour does in fact apply as a matter of law.  The holding company must establish this by producing evidence to support their reliance on the temporary safe harbour.

Bankruptcy Proceedings (Individuals)

To assist individuals, the Government has made a number of changes to the personal insolvency system regulated by the Bankruptcy Act 1966 (Cth). These include:

• the threshold for the minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor will temporarily increase from $5,000 to $20,000;
• the time a debtor has to respond to a bankruptcy notice is increased from 21 days to 6 months; and    
• the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition is extended from 21 days to 6 months.  

These temporary measures will apply for 6 months from 25 March 2020 until 24 September 2020.

Temporary Powers given to the Treasurer

The COVID-19 Legislation enables the Treasurer to provide short term regulatory relief to classes of persons that are unable to meet their obligations under the Act or the Corporations Regulations 2001 (Cth) by:

• ordering that specified classes of persons are exempt from specified obligations;  or
• modifying specific obligations under the Act to enable specified classes or persons to comply with their obligations during the COVID-19 crisis.

The Treasurer can exercise this power if they are satisfied that it would not be reasonable to expect the persons in the class to comply with provisions because of the impact of COVID-19, or the exemption or modification is otherwise necessary or appropriate in order to facilitate continuation of business in circumstances relating to COVID-19, or to mitigate the economic impact of COVID-19.

This is a temporary provision to facilitate the continuation of business during the coronavirus.

For specific legal advice regarding the new safe harbour provisions, including regarding issuing or responding to a demand to or from your creditors or debtors, please contact Leanne Allison or Cameron Sutton. 

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Covid 19- an overview of the JobKeeper wage subsidy scheme

The core component of the Federal Government’s business support package in response to the Covid-19 pandemic is the JobKeeper scheme. This scheme is intended to help employers retain employees on their books, with the objective of ensuring money continues to circulate in the economy during these challenging times.

The JobKeeper legislation was passed by the Federal Parliament on 8 April 2020.  Rules dealing with administering the scheme were made by the Treasurer on 9 April 2020.

The JobKeeper payment is, in a nutshell, a AUD$1,500 per fortnight per employee wage subsidy paid by the Federal Government to employers until 27 September 2020. 

The estimated cost of this measure is AUD $130 billion. The Government has stated that $1,500 per fortnight is the equivalent of about 70% of the median Australian wage and represents about 100% of the median Australian wage in some of the most heavily affected sectors, such as retail, hospitality and tourism.

The scheme operates via a reimbursement system. Participating employers make wages payments to their employees and are then reimbursed in arrears $1,500 by the Government per eligible employee per fortnight. The Government does not pay employees direct. The JobKeeper payment cannot be claimed in advance. The first payments to eligible employers will commence in the first week of May 2020.The first payment is for the fortnight of 30 March - 12 April 2020 i.e. the scheme commences from that date.

Employers who wish to participate in the scheme must register their interest through the Australian Taxation Office website here by 31 May  2020.

Key Eligibility Requirements

• The employer must be an "eligible employer"

The employer must pursue their objectives principally in Australia.

An employer is not eligible for the JobKeeper payment if any of the following apply:

• the Major Bank Levy was imposed on the employer or a member of its consolidated group for any quarter before 1 March 2020
• the entity is an Australian government agency (within the meaning of the Income Tax Assessment Act 1997)
• the entity is a local governing body i.e. a local government council
• the entity is wholly owned by an Australian government agency or local governing body
• the entity is a sovereign entity
• the entity is a company in liquidation
• the entity is an individual who has entered bankruptcy.

The effect of the second and third exceptions listed above is that employees of State and local Governments are excluded from benefiting from the JobKeeper scheme.

The scheme is not limited to companies. Partnerships, trusts, not for profit organisations, sole traders and other legal entities are eligible to participate in the scheme. Special rules apply to payments to business owners and directors. 

• Most employers will be eligible if their business turnover falls by 30% 

In order to be eligible for JobKeeper payments, the projected turnover of the employer's business must fall by 30% as compared to the same period last year. In order to register for the scheme, a business must self assess that it has had or will have the necessary decline in turnover.  

A 50% turnover decline is required for businesses with revenue of AUD$1 billion or more.

Charities need suffer only a 15% decline in order to be eligible.

The turnover calculation is based on GST turnover, even if the employer is not registered for GST. The ATO has released detailed rules about calculations that must be made, and what documents and supporting evidence is needed.

• Employees need to have been engaged by the employer as at 1 March 2020. This includes full-time and part-time employees. Casual employees are only eligible if they had been employed on a regular basis for at least 12 months prior to 1 March 2020.

Eligible employees must be currently employed by the employer for the fortnights it claims for (including those employees who are stood down or re-hired). The subsidy cannot be claimed for employees who left employment before 1 March 2020.

Employees are only eligible if they are older than 16 and were Australian residents on 1 March 2020.

Many employers in the "gig economy" who are casual employees - including in hospitality, food services, retail and tourism - will be unable to benefit from the scheme if they are "recent hires" i.e. have been employed as casuals for less than 12 months as at 30 March 2020. 

Key legal obligations for participating employers

• Each employee must be paid at least AUD $1,500 per fortnight before tax.

Each employee in respect of whom an employer receives a JobKeeper payment must be paid at least $1,500 per fortnight before tax by the employer. This is the case even if the employee would normally receive less than $1,500 per fortnight.  The employer cannot keep the difference between the JobKeeper subsidy and the employee's usual wages. In effect, the wages of employees who usually earn below $1,500 per fortnight are increased to $1,500. 

It can be seen that for employees who earn less than $1,500 per fortnight, their continued employment through to 27 September 2020 essentially comes at no cost to the employer.

If an employer does not continue to pay their employees for each pay period, they will cease to qualify for the JobKeeper payments. For the first two fortnights (30 March – 12 April, 13 April – 26 April) wages can be paid late, provided they are paid by the employer by the end of April 2020.

• The JobKeeper payment can only be received by one employer for an individual

Only one employer can claim the JobKeeper payment in respect of a person. Where a person works multiple jobs, a choice will need to be made as to which employer receives the subsidy. The employee makes the choice. An employer cannot claim the JobKeeper subsidy without an employee's consent.  

If an employee is a long-term casual and has other permanent employment, they must choose the permanent employer.

• An "one in, all in" principle applies

If an employer decides to participate in the JobKeeper scheme, it must nominate all of its eligible employees. The employer cannot choose to nominate only some eligible employees. However, individual eligible employees can choose not to participate.

• Tax must still be deducted on employee's wages

No deduction for JobKeeper payments received is made when calculating and deducting PAYG tax payments on employee's wages.

• Superannuation is not payable on "top up" payments 

New rules are being introduced by the Government with the intention to not require the superannuation guarantee to be paid on additional payments that are made to employees as a result of JobKeeper payments.

JobKeeper Enabling Directions

The JobKeeper scheme gives eligible employers the authority to make what are described as "JobKeeper Enabling Directions" in respect of eligible employees. These directions are designed to provide greater flexibiliity to employers to manage the hours, duties and location of their workforce in the face of the significant Covid-19 related challenges.

JobKeeper Enabling Directions available to eligible employers include: 

• standing down employees (including reducing days and hours)
• changing the duties performed by the employee
• changing the employee’s location of work.

If you need legal assistance in relation to the JobKeeper scheme, please contact Damian Quail in our office.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Need a new will ? Witnessing wills during Covid-19 in Western Australia

In Western Australia for a Will to be valid:

• the Will must be in writing
• the person making the Will must have "testamentary capacity"
• the Will must be signed by at least two witnesses in the presence of the person making the Will.

The last requirement may be difficult to satisfy during the Covid-19 emergency period, particularly in places where there are prohibitions on people leaving their homes i.e. lockdowns.

In some jurisdictions, emergency Regulations have been quickly introduced by Governments to get around the difficulty in achieving face to face witnessing. For more details of the approaches taken in New South Wales, Queensland and New Zealand, our associate firms Swaab, Bennett & Philp and Martelli McKegg have written interesting articles on the subject. Click on their names for more details.

There are no new emergency laws in Western Australia dealing with witnessing of Wills - yet- and so the third requirement still applies. Execution of a Will in Western Australia cannot be witnessed remotely e.g. via videoconference. Similarly, digital signing of a Will is unlikely to be legally effective, and is certainly not advisable.

However, the WA Attorney General the Hon John Quigley MLA has acknowledged the important work of the legal profession, saying in correspondence to the Law Society of Western Australia “I have no doubt that Law Society members are providing essential services to the community during this difficult time.” (more details are here). Further, the West Australian Government’s Prohibition on Regional Travel Directions provides that people performing an "essential service" includes those with specialist skills “required for industry or business continuity and maintenance of competitive operation, where the service is time-critical”.

Our view is that preparing and witnessing Wills is an essential, time critical service, particularly for those concerned about Covid-19. This means that you are able to meet with a solicitor in-person for the purposes of executing a Will. Moreover, in Western Australia strict lockdowns have not been implemented, and so attending your solicitor's office is generally not prohibited. 

Our Perth and Geraldton offices are open for business. Some of our staff are working remotely, and the remainder are working in our offices as usual.

We generally prefer videoconference meetings, for the moment, to take Will instructions. We can organise Skype, Zoom, Blue Jeans, Microsoft Teams, Facetime, Webex or other online meetings as needed. Please note that we cannot take instructions to prepare a Will from a person who is not the person making the Will (the testator), so we must be able to speak with them directly, and preferably alone. We must be able to satisfy ourselves that they are speaking without any pressure or undue influence from someone else. We must also satisfy ourselves that they have sufficient mental capacity to give us Will instructions.

For witnessing Wills, we will work with our clients to satisfy the legal requirement to witness signing of a Will. In this regard, we are complying with the Department of Health's recommended measures to reduce the risk of Covid-19 transmission. These guidelines are being regularly updated as the circumstances evolve, and include practising good hygiene and social distancing.

In some cases, these guidelines will prevent us from being able to witness execution of Wills. In other cases, we can arrange in person witnessing. It is not legally necessary that all signatories use the same pen. It is also not legally necessary that all signatories be physically close to each other - witnessing is valid provided all signatories can see each other sign.  

Of course, anyone required to socially isolate - including those diagnosed with COVID-19, awaiting test results for COVID-19, who have been in close contact with a confirmed case of COVID-19, or who have arrived in Australia after midnight on 15 March 2020 - will not be able to attend our office.

At the time of witnessing a Will, we always need to ensure that a person signing the Will understands what they are signing and are signing of their own free will. This is a legal requirement. 

If a Will cannot be witnessed in compliance with the above legal requirements, it may still be possible to establish the validity of the Will via a Court process.

For further information or to arrange a new Will please contact Michelle Hankey or Cassandra Bailey in our office.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Covid-19 relief for commercial tenants in Western Australia

The State and Commonwealth Governments are in the process of enacting legislation to provide relief to commercial tenants affected by Covid-19. 

The West Australian State Government has recently passed legislation that limits the ability of a landlord to take certain action against tenants under a "small commercial lease" during the "emergency period" (the Commercial Tenancies (COVID-19 Responses) Act 2020).

The emergency period roughly aligns with the Commonwealth Government's Jobkeeper payment period, being 30 March – 29 September 2020, unless another end date is specified. This new State legislation is not yet in force, but it should be very soon.

The relief provided by the new Act operates in favour of tenants under "small commercial leases". A small commercial lease means:

• a retail shop lease as defined in the Commercial Tenancy (Retail Shops) Agreements Act 1985
• a lease where the tenant is a small business as defined in the Small Business Development Corporation Act 1983
• a lease where the tenant is an incorporated association as defined in the Associations Incorporation Act 2015
• another type of lease as prescribed in Regulations to the new Act (yet to be determined). 

During the emergency period protections in the new Act include:

• A six-month moratorium on evictions due to non-payment of rent
• A freeze on rent increases
• A restriction on penalties for tenants who do not trade or reduce their trading hours
• A prohibition on landlords making a claim on any form of security (e.g. a bank guarantee or security deposit) for the performance of the tenant’s obligations under the lease
• A prohibition on landlords progressing action against a tenant for a breach that occurred after 30 March 2020, but before commencement of the new Act
• A resolution mechanism for disputes arising out of, or in relation to, the operation of the legislation or a proposed new Code of Conduct (see below), including a mechanism to protect landlords where tenants are refusing to pay rent despite the capacity to do so.

The West Australian Government will soon pass Regulations to operate in conjunction with the new Act. These Regulations will deal with specific points not set out in the Act. For example, the Regulations might exclude certain small businesses from the protection that is given by the Act.  

The Regulations will also set out a new Code of Conduct equivalent to the National Cabinet Mandatory Code of Conduct  – Small to Medium (SME) Commercial Leasing Principles during COVID. This is the Code of Conduct developed by the Commonwealth Government and released on 7 April 2020 to regulate how a landlord must negotiate with tenants who have suffered Covid-19 related downturns. 

Of note, the Code of Conduct requires that landlords must offer tenants proportionate reductions in rent payable in the form of waivers (i.e. a reduction in rent that will not be recovered by the landlord) and deferrals (i.e. a delay in payment of part of the rent which will be recovered) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant’s trade during the Covid-19 pandemic period and a subsequent reasonable recovery period. 

So, if a tenant's turnover is affected by Covid-19, it may be able to rely on the new Act and the Code of Conduct to negotiate a rent reduction and waiver with their landlord. 

The Regulations may impact on the matters outlined above. Specific advice is needed on a case by case basis. However, many small businesses should take some comfort that if they suffer a Covid-19 related decline in turnover, protection from adverse action by their landlord may be available. 

Other legislation is also currently before the West Australian Parliament which, if passed, is expected to allow tenants to request a termination of their lease if their business will not recover from a Covid-19 related decline in turnover. If passed, this legislation may limit a tenant's liability if they have to terminate their lease early for that reason. 

Please contact Amy Knight for further advice.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Clarifying the ability of trustees to expand their powers: the decision in Re Application of Country Road Services Pty Ltd

In this article (published in the December 2019 edition of the Law Society Brief magazine) Jonathan Haeusler, Special Counsel, and Michelle Hankey, Solicitor, discuss the court’s decision in Re Application of Country Road Services Pty Ltd [2019] NSWSC 779 regarding a trustee’s role and their ability to expand their powers as trustee. 

The trust instrument that created a trust is the primary source of the trustee’s duties, obligations and powers.  A trustee’s primary duty is to administer the trust in accordance with the terms of the trust instrument.  If a trustee acts outside the terms of the trust instrument, the trustee’s acts will be "ultra vires" i.e. invalid.  In certain circumstances, a trustee may apply to the court for, among other things, an order conferring additional powers on the trustee where it would be “expedient in the management and administration” of the trust property to do so.

However, a trustee cannot seek additional and new powers so that it might administer the trust in a different way from that contemplated in the trust instrument. The trustee should not seek to question the terms of the trust or seek to improve them.

The court’s decision in Re Application of Country Road Services Pty Ltd serves to remind us of the trustee’s function in making applications to the court for orders conferring additional powers on trustees.  In particular, the court’s observations remind us that the trustee’s role is to administer the trust in accordance with the terms of the trust instrument, not to seek to change the trust instrument.  Further, that the usual role of a trustee should be one of neutrality.  

The key take-aways from the court’s decision are set out in Jonathan’s article, which is available here.  

If you have any queries regarding trust administration, please contact Jonathan Haeusler or Michelle Hankey of our office. 

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.