FEATURED ITEMS

Secret relationship?

The recent Family Law case of Jonah and White involved an Application by a woman who had a secret relationship with a married family man for 17 years. 

During the 17 years they spent time together at various times and places, and expressed love and affection for each other.  The woman applied under Section 90RD of the Family Law Act 1975 (Cth) for a declaration that there was a de facto relationship between herself and the Respondent. 

Section 90RD of the Family Law Act 1975 (Cth) enables people to seek a declaration from a Court as to the existence of a de facto relationship.  It is probable that at the time of the Application the relationship between the Applicant woman and the Respondent had broken down.

The Applicant argued that during the relationship she and the Respondent had travelled overseas, and the Respondent helped her buy a home, and paid her up to $3,000 a month in financial support.

The Respondent denied any such de facto relationship.
The Court agreed with the Respondent, and decided that no de facto relationship existed. 

The Court said that for a de facto relationship to exist the parties must have merged their lives to the extent that they were for all practical purposes living together as a couple on a genuine domestic basis.

The Court referred to another case where an Applicant had sought a declaration of a de facto relationship, given that she had for 3½ years been a live-in personal assistant for a frequently wheelchair-bound Respondent.  In that case the Court found that the purpose of the relationship was not a de facto relationship, and therefore denied her request for a declaration.

For parties to live in a de facto relationship they must live as though they were married.  They must share finances, live in the same house (although there may be times when they live apart), and demonstrate they had a common purpose.  At the present time children and property matters are determined under the Family Law Act 1975 (Cth) if separation occurred after 31 March 2009. 

Ross Brown
Accredited Family Law Specialist

Is GST payable on the sale of a business?

The sale and purchase of a business is considered to be a taxable supply.  This means GST will apply to all sale and purchases of business unless it satisfies all the requirements of the "going concern" exemption.

Clients need to be aware that in order for your transaction to be considered a supply of a "going concern" (and therefore exempt from GST), a certain number of requirements need to be fulfilled.  It is not simply a case of stating that the transaction is a supply of a going concern - this is only one of the requirements.

At its most basic, the Vendor must sell to the Purchaser everything necessary to continue the operation of the business.  The Vendor also must ensure the Business continued to operate up until the date of settlement and the Purchaser must be registered for GST. 

Extreme caution must be taken when considering whether your transaction satisfies these requirements.  The ATO is strict on its interpretation and therefore we strongly recommend that all our clients seek legal advice about these proposed transactions before any sort of agreement is entered into. 

Helen Buchan - Lawyer

New Act for lenders & borrowers

The Personal Property Securities Act 2009 (“the Act”) is set to commence in early 2011.

It will have a significant impact on lenders, borrowers and business operators dealing in goods or wishing to raise money on security of personal property.  It will also affect purchasers of new and secondhand personal property.

The Act provides a reasonably comprehensive method of recording (on a publicly available Australia wide register) security interests in personal property and dealing with disputes over such property if there is non payment for it.

Anyone selling or providing "personal property" (the term is widely defined and includes chattels, crops, livestock, intellectual property, goods transformed or forming part of other goods and certain types financial instruments) should seek advice to best protect their position if payment is on deferred terms. Failure to protect interests by taking steps towards registration results in a loss of priority against other creditors.

The Act is complex. Specific advice should be sought by businesses about whether their existing terms and conditions best protect them in dealing with others who now or in future may come to owe them money.

If you have any questions or would like to discuss in detail how the Personal Property Securities Act 2009 may affect you, please contact our Business Law team on 5222 2077.

Matthew Kinross-Smith - Accredited Business Specialist

New concessions for young farmers

Exemptions and concessions are available to young farmers purchasing their first farm land.  There is a full exemption on purchases up to $300,000 and a concession for purchases between $300,000 and $400,000.

A "young farmer" is a person under 35 (at the date of the contract) who is carrying on or intends to carry on a primary production business on the land being purchased.  The purchaser must, within five years of the purchase, be engaged substantially full time in the primary production business on the farm land.

The rationale for the exemption is to encourage young people to enter and stay in the farming industry.  It applies to contracts entered into on or after 1 July 2011.

The eligibility criteria are set out in a State Revenue Office Bulletin available on its website www.sro.vic.gov.au.

Geoff Reeve - Partner

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