Personal Properties and Securities Act

personal properties and securities act

Are you ready for the PPSA?

New legislation called the Personal Property Securities Act (“PPSA”) came into effect recently.  It will dramatically alter the way we deal with personal property and the way in which security over personal property can be protected.

“Personal property” is any property (except real estate and fixtures to land) such as machinery and equipment, motor vehicles, book debts, stock, trademarks and patents etc.

The PPSA will regulate any “security interest” in personal property.  If you do not protect your rights you risk losing your interests in that property.

For example you could lose:

  • priority to another creditor; or
  • title to your property if it is left in the possession of someone else (eg. if they sell it or if they go into liquidation etc ).

How does the PPSA affect you?

If you answer yes to any of the questions below, you should contact us to discuss how the PPSA may affect you and what steps you should take to protect your interests.

  • Do you own personal property that could be in someone else’s possession for longer than 90 days ?
  • Do you consign goods to other people to sell ?
  • Do you manufacture and sell goods ?
  • Do your conditions of sale state that you retain ownership until you are paid (i.e.
    retention of title clause)
  • Have you granted “fixed and floating” charges or have they been granted to you ?
  • Do you include charging clauses in your standard documents to give you security for an obligation ?

Registration

A single national online register of Personal Property Securities interests called the PPS Register (“PPSR”) has been established.

It is essential to register your security interests in order to obtain priority. By registering your security interest you can prevent another person taking ownership of your goods.

Any delay in registering your security interest or inaccuracy in the registration could be disastrous.  New security interests created must be registered quickly and in some cases may be registered before the transaction is completed.

 

Questions?

If you have any questions about this blog post, do not hesitate to contact McLaughlin & Associate Lawyers via call or email.

Alternatively, you may visit our office in Springwood.

Going Guarantor

going guarantor

At some stage in your life you may be approached to go Guarantor either for one of your children or for a relative or friend. I tell my client’s that there are three groups of people for whom you should never go Guarantor.

1. Family;
2. Friends; and
3. Strangers.

I repeat never go Guarantor for family, friends or strangers. If you rule out those three groups you will be safe (because there are not too many others left). The reason I advise this is that unfortunately we see case after case where client’s, who did not wish to offend, or did not understand what they were really getting into, find themselves in a plethora of trouble.

I appreciate that sometimes it is hard to say “no” to a child or a sibling or best friend who comes to you with a request to go Guarantor because at the time there doesn’t seem to be too much harm done by simply signing a piece of paper. But it is what happens down the track when things go wrong which can have devastating effects.

If you think about it for a second the reason why a bank wants somebody else to guarantee the loan is because they, after careful consideration and analysis of the borrower’s financial position, ability to repay etc have not go the confidence to lend the money to that person without someone else guaranteeing repayment of the loan. If the banks, with all their billions of dollars, aren’t prepared to take the risk, why should you?

Another factor that a lot of people don’t understand is that if you go Guarantor for say a $300,000.00 loan then as far as your bank is concerned that is a debt on your balance sheet. Therefore, if you then later decide that you wish to borrow money, the amount of your guarantee will be taken into consideration along with your other existing debts in determining how much you can borrow.

I appreciate that sometimes parents want to give their child “a helping hand” in buying their first property and will agree to go Guarantor. If you must, then there are some steps you can take to try and protect yourself.

  • Always go for the minimum amount the bank will accept. The bank may only need you to go guarantor for $80,000.00 on a $350,000.00 loan. In which case you must make sure that is all you guarantee.
  • Always ensure that the Guarantee is limited to a maximum amount. That way, in a worst case scenario where your guarantee is called upon you know exactly how much you are up for.
  • Make sure that you only guarantee the specific loan for which you have been asked to Guarantee. The fine print of some guarantees actually provides that the Guarantor is responsible for all loans of the Borrower both existing and future.
  • Request that you be provided with bank statements of the loan so that you can ensure that it is being kept up to date and has not fallen into arrears.
  • Terminate the Guarantee as soon as you can, don’t let it continue in perpetuity.

I can recount dozen’s of cases where I have seen parents who have had to sell their home or lose their nest egg because they had gone Guarantor for a child in a failed business venture. Invariably, the first notice that the Guarantor has of there being a problem is when they are notified by the bank. Most borrower’s are too embarrassed (or thoughtless) to approach the Guarantor to let them know that there may be a problem.

So remember my advice DO NOT go Guarantor for family, friends or strangers.

Don’t Be Threatened Into Doing Nothing

dont be threatened into doing nothing

 

So often we come across situations where a client has been reluctant or hesitant to proceed with a separation, property settlement, or children’s matter because of threats or blackmail from their partner.

Quite often a husband will threaten his wife that he will show she is “an unfit mother” because of something she did in her youth or something which the wife and husband both participated in consensually during the course of their marriage.  A spouse/partner may quite often feel that they would suffer public humiliation over their escapades and that it will end up splashed across the newspapers and over the internet.  We have had innuendoes about sexual escapades, social drug taking, and shoplifting levelled against clients in the hope that they will cave in.

Often a client will relate to us that their partner has threatened that if they don’t give in to their demands or if they don’t get what they want they shall bring up blah, blah, blah or that if he or she tries to leave they will never see their children again because they will let it be known that blah, blah, blah.

Two things prevent this bullying from succeeding.  Firstly, we as lawyers have a duty to the Court not to unnecessarily raise irrelevant, unnecessary, or intentionally inflammatory or embarrassing matters which have no relevance or bearing on the case at hand.  So therefore what a person may have done in their youth or may have done in the past will not and should not be raised unless it has some relevance to the property settlement and/or children’s issues and invariably they don’t.  In fact the Court takes a particularly dim view of a party who seeks to use or capitalise on such issues.

Before a trial commences each of the parties make submissions to the Court to strike out any offending or irrelevant material from the record.  If successful, reference cannot be made to that issue in the course of the trial and the Judge does not take it into account.

Secondly, there is a ban imposed on anyone publishing the names, address, or employment of a party in Family Court proceedings.  It extends to witnesses and to anything which may lead to the identification of a party or witness to the proceedings.

So even if for some reason the circumstances of a case were published in the papers it would be done in such a way that the parties identities are not revealed.  You may have seen newspaper reports of Family Court proceedings where the parties are referred to as, K v K or C v C.  That is to protect the identity of the parties.

Section 121 of the Family Law Act is unequivocal in stating that:

1.   A person who publishes in a newspaper or periodical publication or by radio broadcast or television or by other electronic means, or otherwise disseminates to the public or to a section of the public by any means, any account of any proceedings, or of any part of any proceedings, under this act that identifies:

(a)   A party to the proceedings;

(b)   A person who is related to or associated with the party to the proceedings or is, or is alleged to be in any other way concerned in the matter to which proceedings relate; or

(c)  A witness in the proceedings;

is guilty of an offence punishable upon conviction by imprisonment for a period not exceeding 1 year.

It’s amazing the relief that I have seen from the faces of clients who may have been held to ransom for years by belligerent, bullying, overbearing, and intimidating partners when they realise that their “little secret” is not going to end up on the front page of the morning paper and that they can stare their partner down thus allowing them to pursue their full rights and entitlements without fear.

Who Is Entitled to Read the Will of a Deceased Person

Who is entitled to read the will of a deceased person

This is something we encounter quite a lot from people who believe, for whatever reason, that they are entitled to read or obtain a copy of a Deceased person’s Will.

But who is actually entitled to do so?  The answer lies in Section 33Z of the Succession Act.  Section 33Z (1) (a) says that only an entitled person can inspect a deceased persons Will.

So who is an entitled person? Again we need to go to Section 33Z(4) of the Act which states that an entitled person is either of the following:

(a)   a person mentioned in the Will, or mentioned in any earlier Will as a beneficiary; or

(b)   is a spouse, parent, or child of the Testator; or is a person who would be entitled to a share of the Estate if the deceased had died intestate; or

(c)   a parent or guardian of a child mentioned in the Will or who would be entitled to a share of  the Estate if the Testator had died intestate; or

(d)   a creditor or other person who has a claim against the Estate.

What is a testamentary trust?

It’s also worthwhile mentioning that you can create a testamentary trust (you can also create more than one of these trusts) and nominate a trustee to oversee the distribution of your capital and assets, via this trust.  The trustee can also be a beneficiary of your Will, but this isn’t necessary. As a trustee of your testamentary trust, they are also entitled to read your Will.

So if you are named as an Executor of a Will and someone demands to read or obtain a copy of the Will, first make sure they are entitled to do so.

Should you wish to discuss any matters regarding the matters raised in this article please contact Mr John McLaughlin of McLaughlin & Associates on 3808 7777.

Mandatory Standards for Window Coverings

mandatory standards for window coverings

Do You Require Window Coverings?

Landlords who supply corded window furnishings in rental properties, and Property Managers who offer services in relation to those properties, must now comply with national Mandatory Product Standards designed to reduce the risk of strangulation of infants and young children.

The legislation is part of The Australian Consumer Law which came into effect on 1 January 2011 and incorporates The Trade Practices Act. It prescribes standards for child safety devices, mandatory warning labels and safety installation instructions.

Any corded window covering supplied by the Landlord such as Vertical Blinds, Venetian Blinds, Holland Blinds, Roman Blinds and Curtains must comply, even if they are second hand or already installed.

As a breach of the Mandatory Standards carries a potential fine of up to $220,000 for individuals and $1.1 Million for companies, Landlords and Property Managers need to take their obligations seriously.

I recommend to you the services of Safer Property Solutions Pty Ltd, “SPS” who offer a specialist compliance inspection and retrofit installation service tailor made for Property Managers. SPS provides free advice on how to identify non-compliance and template letters that you can use to inform your landlords of their obligations.

Legalese and Parenting Matters

Family Law Practitioners no longer refer to terms such as “custody” “access” and “guardianship” when dealing with parenting matters as these terms imply ownership. There are no property rights which attach to children.

Instead the following terms are utilised:-

“LIVES WITH” – which details the person with whom a child/ren is to live;

“SPENDS TIME WITH”  which defines the extent of contact between a child/ren and the other parent;

“SPECIFIC ISSUES”   which sets out various aspects of parental responsibility, such as schooling.

Unless a Court orders otherwise, there is an automatic presumption that both parents equally share parental responsibility for their children until the children reach the age of 18 years.  This parental responsibility remains whether or not either party decides to remarry or have other children.

When parents are able to agree with whom the children live with and also agree when they are to spend with the other parent, we recommend that a written Agreement be signed by the parties and filed with the Court. These Agreements are known as “Consent Orders”. The reason why we recommend parents enter into Consent Orders is that unfortunately sometimes relations between parents deteriorate after separation. Consent Orders provide an enforceable obligation (which is enforceable on both parents) regarding the care of the children.

Occasionally parents need assistance to work out what is the best care regime for their children after separation.  In this instance, mediation is beneficial to bring about a resolution without the intervention of the Court.   Once mediation has been undertaken and a resolution reached, the Agreement can then be documented into Consent Orders.

If parents are unable to agree on parenting matters, then a Judge will make Orders specifying with whom the children are to live with and the time the other parent is to spend with the children.

Where a matter is referred to the Court, a Judge’s first and foremost concern is “what is in the best interests of the child”, not what is in the best interests of Mum or Dad. Therefore, we find that it is much better for parents to enter into an Agreement that they can both live with and operate within the scope of an Agreement instead of a Judge imposing an order on the parties.

Enduring Power of Attorney

enduring power of attorney

Enduring Power of Attorney

When people think of estate planning they usually think of the need for superannuation, life insurance and income protection but equally important is the need for a Will and an Enduring Power of Attorney. I have spoken at length over the last month about the need for a Will now I wish to turn to the equally important aspect of having an Enduring Power of Attorney.

What is an Enduring Power of Attorney?

It is a document given by one person (the Donor) to another person (the Attorney) which enables the Attorney to act on behalf of the Donor and to do all things which the Donor could himself do. The Attorney in effect steps into the shoes of the Donor and can sign documents, access bank accounts etc.

Why do I need one?

Everybody should have an Enduring Power of Attorney appointing either their spouse, relative or close friend to act on their behalf in the event that they are either absent or mentally incapable of handling their affairs e.g. if you are out of town and need documents signed or access to monies or something to be done on your behalf which only an authorised person can do for you.

But the real benefit of an Enduring Power of Attorney is that the power to act on your behalf continues after you become mentally or physically incapable of doing things on your own behalf. For example, we have had cases where the husband and wife may, for tax purposes, have an investment property, shares or money invested in one persons name only. That person has suffered a stroke, heart attack or been in a motor car accident such that they are either physically or mentally incapable of handling their own affairs. The spouse may need to sell some of the assets or access some of the money in order to provide ongoing medical care for the injured party but because they don’t have an Enduring Power of Attorney that cannot easily be done. Instead, a Government appointed Trustee is nominated and as you can imagine, the process becomes very expensive and bogged down with red tape. That could all have been avoided by the making of an Enduring Power of Attorney.

Who should have one?

The simple answer is: Everybody! Spouses should each have one appointing the other their Attorney, the same applies for people in defacto relationships. But also think of the need for the elderly to appoint a child or children Attorney for them and also single children appointing a parent or parents as their Attorney.

It is especially important for adult children to think about their parents as they get older. By having an Enduring Power of Attorney a son or daughter can help their parents as they get on in life with accessing bank accounts, handling documents etc and in the event of mum or dad suffering a stroke or heart attack being able to handle their affairs.

For example, we had a case where an elderly woman suffered a stroke and was physically and mentally incapable of handling her affairs. The family home was in her name only and the children had to place her in a nursing home. The problem was that the home had to be maintained, the rates and insurance paid as well as meeting the costs of nursing care. There was no Enduring Power of Attorney. If there had been, the children could have sold the family home, placed the proceeds on trust for mum and met her ongoing care from the sale proceeds.

So think about it, if you have parents (it doesn’t matter how old they are now) seriously consider the benefit to them and you of having an Enduring Power of Attorney so that one day you will not face the same problems as the family mentioned above.

 

Video 

Prefer the video format? Our principal, John McLaughlin, provides an informative Law Talk episode about the Enduring Powers of Attorney