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Case Study: How Our Lawyers Handle Commercial Disputes At Your Best Interest?

Anfernee Lai Perth, Blog & Articles, Civil Litigation, Commercial Disputes; Business Disputes Perth, Litigation, Partnership Disputes, Shareholder Disputes, Tang Law, Tang Legal

These cases studies are based on real life situations, client names and images may have been changed to protect privacy. Each case study generally represents the experiences clients will have, however, each client has their own subjective goals and requirements to suit those specific goals and requirements. Thus, these case studies may not be deemed to create any warranty or representation that any other clients’ experience will be the same as the experience identified herein.

Genuine Story

Mr Chan was a successful entrepreneur in China who entered into joint venture agreements with Mr Smith with respect to property developments in Western Australia.

After the first project, Mr Smith invited Mr Chan to roll over his capital and profits, in excess of $1 million, from the first project into a second property development project.
After the second project, from which multi-millions of profits were made, Mr Smith again invited Mr Chan to roll over all his monies in the project into a third property development project. Mr Chan disagreed and requested to have his capital and profits from the projects returned to him.

Mr Smith refused. To the surprise of Mr Chan, Mr Smith secretly removed Mr Chan as a director of the company as well as issued more shares to himself.

 

Mr Chan engaged our firm to assist him to recover his capital and the agreed profits. Over the years, Mr Chen has invested approximately $1.2 million into the projects.

Solution

We were instructed by Mr Chan to commence proceedings in the Supreme Court against Mr Smith to recover his capital and the agreed profits.
Simultaneously, we assisted Mr Chan to successfully obtain a Freezing Order against Mr Smith which prevented Mr Smith from disbursing his personal assets as well as assets (including substantial amount of cash) held by the company.
Mr Chan and Mr Smith were unable to reach an out of court settlement and the dispute had to be determined by the Supreme Court after a 10 days trial.

Outcome

Mr Chan was successful in obtaining judgments from the Supreme Court in his favour for a sum in excess of $3.1 million plus recovering $300,000 in legal costs.

About the Writer

Kelvin Tang

Kelvin has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing service on Commercial Law, Dispute Resolution & Litigation, Family Law, Wills & Estate Planning and Settlements.
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What Can I Do If I Have a Dispute With Builders?

Blog & Articles, Building Disputes WA, Civil Litigation, Defamation and dispute, Litigation, Tang Legal, Western Australia Builders

BUILDING DISPUTES IN WESTERN AUSTRALIA

Since 2011 the adjudication of complaints relating to home building contracts and ‘regulated building services’ has been simplified for consumers and service providers. The Building Commission, and the State Administrative Tribunal in certain cases, has jurisdiction to hear complaints arising under the Home Building Contracts Act 1991 (“HBCA”) and the Building (Complaint Resolution and Administration) Act 2011 (“BCRA”).Builders also have recourse to the rapid adjudication processes provided by the Construction Contracts Act 2004in relation to payment disputes.


Home Building Contract disputes

 

Contracts for building work between $7,500 and $500,000 are classified as a ‘home building contract’ by the HBCA. The HBCA regulates home building contracts, including by prescribing terms to be included in the contract and requiring notices, home indemnity insurance and other procedures to be carried out or obtained prior to entry into a contract. Certain terms are also prohibited from inclusion in a home building contract.
As the HBCA relates specifically to matters relating to the contract, complaints arising under this act are primarily contractual in nature.   
Many building service providers incorrectly assume the HBCA only applies to builders undertaking substantial work on a home, such as the construction or renovation of a new home. In fact the HBCA extends to owner-builders and all associated building work, such as landscaping and cabinetry.
The HBCA contains civil penalty provisions for certain breaches of the act by a builder, for example requiring payment of a deposit that exceeds 6.5% of the contract price or undertaking home building work without obtaining the requisite insurance. This can result in the Building Commission commencing a prosecution and significant infringements subsequently being imposed on a builder. It is therefore essential that all providers of home building work, including associated work where the provider directly contracts with the owner, carefully review the provisions of the HBCA and ensure their written contracts comply with the HBCA before they are entered into.
The Building Commission has jurisdiction to hear complaints commenced within 3 years from the date the dispute arose. Remedies for an owner and a builder in relation to non-fulfilment of conditions imposed by the HBCA are set out in Schedule 1 of the Act, and include termination of the contract by the party not in breach.
The Commissioner has a number of remedial orders which can be made under the BCRA in respect of home building contracts, including orders restraining or requiring certain action by the builder, an order that a party pay an amount due under the contract or declaring that an amount is not payable, and an order requiring a party to pay specific compensation arising from a breach of the contract or the HBCA. Orders declaring a provision or a contract void can also be made in respect of specific breaches of the HBCA.
 

Workmanship disputes

A person adversely affected by the carrying out of a ‘regulated building service’ can make a complaint to the Building Commission on the basis that the building work was not carried out in a proper and proficient manner, or was faulty or unsatisfactory. Complaints made under the BCRA are therefore known as ‘workmanship complaints’.
The class of persons ‘adversely affected’ by a regulated building service extends beyond the owner who contracted with the builder, to a subsequent owner of the property or a neighbour for example. The complaint must however be made within 6 years from the date of practical completion where work was not carried out under a permit, or within 6 years from a notice of cessation or a notice of completion where work was carried out under a permit.
The term ‘regulated building service’ is defined in the BCRA as a building service carried out by a registered builder or approved owner-builder, and home building work under the HBCA. ‘Building service’ includes building work, demolition work (within the meaning of those terms in the Building Act 2011*), plumbing work and other prescribed works.
An aggrieved party must give 14 days’ notice to the other party before commencing a complaint, designed to encourage the parties to reach an informal resolution of the dispute with the need to resort to the formal complaint process.
Once the complaint is commenced, the Commissioner has the power to dismiss the claim, or require further details of the claim to be provided in deciding whether to accept or dismiss the claim. Once the claim is accepted, the Commissioner must cause an investigation to be carried out by an inspector, who subsequently produces a report. The report may include recommendations as to how the complaint should be dealt with. After receiving the report, the Commissioner may commence a conciliation process at which both parties must attend generally without their legal representatives present.
Building remedy orders may be made by the Commissioner or SAT if satisfied that the work was not carried out in a proper and proficient manner or was faulty or unsatisfactory. If the compensation or value of the work orders being sought by the aggrieved party exceeds $100,000, the Commissioner must refer the matter to the State Administrative Tribunal, which has jurisdiction up to $500,000.
The Commissioner or SAT can also award compensation in lieu of a building remedy order if it is just and expedient to do so, for example where a builder has shown itself to be incapable of performing any building work to the standard expected of a professional builder, or where the builder has refused to carry out the work.


Claims outside the BCRA

 

For latent defects that are not identified by a consumer within the 6 year limitation period provided in the BCRA, it may be necessary for the consumer to resort to remedies under the building contract, if still available, or a negligence claim against the builder. Such claims would need to be commenced in a Western Australian court,  depending on the value of the claim.
For causes of action based upon a builder’s professional negligence, a consumer will typically have a limitation period of 6 years from the date the damage caused by a latent defect was discovered by the consumer, or was capable of being discovered by the reasonable diligence of the consumer.
 
* The Building Act 2011 defines ‘building work’ as: (a) the construction, erection, assembly or placement of a building or an incidental structure; or (b) the renovation, alteration, extension, improvement or repair of a building or an incidental structure; or (c) the assembly, reassembly or securing of a relocated building or a relocated incidental structure; or (d) the changing of ground levels of land for the purposes of work of a kind mentioned in paragraph (a), (b) or (c) to an extent that could adversely affect land beyond its boundaries; or (e) site work on any land for the purposes of, or required because of, work of a kind mentioned in — (i) paragraph (a), (b), (c) or (d); or (ii) paragraph (a) or (b) of the definition of demolition work; or (f) other prescribed work,
‘demolition work’ is defined as (a) the demolition, dismantling or removal of a building or an incidental structure; or (b) the changing of ground levels for the purposes of work of a kind mentioned in paragraph (a) to an extent that could adversely affect land owned by a person other than an owner of the land on which the building or incidental structure that is the subject of the demolition work is located; or (c) other prescribed work, but does not include work of a kind prescribed for the purposes of this definition as not being demolition work;
‘incidental structure’ means a structure attached to or incidental to a building and includes — (a) a chimney, mast, swimming pool, fence, free-standing wall, retaining wall or permanent protection structure; and (b) a part of a structure.
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Case Note: Du Buisson Perrine v Chan (2016) WASCA 18

Blog & Articles, Estate Planning, Kim Samiotis Perth, Law Case Note, Law Case WA, Perth Lawyers, Tang Legal, Western Australian Court of Appeal, Wills and Estates Lawyers

A decision from the Western Australian Court of Appeal is a precaution to sellers and those drafting contracts for the sale of land, to carefully consider the provisions applicable to terms contracts found in the Sale of Land Act 1970 (WA) (“Act”).

Background

The appeal arose from a dispute between the buyer (Du Buisson Perrine – the appellants) and the seller (Chan – the respondents) of residential property in relation to the seller’s termination of the contract for the sale of the land.
The contract, dated 3 September 2012, provided for a purchase price of $2.09 million with an initial deposit of $150,000 payable in three instalments.
The contract was varied by agreement on four occasions, the last being 27 February 2013 at which time the deposit was reduced to $105,000 and payable by four instalments: $5,000 on 3 September 2012, $10,000 on 19 October 2012, $30,000 on 12 December 2012 and $60,000 on 1 March 2013. Settlement was varied to occur on 7 March 2013.
All instalments of the deposit were paid by the buyer but settlement did not proceed on 7 March 2013. On 21 March 2013 the seller served a default notice on the buyer stating that the buyer was in default under the contract for failure to complete settlement in accordance with clause 3.5 of the Joint Form of General Conditions for the Sale of Land (“GC”). The default notice gave the buyer 11 business days to remedy the default. The buyer failed to complete settlement thereafter and the seller issued a notice of termination to the buyer on 16 April 2013.

Primary judgment

The seller commenced proceedings in the Supreme Court of Western Australia seeking a declaration that the contract was terminated lawfully and that it was entitled to the buyer’s deposit of $105,000.

The buyer disputed that the contract had been validly terminated on the basis that the contract was a terms contract under section 5 of the Act and the seller had not terminated it in accordance with section 6 of the Act.

 

Section 5 of the Act defined a terms contract as:

 

“An executory contract for the sale and purchase of land under which the purchaser is –
(a)  obliged to make 2 or more payments to the vendor (over and above any deposit) before he is entitled to a conveyance or transfer of the land: or
(b)  entitled to possession or occupation of the land before he becomes entitled to a conveyance or transfer of the land,

and for the purpose of this interpretation deposit includes any part of the purchase price which the contract specifies as being a deposit and provides is to be paid, whether by one or more payments, within 28 days of the execution of the contract”

 

Section 6 of the Act prescribed the method for termination of a terms contract as follows:

 

(1)  Notwithstanding any stipulation to the contrary, a terms contract shall not be determined or rescinded on account of a breach by the purchaser of any term of the contract unless and until the vendor has served on the purchase a notice in writing specifying the breach complained of and requiring the purchaser to remedy the breach within the time mentioned in subsection (2) and the purchaser has failed to do so.
(2)  The time referred to in subsection (1) within which the purchaser is required to remedy a breach is:
(a)     where the breach  consists of a failure to pay a sum of money – a date stipulated by the vendor being a date not less than 28 days from the date of service of the notice; and

(b)     in any other case – a reasonable time from the date of service of the notice.

 

The primary judge determined that the definition of ‘deposit’ in section 5 of the Act was exhaustive such that any payments made outside the 28 day limit would render a contract a terms contract. As three of the four instalments of the deposit were made more than 28 days from execution of the contract, Her Honour determined the contract was a terms contract.
The primary judge nevertheless found that the contract had been validly terminated by the seller in accordance with section 6 of the Act. In reaching this determination, Her Honour concluded that the breach referred to in the default notice and termination notice was not the buyer’s ‘failure to pay a sum of money’, but rather the buyer’s failure to complete settlement as required by clause 3.5 of the GC.
Her Honour concluded that the breach relied upon by the seller was a breach that fell under section 6(2) of the Act, which required reasonable notice be provided in terminating the contract. Her Honour was satisfied that 11 business days was a reasonable period of notice. It followed that the seller had terminated the contract effectively and could retain the buyer’s deposit.

Competing positions in the appeal

The buyer appealed the decision of the primary judge on the ground that the breach relied upon by the seller in the termination notice was ‘a failure to pay a sum of money’ to which section 6(1) of the Act applied, requiring the seller to give the buyer 28 days’ notice of termination, which it had not done.
The seller filed a notice of contention disputing the primary judge’s decision that the contract was a terms contract. The seller argued that the definition of ‘deposit’ in section 5 of the Act was inclusive and extended to payments made more than 28 days from execution of the contract provided the deposit was labelled as such in the contract. The buyer opposed the seller’s notice of contention by supporting the primary judge’s finding that the definition of ‘deposit’ was exhaustive.

Decision of the Court of Appeal

The Court of Appeal was constituted by McLure P, Newnes JA and Murphy JA.

 

McLure P determined that the primary judge had erred in construing the definition of ‘deposit’ as exhaustive. Her Honour found that the definition of ‘deposit’ in section 5 of the Act first extended the common law meaning of ‘deposit’ to all payments labelled as ‘deposit’ in the contract, and then restricted the common law meaning to apply only to payments made within 28 days of execution.

The first hurdle for the seller was therefore to establish that three of the four instalments fell within the common law meaning of ‘deposit’, namely being a payment made to bind the bargain and provide security for the buyer’s performance of the contract. McLure P considered that the three instalments were so remote in time from the execution of the contract that they could not satisfy the common law meaning of deposit and the contract was therefore a terms contract.

 

Her Honour concurred with the orders of Newnes JA.
Newnes JA considered the intention of the legislature in section 5 of the Act. Newnes JA determined that a payment of part of the purchase price was only considered a deposit if it was classified as such within the contract and made within 28 days. As three of the four instalments fell outside the period of 28 days, His Honour found they could not be classified as a deposit and the contract was therefore a terms contract pursuant to section 5 of the Act.

His Honour then considered the buyer’s grounds of appeal relating to the type of breach upon which the seller relied in terminating the contract and found that the primary judge had erred in reaching the conclusion that the breach was not a ‘failure to pay a sum of money’ to which section 6(1) of the Act applied.

 

Newnes JA determined that the seller’s termination notice referred to clause 3.5 of the GC, which required the buyer to complete settlement. This imported clause 3.7 of the GC which required the buyer to pay the balance of the purchase price at settlement.
There was no evidence that the buyer had breached the contract other than by failing to pay the balance of the purchase price at settlement. On this basis, the breach referred to in the seller’s termination notice was a ‘failure to pay a sum of money’, which invoked clause 6(1) of the Act. As the seller had not provided the buyer with 28 days’ notice as required by that section, the contract had not been validly terminated.

Newnes JA allowed the appeal and dismissed the notice of contention.

 

Murphy JA gave a dissenting opinion on the definition of ‘deposit’, finding the definition was inclusive and extended to payments made more than 28 days from the execution of the contract provided the payments satisfied the common law definition of deposit.
Murphy JA considered that all instalments of the deposit paid by the buyer were a form of security pending completion of the contract and therefore satisfied the definition of deposit in section 5 of the Act.

His Honour reached the same conclusion as the majority concerning the breach referred to in the seller’s termination notice, but nevertheless would have dismissed the buyer’s appeal on the basis that contract was not a terms contract as all payments were classified as a deposit.

Comment

The decision forewarns the sellers of land and their representatives to:
1.      Consider the implications of sections 5 and 6 of the Act before payment of a deposit via instalments is agreed to in a contract or variations to the contract;
2.      Ensure that the notice requirements imposed by a seller have been met when terminating a terms contract;

 

3.      In the case of a terms contract, consider what grounds for termination exist before issuing a termination notice, particularly to determine if the buyer may have committed some other breach aside from a failure to pay money which can be relied upon, i.e. repudiation of the contract.

ABOUT THE WRITER
KIM SAMIOTIS is the Senior Solicitor of TANG Legal. Her areas of practice include Wills and Estates Planning, Succession Planning, Deceased estates and Estate disputes. TANG LEGAL has handled 4000+ successful cases since 2002 and our focused areas of practice are Commercial Law, Dispute Resolution & Litigation, Family Law, Migration Law, Wills & Estate Planning, and Settlements. 
Telephone:           +618 9328 7525
 
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divorce

What To Do When You Divorce?

Anfernee Lai Perth, Blog & Articles, Child Support, Divorce, Family Court, Family Court Case, Family Disputes, Family Law, Family Law Perth, Tang Legal
WHAT TO DO WHEN YOU DIVORCE?
46,498 divorces granted in Australia in 2014
(Statistic obtained from the Australian Bureau of Statistics, 3310.0 – Marriages and Divorces, Australia 2014)

DID YOU KNOW?

Almost 1 out of 3 marriages would result in divorce and the median duration from marriage to divorce is about 12 years.

The statistic may sound depressing but the reality is that you or one of your friends may one day need to face the prospect of divorce and it is helpful to equip yourself with some knowledge about that process.

HOW TO APPLY FOR DIVORCE?

In Australia, we have adopted the principle of no-fault divorce. This means that the court does not require to consider which partner was at fault in a marriage breakdown. In order to apply for divorce, you will only need to prove an irretrievable breakdown of the relationship which is demonstrated by 12 months of separation.
Once you have been separated for more than 12 months, you can apply for a divorce through the Family Court by filing an Application for Divorce (Form 3). You do not need the consent of your partner to apply for divorce. Generally, you are not required to physically attend court.
You may apply for a divorce in Australia even if you were married overseas, as long as you or your partner meets certain requirements.
It is important to understand that divorce application does not resolve children and financial matters.

WHAT WILL HAPPEN TO OUR ASSETS?

First of all, there is NO automatic split of assets on a 50/50 basis and each case is different.
If you and your partner cannot reach an agreement regarding property division, the decision will have to be made by the court. In doing so, the court will adopt a 4 steps process:
        Step 1: Identify and determine the net value of all properties
      Step 2: Assess the contributions (including financial contribution, non-financial contribution and contributions to the welfare of the family) made by each partner and divide the assets according to the contributions
Step 3: Identify the respective needs of the partners by taking into account factors such as age, health, income, earning capacity and number of dependents and adjust the assets division accordingly
Step 4: Determine whether the resulting division is “just and equitable” and determine the final assets division
Whilst you cannot make an application for divorce until 12 months after separation, you do not need to wait for any period before you are entitled to have the assets divided between you and your partner. 

WHAT ABOUT OUR CHILDREN?

If you and your partner cannot reach an agreement about your children, similarly, the decision will have to be made by the court.
In Australia, the term “child custody” is no longer used. Instead, it is referred to as parental responsibility.  In deciding whether to make a particular parenting order in relation to a child, the court must regard the best interests of the child as the paramount consideration. In deciding what is in the best interests of the child, the primary considerations are the benefit to the child of having a meaningful relationship with both parents and the need to protect the child from physical or psychological harm.
In addition, the Court will also consider other factors including views expressed by the child, the child’s relationship with other persons (e.g. grandparents and siblings), the likely effect of any changes in the child’s circumstances, the child’s background, the child’s attitude and any family violence.
The types of parenting orders you may seek from the court include:
·         who a child live with;
·         who  a child will spend time with;
·         who a child will communicate with;
·         whether you can take the child to overseas holiday; or
·         who has responsibility for major decision about the child.

SO WHAT SHOULD I DO WHEN DIVORCE IS IMMINENT?

It is undoubtedly a very stressful experience for anyone to have to go through separation of relationship. The first thing you should do is to calm down and don’t allow your emotions to get in the way of rational thinking. You need to understand that most family law disputes can be resolved amicably without determination by the court. Once you are ready, you should, at the earliest opportunity, obtain legal and financial advice about your rights and financial standings as a result of the separation.

About the Writer

Kelvin Tang

Kelvin has over 14 years’ experience practising law in Western Australia. He is the founder and Principal Partner of Tang Law based in Perth, Western Australia. Kelvin is a Registered Migration Agent (MARN: 1386452) and has extensive experience in providing family law advice to clients, making divorce applications and applying for Consent Order. Kelvin is able to offer his clients clear and practical advice in relation to children’s disputes, property settlements between married and de-facto couples, spousal maintenance and child support.
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