December 2004


   We thank you for the continued  support and interest provided  to Milne Berry  & Berger. With Christmas around the corner, this  might be the best time for you to get  your business and  personal affairs in order. Kindly contact us if you require a Will, Power of Attorney  to be executed before your holidays.  

 
 In this issue:
Obligation to answer on arrest — Know  your rights!
Animal Companion Act— Some  law relating  to pets
Interesting  Recent Cases
Protecting your financial choices for tomorrow
Gonzales Estate Protected From Killer Son
Issues with your neighbours?
Directors Duties
James Hardie - Observations & Learnings
What is Bankruptcy
Consumer Warranties
Do I need a Will
 
 Obligation to answer on arrest — Know your rights!
Put simply, there is no obligation on a person arrested to answer questions except in limited circumstances. This is known as the right to silence and  a person under arrest can exercise this  right provided  they have a belief on reasonable grounds that  they are suspected of  an offence (Petty v The Queen  (1991) 173 CLR 95). The courts have made it clear that  “no adverse inference” will be drawn against the accused in choosing not to answer questions (per  Mason CJ, Deane, Toohey and  McHugh  JJ, Petty v The Queen  (1991) 173 CLR 95  at 99).

Contrary  to common belief, a suspect does  not have a right to legal representation once arrested. Accordingly, if arrested  it is important to remember these two basic principles.

 
 
 Animal Companion Act— Some law relating to pets
 Do you own a pet? Are  you aware of  the legal obligations imposed  on owners of pets ( or as the law defines them Companion Animals)? If you own a pet  you are responsible for its actions. The law  has become very severe in this  area. Under the Act dogs  must wear a collar and  tag, they must be micro-chipped.  If a dog defecates in a public area,  it is the owners responsibility to remove the faeces and  properly dispose of  it, otherwise significant fines can be imposed.
In the event that  a dog is too  aggressive or has attacked  a person or another animal it can be declared dangerous. If the Local Council issues  a Notice  of  Intention to declare a dog dangerous this  must be responded to immediately. Severe penalties are imposed  on the owner of  the dogs that are declared dangerous and  this  includes having a dog de-sexed, being  required to wear a muzzle at all times and  not being  entitled to go off the lead.
For further information please feel free to contact  us.
 
 
  
 Interesting Recent Cases — Rene Rivkin & Martha  Stewart
Francis Bacon nearly 400  years  ago, recognised that “knowledge is power”. In the commercial environment when one person receives special knowledge and  uses it to his or her specific  benefit and  trades in public shares,  that  person conducts the offence  known as “insider trading”. Insider trading involves trading in securities on the basis of  price sensitive information which  has not been made available to the other party in the transaction.

Sydney’s most  famous case in recent years  has involved the former stockbroker Rene Rivkin,  who was convicted of receiving inside information which, the Court found was used to acquire shares in a
publicly listed company in anticipation of  a commercial transaction occurring in the future which  was more likely than not to increase the value of  the shares.

In a similar situation the famous American business woman  Martha Stewart was found to have also received special information which  allowed her to make a commercial decision to her advantage. Both Stewert and  Rivkin were convicted of  what is colloquially known as Insider Trading pursuant to legislation in their respective states and  countries.

Although neither Stewart nor Rivkin made any significant sums of  money the prosecution expended significant resources to prosecute and  obtain convictions and  then pressed  for custodial sentences. A representative of  the Australian Securities and  Investments Commission (ASIC), in an interview explained why  such tremendous resources  were expended in the matter  of  Rene Rivkin. He asserted that  obtaining evidence of  Insider Trading is notoriously difficult. When evidence becomes available corporate watchdogs need to act appropriately and  to inform the community at large of  the offence  known as Insider Trading

  
 Protecting your financial choices for tomorrow
 
Protecting your financial assets and  the operation thereof and  your desired personal and  lifestyle preferences should you one day not be able to communicate or consciously make  such a decision yourself is your responsible choice to make when you are capable of  doing so.
A   power of  attorney is a legal document that  appoints one person (the  attorney) to act on behalf of  another (the  principal or donor) in relation to their property and  financial affairs. There are any number of  personal and  business situations where giving  someone else the
power to act for you makes good common sense. A power of  attorney can assist you during a short period of time, for example, during a major illness or operation, and  a lengthy  overseas trip  where communication is difficult, and  so forth. A   power of attorney does  not allow a person to make medical or life  decisions on your behalf.

An enduring power of  attorney may be created by  you so that  it continues  to have effect after  you lose capability to make financial decisions.
An enduring guardian is someone you choose to make personal or lifestyle decisions on your behalf when you are not capable of  doing this  for yourself. You choose which  decisions you wish your enduring guardian to make. These are called functions and  you can direct your enduring guardian on how to carry out these functions.

Contact us today to secure your long-term  personal well being  and  security of  assets.
 
  
 Gonzales Estate Protected From Killer Son
On 17  September 2004, Sef Gonzales, a former student and  North Ryde Resident, was condemned to three concurrent life  sentences by  Justice Bruce James in the NSW Supreme Court  for the brutal murders of  his parents Teddy and  Mary Loiva Gonales and  his 18-
year-old sister Clodine on July 10, 2001.

Justice James noted that  Sef’s motives  for such extreme violence were only “to  prevent his parents withdrawing privileges they had extended to him: and  to gain access to their $1.5million estate “as their sole heir”.
The affect of  Sef having been found guilty  of  the murders of  his family automatically  excluded  him from his family’s estate. The law  precludes a person who has unlawfully killed another person from acquiring a benefit in consequence of  the killing, their rights are forfeitied by  law.
Should you have any enquiries about estates, wills,  and the importance of  having your own will, contact  our office.

 
  
 Issues with your neighbours?
Are  you aware that:

•  You and  your neighbour should usually be sharing the cost  of  repairing any fence between your properties?  If you neighbour does  not attend to the cost  of  the repairs, you can proceed against your neighbour to recover the costs.
•  Cutting  back the branches and  roots  of  your neighbour’s trees  that  protrude onto your property usually requires the consent of  your Local Council under its Tree Preservation  Order? If trees  are about
3 metres in height, which  includes large bushes, it would be wise to check  with your Local Council before proceeding to prune!
•  If your neighbour’s tree is causing damage to your property, for example if a driveway is being damaged due to the neighbour’s tree roots, you may be entitled to sue for compensation?
•  There are regulations  that  restrict the use of  certain noisy items such as lawn mowers, air conditioners, etc to be used by  your neighbour. They may only be used during certain  times on certain  days? If you have any problems in relation to pollution  caused due to neighbour’s noise, we can advise  you on the best course of  action with regards to the relevant Local Council Rules and  Regulations and  the Act that  relates  to the Environmental  Protection Authority.

•  You have a right under the Clean Air Act to prevent your neighbour from burning off any material in their premises except for cooking,  recreational, agricultural and  fire fighting purposes. If your neighbour is burning off, you may report this  to your Local Council.
Please contact  us if you require any advice about your rights in a dispute with neighbours. We can assist you with writing  letters or completing forms that  may be required in approaching the relevant authorities.

 
  
 
Directors Duties
 It is established law that  a director is in a fiduciary relationship with a company, meaning they have a duty to act in good faith  and  for the benefit of  the company. Courts have noted that  as fiduciary  agents of  the company the power conferred on directors  should not be exercised in order to obtain private advantage: Mills v Mills (1938) 60 CLR 150. Duties may also be owed to third parties such as the companies creditors, at least in the case where there   are questions as to the company’s solvency: Walker v Wimborne (1976) 137 CLR 1.

A   number of  high profile corporate collapses in the recent times, including the collapse of  the HIH Insurance Group and  Onetel, have seen the corporate regulator, the Australian Securities and  Investments  Commission (ASIC), come to the forefront in enforcing the Corporations law. ASIC took immediate  steps to institute actions against the HIH directors after it’s collapse. ASIC sought and  the court granted declarations that  a director, Rodney Adler, had contravened  the law by engaging in the following activities: entering into related  party transactions, obtaining financial assistance to buy own shares,  breaching hisduties of  care and  diligence, good faith and  misuse of  position to gain advantage for himself. As a result he was ordered to pay  pecuniary penalties and disqualified from being  a director for a period of  20 years.

It is clear from this  case,  and  from ASIC’s prosecution of  the directors  of  Onetel Pty Limited, that  a serious view is taken of  the role of  directors  in company law in Australia. Hence, it is important that  directors  recognise their duties and  where necessary  obtain legal advice where they are unclear of  their obligations in regards to such duties.

 
  
 JAMES HARDIE— Observations  &  Learnings
 
Commissioner David Jackson QC, handed down his Report on 21 September 2004 subsequent to a six month enquiry into James Hardie’s massive under- funding of  compensation for victims  of  asbestos disease. The report confirmed that  James Hardie Industries broke the Corporations Law and  misled the public  when it claimed it had put aside enough money to meet its asbestos liability which  could draw a total of $B2.24. Mr   Peter Macdonald, the Chief Executive Officer, was criticised for making misleading and false statements about the company’s asbestos liabilities being  “fully funded”. James Hardie executives now face the risk of  being  prosecuted by  the Australian Securities and  Investment Commission.

•  We can advise  you of  a Director’s rights and obligations that  are enumerated under the Corporations Law.
•  If you require, we can advise  you of  the courses of action available to you when the company funds  have been misappropriated and  how a trace can be made to the funds  when the company funds  are dissipated. When company funds  are in fact inappropriately handled, it becomes a criminal issue and  we can assist you with writing  letters or completing forms that  may be required  when approaching the Australian Securities and  Investment Commission or an ombudsman to lodge a complaint anonymously.
 
  
 What Is Bankruptcy?
 The term “bankrupt” derives from the Latin “bancus”, referring to the table  or counter of  a tradesperson, and “ruptus”, meaning broken. It thus denotes one whose place  of  trade  is “ broken” or gone.

Bankruptcy is the process by  which  the state takes possession of  one’s property, that  person being unable to pay  their debts. The bankrupt hands over control of their property  and  finances to a Trustee and  in turn receives protection from legal action by their creditors  (people  to whom money is owed). The process of bankruptcy is governed by  the Bankruptcy Act and  is structured so that  money received from the sale of  a bankrupts property  is distributed by  the Trustee to creditors  on a pro rata  ( a percentage of  overall debts) basis.

There are two ways a person can be made bankrupt. Firstly, if you owe a debt to a person and  are unable to meet it you may file a Debtors Petition: this  being  an application to become banktrupt. You will also need to attach a statement of  affairs for the Trustee detailing information such as your income, assets, debts and  business dealings. Secondly, you can be forced into bankruptcy if you owe
a debt over $2000. For a creditor to force you into bankruptcy there must be a court judgment stating that you owe the creditor $2000, a bankruptcy notice  must be served on you and  if you cannot pay  out the creditor a Creditors  petition must be served on you. The final step is when the Federal Court or Federal Magistrates Court  make a “sequestration order” against you i.e.: declare you a bankrupt.
If you would like further information please contact  us to make an appointment.
 
  
 Consumer Warranties
 The Trade Practices Act 1974 (the  Act) affords certain defined consumers the protection of  warranties and conditions that  are implied in certain  consumer transactions. A   consumer is defined within the act as a person who has acquired goods  or services to a value less  than $40,000.00 or where this  price is exceeded, the goods  or services are of  a kind required for personal, domestic  or household use or consumption.

Such  implied terms include:  undertakings  as to quality and  fitness og goods, that  services will be rendered with due care and  skill and  that  materials  supplied in connection with these services will be reasonably fit for the purposes they are supplied. Trade Practises  Act Part V Division 2.
It is important to note that  contractual provisions that  attempt to exclude these implied warranties are void pursuant to the Act.

The Act also makes a provision for the right of consumers to recover direct  from manufacturers or importers in respect of  unsuitable goods, goods of unmerchantable quality and  the failure to provide facilities for repair of  such goods.

As actions in respect of  these provisions are subject to time limits, prompt legal advice should be obtained.
    
 
  
 Do I Need A   Will?
 If you do not make a Will, you may die  “intestate” and  your assets will be divided and  distributed according to State  laws. This could indirectly mean that the people who may benefit from your estate may not be those that  you would have in fact  chosen. In order to prevent such unfair result,  we would  advise  you to prepare a Will.  We can help you draw  up a Will to ensure your wishes to be complied with after your death. We can give you legal advice or recommend independent financial advisors, draw  up and  supervise the proper execution of  your Will, advise  on gifts and  other transfers of  assets with minimum tax repercussions,  advise  on trusts and estate planning. Please contact  us before Easter to grab our special offer  to draft and  supervise the proper execution of  your Will for only $200.00 before your proceed to go for a holiday.
 


 

 

 

 

 

 

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