CPA AUSTRALIA CITY TAXATION DISCUSSION GROUPS

CONFESSIONS OF

THE UN-LAWYEREDUnderstanding Legal Issues that

Touch the Facets of Business

ANTHONY D. URSINOBCom, LLB, GDLP, LLM, MBA

au.linkedin.com/in/anthonyursino

THE SANTUARY OF BUSINESS

TOPICS

Anthony D. Ursino2

Contracting

Governance

MarketingHR

Delinquent customers

Reducing

legal risk

CONFESSION 1: I SIGNED A

CONTRACT WITHOUT READING IT

PURPOSE OF A WRITTEN AGREEMENT

Risk allocation

Obligations referable to

the g/s provided

Reflect the intention of the parties

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Breach

Damages

Common law

Causation

Remoteness

Duty to mitigateLimited by contract

Liquidated damages

clause

Condition / intermediate

term

Termination (optional)

Circumstances outlined in contract?

CONSEQUENCES

WHAT IF A PARTY DOES NOT

COMPLY WITH THE

CONTRACT?

Anthony D. Ursino4

FOR YOUR PENANCE: REVIEW

THE CONTRACT…

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Variations without consent

Termination rights eg termination for convenience and automatic renewals

Liability and indemnities

Liquidated damages eg for failing to meet a milestone

Audit rights – they can come into the office and look at our books

CONFESSION 2: I, AS THE

DIRECTOR, WAS NOT AWARE OF

THE FINANCIALS

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COMMON LAW CORPORATIONS ACT

Care, skill and diligence S180 – duty of care and diligence

S588G – insolvent trading

Use of power for a proper

purpose

Good faith and best interests of

the company

S181 – act in good faith and for a proper

purpose

S184 - criminal liability for intentionally and

recklessly failing to act in good faith, misuse of

position and improper use of information

No conflict and no profit rule S182 – improper use of position

S183 – misuse of information

S191 – material personal interest

S195 – presence and voting (public

companies)

FOR YOUR PENANCE:

FAMILIARISE YOURSELF WITH

THE DIRECTOR DUTIES

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Review financials

Consider P&L, balance sheets, cash flow statements and management accountant reports

Attending and being

active

Disclosure interests and related body transactions

Err on the side of over-disclosure

Business judgement

rule

Be proactive in asking questions

Ignorance is not a defence

Draftingminutes

CONFESSION 3: MY AD CONTAINS

HALF TRUTHS

Legal Illegal

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“A person must not, in trade or commerce,

engage in conduct that is misleading or

deceptive or is likely to mislead or deceive.”

SECTION 18 OF THE

AUSTRALIAN CONSUMER LAW

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The ad should be able to

stand on its own two feet

• The consumer should be able to get the ‘deal’ without hidden fees or catches

Be up front with the essential

terms

• Prices, fees, term, inclusions, exclusions

“*” t&cs should complement

not supplement

• Can’t reverse statements by using t&cs

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FOR YOUR PENANCE: REVIEW THE AD…

EXAMPLES

A battery manufacturer packages its batteries in a pack with a red sticker that claims the batteries will last

longer than two other high-profile brands of batteries.

50-inch televisions at a price of $799 for a week-long sale but only

has 2 TVs in stock

“10 per cent free”

“buy one, get one free”

“best steaks on earth”

“Free month subscription”

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CONFESSION 4: EMPLOYEE WAS

MADE REDUNDANT BECAUSE OF

POOR PERFORMANCE

Distinct Reason

NoticeEnd of

relationship

Termination

Process

Poor Performance

Redundancy

Agreement, award or FWA

Employee Resignation

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FOR YOUR PENANCE: FOLLOW A

STRICT PROCESS - REDUNDANCY

1. Discussion and notice of proposal

2. Consultation incl details, redeployment and employment assistance programs

3. Notice of decision and notice period before

termination - s 117 of the FWA 4. Redundancy

payout - s 119 of FWA

TERMINATION

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Always check the employment agreement, award,

enterprise workplace agreement and Fair Work Act

FOR YOUR PENANCE: FOLLOW A

STRICT PROCESS – PERFORMANCE

MANAGEMENT

1. Discussion followed by first

warning with consultation

and opportunity to reply

2. Assistance to improve

performance eg training

3. Discussion with detailed

notes emailed

4. Final and last warning

5. Termination

notice

TERMINATION

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Always check the employment agreement, award,

enterprise workplace agreement and Fair Work Act

CONFESSION 5: I CONTINUED TO

PROVIDE SERVICES AFTER A

CUSTOMER LIQUIDATION NOTICE

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• The company’s assets are wound up and sold

• The proceeds are distributed in equal portions to the creditors (dividends)

Liquidation = death

• Administrator is appointed to decide whether the company should go into liquidation, be restructured (DoCA) or resume trading.

Voluntary administration = we are going to try work

it out

• The bank/secured creditor appoints a receiver to sell off assets to recover money for their debts

Receivership = secured creditor /

bank is taking control to get their $$

Can

lead

to

death

Can

lead

to

death

Anthony D. Ursino

Anthony D. Ursino

Appointment External

Administrator

Administrator or Receiver

Suspension and termination

EXCEPTION

Administrator/ Receiver

undertakes payment liability

LiquidatorTerminate Goods or Services ASAP

IE YOU FIND

SOMEONE

ELSE TO PAY

FOR YOUR PENANCE: TERMINATE

ASAP

Anthony D. Ursino

QUESTIONS

Disclaimer

The contents of this presentation is not to be deemed legal advice and it is for

information purposes only. It is recommended that parties should seek their own

independent legal advice when confronted with issues discussed in this presentation

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