Everything you need to know about the Compulsory Acquisition process

The Compulsory Acquisition (sometimes known as resumption) of land is the power of Federal, State and Local governments and authorities to take ownership of privately owned land.

It seems like the NSW Government is on an acquisition frenzy casting a shadow over the future of many property owners and business operators.

In particular, a recent article in the Sydney Morning Herald indicated that of the 424 properties marked for acquisition, 111 properties were yet to be acquired for the WestConnex project.

What can the property owners in Sydney’s inner west expect if their property is chosen?

How does Compulsory Acquisition of Land work?

1.    Taking it right back to the beginning, plans for the extension, upgrade or creation of new infrastructure are determined by the NSW Government. For example, the WestConnex project for the extension of the M4 East motorway via underground tunnels.

2.    Property owners who have properties that lie within the area required to be used for the project receive letters from an acquiring authority notifying them of the following:

a.    Their property is to be acquired;

b.    A valuer will be appointed to value their property; and

c.    That the property owner is entitled to engage an independent and registered valuer to value their property.

This letter is called a “Proposed Acquisition Notice”. In the case of WestConnex, the acquiring authority was “WestConnex Delivery Authority”. It is always our recommendation to obtain legal advice early.

3.    The appointed valuers for the acquiring authority will conduct their valuation of the property.

4.    Property owners will then receive a letter of offer from the acquiring authority.

5.    If the offer is not acceptable to the property owners, they can finalise their valuation and submit a counter offer to the acquiring authority.

6.    Negotiations between the acquiring authority and the property owners will then proceed.

7.    Where agreement cannot be reached between the parties, the compulsory acquisition process governed by the Land Acquisition (Just Terms Compensation) Act 1991 begins.

8.    The acquiring authority will make an application to the relevant government minister for approval to compulsorily acquire the property. In the case of WestConnex, the relevant minister was the Minister for Roads, Maritime and Freight.

9.    Once approved, notice of the compulsory acquisition will be published in the Government Gazette at which date the property will become legally owned by the acquiring authority.

10.  Within the next 30 days, the acquiring authority must give the property owners written notification of the compulsory acquisition, advise the property owners of their entitlement to compensation as well as the amount of compensation that has been determined by the Valuer-General.

11.  The property owners will then have 90 days to consider the offer and either accept the amount of compensation or object to the amount of compensation via commencing proceedings in the NSW Land and Environment Court.

12.  If the property owners accept the amount of compensation offered, they are required to enter into a Deed of Release with the acquiring authority. The compensation will then be paid within 28 days of the acquiring authority receiving the completed Deed of Release.

13.  If the property owners decide to reject the offer of compensation and commence proceedings in the NSW Land and Environment Court, the property owners are required to give the acquiring authority notice of the proceedings.

14.  Where the property owner agrees, an advance payment of 90% of the compensation offered will be paid to the property owner within 28 days of the acquiring authority receiving notification. The money is otherwise held in a trust account pending the decision of the NSW Land and Environment Court.

15.  After the acquiring authority has paid 90% of the compensation, it is entitled to vacant possession of the property.

16.  Compensation will then be determined by the NSW Land and Environment Court (or a higher Court such as the Full Court of the Supreme Court of NSW where required). Factors that are to be taken into consideration include:

a.    Market value at the date of acquisition;

b.    Special value incidental to the property owners use of the land;

c.    Loss attributable to severance of land where appropriate;

d.    Disturbance losses including relocation costs, legal fees and valuation fees; and

e.    Solatium (i.e. compensation for non-financial disadvantage arising from the necessity to relocate).

How can G&B Lawyers help you?

Property Owners faced with the prospects of Compulsory Acquisition are permitted to obtain independent legal and valuation advice in relation to the process and their entitlements. The reasonable fees of the legal advice and valuation advice are covered by the acquiring authority.

Property owners should therefore have no hesitation in contacting G&B Lawyers for assistance. G&B Lawyers are experts in compulsory acquisition negotiations having been involved in compensation appeals in the NSW Land and Environment Court.

We will assemble an experienced team of professionals to ensure that the property owner is happy with the amount of compensation and with the outcome and will not walk away out of pocket.

For an obligation-free discussion, contact Kim Glassborow (Partner) on Mobile 0481 287 528 or Email kglassborow@gandblawyers.com.au

 

G&B Lawyers

Office: Suite 1, Level 1, 229 Macquarie Street, Sydney, NSW 2000

Mail: GPO Box 1849, Sydney, NSW 2001

M: 0481 287 528

E: info@gandblawyers.com.au

W: www.gandblawyers.com.au

Reference to Sydney Morning Herald article: http://www.smh.com.au/nsw/cost-of-westconnex-property-acquisitions-set-to-exceed-15b-20160914-grg2zc.html

Damning report into chemotherapy underdosing in the Central West

A damning report into chemotherapy underdosing in the Central West has revealed 28 patients were given incorrect doses of drugs.

That number is expected to increase with Health Minister Jillian Skinner admitting investigators were unable to review all data for all patients treated by Dr John Grygiel from 2006 to March 2012.

The report has been criticised for being too narrow, with Dr John Grygiel working in the region since 1989.

If you or someone you know was treated by Dr John Grygiel between 1989 and 2006, contact Nathan Buckley, Partner on 0411 067 367 or email nbuckley@gandblawyers.com.au to discuss whether you have a claim for medical negligence.

Recent Land and Environment Court Sentencing Judgment – Phillip Foxman

On 15 September 2016, Justice Sheahan of the NSW Land and Environment Court (LEC) handed down the long awaited sentencing judgment in the matter of Environment Protection Authority v Foxman Environmental Development Services; Environment Protection Authority v Botany Building Recyclers Pty Ltd; Environment Protection Authority v Foxman (No 2) [2016] NSWLEC 120.

 

See https://www.caselaw.nsw.gov.au/decision/57d74b9be4b0e71e17f54104.

On 22 December 2011 the NSW Environment Protection Authority (EPA) brought six charges against the Defendants and were successful in its prosecution. The Defendants included:

-       Foxman Environmental Development Services Pty Ltd;

-       Botany Building Recyclers Pty Ltd; and

-       Mr Philip Foxman

Briefly, it was found that waste material comprising processed construction and demolition waste and asbestos, was transported from Botany Building Recyclers Pty Ltd materials processing facility at Banksmeadow to 76 hectares of land known as “Foxman’s Valley” and owned by Foxman Environmental Development Services Pty Ltd in the Wollondilly Shire.

Foxman Environmental Development Services Pty Ltd had purchased the land with the intention of it becoming Mr Foxman’s retirement home and a place where roadbase could be developed. Mr Foxman conceded that he was the “directing mind and will” of both the other Defendants.

The charges laid against the Defendants by the EPA were for:

-       Using land as a waste facility without lawful authority in contravention of section 144(1) of the Protection of the Environment Operations Act 1997 (NSW) (POEO Act); and

-       Causing waste to be transported to a place that could not lawfully be used as a waste facility in contravention of section 143(1) of the POEO Act

Each of the penalties described under the POEO Act carry a $250,000 fine for an individual and a $1,000,000 fine for a corporation as well as daily penalties under section 144 of the POEO Act where the offence continues in the amount of $60,000.

In the sentencing judgment, Justice Sheahan stated that:

“Foxman (directly, and as the controlling mind of his companies) clearly intended to transport the offending material to Foxman’s Valley, and have it placed at particular locations on that property.” [68]

“He was fairly well informed of the detailed regime covering waste disposal and exemptions, and admitted at the trial some consciousness of his material’s non-compliance with that regime, but he considered the regime impractical and too strict, and structured his operations accordingly.” [69]

“He wanted, at the same time, to improve his proposed retirement property, to maximise the capacity of his fee-charging Banksmeadow plant, and to develop at Foxman’s Valley a profitable roadbase product, avoiding the payment of waste levies (estimated to amount to $936,510.00).” [70]

“The major criminality in this case is on the part of Foxman himself. He was deeply, and personally, involved in every aspect of the behaviour proven against the two companies he dominated, as well as himself.” [118]

“The financial penalty to be imposed has to be proportionate to the proven criminality, viewed as a whole, but the major burden should fall on Foxman, as the author and chief manager of the scheme.” [121]

The orders of the LEC are set out in summary below.

Total fines for offences

Foxman Environmental Development Services Pty Ltd                    $100,000

Botany Building Recyclers Pty Ltd                                                     $40,000

Phillip Foxman                                                                                    $250,000

Additional financial penalties

Prosecutor’s legal costs                                                                      $500,000 (estimate)

Investigators Costs                                                                             $4,646

The total costs liable to be paid by Mr Foxman is approximately $900,000.

Other orders

Publication Order in the Sydney Morning Herald and Inside Waste Magazine

Clean up order within 90 days of the date of the order. At the trial, Mr Foxman estimated that it could cost between $10-15 million to comply with the clean-up notice.

The rules and regulations that Mr Foxman believes are “too strict” and “impractical” [see para 75] but are in place to protect the environment, have now arguably caught up with him.

Some may question whether the penalty imposed is enough against Mr Foxman personally as the $250,000 penalty (which is the maximum amount that can be penalised in the case of an individual for contravention of section 143 or 144 of the POEO Act) is in fact made up of three separate offences against both section 143 and 144 of the POEO Act.

The LEC did have the power to order a higher penalty against Mr Foxman, but refrained from doing so.

Perhaps, if the protocol for calculating the monetary benefits that is supposedly being developed by the EPA in accordance with section 249 of the POEO Act was in place, the penalty imposed may have been much greater.

In any event, this sentencing judgment should deter other operators within the waste industry from having a complete disregard for the rules and operating as they see fit, and may assist in creating a more level playing field for all.
If you have any queries, please contact G&B Lawyers | Kim Glassborow (Partner) on 0481 287 528 or kglassborow@gandblawyers.com.au

 

EPA's Container Deposit Scheme - UPDATE

Where are we at?
Since the New South Wales Premier’s announcement in September 2015, the NSW Government has been working towards creating their own, state wide refund Container Deposit Scheme (CDS). The purpose of the CDS is to address litter problems across NSW and to improve recycling.

On 8 May 2016, a challenging commencement date of 1 July 2017 was announced.

On 23 August 2016 the draft Bill (Waste Avoidance and Resource Recovery Amendment (Container Deposit Scheme) Bill 2016 (NSW)) and the CDS Regulatory Framework Discussion Paper was released for a 4-week consultation period. A number of public consultation sessions were held and have now ended.

Public submissions are still being encouraged and will be accepted up until 21 September 2016.

Public Consultation Session

G&B Lawyers attended a recent public consultation session to understand some of the issues that are being grappled with and likely to arise in the future due to this significant change to waste industry.

Following the public consultation session and after reviewing the documents released for public consultation, we have highlighted a number of questions that we have.

Questions

Scheme Coordinator

There is to be a single Scheme Coordinator responsible for the financial management of the CDS and the targets that will be set. The Scheme Coordinator will be appointed by the Minister for the Environment via a competitive selection process. The Scheme Coordinator will be required to enter into a contract with the NSW Government. It appears that the Scheme Coordinator, whilst bound the contract with the NSW Government, will have some power over the operation and the success of the CDS. Anyone or any company could apply to be the Scheme Coordinator, including beverage suppliers and waste operators, perhaps even a Government Department.

Ø  Is the legislation that dictates the contents of the contracts for the Scheme Coordinator tight enough to ensure that the interests of all under the CDS are protected, whilst still providing incentive for person or company to take on the role as Scheme Coordinator?

Network Operators

There may be as many Network Operators as is desired. Network Operators are responsible for the providing the infrastructure and logistics of the collection points and will also enter into a contract with the NSW Government. It is expected that Network Operators will each be required to set up and service a state-wide network of collection points. Further details are to be provided in the Regulation.

Ø  Is the requirement for “state-wide coverage” too high?

Ø  How does a person or company that wants to be a Network Operator buy into the system?

Ø  Do they have to have possession of vacant land or an option to enter into possession of vacant land throughout NSW to be considered as a Network Operator?

Ø  What if there is one company that can meet the requirements of “state wide coverage” that does not enter into agreements with other people or companies to share their collection points, thus rendering the system non-competitive?

Ø  Will the handling fee be high enough to incentivise people or companies to be Network Operators?

Ø  Will the system fail if large entities such as Coles or Woolworths or petrol station chains set up their own, non-legislated, collection points, and transport containers to one or a couple of legislated collection points?

Infrastructure

Collection points are proposed to be by reverse vending machines or a specifically designed facility for the collection and handling of containers. As most people would appreciate, setting up this infrastructure is costly and will require a substantial amount of time. The proposed commencement date for the CDS is July 2017. To install all, or at the least some, collection points throughout NSW, there will be a number of developments requiring consent from the relevant authority.

Ø  Is a regulatory exemption for reverse vending machines appropriate?

Ø  Once chosen, will the chosen Network Operators have enough time to design, construct and open collection points before July 2017?

Ø  Will there be an appropriate transition period to allow the Network Operators to set up the collection points?

Ø  Will any financial assistance be offered to the Network Operator to install the infrastructure?

Contracts

At the commencement of the CDS, there will be a variety of contracts on foot for the collection of waste. These contracts may be in any form such as fixed term or fixed amount of a particular waste stream.  There is the potential for a number of contractual issues to arise if this situation is not considered and addressed.

Ø  Will there be any guidance or regulation in relation to circumstances where the new legislation makes a party to a contract breach an essential term of the contract (for example, where there is no longer enough waste to reach the required contractual amount?

Commencement date

As stated above, the commencement date for the CDS is proposed to be 1 July 2017. At this stage there are a number of unknowns such as the standard government contracts that will be required to be entered into by the successful Scheme Coordinator and Network Operators including what handling fee will be paid to Network Operators.

Ø  Will infrastructure be ready as at 1 July 2017 for the CDS to commence?

Ø  Will labelling from the suppliers be ready for the CDS, particularly when we are unaware of the containers that will be included in the CDS as this stage?

Ø  Would it be more practical for NSW to wait for the Queensland CDS to be more progressed before commencing?

NSW Government Model

The model that has been put forward by the NSW Government seems to pass responsibility for the CDS onto private citizens and companies. The NSW Government will remain in control of the CDS having an overarching ability to control the contracts pertaining to the Scheme Coordinator and Network Operator and the regulation of the system. The logistics, targets, and further finer details in relation to the operation of the CDS will be left to the Scheme Coordinator to determine.

Given the large responsibility and power given to the Scheme Coordinator and the potential flaws in the CDS, it is important to ensure that the system that is set up, will not fail and will be workable for the proposed 20 years.

Ø  Is the NSW Government rushing the deadline to implement the CDS in order to keep an election promise at the expense of implementing and system that is destined to fail?

In our last blog on the CDS were noted that we have very few details on how the CDS will work in practice.

Now, we can report that we have more details, but not nearly enough to say that it will be workable. So, our question still remains – is the NSW government on track to deliver?

G&B Lawyers

Office: Suite 1, Level 1, 229 Macquarie Street, Sydney, NSW 2000

Mail: GPO Box 1849, Sydney, NSW 2001

M: 0481 287 528

E: info@gandblawyers.com.au

W: www.gandblawyers.com.au

G&B Lawyers Conveyancing Special from $900 for Spring!

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Office: Suite 101, Level 1, 229 Macquarie Street, Sydney, NSW, 2000

Mail: GPO Box 1849, Sydney, NSW 2001

M: 0481 287 528

E: info@gandblawyers.com.au

W: www.gandblawyers.com.au

Directors of Storm Financial found to have breached their duties under the Corporations Act

The Federal Court last Friday found that the directors of Storm Financial, Emmanuel and Julie Cassimatis, breached their duties as directors. 

The Court also found that Storm Financial provided inappropriate advice to certain investors. 

Since around 1994, Storm Financial operated a system created by the Cassimatises, which ASIC considered to be "one-size-fits-all" investment advice that was recommended to clients.  The advice recommended that clients invest substantial amounts in index funds, using "double gearing" (Storm Model).  This approach involved taking out both a home loan as well as a margin loan in order to purchase units in index funds, create a "cash dam" and pay Storm's fees.  Once initial investments took place, "Stormified" clients would be encouraged to take "step" investments over time.

By the time of Storm's collapse in early 2009, approximately 3,000 of its 14,000 client base had been "Stormified".  In late 2008 and early 2009, many of Storm's clients were in negative equity positions, sustaining significant losses. 

The case that ASIC advanced against the Cassimatises centered around a sample of investors who were advised to invest in accordance with the Storm Model.  ASIC alleged that the advice provided to those investors by Storm was inappropriate to their personal circumstances, considering that each of the investors were alleged to be over 50 years old, were retired or approaching and planning for retirement, had little or limited income, few assets and had little or no prospect of rebuilding their financial position in the event of suffering significant loss. 

Among other things, it was also alleged that Storm failed to properly investigate the subject matter of the advice given to those investors.  ASIC also alleged that Storm failed to do all the things necessary to ensure that the financial services covered by its licence were provided efficiently, honestly and fairly.

ASIC further alleged that because the Cassimatises were responsible for the day-to-day significant decisions in relation to the provision of financial services to Storm's clients and exercised a high degree of control over its systems and processes, they had caused Storm to contravene its obligations under the Corporations Act 2001 (Cth) and did not exercise their powers as directors of Storm with the degree of care and diligence that a reasonable person would have exercised in that situation.

In a 217 page judgment, Justice Edelman found that:

• Storm provided advice to certain investors, that was inappropriate to their personal circumstances and failed to give such consideration to the subject matter of the advice and did not properly investigate the subject matter of the advice given.
• "A reasonable director with the responsibilities of Mr and Mrs Cassimatis would have known that the Storm model was being applied to clients such as those who fell within this class and that its application was likely to lead to inappropriate advice.  The consequences of that inappropriate advice would be catastrophic for Storm (the entity to whom the directors owed their duties).  It would have been simple to take precautionary measures to attempt to avoid the application of the Storm model to this class of persons." (paragraph 833)

This is an important decision which emphasises the importance of directors' duties to ensure that they do not cause the companies that they control, to breach the law.  The decision also highlights the significant obligation on financial services licensees to provide financial advice that is appropriate to the persons to whom it is given.

The matter will be listed for a further hearing at a later date to determine what civil penalties and disqualification orders should be imposed on the Cassimatises as a result of the breach of their director duties.

It is crucial for directors to understand and comply with their directors duties at all times.

Equally, it is just as important for persons seeking financial advice to ensure that the advice they receive is suitable for their personal circumstances. If you would like to find out more, call Nathan Buckley on 0411 067 367 or email Nathan at nbuckley@gandblawyers.com.au to make an appointment.

The words of another happy G&B Lawyers client!

We would like to take this opportunity to thank you and your team for your continued quality service in the settlement of our first home purchase and acting on our behalf and making what was a very difficult time a lot easier and stress-free.

Regards,
Sam & Shabi

September 2016

New divorce and separation resources to support your financial decisions

ASIC has launched new divorce and separation resources to support your financial decisions.

The Divorce and Separation Financial Checklist and the Asset Stocktake Calculator developed by ASIC will help people navigate the financial aspects of divorce and separation.

The resources are designed to help Australians manage their finances and make informed financial choices to avoid financial pitfalls during periods of significant change in their life.

The divorce and separation financial checklist and asset stocktake calculator will provide guidance on:

• making informed financial decisions at the time of a relationship breakdown;
• separating finances and getting money on track post separation and divorce; and
• commencing the property settlement process by providing a summary of assets and debts.

A relationship breakdown changes many aspects of a person's life, including their finances. This can leave people feeling stressed and overwhelmed and make it difficult to focus on financial decisions.

The new resources can help sort out money issues and guide people through the financial uncertainty they may be facing when a relationship ends, by providing practical steps to separate finances.

Research undertaken by the Australian Institute of Family Studies has measured the impact of a relationship breakdown on people's finances, which especially affects women. Divorce had a substantial negative effect on the household incomes of women, with Australian women experiencing a fall in income of 21 per cent compared to their pre-divorce income.

The new checklist from ASIC's MoneySmart can help you work out what you need to do. You can also use it to support someone you know who is going through a divorce or separation.

ASIC's promotion of the resources is supported by a video featuring Anne Hollonds who explains how the divorce and separation financial checklist can help navigate finances when a relationship ends.

Even if you are on good terms with your ex you should have your own legal advice.

Call Nathan Buckley on 0411 067 367 or email Nathan at nbuckley@gandblawyers.com.au to make an appointment.