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

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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.

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Come and speak to one of our leading experts about your legal issues. We won’t charge you a cent.

If we believe we can help you, your first month will be half price.

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

 

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

Legal Proceedings Commenced by NSW Councils

News about the various Council mergers in New South Wales (NSW) seems to have quietened down since the majority of Council mergers occurred in May 2016.

However, the objecting Councils are still running or preparing to run their arguments against the NSW Government’s proposed mergers in the relevant Courts in the back ground.

One such battle has been played out between Woollahra Council and the NSW Government for its proposed merger with Waverley and Randwick.

On 20 July 2016 Chief Judge Brian Preston dismissed Woollahra Council’s on the basis that the Council had not established the grounds of its challenge.

The Council was ordered to pay the NSW Government’s costs which will come from rate payer’s money.

Despite this outcome, Woollahra Council has decided to battle on and appeal the decision of the LEC. In a Media Released dated 26 July 2016, the Mayor of Woollahra Council, Councillor Toni Zeltzer said:

“The decision to appeal was made on the same basis as our original legal challenge. This is just a further way of demonstrating how serious we are about protecting the democratic rights of our community and serving their best interests”.

The merger of Woollahra Council with Waverley and Randwick will now remain on hold until a final outcome is achieved.

Other Councils who have elected to challenge the NSW Government’s proposed mergers are also exempt until their appeal rights are exhausted.

Councils such as North Sydney, Botany Bay, Ku-ring-gai, Mosman, Strathfield and Hunters Hill have all voted to commence legal action against the NSW Government for proposed mergers.

The reasons for challenging the NSW Government’s decision include:

Ø  Increases to rates;

Ø  Failure to hold a proper public inquiry into the merger proposal; and

Ø  Failure to provide procedural fairness.

It will be a matter for the Courts to now determine whether each of the Councils that have commenced proceedings against the NSW Government have sufficient grounds to avoid the proposed amalgamation. Otherwise the amalgamations will be forced.

Watch this space.

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