Jones v Dunkel – the problem of not calling a witness at a hearing

Posted on April 4th, 2018

Most lawyers know the case Jones v Dunkel: in general terms, it is authority for the proposition that if a party does not call a witness who can apparently give evidence about a matter in dispute, the failure to call them allows the Court infer that the evidence of that person would not assist the party. This is one of the reasons why witnesses are often required to give evidence, even though they may not be of particular assistance to a litigant – to avoid an unfavourable inference if they are not called.

A recent Supreme Court decision, dealing with an insurance policy dispute, led to a discussion of the so called “Jones v Dunkel inference”.  The plaintiff made a decision not to call a number of witnesses at trial; and the defendant asked the Court to make a Jones v Dunkel inference. In dealing with that argument, the Court summarised the principles or considerations that are at play in deciding whether such an inference should be drawn. In particular, the Court suggested that it is the person asking for the inference to be drawn (that is, the opponent of the litigant who did not call the witness) who must prove two fundamental things namely:- Read the rest of this entry »

You need to amend your trust deed

Posted on December 15th, 2017

Recent amendments to transfer duty and land tax legislation may affect every Family/Discretionary Trust that either purchases or holds land in New South Wales.

A Family/Discretionary Trust is often used as an asset protection structure as the trustee normally has wide discretionary powers to distribute income and capital to wide classes of beneficiaries under the trust.

However, this wide discretionary power may cause a Family/Discretionary Trust to fall foul of the legislative amendments in 2016 targeted at “foreign persons” acquiring and holding land in NSW. Foreign persons are now subject to a 4% surcharge purchaser duty when acquiring residential land and a 0.75% surcharge on land tax where a foreign person holds residential land in NSW.   Read the rest of this entry »

Land tax – a win for property developers

Posted on February 20th, 2017

In a win for property developers, on 10 February 2017 the NSW Court of Appeal upheld a previous decision of the Supreme Court allowing a property developer the benefit of the primary production exemption from land tax (Chief Commissioner of State Revenue v Metricon Qld Pty Ltd).

Metricon had acquired a substantial land holding for approximately $60 million, which had been rezoned ‘Urban Expansion’ allowing for residential development. During the relevant period, Metricon sought development approval and paid approximately $2.2 million in consultant’s fees in preparing plans and reports in support of the development. Metricon also during this period agisted the land for cattle grazing for a rental of approximately $30,000.00 per annum. Read the rest of this entry »

Is unfair dismissal compensation taxable?

Posted on January 30th, 2017

Is Unfair Dismissal compensation taxable? Mullane and Lindsay SolicitorsThis issue can be of real practical importance, particularly to a dismissed worker, because knowing how much will be received “in the hand” is often an important factor in trying to negotiate settlements in unfair dismissal claims.

The reality is that whether or not a payment is taxable often depends on the nature of the payment. As a general proposition, compensation for wrongful dismissal is regarded as “capital” in nature and is not taxable but that is not universally the case. If a settlement includes components for unpaid wages or payment in lieu of notice (as well as compensation for wrongful dismissal) the whole of the payment can potentially be taxable unless the different component parts are clearly identified. Read the rest of this entry »

Self-managed superannuation funds (SMSF) & enduring power of attorneys (EPOA)

Posted on December 21st, 2016

The following example from a draft tax ruling illustrates some of the issues in respect to Self-Managed Superannuation Funds (SMSF’s) and Enduring Power of Attorneys (EPOA).  If this prompts a query from you, give us a call:

EXAMPLE:  Clare is the sole member of a SMSF.  The SMSF trustee is Clear Pty Ltd and Clare is its sole director. The responsibilities of being director of the trustee company of the SMSF have become too difficult and time consuming for Clare. Read the rest of this entry »

CLASS ACTIONS: Things to know

Posted on October 9th, 2009

Published by Law Society of New South Wales

In the current economic climate it is not surprising that investor class actions are receiving increased attention.

There is some suspicion and confusion about class actions. Some people have an enduring belief that they must be taking on an unacceptable level of risk if they get involved. Equally, some may just have an aversion to continuing in a claim commenced without their express consent, despite the fact that it could benefit them financially to do so.

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TRUSTS: Blow the dust off that deed

Posted on October 2nd, 2009

Published by Law Society of New South Wales

Many clients are totally unaware of the limited life of trusts.

Trust deeds can sit in safe custody for years without being looked at. But if you are planning to do something with a trust, it is important to check the trust deed first. You may be in for a shock if you find that the date when the trust will mature is coming up soon.

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SEAL THE DEAL: Signing contract documents legally in the e-age

Posted on September 23rd, 2009

Published by Law Society of New South Wales

Often, not enough attention is given to the procedure for executing contractual documentation when finalising an agreement. This is increasingly an issue as the number of parties involved in transactions increase, parties often do not execute contracts in the same physical location, and frequently parties are required to execute signature pages and return them by email.

In a recent court case a tax consultancy operated a taxavoidance scheme for some of its clients. The revenue authorities suspected that the scheme had been dishonestly implemented and sought warrants to search for  documents at a number of client premises.

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Super Funds: Maintaining a sole purpose

Posted on September 18th, 2009

Published by Law Society of New South Wales

Superannuation funds may be looking for more novel ways of accumulating wealth. People may want to accumulate wealth in a super fund by carrying on a business, but the tax office takes the view that this is not acceptable.

An alternative is for the fund to acquire shares in a private company or units in a unit trust which carries on a business. The tax office, however, will most probably say that this does not assist a trustee in avoiding the sole-purpose test.

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Law Reform: Less Australia/New Zealand legal divide

Posted on September 11th, 2009

Published by Law Society of New South Wales

The Australian and New Zealand governments have signed an agreement to make it easier to enforce certain judgments and sanctions between the two countries. It is also intended to streamline the process for resolving civil proceedings that cross the Tasman.

The direct result of this reform will be that parties in Australia or New Zealand with decisions not involving money that are captured by the trans-Tasman law reform will have more options for enforcement and a higher likelihood of success in enforcing when the defendant is in the other country or has property there.

The majority of civil proceedings will be able to be served in the other country without separately seeking permission from a local court, excluding such civil proceedings as dissolution of marriage, enforcement of maintenance obligations and enforcement of child support.

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Landholder Duty: Tax base expands

Posted on September 3rd, 2009

Published by Law Society of New South Wales

New state revenue laws create a new model for imposing duty on land.

Since 1987, NSW has had a tax system which imposes duty on the acquisition of interests in private companies and unit trusts that hold land in NSW.

Prior to 1 July, the rules applied where a “relevant acquisition” was made of a “land-rich” landholder. A private company or trust was considered land-rich if 60 per cent or more of its total assets comprised land or interests in land in all places, and $2 million worth of it or more, needed to be in NSW.

Under the new system, provided the entity holds land worth $2 million or more in NSW, it is irrelevant what proportion of its value is in land.

This expands the tax base to acquisitions of many non landfocused entities, such as in the manufacturing and service sectors. Duty at a top rate of 5.5 per cent must now be calculated not only on the unencumbered value of NSW land, but goods in NSW held by the entity as well.

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Removal of same sex discrimation federally

Posted on June 19th, 2009

The Federal Attorney General has announced that legislation to remove same-sex discrimination from a wide range of Commonwealth laws will be introduced in the Winter Sittings of Parliament. This reform follows the report of HREOC, Same-Sex: Same Entitlements, which focused on financial and work-related legislation.

Areas where discrimination will be removed include:

  • Tax
  • Superannuation
  • Social security
  • Health
  • Aged care
  • Veterans’ entitlements
  • Workers’ compensation
  • Employment entitlements
  • Other areas of Commonwealth administration

The Government has begun introducing legislation in the Winter Sittings of Parliament. In areas such as social security, tax and veterans’ affairs, the reforms are expected to be phased in – to allow time for couples to adjust their finances, and for administrative arrangements to be implemented.

All of the changes are expected to be implemented by mid-2009.

If you have any queries relating to Family or Relationships law please do not hesitate to contact any of our Family and Relationships Law Team at Mullane and Lindsay: Mark Sullivan, Vivien Carty, Kristy Davis and Ashleigh John. Kristy Davis is present at our Tea Gardens office on Wednesday afternoons by appointment. (Tel: 4928 7300).

MANAGING SUPER FUNDS: Breach of rules can lead to imprisonment

Posted on May 29th, 2009

A fund must be deemed a super fund under the superannuation laws for contributions to be tax-deductible and the fund concessionally taxed.

The strategy of tax planning through super funds is a simple one – you contribute as much as possible to a super fund whose income is then subject to, at most, 15 per cent tax, and in due course withdraw the contributions and income as a tax-free pension or lump sum.

However, the government imposes a quid pro quo. It expects that the super fund will be managed in accordance with its rules. The tax office regulates self-managed super funds. If a fund fails to comply with the requirements and becomes a non-complying fund, it will lose its ability to accept tax-deductible contributions and will not be taxed at concessional tax rates. Penalties can also be imposed on trustees and others.

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TAX LAW: Longer to appeal

Posted on May 22nd, 2009

A recent court of appeal decision affects the future conduct of state tax appeals generally, whether they concern stamp duty, land tax or payroll tax in NSW.

The court of appeal has found that where the Chief Commissioner of Tax refuses to give permission to lodge an objection to a decision after the 60-day period allowed in the tax laws, an objection may still be lodged under another part of the law.

For the person in the case, it kept alive his right of objection and appeal for earlier tax years 1997 to 2004 when he had lodged objections against his assessment for land tax after the 60-day period.

Contact your solicitor for further advice.