Case Studies

Please click on a topic below to be taken to case studies on that subject.

• Business structures
• Purchase/sale of real estate
• Purchase/sale of a business
• Protection of assets
• Granting/obtaining rights to use assets
• Business transactions/contracts
• Employment & contracting
• Finance & securities
• Business succession & estate planning

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Business Structures

Belgian software company established an Australian subsidiary

A Belgian software company wanted to establish an office in Australia. We advised on the alternative ways that it could do so and then assisted it to incorporate an Australian company as a subsidiary.

Sale to the highest bidder was the fairest way to resolve a deadlock between shareholders

Two people established a training company. In designing their shareholders agreement, we suggested several alternative means by which they could resolve the problem if they were ever unable to agree on something critical to continuation in business together. They chose to implement a solution by which the highest bidder would be compelled to buy the other's shares in the company.

Share buyback was a more tax-effective way to remove a shareholder from a company

An electrical contracting company had 3 owner-operators, one of whom wanted to leave the company and sell his shares to the others. The owners asked us to advise on the transaction and prepare share transfers. We examined the company's financial statements and were able to show that it would be more tax-effective for all the owners if the company bought back the departing shareholder's shares instead. We then managed the entire process for the company.

Failure to keep a company's statutory records properly increased the cost of selling the company

The owners of an advertising agency agreed to sell the company. It was discovered that a transfer of shares by a shareholder who left the company some years earlier had not been properly documented or recorded. The sale of the company had to be delayed while the issue was resolved at some considerable expense (including penalties for late payment of stamp duty).

Franchise agreement prevented a breach of ‘third line forcing' provisions of the Trade Practices Act

A company designed a drink dispensing system with the intention of granting franchises to supply and service it. We prepared all the documents required so that the company would comply with the Franchising Code of Conduct. In the course of doing so, we advised the company how it should arrange the supply of the drink dispensing system so as not to infringe the prohibition of ‘third line forcing' in the Trade Practices Act.

Franchising prevented a joint venture from breaching the Trade Practices Act

An Australian market leader and a competitor providing equivalent services planned to enter a joint venture agreement containing a non-competition provision. The arrangement might have been regarded as a misuse of market power or as leading to a substantial lessening of competition, contrary to the Trade Practices Act. We assisted the parties to set up a franchise agreement instead, which meant that they could proceed without breaching the Act.

Industry code of conduct required authorisation to avoid a breach of the Trade Practices Act

A pharmaceutical industry group planned to establish a code of conduct for its members. As the code might be regarded as potentially anti-competitive (contrary to the Trade Practices Act) we advised on its content and on the procedure to be followed to obtain authorisation for the code by Australian Competition & Consumer Commission.

Industry standards required authorisation to avoid breaching the Trade Practices Act

An automotive industry group wanted to establish certain common standards which would benefit manufacturers, distributors and retail customers. We alerted the group to the need to obtain authorisation from the Australian Competition & Consumer Commission in order to avoid a breach of the Trade Practices Act.

Purchase/Sale of Real Estate

Pest inspection revealed active termites in a strata development

We recommended that a buyer of a strata property obtain a building and pest inspection before exchanging contracts. He did so and the report revealed that there were active termites in the unit he wanted to buy and probably extended to the other units as well. We negotiated a clause in the contract which meant that our client did not have to settle until the owners corporation produced a certificate that the whole development had been treated to eradicate the termites. We estimate that our advice saved our client $6,000.

Obtaining a survey revealed the true position regarding shared services

A client was buying an industrial building. The survey in the contract showed a gutter shared with the neighbouring building. Clearly the seller (who owned both buildings) needed to create an easement for joint use of the gutter. But we recommended the buyer have another survey carried out. That revealed that the original survey was wrong – there was no shared gutter, but each building had another gutter or downpipe which crossed the other building. This required different easements or, alternatively, changes to the plumbing so that no easement was required. Our advice saved our client potentially $10,000 – 15,000.

A misleading price prediction enabled an unsuccessful bidder to recover his investigation costs

A selling agent gave an indication of the likely sale price of a property that a client wanted to buy at auction. The client incurred substantial costs of investigations about the property. The property was passed in at a price over the buyer's budget. Since the agent had misrepresented the likely sale price, we were able to negotiate full reimbursement of the investigation costs.

Absence of builders warranty insurance enabled a buyer to rescind a contract

A client bought a property for over $2,000,000 at auction without having us review the contract first. We discovered that the seller (who was a builder) had carried out extensive renovations without effecting builders warranty insurance. A building inspection report on behalf of the buyer raised doubts about the structural safety of the renovations. We advised our client that he could rescind the contract and recover his deposit, which he did.

Purchase/Sale of a Business

Restructuring the purchase of a business reduced the price and stamp duty

An internet service provider agreed to buy another ISP's customer base. We pointed out that, if the buyer agreed to buy all the things necessary to conduct the seller's business, it would become the sale of a going concern and the seller would not be liable for GST. The parties agreed to the change and the price was reduced by 1/11^th. An additional benefit was a reduction in the amount of stamp duty payable by the buyer.

Restructuring the sale of a business reduced the tax and stamp duty payable

A concrete resurfacing company agreed to sell its business. On our recommendation, the parties agreed to restructure the transaction as the sale of the company instead. Not only did this considerably simplify the process, it also significantly reduced the tax and stamp duty costs for both parties.

Protection of Assets

Inventor's rights protected against premature disclosure

A client invented a novel cleaning device. He needed help to develop it into a saleable product and wanted to licence it to a major corporation in order to get it sold widely. We wrote a confidentiality agreement which enabled the inventor to hold discussions with prospective collaborators without fear of them illicitly copying the device and without losing his right to apply for a patent later on.

Inventor's right to a patent restored

An industrial designer invented a machine for use in packaging products. Without his agreement, two other people obtained the grant of a patent for the machine in their names. We examined the facts of the matter and, following our advice, the inventor was able to have the patent amended to recognise his prior rights.

Copyright owner's rights protected by licence and other means

A medical professional agreed to allow a not-for-profit organisation to use training materials she had developed. She was concerned about the risk of unauthorised copying and use of the materials after she released them. We therefore drafted an appropriate licence agreement and recommended other practical steps that the medical professional could take to minimise the possibility of misuse of the materials and to ensure she could recover compensation if it happened.

Alteration of a trade mark enabled it to be registered

A training company wanted to register its trade mark. Knowing that registration of the trade mark was likely to be opposed because its key feature was a common English word, we recommended certain changes to it. Although there was opposition to registration of the trade mark, we were successful in arguing that it was sufficiently distinctive to be accepted.

Comprehensive submissions overcame opposition to the registration of a trade mark

A physiotherapist devised and used a trade mark in relation to her practice. An application to register the trade mark was opposed on the grounds that the trade mark was a phrase in common use and should be available for use by other physiotherapists. We prepared a comprehensive submission demonstrating that the trade mark was distinctive of the physiotherapist's practice and the trade mark was accepted for registration.

Use of a company protected a business buyer's house in case of liquidation or court proceedings

A middle-aged executive had been retrenched from his job. He wanted to buy a café, but was concerned about the risk losing his house (which he owned free of mortgage) if the café was unsuccessful or if anyone had cause to sue the business. We recommended that he establish a company to buy the business. The café did prove to be unsuccessful, but our client was able to close down the company without losing his house.

Granting/Taking Rights to use Assets

Landlord's ability to claim unlimited outgoings reduced to fixed amounts

We reviewed a lease for a tenant. The outgoings were supposed to be fixed. However, when we examined the outgoings clause closely, we found that the lessor could charge whatever it liked and change the amount more or less at will. We negotiated a change to the lease to prevent this occurring.

Tenant's liability for damage caused by trespassers removed from a lease

We reviewed a lease for a tenant. We found that that it included a clause stating that the tenant would be solely responsible for damage to the premises caused by a trespasser. We negotiated a change to the lease to place the risk back on the landlord.

American software company's standard agreements converted for use in Australia

A United States software company established an Australian subsidiary. We reviewed and substantially rewrote its standard software licence, software development and professional services agreements to comply with and be effective under Australian laws.

Liability of an online service provider limited in compliance with the Trade Practices Act

An online service provider wanted to prevent its customers from claiming against it if things went wrong when they used the service. We wrote a clause for the service provider's terms of business which limited its potential liability as much as permissible, without infringing restrictions on limitations of liability under the Trade Practices Act.

Business Transactions/Contracts

Written contracts enabled a marketing company recover payment for unauthorised use of its programs

A marketing company devised programs to attract advertisers for radio stations. We wrote a contract between the company and the radio stations that used the programs. A radio station which had entered into the contract subsequently used one of the marketing programs without paying the marketing company. We sent the radio station a demand on behalf of the marketing company and recovered over $20,000 for it.

Written contract solved a vehicle broker's debtor problem

A vehicle broker experienced frequent problems with clients who failed to pay for its services. We recommended a change to the way that the broker ran its business and wrote a simple one page contract, setting out the broker's terms of trade clearly. The broker's debtor problem was solved immediately.

Written terms of business solved a software consultant's debtor problem

A software consultant had regular clients which consistently complained about his charges and were slow in paying his invoices. We drafted written terms of trade and order forms for the consultant, which stated his terms of business clearly. The consultant's clients stopped complaining and started paying his invoices promptly.

Personal guarantees protected a distributor in case its supplier breached their agreement

A Swedish manufacturer of highly specialised safety and testing equipment appointed an Australian distributor. The agreement was designed to assure the distributor of certain minimum returns. Because of the unusual ownership structure of the manufacturer, we assisted the distributor to negotiate personal guarantees from the ultimate owners of the manufacturer.

Review of product brochures improved them and prevented claims under the Trade Practices Act

A building products company had us review its brochures, which we found contained statements that were potentially misleading and deceptive, contrary to the Trade Practices Act. We worked with the company to revise the brochures, so that its customers would be given accurate information and the risk of penalties under the Act and claims by customers was eliminated.

Review of a website eliminated unintentional breaches of the Trade Practices Act

We reviewed a real estate agency's website and helped the agency rewrite parts of it, so as to improve the information given to the public and eliminate statements that were potentially misleading and deceptive. This enhanced the website and prevented the agency from breaching the Trade Practices Act.

Review of a product label clarified it and prevented a breach of the Trade Practices Act

A paint manufacturer produced a special paint under a name which indicated its special properties. We advised on the content and positioning of wording on the paint containers that made the limits of the paint's performance parameters abundantly clear to customers. This minimised the possibility of claims of misleading conduct being brought against the manufacturer by customers or the Australian Competition & Consumer Commission.

Proper labelling limited an electrical equipment manufacturer's liability in case of injury

A manufacturer of electrical testing equipment wanted to limit its liability in case of injury to users of the equipment. We drafted a suitable warning and disclaimer label and advised on how it should be displayed on the equipment so as to prevent users from tampering with it and risking injury.

Disclaimer minimised the possibility of claims against an equipment manufacturer

A hospital equipment manufacturer produced equipment which could cause harm if it was misused. We wrote an explicit disclaimer explaining the potential risks and stating what steps should be taken to minimize them, so as to limit the manufacturer's liability for injury or death so far as possible.

Entrance signs minimised the risk of successful claims against a cable car operator in case of injury arising from misuse

A cable car operator wanted to limit the risk of claims against it if customers misbehaved and were injured. We wrote a simple, comprehensive and explicit warning notice and advised on its positioning at the entrance to the cable car, so as to prevent misuse of the cable car and limit the operator's liability in case of injury resulting from its misuse.

Employment & Contracting

Unapproved alteration of a document we prepared changed its effect

We prepared a standard employment letter for a client company. The letter contained a term allowing either party to terminate the employment without notice during the probationary period. Our client added a sentence, which it thought clarified the term. It didn't: its effect was to turn the probationary period into a fixed period of 3 months, so the company could not dismiss an unsatisfactory employee concerned before it expired.

Unapproved alteration of a document we prepared breached the Workplace Relations Act

We prepared a standard employment letter for a client company. Our client altered the letter to say that it would deduct superannuation contributions from an employee's salary, instead of paying them in addition to the salary. Our client was warned by the Office of Workplace Services that it was in breach of the Workplace Relations Act (and could have been penalised accordingly).

Carelessly drafted clauses offer no protection from competition by an ex-employee

An advertising consultancy drafted its own employment terms for one of its executives. When the executive left to set up his own competing business, we reviewed the restraint provisions in the contract, but had to advise that they were far too extensive and would not be enforceable to prevent the ex-employee from competing with his former employer. The case demonstrates the importance of getting professional advice on non-competition clauses.

Computer software company engaged software developers as contractors

A computer software company consulted us about engaging individual software developers. We advised the company on how to structure its engagement of the developers so as to ensure that they would be classified as contractors and not as employees.

Finance & Securities

Review of a debt factoring agreement led to changes to the factoring company's standard terms

We reviewed a debt factoring agreement for a client that wanted to factor its debts. We identified significant drafting errors that, left unchanged, would have proved very costly for our client. We negotiated changes to the debt factoring agreement that not only resulted in better terms for our client, but were also adopted by the factoring company as permanent changes to its standard documents.

Documentation of loan and security arrangements protects the lender's interests

A father agreed to lend his son part of the purchase price for a house. The son was to borrow the remainder from a bank. When we interviewed the lender, it was clear that not all the terms of the loan had been considered or agreed. With our assistance the parties negotiated a complete arrangement, including a second mortgage. In addition we recommended a deed of priority with the bank, so as to prevent the son borrowing more and putting the second mortgage security at risk of becoming inadequate.

Business Succession & Estate Planning

Business succession plan ensures continuity of business if an owner-operator is disabled or dies

A professional services firm had 3 working principals, each of whom was responsible for a different aspect of the business. The owners recognised the risk to the business if one of them was disabled or died. We assisted them to design and implement a fully-funded business succession plan tailored to their circumstances and requirements, to ensure that the business would continue and the affected owner would be paid out tax-effectively if any of them was disabled or died.

Discretionary trust offers greater protection to an investor than a hybrid trust

An investor was advised by his financial planner to establish a hybrid trust to maximise the benefits to be derived from his investments. We discussed the rationale for the choice of a hybrid trust with the investor and discovered that he was more concerned to protect assets from potential creditors than to maximise the possible tax savings. In the circumstances, the investor decided to establish a discretionary trust instead.

Self-made will led to successful court proceedings by an ignored child

A client died, leaving a will which he had written himself, instead of seeking our advice. The will excluded one of the deceased's children from receiving any benefit from his estate, but provided no justification for doing so. The child took court proceedings and was successful in claiming approximately a quarter of the deceased's estate. The result might have been different if the deceased had instructed us to write his will for him.