Commercial & Corporate
Q: I bought a pair of jeans, but I couldn't wear them because the zipper broke after wearing it twice. When I asked for a return, the store clerk told me, "The jean was an on-sale item, and we do not accept returns." How can I deal with this matter? A: In Australia, the Australian Consumer Law (ACL) guarantees consumers various rights. The scope of ACL is very wide, and it can be applied not only to products but also to services. Section 54 of the ACL states, so to speak, that goods are of acceptable quality—that is, they are safe, durable and free from defects, are acceptable in appearance and finish and do what they are ordinarily expected to do. In this sense, the seller has to refund, replace or repair these jeans because clothes that break after being worn twice would not be "reasonably durable". Section 54 of the ACL determines "reasonable quality" for a product by taking into account various factors such as general use, price, labelling, etc. For example, a $5 t-shirt naturally has a lower degree of "reasonable quality" than that of a $50 t-shirt. In other words, the $5 t-shirt being discoloured after several times of washing will not fall under a consumer guarantee claim. If a home appliance such as a refrigerator breaks after one year of normal use, it will not be considered "reasonably durable". Products such as home appliances often come with a manufacturer's warranty for a fixed period (for example a one-year warranty). However, although this manufacturer's warranty expires, the consumer's right could continue if section 54 applies. In addition, ACL requires manufacturers to incorporate into a warranty the term that "this manufacturer's warranty does not limit the consumer's ACL rights". Furthermore, even if the purchased goods are goods on sale, used goods or goods purchased on the Internet, despite a difference in the degree of guarantee, section 54 of ACL still applies. Situations in which the ACL consumer guarantee does not apply include a purchase of goods without receipts or proof of purchase, a purchase between private individuals without receipt (e.g. garage sales) or at auctions or with goods used unusually. Additionally, there may be cases in which consumers want to return a product just because they changed their mind without any problem with quality. In such cases, ACL does not apply. Accordingly, for the current case, if the store does not accept the return of the jeans, it is recommended that you first tell the store manager that you will consult with the Australian Competition and Consumer Commission or Fair Trading. If they still deny responding, we encourage you to contact these agencies.
Commercial & Corporate
Card Loan – how to avoid bankruptcy Q: I was laid off last year. Since then, I’ve had no source of income and my credit card loan has increased to nearly $30,000. It has come to the point that I can no longer repay it. The collection started to become difficult, so I received consultation from an acquaintance who asked what would happen if I were to go bankrupt. What should I do? (30-year-old unemployed male). A: Bankruptcy definitely frees debtors from their creditors and allows them to restart. However, it is not an easy world. Once you go bankrupt, you lose social credibility and it may become a serious hindrance in the future. For example, it may become difficult to create a new credit card or it may become difficult to obtain a loan. Additionally, there will be restrictions in finding a job and during the bankruptcy declaration, prior permission from the administrator is required to travel abroad. Therefore, bankruptcy is not that simple. However, “self-bankruptcy” is a reliable process when communicating with creditors. As for creditors, their biggest concern is how to get their debts repaid, not how to make you go bankrupt. In the case you go bankrupt, the card company will not be able to recover a dollar, due to the liquidator’s expenses. So, from the credit card companies perspective, it is not an amiable option to make you go bankrupt. It is not that simple to say that if you sell your assets and appropriately repay that you can ask to give up the remaining bonds. In order to settle with the credit card company, you need to negotiate with them. First of all, you will need to disclose all your assets, providing them with credibility that you do not have any income. In order to do this, you will need to show them sincerity and remorse. Additionally, it is important to show them how you got into the situation (such as being laid off) and what you spent with the card. For example, the majority of these may be daily necessities and, in this regard, you may be able to obtain sympathy from the credit card company. In my experience, the most effective method is to suggest to the credit card company “If you give up on the balance, I can borrow a small amount (e.g. $10,000) from my father or relative and make up the repayment”. Then there may be a chance of reconciliation. Additionally, every card company and banks share information regarding problematic customers, so if you had problems with other financial institutions previously, bankruptcy may occur. In any case, when it comes to negotiating with a card company, if possible, it is best to obtain expert advice.
Commercial & Corporate
“A person A who resides in Eastwood lent the amount of $8,000 to his friend B. B promised that he would repay $1,000 per month for eight months and at the end of the last month, B would pay interest of $400. However, B has not repaid any money for five months, and ultimately, he started ignoring A’s contact at all. As such, A wishes to bring a court action against B for the debt recovery.” 1. Mediation through Community Justice CentreBefore commencing a legal proceeding, parties are recommended to resolve their issues through mediation service provided by the local Community Justice Centre. Disputes are sometimes resolved and settled in this stage, and these procedures are beneficial to the parties in disputes in order to ascertain each other’s positions. One of advantages for mediation in the Community Justice Centre is that it does not require any legal assistance by lawyers. Mediation procedures generally take two hours and are free of charge. If A and B execute a settlement document through the mediation and register it to the court, such a document will have legally binding effects. A settlement through mediation procedures is particularly efficient in the sense that parties do not need to spend time and costs for legal proceedings. It is generally known that around 80% of cases are settled in this stage. To get more information, please contact 1800-990-777. 2. Letter of demandIf parties are unable to reach an agreement in mediation, party A may send a letter of demand to party B. That letter may include an amount of debt and a due date, and that A would initiate a court action by submitting a complaint to the court unless B repays the debt by the due date. For instance, A can send the letter stating that “I hereby demand that you repay me $8,400 by 30 April 2018. Otherwise, I will commence legal proceedings against you to recover the debt without any further notice”. It would be good to include in the letter that both legal costs and an interest on the debt would be charged. Although sending a letter alone to B’s address by post is the best way, sending an email or a facsimile together with the letter is even more effective. 3. Court proceedingsIf B doesn’t repay the debt by the due date indicated in the letter of demand, A can initiate a court proceeding in the Small Claims Division of the Local Court given that the amount of debt is less than $10,000. One of the benefits of lodging a claim in the Small Claims Division is that the rules of evidence do not apply, and a trial is conducted faster and simpler than by a judicial panel. Hence, a claimant can be self-represented without appointing a lawyer if he or she has no difficulty speaking in English. If the amount of debt is more than $10,000, a claimant should bring an action in the General Division of the Local Court, and if it is more than $750,000, he or she should bring an action in the Supreme Court. In litigations that are not in the Small Claims Division, it is commonplace for claimants to appoint lawyers in trials due to the complexity of facts and numerous potential sources of disputes. On this occasion, claimants should be noted that a limitation period for a debt recovery is six years from the date of accrual of a debt. If more than six years has already elapsed, a claimant may be unable to bring a court action for a debt recovery against a debtor. 4. Statement of ClaimA has to attest an object of and a reason for a claim in a complaint called the Statement of Claim and submit the document to the Local Court Registry with a filing fee of $99, which begins an official court proceeding. In the Statement of Claim, a claimant can also demand the other administrative fees incurred for a proceeding including a filing fee as well as a legal interest (the average interest rate from January 2018 to June 2018 ranged from 5.50% to 7.50% and can vary before and after a trial). Also, if a lawyer represents a claimant in a court proceeding, A can also demand a legal fee in the Statement of Claim. Once A completes the Statement of Claim and submits both the original copy and two replicated copies (total three copies) to the Local Court Registry, A will be immediately granted a confirmation stamp and a case number. The original copy would be stored at the court, and the other two replicate copies would be returned to A. A has to serve one of the two replicate copies which have the court’s stamps to B within six months thereafter. The most recommended way of a service is either in person or via post by the court. When intending to use the court’s postal service, A can apply for it upon the submission of the Statement of Claim, and the application fee for the service is $42 as of now, the amount which can be also claimed from B by including the amount in the Statement of Claim. 5. Default JudgmentB has to submit a Defence to the court within 28 days of being served with the Statement of Claim. If B fails to do so, A can apply for a Default Judgment. A Default Judgment is when the court unilaterally makes a judgment against a defendant without a hearing, and this judgment concludes with final costs inclusive of an amount of debt, legal costs and interests. When applying for a Default Judgment, A has to submit to the court both an Affidavit of Service which proves that the Statement of Claim is properly served to B either in person or via post by the court and a Notice of Motion-Default Judgment for liquidated claim.
Commercial & Corporate
Q: There is an upcoming marriage between Australians who have an age gap of 10 years. The man has economic power, a house and some assets. As a condition of marriage, he said, “I want you to sign a contract which pre-determines the distribution of assets in the event of a divorce”. When he divorced his ex-wife, he stated he did not want to go through it again as it was not a pleasant experience. What is this document and what is its effect? A: It is a Financial Agreement and is more commonly known as a Prenuptial Agreement under the Family Law Act as per Part VIIIA. The main purpose of the agreement is to identify how the couple will distribute their assets should they divorce. For example, if at the time of marriage, one party has a pre-existing home or an expensive piece of artwork that may have been inherited from a parent, the prenuptial agreement will state “the house or art is not marital property at the time of the divorce and is to be excluded from distribution”. The Financial Agreement not only determines the distribution of assets but also covers child support fees and alimony. However, child support is a child’s right and there is a very likely chance that a dispute will arise in relation to its validity and is generally not covered by the Financial Agreement. A Financial Agreement can be entered into not only before marriage but also during the marriage and after divorce. Ideally, entering into a Financial Agreement will make the divorce process smoother (without having to waste unnecessary legal costs or effort). However, one thing that should be noted is that even if the Financial Agreement was considered a fair arrangement at the time, it may be considered unfair in the future. For example, 10 years later after a child is born, if an individual had been a housewife for a long period and cannot obtain a stable job, can it be considered acceptable then? In this regard, the Family Law Act has several conditions that can revoke the Financial Agreement, including situations whereby the effects of the Financial Agreement are considered unfair. To ensure the validity of the Financial Agreement, information will need to be disclosed which may be considered important, including the details of the assets and a certificate from each respective lawyer that shows advise has been provided to you in relation to the pros and cons of the Financial Agreement and the benefits and the rights of the parties(Section 90G(1)(b) of the Act).