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Our expert legal team is ready to take your call

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:


CALL: (03) 8561 3318

On 10 November 2020, the Federal Government announced changes to the unfair contract term provisions in the Australian Consumer Law, which now make unfair contract terms illegal and punishable by civil penalties. Further changes have also been proposed in relation to expanding the threshold of the term ‘small business’ and the definition of a ‘standard form contract’.

These amendments will greatly expand the reach of the Unfair Contract Term Laws and enable more small businesses to rely upon these protections.

What makes a contract term ‘unfair’?

The unfair contract term regime protects consumers and small businesses that are party to ‘standard form contracts’. A term of a standard form consumer or small business contract is unfair if:

  1. it would cause a significant imbalance in the parties’ rights and obligations arising under the contract,
  2. it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term, and
  3. it would cause detriment, financial or otherwise, to a party if it were to be applied or relied upon.

Examples of unfair contract terms include clauses that allow one party (but not the other) to:

  • terminate the contract,
  • vary the terms of the contract,
  • renew or not renew the contract,
  • determine whether there has been a breach of the contract,
  • avoid or limit liability for negligence, or
  • limit the other party’s right to sue under the contract.

The proposed amendments

1. The Unfair Contract Term

Under the current law, contract terms are automatically void (or invalid) if the Court determines that the term is unfair with no civil penalties being applied. Under the planned changes, these terms will be considered unlawful and Courts will be given broader flexibility to determine what remedy is appropriate, including imposing civil penalties.

2. The ‘Small Business’ threshold

Under the current definition, the protections only apply to a small business contract where at least one party is a business that employs less than 20 people and the upfront price payable under the contract is below certain monetary thresholds, being $300,000.00 for a contract of less than one year’s duration and $1 million for a contract that is one year or long in duration.  

Under the planned changes, the ‘small business contract’ threshold is to apply to those with an annual turnover of less than $10 million or fewer than 100 employees, with no upfront price requirements.

3. The ‘Standard Form Contract’

Under the current law, there is little guidance as to what a standard form contract involves, however the proposed changes direct the Courts to a series of factors that must be considered when deciding if a contract is in standard form.

Such factors include whether a party has an ‘effective opportunity to negotiate the terms of the contract’ and whether there is ‘repeat usage’ of a contract template. The proof of unfairness of a contract term will also change, with the introduction of a rebuttable presumption that a term is unfair, if in a separate case, the same or substantially similar term was used by the same entity or in the same industry and was found to be unfair.

What does your business need to do to get ready for these changes?

Although there has been no set date as to when these amendments will take effect, we suggest that businesses who use standard form contracts consider whether their business is now captured by the expanded definitions.

Further, business should review their existing and template standard form contracts to ensure that there are no unfair contract terms, as there will soon be a large range of penalties for using such terms and such clauses will be at risk of being void at law.

How can Sharrock Pitman Legal assist?

If you would like further information in relation to these proposed changes, or if you would like to seek advice on a contract you have used or have entered into, please contact our Commercial Law team on 1300 205 506 and we will be happy to assist.  

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Written by a member of our Legal Team

,

.

For further information contact

Mitchell Zadow

Mitchell is the Managing Principal of our law practice.

He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.

More on

Commercial Law

However, in this article we will set out the factors that influence how long it will take to obtain a Grant of Probate and to administer an estate in Victoria.

The basics

First things first: what is a Grant of Probate? A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will. Without Probate, the asset holders (say a bank or share registry) cannot be satisfied as who has the correct authority to receive the deceased's assets and may refuse to pay out.

Sometimes, for smaller estates or if assets are mostly jointly owned with a surviving spouse, asset holders might agree to release payment without requiring a Grant of Probate. This is usually on the basis that the person who receives payment promises to repay (or Indemnify) the asset holder if it turns out they paid to the wrong person.

If there is no Will, then you cannot obtain a Grant of Probate. Instead you obtain Letters of Administration. This is effectively the same, in terms of authorising someone to administer the estate, and would usually be obtained by the person who is the closest next-of-kin to the deceased.

“A Grant of Probate is effectively a document issued by the Supreme Court of Victoria which formally authorises an executor to manage the estate of a deceased person in accordance with their Will.”

Timeframes for Probate in Victoria

In order to obtain a Grant of Probate, the Supreme Court needs to be given information about the assets and liabilities of the estate, the deceased person, the witnesses to the Will, the executors and the Will itself. An advertisement of your intention to apply for Probate must also be published on the Supreme Court website for at least 14 days prior to any application being lodged.

Often, making enquires to obtain all the necessary information can take a number of weeks. Also, you will need the Death Certificate for the application for Grant of Probate and possibly for making proper enquires regarding the assets and liabilities. Waiting for the Death Certificate to issue can therefore add a few more weeks to the process. Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.

The Court itself usually does not take long to process the application (maybe another 1 to 2 weeks) and this is completed using the electronic Supreme Court filing system. This means you do not have to go to a Court hearing. The timeframe for processing applications for Letters of Administration is even less, given that there is no Will document for the Court to consider. There is also a general discretion for the Court to raise a 'Requisition' asking for more information before they review the application - this can sometimes delay matters.

“Overall, if you have your application for Grant of Probate lodged within 1 to 2 months from the date of death, you are making timely progress.”

So, here we are a few months after death and you finally have a Grant of Probate or Letters of Administration. It is important to remember that this is the start of the estate administration and not the end. For a very simple estate, you might only need a further month or so to cash the assets and pay them to the correct beneficiaries. However, it can often be more complex than that. Factors that determine the timeframe to administer the estate include:-

  • Some assets will take time to cash or transfer. For example, if selling a property, final settlement might be 60/90/120 days from the day of sale.
  • There is a 6 month period for challenges to be brought against the estate and executors must wait until this period expires before distributing the estate, if there is any risk that a disgruntled family member might come forward.
  • There might need to be final tax returns for the deceased or for the estate. Failing to wait for the ATO to process these could leave the executor personally liable for a tax bill.
  • You might need to advertise for creditors to come forward and wait for a period of months while this advertising timeframe expires. This protects the executor if they are unsure of all of the deceased's financial dealings and creditors.
  • It might not always be a good time to immediately cash estate assets. For example, the shares just took a nose-dive, do you still sell regardless of available price?

There is a general rule that executors have an 'executor's year' to complete the estate administration. This means that you should be aiming to have the estate finalised and distributed within 12 months from the date of death.

The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.

Liability limited by a scheme approved under Professional Standards Legislation.

Need help with Probate?

Our expert legal team is ready to take your call!

Mitchell is the Managing Principal of Sharrock Pitman Legal. He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate and can answer all your questions related to probate.

For further information, contact Mitchell on his direct line:

DIRECT LINE: 
(03) 8561 3318

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For fifty years Sharrock Pitman Legal has made a significant and long term contribution to meeting the legal needs of business owners and residents in the City of Monash and greater Melbourne area.