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In Check Issue 70 | March 201631 March, 2016
Table of contents
Cyber-crime – how alert are you?
Lawyers and the legal profession are increasingly becoming targets of cyber-crime and while many law firms may not appreciate it, they hold information about clients that may be valuable to cyber-criminals. The cyber-criminals can on-sell client personal or transactional information. They can also lock down a firm’s information and ransom firms to have it released or manipulate the flow of information to have money paid to them.
Firms need to take steps to ensure they have addressed their cyber-security risks including:
- training staff on the risks of ‘phishing’ emails and scam scenarios as inadvertent mistakes by staff are considered one of the biggest risks for organisations
- obtaining regular advice from technology experts on the suitability of the firm’s hardware and security software
- developing and implementing policies on the use of personal devices which contain firm information.
For information on cyber risk LPLC has previously written see the following articles on our website.
- Practitioners need to take fraud risk seriously
- Don’t fall for fakes
- Cyber-crime – client’s email account being hacked
- Verify that email really is from your client
- Are you still using Microsoft XP?
- Beware they want to get in!
Common GST question
A building on one title has been divided into three tenancies. Two shops are tenanted and the third is vacant. The supplier/vendor is registered for GST. What is the GST obligation on the third vacant shop? Are all exempt or is the GST proportioned on the third property?
Treatment of unlet area
Where part of a building is let and part vacant, the ATO accepts that a letting enterprise can exist in relation also to the unlet area where:
- it has been let but the tenant has vacated and, when that vacation occurred, the landlord promptly commenced a reasonable re-letting program and has continued it at all times; or
- it has never been let but was intended at all times for letting; has never been intended for the owner’s own use; and there has been a reasonable letting campaign in place at all times for it.
If your client can satisfy one of these tests in relation to the vacant area, the whole supply can be a going concern.
If neither of the above tests can be satisfied, the supply made under the contract of sale of land will be a mixed supply, that is, part GST-free and part taxable. The price should be apportioned between the two components of supply. Ruling GSTR2001/8, dealing with mixed supplies, states at paragraphs 25-27 that any reasonable method of apportionment that is supportable is permitted and that records of the apportionment should be kept available (against any future audit). It is advisable to set out in a special condition in the contract the apportionment and the basis on which it has been made.
If the premises are separately valued for rate purposes, you can apportion the sale price in proportion to the separate values allocated. You would do so on the basis of proportionality rather than simply adopt the municipal value for either component. Other methods include sworn valuations, written appraisals and apportionment in proportion to rents achievable for the various areas.
The parties have to agree that the supply of the property is the supply of a going concern as to the tenanted area, but otherwise taxable. You could do this by inserting “going concern”, “plus GST” and “subject to lease” in the relevant boxes and adding a special condition to the effect that the going concern statement refers to the area that is tenanted. You would have to identify the relevant area and the plus GST statement refers to the balance of the supply made under the contract. General condition 13 does the rest.
Importance of good working relationships within the profession
In our 18 December blog Barristers beware giving off the cuff we discuss the significances of a good working relationship between barristers and solicitors. It also mentioned how good communication including a written brief and contemporaneous file notes are effective risk management practices.
On this important topic of the relationships between barristers and solicitors the Law Institute of Victoria has recently published a podcast. LIV immediate past president Katie Miller and barrister Colin Golvan QC discuss the relationship between barristers and solicitors, and how they can work more effectively together. Go to the LIV podcast page to hear more.
Reminder for RedCrest
The Commercial Court Registry of the Supreme Court of Victoria has recently reminded practitioners and firms that it is their responsibility to manage who has access to their cases on RedCrest – the electronic filing and case management system of the Supreme Court of Victoria.
Firms should regularly audit who has access to the RedCrest electronic files. Transferring access should be part of a checklist when files are transferred internally between practitioners and when a practitioner with access leaves the firm.
2016 Risk Management Seminars
We have a full program of risk management seminars planned for the year. A calendar of dates and venues is listed on our website to help you to map out your CPD year. The brochures for each series will be emailed to you closer to the dates.
Regional Risk Management Tour
|13 April 2016||Mt Eliza
|21 April 2016||Warrnambool|
|22 April 2016||Geelong|
|27 April 2016||Bairnsdale|
|28 April 2016||Traralgon|
|4 May 2016||Horsham|
|5 May 2016||Ballarat|
|11 May 2016||Wangaratta|
|12 May 2016||Shepparton|
|17 May 2016||Mildura|
|19 May 2016||Bendigo|
Risk Management Intensive
27 July | 4 August | 9 August 2016
Registrations open 15 June 2016
Legal Business Essentials
6 September | 18 October | 3 November 2016
Registrations open 10 August 2016
9 November | 15 November | 17 November | 23 November 2016
Dandenong | Ringwood | Moonee Ponds | Bundoora
Registrations open 4 October 2016
Check your contracts for deemed service
You will have heard of Australia Post’s changes to delivery service of mail with the major change being the following three different mail delivery time frames of:
- express post is next day delivery
- priority delivery time is one to four days
- regular deliver time may take up to six business days.
Firms should review all their precedent contract terms dealing with deemed service to assess whether those terms should be redrawn to take into account these changes.
New look website
This month LPLC launched a new-look LPLC website. The web address remains the same at www.lplc.com.au
We have updated the site with the aim of making it easier for you to access information when you visit our website.
Please email LPLC if you have any questions about the website.
Law Institute Journal articles
Each month LPLC writes an article for the Law Institute of Victoria’s journal. The articles are posted on our website here at the start of each month.
Articles published in the past months are:
July Looking after leases
Implementing simple and effective lease preparation processes can help practitioners avoid a claim.
August Write it right
Avoiding common pitfalls when drafting will help mitigate risk and ensure that documents accurately reflect the client’s intention.
September Private lending pitfalls
Advising on termination payments requires specialist expertise.
October Making it personal
Litigators who breach their obligations are at risk of a personal cost order.
November Wills and super claims
Specialist knowledge is needed to advise on superannuation when preparing wills.
December Strategic thinking reduces risk
Business strategy in a changing legal market affects risk of claims.
January/February Don’t fall for fakes
Practitioners need to be wary of increasingly sophisticated scams.