In common with most transactions involving a GST registered person, the sale of a business is generally subject to GST unless the ‘supply of a going concern’ exemption applies – in which case the sale will be GST-free.

Tort Law in Victoria is currently undergoing major statutory change. The reform, collectively know as the Tort Law Reform Package, is encompassed in three statutes:

WRONGS & Other Acts (Public Liability Insurance Reform) Act 2002

The Act provides that:

Limitation of Actions (Amendment) Act 2002

The Act provides that an action for damages for personal injuries may not be brought after the expiration of three years from the date on which the cause of action accrued. This reduces the limitation period from six to three years. The new limitation period does not apply to the following:

Personal Injuries Procedures Bill

This Bill aims to encourage settlement of claims for damages for death or injury, by establishing pre-litigation procedures. The pre-litigation procedures in the Act contain strict timeframes. The result of this is that each party is obliged to develop their respective positions within a short period of time.

Pre-Litigation Procedures

Under these procedures the Claimant must, firstly, provide the Respondent with a Notice of Claim which details the injury, medical treatment received and damages claimed. This Notice may only be provided once the claimant’s medical practitioner reports that the injury is stabilised.

Once the Respondent responds to the Notice and joins any further Respondents, there is a full exchange of documents and relevant information between all parties. Parties must then attend and participate in a conference to resolve the claim. Each party must make written offers at this conference. These written offers will become significant in relation to costs, if the matter goes to trial.
A Claimant will only be able to commence proceedings if a settlement is not reached at the compulsory conference.

Litigation Costs

The following table outlines who is to bear legal costs at trial, where the costs awarded are less than $50,000.00 and the pre-trial procedures have been followed:

Claimant awarded less than $30,000.00 Claimant awarded between $30,000.00 and $50,000.00

Amount awarded is equal to, or more than, the Claimant’s final written offer at compulsory conference Claimant entitled to costs on solicitor/client basis from day proceeding commenced Claimant entitled to costs on solicitor/client basis from day proceeding commenced, and up to $2,500.00 for costs prior to the proceeding.

Amount awarded is equal to, or less than, the Respondent’s final written offer at compulsory conference Respondent entitled to costs on party/party basis from day proceeding commenced Respondent entitled to costs on party/party basis from day proceeding commenced, and up to $2,500.00 for costs prior to the proceeding.

Amount awarded is less than Claimant’s final written offer, but more than Respondent’s final written offer at compulsory conference Each party to bear their own costs Claimant entitled to a maximum of $2,500.00 for costs prior to the proceeding. Otherwise each party to bear their own costs.

Impact

The changes will to some extent make claimants more accountable for their own actions and limit in certain circumstances the amount of damages payable. The new claim procedures will require claimants to outline their case at an early stage and may, in view of the cost provisions, lead to smaller claims not being pursued.
Eventually, the reform should result in a reduction in public liability insurance premiums, however this is not likely to occur in the short term.

Written by Joe Naccarata