Telemarketers and False Advertising: What to do about it if you have entered into a Contract?

Telemarketers and False Advertising: What to do about it if you have entered into a Contract?

We have all received those uninvited telephone calls from someone desperately trying to sell us goods and/or services – often during dinner with the family or at the most inconvenient time possible.

At Nautilus Law Group, we have heard many stories of people agreeing to enter into contracts for goods and/or services as a result of an uninvited phone call, to later find out that the promises which were made to them by the person on the phone are not what they contracted for once they receive the goods or services.

These types of contracts may include a contract to join a program which claims to provide personalised training for property investment or wealth advice, for savings on electricity or natural gas, for home improvements, among many other possible contracts of the like.

The contract agreed to may be expensive and often after the call or even after endorsement of a contract for goods and services unsolicited, the consumer finds those promises evaporate and reality hits that they agreed to an inappropriate arrangement.

What can you do about it?

The Australian Consumer Law provides protections for situations such as this. If the contract for goods and/or services costs more than $100 but less than $40,000, and the contract was made as a result of an uninvited telephone call or an uninvited sale at your doorstep, it is likely that the contract is an unsolicited consumer agreement and specific protections will apply.

These protections include the seller being legally required to send you a copy of the contract within 5 business days after the telephone call, which must clearly state a cooling off period, and include a Notice of Termination which can be used by you to terminate the contract during the cooling off period.

There are further protections in the Australian Consumer Law which impose guarantees that goods be of acceptable quality, match any demonstration model or sample you inspected, be fit for the purpose the business told you it would be fit for and any purpose that you made known to the business before purchasing, and come with full title and ownership. In respect to offers for services (such as personalised wealth planning or property investment classes) the services must be provided with acceptable care and skill or technical knowledge, be fit for the purpose or give the results that you and service provider had agreed to, and the services provider must take all necessary steps to avoid loss and damage to you.

If you have entered into a contract for goods and/or services as a result of an uninvited telephone call or sale at your doorstep, or the goods and services do not meet the guarantees outlined in this article, you may have remedies under the Australian Consumer Law.

If you are unhappy with goods or services you have purchased and require some legal advice, please do not hesitate to contact Tyler Smith of Nautilus Law Group at or phone 07 5574 3560. We will be happy to assist!


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Related Party LRBAs and PCG 2016/5: A review and recommendations for Trustees for Smooth Sailing

Related Party LRBAs and PCG 2016/5: A review and recommendations for Trustees for Smooth Sailing

The release of PCG 2016/5 comes as no surprise, which follows on the back of the Australian Taxation Office (ATO) publications ATO ID 2015/27 and ATO ID 2015/28, which set the tone for related party Limited Recourse Borrowing Arrangements (LRBAs).  The ATO’s 2015 position clarified that nil interest rates and/or interest rate terms being other than “commercial” in nature, constituted “non-arms’ length income” within the meaning of subsection 295.550(1) of the Income Tax Assessment Act 1997 (ITAA97).

PCG 2016/5 sails past interest rates, and now gives the ATO’s position on the entirety of related party LRBAs, including requirements for principal and interest monthly payments, security, terms of lending and standards for setting fixed and variable interest rates.


Given the overriding “sole purpose test” at section 62 of the Superannuation Industry (Supervision) Act 1993 (SISA) – what would lead anyone to think a related party LRBA could be made on other than an “arms’ length” basis, with a commercial standard of reference required?  Let’s think this through – we are limited in acquiring assets from members and “related parties” of members by section 66 of the SISA, we are prohibited from providing financial assistance to members and relatives of members by section 65 of the SISA and we are required to deal with investments at an “arms’ length” in accordance with section 109 of the SISA.  So, does it come as any real surprise that, if a member or a related party of the member is going to lend money to the self-managed superannuation fund (SMSF), it has to be on commercial terms?

It scares me when Trustees lose sight of the overriding black cloud of Part IVA of the ITAA97, and forget that the ATO has the benefit of hindsight in assessing anti-avoidance schemes.  Looking beyond Trustees, those of us advising Trustees must also be alert to our civil, and possible criminal, exposure under SISA, including but not limited to section 55 of the SISA, which puts us, as advisors, on the line to pay losses or damages suffered by any “person” (not limited to members) as a consequence of another “person” (not limited to trustees) involved in a contravention of a SISA covenant.   Remembering the Courts and Financial Ombudsman Service quite often favour the consumer, we need only look to section 52 of the SISA to appreciate the broad liability stacked on our shoulders when giving advice to SMSF Trustees of any nature which is other than, on its face, based on all parties acting on commercial arms’ length terms.

Let’s look, therefore, at PCG 2016/5.  Whilst the ATO provides us with peace of mind as to its interpretation of “arms’ length terms” for purposes of related party LRBAs in the Safe Harbour provisions, the ATO recognises at paragraph 4 of PCG 2016/5 that other arrangements may nonetheless be based on arms’ length terms.

Safe Harbour 1:  The LRBA and real property (commercial or residential)

Table 1

Safe Harbour 2:  The LRBA and a collection of stock exchange listed shares or units


Table 2

So, what happens if you can’t fit your arrangements into the Safe Harbours?  You aren’t sunk just yet.


If your client borrowed from a commercial lender to on-lend to the SMSF, what does the commercial lender’s terms to the client look like?

To keep this simple, let’s create a reference:

Client Pty Ltd, as Trustee for Client Superfund, borrows from John Smith, the sole director of Client Pty Ltd and sole member of Client Superfund, to acquire Greenacre for $500,000.  John borrowed $530,000 from Awesome Bank, secured against his home, on a 30 year interest free term, with the first 5 years being interest free only, with principal and interest from year 6.  John gave a personal guarantee, and also offered up security against his personal share portfolio.  The LVR was 80% of the combined value of John’s home and his share portfolio.  The interest on the loan is variable, based on Awesome Bank’s published rates.  Awesome Bank has their own internal assessment processes for determining variable rates.  John’s advisor told him that he could on-lend at the Awesome Bank’s rate for the full acquisition value, on matching loan terms.  John’s advisor also made sure John registered a mortgage over the property.  What happens now?

Can John rely on Awesome Bank’s terms to escape the Safe Harbours?  Not entirely.

Awesome Bank has recourse against John’s income as well, as the security and later acquired assets of John (through the personal guarantee).  John only has recourse against the real property owned by the SMSF, and nothing else.  Accordingly, given the additional risk, one would expect a commercial lender in John’s position would have either required higher interest rates, shorter terms or a varied LVR.  However, the terms of Awesome Bank’s lending to John are nonetheless material; the first approach for John is to seek out Awesome Bank’s LRBA terms.  If Awesome Bank’s LRBA terms at the time of acquisition were more lenient than the Safe Harbour provisions, John has a commercial “arms’ length” reference to hold to support a variation from the Safe Harbour.  However, to the extent his LRBA terms are more favourable than the Awesome Bank’s LRBA terms, John would need to vary his own LRBA to match (even if the variation was less than the Safe Harbour provisions).

What if Awesome Bank did not offer LRBA lending at the time of acquisition?  Perhaps John could then look to Community Bank instead.  If Community Bank has lending terms which were more lenient than the Safe Harbour provisions, then John would have a commercial “arms’ length” reference to support a variation.

To the extent John tries to find “arms’ length” terms different to the Safe Harbour provisions, he is best to ensure the comparative is truly “commercial”.  John should not look to his best mate Bob, who is a third party lender, to provide the “commercial” comparative – unless Bob is a recognised credit provider who has engaged in LRBA arrangements as a regular component of his business (which business commenced well before the publication of ATO ID 2015/27 and ATO ID 2015/28).


Let’s say that John has to figure out how to raise the shortfall in the LVR.  What are some options?

  1. John could make additional concessional and non-concessional contributions (subject to the contribution caps and restrictions) by allowing part of the loan to be paid down (do not forget the paperwork and required transactions!);
  1. John could invite new members to the fund and their rollovers and/or contributions could be used to reduce the loan (make sure the investment strategy is considered for each);
  1. John could sell the asset (which could be difficult by 30 June – but it is an option); and/or
  1. John could re-finance through Awesome Bank, and give Awesome Bank a personal guarantee (hopefully Awesome Bank values his business).

What if John is in pension phase, and he has to fund increased repayments on the LRBA from the SMSF?  John could look to any of the above options, and he could also:

  1. Commute his pension and roll back to growth phase;
  1. Commute his pension, and commence a part pension with the balance of his member interest in growth phase; and/or
  1. Vary the terms of his pension to reduce his payments to the statutory minimums.

PCG 2016/5 is not the end of the world, but it is a wake-up call to all advisors in the SMSF space to favour conservatism in strategies.  There may be litigation which flows out of PCG 2016/5, given some advisors made exceedingly ambitious strategic recommendations to clients who will not be able to float adequate remedial action by 30 June 2016.  The ATO has given advisors a bit of leeway and, with a bit of creative manoeuvring, many SMSFs can sail to the Safe Harbours with minimal frustration (consider the above options, if the client could fund to lend – the client may likely remediate by treating funds as contributions).

If you would like to discuss PCG 2016/5 or what the ATO Safe Harbours mean for you or your clients, please contact Katrina Brown on 07 5574 3560 or via email.


What happens when I can’t find the Defendant to personally serve?

What happens when I can’t find the Defendant to personally serve?

Defendent to personally serveAs all lawyers and a significant number of clients learn quickly in litigation, finding a Defendant to personally serve can be painfully slow and frustrating.  Unfortunately, the Civil Procedure Rules categorically require personal service for originating matters (and a handful of other proceedings).

If the client is unable to provide any further details of the  Defendant to personally serve, we recommend a process referred to as a “skip trace.”  In simple terms, skip tracing involves hiring an investigator to conduct a search of a wide range of public and private resources, and often involves on site investigation, to find a Defendant’s location.  Skip tracing can be a complex and lengthy process, and usually attracts a fee of anywhere between $110 and $1,100 (which varies depending on the scope of the investigation, if on sight investigation is required, this fee can be significantly greater).

A general skip trace includes some of the following searches, but can depend on what information is already held about the Defendant:

  • Electoral roll search;
  • Electronic White Pages;
  • Federated Content Search;
  • Australia Securities and Investment Commission;
  • Real property;
  • Google;
  • Social websites;
  • Australian Business Number; and
  • Reverse phone searches.

Our Team conduct a range of these searches internally, prior to commencement of proceedings (based on the client engagement).  However, when these initial searches prove unsuccessful and/or the process servers advise us they are unable to locate the Defendant at the last known address – we will offer a solution being a “skip trace” investigation.

We welcome you to contact our offices on (07) 5574 3560 or email We thank you for considering Nautilus Law Group.

Where do I lodge my Claim and Statement of Claim against a Defendant?

Where do I lodge my Claim and Statement of Claim against a Defendant?

claim and statement of claimIn Queensland, “where” you lodge a Claim and Statement of Claim is dictated by the Uniform Civil Procedure Rules 2001 (“UCPR”).

Queensland has three different categories of Courts, which are essentially organised in terms of the matter types which each decide, as well as the level of dollar value to be considered:

1.       In the Magistrates Court for amounts up to $150,000.00;

2.       In the District Court for amounts from $150,000 – $750,000.00; and

3.       In the Supreme Court for an unlimited amount.

Once we determine the category of Court, we then need to decide which Registry in which to lodge your matter.  Unfortunately, the decision as to which Registry is chosen, does not necessarily have any correlation to your location.  The Claim and Statement of Claim should filed be in the Registry closest to one of the following:

1.       The Defendant’s  location; or

2.       The location in which the incident or contract giving rise to the Claim took place.

Selecting a more convenient “Registry” for you, may result in an Order for Costs against you if the Defendant successfully argues you have not complied with the Rules, with the inevitable change of venue for the proceedings.  Therefore, to avoid this expense, we strictly comply with the Rules in selecting the Registry.

The “Registry” grounds the location of your proceedings for the balance of the case.  For instance, if you have to attend Court, you will attend the Court associated with the Registry.  There are exceptions to this, and on occasion you can attend by telephone, but largely your case is tied to that Registry location.

A copy of the Claim must be served on each Defendant, each of which has 28 days from the day of service to file a defence or attend to the matter (such as payment of the debt).  (Please see our Articles for discussions on Service.)

If the Claim is disputed or a Defence is filed, a copy of must be served on you.  You are then provided 14 days to lodge a Reply.

If the Claim is paid in full or you no longer wish to proceed, a Notice of Discontinuance should be filed with the Court.  Alternatively, if no Defence is lodged (or alternative satisfaction of your Claim made), then you may opt to lodge a Default Judgment. 

If you have any questions or enquiries about lodging a Claim in Queensland, we welcome you to contact our offices on (07) 5574 3560 or email We thank you for considering Nautilus Law Group.

Submitted by: Nautilus Law Group

How does “service” of a Statement of Claim work?

After a Claim and Statement of Claim have been lodged with the Court and returned to us, the next step is to “serve” the documents on the Defendant in accordance with the Uniform Civil Procedure Rules 1999 (Qld) (UCPR).

Rule 105 of the UCPR states:

(1)   A person serving an originating process must serve it personally on the person intended to be served.

Service on an Individual:

Personal Service is performed by giving the document to the person mentioned in the document. If the person refuses to accept service, the Rules permit the service agent serving the document to place the document down in the person’s presence and then explain  what has been placed by the person.

Occasionally, we may be required to conduct a skip trace to find a Defendant.  A skip trace requires the engagement of an investigator to search a wide range of public and private records to find the historical movements of the Defendant.  Whilst a skip trace may not find the Defendant, it may bring to light contacts which we can use then to find the Defendant.

If personal service cannot be achieved as a result of demonstrated evasion by the Defendant or it can be demonstrated service can be undertaken by alternative means to personal service (although traditional service attempts have been exhausted), an Application for Substitute Service is the next option. Before such an Application can be considered, we must provide evidence as to all attempts undertaken to date relative to locating and serving the Defendant, as well as evidence to demonstrate that a proposed Alternative is likely to provide notice to the Defendant of the proceedings.

Service on a Company:

If the Defendant in the matter is a company, service is be undertaken by sending the documents by post to the Defendant’s registered office.

After Service:

Pursuant to the UCPR, the Defendant has 28 days from the date of service to file a Defence or reach an agreement with the Plaintiff (such as paying a debt in full or by entering into a payment plan, or engaging in conduct that is required by the Plaintiff of the Defendant in the Claim and Statement of Claim).

If no action is taken by the Defendant following such period, there are a number of options available, but the most logical in cases in which the debt is “liquidated” (i.e. for a fixed amount) is to seek a Default Judgment against the Defendant.  Following entry of a Default Judgment against the Defendant, the Plaintiff is then empowered to “enforce” the Default Judgment.

Effectively, service is the second “starting gate” to the process of chasing a matter.  Service can take a considerable period in many cases in which the Defendant is an individual, and is quite frankly, the most frustrating part for many of our clients.

We welcome you to contact our offices on (07) 5574 3560 or email We thank you for considering Nautilus Law Group.

What is a Solicitor’s Demand Letter?

Nautilus Law Group recommends issuing a Solicitor’s Demand Letter as the initial step in the debt recovery process.
A Demand Letter, referred to in the industry as the “Final Notice” is not a Court document; however, the Letter gives the Debtor one last chance to satisfy the outstanding debt before legal action commences.
Our Demand Letters require payment of the debt, including debt recovery and legal costs (depending on terms of credit offered to the debtor) within a specified period of time.  You, our client, can set that time period and even elect to have a tailored suite of “Demand Letters” relative to different products, services and/or terms of credit extended to your clients.
Whilst we will accept a referral of file based on no more than a debtor’s name, address and debt amount – we strongly encourage you provide as well:
1.  Your credit terms/contract/invoices and any relevant material to the dispute;
2.  Full legal name of the debtor(s) (including any trading names and/or ABNs and/or ACNS) with physical and mailing addresses; and
3.  Contact telephone numbers for the debtor(s).
With these details, we can provide the best possible chance of a powerful “First Strike”, with a ready payment of the debt obligation.
It is quite common for debtors to move or evade collection attempts.  If you provide the above information, we have the ability to service a lateral attack on your debtor matter with our Solicitor Demand Letters.
When the Demand Letter has expired and no contact or payments have been received by the Debtor, we will contact you to seek instructions to proceed with Magistrates Court legal action against the Debtor.  Our Court fees are based on Queensland “scale fees” set by the Courts, and we can provide a cost estimate and realistic recovery plan from the outset of each referral.
If the Debtor, however, makes contact and offers payment in full, or payment by terms – we will consult with you and determine how best to approach the next steps – which may include agreement to allow a payment plan with interest and costs being paid or legal action.
If you have an Accounts Receivable concern, please contact our Team to discuss your matters.  We are happy to assist you with your matters from start to finish.  If appropriate, we can even provide a referral to a Debt Collection Agency (as a pre-legal step).
We welcome you to contact our offices on (07) 5574 3560. We thank you for considering Nautilus Law Group.