Year: 2012

An engineering company has been fined $187,500 for a workplace accident that left a man partially paralysed.

The Industrial Relations Court fined Downer EDI Works for failing to implement guard railings around a machine that is involved in the preparation of asphalt.

The court found there were also limited safety protocols regarding the cleaning of the machine, the task that the worker was undertaking at the time of the accident in May 2009.

The victim, who had worked for the company for eight years, slipped into the pit during a break in cleaning and was crushed between the incline conveyor belt and drum roller.

He sustained partial tetraplegia, significant brain injuries, broken bones and nerve damage.

In his judgment, Magistrate Michael Ardlie said the incident could have led to death.

“The employee is highly unlikely to be able to work again or to be able to live independently” Mr Ardlie said.

“It is clear, and it was not disputed, that in the circumstances the risk was that the employee could have suffered fatal injuries.”

He added that the company had shown regret and had taken action to ensure proper protection and safe work practices were carried out throughout its Dry Creek plant.

“It went further to ensure that Australia wide all its plant was reviewed to ensure that guarding was adequate” he said.

Downer EDI Works was fined $187,500 and ordered to pay $1000 in costs and levies.

Source: Adelaide Now, 6 Jan 2012

About Rushmore Forensic

Andrew Firth is a forensic accountant who has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas.

He specialises in economic loss calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

A court has ordered more than $650,000 that is suspected of being linked to an international drug cartel to be turned over to authorities.

Australian Federal Police allegedly seized the cash in March when they raided the homes of two Gold Coast men suspected of heading the operation.

Ryan Thomas Litchfield, 26, allegedly had $37,500 stashed in a safe and a Louis Vuitton box at his Tweed Heads home.

Police allegedly found more than $600,000 at the Coolangatta home of co-accused Daniel Nunes Negrine, 30.

These and other alleged cash finds at both men’s homes totalled more than $650,000.

Queensland District Court documents allege some of that cash was found in the lining of a couch, while most was in the boots of two cars parked outside an apartment.

A District judge ordered this week that the cash, confiscated under the Proceeds of Crime Act, be surrendered to the Official Trustee of Bankruptcy.

Both men have been charged with conspiring to import cocaine between August last year and March of this year.

It’s alleged they used mules to bring drugs from Brazil into the Gold Coast.

Police allege Litchfield and Negrine can be linked to a man caught at Sydney International Airport and another at the Gold Coast International Airport.

These two mules allegedly had 12 kilograms of cocaine hidden in suitcase linings and windsurfer handles.

A third man, who was allegedly carrying 2kg of cocaine and had links to Litchfield and Negrine, was arrested in New Zealand in February as he was about to board a flight to Australia.

Litchfield and Negrine will both face court at a later date.

Source: AAP, The Gold Coast , May 31, 2012

About Rushmore Forensic

Andrew Firth is a forensic accountant who has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas.

He specialises in financial investigations and provides expert witness reports for court purposes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

A former Gold Coast council worker has been jailed for lying about breaking his ankle on the job to claim workers’ compensation, when he actually injured himself at the pub.

Richard Trevor Moore was sentenced to nine months prison and forced to pay back $65,000 to the Gold Coast City Council.

Moore claimed he tripped on a wet road bump at work but a Southport magistrate ruled he broke his ankle while having drinks at the Parkwood Tavern.

Lawyer Michael Gatenby will today lodge an appeal against the Southport Magistrates Court decision and sentence and seek bail for his client.

Moore, 51, filed a claim alleging he had been retrieving his work phone from his car when tripped at a council depot in September 2010 and badly injured his ankle.

He told his surgeon he thought it was just a sprain and so he drove to the pub for a few drinks at the tavern.

CCTV footage tendered in the court showed him collapsing in the pub and he was taken to hospital by ambulance and treated for a bad fracture.

Q-COMP lawyers, on behalf of the council, said Moore tried to cheat the system in a fraudulent claim for compensation and lying to his council boss and his surgeon about the incident.

Moore, a 20-year council landscaping employee, pleaded not guilty and maintained the initial sprain at the council depot had led to the later fracture.

He further claimed he had been made to sign work reports about the incident while on pain medication.

Southport acting magistrate Gary Finger found Moore guilty of defrauding the council and making five false statements under the Workers’ Compensation and Rehabilitation Act.

He convicted and sentenced him to nine months jail, suspended after he served three months.

He also ordered Moore to repay the Gold Coast City Council $65,861.72.

Mr Gatenby, from Gatenby Criminal Lawyers, said he would appeal the magistrate’s decision and sentence on the grounds that it was “unsound, unsatisfactory and unproved by the evidence“.

A council spokeswoman declined to comment specifically on Moore’s case as the council is forbidden to comment on workers’ compensation matters under the terms of its self-insurances workers’ compensation licence.

Council figures show workers’ compensation claims cost the organisation more than $4 million a year.

Source: Courier Mail, Leah Fineran and Matthew Killoran | 07:07am May 22, 2012

About Rushmore Forensic

Andrew Firth is a forensic accountant who has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas.

He specialises in economic loss calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

Fifty women who contracted hepatitis C after undergoing procedures at a Melbourne clinic have launched a class action in the Victorian Supreme Court.

The action is against three parties – the Australian Health Practitioner Regulation Agency, the director of the now-defunct Croydon Day Surgery and anaesthetist James Latham Peters.

The law suit, filed on Wednesday by Slater and Gordon, is believed to be the first time a personal injury class action has been lodged against a medical practitioner regulator in Australia.

The women had all attended the Croydon Day Surgery between January 2008 and December 2009.

Peters, 61, is also facing dozens of criminal charges, including conduct endangering life, negligently causing serious injury and recklessly causing serious injury over the hepatitis C scandal.

Source: AAP, SMH, May 16, 2012

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in both Australia and overseas.

He specialises in economic loss calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

 

The High Court has found retail giant Woolworths negligent in failing to remove a greasy potato chip from the floor of one of its shopping centres.

As a result Kathryn Strong, an amputee who walked with the aid of crutches, fell heavily to the floor of a food court area at the Centro Taree Shopping Centre in September 2004.

She suffered a serious spinal injury.

Ms Strong sued Woolworths in the NSW District Court, claiming its negligence caused her injury as the area was inspected more than four hours before the accident.

She was awarded damages of $580,299.

Woolworths took the case to the NSW Court of Appeal, disputing its responsibility for the injury.

That court ruled in favour of Woolworths, finding Ms Strong had failed to prove on the balance of probabilities that its negligence caused her fall.

As the chip was probably deposited at lunchtime it could not be concluded that, had there been a dedicated cleaning of the area every 15 minutes, the accident might not have occurred, the court found.

The High Court today ruled the NSW Court of Appeal finding was wrong.

In a majority decision, four of the court’s judges said reasonable care required inspection and removal of slipping hazards at intervals not greater than 20 minutes in the sidewalk sales area, which was next to the food court.

On the balance of probabilities, Ms Strong would not have fallen but for the negligence of Woolworths.

The decision restores the original verdict from the NSW District Court.

Commenting on the decision, Majed Issa, a personal injury lawyer with Maurice Blackburn, said the High Court decision had wide-reaching implications for people injured in public places who under the law must show that their injury was caused by negligence of a third party.

“In this case the High Court agreed that shopping centres and stores should have in place a reasonable inspection and cleaning system that would detect and remove hazards that could cause injury within a reasonable timeframe.” Mr Issa said.

In this case, the court determined that a hazard should be identified and removed if it has existed for at least 20 minutes or longer.

“This obligation also exists if stores have merchandise outside their own physical store, especially in an area where food and drinks are being consumed.”

Mr Issa said Ms Strong, who was injured almost eight years ago, would have spent enormous sums of money in medical and rehabilitation costs.

“Injuries in shopping centres are more common than you would imagine and there is a big cost to the community and individuals when people are injured through no fault of their own” he said.

(Source: SMH, March 7, 2012, AAP & Louise Hall)

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He specialises in economic loss calculations, personal injury compensation and other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

 

Many clients encounter family trusts in family law disputes. Below is an article first published by the SMH (4 April 2012). It provides an interesting examination of family trusts in Australia. Trusts are designed to protect assets but it can be a bit rich when the kids want out, writes Barbara Drury.

Family trusts are a time-honoured way for successful individuals to put a fence around their wealth and protect it from outside threats and prying eyes. But it seems that such a trust can’t protect a family from itself.

In recent months some of Australia’s wealthiest families have been displaying their dirty laundry in full view of the neighbours. The mining magnate, Gina Rinehart, is resisting an attempt by her children to have her removed as trustee of the multibillion dollar family trust. And the billionaire retailer, Solomon Lew, is fighting legal attempts by the estranged spouses of two of his children to get a share of the $621 million family trust.

These fights over the hereditary silver are proof that the trusts are assailable (more on that later) but that does not mean they are not a valuable wealth-management tool.

Close to the chest … increasingly, the Family Court is considering trusts as marital property.

In fact, Australians with far less wealth than Rinehart or Lew are embracing them in ever greater numbers. In 2009, 660,000 trusts lodged tax returns with the Australian Tax Office, a 50 per cent increase in less than a decade.

The main advantages of family trusts (see box) are to protect family and business assets, not just during a lifetime but beyond the grave, and to reduce tax, in that order.

A family trust specialist, Bernie O’Sullivan of Bernie O’Sullivan Lawyers, says many of his clients are professionals who set up family trusts to protect themselves from future litigation.

‘‘In the event they are sued, money transferred into a family trust no longer belongs to them. Rather, it belongs to the trust so it is out of reach of potential creditors” he says.

But let’s not forget the tax benefits.

One of the key ones is that the trustee can distribute income earned on assets inside the trust to other family members, taking full advantage of each member’s tax status and $6000 tax-free threshold.

Capital gains generated by the trust are distributed to the beneficiaries as income. This might be from the sale of assets or distributions from managed investments inside the trust.

The beneficiaries pay tax on the income and can claim the normal 50 per cent discount if the asset was held for more than 12 months.

‘‘Provided the trust deed allows, you can stream different types of income to different beneficiaries” O’Sullivan says.

For instance, you can distribute capital gains to a beneficiary who can offset them against existing capital losses, distribute income to beneficiaries on low marginal tax rates, or distribute income with franking credits to the family member who can benefit most from them.

‘‘The trustee has full discretion whether to distribute income and capital, to whom and in what proportion” O’Sullivan says. ‘‘If they choose not to distribute income, it will be taxed to the trustee [inside the trust] at the top marginal tax rate.”

This is rarely ideal, O’Sullivan says, as trusts would usually be better off distributing ”excess” income to a corporate beneficiary, which pays tax at the company rate of 30 per cent.

Another benefit of family trusts is that they allow assets to be passed from one generation to the next and capital gains tax to be deferred for up to 80 years. But this can cause problems for beneficiaries when the ”vesting” date arrives and the trust is pregnant with unrealised capital gains.

The HLB Mann Judd Sydney tax partner, Peter Bembrick, says when the trust vests, ‘‘all assets have to be passed on to the beneficiaries”. ”Capital gains tax is more likely to be a problem if it has been holding assets for a very long time” he says.

Or if the trust is sitting on billions of dollars of iron ore assets. The dispute at the heart of the Rinehart family feud is Gina’s unilateral decision, as trustee, to extend the life of the family trust by more than half a century from its original vesting date late last year. Three of her four children want their share of the trust’s assets now but Rinehart argues the capital gains tax bill would bankrupt them.

In practice, many family trusts with more modest fortunes wind up early and by the second generation, family members will often go their own way.

”When you have three siblings, all with their own families or divorced, they often want to take their share and go their separate ways” Bembrick says. ”You have to balance the costs of taking assets out of the trust structure with the benefits of each person being able to control their own affairs.”

Regulatory Change

The vexed issue of the distribution of capital gains is one reason behind the federal government’s planned reform of the taxation of trust income.

Bembrick says recent court decisions, including the Bamford versus Commissioner of Taxation case that went all the way to the High Court in 2010, have highlighted gaps between ancient trust law and modern tax law, especially where the distribution of capital gains is involved.

This, plus the recommendations of the Henry Tax Review, is behind the federal government’s planned reform of the taxation of trust income.

A consultation paper was circulated last November with the aim of ”better aligning the concepts of distributable and taxable income”.

While the government stresses that it was not proposing a ”crackdown” on family trusts and that trusts are still a legitimate structure to conduct personal and business affairs, Bembrick says the uncertainty has led some people to think that family trusts are not worth the risk.

”It is vital that the reforms lead to a system that is workable and provides certainty to beneficiaries and trustees of family trusts” Bembrick says.

”There’s a popular perception that family trusts are just a way to rort the tax system but that does not appear to be the approach Treasury is taking. I don’t think they are in danger of disappearing.”

But tax isn’t the only area where trusts have not kept up with the times.

O’Sullivan says the protection offered by family trusts from a family law perspective is not as good as it once was. He says the Family Court is increasingly willing to consider treating an individual’s interest in a family trust as being part of the property of their marriage.

“In recent times there have been more cases where people get divorced and there is very little marital property. In such cases, the Family Court might be more inclined to look to the family trust, if one exists. But there are ways of structuring a trust that offer greater protection” he says.

Costs

Family trusts are not necessarily expensive to set up but the experts agree that you need to be well off to make the most of them.

O’Sullivan says it costs in the order of $600 to set up a family trust, plus ongoing fees associated with lodging an annual return. Additional costs kick in if you decide to have a corporate trustee. ”In total, ongoing costs can amount to $1,000 a year or more” he says.

“Rarely would someone establish a trust for assets of only $100,000 but it’s not uncommon to get started with that if it is expected to grow quickly.”

Regardless, O’Sullivan says anyone thinking of establishing a family trust, streaming income or distributing to corporate beneficiaries should always seek advice from their accountant or lawyer before doing so, as complex tax and succession-planning issues can arise.

A senior adviser at Donnelly Wealth Management, Russell Lees, normally only recommends a family trust where assets exceed $400,000.

“If a client’s capital is reasonably high, we would consider a family trust and self-managed super and shuffle assets from the trust into super” he says.

“If a client is in their 30s or 40s, perhaps with their own business, they can’t get access to money in super so they can use a family trust as an entity to hold money outside super.”

‘‘Trusts are a complicated beast. The holdings are more long-term and it doesn’t dissolve at death, as super does. Even with a testamentary trust, you have to ask, ‘is it worth it to direct $300,000 to a beneficiary?’”

The advantages of setting up any trust needs to be weighed up against the added cost and complexity of using the structure. You need to be satisfied that a trust will have real financial benefits for your family and not just provide a rich seam of fees for your advisers.

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He specialises in assisting people going through divorce and providing other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

A Sydney man allegedly used his employer’s credit card to splurge $127,000 on holidays, electronic goods and other personal items.

The 25-year-old, from Darlinghurst, is also alleged to have siphoned more than $189,000 from the CBD-based marketing firm that he worked for, into his own account.

Police arrested the employee yesterday afternoon following a month-long investigation.

He was charged with fraud offences and is due to appear at Sydney’s Central Local Court today.

Detectives were tipped off about the offences, said to have occurred between April 2011 and March 2012, when the marketing firm noticed irregularities in its accounts.

Source: AAP, SMH 05/04/2012

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He is a former investigator with the Serious Fraud Office in the UK and specialises in complex financial investigations and providing other forensic accounting services.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions. To arrange an appointment with Andrew please call (02) 9954 6200.

 

Thousands of Family Court orders relating to de facto couples, including property settlements and maintenance agreements, have been cast into doubt by a major federal government blunder.

The government neglected in 2009 to arrange for the Governor-General to proclaim a start date for legislation that handed power to the Family Court to handle property and maintenance disputes between de facto couples. The mistake, which Attorney-General Nicola Roxon last night labelled an “unfortunate administrative error”, means all such property and maintenance orders by the Family Court and Federal Magistrates Court between March 2009 and February 11 this year are now uncertain.

Ms Roxon said the government was working to fix the issue as soon as possible, but the opposition seized on the blunder as an “astonishing act of incompetence” that reinforced the view that the government could not get anything right.

Previously, heterosexual and same-sex de facto couples had their property matters dealt with by the state courts.

In 2009, the states referred their powers to the commonwealth, for the first time enabling de facto couples to have their property disputes dealt with by the Family Court as married couples do. However, no start date for the proclamation was arranged.

It is understood this oversight occurred within the Attorney-General’s Department, when Robert McClelland was attorney-general. This meant the changes failed to begin.

The result is that since 2009 the Family Court has been making orders relating to de facto couples for which it had no jurisdiction.

Ms Roxon said she had directed her department to put its full attention to fixing the problem as quickly as possible. “This is a very unfortunate administrative error where a small mistake can have extensive consequences,” she said.

The blunder was detected only earlier this month during Family Court proceedings in Melbourne. The case was adjourned until the issues with the legislation could be resolved.

A proclamation by Governor-General Quentin Bryce was rushed through on February 9 and the changes to the laws finally took effect on February 11.

This means that any orders made from February 11 cannot be challenged.

However, any orders made between March 1, 2009, and February 11 this year are potentially invalid because the Family Court did not have jurisdiction to make them.

The chairman of the family law division of the Law Council of Australia, Geoff Sinclair, said the Family Court and Federal Magistrates Court were trying to ascertain how many cases were involved, but he believed they were in the thousands.

“We are looking to see whether there can be retrospective legislation to deal with those cases . . . I think that is certainly doable” Mr Sinclair said. “We are urging the Attorney-General to take whatever steps are necessary, as soon as possible, to make sure legislation is enacted.”

He said about 90 per cent of family orders were made by consent so he hoped they would not be challenged by the parties.

“It doesn’t matter whether parties are in a de facto relationship or a marital relationship; when the relationship breaks down there’ll often be a lot of emotion from both sides” he said.

“We certainly don’t want a position where people have to go back and revisit issues that have occurred in the past, when hopefully people have put things behind them.”

Opposition legal affairs spokesman George Brandis said: “This is an astonishing act of incompetence at the heart of government. It reinforces every impression the Australian people must already have that this government cannot get anything right.”

However, it is understood a similar oversight occurred under the Howard government in 2006 when the Family Law Act was amended to give the Family Court jurisdiction to consider appeals from family law magistrates in Western Australia.

A proclamation was made to fix this oversight. Senator Brandis said the opposition would support legislation to fix the current problem.

Former Family Court chief justice Alastair Nicholson said the oversight was serious: “If those settlements are called into question, it’s obviously very significant for the people involved.

“It seems the government has no real choice but to pass legislation retrospectively approving them.”

NSW Attorney-General Greg Smith said it was disappointing the federal government had failed to deliver the reforms properly.

(Source: Nicola Berkovic, The Australian, 22/12/2012)

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He specialises in assisting people going through divorce and providing other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions.

A Perth woman has been jailed and another is facing a similar outcome for their respective roles in a “criminal enterprise” that netted about $650,000 from Curtin University.

Joy Angela Sanderson, 47, from Maylands, was today sentenced to 18 months behind bars for laundering more than $100,000 from the university, two years ago.

Her accomplice Tania Carter is facing an even longer jail-term after pleading guilty to 401 charges of stealing a total of about $650,000.

The court heard Ms Carter – Sanderson’s former business manager – drew up false invoices on behalf of Sanderson’s company and submitted them to Curtin University.

The university unwittingly paid the invoices, with the money transferred to Sanderson’s company.

Sanderson then passed on majority of the money to Ms Carter, but retained $22,796 to pay for a holiday and some bills, the court heard.

The ongoing fraud was not detected for nine months, before the university lodged allegations with the Corruption and Crime Commission.

During Sanderson’s sentencing today, District Court Judge John Wisbey said the pair had been involved in a criminal enterprise and imprisonment was the only suitable punishment for Sanderson.

Ms Carter is yet to be sentenced, with her next court appearance scheduled for Friday.

(Sourced: Courtney Trenwith, WA Today, February 14, 2012)

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He specialises in assisting people going through divorce and providing other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions. Rushmore provides services to clients located in Perth and surrounding areas.

 

A local government employee in Perth who contracted $45,000 worth of council work to his company without disclosing he owned it has been given a 14-month jail sentence.

Antony John Patrick Greenwood, 46, pleaded guilty to committing 20 fraud offences when he worked at the town of Cottesloe between March 2010 and May 2011.

His admission came after the council referred the matter to Western Australia’s Corruption and Crime Commission for investigation.

The District Court in Perth heard that Greenwood was the council’s maintenance and conservation officer and in that position had prepared purchase orders and arranged contracts for his own company, Full Circle Design and Construction (FCDC).

Some of the $45,000 worth of contract work Greenwood completed, other work was completed by other contractors, and some of the work was not done, despite being paid for, the court heard.

Greenwood did not tell his employer that FCDC was his firm, though he had signed a code of conduct form saying he would seek permission to do any work outside his council job.

Greenwood has since reimbursed the council for money he received for work that was not completed.

In the District Court on Wednesday, Judge Allan Fenbury told Greenwood he had been involved in serious misconduct, abuse of trust and corrupt behaviour over a 14-month period and his offending warranted a jail sentence.

“This type of deceptive behaviour or corruption is difficult to detect and causes untold financial harm to our society” he said.

Judge Fenbury said he took into account Greenwood’s payment of restitution to the council but said suspending a jail sentence could give the impression that people might be able to buy their way out of prison.

He sentenced Greenwood to four months in jail on six of the fraud counts, 10 months’ jail on another 10 counts and 14 months on the last four counts, all terms to be concurrent.

With an effective sentence of 14 months, Greenwood will be eligible for parole in seven months.

(Source: WA Today, AAP, February 8, 2012)

About Rushmore Forensic

Andrew Firth is a director of Rushmore Group. He has conducted numerous investigations and other forensic accounting engagements in Australia, Singapore, the UK, Thailand, Hong Kong, Vanuatu, and the USA.

He specialises in assisting people going through divorce and providing other forensic accounting services for commercial disputes.  He is a member of the Institute of Chartered Accountants and has appeared as an Expert Witness in numerous jurisdictions. Rushmore provides services to clients located in Perth and surrounding areas.