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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

Like many things in life, building contracts can lead to disputes, which in turn may lead to litigation in the courts or at the Victorian Civil and Administrative Tribunal (VCAT). Litigation is generally costly, time-consuming and stressful, with no absolute certainty as to the outcome. In order to minimise the likelihood of being involved in a dispute, it pays to have your building contract reviewed, whether you are an owner, developer, builder or sub-contractor.

Standard form building contracts

Generally, a building contract will be drafted by one of the parties, and often this comes as a standard form contract. Usually, the party who has drafted the terms of the contract would have done so in a way that is to their advantage. Unlike many other standard form contracts where those who have drafted the contract are unlikely to accept proposed amendments (such as bank loans or utility agreements), building work is fairly competitive and as a result, the drafting party will usually agree to any proposed changes, or at least be willing to enter into negotiations.

Breaches, repudiation and termination

Some key matters which are repeatedly not dealt with properly, or at all, are those regarding liquidated damages and termination rights.

Particularly in commercial building contracts, termination provisions often only provide express termination rights under the contract to the party that drafted the contract. If you did not draft the contract, in these circumstances you will be left with only common law rights of termination. In practice, this means that you will need to convince a court or tribunal that the party that drafted the contract has committed a fundamental breach of the contract, known as repudiation, and that you are entitled to accept that repudiation and terminate the contract.

Breaches of the contract and whether they are characterized as repudiation are often not clear at their time of occurrence. This can lead to uncertainty and risk, if you did not draft the contract and are seeking to terminate for repudiation. Wrongful termination of the contract can result in a damages claim being brought against the terminating party for breach of contract. If you have your contract reviewed, you will have the opportunity to negotiate with the other party to include well drafted breach and termination terms, which can prevent this issue from arising, and provide you with peace of mind in the event that you are required to terminate the contract.

Liquidated damages

Liquidated damages is a pre-agreed amount payable for delays caused by a party. The benefit of having an agreed amount for liquidated damages is that if there is a breach of the contract by reason of delay, the other party does not have to provide evidence to prove their actual losses – they can simply rely on the liquidated damages amount, which is generally a weekly or daily fixed sum.

Often, however, building contracts, and in particular domestic building contracts, provide a very small amount for liquidated damages, which parties commonly either do not notice or do not properly turn their minds to when signing. For example, $250.00 per week or similar may be inserted as a default measure for liquidated damages. This amount is generally inadequate, as liquidated damages are required to accurately reflect the costs incurred as a result of the delay.

If you are an owner, the amount agreed should reflect the holding costs, such as any bank loan interest that would be incurred as a result of the delay, or any loss of profit, such as if the property was to be used as a rental investment property.

If you are a builder, the amount agreed should cover any wages, sub-contractor costs, hire costs and/or interest that is likely to be incurred if construction is delayed.

How can Sharrock Pitman Legal help?

These are just two of the many key matters that should be reviewed carefully before you enter into a building contract. Other matters include definition of scope of works, insurance, extensions of time, variations, prime costs and provisional sums, amount of deposit and progress claims, retention moneys, and charges, just to name a few. If you are thinking about entering into a building contract, it pays to have it checked first. Please contact our Accredited Specialist Commercial Litigation team to obtain a fixed price to review your building contract on 1300 205 506, or send an email to litigation@sharrocktpiman.com.au.

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 one of our lawyers

,

.

Simon Matters

For further information contact

Simon Matters

Simon is a Senior Associate of Sharrock Pitman Legal.

He is an Accredited Specialist in Commercial Litigation (accredited by the Law Institute of Victoria) and deals with Litigation, Mediation of Disputes, and Law for Charities & Not for Profits. For further information, contact Simon Matters on his direct line (03) 8561 3324.

More on

Litigation [Courts & Tribunals]

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.