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Business news, business advice and information for Australian SMEs | SmartCompany

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    Airbnb has rolled out an additional liability insurance program that will provide up to $US1 million ($1.16 million) worth of protection to Airbnb hosts for their listings in the US.

    The company, founded in California in 2008, allows people to list, discover and book accommodation around the world, whether it’s an apartment for the night or a shack for a week.

    It already provides hosts and guests with information about how they can make their listing safer and more secure, and a $1 million Host Guarantee provides reimbursement in cases of property damage.

    The additional liability insurance program, Airbnb Host Protection Insurance, will provide up to $1 million worth of protection to hosts for their listings in the US if a guest is accidently injured anywhere in a host’s building or property during their stay.

    It provides coverage for Airbnb hosts and, where applicable, their landlords. The coverage will be automatic at every stay at a listing in the United States and the company is actively working on ways to expand it internationally.

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    The federal government has launched an inquiry into the barriers to setting up and closing businesses in Australia.

    The inquiry will be undertaken by the Productivity Commission with the aim of identifying ways government and policymakers can ease the burden on small business owners when it comes to closing or launching their enterprise.

    Thousands of small businesses close their doors for the last time in Australia each year due to a number of factors that vary from industry to industry. In 2012 more than 10,000 businesses went under, according to figures from the Australian Securities and Investments Commission.

    The commission has been asked to conduct a broad and wide-ranging investigation. As part of the inquiry, it will specifically investigate the nature and extent of barriers to entry and exit that currently exist for business operators and their impact on economic performance.

    The inquiry will also see the commission provide advice on how to move forward on issues such as regulation and licensing, subsidies for businesses and personal and corporate insolvency regimes on business exits.

    It is expected to make recommendations to the government by mid-August next year, with its findings to be considered as part of the government’s ongoing competitiveness agenda.

    Peter Strong, executive director at the Council of Small Business of Australia, told SmartCompany he welcomed the inquiry and looked forward to its findings.

    “We’re always lacking information around small business so it’s nice to have a focus on us,” Strong says.

    “It will either prove or disprove some of the things we’ve been saying over the years.”

    Strong says he is most interested in what the findings and recommendations will be for business exiting a market.

    “For small business, closing something down often means it hasn’t worked,” he says.

    “It often means the person is under quite a bit of duress and stress. And I want the submissions to be saying, ‘Where are they closing down from?’ I wouldn’t mind getting some data into which industry, how many people in shopping centres and what sort of franchises.”

    Strong says it won’t be an issue if the report releases findings that contradict what COSBOA and small businesses have been saying – as long as industry and policymakers are dealing with the facts.

    “Hopefully, this will also lead to other impact studies about impediments to growth and running a business – what it is like in certain sectors, the bad and ugly,” he says.

    The Productivity Commission declined to comment on the launch of the inquiry when contacted by SmartCompany this morning. However the Commission is expected to release further information about the inquiry within the next few months.

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    The Australian Competition and Consumer Commission has launched proceedings against EnergyAustralia and its telemarketing company Bright Choice Australia for allegedly making false and misleading representations and engaging in deceptive conduct.

    The competition watchdog alleges Bright Choice signed up a number of consumers from Victoria, New South Wales and Queensland to EnergyAustralia over the phone without their knowledge or consent.

    In a statement, ACCC chairman Rod Sims said consumers should be protected from misleading statements from salespeople, whether on the phone or face-to-face.

    “Regardless of whether a salesperson is knocking on your door or calling you at home, the legal protections of the Australian Consumer Law apply,” Sims said.

    “The ACCC’s message is clear – energy companies must act to ensure that their sale agents and representatives do not engage in unlawful sales tactics, whether they are selling door-to-door or telemarking.”

    The competition watchdog is seeking penalties from both companies, as well as an injunction and compliance order against Bright Choice.

    A directions hearing will be held for both proceedings in Melbourne in February.

    Myer chief calls for closure of GST loopholes

    Governments need to do more to close “unfair” tax loopholes for overseas companies, according to Myer’s chairman Paul McClintock.

    McClintock used his chairman’s address at the company’s 2014 annual general meeting to call on both state and federal governments to tackle “several major inconsistencies” which harm trade and prevent Australian businesses from reaching their full potential.

    He told shareholders Myer collected more than $300 million in GST from its customers last financial year. In addition, the retail giant pays more than $49 million in income tax and over $20 million in payroll tax.

    “Offshore retailers selling into Australia pay none of this and it is important that this loophole is closed,” McClintock said.

    “The retail industry has argued strongly that the GST exemption issue must be on the agendas of federal and state governments, but action has still not been taken.”

    Shares down on open

    The Australian sharemarket opened down this morning, with gains in energy stocks offset by weakness in consumer stables.

    The S&P/ASX200 benchmark was down 0.28%, or 14.9 points to 5316.2 at 11.46am AEDT. On Thursday, the Dow Jones closed 33.27 points higher, up 0.19% to 17,719 points.

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    Hundreds of soy milk drinkers are expected to share in $25 million in compensation, in what is believed to be the biggest settlement in Australian food safety class action history.

    Law firm Maurice Blackburn was in the Supreme Court of Victoria this morning to hear if a proposed settlement with Bonsoy distributor and Australian brand owner Spiral Foods, as well as Japanese companies Muso and Marusan-Ai Co, will be accepted.

    Maurice Blackburn principal Jacob Varghese told SmartCompany the three companies involved in the class action have agreed to the multi-million dollar settlement and the court has set a hearing date of January 29 to make its final ruling.

    “All class members will have an opportunity to have their say and we will be making a submission that it is fair and reasonable and a good settlement,” Varghese says.

    Maurice Blackburn launched the class action against Spiral Foods in 2010, claiming hundreds of Australians fell ill after drinking Bonsoy soy milk, which allegedly contained dangerously high iodine levels, between 2004 and 2009.

    Under the deal being considered, Spiral Foods, Muso and Marusan-Ai Co will pay $25 million in compensation to the nearly 500 consumers in the class action, without admitting liability.

    If the court accepts the settlement, which was struck ahead of a planned trial, the members of the class action could see compensation within six to 12 months. A fee for Maurice Blackburn would also come out of the settlement fund.

    Maurice Blackburn filed a claim against Spiral Foods in the Victorian Supreme Court in September 2010, following the worldwide recall of Bonsoy just before Christmas in 2009. At the time, the law firm said it had been discovered that one glass of the soy milk contained seven times the safe dose of iodine.

    Excess iodine has been linked to thyroid conditions that can cause severe chronic and acute illness and Maurice Blackburn said it had been contacted by many individuals, including pregnant women, who had suffered a range of symptoms related to thyroid dysfunction after drinking the milk.

    “Our clients are health-conscious people – they drank this milk to improve their health, and they got sick – some critically ill,” Maurice Blackburn chairman Bernard Murphy said in 2010.

    “Some have quit their jobs and lost their businesses because of their illnesses. Others live with ongoing health problems and their lives have been devastated.”

    Maurice Blackburn alleged Spiral Foods breached the Trade Practices Act and was negligent for supplying the product. According to the law firm, Spiral Foods was adding kombu, an iodine-rich seaweed, to the Bonsoy milk from at least 2003.

    “We are not talking about a factory-floor problem here affecting a certain batch of product, it was a very basic design flaw which affected Bonsoy milk produced over a long period of time,” Murphy said.

    “Spiral Foods released a product to the market containing a dangerous concentration of iodine. The health consequences of excess iodine are well known. This danger could have been easily foreseen and its existence discovered with a simple test.”

    The law firm widened its claims in early 2013 to include two Japanese firms, Marusan-Ai Co, which manufactured the milk, and Muso Co, which exported it to Australia. The amended claim also alleged the three companies failed to act on a test in mid-2006 that revealed the high levels of iodine in the milk and dismissed repeated consumer concerns about the products.

    Varghese says, if accepted, the settlement will be the largest in Australian class action history in relation to food safety issues.

    “It sends a message to the food industry that the class action mechanism is available to consumers to assert their rights,” he says.

    “Even if each individual’s claim is too small, they can band together.”

    SmartCompany contacted Spiral Foods this morning but did not receive a response prior to publication.

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    Sydney businessman Andrew Sigalla was yesterday ordered to stand trial on allegations he breached his duties as a director in an $8.7 million fraud.

    The former chairman, director and chief executive of electronic locker company TZ Limited was arrested at the Intercontinental Hotel last year before being charged on 16 charges of dishonestly using his position to funnel cash from the business.

    The Australian Securities and Investments Commission alleges that on 16 occasions between March 2008 and March 2009, Sigalla took money from TZ’s bank accounts and used the majority of the cash to repay bookmaker Tom Waterhouse and pay off his mortgage.

    ASIC also alleges that, on top of fraudulently taking the money, Sigalla failed to properly record the payments in his accounting books and TZ’s records, did not obtain shareholder approval for the payments, and did not disclose the payments in any published accounts and company annual reports.

    The maximum penalty for each offence is five years’ imprisonment and a $220,000 fine.

    Sigalla has not yet entered a plea to the charges.

    The trial comes as KPMG’s fraud barometer recorded a three-fold increase in major fraud during the past 15 years, with $373 million lost in 2012 and 2013.

    Gary Gill, KPMG’s national head of forensic, told SmartCompany when a fraud involves senior people in a business, like Sigalla, the fraud is usually a lot larger because it takes much longer to detect.

    “That is because senior people usually have the ability to get around the controls and conceal the payments,” he says.

    “When people in the business processing payments come across this thing, the difficulty is that when it is somebody as senior as that, how do you blow the whistle?”

    Gill says businesses need to have a proper whistleblowing system in place for when staff see something dodgy.

    He recommends an external whistleblowing facility which can then report back to the business.   

    Gill also says business should have established controls around payment processes.

    “Make sure there are proper controls around the set up of those payments,” he says.

    “Do some periodic reviews to make sure there is nothing dodgy going on.”

    Sigalla’s time at TZ was rocky and in 2009 he was replaced in the chairman’s role by Mark Bouris.

    Under Bouris’ leadership, TZ launched a $7.5 million legal action against Sigalla, which was settled out of court.

    In July 2010, Sigalla was made bankrupt by Tom Waterhouse in the Victorian Supreme Court, as he owed the bookmaker $2.6 million.

    Sigalla has also been in trouble with ASIC before, with the NSW Supreme Court convicting him of contempt of court in 2012 after he breached a court order by failing to disclose to ASIC almost $30,000 in credit card payments to escort agencies. He was ordered to complete 120 hours of community service.

    The matter will return to court on December 18, 2014.

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    A former petrol station operator has been handed a $123,000 fine by the Federal Court for underpaying two employees almost $50,000 and ignoring attempts by the employment watchdog to settle the matter out of court.

    The Fair Work Ombudsman initiated legal action in February against Wedderburn Petroleum, the former operator of a Caltex petrol station at Wedderburn in regional Victoria.

    The ombudsman alleged Wedderburn Petroleum underpaid two employees, one aged in her late 20s and another aged in her 50s, amounts of $21,637 and $25,621 respectively between 2008 and 2013.

    The employees were paid flat hourly rates ranging from $10 to $15.96 for all hours worked, meaning they were underpaid minimum hourly rates, casual loadings, annual leave entitlements and penalty rates for weekend, public holiday and overtime shifts.

    Wedderburn Petroleum was also found to have contravened record-keeping and pay slip requirements.

    The court heard the ombudsman first contacted Wedderburn Petroleum about the need to pay employees correct minimum rates in 2010 but the company chose to “deliberately” underpay the two workers and failed to co-operate with orders from the ombudsman to back-pay the workers.

    “The breaches were extensive and resulted in proportionately significant underpayments to each employee,” Judge Frank Turner found.

    “The failure to provide pay slips affected the employees’ ability to obtain finance. The employees were on low income and needed to seek additional income to enable them to meet their living expenses.”

    Turner said the size of the fine handed to Wedderburn Petroleum reflects a number of factors, including that the business had made “no effort to co-operate with the Fair Work Ombudsman”, had “shown no contrition” and had shown “flagrant disregard” for court orders to back-pay the workers earlier this year.

    Fair Work Ombudsman Natalie James said in a statement deliberately underpaying workers and then refusing to rectify the underpayments will not be tolerated by her office.

    “We will not hesitate to take action to ensure employees receive their basic minimum entitlements,” said James.

    “Successful litigations such as this also benefit employers who are complying with workplace laws, because it helps them to compete on a level playing field.”



    TressCox partner Rachel Drew told SmartCompany the case “really does highlight that the level of cooperation [with the ombudsman] from an employer can result in a different penalty”.

    “The conduct of an employer when responding to a Fair Work Ombudsman inquiry can have a significant impact on the outcome in court,” says Drew.

    “For example, if it was a matter of the employer correcting the rates they were paying or rectifying underpayments, the Fair Work Ombudsman would probably make the decision not to proceed with court action if the employer agrees to co-operate.”

    “But this employer seems to have taken a chance that the ombudsman wouldn’t commence proceedings and they will pay the price for that.”

    Drew says if a business owner is contacted by the ombudsman, it is in its best interests to co-operate.

    “They are entitled to defend themselves and provide a full explanation of how they run their business but they need to make sure they are being responsive to the investigation,” she says.

    SmartCompany was unable to contact Wedderburn Petroleum as the company no longer operates the Caltex petrol station at Wedderburn.

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    A former hairdressing apprentice has been awarded $5000 in damages after the Equal Opportunity Tribunal of South Australia found her boss “changed her attitude” towards the apprentice when she became pregnant.

    Kate Halimee was employed as a hairdressing apprentice at the SeaSide Salon in Glenelg, South Australia, between November 2011 and June 2012, at which time her apprenticeship was signed off on.

    While Halimee initially struck up a friendship with her employer and owner of the SeaSide Salon, Loretta Santarelli, she told the tribunal Santarelli’s attitude changed towards her changed when she informed her she was pregnant in March 2012.

    Halimee said she experienced a “dizzy spell’ while at work in March and when she sat down to recover, Santarelli told her she “did not know what to do with me”. She later informed Santarelli that she would be unable to continue spray tanning appointments at the salon on advice from her doctor, which led to an argument over the phone between the pair.

    While Santarelli gave Halimee a written notice about the need to improve her work performance after the incident, the tribunal found Santarelli was motivated to issue the warning because of her concerns about the potential impact of the pregnancy on the business.

    The tribunal considered Santarelli wanted to establish a situation where Halimee’s employment could be terminated in the case of future incidents.

    Halimee initially sought $10,500 in compensation for loss of income and damages, but the tribunal chose to award a lesser amount as it was established that she willingly signed off on her apprenticeship, which ended her employment at the salon.

    Workplace lawyer Peter Vitale told SmartCompany the penalty in this case is at the “low end” of potential damages in pregnancy and sex discrimination cases but this is most likely due to a lack of evidence presented to the tribunal about “any damage to [the employee’s] health or loss of income”.

    “Reading between the lines, it appears the tribunal made some sort of allowance for the fact there was a more complicated relationship between them rather than just an employment relationship,” he says.

    Vitale says the case rested on the employee being able to demonstrate a change in her employer’s attitude towards her as a result of her pregnancy, which while she was able to prove to a certain extent, the tribunal did rule that some aspects of the employer’s conduct were not unlawful.

    “What this case demonstrates is that it is not always easy to draw a clear line between what is a personal conflict and what constitutes unlawful conduct,” Vitale says.

    SmartCompany contacted SeaSide Salon but did not receive a response prior to publication.

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    The director of New South Wales beauty chain Ella Rouge Beauty, Ali Hammoud, has pleaded guilty to two charges in the Downing Centre Local Court in Sydney, following allegations he misappropriated more than $2.6 million from a company that has subsequently collapsed.

    The Australian Securities and Investments Commission accused Hammoud of misappropriating $2,609,831.91 from a company called ERB International, of which he was a director.

    ASIC also alleges that between August 8, 2003, and June 26, 2007, Hammoud made false statements in workers’ compensation insurance forms. By understating the company’s wages on the forms, it is alleged the company gained a financial advantage of $338,709.25.

    In a case being prosecuted by the Commonwealth Director of Public Prosecutions, Hammoud pleaded guilty to both charges, which were committed to the Sydney District Court with a hearing on December 5.

    Before its liquidation, ERB operated the Ella Rouge Beauty salon chain, which operates 25 company-owned stores and franchises throughout NSW.

    The company, founded by Hammoud and his partner Manel Issa, opened its first outlet at Westfield Shoppingtown in Hurstville in 1997.

    The case followed an earlier case before the Companies Auditors and Liquidators Disciplinary Board (CALDB), which saw William James Hamilton suspended for six months, for his conduct as joint liquidator of ERB International. Hamilton was a partner at Hamiltons Chartered Accountants at the time.

    The CALDB found Hamilton had entered into a deed of settlement with the directors of ERB to accept an amount without investigating what its true level of debt was. It also found he failed to seek the approval of the court or a resolution of creditors and failed to seek legal advice before entering into the deed of settlement.

    A second liquidation notice for ERB International was published on the ASIC website on November 7, overseen by Simon John Cathro from EY. Creditors with claims that have not already been admitted were given until November 24 to establish their claim.

    Ella Rouge Beauty refused to comment about the matter when contacted by SmartCompany this morning.

    However, on its official website, the company is advertising for franchisees and states it is hoping to expand into Queensland and Victoria in the near future.

    “We are seeking prospective franchisees to join the team and realise their own potential to contribute to the beauty industry… We are dedicated to brining [SIC] the best technology and results to our clients and that is why we use the world’s most state of the art advanced treatment for effective results,” the company states.

    ASIC said in a statement Hammoud faces up to five years in prison for each offence.

    “A breach of directors' duties carries a penalty of five years imprisonment and/or a fine of $220,000. Making a false statement to obtain a financial advantage carries a penalty of five years imprisonment and/or a fine of $22,000,” ASIC said.

    In 2013, a five year penalty was handed to real estate agent Michael Wilkes for misappropriating $412,796.40 from trust accounts while operating inner-city Brisbane real estate agencies.

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    A former liquidator appeared before the Downing Centre Local Court in NSW yesterday accused of obtaining $90,000 by deception.

    In 2009, Mark Levi, who is a managing director of Titan Advisory, was a senior staff member at Jamieson Louttit & Associates. In that role, he oversaw the liquidation of a company called Biseja, which develops projects in the north of Sydney.

    After an investigation, the Australian Competition and Consumer Commission brought Levi before the Companies Auditors and Liquidators Disciplinary Board.

    It claimed that on two separate occasions, in April 2009 and again in October 2009, Levi used a Biseja cheque to pay for his own personal tax while paying for the company’s tax liability. He them allegedly falsified records in an attempt to cover his tracks.

    In October 2010, Levi allegedly admitted the payments to ASIC, but later denied the admission, claiming the payments were made with his employer’s full knowledge and consent.

    In a September 2013 hearing, the CALDB cancelled Levi’s registration as a liquidator.

    In a statement issued at the time, the CALDB said Levi acted in a manner that was “fundamentally inimical to fitness to practise as a liquidator”.

    “CALDB found that Mr Levi engaged in serious acts of dishonesty in misappropriating funds, in falsification of records in order to disguise misappropriation and in putting forward a false version of events after having admitted the misappropriation,” the CALDB said.

    Levi now faces a range of charges over the matter, including two counts of obtaining money by deception, two counts of making a false instrument, two counts of using a false instrument and two counts of making a false document.

    SmartCompany contacted both Titan Advisory and Jamieson Louttit & Associates, but no comment was available prior to publication.

    The chief executive of forensic accounting firm Warfield & Associates, Brett Warfield, told SmartCompany liquidators are often the ones looking over their own shoulder when it comes to oversight.

    “One of the issues is that liquidators are meant to act in the best interests of the creditors. They have widespread powers but these powers can be abused,” Warfield says.

    Warfield says there are a number of ways creditors can reduce their risks.

    “Take a good look at the reports that are produced, as well as the level of detail in those reports, and be proactive in terms of questions at creditors meetings,” he says.

    The latest case comes after ASIC issued a report in April that showed the number of misconduct claims made against Australian liquidators has fallen.

    KPMG’s partner in charge for forensic, Gary Gill, told SmartCompany the good news for creditors is the case is unusual.

    “It’s the first one I’ve heard in quite a while – and I’d certainly say it’s not widespread. In a liquidation, there’s often not a lot left in a business, but there’s always a risk," he says.

    “So it’s important to appoint someone you can trust, be aware of the risks and have some oversight.”

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    A senior employee of the Australian Bureau of Statistics has failed in his bid for an order to stop his managers from allegedly bullying him, with the Fair Work Commission ruling this month what the employee perceived to be bullying was in fact “ordinary” performance management.

    In one of the first cases to test the federal anti-bullying legislation in the public service, senior deputy commissioner Lea Drake found the ABS had attempted to address the employee’s performance on a number of occasions, which led to claims by the employee that he was treated “like a slave”.

    The unnamed employee told the commission his manager, identified as PR, told him to “go back where I came from” and “constantly intimidate[d] me to terminate my employment”.

    “He constantly makes hurtful remarks and makes me feel less important and undervalued,” the employee said.

    “He always puts me down and criticises my every move. He distorts facts and fabricates information about me. He patronises and puts me down under the guise of having performance issues … He fabricates non-existing performance issues.”

    The employee said PR spoke to him “in a condescending manner which has been humiliating” and the experience has “impacted on every aspect of my life”.

    “He is making my life miserable which has affected my health adversely,” he said.

    But the ABS rejected any suggestion that the employee had been bullied and the commission agreed, noting evidence provided by the ABS and PR that genuine attempts were being made to manage the employee’s work performance.

    “I accept that it is the applicant’s honestly held belief that all action taken to manage his performance has been motivated by a desire to establish a reason to terminate his employment,” said Drake.

    “That perception of a malevolent motivation, and an apprehension of termination of employment as an outcome of that conduct, has given rise to significant health issues for the applicant. The applicant is concerned about his continued employment and the financial stability of his family.”

    “[But] I am not persuaded that there is any justification for the applicant’s belief. All of the material which I have considered demonstrates an ordinary exercise of management prerogative. I am satisfied that the respondent’s managers are managing the applicant’s performance in an ordinary fashion.”

    Anthony Massaro, principal at Russell Kennedy Lawyers, told SmartCompany this case is another example of the Fair Work Commission’s “reluctance to interfere in management decisions in the bullying jurisdiction”.

    While Massaro says earlier bullying cases involving claims of unreasonable actions by management have set out principles that will guide future decisions by the commission, this decision is “another duck in the line”.

    But Massaro says it’s important that employers don’t “fall into a false sense of security”.

    “Bad management decisions can still be the subject of WorkCover claims or unfair dismissal claims,” he says.

    Massaro says it is essential for any employer to make sure any performance management process they go through with an employee is “justifiable and clearly attributed to poor performance or a particular behaviour”.

    He recommends an employer collect documentary evidence to support their actions throughout the process, including from previous occasions when performance issues have been raised.

    Massaro says when dealing with bullying or sexual harassment claims, SMEs must “act on them promptly”.

    “The longer you leave it, the more likely it is going to be a big thing and you could be named in a WorkCover claim that affects your premium or named in a bullying claim,” he says.

    “If you act on the claim quite promptly, you have a much better chance of resolving it in house.”

    SmartCompany contacted the ABS but the department declined to comment further on the case.

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    A Western Australian property manager, Van Dung Nguyen, formerly of Girrawheen, Perth, has been banned from holding a real estate and business agents’ licence, as well as a triennial certificate, for five years. He was also fined $3,000.

    Nguyen failed to deposit rental income into a trust account, receiving $13,660 from a tenant for rent, water rates, strata levies and management fees between January 2012 and October 2012, which he then used to pay personal expenses and unrelated business expenses.

    He operated Golden Investments Pty Ltd, which is now deregistered. The owner of the Girrawheen properties was left out of pocket.

    Nguyen filed for bankruptcy in September 2013 and now lives in Queensland.

    The fine was decided at the Western Australian State Administrative Tribunal on 20 November 2014.

    Commissioner for Consumer Protection Anne Driscoll said that income from rental properties needed to be kept separate to the operational account.

    “The law requires that rent and other payments from tenants must be placed in a separate trust account so that the transactions are transparent and the funds cannot be mixed with the day to day financial operations of the agency,” Driscoll said.

    “This allows for easy auditing and gives both the tenant and property owner confidence to know that their funds are being used appropriately.”

    She noted that real estate agents who take money from the trust accounts, even on a borrowing basis, to pay operation expenses are breaking the law.

    This article originally appeared on Property Observer.

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    A former employee of a Western Australian retailer has been successful in his bid to receive full redundancy entitlements, after the Fair Work Commission ruled his employer did not provide him with acceptable alternative employment.

    Lighting International has operated a number of retail stores in WA since 1980 and specialises in home and residential lighting.

    In January this year, Peter Spriggins, who had been employed by the business for eight years and was a manager at the time, was made redundant after the operator closed its Fremantle store.

    Lighting International offered Spriggins a new role of 38 hours minimum a week at any of the company’s five other stores. The role was described not as a manager position but as a “retail salesperson”, which required him to be on his feet for up to eight hours a day.

    Spriggins argued this position was not acceptable and turned it down. Lighting International then sought to have his redundancy pay varied on the basis that he declined an acceptable offer of alternative employment.

    The commission found that while the initial employment offer made to Spriggins by Lighting International in 2006 indicated he would be required to work at any of the company’s locations, he had not been required to do this for seven years.

    In addition, the commission ruled the employee had physical limitations from a non-work related accident that would disadvantage him in his new role. After the accident, Spriggins had moved house so that he lived within a kilometre of the Fremantle store because he found commuting physically difficult.

    As a result, the Fair Work Commission ruled in the employee’s favour and found he was entitled to the full benefits of redundancy pay.

    Emma Starkey, senior associate at Maurice Blackburn, told SmartCompany there are no strict criteria in deciding what constitutes an acceptable alternative employment offer.

    “But what the commission does is look at a series of factors and weigh them up and make an objective assessment between the current role and the new role,” Starkey says.

    Starkey says in this particular case, even though the employee was going to be paid the same, all other factors about the new role were “vastly different” to his current one.

    “So for example, he’d previously been a manager at one store and in his new role he was going to be a salesperson akin to a casual relief salesperson at multiple locations,” she says.

    Starkey says small business owners cannot assume that the same level of pay means an acceptable alternative employment offer.

    “They need to look at all the factors,” she says.

    “Some of them may be hours, pay, location, level of seniority and responsibility, skills and physical capacity. They should also check the person’s contract of employment and the employment conditions … because there might be rules or limitations in them about moving somebody to a new role.”

    SmartCompany contacted Lighting International but did not receive a response prior to publication.

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    A small Adelaide business has hit out at entrepreneur Dick Smith, claiming the high-profile businessman is willing to “crush and destroy” other Australian companies.

    The source of the dispute is a long-running copyright battle between spreads AussieMite, a family-owned business founded by Roger Ramsey, and Smith’s OzEmite brand.

    Smith lost the right to use the OzEmite brand in February this year, when Intellectual Property Australia ruled OzEmite sounded too similar to AussieMite and must be removed from sale.

    The two brands are still at loggerheads, with the dispute to be heard in the Federal Court this week. But while Smith told SmartCompany this morning he is simply “defending” his brand from legal action initiated by AussieMite, Elise Ramsey from AussieMite disputes Smith’s claims that he is not the one who has sparked the dispute.

    The OzEmite trademark was registered in October 1999 but it wasn’t approved until 2003 and Smith didn’t launch his product until 2012.

    Meanwhile the AussieMite name was applied to be registered by Roger Ramsey in 2001. Dick Smith opposed the application at the time, but following the launch of AussieMite by Ramsey in 2001, IP Australia approved Ramsey's application for the name in 2003. 

    Another company owned by the McAlpine family had applied to register the AussieMite name in December 1998 but allowed it to lapse. 

    Under Australian trademark laws, the owner of a trademark has the obligation to use it within five years, or a third party is able to have it removed from the register. This is what Ramsey sought to do with the OzeMite trademark in 2011, having previously objected to Smith’s bid the trademark the name in 2002.

    Speaking to SmartCompany this morning, Ramsey says AussieMite is “devastated” the dispute is still going, as the court costs will be exorbitant, but she says AussieMite will continue to defend its brand. 

    “We had a mediation to try to resolve it but that failed and so now we are going to the federal court,” Ramsey says.

    “If Dick Smith withdrew his application, or choose another name, we would welcome that ... We are happy for Dick Smith to continue with his yeast spread, but just under another name to avoid any confusion, as we position AussieMite on taste and quality."

    “We have opposed his product from the word go and actively voiced our opposition. This is wrong, he is willing to crush and destroy a small family business.”

    Ramsey says as AussieMite is a company with “one brand and one product” the dispute has already taken a toll and is “crippling” the business her father founded.

    “We’ve already spent hundreds of thousands of dollars,” says Ramsey, who says the emotional toll has also been taxing.

    “The amount of energy we’ve put into defending our brand, the work with our lawyers … the countless amounts of time and energy we’ve put in instead of presenting and marketing our great little product.”

    “If we were a big business this wouldn’t be happening, but Dick Smith has deep pockets. It goes against his position and morals of supporting Australia.”

    But Smith maintains Roger Ramsey “pinched” his brand name and all he wants is for both products to be able to be sold alongside each other.

    “They have both been on the market for the past three years, one is presented as Roger Ramsey’s AussieMite and the other is Dick Smith’s OzEmite,” he says.

    “It is quite clear they are two separate products and consumers should be able to make a choice.”

    Both Ramsey and Smith say they expect to front up to court in early 2015, although an exact date is yet to be set.

    In the meantime, Ramsey is taking comfort in the support the company has received from its customers, saying it is the emails AussieMite receives that “keeps us going”.

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    A Melbourne-based importer of Mediterranean and Middle Eastern foods has been stung with a $10,200 fine for stocking a fake honey product named Hi Honey.

    Bera Foods is the latest company to be fined over fake honey products, after Victoria Honey was smacked with a $30,000 penalty for similar allegations in June.

    The company paid the penalty following the issue of an infringement notice by the Australian Competition and Consumer Commission for stocking the sweetener Hi Honey, which features the word “honey” next to a picture of Australia on its label.

    The ACCC found the label misrepresented the product as Australian honey, when in fact the product was predominantly composed of plant sugars and was produced in Turkey.

    “The ACCC was concerned in this case because although ‘Hi Honey’ was labelled as honey, the product was not actually honey produced by honey bees. Honey suppliers must ensure any products they sell as ‘honey’ are in fact produced entirely by honey bees,” ACCC Commissioner Sarah Court said in a statement.

    Bera Foods general manager Ibrahim Ozdamar told SmartCompany when Bera Foods received the notice from the ACCC, it had already cleared all its stock of Hi Honey and was not planning to purchase any more.

    “We stopped importing that a long time ago,” says Ozdamar. “We never imported it again because we don’t like the product quality itself.”

    Ozdamar says there are still several importers selling the product in Australia and says it’s up to the ACCC to also find out those stockists. He says he believes the watchdog was “under pressure” from Australian honey producers.

    Sally Scott, partner at Hall & Wilcox, told SmartCompany the company was stung by the ACCC for two reasons.

    “Firstly, in relation to a representation that the honey was made predominantly from bees and, secondly, that it was made predominantly in Australia, neither of which were the case,” says Scott.

    “These representations didn't arise from express statements. They arose from implications from the term honey and the map of Australia.”

    Scott says businesses need to ensure that they consider not only words, but also implications from their packaging and other representations to consumers.

    “Just because something isn't expressly said, doesn't mean it can't be the subject of a misleading conduct claim. The law looks at the overall impression that consumers would be likely to have,” says Scott.

    Scott says this can include the impact of words, colours, pictures and other implications and businesses need to consider the perspective of consumers, not their staff with their own expert knowledge.

    Scott says the ACCC has certainly scrutinised the honey industry for some time, and while honey stockists need to be wary, so too do other businesses in the watchdog’s crosshairs. 

    “Businesses that produce honey should be alert to the ACCC's focus. Similarly, there are other types of businesses that are getting caught time and time again. Those businesses that operate in the ACCC's target areas should be particularly vigilant.”

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    IBM Australia has lost an unfair dismissal case before the Fair Work Commission but has been spared the need to pay any compensation after it was found an employee used the process as a “forum to criticise” a former colleague.

    The ruling follows a similar case in 2013 in which Ingham’s lost an unfair dismissal case against an employee who was judged to have abandoned his employment, but received harsh treatment from the company due to his experience and medical situation.

    Since June 2010, Kylie Jeffrey had been employed with IBM as a business analyst, after transferring to the company from the Qantas/IBM Indigenous Information Technology Employment Partnership.

    In a chain of events that began in September 2010, Jeffrey took leave from work, citing “stress related injuries” as a result of “bullying, harassment, sexual harassment and racial harassment”.

    Jeffrey took the full 12 months of sick leave entitled to her under her contract and a year later when her leave entitlements expired, she took a three-month period of unpaid sick leave.

    Jeffrey was found fit to return to work in February 1, 2012, but refused to sign the company’s return to work programme (RTWP). The IT giant said Jeffrey could not return to work until the agreement was signed.

    According to IBM, the company received a signed RTWP form in April 2012 and Jeffrey’s Salary Continuance Insurance Claim had also been also approved. However, in July, Jeffrey was certified as psychologically unfit for work, and in August, her general practitioner issued a letter stating that “she was fit for work but restricted to work for four hours per day”.

    The general practitioner eventually told IBM’s occupational physician, Dr Simone Ryan, Jeffrey “was not fit for work and had not been fit for some time, notwithstanding the terms of the certificates issued in August 2012”.

    In August 2012, Jeffrey received a text message from IBM advising that her employment had been terminated.

    In the decision, Fair Work Commission deputy president McCarthy found that Jeffrey “not [having] the capacity to do the job for the foreseeable future” was not a valid reason for dismissal.

    According to McCarthy, there were other grievances and it is likely “IBM had simply had enough and had arrived at a point where the resources and effort devoted to … [Jeffrey’s] grievances could not be justified”.

    But McCarthy criticised Jeffrey for using the hearing as a forum for attacking Ryan and therefore, decided not to order her reinstatement or award compensation.

    “The applicant throughout the proceedings raised allegations and assertions about Dr Ryan. I had made it clear near the beginning of proceedings that I would not deal with any allegations of professional conduct,” McCarthy said.

    “I had to repeatedly remind the applicant throughout the proceedings that the application I was dealing with was related to her dismissal and not to other grievances she may have.”

    “Despite this it appeared to me that another purpose the applicant had in these proceedings was to use it as a forum to criticise Dr Ryan. This was not only unfair to Dr Ryan but a deliberate and regular ignoring of directions and advice I gave the applicant throughout the proceedings.”

    McCarthy said this meant Jeffrey “did not cooperate but rather frustrated efforts to have a reasonable programme for her return to work”.

    Andrew Douglas, a partner at law firm M + K Lawyers, told SmartCompany there was insufficient evidence on IBM’s part to demonstrate whether the absences were really the cause of the dismissal, and therefore McCarthy couldn’t find in the company’s favour.

    “He is essentially saying ‘at the end of the day I don’t know what the reason was – they say she was unfit for work’,” Douglas says.

    “He found [Jeffrey] didn’t have the capacity to do the job when she was dismissed… and the nature of the allegations are so serious and unfair that she could not return to the job in the future.

    “Due to the conduct and absences, there is no compensation.”

    SmartCompany contacted IBM but did not receive a response prior to publication.

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    An employee of public service insurer Comcare who experienced post-traumatic stress and a “major” depressive episode has failed in her bid for additional compensation, after the Federal Court found she was only entitled to compensation from the date she sought medical treatment, not the date of the incident itself.

    Karen Hutchinson, who has been off work since 2011, experienced mental illness after participating in a workplace “respect and diversity” workshop.

    During the seminar, which included a role-playing exercise in which workers were asked to act out threats in the workplace, Hutchinson said her boss leaned over and told her: “I’m going to f-cking kill you.”

    Hutchinson sought medical treatment for depression and post-traumatic stress in 2011, despite the seminar taking place in March 2010.

    She received compensation from Comcare for the period after she was diagnosed but later applied to the Administrative Appeals Tribunal to have the compensation backdated to 2010.

    The tribunal rejected the application and its ruling was upheld by the Federal Court this week, after Hutchinson applied to the court for more time to appeal the tribunal’s decision.

    Justice Neil McKerracher rejected Hutchinson’s bid for more time, saying she failed to identify a question of law in the tribunal’s judgment.

    “The underlying problem is that there is no error of law identified,” McKerracher said.

    “Rather, Ms Hutchinson is dissatisfied with the conclusion reached by the tribunal.”

    Workplace lawyer Peter Vitale told SmartCompany it is not uncommon for compensation claims to continue years after a workplace incident occurs or an initial claim is lodged.

    “This case demonstrates that impairments based on mental illness have a certain latency about them,” Vitale says.

    “It’s important for employers to keep an eye out for signs of mental illness in your workforce.”

    Andrew Klein, special counsel at Russell Kennedy Lawyers, told SmartCompany the tribunal and court decisions give a clear indication that section 7(4) of the Safety, Rehabilitation and Compensation Act 1988 will be applied as per “the letter of the law”, rather than interpreted more widely to grant compensation for injuries of conditions sustained before an employee seeks medical treatment or is incapacitated.

    However, Klein says McKerracher’s decision not to grant Hutchinson more time for her appeal also provides “clear guidance on jurisdictional questions of what’s required to establish a question of law to progress an appeal in the Federal Court”.

    “It’s likely to put a break on access to the Federal Court to appeal AAT decisions,” says Klein.

    Klein says at an absolute minimum, the court is indicating an applicant like Hutchinson must be able to articulate or reference a question of law, rather than rely on the court to define the question of law.

    “The court may be willing to rephrase or take a question of law from submissions even if it is not articulated clearly, but it must be articulated in some form,” he says.

    Klein says the case also demonstrates that the Court does not see the tribunal's role as including “running a case” for an applicant.

    He says while there may be a perception that the courts are more sympathetic or “more helpful” to employees who apply for workers’ compensation, in this case, the court made it clear its view was the tribunal should leave it to the individual applicant to run his or her own case.

    SmartCompany contacted Comcare but did not receive a response prior to publication.

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    We are noticing that there has been a marked increase in audit activity by the ATO over recent time. 

    Everyone dreads the thought of an ATO audit but it doesn’t have to be that stressful, especially if you know how to handle the situation. 

    Firstly if you do get that dreaded ‘knock on the door’, immediately contact your accountant and ask for their professional guidance and assistance.  This may incur a cost, but for peace of mind it is money well spent. 

    Your accountant will act as your agent and will have direct contact with the ATO.  They can understand and speak tax office lingo and know how to answer their questions without raising further questions, plus will hold your hand throughout the process so that you may never have to get involved, other than providing them with any initial and/or ongoing information. 


    1. Initiation
    2. Information gathering
    3. The issue of a facts/position paper
    4. The taxpayer’s response
    5. The issue of assessments
    6. Objections and
    7. Settlements and alternative dispute resolution



    The ATO use reviews to investigate inconsistencies or risks about some activities, transactions or industries and try to confirm the risks. During a review they look for ways to help you comply with tax obligations. They will give you the opportunity to correct any errors by making a voluntary disclosure. If you do not make a voluntary disclosure, they may decide to escalate the review to an audit.


    The ATO use audits to find, measure and correct errors. Some audits follow on from reviews where they confirmed there was a risk.

    Some audits will commence without first doing a review where, from the available information, they know there is a risk. If an audit commences without a review first happening, generally you will be given an opportunity to make a voluntary disclosure.


    The reviews or audits the ATO conduct vary in their complexity. Usually they only involve a phone call or a letter asking you or your accountant to provide further information or verify your claims.

    In some cases however, a tax officer may visit you (although this is rare), or you may be asked to bring all your records for examination. They sometimes may decide to look more closely at tax returns making similar claims, or from within the same industry. 


    Property investors always seem to be a target as there are usually large claims in the individual’s tax returns.  T

    he areas that generally let property investors down in an audit are, claiming costs for a capital improvement as a repair and maintenance.  For example the cost of replacing an old kitchen with a new kitchen is a capital expense and should be depreciated over time v written off against the income immediately. 

    Other areas are, incorrect claims of  the interest on borrowings, and inaccurate capital gains disclosures on the sale of a property.

    When the ATO come knocking this is what they are looking for

    1. That you have declared all the income you have received

    2. That you have claimed the appropriate deductions against this income

    3. That you have claimed the correct credits or offsets

    4. That you have correctly withheld and reported PAYG amounts

    5.  That you have correctly reported any other tax-related obligations


    As a safety net, audit insurance is something worth considering.  For a very small annual premium you can have peace of mind in that if you are selected for a review or audit, and depending on the policy, the majority of your professional fees you pay to the accountant to assist you with the process, will be covered. 

    David Naylor is non-executive chairman and co-founder of Chan & Naylor.

    Disclaimer: This article contains general information. Before you make any financial or investment decision you should seek professional advice to take into account your individual objectives, financial situation and individual needs.

    This article originally appeared on Property Observer.

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    The Australian Competition and Consumer Commission has launched proceedings in the Federal Court against a suite of companies and individuals, including the two largest Australian manufacturers of electrical cable, for alleged cartel and exclusionary conduct.

    The ACCC alleges in 2011 electrical cable suppliers Olex, Prysmian, Rexel and L&H entered into an arrangement for the purpose of restricting supply of electrical cables to contractors and other customers, as well as fixing the price of cutting services provided by Olex and Prysmian.

    According to the competition watchdog, the conduct primarily involved low voltage electrical cables used within residential and commercial buildings. Olex and Prysmian supply electrical cables throughout the country. However, their manufacturing facilities are largely based in Victoria.

    The ACCC alleges cartel conduct mainly occurred at industry association meetings and the Electrical Wholesalers Association of Australia Limited knowingly aided and abetted the conduct in question.

    TressCox Lawyers partner Alistair Little told SmartCompany cartel conduct refers to an agreement between competitors who carry out certain activities in “an anti-competitive way”.

    “So the two parties that otherwise appear to be competitors do something that is in fact anti-competitive,” Little says.

    “It is conduct which almost always happens in secret and is generally regarded as amongst the most damaging anti-competitive conduct that any company can engage in.”

    Cartel conduct can take the form of two businesses agreeing to fix their prices or not approach one another’s customers. Little says this issue is something the competition watchdog has indicated is a “permanent priority”.

    “There are some matters they [the ACCC] regard as permanent priorities and cartel conduct is one because it is particularly damaging in a small economy where there might not be a large number of competitors,” Little says.

    Little points out that the competition watchdog has even managed to convince Federal Parliament to legislate so that serious cartel conduct can result in jail terms.

    ACCC chairman Rod Sims said in a statement identifying and prosecuting cartel conduct is a key priority for the competition watchdog because cartels can hurt consumers by driving up prices.

    “This alleged cartel spanned most of the major players in the supply chain for electrical cable, so the potential for harm to customers such as electricians and commercial contractors, and therefore ultimately businesses and households, was considerable,” Sims said.

    “This case also serves as a warning that the ACCC will act if it suspects an industry association or any other forum is being used as an apparatus for collusion.”

    SmartCompany contacted the companies in question and the Electrical Wholesalers Association of Australia but did not receive responses prior to publication.

    The matter has been filed in the Federal Court in Melbourne and a directions hearing has been listed for February next year.

    Last year a Japanese cable supplier was hit with a $1.3 million fine by the Federal Court in Adelaide for cartel conduct.

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    A woman has lost her bid for workers’ compensation for a permanent injury after hurting herself while putting up office Christmas decorations 14 years ago.

    Kay Brown, a former employee at the Murray Bridge Centrelink office in South Australia, claimed she “pulled a muscle in my bum” when she fell off her desk in December 2000 while hanging up festive decorations.

    Comcare compensated the former public servant in 2011 after initially denying responsibility. However, a year later Brown lodged a claim for permanent impairment due to a lower-back injury she said was caused by the same fall in 2000.

    But when the case appeared before the Administrative Appeals Tribunal, expert witnesses said Brown did not experience back pain until three months after the fall, which made it improbable that there was any link between the accident and subsequent back problems.

    The tribunal also found Brown suffers from a degenerative disease that means even if she had not fallen in the office, she would still be living with the same level of impairment.

    As a result, the Administrative Appeals Tribunal ruled Brown’s permanent impairment which she “undoubtedly suffers” was not compensable.

    Andrew Klein, special counsel at Russell Kennedy Lawyers, told SmartCompany the case highlights how the “causal link” between the workplace accident and permanent injury was found to be broken because of a significant period where the applicant was symptom-free.

    “The essential issue was it needed to be found that the injury occurred as a result of them having a fall while putting up the Christmas decorations and it resulted in her permanent impairment,” Klein says.

    “The tribunal essentially found because she had a long or a significant period of being pain and symptom-free after the Christmas decoration fall in 2000, it broke the nexus.”

    Klein also points out that it in cases that stretch back over a long period of time, it can be hard for the Administrative Appeals Tribunal to trace back what is “often a convoluted history of events, injuries, aggravations and flare-ups”.

    “It’s often a very difficult exercise for the tribunal to sort and sift through the voluminous medical evidence that accumulates over that period and to sort through the various things that happen to an individual during that period,” Klein says.

    “The case also highlights the absolute importance of contemporaneous medical evidence and confirms that contemporaneous medical evidence – that is, evidence that was taken at the relevant time – will always be preferred by the tribunal.”

    Klein says this particular case also shows the importance of preserving evidence for both applicants and insurers.

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    You’ve put blood, sweat and tears into creating your business, establishing a brand and building a reputation in the marketplace.

    So what happens when another business piggybacks off your hard work and blatantly copies your idea and your execution?

    It’s common practice to protect your intellectual property in Australia but many businesses fail to invest in trademark and intellectual property protection overseas.

    Australian steak restaurant chain The Meat & Wine Co thought it had taken all necessary precautions after registering trademarks in Australia for its name and logo.

    But that didn’t stop an imitator opening up in Kuala Lumpur last month using the same name, logo and signage as the The Meat & Wine Co.

    Now the steak house is embroiled in a legal battle across countries and jurisdictions to try to stop the damage to its reputation.

    SmartCompany is aware other Australian businesses are also victims of having their intellectual property ripped off in Asia.

    Intellectual property lawyer Richard Hoad, a partner at Clayton Utz, says businesses need to be alert to the copycats.

    While there is a cost to registering a trade mark in multiple jurisdictions, you need to carefully consider how your business might one day grow and the damage that can be done to your brand by imitators.

    “The cost of registering a trade mark, even in multiple countries, is totally insignificant compared to the very substantial sums involved in fighting to protect your brand through the courts,” Hoad says.

    “It really is a case of ‘a stitch in time saves nine!’”

    Stephen Stern, partner at law firm Corrs Chambers Westgarth, says many of his clients have suffered at the hands of “interlopers” in Asia including Treasury Wine Estates which is the owner of the iconic Penfolds brand.

    “It happens all the time it is absolutely day to day business in Asia, particularly 99% of it in China,” he says.

    READ MORE: How to stick it to brand thieves and protect your intellectual property

    It’s a difficult situation for small businesses, which already find it an expensive enough exercise protecting their intellectual property in Australia.

    Big businesses may think nothing of filing trade mark applications in jurisdictions around the world, but for a business short on cash it’s a different issue.

    The problem is that failing to do so can leave you at the mercy of rip-off merchants.

    This can then lead to legal battles that are costly in terms of time and money.

    As Steven Kastoun, chief financial officer of The Meat & Wine Co says, “what is frustrating is that it is an expensive process, the only people benefiting from this are the lawyers.”

    If you are aware of any Australian businesses which are being ripped off in Asia or if your business has encountered this problem please get in touch on

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