NSW council not liable after all

A recent High Court decision supports the emphasis NSW courts and the legislature have placed on personal responsibility in public liability claims, according to Phillips Fox partner Michael Down.

The High Court upheld a NSW Court of Appeal judgement which found in favour of Coffs Harbour City Council and the State of NSW.

Irish backpacker Garry Mulligan had claimed damages for serious spinal injuries suffered in 1999 when he dived into Coffs Creek and hit his head on the creek bed. He sued Coffs Harbour City Council and the State of NSW for $9 million, claiming both parties had neglected to sufficiently warn users of the varying depths in the creek.

Mr Down says the High Court decision "clearly demonstrates that local councils should not be required to warn of matters that are common knowledge or be liable for injuries sustained in everyday recreational activities".

The High Court decided the council had not been negligent and was not required to warn of the uneven creek bed. Mr Mulligan was ordered to pay the council's legal costs.

Learning from the Big Boys

Just because a business falls into the small to medium enterprise bracket doesn't mean it can't learn a thing or two from the big players. Adapting methods and plans is something that SMEs are becoming more adept at these days.

Adopting big business techniques and attitudes can give SMEs a more competitive edge and professional reputation. It also helps in long-term plans for businesses looking at a future initial public offering (IPO).

Here are10 tips to help SMEs grow:

1. Have a plan. Business plans are a great way to consolidate a company's vision and future direction. Decisions can then be made in view of this, and tailored to fit future directions. And of course, keeping those plans flexible and revised constantly as a business grows is a must.

2. Manage your compliance obligations. As a business grows, so too does its compliance responsibilities. So it's a good idea to factor things such as income tax payments, PAYG remittance, audit requirements, payroll tax and OH&S issues.

3. Plan for growth. It sounds like a no-brainer, but when making plans, businesses should remember to anticipate the resources needed, and not just budgeting for staff, but other factors like working capital impacts, premises and systems capacity.

4. Look after your staff. The value of staff can often be overlooked, so while a full-time HR person may not be practical, having some good HR policies in place will always help. They can either be controlled from within, or through an external consultant.

5. Review your financing options. Large businesses take advantage of the range of financial alternatives available. They choose the one best suited to their needs, and constantly review its effectiveness. SMEs can do the same thing. No longer is it recommended to have a business overdraft secured over a director's property. Other possible methods include leasing, debtor finance and rolling bill lines.

6. Prepare financial reports. Having this business knowledge regularly helps in making decisions from an informed position, identifying problems and solving them quickly. It's certainly better than making decisions based on instinct.

7. Outsource non-core tasks. Even big businesses recognise they don't always have the required expertise in-house, so they build up a network of advisers. Sometimes small businesses don't as a way of minimising costs, but find themselves spending more in the long run. Staff training, bookkeeping and accounting are some functions that can be outsourced.

8. Provide remuneration incentives. Staff remuneration should always be tied to company performance, and big business often uses incentive or bonus schemes, not only to get individual results, but to obtain good company results as well. Employee share schemes may not be the way to go for SMEs, but bonuses are a good alternative.

9. Work on your internal communications. Often, big businesses have effective communication channels, with everyone aware of corporate goals, strategic direction and the like. Regardless of how contained and close-knit small businesses can be, good staff communication and the free flow of information is still important.

10. Managing your reputation. Recognising where your company, large or small, fits into the wider community is critical. Sometimes small businesses forget this and fail to regulate their "wider" reputation. Just having a well-respected identity can be a great benefit.

Source: HLB Mann Judd
20 October 2005

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