Cases of Interest

OFFENSIVE AUTOCOMPLETE SEARCH RESULTS ON GOOGLE FOUND TO BE DEFAMATORY

If Google refuses to remove it once notified, any offensive autocomplete search results on Google may be defamatory, rules the Supreme Court of South Australia.

In a landmark case, a former SA Health researcher has won a six-year legal battle against Google, proving she was defamed due to the way the search engine auto-completed search terms. Duffy v Google Inc [2015].

THE HIGH COURT HAS RULED THAT MINISTERIAL DECISIONS THAT AFFECT PROFITABILITY TO SURROUNDING BUSINESSES MAY NOW BE CHALLENGED

Economic pressures that may threaten profitability are now legitimate grounds to challenge administrative or regulatory decisions.

The ACT Minister for the Environment and Sustainable Development approved a proposed commercial development in the suburb of Giralang. This included a new supermarket. The owners of existing supermarkets in the area said that this would make their own businesses less profitable and perhaps cause them to close.

The High Court decided that economic interests such as those of the supermarket owners were enough to challenge the Minister's approval of the proposed development. Argos Pty v Corbell, Minister for Environment and Sustainable Development [2014].

High Court finds lease enforceable by tenant even though technically illegal under statute

The Club granted a lease to Mr and Mrs Gnych to run a restaurant. However, the Club failed to obtain approval for the lease from the NSW Independent Liquor and Gaming Authority.

Ultimately, the Court ruled in favour of the Gnych's, holding that the lease was not necessarily void, and thus enforceable.

The Polish Club Case has magnified a very common practice of hotels and clubs granting leases to third parties who then run their own businesses in the licensed premises. Gnych v Polish Club Limited [2015].

BEWARE! TAX OFFICE ENFORCING PROFIT-SHIFTING ARRANGEMENTS

Oil giant Chevron has lost a Federal Court case against the ATO, in a landmark profit-shifting case that has hit the company with a $300 million tax bill.

The multinational conglomerate has engaged in a complex series of loans and related-party payments worth billions of dollars. These arrangements permitted the company to avoid up to $258 million worth of tax.

The key question examined during the trial was to which extent energy companies could charge themselves for the risk they carried when raising US dollar loans for Australian investments.

The decision signals a shift in confidence for the ATO to take on large transnational companies that engage in questionable offshore tax-reducing arrangements. Chevron Australia Holdings Pty Ltd v COT (No 4) [2015].

CONTESTING A WILL

New laws relating to wills and succession planning are set to be introduced in July 2015, making it harder for adult children to challenge wills in Victoria. If you are a planning on challenging a will, you will now be required to prove that you are either:

a) Disabled;
b) Under 18 years of age;
c) Under 25 years of age and studying full time; or
d) Wholly or partly dependent on the deceased for your maintenance or support.

Future disputes are likely to focus on the definition of "dependent" and hinge on the individual circumstances of each case.

RETAIL LEASES ACT LANDLORDS REPAIR OBLIGATIONS

Landlords should be aware of the curious provisions of the Retail Leases Act with regard to their obligation to repair and maintain. Under the Act the Landlord is required to maintain in a condition consistent with the condition when the lease was entered into the structure and generally the Landlord's property. In one recent matter a Landlord bought a petrol station some years ago on a leaseback arrangement and was happy to have included in the price all of the tanks and equipment which were necessary to operate the tenant's business. However recently he was hit with a substantial demand to repair an underground tank that had failed. Fortunately the matter settled on commercial terms. It should also be noted that on a strict reading of the section each time a lease is "entered into" by way of an option this resets the "condition" of the premises for the next term.

FRANCHISING CODE CHANGES: HIGHER PENALTIES FOR NON COMPLIANCE

As of January 2015, a number of significant changes have been introduced to the Franchising Code of Conduct and to the corresponding Competition and Consumer Act. The Government has introduced new penalties for breaches of the code, with the aim of improving compliance. Breaches of certain provisions of the Code, including the new obligation for parties to act in good faith and the increased disclosure requirements imposed on franchisors, may attract civil penalties of up to $51,000. With such hefty civil penalties threatening, it is crucial to ensure that your Franchise Agreement is fully compliant with the most recent changes to the Code.

S.32 STATEMENT, A NEW LOOK

If you have been to an auction this summer, you may have noticed a change to what you are typically used to seeing. That is because The Sale of Land Amendment Act (2014) introduced changes to the s.32 vendor's statement which came into effect on 1 October 2014. The abovementioned changes include the following:

  • The introduction of a new due diligence checklist for residential properties
  • The grouping of disclosure into themes
  • The removal of some redundant provisions
  • The updating of terminology
  • New disclosure requirements relating to issues such as planning scheme overlays and bushfire prone area
  • Non requirement of an Owners Corporation Certificate when all documents are disclosed or when there is an inactive Owners Corporations (subject to some conditions)
  • The requirement to disclose only those services that are not connected (i.e. water, gas and electricity)

Consequently, if you are a vendor or real estate agent, it is important that you are aware of these changes so as to avoid increased penalties by ensuring that all documentation provided to prospective purchasers is compliant with the new provisions.

LAND TAX - ARE YOU MINIMISING IT?

Anyone who owns a property in Victoria would understand that Land Tax can be a significant burden on your property portfolio. For most people, the complexities of tax rules are far too overwhelming and they end up paying more tax than they really need to. Since the enactment of the Vic Land Tax Act in 2006, the grouping provisions that apply to properties held by related corporations no longer apply to trusts. As a result, land held in different trusts is separately assessed for land tax purposes. Specifically for anyone with a property portfolio of over $3 million this offers you the opportunity to make a significant saving on your land tax expense each year if you properly structure your purchase at the outset and pay the trust surcharge.

RECENT INTERESTING CASES

Builder of property development escapes liability for underlying defects

The High Court of Australia has found the builder of a strata plan development, does not owe a duty of care to the Owners Corporation for economic loss caused by underlying defects in the common property. This decision underlines the ability of parties to limit liability through detailed risk allocation provisions, which should provide comfort to those involved in the property development and construction industries. Brookefield Multiplex Ltd v Owners Corporation Strata Plan 61288 & Anor.

Too close for comfort

In a recent decision, the Federal Court of Appeal found that administrators were in a position of apprehended or perceived ASIC obtained orders removing the liquidators on the ground of apprehended bias. This decision has serious implications for insolvency practitioners. ASIC v Franklin (liquidator), in the matter of Walton Constructions Pty Ltd [2014] FCA 85

Retail employees all grown up

In 2014 the Full Bench of the Fair Work Commission handed down a decision to vary the General Retail Industry Award 2010 to the effect that 20 year old retail workers will now be paid the same rate of pay as adult workers, after six months with their employer. This new rate of pay will be gradually introduced over two years. It is therefore essential that employers ensure that their employees receive at least minimum wage and that they are aware of any developments in this area.

Credit card late payment fees unlawful

Justice Gordon of the Federal Court of Australia held that fees charged for late payment of credit card accounts fall under the definition of 'penalties' and are therefore unenforceable. Gordon J reasoned that late credit card payment fees were penalties because they did not represent fees charged for further services but were actually collateral to the performance of a primary obligation (i.e. payment of the monthly minimum amount by the due date). Paciocco v Australia and New Zealand Banking Group Ltd [2014] FCA 35.

10 years to bring a claim in a building dispute

A purchaser claimed that the developer had breached its statutory obligations by issuing building permits in a way that had caused the purchaser to suffer loss. The key question was whether the claim was statute barred due to it being brought more than six years after the alleged breach although it had been less than 10 years after the occupancy permit was issued. The Victorian Court of Appeal held that all claims brought in Building actions, whether founded in tort or contract, must be brought within 10 years from the time the occupancy permit or certificate of final inspection is issued. Brirek Industries Pty Ltd v McKenzie Group Consulting (Vic) Pty Ltd [2014]

Business Law

It's Misleading for Business Names to include places not Connected with Business

The ACCC successfully levied civil penalties for misleading and deceptive conduct after it was found that Kingisland Meatworks and Cellars had little connection to King Island. The court held that the company was clearly advertising as if its wares came from King Island and the company might have needed to source as much as 70% of its meat from King Island before it could claim a connection to the region. ACCC v Kingisland Meatworks and Cellars Ltd [2012] FCA 859

Personal Insolvency Agreement Set Aside After Agreement by Creditors

A Personal Insolvency Agreement was entered by Mr Rollo, which offered 3c for each $1 owed to creditors. The trustee recommended the agreement to the creditors as it included $100,000 being made available by Mr Rollo that increased what would be received by creditors if Mr Rollo was made bankrupt. However, after the agreement was entered, one creditor discovered that a debt for over $1.2M of Mr Rollo, supported by a default judgment, was invalid. The Court agreed to look behind the default judgment and set aside the Personal Insolvency Agreement.

Employee not entitled to Reinstatement pending Unfair Dismissal Claim

Ms Russell sued for reinstatement after she was dismissed from the employment of the Respondent. She also brought an application for an interlocutory injunction granting her reinstatement pending the determination of the case. Despite proving she had a case, her reinstatement pending the final hearing was refused for reasons including the irreparable breakdown of the relationship between Ms Russell and her employer. Russell v Institution of Engineers Australia (trading as Engineers Australia) [2013] FCA 1250

Litigation

Inadvertent Disclosure does not Waive Privilege

The High Court has confirmed that inadvertent disclosure of documents does not necessarily waive privilege over them. However, the Court paid close attention to the conduct of the party claiming privilege to make sure that once disclosure was discovered, they acted with haste to maintain their privilege. Expense Reduction Analysts Group P/L v Armstrong Strategic Management and Marketing P/L [2013] HCA 46

Substituted Service by Social Media Available but Difficult to Obtain

After US rapper Flo Rida aborted a concert, he was sued for breach of contract. Conventional service was ineffective and an order for substituted service by Facebook was obtained. Default Judgment was then entered against him. Flo Rida has been able to set aside default judgment on the basis that the substituted service order was inappropriate. The Court agreed, holding that while service by Facebook was potentially appropriate, in this case, there was no evidence before the court that service by Facebook would come to Flo Rida's attention. Flo Rida v Mothership Music Pty Ltd [2013] NSWCA 268

Duty of Care Owed to Rescuers

The Defendant, Mr Clark, was in his boat when it capsized, but was lucky enough to be able to call the Plaintiff, Mr Blackney to his rescue. Unfortunately for Mr Blackney, the rescue did not go well and he himself was rendered unconscious by the rough seas and suffered personal injury. He successfully sued Mr Clark, with the Court holding that it is reasonably foreseeable that a person in trouble will be rescued and thus a duty of care is owed to the rescuer. Blackney v Clark [2013] NSWDC 144

DISCLAIMER NOTE: This is a short prècis of recent cases that may be of interest. Cases and outcomes vary markedly depending on their specific facts. They should not be viewed as a substitute to obtaining comprehensive legal advice for your particular problem.

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