Law changes

NSW Court of Appeal revisits compulsory acquisition law

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On 6 September 2018, the NSW Court of Appeal (Bathurst CJ, Ward JA and Payne JA) delivered judgment in the case of Roads and Maritime Services v Desane Properties Pty Ltd [2018] NSWCA 196.

The case concerned the validity of a Proposed Acquisition Notice (PAN) that had been issued by the RMS for the compulsory acquisition of a property owned by Desane at Rozelle. The property was required as part of the proposed Rozelle Interchange associated with the Westconnex road project in Sydney.

The Court of Appeal (in a unanimous judgment) overturned the decision of the primary judge and found that the PAN was valid. Accordingly, the RMS was able to proceed with the acquisition of the property.

In its judgment, the Court of Appeal gave useful guidance as to the circumstances in which a PAN will be legally defective. The Court held that:

  • PANs are not required to strictly comply with the Approved Form under the Land Acquistion (Just Terms Compensation) Act 1991 (the Act) and that “substantial compliance” is sufficient;

  • similarly, PANs do not need to precisely adopt the language of the Act at the time of issue;

  • there is no requirement for a PAN to state the public purpose for the acquisition;

  • there was no improper purpose on the part of the RMS in relation to the acquisition of the property. The Court found that the critical time for assessing purpose is not when the PAN is issued, but at the time of acquisition. The Court overruled the finding of the trial judge that the RMS intended to acquire the property as open space and parkland - as this would only arise once construction of the underground interchange was complete. The Court adopted a liberal approach to the necessary “purpose” and found that that there was no need to identify the specific purpose with precision at the time the PAN was issued.

Lessons from the Case

The case provides important appellant guidance as to the circumstances in which a PAN may be legally invalid.

The overriding theme of the case is that Courts should adopt a measure of flexibility when the validity of a PAN is challenged. That said, Councils and government agencies still need to exercise great care in the preparation of PANs and the surrounding process to avoid subsequent legal challenges to a compulsory acquisition.

For further information please don’t hesitate to contact:

Justin Conomy
Special Counsel
justin@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Practical Considerations: Challenging a creditors statutory demand

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On 21 March 2019, Justice Black considered an application to set aside a statutory demand: In the matter of Skylane Worldwide Enterprises Pty Ltd [2019] NSWSC 707.

The Court has power to set aside a creditor’s statutory demand under s 459H(1)(a) of the Corporations Act 2001 (Cth) where there is a genuine dispute between a company receiving a demand and the issuer of the demand, about the existence or amount of the debt to which the demand relates.

That threshold has been held to be rather low. It is nonetheless real.

The facts in the matter before Justice Black were of no interest to anyone other than the parties, and will not be rehashed, but Justice Black considered the standard authorities on the low threshold which are worth reviewing:

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Justice Black also referred to two of his own decisions: Re Wollongong Coal Pty Ltd [2015] NSWSC 1680; (2015) 110 ACSR 134 at [9]–[22] and Re Erma Properties Pty Ltd [2017] NSWSC 1748. 

In then setting aside the demand in question, Justice Black concluded that the plaintiff (recipient of the demand) had:

“not established a genuine dispute, involving more than mere bluster or assertion, being a dispute that has sufficient objective existence or prima facie plausibility to warrant further investigation and to require [the defendant] to proceed by way of contested proceedings, rather than by the issue of a creditor’s statutory demand which, if not complied with, will give rise to a presumption of insolvency.”

The case was dismissed with costs.

Lessons from the Case

The case highlights the need for:

  • A creditor, before issuing a demand, to make an objective assessment of whether there are grounds upon which the debtor may rely to assert a dispute or off-setting claim – if so, then suing for the debt may be the preferred option.

  • A debtor, upon receiving a demand, to make a proper assessment as to whether there are plausible grounds on which to seek to set it aside.

Whilst the threshold for raising a dispute is rather low, it is nonetheless real, and it will not be reached where the plaintiff does not rise above mere bluster or assertion.

Coutts can assist clients with advising clients as to both of the above steps, and represent clients in hearings on these matters, without needing to brief counsel to argue such cases.

For further information please don’t hesitate to contact:

Justin Conomy
Special Counsel
justin@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Unfair Contract Terms Update

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Overview

The introduction of unfair contract laws has visited a major change in the law relating to standard form commercial agreements. When first introduced in July 2010 the laws only applied to consumer contracts - however from November 2016 the laws were extended to cover small businesses. 

Review of Unfair Contract Laws

There is presently a statutory review being conducted in relation to the extension of the unfair contract laws to small businesses. The time for submissions closed in December 2018 and the review findings are likely to be known by mid 2019.

The review is considering most aspects of the operation of the unfair contract laws including:

  • the definition of a “small business” which is currently defined as a business which employs less than 20 people and the upfront price payable under the contract is less than $300,000 in a single year or $1 million if the contract extends for more than 12 months. Concern has been expressed by a variety of stakeholders that the “head count” aspect of the definition has practical difficulties. The review is also considering whether the amount of $300,000 is an appropriate threshold. The ACCC has indicated that it will submit to the review that the definition of a “small business” be expanded so that more businesses are brought within the regime;

  • whether further clarification should be given in the legislation as to what constitutes a “standard form contract”;

  • whether it is appropriate to continue to maintain the exemptions in the legislation which apply to terms that define the main subject matter of the contract or set the upfront price payable under the contract;

  • whether further examples or clarification should be provided in the legislation as to what constitutes an "unfair" term.

 

Other potential changes

The ACCC is pushing for changes to the Competition and Consumer Act 2010 (Cth) to allow the pecuniary penalty and other enforcement provisions of the Act to apply to unfair conduct breaches as they do for other breaches of the Australian Consumer Law, such as misleading deceptive or unconscionable conduct. So far the government has resisted those calls. It will be interesting to see if the present review process makes any recommendations on this issue. A change to the law in this area will apply significant added pressure to businesses to ensure their standard form contracts are compliant with the unfair contract laws - especially given the recent increase in the maximum pecuniary penalty order from $1.1 million to $10 million per breach.

Investigation Powers Strengthened

In October 2018, the ACCC’s investigative powers were boosted to enable it to compulsorily obtain information, documents and evidence to determine if a contractual term may be unfair. These new powers apply only in relation to contracts entered into on or after October 2018.

Conclusions

Unfair contract laws have visited a major change on consumer and commercial transactions throughout Australia - especially since November 2016 when the laws were expanded to cover small businesses. The present review process may make recommendations which further expand that reach and potentially result in breaches of the laws being subject to financial penalty orders. We will report further once the recommendations of the review are made public. In the meantime, it would be prudent for businesses to keep their standard form contract terms under review to ensure that they remain compliant with the unfair contract laws.  

For further information please don’t hesitate to contact:

Daniel St George
Senior Associate
daniel@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Important changes to the laws in relation to construction payments

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Overview

The NSW parliament has recently passed the Building and Construction Industry Security of Payment Amendment Act 2018  which makes some substantial amendments to the Building and Construction Industry Security of Payment Act 1999 (the Act).  The Act sets out the legal framework for building contractors to recover instalment payments for the performance of construction work.

The changes will become effective later in 2019 once the drafting of the applicable regulations are finalised.

Changes to Payment Claims

The new sections of the Act provide that:

  • a payment claim may be served on and from the last day of the month in which the construction work was first carried out and on and from the last day of each subsequent named month (new section 13(1A) of the Act). This change is significant as it means that an entitlement to issue a payment claim will no longer be dependent on a “reference date” in the construction contract having been met;

  • if the construction contract makes provision for an earlier date for the service of a payment claim, the claim can be served on and from that earlier date (new section 13 (1B) of the Act);

  • the time period for a subcontractor to receive payment under a payment claim will reduce from a maximum of 30 business days to 20 business days;

  • payment claims, to be valid, must specifically state that they are made under the Act (this was an original requirement in the Act before the amendments in 2014);

  • in the case of a construction contract that has been terminated, a final payment claim can be served on and from the date of termination (new section 13(1C) of the Act). This overcomes the result in the recent case of Southern Han Breakfast Point Pty Limited (in liq) v Lewence Construction Pty Limited;

  • allowing the claimant to serve a single payment claim in respect of more than one progress payment or including an amount the subject of a prior payment claim.

 

Changes to Adjudication applications and procedures

The changes made to adjudication applications are not as extensive and include:

  • clarifying that an adjudication application can be withdrawn at any time prior to the appointment of an adjudicator. A withdrawal can also occur post appointment - but if the other party objects then the withdrawal will not be effective if the adjudicator is of the opinion that it is in the interests of justice to uphold the other party’s objection;

  • allowing an adjudicator 10 business days from the date on which the respondent lodges a response or, if a response is not lodged, the end of the period within which the response was required to be lodged, to determine the adjudication application. This change gives the adjudicator further time than the existing requirement of having to provide an adjudication determination within 10 business days from the date on which the adjudicator notifies the parties of his/her acceptance of the appointment;

  • allowing the Supreme Court to sever a discrete part of an adjudication determination that is subject to jurisdictional error - while confirming the validity of the balance of the adjudication determination.

Companies in liquidation

The changes will stop any company in liquidation from serving a payment claim or taking any action to enforce a payment claim or taking any further steps in relation to the making of an adjudication determination.

Increased fines for Companies

The new laws introduce substantial increases in the maximum penalties for companies serving non-compliant payment claims, including payment claims which include false or misleading statements (a five fold increase for companies in the maximum penalties per breach from $22,000 to $110,000 per breach). 

Personal liability of directors

Directors and corporate officers can also now be held personally liable as accessories to companies who have breached the Act.

New investigation and enforcement powers

A much stronger investigative regime has been introduced to ensure compliance with the provisions of the BCISP Act including search and seizure and information gathering powers.

 

Key Take-Aways from the changes

The changes to the Act include some significant wins for construction contractors. Contractors will no longer be hamstrung by requirements in construction contracts which delay the dates on which they can issue payment claims. Subcontractors will also enjoy a shorter time period for payment once payment claims are issued. It is important that all construction industry participants are aware of these changes when they commence and make the necessary adjustments to their contractual documentation and procedures.  This area of law is highly technical and it is important that expert legal advice is obtained at the outset to avoid the potential for non-compliance with the new laws.

For further information please don’t hesitate to contact:

Justin Conomy
Special Counsel
justin@couttslegal.com.au
1300 268 887

This blog is merely general and non specific information on the subject matter and is not and should not be considered or relied on as legal advice. Coutts is not responsible for any cost, expense, loss or liability whatsoever in relation to this blog, including all or any reliance on this blog or use or application of this blog by you.

Mobile Phone Detection

Mobile Phone Detection

In NSW, it is an offence to use your mobile phone whilst driving. From 1 July 2018, drivers on NSW roads can be detected and fined for using mobile phones whilst driving, due to The Road Transport Legislation Amendment (Road Safety) Act 2018 No 15, which has provided powers for camera technology to detect hand held phone usage.

A $330.00 fine and a loss of four demerit points is the result of using your mobile phone whilst driving. If you are caught in a school zone, the fine will increase to $439.00. If you are caught using your mobile phone whilst driving in a double demerit period, you will be subject to double demerit penalties.

Once you have been detected by a camera using your mobile phone whilst driving, the footage will be reviewed manually and then you will be sent an infringement notice. If you are using devices in your car that allow you to use your mobile phone through connectivity services integrated in the car system without physically touching the phone, such as Apple Car Play, Android Auto, or other manufacturer infotainment systems, the camera technology will not record an infringement for the use of the mobile device under these circumstances.

Currently in NSW, only unrestricted drivers can use mobile phones only if the phone is

  • in a cradle fixed to the vehicle
  • is not in the way of the drivers road vision or if you can use Bluetooth or voice activation without physically touching the phone, including the use of integrated car systems such as App le Car Play or Android Auto.

If the above is adhered to, mobile phones are permitted for the following purposes:

  • To make or answer a call
  • To play music
  • As a driver’s aid – example Navigation

Be sure not to be caught using your mobile phone whilst driving. Research has revealed that simply taking your eyes off the road for longer than two seconds, doubles your chances of having an accident. Males and Females aged 17-39 years old have the highest involvement of mobile phone use as a factor of accidents.

 

If you have an incident with mobile phone offences and you need advice, be sure to contact our Criminal Law Department on 4647 7577 to book your initial consultation!

For further information contact:

Luisa Gaetani
Senior Lawyer
luisa@couttslegal.com.au
02 4607 2112