Insurance non-disclosure – The Importance of what an Insurer knows

Posted on September 12th, 2018

In 2017, the Supreme Court considered a dispute about whether an insurer had to pay out a claim in circumstances where it alleged its insured had failed to disclose relevant matters in its proposal.

The (very brief) facts were that the insured was a company that operated a petrol station. Its insurance policy did not cover any liability arising from gradual pollution. In June 2013, a sewer near the petrol station exploded and it was ultimately determined the explosion was caused by a sudden petrol leak. The company carried out both repairs and preventative work; and then claimed on its policy. The insurer declined cover. Read the rest of this entry »

Can lease obligations operate ‘prior’ to the commencement date of the Lease?

Posted on June 25th, 2018

Can lease obligations operate 'prior' to the commencement date of the Lease?Will a Court enforce provisions of a lease against a party in respect of a period of time prior to the commencement date of the lease? This was one of the questions raised in Bonafair Holdings Pty Ltd v Hungry Jacks Pty Ltd.

His Honour, Sackville AJA, concluded that the language used by the parties in the relevant clauses will be determinative on the issue. “It is of course possible for a lease to contain provisions attaching consequences to events or conduct pre-dating commencement of the lease… However, in the absence of any language evincing a contrary intention, provisions in a lease for a term of years ordinarily create rights and obligations between the lessor and the lessee as and from the date the term of the lease commences“. Read the rest of this entry »

Directors’ liability for legal costs

Posted on June 25th, 2018

A cautionary tale for directors who might think they can hide behind a “corporate veil” and avoid personal exposure.  Parties to a complicated dispute settled the dispute and entered into consent orders.   Subsequently, an application was made against one plaintiff company to enforce the consent orders.  The company had failed to execute all necessary documents.  When the plaintiff company continued to fail to comply, the Supreme Court (Tasmania) made an order under section 169 Supreme Court Civil Procedure Act 1932 (Tas) empowering the Registrar of the Court to execute the documents instead.  The Defendant then sought a costs order for the cost of enforcing the orders.  Read the rest of this entry »

Bankruptcy and the “slip rule”

Posted on June 13th, 2018

Bankruptcy and the "slip rule"Most of us understand that once a judgment in a Court case is entered, it is final (except for any appeal rights). One minor exception, commonly known as the ‘slip rule’, is where an obvious error was made in a judgment or order. In the case of such an error, it can be corrected under the slip rule without the necessity for an appeal.

Slip rule applications are relatively rare. Even rarer was the situation that arose in 2016 when the Court was asked to make a slip rule correction to a judgment affecting a person who had become bankrupt. Under the Bankruptcy Act when a person becomes bankrupt, a creditor cannot “take any fresh step” in Court proceedings, except by leave. The issue the Supreme Court had to determine, was whether making a correction under the slip rule amounted to a “fresh step”. If so, the correction was not possible except by leave of the Federal Court (as opposed to the Supreme Court, where the proceedings had been instituted). Read the rest of this entry »

Costs – who pays when each party has some success

Posted on April 4th, 2018

The Supreme Court recently issued a cost decision that grapples with an issue that occasionally arises once litigation is finalised.  That is, if there are several issues in dispute in the proceeding, and both parties have some measure of success on various issues, who should pay costs?

The usual rule is that ‘costs follow the event’.  That is, the successful litigant usually gets an order that the unsuccessful litigant should pay their costs.  Costs are not intended to be a penalty but rather to recompense the successful litigant for the cost of vindicating their rights.  Where one party is wholly successful, they would ordinarily expect a costs order in their favour.

It is less easy to apply that ‘rule’ where each party has some, but not total, success. Read the rest of this entry »

Jones v Dunkel – the problem of not calling a witness at a hearing

Posted on April 4th, 2018

Most lawyers know the case Jones v Dunkel: in general terms, it is authority for the proposition that if a party does not call a witness who can apparently give evidence about a matter in dispute, the failure to call them allows the Court infer that the evidence of that person would not assist the party. This is one of the reasons why witnesses are often required to give evidence, even though they may not be of particular assistance to a litigant – to avoid an unfavourable inference if they are not called.

A recent Supreme Court decision, dealing with an insurance policy dispute, led to a discussion of the so called “Jones v Dunkel inference”.  The plaintiff made a decision not to call a number of witnesses at trial; and the defendant asked the Court to make a Jones v Dunkel inference. In dealing with that argument, the Court summarised the principles or considerations that are at play in deciding whether such an inference should be drawn. In particular, the Court suggested that it is the person asking for the inference to be drawn (that is, the opponent of the litigant who did not call the witness) who must prove two fundamental things namely:- Read the rest of this entry »

Liability in the absence of a therapeutic relationship

Posted on April 4th, 2018

The NSW Court of Appeal recently found a medical treatment provider was liable for personal injury, even though there was never a therapeutic relationship with the person who was injured.

Briefly, a Mr Mason suffered from psychological illness for which he was taking medication. He was remanded in custody on criminal charges, to Parklea Correctional Centre. It was privately operated by GEO Group under contract with the State Government. The contract required GEO to provide psychological and counselling services to inmates.

When Mr Mason was processed at Parklea, he told employees of GEO about his conditions and medications, but he was not prescribed any replacement drugs nor referred for counselling or other treatment. Days later, he jumped from a high level landing and suffered personal injury. He then sued GEO for those personal injuries. That case settled, but a related claim between GEO and its insurer continued because the insurer contended that its policy did not provide cover unless GEO had actually provided (medical) services. Read the rest of this entry »

Rental car agreements & drink driving

Posted on April 3rd, 2018

It is a common provision in car rental agreements that if the car is damaged as a result of the driver breaching a law in force where the accident occurs, insurance coverage will not be available. The clauses are often drafted to cover a wide range of breaches of the law but that would almost always include an accident that occurs when the driver was “over the limit” for blood alcohol.

One of the features of the Insurance Contracts Act, which governs a number of classes of insurance policies including car rental agreements, is that if there is a “technical” breach of the policy, but that particular breach did not cause the loss or increase the risk of loss, the insurer may not be able to refuse cover. However, that principle only applies where a policy of insurance exists – as Gardam’s case shows, it has no application to a document (such as a rental agreement) that is not an insurance contract. Read the rest of this entry »

Who’s liable for unsafe rental premises?

Posted on January 11th, 2018

The N.S.W. Court of Appeal recently considered the respective liabilities of a landlord, managing agent and tenant arising out of the collapse of a balcony at a rental property at Collaroy, on the Northern Beaches of Sydney (Libra Collaroy Pty Limited v Bhide).

In 2005, the landlord engaged a real estate agent to manage their residential rental property pursuant to a Management Agreement. During the tenancy, the tenant raised numerous issues concerning the state of repair of the upstairs balcony. The managing agent obtained quotes for repairs and forwarded these to the landlord however these were not acted on.

In 2012, the balcony collapsed injuring 4 people, including the tenant’s daughter. The 4 injured persons commenced proceedings against the landlord and the managing agent for their injuries and the tenant also commenced proceedings against the landlord and the managing agent for psychological injury. The landlord and managing agent issued cross claims against each other and also against the tenant. Read the rest of this entry »

Buying or selling an RTO?

Posted on January 10th, 2018

If you are buying or selling a Registered Training Organisation (“RTO“) it is very important you engage a competent solicitor who has experience in dealing with RTOs.

In addition to dealing with the usual sale of business considerations, including without limitation:

  • Stock,
  • Goodwill,
  • Plant & Equipment (including discharging securities),
  • Restraints,
  • Employees,
  • Leases/Licence Agreements/Supplier Agreements/Franchise Agreements, and
  • Intellectual Property;

The sale or purchase of an RTO must also deal with the government department known as the Australian Skill Quality Authority (“ASQA”).  Read the rest of this entry »

Naming your small business start-up – what to consider

Posted on January 10th, 2018

 

One of the first things to do for your small business start-up is choosing a name. It is also one of the most exciting! It is a creative opportunity to come up with the name that will identify your business going forward and build your successful empire (hopefully)!

 However, there are some unexciting legal considerations that should also be addressed during this process. The main one is to ensure that you are not going to infringe on anyone else’s intellectual property rights when settling on your name or be accused of trying to pass off as another business with a similar name. There are some administrative headaches that can also be avoided if you put some effort into identifying the current marketplace before settling on a name.  Read the rest of this entry »

You need to amend your trust deed

Posted on December 15th, 2017

Recent amendments to transfer duty and land tax legislation may affect every Family/Discretionary Trust that either purchases or holds land in New South Wales.

A Family/Discretionary Trust is often used as an asset protection structure as the trustee normally has wide discretionary powers to distribute income and capital to wide classes of beneficiaries under the trust.

However, this wide discretionary power may cause a Family/Discretionary Trust to fall foul of the legislative amendments in 2016 targeted at “foreign persons” acquiring and holding land in NSW. Foreign persons are now subject to a 4% surcharge purchaser duty when acquiring residential land and a 0.75% surcharge on land tax where a foreign person holds residential land in NSW.   Read the rest of this entry »

Representing the interests of non-unionised workers

Posted on December 14th, 2017

On 13 December 2017 the High Court delivered a decision in a case of Regional Express Holdings Limited v Australian Federation of Air Pilots [2017] HCA55.

The central issue in dispute was whether an industrial association (such as a union, or other representative body) was entitled to represent workers who were not members of the industrial organisation.

The short facts were that Regional Express (REX) had written to a number of its pilots to the effect that if they made claims for accommodation costs during layovers, they would not be given command roles.  The Australian Federation of Air Pilots (AFAP), a representative body for commercial pilots, commenced proceedings alleging REX’s letter contravened a number of workplace rights.  None of the individuals to whom REX had written, were actually members of AFAP.  REX applied to summarily dismiss the proceedings on the basis that AFAP was not “entitled to represent the industrial interests of” individuals who were not members of its organisation. Read the rest of this entry »

Urgent applications, preservation orders and third party rights

Posted on November 1st, 2017

Many courts in Australia have processes that allow applications to be made before any formal litigation is commenced.  In the Federal Court, one form of ‘pre-litigation’ application that can be made, relates to the preservation of property or information that may be relevant to a later, substantive, claim. 

A recent example was where a software designer suspected a former employee had taken, and was using, its confidential information for the benefit of a direct competitor.  It sought orders for access to the ex-employee’s computers and other electronic devices for the purposes of copying their contents in order to preserve information that may be relevant to a future substantive claim. Read the rest of this entry »

When is a judgment final?

Posted on November 1st, 2017

There are some specific circumstances in which a Court will ‘go behind’ a judgment – even though it remains ‘on the record’ of a court and has not been set aside by appeal. One such circumstance is in bankruptcy proceedings. Although a judgment is ‘prima facie’ proof of a debt, in bankruptcy a judgment is never conclusive proof that a debt exists.

Where, for example, a judgment was entered by default (that is, the debtor did not actively defend the claim) a Bankruptcy Court can, and often does, look behind the judgment to see if there was a genuine debt upon which the judgment was based.  This generally occurs in circumstances where the debtor is seeking to set aside a Bankruptcy Notice or Creditor’s Petition, based on the judgment.  Read the rest of this entry »

Is your website a ‘business record’?

Posted on October 31st, 2017

Most of us understand, at least generally, that for material to be considered by a trial judge in the course of a hearing it must comply with the ‘rules of evidence’.  Both under the common law and under both the NSW and Commonwealth Evidence Acts, one class of material that can generally be given in evidence is ‘business records’.  The broad theory behind this is that businesses will generally maintain accurate records of how they have been conducted (for example as to who their customers are, what revenues they generate, how they carry out production etc) and that their historical records are therefore generally reliable material for the purpose of a court making decisions.

However when the ‘record’ is in the nature of advertising or promotional material, while it is certainly a document created by a business, the courts tend to be much more cautious as to whether these are ‘business records’ in the relevant sense.  The distinction seems to be whether documents are records of a business; or the product of it.  Consequently in recent times the courts have rejected attempts to tender, as business records, both corporate magazines (Australian Competition and Consumer Commission v Air New Zealand Limited (No. 5) [2012] FCA 1479 and extracts from a company’s web page (Clipsal Australia Pty Limited v Clipso Electrical Pty Limited (No. 43) [2017] FCA 60).  Read the rest of this entry »

Think before you terminate!

Posted on August 15th, 2017

If you are thinking of terminating a contract that is of any significance, you must obtain legal advice prior to doing so.

Too often we see people take action to terminate a contract as a result of circumstances that they consider entitle them to terminate the contract and suffer significant consequences as a result.

If you terminate a contract or attempt to terminate a contract in circumstances where you are strictly not entitled to, or do so in an inappropriate manner, the other party may be entitled to treat your termination or attempted termination of the contract as a repudiation of the contract. Read the rest of this entry »

Employee restraints of trade – are they enforceable?

Posted on July 12th, 2017

The case of Thinkstorm Pty Ltd v Farah [2017] NSWSC 11 recently addressed the issues of employment restraints and their enforceability in the context of employment contracts.

The facts of the case involved the employer (Thinkstorm) seeking to enforce a restraint of trade provision by way of injunction against one of its previous employees (Farah). Farah had worked for Thinkstorm as a computer engineer using the computer software known as WorkBrain and provided services to Queensland Health on behalf of Thinkstorm. Farah’s employment contract contained a generic restraint of trade clause providing that Farah must not directly or indirectly, for a period of 12 months following the termination of his employment, solicit, canvass, deal with or approach any person, firm or company for which Thinkstorm provided goods or services to at any time during the last 12 months of Farah’s employment with Thinkstorm. Immediately following Farah’s resignation from Thinkstorm, Farah accepted an employment contract with Queensland Health.  Read the rest of this entry »

When is a deposit refundable under a business sale agreement?

Posted on July 10th, 2017

The case of Sarker Trading Pty Ltd v Vanage Pty Limited [2016] NSWDC 250 recently addressed the issue of deposits and whether or not a deposit can be forfeited under a Business Sale Agreement where the Agreement is rescinded.

The facts of the case are:

  • Sarker, as purchaser, entered into a Business Sale Agreement with Vanage for the purchase of a Subway Franchise in Forestway NSW for $95,000.00 (“the Agreement“).
  • The Agreement provided that it was a condition precedent to completion that Sarker be approved as a Franchisee of Subway.
  • Sarker paid an initial deposit of $10,000 (10.5%) and a further “Security Deposit” of $75,000.00.
  • Sarker failed the relevant “Skills Test” performed by Subway required to be approved as a Franchise.
  • Sarker sought to rescind the Agreement for an inability to satisfy a condition precedent to completion.
  • Vanage asserted it was entitled to retain the deposit and the Security Deposit.

Read the rest of this entry »

Anti-bullying laws and company directors

Posted on July 4th, 2017

We generally do not think of company directors as “workers”. However a recent Fair Work Commission decision says that directors are workers – at least for the purpose of its anti-bullying powers.

The anti-bullying part of the Fair Work Act says that “workers” are eligible to make an anti-bullying application. A “worker” is defined by reference to the Work, Health & Safety Act 2011 which itself lists a number of classes of activity that amount to being a “worker”. A company director is not included in the list; but the general description includes a ‘person carrying out work in any capacity for a person conducting a business or undertaking’.  Read the rest of this entry »