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Domany v Minister for Home Affairs [2019] FCA 1508

MIGRATION – application for an extension of time to appeal a decision of the Federal Circuit Court – where a delegate of the Minister refused an application for a Special Eligibility (Class CB) Former Resident (Subclass 151) visa as the applicant did not satisfy cl 151.212 of Schedule 2 to the Migration Regulations 1994 (Cth) – where the Administrative Appeals Tribunal dismissed the application as the application was not made within the prescribed period nor had the relevant fee been paid – application dismissed

Philip Cowdery

Philip is a partner in our Corporate and Commercial Group. He handles:
• a wide range of transactional work, civil disputes and proceedings
• domestic mediations and arbitrations
• investigations by ASIC and RMS
• the full range of statutory and regulatory inquiries and disciplinary proceedings
• criminal proceedings arising in transport law and corporate context
• a variety of administrative law matters often involving proceedings for judicial review; and
• the implementation of innovative litigation strategies relating to transactional work of the firm.
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Zabina Naem

Zabina joins Nexus Law Group after starting her career in suburban practice where she worked primarily in property law but found her passion for estate planning and administration. She now works mainly in the area of Wills and Estates.
Zabina loves working with clients to tailor an estate plan most suited to their objectives. She has recently commenced her Masters in Estate Planning to provide clients with an even greater specialised service.
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DWA17 v Minister for Immigration and Border Protection [2019] FCAFC 160

MIGRATION – appeal from decision of Federal Circuit Court affirming decision of Immigration Assessment Authority to refuse a protection visa – where Authority possessed a written record of appellant’s entry interview but incomplete audio recording of interview – where Authority rejected certain claims in part because they were not raised at the entry interview – whether Authority fulfilled its statutory task – no error disclosed in the reasons of the Authority or Federal Circuit Court
MIGRATION – where Authority drew conclusions from news articles – where news articles not in evidence – whether Authority acted illogically or unreasonably in drawing conclusions – reading of reasons as a whole – no error disclosed – appeal dismissed with costs

ASIC v Vocation: Directors liable under section 180 of the Corporations Act for company’s breach of disclosure obligations and misleading conduct

In the recent decision of ASIC v Vocation Limited (In Liquidation) [2019] FCA 807, the Federal Court found three directors personally liable under section 180 of the Corporations Act 2001 (Cth) for allowing Vocation Limited to breach its statutory obligations as an ASX listed entity.
Background
ASIC commenced civil penalty proceedings against Vocation and three of its directors: Mr Mark Hutchinson (CEO), Mr John Dawkins (Non-Executive Chairman) and Mr Manvinder Gréwal (CFO).
The key issue in this case concerned a misapprehension on the part of the defendants as to the potential impact of contractual measures being taken against two of Vocation’s subsidiaries by the Victorian Department of Education and Early Childhood Development (DEECD) in relation to contracts for government funding of vocational education and training. These measures included the withholding of payments totalling approximately $20 million, and a direction that these subsidiaries suspend all future student enrolments.
Overall, it was found that the directors had failed to adequately inform themselves of these matters by unreasonably and uncritically relying on information provided to them by senior management regarding the company’s ongoing dispute with the DEECD.
Breach of primary obligations by Vocation
The defendants’ conduct resulted in Vocation breaching a number of its obligations as a listed entity under the Act. The following contraventions were alleged by ASIC:

Breach of continuous disclosure obligation – Nicholson J found that Vocation failed to notify the ASX of the action being taken against it by the DEECD, despite this being information that would be reasonably likely to influence investors in deciding whether to acquire or dispose of Vocation’s shares. This was found to be a breach of ASX Listing Rule 3.1, resulting in Vocation’s contravention of section 674(2).
Misleading and deceptive conduct – Nicholson J found two instances of misleading and deceptive conduct in relation to a financial product (Vocation’s securities) in contravention of section 1041H:

Vocation made an announcement to the ASX that failed to include key information regarding the extent of the measures being taken against it by the DEECD.
In connection with a proposed share placement, Vocation’s CEO and CFO provided a misleading due diligence questionnaire (DDQ) to UBS Australia in circumstances where UBS Australia was considering underwriting the proposed offer of shares.

Lodgement of a defective Cleansing Notice – in connection with the share placement, Vocation lodged a ‘Cleansing Notice’ with the ASX pursuant to section 708A(5), which contained incorrect statements regarding Vocation’s compliance with its disclosure obligations. However, Nicholson J declined to find Vocation liable for this, as it could not be shown that the defendants had actual knowledge of this defect, as required by the provision.

Directors’ duties – ‘stepping stone liability’ under section 180
ASIC alleged that each of the defendants had breached their duty of care and diligence under section 180 by allowing Vocation’s breaches of the Act.
This demonstrates the ‘stepping stone’ approach to liability under section 180 – whereby directors may be personally pursued for failing to protect their company from a ‘foreseeable risk of harm’ by exposing it to a risk of penalty for breaching the Act.
Nicholson J made the following findings on the liability of each of the defendants:

Liability of Mr Hutchinson (CEO)

One of the key responsibilities of Mr Hutchinson was to provide the board with timely and quality information that would assist it to make decisions in relation to matters such as ASX disclosure.
As CEO, Mr Hutchinson had a greater responsibility than Vocation’s non-executive directors to inform himself of matters affecting its business.
It should have been clear to Mr Hutchinson that the information provided to him by senior management in relation to the dispute with the DEECD was ‘wholly unreliable’.
Mr Hutchinson breached his duty under section 180(1) by failing to properly assess the likely impact of the measures imposed by the DEECD on Vocation’s business, which lead to the company’s breach of its continuous disclosure obligation, the misleading ASX announcement, and the submission of the misleading DDQ.

Liability of Mr Dawkins (Non-Executive Chairman)

As a non-executive director, Nicholson J made some allowance for Mr Dawkins’ reliance on information provided to him by Mr Hutchinson and senior management.
Mr Dawkins’ principal failing was that he did not turn his mind to the correctness of the assumptions underlying the information provided to him.
Overall, it should have been clear to Mr Dawkins that management could not be relied upon to provide accurate or reliable information in relation to the dispute with the DEECD.
Mr Dawkins breached his duty under section 180(1) by allowing Vocation’s breach of its continuous disclosure obligations.

• Liability of Mr Gréwal (CFO)

As CFO, Mr Grewal’s responsibilities included the completion of DDQs.
A reasonable person in Mr Gréwal’s position would have at least reviewed the key correspondence from the DEECD for the purpose of confirming the accuracy of the DDQ.
Mr Gréwal breached his duty under section 180(1) by providing the DDQ to UBS Australia in circumstances where he should have been aware it contained misleading representations.

Latest statement on the ‘business judgment rule’
This case has provided the latest judicial statement on the debate as to whether the business judgment defence under section 180(2) applies to compliance decisions.
Mr Hutchinson sought to contend that the decision not to disclose the information to the ASX was an exercise of business judgment. In rejecting this contention, Nicholson J followed the authority in ASIC v Fortescue Metals to confirm that decisions relating to compliance with the requirements of the Act, such as whether or not to make an accurate disclosure, are not an exercise of business judgment for the purpose of the defence.
Furthermore, it was held that even if the rule had applied, it could not be said that Mr Hutchinson had appropriately informed himself of relevant matters in order to be able to avail himself of the defence.
Key takeaways
The decision raises a number of important points that company officers should be aware of:

Company board members must be proactive in analysing and understanding matters affecting their business, and should critically assess information provided to them by senior management particularly where there is a reason to question its reliability.
Company officers should also be aware of any important assumptions that advice provided to them by external legal advisers might be based on.
The business judgment defence will not be available for decisions on compliance matters such as ASX disclosure.
A director may be liable under section 180 for allowing their company’s breach of the Act even where they had no actual knowledge of the contravention – this is a lower threshold than other personal liability provisions, such as section 674(2A) (personal involvement in company’s breach of its disclosure obligations).

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Hall & Wilcox advises Sto Group on acquisition of Unitex

Leading Australian law firm Hall & Wilcox is pleased to have advised German company Sto Group on its acquisition of Unitex, an Australian manufacturer and distributor of building products for residential and commercial architectural products.
Sto Group is a major international manufacturer of products and systems for building coatings, including systems for external wall insulation and rainscreen cladding, render and paint for home and office interiors, decorative coatings and acoustic systems for regulating room noise. It has an annual turnover of €1.2 billion and a large international presence but, before this acquisition, had not entered the Australian market.
The Hall & Wilcox team, led by Head of International Oliver Jankowsky, advised Sto Group on all corporate aspects of the asset and share acquisition, including tax, property and employment advice. The team also comprised Partner Deborah Chew and Lawyers Alicia Haesslein, David Holland and James Fisher.
‘We are delighted to assist Sto Group with its acquisition of Unitex and ongoing international expansion,’ Oliver Jankowsky said.
‘Assisting a client such as Sto shows the strength of Hall & Wilcox’s international presence and our ability to work seamlessly with overseas clients and foreign counsel to achieve our client’s strategic goals.’
In thanking Hall & Wilcox, Dr König, of Schrade & Partner Rechtsanwälte PartmbB, the Sto Group’s German counsel, confirmed that ‘Mr Jankowsky and Hall & Wilcox provided excellent support.’
Hall & Wilcox’s international desks cover Europe, China, Korea and Malaysia. The team has extensive experience in cross-border transactions and disputes and works with clients and other firms from around the world.
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AIU16 v Minister for Immigration and Border Protection [2019] FCA 1493

MIGRATION – appeal from a decision of the Federal Circuit Court – application for a protection visa – refusal of protection visa – adverse credit findings – whether the Tribunal failed to comply with ss 424AA, 424A and/or 425 of the Migration Act 1958 (Cth) – no jurisdictional error in Tribunal finding – no appellable error in decision of primary Judge

Sidhu v Minster for Immigration and Border Protection [2019] FCA 1504

MIGRATION – appeal from decision of the Federal Circuit Court of Australia upholding decision of the Administrative Appeals Tribunal -Tribunal did not failed to consider any relevant considerations – breach of condition 8516 attached to his 573 visa – breach cured but power to cancel visa still enlivened – appeal dismissed

Berg Engineering Pty Ltd v Tivity Solutions Pty Ltd & Ors (No 2) [2019] QSC 224

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – COSTS – INDEMNITY COSTS – RELEVANT CONSIDERATIONS GENERALLY – whether a special order should be made that the costs be assessed on the indemnity basis or equivalent – where it was held that the plaintiff pay the defendants’ costs of the application to set aside the search order of 20 September 2018

Ratapu v Minister for Home Affairs [2019] FCA 1494

MIGRATION – Application for judicial review of a decision of the Administrative Appeals Tribunal – no failure to take into account a relevant consideration – no irrationality, illogicality or unreasonableness – application dismissed

DBF16 v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2019] FCA 1496

MIGRATION – application for judicial review of decision of the Federal Circuit Court – Circuit Court upheld Tribunal’s decision to reject application for protection visa -Tribunal erred by failing to hold that certificate issued pursuant to s 438(1)(a) of the Migration Act 1958 (Cth) was invalid – no jurisdictional error as documents the subject of the certificate not material – appeal dismissed

SGR Pastoral Pty Ltd v Christensen [2019] QSC 229

PROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – SERVICE – OTHER MATTERS – where the applicant applies for an order under s 459G of the Corporations Act 2001 (Cth) that the respondents’ statutory demand be set aside under s 459H – where the respondents contend the application should be dismissed because it was not properly served within the strict 21 day time period – where the applicants emailed sealed copies of the application and supporting affidavit to the respondents’ solicitors on the 21st day of the service period – where the managing clerk of the respondents’ solicitors’ firm deposes that the email was received at 1:21pm, he saw the email at 2:15pm and he read the email sometime after 4pm, after he had left the office – whether service under s 459G can properly be effected by email – if so, whether service was effected when the email was received, seen or read – if service was not effected until the email was read, whether service is taken to be effected the next day, given it was after 4pm – if service was not effected until the email was read, whether the documents were not served at the nominated place for service, given the managing clerk was not in the office at that timeCORPORATIONS – WINDING UP – WINDING UP IN INSOLVENCY – STATUTORY DEMAND – APPLICATION TO SET ASIDE DEMAND – GENUINE DISPUTE AS TO INDEBTEDNESS – ASSESSING GENUINENESS – GENERALLY – where the applicant applies for an order under s 459G of the Corporations Act 2001 (Cth) that the respondents’ statutory demand be set aside under s 459H – whether the applicant has shown a genuine dispute about the existence and amount of the debt claimed in the statutory demand in the sense of a plausible contention requiring investigation – whether the applicant has shown it has a genuine offsetting claim which it ought to be entitled to litigate in the ordinary way

Murphy Operator & Ors v Gladstone Ports Corporation & Anor (No 4) [2019] QSC 228

TORTS – LAW OF MAINTENANCE AND CHAMPERTY – CHAMPERTY – where plaintiffs seek declarations that the litigation funding arrangements are not by reason of maintenance, champerty or public policy, unenforceable – where first respondent and plaintiffs argue that the torts of maintenance and champerty no longer exist as part of the common law of Australia – whether maintenance and champerty still exist as part of the common law of AustraliaPROCEDURE – CIVIL PROCEEDINGS IN STATE AND TERRITORY COURTS – REPRESENTATIVE PARTY OR PROCEEDINGS – where plaintiffs seek declarations that the litigation funding agreements are not by reason of maintenance, champerty or public policy, unenforceable – where plaintiffs argue s 103K(2)(b) of the Civil Proceedings Act (Qld) 2011 authorise the litigation funding agreements – whether s 103K(2)(b) of the Civil Proceedings Act (Qld) 2011 authorise the litigation funding agreementsCONTRACTS – GENERAL CONTRACTUAL PRINCIPLES – ILLEGAL AND VOID CONTRACTS – CONTRACTS CONTRARY TO PUBLIC POLICY – OTHER CONTRACTS – where plaintiffs seek declarations that the litigation funding agreements are not by reason of maintenance, champerty or public policy, unenforceable – where plaintiff argues that there is lawful justification for the litigation funding agreements and therefore are enforceable – where defendant argues that there is no lawful justification therefore the entry into the agreements is a civil wrong and the agreements are unenforceable as contrary to public policy – whether the agreements are lawfully justified and are therefore enforceableEVIDENCE – ADMISSIBILITY – GENERAL PRINCIPLES – where plaintiffs seek declarations that the litigation funding agreements are not by reason of maintenance, champerty or public policy, unenforceable – where defendant argues that the first respondent exercises impermissible control of the proceedings – where defendant tendered invoices issued by the plaintiffs’ solicitors seeking to demonstrate impermissible control of the proceedings – where first respondent objects to the admissibility of the invoices on the basis that they are evidence of post-contractual conduct – where issue was left to be decided in judgment – whether the invoices are admissible

Asirifi-Otchere v Swann Insurance (Aust) Pty Ltd [2019] FCA 1500

PRACTICE AND PROCEDURE – representative proceedings under Part IVA of the Federal Court of Australia Act 1976 (Cth) – application for a common fund order – whether appropriate to make common fund order to ensure justice is done in the proceeding – whether a common fund order providing for a funding commission not exceeding 25% of recovery is appropriate – applicable principles where common fund order sets percentage cap on funding commission where actual commission to be later approved by the Court – application for common fund order granted

Sneak peek episode 178. How to find a competent fire safety professional

Sneak peek at this week’s podcast episode: I’m chatting to Rob Broadhead of 2020 Fire Protection about changes afoot in his industry which aim to (finally) connect strata buildings with trusted and experienced fire protection professionals.
Listen to the full episode here: https://www.yourstrataproperty.com.au/how-to-find-a-competent-fire-protection-professional/ Want to watch the full video? Become a member and receive immediate access to this video and lots more: https://www.yourstrataproperty.com.au/membership/The post Sneak peek episode 178. How to find a competent fire safety professional appeared first on Your Strata Property.

Globaltech Corporation Pty Ltd v Australian Mud Company Pty Ltd [2019] FCAFC 162

PATENTS – construction – where claims in suit comprised method claims and system claims for core sample orientation – where the method in claim 1 involved two timers, one in the downhole device and one on the surface – whether the primary judge erred in his construction of the patent – whether, on the true construction of claim 1, it required both the downhole timer and the surface timer to count with reference to the same initial reference time – whether the word “beyond" meant no more than "after" or "later than" – appeal dismissed

R v PBE [2019] QCA 185

CRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE – GROUNDS FOR INTERFERENCE – JUDGE ACTED ON WRONG PRINCIPLE – where the 17 year old applicant was found guilty on his own plea of attempted armed robbery and 14 other offences in the Childrens Court – where the sentencing judge in effect sentenced the applicant to serve 16 months in detention and recorded a conviction for all offences – where the prosecutor mistakenly submitted at sentence that the applicant had had convictions recorded previously – where the sentencing judge ordered that convictions be recorded on the basis that detention was ordered for some of the offences – whether the sentencing judge erred in the exercise of the sentencing discretion by considering the ordering of detention as a distinct reason to record convictionsCRIMINAL LAW – SENTENCE – SENTENCING OF JUVENILES – OTHER MATTERS – where the 17 year old applicant was found guilty on his own plea of attempted armed robbery and 14 other offences in the Childrens Court – where the sentencing judge in effect sentenced the applicant to serve 16 months in detention and recorded a conviction for all offences – where the sentencing judge did not consider in their reasons whether the offences should be referred to the chief executive for a restorative justice process under s 162 of the Youth Justice Act 1992 – whether the sentencing judge erred in the exercise of the sentencing discretion by failing to consider whether the offences should be referred to the chief executive for a restorative justice processCRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE – GROUNDS FOR INTERFERENCE – JUDGE ACTED ON WRONG PRINCIPLE – where the 17 year old applicant was found guilty on his own plea of attempted armed robbery and 14 other offences in the Childrens Court – where the sentencing judge in effect sentenced the applicant to serve 16 months in detention and recorded a conviction for all offences – where the sentencing judge, when considering whether to record a conviction, identified that the applicant had presently poor prospects of rehabilitation but acknowledged that the applicant’s future chances of rehabilitation could be affected by the recording of convictions – where the sentencing judge in effect reasoned that the applicant was unlikely to improve in the short term but had chances of rehabilitation in the long term – whether it was appropriate for the sentencing judge to consider whether the applicant’s rehabilitation might take some time, instead of considering the impact of the recording of convictions on his chances of rehabilitation generallyCRIMINAL LAW – APPEAL AND NEW TRIAL – APPEAL AGAINST SENTENCE – GROUNDS FOR INTERFERENCE – SENTENCE MANIFESTLY EXCESSIVE OR INADEQUATE – where the 17 year old applicant was found guilty on his own plea of attempted armed robbery and 14 other offences in the Childrens Court – where the sentencing judge in effect sentenced the applicant to serve 16 months in detention and recorded a conviction for all offences – where the applicant contends that no conviction should have been recorded for any offence but does not otherwise seek to disturb the orders made by the sentencing judge – where the applicant had a lengthy criminal history, a troubled personal history, and abused illicit drugs – where some of the offences were rightly categorised as serious – where it was established that the sentencing judge erred in the exercise of the sentencing discretion and the applicant should be re-sentenced by the Court of Appeal – whether it is appropriate to record a conviction for any of the offences