Fair Work Commission confirms desk not required to be provided to employee working from home
It has been a turbulent year for most workplaces, including managing the sudden shift to working from home arrangements. Against this backdrop, the Fair Work Commission has provided interesting commentary in the recent unfair dismissal case of Jayson McKean v Red Energy Pty Ltd [2020] FWC 5688, which involved a dispute about whether the employer was required to supply a desk for an employee working from home.
Background

Jayson McKean (‘McKean’) was employed at Red Energy Pty Ltd (‘Red Energy’) as a Customer Assist Specialist. At the beginning of the COVID-19 pandemic, Red Energy, like many employers, encouraged employees to work from home. McKean resisted the shift to working from home, for reasons said to relate to financial stress and a recent move of house, unless Red Energy provided him with a desk or reimbursed the cost of purchasing one.
Although Red Energy provided a laptop, headset, adjustable chair, ergonomic assessments, access to an occupational therapist and online resources to its staff, it would not agree to provide a desk.
Initially, McKean continued to work from the office, but following the reintroduction of Stage 3 restrictions in July, Red Energy informed McKean that he would need to arrange to work from home. McKean’s union engaged in unsuccessful discussions with Red Energy to find a solution, but when these failed, McKean requested 6 weeks leave. After his request for leave was rejected, McKean felt that he had no choice but to resign.
The case
McKean brought an unfair dismissal case to Fair Work Commission, seeking reinstatement and payment of lost wages. He argued that Red Energy’s conduct, in refusing to buy him a desk, grant the application for leave, or allow him to continue working from the office, amounted to constructive dismissal because it left him with no reasonable choice but to resign his employment.
McKean further argued that Red Energy had breached the Occupational Health and Safety Act 2004 (Vic) by failing to take reasonably practicable measures to maintain a safe working environment for its employees. 

For an unfair dismissal claim to be heard by the Fair Work Commission, the employment must have been terminated “on the employer’s initiative”. Red Energy argued that it had not and lodged a jurisdictional objection to McKean’s unfair dismissal claim, arguing that McKean had not been forced to resign and therefore that he had no standing to make a claim.

Findings

The Commission rejected McKean’s arguments as being “entirely without merit”. The Commission found that McKean could have reasonably bought a desk, noting that McKean himself had acknowledged that he had the means to do so, and it was only on principle that he refused.  The Commission found that “on any reasonable view, the prospect of having to pay a small sum to buy a desk was not a matter that forced McKean to resign”. This finding alone was enough to dismiss the case.

The decision of the employer to refuse leave was also found to be reasonable, given it was a request for an extensive period with very short notice. McKean’s decision to resign was therefore one that was made freely by him and not because he was left with no other alternative. 

Deputy President Colman also found that the facts did not establish that there was an OHS risk, let alone a contravention of the OHS Act. The resources provided by Red Energy were found to be adequate, having regard to the nature of McKean’s work. There was no basis to argue that it was not reasonably practicable for McKean to work from home.

Deputy President Colman made additional commentary on the repeated refusal by McKean to work from home, stating that the direction to work from home was plainly lawful and reasonable in the circumstances, and Red Energy would have been entitled to dismiss McKean for his failure to follow a lawful and reasonable direction. Although in this case Red Energy had not dismissed the applicant, DP Colman stated that he would not have considered the dismissal harsh, unjust or unreasonable if it had.

Lessons to employers

This case is useful to employers in understanding what would be required to establish a constructive dismissal. The employer’s conduct in this matter had in no way forced a resignation, and the unfair dismissal claim therefore failed on jurisdictional grounds.  

This decision also provides valuable insight into what equipment might need to be provided by an employer to provide “adequate resources” to meet OHS obligations. Whilst in this case, a desk was not required for the employee’s particular role, an employer should consider the particular requirements of an employee’s role when deciding what is necessary to enable working from home.

Please contact our Employment Team if you would like to discuss your particular workplaces circumstances and what adequate resources might be required to accommodate working from home arrangements.

with Emily Clapp, Graduate at Law
Home office set up, or setting up the office at home? | Hunt & Hunt Lawyers

Over the past few years, Customs has had some major, and at times, surprising losses in Australian Courts and Tribunals (including one case where wheelie bins were classified as vehicles!).  The most high profile loss concerned the classification of vita-gummies where the High Court held that they should be classified as a medicament rather than food.
Legislation has been introduced to parliament to prevent a replication of outcomes like these in respect of future imports.  The outcome will mean that future imports will be taxed as the Government intended.  However, the legislation does not undo the judicial reasoning that resulted in Customs losing those cases.  Most significantly, we are still stuck with the position that the French text of the Harmonised System (HS) Code needs to be considered when interpreting the Customs Tariff Act (which, incidentally, is in English).
Customs Tariff Amendment (Incorporation of Proposals and Other Measures) Bill 2020
The proposed legislation seeks to change the tariff outcome in a number of important cases as set out below:

Pharma-Care – Vitamins and other supplements – In this case health products being vitamins and garcinia extracts were held to fit within Chapter 30 as a medicament. Although Customs lost the case at the High Court, the Court did uphold Customs’ argument that when interpreting the Australian HS code, the corresponding provisions of the French text of the code must be considered.  The legislation amends the classification outcome of the case by seeking to add a new note that specifically exclude vitamins and other supplements from Chapter 30.  The goods will be classified to heading 2106 unless another more specific provision applies.  This amendment is consistent with the amendments to the explanatory notes made by the World Customs Organisation (WCO) HS Committee in 2019.
Sulo – Wheelie Bins – In this case, the Administrative Appeals Tribunal (AAT) held that wheelie bins should be classified in Chapter 87 as vehicles, as they are essentially designed for the movement of goods, being waste.  Customs had argued for classification to Chapter 39 on the basis of explanatory notes that stated that dustbins fall in Chapter 39.  The AAT criticised this approach, holding that the explanatory notes should not be used to create ambiguity where there is no ambiguity in the terms of the headings.  Since this decision, the WCO has expressly changed the explanatory notes so that wheelie bins are expressly excluded from Chapter 87.  On this basis, Customs has sought that chapter notes be added to Chapter 87 of the Australian legislation stating that the heading does not cover wheelie bins.
Smoothflow – Fire Pipes – The classification outcome in this case was driven by an attempt to avoid dumping duties on hollow structural sections (steel pipes and tubes). The importer sought classification to heading 7308 on the basis that the heading applied to pipes used in connection with a structure (as opposed to forming part of the structure).  The AAT agreed with the importer following consideration of the French text of the HS code.  Customs is in the process of appealing this decision.  The outcome for future importers will be decided not by that appeal, but by this legislation which provides that tubes and pipes prepared for the conveyance of fluids (water, oil and gas) are not included in heading 7308.
Solu – Goods cut to size after import – This case concerned the tariff classification of various aluminium extrusions to be used as rails and handles. The goods would almost always be cut to size after importation.  The AAT held that the need to cut to size did not alter the classification of the goods.  This was because at the time of import, those goods had the essential character of a complete or finished article.  This case had a significant dumping duty impact as the aluminium extrusions were not classified to Chapter 76 which attract dumping duties.  Rather than appealing the AAT finding regarding parts versus finished goods, Customs has instead sought legislative amendment so that headings 7308 (iron/steel structures), 7610 (aluminium structures), 8302 (mountings/fittings) and 9403 (furniture parts) do not include goods that require further modification before use, including but not limited to, cutting, drilling and bending.

Customs Overreach
The proposed amendment based on “further modification” to plates, rods, angles, shapes, sections, tubes and pipes seems to go much further than was necessary to address the issues arising from the Solu case.  For instance, if cabinetry rails were cut to the precise size at the time of import, but did not have screw holes, the item would require drilling and would now be excluded from heading 9403.
The term “further modification” is too wide and goes beyond established identification principles.  Some modification will be so minor that the good should rightly be classified to heading 7308, 7610, 8302 or 9403 as applicable.  The proposed amendments could prevent this outcome.
The answer may be for importers to argue that a particular good has such features at the time of import that it is correctly identified as a furniture or building part, rather than a mere “plate, rod, angles, shape, section, tube or pipe”.  If this is the case, the new notes would not exclude the good, despite the need for further modification, as the new notes only apply to goods identified as mere ” plates, rods, angles, shapes, sections, tubes or pipes”.  These arguments will be strongest where the required modification is very minor.
Commencement of New Classifications
The new classification rules will only apply to goods imported after the date that the legislation commences, which is the 28th day after the Act receives Royal Assent.  At this stage the bill has not passed the Senate.  The changes will take effect from some time in 2021.
Implications
Importers need to consider the following:

tariff concessions orders that rely on a classification that will change after the bill is passed
duty free vitamin and health supplements that will in the future be classified as a food that attracts duty
dumping duty payable on steel pipes and aluminium extrusions that are currently classed as parts of a building or furniture
steel and aluminium products that require some minor further modification before use that may in the future (perhaps inadvertently) be classified to a different heading
the HS code on certificates of origin for affected goods
tariff advices applying to affected products – legislative amendment is a ground on which Customs can revoke a tariff advice

Please feel free to contact Russell Wiese on 8602 9231 or at [email protected] if you would like to discuss how the proposed amendments will affect your products.
 
New Customs legislation to change the effect of recent Australian cases – However, we still need to learn French | Hunt & Hunt Lawyers

The Sydney Morning Herald reports that over 186,000 people were affected by a phishing attack on Service NSW back in March 2020 and has suggested that a large amount of the personal information that was obtained was in the form of scanned documents (such as scans of identity documents, like passports and licences, or banking and Medicare details). For its part, Service NSW’s states that over 3.8million documents were stolen, of which 500,000 contained customer information.
This is unfortunately another example of where an organisation’s Privacy and Data security practices can let them down, and ultimately cop some bad press.
So how do you avoid becoming the hottest scoop for all the wrong reasons?
Simply put, privacy and data should be at the centre of your organisation’s systems development and training. As the year winds down, it is an ideal time for organisations of any kind to look at what are their privacy and data keeping practices.
Ideally you will want to take a top to bottom spring clean, a full data audit of your organisation by an independent professional… but 2020 has been a tough year and it’s time for some easy wins, so here are our top three things you can do, right now to spruce up your approach to privacy and data security.
1 – Don’t collect it (or keep it) if you don’t need to!
How do you cut the costs of bandwidth and data storage, and save you a lot of privacy concerns? Cut down on the personal information you collect! You should ask yourself (and your management teams) what information are you collecting about people, are you collecting identity documents, and if so, why?
If the answer is anything less than “we have specific legal advice saying we must keep this” then you may wish to consider whether your practices should change.
We know businesses, from real estate agents, to accountants, to pubs and clubs, love to collect identity documents, but they’re not always required or not always required to be kept on file. If you do collect identity documents, then consider:
– Do we need it to begin with?
– Do we have a valid purpose for collecting it?
– If yes, do we need to actually keep a copy or just a record that we have seen it?
– If yes, can we record this identity verification by another means and keep the verification instead of the identity document?
For example, you might need to obtain a copy of someone’s drivers licence to do some identity checks. Once the checks are done, will it be sufficient to have a signed file note recording that a senior employee has done this verification, and then destroy the copy of the licence?
While time is required to implement changes to any process, it will save you time, money and avoid the risk of disclosures (and public commentary).
2 – Keep it secret, keep it safe
If you do need to keep a person’s documents with their details, don’t let email become your organisation’s artificial document storage. Use a file management system.
Where possible, any files you collect, hold, and need to send (at least internally) should be housed within an encrypted file system. Ideally if you are using a document management system you can simply send a link to a document, not the document itself. This is not only more secure but again any accidental disclosure by staff will be guarded against as someone who is external to your organisation won’t be able to utilise such a link.
If your sending files externally, use a secure file sending facility. There are a myriad on the market, and with many organisations using Microsoft’s 365 package, OneDrive is very useful for this. Remember to apply password protection and access settings to your files and you are now significantly safer than using email.
Using a file storage/sending facility will usually involve a separate system to your emails. Again, the added benefit here is if your email is compromised, there’s a good chance your separate systems will still stand.
Once you’ve convinced your organisation to all participate in this practice, it’s a good idea to speak to your IT team about archiving and taking offline your prior-to-this-practice email database. Remember all those emails you’ve already sent will continue to linger and continue to be a data risk until they’re deleted.
3 – Train your staff in privacy like you train them in WHS
This is another easy win. We’ve all either had to sit through, or train people on work health and safety. Why? It’s not just a legal requirement and a concern for Directors, but because its important – a workplace injury can have long lasting and tragic impacts on a person.
Of course, so too can a privacy breach. The circumstances and immediacy might be different, but a privacy breach can haunt your organisation and those affected. So why not have routine training and a solid onboarding program to ensure your staff are privacy and data conscious?
Unlike some WHS issues, privacy issues can often be harder to spot, especially if there has been entrenched practice, or perhaps some of your staff are inexperienced in particular systems and emerging technology. As such, its important your training is pitched so all staff know their obligations and gain core competencies in privacy and data handling.
4 – Ask the experts
Okay so we added one more. If your organisation needs to focus on building its business and is time poor when it comes to privacy and data considerations, then ask Hunt & Hunt’s team of privacy experts. Whether you need a foundational workshop, a 360-degree audit, help investigating a suspected data breach or anything in between, Nicholas Commins and our other privacy gurus are ready to assist you.
For more information please contact us at [email protected]
Article prepared by: Nicholas Commins – Associate, Sydney
Paper necessity or data vulnerability? | Hunt & Hunt Lawyers

The Full Bench of the Fair Work Commission recently handed down a significant decision which is of particular relevance for employers who have statutory child safety obligations because their staff work with children.
Handed down on 20 November 2020, the decision dismissed the appeal of an employee against a decision of Deputy President Anderson which itself dismissed the employee’s unfair dismissal claim (DA v. Baptist Care SA [2020] FWCFB 6046).
Facts
Baptist Care provides emergency and ongoing residential care and support services for vulnerable individuals in South Australia, including care for children who are under the guardianship of the CEO of the SA Department of Child Protection (Department).
DA worked as a casual employee for Baptist Care with children in residential facilities. Relevant details are:

in 2018, new child safety provisions came into effect in the Children and Young People (Safety) Act 2017 (SA) (CYP Act);
section 107(1) of the CYP Act requires that a person must not be employed in a licensed children’s residential facility unless the person has undergone a psychological or psychometric assessment of a kind determined by the CEO of the Department.  Contravention of this requirement is an offence which may be subject to financial penalties and imprisonment;
in August 2018, the CEO of the Department issued a determination prescribing the kind of psychological or psychometric assessment required.  This included an interpretation of the results of the psychometric assessment and one-on-one interview by a registered psychologist who is approved in writing by the CEO of the Department;
at the time, the only provider with approval to conduct the assessment under the determination was PsychCheck Pty Ltd (PsychCheck).  The agreed protocol by which PsychCheck was required to conduct these assessments included a requirement that any assessment of unsuitability had to be signed off by 3 internal psychologists (including the assessing psychologist).  Significantly, PsychCheck would not provide any reasons for its assessments, only a Statement of Suitability;
Baptist Care also entered into an agreement provided by PsychCheck for the provision of psychometric/psychological assessment services.  The terms obliged Baptist Care to require its employees to complete a Consent Form for their assessment in prescribed terms.  It also stated that PsychCheck would not give feedback on the reasons for the outcome;
Baptist Care required all of its relevant employees to enter into new employment contracts which incorporated the relevant requirements of the CYP Act.  It became a condition of employment that the employee have an approved Child Related Employment Screening;
DA was informed that he was required to undergo psychometric testing.  He was required to, and did, sign the Consent Form from PsychCheck;
PsychCheck sent Baptist Care a Statement of Suitability for DA which assessed him as “currently psychologically unsuitable“.  Baptist Care was not provided with, nor did it seek, any reasons for the conclusion or other feedback;
DA was invited to a meeting with Baptist Care and given a letter requiring him to show cause why his employment should not be terminated as a result of his “unsuitable” assessment.  Three weeks later his employment was terminated.

Initial decision of DP Anderson
DP Anderson found there was a valid reason for DA’s dismissal because he was unable to fulfil an inherent requirement of his job, namely an assessment of psychological suitability that allowed him to undertake the care of children under the guardianship of the State.
His Honour commented that DA’s submissions erroneously conflate the reasons for the psychometric assessment with the reason for dismissal.  DA was not dismissed because Baptist Care considered he was unsuitable to work with children.  He was dismissed because Baptist Care believed that, once assessed as unsuitable, DA could no longer perform an inherent requirement of the job.  Therefore, Baptist Care neither influenced the outcome of the assessment nor formed any view on its legitimacy (indeed, like DA, it was not privy to the reasons).  The merit of the assessment was therefore not relevant to the question of whether a valid reason existed for termination.
Consequently, the professional opinions of DA’s treating psychologist and alternate professional conclusions were not relevant.
DP Anderson did find that there were two elements of unfairness caused by Baptist Care.  This related to the following two matters in the draft agreement presented by PsychCheck which were negotiable but not negotiated by Baptist Care:

the provision that PsychCheck would provide no reasons or feedback for the outcomes which it determined; and
the lack of a mechanism for review or re-evaluation of the outcome.

However, the Deputy President found that, although these factors weighed in favour of a finding of harshness, there were substantial factors weighing against a finding of unfair dismissal.  These included that Baptist Care:

had a valid reason for termination;
did not seek out DA’s dismissal;
allowed the psychometric assessment to be independently conducted on its merits;
complied with its legislative and contractual obligations to DA, to PsychCheck and to the Department;
provided opportunity for DA to put his position before deciding to dismiss him; and
even if reasons for DA’s unsuitable assessment had been provided to either DA or Baptist Care at the time, the fact of the unsuitable outcome would still have put Baptist Care in a position where it had no choice but to dismiss DA, based on the inherent requirements of his role.

Full Bench decision
The Full Bench of the FWC upheld DP Anderson’s dismissal of the unfair dismissal claim.  It stated that Baptist Care was subject to the operation of the CYP Act, which required it, at pain of criminal penalties, not to employ a person in a licensed children’s residential facility unless they had undergone the required assessment determined by the CEO of the Department.
The Full Bench added that the capacity for this statutory regime to result in unfairness upon employees is obvious.  The process does not take into account the employee’s history of working with children.  Further, an assessment of unsuitability does not necessarily mean that the employee would engage in unacceptable behaviour or harm children. However, the Full Bench explained that the capacity of the CYP Act to cause unfair outcomes for employees is not something which can render a dismissal caused by it to be unfair. 

“The legislative scheme reflects a policy choice by the South Australian legislature to prioritise a precautionary and preventative approach to the care and safety of children over the interests of employees working with children“.
The Full Bench also rejected the scenario put by DA that, if Baptist Care had entered into a more flexible agreement with PsychCheck allowing Baptist Care control over the identity of the psychologist conducting the assessment, allowing it to be given reasons for a determination of unsuitability and provided for a right of review, then DA would never have been dismissed.  Whilst the provision of reasons for the unsuitability assessment would undoubtedly have given greater transparency to the process, it would have made no difference to the position under the CYP Act that DA could not lawfully perform the inherent requirements of his role.

The Full Bench also found that there were major constraints on Baptist Care’s ability to bargain with PsychCheck for contractual terms which gave employees greater protections because:

PsychCheck was, at the time, the only approved provider of assessment services under the Department’s determination; and
Baptist Care was required to focus on putting in place arrangements which allowed it to comply with the CYP Act and did not have unlimited time to negotiate terms.

Lessons for employers
Most employers who have staff working with children are not subject to the same prescriptive requirements as under the CYP Act in South Australia to put their staff through successful psychometric testing before they can work with children.  However, the decision highlights many of the relevant factors that employers should take into account when assessing the suitability of job applicants and existing employees to safely work with children.
Furthermore, for employers to successfully discharge their statutory and common law duties of care in relation to child safety in the future, employers may want to consider whether they introduce their own psychological/psychometric testing requirements.
If your business is impacted on by these issues or you would like any advice on this area, please contact the Employment Team at Hunt & Hunt.
Inherent requirements termination upheld by Full Bench | Hunt & Hunt Lawyers

It has been a grim year for sports organisations who were among the worst hit from the pandemic. Traditional revenue streams from player registrations were significantly reduced, sponsorship payments were cut, fundraisers were cancelled, and canteens remained closed.
Many clubs could no longer afford merchandise or playing kits and could not keep up with ongoing payments to use council owned parks for their fields.
The resumption of contact sports by the NSW Government was a saving grace for most, but with the financial effects so deep in some sporting codes, for others it could take a few seasons to recover.
I have been asked by numerous sports clubs to provide them with some tips to cushion the financial impacts of covid-19 this year and to come out in full swing in 2021. Below are some of my main suggestions.
 

Negotiate with your Local Council

By way of example, in September this year Canterbury-Bankstown Council waived all ground hire costs for sporting clubs and associations for the 2020 winter season. A critical decision that kept in excess of $250,000.00 in the pockets of sports clubs in the local area.
You should speak to your local Councillors about the prospects of a cost-free period or a substantial discount. It goes without saying that sports plays an integral role in engaging the community and boosts the mental and physical wellbeing of participants.

Re-think your kit provider

No doubt, it would be nice to feel like Real Madrid or La Lakers and have Nike or Adidas produce your kits, but it may not be a financially viable decision. Because many brands will have experienced a reduction in their revenue stream due to covid-19, there will be greater competition in the market for your business which means brands will be more willing to produce your kits at a lower price and you will have greater capacity to leverage a cheaper deal.

Expand your sponsorship opportunities

Local sports clubs are not bullet proof from losing sponsors and many clubs opt to find a single major sponsor rather than multiple minor sponsors. The issue we have seen in this pandemic is that the survival of some clubs was entirely reliant on a singular sponsorship payment.
It is important to diversify your income streams from sponsors. There are greater prospects of securing the clubs long-term financial position when there are multiple channels of income.

Access the Government assistance schemes

There are many subsidised packages created by the NSW Government to encourage participation in sport. The ‘Active Kids’ program provides two $100 vouchers for parents, guardians and carers of school-enrolled children to use towards sport and active recreation costs each year. You may also be eligible for the Community Sports Recovery Package and the Grassroots Sports Fund which include one-off payments of $1,000.00.
You should also regularly check the NSW Office of Sport website for updates and I encourage you to get on top of every available benefit possible.
Get in touch

As a former professional athlete, I understand the financial and commercial struggles that face local sports organisations. If you operate a sports club or play for a club that is facing financial pressures, please contact me on [email protected] or (02) 9391 3196.
 
Article prepared by: George Mourani – Lawyer, Sydney
How local sports clubs can become more financially dependent and prosper in 2021 | Hunt & Hunt Lawyers

With over 15 years’ experience in acting for the ATO Charles Bavin knows the ins and outs.
Charles’ top tips when negotiating with the ATO are:
 

Get in early.

The ATO is committed to the early resolution of disputes and will explore all means to achieve that end. If a tax debtor takes the initiative to address its taxation debt with the ATO it will find there is a much better outcome than if it ignores its obligations and waits for the ATO to take action.
 

Communication is key.

The ATO encourages tax debtors to contact them to discuss options available for resolving a taxation debt. When there is ongoing, open communication between a tax debtor and the ATO there is more likely to be an efficient resolution to a taxation debt.
 

Ensure your records are up to date. 

Before contacting the ATO in relation to a taxation debt a tax debtor should review their records and ensure everything is up to date, including any outstanding lodgements for the ATO, as well as its own financial records. A payment arrangement is less likely to be considered unless all lodgements are up to date and the ATO will likely want to ensure what is being offered is not only able to be complied with, but also the most that the debtor is able to pay.
 

Be aware of your options. 

The ATO is not likely to offer a settlement or payment arrangement to you. All tax debts are payable in full when due. However, the ATO will consider assisting tax debtors in discharging their taxation debts and has the power to consider:
 

remitting penalties and other additional charges and interest including GIC in certain circumstances;
entering into payment arrangements, including secured arrangements;
deferring time for payment;
in limited circumstances, releasing payment of certain liabilities; and
in limited circumstances, accepting a settlement offer.

Try not to pay other debts at the expense of the ATO

If the ATO sees other creditors are being paid in priority to it then it will be less likely to be lenient to you.
 
If you would like to know more please look forward to our upcoming webinar series presented by Sarah Cappello, Charles Bavin, Matt Gauci and Lauren Boyd. The three-part series will provide additional practical tips to negotiate with the ATO and further focus on businesses and their directors who may be exposed to insolvent trading, cash flow/debtors and director liability.
Click here to register:
https://us02web.zoom.us/webinar/register/8316057391138/WN_6EGtqvjaRb6q0cG8e3Zf6A
Hunt & Hunt have an experienced insolvency and debtor recovery team across all of our offices, in Sydney CBD, greater Sydney and regional NSW. Get in touch with us on 9391 3000 for any enquiries.
Charles’ top 5 tips when negotiating with the ATO | Hunt & Hunt Lawyers

Preparing for the festive season can be a frantic and stressful time for everyone, but can be especially difficult for those with separated families. If you and your partner are separated, knowing the answers to the following questions ahead of time can help minimise conflict and avoid a last-minute rush to Court.
 

What are the care arrangements for your children for Christmas Eve, Christmas Day and Boxing Day?
What are the care arrangements for the summer holidays generally?
Have you provided or been given the details of any holiday trips you or the other parent are planning on taking the children on?

Being prepared can mean the difference between enjoyment and disaster. Other tips to keep in mind which can help ensure smooth sailing are:
 

If the children are going to be with you for long stretches of time, make sure they’re able to regularly call or Facetime the other parent.
Make sure that you and any friends or relatives who might be visiting don’t say bad things to the children about the other parent or talk to them about the Court case (even after a few drinks at Christmas lunch).
Don’t post mean, sarcastic or hurtful things on Facebook or social media – not only is it a bad look, but it’s not in the Christmas spirit.

Unfortunately, sometimes things just go wrong or can’t be resolved. If you need help negotiating arrangements, or if the worst should happen, contact our experienced Family Law team at Hunt & Hunt for legal assistance and help get your holidays back on track.
With offices in Sydney CBD, greater Sydney and regional NSW, Hunt & Hunt can quickly respond to family law issues as they arise. Call us on 9391 3000.
Article prepared by: Benjamin Keyworth – Associate, Sydney
Family Law: Custody Arrangements Over Christmas | Hunt & Hunt Lawyers

Annual leave over the Christmas and New Year’s period can be difficult to manage. As this period fast approaches, now becomes an important time for employers to plan ahead for the shutdown period to notify its staff to take forced leave. Employers must ensure they meet any specific obligations under any relevant Award or Enterprise Agreement, otherwise the implications may be costly.
Most employees under an Award or Enterprise Agreement contain terms regarding annual shutdown periods and generally speaking at least four weeks’ notice by the employer is required. However, some Awards or Enterprise Agreement’s may contain a greater period of notice. Alternatively, employees that are covered by a separate employment agreement may have relevant provisions regarding the Christmas and New Year’s shut down period or it may be covered under a company’s policy. Familiarise yourself with the required notice period to ensure that it is done in time!
Where there is no mention of notice periods under the industrial instrument, the general rule under the Fair Work Act 2009 (Cth) (FWA) allows employers to direct their staff to take annual leave if the request is reasonable. For example, the employer’s enterprise being shutdown over the Christmas and New Year’s period is considered to be reasonable under the FWA. Factors taken into account to determine whether a direction by the employer is reasonable include:
(a) Needs of the business or employee;(b) Prior arrangements between employer and employee;(c) Timing of the notice given to the employee;(d) Business’ past practices.
On the other hand, an employer may wish to direct employees to attend work over the Christmas period if it is a particularly busy time for the business or if a small number of employees are required to keep the business running (again it is important to check whether there is any mention of this under the industrial instrument). However, an employer must not unreasonably refuse an employee’s request to take annual leave over the Christmas and New Year’s shutdown period and again what is reasonable will depend on the circumstances.
To help you focus on your operations during this busy time of year, we can help manage the legal requirements with respect to the holiday period or employment obligations in general! With offices in Sydney CBD, greater Sydney and regional NSW, our experienced employment team at Hunt & Hunt Lawyers are well placed to help any and all businesses. Call us on 9391 3000.
Article prepared by: Joey Tass – Associate, Sydney

Employment Law: Notice For Holiday Period | Hunt & Hunt Lawyers

Flying under the radar, in late July 2020, the Electronic Transactions Regulations (Cth) 2020 repealed and replaced the Electronic Transactions Regulations (Cth) 2000 to extend the range of transactions to which the provisions of the Electronic Transactions Act 1999 (Cth) (Electronic Transactions Act) apply.
The number of exceptions to application of the Electronic Transactions Act which are contained in Schedule 1 of the Regulations has been reduced from 157 items to 93 items and the scope of some of the other exemptions has been narrowed.
Unlike the many temporary dispensations introduced by various states and territories in response to Coronavirus COVID-19, this change is permanent.
Notably, electronic communications under the National Consumer Credit Protection Act 2009  (National Credit Act) are facilitated by these changes.
Previously, where a credit provider wanted to communicate with a debtor and send documents electronically, the credit provider not only had to obtain the debtors consent, but also had to follow special rules and give specific notifications to debtors. In addition, communicating electronically was prohibited in certain situations – guarantees being a case in point.
The new regulations:

remove the special and convoluted rules that applied the giving of consent by the recipient, and
allow guarantees to be made and guarantor notices to be given electronically.

Both credit providers and credit assistants (as defined in the National Credit Act) can avail themselves of these changes. Existing consent forms used by credit providers will need to be changed.
To make it clear, consent still needs to be given by the debtor and a guarantor – but now it is just a “simple” consent that is required.
Additionally, under the new Regulations, not only can guarantees be made electronically, but:

copies of the signed guarantee and credit contract may be given electronically (section 57(1)(a) and (b);
guarantees may be extended to cover liability under future credit contracts electronically (section 59 (2)(a), and
notice of a proposed further advance under a credit contract may be given to a guarantor (as a precursor to a guarantor agreeing to extend the guarantee to cover a further advance) (section 61 (1)(a).

However, the new Regulations still prohibit electronic communications in relation to default situations. In particular:

notices of default under credit contracts and mortgages (section 88);
giving notice of intent to enter residential property to take possession of goods (section 99(1)(b);
requests for consent to enter premises to take possession of goods (regulation 87(a));
giving consent to enter premises to take possession of goods (regulation 87(c));
giving notice to debtor after taking possession of goods (section 102(1));
giving notice to enforce judegment against linked credit provider (section 130(5(a), and 130(6)(a))
giving notice to repossess goods under consumer lease (section 178)

Changes have also been made to a range of other legislation to permit electronic communications, including to the following financial services legislation:

Banking Act 1959;
Financial Transaction Reports Act 1988;
Insurance Act 1973;
Retirement Savings Accounts Act 1997, and
Superannuation Industry (Supervision) Act 1993.

A minor referencing change has also been made to the Corporations Act 2001 which while of no practical relevance, may be confusing to the uninitiated!
Credit providers and credit assistants now need to review and change their documents and procedures.
It is hoped that the Federal Government will also look at enabling a greater range of electronic communications under the Corporations Act 2001 (Cth). The Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 (Cth) was a Federal Government’s response to the impacts of COVID-19. But this Determination is currently only temporary and ends in late March 2021. More permanent solutions for companies are well overdue.
Changes to the Electronic Transactions Regulations permit more electronic communications | Hunt & Hunt Lawyers

Following on from the announcement by Government in late September 2020 of proposed changes to responsible lending laws, Federal Treasury has now released draft legislation for consultation.
Given the fact that the proposed rollback of responsible lending laws is proposed to take effect from 1 March 2021, the consultation period is necessarily short – ending on 20 November 2020.
The legislative package comprises:

An amending bill – National Consumer Credit Protection Amendment (Supporting Economic Recovery) Bill 2020 (updated)
Draft Regulations – National Consumer Credit Protection Amendment (A New Regulatory Framework for the Provision of Consumer Credit) Regulations 2020
Draft Standards – National Consumer Credit Protection (Non ADI Credit Standards) Determination 2020
Explanatory Memoranda for the legislative package

The draft standards only apply to non–ADI credit providers and are designed to bring non-ADI credit providers into alignment with the requirements imposed on ADIs by the Australian Prudential Regulatory Authority (APRA)
The explanatory memorandum for the Bill contains a useful summary of the effect of the proposed legislative changes – extracted below. One thing clear is that further obligations will be cast upon credit assistants and that the coverage of the best interests duty will extend to all credit assistants, not just mortgage brokers.  It was never clear why the best interests duty was limited to mortgage brokers.
The explanatory memorandum provides the following comparison between the existing and the proposed laws in connection with responsible lending obligations (RLOs)

New law
Current law

Responsible lending obligations

Chapter 3 RLOs will only apply to SACCs, SACC-equivalent loans provided by ADIs and consumer leases beginning on 1 March 2021. This is the case for both credit providers and credit assistance providers.
Chapter 3 RLOs apply to all consumer credit contracts, consumer leases and SACCs. This is the case for both credit providers and credit assistance providers.

ADIs are not subject to Chapter 3 RLOs (other than for SACC-equivalent loans) beginning on 1 March 2021.
Existing prudential standards continue to apply.
ADIs are subject to Chapter 3 RLOs and a prudential standards regime set and enforced by APRA under the Banking Act 1959.

Non-ADI credit conduct is not subject to Chapter 3 RLOs from 1 March 2021 (this conduct does not include SACCs and consumer leases).
Non-ADI credit conduct is subject to non-ADI credit standards made by legislative instrument. These will be similar to those imposed on ADIs.
Non-ADIs are subject to Chapter 3 RLOs.

Best interests obligations

A best interests duty and obligation to resolve conflicts of interest in the consumer’s favour apply to all credit assistance providers.
A best interests duty and obligation to resolve conflicts of interest in the consumer’s favour is legislated to apply to mortgage brokers only.

New non-ADI credit standard

The Minister is able to make non-ADI credit standards, by way of legislative instrument, specifying requirements for a credit licensee’s systems, policies and processes relating to certain non-ADI credit conduct.
No equivalent.

 
The net effect is that ADIs will follow APRA requirements and Non–ADIs will follow an equivalent standard set out in the National Consumer Credit Protection (Non-ADI Credit Standards) Determination 2020 as amended from time to time.
Importantly, the relevant Standards will be able to be changed and amended easily – without parliamentary oversight. ASICs Regulatory Guide 209 can also be changed without oversight by Parliament, so in practice there might be little difference in approaches.
While prescriptive responsible lending obligations are being rolled back it will not be open slather. There is a move towards a principles-based approach to lending rather than the current process driven approach. The explanatory memorandum explains the situation thus:
1.19      Schedule 1 to the Bill will amend the Credit Act to allow the Minister to make standards, by way of legislative instrument, specifying requirements for a credit licensee’s systems, policies and processes relating to certain non-ADI credit conduct.
1.20      These requirements will be system level obligations rather than focusing on individual loans engaged in by licensees. This reflects the Government’s decision to move away from a prescriptive framework for lenders and borrowers and will support risk-based lending that is attuned to the needs and circumstances of the borrower and credit product.
…………………….
1.49      These standards will require licensees to implement adequate systems, policies and processes relating to non ADI credit conduct rather than impose individual conduct level obligations. This enables credit assessment to move away from a prescriptive framework for lenders and borrowers and will support risk-based lending that is attuned to the needs and circumstances of the borrower and credit product. These standards are appropriately adopted from the APRA standards to maximise alignment between the ADI and non-ADI regimes.
Additionally, the credit providers will have to conduct a credit assessment (draft standards 8 and 9) and will still be required to give a form of analysis/assessment to borrowers on request (draft standard 13) and may be required to give one as a matter of course, which is consistent with broker requirements.
For credit assistants there is commentary and worked examples in the explanatory memorandum about how they should satisfy their “best interests” duty obligations at paragraphs 1.23 to 1.37.
The extent to which there will be alignment between the obligations imposed upon ADIs and non-ADIs in connection with lending policies and processes remains to be seen. APRA’s approach in Prudential Standard APS 220 (Credit Risk Management) and Prudential Practice Guide APG 2239 (Residential Mortgage Lending) is always likely to be more nuanced and flexible than proposed legislation governing non ADIs.
The changes are major and upend the status quo in a significant way. Further updates will follow as developments occur.
Rollback of Responsible Lending Laws – Draft legislation released for public consultation | Hunt & Hunt Lawyers

During 2019, the Australian Registrars’ National Electronic Conveyancing Council (ARNECC) consulted on proposed changes to the rules governing electronic conveyancing in Australia – referred to as the Model Participation Rules (MPR) and the Model Operating Requirements (MOR).
One aspect of the proposed changes to the MRP that caused great consternation amongst practitioners was the proposal to require everyone to adopt the verification of identity standard (VOI Standard) when identifying parties to a conveyancing transaction and remove the option for Subscribers (lenders, lawyers and conveyancers) to verify identity by taking “reasonable steps”.
Strong representations were made by industry with regard to this proposed change, especially lenders who generally have their own processes to verify identity, often electronically and incorporating Anti-Money Laundering (AML) requirements at the same time.
The release by ARNECC on 9 October 2020 of a further consultation draft on the proposed changes makes it clear that ARNECC has abandoned that proposal.
The net effect is that the status quo prevails and Subscribers can verify identity either:

by applying the VOI Standard, or
in some other way that constitutes the taking of reasonable steps.

Of course, persons who are identity agents such as Australia Post and Zip ID will still have to verify in accordance with the VOI Standard – as they do currently. Identity agents will not apply the reasonable steps standard as what would be “reasonable” depends on the particular circumstances. Identity agents are not in a position to be able to make this assessment due to their lack of knowledge of the person being identified.
The other proposed changes to the MPR and MOR are generally not contentious, although will involve a change to the client authorisation form that is required to be completed by the client in order to authorise Subscribers to sign and transact on electronic conveyancing platforms such as Property Exchange Australia (PEXA).
The consultation period on the draft MPR and MOR closes on 6 November. It is proposed that the changes will take effect from March 2021.
eConveyancing – Changes to the Model Participation Rules | Hunt & Hunt Lawyers

Background
The Husband (58 at time of trial) and the Wife (44) commenced an intimate relationship in 2012 while the Husband was still residing with his former spouse. The couple only lived together intermittently and were never de facto.
There was a significant asset and income disparity between the parties, with the Husband initially having around $20,000,000 worth of assets (later reduced to $9,000,000 after a property settlement with his former wife) and the Wife only having nominal. In April 2014 the Husband bought an uninhabitable house for $2,200,000, gifted the Wife one-tenth and commenced renovations.
In December 2014, while in hospital from a suspected heart attack and under pressure from the Wife, the Husband transferred the Wife a further 40% of the property. In March 2015, the parties then entered into a Deed stating that the parties held the property as joint tenants and if the Wife died before the Husband he would transfer her siblings $1,000,000.
In August 2016 the parties married, only to separate 23 days later. Both parties sought alterations of property interests.
Initial Findings
By January 2018, the Wife had spent over $200,000 in legal fees. Over the Wife’s objections, the matter was listed for final hearing in June 2018. The Wife failed to file her evidence on time and her solicitors ceased to act a week before the hearing, leading to her to file an application for adjournment the day before the hearing. The application was refused, and the Wife was warned that the hearing might proceed even if she didn’t appear. Despite this warning, the Wife did not appear at the hearing, and the matter proceeded undefended.
The trial judge found that, despite the marriage’s brief duration, the parties had intended to have a lasting relationship and for the property to be a place where they shared their lives. His Honour found that the Husband had intended for he and the Wife to be joint tenants and acknowledged his obligation to make payment to the Wife’s siblings if she predeceased him. His Honour was satisfied that it was just and equitable to make a property settlement order and that the Husband’s contributions to the property had been overwhelming greater than the Wife’s.
The trial judge found that the Wife’s contribution to the property had been less than $220,000 and made orders leaving her with assets of $430,000 and the Husband with assets in excess of $12,000,000.
Full Court Appeal
The Wife appealed and sought to adduce further evidence. The Full Court rejected this and found that all of the evidence the Wife now sought to adduce could have been put on before the trial.
The Full Court also rejected the Wife’s argument that the trial judge had failed to take the Deed or the Wife’s legal ownership of the property into account. The Full Court found that the property settlement did not deprive the wife of the benefit of the deed without giving her any compensation, noting that both parties sought orders severing the joint tenancy. The Wife’s appeal was dismissed.
High Court Appeal – Majority Decision
The Wife appealed again to the High Court, where a majority of Chief Justice Kiefel and Justices Bell and Keane dismissed her appeal. The Wife, the majority found, had had an opportunity to put her case before the trial judge and failed to take it; a final hearing was not some preliminary skirmish the Wife was at liberty to choose not to participate in without consequence. The Court reiterated that in family law matters parties are under an obligation to act in a way that resolves their case in a just and timely manner, and at a reasonable cost, and stated that the need for finality in a case such as this, where there was a notably short marriage and no children of the relationship, was a highly material factor.
The majority also found that the Deed did not contain an inference that the Husband was to pay the Wife $1,000,000 upon separation, as the Wife claimed, only for the Husband to pay the Wife’s siblings if the she died before the Husband while they still owned the property. Their Honours rejected the Wife’s contention that the trial judge had failed to properly consider her contention, which she had raised only on appeal, that the parties’ property interests shouldn’t be disturbed – as this argument was not put to him, the High Court found, the trial judge could not be criticised for not addressing it. Nor, said the Court, should his Honour be taken to task for not closely examining whether the second, 40% transfer was voidable due to undue influence, unconscionable conduct or duress; the trial judge had made no such finding, and his reasons reflected the arguments that were put to him. The Wife’s right of appeal, the Court concluded, was not an opportunity for her to make a case that she chose not to make at trial, and the trail judge’s assessment of the parties’ respective financial contributions were open to him in this case.
Dissenting Judgment
Justices Nettle and Gordon dissented. In their view, the primary judge had failed to give proper effect to the interests of the parties, which was an essential first step in making an alteration of property interests.
Their Honours zeroed in on the trial judge’s finding that the Wife’s additional 40% interest in the property had been abrogated by the Wife’s “pressure” on the Husband, finding that this was incorrect; whatever “pressure” may jave affected the Husband’s initial transfer, it had not been present when he entered into the Deed. The dissenting Justices reiterated that where duress, undue influence or unconscionable conduct are claimed the Court must closely consider the facts in order to establish it. The trial judge had not done this, and the facts did not show that the Wife had exerted improper pressure when the transfer was made. Additionally, even if she had, the Deed then ratified the transfer.
In their Honours’ view, the Deed clearly ratified transferring the Wife joint title, and the trial judge should have stared by recognising the joint ownership, and how that ownership came to be, whether by gift or otherwise, was irrelevant. According to Gordon and Nettle this was not just an incidental finding either; if the trial judge had taken the Wife’s full 50% interest into account, they asserted, logically, under the method of calculating the asset split he had used, the Wife would have been awarded five times what she recovered. There was no justice, their Honours declared, in stripping the Wife of her 50% interest in a million-dollar property in return for $180,000 in costs.
Conclusion
Like many High Court judgements, Hsiao & Fazarri is as much about the conduct of judges as it is about litigants. Nevertheless, there are a few salient points which practitioners can take away.
The first, and perhaps the most obvious, is to not be lax when going to Court. The fact that a right of appeal exists does not remove the need to initially make one’s case at trial – an appeal is not a do-over, and a hearing is not a draft. Secondly, it is vitally important to be very careful when wording a Deed, as any entitlements a Deed contains will turn on how they’re worded – an entitlement under specific circumstances is not an entitlement no matter what. Nothing is as expensive as a missed opportunity; and near enough, as they say, is not good enough.

~ with Benjamin Keyworth, Associate.
Case Note: Hsiao v Fazarri [2020] HCA 35 | Hunt & Hunt Lawyers

Hunt & Hunt was pleased to field a team of 6 lawyers from our Sydney office, who participated in this year’s Vinnies Community Sleepout in support of the Bathurst community and our longstanding client, St Vincent de Paul Society NSW.
On Friday 23 October 2020, Hasti Kalarostaghi (Partner, Environment & Planning), Daniel Murray (Special Counsel, Property), Jessica Baldwin (Senior Associate, Environment & Planning), Nicholas Sharman (Associate, Property), Daniel Weissel (Lawyer, Property) and George Mourani (Lawyer, Litigation) spent a night sleeping rough in  backyards, courtyards, basements, living rooms and paddocks to raise funds and awareness of the various issues surrounding homelessness and disadvantage in our community, not just in metropolitan areas, but also across regional NSW.
This year Hunt & Hunt particularly decided to focus our efforts to raise funds for the Bathurst community, in supporting John Therry House. John Therry House is a new homeless persons and women’s refuge in Kelso and will be operated by Vinnies.  This will provide essential support for those in need and seeking assistance in the Bathurst region.
The event was accompanied by a livestream telecast hosted by TV and radio personality, Deborah Knight, which involved interviews with a number of Vinnies volunteers and people who have been supported by Vinnies across the State.
For Daniel Murray, the Sleepout really highlighted the importance of the vital grassroots works that Vinnies does throughout the community.  “Particularly in light of the struggles that 2020 has posed, the interviews hit home that support from Vinnies is not a question of providing a “handout”, but rather, a “hand-up”, for those who are vulnerable or in need.  Those seeking help face no judgement from the team of Vinnies volunteers, and are treated with care and compassion as Vinnies try to make a difference help those facing disadvantage. ”
The Sleepout gave Jessica Baldwin the opportunity to reflect on the challenges faced by those sleeping rough.  “While I may not have roughed it as much as others participating in this year’s CEO sleepout, whilst sleeping in a tent under the stars (or more clouds) I thought about the many people in our community sleeping rough, sometimes in tents in public spaces, and the lack of access to toilets and basic hygiene needs.  For women especially, I thought about the safety aspect and also the isolation when family and support networks breakdown. I hope that the funds raised this year will mean increased access to safety, shelter, and services for all in the community.”
At the time of writing, the Sleepout for the Bathurst Community has raised $11,906.05, exceeding its target of $10,000.00.  Across the state, $140,678.32 has been raised to date, over and above the initial goal of $140,000.00 to help Vinnies continue providing a helping hand across the state.
The Hunt & Hunt team has been overwhelmed with the generosity and support that we have received from our colleagues, family, friends, and broader community, and we are extremely grateful for the funds donated to such an important cause in a year when many have faced homelessness for the first time.

Hunt & Hunt supporting the 2020 Vinnies Bathurst Community Sleepout | Hunt & Hunt Lawyers

Recent changes to the law affecting Victorian real estate transactions have increased the disclosure obligations on sellers and continued the slow march of growing consumer type protections for buyers of real estate.
Traditionally, real estate transactions were largely governed by the Latin legal principle of caveat emptor – “let the buyer beware” – meaning that the purchaser buys the property at its own risk. The caveat emptor principle placed the responsibility on the purchaser to make the necessary enquiries to ensure that there were no issues of concern with the property before committing to the purchase.  If serious issues revealed themselves later, the purchaser would have limited options, such as suing for fraudulent concealment or misrepresentation intended to induce the purchaser to buy.
The introduction of vendor disclosure laws in Victoria in the early 1980s, resulted in a partial shift of this responsibility to the vendor.  Section 32 of the Sale of Land Act 1962 (the Act) requires that the vendor must disclose prescribed matters about the property to a purchaser before the purchaser signs a contract of sale (called a “vendor statement” or a “section 32 statement”), and gives purchasers certain rights in the case of material omissions or inaccuracies in the disclosure, including a right to terminate the contract before settlement. The Act also made it an offence for a vendor to “fraudulently” conceal any “material facts” about the property with the intention of inducing a sale, which was punishable by financial penalty.
Further strengthening of disclosure obligations
The Victorian government has taken the view that the threshold of “fraudulently” concealing material facts was too high, since it required active and intentional steps to conceal material information from purchasers, and offered insufficient protection to purchasers.  This threshold has been reduced to “knowingly” by making amendments to the Act, which took effect on 1 March 2020.   As a result, a vendor or selling agent who “knowingly” conceals material facts from a prospective buyer, with the intention of inducing them to buy the property, will be guilty of an offence.  This is potentially a serious offence as it carries a fine of up to $20,000 or a prison sentence for up to 12 months.
However, unlike in the case of a deficient vendor statement, a purchaser who is induced to buy as a result of a vendor knowingly concealing a material fact, does not have a statutory right to terminate the contract.  If a purchaser considers – whether before or after completing the purchase – that material facts were concealed from them, with the intention of inducing them to buy, their options will still be limited to pursuing a claim for rescission of the contract (before settlement) or damages (after settlement) on the basis of misrepresentation, fraud or deceit.
“Fraudulently” vs “knowingly”
The practical and legal difference between “fraudulently” and “knowingly” is significant, although perhaps not immediately apparent to many non-lawyers. Consumer Affairs Victoria has provided some guidance on how the changes are to be interpreted. According to guidelines published by Consumer Affairs Victoria, “fraudulently” requires that active steps be taken by the vendor to conceal the “material facts”, whereas the new standard of “knowingly” does not require any active steps be taken, and it is sufficient for the vendor to simply choose not to reveal a “material fact” to a prospective buyer.  In other words, this new standard now means a vendor has a positive legal obligation to tell a prospective buyer everything they know about the property that is material.
However, to be guilty of an offence under the new standard, the vendor (or its agent) must have decided not to reveal material facts, with the intention of inducing the person to buy.  This implies a conscious decision by the vendor (or the agent) not to reveal the relevant facts because they consider revealing the facts would, or could, result in the person deciding not to buy.
It is very difficult to predict exactly how this new standard will be interpreted and applied legally until specific fact scenarios are tested in the courts, and some judicial guidance is given.  This will not occur until the relevant authorities proceed with a prosecution under the Act, or a purchaser takes action under the Australian Consumer Law and Fair Trading Act 2012 (Cth).
“Material Facts”
The reference to “material facts” already existed in the Act, but without any definition or guidance as to its meaning in the context of real estate transactions.  The lawmakers considered this when drafting the amendment, and Consumer Affairs Victoria has provided some commentary in its guidelines.
According to the guidelines, a “material fact” in a real estate transaction is a fact that influences a person in deciding whether or not to buy the property at all, or to buy the property at a certain price. A “material fact” can be specific or general:

“specific material facts” are facts that a vendor knows would be important to a specific purchaser. For example, a vendor could know a fact was important to a specific purchaser as a result of questions asked by that purchaser, or knowledge of the purchaser’s intended use of the land; and
“general material facts” are facts that an average, reasonably informed purchaser would regard as material in their decision to buy the land.  Interestingly, Consumer Affairs Victoria consider that there is, for example, a community expectation that homicides that have occurred at a property be disclosed to prospective buyers.

A “material fact” must actually be known by the vendor, and a vendor is not required to carry out enquiries or tests to determine if there are any unknown issues that need to be disclosed.  On the basis of these guidelines it would be necessary to prove the vendor actually had knowledge of the “material fact” and chose not to disclose it with the intention of inducing the person to buy the land.  In other words, a vendor must have known, or suspected, that the prospective purchaser may not have proceeded with the purchase, had they known of the fact, and withheld the information for that reason.
The guidelines published by Consumer Affairs Victoria include a list of examples of what a “material fact” would likely be, and include the following:

structural defects, infestations, contamination or dangerous materials present on the property (such as asbestos or combustible cladding);
causes of obvious defects, or risks of future defects, that are not immediately apparent (such as underground tree roots or defective stumping);
a significant event having occurred at the property (such as a serious crime or natural disaster);
illegal or non-compliant building work; and
facts about the surrounding neighbourhood that may affect the use and enjoyment of the property to a greater extent than ordinary properties in the area (such as significant development proposals nearby).

These examples of “material facts” given have the potential to be interpreted very broadly. For example, the guidelines specifically include crimes occurring at the property without setting any clear scope for severity or timeframes – would a vendor have to disclose a domestic violence incident that took place 50 years ago? Legal commentators have expressed concerns that the guidelines are insufficient and fail to clearly set out the parameters of liability for vendors, contrary to their purpose. In any event, the courts are not obliged to consider the guidelines and can choose to consider decades of judicial interpretation of the words “material facts” instead. As a result, the guidelines provide little certainty as to how the courts will apply the law.
When must a “material fact” be disclosed?
A material fact must be disclosed before the purchaser signs a contract to buy the property.
If physical conditions are clearly evident on an inspection of the property it is not necessary to separately disclose those conditions.
Remember that a vendor is not required to disclose facts that an average, reasonably informed purchaser would not regard as material in their decision to buy the land, unless a particular person has indicated (for example by questions they have asked) that a particular matter that would not otherwise be material to an average reasonably informed purchaser, is nevertheless, material to them.
Where “material facts” that are not obvious on physical inspection are disclosed to prospective purchasers, it is important that there is evidence of this disclosure, to minimise the chances of a successful claim or prosecution at a later date, for failure to disclose.  It would be prudent to ensure that these “material facts” are recorded in the vendor statement and included in marketing material where appropriate. Disclosures can also be made orally (for example by an agent during an open inspection) and in this case we recommend the vendor or the agent make detailed notes of the disclosures (and who they were made to) as soon as possible after the discussion took place.  Where a property is sold by public auction it would also be prudent for the relevant “material facts” to be repeated by the auctioneer prior to commencement of the auction.
Summary
The amendments to the vendor disclosure laws are still very new and their practical effect on vendors is still unclear. What is certain however is that the amendments significantly increase a vendor’s disclosure obligations beyond what were previously.  It is important that vendors and their real estate agents are aware of these new requirements and give very careful consideration to any facts and circumstances concerning the property which they may be required to disclose under these changes. If a vendor, or their agent, is hesitant about whether or not to disclose a fact because it they are concerned it may affect the saleability of the property, it likely will need to be disclosed under the new laws.
Our experienced property team can assist with all aspects of vendor disclosure obligations, and real estate transactions generally.
 

~ with Lachlan O’Brien, Associate
 
Seller Beware – Increasing disclosure obligations and risk when selling real estate in Victoria | Hunt & Hunt Lawyers

A recent decision on 29 September 2020 by Commissioner Bissett of the Fair Work Commission has highlighted the expectation for employers to allocate work to employees rather than relying on stand down directions to manage its financial position during the coronavirus pandemic.
Background
In Independent Education Union of Australia v The Peninsula School T/A Peninsula Grammar School [2020] FWC 5180, The Peninsula Grammar School (PGS) stood down selected employees while students were learning remotely, following  the Victorian Government’s directions issued on 2 August 2020 for Stage 4 restrictions. This resulted in 90% of PGS’s onsite facilities being forced to close.
Of those employees who were stood down, Ms Campbell and Ms Lees are library technicians and Ms Pearman is a classroom learning assistant. PGS submitted that it was unable to identify any useful work during the period of remote learning and that this was a ground for standing down the employees under section 524 of the Fair Work Act 2009.
Section 524 relevantly provides that: “an employer may stand down an employee during a period in which the employee cannot usefully be employed because of a stoppage of work for any cause for which the employer cannot reasonably be held responsible”.
The Commission held that a stoppage in the business of the school was a precondition for a stand down because without such a stoppage being made out, the stand downs could not be authorised by section 524.
Stoppage of Work
The Commission referred to a recent decision of the FWC by DP Anderson in Stelzer, where he commented:
(a) what constitutes a “stoppage of work” ….should not be so broadly construed as to include a mere downturn in business activity nor be so narrowly applied as to require the entire cessation of business activity; and
(b) the statutory phrase is a stoppage of work, not a stoppage of the business. For the stoppage of work some defined business activity with respect to which work is performed needs to cease, but not the cessation of business activity entirely.
Commissioner Bissett commented that a mere reduction in available work or a disruption to the way work is done would not alone constitute a stoppage. The terms “stoppage of work” in the legislation connoted a greater meaning than that and if the section was intended to allow stand downs when there are mere disruptions, it would have been specified with words other than “stoppage”. Furthermore, such a liberal interpretation of the section could consequently deprive employees of their fundamental entitlement to work under their employment relationship.
The Commission also found that there were 2 questions that it must ask itself in order to determine whether the requirements in section 524 are satisfied:

Was there a stoppage of work? If the answer is no, then no further enquiry is necessary; and
If the answer to 1 is yes, was the cause of the stoppage for a reason for which the employer could not reasonably be held responsible?

Ms Pearman (classroom learning assistance)
PGS argued that the suspension of classroom learning meant that Ms Pearman’s assistance was no longer required during Stage 4. The Commission observed that the role of PGS is to provide an education to its students. However it did not accept, as PGS submitted, that the business activities to educate were tied to being onsite.
The Commission had no doubt that during the period in which students are learning remotely, the business activities and core responsibilities of PGS continued. Though the delivery of teaching was admittedly different, classes were still running and teachers were still engaging with students. Accordingly, it could not be said that Ms Pearman’s role as a classroom assistant is constrained to the physical delivery of learning in the classroom and ceases when learning is transitioned to being online. The Commission concluded that there had been no stoppage of work for Ms Pearman.
Ms Lees and Ms Campbell (library technicians)
It was clear that there had been a reduction in demand on the library and that some of the work in the library had ceased. However, a few matters came into evidence before the Commission which implied that work had not stopped entirely. Firstly, students and teachers were still using the library online despite not having access to the library’s physical space. Secondly, the librarian had not been stood down which implied that work was still being provided. And lastly, PGS had intended to have the library books relabelled but suspended those plans for the time being as it was not a priority.
The Commission stated that just because PGS did not wish to have relabelling work done at a particular time could not establish that the work of the library had stopped for reasons beyond PGS’ control. Rather it showed that the work had stopped simply because of a direct decision by PGS. As such, the Commission found that there was no stoppage in the business activity of the library.
Fairness
PGS implored the Commission to take into account fairness between the parties in dealing with the dispute, as required by section 526(4) of the Fair Work Act 2009. In particular, PGS contended that the Commission should have regard to economic considerations from the school’s perspective.
While the Commission acknowledged that PGS had been impacted by the need to teach students remotely and that it had suffered a reduction in income, it stated that PGS’ version of fairness seemed to weigh heavily in its favour. As the requirement is fairness between the parties the Commission refused to constrain the notion of fairness to just the financial considerations of the employer.
The Commission noted that consequences of a stand down on employees can be immense. Active employment not only provides an economic benefit but also the feeling of self-worth that comes from employment. Accordingly, a minimisation of losses on wages cannot possibly outweigh the impact on stood down employees. Given the importance of work, the Commission held that a stand down direction should not be made simply to resolve a financial strain on the employer.
In any event, the Commission found that notions of fairness in section 526(4) do not justify the stand downs remaining where PGS has no jurisdictional right to stand down because there is not a stoppage of work.
Conclusion
The Commission was satisfied that, in both the library and classroom teaching environment, there had been no stoppage of work for reasons beyond the control of PGS. As the necessary pre-requisite grounds had not been met, the stand down of the employees by PGS were not made in accordance with section 524 of the Fair Work Act 2009. Additionally, the issue of fairness does not justify the stand downs remaining where the prerequisite in section 524 for a stoppage of work has not been met. Hence PGS was ordered to withdraw the stand down directions..
While businesses continue to struggle during these unprecedented times, this decision by the Fair Work Commission is a reminder that the stand down provisions in the Fair Work legislation only allow employers to stand down staff in limited circumstances outside of the JobKeeper rules.
The glaring issue is that section 524 was not drafted with a pandemic or even the potential of working from home in mind. It is manifestly inadequate as a tool for employers who are bleeding financially in the current COVID-19 climate to use as a means of protecting both business solvency and permanent job losses.
This decision may yet be appealed.
If your business is impacted on by these issues or you would like any advice on this area, please contact the Employment Team at Hunt & Hunt.

~ with Michelle Nguyen, Graduate-at-Law
School ordered to withdraw stand down direction – Employees not to be stood down to alleviate financial strains of employers | Hunt & Hunt Lawyers

Background
On 20 August 2020 the Premier announced that the Victorian COVID-19 rent relief scheme for retail and commercial leases (which was to expire on 29 September 2020) would be extended to 31 December 2020.  Enabling legislation was given royal assent on 22 September 2020 and on 29 September 2020 the existing regulations (we will refer to them as the “previous regulations”) were amended by the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Miscellaneous Amendment Regulations 2020 (Vic).  We will refer to them as the “new regulations”.  While the changes are loosely described as extending the existing scheme, there are some important differences and key rights and obligations, that both landlords and tenants should be aware of.
Extension period
The new regulations are not retrospective and only cover the period from 30 September to 31 December 2020 (the Extension Period).
The previous regulations continue to apply in relation to the period from 29 March to 29 September 2020.
It’s worth noting that the enabling legislation does not expire until 26 April 2021 which gives the government the ability to further extend the scheme up to that date, if it considered this necessary.
Eligible leases
Under the previous regulations a tenant, in order to be eligible, must have been an “employer”, which had the effect that sole traders were excluded from the scheme.  Under the new regulations tenants who are not “employers” will be eligible for relief during the Extension Period, providing those tenants meet the other criteria, including being entitled to JobKeeper payments.
To be eligible for JobKeeper payments, businesses and not-for-profit organisations need to demonstrate that they have experienced a decline in turnover of:

50% for those with an aggregated turnover of more than $1 billion;
30% for those with an aggregated turnover of $1 billion or less; or
15% for Australian charities and not-for-profits.

Some protections are also afforded to tenants who cease to be entities entitled to JobKeeper payments after 29 September 2020 and consequently fall out of the definition of “eligible lease” under the new regulations.
While tenants that fall into this category cannot make new applications for rent relief, they are still entitled to concessions for outgoings and protections against rent increases during the Extension Period. Further, if a tenant makes an application for rent relief under the new regulations and subsequently becomes ineligible for JobKeeper payments before the application is resolved, it is nevertheless considered an “eligible lease” under the new regulations.
For more information on JobKeeper eligibility requirements, please visit the ATO’s website here.
Rent relief must now be proportional to the tenant’s decline in turnover
The previous regulations made reference to a number of criteria to be taken into account by a landlord in determining its offer of rent relief, one of which was the financial position of the landlord.  As signalled by the Premier when he made his announcement on 20 August 2020, the new regulations now require the rent relief, during the Extension Period, to be in direct proportion to the tenant’s decline in turnover from the relevant premises.  The landlord’s financial situation is not a relevant consideration for determining the relief in the Extension Period.
The structure of relief for the Extension Period remains the same – at least 50% of the relief granted must we waived by the landlord and the remainder deferred for a minimum period of 24 months.  For example, if a tenant’s turnover has declined by 90%, the landlord is required to waive 45%, another 45% will be deferred and the tenant must pay 10%.
As a result of this change of emphasis, the new regulations go into some detail in relation to how decline in turnover is calculated and what documents can be produced to evidence this decline.
Process for requesting and determining rent relief during the Extension Period. 
As with the previous regulations, the process is commenced by the tenant making a written request for relief.  The landlord must then make a rent relief offer within 14 days (unless a different time frame is agreed between the parties in writing), following which the parties must negotiate in good faith and endeavour to agree on a relief package.
An important difference with the new regulations is that a tenant is only entitled to relief from the date from the date it gives the landlord a written request accompanied by the by the information and materials required under the regulations.  It is therefore vitally important for tenants to make this written request as soon as possible.
The new regulations are much more specific than the previous regulations, in relation to the information and material to be included with the tenant’s request for rent relief.  We summarise below the requirements under the new regulations:

the tenant must include a statement to the effect that the lease is an eligible lease and is not otherwise excluded by the new regulations, and must set out the tenant’s decline in turnover that is associated only with the premises (discussed below);
the tenant must provide information that evidences the tenant is an SME entity and is entitled to JobKeeper payments; and
the tenant must include information that provides evidence of the tenant’s stated decline in turnover (which must be stated as a percentage), including at least one of the following:

extracts from the tenant’s accounting records;
the tenant’s BAS;
statements issued by an ADI (i.e. a bank) in respect of the tenant’s account; or
a statement prepared by a practicing accountant.

On receipt of a written request which includes all this information a landlord has sufficient information to satisfy itself that the tenant is eligible for relief under the scheme, and to calculate the amount of rent relief to be offered, based on the tenant’s decline in turnover.
The Victorian Small Business Commission provides helpful guidance on this step, including an example form of written request.  For more information on the process and to access the example form of written request, visit the VSBC website here.
Calculating the decline in turnover
As mentioned above, the new regulations make it clear that decline in turnover must be calculated only by reference to the decline in turnover associated with the premises under the lease.  If a tenant operates from more than one premises it will need to separate its turnover figures for the premises in question.  It seems likely that on-line sales, where a customer attends the particular premises to “click and collect”, would be included in the turnover for those premises.
In calculating the decline in turnover for the purpose of calculating the rent relief, the new regulations adopt the actual decline in turnover test outlined by the Australian Tax Office, which you can view here.
This process allows the use of a “basic test” to determine the decline in turnover or, where that test is not suitable for the relevant circumstances, a number of “alternative test” options are available.
The “basic test” requires the tenant to estimate its turnover from the date it requested rent relief until 31 December 2020. It must then compare this estimate to the corresponding period in 2019 to determine the percentage change.
There are a number of alternative tests that can be used where the basic test would not be appropriate in the circumstances.  By way of example, if a tenant’s turnover is not cyclical, it must use the tenant’s average monthly current GST turnover as a comparison, calculated in accordance with the details set out by the Australian Tax Office.
We emphasise that the necessary materials and calculations must be supplied with the written request for rent relief.  If they are not provided, or are insufficient or defective, it may be that the written request does not satisfy the requirements of the regulations and accordingly the tenant may not be entitled to rent relief until the full and correct information is provided to the landlord.
Can a relief agreement made under the previous regulations be revisited?
The intention of the new regulations is to enable tenants to obtain, during the Extension Period only, rent relief that is directly proportional to their decline in turnover.  The new regulations are not retrospective and do not allow for adjustment of rent relief already agreed under the previous regulations.
However, where a rent relief agreement entered into under the previous regulations covers a period extending beyond 29 September 2020, the new regulations allow a tenant to request a variation so that the rent relief under that agreement, for any time that falls within the Extension Period, is in direct proportion to its decline in turnover.  Any such request must be made in accordance with the process set out in the new regulations, including the provision of evidence of decline in turnover as set out above.
Timing will also be important here, as the entitlement to adjustment of the existing rent relief may only apply form the date the formal request is made.
Dispute resolution process
As foreshadowed in the Premier’s announcement on 20 August 2020, the dispute process in the new regulations does enable a tenant, in limited circumstances, to seek a binding order from the Victorian Small Business Commission, to resolve a dispute regarding rent relief.  This only applies to disputes with respect to rent relief during the Extension Period, and disputes already in progress under the previous regulations will continue according to the procedures outlined in those regulations.
If a binding order is made, a landlord or a tenant may apply for the order to be amended or revoked.  Either party also has a right to apply to VCAT for a review of a binding order, or any amendment or revocation of a binding order, or of a decision by VSBC not to make a binding order or not to amend or revoke a binding order.
However, given the far more prescriptive nature of the new regulations, in terms of calculating the rent relief in direct proportion to decline in turnover, its seems likely the need for dispute resolution or determination regarding rent relief during the Extension Period will be much reduced.
Moratoriums against rent increases and evictions
The moratoriums against rent increases and evictions relating to rent payments continue until 31 December 2020. The moratorium has been extended to include evictions for non-payment of outgoings.
Importantly, the moratorium only applies if the tenant is complying with the process for seeking rent relief under the regulations, including good faith negotiations, and where a rent relief agreement has been entered into, only while the tenant is complying with that agreement.  It’s possible that a tenant who delays in making a written request for rent relief could lose the benefit of the moratorium, although there is some uncertainty here since the new regulations do not specify a timeframe for making that request.
Our Property Group can provide advice and assistance on all issues concerning the Covid-19 rent relief scheme in Victoria, including the significant changes to rights and processes under the new regulations.

Disclaimer
This article is intended to provide general information only. It is not an exhaustive or accurate summary of the law, nor is it intended as legal advice and cannot be relied upon as such. Please seek legal advice specific to your circumstances should you require assistance.
Extension of COVID-19 rent relief scheme in Victoria – Update | Hunt & Hunt Lawyers

In a decision delivered by the Court of Appeal on 18 September 2020 an appeal by the plaintiff based upon a miscarriage of justice caused by evidence being improperly admitted to the jury and against the jury’s assessment of damages was dismissed.
Similarly, the Court of Appeal dismissed the defendant’s appeal that the presiding judge should not have ordered that each party bear its own costs. Rather the defendant argued that the proper application of the Accident Compensation Act required an order that the plaintiff pay the defendant’s costs.
The plaintiff’s appeal provided yet another example of how difficult it is to successfully appeal against what was essentially an exercise of discretion by the judge and the jury’s verdict.
In arriving at its decision the Court of Appeal quoted a passage from the Hight Court’s judgement in Calin v. The Greater Union Organisation Pty Ltd which succinctly illustrates the difficulty in appealing against a jury’s decision:
“The correct principle is that a Court of Appeal may order a new trial if the jury has reached a conclusion which is against the evidence in the sense that the evidence in its totality preponderates so strongly against the conclusion favoured by the jury that it could be said that the verdict is such as reasonable juries could not reach.”
Possibly of more interest is the argument that the parties had as to costs.
In this particular case the defendant made a statutory offer of nil on the basis that the plaintiff was entitled to retain those statutory benefits she had already received. The statutory counter offer was $135,000. At trial the jury found for the plaintiff and assessed her damages at $30,000 for pain and suffering and $30,000 for loss of earnings. As these sums were less than the statutory threshold set out in section 134AB(22) of the Act the trial judge entered judgement for the defendant. She then ordered that pursuant to section 134AB(27)(b)(ii) that each party bear their own costs.
The defendant sought leave to appeal against the judge’s order for costs arguing that the costs of the proceedings were governed by section 134AB(28)(a) which meant that the judge should have ordered that the plaintiff pay the defendant’s costs of the proceeding.
The relevant parts section 134AB dealing with costs are as follows:
“Section 134AB(27)
Subject to the rules of court –
(a) In proceedings relating to an application for leave of the court under sub-section (16), costs are to be awarded against a party against whom a decision is made; and
(b) unless sub-section (28) applies in proceedings for the recovery of damages in accordance with this section –
(i)           if no liability to pay damages is established, costs to be awarded against the claimant; and
(ii)          if damages were assessed but cannot be awarded under this section, each party bears its own costs; and
(iii)          if damages are awarded, costs would be awarded against the authority or self-insurer.
Section 134AB(28)
In the proceedings for the recovery of damages commenced in accordance with this section after a statutory offer was made, or deemed to have been made, under sub-section (12) –
(a)  if no liability to pay damages is established, the worker must pay the party and party costs of the employer, authority or self-insurer and the worker’s own costs;
(b)  if judgement is obtained or a settlement or compromise is made in an amount not less than 90% of the worker’s statutory counter offer under sub-section (12) and more than the statutory offer of the authority or self-insurer, the authority or self-insurer must pay the worker’s party and party costs and its own costs;
(c)  if judgement is obtained or a settlement of compromise is made in an amount not more than the statutory offer of the authority or self-insurer under section (12), the worker must pay the party and party costs of the authority or self-insurer and the worker’s own costs;
(d)  if judgement is obtained or a settlement or compromise is made in an amount that is more than the statutory offer of the authority or self-insurer under sub-section (12) but less than 90% of the worker’s statutory counter offer under that sub-section, each party bears its own costs –
and the court must not otherwise make an order as to costs.”
The defendant argued that the question of costs was covered by section 134AB(28)(a) and that this meant the worker must pay the defendant’s costs. At trial the plaintiff argued that section 134AB(27)(b)(ii) applied so that each party had to bear its own costs. Judge Bourke agreed with the plaintiff and when doing so upheld a submission that an offer of zero is not a statutory offer to which sub-section (28) applied.
The Court of Appeal specifically concluded that there was nothing in the Act that prohibited a statutory offer of nothing, or zero. In addition on appeal even the plaintiff accepted that a statutory offer of zero was a valid statutory offer. However, it argued that sub-section (28) had no application to the present case because the plaintiff established a liability to pay damages even if it was for an amount below the statutory threshold. As such no paragraph of sub-section (28) was applicable which meant that the question of costs was dealt with or had to be dealt with under sub-section (27)(b)(ii).
The Court of Appeal stated that by its own terms section 134AB(27) applied unless sub-section (28) applied. The court then went on to consider whether any of the provisions of sub-section (28) might apply to this particular case.
They concluded that the words “no liability to pay damages is established” should be given a uniform interpretation in both sub-sections (27)(b)(i) and (28)(a). That being the case those words were a reference to the plaintiff being unable to show that the defendant was liable and this contrasted with the situation where a plaintiff was unable to satisfy the thresholds set out in the Act.
Accordingly, section (28)(a) didn’t apply to the present circumstances. Further, the defendant didn’t even try to rely upon sub-section (28)(c) because it was obvious that there had been no judgement obtained by the plaintiff “in an amount”.
The result is that costs in this case were determined by the operation of section 134AB(27)(b)(ii) which meant that each party was required to bear their own costs.
In reaching this conclusion the court acknowledged that this interpretation of the Act could on occasions lead to some anomalous results. For example the court accepted that there could be plaintiffs who obtain very substantial assessments of damages that are in excess of the statutory offer but less than 90% of the statutory counter offer.
In such cases under sub-section (28)(c) they would be required to pay the costs of the proceedings. In contrast a plaintiff who may have received the same statutory offer and made a similar counter offer may have damages assessed in amounts less than the thresholds referred in sub-section (22) but would only have to bear their own costs. The court accepted this to be the case and simply said it was one of the quirks of the legislation.
Case Note: Murray Valley Aboriginal Cooperative Ltd v. Havea (2020) VSCA 243 | Hunt & Hunt Lawyers

On 24 September 2020, the Australian Federal Government announced what it called the most significant reforms to Australia’s insolvency framework in over 30 years.
“The reforms, which draw on key features from Chapter 11 of the Bankruptcy Code in the United States, will help more small businesses restructure and survive the economic impact of COVID-19“, says Treasurer Josh Frydenberg.[1]
Key elements of the proposed reforms include:

the introduction of a new debt restructuring process for incorporated businesses with liabilities of less than $1 million, drawing on some features of the Chapter 11 bankruptcy model in the United States;
moving from a one-size-fits-all “creditor in possession” model to a more flexible “debtor in possession” model which will allow eligible businesses to restructure their existing debts while remaining in control of their business;
a rapid twenty business day period for the development of a restructuring plan by a small business practitioner, followed by fifteen business days for creditors to vote on the plan;
a new, simplified liquidation pathway for small businesses to allow faster and lower cost liquidation;
complementary measures to ensure the insolvency sector can respond effectively both in the short and long term to increased demand and to meet he needs of small businesses.

The reforms are said to cover approximately 76% of businesses subject to insolvencies today. [2]
Those within the insolvency industry will note that the proposed reforms are largely an adaptation of policies set out by the Australian Restructuring Insolvency & Turnaround Association (ARITA) in 2014.
“It is disappointing that positions we outlined well before any recession occurred are only being adopted in the middle of a crisis“, says ARITA CEO John Winter.[3]
Whilst a reform of the insolvency industry has been sought for some time, we await details of the entire regime to determine how much the proposed measures will differ from the current Deed of Company Arrangement (DOCA) regime.
Of the proposed changes announced, we note the following differences:

directors will retain control whilst developing a binding plan with the assistance of a small business insolvency practitioner (as opposed to an administrator being placed in control whilst a DOCA proposal is being negotiated);
in order for the binding plan to be approved, it must be supported by more than 50% of the creditors by value (where the DOCA regime requires support of a majority of creditors both in number and in value);
employee entitlements that are due and payable must be paid out in full before the plan is voted on by creditors (this is not presently the case);
related creditors are prohibited from voting (which is a safeguard to prevent corporate misconduct, for example phoenix activity).

It is also presently unclear the extent to which a proposal is required to be investigated given the ‘rapid’ timeframe and whether there will be ultimate Court oversight, as is the case with the current s440A(2)[4]
The reforms are set to commence from 1 January 2021. As the industry waits to see how the Federal Government finalises these proposed changes in such a short period of time, we anticipate that the devil will be in the detail to determine whether this alters the approach for small businesses and insolvency professionals.
If you have concerns about your business and the restructuring options currently available to you, please don’t hesitate to get in touch!
Authors
Matt Gauci, Partner
Jessica Egger, Lawyer
 
[1] 24 Sep 2020, The Hon Josh Frydenberg MP & The Hon Michael Sukkar MP joint media release, ‘Insolvency reforms to support small business recovery’
[2] Ibid
[3] 24 Sep 2020, ARITA Media Release: ‘Insolvency and restructuring profession welcomes Government’s proposed reforms – but careful review still requires’
[4] Corporations Act 2001 (Cth)
Insolvency Reforms: for better or for worse? | Hunt & Hunt Lawyers

It is with great pleasure and excitement that we announce that from 1st October 2020, Hunt & Hunt Lawyers will merge with Cappello Rowe Lawyers. This huge opportunity will allow for both firms to expand, grow and provide more extensive service and legal support to our clients and contacts.
Regarding some of the practical elements of this merge:

The merger will officially take place as at 1st October 2020.
Cappello Rowe Sydney team will join the Hunt & Hunt offices in their new Bligh Street offices from 19th October.
All Hunt & Hunt team members are remaining in their current roles and will continue to support our clients with the same level of personalised service that you expect.
Hunt & Hunt will expand our footprint into regional NSW by joining the Cappello Rowe Griffith office. This will allow for further growth in this region.
We are excited to add Cappello Rowe’s Commercial Law, Employment Law and Family Law teams to expand our practice areas.

Most importantly for our clients
You will deal with exactly the same people as you always have. The only change will be that we will have access to more resources, expertise, and knowledge to support you better.
Why did Cappello Rowe choose to merge with Hunt & Hunt? Hunt & Hunt is a much larger and better resourced firm than Cappello Rowe. Hunt & Hunt brings a national footprint and a more substantial level of legal experience and expertise. This merger allows Cappello Rowe to offer a greater legal service and support to our clients. The result makes Cappello Rowe a better firm for our clients and contacts.
Why did Hunt & Hunt choose to merge with Cappello Rowe? Cappello Rowe bring extensive skills, knowledge and resources in Family Law, Commercial Litigation and Property Law. This merger allows Hunt & Hunt to offer greater legal service and support to our clients. The result makes Hunt & Hunt a better firm for our clients and contacts.
Jim and all our partners are extremely excited about this merger and hope that you, our clients and contacts join us in celebrating this great news. We greatly look forward to continuing to work closely together.
 
Image: Sarah Cappello, Partner at Cappello Rowe, and Jim Harrowell AM, Managing Partner of Hunt & Hunt are excited about the potential the merger can bring to both firms and our joint client base.
 
Cappello Rowe to join Hunt & Hunt | Hunt & Hunt Lawyers

On 20 August 2020 the Victorian government announced that as a result of the continuing impact of Stage 3 and Stage 4 restrictions in Victoria, the COVID-19 protection measures for commercial leases and licences would be extended to 31 December 2020.  The existing measures are detailed in the COVID-19 Omnibus (Emergency Measures) (Commercial Leases and Licences) Regulations 2020 (Vic) and the regulations made under that Act.  These regulations currently expire on 29 September.
New regulations will be issued to give effect to the extension, but before that can happen, the Act needs to be amended.  A Bill to amend the Act passed the Legislative Assembly on 4 September 2020. It now moves on the Legislative Council for consideration where debate is due to end on 17 September 2020. There is little doubt the Bill will be passed. The extension has been applauded by the Australian Retailers Association, which reported that 60% of its retailers were still engaged in negotiations with landlords for rental relief.
While the details of how the extension will operate and who will be eligible for extended relief will not be known until the new regulations are issued, we can gain a some understanding of how the extension will work from the government’s press release on 20 August 2020.
Moratorium on rental increases
The ban on rent increases will continue unchanged until 31 December 2020. There is potential for this moratorium to be further extended as the Bill provides a mechanism for the government to make new regulations up until 26 April 2021.
Moratorium on evictions
The ban on tenant evictions is set to continue. However, a notable change is that this moratorium will not apply in “specific circumstances”.  As yet it is not clear what these circumstances will be.
Definition of eligible lease
The Bill alters the definition of an eligible lease. The current regulations only cover leases where the tenant is both an SME and an employer eligible for the JobKeeper scheme. However, a new, broader definition of eligible lease is prescribed by the new Bill. The second reading speech that accompanied the Bill states that the new definition will include sole traders, not for profit businesses and franchisees. Tenants will no longer be required to be businesses with employees to be included in the scheme.
Rent reductions proportional to turnover
The approach under the existing regulations endeavoured to balance the tenant’s reduction in turnover and the landlord’s ability to absorb loss.  The government announcement indicates the new regulations will increase the focus on the tenant’s financial circumstances and establish stronger measures to ensure that rent relief is directly proportional to reduction in turnover.
Increased powers for the Victorian Small Business Commission (VSBC)
At present, landlords and tenants can apply to the VSBC for assistance in resolving rent relief disputes by way of mediation. However, the VSBC cannot make binding orders. In its press release on 20 August 2020, the Victorian government stated that the VSBC “will now also have greater capacity to make an order on rent relief if a landlord refuses to respond to rent relief requests.”
The increased powers were confirmed in the Bill tabled in parliament last week. Under the new regulations, the VSBC will be able to make binding orders:

directing landlords to give specified rent relief to tenants; and
governing the process for rent relief applications by tenants, including what documents the tenant must provide to the landlord.

The Bill also allows for the review and enforcement of binding orders by VCAT.
Assistance to landlords
While the government announcement suggests the new regulations will place more emphasis on the tenant’s turnover situation and less on the landlord’s financial position, there will be new measures to assist landlords. First, a $3000 grant per tenancy will be available for eligible small commercial landlords. Secondly, a land tax waiver of up to 50% will be available for all landlords who provide tenants with an outright rent waiver for at least 3 months.
Conclusion
The extension means that landlords and tenants can now continue to engage in negotiations without the fear that the protections will end on 29 September 2020.  However, we await release of the new regulations to fully understand how they will operate.
Our Property Team can provide advice and assistance on how to plan and manage the process in accordance with the Initial Regulations and New Regulations, in a way that best protects your rights and entitlements, whether as a landlord or tenant.

with Christian Mennilli, Graduate at Law
Victoria announces extension of COVID-19 rent relief scheme for commercial leases   | Hunt & Hunt Lawyers