In our recent newsletter,  we reported on the announcement by ASIC on Monday 23 March 2020 that it was recalibrating its regulatory priorities to focus on COVID-19 challenges.
On Tuesday 14 April 2020 ASIC provided further details of the changes to ASIC regulatory work and priorities in light of COVID-19.   It is opportune to review the changes which are coming thick and fast in this rapidly moving environment.
The changes are comprehensive an affect many area of ASIC operations, including:

Financial Advice
Managed Funds
Superannuation
Credit retail banking and payments
Insurance
Market infrastructure and supervision
Insolvency practitioners
Financial reporting and audit

Some of the more relevant changes as they affect the finance and advice industry are set out in the numbered paragraphs below. For full details of all the changes please refer to the ASIC information release.
1.    Credit, retail banking and payments
ASIC is making the following changes:

Review of lender responses to consumers experiencing financial difficulty – ASIC is deferring the next stage of this work until 30 September 2020.
ASIC will be actively engaging with stakeholders on how to approach financial difficulty issues, in particular around hardship requests resulting from the impact of COVID-19.
Buy now pay later products – ASIC will continue its follow up work, but is deferring the finalisation and release of the follow-up report until further notice.
Buy now pay later products – ASIC will be engaging with the sector on their responses to COVID-19.
Review of the ePayments Code – ASIC will continue working on this review, but is deferring the release of its second consultation paper on the Code until the second-half of 2020.
Debt collection industry review – ASIC is deferring the collection of data for this review until 30 September 2020.
Guarantee and co-debtor loans industry review – ASIC will continue to monitor developments and analyse the information it has already received. ASIC is deferring the collection of further data for the purposes of this work.
Fees in deposit and savings account industry review – ASIC is deferring the collection of further data for the purposes of this work.
Recurrent mortgage data collection pilot – ASIC is deferring its industry engagement activities until further notice.

2.  Financial Advice – ASIC grants temporary relief to financial advice industry to facilitate the provision of timely advice in particular with regard to superannuation.
a.  Advice in relation to early access to superannuation entitlements
Many members of the public will need advice about whether or not to access their super entitlements early. To facilitate this ASIC, on Tuesday 14 April 2020, announced that it has decided to:

allow advice providers not to give a statement of advice (SOA) to clients when providing advice about early access to superannuation;
permit registered tax agents to give advice to existing clients about early access to superannuation without needing to hold an Australian financial services (AFS) licence; and
allow superannuation trustees to expand the scope of personal advice that may be provided under the auspices of ‘intra-fund advice’, to include early access advice.

The relief granted is temporary and is granted on certain conditions, being:

clients must be provided with a record of advice (ROA), which meets certain content requirements. An ROA is a shorter, simpler document that sets out the advice that is being provided;
the advice fee, if any, is capped at $300;
the advice provider must establish that the client is entitled to the early release of their superannuation; and
the client must have approached the advice provider for the advice.

 
b.  Statements of Advice for time critical advice allowed to be given within 30 business days (5 business days currently)
This change allows financial advisers to give the urgent advice and not also have to comply with the obligation to provide a Statement of Advice shortly after.
 
c.  Records of Advice to be permitted for existing clients
ASIC will allow “records of advice” (ROA) to be given to existing clients instead of formal “statements of advice” (SOA)  A ROA is a shorter, simpler document than a SOA.
 
d.  Relief to be implemented by Legislative Instrument
The relief is being implemented by legislative instrument – ASIC Corporations (COVID-19 – Advice-related Relief) Instrument 2020/355
 
e.  The relief is temporary.
ASIC has stated that while the relief is temporary that it will consult with key stakeholder before revoking the Instrument of relief and provide 30 days’ advance notice of any change to the industry.
 
3.  Additional Financial Advice matters
ASIC is:

deferring its review of life insurance advice until further notice.
deferring work on grandfathered conflicted remuneration until further notice.

4.  Insurance
ASIC has advised changes in relation to the following matters:

Consumer credit insurance (CCI) lender review (follow up to REP 622) – Apart from overseeing remediation, ASIC is deferring other follow up work until further notice.
Total and permanent disability insurance industry responses (follow up to REP 633) – ASIC will contact insurers by the end of April 2020 to seek information about the steps taken so far to meet the expectations outlined in the report.
Travel insurance review – ASIC is deferring work on this until further notice

 
5.  Corporations

ASIC has provided a ‘no-action’ position on upcoming AGMs due by 31 May 2020 that need to be deferred or that are held online.
ASIC is providing temporary relief to allow ‘low doc’ placements, rights issues and share purchase plans to be made to investors, even if they do not meet all the normal requirements.
Additionally, ASIC is closely monitoring market conditions and COVID-19 developments that may affect financial reporting in general.

ASIC releases further details of deferrals and dispensations in response to COVID-19 | Hunt & Hunt Lawyers

The PM announced on Tuesday 7th April 2020 that the Commonwealth and the State and Territory governments have agreed on a “mandatory” industry code of conduct governing commercial, industrial and retail leases impacted by the COVID-19 pandemic, which can be found here. The Code does not cover residential leases. It will be for the States and Territories to address residential leases separately, although the principle of a 6 month moratorium on evictions still applies to them.
The Code sets out the principles that will guide the structuring of rent relief for eligible tenants, with a view to enabling them to survive the COVID-19 pandemic and recover their businesses afterwards. Legislation will be required in each State and Territory to give the principles the force of law. The principles are expressed in broad and generalised language, and it is anticipated that more detail will be contained in the legislation, which is eagerly awaited.
We have summarised the key principles below, and commented on a number of implications and practical issues that will need to be fleshed out, either in the legislation or in negotiated agreements between the parties to each lease.

The fundamental approach that underpins the Code, is that the financial burden of the impact of the pandemic should be shared equitably between the landlord and the tenant, having regard to the circumstances of each of those parties, and the nature and extent of the impact in relation to each lease. Each situation will be different, and the Code envisages that a bespoke agreement will be negotiated between the parties, in good faith, against the background of the principles set out in the Code.

In essence, the parties to each lease must reach an agreement on rental relief which is consistent with the principles in the Code, in addition to dealing with other commercial issues relevant to their particular lease. Importantly, the Code anticipates than a binding form of mediation will apply, where the parties cannot agree. In these difficult and uncertain times, with many landlords and tenants under extreme financial, not to mention emotional, stress, it seems realistic to expect that this fall back resolution process will be heavily used. The procedure, detailed terms of reference and resourcing for this process will be crucial in resolving these issues over the next 6-12 months, or more.
Application
The Code will apply where the tenant has a turnover of less than $50m and qualifies for the JobKeeper programme.
For retail corporates the test is applied at a “group” level and not by individual premises.

To qualify for the JobKeeper programme a tenant must satisfy the ATO that as a result of the pandemic, its turnover has fallen, or will likely fall, by 30% or more, by reference to its trading in the corresponding period in 2019, as reported in its Business Activity Statements.
Legislation establishing the JobKeeper programme has now passed both houses of parliament. It will be known as the Coronavirus Economic Response Package (Payments and Benefits) Act 2020, and will be administered by the Commissioner of Taxation. Under the new Act the federal Treasurer is given the power to make rules in relation to the programme, including in relation to eligibility criteria, conditions of entitlement, record keeping and other matters. Until these rules are issued, there may be uncertainty as to whether or not the Code will apply to some leases.
The ATO’s assessment of a tenant’s application under the JobKeeper programme will determine whether or not the Code will apply to each particular lease. At this point it is unclear whether a landlord will have any right to seek a review of the ATO’s determination.
There are potentially a number of circumstances where a tenant that initially qualified for the JobKeeper programme, ceases to qualify before the end of the 6 month programme period. For example, if its turnover increases to the point where it ceases to meet the threshold, or its entitlement is re-assessed following a review, or possibly for non-compliance with the programme rules. Until the detailed programme rules are released, it will not be clear how these events may impact on a tenant’s eligibility under the programme – and therefore the continued application of the Code – or what the timing impacts might be. A negotiated agreement may need to address these possible scenarios.
The “grouping” of larger retail chains may have an unfair impact on some landlords – for example, if a particular site continues to trade profitably while the overall group suffers a significant impact, that landlord may be required to grant concessions which in effect subsidise other landlords.

Duration of relief
Relief is to apply for the duration of the COVID-19 pandemic (which is defined by reference to the period the JobKeeper programme operates – currently 6 months commencing on 30 March) and for a reasonable recovery period thereafter.

At this stage no one knows whether the 6 month period will be too short, or possibly too long. It could be wound back if early restrictions are effective, or it could conceivably be extended, using existing or modified criteria. Any negotiated agreement would need to be sufficiently flexible to deal with these scenarios.
Determining what is a “reasonable recovery period” could be very difficult. It may vary from one tenant/business to another, and be affected by a range of other as yet unknown circumstances. It’s also possible that recovery could be set back if restrictions are re-imposed.

Proportionality
The financial risk and cashflow impacts are intended to be shared between the landlord and the tenant on a proportional basis. • The basic approach here is that the relief should be in proportion to the reduction in turnover. For example, a 40% reduction in turnover would result in a 40% rent reduction.

However the principles also suggest that in assessing the impact to the tenant, regard must also be had to its revenue, expenses and profitability. Other government concessions and assistance (e.g. JobKeeper payments, payroll tax relief etc) should be taken into account in this assessment. This approach could result in a rent reduction being a lower percentage than the reduction in overall turnover. Consideration needs to be given to how these assessments can be undertaken in a cooperative and confidential manner.
The financial position of the tenant will change as the effects of the pandemic abate, and a negotiated agreement may need to require ongoing financial reporting by the tenant, and possibly allow for an independent review process, with necessary adjustments, to ensure that the burden continues to be apportioned on an equitable basis.

Form of relief
The rental reduction is to take the form of a rental waiver or a combination of rental waiver and rental deferral. However the rental waiver component must be at least half of that package.
Any deferred rent is to be repaid over the remaining term of the lease (but not less than 2 years) commencing after the “recovery period”.

The waiver means that landlords will be required to write off at least 50% of the rental reduction amount Where landlords have debt facilities, unless banks agree to write off debt (unlikely), landlords will suffer a loss and may need to restructure (increase) debt facilities.
In relation to the component of the rental reduction that is to be deferred (rather than waived), if repayment of that deferred amount is likely to compromise the tenant’s future ability to pay amounts due under the lease, then the principles say that rent should be waived rather than deferred. In many cases this will be extremely difficult to determine, especially in the early days of the pandemic. Even if the parties agree initially to defer a certain amount, it may be that when those payments become due, they cannot be enforced, having regard to this principle.

Freeze on default action
Landlords may not terminate leases, or access security (e.g. bank guarantees) during the COVID-19 period and the post-COVID-19 recovery period.

Although not clear from the wording, it may be that this restriction also applies with respect to pre-COVID-19 defaults, as the emphasis seems to be on not evicting tenants during the COVID-19 period, and not the date of the default.
It will be important to clarify and fix the recovery period for each lease, otherwise there will be uncertainty as to when enforcement action can be taken.

Freeze on rent review
Rent reviews will not be undertaken during the COVID-19 period or the “reasonable recovery period”. • Presumably these reviews will, unless otherwise agreed, occur immediately after the end of the recovery period.

It’s not clear whether subsequent reviews are also postponed by a similar period, or just those that would have occurred during the COVID-19 period and recovery period.
It’s difficult to predict what market rents will look like post COVID-19. In the case of retail leases covered by the Retail Leases Act 2003, where “ratchet” provisions do not apply, market rents may potentially reduce significantly. For leases not covered by the Act, a rachet provision may provide some benefit for landlords.

Extension of lease terms
Tenants may require lease terms to be extended by a period equivalent to the COVID-19 period and the recovery period.

This appears to be optional for tenants, but not for landlords. If landlords require an extended commitment from the tenant, given the relief granted during the COVID-19 period and recovery, it will be necessary to include this in the negotiated agreement.

Good faith negotiations
Landlords and tenants are required to enter into good faith negotiations with a view to agreeing on a relief package, consistent with the principles.

The Code emphasises the need for landlords and tenants to enter these negotiations in good faith, to be open and honest and to provide sufficient and accurate information, with a view to agreeing appropriate arrangements on a case by case basis.
The parties should genuinely initiate these negotiations as soon as practical. However, until the detailed legislation has been passed it is difficult to know what the legal restrictions and commercial drivers will be for those negotiations.
Where the parties are unable to agree on terms, either party will be able to initiate mediation, and the intention appears to be that the mediation process will result in an outcome that is binding on both parties. Many parties will not be able to reach agreement and will fall back to the mediation process for a resolution. The terms of reference and operation of the mediation process will be an essential part of this scheme.

Please contact our Property Group if you have questions in relation to the Code or need assistance with negotiations in relation to your lease.
Steve Aitchison – principal
Emily Clapp – lawyer
Commercial Leases and COVID-19 – Mandatory Industry Code | Hunt & Hunt Lawyers

The Federal Government’s urgent response to the impact of coronavirus on the economy led to the passing of two Bills by the Commonwealth Parliament on Wednesday, 8 April 2020.
The following Acts commenced operation on 9 April 2020:

Coronavirus Economic Response Package (Payments and Benefits) Act 2020; and
Coronavirus Economic Response Package Omnibus (Measures No. 2) Act 2020.

They set out obligations employers must satisfy in order to be eligible for JobKeeper payments. They also provide new powers to employers to give directions to employees (including stand downs) and reach agreement on other issues.
JobKeeper
Turnover requirements
Employers are now eligible for the JobKeeper payment of $1,500 per fortnight per employee until 27 September 2020 if:

their business has or will likely have a reduction in turnover of 30% or more for the relevant month or quarter (for businesses with an annual turnover of less than $1 billion);
their business has or will likely have a reduction in turnover of 50% or more for the relevant month or quarter (for businesses with an annual turnover of more than $1 billion);

The scheme is also available to sole traders or self-employed people.
Employer payment obligations
Three employer payment obligations are mandated, as follows:
1. Satisfy the wage condition
Employers must satisfy the wage condition (as defined in the Rules to be made by the Treasurer) for an employee by the end of the relevant fortnight. This is presumably the requirement that the employer first make the relevant wage payment to the employee, before the ATO will reimburse the employer for that payment via JobKeeper.
2. Minimum payment guarantee
Employers must ensure that the total amount payable to the employee for the fortnight is the greater of:

the JobKeeper payment for the employee; or
the amounts payable to the employee for the fortnight in relation to the performance of work (including overtime, penalties, loadings, leave payments, etc).

This means that part time or casual employees (who qualify) must be paid the full $1,500 per fortnight, even if they would normally earn less.
3. Hourly rate of pay guarantee
If a JobKeeper enabling direction (see below) is given to an employee, the employer must ensure that the base rate of pay (worked out on an hourly basis) is not less than the base rate of pay that would have been applied if the direction had not been given.  If the employee is not paid by reference to an hourly rate of pay but a workplace instrument applies (e.g. award/enterprise agreement), then the base rate of pay is that outlined in the instrument.
Directions to employees and related measures
Stand down and related options
An employer can give employees directions to:

not work on days they would usually work;
work for a lesser period than they would ordinarily work on any days; or
work a reduced number of hours (compared with their ordinary hours of work). This can include a complete stand down, with no hours worked.  Numerous requirements must be satisfied in order for such a direction to be permissible.

Periods during which an employee is under a direction count as service as an employee (i.e. periods of full or partial stand down still count as service).
Also, during a period of stand down, the following apply as if a stand down direction had not been given:

leave accrues;
if the employer makes a request to the employee to take paid annual leave as outlined above, then leave accrues whilst the leave is being taken; and
redundancy pay and pay in lieu of notice calculations are to be based on ordinary hours and rates of pay.

Direction to perform duties
An employee can be directed to perform duties within their skill and competency.  This allows employees to be allocated duties that they would not normally perform where there is not the same need for any or all of their duties currently, owing to the pandemic.
Direction to work from different location
An employee can be directed to perform duties at a different location (including at their home).
Before any of the above three directions can be given, there are a number of requirements that must be satisfied.  These vary depending on the direction.
Periods during which an employee is under a direction count as service as an employee (i.e. periods of full or partial stand down still count as service).
See the chart below for further detail about JobKeeper enabling directions.
Agreement with employee about days of work/taking paid annual leave
In addition to directing employees on the above issues, employers can also reach agreement with employees to:

perform duties on different days/at different times; and
for employees to take paid annual leave as normal, or take twice the amount of annual leave at half their rate of pay.

Employees must consider and not unreasonably refuse any request from an employer for any such agreement.
The second chart below summarises the types of agreements that can be reached.
Other issues
Employee requests during direction
Employers must consider and not unreasonably refuse requests by an employee to:

engage in reasonable secondary employment; or
undergo training/professional development.

Disputes
The Fair Work Commission may deal with disputes about the operation of these provisions by arbitration.
Paid parental leave
The period during which an employee is in receipt of the JobKeeper allowance is considered to be “qualifying work” for the purposes of the paid parental leave work test.
More detail about these provisions is contained in the charts and table below.

Potential JobKeeper Enabling Directions (JEDs)

A.   JobKeeper Enabling Stand Down (JESDD)

Necessary requirements for a JESDD:

Employers can give a JESDD to employee to:
(a)  Not work on day(s) employee would usually work;
(b) Work for a lesser period than they would ordinarily work on a day(s); or
(c) Work a reduced number of hours (compared with ordinary hours), potentially down to nil hours.
JESDD does not apply to an employee during authorised paid/unpaid leave/absence.
Comply with requirements 1 to 9 inclusive in Table 1 below.

B.   Direction to perform duties

Necessary requirements for a duties direction:

Can direct employee to perform duties within their skill and competency (i.e. duties other than normal duties).
Comply with requirements 1 to 12 inclusive (except for 7) in Table 1 below.

C.  Direction to perform duties at different location

Necessary requirements for a location direction:

Can direct employee to perform duties at a different location (including employee’s home).
Comply with requirements 1 to 9 inclusive (except for 7) plus 13 and 14 in Table 1 below.

 

Agreements with employees about days of work and taking paid annual leave

A.           Agreements about days of work

Necessary requirements for a days of work agreement:

Can reach written agreement with employee to perform duties on different days.
If employer makes a request for days of work agreement:
(a)              Employee must consider request; and
(b)              Employee must not unreasonably refuse request.
 
Comply with requirements 3, 4, 6, 15 and 16 in Table 1 below.

B.           Agreements about taking annual leave

 

Employee must consider and not unreasonably refuse request by employer to take paid annual leave if:
(a)               Employer satisfies items 4 and 6 in Table 1; and
(b)              The balance of annual leave remaining does not drop below 2 weeks.
Double leave at half pay – can also agree in writing to take twice as much paid annual leave at half the rate of pay.
Comply with items 4 and 6 in Table 1 below.

 

Table 1
Requirements for JEDs/Agreements

1.    Employer must give written notice of intention to give the direction at least 3 days before the direction (unless employee genuinely agrees to a lesser notice period). *

2.    Employer must consult with the employee (or their representative) before giving the direction and keeps written record of consultation. *

3.    *Steps 1 and 2 are not necessary if the:
i.    employer previously took these steps in relation to an earlier direction of the same type;
ii.    employee/their representative expressed a view; and
4.    employer considered views in deciding to give the direction.

5.    Direction is in writing.

6.    Employer qualified for JobKeeper.

7.    The stand down is/duties are safe having regard to (without limitation) the nature and spread of COVID-19.

8.    Employer is entitled to one or more JobKeeper payments for the employee for the period.

9.    Employee cannot be usefully employed for their normal days/hours because of changes to the business attributable to:
i.    COVID-19 pandemic; or
ii.    Government initiatives to slow the transmission of COVID-19.

10.  The direction is reasonable (it does not apply if it is unreasonable in all the circumstances).

11.  Employer has complied with the 3 new payment obligations as follows:
i.    Satisfying the wage condition;
ii.    Ensuring the minimum payment guarantee; and
iii.    Abiding by the hourly rate of payment guarantee.

12.  The duties are reasonably within the scope of the business operations.

13.  Employee has appropriate licence/qualifications, where required.

14.  Employer reasonably believes direction necessary to continue the employment of one or more employees.

15.  The place where the employee is to work is suitable for the duties.

16.  If the place is not the employee’s home, it does not require unreasonable travel (including with reference to COVID-19 circumstances).

17.  Performance of the duties is both safe and reasonably within the scope of the employer’s business operations.

18.  The agreement does not reduce the employees ordinary hours.

 
Coronavirus Workplace Law amendments | Hunt & Hunt Lawyers

The COVID-19 pandemic has had a devastating effect on retail and other businesses, most of whom occupy leased premises, and will continue to do so for some time.
Tenants are not able to pay rent. Land owners who rely on that rent to service their mortgages, will soon fall into default.  Land owners who do not have mortgages, or would normally have surplus income from rented properties, which they rely on for living and other expenses, will also be in financial difficulty.
In most cases, tenants that are unable to pay rent as a result of the pandemic, are at risk of having their leases terminated.  Rent “abatement” clauses in most leases only apply where trading is affected by physical damage and it is unlikely that the common law doctrine of “frustration” will assist tenants to walk away from their lease commitments.  It’s also very rare for leases to contain “force majeure” clauses and for those that do, it’s rare for them to extend to events like this pandemic.
The Commonwealth, State and Territory governments have signalled their intention to support an environment where businesses can “hibernate” during the worst of the COVID-19 crisis and come back to life after it is over. The National Cabinet has released a statement that it intends to agree to a ‘common set of principles’ that will underpin and govern an Australian response to these issues. However, States and Territories will need to act separately as they each have jurisdiction in relation to retail and commercial leasing issues within their States and Territories.
In NSW the state government has passed amendments to the Retail Leases Act 1994 and Residential Tenancies Act 2010 empowering the relevant Minister to make regulations under any relevant Act which may provide for the following matters, for the purposes of responding to the public health emergency caused by the COVID-19 pandemic:

prohibiting recovery of possession by a lessor/owner/landlord
prohibiting termination of a lease or tenancy by a lessor/owner/landlord in particular circumstances
regulating or preventing the exercise or enforcement of another right under the relevant Act
exempting a lessee/tenant or class thereof from the application of any provision under the relevant Act.

On 30 March the Victorian premier issued the following release via Twitter:
‘Today we announced a ban on rental evictions. From hospo to retail, if you’re struggling to get by due to coronavirus you won’t be evicted just because you can’t pay the rent. It’ll last six months – and it means one less thing to worry about for Victorians doing it tough’
The Victorian government will soon pass legislation to give effect to this ban or moratorium, and it is expected the legislative approach will be similar to that taken by NSW, giving broad regulatory powers to the relevant Minister.
The implications for land owners of this proposed moratorium on tenant evictions are uncertain and potentially prejudicial to land owners.  We will need to wait for more details from the State and Territory governments as to how they propose to deal with these issues, but there is a limit to how far these issues can be addressed by legislation and regulation.  For these reasons, the Prime Minister and State Premiers have urged land owners and tenants to talk to each other and endeavour to reach agreement on terms that will make this “hibernation” workable for both of them.
There are some common issues which may be relevant for consideration in discussions between land owners and tenants. These issues will depend on the circumstances of each lease, and the details of the legislative and regulatory measures implemented in each State and Territory.
Eviction – the proposed moratorium is on “eviction”, meaning a land owner will not be able to terminate a lease and take back possession during the moratorium period. It does not appear, at least at this stage, to provide for a release or waiver of rent during that period.
Waiver of rent? – consideration will have to be given as to whether the rent is to be waived for the moratorium period, or some other period. If the rent during that period is not waived, then it continues to accrue (with interest) and in theory a land owner would be entitled to commence a termination process immediately after the moratorium period ends.While many tenants will find it very difficult to pay rent during this period, waiver of the rent will have the effect of passing this commercial loss fully to the land owner, who may receive no corresponding relief for loan liabilities, other than deferral (see below). Other possible arrangements that could be considered by the parties, include waiver of default interest, deferral of the rent payment, possibly with repayment over time, subject to the business achieving certain post-pandemic performance hurdles or a restructure of future rentals, release of part of the debt or a combination of these measures.
Performance security – where tenants are in arrears, should land owners have the right to access performance security (e.g. cashing a bank guarantee) to apply to the rental arrears, without necessarily terminating the lease? No mention has been made so far in public announcements on this subject.  It is possible, if not likely, that land owners will be prevented from accessing security with respect to pandemic related defaults.
Pre-pandemic defaults – there will be existing tenant defaults, and possibly enforcement and termination proceedings already in train, with regard to pre-pandemic defaults. As yet, it is unclear whether these will be affected by the moratorium.  Will these be “frozen” until the end of the moratorium period?  If so, this could be prejudicial to a land owner and possibly postpone the inevitable, and tie the land owner’s hands in the meantime.
Bank concessions – the Australian Banking Association has announced that Australian banks will provide a range of relief measures to certain land and business owners during the 6 month moratorium period. Land owners with total loan facilities not exceeding $10m, will be granted loan repayment deferrals (with interest capitalised), on condition they undertake not to evict current tenants for rent arrears as a result of the pandemic.
Small business owners (many of whom are tenants) impacted by the pandemic will also be granted loan deferrals for a corresponding period.
It will be important for land owners and tenants to clarify with their financiers whether they are offering relief, exactly what is being offered and what the terms of that relief will be.
Based on the public statements so far, the required undertaking not to evict tenants during the moratorium period will not prevent land owners simply postponing rental payments during the moratorium period, and not waiving them.
Early re-start – it may be that the impacts and restrictions associated with the pandemic subside earlier than currently anticipated. If a tenant is able to commence trading again after, say 3 months, should rent recommence, or perhaps partially recommence at that time (or perhaps a month later)?   If partially, on what basis will that rental portion be determined?  If an arrangement is agreed for early recommencement of rental (whole or partial) will this affect concessions granted to the land owner by the bank, and result in an early end or partial removal of the loan deferment concessions?
Outgoings – consideration should also be given to liability for rates, taxes and outgoings. The treatment of these expenses may vary in each case, and depend on the financial ability of parties to pay;
Unoccupied premises – the moratorium is intended to prevent land owners terminating leases and evicting tenants during the moratorium period. Therefore, tenants will retain possession of the premises during this period.  For some leases, for example, stand- alone properties, thought should be given to whether the tenant can make use of the premises for an alternate purpose (perhaps not consistent with the permitted use stated in the lease), and possibly earn alternate income.
As the occupier under an ongoing lease, the tenant will normally have responsibility for securing and protecting the property. Thought should also be given to the cost of security and insurance, and whether the risk and insurance cost associated with an unoccupied building in the pandemic environment may increase;
Extension of term? – given that land owners will face loss of rent for 6 months at least, and the tenant may suffer absence of income for an equivalent period, it may be appropriate that the parties agree that the current term is extended for a term equivalent to the moratorium period, or perhaps longer;
Short term leases – where leases only have a short term left to run – for example, if they expire during the moratorium period or within a short time afterwards, the parties may prefer to end the lease by agreement. Consideration would have to be given to the possible impact on “loan concessions” granted by the bank for the duration of the moratorium period;
Renewal options – if a renewal option has been exercised, for example before the full impact of the pandemic became evident, the renewal will nevertheless be binding, unless agreed otherwise. Where the renewal term is to commence during the moratorium period, with a market rent review to apply, this review may be prejudicial to the land owner.  Apart from the difficulty, and potential unknown impacts on market valuations during the height of the pandemic, it would seem unfair for the starting rent for a renewal term to be determined by reference to market rates at the height of the pandemic, in circumstances where the parties will in effect be “freezing” the lease arrangements for 6 months, with the land owner possibly foregoing rent for that period.
Where an option will be due for exercise during the moratorium period, or possibly during a post pandemic “recovery period”, it may be appropriate for the parties to agree to postpone that renewal. Alternatively, it may be agreed that the tenant commit to the renewal, and possibly an agreed commencing rental, as part of an agreement with the land owner for a range of “pandemic concessions”;
Rent reviews during moratorium period – where rent reviews (such as fixed percentage and CPI reviews) are due during the moratorium period, it may be appropriate that the review is calculated and the rent adjusted accordingly, but not take effect until the end of the moratorium period.
Market rent reviews during the moratorium period will be problematic – see our comments above. It may be appropriate for the parties to agree that market reviews are deferred until after the moratorium period ends, or the tenant is able to recommence trading. It may also be appropriate that a suitable “recovery period” be allowed before a market review, so that the market rent is determined in a more normally functioning economy (as far as that is possible) and not distorted by the extraordinary pandemic conditions; and
Land owner finance issues – any lease variations or restructuring will affect capital value as well as income, and be critical to ongoing finance arrangements for land owners with mortgages. Land owners must liaise closely with their financiers in relation to proposals and negotiations with tenants with regard to these matters, and obtain any necessary consent before concluding any new arrangements with tenants.
 
The National Cabinet has also announced a moratorium on eviction of residential tenants. This article is focussed on retail and commercial leasing, but we acknowledge that many land owners who have invested in residential rental properties will face substantial difficulties where rental income is affected, in circumstances where the land owner is prevented from taking any action.  The JobKeeper support package announced by the Commonwealth Government on Monday 30 March may have an impact on this particular sector, not anticipated when the eviction moratorium was announced. It would be unfair if residential tenants, with the benefit of this income support, were in a better position to afford to pay the rent, but could avoid doing so, while the land owner was unable to take any enforcement action.
The impacts of the pandemic on our society and economy are massive, unpredictable and changing on a daily basis.  The effects on legal and commercial arrangements affecting real estate and leasing will be difficult to predict, but undoubtedly significant.  There are no legal precedents for responding to these momentous events.  The issues are extremely complex and will involve a mix of legal, regulatory and commercial measures.
We will keep our clients updated and assist them navigate the developments in this area. As always, do not hesitate to contact our property team to understand how COVID-19 might be impacting your specific circumstances.
 
Steve Aitchison
Principal
Melbourne
T +61 3 8602 9217
F +61 3 8602 9299
E [email protected]
Francis Qi
Lawyer
Melbourne
Emily Clapp
Graduate-at-Law
Melbourne
Retail and commercial leases in a COVID-19 world | Hunt & Hunt Lawyers

On 11 March 2020, the World Health Organisation declared COVID-19 a global pandemic. Countries across the globe have taken unprecedented steps to curtail the spread of COVID-19, however, this has seen major disruptions within the economic space particularly for business.
What happens if you or your business cannot comply with the obligations under a contract due to the COVID-19 crisis?
There might be some legal options available to you depending upon your situation. Below, we consider the:

legal concept of force majeure; and
doctrine of frustration.

My contract includes a “Force Majeure” clause – what is that?
A contract will often include a force majeure clause.
Force majeure is a legal concept designed to provide relief to parties, otherwise bound by their obligations under a contract, affected by an unavoidable or unforeseeable event.
The inclusion of a force majeure clause within a contract is an express agreement between the parties setting out what is to happen if the contract is unable to be performed due to a certain event.
The concept of force majeure not only operates differently across all jurisdictions in Australia but also from contract to contact given the inherent principle of “freedom to contract”.
HINT: the principle of “freedom to contract” states that parties are free to define and set the parameters of a clause as they see fit.
Whilst there isn’t a standard force majeure clause, most clauses have three essential elements:

the event can occur by forces either natural or human;
the event cannot have reasonably been foreseen by the parties;

An example of a force majeure clause is:
“Neither party is responsible for any failure to perform its obligations under this contract, if it is prevented or delayed in performing those obligations by an event of force majeure”.
The event was completely beyond the parties’ control and they could not have prevented its consequences.
Does my force majeure clause cover the COVID-19 pandemic?
To put it simply, it will depend on the drafting of your force majeure clause.
Most contracts will define the force majeure clause. Some examples include:

Riot
War
Acts of terrorism
Bushfires
Floods
Earthquakes
Outbreak of infectious diseases

The more precise these clauses are drafted, the better they are able to be interpreted. For example, terms such as “Acts of God” should be avoided to ensure there is no ambiguity.
If your contract fails to specifically identify the events of force majeure that apply, then the specific facts and circumstances of your situation will need to be analysed.
This analysis includes consideration of the following:

the agreed width of the clause – how broadly or narrowly did the parties agree for the clause to be drafted?
if the clause is considered too ambiguous it should be interpreted against the party that created, introduced or requested that clause be included.

This is also known as the “contra proferentem rule”.

where general words follow a list of particular things, for example “including, but not limited to”, the general words are restricted to matters of the same kind as those specifically listed.

This is also known as the “ejusdem generis rule”.
What happens if I enliven the force majeure clause in my contract?
Again, this will depend on the drafting of your contract. You should seek legal advice relevant to your particular circumstances.
Each contract should identity a party’s obligation, how it will be affected by the force majeure event, the obligations on the parties arising when a force majeure event occurs and the obligations on the parties after the force majeure event ceases.
What is the doctrine of “Frustration“?
The doctrine of frustration provides that both parties will automatically discharge each other from their obligations under the contract where it has been impossible to perform.
A contract may become frustrated where:

neither party is at fault;
meeting the obligations under the contract becomes “radically different” from those contemplated by the parties.

For example, a contract between A and B, whereby B agrees to hire A’s theatre on a particular night may be frustrated if, as a result of a terrorist act the theatre is destroyed prior to the date for performance of the contract.
If I cannot fulfil my obligations under a contract due to disruptions from COVID-19 am I protected by the doctrine of frustration?
It is important to remember that each situation must be analysed on its facts.
Not all major disruptions which will occur as a result of COVID-19 mean a contract has been frustrated.
What happens if I seek relief under the doctrine of frustration?
If a contract is found to have been “frustrated”, it is automatically terminated from the point of frustration.
This means that all future obligations are discharged, but any obligations which were required to be carried out before the frustrating event or any future obligations that do not require you to take positive action remain enforceable.
The doctrine of frustration arises from the common law. Some states have introduced legislation which sets out what is to occur when a contract becomes frustrated. See for example the Frustrated Contracts Act 1978 (NSW) and the Frustrated Contract Act 1988 (SA).
You should seek legal advice relevant to your particular circumstances.
Managing Contractual Impacts of COVID-19
Has the COVID-19 pandemic impacted your ability to comply with your obligations under a contract?
Has another party failed to comply with their obligations under your contract as a result of the COVID-19 pandemic?
Contact Hunt & Hunt Lawyers for further information or to discuss your particular circumstances.
With the uncertainty surrounding COVID-19 and the potential impacts upon business, it is important to be familiar with the legal options available to you at this difficult time.
Help! I can’t comply with my contract due to Coronavirus: a guide to contract relief during the COVID-19 Pandemic | Hunt & Hunt Lawyers

The announcement by ASIC on Monday 23 March 2020 that it is recalibrating its regulatory priorities to focus on COVID-19 challenges is a welcome relief to the finance industry in these challenging times.
ASIC states that it will now afford priority to matters where there is the risk of significant consumer harm, serious breaches of the law, risks to market integrity and time-critical matters.
ASIC announced that it has:
“immediately suspended a number of near-term activities which are not time-critical. These include consultation, regulatory reports and reviews, such as the ASIC report on executive remuneration, updated internal dispute resolution guidance and a consultation paper on managed discretionary accounts”
Stakeholders will be shortly be notified of the deferrals and new arrangements.
ASIC also announced that it will:

suspend its enhanced on-site supervisory work such as the Close and Continuous Monitoring Program;
be mindful of the difficulties encountered by firms in complying with their regulatory obligations due to the impact of COVID-19 and work constructively and pragmatically with those firms, and
provide relief or waivers from regulatory requirements where warranted.

While ASIC will continue with its enforcement activities, it will focus on action necessary to prevent immediate consumer harm, “egregious” illegal conduct and other time critical matters. The expression “egregious” means “outstandingly bad – shocking”
Only time will tell whether ASIC actually “walks the talk”
ASIC announces a change in its regulatory focus during the Covid 19 emergency | Hunt & Hunt Lawyers

On Sunday 22 March 2020, the Australian Federal Government announced that it will make temporary amendments to and corporation laws in light of the economic challenges otherwise profitable and viable businesses are facing amid the COVID-19 pandemic.
The Federal Government has stressed that it is important for businesses to have a safety net to make sure that when this pandemic has passed, they can resume normal business operations.
The Federal Government has proposed the following temporary changes:
Statutory Demands

Increasing the current minimum threshold for creditors issuing a statutory demand on a company from $2,000.00 to $20,000.00. This will apply for six (6) months.
The timeframe for a company to respond to will be extended from twenty-one (21) days to six (6) months. This will apply for six (6) months.

Bankruptcy Proceedings

Increasing the current minimum amount of debt required for a creditor to initiate bankruptcy proceedings against a debtor from $5,000.00 to $20,000.00. This will apply for six (6) months
The timeframe a debtor has to respond to a bankruptcy notice will be extended from twenty-one (21) days to six (6) months. This will apply for 6 months.
Extending the period of protection a debtor receives after making a declaration of intention to present a debtor’s petition from twenty-one (21) days to six (6) months. This will apply for six (6) months.

Insolvent Trading

Directors will be relieved of their duty to prevent insolvent trading with respect to any debts incurred in the ordinary course of the company’s business. This will apply for six (6) months.
Egregious cases of dishonesty and fraud will still be subject to criminal penalties and will still be payable by the company.

Tax

The ATO will assist businesses struggling as a result of the COVID-19 pandemic tailoring solutions for their circumstances, including a reduction of payments or deferrals, or withholding enforcement action.

Powers to the Treasurer

The treasurer will be given instrument-making power in the Corporations Act 2001 (Cth) to amend provisions of the Act to provide relief from specific obligations or to modify obligations to enable compliance with legal requirements during the COVID-19 pandemic. This will apply for six (6) months.

These proposed changes do not yet have legal effect, however, given the urgency in providing relief to Australian businesses we anticipate that the amendments to legislation will take place shortly.
The proposed amendments apply to statutory demands and bankruptcy notices issued on or after the date of commencement of the Coronavirus Economic Response Package Omnibus Act 2020.
Hunt & Hunt Lawyers national insolvency team will continue to monitor the changes to insolvency laws and provide further updates as new information becomes available.
Please contact Hunt & Hunt Lawyers if you require further information, or to discuss your specific circumstances.
Temporary changes to insolvency laws amid the COVID-19 pandemic | Hunt & Hunt Lawyers

A raft of draft legislation to implement a further 22 of the recommendations of the Banking, Superannuation & Financial Services Royal Commission (Royal Commission) was announced by the Treasurer, the Hon Josh Frydenberg MP on 31 January.
The consultation period on the exposure drafts ended on 28 February 2020.
These measures will directly affect the finance sector.
Most changes are proposed to take effect on 1 July 2020, indicating the urgency on the part of the Government to get these changes across the line quickly. A couple of the changes take effect later, while others do not yet have a definite start date.
The exposure drafts released are:
1.    Breach Reporting and remediation by Credit Licensees
The Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020: FSRC rec 1.6, 2.7, 2.8, 2.9 and 7.2 (Reference checking and information sharing, breach reporting and remediation) which will:

strengthen breach reporting requirements for financial services licensees and introduce them for credit licensees
establish a compulsory scheme for checking references for prospective financial advisers and mortgage brokers.
give ASIC power to make legislative instruments setting out the detail of the reference checking and information sharing obligation.
require licensees to notify clients of suspected misconduct, conduct investigations into suspected misconduct, and remediate affected clients
licensees are required to maintain records to demonstrate compliance with the requirement to notify, investigate and remediate misconduct.

These changes will have a major effect on the credit industry and will bring this sector generally into line with the financial advice sector. More immediate involvement of ASIC in situations where a breach has occurred is certain.
Licensees must report designated breaches to ASIC within 30 days of discovery of breach, and outcomes of investigation need to be reported within 10 days.
Treasury is currently consulting with industry on how this change will operate in practice. The requirement for Licensees to remediate consumers is a significant change.
Credit Licensees must also report serious concerns about mortgage brokers to ASIC.
Proposed commencement date: 1 July 2020

 
2.    Codes of Conduct – ASIC may declare certain provisions of Codes to be enforceable
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: FSRC rec 1.15 (enforceable code provisions) which will strengthen the existing code of conduct framework in the financial services sector, by specifically:

enabling ASIC to identify one or more provisions of the code as enforceable code provisions if ASIC considers that it satisfies specific criteria
providing that if ASIC identifies one or more provisions of a code to be an enforceable code provision, that provision becomes enforceable under statute
providing that a court may impose a penalty if a declaration has been made that an enforceable code provision has been breached (up to 300 penalty units).
empowering AISC to issue infringement notices for breaches of enforceable provisions of Codes.
requiring Codes to be independently reviewed every 5 years.

Proposed commencement date: 1 July 2020

3.    Financial Advisers – requirement to periodically renew fee arrangements with clients
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: FSRC rec 2.1 (ongoing fee arrangements) and the associated Regulations, which will require:

fee recipients to seek renewal of ongoing fee arrangements by clients annually (currently every 2 years, except for fee arrangements first entered into prior to 1 July 2013 where currently they are not required to be renewed).
fee disclosure statements going forward to not only state what fees were in the preceding year, but also what fees will be in the current year (currently disclosure is only required for prior year)
written consent must be obtained prior to fees being deducted under an ongoing fee arrangement and consent generally cannot be obtained for a period of more than 12 months (currently there is no ongoing requirement to seek new consent after the initial consent has been given)
fee recipients to obtain written consent to continue an ongoing fee arrangement annually
new record keeping requirements

Proposed commencement date: 1 July 2020

4.    Financial Advisers – required to disclose any lack of independence
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: FSRC Rec 2.2 (disclosure of lack of independence) which will requires financial services licensees and authorised representatives are required to:

 give a written disclosure of lack of independence (in a form prescribed by ASIC) where they are unable to validly claim that they are   “independent”, “impartial” and “unbiased”.
include a statement to that effect in their financial service guide.

Proposed commencement date: 1 July 2020

5.    Trustees of Registrable Superannuation Entities (RSEs) must hold no other duties or office
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: RSE licence condition—no other duty (FSRC rec 3.1) – will impose a new licence condition on RSEs prohibiting them from having a duty to act in the interests of another person.
Proposed commencement date: 1 July 2020

6.    Restricting the ability of Trustees of Super Funds to charge advice fees on Choice funds without the informed consent by member.
The Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020: fees (FSRC Recs 3.2 & 3.3) will provide that superannuation members in choice funds must not be charged advice fees by Trustees unless they have first given informed consent.
Proposed commencement date: 1 July 2020
 

7.    Trustees of Super Funds must not charge advice fees to members on My Super products.
The Financial Regulator Reform (no. 2) Bill 2019: Fees (FSRC Recs 3.2 & 3.3: Advice Fees for Mysuper and Choice Products) will implement this change.
Proposed commencement date: 1 July 2020

8.    Ban the unsolicited sale of Financial Products
The Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020: Hawking of financial products will ban the “hawking” of financial products, subject to some limited exceptions. The legislation also defines more precisely the meaning of the expression “unsolicited contact” and strengthens the provisions dealing with “right of return and refund”
Proposed commencement date: 1 July 2020

9.    Clarify roles of APRA and ASIC in relation to regulation of Superannuation.
The Financial Sector Reform (Hayne Royal Commission Response – Stronger Regulators (2020 Measures)) Bill 2020: ASIC regulation of superannuation makes it clear that:

APRA is generally responsible for prudential regulation and member outcomes. It is also generally responsible for licensing and supervision of RSE licensees.
ASIC is generally responsible for protecting consumers from harm, market integrity, disclosure and record keeping.
The Commissioner of Taxation is generally responsible for self-managed superannuation funds, data and payment standards, tax file numbers and the compassionate release of superannuation amounts.

ASICs role and powers are beefed up under the amended legislation.
Proposed commencement date: 1 July 2020

10.    Restrict use of the expressions “Insurance” and “Insurer” to prevent consumers from being misled.
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: Use of terms “insurance” and “insurer will make it a strict liability offence for a business to describe:

a product or service they offer as insurance, if the product or service is not insurance, in circumstances where it is likely that the product or service could mistakenly be believed to be insurance.
itself as an insurer if the business could mistakenly be believed to offer insurance, and either the product is not insurance or the person is not appropriately registered or authorised under applicable insurance legislation.

The offences do not apply to government entities, State insurance, or products or services prescribed by the regulations, or entities exempted by ASIC.
Proposed commencement date: 1 July 2020

11.    Implement a “deferred sales model” for the sale of add-on insurance products.
This change is implemented by The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: Deferred Sales Model For Add-On Insurance
Currently, only the Banking Code of Practice contains provisions dealing with deferred sales model.
These changes will make the sale of add on insurance products difficult, if not impossible.
Proposed commencement date: 12 months after the date the enabling legislation receives Royal Assent.

12.    Introduce a cap on commissions that can be paid for sale of add on insurance in connection with the sale or leasing of motor vehicles.
The Financial Sector Reform (Hayne Royal Commission Response—Protecting Consumers (2020 Measures)) Bill 2020: Caps on commissions implements these changes and will:

place a cap on the amount of commissions that may be paid in relation to add-on risk products such as tyre and rim insurance, mechanical breakdown insurance and consumer credit insurance (for the credit facility) supplied in connection with the sale or long-term lease of a motor vehicle.
provide ASIC with the power, by legislative instrument, to set caps on the amount of commissions that may be paid in relation to certain add-on risk products sold in connection with the sale or long-term lease of a motor vehicle.
make it a criminal offence, civil penalty and offence of strict liability for a person to pay or receive a commission in relation to an add-on risk product that exceeds the cap determined by ASIC for that product.
give consumers the right to recover commissions paid in excess of the cap.

Proposed commencement date: the day after the enabling legislation receives Royal Assent.

13.    When taking out life insurance, replace the existing duty of disclosure imposed on the consumers with a duty to take “reasonable care” to not make a misrepresentation.
These changes are implemented by the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020: FSRC Rec 4.5 (Duty of Disclosure To Insurer) and will bring life insurance more into line with the existing regime that currently applies to motor vehicle insurance, home buildings insurance, home contents insurance, sickness and accident insurance and travel insurance.
Under the current law, an insured is required to disclose matters known to the insured that are relevant to the insurer’s decision of whether or not to accept the risk and, if so, on what terms. The current duty was considered to have placed too greater a burden on insureds.
Proposed commencement date: 1 July 2020

14.    An insurer may only avoid a contract of life insurance on the basis of non-disclosure or misrepresentation if it can show that it would not have entered into a contract on any terms
This change is implemented by the Financial Sector Reform (Hayne Royal Commission Response – Protecting Consumers (2020 Measures)) Bill 2020: Avoidance of Life Insurance Contracts (FSRC Rec 4.6) .
Proposed commencement date: the day after the enabling legislation receives Royal Assent.

15.    Establish the Financial Regulator Assessment Authority to oversee ASIC and APRA.
This is implemented by the Financial Regulator Assessment Authority Bill 2020 and the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2020 Measures)) Bill 2020 . In summary, the Authority:

will assess APRA’s and ASIC’s effectiveness;
reports to the relevant Minister;
undertakes capability reviews of APRA and ASIC when requested by the Minister;
consists of the Chair, a Departmental member and 2 other members assisted by APS employees’ and
may request information from APRA and ASIC

Proposed commencement date: 1 July 2020

16.    ASIC given new powers to issue directions to licensees to prevent or address suspected breaches of financial services law or credit legislation.
This change is implemented by the Financial Sector Reform (Hayne Royal Commission Response—Stronger Regulators (2020 Measures)) Bill 2020: FSRC Rec 7.2 (ASIC Directions)
Proposed commencement date: the day after the enabling legislation receives Royal Assent.
Government releases raft of draft legislation to implement further recommendations of the Banking, Superannuation & Financial Services Royal Commission | Hunt & Hunt Lawyers

In recent developments, the High Court of Australia in Kadir v The Queen; Grech v The Queen [2020] HCA 1 considered when illegally obtained evidence can be admissible in court and whether or not the American concept which excludes evidence “from the poisonous tree” does not apply.
This decision has significant repercussions for parties to litigation where evidence has been illegally obtained, and how parties must go about obtaining evidence in support of their case.
Background
This case involves the use of rabbits as ‘live bait’ at training greyhounds for racing. The practice is cruel and illegal in Australia. The prosecution had initially obtained evidence in the form of covert video recordings of the Appellant’s property obtained by an animal activist and documentary photographer. The videos substantiated an anonymous complaint that had been received by Animals Australia.
Based on the videos, further evidence was obtained in the form of:

oral admissions by the Appellant  to the activist who attended the Appellants’ property and spoke to him whilst posing as a greyhound owner seeking to have dogs “broken in” by “live baiting”; and
a search warrant issued by RSPCA.

The Court was asked to consider whether the video, admissions and search warrant should be excluded on the basis they had been “illegally obtained”.
Was the evidence illegally obtained?
It was not in dispute that the evidence had been obtained illegally.
It is an offence for a person to knowingly install, use, or maintain an optical surveillance device on-premises to record visually an activity if the installation, use, or maintenance of the device involves entry onto the premises without the consent of the owner or occupier.
Note: See section 8 of the Surveillance Devices Act 2007 (NSW)
Can the court admit evidence even though it is obtained illegally?
It may come as a surprise, but the court can admit evidence that has been illegally obtained if the court feels that it is more desirable to the public interest to admit the evidence than to exclude it – but this decision is not taken lightly.
Note: See section 138 of the Evidence Act 1995 (NSW)
Extreme caution is taken by the courts to balance the desirability of the public interest.
On one hand, if illegal evidence is admitted, the court is presented with the full evidence and is better positioned to make a decision.
On the other hand, admitting illegal evidence may encourage “vigilantism” (taking the law into one’s own hands) and the gathering of evidence improperly or in contravention of the law.
What are the considerations for the Court in deciding if illegal evidence is admissible?
There are numerous considerations the court will consider including:

the probative value of the evidence (how relevant it is to the case); and
the importance of the evidence.
the nature and gravity of the offence; and
the difficulty of obtaining the evidence without breaking the law.

In this case, the High Court ruled that the surveillance video was inadmissible because vigilantism, even for creditable reasons, should not be encouraged. The Court found the seriousness of the contravention (which involved trespassing the property) was high.
However, the Court took a different approach in respect of the admissions and the search warrant and departed from the principle of “fruit of the poisonous tree”. This is because the evidence was obtained lawfully and was also held to be:

of high probative value; and
in the public’s interest to convict wrongdoers who commit serious offences.

How does this affect me?
The Court’s decision, in this case, reinforces that evidence will generally be inadmissible if it has been obtained as a result from a serious breach of the law.
However, the Court has left room for illegally obtained evidence to be admitted if it is in the public interest to do so – although this is a high threshold to achieve.
The considerations are not black and white and are determined on a case-by-case basis. If you are a party to litigation and are concerned that evidence to be relied upon by you, or another party, may have been illegally or improperly obtained, you should seek legal advice because it may be admissible.
Author
George El-Mourani
Graduate at Law
Fruit of the poisonous tree: when illegally obtained evidence can be used in Court | Hunt & Hunt Lawyers

Dumping duties payable on the importation of aluminium extrusions continues to be a key focus of the Australian Border Force.  This is not surprising given that inadvertent non-compliance remains high and the relevant duty rates exceed 100%.  An unexpected dumping duty bill can be a business ending event and a key part of managing this risk is closely monitoring developments affecting what dumping duties are imposed.
There are at least 3 key events in a life of a dumping duty – the initial investigation that results in the duties being imposed, a review of the rates that will apply and an inquiry every 5 years into whether the dumping duties should continue.  The last of these, a continuation inquiry, was commenced in mid-February into Chinese exports of aluminium extrusions.
What is a dumping duty continuation inquiry?
Dumping duties automatically expire after 5 years unless a continuation inquiry is held.  A continuation inquiry in conducted by the Anti-Dumping Commission (ADC) and involves an examination of the following questions:

should the dumping duties continue unaltered;
should the dumping duties be permitted to expire;
should the dumping duties cease to apply to particular exporters or particular types of goods;
should the rates of dumping duties change.

Does this mean the dumping duties may end?
Where dumping is unlikely to continue or the local industry will no longer suffer injury, it makes sense that dumping duties should end.  After all, these are protectionist, and not revenue raising, duties.  Unfortunately, the continuation inquiry into aluminium extrusions is unlikely to bring about an end of the dumping duties.  The level of exports from China has not decreased and the most recent review (concluded in May 2019) found high levels of dumping.
Could the rates change? Yes, especially is the ADC follows the recent WTO ruling
The level of dumping duties should be the big focus area.  While not all continuation inquiries involve a review of the rates, this inquiry is likely to.  This is because the last aluminium extrusion rate review was based on exports during the 17/18 financial year.  This data is already 20-26 months old.  The ADC is likely to exercise its discretion to update the rates.  As a result, the inquiry needs to be treated in the same way as a review.  The result of this will be the resetting of:

specific dumping duty rates for the major exporters,
the rate that applies to cooperating exporters; and
the rate that applies to all other exporters (including those that did not participate in the inquiry).

The last time a review was conducted there was a dramatic change in each of the above 3 types of rates.  This is due to changes in factors such as the differential between Chinese aluminium prices and global prices, profits on Chinese domestic sales and export prices.
However, what makes this review especially interesting is that the WTO has recently found that the ADC method of calculating certain dumping margins was not in accordance with WTO requirements.  While the WTO was reviewing a decision regarding Indonesia A4 copy paper, the offending practice has been adopted by the ADC in relation to aluminium extrusions exported from China.
Traditionally, the ADC has disregarded actual Chinese domestic selling prices due to alleged Chinese Government influence in the market for materials used to produce aluminium extrusions.  This practice always leads to large dumping margins.  However, following the WTO ruling, the ADC will first have to ask whether the Government Influence has prevented Chinese domestic prices and exports from being comparable.  Chinese manufacturers used the same inputs to produce domestic goods as they do exports.  As such, the starting point should be that the Government influence equally impacts the price of both categories of goods and those prices remain comparable.
Exporters need to be involved now
The last thing a Chinese exporter needs on top of the Coronavirus is an investigation by the ADC.  However, the continuation inquiry has strict timeframes.  Those exporters selected for specific in depth review need to lodge their exporter questionnaire by 23 March 2020.  Other exporters that wish to obtain the residual exporter rate need to complete the ADC’s information request and associated spreadsheet by 23 March 2020.
No doubt the Coronavirus will impact the ability of some exporters to meet the 23 March deadline.  Those affected need to seek an extension from the ADC prior to 23 March.
All exporters and importers should consider whether they wish to make a submission to the ADC regarding the inquiry.  Submissions can cover any topic including the primary issue of whether the dumping duties should continue or more specifically, how dumping duties rates should be calculated.
The outcome of this inquiry will greatly impact the viability of Chinese aluminium extrusion supply chains.  Please contact us if you would like assistance responding to the inquiry.
What is a dumping continuation inquiry and why will it have a big impact on importers of aluminium extrusions? | Hunt & Hunt Lawyers

There is a common misunderstanding that if an order is made winding-up a company then this order is set in stone.  This, however, is not the case.
The corporations law provides a means to wind back the clock, which essentially permits a company to resume its business as if no winding-up order had been made.
There are two different ways in which a winding-up can be reversed:

seeking to stay or terminate a winding-up; and
seeking to set aside the order winding-up a company.

How do I seek to stay or terminate a Winding Up?
Section 482 of the Corporations Act 2001 (Cth) (the Act) gives the Court power to either stay the winding-up (either indefinitely or for a limited period) or to terminate the winding up.

Note: In practice, if a Court is satisfied of the requisite criteria, an order terminating the winding-up is more likely to be made. 

Stays for a limited period of time are rarely given.
The Act does not provide a specific list of criteria which needs to be satisfied to successfully apply for the termination or stay of a winding-up.
The Courts, however, in their decisions which consider this type of application (see for example Re: Warbler Pty Ltd (1982) 6 ACLR 526), have set out a range of factors to be taken into account.
These factors include:

the interests of:

the creditors, including their attitudes and whether their debts have been discharged;
the liquidator;
the members of the company; and
the public, including whether the conduct of the company was in any way contrary to commercial morality or the public interest;

the general background and circumstances which led to the winding up of the company, including an explanation of any non-compliance by the directors with their statutory duties; and
the present and future solvency of the company.

This list of factors is non-exhaustive and generally the most important factor is the solvency of the company.

In the matter of Glass Recycling Pty Ltd (ACN 001 332 654) [2014] NSWSC 439, Brereton J explained that although it is generally said that an order terminating the winding up will usually be made if:

all the creditors are paid out;
the liquidators’ costs and expenses are covered; and
the members agree,

the Court will also consider whether the state of affairs that required that the company be wound is not likely to reoccur in the foreseeable future.
The power to make an order under section 482 of the Act is discretionary and the onus is on the applicant to make out a positive case for termination.
It should not be assumed that an order staying or terminating a winding-up will be made, even in circumstances where one may feel they met the ‘general’ factors considered by the Court, see In the matter of Rainbow Carlingford One Pty Ltd (in liquidation) [2019] NSWSC 971.
How do I seek to set aside a Winding-Up order?
Rule 39.05 of the Federal Court Rules 2011 (Cth) (the Rules) gives the Court power to set aside a winding-up order made in the absence of a party.
In the matter of George Ward Steel Pty Ltd v Kizkot Pty Ltd (1989) 15 ACLR 464, the Supreme Court of New South Wales held that the Court should exercise its power to set aside a winding up if:

the order was made in the absence of the company;
the application to set aside the order is brought promptly;
a good explanation is provided for the non-appearance;
notice is given to the liquidator, to the company or individual who sought the company be wound up and to any creditor who appeared at the hearing;
there is consent, or as a minimum no opposition, to the setting aside; and
the liquidator has not found anything in his or her investigations showing a reason for the company to be stopped from trading.

The power to make an order under Rule 39.05 of the Rules, much like an application for termination, is discretionary, meaning that even if the above considerations exist, there is no guarantee that the order setting aside a winding up will be made.
What should I do next?
If your company has been wound up and you wish to find out what options are available, you should seek urgent legal advice.
At Hunt & Hunt, we have a national insolvency team who can assist you with anything insolvency-related, including with advice on the options available following the winding-up of your company.
If you require advice specific to your circumstances, please don’t hesitate to get in touch.
Authors
Matt Gauci, Senior Associate
Jessica Egger, Lawyer

My company has been wound up! What are my options? | Hunt & Hunt Lawyers

The coronavirus outbreak represents an unforeseen and uncontrollable event.  The global focus is rightly on the human impact and in an effort to limit the spread of the virus, Governments are taking measures that are significantly impacting international trade.  These measures are shutting down the world’s manufacturing hub and the impact may be felt for months.
The legal implications of the coronavirus will come down to a mixture of the terms of the relevant contracts, which country’s law applies, and the actions of the parties.
Likely impacts – supply contracts
The natural consequence of an extended business closure in China together with restrictions on the movement of people and cargo will be the failure to supply goods by the nominated date, or at all.  This could be caused by an inability of a Chinese manufacturer to obtain materials, extended factory shut downs, delays in obtaining required documentation or inability to ship goods to Australia.
The end result is a failure by the supplier to deliver goods when promised.  Losses could be the loss of purchase monies paid and/or the consequential loss of profits resulting from the non-delivery or delayed delivery.
What does the contract say?
Force Majeure Clause
The first step is to review any written contract and identify if it contains a force majeure clause.  This is a clause that will enable a party to avoid performance of an obligation where that performance is affected by the occurrence of an event beyond that party’s reasonable control.  The coronavirus and the resulting Government action, is likely to satisfy most force majeure clauses.
However, this is not the end of the matter.  Force majeure clauses usually require the effected party to give notice of the force majeure event and take reasonable steps to mitigate the impact of the force majeure event.  Further, the force majeure event cannot be used as to excuse non-performance disconnected from the coronavirus.
Governing law
If there is no force majeure clause the governing law become even more important.  Under Australian law a force majeure clause will not be automatically implied into the contract.  However, as set out in the alert from our Chinese Interlaw partners, Zhonglun W&D Law Firm  a force majeure clause will be implied under Chinese law.
Australian importers wishing to make a claim against Chinese suppliers will need to consider the extent to which such a claim would be enforced by a Chinese Court.
Frustration
The law does not hold parties to contracts where completion becomes impossible due to an unforeseen event.  In such a case the contract may become frustrated and be automatically terminated from the point of frustration.  Due to unexpected Government imposed shutdowns and restrictions on the international movement of people, some contractual obligations may now be impossible to perform.  This is most likely to be the case for time sensitive obligations.
However, it is all about timing.  What was an unforeseen even in January, may not be in February.  Frustration cannot be claimed where a party is aware of a risk and elects to take that risk.
Contracts of Carriage
The coronavirus has had an immediate impact on the movement of goods through Chinese ports.  With the dramatic reduction in passenger flights, air-freight options are reduced.  Further, there are increased instances of goods being unloaded at nearby ports for future transhipment to China.  This means delays and increased logistics costs.  Those costs will come in the form of storage, container detention and transhipment expenses.
Freight forwarders
Under most contracts of carriage, the shipper, and not the carrier, will be liable for these unexpected additional costs.  For freight forwarders we recommend the following:

as early as possible make your customers aware of the potential for extra costs;
where possible provide guides as to those additional costs, such as daily detention and storage costs;
seek written agreement from the customer that it is aware of the costs and agrees that it will be liable for these costs (a letter of indemnity is best);
take what steps are reasonably possible to try lower the cost; and
depending on the customer and risks involved, consider obtaining security from the customer for the expected costs.

Legal rights are much more likely to be enforced where the customer was made fully aware of the potential costs and their legal liability for those costs.  Early and upfront disclosure is much better than the tactic of not raising the issue in the hope that the issue will go away.
Shippers and consignees
If the shipment of goods is delayed and/or unexpected costs are incurred, as a first step we suggest informing your insurers.  Whether costs associated with delay are covered will depend on the wording of the policy.
It is important to also notify insurers if goods are delivered to a different port than expected.  This is because insurance coverage may end on the discharge of the goods, even if it is not at the intended port.
Shippers and consignees should make an early assessment regarding potential costs.  It is all too common to see storage and container detention charges exceed the value of the relevant goods the subject of the original dispute.  If the length of disruption remains uncertain, it may be prudent to take whatever steps are necessary to unpack goods into cheap storage and return containers that incur costly daily fees.
The message is clear – communicate and take reasonable steps to limit costs
While much is in the hands of Government bodies, there are still some actions that can be taken by parties to improve their circumstances.  Reviewing contracts, notifying other parties of the impact of force majeure events, terminating contracts that can longer be performed, moving goods to cost effective storage away from ports are all steps that should be taken early.
Whether the issue is in Australia or China, Hunt & Hunt through our network of Interlaw firms can help you assess and mitigate the consequences of the Government response to the Coronavirus.
Coronavirus – The legal impact on international supply chains | Hunt & Hunt Lawyers

This article is republished with permission from Jackson Y. Teng, Senior Partner at Zhonglun W&D Law Firm, our Interlaw partner firm.
As the only Australian member of Interlaw, Hunt & Hunt is strategically aligned with commercial lawyers in every industrialised country in the world.  Interlaw firms provide clients with access to a range of specialities, expertise  in local jurisdictions and a roadmap through the legal, cultural and linguistic difficulties which cross-border commercial transactions can involve.

Foreword
With the novel coronavirus sweeping through mainland China and the World Health Organization having declared a Public Health Emergency of International Concern, the PRC government has adopted a series of drastic administrative measures, such as shutting down the entire city of Wuhan.
The outbreak and the resulting measures by the central and local governments are impacting businesses and enterprises in multiple ways. In addition, many countries are also taking actions to contain the spread of the coronavirus by suspending or limiting air flights to and from mainland China. With no end in sight, these impacts are likely to last for some time and it then become paramount for businesses and enterprises to fully assess the risks that they may face as normal operations are being disrupted.
With our regular Legal Alert, we will summarize key factors and provide general legal comments for the outbreak of the coronavirus. The first issue is to review force majeure event as many contracts involving PRC contracting parties may not perform normally under the circumstance.
Ⅰ. What Constitution of a Force Majeure Event?
Section 180 of General Rules of the Civil Law of the People’s Republic of China (“Civil Law”) states, “Unless otherwise provided by law, a person who fails to perform his civil law obligations owing to force majeure assumes no civil liability. Force majeure means an objective circumstance which is unforeseeable, unavoidable, and insurmountable”.
Section 117 of Contract Law of the People’s Republic of China (“Contract Law”) states, “A party who is unable to perform a contract due to force majeure is exempted from liability in part or in whole in light of the impact of the event of force majeure, except otherwise provided by law. Where an event of force majeure occurs after the party’s delay in performance, it is not exempted from such liability. For purposes of this Law, force majeure means an objective circumstance which is unforeseeable, unavoidable and insurmountable.”
Pursuant to the above laws, “force majeure” refers to an objective circumstance, which is unforeseeable, unavoidable and insurmountable. The outbreak of the coronavirus is unforeseeable even from the perspective of medical experts. In addition, the government have adopted administrative measures in response, which include extending public holiday period, forced quarantines, and suspension of public transportation systems. We incline to think the outbreak of the coronavirus qualifies as a circumstance that is unforeseeable, unavoidable and insurmountable.
On the other hand, we shall also consider the judicial philosophy formulated during the 2003 SARS outbreak. Notice of the Supreme People’s Court on the Conduct of the Relevant Trials and Executions during the Prevention and Treatment of the SARS states, “disputes relating to non-performance of contracts directly resulted from the administrative measures taken by the government to prevent and controls the SARS epidemic shall be resolved in accordance with the Sections related to force majeure of the Contract Law”.
Ⅱ. Legal Consequences of a Force Majeure Event
The application of force majeure nevertheless shall not be abused and shall follow the principles of fairness and utmost honesty.
Pursuant to Section 117 of Contract Law, “A party who is unable to perform a contract due to force majeure is exempted from liability in part or in whole due to the impact of the event of force majeure, except otherwise provided by law. Where an event of force majeure occurs after the party’s delay in performance, it is not exempted from such liability”, there shall be causation between the event of force majeure and the non-performance of a contract.
Liabilities exempted under Contract Law include those for non-performance and those for damages to the contracting party that is affected by the event of force majeure. However, it may not be fair for the non-breaching party to bear all the damages. In legal practices, it is possible for PRC courts to rule that, based on the principle of fairness, the contracting party affected by the event of force majeure shall share part of the economic losses with the non-breaching contracting party.
One example is, after the 2003 SARS outbreak, some courts ruled that, the lessee of a commercial property shall still pay part of rents to the lessor even the lessee’s business operation at the premise was severely restricted.
Ⅲ. Legal Actions Can Be Taken by Exporters/vendors
As we are being frequently consulted by clients in the international trading business recently, we would take it as an example to illustrate how a business shall deal with the current circumstance cautiously.
(1) To notify the other contracting party timely and take measures to mitigate damages
Section 118 of Contract Law provides, “If a party is unable to perform a contract due to an event of force majeure, it shall timely notify the other party so as to mitigate the losses that may be caused to the other party, and shall provide evidence of such event of force majeure within a reasonable period”.
If an exporter/vendor is affected by the outbreak of the coronavirus and cannot perform a business contract, it is important for it to notify the other contracting party as soon as possible through ways specified in the contract (e.g. email or written letter) and take all possible measures to mitigate economic losses. Otherwise, it would still be liable for any losses even in an event of force majeure.
On February 1, 2020, China Chamber of International Commerce (“ICC China”) announced that it would assist enterprises to acquire force majeure certificates as long as they are able to provide qualified materials and meet disclosed requirements. Enterprises are required to submit evidence(s) of delays or cancellations in sea, air or land transportation as well as export cargo sales contracts or agreements.
ICC China would process the documents in accordance with laws and regulations of PRC, as well as international trade practices. The certificate issued by ICC China is widely recognized by governments, customs, chambers of commerce and enterprises around the world.
(2) Change or terminate contracts
Section 94 of Contract Law states, “if the purpose of the contract cannot be achieved due to force majeure event, the parties are entitled to terminate the contract.”
Currently, exporters/vendors are mainly affected by the extended public holiday period and travel restrictions to their workers as well as interruption on logistic systems, while circumstances may also differ among locations due to various administrative measures undertaken by local governments. At the same time, exporters/vendors should also have foreseen and been prepared for the interruption in production during a normal Chinese New Year Holiday period. If the outbreak does not directly lead to the unattainable objective of a contract, we do not recommend the contracting parties terminate the contract. It is a complicated matter and the party that execute such a right may bear the burden of proof. Even an exporter/vendor is confronted with difficulties on duly performing a contract, it shall first actively negotiate with its business partner in goodwill.
Ⅳ. Legal Actions Can Be Taken by Importers / purchasers
(1) To notice the other contracting party timely, take measures to mitigate damages (if any), and communicate with the banks (if necessary)
As a major contractual obligation, importers/purchasers are required to make payments, which usually means issuing a letter of credit. Since the working time of banks may be affected by the outbreak, we recommend that importers/purchasers communicate and coordinate with their banks, so that late loadings, ship delays or other losses resulted from a delay in obtaining a L/C can be minimized and avoided, to the greatest extent.
(2) Coordinate Change of logistics and warehousing
Collecting goods timely is another major contractual obligation for importers/purchasers. In case ports and airports are closed due to the outbreak, importers/purchasers shall inform their exporters/vendors immediately and negotiate on alternative options. The party that does not take appropriate measures to prevent losses may be exposed to compensation claims.
In summary, despite of the existence and application of force majeure event, both importers/purchasers and the exporters/vendors shall timely and responsibly notify their counterparties, take reasonable mitigation measures and keep all relevant documents.
Jackson Teng
Senior Partner
[email protected]
 
Vivien Jiang
Partner
[email protected]
Outbreak of Cornoavirus and Legal Responses – the Chinese Perspective | Hunt & Hunt Lawyers

The High Court has found against the Comptroller-General of Customs and handed down a decision that vita-gummies are classified as a duty free medicament and not as food.  However, in reaching its decision it made a number of findings that could have a wide impact on future classification decision.  These findings include that when interpreting the tariff it is appropriate to have reference to the French version of the harmonised code.
The key issue
Comptroller-General of Customs and Pharm-A-Care Laboratories Pty Ltd involves the tariff classification of certain vitamins and a plant extract design to assist with weight loss.  Both products are sold as gummies, meaning the active ingredient is delivered by a lolly type product.
The issue was whether the gummies should be classified to heading 3004 (medicaments for therapeutic or prophylactic uses), 2106 (food preparations) or 1704 (sugar confectionary).  The AAT found that the gummies had health benefits so therefore fit within heading 3004 unless note 1(a) to chapter 30 applied.  Heading 1(a) provides that the chapter does not cover:
“Foods or beverages (such as dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters), other than nutritional preparation for intravenous administration (Section IV).”
The AAT and Full Federal Court both held that the wording of note 1(a) meant that the examples in brackets are only excluded if they are “foods or beverages”.  In particular, it was held that for a food supplement to be covered by the note, the food supplement must first be a “food”.
The High Court held that although the AAT and the Federal Court incorrectly interpreted note 1(a) (see discussion below), this did not produce the wrong result.  This was because the AAT had correctly found that the vita-gummies were not a “food supplement” and had found that that the vita-gummies were correctly described as having a therapeutic or prophylactic use.  As such, classified to heading 3004 was appropriate.
French vs English Text
Customs had argued that the clear introductory words of note 1(a) “Food or beverages (such as…” should be read in a different way as those same words are completely absent from the French version of the harmonised code. 
The High Court accepted this argument and said that the note should be interpreted as only excluding the words in brackets, being “dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters”.  This had the outcome that note 1(a) does not exclude food or beverages generally, but rather only the specific examples provided.  Further, a good must only meet this description and need not also be categorised as a food or beverage.
This is a dramatic change in the meaning of the note and one that is not open on a fair reading of the English words alone.  This shows the impact of adopting an interpretation consistent with the French wording.  It raising the following implications:

When should customs brokers and ABF officers refer to the French version of the tariff over the version adopted by the Australian parliament?
How would those administering the tariff even know when there is a material difference between the French and the English versions.
If the English version is required to be tested against the French version, could any ABF officer or Customs Broker properly do their job without being able to read French?
Even if you find a difference between the English and French versions, what guidance is there to which version should be preferred?

The approach put by Customs and accepted by the High Court has the potential to turn tariff classification into a linguistic nightmare.
 Are “food and beverages” no longer excluded by the note to Chapter 30?
This may be a case of being careful for what you wish for.  Prior to this decision it was a given that a food or beverage was excluded from Chapter 30 by reason of note 1(a) stating that the chapter does not cover “food or beverages…”.  However, the High Court has held that the note only applies to “dietetic, diabetic or fortified foods, food supplements, tonic beverages and mineral waters” and not food and beverages more generally.
Of course the food or beverage must still be fit within the term “medicament” and have a therapeutic or prophylactic benefit to fall within heading 3004.  However, if this hurdle is reached, it may not be a case of the Court having to consider two competing headings (heading 3004 and a food chapter) as some of the food chapters have notes saying that the chapter does not cover goods of 3004.  The potential for unexpected outcomes seems high.
Reference to bracketed tariff headings in notes
At the end of note 1(a) were the bracketed word “(Section IV)“.  Then Full Court held that the words in brackets meant that note 1(a) only excluded food or beverages falling within section IV of the tariff.
Customs argued, and the High Court agreed, that the words “(Section IV)” are merely a guide to the reader, indicating where the items listed in note 1(a) might be classified if excluded from chapter 30.
Reference to section, chapters and headings in brackets should only be taken as a guidance note and do not have the force of including or excluding particular goods.  This should be contrasted to a note that specifically states “excluding goods of …”.
Again, this is a problematic outcome as bracketed chapter/heading references have acted as a good aid to tariff classification.  These words will now be taken as having no legal influence over the correct classification of goods.
There was some good news…
Conventional tariff classification has followed an approach of objective identification of goods followed by a separate step of classifying the goods as identified.  The correctness of this approach was strongly upheld by the High Court.
This was a rejection of a confused approach to classification argued by Customs which seemed to involved firstly breaking complete goods down into their ingredients and classifying according to the various ingredients by reference to terminology in tariff headings.  The High Court expressly reject classifying a good as if it is a mixture, if it can in fact be classified under interpretative rule 1 (according to headings and notes).
The Court highlighted that in classifying the goods, the Tribunal had correctly asked the basic questions “what really are the goods, and what really is it that they do”.  This seems like a common sense starting point when classifying goods.
What next? – Refunds, legislative change and testing the limits of the judgement
This case represents the end of the judicial process – there will be no further appeals.
Refunds – Importers of heath and cosmetic products (including vitamins) need to review the past and future classification of their goods.  There may be refund opportunities for products previously classified as food.  This will be of particular importance for goods from Europe where there is no Free Trade Agreement.
Legislative change – Clearly the Government did not want the outcome that vitamins were duty free.  The taxation of imported vitamins is a policy decision.  However, Australia will not be able to raise tariffs for heading 3004 above its WTO commitments.  An alternative may be for Australia to amend the legislation to specifically list vitamins as subheadings in its desired chapter
Where does it end – Importers are likely to review their range of products to identify goods that have either a therapeutic, preventative or cosmetic purpose and form a view as to which should fall to chapter 30.  The primary area of focus is likely to be foods sold for a specific health benefit rather than to be consumed for general nourishment.
Re-test the issue – In its closing paragraph, the High Court noted that it had not expressed an opinion on whether vitamins actually have a health benefit as it was not a point of appeal raised by Customs.  This may have been a suggestion that the issue is still open.  Customs may consider one option is to tackle future attempts to classify edibles to heading 3004 by arguing a lack of health benefits.  If it does so, it should remember that the garcinia extract was classified to heading 3004 despite it having only cosmetic benefits.
Please contact Russell Wiese (03 8602 9231, [email protected]) if you would like to discuss how this case applies to your imports.
Australia’s highest court rules on tariff classification – wins and losses for industry | Hunt & Hunt Lawyers

In 2019, the NSW Government announced a range of reforms to the State’s liquor laws which included relaxing the lockout laws introduced in 2014.
 
What’s happening to Sydney’s lockout laws?
The first stage of the reforms commenced on 14 January 2020, with the repeal of lockout laws in certain parts of Sydney. The first weekend after the repeal of the lockout laws was well-received by the industry and public, and without significant incidents. It is anticipated that venues in the Sydney CBD will experience an increase in patronage in the near future.
The changes came about following the recommendations of the NSW Parliamentary committee into Sydney’s night-time economy. The Joint Select Committee was required to inquire into and report on the measures required to:

maintain and enhance community safety;
maintain and enhance individual and community health outcomes;
ensure existing regulatory arrangements in relation to individuals, businesses and other stakeholders, including Sydney’s lockout laws, remain appropriately balanced; and
enhance Sydney’s night-time economy.

What areas will be affected?
The reforms differ between the Sydney CBD Entertainment Precinct (an area extending from The Rocks in the north, to Darlinghurst in the east, Surry Hills in the south and Darling Harbour in the west) and the Kings Cross Entertainment Precinct. The existing laws have been heavily relaxed in the Sydney CBD Entertainment Precinct. Whilst most laws have been retained in the Kings Cross Entertainment Precinct with a review to take place in 2021.
In the Sydney CBD Entertainment Precinct, the reforms include:

The removal of the lockout restriction of 1.30 am as the last entry for licensed venues;
An adjustment to last drinks times from 3 am to 3.30 am for most venues; and
The relaxation of certain drink restrictions, including the removal of restrictions on serving cocktails and shots and drinks in glass after midnight.

In the Kings Cross Entertainment Precinct, the hours of operation of ID scanners have been relaxed. The lockout restrictions and last drinks times will continue to apply, however, there will continue to be a process for certain premises to apply for exemptions from the lockout and liquor sales restrictions.
State-wide reforms include:

The extension of takeaway liquor trading hours, from 11 pm to midnight Monday to Saturday, and 10 pm to 11 pm on Sunday;
An increase in the patron capacity of small bars, microbreweries and small distilleries from 100 to 120 under relevant licencing arrangements;
The commencement of a streamlined process for the conversion of liquor licence types; and

The relaxation of the liquor licence freeze applying to established producer/wholesaler licences.
Other changes across the state
The NSW Government is also considering the following significant changes to liquor laws, subject to further consultation and development:

The implementation of a single, integrated incentives and sanctions system to reward well-managed venues and sanction venues that breach liquor laws or have a poor safety record;
The alignment of liquor licensing and planning processes to allow a range of businesses to open or change their business models more easily;
The adoption of a more sophisticated approach to assessing and managing risks associated with the density of licensed premises and late trading;
Enabling family-oriented functions and more diverse small business services in small bars in certain circumstances, including where minors may be present; and
The making of other minor and procedural amendments to remove unnecessary red tape, remove regulatory overlap and improve regulatory oversight.

Importantly, the first stage of reforms are not universal and vary depending on a range of factors including the location and safety record of your business, and the development consents that may apply. For example, a development consent may impose more restrictive requirements on your venue in relation to trading times, which must be complied with regardless of the removal of the lockout restriction of 1.30 am.
Need advice?
Do you currently own or operate, or plan to own or operate a licensed venue or premises? The liquor law reforms could provide major opportunities for your business.
Our planning and environment team can provide assistance in relation to all aspects of liquor laws, including specific advice in relation to the liquor law reforms, liquor licencing, and development consents.  Contact us now.
Author
Caitlin Polo, Lawyer
 
Sydney gets its mojo back: night life post lockout laws | Hunt & Hunt Lawyers

It’s always a question of priority when running a private business – every dollar is precious. If a dollar is to be re-invested, it needs to be well invested.
We often hear business owners wondering why they should invest in a Shareholders’ Agreement – “we get along really well”, “we’ve known each other a long time”, “I trust him or her” or “if we have a problem, we’ll just work it out commercially”. And that might well be right. But like any relationship breakdown, the circumstances and timing are often unpredictable and so is the response. Plus, money is involved (often a lot of money) so the stakes are high.
A good Shareholders’ Agreement sets out a map for running the business in the good times and resolving issues when things aren’t so rosy. Which decisions require unanimous or majority approval? What happens if the business needs additional capital for expansion? If the business owners can’t agree on the direction of the business, then what? If one business owner can’t work for an extended period, what will we do?
Agreeing a Shareholders’ Agreement when the parties have a good working relationship is much, much easier than at any other time!
So, why spend money on a Shareholders’ Agreement when you can buy one online or just use one that you’ve seen before or used in another business?
A good Shareholders’ Agreement for your business will never be exactly the same as one for any other business. Whilst all Shareholders’ Agreements have some level of similarity, the particular options for each of the issues are nearly endless. Your Shareholders’ Agreement needs to be carefully prepared to accommodate the needs of the particular business and the business owners.
The skill is not just reading what’s in the agreement, it’s the experience of knowing what is not in the agreement. Sometimes leaving something out is to your advantage. Sometimes it’s not. It’s also knowing what the other options might be.
As well as setting out mechanisms for resolving disputes between business owners whilst preserving business value, a Shareholders’ Agreement should also facilitate investment by new owners and exit by the current owners.
We have prepared many Shareholders’ Agreements and can offer a fixed price for preparation of your business’ Shareholders’ Agreement. If you want to have a confidential discussion about preparing a Shareholders’ Agreement or your business generally, we’d love to hear from you.
Shareholders’​ Agreement – why do I need one? | Hunt & Hunt Lawyers

As the Australian fire seasons become longer and more intense, everyone in the community must plan and prepare as best as possible. Property owners are reminded that the majority of structures are lost to ember attack, rather than the fire front itself. Ember attack can occur many kilometres and hours ahead of the fire front, especially under high wind conditions.
One of the ways to help reduce the risk of ember attack is to clear around buildings. Permissible clearing around buildings for bushfire protection is different in each state.
The New South Wales 10/50 Code
The 10/50 Vegetation Clearing Code of Practice (10/50 Code) was introduced on 1 August 2014 in response to the devastating 2013 bushfires in the Blue Mountains and may be part of your preparations for the fire season.
Can I clear the land around my house?
Under Part 4 Division 9 of the Rural Fires Act 1997 a property within a 10/50 Entitlement Clearing Area may remove, destruct (by any means other than by fire) or prune trees within 10 metres of a building containing habitable rooms and other vegetation within 50 metres of a building containing habitable rooms. Further, any branches within 10 metres of a residence may be pruned, even if the tree trunk is located more than 10 metres from the residence.
The 10/50 Code applies to builings containing habitable rooms, such as residential accommodation including dwellings, tourist and visitor accommodation, caravans installed or placed in caravan parks, and manufactured homes installed in manufactured home estates.
The 10/50 Code also applies to ‘high-risk facilities’ including childcare centres, schools and hospitals, and farm sheds.
Is my property in a 10/50 Clearing Entitlement Area?
To check if your property is located in a 10/50 Clearing Entitlement Area, visit the RFS online tool.
It is advised to check the tool on the day that you intend to remove any vegetation and keep a dated print screen and/or hardcopy of the map for future reference.
What is a tree v vegetation?
A tree is defined as:
a perennial woody plant that is three or more metres in height and that has one or more self-supporting trunks (at least one of which has a circumference at a height of 1.3 metres above ground of more than 0.3 metres) but it does not include a woody plant that is:

a shrub, which is a small, low growing, woody plant with multiple stems, or
a vine, which is a woody plant that depends on an erect substrate to grow on.

Who can remove trees and vegetation?
Trees and vegetation can only be cleared pursuant to the 10/50 Code with landowners’ consent. Tenants must obtain written approval from the landowner before clearing any vegetation or trees. Further, neighbouring or adjoining land must not be cleared without consent. If a single tree trunk spans more than one property, all landowners’ consent is required. It is recommended to document consent in writing.
Trees may also be removed if they are located within 10 metres of a building on adjoining property. In this instance written consent from the adjoining property owner must be gained prior to removal of the tree.
Important considerations
The following vegetation and trees cannot be cleared:

Mangroves, saltmarsh, Coastal Wetlands, Wetlands including Ramsar Wetlands,
Littoral Rainforest
Koala habitat
Land within 100 metres of the coastline or estuaries of NSW
Lord Howe Island
Critically Endangered Plants, Critical Habitat, and Critically Endangered Ecological Communities
National Parks and World Heritage areas
Local heritage items
Vegetation of high environmental significance identified as part of the bio-certification of the Sydney Region Growth Centres
An Aboriginal Place
Where the clearing would be inconsistent with any order, agreement, management plan, or other instrument that applies in relation to the land.

The latest copy of the 10/50 Vegetation Clearing Code of Practice for NSW, dated 4 September 2015, is available here.
As trees are important aspects of our communities and provide us with many benefits, it is suggested that trees and vegetation cleared could be replaced with more fire-retardant species and planted at a distance from habitable buildings.
The Victorian Bushfire Exemptions
Equivalent provisions to the NSW 10/50 Code of Practice were introduced from 18 November 2011 to all planning schemes across Victoria via clause 52.48 of the Victoria Planning Provisions, under the Planning and Environment Act 1987. Following the restructuring of the Victoria Planning Provisions and all planning schemes on 31 July 2018, the provisions (slightly amended) are now located in clause 52.12.
As a result, no planning permission is required (outside twenty specified inner and middle-ring local government areas in Greater Melbourne or within a Bushfire Management Overlay) before undertaking bushfire protection measures such as—

removal or lopping of vegetation (including trees) within 10 metres of an existing building used for accommodation where the building was constructed or approved before 10 September 2009;
removal or lopping of vegetation (other than trees) within 30 metres of an existing building used for accommodation where the building was constructed or approved before 10 September 2009;
removal or lopping of vegetation (including trees) within 4 metres either side (that is, a total width of 4 metres on the two sides of the boundary, considered together) of an existing boundary fence between properties in different ownership constructed before 10 September 2009;

Additionally, no planning permission is required before undertaking removal or lopping of vegetation (other than trees) within 50 metres of an existing building used for accommodation where the building was constructed, lawfully erected or approved before either 10 September 2009 or 18 November 2011 (the relevant date dependent on specific factual circumstances) and that is on land within a Bushfire Management Overlay, regardless of the local government area in which it is located.
Value of trees
As trees are important aspects of our communities and provide us with many benefits, it is suggested that trees and vegetation cleared could be replaced with more fire-retardant species and planted at a distance from habitable buildings.
Need advice?
Our Environment & Planning teams are able to guide landowners in relation to land clearing activities, whether under the 10/50 Code and other NSW legislation or under the Victoria Planning Provisions and related Victorian legislation, as well as provide assistance in relation to the development of land.
If you require advice, please don’t hesitate to get in touch.
Clearing vegetation for bushfire protection: an update for NSW and Victoria | Hunt & Hunt Lawyers

From 1 March 2020, new annualised salary clauses will be introduced into a number of modern awards.  These changes come about as part of the Fair Work Commission’s four-yearly review of the modern award regime.
There will be three model annualised salary clauses which replace the existing clauses that already appear in many modern awards or which will be inserted into other awards which did not previously have annualised salary clauses.
The new annualised salary model clauses will introduce new notification, record-keeping and wage reconciliation obligations on employers whose employees are covered by the relevant modern awards and who may choose to utilise these arrangements.
Common awards affected include the Clerks – Private Sector Award 2010, the Manufacturing and Associated Industries and Occupations Award 2010 and the Hospitality Award 2010.
Analysis
Since the new clauses are quite prescriptive, on a practical level, they may prove to be too unwieldy and too risky for employers to meaningfully utilise.
It is therefore reassuring that the Fair Work Commission has clearly stated that employers and employees are not obliged to rely on award annualised salary clauses and can continue to utilise common law contracts with “set-off” clauses.
The Commission stated:
[22]…an employer is able to pay an employee to whom an award applies an annualised salary arrangement that compensates for or “buys out” various identified award entitlements without engaging with any annualised wage arrangement clause in that award and without there needing to be an annualised wage arrangement clause in that award… The model clauses do not seek to invalidate or regulate any such contractual arrangement.
Common law contracts with “set-off” clauses allow employers to set flat salary arrangements which can reduce the administrative burden of reconciling complex hourly rates, overtime and penalty rates, allowances, leave loading and other obligations in modern awards.
These contracts with “set-off” clauses work by providing a rate of pay which is higher than the award base rate and including a term that allows the “over award” salary component to be applied against any other award entitlements which may be payable, such as overtime rates and allowances. The “over award” component must obviously be sufficient to do so. The clause must be carefully drafted to clearly identify relevant entitlements which can be “set off”.
Whilst “set-off” arrangements are useful, they are not “set and forget” clauses.  Awards commonly require that entitlements must be paid within the corresponding pay period or roster cycle.  So contractual salaries must be set at a level to account for variations in penalties and allowances, or else top up payments must be paid, when they are earned, to ensure award compliance.  As well as that, employers must consider how and whether it is necessary to make and keep records of working patterns to enable meaningful reconciliation each pay period.
The New Model Clauses
Employer Obligations Common to All Awards
Employers must:

record the award provisions which are satisfied by the annualised salary.
record the method by which the annualised salary has been calculated, including specification of each separate component of the annualised salary and any overtime or penalty assumptions used.
record the “outer limits” of ordinary hours which attract penalty rates and overtime hours which the employee may be required to work in a pay period or roster cycle without being entitled to an amount in excess of the annualised salary.
in any pay period or roster cycle, pay  an employee for any hours in excess of the identified outer limits.
each 12 months, or on termination of employment, calculate the remuneration payable under the award and compare it to the amount paid as an annualised salary, and make good any shortfall within 14 days.
keep a record of the start and finish times of work and any unpaid meal breaks.  Employees must sign or acknowledge the record as correct in writing each pay period or roster cycle.

First Model Clause
Applies to awards:

Banking, Finance and Insurance Award 2010
Clerks – Private Sector Award 2010
Contract Call Centres Award 2010
Hydrocarbons Industry (Upstream) Award 2010
Legal Services Award 2010
Mining Industry Award 2010
Oil Refining and Manufacturing Award 2010 (clerical employees only)
Salt Industry Award 2010
Telecommunications Services Award 2010
Water Industry Award 2010
Wool Storage, Sampling and Testing Award 2010

Effects:
This category includes modern awards for employees who work relatively stable hours.
They do not require an employee’s agreement to the introduction of an annualised salary arrangement.
Employers may calculate the annualised salary, but must do so with reference to specified assumptions about overtime/penalty rates.
Second Model Clause
Applies to awards:

Broadcasting and Recorded Entertainment Award 2010
Health Professionals Award 2010 (supervisory and managerial staff only)
Horticulture Award 2010
Local Government Industry Award 2010
Manufacturing and Associated Industries and Occupations Award 2010
Oil refining and Manufacturing Award 2010 (non-clerical employees)
Pastoral Award 2010
Pharmacy Industry Award 2010
Rail Industry Award 2010

Effects:
This category includes modern awards for employees who work highly variable hours and/or significant ordinary hours of work attracting penalty rates.
They require that an employer and an employee agree to the introduction of an annualised salary arrangement.
The agreement may be terminated on 12 months’ notice or at any time by written agreement.
Third Model Clause
Applies to awards:

Hospitality Award 2010 (non-managerial staff)
Marine Towage Award 2010 (non-managerial staff)
Restaurant Award 2010 (non-managerial staff)

Effects:
This category includes modern awards which provide that the annualised salary be an amount not less than a specified percentage above the minimum weekly wage set out in the modern award.
They will require that an employer and an employee agree to the introduction of an annualised salary arrangement.
The agreement may be terminated on 12 months’ notice or at any time by written agreement.
For more information about the changes being introduced in March 2020, or if this article has raised questions about the employment contracts that you utilise in your business, please contact David Thompson or Richard Scougall in our Employment Law team on 03 8602 9252.
Modern Award annualised salary changes will go live from March 2020 | Hunt & Hunt Lawyers

The principals and staff at Hunt & Hunt are deeply saddened by the bushfires that have caused massive destruction across parts of our country.  Our thoughts are with those who live and work in the devastated areas, and with the selfless volunteers who have been battling the fires and providing assistance to the communities affected.
Things you need to consider if you have been affected by the bushfires
Many legal issues can arise due to the impact of the bushfires.  Those issues can include:

the loss of identity documents, such as passports, drivers licences, Medicare cards, birth certificates and marriage certificates;
Wills, Powers of Attorney, Appointments of Medical Treatment Decision Maker and may have been destroyed;
the need to deal with the affairs of a person who has died during the bushfires;
Certificates of Title to property may have been destroyed;
trust deeds for family trusts or superannuation funds may have been destroyed;
insurance claims and disputes resulting from the loss of property;
tenancy issues, whether you are a landlord or a tenant; and
financial hardship from loss of income (whether due to unemployment or your business being damaged), debt, relocation and the cost of re-establishing yourself after the fires.

How we can help
Hunt & Hunt are able to provide pro bono legal assistance in some cases.
Our team are experienced in many areas and are able to provide advice concerning the majority of the above issues.
In particular, our wills and estates team and our property team are able to provide extensive advice and assistance in:

preparing replacement Wills, Powers of Attorney and Appointments of Medical Treatment Decision Maker;
the replacement of other identity documents;
dealing with state Civil and Administrative Tribunals for a person who no longer has the capacity to make their own decisions (if no Power of Attorney is in place or if it has been destroyed);
estate administration including Applications for Probate or Letters of Administration including obtaining Probate of a copy of a Will if necessary;
making an application to the Supreme Court for a court-ordered Will where a person no longer has capacity to make their own will and it has been destroyed;
issues relating to the loss of trust deeds and self-managed superannuation funds deeds, and if need be, an application to the Court for a new deed;
arranging for the replacement of Certificates of Title for land; and
all other general issues relating to real estate.

Every person’s circumstances will be different and the advice given here is of a general nature.  Please contact us to discuss how we can help and to obtain specific advice relevant to your circumstances.
Other ways to seek help
Victoria
In Victoria, assistance is available via Disaster Legal Help, whose partners are Victoria Legal Aid, the Federation of Community Legal Centres, Justice Connect, the Victoria Bar and the Law Institute of Victoria.
Many lawyers, including members of Hunt & Hunt, have registered to participate in the program.
You can access Disaster Legal Help by telephoning 1800 113 432 or by accessing their website:  www.disasterlegalhelp.org.au
New South Wales
In New South Wales, legal assistance is available via the Disaster Response Legal Service NSW, a partnership between Legal Aid NSW, community legal centres, the Law Society of NSW and the NSW Bar Association.
You can contact the Disaster Response Legal Service NSW hotline on 1800 801 529.
Lost identification documents can be replaced through Service NSW. Service NSW will have mobile centres servicing bushfire affected communities. Please check service.nsw.gov.au/campaign/mobile-service-centres for locations.
Bushfire Recovery and How We Can Help | Hunt & Hunt Lawyers

The role of good design in development in NSW was considered in a decision of the Land and Environment Court earlier this year. In Zammit v Inner West Council [2019] NSWLEC 1074 Commissioner Horton discussed how Better Placed, an overarching policy setting out the government’s position on design, as well as the object for good design in the Environmental Planning and Assessment Act (NSW) 1979 (EP&A Act) can be used to steer design.
In his decision, Commissioner Horton considered the emerging role of ‘good design’ in the context of an appeal against Council’s deemed refusal of a development application for alterations and additions to an existing dwelling. The dwelling was located in a heritage conservation area pursuant to the relevant Local Environmental Plan.
The Applicant relied on evidence of an urban designer to argue that the proposed development was an example of good design, and therefore it was consistent with the design object in s 1.3(g) of the EP&A Act, the objectives in Better Placed, and the objectives in Chapter A, Part 2 of the relevant development control plan.
Good Design Object
Section 1.3(g) was inserted into the objects of the EP&A Act in March 2018 together with a suite of other amendments. Section 1.3 of the EP&A Act now provides (emphasis added):
The objects of this Act are as follows:
              …
              (g) to promote good design and amenity of the built environment.
Section 4.15 (previous s 79C) of the EP&A Act provides relevant considerations for a consent authority when evaluating a development application. They are:
(a) the provisions of—

(i) any environmental planning instrument, and
(ii) any proposed instrument that is or has been the subject of public consultation under this Act and that has been notified to the consent authority (unless the Planning Secretary has notified the consent authority that the making of the proposed instrument has been deferred indefinitely or has not been approved), and
(iii) any development control plan, and
(iiia) any planning agreement that has been entered into under section 7.4, or any draft planning agreement that a developer has offered to enter into under section 7.4, and
(iv) the regulations (to the extent that they prescribe matters for the purposes of this paragraph),
(v)   (Repealed)

                            that apply to the land to which the development application relates
While good design may have been a relevant consideration for consent authorities pursuant to s 4.15 of the EP&A Act, the inclusion of an object for good design in the EP&A Act, has elevated the role of good design in the planning system, as the objects of the EP&A Act guide the interpretation of the considerations in s. 4.15[1].
Accordingly, consent authorities should now promote good design and the amenity of the built environment in all planning decisions. But what is good design? Are there any benchmarks?
Better Placed
In late 2017, the NSW Government Architect released Better Placed, an integrated and overarching design policy that provides a set of principles and guidance to support productivity, liveability and sustainability through good design.
Better Placed responds to concerns about impacts of poor design and recognises that good design adds value to a development. The policy establishes a baseline of what is expected to achieve good design across all projects in NSW, and that we should make the most of opportunities that will arise to incorporate good design in the development of new spaces and places.
Better Placed provides seven key objectives in the design of the built environment. They are:

Better fit – contextual, local and of its place
Better performance – sustainable, adaptable and durable
Better for community – inclusive, connected and diverse
Better for people – safe, comfortable and liveable
Better working – functional, efficient and fit for purpose
Better value – creating and adding value
Better look and feel – engaging, inviting and attractive

In addition to providing a benchmark for good design, Better Placed can also be used to guide specific projects where there is a gap in existing planning controls, for example in seniors housing and mixed-use developments.
Better Placed is supported by a number of other design guides, manuals and case studies.
At paragraph [50] of his decision, Commissioner Horton stated that Better Placed is:
“… clearly intended by its publisher, the Department of Planning and Environment, to be an adjunct document that provides principles and guidance for parties delivering on object (g) of the EPA Act including, presumably, to consent authorities when exercising their function as a decision-maker in relation to development applications, pursuant to s 4.15 of the EPA Act.”
Further, at paragraph [50], Commissioner Horton acknowledged that:
“… the value of Better Placed, and its associated design guides, manuals and case studies, lies in its potential to be a resource for those in the business of procuring design services, or planning to undertake development.”
How are developers affected?
The decision is important for developers as it demonstrates not only the elevation of good design in development in NSW, but crucially, how design quality is expected to be satisfied under the new objects of the EP&A Act.
Our planning and environment team can provide assistance in relation to all aspects of development applications and appeals, including specific advice in relation to design requirements.
 
[1] As per s. 33 of the Interpretation Act 1987 (NSW) objects of an Act should guide the interpretation of the other provisions of the Act.
 
Authors
Hasti Kalarostaghi, Partner
Jessica Baldwin, Senior Associate
Caitlin Polo, Lawyer
Greater Focus on Good Design | Hunt & Hunt Lawyers