It is important for tenants and landlords equally to be aware of how their commercial lease is renewed (or extended) and what their rights are under the lease and the Retail Leases Act 1994 (NSW) (“Act”).
Subject to the terms of the lease and what terms have been negotiated with the landlord, commercial leases will generally allow the tenant the right to renew the lease for a further term as agreed between the parties.
Landlords do not have to offer a renewal option when the relevant terms of exercising an option are not outlined in the lease. However, in light of the outbreak of Covid-19 pandemic, it is now more likely that both landlords and tenants look into a long-term commercial lease.
What is the process of renewal?
A retail lease must include a nominated period of time that the tenant will rent the retail property.
Some retail leases may also have an option to renew or extend the lease for a further term. There could be more than one further term.
The option will allow the tenant to demand another fixed term of the lease on the same terms as agreed in the existing lease. The renewed lease will have a new rent and period of extension depending on the agreement between the parties.
If the retail lease contains an option, the agreement must be negotiated between the landlord and the tenant prior to entering the lease.
Hence if a lease agreement does not contain a right of renewal, the landlord and tenant are not bound to renew the lease except if negotiated otherwise or where allowed under the Act.
If a tenant wishes to exercise the option, the tenant must notify the landlord in writing prior to the end of the option period as stated in the lease.
The landlord is not obliged to notify the tenant about the deadline to exercise the option. However, the landlord cannot stop the tenant from exercising the option if the option is already included in the lease.
How is the option exercised?
The commercial lease outlines the term related to how and when the option to renew is exercised.
The tenant is entitled to request a new lease, on the terms originally agreed between the landlord and the tenant.
However it should be noted that the tenant must have conformed with all the obligations under the term of the lease.
The Tenant must also send a written notice to the Landlord in relation to the exercise of the option in accordance with the terms of the requirement of a notice noted in the lease. The written notice should generally include the details of the landlord, the tenant, the premises and the lease.
The timing is crucial. It is important that the tenant exercise the option prior to the deadline nominated in the lease for exercising option. Delay in exercising the option may result in a requirement for negotiating a new lease.
Upon receipt of the tenant’s notice to exercise the option, the landlord will then prepare a formal extension of lease to be signed by both tenant and landlord.
This formal document is important and it should be drafted to outline all the necessary further terms required.
The new rent will generally be calculated in accordance to the current market rental value and as agreed by the parties. An independent valuation can also be prepared in absence of an agreement.
The terms of the renewal of lease can always be negotiated by experienced lawyers for tenants and landlords.
Consequences of not exercising an option of renewal?
Subject to the terms set out in a lease there could be potentially damaging consequences if the tenant refuses to exercise the option such as:

If a tenant continues to occupy the premises after the end of the lease term without notifying the landlord of exercising the option of renewal in accordance to the terms of the lease, the tenant will be on a periodic (for example month to month) lease most likely under the same terms as the expired lease.
However, the landlord will be entitled to increase the rent or alternatively either party may terminate the lease following a one-month notice.
The landlord may seek vacant possession following a notice to vacate the premises which usually only requires a 30-day notice.
The landlord may agree to a new lease however negotiate new terms that may not be favourable to the tenant.

What happens if the option is not exercised within the time limit?
If the tenant fails to comply with the deadline for exercising the option, the tenant may still be able to negotiate with the landlord as soon as possible seeking a new lease on the basis of same or similar terms of the old lease.
Often it is also beneficial for the landlord to allow the tenant to exercise the option out of time to avoid further costs and the uncertainty of finding a new tenant to rent the premises.
Conclusion
An option for an extension of the lease is useful when tenants are uncertain how long they want to continue in the premises after the first lease period. If a tenant is considering staying, it would be beneficial to negotiate this with the landlord before signing the lease. This will allow the tenant to lock in again on the same terms and to have the security of continuing business in the same premises.
Similarly, the Landlord may also be more flexible with accepting the renewal of the lease or negotiate more favourable terms to avoid the costs and hassle of finding new tenants.
Whether you are a tenant seeking to negotiate with the landlord and exercise an option of renewal of lease or whether you are a landlord who wish to consider the benefits and draft a renewal of lease, we can assist you by providing our legal services.
If you require assistance with reviewing the lease, preparing notice of renewal to the landlord or drafting a renewal of lease as a landlord of commercial premises, feel free to contact our office to speak with one of our friendly solicitors today. Call our office on 02 9251 3611 or email us at [email protected].
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Generally, the court is of the view that Final Court Orders are exactly what they are named after ‘Final’. Therefore the court is usually reluctant to easily entertain applications to ‘set aside’ a final court order. This includes Orders that are made by Consent (as agreed between the parents) or Orders made by a Judge.
However there are times when circumstances change or the best interests of the child would require that the final parenting orders be varied or set aside.
Some matters to consider for setting aside final parenting orders
There are several reasons a parent or legal of carer of a child who is concerned about the child’s care and welfare may seek to vary existing final parenting orders for the child. Some of the arguments in such circumstances are as follows:

When there is a compelling prima facie case that circumstances relevant to co-parenting have changed
If a party cannot reasonably comply with the Orders.
If the Orders are no longer practical.
The difficulties that had arisen in terms of compliance with the original orders.
If the Orders no longer reflect actual arrangements for a child.
When subsequent parenting plans made are inconsistent with the Orders.
Where one of the parents or carers repeatedly and without reasonable justification fails to comply with the existing Orders, without reasonable excuse.
If a parent wishes to move interstate or overseas with children.
If the existing Orders were made without all the relevant information being put before the Court.

In many cases, final parenting orders are made when children are young. Due to the family and children’s needs and best interests as children grow up, it may be that the orders made when children were young may not be suitable or applicable as children grow older and family circumstances change.
If there are final Parenting Orders, a party seeking to change or vary these orders must demonstrate to the Court there has been a “significant change in circumstances” from those at the time the Final Orders were made, to warrant the Court re-opening the proceedings.
It is important to note that pre-existing issues which were raised or could have been raised at the time of the original final orders will not be enough to constitute a significant change of circumstance
In Rice v Asplund some 30 years ago a ‘threshold test’ was considered that must be satisfied before a Court can look behind Final Orders to consider whether the sought after variation is in the child’s best interests. It was held that the court would review a Final Parenting Order, if it is satisfied that a substantial change in circumstances had occurred, or that important information had not been disclosed when the existing Orders were made. That threshold test was also used in a more recent case in 2017 – Searson v Searson [2017] FamCAFC 119. It was held that a parent seeking to have parenting orders set aside or varied must establish that there has been a significant change in circumstance.
Parties can also always change their Final Orders by agreement.
If a party seeks to vary Final Orders and no agreement can be reached between the parties, an application must be made to the Court to change or vary final Parenting Orders.
What warrants parenting orders to be set aside or varied highly relies on the factual circumstances of each case.
Conclusion
Courts have an interest in avoiding costly and lengthy litigation. Opening parenting matters that have already been dealt with in court on a final basis is often considered to the detriment of the children. Inevitably there are situations where changes in circumstances mean that final parenting orders may no longer be appropriate or in the best interests of the children.
In applying for setting aside or varying parenting orders, one needs to show that there has been a significant change of circumstances that makes a change necessary.
It is important to note that in changing and existing a court order, the new proposed orders must consider the best interests of the child or children.
The existing final parenting orders may only be varied by a Court, after a formal application has been made for both final orders made by consent or by a judge.
If you have obtained final parenting orders and you seek to vary them or if you are in the process of obtaining final parenting orders, it is important to receive necessary legal advice to minimise the costs and stress of re-litigation at a later date. Feel free to contact our office to speak with one of our friendly solicitors today. Call our office on 02 9251 3611 or email us at [email protected].
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Family provision claim often commences by persons who intend to challenge the will of a deceased in the event the deceased failed to adequately provide for their needs, proper maintenance or advancement in life.
The law of succession differs in each state. However generally, the eligible claimants of a family provision claim as outlined by state legislation are spouses, de-facto partners, children, former spouses. It could also be grandchildren, dependents of the deceased or member of the deceased’s household.
The question arises as to what could happen to the friend of the deceased in respect to claiming a benefit from the estate. The legislation??? NSW OR GENERALY does not give an inherent right to a friend of the deceased to make a family provision claim. Having said that it does not mean that the deceased’s friends are not eligible to the provision of a friend’s will.
Further detailed review will be needed to find specific criteria that would be enable a eligible person under legislation to benefit from the estate.
In NSW under the Succession Act 2006 (NSW) (the Act) a friend may be an eligible person to make a family provision claim in so far as he or she be able to show to the court that he or she is wholly or partially dependant on the deceased or was a member of the same household as the deceased at the time of the death.
Once the issue of eligibility is addressed and confirmed, there are several other evidential requirements that will ascertain the prospects of success of the friend’s family provision claim.
In Rakovich v Marszalek [2020] NSWSC 589 a friend was found an eligible person of the deceased under the Act. The deceased died intestate that is the deceased did not have a will at the time of his death.
The plaintiff was the deceased’s close friend for over 30 years and he was not financially well off.
Further the court was satisfied with the friend’s oral evidence in the witness box, the friend’s nature, duration and quality of the his relationship with the deceased, the cards sent to the friend by the deceased, the evidence of a neighbour who corroborated the evidence of the friend, the medical reports of the deceased referring to the good relationship of the friend with the deceased and the relationship of the friend’s family with the deceased up until the time of the death.
It is also important to note that other beneficiaries were distant nieces and nephews who on the evidence had never met the deceased, were living overseas and were rarely in communication with the deceased.
The court held that the provision made for the friend pursuant to the operation of the rules of intestacy is inadequate for his proper maintenance or advancement in life, orders that he receive, by way of provision, out of the estate of the deceased, a lump sum equating to 45 per cent of the net estate of the deceased.
Hence, if you are in doubt as to your rights in relation to the estate of a deceased, it would be best to leave the hard work to the professionals and seek legal advice.
For minimal costs we would be able to review the matter and provide you with initial advice as to your prospects of success.
Whether you are looking into challenging a will or defending the will of the deceased against a claim of family provision or whether you are an executor, beneficiary or an interested party in the estate of a deceased, one of our experienced solicitors will be able to assist you in assessing your case or answering your questions. Feel free to contact our office to speak with one of our friendly solicitors today. Call our office on 02 9251 3611 or email us at [email protected].
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In the State of New South Wales as it is in other parts of Australia, there are currently a number of restrictions on public gathering and movement mostly in line with the public health policies of the Government. The question that follows the placement of restrictions in New South Wales is whether the government has the power to enforce those restrictions under the legislation. Further, one of the confusing outcomes of the restrictions arising from the unprecedented pandemic outbreak is where the line is drawn between what is allowed and what is illegal to do during the COVID-19 pandemic.
Government Powers & COVID-19 Restrictions
The Public Health Act 2010 (NSW) (“the Act”) addresses the powers of the government in relation to the restrictions and also outlines the outcome of the breach of orders made under the Act.
Under the Act, the NSW Government has the power to deal with public health risks in general in circumstance that a situation causes a risk to public health. The Government’s exercise of such powers remains lawful irrespective of whether or not a state of emergency is declared.Section 7 of the Act provides that where the health minister considers on reasonable grounds that a situation has arisen that is, or is likely to be, a risk to public health, the minister may take such action or give such directions that are necessary to deal with the risk and its possible consequences.
In line with a rather broad Public Health Powers, the NSW Health Minister will be able to make directions necessary in line with reducing or removing the risk of COVID-19, segregating and isolating people within the State of NSW and to prevent or give on a conditional basis access to any part of NSW.
There are however time restrictions in relation to such Orders made under the Public Health Powers which deem them expired after 90 days unless the orders are withdrawn or otherwise made to expire sooner.
Criminal Offence Penalties and COVID-19
The Act also empowers the state officials to make a range of enforceable directions and orders with a view to dealing with public health risks. These restrictions are enforceable under the Public Health (COVID-19 Restrictions on Gathering and Movement) Order 2020, effective 31 March 2020, and the Public Health (COVID-19 Restrictions on Gathering and Movement) Amendment Order 2020, effective 4 April 2020.
Breach of such orders made under the Act is a criminal offence and attracts heavy penalties.
Section 10 of the Act states that a person who, without reasonable excuse, fails to comply with such a direction faces a maximum penalty of 6 months in prison and/or a fine of 100 penalty units which is currently $11,000.
The Act further provides for any continued failure to comply with the directions to be punishable by a fine of 50 penalty units, or $5,500, for each day the offence continues. Under the Act, the maximum penalty for companies and legal entities is 500 penalty units, or $55,000, and 250 penalty units, or $27, 500 for each day the offence continues.
Further, NSW law enforcement authorities are empowered to issue criminal infringement notices. Hence NSW Police has the power to issue ‘on-the-spot’ penalty notices of up to $1000 to individuals and up to $5000 to businesses. Receiving these penalty notices does not by itself result in criminal record and the recipient of the fine may elect to take the matter to court.
Importantly, if the matter is taken to court and in circumstances that the Court decides that the offence is proved to have occurred, the maximum penalties outlined above will be enforced and the finding of guilt will lead to a criminal record. It is very important to note that in such circumstances an experienced lawyer’s services would be required to persuade the Court with the exceptions available to the recipient of penalty notice with a view to seek an order from the court for section 10 dismissal or a conditional release order without conviction.
There are a range of restrictions now in place on movements and gatherings and social distancing and public conducts which will affect your day to day routine whether it is leaving home without a reasonable excuse or being in company of others, or leaving the state of your residence.
It is crucial that you are familiar with the current and fast-developing rules and ascertain that your actions will not bring unwanted and disappointing consequences at these already difficult and stressful times. Please contact one of our efficient and helpful solicitors at Pavuk legal for consultation and advice.
 
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Force Majeure was for a long time a rather boring and often short precedent paragraph in contracts that referred to the unprecedented forces that affected the performance of a contract. In light of the outbreak of COVID-19 pandemic, substantial consideration should be given to the force majeure clause both at time of drafting a commercial contract and when the contract is being interpreted for the purpose of occurrence of force majeure events.
It remains to consider whether the disruption of the pandemic will instigate parties to a contract to consider how the unprecedented situation will alter or discharge their contractual obligations.
What is Force Majeure?
Force Majeure sometimes referred to as “act of God” is defined to be an occurrence not anticipated by either party of the contract and that is exclusively the consequence of natural causes.
In Nugent v Smith [1876] 1 CPD 423 “act of God” was interpreted to be “elementary forces of nature unconnected with the agency of man or other cause“.
There are a number of cases historically that interpret some illnesses to be a considered as an “act of God”.
Frustration of Contract
Under the common law, if a party voluntarily enters into a contract, that party must perform all its obligations that are outlined under the terms of the contract, even in the circumstances that performance is impossible. Failure to perform the obligations may render the non-performing party liable to compensate the other party or parties in the contract.
The application of the doctrine of frustration of contract is that in fact the performance of the contract becomes impossible through neither party’s fault.
Legally, once a contract is frustrated in this manner, it follows that the contract automatically terminates at the time of frustration.
Force Majeure and COVID-19
The wording of the clause of Force Majeure in contracts are usually the starting point if not the main source of considering whether Force Majeure covers COVID-19. The wording may refer to particular illnesses such as viral, pandemic or epidemic diseases. There could also be references to the government regulatory and legislative actions, economic emergency or national emergency.
For example an obligation of an artist under the contract to perform in an event may not be prohibited by COVID-19 virus per se, however under the current circumstances of lockdown and social distancing regulations it will be prohibited by way of the restrictions placed by the Government.
In the current circumstances arising from the outbreak of COVID-19 pandemic, there are several issues to be considered if there is the possibility of non-performance of the contract. For example in a construction contract there could be issues of delay, shortage of material, shortage of skilled tradesperson and government restrictions such as social distancing that may require a limited number of tradespersons on the site at any period of time which may incur inherent risks for the continuation of work at a construction site.
The parties should also consider and seek legal advice in relation to the relevant regulations and legislations now in place for COVID-19 in different states.
It remains to be argued whether COVID -19 fits into the concept of consequences of natural causes. On one hand the circumstances of force majeure could be considered as the outcome of an illness which is the consequence of human to human infection by COVID-19. Alternatively, the disrupting outcome may be the result of government’s regulations and legislations including the effect on economy rather than the virus itself.
Another issue of significance is the force majeure clause in the contract. A substantial consideration should be given to the specific wording of the Force Majeure Clauses. This will also cover obligations that are impossible to be performed, or alternatively can be performed but will be costly and inefficient.
It is imperative that parties pay more attention to the Force Majeure Clause in future with a view of addressing all the unprecedented occurrences that the parties wish to cover such as the detailed obligations of the parties to be outlined under force majeure circumstances, the right to terminate the contract without incurring penalty in the event the force majeure event continues for a nominated period of time and the payments that ordinarily are payable under the terms of the contract to be temporarily suspended until such time when the force majeure event terminates and the parties are able to continue their obligations under the contract.
The clause should also make reference to a reasonable period of notice that the party or parties affected by the force majeure event are required to provide.
The preparation and interpretation of a force majeure clause in a commercial contract is crucial to the sustainability of the contract and the minimisation of damages and costs incurred by the parties to the contract.
If you have any queries in relation to the terms of your contract or require a contract to be prepared for your business, please seek legal advice from one of the efficient solicitors of Pavuk Legal.
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The National Cabinet has issued its own principles regarding commercial leases.
The National Cabinet has agreed that a mandatory code of conduct will be developed and guided by principles. The Code will then be legislated and regulated in each State and Territory Governments.
The aim is to legislate a code of conduct that requires landlords to reduce rent proportional to tenants’ trading reduction through a combination of waivers of rent and deferrals of rent.
The code will apply to tenancies where the landlord or the tenant are eligible for the JobKeeper program and have a turnover of $50 million or less.
It is important to note that Leasing is a state matter and implementation of the National Principles or any ‘model rules’ will need to be through state legislation.
In the state of NSW the COVID-19 (Emergency Measures) Act 2020 (NSW) has already been enacted and was commenced on 25 March 2020. It is stated that the Act amends legislation across a range of fields and provides specific regulation making powers for the purposes of responding to the public health emergency caused by the COVID-19 pandemic.
Further, the Act amends the Retail Leases Act 1994 (NSW) and the Residential Tenancies Act 2019 (NSW) to allow regulations to be made under those Acts and any other ‘relevant Act’ providing for the following matters:

prohibiting the recovery of possession of premises by a landlord from a tenant under the relevant Act in particular circumstances;
prohibiting the termination of a lease by a landlord under the relevant Act in particular circumstances;
regulating or preventing the exercise or enforcement of another right of a landlord under the relevant Act or an agreement relating to the premises or land in particular circumstances; and
exempting a tenant from the operation of a provision of the relevant Act or any agreement relating to the leasing or licensing of premises or land.

Coronovirus Moratorium on Eviction
Principle 1 of the National Principles refers to “a short term, temporary moratorium on eviction for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to coronavirus”.
Currently it is not known to what extent Principle 1 will be enacted by the states is unknown. However it is likely that the states make legislation to prohibit the recovery of possession of premises or the termination of a lease by a landlord during the moratorium period in the event the covenant to pay rent is breached.
There are a lot of grey areas and uncertainties in this respect. For example It is not clear whether other reliefs available to landlords will also be restricted, such as whether the landlord will be entitled to recover default interest, calling up bank guarantees or whether enforcement action against guarantors will be prohibited.
Further it is not clear from the structure of Principle 1 as to whether during the Moratorium period it is essential that rent continue to be paid. However there are not covenants included that waives the obligation to pay rent.
Mediation
The code is to foreshadow a binding mediation process run by the states and territories for the code.
It is important to note that National Principles are not law and it is essential that tenants be advised not to terminate a lease on the grounds of financial hardship.
Rather the parties to a tenancy should be encouraged to negotiate and mediate on a case by case basis using the National Principles as a guide with a view to come to an agreement in relation to the important issues of the dispute such as the amount of the rent.
The difficulty with the Moratorium of Eviction is that if landlord and tenants fail to agree on arrangements to either waiver, partially or absolutely, the rent or alternatively defer the rent, then it is fair to say that it is unlikely that the moratorium on eviction/termination be of utility in addressing the dispute and hardships existing between landlords and tenants. In effect, there will be no restriction for the landlords to terminate leases after moratorium if the rent remains in arrears.
For this reason, we suggest landlords and tenants negotiate and with a view to consider the case by case circumstances and either provide an extended period of time to repay all rental arrears or alternatively waive the amount of rent which has accrued during the Coronavirus Moratorium period.
The solicitors at Pavuk Legal are here to assist landlords and tenants with the process of mediation and any issues in relation to commercial and residential tenancies.
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The outbreak of Coronavirus and the subsequent widespread lockdown certainly affects different aspects of life. As people navigate through this unprecedented crisis, more people are working from home, more students are home schooling and in general people are staying home to follow the principles of social distancing.
Whilst it is an admirable practice to fight Coronavirus, people may succumb to another threatening virus while living under the same roof for a prolonged period of time with other members of the family.
There is a growing concern that COVID-19 lockdown measures, job losses, financial hardship, isolation, working from home and cabin fever may escalate abuse in family homes across Australia.
Attorney General of NSW stated that since the lockdown, the searches about domestic violence on Google increased by 75%.
It is important to remember that irrespective of the hardships and difficult situations in our surrounding environment, it is not allowed to lash out and it is not allowed to abuse the more vulnerable members of the household in particular and the society in general.
Domestic Violence
Often there is the misapprehension that domestic violence only impacts on women and children. Whilst the victims of the domestic violence are generally the vulnerable members of a household, it should be noted that domestic violence can victimise anyone from all ages, cultures and religion backgrounds – including men, women, children and members of LGBTIQ community.
Unfortunately, the rate of domestic violence against women and children is still high in Australia. The Department of Communities and Justices states that research shows there is a clear link between men’s violence against women and gender inequality.
The important things to consider by victims of domestic violence is to nip the violence in the bud. The best way to do it is not to put up with it, stop making excuses for it to and ultimately stand up to it by reporting it to the Police and seek professional and legal advice. The safety of the family unit depends on that.
Child Abuse
It is said that in many ways abuse is like a deadly virus.
Abuse is a communicable disease, one that gets transferred from one generation to the next. It can turn deadly at any time.
The children are usually the typical victims of abuse.
It is likely that the children who are subjected to prolong sexual, physical or emotional abuse, they themselves grow up to continue on the path of their predators and become abusers.
Youth Law Australia defines child abuse as any action towards a young person under 18 years of age that harms or puts at risk their physical, psychological or emotional health or development.
It is necessary that child abuse be reported to Police or Child Protection Helpline.
After a child abuse is reported, the authorities can remove the child to a safe place, seek a special court order to stop the predator abusing the child and they can also assist by providing a plan to the family to keep them safe from the predator.
Conclusion
The best way to deal with abuse and violence of any kink is for the victim to report it and put a stop to it.
Please immediately contact Police if you are emotionally, physically or sexually abused of if you fear for your wellbeing and the wellbeing of your family members. For abuse of children, please also contact Child Protection Helpline.
It is important to then seek legal advice.
Whether you require criminal law advice, family law advice, property advice and/or parenting advice, we are here to help.
Please contact one of the efficient solicitors of Pavuk Legal.
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Circumstances have changed due to the outbreak of coronavirus. Our health system, our social interactions, and our lifestyles in general have changed. However the most important changes that are affecting our economy is the changes surrounding people’s jobs and uncertainty of their employment status.
The new situation may be devastating for the employees but may also be confusing and daunting for employers who are concerned about the survival of their business and their legal responsibilities towards their employees.
Working from Home
Many small and big business have closed their main offices or alternatively reduced the number of employees at work offices and the employees are fully or predominantly working from home.
Obviously working from home is not an option for all business and many employers are left with no option but to stand down their employees or seek that the employees take annual leave or leave without pay.
There are several options that employers may consider which we will look into it from a legal point of view:
Dismissal of Employees
Employers may instruct their employees to seek annual leave, or leave without pay on a temporary basis until their business picks up after the COVID-19 pandemic is over.
However due to the uncertainties surrounding the duration of the pandemic it is not clear how long employers would be able to use this strategy to keep the employees on the book.
Under the Fair Work Act 2009, the employer may stand down an employee during a period in which the employee cannot usefully be employed. However the standing down is acceptable under circumstances such as an industrial action (other than industrial action organised or engaged in by the employer), a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown, or a stoppage of work for any cause for which the employer cannot reasonably be held responsible.
Under these circumstances it should be established that there is no useful work for the employee to perform and this exercise requires due consideration and should be decided based on the factual circumstances of each case.
Before making any such decision, the employer should also give substantial weight to the employment agreement and any other contracts the employer may have with the employee.
A stand down may have serious consequences for an employee who may potentially lose their livelihood and income for an uncertain period of time. Hence it is a decision for the employer which requires considering the relevant regulations and agreements to avoid any future lawsuits when all the dust settles.
Redundancy
Whilst redundancy may be a safer option for employees and definitely a more economically beneficial outcome for the employee compared to the “stand down” option, it may not be considered viable for an employer whose business is already suffering substantial loss.
Therefore it would be beneficial for both employers and employees to consider all the facts and options and come to a mutual agreement with outcomes such as temporary reduced salary, part paid leave, or reallocations of the jobs to the employees on a temporary basis to keep them on the payroll.
Conclusion
At the end of the day the government and authorities such as FairWork Ombudsman encourage employees and employers to work together to find the most beneficial and workable solutions that suit their individual workplaces and circumstances.
To do so it is very important that employers and employees seek legal advice and assistance to provide the best tailor-made solution for each individual business.
Please do not hesitate to contact one of our efficient solicitors at Pavuk Legal for advice and assistance.
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To our clients and Colleagues
In light of the unprecedented developments arising out of the spread of Coronavirus in Australia and overseas, the management of Pavuk Legal is regularly monitoring the guidelines and recommendations with a view to protect the health and the wellbeing of our staff and our clients.
We are taking immediate steps to avoid significant interruptions to day to day carriage of our matters. As such we will continue our work remotely if required.
We will cancel or postpone all interstate travel that is not essential. Otherwise, all our services will remain in place, with minimum interruption to our clients.
We wish to remind you that as we already have in place with our clients overseas, we have the facilities to have virtual meetings with our clients and other parties. We will continue conferring with our clients via a range of technological communications including video conferencing, audio communications and email correspondence.
We continue to be available via our phone numbers.
We will ask all our colleagues to now send us documents and correspondence via email only.
To our clients who do not have the facility to scan documents and/or email us please call us and we will assist you.
We are expecting that there will be further developments which would require changes to our policy and flow of work. We are committed to updating our website regularly and keeping regular communications with our clients.
We will continue to take new enquiries from clients with new cases and we understand that some matters require urgent and prompt attention. We will allow additional services in a timely manner for those matters.
We wish to thank you for your continuous trust in us and from our office to your offices and homes we wish you health and safety in these difficult times.
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On 27 February 2020, the Prime Minister Scott Morrison announced a Coronavirus Emergency Response Plan in respect to preparing for the Covid-19 Pandemic. The Department of Health has noted that the illness can cause the common cold to more severe diseases.
As Covid-19 continues to spread more rapidly around the globe, governments world-wide have continued to implement travel bans and trade restrictions. It is expected that these changes will impact market conditions and value of collateral in Australia.
The markets are set to remain volatile for the short to medium terms given the developments with Covid-19 internationally. With changes to the market and value of collateral, it is possible that you will need to make margin calls or restructure debt arrangements and obtain Financial Advice and there will be significant pressure during these difficult and challenging times.
In such circumstances, you will need to be prepared and also aware of the key risks in relation to these changes and the possible unprecedented steps you and/or your Lenders and Fund Manager will need to take, at such a vulnerable time.
Below is an outline of the key risks that may arise, and the proposed measures required to mitigate these risks.

Time Restraints

Whilst Financial Advisors, Lenders or Fund Managers will be conducting their due diligence through market research and market analysis, the value of collateral will begin to decline rapidly with the spread of Covid-19.
It is possible that in such circumstances, a lender may be inclined to give limited time to make a margin call or restructure and refinance of a loan, before they pursue further action.

Contractual Rights and Obligations

When acting quickly, things often go wrong. It is necessary that teams, lenders and borrowers are aware of their contractual rights and obligations under a margin loan or loan arrangements.
In times of a pandemic, it is crucial that not only stakeholders act fast, but also uphold their contractual rights and obligations to ensure that they see their end through.
It is important that both parties, respect and abide by the clauses in the contract, even if it is not in their favour. For example, if notice is required in writing, it is not sufficient for a Relationship Manager to make a margin call by telephone, processes need to be followed and verification of follow up needs to occur.
Despite the evolving pandemic, or any other turbulent time, the contract must be upheld. Therefore, it is beneficial to review and ensure that you can perform the contract you are entering into.

Timing and Liquidation

If you are unable to meet a margin call, and the assets have already been liquidated in your account to repay the debt, you’ll find that the remaining balance owned becomes an unsecured debt that will now be in default. Lenders will do whatever is necessary to bring the account back up to the minimum value. Therefore, it is important to not take any steps to liquidate until time to meet the margin call has passed. This is to ensure that you have not defaulted on an unsecured debt.

Documenting Calls for Action

It is obvious that in challenging times, lenders and borrowers may need to act quickly and make unprecedented changes, to ensure that the contract can be fulfilled. In this respect, it is highly recommended that any steps you or the borrower may need to take are not only reasonable and in good faith but are also documented appropriately.
Documenting any unprecedented calls for action will protect you in the long run.

Negotiations with the lender

It is imperative that when negotiating with the lender, you do so directly with the lender and not other team members to ensure that no conflicting messages are being delivered. It is also important, that anything you agree to is put into writing and in line with your contractual rights and does not impose further obligations on you which you cannot fulfill.

Other Obligations

Further to the above, it is important that you understand your wider obligations applicable when dealing with margin loans and calls. It is necessary to ensure that any terms of the agreement do not impede your rights and are not unfair on you. Further, it is important to understand the lenders responsible lending requirements pursuant to the Corporations Legislation Amendments (Financial Services Modernisation) Act 2010 and the broader National Consumer Credit Regulation; as well as Financial Advice under the Corporations Act 2001.

Complaints / Seeking further Advice

Lastly, familiarise yourself with the ASIC complaints system and the Australian Financial Complaints Authority (AFCA) to ensure that if need be, you are well equipped with the tools and information needed to pursue a complaint. However, before you do so, you may need to seek legal advice in respect to your contractual rights and obligations.
If you are considering pursuing a complaint, one of our experienced solicitors will be able to assist you in understanding your contractual rights and obligations. Feel free to contact our office on 02 9251 3611 or email us at [email protected].
The post Dealing with Borrowers and Financial Advisors in Challenging Times appeared first on Pavuk Legal.

Deciding the right time to sell your business is a tricky exercise. Deciding to sell your business during tough times, and for high value, is even trickier yet.
Business owners need to carefully consider what has to be done to show potential purchasers that their business is worth the buy – even in the face of declining confidence in the market or economic downturn.
While each business is has its own unique features, strengths, weaknesses and risks, there are still key strategies that business owners can do to make their business more appealing to potential buyers.
What follows is an overview of general key legal aspects that can be done to increase your prospects of selling your business for high value.

Review Your Readiness for Sale

Your business has to be sale ready before you can sell it for profit and walk away. Issues to make sure your business is more desirable for sale include but are not limited to:

Making sure your business is not too reliant on you to operate (see 4 below);
Addressing any liabilities or risk issues i.e. for poorly manufactured products;
Increasing the scalability of your business (see 5 below);
Making sure your assets are transferable;
Making sure your business is litigation free;
Consulting with your professional advisers about any taxation penalties or compliance problems;
Reducing any long-term debt obligations.

Do Your Own Due Diligence

In preparation for your potential buyers due diligence enquiries and before they send you their due diligence check lists, you should undertake your own legal, financial and, if required, technical due diligence of your business and prepare necessary documentation for review by your potential buyers.
Due diligence will reveal what needs to be fixed. For example, there may be old Personal Property Securities Register (PPSR) charges registered by your financiers over the whole of your company’s assets, even where there is no debt owed to them anymore. Such PPSR charges often stay on the register until you specifically ask your financiers to remove them.
Furthermore, there may be structural changes, asset transfers, dividend payments and legal documents that you need to complete before your business is ready for sale.

Protect Your Business Intellectual Property

Ensuring you have a strong brand with a history of a good and continuously improving reputation among existing and potential customers is a strong indication of your business’ value.
Ensuring your brand has been correctly registered as a trademark will only strengthen the value of your business. This involves ensuring that all applicable ongoing fees for the trademark registration are paid to continue registration.
Furthermore, if your business uses other intellectual property, e.g. a design, invention, plant variety, website, software programs, other copyrighted materials or work, consider what registrations or other steps you have taken or should take to protect your business intellectual property.

Reduce Key Person Risk

If your business is dependent on your skills and ‘know how’ or those of its director or the other few key staff members, potential buyers may be doubtful that they will be able to continue to operate the business on completion or in the near future in your absence.
Fully documented business processes and procedures that enable a business to be run by the other or new personnel will reduce this risk for potential buyers and make your business a more enticing buy.
Furthermore, consider whether you need to retain the existing key person or staff by offering them to join an employee share option plan or under alternative arrangements.
If you are yourself a key person of your business, you may want to consider ‘growing’ your successor within the business who can step in and replace you as its key person for the new owners. Businesses that can operate independently of their owners are much more attractive and perceived as passive income producing assets by potential buyers.

Increase Scalability

A business that is highly scalable or has potential to develop into a highly scalable business, e.g. an IT company developing software products and selling them online as opposite to a merely software outsourcing company working with their customers on a project basis, can be a very attractive business to invest in.
Ensure that your business holds all intellectual property rights in respect to its products and assets and their development by employees or contractors to protect your intellectual property and confidential information.

Maintain Up-to-date Contracts with a Variety of Customers

Generally, overdependence of business revenue on any single customer is an instant alert to a potential buyer and can result in a significant decrease of the sale price.
In this respect, consider whether all the contracts with long standing customers are being correctly renewed or extended and strategies to expand on your client market.

Have Precedent Documents and Repeat Customers

If your business is not based on one-off sales but has many repeat customers ensuring recurring revenue, this will be much more attractive to potential buyers. Consider what precedent engagement letters, contract documents and other documentation you have developed and whether you keep them up-to-date to ensure continuous sales and increases to your recurring revenue.

Avoid Relying on a Single Supplier and Service Provider

If your business relies on a single third-party supplier or service provider for the main products or critical services, with no feasible alternatives, this will raise concerns and result in close due diligence review by potential buyers. Consider whether you have correctly executed and sufficient contract documentation in place with your critical supplier or service provider and if there is any need for improvement.
Our Services
Pavuk Legal can provide you with legal advice and assistance in respect of the proposed sale of your business, including due diligence review, restructure, assets transfer, corporate and other changes, preparation of the heads of terms and contract documentation, negotiations with the proposed buyer, payments and other completion requirements.
If you are considering selling or buying a business, one of our experienced solicitors will be able to assist you. Feel free to contact our office on 02 9251 3611 or email us at [email protected].
 
The post Preparing Your Business for Sale at High Value in Tough Times appeared first on Pavuk Legal.

Keys to a successful mediation
Often a successful mediation is the outcome of the proper management of the mediation process by the lawyers. A lawyer plays a substantial role in providing proper advice to client, providing a comprehensive brief to the mediator, acting in good faith before and during the mediation and when all parties come to an agreement formulating an offer of settlement. To achieve a successful outcome your lawyer will commence the process of mediation way before the day of mediation.
A lawyer’s primary task in respect of the client is to prepare the client for the mediation. This is a process that requires proper advice to the client in relation to the issues of risk analysis, the best interests of the client, the nature of mediation, the strategies to be implemented in relation to the mediation and the reasonable outcome that the mediation may bring for the client.
The lawyer should help the client understand that the nature of the mediation is not adversarial. The mediation is in fact an exercise to resolve the parties’ dispute amicably, expeditiously and with minimum costs incurred.
The lawyer must also prepare the mediator. It is extremely helpful when the mediator appointed is familiar with the subject of the dispute. The mediator’s skill and experience along with any other required qualification depending on the subject of the mediation should all be considered at the time of appointing a suitable mediator. The mediator should then be properly and comprehensively briefed of the issues of dispute and the expectations of the parties from the mediation.
Throughout the process of mediation, the lawyer should be acting in good faith and abide with the lawyer’s duties and proper conduct. If the lawyer suspects foul play, it should be brought to the attention of the mediator.
Another important and rather technical role of the lawyer is to formulate a suitable and practicable legal offer of settlement. The terms of an offer of settlement should not be misleading or ambiguous. It would be helpful if a draft copy of the terms of agreement is prepared prior to the mediation in anticipation of a settlement.
Every step of the mediation including the negotiations, agreements and statements be it written or oral is subject to strict confidentiality. It is crucial that your lawyer understands and honours the terms of confidentiality and provides you advice on how the confidentiality terms work and what are the exceptions to the rule. Your lawyer should help you understand the nature of the “without prejudice” negotiations.
It is important that your lawyer guide you through every step of mediation and has the negotiation skills that help achieve the best outcome for you.
One of our experienced solicitors will be able to assist you in assessing your case or answering your questions in relation to mediation and dispute resolution process. Feel free to contact our office to speak with one of our friendly solicitors today. Call our office on 02 9251 3611 or email us at [email protected].
The post Why Litigate When You can Mediate – Part 2 appeared first on Pavuk Legal.

Benefits of Mediation
Generally, mediation is a process where parties attempt to negotiate in the presence of a mediator with a view to resolve the legal dispute. There are several considerable benefits to this process:

The most obvious and important benefit of a successful mediation is that the legal costs will be reduced in comparison with running a litigation matter in court.
The nature of mediation is not adversarial.
The parties at the mediation will be benefit from the support of a mediator who will be neutral and aim to achieve a mutually beneficial outcome at the mediation.
At the mediation the parties will have a better understanding of their respective expectations and will be able to work towards achieving a mutually accepted resolution whereas in court the outcome is more likely unpredictable.
During the process of mediation, the parties may consider each party’s legal costs and reach a resolution that would be best accommodating in relation to the legal costs. However, even in case of a successful litigation, the issue of the costs will be considered separately by the courts.
The process of mediation is significantly quicker than the outcome of litigation in court.
The stress and at time traumatising effect that a court proceeding may have on individuals could be avoided in the process of mediation.
The mediation is in a more relaxed and comfortable atmosphere where each party has its own separate room with their own legal representatives.
The parties to the mediation have a control over the resolution of the dispute and they can decide on the issues to be raised during negotiations and other issues that could be agreed on without admission.
The negotiations and process of the mediation are confidential, and the records will not be kept. This will allow the parties to engage more honestly and voluntarily in the negotiations.
Courts will generally welcome this process as it will reduce the courts’ workload.
If a resolution is not achieved during the mediation and the matter proceeds in court, the issues of dispute are most likely identified at the mediation and therefore the time and costs spent in court may be considerably reduced.

There are several benefits in attempting to resolve a matter through mediation. As mentioned by Chief Justice JJ Spigelman, Chief Justice of the Supreme Court of NSW:
“The success of mediation cannot be measured merely by savings in money and time. The opportunity of achieving participant satisfaction, early resolution and just outcomes are relevant and important reasons for referring matters to mediation.
One of our experienced solicitors will be able to assist you in assessing your case or answering your questions in relation to mediation and dispute resolution process. Feel free to contact our office to speak with one of our friendly solicitors today. Call our office on 02 9251 3611 or email us at [email protected].
The post Why Litigate When We can Mediate – Part 1 appeared first on Pavuk Legal.

They say that “sometimes the poorest man leaves his children the richest inheritance”. But is this adequate?
One of the grounds that an eligible person may contest a deceased person’s will is that they have not been given adequate provision from the estate for their proper maintenance, education and advancement in life.
This bears the question – how much is ‘adequate’?
To assess whether the provision is adequate the Court will consider a number of factors which are appropriate to the claimant’s case. The Court will also consider what the proper level of maintenance, education and advancement in life is for that Clamant.
Some of the factors that will be considered by the Court are the claimant’s financial position, the size and nature of the deceased’s estate, the relationship between the claimant and the deceased and also the relationship between the deceased and any other person who may have legitimate claims on the deceased’s estate.
Hence even if the Court does consider that the claimant has not been given adequate provision for proper maintenance, the Court may still refuse to make an order for further provisions from the estate for that claimant. For example, it may be that there are no assets or not sufficient assets in the estate to make it reasonable for the Court to release further provisions to the claimant. Similarly if there are several beneficiaries under the will, if the size of the estate is not proportionate to the number of beneficiaries, the Court will be reluctant to give even more of the estate to the claimant.
There is also the question of what constitutes ‘proper’ maintenance.
The High Court considered that the word ‘proper’ “…implies something beyond mere dollars and cents”. The High Court’s definition is that “…The use of the word “proper” means that attention may be given, in deciding whether adequate provision has been made, to such matters as what use to be called the “station in life” of the parties and the expectations to which that has given rise, in other words, reciprocal claims and duties based upon how the parties lived and might reasonably expect to have lived in the future.”
Accordingly, the factual circumstances of each case is very important when a claimant wishes to bring a claim on the ground of inadequate provision made by the deceased in the will for the claimant.
One of our experienced solicitors will be able to assist you in assessing your case or answering your questions in relation to Wills and Estates matters. Feel free to contact our office to speak with one of our friendly solicitors today. Call our office on 02 9251 3611 or email us at [email protected].
The post Estate Litigation appeared first on Pavuk Legal.

Often one party to a separation may wish to move overseas.
One of the arising issues to consider during an international divorce is which country the children will call their place of residence.
The fears and complexities associated with separation of this kind may be exacerbated when one parent abducts the child from their place of residence without the consent of the other parent.
In a multicultural country such as Australia with a possibility of having multinational passports, the parents can easily travel with children.
When there is a dispute between the parents in relation to the parenting, generally the parents should not take the child out of Australia until parenting orders are made or alternatively with leave of court.
If a child is taken overseas by one parent without the consent of the other parent, the non-consenting parent will have an avenue to seek that the child be brought back to Australia.
Time is of the essence in these matters. The longer the child is kept in the new country, the harder it is to obtain a court order to have them brought back to Australia.
The best option would be that the parents keep trying to reach an agreement to voluntarily return the child back to Australia.
However, when the destination country is not one of the countries committed to the Hague Convention, the chances of bringing them back to Australia are much slimmer.
Hence it is very important to act promptly where there are risks of abduction in particular for children and parents with dual or multiple nationalities and prevent the issue in advance.
Generally, the best approach would be to commence an application in court seeking an order that the child be restrained from being removed from Australia without consent of both parents or an order of the Court.
In the event there is a reasonable threat that the children may be taken out of Australia, an application should be made to include the children on Federal Police Watch list and for this there is a requirement of a family court order that the children be restrained from being removed from Australia without consent of both parents or an order of the Court.
In order to apply to the family court for such orders, the application should provide substantial and sufficient reasons of the existing threat. The Court will not make these orders lightly.
If your child has been abducted without your consent or if you have concerns that your child will be abducted, you will be needing immediate legal advice.
If you require assistance and legal advice, our experienced solicitors at Pavuk Legal would be pleased to assist you. Feel free to contact our office to speak with one of our friendly solicitors today.
If you require assistance and legal advice, our experienced solicitors at Pavuk Legal would be pleased to provide you with extensive advice in relation to unfair dismissal matters. Feel free to contact our office to speak with one of our friendly solicitors today.
The post Taking Children Overseas or Abduction appeared first on Pavuk Legal.

Transacting digitally might be a foreign concept to many, however individuals, businesses and government agencies transacting digitally, more than ever before. As such, legislation accepting digital signatures is constantly changing.
What follows is a brief overview of the nature of digital transactions and e-signatures and the current legal requirements in Australia if you wish to transact digitally, with a specific reference to conveyance of properties in New South Wales.
Transacting Digitally – What does that mean?
Transacting digitally can involve contracts or correspondence and the use of e-signatures to constitute valid binding agreements.
Whilst transacting digitally is a new phenomenon, it is important to understand the rules and exemptions surrounding e-signatures, to ensure that digital transactions are completed appropriately and contracts are valid and binding.
What is an E-Signature?
An e-signature is a visible representation of a person’s name or mark, placed by or on behalf of the person on a document by electronic or mechanical means with an intention of the name or mark being a signature.
A person may apply his or her e-signature by accessing a document via a touch screen device and signing using his or her finger, a smart pen or a mouse, or affix a digitised image of his or her signature on the document. E-signatures do not generally include signing on paper and delivering the document by e-mail or other electronic means.
A digital signature is a special form of e-signature. There are software programs available to implement an e-platform to facilitate the digital execution of documents. This software uses a certificate-based digital ID to verify the identity of the signatory and bind the digital signature to the document with encryption. Such technology provides verification and authentication methods which can assist with the compliance of requirements set out under the relevant Electronic Transactions regulation (ETAs).
Overview of Australian Legislation
Regulation in respect to ETAs exist at State and Federal Level in Australia.
Furthermore, there are other specific transactions legislation which operate, such as the Conveyancing Legislation Amendment Act 2018 (NSW) which amends the Conveyancing Act 1919 (NSW) to allow for electronic signatures on contracts and deeds relating to land under the Real Property Act 1900 (Cth).
Section 38A of the Conveyancing Act 1919 (NSW) now allows conveyancing documents to be electronically signed and witnessed in NSW.
This includes all contracts for sale of land, deeds and leases – such documents were previously not permitted to be executed electronically under the NSW ETA.
 E-signature Acceptance in Australia
 As a general rule, e-signatures are valid in Australia in respect to the following:

If an e-signature is required as proof for a legally binding agreement, the requirement is considered to be met if:

The e-signature can be used to identify the person’s signature and to indicate their intention to be bound by the agreement;
The method of an e-signature is reliable and appropriate for electronic communications. This is an objective test taking into consideration all relevant circumstances and the purpose for which the e-signature is required (otherwise there must be sufficient evidence to indicate the identity of the signor and his/her approval of the document); and
The other party of the document has consented to the use of the e-signature.

Email Correspondence
Email correspondence may constitute a valid binding agreement.
For example, a typed name on an email may constitute a valid binding agreement. In Attorney-General (SA) v Corporation of the City of Adelaide [2013] HCA 3, a certificate was required to be signed in relation to a by-law. However, the lawyer did not sign the electronic document. Only his name was on the document. It was held, the statement of the lawyer’s name and accompanying email was sufficient to identify the lawyer and the certification was properly executed.
Similarly, in Kavia Holdings Pty Ltd v Suntrack Holdings Pty Limited [2011] NSWSC 716, it was held  that “the inclusion of the sender’s name on the email amounted to ‘signing’ for the clause (providing for an option to renew in a lease). The requirement for signing is intended to identify the sender and authenticate the communication.
Exemptions
Not all documents can or should be executed using e-signatures. Some transactions will require pen to paper signatures. It is therefore important to check what transactions are exempted or cannot apply the use of e-signatures.
E-signatures Execution by Corporate Entities
Companies are governed by the Corporations Act 2001 (Cth) (Corporations Act) which is a Commonwealth legislation. Similarly, the use of e-signatures also fall under the Commonwealth ETA, which provides a list of exempt Commonwealth Laws. ‘Corporations Law’, now known as the Corporations Act is an exempt body of law (under the Commonwealth ETA) that does not provide for e-signatures.
Section 127 of the Corporations Act states that two directors of a company (or a director and a company secretary) may sign documents with or without the company seal. Section 127(4) also specifies that section 127 does not limit the ways in which a company may execute a document (including a deed).
However, until the Corporations Act explicitly permits the use of e-signatures, corporate entities will not be able to execute documents and deeds via e-signature. Despite the Act stipulating that the ways in which companies sign documents is not limited, companies should not take the risk using e-signatures.
Signatures that Need to be Witnessed
In most jurisdictions in Australia, the state ETA does not apply where a document is required to be witnessed. The general law concerning electronic witnessing of documents is untested. As such, any documents requiring individual signatures to be witnessed, should not be signed electronically. Nevertheless, in certain circumstances, the exemption is now modified by the Conveyancing Legislation Amendment Act 2018 (NSW) with respect to a conveyance.
Deeds
Under common law, deeds must be written on “parchment, vellum or paper”. ETAs do not overrule the basic requirements of a deed. Hence, it is accepted that deeds cannot be electronically executed.
An exception to this exemption is the execution of deeds in connection with the conveyance of real property in New South Wales. As a result of the recent Conveyancing Legislation Amendment Act 2018 (NSW), New South Wales is the first state in Australia to allow deeds relating to property to be signed and attested electronically.
Documents for Third Parties or Regulators
E-signatures are accepted by some government authorities including the Australian Patent Office. The relevant authority should be consulted to determine whether that authority accepts official forms to be signed using e-signatures.
Cross Border Transactions
If you wish to apply an e-signature on an agreement in a cross-border transaction, you should ensure that e-signature is an accepted form of execution in the relevant jurisdiction.
Do’s and Don’ts
When transacting digitally it is important to note the general principles that apply and the ‘do’s’ and ‘don’ts’.

Always ensure that the digital transaction you’re working on allows for e-signatures. This is especially important for Companies, as the Corporations Act does not explicitly allow for e-signatures.
A name typed in an email may constitute a valid binding agreement.
If you are implementing or considering establishing e-signature platforms in your organisation, you should:

Determine whether the platform meets the requirements under the relevant ETA in the use and affixing of e-signatures; and
Ensure that there are proper security measures that have been implemented or will be established to ensure only authorised persons within your organisation may apply e-signatures.

If you are receiving or processing electronically signed documents:

You should have regard for the type of document it is and whether or not it is appropriate to accept a document signed digitally, due to the fact that documents such as deeds cannot be signed digitally nor are they valid or enforceable.
Always ensure that the relevant authority will accept e-signatures on official forms including other documents in cross-border transactions.
Always ensure that documents that require individual signatures to be witnessed, have not been signed digitally.

Additionally, keep in mind that any information regarding e-signature is considered personal information and should be collected, maintained and disclosed strictly in accordance with the relevant privacy legislation. Thus, it is imperative that your or your organisation strictly allow only authorised personnel to manage e-signatures within digital transactions.
If you require assistance and legal advice in respect to transacting digitally, our experienced solicitors at Pavuk Legal would be pleased to assist you with any digital conveyancing matters. Feel free to contact our office to speak with one of our friendly solicitors today.
The post Transacting Digitally – What Do I Do or Don’t Do? appeared first on Pavuk Legal.

Overview
A common way to fund a new business concept is to raise Capital by approaching family, friends or funders. In fact, it may be the only way to obtain funding on reasonable terms, either because you have no credit history, the business model is completely untested, or you want to maintain confidentiality about your business.
As a founder you may invest in your own business. This might be through a lump sum (savings) or by reducing the payments as salary you draw from the business for a period of time – that is, you pay yourself last.
Furthermore, if your business is initially dependent on you, it will need to have access to working capital in case you face a major health issue, such as a heart attack. Make sure you document correctly all funds you have invested in your business.
What follows is an overview of the current legal framework in respect to capital raising and the risks associated with it.
Corporations Act
The Corporations Act 2001 (Cth) (Corporations Act) regulates capital raising. The Corporations Act imposes strict disclosure requirements on companies raising capital.
For private companies, however, there are exemptions to these requirements.
If you are offering shares to the public, you will be exempt from the formal disclosure requirements if:

You made a personal offer to someone likely to be interested in the offer, and you only intended that person to accept the offer; and
You made the offer to less than 20 people in a 12-month period; and
Your offer will not result in the company raising more than $2 million in a 12-month period.

These exemptions mean that a start-up raising $2 million or less in a 12-month period from less than 20 entities should not have to go to the trouble of preparing formal disclosure documents. A pitch deck (and if required, an information memorandum) should suffice. It is crucial, however, that your pitch deck is accurate, truthful and not misleading or deceptive. You should include an appropriately drafted legal disclaimers and have a qualified accountant review your financials.
Risks Attaching to Funding
There are several risks attaching to funding, such as:

Business failure and the risk that a close associate (Friend, Family or Funder) may lose money
Lack of commercial understanding or dealings at arm’s length
Lack of formalities

If you have another source of finance, try to avoid funding from a close associate. While you may have to give more equity away or pay more interest to a third-party investor, at least you avoid being dependent on close associates. Avoid borrowing a large amount from a close associate. Only accept their money if you know they would not be affected if something happened and you could not give them back their money.
To minimise the risks associated with sourcing finance from close associates:

Disclose – fully disclose all details about your business. Give the potential investor a copy of your business plan and ensure they understand all the risks involved with the business, including all external and internal risks, especially the untested nature of the products or business.
Explain – explain that its difficult to value a new business. Also be aware that your family and friends will probably fall into the category of ‘unsophisticated investor’ and may not know how to value your business.
Set realistic expectations – make sure you talk openly and frankly about your expectations for the business; when and how you will repay the money, what happens if the business fails and any liability that may arise. Also discuss the ways that you will act at arm’s length (and not as a ‘mate’, friend or family) between the investor and the business.
Observe formalities – have a solicitor prepare a short-form agreement outlining the funding requirements between you and any other parties, include the following:

Amount being invested
When the money will be repaid
Whether the investment accrues interest or dividends and the rate of return
The rights attaching to the investment
What happens when you want to sell the business
A dispute-resolution provision that details how you will deal with a breach of the agreement

Beware of the fool – the fool as an investor in your business is more prevalent than you may think. The fool is a person who takes little interest in the detail of an Offer, operates on selective memory about the Offer and wants to control your venture.

If you require assistance and legal advice in respect to capital raising for your new business venture, our experienced Solicitors at Pavuk Legal would be pleased to assist you. Feel free to contact our office to speak with one of our friendly solicitors today.
The post Funding a Business Venture appeared first on Pavuk Legal.

Personal training has been a growth industry over the past decade or so as time-poor people seek a more customised experience in the quest to lose weight and get fit. The result has been a lot more people starting a personal training business but anyone who does so needs to be aware of some essential steps they need to take in order to avoid later problems.
By its nature, personal training carries some risk, particularly if a client ends up injured either by undertaking a new fitness program or having an accident in an outdoor location, for instance. Thankfully many of these pitfalls can be avoided by taking some simple pre-emptive steps in setting up the business.
Qualifications
Personal trainers in Australia require a nationally recognised qualification. While a Certificate III (SIS30315) in Fitness allows you to become a gym instructor and run organised classes, adding a Certificate IV (SIS40215) allows you to train individual clients.
You may also need other licences if, for example, you’re training people under the age of 18. Lots of personal trainers also like to get away from the gym and conduct classes in ‘bootcamp’ fashion outdoors. Doing so will generally require a permit from the local council in order to use any of its public areas for a business purpose. If you intend to use a well-known training method, such as CrossFit, you will also need to be aware that these are trademarked and certification or a licensing arrangement will need to have been negotiated in order for you to use it.
Client agreements
Perhaps most important in starting a personal training business is the need for a written agreement for clients to sign before they begin training with you. This document should set out what services you will provide the client, what the client is required to do in return (payment amounts, methods, frequency,etc.), clauses which as best as possible limit your liability, cancellation and no-show policies.
Avoid using standardised forms you might find on the internet and if in doubt, consult a lawyer experienced in business start-ups. In the field of personal training, an expert corporate lawyer will advise that any agreement should include a disclaimer that you are not responsible for the fitness outcomes of your clients, lest you leave yourself open to a charge of misleading conduct.
The agreement should also be clear that you are not responsible for any injuries to your clients and that any responsibility for their capacity to do the training, such as a medical clearance, rests with the client.
A client agreement or contract should also include a waiver in which the client acknowledges and accepts the risks of injury from physical exercise and, ideally, a medical history checklist which helps you identify people with medical conditions who might be at higher risk of injury from training. Note that this information is governed by privacy legislation in terms of how you collect, store and use a client’s medical information.
The importance of insurance
Many people starting a business try to avoid the cost of insurance with the rationale that, “it’ll never happen”.
Because of the risks inherent in personal training, this would be an unwise decision. Those conducting a personal training business should consider either professional indemnity insurance and/or public liability insurance before they begin conducting sessions.
Indemnity insurance provides cover if a client later claims that your advice, goods or services were provided in a negligent fashion which caused them injury or loss. The client may claim against you for medical costs or loss of income, which will be covered by the indemnity policy should they be successful.
A public liability policy provides cover should a third party suffer injury or property damage as a result of the operation of your personal training business. Say you’re running a class in a public park and a person who is not part of the class trips over some hand weights left beside a path and is injured. Provided you weren’t negligent in leaving the weights in that place, the public liability policy will likely deal with this situation.
Business structure and advertising
The next decision will be which type of business structure to choose in setting up your business. In Australia, that is a choice between being a sole trader, a proprietary limited company, a partnership or a trust. For most people starting a personal training business, operating as a sole trader will be the simplest and most cost-effective option but it doesn’t provide much protection from liability in the case a claim arises against you. Incorporating, which essentially separates you from the business, provides more protection for your personal assets in the event of legal action or debt but requires more time, paperwork and money to set up.
Gaining clients might require you to create a website. If the site is only used to promote your services, you will need to include a Privacy Policy as you will likely collect personal, medical and health information from prospective clients. You should also include your client contract/agreement so interested parties can see you have taken the time to set up professionally.
If you plan to sell equipment, clothing, supplements, online courses or other products via the site, you will need to have a comprehensive section on terms and conditions that conforms with Australian consumer law requirements.
Seek advice
There is quite a bit to do in setting up a personal training business and it’s important to get it right at the start to avoid legal problems later, particularly in an industry which carries some inherent risks.
If you have any questions or concerns in this area, speak today with Pavuk Legal. We have an extensive background in advising businesses at the start-up stage and can assist with all of the points raised in this article. Call us today on (02) 9251 3611.
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Calderbank offer essentially means that the burden of costs will be unloaded on the party who unreasonably fails to accept an offer of settlement.
Offers contained in a Calderbank Letter are usually marked ‘without prejudice save as to costs’. It is recommended that a Calderbank offer be in writing.
At times the Calderbank offers of settlement may not appear appeasing to the recipient. However the difficult question is how could one responsibly rejects a Calderbank Offer.
The principles to be considered by the Court in determining whether a refusal of an offer is reasonable were outlined in Hazeldene’s Chicken Farm Pty Ltd v Victorian Workcover Authority (No.2) [2005] VSCA 298 being:
the stage of the proceeding at which the offer was received;

the time allowed to the offeree to consider the offer;
the extent of the compromise offered;
the offeree’s prospects of success, assessed as at the date of the offer;
the clarity with which the terms of the offer were expressed;
whether the offer foreshadowed an application for an indemnity costs in the event of the  offeree’s rejecting it.

It was further held in Victorian WorkCover Authority v O’Brien (2017) VSC 68 that the critical matter to consider in determining “ …whether a refusal of an offer is reasonable is whether the rejection of the offer was unreasonable in the circumstances.”
It can follow that if the recipient of an offer of settlement rejects the offer on the basis that the recipient’s case has  a reasonable prospect of success, the Court may not consider the rejection of offer unreasonable and hence may not award costs to the party that proposed the offer.
Further an offer of settlement that requires the recipient to capitulate is unlikely to be entertained by the court in circumstances that the recipient may have reasonable prospects of success.
The decision to accept or reject an offer of settlement requires expertise and substantial legal consideration.
If you require assistance and legal advice, our experienced solicitors at Pavuk Legal would be pleased to provide you with extensive advice in relation to unfair dismissal matters. Feel free to contact our office to speak with one of our friendly solicitors today.
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Copyright subsists in original literary, dramatic, musical or artistic work that is unpublished and of which the author was a qualified person.[1] However, there is no legislative protection of the output generated by artificial intelligence, under the Copyright Act 1968 (Cth).
So what do you own? If you are the inventor of a software that generates artificial intelligence output, do you own the copyright to the generated output? In light of the Copyright Act 1968 (Cth), the answer is no, however there are a few items that will need to be considered.
By way of introduction, section 32 of the Copyright Act 1968 (Cth) explicitly outlines the circumstances for which Copyright will subsist, and it makes a very clear point that the ‘author’ of the original work, needs to be a ‘qualified person’.[2] A qualified person is subsequently defined as an Australian citizen or a person resident in Australia.[3] This explicitly rejects the possibility of a creator of software to be the author of computer-generated output (i.e artificial intelligence).
Human Authorship
Whilst copyright exists for inventors of source codes, courts have been reluctant to confirm the existence of copyright when artificial intelligence generates the output. This is due to the fact that there is a lack of human authorship. Human authorship considers whether there has been a certain level of exertion of skill, labour and intellectual effort conducted by a human author.[4]
The issue that arises with artificial intelligence generating output, is that regardless of the circumstances, there would have exertion of skill, labour and intellectual effort put into the creation of the software, or source code, which further generated the output. However, courts will consider whether or not these principles (i.e exertion of skill, labour and intellectual effort) had been exerted by a human in respect to the generated output of the artificial intelligence software.
Involvement of Humans or Computerised Processes?
If the output is generated by a computerised process, then Australian courts will consider the output as authorless. This was supported in the case of Telstra Corporation Limited v Phone Directories Co Pty Ltd (2010) where it was held that phone directories had been generated with minor involvement of ‘humans’ and thus that compilation process undertaken by artificial intelligence was merely a computerised process.[5]
However, if the generated output is merely facilitated by the software or program, and it can easily be determined that there was sufficient human involvement in the generation of the output, courts will likely consider that copyright subsists.
What risk does this involve for business?
In the age and emergence of artificial intelligence, being unable to copyright and protect work generated by artificial intelligence programs (of which consists of human effort to create the program), creates significant risks to businesses. Businesses are at risk of having the generated output copied and stolen, with little to no attribution that it was indeed the businesses effort to create such a program.
Moving forward?
It can be said that whilst Australian federal legislation indeed provides protection to authors of original literary, dramatic, musical or artistic work, including creators of software, there is no coverage in the Copyright Act 1968 (Cth) affording protection to the creators of this software, for the generated output of the software.
Whilst, Australia has not made any amendments to legislation in this respect, it is indeed at the forefront of conversation, internationally. The New Zealand Copyright Act 1994 incorporated amendments in 2010, providing for computer generated works. Section 5(2)(a) of the New Zealand Act states that a person who made the necessary arrangements for the creation of the ‘computer-generated’ work to be undertaken, is considered the author of that work; thus, copyright subsists. Careful consideration will need to be given to this issue, as software creators are already copyright protected for the software/source codes that they created.
Therefore, if you find yourself a software creator, whose program is generating artificial intelligence output, it is worthwhile considering two items. Firstly, you should consider the level of human involvement in the generation of the output, this will give you a good indication of whether or not an Australian court will consider whether copyright subsists or not. Secondly, you may wish to consider the possibility of patenting your software, in the absence of proper legislative protection. Should you wish to undertake this approach, we recommended that you seek legal advice in respect to whether the software or program you have created can even be patented,[6] in order to not only protect the output generated by the software and but also your competitive advantage.[7]

[1] Copyright Act 196 (Cth) s 32.
[2] Ibid.
[3] Ibid s 32(4).
[4] Alexandra George, ‘Reforming Australia’s Copyright Law: An Opportunity to Address the Issues of Authorship and Originality’ (2014) 37(3) University of New South Wales Law Journal 939.
[5] Telstra Corporation Limited v Phone Directories Co Pty Ltd (2010) 264 ALR 617.
[6] IP Australia, Patents for Computer Related Inventions, Patent Protection for Software, 28 November 2018.
[7] IP Australia, Patents for Computer Implemented Inventions (Software Patents).
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