Uber Breached its Privacy Obligations to Users

Uber Breached its Privacy Obligations to Users

The Australian Information Commissioner and Privacy Commissioner has found that Uber failed to protect the personal data of Australians following a cyber-attack in 2016. It was found that Uber paid the attackers a reward and required them to subsequently destroy the data. The Office of the Australian Information Commissioner made an investigation into whether Uber’s preventative measures complied with the Privacy Act 1988 (Cth) (‘Privacy Act’).

Do Australian Privacy Laws apply to International Companies?

Uber does not have a head office in Australia and therefore has no physical presence in Australia. As such, it did not have a direct contractual relationship with Australian drivers or passengers when the data breach occurred. Uber claimed that it was not subject to the requirements under the Privacy Act. However, the Commissioner determined that as Uber carried out business in Australia, section 5B(1A) of the Privacy Act applied. This section extends the operation of the Privacy Act extra-territorially to the acts of organisations which engage in Australia, despite being registered or having their physical presence outside Australia.

How did Uber breach the Privacy Act?

In their findings, the Commissioner determined that Uber failed to comply with three Australian Privacy Principles (APPs). We have written a previous article explaining these principles in more detail. In this case, the main breaches were:

  • APP 11.1, which requires an entity to ‘take such steps as are reasonable in the circumstances to protect the information from misuse, interference and loss and [to protect the information] from unauthorised access, modification or disclosure’.
  • APP 11.2, which requires an entity that no longer needs personal information it holds to ‘take such steps as are reasonable in the circumstances to destroy the information or to ensure that the information is de-identified’.
  • APP 1.2, which requires an entity to take reasonable steps to ‘implement practices, procedures and systems relating to the entity’s functions or activities that will ensure’ compliance with the APPs and will enable inquiries or complaints to be dealt with.

As a consequence of these breaches, the Commissioner ordered Uber to implement a comprehensive data retention and destruction policy, an information security program and an incident response program to ensure that they can comply with the APPs moving forward.  However, no fines were imposed on the organisation.

This decision has made clear that global corporations will be held liable under Australian privacy laws even if customers’ personal information is retained overseas. It is also important to note that Uber has faced proceedings in other jurisdictions including the United Kingdom for similar breaches, and where monetary sanctions were imposed.

How Etheringtons Solicitors can help

The findings of the Commissioner are a timely reminder of the importance of both inter and intra-national entities who operate within Australia to ensure they are meeting their obligations when dealing with personal information. If you require assistance with understanding privacy obligations, do not hesitate to get in contact with our experienced team by calling (02) 9963 9800 or via our contact form.

Misleading or Deceptive Conduct: The Case of Lorna Jane

Misleading or Deceptive Conduct: The Case of Lorna Jane

On the 23rd of July 2021, the Federal Court ordered Lorna Jane Pty Ltd to pay $5 million in fines for making false and misleading claims to consumers in relation to its “LJ Shield Activewear” line of products. The company admitted that in July of 2020, it falsely represented that the activewear “stopped the spread” and “protected wearers” against viruses including COVID-19. This article discusses the lesson learnt from this Federal Court proceeding and how the law surrounding misleading and deceptive conduct protects consumers.

What is Misleading or Deceptive Conduct?

Misleading or deceptive conduct is regulated under the Australian Consumer Law which provides that a person must not, in trade or commerce, engage in conduct that is misleading or deceptive or likely to mislead or deceive. ‘Trade or commerce’ is interpreted by its ordinary meaning and extends to anyone providing or acquiring goods and services. Therefore, it is important for business owners to be aware of their obligations. For conduct to be considered ‘misleading or deceptive’ there must be a real possibility that the alleged conduct will mislead a consumer into thinking that the false claim was, in fact, true. This may include:

  • False advertising about a company’s or its competitors’ products;
  • Small print and disclaimers hiding important information from consumers;
  • Bait advertising and special offers which misrepresent products or prices;
  • Pricing errors where products are advertised at incorrect prices; or
  • Silence and withholding important information.

However, even if a consumer discovers the truth before the conclusion of a transaction, the company can still be found to have engaged in misleading and deceptive conduct as the consumer has been enticed into ‘the marketing web’. Misleading or deceptive conduct claims can be brought by individual claimants who have relied upon this conduct to their detriment, or by the Australian Competition & Consumer Commission (ACCC) as part of their regulatory function.

The Case of Lorna Jane

The marketing campaign for the Lorna Jane “Shield Activewear” included claims that the product incorporated ground-breaking technology that made the transferal of pathogens onto the fabric impossible, thereby eliminating viruses upon contact with the fabric. These misrepresentations were made both in store and on the company’s social media platforms. Representatives from the company admitted that there was no scientific basis for their claims. The Federal Court emphasised the severity of the company’s conduct, characterising it as ‘exploitative, predatory and potentially dangerous’. Along with the $5 million in penalties, the Court also ordered that Lorna Jane be restrained from making any ‘anti-virus’ claims about their products, must publish corrective notices across their media platforms and establish a consumer law compliance program.

How Etheringtons Solicitors can help

This case is a timely reminder that the ACCC will continue to prioritise consumer protections in the midst of the pandemic and hold companies accountable for their advertising practices. It is important for companies to be fully aware of their obligations particularly during this rapidly changing environment. If you would like more information on how we can assist you, do not hesitate to contact us on 9963 9800 or via our contact form.

Estate Planning For Single Parents

Estate Planning For Single Parents

Single parent families now represent 14% of all Australian families, with a majority of their children being under the age of 18. Being a single parent can be difficult financially, therefore, it is important to ensure that your financial affairs and estate plan are in place to protect your children should something ever happen to you. An Estate Plan is legally binding and documents how you wish for your assets distributed in the event of your death. This article will discuss the two main factors you should consider when forming your estate plan as a single parent, namely making sure you have an updated Will, have appointed a guardian and made plans regarding your insurance and superannuation.

1. Your Will

Your Will appoints an Executor to manage your assets and liaise with your children’s guardian. The Executor will hold your children’s share of the estate on trust until they become adults. These assets can be held on trust, so that they are protected for your children until they come of age. A solicitor can assist you in setting up a trust if it is deemed necessary.

As a single parent, it is important to ensure that your Will is up to date and reflects the current circumstances of you and your children. This is particularly true if you have separated, or are currently in the process of separating from a former partner, or entering into a new relationship as these changes can have a profound effect on your estate plan. You also need to ensure that any and all alterations to existing Wills should comply with section 6 of the Succession Act 2006 (NSW). Furthermore, if you do not have a Will, your assets will be divided according to the laws of intestacy, and may not be divided according to your wishes had you been alive, and may not be in the best interests of your children. This emphasises the importance of having an accurate, updated Will which clearly sets out your wishes in the event something should happen to you.

It is important to note that your life insurance and superannuation death benefits are not controlled by your Will. It is important to nominate beneficiaries for these assets so that your children may be provided for financially after your death. While minor children cannot receive these assets themselves, there are methods for protecting these assets until your children are older.

2. Appointing a Guardian

In the event of your passing, it is important that a guardian is appointed. In multiple parent families, the surviving parent is made solely responsible in this situation due to the presumption of shared parental responsibility prior to the death. However, in single parent families, the appointed Guardian will be responsible for your minor children (those under the age of 18) in your absence, and will have decision-making powers over their care, welfare and development. Appointing this guardian will help support your children through the difficult transition in the event something happens to you. It will also avoid any uncertainty over who is responsible for them, and may assist in reducing family conflicts in the future.

This is a significant decision, as the appointed guardian will be responsible for their medical treatment, education, residence and other day to day considerations. It is important that you choose someone who you believe will make these decisions in your children’s best interest, in the same way that you would. A frank discussion with the person you are considering appointing is important to ensure that they are willing to take on this significant responsibility, as well as outlining specific arrangements to be made in your stead. You may choose to include a Memorandum of Wishes with your Will to provide any such specific guidance for your guardian.

Similarly, you may wish to prepare an Enduring Power of Attorney which specifies who will make personal and financial decisions on your behalf if you become incapacitated by illness or an accident.

How Etheringtons Solicitors can help

As a single parent important thing is to protect the interests of your children as you navigate major milestones in life. This may include removing or adding partners in the future. Any Will you have made may become obsolete and no longer representative of your wishes within a few years of drawing it up. If you would like to discuss constructing a new Will, or changes in your circumstances resulting in the need to review of your current Will, please call us on (02) 9963 9800 or via our contact form.

High Court’s decision to reject backpay to Casual Workers

High Court’s decision to reject backpay to Casual Workers

The High Court of Australia had recently reversed the decision to grant casual workers the right to be paid leave entitlements. Dismissing these payments would force workers to be ineligible to receive payments for annual, sick or other types of leave. The unanimous ruling had been made following appeals that concluded that workers who were employed under a regular, permanent basis were not to be considered ‘casuals’ under the Fair Work Act 2009 (Cth) (“the Fair Work Act”).

The decision on Workpac v Rossato

The High Court’s decision was made after allowing the appeal of Workpac in their case against casual mine worker Robert Rossato. The courts had investigated Mr Rossato’s status as a ‘long-term employee’ for the labour-hire company but it was found that he was only employed in the capacity of a designated ‘casual-worker’.

It is known that Mr Rossato was employed by Workpac for four years. During the time, he received a total of six employment contracts which described his role as a ‘casual employee’. Mr Rossato claimed that by working on a fixed weekly roster – sometimes over several consecutive months – he was more than just a ‘casual-worker’ and that there was a discrepancy between his title and the leave entitlements that he was receiving. The Court made findings in relation to the regulation of these entitlements, and considered whether Mr Rossato should be awarded restitution as well whether Mr Rossato should be considered as more than a casual employee. On Appeal, Mr Rossato’s role was found to be ‘other than a casual employee’ under the Fair Work Act.

Fair Work Act 2009

The Fair Work Act is one of the essential Commonwealth statutes that governs employment in setting out terms, conditions, rights and responsibilities in the relationship between employers and employees. It regulates the rights of both employers and employees to request flexible working arrangements, and also deals with things such as termination and the general protection of workers’ rights.

The High Court’s decision on Workpac v Rossato necessitated a change to the definition of a casual employee under s15A of the Fair Work Act to: “employment made by the employer to the person is made on the basis that the employer makes no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person”.

How Etheringtons Solicitors can help

If you would like further information regarding employment issues or paid entitlements, please do not hesitate to contact one of our solicitors on 9963 9800 or via our contact form here.

The Legality of Cash in Hand Wages in Australia

The Legality of Cash in Hand Wages in Australia

Some businesses choose to pay their employees cash in hand wages rather than transferring them to a nominated bank account. Whilst this method is generally believed to be illegal, that is not necessarily the case. Employers must meet their obligations to their employees and the government, whether they make payment in cash or otherwise. This article will explain how cash in hand wages can be legal and the obligations employers must observe when paying their employees.

What is ‘cash in hand’?

Payment of wages as cash in hand means that a person is paid directly in cash rather than through a bank or with a cheque. However, in small hospitality and maintenance businesses, where this practice is common, it is an easy and efficient way to operate the business.

Employer obligations

If an employer wants to pay wages through cash in hand, it is important that they ensure their obligations are still being met by:

  • Paying your employees the correct amount under the relevant award;
  • Paying the correct amount as stipulated in the contract and allowing for any leave entitlements;
  • Taking out the relevant tax amount to ensure your employees aren’t left with the bill;
  • Contributing superannuation payments to their nominated super fund; and
  • Being covered by workers compensation should your employee ever be injured at work.

To legitimise the cash in hand payment, it is advisable to provide your employees with a pay-slip to prove that their earnings correlate with the award, the correct tax is being taken out and superannuation payments are being made. Pay slips should generally include:

  • Employer and employee names;
  • Australian Business Number;
  • Pay period (weekly or fortnightly);
  • Gross and net pay (pay before and after tax);
  • Applicable hours worked and rate of pay;
  • Any additional loadings or penalty rates; and
  • Superannuation contributions.

You can also provide your employees with a payment summary at the end of each financial year which outlines how much they have been paid throughout the year, and what amount of this is going to tax.

Once you have provided these records to your employees, it is essential to keep and file a copy for your own records. Employers are expected to keep a record of their employees and their pay and this can be as simple as keeping a physical or electronic copy of their pay slip.

It is also important as an employer that you ensure that you comply with the requirements of the Australian Taxation Office. Committing tax fraud or other tax related offences can attract severe criminal penalties. Therefore, it is important to comply with the ATO’s requirements and withhold the correct tax amount from your employees’ wages. If you are concerned about tax thresholds or understanding your reporting obligations, it is imperative that you seek the appropriate financial and legal advice.

There have been a number of high-profile cases involving the systemic underpayment of workers in restaurants, convenience stores and petrol stations. It is critical that these sorts of practices do not continue into the future.

Receiving cash in hand wages

As an employee, receiving cash in hand payments may be more convenient for you and your employer. However it is important to ensure that you are not being paid less than what you are owed under your contract or under the correct award rate. You are also obligated to declare your income to the Australian Taxation Office when completing your tax return. It is advisable to confirm with your employer that they are paying superannuation contributions to your nominated super fund. If you are concerned about the way in which you are being paid, speak to your employer or seek experienced legal advice.

How Etheringtons Solicitors can help?

We can help you by providing advice and representation in any employment law matter, whether you are the employer or employee. If you need any assistance contact one of our lawyers here or call 02 9963 9800 for a no-obligation discussion and for expert legal advice.

Applying for a Director Identification (Director ID) Number

Applying for a Director Identification (Director ID) Number

With the enactment of the new laws, all current company Directors and anyone who wishes to become one, will be required to obtain a unique Director identification (Director ID) number. This will be administered by a new national registry service, the Australian Business Registry Services (ABRS). Unlike the previous system which allowed any natural person to register themselves as a Director in a database maintained by ASIC, this new registry will assist regulators to accurately identify Directors with verified identification documents, which will assist with enforcing accountability if they commit offences or engage in misconduct, and prevent illegal phoenix activity.

Who should apply for Director ID and when?

All natural persons who are currently registered as a Director, or want to be registered as a Director, of a legal entity under the Corporations Act 2001 (Cth) must apply for Director ID through the new service called the Australian Business Registry Services (or ABRS). Relevant legal entities include a company, corporate trustee (including a self-managed super fund), charity or not-for-profit organisation, registered Australian body, or a foreign company registered with ASIC carrying on business in Australia.

The deadline for applying for a Director ID depends on when you were appointed as a Director:

  • If you are already a Director on or by 31 October 2021, you must apply for Director ID by 30 November 2022.
  • If you become a Director between 1 November 2021 and 4 April 2022, you must apply for Director ID within 28 days of your appointment.
  • If you become a Director from 5 April 2022, you must apply for your Director ID prior to your appointment or registration of a company.

Failure to apply for Director ID by the required date may result in criminal or civil penalties of 5000 penalty units, which equates to up to $1.11 million. From the date you receive your Director ID, it will be attached to you permanently, even if you cease to be a Director, move interstate/overseas or change your name.

How do you apply for Director ID through the ABRS?

You must apply for Director ID yourself as you must verify your own identity. However, a staff member at Etheringtons Solicitors can assist you to understand the new Director ID requirements and provide support throughout your application. To apply, you must:

  1. Set up your MyGov ID login, ensuring you achieve standard or strong identity strength, and download the relevant phone application.
    • If you are unable to do this, you can complete your application for Director ID through a slower phone application or paper form which will be available in November 2021 but you must still complete step 2.
  2. Prepare your documentation as evidence of your personal identification. This documentation must be verifiable by the ATO and will include the following:
    • Tax file number (TFN),
    • Residential address as held by the ATO, and
    • Any two of the following personal information documents:
      • Bank account statement
      • ATO notice of assessment
      • Superannuation statement
      • Dividend statement
      • Centrelink payment summary
      • PAYG payment summary.

If your legal entity has an Australian Business Number (ABN), you will be required to confirm whether that organisation is registered as a company with ASIC (with an appropriate Australian Company Number), as an Australian Body (with an appropriate Australian Body Number (ARBN)), or as a foreign company (with an appropriate ARBN).

  1. Once you have a myGovID you can log in and apply for your director ID. If you can’t apply online you can use a downloadable form instead – Application for a director identification number (NAT75329, PDF, 306KB).

How Etheringtons Solicitors can help

A solicitor or other staff member at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with business law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

NSW progresses to digital conveyancing

NSW progresses to digital conveyancing

The Registrar General of New South Wales (NSW) has declared that from 11 October 2021 (‘Cessation Day’), there will be no more paper certificates of title (“CT”) in the NSW land title system, becoming  entirely electronic instead. The Real Property Amendment (Certificates of Title) Act 2021 will amend the Real Property Act 1900 (NSW) from 11 October in two main ways:

  1. The legal effect of paper certificates of title will be cancelled and the requirement to produce a certificate of title in some land transactions will be removed; and
  2. The electronic lodgement (eConveyancing) of all land dealings in NSW, including leases will be accepted.

Certificate of Title (CT) in the NSW Torrens Title system

In the NSW Torrens Title system, registration of a land dealing in the land registry constitutes conclusive evidence of ownership of property. A CT is a document issued by the land registry to record the owner of the property, as well other interests and dealings held by third parties over the property. However, advancements in technology have now made having rendered the use of actual paper CT unnecessary.  Cessation Day is indicative of NSW’s efforts to convert to an entirely digital conveyancing jurisdiction. This will modernise the NSW land title system, keeping it in line with other Australian jurisdictions including Queensland, South Australia and the Australian Capital Territory who already no longer issue paper CTs. However, the Torrens Title system will continue to reflect the ownership and interests in land.

Effects of the amendment on CTs

All existing NSW CTs for land will no longer be legally valid from 11 October 2021, and no new CTs will be issued. Instead, the NSW Land Registry Services (“NSW LRS”) will issue an Information Notice which will confirm the land title dealings registered and their date of registration. Additionally, in the event of a subdivision or consolidation of land, a new folio of the Register will be created.

But what are the practical implications for landowners?

  • If you are the landowner and hold a paper CT, you do not need to take any action in response to these amendments. We encourage you to keep your CTs to comply with any requisitions or outstanding notices which are not finalised ahead of Cessation Day.
  • If another party is holding the paper CT on your behalf, you may wish to have that CT returned to you. From Cessation Day, under the Real Property Act 1900 (NSW) a court may order for the CT to be returned to the NSW LRS and for the said CT to no longer have a legal effect.

Effects of the amendment on electronic lodgement

From Cessation Day, all dealings listed in the schedule of edealings (which accounts for 99% of all land transactions) must be lodged electronically. Lodging these land dealings in paper form will not be permitted. The remaining 1% of land transactions will need to be prepared on paper but also lodged electronically with a ‘dealing of exception’ attached.

This change to electronic lodgement means that parties to land transactions will need to engage experienced lawyers, such as those at Etheringtons Solicitors, and licensed conveyancers to register their land dealings. Parties will also need to prove that they have a right to deal with the land, which may involve proving your identity with current documentation and establishing your connection to the property from an independent source.

Benefits of digital conveyancing

In the past, CTs have been used to reduce the risk of fraud in the paper system and as security for financing arrangements. The amendments aim to create a faster and more secure process in their stead. The cessation of paper CTs will make land dealing transactions easier and a better experience for all parties. The NSW LRS makes electronic title searches available in a fast, cost effective way to anyone wanting to verify ownership records. This removes the hassle of finding an original paper CT which can be time consuming to locate and replace. All land dealings are now registered online using electronic settlement platforms (including PEXA), making electronic lodgement a logical progression.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law and its relation to your individual circumstances. If you need further advice or assistance with property law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Scarlett Johansson Sues Walt Disney Co. For Damages

Scarlett Johansson Sues Walt Disney Co. For Damages

Scarlett Johansson sues Walt Disney Co. for damages for intentional interference in her contract with Marvel Studios

Scarlett Johansson recently filed a law suit against Walt Disney Co. (Disney) alleging that the studio engaged in the tort of intentional interference by releasing Black Widow on Disney+ at the same time as it was released in theatres. She alleges that this interference caused Marvel Studios (Marvel), a subsidiary of Disney, to breach the terms of their contract with her. She is seeking both compensatory and punitive (also called exemplary) damages. This article will provide further insight into the elements of the tort of intentional interference in Australia and how it relates to Johansson’s claim.

Background for Johansson’s claim against Disney

Johansson alleges that Disney caused Marvel to breach the terms of her contract, by releasing Black Widow on Disney+ simultaneously with the theatrical release. Her compensation for the film was “based largely on ‘box office’ receipts”. This has been common practice within the industry for decades where stars are often paid an upfront fee along with receiving a portion of the back end profits which are dependent on box office success.

Johansson’s claim exposes the current shift within the film industry towards prioritising streaming services as a result of the COVID-19 pandemic, which will impact the future cinematic experience. COVID-19 has pushed film companies to adopt a hybrid release model, where movies are released in cinemas and on streaming platforms simultaneously. While Netflix offers larger up front deals to actors who forego cinematic releases, this claim highlights that many film companies have not shifted their payment practices in accordance with this new model. This claim will potentially set a precedent for other actors contracted under the same model. Disney has accused Johansson of “callous disregard for the horrific and prolonged global effects of the COVID-19 pandemic”, adding that there was “no merit whatsoever” to the claim.

Tort of intentional interference

Johansson alleges that Disney intentionally interfered with her contract with Marvel, thereby committing a civil wrong as they were subject to a duty not to do so. According to the influential case of Allstate Life Insurance Co v Australia and New Zealand Banking Group Ltd [1995] FCA 1368, this tort allows damages to be claimed against a defendant who induces or procures an entity to act or refrain from acting whilst being aware that doing so would result in the entity breaching their contractual obligations to the plaintiff.

The recent case of Daebo Shipping Co Ltd v The Ship Go Star [2012] FCAFC 156 outlines the elements needed to establish this:

  • There must be a contract between the plaintiff (Johansson) and a third party (Marvel).
    • In this case, Johansson must establish that her contract with Marvel specifies that Black Widow would have an exclusive theatrical screening for a period of time. Johansson will likely argue that the agreement for a ‘wide theatrical release of the picture’ will be understood to expressly or impliedly promise this exclusive release. If this is proven, Disney would have intentionally disregarded this contract by simultaneously releasing the film on their streaming platform.
  • The defendant (Disney) must know that such a contract exists.
  • The defendant (Disney) must know that if the third party (Marvel) does, or fails to do, a particular act (provide an exclusive theatrical release) that conduct of the third party would be a breach of contract.
  • The defendant (Disney) must intend to induce or procure the third party (Marvel) to breach the contract through that conduct (failing to provide an exclusive theatrical release).
    • To establish this, the defendant (Disney) must have a “fairly good idea” that the contract benefits another person in the respect which they are intervening in. Reckless indifference or wilful blindness can amount to his knowledge.
    • Knowledge of the contract can infer that there was “actual” or “subjective” intention within the state of mind of the defendant (Disney).
  • The breach must cause loss or damage to the plaintiff (Johansson).
    • Johansson will likely allege that Disney presumably released the film on Disney+ to increase the share price, at Johansson’s expense as it likely interfered with box office sales.

Johansson is seeking both compensatory and punitive damages

Compensatory damages aim to put the plaintiff (Johansson) into the position they would have been in, had the defendant (Disney) not committed the civil wrong. These damages are calculated according to the size of the plaintiff’s loss, which will be difficult to calculate in this matter given the effects of COVID-19 on the industry globally and the uncertainty of the specific revenue expected from an exclusive cinematic release.

Punitive damages are only available in the USA for tortious claims (not for breach of contract), and aim to punish the defendant (Disney) for egregious conduct, acting as a deterrent for future actions. Awards of punitive damages in the USA are often significantly larger than that of compensatory damages. However, punitive damages are rarely available in Australia, and only for very rare personal injury matters.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. If you need further advice or assistance with contractual or tortious matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

Enforceable Covenants: Is the land readily identifiable?

Enforceable Covenants: Is the land readily identifiable?

Conveyancing is the process of transferring the legal title of property from one party to another, allowing the purchaser to be notified of any covenants (restrictions or rights) in advance of making their purchase. There are numerous requirements which must be met for a covenant to be enforceable against a purchaser. A recent case in the Victorian Supreme Court highlights the importance of making land affected by covenants readily identifiable, so that the covenant can be enforced.

What is a covenant?

Covenants are the obligations imposed during conveyancing, where the purchaser agrees to abide by the particular rules set out by the vendor relating to the property. There are two types of covenant:

  1. A positive covenant: which requires the owner of a parcel of land to conduct a certain act on or to the property. An example would be having to landscape the gardens.
  2. A restrictive covenant: which restricts the land from being used in a certain way. These types of covenants are far more common and can include things like no fences unless they are of a certain style or color, or no advertising signs to be placed on the property.

Covenants “run with the land”, meaning they apply to all of the successive owners, provided that the covenant benefits the land rather than any particular covenantee. Anyone can create and register a covenant to their property. They may be created by inclusion in a transfer or as set out in a deed agreement between the parties.

Covenants may be extinguished or modified if the owner of the land expressly releases the covenant or does so by implication where the changing nature of the land negates the covenant’s value. They may be extinguished where statute, such as the Conveyancing Act 1919 (NSW), requires the covenant to be released.

Enforcing a covenant

Covenants are enforceable against landowners under both the laws of contract and equity so long as the covenant “touches and concerns” the land, that is, the covenant requires an action that has some effect, direct or indirect, on what happens on the land. To be enforceable, the covenant must indicate that the land is “benefited” or “burdened”, meaning it must contain at least one clause that either includes a positive obligation on the owner or a restriction on the way the land is used.

Additionally, a covenant must touch and concern the land of the covenantee. A covenant which touches and concerns part of the land cannot be extended to benefit the entire land, meaning a covenant which restricts building on 18 acres does not restrict building across the entire 700 acre estate. A subdivision may benefit from a covenant if there was an intention to touch and concern the whole land. However, if the covenant does not benefit the subdivided part, the intention of the parties will be irrelevant and the covenant will be unenforceable.

The land must be readily identifiable to be enforceable: Re Ferraro [2021] VSC 166

In this matter, the Court held that the plaintiff’s land was no longer affected by restrictive covenants as they no longer readily identified the land to which the covenants conferred a benefit.

In 2019, the plaintiff became the owner of a parcel of land with two restrictive covenants preventing her from carrying out certain development plans which included the partial demolition and alterations to the existing dwelling on the land. The covenants were registered in 1907 and 1911 and prohibited the construction of certain structures, required the use of certain materials when building a dwelling house and required any development to be approved by a few named individuals.

The Court, in its findings, upheld the principle that a restrictive covenant will only run with the land if it is given for the benefit of land, not simply for the benefit of a covenantee, and such covenant must touch and concern the land. The wording of the covenants was also examined by the Court and it was found that the ambiguity as to who the transferees were meant that the benefited land could not be ascertained.

Contact Etheringtons Solicitors

We can help you navigate the process to ensure that you are able to obtain good title on any prospective property and that there are no unknown restrictions on the property before you buy. If you need assistance with a conveyancing matter (either buying or selling) or would like more information please call us on (02) 9963 9800 or via our contact form.

Welcome Update to Electronic Processes for Businesses during COVID-19

Welcome Update to Electronic Processes for Businesses during COVID-19

The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (“the Bill”) was passed by Federal Parliament on 10 August 2021 and became effective from 14 August 2021. The Bill amends section 127 of the Corporations Act 2001 (Cth) (“Corporations Act”) to facilitate the electronic processes and execution of documents and allow businesses to carry on “as usual” as much as possible whilst navigating the challenges of COVID-19. The changes made will remain in effect until 31 March 2022, providing a sense of stability.

Australian Institute of Company Directors CEO and Managing Director Angus Armour has welcomed the changes, saying;

‘This reform provides greater certainty for companies to make disclosures to the market, without the apprehension of speculative class actions challenging this disclosure with the benefit of hindsight, and that is in everyone’s interest. We are hopeful that over time these changes will also help to rebalance skyrocketing insurance premiums’.

Apart from amending the Corporations Act to allow companies to execute company documents electronically, the Bill also allows company meetings (including general meetings) to be held virtually, by electronic means. Finally, companies may send notices of meetings through electronic communications or by providing sufficient information to allow electronic access to the notice.

Electronic execution of documents

We have written previous articles on how legal documents such as a Will or an Affidavit can be witnessed electronically and the witnessing of the fixing of seals can be performed electronically via audio-visual link. However, in signing or witnessing the document electronically, it must be stated within the document that the fixing of the seal has been observed by electronic means.

Documents can also be executed using separate copies, providing that the copy includes all the original document’s contents and the signing method must identify the signee, record their intention to sign and must be reliable for the circumstances of the signing, for each of the signatories.

Notices to Shareholders

Whilst previously the default position was to send hard copies of notices of meetings (and shareholders can still elect to receive physical copies), it is now sufficient to provide them electronically via email or by sending an electronic address from which the material may be downloaded.

Company Meetings

The Bill introduced new emergency powers of relief that allow the Australian Securities and Investment Commission (ASIC) to grant companies temporary relief from certain Corporations Act requirements. Notably, ASIC can now make a determination to extend the timeframe for public companies to hold an AGM on a class basis where extraordinary circumstances (such as COVID-19) would make it unreasonable for such meetings to be held.

The changes also allow companies or registered schemes to hold virtual meetings, even if their company constitution does not allow it, where ASIC considers it would be unreasonable to expect them to conduct in-person meetings. Importantly, such relief cannot be in place for more than 12 months after it commenced.

Whilst these reforms are great news for the 2021 fiscal year AGM, if companies wish to continue using virtual mediums to conduct shareholder meetings, it is prudent to update the company constitution to reflect this. Further, companies will still need to be cognisant of their obligations to allow shareholders to speak and ask questions orally as well as in writing within the virtual AGM format. Therefore, the platforms used by companies will need to offer a two-way audio exchange such as video conferencing platform Zoom.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant law in relation to your individual circumstances. Furthermore, Etheringtons Solicitors can assist with a variety of Business and Company Law matters. If you need further advice or assistance understanding your company’s obligations, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

The Family Home Guarantee: Helping Single Parents Purchase Property

The Family Home Guarantee: Helping Single Parents Purchase Property

The Commonwealth Government introduced a scheme to support eligible single-parent families to enter the housing market that came into operation on 1 July 2021. Known as the Family Home Guarantee, this scheme is administered by the National Housing Finance and Investment Corporation (NHFIC), a corporate Commonwealth entity established under the National Housing Finance and Investment Corporation Act 2018 (Cth). By guaranteeing a participating lender up to 18% of the property’s value on behalf of the purchaser, the NHFIC allows a single parent to enter the housing market sooner.

What is the Family Home Guarantee?

The Family Home Guarantee (FHG) scheme supports eligible single parents with at least one dependent child to purchase a family home with as little as a 2% deposit as part of the purchaser’s home loan from a participating lender. The FHG is for a maximum of 18% of the property’s value (as assessed by the lender).

The guarantee itself is not a cash payment nor a home loan deposit, but it means that the eligible purchaser will not need to pay lenders mortgage insurance for having less than a 20% deposit. There are no costs or repayments associated with the FHG itself. However, scheduled repayments of the principal and interest of the associated home loan are required for the full loan agreement period, which must be no more than 30 years.

Eligibility for a property purchase with this scheme

From 1 July 2021 to 30 June 2025, 10,000 FHGs will be made available to eligible single parents. To be eligible for this scheme, at the time you are applying you must:

  1. Be an Australian resident who is at least 18 years of age and single – meaning without a spouse (separated but not divorced is not considered single) or de facto partner. This single parent must have a taxable income which does not exceed $125,000 per annum.
  2. Have a least one dependent child living with you – meaning you are the natural or adoptive parent of a child who is either under 18 years of age or 16-22 years of age and receiving a disability support pension, indicating that you are legally responsible for their care, welfare and development. 
  3. Not currently own a home in Australia – meaning you must not currently have a freehold interest in real property, a lease of land or a company title interest in land. It does not matter whether you are a first home buyer or have previously owned a home, as long as you do not currently own a home.
  4. Have the minimum 2% deposit available to pay for the residential property.
  1. Be looking to purchase a residential property – such as a house, townhouse or apartment. The type of home you purchase will determine the time frame of your eligibility. For example, if you are purchasing an existing dwelling, the contract of sale must be signed by you and dated on or after 1 July 2021 but other dates may apply if you are building the home.

Additional property price caps apply depending on your chosen location. In Sydney and regional centres within New South Wales, the property price threshold is $800,000. In the rest of the state, the property price threshold is $600,000. We have prepared another article on the hidden costs of purchasing property to ensure you do not encounter any unexpected costs in this process. Participating Lenders have additional property specific criteria which will affect your eligibility.

Applying for the Family Home Guarantee

All eligible purchasers need to consult with Participating Lenders as all applications for the scheme need to be made directly with them. Seeking legal advice from an experienced solicitor can help with this and also assist you to structure your loan agreement to best suit your personal circumstances.

How Etheringtons Solicitors can help

A solicitor at Etheringtons Solicitors can provide clarification of the relevant property law and its relation to your particular property purchase and individual circumstances. If you need further advice or assistance with property law matters, please contact one of our experienced solicitors on (02) 9963 9800 or via our contact form.

How the New Family Court Structure Will Affect You

How the New Family Court Structure Will Affect You

In February of 2021, Parliament passed the Federal Circuit and Family Court of Australia Act 2021 and the Federal Circuit and Family Court of Australia (Consequential Amendments and Transitional Arrangements) Act 2021 which essentially proposed to merge the Family Court and Federal Circuit Court into a single unified structure. As the official merger was on the 1st of September 2021, this article will provide an update on how these reforms will impact you.

Navigating the Family Law system can be incredibly challenging at the best of times so it is essential, if you are experiencing familial issues, that you seek experienced legal advice to assist you in navigating these challenges as the Family Law landscape undergoes significant change.

Review of the Changes

We have previously written an article which gave a detailed overview of the proposed changes. By way of summary, the new Federal Circuit and Family Court of Australia will consist of two divisions:

  • Division 1: will only deal with complex Family Law matters and appeals; and
  • Division 2: is the single entry point for all other Family Law matters. Judges will preside over a combination of Family Law and Federal Law matters such as employment and immigration.

The reforms have also resulted in a change to the rules of the family courts. The Federal Circuit and Family Court of Australia (Family Law) Rules 2021 were recently finalised and also came into effect on the 1st of September. One of the important features of these reforms is the establishment of a nationally uniform case management pathway which will operate to make proceedings less complex and prioritise alternative methods of dispute resolution. From the 1st of September, family matters will be dealt with in the following manner:

new structure family law

The new Family Law Rules will also retain the need for parties to fulfil the required pre-action procedures. This means that parties should not file proceedings until they have engaged in dispute resolution, exchanged documents and made a genuine attempt to settle the dispute outside of litigation. Undertaking these pre-action procedures can be acrimonious, so it is best to seek out legal advice early to ensure your interests are well represented.

Dispute Resolution

As part of creating a consistent internal case management pathway, dispute resolution has been placed at the forefront to ensure just outcomes are achieved for parties in an efficient manner. It is an expectation of the court that both parties and their legal representatives make every effort to participate in dispute resolution. There are a number of different types of dispute resolution including mediation, negotiation and conciliation, and we have written previous articles explaining these processes.

Under the new case management pathway, dispute resolution must occur within 5-6 months of the date of filing. However, we should note that in circumstances where it is unsafe to conduct alternative dispute resolution, the parties will be given an opportunity to raise these concerns with the Registrar in formal court proceedings.

What the changes hope to achieve

The overarching purpose of these structural reforms is to ensure that the resolution of family disputes is achieved as quickly, inexpensively and efficiently as possible. In a Media Release from the office of the Attorney-General, Christian Porter stated that;

‘bringing the courts together under one amalgamated structure creates a single point of entry for families who will no longer be bounced around between different courts – an issue that occurs too often in the current system and can lead to lengthy delays for families because matters have to begin again.’

The unification of the family courts is hoped to resolve up to 90% of disputes within a 12 month timeframe by:

  • Improving risk identification and the safety of vulnerable parties;
  • Encouraging alternative methods of separation which are less burdensome on the parties;
  • Improving compliance with court orders; and
  • Enhancing access to justice for those from remote or vulnerable communities through the use of technology.

Additionally, as we noted in our previous article, judges hearing Family Law matters in the new amalgamated court will need to satisfy additional appointment criteria to guarantee they are suitable to dealing with more complex Family Law matters, including family violence.

How Etheringtons Solicitors can help?

Understanding the Family Law system can be a confusing and emotionally exhausting task. Our dedicated Family Law solicitors are ready and willing to assist you with your parenting or Family Law concerns. If you would like further information, please do not hesitate to contact one of our experienced solicitors on 9963 9800 or [email protected]. For more articles on family and other areas of law, see our blog here.