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  • When life gives you lemon

    When life gives you lemons - Australian Consumer Law

    Australian Consumer Law remedies for dodgy vehicles

    A recent study by the Australian Bureau of Statistics found that approximately 71% of Australians primarily use vehicles to commute and 88% use a car to get to places other than work.[1] Unfortunately, as many as two-thirds of new car buyers have experienced problems with their vehicles in the first 5 years of use.[2] What happens when your hard-earned car is a lemon?

    In Australia, consumers are protected by the Australian Consumer Law, contained in the Competition and Consumer Act 2010 (formerly known as the Trade Practices Act 1974), which provides a number of guarantees, including guarantees as to:

    • acceptable quality; and
    • fitness for any disclosed purpose.

    These guarantees are implied by law into all purchase agreements for goods priced under $40,000 or acquired for personal, domestic or household use.  This includes cars purchased for personal or family use. Whether under warranty or not, cars must comply with certain standards so as not to breach the guarantees. The above two guarantees are explored further below.

    Acceptable quality” means that goods must be safe and free from defects, amongst other things. This encompasses a range of potential problems that could occur with a car, from engine issues to more minor concerns such as appearance. However, this guarantee does not cover defects which the consumer knew about prior to purchase or damage due to abnormal use.

    The guarantee as to fitness for any disclosed purpose means that goods will be reasonably fit for:

    • a particular purpose for which the goods are being bought, made known to the supplier; and
    • any purpose for which the supplier represents the goods will be reasonably fit.

    This provides another, more specialized, layer of protection in addition to the guarantee as to acceptable quality. For example, a car acquired from the dealer for regular family camping trips should be able to handle off-road terrain; the sale of a car which cannot could be in breach of the Australian Consumer Law, despite the car being otherwise in good working order.

    Where a guarantee has been breached, the failure to comply with the Australian Consumer Law can be classified as either a major or a minor failure. The remedies available to the buyer differ according to this classification. Whether a failure is major or minor will depend on the circumstances; however, a major failure occurs where:

    • the consumer would not have purchased the goods had they known of the failure;
    • the goods are unfit for purpose and cannot be remedied within a reasonable time; or
    • the goods are unsafe.

    Cars that undergo multiple repairs may indicate that there has been a major failure to comply with consumer guarantees.

    Remedies available include requiring the supplier of the car to remedy the failure (if minor) or rejection of the car, with a corresponding right to compensation. Consumers may also recover damages for any reasonably foreseeable loss or damage suffered by reason of the failure.

    So what can you do if you suspect your car is a lemon?

    1. Consider the issues. Is there a small fault or is there a serious safety concern?
    2. Contact the supplier. In the first instance, depending on issue, the supplier may seek to remedy any defect. This communication is best done in writing so you can keep a record.
    3. Know your rights. If a remedy isn’t forthcoming or the car is a true lemon and the problems remain unresolved, you may have a right to reject the vehicle and claim compensation.

    Often these matters are resolved in the early stages without recourse to litigation, but sometimes something more is required to get the solution you need. If you are experiencing difficulties or the manufacturer or dealer is dragging the chain in fixing your car, let us know if you need help. If life gives you a lemon, there are protections available – so don’t settle for lemonade.

    [1] http://www.abc.net.au/news/2014-02-03/two-in-three-australians-drive-to-work-study-of-commuting-habit/5233950

    [2] http://www.smh.com.au/business/retail/owners-of-lemon-cars-are-struggling-to-use-their-consumer-rights-to-end-nightmare-20160311-gngmhs.html

    If you have a problem with a lemon car, or have any questions about your options, please contact Laura Scotton, Litigation.

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  • Amalgamation gives Council ‘Get Out of Jail Free Card’

    Amalgamation gives Council ‘Get Out of Jail Free Card’

    In a decision handed down by Moore J on 2 February 2017, the Land and Environment Court has held that the amalgamation of two Councils effectively put an end to a criminal prosecution brought by the EPA for an environmental offence committed by one of the Councils prior to the amalgamation.

    The EPA had commenced criminal proceedings against the former Wellington Shire Council on 21 April 2015 for an offence of “causing water pollution” in breach of s.120 of the Protection of the Environment Operations Act 1997.  The old Council entered a plea of guilty to the charge but a sentencing hearing for the offence had not been held when, on 12 May 2016, the Local Government (Council Amalgamations) Proclamation 2016 was made.  That Proclamation dissolved both the old Council and the former Dubbo City Council and constituted a new Council now known as Dubbo Regional Council.

    The Proclamation contained a number of provisions to give effect to the amalgamation, including provisions transferring a range of staffing, financial and legal responsibilities to the new Council.  One of those provisions expressly provided that any proceedings relating to the assets, rights or liabilities commenced against one of the old Councils and pending immediately prior to the amalgamation were to be taken to be proceedings pending against the new Council.

    Following the amalgamation, the new Council applied to strike out the EPA prosecution.  The Council’s position was that clear words would be required in the Proclamation to result in the criminal liability of a former Council being transferred to the new Council. It argued that, in the absence of express statutory provision and clear language, it was ‘inconceivable’ that a legal person not in existence at the time of the alleged offence, could be found to be criminally liable for an offence alleged to have been committed by another person.

    The Court accepted the Council’s argument, holding that clear and express language would be necessary to have the effect that criminal proceedings commenced against a former Council could be continued against the new Council.  The Proclamation transferring assets and liabilities to the new Council should therefore be taken to have transferred only civil liabilities, not criminal ones.

    A second Proclamation was made on 9 September 2016, the Local Government (Bayside) Proclamation 2016.  Although the primary purpose of this Proclamation was to dissolve the former Councils of Rockdale and Botany Bay, it also contained a number of amendments to the first Proclamation.  One of those amendments was a new provision that expressly transferred criminal liability from dissolved Councils to newly constituted Councils.

    Section 736 of the Local Government Act 1993 permits the amendment of a Proclamation by the Governor but expressly provides that, except with the consent of the relevant Council, such an amendment is not to affect anything done before the publication of the Proclamation.  The Court found that these provisions meant that the second Proclamation could not have the effect of transferring criminal liability to the new Council unless the new Council had agreed to that occurring, which it had not.

    In those circumstances, the Court struck out the prosecution that had been brought against the former Wellington Shire Council by the EPA and the Council was effectively given a ‘get out of jail free’ card.

    If you have any questions about Local Government Law, or about the proceedings above, please contact Alan Bradbury.

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  • PPSA Gas Turbine

    How to lose US$44 million in 344 days - PPSA

    The Personal Property Securities Act (PPSA) has done it again!

    In a decision handed down on 6 February 2017 the NSW Court of Appeal found that the lessor of goods had failed to perfect their security interest in circumstances where the PPSA applied and, as a result, lost title to $US44 million worth of equipment.

    Under the PPSA if a person supplies goods on credit or leases goods then they can (and should) register a ‘security interest’ to protect their ownership of the goods until either (1) the goods are fully paid for or (2) the lease comes to an end and the goods returned. Registering a security interest on the Personal Property Securities Register ‘perfects’ their rights and puts the world on notice that it claims an interest in the goods. The PPSA is about registration; it is no longer about ownership rights.

    In this case, on 5 March 2013 General Electric International Inc (GE) agreed to lease four mobile electricity generating gas turbines to Forge Group Power Pty Ltd (Forge Power) for two years. The turbines were delivered and installed to a temporary power station. GE sold part of its leasing business to Power Rental Op Co Australia (Power Rental) and took ownership of the turbines in October 2013, even though the turbines were physically at the Forge Power site.

    As luck would have it, voluntary administrators were appointed to Forge Power on 11 February 2014.

    Under the PPSA unless you have a perfected security interest, when an administrator is appointed title in goods that are leased by the company can vest in the administrator. At no point did GE or Power Rental register on the PPSR, even though they had approximately 344 days between the start of the lease and the date of the administration to do so.

    The administrators claimed that because there was no perfected security interest, and the lease of the equipment was a ‘PPS Lease’ they now owned the turbines (worth approximately US$44 million). In order to get their turbines back Power Rental argued that because the turbines had been fixed to the land, they were not ‘personal property’ and the PPSA did not apply to them.

    So what was the decision?

    The Court of Appeal held that the turbines did not become ‘fixtures’ to the land. As the turbines were not ‘fixtures’ the PPSA did apply, the lease of the turbines was a PPS Lease and should have been registered. As neither GE nor Power Rental registered or perfected their security interest, they lost title to the turbines.

    If you supply goods on credit or you lease or hire goods then you can (and should) register a security interest – don’t assume you are protected.

    A copy of the decision is available here.

    If you have any questions regarding the PPSA or the PPSR, contact Katie Innes.

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  • Taking the piss misconduct - BAL Lawyers

    Taking the piss: 'serious' misconduct in the Australian Public Service

    Allegations of misbehaviour must be handled with great care, as a recent case shows. Serious misconduct in the workplace is no laughing matter. It takes effort, though, to suppress a chuckle when reading the recent Fair Work Commission case of Walia v Citywide Service Solutions. Notwithstanding its private sector context, Walia offers a reminder about the care needed when managing code of conduct allegations and provides a timely opportunity to revisit the Australian Public Service’s misconduct process.

    The applicant in Walia was employed by Citywide as a garbage-truck driver, operating in the Melbourne CBD. In June 2016, Bobby Walia was midway through a 10-hour shift when a City of Melbourne inspector spotted him urinating in a laneway. The inspector issued Walia with an infringement notice for public urination.

    Walia notified his employer of the incident, who were understandably concerned. Walia said he had urgently needed to urinate but found it difficult to park his garbage truck near a public toilet. Citywide determined that, as Walia’s actions were against the law and had the potential to cause reputational damage to Citywide, it would terminate his employment for serious misconduct. Walia promptly sought unfair-dismissal relief.

    Commissioner Michelle Bissett began her consideration of the dispute by observing: “There have been many (perhaps too many) decisions of the commission where an employee has had his employment terminated for urinating other than in the toilet.” She held that, while Citywide had a valid justification – “[Walia] provided no cogent reason why he did not stop to go to the toilet before it became urgent” – the dismissal was nevertheless harsh. Termination was “disproportionate to the gravity of the misconduct”, especially given that Walia had immediately self-reported and shown contrition, and that termination would also have an inordinate adverse impact on him. Accordingly, Bissett ordered Walia’s reinstatement.

    Had the applicant in Walia been a federal public servant, his misconduct would have been dealt with under the APS code of conduct and the relevant agency guidelines. I have dealt with the minutiae of code disciplinary investigation on many occasions before, and don’t propose to do so again here. The Public Service Commission’s 2015 Handling Misconduct: A Human Resource Manager’s Guide and the Australian Government Solicitor’s 2014 Misconduct in the Australian Public Service legal briefing are both good starting points.

    The key takeaway point from Walia, though, is that conduct considered by the employer to constitute serious misconduct does not axiomatically justify termination. While the label “serious misconduct” is often used in the APS context, it must be noted that the term does not appear in the Public Service Act. Notwithstanding the concept’s origins in the common law – and it is well accepted that, absent a legislative framework, an employer can summarily dismiss an employee for a single act of “serious misconduct” where it is fundamentally inconsistent with the continuation of the employment contract – termination on such a basis could still fall foul of the unfair-dismissal protections.

    Moreover, it should always be borne in mind that the APS misconduct regime is protective rather than punitive. Sanctioning public servants can only be done to protect the public, maintain proper standards of conduct within the APS and uphold the service’s reputation. Too often, this protective purpose is forgotten in a rush to punish misbehaviour. In the Walia case, the incident occurred in sight of an apartment block, giving rise to a reputational hazard. However, had Walia’s public servant equivalent urinated out of sight behind a corner, imposing anything more than a reprimand would be questionable.

    There is, though, one notable exception that deserves consideration. Employees at the Australian Criminal Intelligence Commission, Australian Federal Police and Australian Border Force are all subject to a peculiar provision in their respective originating legislation. Where the agency head reasonably believes that the conduct of a terminated employee amounted to serious misconduct, and this conduct had or is likely to have a damaging effect on the agency’s reputation or staff morale, they can make a declaration. This declaration precludes the Fair Work Act from applying to the termination, such that the terminated employee can’t lodge an unfair dismissal claim or demand payment in lieu of notice.

    While the specialised nature of the Australian Criminal Intelligence Commission or the AFP may justify this limitation, its introduction in the Australian Border Force Act means thousands of public servants are now at risk of losing their right to challenge a termination. The explanatory memorandum’s justification was hardly persuasive: … in instances of serious misconduct … the application of the Fair Work Act can impact on the ability of the secretary to both quickly and decisively remove an APS employee … For example, a review of the dismissal that results in the person having to be reinstated may send a mixed signal to the community or the workforce about the tolerance of serious misconduct within the department.

    The latter proposition borders on the absurd: an employee would only be reinstated should the commission determine they had not committed the misconduct, or there were compelling mitigating circumstances that make the termination “harsh”. Suggesting this eventuality would be destructive of public confidence in the Border Force is tantamount to arguing that appeal rights in criminal cases should be removed because an overturned conviction undermines faith in the prosecutor’s office.

    Thankfully, terminated Border Force staff who are subject to such a declaration can still challenge the misconduct finding (and, indeed, the declaration itself) via judicial review. Nevertheless, this development is deeply troubling, and unlikely to lessen red tape for affected employees – or the public service generally – in resolving nasty workplace disputes.

    Managing misconduct is rarely easy, and often reasonable minds will differ on the appropriate response to misbehaviour in the workplace. To some, the decision in Walia might be “taking the piss” and offer yet another example of the Fair Work Commission’s employee-friendly nature; to others, Citywide’s initial handling of the incident would be considered grossly excessive and the ultimate outcome entirely just. For those managing misconduct in the APS, adopting a proportionate and procedurally fair approach should prevent headline-grabbing outcomes like that in Walia.

    First published in the Canberra Times.

    John Wilson is the managing legal director at Bradley Allen Love Lawyers and an accredited specialist in industrial relations and employment law. He thanks Kieran Pender for his help in preparing this article.

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  • cycling liability

    Picking Up the Pieces - Liability Cover for Accidents Caused by Your Negligence

    Are you financially prepared for a major accident outside the boundary of your home caused by you?

    Does your home and contents insurance policy provide liability cover if you cause injury or death to another person in an accident?

    Though most Australians insure their homes, more than one-third do not insure their contents.  Contents insurance covers the financial cost of repairing or replacing your household personal possessions and furnishings such as curtains, furniture, white goods, stereo, TV, computers and other electrical appliances, clothing, jewellery, sporting equipment and even toys.

    It is important to check that the home and contents insurance includes liability cover to protect against financial loss if your actions or your negligence is found to cause a person to be injured or killed.

    The insurance should cover two key financial risks.  One is the compensation that you may be ordered to pay the injured party, plus their legal costs if a claim against you is upheld.  The second is the legal cost of defending a claim.  Ordinarily the level of coverage for all claims from any one incident under contents legal liability cover should be at least $10 million including all associated legal costs. Some policies will provide coverage of up to $30 million for public liability.

    The importance of checking your home and contents insurance cover was recently highlighted when the ACT Supreme Court ordered a cyclist to pay nearly $1.7 million in damages to a fellow cyclist who was knocked off his bike and hit by a car when the cyclists side by side collided on their way home from work.

    At the time, the cyclists were riding on a major road in a designated cycling lane after dark. The wheel of the offending cyclist struck a wooden stake lying on the cycle-way.  The accident occurred during the evening peak hour in winter when there was adequate lighting; which the court found would have allowed the offending cyclist to see the wooden stake.  The primary judge found that the offending cyclist should have seen the wooden stake in adequate time to take evasive action had he been keeping a proper look out for objects on the cycle-way.

    The offending cyclist appealed the decision that he had breached his duty of care and caused injury and financial loss to his fellow cyclist on the grounds that the findings against him were based on inadequate evidence about flawed lighting, and that expert evidence was required to show that he failed to exercise reasonable care.  He also argued the primary judge did not properly explain his reasons for finding the accident was avoidable.  The ACT Court of Appeal found that none of the challenges to the primary judge’s findings were supported by the evidence.  Special leave to appeal to the High Court was refused.

    The subsequent publicity surrounding the case, as it was widely reported in the Canberra media, resulted in an increase in the membership of the local cycling group Pedal Power ACT which automatically provides insurance coverage for its members.

    Fortunately, the negligent cyclist had insurance protection under his general home and contents insurance policy which provided liability cover for his fellow cyclist’s injuries. Certainly, cyclists should have insurance protection against liability to others, in their own interest as much as for the victims of anyone they negligently injure.  Whilst this may be a benefit of membership of a local cyclist organisation, it is prudent to check whether this coverage exists as part of a home and contents insurance policy.

    Written by Bill McCarthy, Special Counsel, Insurance Law & Liability.

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  • BAL-WhistleBlower

    Is 2017 the year of the whistleblower?

    Proposed changes to the Public Interest Disclosure Act and talk of a private sector equivalent indicate that 2017 could bring positive change for whistleblowers. Employment law expert John Wilson explains.

    “Sunlight,” eminent American judge Louis Brandeis once mused, “is said to be the best of disinfectants.” Yet while transparency is now a popular political buzzword, Australia remains an unfriendly place for those who dare to let the light shine on corruption and maladministration. The words of former NSW police commissioner Tony Lauer – that “nobody in Australia much likes whistleblowers” – continue to ring true.

    While the enactment of the federal Public Interest Disclosure Act in 2013 introduced long overdue protections for public sector whistleblowers, complementing a patchwork of similar legislation at state-level, this reform has been largely ineffectual. The absence of a comprehensive whistleblower scheme in the private sector only exacerbates a prevailing atmosphere of hostility towards those who report governmental or corporate wrongdoing.

    Unlike some jurisdictions where whistleblowers are adequately protected from retaliation, able to seek financial rewards and even empowered to initiate lawsuits when regulators fail to act, whistleblowers in Australia face severe personal and professional consequences. A Fairfax headline last year said it all: “Americans pay millions to whistleblower at BHP; we hound them out of their jobs”.

    A ray of sunlight?

    Political developments last November provide hope that change could be imminent. The Derryn Hinch and Nick Xenophon cross-bench deal to pass the government’s union regulation legislation came in return for strong protections for union whistleblowers, and the promise that similar laws will be introduced in other sectors. A parliamentary inquiry will report by June, with the objective of implementing “an equal or better whistleblower protection and compensation regime in the corporate and public sectors” by mid-2018. It has even been suggested that an American-style system of bounties or financial rewards for information could be established.

    Long-time observers of whistleblower protection laws in this country will not hold their breath. The federal Public Interest Disclosure Act, which although flawed represents a consideration step forward, took two decades, six parliamentary committees and three unsuccessful bills before finally being passed in 2013. Nevertheless, the prospect of improved whistleblower protections for public servants and the introduction of a private sector equivalent is enticing.

    First published in the Mandarin. Read the full article here.

    Written by John Wilson, Director, Employment & Workplace Relations, and Kieran Pender, Law Clerk.

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