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It is no secret that in today’s society there are a few companies that reign supreme when it comes to how we view digital content. Regulatorily speaking – erhem – keeping up with the evolution of technology is a never-ending game of fat cat and mouse. Australian Competition and Consumer Commission’s (“the ACCC”) recent inquiry into Digital Platforms (“the Inquiry”) has given us insight into how these large corporations collect, use and share our data – often without us even realising that it is happening. But the impact of the Inquiry is not limited to just those few large foreign companies, such as Facebook and Google, the findings and the resulting policy and law-making changes will no doubt have far reaching consequences that will affect small and large business alike.
Generally, the outcome of the Inquiry is that, in the field of “data collection,” there needs to be in place measures that will better protect smaller players in the market, namely by:
On 12 December 2019 the Government released ‘Regulating in the Digital Age’ – their response to how they plan to tackle issues unearthed by the Inquiry. The Government’s immediate response to the report includes investing $26.9 million in a new branch of the ACCC to monitor and report on competition and consumer protection in digital platform; its first order of business: to investigate the supply chain of online advertising and ad technology. 
The opaque nature of the ad-tech supply chain means that businesses who use these services are never sure if they are getting bang for their buck, as the sum of prices charged by ad tech suppliers and the share of advertising expenditure they retain are unknown to consumers. This lack of clarity is exacerbated by Google and Facebook obscuring how they rank and display their advertising. The Government’s decision to immediately allocate funds and investigate the online advertisement supply chain bodes well for smaller Australian businesses who rely on online advertisements, as they may be better placed to make more informed decisions on how to strategically enhance their online marketing strategy.
Notably, the Government’s response to the Inquiry has remained silent on its first recommendation regarding mergers and acquisitions of digital platforms. Despite the Government’s silence, the ACCC will take a tougher stance on any merger in the digital platform space that threatens potential competition. This may place a spanner in the works for both tech behemoths and small digital start-ups whose aim is to be bought out by big tech companies. This could have adverse effects on small scale digital innovation, as it may make it harder to appeal to potential investors. Ultimately, this heightened regulatory scrutiny may benefit consumers through enhancing competition, as big companies may be prevented from gaining an even larger market share.
Although it is premature at this stage to gauge the full impact of the Inquiry on Australian business, it marks the dawning of a new era of regulation in the Wild West of digital platforms. Digital monoliths may face closer scrutiny when buying out their rivals and when developing their advertising services, while smaller businesses and advertisers who use these platforms stand to benefit from greater transparency around the digital advertisement supply chain. However, all digital platforms, regardless of size, will have increased obligations to protect consumers’ privacy and data if the recommendations of the Inquiry are implemented.
Written by Anna Phillips with the assistance of Claudia Weatherall.
 Australian Competition & Consumer Commission, Digital Platforms Inquiry (Final Report, June 2019) 1 – 3.
 Australian Competition & Consumer Commission, Digital Platforms Inquiry (Final Report, June 2019) 3.
 Department of Prime Minister and Cabinet, ‘Response to Digital Platforms Inquiry,’ (Media Release, 12 December 2019) < https://www.pm.gov.au/media/response-digital-platforms-inquiry>.
 Australian Competition & Consumer Commission, Digital Platforms Inquiry (Final Report, June 2019) 12.
 Department of Prime Minister and Cabinet, ‘Response to Digital Platforms Inquiry,’ (Media Release, 12 December 2019) < https://www.pm.gov.au/media/response-digital-platforms-inquiry>.
 Australian Competition & Consumer Commission, Digital Platforms Inquiry (Final Report, June 2019) 10.Read more
When you think of the word ‘agent,’ a 007 Bond type character may spring to mind. However, in the far more textured but mundane corporate world when a company agent goes rogue, the company (‘the principal’) might find themselves liable under contracts they never intended to be party to.
An “agent” for a company is someone, usually an employee, who has the authority to create legal relationships on behalf of the company with third parties. This is not to say that an agent has unlimited power to bind the company; the critical issue is “where does that limit lie?”. An agent can only bind the company when the agreement in question falls within their ambit of their ostensible authority or their actual authority. An employee is not an “agent of a company” merely because they are an employee, as their “authority” flows from the role the employee is required to perform. There are several ways that an agency relationship can develop, and this includes:
Expressly stating that a person is an agent of a company does not indicate they are in fact an agent (though it does tend to imply that some authority is held), rather, the actual nature of the relationship between the alleged agent and the company will determine whether the person is truly the company’s agent. 
A company will not usually be bound by their agent if the agent enters into an agreement on behalf of the company that is outside their authority. If an agent acts outside of their authority, they may be liable to both the company for a breach of contract and, also, to the third parties of the agreement. An agent can have:
In conclusion, it always pays to give good instructions and to clearly set out the boundaries of your employees’ authority to minimize the risk of ‘rogue agents’. Better still if an agent has limited authority, communicating the limitation (i.e. subject to approval by management) to the “other side” provides the best defence.
Written by Riley Berry with assistance from Claudia Weatherall.
 Clive Turner and John Trone, ‘Australian Commercial Law 31st Edition’, (Thomson Reuters, 2016) 222.
 Collins v Blantern (1767) 2 Wils 341; [1558-1774] All ER Rep 33; (1767) 95 ER 847.
 Howard Smith & Co Ltd v Varawa (1907) 5 CLR 68 at 82.
 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd  2 QB 480 at 498.
 Sachs v Miklos  2 KB 223 at 35.
 International Harvester Co of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Co (1958) 100 CLR 644 at 652.
 Clive Turner and John Trone, ‘Australian Commercial Law 31st Edition’, (Thomson Reuters, 2016) 226.
 Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd  2 QB 480 at 502 – 503.
 Hely-Hutchinson v Brayhead Ltd  1 QB 549 at 583.
 Panorama Developments Ltd v Fidelis Furnishing Fabrics Ltd  2 QB 711 at 717 – 718.
 Panorama Developments Ltd v Fidelis Furnishing Fabrics Ltd  2 QB 711 at 717 – 718.Read more
In January 2020, Jill McSpedden and Christine Harvey moved to BAL Lawyers in Canberra City. They join Keith Bradley AM and Ellen Bradley in BAL Lawyers Estates and Estate Planning Team, which boasts a wealth of experience and strives to deliver an exceptional quality of service to its clients.
Jill McSpedden ran a private legal practice in Canberra for more than 30 years, which was known as Jill McSpedden and Associates. Prior to starting her own practice, Jill worked in various contexts including at the Insurance Commission and the Trade Practices Commission, now known as the ACCC. Jill McSpedden and Associates was established in 1983, first operating out of Jill’s home in Canberra’s inner south. Jill built the practice from the ground up into a flourishing business with loyal clientele in its core areas of estates, estate planning, conveyancing and business law. As the practice grew, Jill settled in commercial premises in Yarralumla.
Christine Harvey has had a diverse career in both private and government practice and as a special magistrate of the ACT Magistrates Court. She has held a wide range of executive and director level positions for peak industry bodies, professional associations and has been a director on boards of several companies in the not-for-profit sector. Christine has held positions as Director of Professional Standards of the Law Society of the ACT, Executive Director of the Law Society of the ACT, Deputy Secretary-General of the Law Council of Australia, Chief Executive Officer of the Royal Australian Institute of Architects, Junior Vice President of Professions Australia and Chief Executive Officer of The Victorian Bar.
McSpeddenHarvey was formed in 2008 when Christine Harvey and Jill McSpedden joined forces. Over the following decade the firm continued to prosper as a well-established boutique legal services practice, recognised for its focus on estates and estate planning.
Jill and Christine joined BAL Lawyers in January 2020. At BAL Lawyers, Jill, Christine and the team will work with you to put in place forward-thinking and flexible estate planning, tailored for families’ individual needs and circumstances. BAL Lawyers has six legal teams with experience and expertise in estates and estate planning, commercial and business law including co-operatives and mutuals, real estate law, local government, planning and environment law, employment law, litigation and business succession.
If you are a director of a small company, it is likely that you have signed a personal guarantee, perhaps several. Whether or not directors’ personal guarantees are an inevitable cost of doing business for small companies with limited assets, the effects can be serious and are often misunderstood. So how much have you put on the line for your business, and what can you do to minimise your exposure?
The most important feature of modern companies is the idea of limited liability. By establishing a legal entity that stands between you and your business activities, the buck stops with the company, preventing shareholders and directors from personally bearing the burden of any liabilities incurred by the business (subject to a number of statutory exceptions).
However, banks, landlords, financiers and other key business partners almost uniformly ask small companies with limited assets to ‘lift the corporate veil’ and have directors (and occasionally shareholders) promise to be personally liable if the company fails to pay its debts or perform its obligations. By signing a personal guarantee, you are therefore contractually putting your own assets on the line, including your personal finances, your material assets and even your family home.
Personal guarantees can take a variety of forms, but are often more extensive than many directors may realise. In addition to the principal liability incurred by your company, the guarantee may also cover extra costs, such as interest rates, debt recovery fees and even creditors’ legal costs. Directors are often required to sign an ‘all moneys’ guarantee, rendering them personally liable for the entirety of the company’s debts and liabilities regardless of their origin and when they arise.
One of the most onerous features of personal guarantees—and one that can lead to nasty surprises for former company directors—is that they often (and typically will) extend beyond the life of your directorship. The guarantee is a contract signed in your own name, so there is nothing that inherently makes the liability under it dependent on your position within the company. Unless the terms of the guarantee itself specify otherwise, this means that your liability will extend beyond your resignation, and potentially even after the company stops trading or winds up.
Finally, many guarantees are given ‘jointly and severally’ by directors. This may not mean much to you, but these words can have serious implications. It means that a creditor may call on all directors to pay a company debt, but they could equally pursue any one director for the entirety of the debt.
While a personal guarantee can be often unavoidable for smaller businesses, it is not necessarily inevitable in all cases. Where your business is important to a particular creditor and you have enough negotiating power, you may be able to assure them with an alternative, such as a bank guarantee. In any case, you should always attempt to limit your liability as far as possible, including by limiting the term of the guarantee to the period of your directorship or to a particular amount.
If the other party still refuses to extend credit without a full and largely unlimited personal guarantee, then you must ensure that you keep on top of your obligations. Maintain a comprehensive register of any personal guarantees you have given so you don’t lose track. Once your time as director is up, then you need to take active steps to withdraw your guarantee or replace it with one form a new director. This can be complex and often requires approval or confirmation by the creditor, so it is important to get independent legal advice. Sometimes it may require ending an account and opening a new account.
If you’ve been asked to sign a personal guarantee—or don’t know how to get out of one—get in touch with our Business team.
Changes to gift card laws came into effect late in 2019 that impacted the issue and use of gift cards. Just in time for Christmas shopping, the changes mean fewer wasted gift cards expiring before customers have a chance to use them.
From 1 November 2019, gift card laws meant that all gift cards must comply with the following rules:
Restrictions on post-purchase fees includes a restriction on charges such as activation fees, account keeping fees and balance enquiry fees. Standard business fees, such as those charged in respect of payment processing costs and not solely in relation to gift cards, are not restricted.
There are certain exclusions in terms of the types of gift cards that must comply with the new laws. For example, the three-year expiry period does not apply to gift cards that can be reloaded, that are issued for temporary marketing purposes or issued as a bonus under customer loyalty programs. However, all standard gift cards and vouchers will otherwise be required to comply, with strict penalties applicable for both companies and individuals in the event of non-compliance.
Consumers will now be able to enjoy more certainty when purchasing and using gift cards, as these new requirements are applicable to all gift cards and vouchers supplied from 1 November 2019 onwards, regardless of whether or not the gift card appears to comply. Older gift cards will have the same expiry date and post-purchase fees applicable at the time of purchase.
Businesses offering gift cards should take note to update their systems and terms and conditions so as to be compliant with the new laws.
These amendments were made to the Competition and Consumer Act 2010, which provides various protections for Australian consumers for the purpose of promoting fair trading and competition.Read more
Amidst ongoing catastrophic bushfires, those who have lost their home may find themselves unable to build due to underinsurance. Adding to the grief are forecasts of higher-than-average temperatures and predicted longer bush fire seasons. Such extreme weather conditions will have consequences over time, with more people losing their homes to a catastrophic fire event.
The Insurance Council of Australia has warned that most households are underinsured; perhaps as high as 80% of all insured homeowners.
Underinsurance occurs when the amount a homeowner insures their property for does not cover the actual rebuilding cost, leaving the homeowner out of pocket for the extra costs of a rebuild to new building standards.
A new rating standard – known as the Bushfire Attack Level (BAL) – was developed after the 2003 Canberra bushfires and introduced in the wake of the 2009 ‘Black Saturday’ bushfire in Victoria. The BAL aims to reduce the risks of a home igniting in a fire risk zone.
Only if your home is in an area prone to bushfires do you need to consider getting a BAL assessment.
The bushfire zoning of your property, proximity of the home to bushland, and the slope of the land are some of the factors that will determine the construction requirement for homes approved and built (or rebuilt) after 10 September 2009. The higher a building site’s BAL, the more stringent the construction requirements which cover floors, external walls, doors and windows, roofs, verandas and attached carports.
If your home was built before 2009 and it burns down, it may – depending on its BAL – have to be rebuilt to a higher building standard than it was originally constructed. These higher construction standards can significantly increase the cost of rebuilding your home in a bushfire prone area. If you do not take account of the increase in rebuild costs – which can include the extra demand for builders and building materials after a bushfire disaster in calculating the replacement cost – you risk being underinsured.
In estimating your building costs, there are a range of free-independent insurance calculators that can be used to estimate the cost of rebuilding your home in accordance with national building construction standards. For a more accurate estimate, a builder, architect or quantity surveyor could be engaged for this task.
Another reason for reviewing your insurance policy and checking whether you are underinsured is that a home lender, probably a bank, will want any existing mortgage to be paid out before a rebuild with the likelihood of a fresh mortgage needed for any rebuild.
You can upgrade your insurance cover by updating the sum insured of home and contents to reflect the likely replacement cost of rebuilding to current bushfire standards. This option – often referred to as a sum insured safeguard – can increase the nominated sum insured by up to 25%. Insurers are only obliged to cover you up to the amount you are insured for. Payment of an additional premium for this safeguard will provide a buffer to ensure that you are fully covered. Note that you may not be entitled to an automatic payment of this higher sum as the insurer is only required to pay the amount of your actual loss.
Commonly, an insurance policy for home and contents will instantly cover bushfires as an insured event:
Otherwise, your cover for loss or damage due to bushfires will start within the first 48 or 72 hours after you buy the property depending on the wording of your particular policy. Any delay in the operation of a policy is designed to stop people taking out cover immediately before or during a bushfire emergency and then claiming for loss of damage due to a bushfire.
Sometimes insurers impose a “postcode embargo” on new policies for areas currently affected by bushfires. The embargo can apply for several days and then be lifted which should permit a homeowner to obtain appropriate insurance cover. A new policy issued during a period of high bushfire risk may include a no-claim period. This would prevent a claim for the specific risk until the no-claim period has expired.
Bear in mind that we are seeing bushfires in more areas and bushfire warning levels being more frequently communicated, it is important that you make your own enquiries or talk to an insurance professional to ensure you understand exactly what your insurance covers.
When you first take out a policy and at every renewal, it is your obligation to review the amount of cover that the insurer is offering to ensure that it meets your needs and expectations. If you are not satisfied with the amount of cover you are offered, this should be discussed with your insurer. The aftermath of a catastrophic fire event should not be compounded by the trauma of underinsurance. Local communities impacted by the onslaught of a bushfire are often so disrupted that families are forced to move elsewhere as the rebuild costs bear no resemblance to the sum insured on their homes.
Written by Bill McCarthy.Read more