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  Essential Guide to Local Government Law: Hoarding

  Hoarding involves the collection of an excessive number of items of (often) low value, as well as an inability to throw such items away.  Hoarding often results in squalor. Hoarding and squalor can have a significant adverse impact on neighbourhood health and amenity and can be a difficult issue for local councils to resolve.

  This Essential Guide provides guidance to councils on the options which are available to them under the Local Government Act 1993 (LG Act) to address hoarding in their communities.

  Options under the Local Government Act 1993

  Section 124 of the LG Act contains a range of orders which may be appropriate to address a hoarding situation. These include:

  1. Where articles or matter are being kept on premises in the immediate vicinity of a public place (such as a road or park) and in a manner that creates “unsightly conditions”, a council can give an order under item 10 of s.124 of the LG Act requiring the owner or occupier to remove or stack those articles or matter, to cover those articles or matter, to erect fences or screens, or to plant trees.
  2. Where birds or animals are being kept on premises that are of an inappropriate kind or number, or are being kept inappropriately, a council can give an order under item 18 of s.124 of the LG Act to the occupier of the premises requiring that they not keep birds or animals on the premises other than birds or animals of such kinds, in such numbers or in such a manner as specified in the order. The relevant standards for keeping birds or animals are in Part 5 of Schedule 2 of the LG Regulations.
  3. Where the land or premises are not in a safe or healthy condition, a council can give an order under item 21 of s.124 of the LG Act requiring the owner or occupier to do or refrain from doing such things as are specified in the order to ensure that land is, or premises are, placed or kept in a safe or healthy condition.
  4. Where waste is present or generated on the land or premises and is not being dealt with satisfactorily, and is not regulated by the Protection of the Environment Operations Act 1997, a council can give an order under item 22 of s.124 of the LG Act to the owner, occupier or person responsible for the waste (or waste receptacle) requiring them to store, treat, process, collect, remove, dispose of or destroy the waste in the manner specified in the order.
  5. Where waste on residential premises is causing or is likely to cause a threat to public health or the health of any individual, a council can give an order under item 22A of s.124 of the LG Act to the owner or occupier of the premises requiring them to remove or dispose of the waste or to refrain from keeping waste on those premises.

  A council can issue a combined order for a number of Items in the Table to s.124 of the LG Act under s.143, but an order under Item 22A cannot be included in a combined order.

  Evidence and inspections

  To support the giving of an order, a qualified and authorised council officer or contractor will first need to inspect the land or premises to identify the type, volume and location of the hoarded material and assess what order (or combination of orders) is appropriate in the circumstances.  As part of this process we recommend that the investigating officer:

  • take photographs of the property, including from nearby public places;
  • draft a detailed file note of the type and volume of materials being hoarded;
  • identify the location of those materials on the property, potentially by creating a map or sketch plan showing the different areas on which the material is located; and
  • look for evidence of the presence of vermin or feral animals.

  The investigating officer will then need to prepare a report indicating whether and why, in their view, the circumstances warrant the giving of an order. We also recommend that the investigating officer makes a record of any complaints received from the neighbours about the hoarding and obtains a written signed statement from the closest neighbours detailing the impacts they experience as a result of the hoarding.

  An authorised person can only inspect residential premises (including the curtilage of those premises) with the consent of the occupier[1]. Where the occupier does not give their consent, then it may necessary to consider other options such as inspecting the land from adjacent public land or neighbouring private land (with the consent of the owners of that land).  If that is not practicable, it may be necessary to obtain a search warrant.

  Giving notice of the Council’s intention to give an order

  There is a strict process under Part 2 of Chapter 7 of the LG Act for the issuing of orders. Except in the case of an emergency, or an order to be issued under item 22A, the Council must first give written notice of its intention to issue the order.  In drafting the notice, the council should ensure that the terms of the proposed order are realistic, are appropriate to the circumstances and are supported by the evidence gathered by the council. The terms of the proposed order will also need to be as precise as possible to ensure the recipient understands exactly what they are required to do. For example, adopting a general description of the materials as ’waste’ or ‘junk’  can be problematic, especially where the hoarder considers that the items have value. We recommend that an order include a detailed description of the hoarded items where possible, as well as a sketch plan showing the location of those materials. Proposing a staggered approach to disposing of hoarded items can be a good method to achieve a gradual but measurable clean-up process.

  Giving an order

  After the date specified in the notice of intention for the recipient to make representations has passed the council will need to do another inspection of the site to determine whether the circumstances necessitating the issue of the order are still present. If they are, the council will need to consider any representations which have been made in deciding whether to give the order (or an amended order)^[2].

  If, after giving proper consideration to any representations received from the person to whom the notice of intention was given, the council decides to issue the order then it should make sure that the order includes the reasons why the council has decided to exercise its discretion to give the order in the circumstances^[3]. These reasons should not simply restate the circumstances in which an order may be given that are mentioned in the table to s.124 of the LG Act and should clearly explain why the order is being given.

  The order will need to be served using one of the methods listed in s.710 of the LG Act, and a file note kept of the method of service.

  Review, appeal and enforcement options

  The recipient of an order under s.124 of the LG Act (other than an order under item 22A) can seek review of the order by the NSW Land and Environment Court (the Court).^[4] Any application for review must be commenced within 28 days of the date the order is given. In such an appeal the Court will review the circumstances and decide for itself whether an order should be made and, if so, in what terms. The legal validity of an order can also be challenged under s.674 of the LG Act.

  After the period of time for compliance with the order has passed, the council will need to do a further inspection to see if the order has been complied with (in part or at all) or whether it is necessary to take additional steps to enforce compliance.

  If the work required by an order is not done within the specified time, a council can do ‘all such things as are necessary or convenient to give effect to the terms of the order, including the carrying out of any work required by the order’.^[5]  While this seems like a broad power, we do not recommend that this power be exercised without an order from the Court authorising that work to be done, as a council may otherwise be found to be trespassing or unable to recover the costs it incurred in having done the necessary work.

  The failure to comply with an order is also a breach of the LG Act which a council can seek to remedy or restrain by bringing Class 4 civil enforcement proceedings in the NSW Land and Environment Court.^[6]   Civil enforcement proceedings are directed to remedying an existing breach, but can also be forward looking in the sense that they seek to prevent future breaches of the law (eg by ordering that a person not keep specified waste on their property).  In such proceedings, the Court has a wide discretion to make such orders as it considers appropriate, including an order enabling the council to take the necessary clean up action and recover the reasonable costs it incurs in doing so.

  Alternative options under the Environmental Planning and Assessment Act 1979

  In some circumstances a council may be able to take action under the Environmental Planning and Assessment Act (EPA Act) in response to a hoarding situation. For example, the hoarding of material may sometimes constitute prohibited development or development for which consent is required but has not been obtained, amounting to a breach of the EPA Act. Further details on the issue and enforcement of development control orders given under the EPA Act can be found in our two-part Essential Guide series on EPA Act orders, found here.

  Questions?

  For further information or assistance on how the Local Government Act 1993 can assist you to manage hoarding in your community, please contact Alan Bradbury and the Local Government & Planning team on (02) 6274 0999.

  The content contained in this guide is, of course, general commentary only. It is not legal advice. Readers should contact us and receive our specific advice on the particular situation that concerns them.

  [1] Local Government Act 1993 s.200. The wide and beneficial construction of the power to give an order under Item 21 does not authorise a trespass or other infringement of another’s property rights: Mailey v Sutherland Shire Council [2017] NSWCA 343.

  [2] Local Government Act 1993  s.134 and s135. The Council must also consider criteria in any local policy adopted under Part 3 (s.131)

  [3] Local Government Act 1993 s..136

  [4] Local Government Act 1993 s.180

  [5] Local Government Act 1993 s.678

  [6] Local Government Act 1993 s.673

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  Do tenants need to seek consent in commercial leases?

  The nature of business often means that a tenant will sometimes seek to make changes to their leasing arrangements. The most common are requests for consent to assign their lease to another party or underlease part or all of their premises to another party. Sometimes a tenant may seek a variation to its lease to accommodate an assignment to an incoming tenant or simply as a result of a change in financial circumstances and business downturn.

  In most circumstances, a lease will require a tenant to seek the landlord’s written consent to any such arrangements. In the case of an assignment or an underlease, the tenant’s request will likely need to include information to allow the landlord to properly consider the request such as the financial resources and business acumen of the proposed assignee or underlessee. Where the lease falls under the jurisdiction of the Leases (Commercial and Retail) Act 2001 (ACT), a landlord cannot unreasonably withhold its consent where such information is provided. It is common practice for a landlord to require a tenant (and the prospective third party) to enter into a deed to document the agreement and formally provide the consent of the landlord.

  Tenants occasionally forget to inform the landlord that they have sold/assigned their lease or allowed an underlessee to take occupation of the premises. Unsurprisingly this puts them in a difficult legal position when the landlord becomes aware of the transition, however, at this point a third party is usually in possession of the premises and the tenant has vacated. The tenant will be deemed to have breached its lease obligations in failing to obtain landlord consent in accordance with the terms of the lease and the consequences can be quite serious as the landlord may purport to terminate the lease on the grounds that the tenant has abandoned the premises or repudiated the lease.

  Both landlords and tenants need to be properly advised as to how a lease operates in such circumstances so that they are aware of when landlord consent is a requirement and avoid the risk (and the mess) of neglecting this critical process in leasing arrangements.

  The bottom line is for a tenant to seek consent rather than forgiveness; it can save a lot of aggravation in the long run.

  If you would like to discuss a commercial leasing issue, please contact our Real Estate team.

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  Legal professional privilege: Sword or shield?

  Legal professional privilege is a venerable principle. With antecedents in 16th century Elizabethan England, the concept — that there can be no compelled disclosure of communications between a client and their lawyer — remains a fundamental tenet of common law legal systems the world over. Nor is the principle unique to the Anglosphere: although the exact nature and tenor of the rule varies widely, almost every jurisdiction globally recognises some form of confidentiality in lawyer-client communication.

  Truth, like all other good things, may be loved unwisely — may be pursued too keenly — may cost too much. -Vice-Chancellor Knight Bruce

  …Which makes it somewhat surprising that the principle is under attack. Despite its august lineage, influential international institutions including the World Bank and United Nations Office on Drugs and Crime (UNODC) have recently suggested that privilege is facilitating corruption and illicit asset flows. Prosecutors are increasingly asserting that professional secrecy is being misused, while advocacy group Global Witness secretly filmed eminent American lawyers offering advice on how to move suspicious funds for a (fake) prospective client. In the courts, attempts have been made to narrow the application of privilege — with mixed effect.

  In a 2005 article, Stephen Argument asked ‘is legal professional privilege an endangered principle?’ It seems his concerns were prescient. Proponents of privilege watch on with growing concern. Courts in this country and elsewhere have consistently hailed privilege’s significance. The comments of Gummow J are representative: privilege is ‘not a mere rule of evidence but a substantive and fundamental common law doctrine, a rule of law, the best explanation of which is that it affords a practical guarantee of fundamental rights’. Others believe privilege’s importance is overstated. In the same year but in a different case, Gummow’s colleague Toohey J remarked: ‘Important, indeed entrenched as legal professional privilege is, it exists to serve a purpose, that is to promote the public interest by assisting and enhancing the administration of justice. It is not an end in itself.’

  Mason J had earlier observed: ‘[I]t is impossible to assess how significantly the privilege advances the policy which it is supposed to serve. The strength of the public interest is open to question.’ All of which makes a case shortly to come before the High Court of Australia, Glencore International AG v Federal Commissioner of Taxation, all the more interesting. In 2014, mining giant Glencore sought advice from Appleby, a law firm now notorious for its offshore restructuring practice. In 2017, documents relating to that advice became publicly available following the Paradise Papers leak. Those documents subsequently came to the attention of the Australian Taxation Office.

  Keep reading.

  Written by John Wilson and Kieran Pender. First published in Ethos.

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  Good Debtor Management and Enforce Recoveries - May Business Breakfast Club Summary

  This month at Business Breakfast Club, Laura Scotton of BAL Lawyers discussed debtor management trends, how to set up good debtor management techniques and strategies, and what the next steps are for debtors who still do not pay. The breakfast ended with Katie Innes introducing BAL Lawyers’ new Debt Recovery Partner Site: Enforce Recoveries.

  Good Debtor Management

  Getting debtor management right is imperative for the sustained financial health of any business. If poorly managed, the consequences for cash flow and growth can put a business at greater risk of insolvency, which may increase the exposure of your personal assets.

  Principles of good debtor management should underpin the entire creditor–debtor relationship, right from the inception of all new contracts. The drafting of terms relating to credit and repayments should be specific and unambiguous, with clear obligations and consequences built into every arrangement.

  Amongst other things, businesses should have trading terms (in writing) that stipulate the maximum payment time and any specific terms attaching to late payments, such as accrual of interest. Of course, these trading terms must be communicated to your customers and clients before you commence work; preferably they should be signed as well.

  Good debtor management also relies on robust internal systems. Your organisation should be set up so that invoicing occurs regularly and that the terms of the invoicing are clear. You should also ensure that you create and maintain comprehensive records; not only is this essential for meeting your legal requirements, it will help your business render invoices quickly and avoid any uncertainty.

  Once things are underway, there are five key steps you can take to ensure you set up good debtor management practices within your business:

  1. Be prompt: Invoice as quickly and as often as possible
  2. Be protective: Ensure invoice meets regulatory requirements
  3. Be participatory: Follow up with clients and send reminders for unpaid invoices
  4. Be proactive: Action payment disputes as quickly as possible
  5. Be prepared: Consider payment plans and consider if you should take security

  What happens when debtors refuse to pay?

  When Debtors refuse to pay, even after you have followed up with them, sometimes you need to take it further to get action. While communication and relationships are important, you should be proactive about enforcing your rights to avoid getting deeper into the hole. There are several debt recovery tools available including:

  1. Letters of Demand;
  2. Debt Collection Agencies;
  3. Statutory Demands (for corporate debtors); and
  4. Litigation and Enforcement.

  Here in the ACT, many businesses can face unique challenges associated with contracting for the provision of goods or services to the Federal or Territory Governments, including late payment. However, changes will soon be coming into effect to ensure that small to medium businesses don’t have to wait as long. From 1 July 2019, the Commonwealth has committed to paying invoices under $1 million within 20 days, and is requiring large businesses seeking to secure government contracts to make the same commitments.

  Enforce Recoveries:

  Chasing unpaid invoices isn’t fun, or an effective use of time for any business. Yet cash flow is king for businesses to grow and be sustainable.

  BAL Lawyers is the legal partner of a new debt recovery website, Enforce Recoveries, to help businesses get fast payment from debtors. Once you’re logged in, you submit the details of your debtors and outstanding amounts. We then check the debtor details, perform a conflict check and send a letter of demand straight to the debtor.

  Read the RiotACT Article on Enforce Recoveries here.

  For more information, please contact Laura Scotton or Katie Innes. The next Business Breakfast Club will be held on 14 June 2019. If you would like to attend, please click here.

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  Can your Landlord terminate the Lease under a demolition clause to refit the Premises for a larger tenant?

  Entering into a retail lease can seem like a risky business. Leases are often drafted in favour of the Landlord. One common example is the ability of a Landlord to terminate the lease to demolish or renovate the leased premises. But what is to prevent a landlord using a demolition clause to terminate the lease purely because a more commercially advantageous tenant is found?

  The Act

  The Retail Leases Act 1994 (NSW) (‘the Act’) provides some protection for tenants when a landlord seeks to exercise its rights under a demolition clause. Section 35 of the Act limits the operation of demolition clauses to provide security against an invalid termination.

  Section 35 relevantly provides that:

  • the Landlord must provide the Tenant with detail of the demolition proposal sufficient to indicate it is a genuine proposal;
  • the lease cannot be terminated unless the demolition cannot be carried out without vacant possession of the premises; and
  • the lease cannot be terminated without at least 6 months written notice being provided to the Tenant.

  Wynne Avenue Property Pty Ltd v MJHQ Pty Ltd

  Despite the protections provided by the Act, disputes often arise where Landlords seek to terminate a lease due to an impending demolition of the premises. This occurred in the recent NSW case of Wynne Avenue Property Pty Ltd v MJHQ Pty Ltd [2019] NSWCATAP 41 where the Landlord sought to create larger premises to be leased to a tenant with more commercial potential. Indeed, the Landlord had signed a Heads of Agreement in respect of the larger premises with the prospective tenant prior to serving a demolition notice on the Tenant.

  The case turned on whether the Landlord had provided a genuine proposal and is indicative of how similar circumstances will be dealt with in the ACT. In the ACT, Section 78(a) of the Leases (Retail and Commercial) Act 2001 (ACT) also provides that a Landlord is unable to terminate a lease under a demolition clause unless the Landlord gives the Tenant notice of a genuine proposal to demolish the building within a reasonable time after the lease is terminated.

  In Wynne Avenue Property, the Tenant argued that the notice was not valid as there was no genuine proposal to demolish the premises. Rather the motive behind the demolition was to accommodate a more commercial advantageous tenant. On appeal, the Tribunal ruled that in accordance with Blackler v Felpure Pty Ltd [1999] NSWSC 958, the motivation of the Landlord is mostly irrelevant when determining whether a genuine proposal exists (unless it shows that there is no genuine proposal).

  Conclusion

  While the Act safeguards tenants from arbitrary termination, these protections only extend so far. As Wynne Avenue Property Pty Ltd v MJHQ Pty Ltd shows, tenants can find themselves at a disadvantage due to the drafting terms of the lease. Tenants in any Australian jurisdiction should seek legal advice on the terms of any lease prior to entering into the Lease, particularly when a demolition clause is contained within the lease terms.

  If you have any questions about your rights under a demolition clause, please contact the Real Estate Team at BAL Lawyers.

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  Three (Very Expensive) Words: Federal Court finds Kraft liable for misleading and deceptive conduct

  In many Australian households, nestled somewhere in the pantry between the Vegemite and the Nescafé, there will be an unmistakable jar of semi-liquid gold: Kraft Peanut Butter. Or at least, it was Kraft Peanut Butter. The more observant among us may have noticed that two years ago the Kraft logo at the top of the iconic yellow label was quietly replaced by that of Bega, the Australian dairy powerhouse.

  In 2017, Mondelez-the company managing Kraft’s Australian operations-sold its market-dominating peanut butter product to Bega for $460 million, including its Port Melbourne production facility, the recipe, and the associated assets and goodwill.

  Despite a voluntary changing of the guard, an ugly legal battle between the food giants soon erupted when Kraft (perhaps realising that it had given up on a good thing) attempted to re-enter the Australian market by pairing up with Sanitarium to develop a peanut butter product with the same taste and feel as the product now made by Bega, clothed in virtually indistinguishable packaging.

  On 1 May 2019, the Federal Court handed down its judgment, finding that all rights in the ‘peanut butter trade dress’-comprising the distinctive visual elements of the jar, lid and label-had passed to Bega for their exclusive use when they purchased the iconic product.

  In his damning judgment, Justice David O’Callaghan found that Kraft’s new product had misled consumers with three little words.

  “Loved since 1935”

  Although in relatively fine print under the main logo, the emblazoning of that phrase on the labels of Kraft’s peanut butter proved fatal for the US monolith. Justice O’Callaghan found that this, as well as a press release stating that “Kraft Peanut Butter will … be back on Australian supermarket shelves in 2018”, was designed to mislead consumers.

  He agreed with the submissions of Bega that this conduct constituted an “obvious attempt by Kraft to create an association to the product which had been produced by the business owned, first, by Kraft Foods Limited, and then by Bega continuously since 1935” and that, in doing so, they were “seeking to attach themselves to a product that they had never produced and give the impression as though they had”.[1]

  Justice O’Callaghan held that the suggestion that Kraft would be bringing its peanut butter “back” also constituted misleading and deceptive conduct under the Australian Consumer Law as “[t]hat peanut butter is surely the very peanut butter product that Bega acquired, along with all the other assets. It was thus not [Kraft’s] to bring “back”.”[2]

  While the orders flowing from the Court’s findings have yet to be handed down, Kraft is unlikely to escape lightly given the scope of the wrongdoing identified by Justice O’Callaghan in his 182-page judgment. This case serves as a useful reminder of the immense value in intangible assets in the sale of business, including unregistered trademarks, as well as the need to tread carefully when attempt to piggy-back off the goodwill of popular products.

  If you have questions about navigating the ins-and-outs of the Australian Consumer Law and/or peanut butter choices, please feel free to get in touch with the Business team at BAL Lawyers.

  [1] Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593, [461].

  [2] Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8) [2019] FCA 593, [468].

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