News & Events

  • Hoarding Essential Guide

    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

    Read more
  • Good Debtor Management Enforce Recoveries

    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.

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

    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.

    Read more
  • Three Very Expensive Words- Federal Court finds Kraft liable for misleading and deceptive conduct

    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].

    Read more
  • Earlier this year the ACT Government announced financial and non-financial incentives for gaming machine licensees that take up the option to voluntarily surrender Gaming Machine Authorisations and Authorisation Certificates. These incentives are offered to support clubs' ongoing operations and to assist in reducing clubs' reliance on Gaming Machine revenue. The ACT Government wanted to reduce the number of machines in the territory to 4000 by 2020. As part of the voluntary surrender regime in January and February this year ACT clubs and hotels had voluntarily surrendered 934 machine authorisations, leading to a total of 4012 machine authorisations left in the territory. Given the numbers, it is clear that most (if not all) Clubs took part in that voluntary surrender regime and have received a range of benefits including cash incentives and offset amounts for fees, charges and other amounts that are usually imposed by the ACT Government. Offset amounts can be claimed to reduce or eliminate fees owing for Lease Variation Charges, deconcessionalisation payout amounts, and other Government land, lease and planning and development fees and charges; these offsets can be claimed anytime up to 31 March 2026. It is these offset amounts that present a significant opportunity for clubs to repurpose and redevelop their land; allowing clubs to create a strong, sustainable, and diverse income streams (and one which is not heavily reliant on gaming machine revenue). Land redevelopment presents a great opportunity for clubs to fully maximise the potential of their assets and better engage with current community needs. While the development application and consequent use of the offset would still be contingent on normal Government planning approval processes being completed, with the offset amounts clubs now have new strategies available to them to create a strong community focused sector. The windfall granted to many clubs who surrendered licences, in the form of either direct financial incentives or future offsets, may allow them to pursue redevelopment on their own account, rather than through ground leases to third party developers. Obtaining financing represents an (often insurmountable) hurdle for many clubs, which may become more difficult still in light of the more stringent lending policies being pursued by financial institutions in light of last year's Banking Royal Commission. This may be ameliorated to some extent by the significant planning offsets granted to licence-forfeiting clubs over the coming years, as well as the immediate incentive payments. Not only would such redevelopment generate new and ongoing revenue for clubs shifting away from a reliance on gaming, it may allow those who have retained gaming machines to more easily meet their obligations under the revised Gaming Machine Regulation 2004, due to come into force on 1 July 2019. The amended Regulations make clear that clubs can fulfil their compulsory 'community purpose contributions' through the maintenance of recreation and sporting facilities available to the public. Of course, there's no one size fits all approach to land redevelopment, nor is it going to be feasible or appropriate for all clubs. Clubs should think carefully and seek proper financial and legal advice before jumping headlong into what can be a very significant undertaking. However, given the opportunity presented by the incentives provided to the clubs by the ACT Government, as well as a renewed emphasis on the principles underpinning the community-based gaming model, it is certainly worth considering whether now might be the right time to pursue a new direction. If you or your club are thinking about pursuing development of its assets or want to know more about current developments in the regulation of the gaming industry, please feel free to get in contact BAL Lawyers.

    Diversifying Revenue and Assets for Clubs

    Earlier this year the ACT Government announced financial and non-financial incentives for gaming machine licensees that take up the option to voluntarily surrender Gaming Machine Authorisations and Authorisation Certificates.  These incentives are offered to support clubs’ ongoing operations and to assist in reducing clubs’ reliance on Gaming Machine revenue. The ACT Government wanted to reduce the number of machines in the territory to 4000 by 2020. As part of the voluntary surrender regime in January and February this year ACT clubs and hotels had voluntarily surrendered 934 machine authorisations, leading to a total of 4012 machine authorisations left in the territory.

    Given the numbers, it is clear that most (if not all) Clubs took part in that voluntary surrender regime and have received a range of benefits including cash incentives and offset amounts for fees, charges and other amounts that are usually imposed by the ACT Government. Offset amounts can be claimed to reduce or eliminate fees owing for Lease Variation Charges, deconcessionalisation payout amounts, and other Government land, lease and planning and development fees and charges; these offsets can be claimed anytime up to 31 March 2026.

    It is these offset amounts that present a significant opportunity for clubs to repurpose and redevelop their land; allowing clubs to create a strong, sustainable, and diverse income streams (and one which is not heavily reliant on gaming machine revenue).

    Land redevelopment presents a great opportunity for clubs to fully maximise the potential of their assets and better engage with current community needs. While the development application and consequent use of the offset would still be contingent on normal Government planning approval processes being completed, with the offset amounts clubs now have new strategies available to them to create a strong community focused sector.

    The windfall granted to many clubs who surrendered licences, in the form of either direct financial incentives or future offsets, may allow them to pursue redevelopment on their own account, rather than through ground leases to third party developers. Obtaining financing represents an (often insurmountable) hurdle for many clubs, which may become more difficult still in light of the more stringent lending policies being pursued by financial institutions in light of last year’s Banking Royal Commission. This may be ameliorated to some extent by the significant planning offsets granted to licence-forfeiting clubs over the coming years, as well as the immediate incentive payments.

    Not only would such redevelopment generate new and ongoing revenue for clubs shifting away from a reliance on gaming, it may allow those who have retained gaming machines to more easily meet their obligations under the revised Gaming Machine Regulation 2004, due to come into force on 1 July 2019. The amended Regulations make clear that clubs can fulfil their compulsory ‘community purpose contributions’ through the maintenance of recreation and sporting facilities available to the public.

    Of course, there’s no one size fits all approach to land redevelopment, nor is it going to be feasible or appropriate for all clubs. Clubs should think carefully and seek proper financial and legal advice before jumping headlong into what can be a very significant undertaking. However, given the opportunity presented by the incentives provided to the clubs by the ACT Government, as well as a renewed emphasis on the principles underpinning the community-based gaming model, it is certainly worth considering whether now might be the right time to pursue a new direction.

    If you or your club are thinking about pursuing development of its assets or want to know more about current developments in the regulation of the gaming industry, please feel free to get in contact with the Business team.

    Read more
  • Swing, sling and that liability thing

    Swing, sling and that Liability thing

    Pole and aerial sling gymnastics has become a mainstream form of fitness practiced by many gym enthusiasts. It requires significant muscular endurance and coordination. Proficiency is achieved after proper instruction and rigorous training. It should come as no surprise that this past time is no stranger to injury leading to claims against pole studio owners.

    The liability of one particular pole studio owner was recently considered in the ACT Supreme Court. Specifically, in Cornwall v Jenkins atf the iSpin Family Trust [2019] ACTSC 34, the court found that an owner and operator of an aerial sling and pole fitness studio did not breach its duty of care to a participant who sustained injuries as a result of a fall in the aerial sling class, which the court found had an obvious element of risk to it.

    Facts:

    Whilst participating in aerial sling classes, the plaintiff was using a fabric sling attached to the ceiling to perform fitness manoeuvres. She had been attending such classes for about a year when she fell from the sling and broke both her wrists. The plaintiff brought an action in negligence against the owner of the fitness business, and as occupier of the premises. Although the circumstances surrounding the accident were contested, the plaintiff claimed that the owner had breached its duty of care as no explicit warning was given about the risks of falling from the sling. It was also alleged that thick crash mats, and directions to use spotters, were not provided.

    Findings:

    The Supreme Court did not accept that the owner acted negligently or breached its duty of care.

    There had been very few instances of people injuring themselves whilst undertaking the manoeuvre at the studio. The judge found that it was reasonably foreseeable that someone undertaking this above ground manoeuvre would suffer an injury if they fell. However, the judge concluded that a reasonable person would have been able to identify the risk of falling from the sling and the owner’s failure to warn the participant would not have prevented the accident from occurring.

    The court accepted evidence that the instructor directed that a spotter should be used for sling manoeuvres. The instructor’s alleged failure to supervise the participant would not have prevented the harm because it was not the instructor’s responsibility to prevent participants from acting against her instructions.

    In relation to the issue regarding the mats, both yoga mats and thick crash mats were available for participants to use. Although the instructor did not urge participants to use the thicker mats, the court found that a reasonable person in the owner’s position would not necessarily have insisted upon the use of the crash mats due to the fact that the instructor had never witnessed a fall from the sling or injury during years of involvement with the business.

    Although the plaintiff’s injuries were clearly suffered by the fall from the sling, the plaintiff failed to prove that they were causally connected to any breach of the owner’s duty to exercise due care.  The court’s verdict thus swung in favour of the studio owner.

    Key Lessons:

    • This case shows that negligence claims are heavily dependent on the factual and evidentiary matrix to prove matters alleged. A dangerous activity involving an injury may not necessarily result in a finding that the activity was carried out negligently.
    • If you owe a duty of care to certain individuals, you should take precautions to warn them of any risks associated with their activities within your care, so that they are able to make their own decision as to whether or not to engage, and how to act.
    • A court will assess the reasonableness of measures taken by the owner in a prospective manner, meaning that they will not reason with the benefit of hindsight.[1]
    • Although you might not have seen any injury or issue eventuate before, if a certain risk of harm is foreseeable, you should still provide those persons within your scope of duty of care with sufficient protective measures.
    • Finding the right insurance coverage to respond to any such disasters to your business is crucial. In the event that an injured person brings legal proceedings against you, damages in the ACT courts can be generous, and you will be well placed to be properly protected from that exposure.

    [1] Vairy v Wyong Shire Council [2005] HCA 62; 223 CLR 422, [126] – [129].

    If you have any questions regarding personal injury or liability, please contact the Litigation group at BAL Lawyers.

    Written by Bill McCarthy and Maxine Viertmann.

    Read more
  • Locked out: at what cost to Landlords?

    Bradley Allen Love recently obtained a six figure judgment debt for a tenant who had been locked out of his Fyshwick premises, unlawfully, for failing to pay rent. The proceedings involved a number of claims, including a claim for damages for conversion and detinue of goods – being the wrongful dealing with and detention of another’s goods. The claim was defended by the landlord on the basis that the lease had been properly terminated and so the lockout was lawful.

    The ACT Magistrates Court decision, Biedrzycki v Bird & Smith [2019] ACTMC 8, contains a number of important lessons for both tenants and landlords of commercial leases.

    Payment of Rent

    During the term of the lease, the tenant withheld rent payments on the basis that he was unable to conduct his business due to flooding and an inoperable door to the premises. The non-payment of rent gave rise to a purported notice of termination. Although the tenant contested the termination, the Court held that the landlord was entitled to terminate the lease by reason of the failure to pay rent – a fundamental breach.

    Importantly, under ACT tenancy laws, a tenant must not refuse to pay rent if they are able to fully or partially use the leased premises for their normal purpose. Instead, tenants may make an application to the Court to seek relief, if it is necessary to do so.  Put more directly, tenants do not have the power to self-assess what discount they should be entitled to.  Absent agreement from the landlord, the court should be applied to for a determination of the dispute.

    Conversion and Detinue Claim

    After lockout, the landlord did not allow sufficient access for the tenant to recover his goods and equipment from the property. When the tenant was later granted access once more, some 85 items were missing. During the lockout period, the landlord was the only party with access to the premises.

    The Court found that there must be a balanced approach in considering the reasonableness of access to recover property. For the majority of the goods, the court held that conversion was not upheld, as access was ultimately provided by the landlord.   However, the 85 missing items were another matter.

    The Court found the landlord liable for the replacement cost of the 85 missing items, stating that the landlord was reckless in failing to keep the premises secure, and therefore assumed liability for those losses. While the evidence did not reveal what happened to the missing items, as the only party with access to the premises, the landlord assumed some responsibility to keep the premises secure and act reasonably to allow the tenant access to recover the goods. By failing to do so, the landlord was ordered to pay the tenant $150,000 – albeit the case that the quantum of this award has been appealed to the Supreme Court, with further judicial consideration to follow.

    Key Takeaways

    A lease, like any other contract, must be performed according to its terms. The ordinary principles of contract law apply to leases, including principles of termination for breach of contract. However, even if a lease is properly terminated, the relationship between the landlord and tenant may not yet be. Landlords should take care to ensure that they do not assume liability for unrecovered goods when locking tenants out of premises. Where this may occur, ensure you act reasonably by:

    • properly securing the premises;
    • negotiating appropriate access to minimise the risk of property loss; and
    • surrendering goods upon lawful and reasonable demand.

    What is reasonable will depend on the circumstances. If you are unsure, we recommend you seek legal advice. A failure to do so may be costly.

    If you have any questions about failure to pay rent, or what your options are, please get in touch with our Litigation team.

    Disclaimer: Please note this case is currently subject to appeal. Further updates will be provided as they become available.
    Read more
  • Recovering costs in a cost-free jurisdiction

    Recovering costs in a cost-free jurisdiction

    The ACT Civil and Administrative Tribunal (“the ACAT”) is well known as a ‘no costs’ jurisdiction. This epitomizes the intended purposes of ACAT, to be simple, quick, inexpensive and informal.  As such, parties to a matter in the ACAT are intended to bear their own costs unless the ACAT orders otherwise, which the ACAT may do if, for example, one party has caused unreasonable delay or obstruction.

    However, the cases below demonstrate that, if the parties to the proceedings were parties to a contract that provided for payment of costs incurred in recovering any moneys owed, the ACAT may still enforce the contract and award “costs” in keeping with the contractual terms, notwithstanding the usual rule that each party should bear their own costs of ACAT proceedings.

    Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustees for St Mary Mackillop College Canberra v Kenningham [2017] ACAT 97

    Facts

    In 2017, the applicant, St Mary Mackillop College, commenced ACAT proceedings to claim unpaid school fees from the respondent who sent her children to the College. The College also claimed legal and other costs incurred by them in seeking to recover the unpaid school fees in accordance with a recovery clause in the signed enrolment form, which entitled the school to recover any expenses incurred by them as a result of late or no payment.

    Findings

    The Tribunal ordered the respondent to pay the applicant the amount of unpaid school fees owing, as well as the expenses properly incurred by the school in taking action to recover the debt.  The ACAT did so without entering a “costs order” in the usual way, but instead ordered the expenses incurred in the proceedings were able to be recovered as a contractual debt in accordance with the contract between the parties in the form of the signed enrolment form.  In doing so, the ACAT found it was not being asked to exercise any discretion regarding costs, instead it was required only to apply established principles of contract law.

    Key Lessons:

    • In the event that a party to the contract seeks to recover any monies owing under an agreement, a recovery clause in a contract will entitle that party to recover its costs in doing so from the other party.
    • Although ACAT is a ‘no-cost jurisdiction’ where parties are to bear their own costs, the ACAT has shown reluctance in denying the effect of a contractual agreement.
    • Although costs are always a matter for the court or at the ACAT’s discretion, there may be a additional contractual basis for recovering costs.
    • Another instance in which ACAT may make an order for costs is where one party has caused unreasonable delay or obstruction before or while the ACAT is dealing with a matter. Note that this is distinct to a case simply being poor, unsubstantiated or disorganised.[1]
    • However, the ACAT has made clear that a contractual recovery clause will not automatically result in recovery of the costs of recovering amounts, as this is still upon discretion of the court or Tribunal.
    • Contracting parties should take caution in reviewing all contractual terms before signing, so as to not be taken by surprise at a later stage.

    [1] Bell & de Castella and Rob de Castella’s Smartstart for Kids Ltd [2013] ACAT 66

    If you have any questions regarding ACAT or costs jurisdiction, please contact the Litigation group at BAL Lawyers.

    Written by Kate Meller and Maxine Viertmann.

    Read more