News & Events

  • beware auction contracts

    Beware Auction Contracts: Vendor fails to do agreed works in Contract for Sale of Land and Purchaser loses Deposit!

    You would assume that a Vendor who agrees to complete works on a Property prior to completion of the Contract is required to do so prior to the agreed completion date specified in the Auction Contract, especially if the Contract required them to do so. You may equally assume that, if a Vendor fails to complete such works prior to the completion date, the Purchaser would be entitled to terminate the Contract. However, as shown by the NSW Court of Appeal case of Namrood v Ebedeh-Ahvazi [2017] NSWWCA 310, nothing in the world of Contract law can be so readily assumed.

    What happened in the case?

    Mr Namrood (the Purchaser) was the successful bidder at auction to purchase a vacant residential block of land from Mr Ebedeh-Alwah (the Vendor). The Purchaser only became aware of the auction on the auction date and did not seek legal advice on the terms of the auction contract. The Contract entered into between the parties contained a special condition under which the Vendor undertook to remove loads of soil and restore the level of the Property in accordance with a Council Notice issued to the Vendor prior to ‘Completion’ (the Vendor Works). The Council Notice made non-compliance an offence open to prosecution.

    The ‘Completion Date’ in the Contract was 20 June 2015. By this date, the Vendor had not completed the Vendor Works. After protracted correspondence between the parties, the Purchaser purported to terminate the Contract due to the Vendor’s non-compliance. The Vendor did not agree that the Purchaser had validly terminated the Contract and continued to complete the Vendor Works; following which the Vendor sought to compel the Purchaser to complete the Contract. When the Purchaser refused to complete, the Vendor sought to terminate the Contract and keep the deposit.

    What did the Court rule on the Auction Contract?

    The NSW Court of Appeal determined there was a clear distinction in the Contract between the terms ‘Completion” and “Completion Date”. The Completion Date was defined as 20 June 2015. The term Completion, however, meant the date on which title to the Property was actually transferred. This date (as would be the case) was not necessarily 20 June 2015.

    As the parties had chosen ‘Completion’ and not the ‘Completion Date’ as the time by which the Vendor was required to complete the Vendor Works, the Vendor was not required to do so prior to 20 June 2015. Rather the Vendor was only required to complete the Vendor Works prior to the date on which the Contract was actually completed. This meant the Vendor was not in breach when the Purchaser purported to terminate the Contract and, as the Contract remained on foot, had later validly terminated the Contract. This Vendor was therefore entitled to retain the 10% Deposit.


    The ruling in Namrood v Ebedeh-Ahvazi may seem like a strange result. However, it emphasises the importance courts place on the specific drafting of contractual clauses. Those entering into property deals must be sure to obtain legal advice on the specific terms of the Contract and should not assume that the meaning of any contract clause is clear and unambiguous.

    This is difficult with auction contracts, which are disclosed to would be purchasers a short time before the auction or even at the point of signing. Make sure you obtain a copy of the auction contract as early as possible before the auction date and seek legal advice on the terms of the Contract before bidding at auction. Otherwise you can be caught out in the most unexpected of circumstances.

    For advice on auction contracts, please contact us.

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  • Workplace Privacy Candid Camera Covert Surveillance

    Workplace Privacy - February HR Breakfast Club Summary

    The focus of Australian labour law continues to move beyond securing core industrial rights regarding wages, towards issues surrounding wellbeing, mental health, reputation and workplace privacy. Speaking on workplace privacy and surveillance, Rebecca’s presentation focused on:

    1. whatprivacy legislation applies to your organisation(noting that all employers are subject to legislation surrounding the privacy of Tax File Numbers and health information);
    2. the impending amendments to the Privacy Act 1988(Cth) regarding reporting of privacy breaches and the European General Data Protection Regulations;
    3. when, and how, you can monitor employees in the workplaceand their IT use (emphasizing the importance of making sure your ACT-based organisation has a policy in place that notifies employees of workplace surveillance).

    Workplace privacy case study video:

    Take aways:

    1. Employee medical files must be kept confidential
    2. Employees must be notified prior to the emails being monitored

    Q&A Corner

    Q: We share so much of our lives online these days, how can people expect to have privacy in the workplace? What are employers supposed to do when sensitive information is disclosed outside the workplace (for example, on Facebook) and is subsequently the topic of discussion among employees?

    A: These days a lot of individuals are willing to share their private lives on social media – but not in their workplaces. It is important that employers comply with the relevant privacy legislation when it comes to information they receive from the employee. Two employees discussing a colleague’s broken leg (after seeing a picture of it shared on Instagram) is not equivalent to an employer discussing an employee’s medical certificate at morning tea.

    Q: What constitutes a ‘health record’ for the purposes of the Health Records (Privacy and Access) Act 1997 (ACT)?

    A: A ‘health record’ is any ‘record’ which contains ‘personal health information’.

    ‘Personal health information’ is any information:

    1. relating to health, illness or disability; or
    2. (if the employer is a health service provider, such as a hospital) any information collected in relation to the health, illness or disability of a consumer.

    A Record is a record in documentary or electronic form that consists of personal health information. Examples of records are:

    1. Documents;
    2. Photographs;
    3. Emails;

    This answer is, of course, general commentary only. It is not legal advice. Readers must contact us and receive our specific advice on the particular situation that concerns them before acting or refraining from acting.

    For more information about workplace privacy, please contact Rebecca Richardson.

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  • crowd funding

    Crowd Funding: Business Breakfast Club February Summary

    UPDATE: as at 28 February 2018: Crowd-sourced equity funding for proprietary companies Bill passes the House of Representatives

    This month at Business Breakfast Club, we discussed the crowd funding regime including the current legislation that applies to public companies and the proposed bill to extend that regime to proprietary companies. BAL Director, Katie Innes shared some of her insights on the topic. Katie touched on:

    Funding Businesses

    Raising funds to kick start a business is a central concern of all business entrepreneurs. Traditionally, the two methods used to raise those funds include taking out a loan or raising capital through selling shares.

    Amendments to the Corporations Act in 2017 were designed to support innovation and entrepreneurship (by simplifying the capital raising provisions of the Act and reducing compliance costs) while balancing and protecting the interests of retail investors.

    Current Legislation

    Currently only public companies can access crowd sourced funding but they must only do so through an approved intermediary who holds a specific type of AFSL. Only seven entities are currently approved for these types of AFSLs. Like the previous capital raising provisions, there are a number of similar disclosures that must be made by a public company in its offer document, so whether the legislation actually delivers a practical reduction in compliance costs is yet to be seen.

    Proprietary companies cannot access the crowd sourced funding regime as they were intended to be ‘closely-held’, i.e. shareholders who have a direct connection to (or rights to appoint) management. Under the Corporations Act there are currently two restrictions on proprietary companies which hinders their ability to raise funds:

    1. proprietary companies must not have more than 50 non-employee shareholders; and
    2. proprietary companies cannot make public offers of equity to retail investors.

    A bill is before Parliament to amend the legislation and extend the regime to propriety companies.

    If the Bill is approved

    If the Bill is passed, proprietary companies would be able to access crowd sourced funding but their structure and reporting obligations will change. Such changes would include:

    1. a minimum of two directors with a majority of directors residing in Australia;
    2. preparation of financial reports in accordance with accounting standards;
    3. requirement that financial reports be audited if the company raises more than $3 million from crowd funding offers; and
    4. restrictions on the financial benefits that may be given to related parties including directors.

    More information about the bill is available here.

    Who benefits the most under the crowd funding regime?

    Generally, the crowd funding regime is going to benefit established companies whose products have already been tested and where there is a desire to expand those businesses.

    The regime will also benefit retail investors by providing them with access to new types of share offerings that were previously off limits under the Corporations Act, allowing them to diversify their investments in equity other than in ASX listed shares.

    Early-stage companies could access the crowd funding regime and there is the potential for higher returns for investors but with that is the potential for higher risk. Investors may be reluctant to invest where the financial statements or business plan in the offer document is lacking.

    The Business Breakfast Club is held on the second Friday of each month. If you would like to attend, please contact us to be added to the invite list.

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  • Local Government Guide: Acquisition of land by NSW councils

    Essential Guide to Local Government Law: Acquisition of land by NSW councils

    The process of acquiring land or an in interest in land, such as an easement, is underpinned by the Land Acquisition (Just Terms Compensation Act) Act 1991 (the Act). Whilst the NSW State Government has published a number of resources to guide stakeholders through the acquisition process, this brief commentary will discuss the key steps involved and provide some practical guidance for council staff.

    Private or compulsory acquisition of land

    There are two main processes by which a council may acquire land: by a private agreement (by contract or deed) or compulsory acquisition. Another method, less frequently adopted, is where the parties agree that the acquisition is to occur via the compulsory process.

    1. Private agreement

    The most common method of land acquisition is by negotiation and agreement. In this situation, the council and the landowner agree on the price to be paid for the land and the transaction takes place just as it would if the land was being purchased by an ordinary person.

    To improve fairness and transparency in the land acquisition process, NSW State government policy requires the council, when first notifying a landowner that their land is required for a public purpose, to approach the landowner in person (except in exceptional circumstances) and to appoint a designated person to coordinate all interactions between it and the affected landowner.[1] The council must also provide the landowner with a copy of the NSW Government’s “Land Acquisition Information Guide” or an equivalent document.[2]

    When contact is established with the landowner, the terms of the acquisition can then be negotiated to suit the specific needs of the parties.

    The ultimate decision to acquire land needs to be made by a resolution of the council as this is not a decision that can be delegated.[3] However, an in-principle agreement may be negotiated with a landowner prior to a council resolution provided that the ‘agreement’ is then subject to the passing of a council resolution approving the purchase. It is important for the person conducting the negotiations to ensure that the landowner understands that any offer is subject to approval by the council.

    2. Compulsory acquisition

    Except in certain specified circumstances, the Act requires councils to make genuine attempts, for at least 6 months, to acquire land by agreement before any action is taken to compulsorily acquire the land.[4]The specified circumstances include where agreement is reached before the end of the 6 month period, as well as where the affected owner refuses to negotiate, cannot be located, or agrees to a shorter timeframe. The 6 month negotiation period also does not apply to the acquisition of Crown land or land below the surface.

    If a private agreement cannot be reached, the acquisition can occur via the compulsory process, subject to the Minister and the Governor’s approval. The decision to apply for the Minister and Governor’s approval needs to be made by a council resolution.[5] The application should then be prepared in accordance with the NSW Office of Local Government’s guidelines.[6]

    If the council’s application is approved, the compulsory acquisition can then occur in accordance with the procedures set out in the Act. This will involve the service of a ‘Proposed Acquisition Notice’ on relevant land interest holder(s),[7] notifying the NSW Registrar General,[8] and notifying the NSW Valuer-General.[9]

    After the period of notice (usually 90 days) has expired, the land is acquired by the publication of an ‘Acquisition Notice’ in the Government Gazette.[10] A copy of the Acquisition Notice must also be published in at least one newspaper circulating in the local area or on a website that the council believes is appropriate to bring the acquisition to the notice of people in the local area.[11]

    3. Compulsory acquisition by agreement

    This process involves the council and the landowner agreeing that the acquisition is to occur via the compulsory acquisition process described in (2) above. In our experience this method is preferred by the NSW Department of Crown Lands when the land to be acquired by the council is Crown land.

    Identifying relevant interest holders and third parties

    Council staff should conduct a title search of the land designated for acquisition early in the process to identify any relevant encumbrances and stakeholders. If the land is subject to a caveat, mortgage or lease, a landowner may need to procure the consent of any third parties for the acquisition to occur by agreement.

    Survey plans

    If the council is not proposing to acquire an entire lot in a deposited plan, it will need to engage a surveyor to prepare a survey plan of the land to be acquired. The type of plan required will depend on the nature of the interest being acquired and whether the land is to be acquired privately or via the compulsory process.

    If the council applies for the acquisition to occur via the compulsory process, a plan of acquisition identifying the land will need to be registered at the NSW Land Registry Service before the NSW Office of Local Government will process the council’s compulsory acquisition application on behalf of the Minister.


    Each landowner affected by an acquisition is entitled to be compensated ‘on just terms’ in accordance with the Act. The Act contains a statutory guarantee that the compensation will not be less than the market value of the land assessed in accordance with the Act and unaffected by the proposal for acquisition.[12]

    The Act specifies the matters which need to be taken into consideration when determining the value of the compensation payable.[13] These matters include not only the market value of the land to be acquired, but also disturbance costs of the landowner, including their reasonable legal and valuation fees, financial costs (such as fees imposed by their mortgagee), any special value of the land and any disadvantage resulting from relocating a person’s residence (if relocation is necessary).

    The matters which need to be taken into consideration when land is being acquired by compulsory acquisition must also be taken into account when land is being acquired by negotiation and agreement, unless the land is available for public sale [14]. The land is available for public sale if the landowner holds it out as being for sale.

    Briefing a qualified valuer early in the negotiation process will assist the parties to reach agreement on the compensation payable.

    If no agreement is reached and the acquisition occurs via the compulsory process, the compensation will be determined by the NSW Valuer-General,[15] at the council’s cost.

    When the compensation is determined by the Valuer-General the council must offer that amount to the landowner in a ‘compensation notice’.[16]  If the landowner objects to the amount offered they may lodge their objection with the Land and Environment Court of NSW and the Court will determine the amount of compensation.[17] If this occurs it is open to the council to argue in the Court proceedings that a lower compensation amount should be payable rather than the amount which was determined by the Valuer-General.

    Timeframes and project delivery

    The acquisition of land, or an interest in land, is often undertaken for the purposes of constructing public infrastructure that is the subject of a specific funding grant and which will be carried out by contractors. When procuring contractors and estimating project delivery timeframes, council staff should keep in mind the following matters, as they can significantly delay delivery of a public infrastructure project:

    • In most (but not all) circumstances the council is required to attempt to acquire the land by agreement for at least 6 months before serving a Proposed Acquisition Notice on the landowner under the compulsory acquisition process;[18]
    • Time needs to be allowed for the making of the council’s compulsory acquisition application to the Minister and Governor, for that application to be considered by the Minister and for approval to be given to enable the acquisition to proceed;
    • Unless approval of the Minister is obtained for a reduced time period, or the affected landowner agrees, the compulsory acquisition of the land can only occur 90 days after the council gives the affected land interest holder a Proposed Acquisition Notice.[19]


    While the acquisition of land can appear to be straight forward process, there can be numerous issues that can add complications and delay. Keeping the matters outlined in this short guide in mind will assist you to plan and acquire land effectively and efficiently.

    For further information about, or assistance with, a council land acquisition, please contact Alan Bradbury or Andrew Brickhill 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] NSW Department of Finance, Services and Innovation Circular: DFSI-2017-02 � Improvements to NSW Land Acquisition Process.

    [2] NSW Treasury and Finance Circular: OFS-2015-01-Changes to Land Acquisition Processes by Acquiring Authorities.

    [3] Local Government Act 1993, section 377(1)(h).

    [4] Section 10A.

    [5] Local Government Act 1993, section 377(1)(s).

    [6] NSW Department of Local Government Circular to councils: 06-49 New Guidelines for the Compulsory Acquisition of Land by councils.

    [7] Section 11.

    [8] Section 17.

    [9] Section 18.

    [10] Sections 19(1) and 20(1).

    [11] Section 19(2).

    [12] Section 10.

    [13] Section 55.

    [14] Section 38.

    [15] Section 47.

    [16] Section 42.

    [17] Section 66.

    [18] Section 10A.

    [19] Section 13.

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  • Granny flat arrangements — when will they be appropriate?

    Granny Flat arrangements - when will they be appropriate?

    Granny flat arrangements are becoming increasingly popular. Too often however a granny flat arrangement will fail to deliver what the parties were expecting. On many occasions the arrangement leads to family disputes or even to litigation.

    There are a number of key considerations that family members need to take into account when entering into a granny flat arrangement.

    This article focuses on those key considerations and includes a checklist for practitioners to follow when considering a granny flat arrangement for their clients.

    Key points/how does it affect you?

    • To confirm the key questions to be raised for you to determine whether a granny flat arrangement is appropriate in a particular client situation.
    • If a granny flat arrangement is appropriate for the specific circumstances then there are recommended aspects that an adviser should address when documenting the arrangement.
    • This article will assist advisers to develop their own checklist to use when acting for clients that want to put in place a granny flat arrangement.

    What are granny flat arrangements?

    The following article focuses on ‘granny flat arrangements’ that involve the grant of a ‘granny flat interest’ as the term is defined in the Social Security Act 1991 (Cth).[1] The elements of this definition are noted below.

    It is also relevant to note that the phrase ‘granny flat’ has its own meaning in a real estate context being a self-contained living area that is part of an existing residential dwelling.

    Although a granny flat interest will often relate to a separate living area, it does not have to. A granny flat interest can be created where there is no separate living area.

    Definition of granny flat interest

    A granny flat interest is where the person resides in a private home and acquires for valuable consideration, or has retained a right to accommodation for life, in the residence or acquires (or has retained) a life interest in the residence.

    Importantly, the payment made or the consideration provided by the person (invariably the parent) is generally an ‘exempt asset’ for social security purposes. Therefore the deprivation or gifting rules do not apply. The rationale for this approach was described by Centrelink as follows:

    We don’t use market value to work out how much a granny flat interest is worth. Instead, we value it at the same value as the assets you transferred or paid if you are:

    • transferring the title of the home you live in to someone else and keep a lifetime right to live in that home or in another home [This applies if your home was or would have been totally exempt from the asset test]
    • paying to:
      • build a granny flat on someone else’s property C convert someone else’s home to suit your needs and getting a lifetime right to live there, or
      • buying a property in someone else’s name and get a lifetime right to live there

    [Provided you pay in one of these ways and do not transfer additional assets as well, no deprivation will occur.][2]

    If an additional payment or consideration is provided, Centrelink will apply the ‘reasonableness test’. This test is based on the combined partnered rate of the annual pension and is multiplied by the age-related factor. If the payment or consideration being provided exceeds the reasonableness amount, then there will be a reduction in the pension.

    The typical situation is where the parent transfers the home to their child or where the parent pays for renovation of the house on the child’s property to create a self-contained living area.

    Where the parent is a self-funded retiree who is not reliant on the Commonwealth pension, options other than the creation of a granny flat interest would be preferred. Those options would include the parent being registered as a co-owner (either as a joint tenant or as tenants in common). This option may have stamp duty and taxation implication for the parties.

    The most common and problematical situation is where the parent is a pensioner so is subject to Centrelink rules including the deprivation (gifting) rules. As indicated above, in certain cases there is a specific exemption of those rules to the grant of a granny flat interest.

    The challenge when advising in these situations is evident, especially when acting for the parent. It will be critical for the exemption to apply and for a granny flat interest to be created. This is because the parent will need to continue to receive the pension and will need their pension to be unaffected by the gifting rules.

    To achieve that result it necessarily means that the parent is restricted to receiving a life tenancy or life interest in the property. Although this life interest can be transferred to any replacement property, the level of faith being placed by the parent in the arrangement is significant.

    Importantly the granny flat interest cannot be revoked by the child as the owner of the property just because they want to sell. The child can either transfer the life tenancy or interest to another property or compensate the parent financially for losing the granny flat interest. The property can also be sold subject to the life tenancy or life interest but such a sale will be unlikely where the purchaser is an unrelated party.

    Despite these protections, the parent transferring their property to a child for simply the grant of life interest or tenancy is taking a step that assumes that the life tenancy or interest will deliver important personal benefits for them.

    As described by one commentator, [3] there is an element of counter intuitive regulation with these rules. The situation is that there is a transfer of property by the parent for no payment and the only right obtained by the parent is a right of residence in the property. Such a situation is at odds with the well-established equitable principles in relation to constructive trusts and resulting trusts.

    An adviser for the parent must recognise the context and carefully address the risks for the parent who is making the gift in exchange for the right of residence or life tenancy.

    When is a granny flat arrangement appropriate?

    There are situations when the question of a granny flat interest will be appropriate.

    The following are circumstances that will reinforce the suitability of the arrangement:

    Ideally there would have already been a history of having recently resided in the same residence, thereby confirming such living arrangements can work for both parties.

    If the factual context is consistent with the above, then a granny flat arrangement could well be appropriate. If the situation being considered does not include the above elements, there will need to be a close assessment as to the desirability of the parties entering into a granny flat arrangement.

    What are the elements of a deed of family arrangement for a granny flat?

    If the parties proceed with the granny flat arrangement, it is critical that the arrangement be documented. To cover the required issues, the relevant deed of family arrangement will be quite detailed.

    It is also critical that each party receive independent advice, both legal and financial. Clearly financial advice for the parent will be critical but financial advice for the child will often be just as important. For instance where the child is likely to also be a pensioner or social security benefit recipient in the short term, the transfer of the parent’s home may have an impact on those benefits as a result of the assets test.

    The following aspects should be covered in some detail in the deed:

    • a detailed statement of the relevant background including why the parties are entering into the deed and what has occurred in the past
    • the background will include a statement confirming that each party has received independent advice
    • a detailed statement of the obligations of the carer or child, with this statement describing the types of care and tasks that are to be provided and undertaken
    • confirmation as to who is responsible for the payment of property outgoings and service charges
    • confirmation of the insurance obligations, including insurance of their contents by the parent
    • conditions dealing with holidays, absences and periods of respite
    • a list of the circumstances where the parties contemplate the arrangement would end including the following:
      • where there is a need for additional care for the parent above what the child can provide
      • a separation of the child from their partner
      • insolvency or death of the child (or the child’s spouse)
    • the deed should then specifically cover the consequences of termination of the arrangement. There will need to be recognition that there should be refund of the equivalent value being made to the parent
    • The child has demonstrated an ability to provide care and support for the parent including assisting with meals, shopping and travel arrangements for their parent.
    • The parent presents as being in reasonably good health and there is no apparent need for the level of care that they will require to escalate in the short term, especially with a condition that will require regular medical care.
    • The arrangement is not driven by the financial needs or objectives of the child. Instead there is a primary objective of providing suitable accommodation for the parent with their family on a long-term basis.
    • The parent and child (and preferably also the child’s spouse) have a very close relationship.

    If the parties reach the stage of finalising a deed of family arrangement one of the important additional aspects to consider is the impact that the deed will have on their estate planning. A granny flat arrangement will have significant implications on the estate planning for both parties.

    In essence, the parent is disposing of a significant asset during their lifetime which results in their estate being significantly depleted. In relation to the child, they are receiving a significant asset as part of their inheritance in advance.

    There is likely to be some interest and perhaps concerns from any siblings of the carer/child that received the benefit from their parent. The recommendation is that any other siblings be informed and consulted in relation to the option of arranging a granny flat interest.

    It is clear that the granting of a granny flat interest can also achieve the parent’s objective of providing specific and significant support for one of their children.

    It may also be that there are concerns of the parent that if the benefit was provided to the child under the will, that provision could be the subject of a claim for further provision by any other child that is not party to the deed of family arrangement. If the parties have a connection with New South Wales, the entry into a granny flat arrangement is likely to be relevant under the notional estate provisions.

    Whilst this objective of providing a benefit to a particular child may well be a sought after outcome of creating the granny flat interest, it would only be in the very rare circumstances (if at all) that this estate planning objective should be the determinative factor in entering into the arrangement. The important matters referred to above would also need to be considered.


    For granny flat arrangements to be workable for both parties and for the review of the arrangement to be kept out of the courts, there will need to be some serious assessment and consideration of whether or not the arrangement is appropriate for the particular clients.

    Even where appropriate, the arrangement would need to deal with a possibility of there being a change in circumstances for the parties.

    In the right context and after thorough and careful advice, a granny flat arrangement can achieve significant and beneficial outcomes for the parties. The benefit of a parent being able to live in a family home for as long as possible has both significant financial and personal benefits. The child/carer receives a significant financial benefit but in return they have also taken on a significant care responsibility. There is also an important sense of fulfilling a common personal goal that allows their parent to receive care in the preferred place of a family home.

    To achieve these outcomes advisers will need to walk the parties carefully through a proposed granny flat arrangement to ensure that these objectives are achieved.

    To learn more about if a granny flat arrangement is right for you and your family, contact our estates team.

    Written by David Toole and Golnar Nekoee. First Published in the LexisNexis Retirement & Estate Planning Bulletin.

    [1] Section 12A.

    [2] Department of Human Services, Granny Flat Interest, 27 August 2017,

    [3] R McCullagh, The tangled web of granny flats, 22 August 2015.

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  • The Privacy Act is changing on 22 February 2018 - Privacy Policy

    The Privacy Act is changing on 22 February 2018 - This is NOT a drill!

    From 22 February 2018 amendments to the Privacy Act 1988 will take effect and introduce a mandatory notification procedure for data breaches. Currently, there are no requirements to notify individuals affected by a data breach.

    All entities which are bound by the Australian Privacy Principles will have new reporting obligations if there is an eligible data breach. Those entities will need to notify the Office of the Australian Information Commissioner (OAIC) and any parties who are at risk because of the breach.

    An eligible data breach is either:

    • unauthorised access or disclosure of information that a reasonable person would conclude is likely to result in serious harm to any individuals to whom the information relates; or
    • information that is lost in circumstances where unauthorised access or disclosure of information is likely to occur and it can be reasonably concluded that such an outcome would result in serious harm to any of the individuals to whom the information relates.

    To determine whether an individual is at risk of serious harm you will need to consider factors such as the sensitivity of the information, whether the information is protected by one or more security measures, the kind of persons who could obtain the information and the nature of the harm.

    If you suspect there has been a data breach but you are not aware of the circumstances or whether it is actually an eligible data breach then you must carry out a reasonable and expeditious assessment within 30 days of becoming aware of the breach.

    If there are reasonable grounds to believe there has been an eligible data breach then you need to notify the OAIC and the individuals whose data was affected or individuals who are at risk with:

    • a description of what occurred
    • the kinds of information concerned; and
    • the recommended next steps that individuals affected should take in response to the data breach.

    In some circumstances if you take action in response to the breach before any disclosure or serious harm occurs then the Act provides that it may not be an eligible data breach and you do not need to go through the notification steps.

    Failure to abide by the investigation and notification regime will be an interference with an individual’s privacy and therefore a breach of the Privacy Act. The OAIC may investigate, make a determination and pursue civil penalties against you for such a breach.

    So what should you be doing?

    1. Consider whether your ICT security systems are sufficient to protect against the unauthorised release or disclosure of personal information;
    2. Review and update your internal policies and protocols to ensure that:
      • you and your team can respond to actual or potential data breaches quickly; and
      • you can conduct the necessary assessments within the timeframes required by the Privacy Act;
    3. Educate your staff on the changes to the Privacy Act and what they can be doing to mitigate the risk and help you respond if a breach occurs; and
    4. Update your privacy policies to include your notification processes.

    For advice on the changes to the Privacy Act or to update your privacy policies please contact us.

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  • Psychological Injury Workers Compensation HR Breakfast Club - January Summary

    Psychological Injury Workers Compensation: HR Breakfast Club - January Summary

    This month, we discussed the impacts of Mental Health Workers Compensation.

    This month, we discussed the tricky minefield which is workplace psychological injuries, how they arise, and when they are compensable. Bill McCarthy, BAL Special Counsel who has extensive experience in workers compensation and insurance law, shared some of his insights on the topic. Bill touched on:

    The different types of workplace psychological injuries:

    • Psychological injury attributed to work-related stress may include such disorders as depression, burnout, anxiety, post-traumatic stress disorder and adjustment disorder.

    Some statistics about psychological injuries:

    • Psychological injury accounts for around 11% of accepted claims within the Comcare scheme.
    • Psychological injury accounts for approx. 30% of the cost of Comcare claims.
    • Workers with psychological injury are staying off work for longer. 55% of psychological claims that reach four weeks lost time continue on to 13 weeks of lost time.
    • The impact of mental harm is delayed recovery, slow return to work and increasing claim liabilities resulting in premium pressures.

    What is adjustment disorder, and why is it controversial

    • The specific signs and symptoms of an adjustment disorder may vary greatly from one affected person to the next. There are currently 6 recognised sub-types of adjustment disorder – Adjustment disorder with depressed mood, Adjustment disorder with anxiety, Adjustment disorder with mixed anxiety and depressed mood, Adjustment disorder with disturbance of conduct, Adjustment disorder with mixed disturbance of emotions and conduct, and Adjustment disorder unspecified. There are so many different presentations of this disorder, and sometimes it feels as though it is a ‘waste-basket diagnosis’ which is assigned to those who fail to meet the criteria for other mental disorders.

    When is a psychological injury compensable?

    A psychological injury is only compensable if it arises out of or in the course of employment. The employment must have been a significant, material, substantial or the major contributing factor to the injury. However, psychological injuries that have arisen out of ‘reasonable action’ taken by the employer are not compensable. For example, if an employee develops anxiety or depression as a result of a (fair) poor performance review, it is unlikely that that injury will be compensable.

    This answer is, of course, general commentary only. It is not legal advice. Readers must contact us and receive our specific advice on the particular situation that concerns them before acting or refraining from acting.

    If you would like to join the HR Breakfast club, it runs on the third Friday of every month, please get in contact.


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  • ‘Over the top’ discipline: rethinking bullying in the public service

    'Over the top' discipline: rethinking bullying in the public service

    Recent cases show that bullying in the public service can take place through otherwise legitimate mechanisms, such as reassignment decisions and misconduct investigations. Employment lawyer John Wilson explains.

    The Fair Work Commission’s anti-bullying jurisdiction has been the subject of controversy since its inception in 2014.

    Legislative amendments to the Fair Work Act 2009 empowered the commission to issue ‘stop bullying orders’ to protect employees from continuing to be bullied at work. But the jurisdiction has been lambasted as ineffective, with only a handful of orders made in the past three years.

    To establish bullying under the Fair Work Act, a worker needs to show that an individual, or group of individuals, has’repeatedly’behaved’unreasonably’towards the worker, and that behaviour creates a risk to health and safety. Actions which constitute reasonable management action carried out in a reasonable manner are not bullying (regardless of the health consequences). For the commission to make a stop bullying order, they must also be satisfied that there is a risk the worker will ‘continue’ to be bullied at work.

    Bullying in the public sector can be particularly pernicious. This is because public sector employees are often inclined to remain in the public service, whereas their private sector counterparts are more likely to jump ship to escape poor workplace behaviours. Also, the kind of easily identified conduct that amounts to classic bullying (such as swearing, and physical and verbal abuse) is often absent in public sector clerical workplaces, but replaced with more subtle forms.

    If Sabrina in accounts deliberately sneezes in your lunch every Friday, it is probably relatively easy to show that you are being bullied by Sabrina. But consider the scenario where Sabrina makes a complaint that you have been ignoring her, and that you adopted a disrespectful tone in a staff meeting a few months ago. Sabrina is finding this very stressful. HR commences an investigation to determine if you have misconducted yourself. HR decides that in the meantime, you need to be removed from your usual duties. Could you be the victim of workplace bullying by HR?

    The 2017 case of Coulson raised this possibility. The applicant alleged that she had been bullied by a number of senior personnel at a federal department via:

    1. Being subjected to several unnecessary decisions to suspend or reassign her duties during a misconduct investigation; and
    2. A continuation of the reassignment decision after the misconduct investigation concluded there had been no misconduct.

    The department applied to have the stop bullying application dismissed on the grounds that it was frivolous or vexatious or had no reasonable prospects of success. In particular they argued that the initial reassignment decision was reasonable management action.

    Commissioner John Kovacic refused to accept that the claim had ‘ no reasonable prospects of success’ and permitted the case to proceed to hearing. This judgment suggests that ‘over the top’ disciplinary actions can amount to bullying. Admittedly, the bar for the commission to dismiss was a high one but the judgment does give hope to public sector employees who find themselves the subject of a string of administrative actions as part of bullying conduct.

    In another recent case, Burbeck v Alice Springs Town Council, the commission issued a stop bullying order after finding that disciplinary action was ‘retaliatory and punitive’. While commissioner Nicholas Wilson found both the employer and employee to be at fault, he wished to ‘reset the employment relationship’ and therefore made a range of orders. These required the council to arrange anti-bullying training for staff, and to review its disciplinary procedures.

    We may need to expand the stereotypical, steal-your-lunch-money concept of bullying to address the potentially more insidious forms of workplace bullying that can emerge in modern bureaucratic workplaces. There are signs the law is adapting to accommodate this reality.

    John Wilson is managing legal director at Bradley Allen Love. His firm acted for the applicant in Coulson.

    First published in the Mandarin.

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  • Agreements for Lease: Kicking goals with AFLs

    An agreement for lease (AFL) is quite simply an agreement between two parties to enter into a lease in the future. Unlike a lease, it does not create an immediate legal right to take possession of the land, however it does create enforceable rights between the parties.

    When to use an AFL

    An AFL can be vital when a landlord and potential tenant want to create a binding legal relationship for the leasing of property, but when a final lease cannot be entered into right away.

    There are many reasons why a lease might not be able to be entered into immediately:

    • the Landlord might not yet hold title to the premises;
    • there might be a previous tenant still in occupation of the premises;
    • third party approvals might be necessary before the premises can be occupied; and
    • finally, and most importantly, the premises might require substantial repairs, renovation or fitout prior to the tenant taking occupation, often purpose built for the tenant.

    Why an AFL is important

    Where both a landlord and potential tenant are relying on a lease being entered into in the future, but have no legal agreement recording that, each is exposed to risk if the other should pull out. Particularly, in circumstances involving premises being refurbished or fitted out for the specific needs of a particular tenant, both parties are taking on a significant amount of risk. The landlord may be spending a substantial amount of money on the premises and could be left out of pocket if the tenant does not end up moving in. On the other hand, a tenant may be forced to pay extra if it needs to find alternative premises in a hurry because a prospective landlord does not complete the required fitout or rents it to someone else.

    It is to mitigate these risks to both parties that it would be wise to enter into a formal AFL. An AFL provides clarity around important issues, such as time frames for completion of works and when the lease is to commence. An AFL also provides enforceable obligations on both parties in the event that the lease falls through, which can reduce the loss suffered.

    What should an AFL cover?

    An AFL needs to cover all the issues which may arise prior to a lease being entered into, as well as the form of the lease that will eventually be in place. Among the things that may need to be covered are:

    • key dates and timeframes for any events precedent to entering into the lease;
    • what works are to be carried out by the landlord or tenant;
    • who is responsible for paying for any works and any financing or loan arrangements;
    • obligations to obtain finance or development approvals by third parties;
    • the terms under which the lease will be entered;
    • lease incentives;
    • guarantees and indemnities; and
    • dispute resolution.

    Due to the wide range of issues that need to be covered, AFLs can actually be larger and more complicated than the leases that arise out of them.

    If you need an Agreement for Lease, contact our property and commercial leasing team to help you prepare an AFL to ensure that your complex leasing arrangements run with a minimum of risk.

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  • Can strata subdivision avoid minimum lot sizes in NSW?

    Clause 4.1 of the standard instrument local environmental plan provides that the size of any lot resulting from a subdivision of land must not be less than the minimum lot size for the land shown on the Lot Size Map. Does the same minimum lot size apply if the proposed lots are to be created by the registration of a strata plan?

    This question was considered by the Land and Environment Court in a decision handed down on 11 December 2017.

    In DM & Longbow Pty Ltd v Willoughby City Council [2017] NSWLEC 173, the applicant sought development consent for the conversion of an existing dwelling to a dual occupancy and the strata subdivision of the land into 2 lots (one for each unit) and one common lot.

    The Council originally refused development consent for both developments but ultimately agreed that the dual occupancy development was acceptable. However, it maintained its opposition to the approval of the strata subdivision of the dual occupancy.

    The Council argued that the lots proposed to be created were less than the minimum lot size for the land shown on the Lot Size Map and that the development standard setting the minimum lot size for the land was specified in clause 4.6 of the LEP as one that could not be varied. The applicant argued that the minimum lot size did not apply to the subdivision because of clause 4.1(4). That clause provides that clause 4.1 does not apply to the subdivision of individual lots in a strata plan or community title scheme.

    The Council was successful before Commissioner Dixon who held that the subdivision was not capable of being approved. The applicant appealed arguing that clause 4.1(4) applied to all strata subdivisions, not only the subdivision of individual lots in an existing strata plan but also the creation of individual lots in a new strata plan, saying this was the most obvious reading of the phrase the subdivision of lots in a strata plan as that phrase is used in clause 4.1(4).

    Preston CJ, however, preferred the Council’s interpretation of the provision. The Council had argued that clause 4.1(4) applied only to the subdivision of individual lots in an existing strata plan and not the subdivision of a lot to create a new strata plan. His Honour observed that the basic rules of statutory construction required the language of clause 4.1(4) to be read in context and having regard to the objective it was designed to promote, but that the primary focus must remain upon the text. His Honour found that the text of clause 4.1(4) was clear and unambiguous and that:

    The object of the action of subdivision is the individual lots in a strata plan. The subdivision is of those lots. Those individual lots must be in a strata plan . A strata plan is a plan that is registered as a strata plan It is a strata plan that is already in existence. If there is no strata plan yet in existence, there can be no individual lots in a strata plan that can be subdivided.

    The Court held that the applicant’s proposed subdivision was not of land in an existing strata plan (it was land under the Real Property Act 1900) and that the subdivision was therefore not capable of being approved as the size of the lots to be created was less than the minimum lot size for the land specified on the Lot Size Map.


    The information in this article is no longer current  see:

    This decision highlights the need for Councils to consider whether different lot sizes should be specified in their local environmental plan for lots in strata plans. Not doing so will result in the general minimum lot size applying whether or not land is being subdivided by registration of a plan of subdivision or a strata plan.

    If you need advice about strata subdivision, or would like to know more, please contact Alan Bradbury.

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