News & Events

  • Do Your Due Diligence - Buying Property In The Act bw

    Do your Due Diligence - Buying Property in the ACT

    Purchasing real estate is a significant investment for most people. It stands to reason then that a prudent buyer will want to know as much about a property as is possible before proceeding with the purchase. Though it is a common misconception that the contract contains all information pertaining to the property,  the cornerstone of property law in Australia rests in the concept of buyer beware and due diligence in relation to any real estate purchase is a serious consideration. Where possible, buyers should make all relevant enquiries of the property prior to entering into a contract.

    In respect of residential property in the Territory, buyers are afforded some protection under the Civil Law (Sale of Residential Property) Act 2003 and the Unit Titles Act 2001. Under the legislative regime, obligations are imposed on the seller to attach a set of ‘required documents’ (a defined term) to a Contract for Sale before a property is marketed.

    These Required Documents include copies of all interests and encumbrances registered against the title, an extract of the title, the Crown Lease or Units Plan and the Deposited Plan. Also included is an extract noting any notices or breaches of the Crown Lease and any relevant notifications pertaining to development applications lodged over the site and adjacent land, heritage status, and contamination. The seller is also required to attach a current building, compliance and pest report (for town houses and stand-alone dwellings) and an energy efficiency rating. If the property is a unit, the seller must also include a report (called a Section 119 Certificate) detailing the relevant fees, charges and administrative information of the Owners Corporation.

    The disclosures required for a residential sale contract offer buyers a considerable understanding of the title and condition of the property and to an extent, negates the need for further investigations of the property. It should be understood, however, that the building, compliance and pest reports are not conclusive evidence of the state or repair of the property. These reports are based on a visual inspection of the property only and, particularly where the property is furnished, may not identify all defects. For this reason, buyers should always undertake their own inspection of the property and, where deemed prudent, obtain their own building, compliance and pest report from a trusted contractor.

    The above situation is distinctly different if the property does not fall under the ‘residential’ regime, that is, if the property is classed as commercial, industrial or rural premises. For these types of premises, the disclosure obligations of the seller are limited to information concerning dangerous substances such as the provision of an asbestos report, register or management plan (if any) as is required under the Work Health and Safety Act 2011 and Work Health and Safety Regulation 2011. Beyond such instances, however, the obligation for disclosure is largely a commercial decision for the seller and the onus rests squarely on the buyer to undertake its own investigations. This can often be an expensive and timely exercise but the risks, both monetary and legal, which can arise from a failure to undertake proper due diligence far outweigh such costs and the costs of obtaining appropriate legal advice.

    Our property team have extensive experience dealing with contracts for all types of properties. Get in touch with a member of our Real Estate team and do your due diligence before you sign.

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  • One Year of Mandatory Data Breach Reporting Insights and Lessons

    One Year of Mandatory Data Breach Reporting: Insights and Lessons

    The strength of the global economy is inextricably tied to data. Information has never before been created, stored, used and shared on so large a scale, underpinning trade and commerce, government and public services across the world. The corollary of our total data-dependence is that concerns about information security are at an all-time high. Australia is now just one of many countries to have introduced a mandatory data breach reporting regime, with the EU, Canada and New Zealand following soon after.

    The Notifiable Data Breaches (NDB) scheme came into effect in February 2018, requiring Australian Government agencies and private organisations that are subject to privacy obligations under the Privacy Act 1988 (Cth) to report data breaches where personal information they hold has been lost or subject to unauthorised access or disclosure. If that event is likely to cause ‘serious harm’, the entity has to alert both the individual(s) concerned and the Office of the Australian Information Commissioner (OAIC).

    One year on, the OAIC has released a 12-month Insights Report to mark the recently held Privacy Awareness Week, in addition to the four Quarterly Statistics Reports it has published since the introduction of the NDB scheme.

    One important—if expected—result to note was the substantial increase in reported data breaches. Compared to the previous 12 months under the earlier voluntary scheme, the OAIC has seen a 712% increase in notifications. It seems that entities understand their obligations, bringing to light the scale of the challenges we face as a nation in the field of information security.

    So, what else have we learned?

    Key Findings

    Of the 964 eligible data breaches reported in the 12 months leading up to 31 March 2019, a disquieting 60% of those were related to malicious or criminal attacks. The most common method among these was phishing, with many attackers succeeding in obtaining credentials like usernames and passwords to gain access to protected systems and information.

    Also concerning was human error as a significant cause of data breach. Over a third of all reported breaches were occasioned by human error, such as unintended disclosures (accidentally mis-sending an email, anyone?), lost devices, and so on.

    Another interesting finding was to do with affected sectors. In this regard, health service providers took first place by a long shot, with over 200 eligible data breaches reported. A startling 55% of these were due to human error, putting in stark relief the need to have robust policies, procedures and training in the health sector. This is particularly so with the advent of My Health Records, rendering the potential scale and impact of a breach much larger as the health data ecosystem continues to grow.

    Lessons

    Whether or not your organisation is regulated by the NDB scheme, the OAIC’s Report serves as an important reminder of what can go wrong and the need to take steps to better protect the information you hold.

    One key take-away arising out of the staggering proportion of malicious attacks and human errors is the need for comprehensive and regular staff training. All personnel within your organisation should be alert to the ways in which they may unwittingly facilitate access to—and misuse of—personal and sensitive information, and should be reminded that everyone has a role to play in the maintenance of information security.

    The NDB scheme has played an important role in highlighting the importance of swift and proactive management of data breaches. As put by the Australian Information Commissioner and Privacy Commissioner, Angelene Falk:

    The requirement to notify individuals of eligible data breaches goes to the core of what should underpin good privacy practice for any entity—transparency and accountability.”

    “It’s also an opportunity for organisations to earn back trust by supporting consumers effectively to prevent or manage any potential harm that may result from a breach.”

    Even if your organisation is not caught by the obligations, or in cases where you determine that a given data breach does not meet the eligibility threshold, working with affected individuals to minimise the consequences of data breaches promptly and openly represents a positive change in the privacy landscape.

    If you have any questions about your privacy risks or obligations, feel free to get in touch with our Business team.

    Written by Katie Innes with the assistance of Bryce Robinson. 

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  • How much is enough for a Widow Recent Guidance from the NSW Court of Appeal

    How much is enough for a Widow? Recent Guidance from the NSW Court of Appeal

    The New South Wales Court of Appeal has overturned a decision of the New South Wales Supreme Court after it deemed that an indexed annuity of $52,000 per annum was inadequate for a widow and instead awarded the widow a legacy of $1.75 million.

    The judgement in the matter of Steinmetz v Shannon [2019] NSWCA 114 can be found here.

    The facts of the case were as follows:

    • the widow (the Appellant in this case) was the second wife of the deceased. The widow and the deceased had been in a relationship for about 28 years;
    • the deceased left his widow an indexed annuity of $52,000 for the remainder of her life, to be paid in quarterly instalments. The remainder of the estate was left to the deceased’s two children from his first marriage;
    • the Estate was valued at approximately $6.8 million;
    • the deceased and his widow were financial independent of each other. Their assets were kept largely separate, they resided in separate homes, though, the deceased would spend his funds on mutual expenses, entrainment and holidays;
    • at the time of the appeal, the widow’s assets (including the value of her home) were just over $700,000. She declared her income as just over $70,000 and expenses just under $40,000 per annum;

    The Supreme Court Trial Judge dismissed the widow’s application for further provision on the basis that the annuity was adequate provision to the widow’s proper maintenance.

    The Trial Judge further mentioned that the annuity would enable the widow to continue living in the same house as she did during her relationship with the deceased, and to maintain the same lifestyle. In concluding that the annuity was adequate, the Trial Judge stated the following:

    She will not be in a position to live extravagantly, but she did not do so when married. She will not have the benefits, the security, the holidays, the comforts and the additional financial advantages that she enjoyed during her relationship with the deceased. But as a matter of law, should she be entitled to expect more?”.

    The widow appealed to the Court of Appeal. The Court of Appeal held:

    1. that an indexed annuity of $52,000 for the remainder of the widow’s was not considered to be adequate provision.
    2. that insofar as it is necessary to resort to concepts of “moral duty” or “community standards” as a measure of proper provision, the former is preferable.
    3. that “to leave a 65 year old widow reliant for the rest of her life on quarterly payments by the children of her deceased husband’s first marriage, rather than placing her in control of her own resources, is in this day and age not an appropriate form of provision for a widow who is well and truly capable of managing her own affairs and when there have historically been tensions between her and at least the first respondent. However reliable the respondents might be, this form of provision effectively obliges her to have an ongoing relationship with them, and to trust them to perform the obligation, and does not afford her the independence and self-reliance which, according to today’s community standards, a widow should have. It is not only rigid and paternalistic, but demeaning and controlling” [emphasis added]

    The Court of Appeal allowed the appeal, set aside the orders of the Trial Judge made in the previous year and awarded the widow a legacy of $1.75 million.

    The Respondents (the children of the deceased’s first marriage who opposed the application) were ordered to pay the widow’s costs of both the appeal and the proceedings in the first instance.

    The “Take away points” from this case

    Whilst not a ground-breaking decision, this case serves as an important warning and a reminder to both Willmakers and litigants as to considerations the Court takes into account when reviewing the adequacy of provision for a widow/widower.

    The following two points should be taken into consideration:

    1. viability of an ongoing relationship – the Court of Appeal held that the present value of the $52,000 per annum annuity was $880,000.

    In awarding a legacy of $1.75 million to the widow, the Court almost doubled her entitlement but was primarily motivated by ensuring that the widow was not left at the “mercy” of the respondents (the children from the first marriage).

    The Court was very much conscious that an ongoing relationship between the widow and the respondents would not be appropriate.

    1. “moral duty” is preferable to “community standards” – as a measure of proper provision, the Court held that that an emphasis should be placed on what a testator is morally obliged to do as opposed to what the community would expect a testator to do.

    Whether you are considering your Estate Plan, or are a litigant in Court proceedings, it is important to consider the interplay between the parties left behind, in addition to whether provision is adequate to each party. Please contact Golnar Nekoee for more information.

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  • 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

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  • 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.

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  • 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.

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  • 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].

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  • 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.

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