On 10 September 2021, following the #MeToo movement and the Australian Human Rights Commission National Inquiry into Sexual Harassment in Australian Workplaces, Parliament enacted the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 (Respect@Work Act).
The Respect@Work Act, which is aimed at ensuring workers are ‘protected and empowered’, amends the Fair Work Act 2009 (Cth) (FW Act), Sex Discrimination Act 1984 (Cth) and the Australian Human Rights Commission Act 1986.
The changes reflect a zero tolerance for sexual harassment by treating sexual harassment as a workplace health and safety issue. Additionally, the Respect@Work Act serves as a catalyst for Employers to review their existing policies and implement training to ensure their workplace is a comfortable environment for all employees to be free of sexual harassment.
What is Sexual Harassment?
As now provided in section 28A of the Sex Discrimination Act 1984, sexual harassment is defined as:
Conduct will amount to sexual harassment if a reasonable person, in the circumstances, would anticipate that the harassed person might be offended, humiliated or intimidated.
Respect@Work Act’s key changes to the Fair Work Act 2009 (Cth):
Respect@Work Act’s key changes to the Sex Discrimination and Australian Human Rights Commission Acts:
Key Takeaways for Employers:
Employers should interpret these changes as a clear sign that there is no tolerance for sexual harassment in the workplace. Employers may now be liable for employees who sexually harass others, unless the employer can be said to have taken all reasonable steps to prevent sexual harassment from occurring.
Employer’s should be on the front foot of these changes by:
Contact the Workplace Law Team at Chamberlains Law Firm for any questions and concerns.
One of the biggest issues facing first time commercial tenants is to know when in the process to contact a lawyer to get advice.
The common process is to first work with a commercial real estate agent or the landlord to prepare and enter into an agreement with a document called a ‘Heads of Agreement’ (HOA) or ‘Term Sheet’.
What is a HOA?
Usually, the HOA is a short document setting out the major terms agreed upon between the parties. For example:
Once the HOA is signed by both Tenant and Landlord, the landlord’s solicitors issue the formal lease based on the matters discussed in the HOA. It is at this stage in the process that you should contact your solicitor and give them a copy of the HOA and give their details to the agent or landlord’s solicitor.
Is a HOA legally binding?
The short answer, as always for lawyers, is that ‘it depends’. Usually there will be terms in the HOA that are binding, but the HOA does not generally bind you to the terms of the lease itself. For example, the HOA might specify that a Tenant is still be liable for the legal fees of the landlord if the Tenant refuses to sign the formal lease document.
However, signing the HOA should not bind you to the terms of the lease. If you are concerned about the provisions of the HOA, then you should seek legal advice before signing the HOA or any similar document.
What are the Dos and DO NOTs of a commercial lease?
DO NOT enter possession of the premises (for example, accept the keys from the agent or landlord) prior to seeking legal advice on and signing the formal lease. Simply because accepting the keys may be deemed as acceptance of some or all of the terms of the lease.
DO review the HOA carefully and ensure all matters are included – for example, any verbal promises from the landlord regarding incentives, rebates, works to be conducted or any other matter.
DO make sure that you inspect the premises and make sure that they will meet the requirements of your business. For example, if you are running a café or restaurant, make sure that the premises will or can be fitted out to accommodate the necessary plumbing, grease traps etc.
DO NOT sign anything you are not comfortable signing without seeking legal advice first. The High Court has held that signing a contract can be an acceptance of its terms regardless of whether or not you have read or understood them.
If you have any questions about commercial leasing, please contact our team of property lawyers at Chamberlains for helpful, timely and reliable advice.
FIRB stands for ‘Foreign Investment Review Board’, which is a body set up under the Foreign Acquisitions & Takeovers Act 1975 (Cth) (‘FATA’) and reporting to the Treasurer. The FATA requires that certain investments in Australian business, entities or land, are reviewed by the FIRB before they can take place.
FIRB approval is only required where the investor is a ‘Foreign Person’ within the meaning of the FATA. The definition is generally ‘an individual not ordinarily resident in Australia’.
Several categories of investment can be subject to FIRB review and approval. Generally, acquisition of substantial shareholdings in companies, controlling interests in certain entities, purchases of high-value land, agricultural business and any sensitive businesses or land are all subject to FIRB review.
Some transactions require FIRB approval, however the Treasurer has broad powers under the FATA to order that any transaction involving foreign investment be reviewed by the FIRB. If you choose to voluntarily submit for a review a transaction where FIRB review is not compulsory, the Treasurer loses their power to ‘call-in’ for review the transaction.
The FATA has particular significance for foreign investors in residential land, including “off the plan” apartments.
The FATA requires that foreign persons apply for FIRB Approval before acquiring an interest in Australian land. This definition is broad. If one were to generalise, an interest would generally mean any right to deal with Australian land. Interestingly, while ‘non-residential land’ is subject to a minimum value before requiring FIRB approval, all purchases of residential land are subject to FIRB approval.
Foreign investors require FIRB approval before formally exchanging contracts for the purchase of residential land. For foreign investors, some solicitors will include a ‘subject to FIRB’ clause in contracts which makes the contracts conditional on FIRB providing approval. This means that if FIRB approval is denied or not granted within a certain period, contracts can be cancelled, and depending on the clause, the deposits may be returned or forfeited.
If you are a foreign investor, you should seek advice from your solicitor or conveyancer about what will happen if you fail to receive FIRB approval within the specified timeframe.
Contracts for sale are not the only way of obtaining an interest in Australian land. A less common example is a Call Option deed (sometimes called a Put & Call Option Deed) to purchase residential property.
In a Call Option deed, the buyer is granted a right to either nominate themselves to purchase the property or nominate someone else to purchase the property and the buyer must exercise such rights within the timeframes noted in the call option deed.
If a foreign person wishes to enter a call option deed, they will still require FIRB Approval because upon executing the deed they acquire a right to deal with Australian land. This means that a call option deed cannot be used to avoid applying for FIRB.
Breach of FIRB obligations carries significant civil and criminal provisions. Please ensure that you seek advice prior to taking any action.
Please ensure that you seek legal advice from our Property Law specialists team regarding whether you are required to apply for FIRB.
Note: This article is intended to provide a general overview of only a few circumstances where Foreign Buyers are required to apply for approval from the Foreign Investment Review Board (FIRB).
Participating at a property auction is always a thrilling experience for property buyers. But before you register to bid have you considered seeking legal advice with respect to the Contract for Sale?
There are number of matters to be aware of when purchasing property, but most importantly you should have the contract reviewed by a qualified property lawyer.
What do we review in an Auction Contract?
We can review the contract and provide you with written advice and, if necessary, negotiate any amendments required.
Once you obtain a copy of the Auction Contract from the Sales Agent, you can forward a copy to us for review. We will review the Contract to ensure the Contract is compliant with the Civil Law (Sale of Residential Property) Act 2003 (ACT) (“the Act”). We can advise on any omissions, and the risks of non-compliance.
It is common in the ACT for a Contact for Sale to include Special Conditions that prevail over the standard terms. We will review any Special Conditions and identify any particular conditions of concern. We can provide advice and make any recommendations necessary and even negotiate amendments on your behalf.
If the property you are interested in is a standalone house or a townhouse, it is most likely that there is a Building Report included in the Contract. We will help you identify some of the issues that are noted in the Building Report. However, you will need to ensure you are satisfied with the current state of repair of the Property prior to the Auction.
When you are buying an apartment or a townhouse, the Contract will include documents pertaining to the Owners Corporation records. These documents may disclose important information with respect to the complex itself. We review and provide advice on these documents.
If you would like for our property law specialists team to review your Auction Contract prior to exchange please contact our friendly staff.
With auctions being a very successful sale method for property in the ACT at the moment, many buyers are looking to make a pre auction offer.
In order to make a successful pre auction offer, a sales agent will insist on the buyer providing a section 17 certificate. But what exactly is a section 17 certificate?
In the ACT there is a 5 day cooling off period imposed under the Civil Law (Sale of Residential Property) Act 2003 (ACT) Act when contracts exchange. Essentially this means a buyer can rescind within this 5 day cooling off period if they wish.
The cooling off period, however, does not apply in the following circumstances:
A sales agent is unlikely to call off an auction unless contracts exchange unconditionally. The sales agent will require the buyer to seek legal advice and provide a section 17 certificate at the time of exchange.
If you are interested in making a pre auction offer we can assist with reviewing the contract and providing you with a section 17 certificate. Please feel free to contact our Property Law specialists team to discuss further.
“Warranties” in the context of contracts means a particular type of contractual term. Because courts can have different ways of enforcing contracts or awarding damages, there has been a historical evolution of three “levels” of contractual term, each with its own remedies.
There are two basic remedies for a breach of contract. The first is damages; the second is a right to terminate the contract. Whether or not a right to terminate arises depends entirely on the severity of the breach and the classification of the term that is breached.
A warranty is considered to be the at the bottom of the ladder in contractual terms. This doesn’t mean that warranties are unimportant, simply that breach of a warranty only gives rise to damages, monetary compensation, rather than a right to terminate the contract or sue for specific performance (a court order that a party perform its contractual obligations).
Warranties can be specified in contracts or contractual terms can be inferred by a court to be warranties.
Most contracts for the sale of land will have clauses where the buyer or seller will variously “warrant” to certain terms. For example, the ACT Law Society standard terms provide in Clause 7 various things the seller will warrant. By making these terms warranties, a party’s only remedy for a breach of those terms will be damages, and not a right to terminate the contract.
Various legislation often inserts implied warranties into contracts for the sale of land, meaning that if those terms are not written in the contract, they will be considered warranties under the contract regardless. One example is the implied warranty in the Civil Law (Property) Act 2006 (ACT):
264 Implied warranties
a) to the seller’s knowledge, there are no unfunded latent or patent defects in the common property or owners corporation assets, other than the following:
i) defects arising through fair wear and tear;
ii) defects disclosed in the contract.
When buying or selling property, make sure you are aware of any warranties involved and that you understand the consequences of breaching those warranties or having them breached by the other party to the contract.
The most important thing is to remember that breaching a warranty does not generally give rise to a right to terminate the contract or have a court order specific performance.
If you are seeking for legal advice, our Property Law specialists team can help you. Get in touch today!
The management of unit titles by an Owners Corporation, formerly known as a Body Corporate, is governed by legislation in the ACT. Principally, the Unit Titles (Management) Act 2011 (UTMA) sets out the requirements for managing unit plans.
A suite of reforms were introduced in late 2019 by the ACT Government to deal with changes in the type and number of unit complexes being built and occupied. One particularly important reform is around casting votes prior to and at a meeting by proxy.
New Pre-Meeting Voting Rules
Schedule 3 of the UTMA sets out the quorum requirements for different kinds of resolutions that must be passed. Prior to the amendments, any motions were required to be considered in a meeting with a minimum quorum, requiring long statutory periods of notice and minimum attendance by owners or their representatives.
The inclusion of Schedule 3.31A in the UTMA now permits for an Owners Corporation to agree on (ironically enough at a general meeting) an alternative means of voting on matters to be decided by the owners corporation before a meeting (a pre-meeting vote).
This voting method can be adopted for a particular matter to be decided or a ‘class of matters’, meaning that the owners corporation could resolve that certain minor decisions be made through these electronic pre-meeting votes.
For example, there may be an email or letter circulated prior to a meeting that permits all eligible voters to cast their votes without having to attend the meeting or nominate a proxy for the vote. This measure is twofold. Firstly, it enhances accessibility for members of the Corporation that may be unable or unwilling to attend a general meeting; secondly it adds an additional layer of protection against ‘vote stacking’, where certain owners gather proxy votes and use them to their own advantage.
The practice of vote stacking and its potential effects also drove the amendment of schedule 3.26 of the Act, which restricts attendees to exercising only 1 proxy vote for complexes with fewer than 20 units, or no more than 5% of proxy votes where there are more than 20 units in the complex.
Obligations for using electronic voting
However, it is important to be aware that regulations made under the UTMA require the owners corporation to ensure that if electronic means of pre-meeting voting is used, then members of the owners corporation must have reasonable means of accessing the vote and that information on how to vote accompanies notice of the meeting. For any matter decided wholly by a pre-meeting vote, that motion cannot be changed or amended in the meeting itself, making the pre-meeting vote largely binding, so it is important to consider carefully the kinds of things to be subject to pre-meeting voting. If the matter requires deliberation or discussion, then it would be better to save it for the meeting, which regulations permit people to attend remotely.
How does a pre-meeting vote affect a resolution?
A pre-meeting vote is not a resolution. A resolution should still be decided at a meeting. However, if the votes have already been cast, then passing a resolution is a quick and easy formality. It is still important the ensure that resolutions are passed and recorded properly however to comply with legal obligations.
Under the amendments, special resolutions now effectively require a 75% vote in favour of their passing. The UTMA requires that the maximum number of votes against a special resolution not be more than ¼ of the total number of votes that can be cast at the meeting.
UTMA sch 3 which outlines the law regarding meetings (including amendments in question): Here
Explanatory statement for the amending act: Here
If you are seeking for legal advice, our Property Law specialists team can help you. Get in touch today!
In the recent decision of Josey v InvestaFox Pty Limited [2021] NSWSC 827, the Supreme Court of New South Wales consider the legal costs implications when legal proceedings are dismissed.
P commenced legal proceedings seeking specific performance of a deed that saw D grant P a drainage easement. Shortly afterwards, the proceedings were dismissed by agreement.
When proceedings are dismissed normally the plaintiff will pay the defendant’s legal costs, unless the Court says otherwise: Uniform Civil Procedure Rule r42.20.
P said D had engaged in unreasonable delay in relation to the deed, forcing P to commence proceedings.
D said the deed had not been entered into properly before the proceedings were commenced.
There was a degree of delay of delay and disorganisation about entering into the deed, and confusion about when the counterparts were executed.
There was some suggestion that D might have engaged in unreasonable delay, but there was also a complaint that it took P the best part of a year to pay an $800 invoice required by the deed.
Due to the delay in progressing the matter, the Court found it was not unreasonable for P to have commenced proceedings.
However, the Court ordered each party to pay its own costs.
This judgment confirms that a plaintiff may stand disappointed if it relies too heavily on r42.20 to carry the day.
In the recent decision of Alon Pty Ltd [2021] NSWSC 1021, the Supreme Court of New South Wales considered the application of the administrator of a deceased person’s estate to have the deceased’s shares in a company transferred to him in the face of resistance from the company’s director (who was also the deceased’s son).
Years ago, mum and dad incorporated a company and, among other things, became shareholders of the company’s Class “A” voting shares.
The company held assets in its own capacity and also in its capacity as trustee of the family trust.
Mum and dad’s two sons, S1 and S2, eventually became directors of the Co.
In 2011, Mum retired leaving S1 and S2 as sole directors. In the same year the family trust deed was amended effectively placing the company in complete control of the trust, as both trustee and appointor.
In 2018 S2 ceased being a director, leaving S1 as sole director.
In 2019 mum died. In 2020 an administrator was appointed to mum’s estate.
The administrator found the company then had 11 Class “A” shares issued – 9 owned by mum, and one each owned by S1 and S2.
The administrator served on S1 an application to transfer mum’s shares to him.
If the application was registered, the administrator would hold 9 voting shares, allowing him to instal new directors and take control of the company.
The administrator chased S1 a number of times to seek to become registered as the true holder of mum’s shares, and threatened Court proceedings and an indemnity costs order if the matter was litigated
S2, in 2021, then transferred mum’s Class “A” shares to himself and allotted more shares of other classes to himself.
In May 2021 the administrator commenced the proceedings seeking to rectify the company’s share register to reflect his ownership (as administrator) of Mum’s shares and to reverse the allotment.
The Court found there was no just cause for S2 to fail to register the share transfer and made orders causing it to be registered.
S2 did not have power to allot himself extra shares as the Co required two directors and, from 2018, S2 was its sole director.
The transfer of mum’s shares and S2’s purported allotment of further shares to himself were both made without power and had no effect.
Due to S2’s intransigence, the administrator pressed for an indemnity costs order.
An indemnity costs order arises from the unreasonable conduct of the litigation itself, not the conduct that led to the litigation.
S2’s intransigence and attempt to seize control as “majority shareholder” came before the litigation was commenced.
However the administrator warned heavily of the possibility of an indemnity costs order in the correspondence sent before litigation was commenced, S2’s defence was hopeless, and the Court found the estate should not be depleted by S2’s unreasonable refusal to agree to the orders sought.
The administrator got essentially what he came for, including the indemnity costs order.
This is a lesson in understanding what rights you have as a director, and the difficult outcomes you can face if you try to do what you’re not supposed to.
In the recent decision of Yelland v Plus Architecture [2021] VSC 416 the Supreme Court of Victoria considered whether a shareholder’s sale of shares at a discount was a breach of a shareholders agreement or, indeed, where it was corporate oppression.
Y owned and controlled a company, P. P was a shareholder in the companies in a group that operated a national business. Y was one of the directors of the companies in the group.
Y was terminated as a director of each company in the group and, and by operation of the various shareholders agreements for each company in the group, P’s shares were transferred to the other shareholders at a discount. P accepted this discount transfer under protest.
P relied on s232 of the Corporations Act to challenge the discount; alleging termination of Y was unfair.
Separately P claimed the discount was a breach of the various shareholders agreements that related to each of the companies in the group.
The Ds said the termination was appropriate due to Y’s poor behaviour, and was not motivated by the share discount.
In 2017 Y and the other directors, had fallen into serious dispute.
The disputes concerned possible share dilutions of each shareholder’s holdings in order to let in new shareholders, pay for senior staff, governance, and the future direction of the business.
There was evidence Y bullied staff.
Y sought to renege on a more recent shareholder purchasing a departing shareholder’s shares.
This led to a mediation process.
Following mediation, the group’s board sent a letter to Y proposing resolutions that Y be terminated as a director at a board meeting a month later.
The next day, Y purported to resign giving 3 months notice.
Roughly a month later (and before the 3 month resignation notice period expired) the resolutions terminating Y passed.
The Court found the group’s board had good reason for terminating Y i.e. to bring to an end the problems Y was causing. It was not a mere share discount manouver.
The Court noted the terms of the various shareholders agreements had been accepted by Y and P, so being held to them was not inappropriate.
P’s primary oppression claim failed.
P also complained the discount was a breach of the various companies’ shareholders agreements and constitutions.
Whether the discount applied depended on whether termination or resignation took effect first. P argued that Y’s resignation took immediate effect, despite a 3 month notice period.
The resignation would take effect 3 months after notice was given, so the termination resolutions passed in the intervening time took precedence.
P did not show that applying the discount was a breach of the agreements.
The discount was found to be OK.
This decision shows the importance of harmonious relations at board level for the prosperity of an enterprise, and the vital importance in making sure whatever document you are signing up to actually says what you want it to say.