Stipe Vuleta (Managing Director and Head of Chamberlains’ Insolvency Practice) has been named as a finalist in the Lawyers Weekly Partner of the Year Awards for Insolvency Partner of the Year.
The Partner of the Year Awards recognises and rewards lawyers at the height of their careers, noting their outstanding achievements, leadership, technical expertise, mentorship and business development skills.
This year the awards are more important than ever, highlighting and shining a spotlight on the top partners who lead the way in the business of law during a time of unprecedented change.
The finalist list, which was announced on 15 June 2021, features over 220 high-achieving partners within the legal industry, across 32 submission-based categories.
Lawyers Weekly deputy editor Jerome Doraisamy said: “The past year has produced extraordinary challenges for legal professionals of all stripes, perhaps especially so for partners and team leaders who have responsibility for navigating through choppy waters. To be a finalist for this year’s Partner of the Year Awards is an outstanding achievement.
“On behalf of Lawyers Weekly, I wish all finalists the very best of luck, and I look forward to celebrating with you on the night.”
Stipe Vuleta, Managing Director at Chamberlains Law Firm, is humbled to be recognised and proud to be named as a finalist in the Partner of the Year Awards 2021.
The 2020 case of Snell v Glatis (Snell v Glatis (No 2) [2020] NSWCA 166), where Chamberlains Law Firm represented the Appellants, saw a successful appeal of the primary judge’s orders for a compulsory buy-out of an oppressed minority’s shareholdings in a group of companies and instead ordered a winding up.
The Appeal centred on whether a buy-out order was appropriate or whether it would only give rise to further complications. Their Honors considered these practical difficulties pointed powerfully in favour of winding-up, and a winding-up order was accordingly made.
The Court of Appeal considered a previous judgment where the following principles can be applied:
- Oppression can be cured by the oppressor being ordered to acquire the oppressor’s shares at fair value;
- The share buy-out order should seek to put the company back on the rails and avoid the causes of conflict;
- Compared to a share buy-out, winding up should be seen as a last resort; and
- Winding up a profitable and operating company is an extreme step and requires a solid case to be made.
In considering the above, the Court of Appeal confirmed that any relief in an oppression dispute with be on a “case by case” basis. The context in which the particular company or companies operate together with their structure and history will always be relevant to what form of relief is appropriate.
The purpose to be achieved by a buy-out order is to return to a minority shareholder the value of his, her or its shareholding.
In this case, given that the corporate assets were substantially realisable and there was minimal active trading, many of the considerations tending against ordering winding up did not apply. Winding up was a realistic means of securing the respondent’s share of the value of the relevant corporate group, which would also prevent ongoing oppression.
If you have any legal questions about commercial and corporate law, reach out to our specialists at Chamberlains Law Firm!
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On 18 May 2021, the European Union Intellectual Property Office (EUIPO) published a decision regarding an application by United Kingdom greeting card company, Full Colour Black Limited (Full Colour), against notorious street artist Banksy to declare one of his trademarks invalid. EUIPO held that the trademark, based on the artwork known as ‘Laugh Now’ (pictured below), was invalid in its entirety as it was found to be filed for in bad faith.
Banksy, Laugh Now But One Day We’ll Be In Charge, 2002, spray paint and emulsion on paperboard. (Source: ARTnews)
Background
Between 2014 and 2018, ‘Parent/Legal Guardian for the artist Banksy’ company Pest Control filed several European Union Trademark applications for many of Banksy’s most iconic works and designs.
In 2019, Full Colour began selling greeting cards featuring these designs, such as ‘Laugh Now’ and ‘Flower Thrower’.
Later that year, Full Colour filed applications with the EUIPO to have Banksy’s trademarks invalidated. The applications were broadly based on two grounds, those being:
- Banksy never made use of the marks, except in his artistic expressions, and had no intention of commercialising or enforcing the intellectual property rights against other third parties that reproduced the designs; and
- The applications were made in bad faith.
In response to these applications, Banksy unveiled a brick-and-mortar store in the UK called Gross Domestic Product. Customers could view window displays and buy the products online after a vetting procedure to ensure that they would not re-sell the items and were not art dealers.
The Decision
The EUIPO held that Banksy had acted in bad faith in seeking the trademark and his actions ‘are inconsistent with honest practices as it had no intention to use the EUTM as a trademark according to its function’.
In reaching this decision, the EUIPO relied on statements made previously by Banksy and a director of Pest Control (Mr M.S.) concerning the recently opened store and his general attitude towards intellectual property laws. In his own words, Banksy was ‘not trying to carve out a portion of the commercial market by selling his goods’. He was merely trying to fulfil the trademark class categories trademark for these goods to circumvent the non-use of the sign requirement under EU law’.
Statements such as:
‘Copyright is for losers’ – Banksy;
‘The motivation behind the venture was “possibly the least poetic reason to even make some art” – a trademark dispute’ – Banksy;
‘For the past few months, I’ve been making stuff for the sole purpose of fulfilling trademark categories under EU law’ – Banksy;
‘I still encourage anyone to copy, borrow, steal and amend my art for amusement, academic research or activism. I just don’t want [Full Colour] to get sole custody of my name’ – Banksy; and
‘Banksy is in a difficult position…Because he doesn’t produce his own range of shoddy merchandise, and the law is quite clear – if the trademark holder is not using the mark, then it can be transferred to someone who will… I proposed that Banksy begin his own range of merchandise and open a shop as a solution to the issue…‘ – Mr M.S.;
All pointed to Banksy’s application of the trademarks not being intended to provide commercial goods or services.
Another factor that weighed on the ruling was Banksy’s decision to remain anonymous to preserve the secretive persona which propels his fame and success. This factor has hindered him from protecting this piece of art under copyright laws as he cannot be identified as the unquestionable owner of such works.
This decision follows on from the EUIPO decision regarding the artwork ‘Flower Thrower’, which had an identical outcome, and there are five more similar cases before the EUIPO to be decided in the coming months. These decisions potentially have a domino effect for Banksy’s registered trademarks worldwide.
Practical Considerations in Australia
Section 62A of the Trade Marks Act 1995 (Cth) (Act) provides that:
The registration of a trademark may be opposed on the ground that the application was made in bad faith.
The Act does not define what bad faith means in this context; however, the Courts have stated that bad faith is determined on the balance of probabilities and on the basis of whether the conduct of applying for the trademark fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced persons: see Fry Consulting Pty Ltd v Sports Warehouse Inc (No 2) [2012] FCA 81.
While this decision is not binding in Australia, it may prove an influential example of conduct that may give rise to bad faith and should be considered, especially when applying for international trademarks.
***Assisted by: Patrick Jamieson***
If you have questions or concerns about intellectual property agreements, contact one of our intellectual property lawyers today.
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1. Help my insurance claim is taking forever, what are my options?
Under the General Insurance Code of Practice, insurers have timeframes they must meet when handling your claim. These timeframes include:
- Within 10 business days of receiving your claim, they must tell you what information they need to make a decision, appoint a Loss Assessor or Loss Adjuster where necessary, and give you an estimate of when a decision will be made.
- Keep you informed about the progress of your claim every 20 business days.
- Respond to your enquiries about your claim within 10 business days.
- Once all relevant information has been obtained, they must accept or deny claim within 10 business days
- A decision must be made on your claim within 4 months of receiving your claim, under ordinary circumstances.
If your insurer does not meet these timeframes in handling and making a decision on your claim, you should first lodge an internal dispute with your insurer. They must make a decision about your complaint within 45 days of it being lodged.
Should your complaint not be resolved through your insurer’s internal dispute resolution process, you may lodge a complaint with the Australian Financial Complaints Authority.
2. Does my insurance company have to cash settle, repair, or replace?
Under most policies, your insurer has the right to decide whether to cash settle, repair or replace. The decision will depend upon the nature and extent of the damage.
3. Insurance investigations – What information can my insurance company request for me?
If your insurer is conducting an investigation into your claim, they must only investigate matters that are relevant and necessary to the claim, and must do so in an appropriate and respectful manner. Investigators must only collect information that is reasonably relevant to the investigation. Some information that is commonly requested includes bank statements, telephone records, driving records. If you have concerns about the nature of the information being requested from you, you should ask your insurer to explain why the information is relevant
4. If I pay my premiums by instalments am I still covered?
Yes, you will still be covered if you are paying your instalments on time. Your insurer cannot cancel your insurance policy for non-payment without providing you with written notice at least 14 days before cancellation.
5. What special services do I need to consider as a broker?
- An insurance broker is required to act in the best interests of its clients. All brokers must comply with a code of conduct as members of the National Insurance Brokers Association of Australia (“NIBA”). As part of the NIBA, Insurance Brokers are expected to review its clients’ policy of insurance, advise on changes that may have an affect on its clients and must do what is necessary to ensure that its clients are in compliance with their insurance, whether it be fulfilling disclosure requirements or ensuring that an insured’s premiums are paid on time.
- As there is a requirement for insurance brokers to act in the best interests of their clients, those interests must comply with all relevant laws, there must be transparency to manage conflicts of interest that may rise. There are various other service standards to must be complied with and this can be found under the NIBA Code of Practice.
- An insurance broker is required to assist its clients in identifying risks and explain terms or conditions, benefits, costs associated with insurance policies or discuss exclusions that may affect an insured’s compliance with its policy of insurance.
If you have any questions or concerns please contact Chamberlains and talk to one of our insurance law experts today.
With the COVID-19 vaccine rollout underway, it’s the question everyone is asking – Can an employer require its employees to be vaccinated?
Two recent decision handed down by the Fair Work Commission have upheld that employers were justified in terminating employees who failed to comply with the lawful and reasonable direction to be vaccinated in accordance with their workplace policies.
Whilst both decisions related to the flu vaccination, they do shed light on the complex question of when employers can enforce mandatory vaccinations.
The Decisions
In Barber v Goodstart Early Learning [2021] FWC 2156, Goodstart Early Learning, who operated a childcare centre, implemented an immunisation policy which required all its staff to receive the flu vaccination, unless they were unable to do so based on medical grounds. Ms Barber objected to the vaccination and obtained a medical certificate which stated that she had allegedly suffered from an adverse reaction to the flu vaccination in the past. Subsequently, Goodstart Early Learning terminated Ms Barber’s employment on the basis that she was unable to meet the inherent requirements of her role.
The Commission found the failure to obtain the flu vaccination did not inhibit Ms Barber from performing the inherent requirements from her role. However, the Commission held that Goodstart Early Learning did have a valid reason to terminate Ms Barber as she had failed to comply with the lawful and reasonable direction to be vaccinated in accordance with Goodstart Early Learning’s policy.
Similarly, in Kimber v Sapphire Coast Community Aged Care Ltd [2021] FWC 1818, Sapphire Coast Community Aged Care Ltd, who operated a nursing home, terminated Ms Kimber on the basis that her refusal to comply with the NSW public health order, which provided that no person may enter an aged care facility without an up-to-date influenza objection, meant that she was unable to fulfil the inherent requirements of her role.
The Commission found that Ms Kimber was indeed unable to perform the inherent requirements of her job if she was not lawfully permitted to enter or remain in Sapphire Coast Community Aged Care Ltd’s business premises.
When will mandatory vaccinations be lawful and reasonable?
Whilst the question of reasonableness will likely differ for each employer, both cases highlighted what factors will be of importance in determining if an employer’s policy is reasonable, such as:
- The employer’s health and safety obligations under the relevant legislative framework;
- The environment in which the employer operates;
- The Government’s recommendations and advice surrounding vaccination;
- The relative ineffectiveness of alternative control measures (such as personal protective equipment, social distancing and hygiene);
- Whether the policy was appropriately adapted (such as to allow for medical exemptions);
- Whether the employer engaged in union consultation and support for the policy; and
- Whether the policy was within the scope of the employee’s contract.
Takeaways
The above cases are not indicative of a broad approval of mandatory vaccinations. However, they do provide guidance on when mandatory vaccination policies can be lawful and reasonable, particularly in circumstances where the employer operates in environments which present distinct risks, such as caring for vulnerable people. The onus is ultimately placed on the employer to justify the need and practicality of a mandatory vaccination policy.
Contact Chamberlains Law Firm for any questions and concerns regarding Workplace Law.
The Federal Government announced in the 2021-2022 budget that it will be introducing a patent box scheme aimed at encouraging innovation in Australia. From 1 July 2022, patents in the medical and biotechnology field will be eligible to fall within a patent box that will tax income derived from the patent at a concessional corporate tax rate of 17%.
Australia currently taxes profits generated by patents at the headline corporate rate of 30% for large businesses and 25% for small to medium enterprises (from 1 July 2021). The patent box will offer a competitive tax rate for profits generated from Australian owned and developed patents. However it will only be available to patents that have been granted this status by the Government.
The patents are required to be domestically developed, with the aim of encouraging additional investment in research and development as well as keeping these activities and the patents, in Australia.
The Government plans to consult with industry about the detailed design of the patent box and also plans to consult on whether the patent box would be an effective way of supporting the clean energy sector.
In the recent decision of Sara Stockham Pty Limited v WLD [2021] NSWCA 51, the NSW Court of Appeal considered a dispute that arose concerning a unit trust. Two dentists worked together using a unit trust in which both dentists’ entities held units. The relationship between all was governed by an agreement. The agreement contemplated a unit-holder exit for “fair market value”.
One dentist tried to exit from the unit trust arrangement. That triggered a clause in the agreement regarding the trustee appointing a valuer, and the trustee approached the Court for judicial advice pursuant to s63 of the Trustee Act 1925 (NSW).
The dentist who was trying to exit opposed that application for advice, but the trustee got the Court’s advice and went ahead with the valuation. The disgruntled dentist then commenced further Court proceedings. As part of those, the parties asked the Court to separately determine the meaning of a particular clause of the agreement: Clause 7.8.
At first instance, the Court held that Clause 7.8 did not apply to any valuation. However, the disgruntled dentist appealed this decision, and the Court of Appeal had to give further thought to the operation of Clause 7.8.
Clause 7.8’s effect was to prevent the trustee from effecting decisions on “Major Policy” issues (like dealing with assets worth over $50,000.00) without unanimous unit-holder approval. The disgruntled dentist said that a Major Policy decision made without unanimous consent was void pursuant to Clause 7.8 and should not be part of a valuation.
The Court disagreed.
The Court of Appeal (agreeing with the first instance decision) found that Clause 7.8 renders the trustee’s decision void if there is no unit-holder unanimity but not the resulting transaction. What that means is that the transaction itself still stands, but a claim against the trustee for breaching the agreement may be available to the disgruntled dentist if they wished to pursue it.
That meant that while there may be a later dispute about the valuation or an alleged breach of the trustee’s duties, those issues were not raised in this litigation which solely dealt with the operation of Clause 7.8. The appeal was dismissed.
This case highlights the importance of carefully “reading the fine print” on any agreement before you enter into it and, potentially, obtaining legal advice concerning it. That is one of the best ways to avoid being bound to a relationship whose terms no longer suit you.
If you have any questions or concerns please contact Chamberlains and talk to our dispute resolution team today.
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In the recent cased of Capilano Honey Limited v Dowling (No 4) [2021] NSWSC 264, the Supreme Court of New Wales considered a piece of litigation arising from a honey-making company, and its CEO commencing injurious falsehood and defamation proceedings.
The company and the CEO wanted damages and orders restraining the defendant from making further defamatory publications in future.
The plaintiffs complained about the defendant publishing various pieces of material which conveyed meanings, including:
– The plaintiff company’s honey was toxic;
– The plaintiffs conspired with the judiciary and a consumer advocate magazine; and
– There exists a “sex tape” showing the CEO discussing a sex act performed with an employee.
The publications were made on the defendant’s website, Facebook and Twitter.
The defendant put no evidence before the Court that the honey was indeed “toxic” or harmful. The defendant (who was not represented by lawyers) did not raise the sort of usual defences which might be expected, including truth, and indeed made several admissions in their defence.
Working through the publication-identification-reputation matrix required in defamation matters, the Court found the CEO had been defamed and awarded the CEO $150,000.00 in damages.
The company’s claim was in injurious falsehood, not defamation, meaning the company had to prove the falsity of what was said. The company did so and proved malice, obtaining a more “cautious” $25,000.00 in damages. The orders restraining further publication were made.
This case illustrates the dangers of publishing false material online. It can be an expensive mistake to make!
If you have any questions or concerns please contact Chamberlains and talk to our dispute resolution team today.
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In the recent decision of Agha v Devine Real Estate [2021] NSWCA 29, the NSW Court of Appeal considered a scenario where Party A, a former shareholder in and employee of Company R, ceased being a shareholder, quit his employment, and set up a competing business in the same industry.
Before leaving the employ of Company R and before ceasing to be a shareholder in Company R:
– Party A arranged for another employee of Company R to send Party A Company R’s client lists; and
– On the day Party A gave notice, they intended to set up a competing business, a person using Party A’s password-protected username changed 905 contacts in Company R’s database by altering a digit or digits for each phone number.
At first instance, each was found to be a breach of confidence attributable to Party A.
The inference was available that Party A was responsible for the sabotage, especially as A did not cross-examine R’s witness or give evidence. Party A sought to appeal this finding in the Court of Appeal but failed.
The client lists were confidential and not part of Party A’s own knowledge (as shown by Party A, causing the lists to be emailed to their personal address). The conduct was restrained by contract and also by equity.
The fact that Company R put the confidential information into affidavit evidence as part of the litigation did not place it in the public domain and so did not release Party A from duties of confidence.
Party A’s appeal failed. (Apart from some issues like the form of some of the Court orders.)
This decision illustrates the solemnity and importance of appropriately dealing with other parties’ confidential information.
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Recently, in the decision of Mudgee Dolomite & Lime Pty Limited (No. 4) [2021] NSWSC 393, the Supreme Court of NSW considered a dispute between two directors and equal shareholders of a mining company that eventually led to it being wound up.
Liquidators were appointed.
Before the windup, the first shareholder had brought a derivative action on behalf of the company pursuant to s237 of the Corporations Act 2001 (Cth) against the second shareholder and their related entities. The claim succeeded concerning the revenue from one mine, which the second shareholder diverted away from the company to their own interest. Still, the claim failed in relation to revenue from another mine that the second shareholder had directed away from the company.
The second shareholder appealed.
The first shareholder applied to lodge a cross-appeal on behalf of the company.
The liquidators came before the Court to seek advice pursuant to s 90-15 of the Insolvency Practice Rules, including asking the Court if they would be justified in:
(i) causing the company to defend the second shareholder’s appeal;
(ii) not opposing the first shareholder’s cross-appeal; and
(iii) instructing the same lawyers the first shareholder used for the derivative action Advice was given.
Regarding (i) the Court advised that the liquidators were justified in defending the appeal.
Regarding (ii) the Court advised the liquidators were justified in not opposing as the proposed cross-appeal because the first shareholder bore many of the risks (including an adverse costs order). There was a potentially significant upside for the company if the first shareholder won.
Regarding (iii) the Court advised the liquidators were justified in instructing the same lawyers as it would be in the company’s best interests to make use of the earlier lawyers’ case-specific knowledge.
Having provided the advice, the Court then ordered that the liquidators’ legal costs of the proceedings were to be paid as costs of the winding up.
This case serves as a powerful illustration of the value for liquidators in approaching the Court to seek advice about a proposed course of conduct. Perhaps more than that, it shows the damaging impacts that a dispute between shareholders can have on a company’s financial position.
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