Chamberlains Law Firm and Howes Kaye Halpin Solicitors (HKH) are pleased to announce that as of 1 October 2020, the two firms have successfully merged and integrated under Chamberlains’ flag. The merger will further strengthen the firms’ joint offering, particularly in Personal Injury, Property, Corporate Law and Wills & Estates, and turns Chamberlains into one of the largest law firms by headcount in the ACT.
A summary of key details surrounding the merger are as follows:
HKH is a long-standing firm in the Canberra region, having operated for the past 40 years, with extensive experience in a range of practice areas including Personal Injury, Property, Corporate Law and Wills & Estates. HKH is generally recognised as having ‘big firm expertise with a small firm genuine care factor’ and has been recognised multiple times in the prestigious Doyle’s Guide.
Chamberlains’ Managing Director, Stipe Vuleta, comments:
“Canberra is the cultural heart of Chamberlains Law Firm and it makes me particularly proud to welcome such an amazing group of people into the Chamberlains family. Widening our scope of expertise in the nation’s capital and deepening our roots within the community which has looked after us for so long as a firm and for whom we are invigorated every day to wake up and serve.”
Despite the challenging climate of 2020, Chamberlains has had a very successful year, continuing its growth in multiple markets, with some of the key achievements being:
Joining Chamberlains’ board from HKH are Ben Hatte and Alison McNamara.
Alison McNamara, Director – Compensation & Estate Litigation:
Alison brings a wealth of experience in the personal injury and litigation sectors to Chamberlains, having a background predominantly in the areas of civil, commercial and estate litigation. Alison has a history of achieving outstanding results for clients who have suffered physical and psychological injury from workplace accidents, medical negligence, motor vehicle accidents, public liability matters, and also regularly acts in wills and estate disputes.
Alison also comments the merger:
“We immediately saw great synergies in the culture of Chamberlains and HKH. Both firms are very much driven by an incredible team committed to achieving excellent results. Our clients will benefit by combining forces, with our expertise at HKH, particularly in the property and personal injury divisions, complementing the existing full-service offerings at Chamberlains. We are excited about the prospect of what we can achieve together for our clients under a joint Chamberlains flag”.
Ben Hatte, Director – Property Law:
Ben joins the Chamberlains’ board with over 10 years of experience, having headed the HKH Property and Commercial practice. Ben is an expert in all aspects of property law, having guided many first-time homebuyers, investors, and builders over the years and developed one of the strongest property practices in Canberra. Ben brings determination and enthusiasm to the firm as well as a heavy technical competence, attention to detail and commercial acumen
The merger further strengthens Chamberlains’ full-service offering, particularly in the Personal injury, Property, and Corporate Law sectors, turning Chamberlains into one of the largest law firms by headcount in the ACT.
The decision of the Full Federal Court in Kraft v Bega [1] earlier this year over the design of peanut butter packaging, raises important questions regarding unregistered trademarks. Specifically, whether licensing agreements of unregistered trademarks may be ineffective if they do not also assign the goodwill of the business.
What is a “trade dress”?
A trade dress refers to the appearance of product packaging and includes the rights to the “visual appearance of a product packaging” for example its shape, colour scheme and graphics. Importantly, this is separate to the trademark itself. In Australia, lawyers more commonly refer to trade dress as “get-up”.[2] Both Kraft and Bega agreed that the trade dress was an unregistered (or common law) trademark. Generally, unregistered trademarks allow for actions to be taken under Australian Competition Law since whoever owns the mark can exclude others from using the same trade dress.
In this case, the parties agreed that the Peanut Butter Trade Dress (PBTD) was “a jar with a yellow lid and a yellow label with a blue or red peanut device, with the jar having a brown appearance when filled”.
Why was the use of the trade dress in dispute?
The design of the peanut butter jar was created by the Kraft Foods Group. In 2017, Bega Cheese purchased Kraft’s peanut butter including their ‘trade dress‘. After the sale, Kraft began to manufacture peanut butter and sell it with elements of the trade dress. After the sale. Both Kraft and Bega claimed that they were entitled to the exclusive use of the Peanut Butter Trade Dress.
Kraft contended that due to a company restructure, they were only licensees and as such the trade dress was not theirs to sell. Further, they attempted to separate the goodwill of the peanut butter business that Bega acquired from the goodwill associated with the trade dress of the peanut butter claiming it was a “diagnostic cue” that enhances only the Kraft mark.
Bega submits that under Australian common law, Kraft couldn’t assign the trade dress because as an unregistered trademark, it was impossible to separate it from the goodwill of the peanut butter business (and as such, cannot be assigned separately to the peanut butter business).
The outcome:
The purchase of Kraft peanut butter by Bega was validly executed, and consequently, they were able to use the trade dress to the exclusion of the original owners. Contrary to Kraft’s argument, the transfer documents were found to effectively transfer the trade dress as part of the goodwill of the business to Bega.
Justice O’Callaghan, deciding in favour of Bega, observed that “goodwill” is inseparable from the business it adds value to and cannot be dealt with separately. Further, goodwill provides rights to exclude others from using the trade dress to ensure attraction to that business. He granted Bega the right to use the yellow lid and red and blue labels, at the exclusion of all other competing brands.
Takeaways:
When selling a business, consult with a solicitor to consider which parts of your brand and product may be able to be registered as a trademark. This will help avoid legal disputes by clearly specifying which assets are being sold. Similarly, when buying a business or rights to a product, consult a lawyer to ensure all assets you intend to use are included in the contract of sale.
It may also be worthwhile registering any commercially significant brand elements rather than relying on the rights for unregistered trademarks provided at common law. Especially if trying to licence the use of your trade dress without assigning goodwill as otherwise they may not be validly licensed.
[1] Kraft Foods Group Brands LLC v Bega Cheese Limited (No 8), [2019] FCA 593.
[2] See Reckitt & Colman Products Ltd v Borden Inc [1990] UKHL 12; [1990] 1 All ER 873 at 880.
In the decision of J P Morgan Australia Ltd v Consolidated Minerals Pty Ltd [2011] NSWCA 3, the Court considered a case where a client appointed an investment banker to advise on takeovers and mergers.
The contract was formed by an engagement letter from the banker being accepted by the client. The engagement letter entitled the banker to various fees based on different events, offers and payments.
Following a “bidding war” the client became a wholly-owned subsidiary of a purchaser.
Following the transaction, the banker issued an invoice for $50m. The client objected to it and paid only $20m. The banker sued for remaining $30m, lost at first instance and appealed.
Critical was whether payment for a pre-bid stake in the client was “in connection with” the eventually accepted offer. If it was, then the banker was entitled to charge a higher fee than if it was not.
The Court found that matters “in connection with” an offer for the purposes of the particular engagement could only arise after the relevant request, and not before. As the payment for a pre-bid stake was before the suitable offer, this caused difficulty for the banker.
The Court took some support for its view from the doctrine of contra proferentem. The banker drafted the term, it gave rise to a large fee, and if it was ambiguous, then the banker had no claim to have those doubts resolved in its favour.
The banker’s appeal and the client were not required to pay the particular fee claimed.
Annulment of bankruptcy is the process by which your bankruptcy can be cancelled, ending your period of bankruptcy. If your bankruptcy is annulled, your name will remain on the National Personal Insolvency Index, but your bankruptcy will be listed as ‘annulled’.
There are three ways to go about having your bankruptcy annulled:
Payment of all debts
Under s 153A of the Bankruptcy Act 1966, the trustee of your bankruptcy may grant an annulment if satisfied you have paid all your debts in full, including interest payable, administration costs, and remuneration expenses of the trustee. To work out the amount payable to discharge you from bankruptcy, contact your appointed trustee.
Court order
Under s 153B of the Act, bankruptcy may be annulled by the court in limited circumstances, where it can be proven that the bankruptcy order ought not to have been made. The types of situations this would be considered in is where the debt was not owed or had already been paid, non-service of the creditor’s petition, or stolen identity.
Arrange a Composition with creditors
Under s 73 and 74 of the Act, you may agree to an arrangement with your creditors to repay some portion of your debts less than the full amount. A proposal should be lodged to your trustee, who will consider the proposal before presenting it to creditors for their consideration. A Composition, once accepted by creditors, is legally enforceable. It is important to ensure the arrangement is realistic as failing to comply with the terms will be contempt of the court.
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Two plaintiffs invested money with the first defendant for a fixed term having signed various documents titled “Declaration of Trust”.
At the end of the term of investment, the first defendant did not repay the money.
The plaintiffs said that the first defendant held the funds on trust. The plaintiffs also said that the second and third defendants might be holding some of the money and that, if they were, they were doing so as constructive trustees. (However, this “constructive trustee” issue was saved for another day.)
The defendants did not attend the hearing. The Court nonetheless found it was appropriate to proceed in their absence.
Thus the Court was left to decide various issues including whether the first defendant held the funds on trust.
Before the investment, the first defendant had made various representations about an investment with him being “100% safe and secure”. The Ps subsequently made a number of investments with him. As many of the investments were made, the first defendant would send a document titled “Declaration of Trust” for the relevant plaintiff to sign.
Between them the plaintiffs invested around $2.4m in this way.
In considering whether a trust had arisen the Court had to consider whether there was certainty of intention, subject matter and object.
The test of certainty of subject matter (the money) and object (investing with the hope of a return) were comfortably met. But did the parties intend that the money be held on trust?
Yes, the Court found.
The reasons were: (i) the terms of the relevant document referred to the sums being held “in trust”; (ii) the use of the word “trust” in the documents was purposeful; (iii) the surrounding circumstances suggest a trust purpose; and (iv) even if the relationship was debtor/credirtor, such a relationship does not negative the obligations of a trust arising.
The Court declared first defendant held the sums on trust for the benefit of the plaintiff and left the issue of pursuing the other defendants for another day. Costs followed the event.
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On 1 September 2020, the NSW Government introduced the new Building and Construction Industry Security of Payment Regulation 2020, which repeals the existing 2008 Regulation. Currently, owner occupier construction contracts are exempt from the Security of Payment laws. This means that most contractors in the residential space (both on the builder side and the home owner side) are not subject to the Security of Payment regime.
From 1 March 2021, for construction projects within NSW this will change, with owner occupier contracts to be included within the definition of ‘exempt residential construction contracts’, and therefore those contracts will be subject to the Security of Payment Act.
The effect of these changes will be that under Schedule 2 of the Regulation, builders will be able to serve a statutory Payment Claim on the homeowner, apply for Adjudication to resolve disputes, and invoke a statutory right to payment (in addition to their contractual right to payment).
What does this mean for residential builders?
The changes are intended to provide relief for residential builders, who will be able to recover moneys owed by owner occupiers under the Act by applying for Adjudication and obtaining enforceable Determinations. This process typically takes between 6 – 9 weeks to complete, and costs a fraction of the expenses involved in litigation. Currently, builders have to resolve residential construction disputes (where the amount in dispute is less than $500,000.00) through the NSW Civil & Administrative Tribunal. That process typically takes 6 – 9 months to complete, and can be prohibitively expensive.
Additionally, builders will have a statutory right to payment in relation to a Payment Claim and enforce these rights through the courts where the owner does not dispute the amount within the time permitted. That process can be even quicker and less expensive again.
What does this mean for home owners?
Homeowners should be aware that the new Regulation will allow builders to enforce statutory rights under the Security of Payment Act if a Payment Schedule disputing the amount claimed in the Payment Claim is not served within the time permitted. Homeowners should also be aware of the requirements in responding to Adjudication Applications made by builders.
This change is set to come into effect 1 March 2021, with the NSW Government expected to release further information and guidance for builders and owner occupiers prior to this date.
We recommend residential builders speak to our building and construction team for advice on how to best utilise the Security of Payment laws for owner occupier contracts. Homeowners who have or who are intending to contract for construction work after 1 March 2021 should also seek advice on the Security of Payment laws.
Issues arising out of parties to civil proceedings failing to adhere to the overriding purpose of Civil Procedure Act 2005 (NSW), the rules of the Court & its implications for costs – Apollo Kitchens (NSW) Pty Limited v Goway Travel Pty Limited (No. 2) [2020] NSWSC 1157
Apollo Kitchens (NSW) Pty Limited (the Respondent) was required to pay two-thirds of the costs of Goway Travel Pty Limited (the Applicant) by reason of vacating a hearing date on 30 June 2020.
Some important take-aways from the decision are as follows:
Legal Principles Regarding Costs Orders
The power to order costs lies in the discretion of the Court. The Court has the power to consider who and to what extent a party is to liable for the payment of costs and whether costs will be awarded on the ordinary basis or an indemnity basis (s.98 Civil Procedure Act 2005 (NSW)).
Costs on an ordinary basis are also known as “party/party costs”, and this allows a successful party to recover from the unsuccessful party in proceedings. This allows a successful party to be compensated for solicitor/client costs which have been reasonably incurred in the course of proceedings.
Indemnity costs may be ordered when something has occurred through the course of litigation so as to consider one party liable to pay another almost all costs incurred. This includes when a successful party:
(a) has been subject to unnecessary costs and/or expenses in the proceedings as a direct result of the conduct of their opponents; and/or
(b) makes a formal offer of compromise in the course of proceedings and the offer was more favourable than the outcome obtained in the course of the proceedings.
The general rule in litigating matters is that costs follow the event: Rule 42.1 Uniform Civil Procedure Rules 2005 (“UCPR”).
In the present case, the costs application arose from an interlocutory application as to the appropriate outcome for costs incurred by the parties as a result of the adjournment of a hearing.
The Court noted some critical principles with respect to making costs orders on an indemnity basis. The Court stated that an indemnity costs order might be appropriate where the case demonstrates “some relevant delinquency” by a party to the proceedings: Oshlack v Richmond River Council (1998) 193 CLR 72; [1998] HCA 11 at [44]. A “relevant delinquency” is not a question of a moral or ethical failure, but rather a delinquency that is relevant to the conduct of a case: White Constructions (ACT) Pty Limited (In Liquidation) v White and Ors [2004] NSWSC 303 at [10]-[11]. For a party seeking an indemnity costs order, it is necessary to show a level of unreasonableness in the conduct of a party through the course of proceedings: Leichhardt Municipal Council v Green [2004] NSWCA 341 at [51], [57].
In this matter, the Applicant submitted that the Respondent had failed to comply with Court orders on several occasions, and this conduct contributed to the inability for the parties to prepare for hearing. Further, Counsel for the Respondent was briefed only a week prior to the scheduled hearing and amendments to the Respondent’s Statement of Claim were sought. In these circumstances, the Applicant submitted that the circumstances by which the proceedings had come to be adjourned were considered a delinquency or misconduct by the Respondent. His Honour noted that the Applicant had also submitted a further affidavit to form part of the evidence a day prior to the scheduled hearing.
His Honour Justice Johnson stated that he was not persuaded that costs should be ordered on an indemnity basis, but rather an appropriate outcome was for the Respondent to pay two-thirds of the Applicant’s costs. Although the Respondent did not fully comply with its obligations under the Civil Procedure Act 2005 (NSW) leading up to the hearing, his Honour was not satisfied the Applicant established the requisite level of delinquency or unreasonableness on behalf of the Respondent to warrant an indemnity costs order.
The recent decision of University of Canberra v Zierholz@UC Pty Ltd [2020] ACTCA 45 highlights the need for parties to consider adverse costs orders when commencing proceedings, and in particular appeal proceedings.
The Courts will often consider making an order for security for costs when a party brings an appeal. Such an order requires the Appellant to pay into the Court an amount of money the Court considers appropriate for the Respondent’s legal costs, should the appeal fail.
In this instance, Zierholz brought an appeal from the finding of the primary judge, where the judge at first instance determined that there had been no breach of fiduciary duty, no breach of contract, and no breach of the provisions of the Competition and Consumer Act 2010 (Cth). The Appellant in this instance was a company with little capital, and the directors of Zierholz were also in a financial position where their liabilities exceeded their assets by over $400,000. Accordingly, the Court made an order that Zierholz pay $50,000 into Court as security for costs before it was allowed to proceed with the appeal. This was despite the Respondent estimating $125,000 to $170,000 for its legal costs for the appeal.
While, in some circumstances, the security of costs regime can act as a barrier to obtaining justice, the security for costs operates to protect parties to proceedings from incurring substantial legal costs which are unlikely to be repaid if they are successful. This is demonstrated by the Court’s reasoning at [16] of this decision, where the Court affirmed the view of the Court in Twining v Curtus [2014] ACTCA 19 (Twining) as follows:
“the purpose of such applications is to protect a successful litigant from the injustice caused by being forced to contest a claim for a second time without a probability of obtaining the costs thus expended and thereby to provide a fund to defray such costs and to discourage frivolous and unmeritorious appeals.”
It would be a travesty if a party that was successful in the first instance, and was also successful in defending an appeal, was ultimately in a worse financial position by virtue of being unable to recover their legal costs in relation to the appeal.
This position was further outlined by the Court in this decision where the Court, again, confirmed Twining by quoting:
In Twining at [14]-[15], cited in Haides at [28], Refshauge J stated:
14. I noted, also, that there was a difference between applications for security for costs at trial and on appeal, a position that has been clear since as long ago as 1885: Cowell v Taylor (1885) 31 Ch D 34 at 39. See also Rainbow v Kittoe [1916] 1 Ch 313 at 318. As was pointed out in Riverside Nursing Care Pty Ltd v Minister for Aged Care (2000) 63 ALD 122 at 125; [14], the appellant “has had its day in court”. Thus, there is, in an appellate situation, a decision in the respondent’s favour, which must be taken to be correct until set aside: Kennedy v McGeechan [1978] 1 NSWLR 314 (note) at 315.
15. A particular difference is that in the case of an appeal, unlike the case of a trial, impetuosity of an individual is a ground for the making of an order that an appellant provide security for costs. The prospects of success are also relevant, despite the difficulty in some cases of assessing them.
Appeals are often costly legal exercises, and the security for costs regime ensures that parties are protected from some of the pitfalls of the litigation process, although in this instance, if the Respondent’s estimate of the costs of the appeal are correct, there will still likely still be a shortfall.
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In the recent decision of the Supreme Court of NSW, Balzola v Passas (No 2) [2020] NSWSC 1200, a plaintiff sued two defendants in defamation.
The plaintiff succeeded against the first defendant and failed against the second.
The damages were very modest, the sum of around $11,000.00.
The Court found that, in relation to the second defendant, that costs should “follow the event” meaning the plaintiff had to pay the second defendant’s legal fees. The second defendant tried to elevate that costs order to cost on the more generous “indemnity” basis, but failed. This meant that that the plaintiff had to pay on the less generous “ordinary” basis.
Having been successful against the first defendant, the plaintiff sought his costs against her on the indemnity basis.
The plaintiff failed. The Court found that an offer the plaintiff made, which the first defendant did not accept, required a wide-ranging apology and did not provide for a “clean exit” from the litigation. As such, it was not unreasonable for the first defendant not to accept it.
Further, the Court found the first defendant should only pay a proportion of the successful plaintiff’s costs because: (i) the very modest $11K claim raised an issue about whether the legal costs were proportionate, (ii) the P was only partially successful, having lost on more of the claim than he won, and (iii) the first defendant should not have to pay legal costs relating to the plaintiff’s unsuccessful pursuit of the second defendant.
The Court ordered that the first defendant only had to pay two-thirds of the plaintiff’s legal costs.
In closing, the Court queried whether the proceedings were worth the “powder and shot”; whether the legal costs incurred – and the argument about those costs – was worth the modest amount of damages claimed.
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Any order for property adjustment made in either of the Federal Circuit Court of Australia or the Family Court of Australia is capable of being set aside or varied if certain criteria are met.
The grounds for which a person can make such an application are as follows:
The Family Law Act 1975 (Cth) is clear insofar as, an application to set aside or vary property orders is expanded to include not only those parties to the relationship, but those who would otherwise be affected by those orders, including the Trustee in Bankruptcy if one of the parties was or became bankrupt after the orders were made, or any third-party whose interests are affected by the property orders.
It is important to note that consideration of these issues sits within the court’s discretion and upon consideration, the court may either vary the order or set aside the orders in part of in their entirely.
In a practical sense, this boils down to a four-step process. Firstly, you must establish that a ground exists and then secondly, prove that such amounts to a miscarriage of justice that would justify the Court setting aside the orders. Thirdly, you must satisfy the Court that it is appropriate to exercise their discretion to vary or set aside the order and fourthly, thereafter outline what orders should be made in place of the original orders.
In order for your claim under Section 79A(1) of the Act to succeed, the Court must be satisfied that a miscarriage of justice has resulted by virtue of one or more of the grounds listed above. It is not sufficient to merely establish the existence of one or more of the stated grounds. For example, it is not every failure to disclosure relevant information that would justify a Court setting aside property orders. It will only be in cases when the absence of disclosure has led to the Court making an order which is substantially different from the order in which it would have made if such disclosure had taken place.
Any advice or consideration as to whether property orders should be set aside or varies is inherently complex and turns on the facts of the case. If you are party to a relationship, or any other person affected by property orders, we highly recommend you seek expert advice as to your circumstances from the Chamberlains Family Law Team at familylaw@chamberlains.com.au