It is a common misconception that a waiver in a contract will protect an equine professional from any and all liability when someone is hurt (or dies) whilst engaged in an equine related activity. While waivers should be used, it is not the case that they can protect you from all liability whatsoever, and the consequences of misunderstanding your legal obligations may have a serious impact on your business.
The law recognises that horses (or other defined equine) are big, unpredictable and easily startled (amongst other things) and cannot always be controlled by an equine professional. The law recognises those characteristics to be the inherent risks of equine activities and does not impose liability for personal injury on an equine professional for injuries caused by those inherent risks. That protection, however, does not prevent liability if the equine professional:
1. Provides faulty equipment or tack to a participant, when the equine professional knew or ought to have known the equipment was faulty;
2. Provides a horse to a participant, but failed to make reasonable and prudent efforts to assess that participants ability to safely engage in the activity;
3. Failed to fix a dangerous latent condition of the land or facility such as pot holes, slippery footing or branches overhanging an arena or yard; or
4. A participant is intentionally or recklessly injured.
Equine Activity is broadly defined at law to include anything from participating in shows, fairs and competitions through to farrier work, and most activity in between.
Luckily there are a few steps that you can take to ensure your protection from liability if a person is unfortunate enough to be injured:
1. Display a warning sign – the Civil Law (Wrongs) Act 2002 (ACT) obliges an equine professional in the ACT to display a warning sign to the following effect.
WARNING
Under the Civil Law (Wrongs) Act 2002, an equine professional is not liable for injury to, or the death of, a participant in an equine activity that results from an inherent risk of the activity. This is subject to limitations set out in the Act.
The warning notice must be in black letters with each letter at least 2cm high and displayed in a conspicuous place in proximity of the arena.
2. Get legal advice about appropriate wording to be included in your written contract, which will be provided to each participant prior to the provision of professional equine services; and
3. Make sure you have the right insurance. This insurance must cover more than the inherent risks of equine activities and should extend to circumstances in which the equine professional may have been negligence, or, for example, a horse bolts out onto a road and causes an accident.
We recommend that if you are providing professional equine services to people though teaching people to ride or by renting equipment or tack, you take care to ensure you are complying with your obligations at law and you have proper insurance in place to protect you where the law does not.
Agisting horses can bring about a range of difficulties when owners neglect paying invoices. In Victoria, the Impounding of Livestock Act 1994 (Vic) enables a landholder with a horse agisted on their property to create a lien over the horse to recover costs if agistment fees were not paid for 14 or more days.
In New South Wales and the Australian Capital Territory, however, these matters are more complicated. The lack of clear agistment related legislation, coupled with often loosely drafted Agistment Agreements results in confusion when landowners want to dispose of horses agisted on their land. If the terms of an Agistment Agreement are not clear, landowners are forced to lean on the appropriate legislative provisions.
New South Wales
In New South Wales, landowners can dispose of the horse in accordance with the requirements set out in the Uncollected Goods Act 1995 (NSW) (NSW Act).
The initial step is to draft a Notice compliant with the requirements of section 26 of the NSW Act. The notice must include:
(a) The bailee’s name;
(b) A description of the goods;
(c) An address where the goods may be collected;
(d) A statement of any costs that must be met by the owner before the goods will be released by the possessor;
(e) A statement to the effect that, on or after a specified date, the goods will be disposed of unless they are first collected and the relevant charges are paid; and
(f) If applicable, a statement to the effect that the person will retain, out of the proceeds of sale of the goods, an amount not exceeding the relevant charges.
According to section 22(1) of the NSW Act, landowners must allow for a six-month period before disposing of the horse. Th NSW Act, however, is somewhat restrictive in its required method of disposal. Landowners are entitled to dispose of the horse by public auction (pursuant to section 22(2) of the NSW Act) if the horse is valued at over $500.00 and under $5,000.00.
If the proceeds of the sale are insufficient to pay the relevant charges due to the landowner in respect of the horse, the landowner may recover the amount of the deficiency from the horse owner, as a debt, in any Court of competent jurisdiction, pursuant to section 29(3) of the NSW Act.
Alternatively, the landowner can seek a Court order for the disposal of the horse pursuant to section 8 of the Act. This involves a higher commercial risk and time commitment from landowners. It does allow, however, for the debt enforcement and disposal to be dealt with simultaneously.
In the matter of Coshott v Shipton Lodge Cobbitty Pty Limited and Anor [2006] NSWSC 556 (Coshott) the Court dealt with the debt involved in the failure to pay agistment fees. The Court found in favour of the applicant authorising disposal of the horse and, pursuant to section 8 of the NSW Act, the horse was able to be sold at public auction.
Other than this case, however, the legislation in application to agisting horses has been sparse. This makes it difficult to predict how Courts will determine agistment based cases in the future.
Australian Capital Territory
In the ACT, despite having the same name, the Uncollected Goods Act 1996 (ACT) (ACT Act) provides a different set of requirements for landowners.
According to section 8 of ACT Act, where a horse owner refuses or fails to comply with a Notice made by the landowner in to remove goods from a property the goods shall be deemed to be uncollected goods and may be disposed of in accordance the ACT Act.
The Notice required in the ACT is far less time intensive than that required in New South Wales. Pursuant to section 7 of the ACT Act a Notice shall:
(a) be in writing; and
(b) contain—
(i) a brief description of the goods; and
(ii) the address at which the goods are available for collection; and
(iii) a statement of the times at which, or the hours between which, the goods will be available for collection at that address; and
(iv) a statement that the goods may be disposed of in accordance with part 3 if they are not collected within 7 days of the date of the request; and
(v) a statement of any costs that must be met by the owner before the goods will be released by the possessor.
The ACT Act allows for the disposal of the horse depending on its value. “Goods of significant value” have a net value of more than $500. After 3 months, horses above this value may be disposed of by public auction. The ACT Act’s shorter waiting timeframe makes the notice period more acceptable than that required in NSW. This results in fewer cases requiring taking the matter to Court.
Unlike the NSW Act the ACT Act does not provide a method for a Court ordered disposal of the horse.
Conclusion
The subtle difference between the Acts can have significant ramification for landowners agisitng horses. The ACT Act makes providing a notice viable option if the horse has value to cover the invoices owed. In New South Wales, however, the 6 month period increases the debt owed to the landowner and a section 8 order can often bring the matter to a resolution in a shorter timeframe.
The lack of certainty surrounding these pieces of legislation, make it important to seek legal advice before attempting to enforce an Agistment Agreement or serving a Notice on a horse owner.
You may be aware of it being unlawful in the European Union to name or refer to any sparkling wine “Champagne” unless it is produced in the Champagne region of France. France’s Comité Champagne has a reputation for being particularly aggressive and litigious in protecting their trademark, with a recent multifaceted court battle with an Australian woman calling herself ‘Champagne Jayne’ concluding in 2017 – she won and has the right to continue operating under that name.
In a similar vein, Australian winemakers have just recently determined that the term for any wine made with Nero d’Avola grapes must not be used to describe any wines that are not from the Italian region of Avola in the south east of Sicily. This declaration has been made by the Geographical Indications Committee, which has power to grant protection to such terms under the Wine Australia Act 2013 (Cth) (the Act), and comes as a result of a push from Italy’s Ministry of Agriculture to prevent the sale of Australian Nero d’Avola wines in the UK.
As a result of this determination Australian winemakers that produce Nero d’Avola wine now face some uncertainty as to whether they are allowed to trademark their wines if it includes some variation of the term Nero d’Avola, despite this accurately describing the product.
More seriously, protection under Part VIB of the Act also makes it illegal to falsely describe or present wine as the product of a certain protected geographical indication – in this case, Avola – with penalties of imprisonment of up to 2 years.
Winemakers should be acutely aware of this new restriction and make sure their grapes don’t attract the wrath of Wine Australia or other overseas regulatory bodies.
If you are a secured party on the Personal Property Securities Register (PPSR), you should be acutely aware of 30 January 2019. This is the day that the PPSR passes it’s seventh year, and importantly is the date that the first seven-year registrations made on the PPSR will begin to expire.
Seven years is the maximum time a registration over items with serial numbers can subsist without needing renewal. These are items commonly registered on the PPSR and include assets like cars and boats, and intellectual property such as trademarks and patents.
Priority of interest on the PPSR is important because it determines which creditors are paid first out of the proceeds of selling the secured asset. Expiration of a PPSR registration opens a secured party up to being classed as an ordinary unsecured creditor. It effectively places them to the back of the priority queue, behind secured creditors that have renewed their registrations. A secured party cannot renew a registration once it has lapsed and maintain their spot in the queue.
Putting off renewal of a security interest can accordingly have disastrous consequences, with no priority of interest if the grantor of a security gets wound up and the asset is sold to pay other creditors. It is vital that you diarise any dates that your PPSR registrations are set to lapse, or even better, get to renewing them as soon as possible.
So be sure to not forget the PPSR’s birthday this year.
Schedule 1.20 of the Justice Legislation Amendment Act (No 3) 2018 (NSW) officially came into effect by proclamation on 28 February 2019, bringing the jurisdictional limit of the Local Court of New South Wales, when sitting in its Small Claims Division, up from $10,000.00 to $20.000.00.
Schedule 1.20 of the Justice Legislation Amendment Act (No 3) 2018 (NSW) amends section 29(1)(b) of the Local Court Act 2007 (NSW), which provides for the jurisdictional limits of the Local Court broadly.
The amendment is a very deliberate attempt to facilitate the just, quick and cheap resolution of minor civil claims in New South Wales, and to improve access to the Local Court system for a wider array of litigants. However, for insurers and those familiar with the existing structure, there are costs implications to now be mindful of prior to litigating.
The Small Claims Division in New South Wales
In his second reading speech of the Bill, the Attorney-General, Mr Mark Speakman, noted that the amendment will “increase the number of matters that can access the division’s more streamlined and less formal processes”. Case management in the Small Claims Division in this regard is governed by Local Court Practice Note Civ 1, which specifically draws attention to section 57(1) of the Civil Procedure Act 2005 (NSW), providing that proceedings are to be managed with regard to the following objects:
(a) the just determination of the proceedings,
(b) the efficient disposal of the business of the court,
(c) the efficient use of available judicial and administrative resources,
(d) the timely disposal of the proceedings, and all other proceedings in the court, at a cost affordable by the respective parties.
Proceedings are inherently less “formal” in the Small Claims Division; the rules of evidence do not apply, witnesses generally do not appear in person, and the maximum amount of costs that can be awarded to a successful party are capped depending on the amount of the claim. Matters are generally heard by an Assessor, who has a wide discretion to determine the matter as they deem fit.
Accordingly, prospective litigants with claims up to $20,000.00 are now afforded the opportunity to have their matter determined in a much more affordable and time-friendly manner.
Costs Implications
Previously, for claims in the General Division of the Local Court up to $20,000.00, a successful party was entitled to a maximum of 25% of the amount claimed by the plaintiff (Local Court Practice Note Civ 1, rule 36.2). The Amendment will of course now mean that parties to disputes up to $20,000.00 are bound by cost capping, which is presently $729.60 excluding GST. Whereas insurers and other litigants have traditionally enjoyed the benefit of greater costs protection for claims up to $20,000.00, that protection is no longer guaranteed.
Conversely, defendants may now be minded to delay settlement and push for a determination, noting that their costs exposure for claims up to $20,000.00 is significantly reduced. As the Small Claims Division is not subject to the same rules governing offers of compromise, there is very little risk of an indemnity or other costs order being made should a defendant subject to a claim up to $20,000.00 take their chances at an Assessment Hearing.
Commercially, insurers and other parties to litigation with claims up to $20,000.00 will have to be mindful that they simply will not be able to recoup as much in costs as they previously were entitled to. Parties should consider these legislative developments when weighing up whether to resolve a dispute prior to litigating, or pressing forward and engaging lawyers. Equally, lawyers should consider their case management strategies to ensure that their costs are not disproportionate to the amount being claimed.
Conclusion
The Small Claims Division of the Local Court plays an important role in ensuring that litigants have access to a less formal, more streamlined forum for resolving civil disputes in an affordable manner. Schedule 1.20 of the Justice Legislation Amendment Act (No 3) 2018 (NSW) is another step towards this goal.
However, parties experienced in litigating in this jurisdiction should be mindful of the costs implications which now apply to claims up to $20,000.00.
Introduction
To the dismay of thousands of chocolate loving Australians, the chocolate restaurant and chocolatier Max Brenner announced they were entering into voluntary administration late last year. While the directors claimed that everything would be business as usual while they attempted to save the company, the current situation is far from normal.
What is Voluntary Administration?
Voluntary administration is the process where an insolvent company is put under the control of an independent person known as an administrator whose job is to review the company’s assets and finances, and generate the best result for both the company and its creditors.
Voluntary administration is different from liquidation as the ultimate goal is to save the business rather than finalise its affairs and eventually dissolve it.
Max Brenner
Max Brenner began its story in Israel in 1996 as a small retail shop selling handmade chocolates. The first Max Brenner Chocolate Bar opened in Australian in 2000 in Paddington Sydney. The chocolate company displayed rapid growth in Australia, opening its 35th store in 2013 and another 3 since. The company has also grown rapidly in the international market, having opened stores in Singapore, China, USA, Russia and Japan.
Despite having the best Italian Thick hot chocolate ever made, the company announced it was entering voluntary administration in early October 2019, citing rising costs and poor sales (though a costly renovation of their head office is thought to have played a large role). While the directors claimed the business would operate as normal while they assessed their prospects, 20 out of their 37 stores were swiftly closed.
Since then, the Israeli master franchise owner, Max Brenner Industries Ltd, withdrew the local business license and successfully applied to have liquidators appointed. There was some hope for the business with the announced buy out by a company named Tozer & Co, however they were dashed just a day after the initial announcement, when it was confirmed that the deal had fallen through with no explanation.
The administrators determined that the chained owed more than $33 million to creditors, and approximately 700 former staff have claims for unpaid wages and superannuation dating back as early as 2016. Receivers have also been appointed by one of the companies secured creditors, Glenn Wein, who supposedly has security over “any real property or any leased owned or held” by Max Brenner Australia. At this stage the future of the company is not clear.
Doughnut Time
Max Brenner isn’t the only sweets café to experience such problems. The Brisbane born chain Doughnut Time entered liquidation in March last year after a very turbulent year of business. They first showed signs of problems in late 2017, with unpaid rent on their stores and unpaid wages to staff. Initially the directors attempted to save the company by closing half their stores and selling the company to its former CEO. This sale ended up falling through and the company was forced into liquidation, leaving close to 500 employees unemployed with unpaid wages and superannuation. These employees are now having to rely on the Fair Entitlements Guarantee to claim lost wages, although there is speculation that up to 75% of the staff may be ineligible, due to being in Australia on work visas. The Doughnut Time founder explained that the financial hardships were due to his expanding the business too quickly, opening 15 stores in as little as 3 years.
But this is not the end of the Doughnut Time saga, with an announcement made last July by new business owner Peter Andros that the iconic store will be making its comeback in the near future. At this stage the business has plans to open 8 stores across Brisbane, the Gold Coast and Melbourne, with further plans for Sydney in the future. The new owners are committed to not making the same mistakes as their predecessors, preferring a “’start small’ approach to operations”.
Other Examples
Oliver Brown, the Belgian-inspired chocolate café have also experienced financial hardships this year, entering voluntary administration on the back of a reported $29 million owed to creditors. The company’s 52 franchised stores faced uncertain futures until it was announced that the creditors voted in favour of a deed of company arrangement, thus ending the administration. This isn’t the first financial crisis the company has faced. 2 stores were placed into administration and liquidation earlier this year and the whole company was in voluntary administration back in 2012 due to a dispute between shareholders.
Other businesses such as Koko Black, Darrell Lea and even Australia’s oldest chocolate makers Ernest Hillier have entered voluntary administration in the last 6 years, which displays an alarming trend.
Fortunately, it’s not all bad news in the chocolate industry. Some cafes such as San Churro are still going strong with no reported financial stress. Giro Maurici, co-founder of San Churro, places great importance on keeping up with tech trends such as Uber Eats and focusing on long term sustainability, rather than fixating on expanding the business as quickly as possible.
Conclusion
While the history of Australian dessert cafes may look rocky [road], there are some examples of sustainable business models, and many lessons to be learned by prospective businesses. A common thread between the some of the newer chocolatiers who’ve collapsed is an over-eagerness to expand, and biting off more [chocolate] than they can chew, which should serve as a warning to others not to overburden a relatively young company.
Chamberlains Law Firm is delighted to announce the merger of Shaw McDonald Lawyers into its growing practice.
Based in Sydney and established in 1908, Shaw McDonald has a proud 100-year history of providing first-class legal advice and representation to clients Australia-wide, particularly in the areas of Insurance law, Dispute Resolution, Personal Injury and Equitable Disputes.
As of 1 March 2019, Chamberlains will welcome Directors of Shaw McDonald, Gary Patterson and Lachlan McBride, along with their dynamic and highly skilled teams into its Sydney Office.
Managing Director of Chamberlains Law Firm, Stipe Vuleta, is looking forward to strengthening Chamberlains’ value offering.
“Both Shaw McDonald and Chamberlains share a number of core areas of expertise, however they also have strength in differing areas, which has very much inspired this exciting merger”, says Stipe. “Given our common values and commitment to excellence I feel this will increase an already compelling offering throughout Canberra, Sydney, and the surrounding regions.”
Gary Patterson, having been a director of Shaw McDonald for 39 years was enthusiastic about the future commenting…
“This is a wonderful opportunity to launch a larger and more competitive player in the tough Sydney commercial market. The opportunities that will flow from this merger will be significant. With pride in our past century of legal service provision, all of us at Shaw McDonald look forward to exciting times growing within the Chamberlains team.”
This was seconded by Lachlan McBride, who said…
“We are thrilled to increase our service offering to our clients by being part of an expanded integrated network of legal experts in a number of fields. We see the synergy between Chamberlains and Shaw McDonald as creating significant benefits to the end user of legal services and we look forward to what we can achieve as a united organisation”.
Of this exciting opportunity, Michael Terry-Whitall, Chamberlains Sydney based Director of Construction Litigation commented “Directors of Shaw McDonald and Chamberlains have a long shared history and professional relationship, and 1 March represents the formalisation of that relationship under one banner.” Michael added, “When you have the opportunity to work together with people who have shared values the end product is always going to be greater than the sum of its parts and in turn will exceed client expectations.”
This is an exciting new chapter in the history of Chamberlains Law Firm which already spans several decades and comes 10 months after Chamberlains successfully incorporated Canberra based firm Backhouse Legal. This logical next step demonstrates the firms ongoing commitment to growth and excellence in providing personalised legal services to clients across Canberra, Sydney and throughout the region.
Recently when we have been out at events speaking with competitors, grooms and other people about what we do, we have noticed that a comment we often hear is ‘I don’t need a lawyer’. There are however very good reasons to have a lawyer, even if you are not currently in a dispute.
Many people in the horse industry participate as a small business, such as a riding instructor, boutique retailer, boarding and training operation or coaching business. All businesses have legal requirements to meet, and practical requirements which may raise legal issues such as safety considerations.
For example, if you are accepting horses onto your property for boarding or training, you should have a contract in place which addresses all the situations where things typically go awry in that scenario. This means that the terms are clear to all parties which reduces arguments involving the contract should a party be in breach. You will also be more confident in what to do if a sticky situation evolves. If you have lawyers that you work with regularly, they will be familiar with the terms of the contracts you use because they drafted them, and they can easily advise you should any issues arise.
Other areas all businesses typically need assistance with include intellectual property, employment law, taxation law, and property law. Lawyers can often assist you in finding other help you may need, such as an accountant with experience in the issues your business is facing, and they can work with your accountant to ensure your business management practices meet the legal requirements and function efficiently and cost effectively. Good business practices can be a little like preventative medicine – many problems can be avoided or reduced in severity by the appropriate practices being in place. This also tends to reduce the cost of dealing with any problems that do arise!
If your business spends a smaller amount on preventive services such as these, it not only reduces the risk of problems later down the track, but it also puts your business in a good position should a dispute arise. It means your business will already have a relationship with a trusted advisor if urgent legal work is needed.
Even if you are an amateur owner who is riding for pleasure, you will benefit from having such a relationship with a lawyer as everyone needs a will, and most people will need other legal work done from time to time such as when they buy or sell property. We also strongly recommend that you have a sale contract in place if you are buying or selling horses, regardless of whether you have a business or not.
We offer drafting of legal documents such as:
Chamberlains also offers Equine Business related services such as:
We are proud to announce that Stipe Vuleta, Chamberlains Managing Director and head of our Litigation and Restructuring Team will be speaking at the Canberra Legalwise seminar on Thursday 28 February 2019 which will be covering several topics on Property, Trusts and Insolvency.
Stipe brings a depth of experience from the traditional Legal and emerging Legal Technology sectors with Top Tier, Boutique and Online Expertise. Providing practical and commercial solutions to complex legal problems at all stages of the corporate and personal financial life cycle.
What Topics are Being Covered?
The seminar will feature individuals from several leading Canberra organisations covering a diverse range of topics including reviewing and amending trust deeds, property investments in Self-Managed Superannuation Funds (SMSFs) along with Chamberlains Managing Director focusing on insolvency issues and the new Ipso Facto and Safe Harbour Regimes.
Changes to the Corporations Act 2001 (Cth) made in 2017 through the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) (Act) introduced safe harbor and ipso facto reforms. The latter of these reforms came into force on 1 July 2018, and recently passed regulations have provided scope for their effects on commercial and construction contractual relationships.
Topics that will be covered on the day include:
These reforms have serious impacts on entities looking to enter into contracts. People seeking to end contracts on the basis of an insolvency event will no longer be able to rely on contractual terms, creating additional factors that need to be considered when entering into a contract. There will be no way to contract around the reforms, and any such clause that falls outside the bounds of the new laws will be dealt with by regulatory powers granted to the Government.
While ipso facto clauses have been very popular in construction and commercial contracts, these changes create greater need for parties to consider due diligence on the financial position of tenderers and other parties. Purporting to terminate a contract in breach of these amendments could be held to be repudiation of a contract and can result in having to pay damages.
How to Attend the Legalwise Seminar
The event will be held on:
Thursday 28 February 2019 – 2:15 PM – 4:15 PM
At:
Hyatt Hotel Canberra,
Level 1 Meeting Rooms,
120 Commonwealth Avenue,
Yarralumla
Tickets are available from HERE.
We look forward to seeing you there for what no doubt will be a very interesting and informative afternoon.
Registering security interests on the Personal Property Securities Register (PPSR) requires accuracy and attention to detail. The well-known case of In the matter of OneSteel Manufacturing Pty Limited (administrators appointed) [2017] NSWSC 21 showed that the recording of a grantor of a security with their ABN instead of their ACN is insufficient for the security interest to be perfected. That particular error is infamous for causing OneSteel to lose their priority interest over an asset worth $23 million, effectively causing a $23 million loss.
Recently, another case has illustrated that where there are trusts involved, it is critical that the correct entity details are recorded on the PPSR. In In the matter of Psyche Holdings Pty Limited [2018] NSWSC 1254, a lender, Ridgeway, entered into a general security agreement for a loan granted to Psyche Holdings, the corporate trustee of a trading trust.
Where a trust is the grantor of a security interest, the trust’s ABN must be used as the reference in the financing statement in accordance with PPSA Regulation 1.5 in Schedule 1 of the Personal Property Securities Regulations 2010 (Cth), rather than the corporate trustee’s ACN.
The key issue was that Psyche Holdings’ trust was not assigned an ABN until after the PPSR registration had been made. This meant that Ridgeway had used the trustee’s ACN for their security registration.
Upon realising this mistake – some 5 years after making the registration – Ridgeway applied to the Court under section 588FM of the Corporations Act 2001 (Cth) (Corporations Act) to exercise its discretion to have the registration time for their security fixed to a later date.
Under s 166 of the Personal Property Securities Act, where a registration is correct at the time of lodgement but subsequently becomes incorrect, the registration becomes ineffective five business days after the secured party acquires knowledge of the defect.
Luckily for Ridgeway, the Court was satisfied that the ABN/ACN error was due to inadvertence and elected to fix a later time for the registration under section 588FM of the Corporations Act. Ward J held that:
If the above facts had not been present, it is unlikely that the Court would have exercised its discretion to make good the defective PPSR registration.
So how should the PPSR be used for security over a trust’s assets? A system where both the trustee’s ACN and trust’s ABN are registered as grantors for the one security registration may help solve some of the issues that arose in this case. In many ways, however, this case shows that the PPSR regime is still far from perfect – and confusion will likely persist despite such matters going to the Courts.