Frequently asked questions

Under the Australian Consumer Law, when you buy certain products and services they come with automatic guarantees.

Businesses must guarantee products and services they sell, hire or lease for:

• under $40 000; and
• over $40 000 that are normally bought for personal or household use.

The consumer guarantees applying to products and services, regardless of any other warranties the business gives you, are as follows:

Products must be of acceptable quality, that is:

• safe, lasting, with no faults;
• look acceptable; and
• do all the things someone would normally expect them to do.

Generally, acceptable quality means that that the product does what would normally be expected for the type of product and cost.

Products must also:

• match descriptions made by the salesperson, on packaging and labels, and in promotions or advertising;
• match any demonstration model or sample you asked for;
• be fit for the purpose the business told you it would be fit for and for any purpose that you made known to the business before purchasing;
• come with full title and ownership;
• not carry any hidden debts or extra charges;
• come with undisturbed possession, so no one has a right to take the goods away or prevent you from using them;
• meet any extra promises made about performance, condition and quality, such as lifetime guarantees and money-back offers; and
• have spare parts and repair facilities available for a reasonable time after purchase unless you were told otherwise.

Services must:

• be provided with acceptable care and skill or technical knowledge and taking all necessary steps to avoid loss and damage;
• be fit for the purpose or give the results that you and the business had agreed to; and
• be delivered within a reasonable time when there is no agreed end date.

A term of a consumer contract or small business contract is void if:

• the term is unfair; and
• the contract is a standard form contract.

A term of a consumer contract or small business contract is unfair if it:

• would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and
• is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and
• would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

In determining whether a term of a contract is unfair under the Australian Consumer Law, a court may take into account such matters as it thinks relevant, but must take into account the extent to which the term is transparent and the contract as a whole.

A term is transparent if the term is:

• expressed in reasonably plain language; and
• legible; and
• presented clearly; and
• readily available to any party affected by the term.

A consumer contract is a contract for:

• a supply of goods or services; or
• a sale or grant of an interest in land,

to an individual whose acquisition of the goods, services or interest is wholly or predominantly for personal, domestic or household use or consumption.

A contract is a small business contract if:

• the contract is for a supply of goods or services, or a sale or grant of an interest in land; and
• at the time the contract is entered into, at least one party to the contract is a business that employs fewer than 20 persons (a casual employee is not to be counted unless he or she is employed by the business on a regular and systematic basis); and
• either of the following applies:

1. 1. 1. the upfront price payable under the contract does not exceed $300,000; or
      2. the contract has a duration of more than 12 months and the upfront price payable under the contract does not exceed $1,000,000.

Section 25 of the Australian Consumer Law sets out specific examples of the type of contract terms that are unfair. It is not an exhaustive list and other terms not listed may constitute an unfair term and be void. You can view section 25 here.

To succeed in proving that a person (or a company) has breached section 18 of the Australian Consumer Law, which relates to misleading and deceptive conduct, it is necessary to demonstrate each of the following 3 elements:

• a person has engaged in conduct;
• the conduct is in trade or commerce (which effectively means commercial activity); and
• the conduct must be misleading or deceptive or likely to mislead or deceive.

Importantly, conduct can include silence. Where a person remains silent on a particular matter that silence will be considered in the context of the person’s overall conduct to determine if the conduct generally is misleading or deceptive.

A person engages in misleading conduct if they engage in conduct that might lead a reasonable person in the position of the recipient of the information to be led into error.

If you can establish that a person has engaged in misleading or deceptive conduct or conduct which is likely to mislead or deceive, that you relied upon that conduct and consequently suffered a loss, then you should seek advice on the merits of your claim and time limit within which it must be made.

A contract is voidable when there are factors that allow one party to end the contract. Until that party exercises its right to end the contract, which is done by rescinding the contract, the contract remains enforceable.

Factors that make a contract voidable include:

Having regard to the above, some common examples of voidable contracts include:

• a contract signed by a minor;
• a contract that was entered into as the result of one party tricking or forcing the other into signing; and
• a contract entered into at a time when one or more parties were under the influence of drugs or alcohol.

It is important to be aware that ‘voidable’ contracts are different to ‘void’ contracts. A void contract means neither party can enforce the contract, because the contract was invalid from the start and never came into existence. A contract may be void, for example, if the subject matter is illegal, if the contract is impossible to perform, or if the contract is too uncertain or is incomplete.

Anticipatory breach of contract arises where a contract exists but, prior to its fulfillment, one party indicates by words or conduct to the other party/parties that it is unable or unwilling to complete its obligations under the agreement; that is, it is no longer willing to abide by the terms of the contract. This is also known as ‘contract repudiation’.

When this happens the aggrieved/innocent party has a decision to make. They can:

• affirm the contract by ignoring the anticipatory breach and hold the other party to their side of the contractual bargain, which may be possible by seeking orders from the court compelling compliance with the contract (known as specific performance); or
• accept the repudiation, terminate the contract and claim damages for any loss suffered.

Any breach of contract entitles the innocent party to damages if they have suffered loss as a result of the breach. The fundamental principle of damages is compensation; the innocent party is to be placed in the same situation as if the contract had been performed as agreed.

Unless a presumed measure of damages applies in the specific circumstances, to recover damages the aggrieved party must prove:

• loss has or will be suffered;
• there is a causal connection between the loss and the conduct of the party who breached the contract; and
• the loss suffered is not too remote from the circumstances.

In assessing the amount of damages payable, account may be taken (where relevant) of events which would have occurred had the contract not been terminated.

A contract term may be deemed unfair as a result of Part 2-3 of the Australian Consumer Law. Please refer to question 2 above under the heading ‘Competition & Consumer Law’, which provides an explanation of when a contract term will be deemed unfair under the Australian Consumer Law.

An unjust contract or term may also be reviewed under the Contracts Review Act 1980.

Where the court finds a contract or a provision of a contract to have been unjust in the circumstances relating to the contract at the time it was made, under the Contracts Review Act the court may, if it considers it just to do so, and for the purpose of avoiding as far as practicable an unjust consequence or result, do any one or more of the following, amongst other things:

• it may decide to refuse to enforce any or all of the provisions of the contract;
• it may make an order declaring the contract void, in whole or in part; or
• it may make an order varying, in whole or in part, any provision of the contract.

Express terms are the terms of the agreement which the parties have expressly agreed upon prior to entering into a contract. Ideally, the contract will be in writing and the express terms are those that are included in the written document. Where a contract is agreed upon verbally, the express terms are the terms that the parties discussed and agreed upon.

Implied terms arise as a result of the court inferring the actual intention between the parties and, consequently, implying terms into the contract that were not otherwise expressly set out. Implied terms are as effective as if they were included in the contract from the outset.

In the case of a formal contract which otherwise appears to be complete on its face, the 5 strict requirements for a term to be implied are that the implied term must be:

• reasonable and equitable;
• necessary to give business efficacy to the contract;
• so obvious that ‘it goes without saying’;
• capable of clear expression; and
• consistent with the existing terms of the contract.

In all other cases, where it is apparent that the parties have not attempted to spell out the full terms of their contract, the court may imply a term into a contract if the term is:

• necessary, in the circumstances of the case, for the reasonable or effective operation of a contract of the same nature as the contract; and
• consistent with the express terms of the contract.

Rescission is the act of cancelling a contract from the beginning and restoring the parties to the positions there were in prior to the contract having been entered into.

The main grounds of rescission are:

• misrepresentation (whether fraudulent, negligent or innocent);
• undue influence;
• duress; and
• unconscionability.

Rescission will not apply where:

• the party entitled to rescind affirms the contract by continuing to operate in accordance with it;
• the party seeking rescission is unable to restore the other party to its pre-contractual position. This might arise where a benefit has already changed hands and it cannot be reversed; or
• rescission would destroy a third party’s rights.

The appropriate strategy for recovering a debt from an individual depends upon a number of factors including the size of the debt, the financial position of the debtor, and the amount you are prepared to spend taking steps to recover the debt.

Assuming you have exhausted the informal options available to you, such as calling the debtor or writing to the debtor yourself by email or letter, in general, the options available to you are:

• sending a formal letter of demand;
• commencing court proceedings; and
• once you have a court Judgment, taking steps to enforce that Judgment.

If you have a caveatable interest over the debtor’s property, you should register a caveat. This is not a debt recovery mechanism, however, oftentimes property owners do not want a caveat on Title to their property and it can prompt them to make payment of the debt so as to facilitate removal of the caveat.

Similarly, if you have a contract with the debtor that entitles you to submit the debt as an entry on the debtor’s personal credit rating report, you should consider contacting an authorised credit reporting agency to make that submission.

As with recovering a debt from an individual, the appropriate strategy for recovering a debt from a company depends upon the size of the debt, the financial position of the debtor, and the amount you are prepared to spend taking steps to recover the debt. From a practical commercial perspective, it is also appropriate to factor in whether you wish to have an ongoing commercial relationship with the debtor.

Assuming you have exhausted the informal options available to you, such as calling the debtor or writing to the debtor yourself by email or letter, in general, the options available to you are:

• sending a formal letter of demand;
• sending a Creditors Statutory Demand for Payment of Debt under the Corporations Act; or
• commencing court proceedings;  and
• once you have a court Judgment, taking steps to enforce that Judgment.

If you have a caveatable interest over the debtor company’s property, you should register a caveat. This is not a debt recovery mechanism, however, oftentimes property owners do not want a caveat on Title to their property and it can prompt them to make payment of the debt so as to facilitate removal of the caveat.

Similarly, if you have a contract with the debtor that entitles you to:

• submit the debt as an entry on the debtor company’s credit rating report, you should consider contacting an authorised credit reporting agency to make that submission; or
• register a security interest over the property of the debtor on the Personal Property Securities Register, you should lodge that registration.

Yes, there is a time limit.

Debt recovery is usually based upon a breach of contract by one party. If this applies to you and the debt you are seeking to recover relates to a contract, then you have 6 years from the date of the breach of contract to commence proceedings to recover that debt. There are limited circumstances in which this 6 year limitation period can be extended. The circumstances include, for example, if during the 6 year period the debtor confirms to you that they owe the debt, then the 6 year limitation period will recommence from the date of confirmation.

If you already have a court Judgment, then you have 12 years running from the date on which the Judgment first becomes enforceable to enforce that Judgment.

I’m glad you asked! Here you go, use this one. It’s on me, no strings: free template letter of demand for debt recovery.

A publication is defamatory if it is likely to cause ordinary, reasonable persons to think less of the person whom the publication is about or to shun or avoid them. There are two distinct consequences flowing from this:

• in the first case, the publication is defamatory if likely to cause damage to the reputation of the person in the eyes of right-thinking members of the community in general; and
• in the second case, the publication is defamatory because of its tendency to exclude that person from society.

A publication causes damage to the reputation of a person if it disparages them, or discredits them and causes them to be held in less esteem, so that people think the less of them.

Whilst the word ‘publication’ is used in the context of defamation, it is not limited to a written publication. For the purposes of defamation law, a publication can be made verbally.

The terms libel, slander, and defamation are frequently confused with each other.

Historically, libel and slander were the terms used to describe different types of defamatory statements. Libel is a defamatory statement that is made in writing. Slander is a defamatory statement that is made verbally. The distinction is no longer relevant because it was abolished by the enactment of section 7 of the Defamation Act 2005. Both types of defamation are now collectively referred to as a defamatory publication.

Yes, if the publication made about you on social media is defamatory and it was published within the last 12 months. There are many existing decided cases involving posts that were published on social media and Google Review.

Commencing court proceedings to make a claim for defamation can be costly, as are any court proceedings, and involves risk. It is advisable to obtain legal advice before commencing any court proceedings.

A claim for defamation is not maintainable if brought after the end of a limitation period of 1 year running from the date of the publication of the matter complained of.

Under section 56A of the Defamation Act, a person claiming to have a claim for defamation may apply to the court for an order extending the limitation period. A court must, if satisfied that it was not reasonable in the circumstances for the person to have commenced proceedings in relation to the matter complained of within 1 year from the date of the publication, extend the limitation period to a period of up to 3 years running from the date of the publication. A court may not order the extension of the limitation period for a defamation claim in any other circumstances.

If you believe you have been defamed and wish to seek advice, you should do so as early as possible inside the 1 year limitation period, as opposed to relying on the possibility that you may be able to seek an extension of time.

The Defamation Act has a focus on speedy and non-litigious resolution of defamation matters. There are steps that can be taken in an endeavour to avoid the matter proceeding to court.

If you have been defamed or have received notification that someone asserts you defamed them, it’s important to consider the appropriateness of an apology as a means of resolving the issue. It is not compulsory for the wrongdoer to provide an apology and in many cases, I have seen that where an apology is provided, it is provided on a private and confidential basis.

An apology made by or on behalf of a person in connection with any defamatory matter alleged to have been published by the person:

• does not constitute an express or implied admission of fault or liability by the person in connection with that matter, and
• is not relevant to the determination of fault or liability in connection with that matter.

Evidence of an apology is also not admissible in any civil proceedings as evidence of the fault or liability of the person in connection with that matter.

Evidence of the apology is admissible, however, if tendered on behalf of the wrongdoer as a means to show an effort was made to minimise the level of damage caused by the publication of the defamatory matter, and therefore minimise the amount of any monetary award of compensation that might be made.

The defences to a claim of defamation include:

• Truth;
• Absolute privilege (meaning the matter complained of was published in the course of proceedings of a parliamentary body, or of an Australian court or tribunal);
• Qualified privilege (which protects honest communications where the person who made the publication has a moral, legal or social duty to make the communication, and the recipient of the publication has an interest in receiving the information);
• Honest opinion;
• Triviality; and
• Innocent dissemination.

Since 1 October 1998, there has been a mandatory Franchising Code in operation in Australia, which was revised on 1 January 2015. A copy of the Code (including the amendments since 1 Janaury 2015) is available here.

The Franchising Code includes:

• disclosure requirements;
• a good faith obligation;
• a dispute resolution mechanism;
• a cooling-off period; and
• procedures for ending a franchise agreement.

The rights and obligations arising under the Code are in addition to those under the Australian Consumer Law and the Competition and Consumer Act. If you are uncertain about your rights and obligations, you should consider seeking legal advice.

The Franchising Code provides mechanisms for parties to a franchise agreement to try and resolve disputes in a time and cost-efficient manner, enabling both parties to endeavour to move past the dispute.

Franchisors must have an internal procedure set out in the franchise agreement outlining how it handles complaints, and this procedure must meet certain minimum standards set by the Code. Beyond the franchisee’s internal procedures, which should be used as the starting point, the Code also provides a procedure for resolving disputes.

If a dispute does arise, either party may initiate the complaint handling procedure under the Code, or under the franchise agreement.

The Code requires you to first try to resolve your dispute with the other party by writing to them outlining:

• the nature of the dispute;
• what outcome you want; and
• what action would settle the dispute from your perspective.

If the parties are unable to agree upon an outcome within 3 weeks of the complaint procedure being initiated, either party may then refer the matter to mediation, where an independent third party will facilitate continued negotiation.

Mediation is mandatory for both parties to attend, once requested, and they must genuinely try to resolve the dispute.

The dispute resolution procedure in the Code does not affect a party’s right to take legal action over a franchising dispute. It is prudent to obtain legal advice before commencing any legal proceedings.

Yes, they do. Under the Franchising Code, parties who enter, or propose to enter, into a franchise agreement must act in good faith towards one another. The obligation applies to all aspects of the franchising relationship, including:

• pre-contractual negotiations;
• performance of the contract;
• dispute resolution;
• the end (including termination) of an agreement; and
• it may also extend to conduct after a franchise agreement comes to an end.

Australian courts have found business dealings to be not in good faith when they involve one party acting for some ulterior motive, exercising their powers unreasonably without regard to the other party’s legitimate business interests, or in a way that undermines or denies the other party the benefits of a contract.

The Code outlines certain matters that a court may consider when determining whether a party has acted in good faith. These matters are whether the party:

• acted honestly and not arbitrarily; and
• cooperated to achieve the purposes of the agreement.

A court can also take into account other matters it considers relevant.

Yes, once mediation is requested by a party to the franchise agreement, it becomes mandatory for both parties to attend and to genuinely try to resolve the dispute.

Mediation is a time and cost-effective way to try to resolve a franchising dispute before commencing court proceedings. The mediator will assist parties to come together and negotiate an outcome that is acceptable to both parties.

Winding up is a process where a company’s outstanding matters are finalised, its assets liquidated, and it ceases to exist as a company. It is a statutory process undertaken pursuant to the Corporations Act 2001. The process usually involves the liquidator converting the business’s assets into cash, ceasing or selling the business operations, distributing the proceeds amongst its creditors and distributing any surplus to shareholders.

Winding up a company gives rise to a number of financial, commercial and legal issues that usually impact a number of stakeholders. It is highly advisable to seek legal advice before implementing a decision to wind-up.

The liquidation of a company allows an independent registered liquidator to take control of the company so its affairs can be wound up in an orderly and fair way to benefit creditors according to their assigned priority. If a surplus is available, it will be distributed among members.

The traditional method of voluntary liquidation involves initiation by the company and its officers; a company resolution is required.

If the company is insolvent (meaning incapable of paying its debts as and when they fall due) before the resolution is made, the procedure to be followed is one of a creditors’ voluntary liquidation.

A creditors’ voluntary liquidation begins when:

• an insolvent company’s shareholders resolve to liquidate the company and appoint a liquidator, or
• creditors vote for liquidation following a voluntary administration or a terminated deed of company arrangement.

If the company is solvent, the procedure required is one of members’ voluntary liquidation. You may question why winding up a solvent company would be necessary. This approach may be appropriate where the officers and shareholders of the company wish to bring the operations of the company to an end, but the company doesn’t meet the requirements for voluntary deregistration (for example, because it has assets worth $1,000 or more or unpaid creditors).

To begin winding up a solvent company, a majority of the directors must make a declaration of solvency, in which they declare that they believe the company will be able to pay all its existing debts in full within 12 months of the commencement of the winding up. This declaration is made by lodging an ASIC Form 520 with ASIC.

After the solvency declaration has been lodged, the company members must pass a special resolution to wind up the company. Following this, a notice of the resolution to wind up the company must be published on ASIC’s Published Notices website by the end of the next business day after the liquidator is appointed. There are monetary penalties for failing to lodge a notice within this timeframe.

The Corporations Act 2001 sets out the grounds for a compulsory liquidation and the persons or entities eligible to apply.

In the case of compulsory liquidation on the ground of insolvency, the following parties may apply to the court for a winding-up order:

• the company;
• a creditor;
• a contributory;
• a director;
• a liquidator of the company;
• the Australian Securities and Investments Commission (ASIC); or
• a prescribed agency.

An unsecured creditor is a person or entity who is owed money but does not hold a security interest over assets of the debtor in respect of that debt.

In the liquidation context, employees are a special category of unsecured creditor. In a liquidation, outstanding employee entitlements are paid before the claims of other unsecured creditors.

If there are funds left over after paying the liquidators’ costs and priority creditors, including employees, the liquidator will pay unsecured creditors a dividend. Generally, funds are distributed in the following order:

• costs and expenses of the liquidation, including liquidators’ fees;
• outstanding employee wages and superannuation;
• outstanding employee leave of absence (including annual leave and long service leave);
• employee retrenchment pay; and
• unsecured creditors.

Each category must be paid in full before the next category is paid. If there are insufficient funds to pay a category in full, the available funds are paid amongst the creditors in that category on a pro-rata basis.

The standard period of bankruptcy is 3 years, after which time the bankruptcy is automatically discharged unless an objection to discharge is lodged.

Within the 3 year period, however, a bankruptcy may be annulled if the bankruptcy trustee is satisfied that all the bankrupt’s debts have been paid in full. In these circumstances, the bankruptcy is annulled, by force of the Bankruptcy Act 1966, on the date on which the last such payment was made.

The National Personal Insolvency Index (NPII) is a publicly available electronic record of some personal insolvency proceedings in Australia. The Bankruptcy Register Search is an online service anyone can use to access personal insolvency information about individuals directly from the NPII.

The NPII records the following information of the bankrupt (or formerly bankrupt) person:

• The name, date of birth (if known), residential address, and occupation as disclosed on documents accepted by the Official Receiver.
• Previous names and aliases (if known).
• The type of proceeding, the date it started, and the administration number.
• The name and contact details of the trustee or administrator of the proceeding.
• The current status of the person and/or the proceeding. For example, whether a person is discharged from bankruptcy or whether a creditor’s petition for a person’s bankruptcy is in progress.

Intellectual property (‘IP’) is the property of your mind or proprietary knowledge.  It can be an invention, trade mark, design, brand, or the application of your idea.

IP rights are like any other property right. They allow creators, or owners, of patents, trademarks or copyrighted works to benefit from their own work or investment in a creation.

Different types of IP create or are suited to different types of IP protection rights. The most common types of IP rights are:

• Patents, which protect inventions and new processes;
• Trade marks to protect logos, words and other branding;
• Copyright, which protects art, writing, music, film, and computer programs;
• Registered designs, which protects the visual design of a product;
• Circuit layout rights, to protect layout designs or plans of integrated circuits used in computer-generated designs; and
• Plant breeders rights, which protect the commercial rights of new plant varieties.

IP infringement refers to a breach of IP rights. A breach occurs when a piece of work protected by IP rights is used, copied, or otherwise exploited without having the proper permission from a person who owns the IP rights.

What constitutes infringing conduct will vary depending on the type of IP right involved. Each IP right is covered by its own legislation and established legal principles.

A breach of IP rights does not have to be intentional in order to constitute an infringement. It can and quite often does happen inadvertently.

It is the responsibility of the owner of IP to ensure they enforce their rights. When an infringement occurs, the timely enforcement of IP rights is necessary so as to maintain the value of the IP and to deter potential infringers from attracting commercial value from your IP.

Fair dealing (sometimes also called fair use) is an exception to copyright infringement, which allows use of copyright material for the purposes of review or criticism, research or study, parody or satire, news reporting, judicial proceedings, or legal advice. For the exception to apply, the copyrighted material must be being used for one of those set purposes.

The concept of fair dealing is not a general exception for using copyright material simply because you think it is fair to do so or because you are not making a profit from its use.

Most importantly, do not ignore it. If you have been served with a Statement of Claim that means court proceedings have been commenced against you. There is a limited window of 28 days within which you can file a Defence before the plaintiff in the proceedings will be able to apply for Default Judgment against you. Default Judgment is an application made in writing by the plaintiff, which is considered and where applicable, approved, in the court registry without the dispute going to any type of hearing.

The 28 days within which you have to file a Defence before the plaintiff can apply for Default Judgment starts to run from the date on which you were served with the Statement of Claim. Depending on how you were served with the Statement of Claim, the effective date of service may not be the actual date you received the document, so it is advisable to seek legal advice as early as possible after you receive the Claim. This will enable you to clarify when you should file a Defence by (assuming you have a defence) and to obtain legal advice on the Claim.

If you have a defence, ensure it is filed within the 28 day period, unless your solicitor has advised you otherwise. Sometimes a longer period is available if, for example, your solicitor has requested further particulars of the Claim from the plaintiff and is awaiting a response to that request.

If you do not have a defence to the Claim, a solicitor can help you to resolve the dispute by facilitating payment by you of the amount claimed, whilst avoiding Default Judgment, or by negotiating a settlement of the Claim that might, for example, include payment of a reduced amount or payment via an agreed payment arrangement.

The principles of law upon which the determination of costs issues are made are primarily regulated by legislation and court rules.

For costs to be payable otherwise than as part of a negotiated settlement, an order of the court must be made.

If the court determines that costs are to be paid on an indemnity basis, that generally means that all costs (other than those that appear to have been unreasonably incurred or appear to be of an unreasonable amount) are to be allowed and are payable by the party against whom the costs order has been made.

If the subpoena is in proper form, it will have included in it a section setting out your obligations and rights in response to the subpoena. You should read that section carefully.

A subpoena is a court order. Consequently, failure to comply with a subpoena without lawful excuse constitutes contempt of court.  A person who fails to comply with a subpoena may become liable to pay costs and damages to the issuing party, and in the case of deliberate disobedience, it can result in the arrest of the subpoenaed person.

The reasons that may constitute ‘lawful reason’ as to why a subpoena recipient does not comply with a subpoena include:

• the subpoena document specifies a date that is the last day on which the subpoena can be served. A subpoena recipient does not need to comply with the requirements of a subpoena unless it is served on or before that date. It is possible, however, for the issuing party to seek and obtain a later date for compliance at the first listing of the subpoena, and to then notify the subpoenaed party of the new date;
• a subpoenaed party is entitled to receive a reasonable amount of conduct money in return for their compliance with the subpoena. If conduct money is not provided, the subpoenaed party need not comply. If the subpoena requires the subpoenaed party to attend court, conduct money for their attendance must be provided within a reasonable time before the date on which attendance is required;
• where the subpoena requires the recipient to produce documents or things, the subpoenaed party (or another party to the proceedings) may apply to have the subpoena set aside. This may apply, for example, if the subpoena is not issued for a legitimate purpose related to the court proceedings, if the subpoena is a ‘fishing’ expedition, or if the scope of the subpoena is unduly burdensome on the subpoenaed party.

Mediation and arbitration are both methods of alternative dispute resolution.

Mediation is a method in which an impartial third party (mediator) seeks to facilitate a settlement by encouraging the disputing parties to generate solutions that focus on their mutual interests. Mediation may take place because the parties voluntarily agree to participate, because it is a compulsory step in a dispute resolution process (for example, under the Franchising Code of Conduct or pursuant to a contractual dispute resolution clause), or it may be court-ordered.  The parties are not bound to reach an outcome and may withdraw from the mediation at any time. The parties cannot be forced to enter into a legally binding agreement at mediation, and the mediator does not have the power to impose a decision or outcome upon the parties.

Arbitration is a system for the final determination of disputes in a judicial manner by a private tribunal constituted for that purpose. The arbitral tribunal is typically composed of 1 or 3 persons, known as ‘arbitrators’. The role of the tribunal is to hear the dispute and render a final and binding decision, called an ‘award’. Arbitration typically occurs because the parties have committed to that process as part of the dispute resolution procedures in a contract between them.

Anyone who frequently and persistently takes legal action without reasonable grounds or for improper purposes can be subjected to a vexatious proceedings order under the Vexatious Proceedings Act 2008.

Section 6 of the Act defines vexatious proceedings as:

• proceedings that are an abuse of the process of a court or tribunal; and
• proceedings instituted to harass or annoy, to cause delay or detriment, or for another wrongful purpose; and
• proceedings instituted or pursued without reasonable ground; and
• proceedings conducted in a way so as to harass or annoy, cause delay or detriment, or achieve another wrongful purpose.

In New South Wales, the Supreme Court, the Land and Environment Court, and the Industrial Court can make vexatious proceedings orders. The Supreme Court may make orders that impact upon ongoing proceedings in any other court or tribunal in New South Wales.

The Supreme Court can make orders that stay (ie freeze) all or part of any current New South Wales proceedings and orders that prohibit the person from starting any new proceedings in New South Wales without the Court’s permission.

When property is held by co-owners, it can sometimes give rise to disagreement about whether (and when) to sell the property.

A co-owner of property, whether owned as joint tenants or tenants in common, can apply to the Supreme Court for an order pursuant to section 66G of the Conveyancing Act, whereby Trustees are appointed to give effect to the sale of the property.

The circumstances in which the Court will refuse to grant an order under section 66G are very limited.

While coming to an agreement with your co-owners without the need for court intervention is generally the preferable approach, and something I can take steps to assist you in trying to achieve, where this is not possible an application under section 66G has been a long-standing source of assistance to parties wanting to sell property.

After a successful section 66G application is made and the property is sold, monies made from the sale are kept in trust by the trustee appointed by the court, to be distributed between the relevant parties in compliance with orders of the Court.

The first thing you should do is read your lease contract carefully. Look for these 2 things:

• what does it say about the particular issue you have fallen into dispute about; and
• is there a clause that sets out the dispute resolution process?

If a commercial lease is a retail lease, the Retail Leases Act 1994  sets out certain minimum standards that parties in a rental relationship must observe.

Once you have familiarised yourself again with the lease contract, consider whether it is possible to approach the other party informally to resolve the issue.

If the matter remains unresolved after informal discussions, you can seek resolution of the commercial lease dispute the NSW Civil and Administrative Tribunal (‘NCAT’). NCAT can only hear retail lease disputes where the application relates to a claim valued at less than or equal to $400,000. Beyond that amount, you should consider the District Court or Supreme Court; you should seek legal advice about the merits of your claim and which Court is the appropriate jurisdiction.

Before you apply to NCAT, parties to a retail lease dispute within the jurisdiction of NCAT must engage in mediation with the Office of the NSW Small Business Commissioner. If the dispute is not resolved at mediation, the NSW Small Business Commissioner will issue a Certificate confirming that mediation failed, which enables you to then proceed to make the NCAT or court claim (as applicable).

If your lease is a non-retail, commercial lease or your retail lease application exceeds the $400,000 threshold, you cannot apply to NCAT. In these instances, legal action in a court may be necessary to resolve your dispute.

An ‘off the plan contract’ means a contract for the sale of a residential lot that has not been created at the time the contract is entered into.

Unfortunately, despite what may be good intentions, the timeline for the development of property often exceeds the estimated completion date. This can occur due to weather, building complications, and Council approval delays, amongst other reasons. Irrespective of the reason, the delay can create financial distress and frustration for the developer and purchaser.

If you wish to bring the contract to an end, or the developer has indicated they intend to bring the contract to an end, the first thing you should do is read over the Sale of Land Contract to refresh your memory as to what it says about rescission and termination rights. A developer who is proposing to rescind a contract under a sunset clause must serve each purchaser under the contract notice in writing at least 28 days before the proposed rescission that specifies why the developer is proposing to rescind the contract and the reason for the sunset event not occurring by the sunset date.

Pursuant to section 66ZS of the Conveyancing Act, a developer may rescind an off the plan contract under a sunset clause, but only if:

• each purchaser under the contract, at any time after being served with the notice, referred to above, consents in writing to the rescission, or
• the developer has obtained an order of the Supreme Court under section 66ZS permitting the developer to rescind the contract under the sunset clause, or
• the regulations otherwise permit the developer to rescind the contract under the sunset clause.

The Supreme Court may, on the application of a developer under an off the plan contract, make an order permitting the rescission of the contract under a sunset clause, but only if the developer satisfies the Court that making the order is just and equitable in all the circumstances. What is just and equitable is determined on a case-by-case basis. I can provide you with advice as to what the court will consider when determining this question, but generally the factors include:

• the terms of the off the plan contract;
• whether the developer has acted unreasonably or in bad faith;
• the reason for the sunset event not occurring by the sunset date;
• the likely date on which the sunset event will occur;
• whether the subject lot has increased in value; and
• the effect of the rescission on each purchaser.

A disagreement between shareholders with a 50/50 split in company ownership can create a significant hurdle to moving past the dispute, and a substantial emotional and financial toll upon all parties involved. Neither party is able to force their business partner to sell their shares, so an alternative means of resolution will be required.

The first port of call is to check your Shareholders Agreement if you have one because it is common for such agreements to contain a dispute resolution clause outlining the procedure for resolving a dispute. The dispute resolution clause may specify that the parties agree to undergo some form of alternative dispute resolution, such as mediation, before commencing proceedings or it may set out the pre-agreed terms upon which one party has to sell their shares to the other to resolve the dispute.

Where a company does not have a shareholders agreement or the shareholders are unable to resolve the dispute through negotiation or mediation, it may be necessary to commence court proceedings to obtain orders that will resolve the matter.

Subject to the grounds upon which any court application is made, the Court has very broad powers that it can exercise to resolve the dispute. The Court can even disregard the orders that the parties to the proceedings are seeking and impose its own orders, as it deems appropriate. For example, the Court can make an order:

• that the company be wound up;
• that the company’s existing constitution be modified or repealed;
• regulating the conduct of the company’s affairs in the future;
• for the purchase of any shares by any member or person to whom a share in the company has been transmitted by will or by operation of law;
• for the purchase of shares with an appropriate reduction of the company’s share capital;
• for the company to institute, prosecute, defend or discontinue specified proceedings;
• authorising a member, or a person to whom a share in the company has been transmitted by will or by operation of law, to institute, prosecute, defend or discontinue specified proceedings in the name and on behalf of the company;
• appointing a receiver or a receiver and manager of any or all of the company’s property;
• restraining a person from engaging in specified conduct or from doing a specified act; or
• requiring a person to do a specified act.

In general, however, the usual outcome of court proceedings relating to a shareholder deadlock will be that the court:

• orders one shareholder to buy out the other at a determined price; or
• decides on the direction of the company and how it is to be conducted, including whether to appoint a liquidator.

As any court application relating to a shareholder deadlock often gives rise to a number of financial, commercial, and legal issues that usually impact a number of stakeholders, it is highly advisable to seek legal advice before commencing any proceedings.

The Corporations Act defines shareholder oppression by reference to conduct that is either:

• contrary to the interests of the members as a whole; or
• oppressive to, unfairly prejudicial to, or unfairly discriminatory against, a shareholder or shareholders (whether as shareholders or otherwise).

Shareholder oppression involves conduct by the majority shareholder(s) that is unfairly prejudicial to the interests of the minority.

A non-exhaustive list of the circumstances where oppression has been found to exist is as follows:

• in the conduct of board meetings if conduct unfairly or against the interests of the company as a whole;
• in the denial of management expectation;
• in the nomination to the board;
• in the making of excessive payments to directors;
• where Board decisions are not in the interests of the company;
• in the unlawful divestiture of shares;
• where the Directors alter the contributions of a shareholder contrary to a previous arrangement, without notice;
• in the issue of shares to decrease minority shareholding;
• as a result of the improper appropriation of business opportunities;
• due to the inability to sell shares in a private company;
• due to inadequate payment of dividends;
• if there is a failure to investigate irregular payments to directors;
• if there is a failure by the directors to prosecute an action;
• if there is a failure to grant access to records of a wholly-owned subsidiary;
• due to the use of company funds to defend oppression proceedings; and
• due to the misappropriation of company funds.

A derivative action is where the person or persons who bring a claim rely not on a cause of action (ie grounds for making a claim) belonging to them personally, but on one belonging to another person or entity.

In the context of the Corporations Act, a derivative action is one brought by a member or officer of the company (former or current) based on a cause of action belonging to the company, rather than a cause of action belonging to them personally. This may happen, for example, where the majority of shareholders refuse to pass a resolution to commence proceedings, or where the majority of directors of the company refuse to commence proceedings, on behalf of the company.

The following persons may apply to the court for permission to bring a derivative action or intervene in proceedings to which the company is a party:

• a member, former member, or person entitled to be registered as a member, of the company or of a related body corporate; or
• an officer or former officer of the company.

I am often contacted by people who feel that they have been unfairly left out of a Will or who have serious concerns about the circumstances in which a Will was made. I understand that the death of a family member or loved one is an emotionally challenging time, and this grief can be heightened if you feel you have been unfairly provided for in their Will, not provided for at all, or that the person was not capable of or pressured into making their Will.

There are often sound reasons for seeking to challenge or contest a Will.

You may be eligible to challenge or contest a Will if you believe:

• the deceased person was unduly influenced by another person when the Will was prepared and signed;
• the deceased was tricked into drafting a Will on certain terms or making changes to their Will;
• the deceased’s Will was forged by another person;
• the deceased lacked the mental capacity required to prepare, or provide instructions on the preparation of, their Will; or
• you are an eligible person under the Succession Act 2006 and have not received adequate provision in the deceased person’s Will for your maintenance, education and/or advancement in life.

If any of the above applies to you, you should seek legal advice to ascertain the merits, risks, and costs of commencing court proceedings to assert your claim.

Contesting a Will on the basis that you have not been adequately provided for, or provided for at all, is made by filing a family provision application under the Succession Act 2006.

An application for a family provision order must be made not later than 12 months after the date of the death of the deceased person, unless the Court otherwise orders on sufficient cause being shown or the parties to the proceedings consent to the application being made out of time.

Contesting a Will on the basis that you have not been adequately provided for, or provided for at all, is called a family provision claim and it is made by filing a family provision application under the Succession Act 2006.

‘Without prejudice’ refers to a type of legal privilege that attaches to any written or verbal statement made by a party to a dispute in a genuine attempt to settle that dispute.

In the legal context, a ‘privilege’ is a rule of evidence. It refers to a right or immunity conferred upon a person/entity in connection with legal proceedings.

If parties to a dispute engage in a ‘without prejudice’ discussion, or one party sends correspondence to another on a ‘without prejudice’ basis, it means that subject to limited exceptions the content of the communication cannot subsequently be used in legal proceedings, provided the communication actually meets 3 necessary elements, being:

• a dispute exists;
• one or more parties are making a genuine attempt to resolve the dispute; and
• in doing so, the party conveys a factual or legal admission or assertion about the dispute.

I often see the term ‘without prejudice’ used incorrectly because a common misconception exists that using this term makes the subject communication ‘off the record’. That is incorrect. Unless the communication meets the criteria set out above and none of the legal exceptions apply, merely using the words ‘without prejudice’ will not prevent evidence of the communication being used in legal proceedings.

Some of the exceptions to the without prejudice privilege set out in the Evidence Act include, but are not limited to, circumstances where:

• the substance of the communication or document has already been disclosed with the express or implied consent of both parties;
• there is a statement in the communication or document to the effect that it is not to be treated as confidential;
• evidence before a court is likely to mislead the court if the communication is not disclosed in order to contradict or qualify that evidence;
• the communication was part of a fraud;
• the proceeding in which it is sought to adduce the evidence is a proceeding to enforce an agreement between the persons in dispute to settle the dispute, or a proceeding in which the making of such an agreement is in issue; or
• the communication or document is relevant to determining liability for costs.

There are several enforcement mechanisms that can be used to enforce a Judgment for the purpose of seeking payment in compliance with that Judgment. The appropriate enforcement mechanism varies from case-to-case, dependant upon factors such as the size of the Judgment debt, whether it is a Judgment against a person or entity, and the amount of information known about the Judgment debtor (such as where they currently live, which financial institution they bank with, whether they have any assets and if so, what they are).  Obtaining legal advice will help you decide which enforcement mechanism is likely to be the most effective.

The enforcement mechanisms include:

If you do not have sufficient information about the Judgment debtor to decide which mechanism to pursue, or you need more information from the Judgment debtor before being capable of pursuing one or more of the enforcement mechanisms, you can serve the Judgment debtor with an Examination Notice. This is a document served upon the Judgment debtor requiring them to answer questions regarding his/her financial circumstances and to provide copies of specified documents.  If the Judgment debtor does not comply with the notice within the timeframe you specify (which must be no less than 28 days), then you can apply to the court and serve the Judgment debtor with an Examination Order.

An Examination Order is a court order requiring the Judgment debtor to attend court on a specified date to be verbally examined (questioned) by you or your lawyer about his/her financial circumstances. If the Judgment debtor does not comply with the Examination Order, they can be arrested.

There are generally 3 factors that determine which court legal proceedings should be commenced in, being:

• the monetary amount of the claim;
• the grounds upon which the claim is based; and
• the type of relief (court orders) being sought.

Some courts have a monetary jurisdiction, meaning that it has a monetary limit on the amount that it can hear and decide cases about. Subject to some exceptions, the monetary limits are:

• Local Court of NSW, Small Claims Division: matters up to $20,000;
• Local Court of NSW, General Division: matters between $20,000 and $100,000;
• District Court of NSW: matters up to $750,000;
• Federal Circuit Court, General Federal Law: matters up to $750,000.

The Supreme Court of NSW and Federal Court of Australia do not have a monetary cap on their jurisdiction.

Certain courts do not have the power to hear and determine all types of claims. For example, the Local Court does not have the power to hear claims based in equity. The Local Court and District Court do not have the power to make orders in Corporations Act matters, such as for the winding up of a company.

There can be consequences for commencing proceedings in a court that should have been commenced elsewhere, such as adverse cost consequences, transfer or dismissal of proceedings and delays.

It is prudent to obtain legal advice before commencing any legal proceedings.