The defence of hardship to specific performance actions

The decision of Evans v Robcorp Pty Ltd[2014] QSC 26 is of interest as being an instance where the defence of hardship, in this case, financial hardship, was successfully pleaded in defence to a summary application for specific performance of a contract for the sale of land. Equity has always recognised the defence of hardship in response to an action for specific performance which, as an equitable remedy, might be refused in the discretion of the Court (Hewett v Court (1983) 149 CLR 639 at 664). However, whilst the remedy is discretionary, there are certain accepted principles which have guided the courts in their application of this defence to particular facts. It is not a blanket defence to a claim for specific performance where the buyer simply does not have the funds to complete the contract at the time when settlement is called for. Occasionally, a radical change in, say for instance, the health of the defendant between contract and completion, perhaps coupled with a long delay by a seller in calling for completion not being the fault of the buyer might enliven the defence (Patel v Ali [1984]1 Ch 283)

Is there such a thing as an “irrevocable authority”?

The Queensland Court of Appeal decision of FTV Holdings Cairns Pty Ltd v Smith [2014] QCA 217 analysed many issues concerning the enforceability of an “irrevocable authority” signed by clients directed to their solicitors regarding the payment of money to a third party. The action also drew those solicitors into the litigation as they acted contrary to that “irrevocable authority” by paying the money concerned directly to their clients but upon their clients’ later instructions. The result probably confirmed what many solicitors have believed to be the case for some time but which had never been considered in legal analysis in an appellate court. The facts of the case would be common to many day to day transactions.

A sunburnt country – storms, surges and sea levels : of insurance and flooding rains

Increasing population pressures and life-style choices are resulting in more people living in areas that are at risk of inundation from rising sea levels and flooding. However, following natural disaster events, such as the 2011 Queensland floods, many Australians discovered they were uninsured. Either their insurance policies did not cover flood; or multiple (and confusing) water-related definitions led them to believe they had cover when they did not. Several theories are analysed to try to explain what is a world-wide underinsurance problem but these do not provide an answer to the problem. This research focuses on uncovering the reasons consumers fail to adequately insure for flood and other water-related events. Recent Australian legislative attempts to overcome insureds’ confusion of water related definitions are examined for this purpose. The authors conclude that Australian and other) legislators should set a maximum premium for a minimum amount of flood and sea related cover; and restrict the building and style of homes in flood prone areas.

Competition policy review : draft recommendations on competition laws

On 4 December 2013, the Prime Minister and the Minister for Small Business announced a “root and branch” review of Australia’s competition policy. The Minister for Small Business released the final Terms of Reference for the competition policy review on 27 March 2014, following consultation with the States and Territories, and announced the Review Panel headed by Professor Ian Harper. Under the terms of reference the Competition Policy Review Committee (the Harper Committee) is required to focus on three broad areas: •examining what can be done to create more competition in service areas such as health, education and intellectual property; •considering whether the structure and powers of the competition institutions (the ACCC , the NCC, the Tribunal and the AER) remain appropriate; and •examining the effectiveness of the competition provisions of the Competition and Consumer Act 2010 (Cth) (CCA) and laying down a broad framework through which the law can be streamlined and reformed over time.

Incentivising tenants to stay the term – will clawbacks be enforceable?

Incentives are commonly offered by commercial landlords to tenants in the form of short term rent deductions or contributions to the tenant’s fitout. Usually these incentives are conditional upon the lessee remaining in the premises for the term of the lease with an obligation on the tenant to repay a proportion of the fitout contribution and rent deductions upon early termination or assignment. While the enforceability of clawback provisions has always been unclear, there was commercial benefit to landlords in maintaining high rentals on the face of the lease and attracting good quality tenants through fitout contributions. The use of clawback provisions as part of these incentives was recently analysed by the Queensland Supreme Court through the lens of the penalties doctrine in GWC Property Group Pty Ltd v Higginson & Ors [2014] QSC 264, with a negative outcome for the landlord. Unless the decision is overturned on appeal, the salient message for landlords is that repayment of incentives for any reason, not just a breach of the lease, is unlikely to be enforceable.

Balancing information disclosure and “Red Tape” : Queensland’s proposal of seller disclosure

The Queensland Property Law Review is currently reviewing seller disclosure laws in Queensland. The review will consider if the desire to provide consumers of real estate with valuable timely information about a property offered for sale can be effectively delivered with a minimum of red tape. This article examines the principles proposed by the first discussion paper on seller disclosure and their likely effect in practice.

How should regulators deal with entrenched company executives?

The regulatory framework for corporate governance, both in Australia and internationally, shifts between rules based regimes and principles based approach. The rules based regimes are typified by legislation that imposes mandated compliance based rules, such as the Sarbanes Oxley Act. Other regimes, such as Australia’s CLERP 9 and the ASX Corporate Governance Council’s principles, have opted for a disclosure approach. This paper examines these approaches in the context of the non-binding vote rule, which arguably combines aspects of both. The study’s methodology empirically considers evidence relating to actual voting patterns as well as case study examples of the non-binding vote’s effectiveness. Significantly, our analyses show that from its inception, the non-binding vote was effective in motivating management to change the remuneration package to one they perceived as more acceptable to shareholders and that the non-binding vote is an effective regime to manage CEO remuneration (and by extension) executive remuneration.

Putting the 'Personal' back into injury: An interpretation of Pt 3-5 of the ACL

There is an ongoing debate in relation to Part 3-5 of the ACL, particularly over its use in relation to other civil liability remedies. This article looks more closely at ss 138 and 139. It argues that, because of a possible design flaw in the statutory construction of s 138, it can be interpreted much more broadly than it has been to date. Also, the paper discusses the effect on an interpretation of s 139 ACL of both the High Court’s decision in Marks v GIO Australia Holdings Ltd, and a small but significant amendment to s 139 when the ACL was enacted. It argues that s 139 can now be interpreted broadly to include claims not just for loss of financial support or services but for all loss or damage or injury caused.

Revisiting the Australian code of banking practice: Is self-regulation still relevant for improving consumer protection standards?

The Code of Banking Practice is one of the oldest examples of consumer protection provided through self-regulation in the Australian financial services sector. However, since the Banking Code was first released in 1993, the volume of consumer protection legislation applying to banks has increased exponentially and parts of the Banking Code that once provided new consumer rights have now been largely superseded by legislation. In light of the increasingly complex set of laws and regulations that govern the relationship between banks and their consumer and small business customers it could be argued that the Banking Code has a limited future role. However, an analysis of the Banking Code shows that it adds to the consumer protection standards provided by legislation and can continue to facilitate improvements in the standards of subscribing banks and of other institutions in the financial services sector. Self-regulation and industry codes should continue to be part of the regulatory mix. Any regulatory changes that flow from the recent Financial System Inquiry should also facilitate and support the self-regulation role, but the government should also consider further changes to encourage improvements in industry codes and ensure that the implicit regulatory benefits that are provided, in part, because of the existence of industry codes, are made explicit and made available only to code subscribers.

Beyond blue gene: Intellectual property and bioinformatics

This article considers the challenges posed to intellectual property law by the emerging field of bioinformatics. It examines the intellectual property strategies of established biotechnology companies, such as Celera Genomics, and information technology firms entering into the marketplace, such as IBM. First this paper argues that copyright law is not irrelevant to biotechnology, as some commentators would suggest. It claims that the use of copyright law and contract law is fundamental to the protection of biomedical and genomic databases. Second this article questions whether biotechnology companies are exclusively interested in patenting genes and genetics sequences. Recent evidence suggests that biotechnology companies and IT firms are patenting bioinformatics software and Internet business methods, as well as underlying instrumentation such as microarrays and genechips. Finally, this paper evaluates what impact the privatisation of bioinformatics will have on public research and scientific communication. It raises important questions about integration, interoperability, and the risks of monopoly. It finally considers whether open source software such as the Ensembl Project and peer to peer technology like DSAS will be able to counter this trend of privatisation.

Submission to the Productivity Commission issues paper business set-Up, transfer and closure

The Commission has been asked to identify appropriate options for reducing entry and exit barriers including advice on the potential impacts of the personal/corporate insolvency regimes on business exits...

Submission to the Productivity Commission draft report business set-up, transfer and closure

The Commission has released a Draft Report on Business Set-Up, Transfer and Closure for public consultation and input. It is pleasing to note that three chapters of the Draft Report address aspects of personal and corporate insolvency. Nevertheless, we continue to make the submission to national policy inquiries and discussions that a comprehensive review should be undertaken of the regulation of insolvency and restructuring in Australia. The last comprehensive review of the insolvency system was by the Australian Law Reform Commission (the Harmer Report) and was handed down in 1988. Whilst there have been aspects of our insolvency laws that have been reviewed since that time, none has been able to provide the clear and comprehensive analysis that is able to come from a more considered review. Such a review ought to be conducted by the Australian Law Reform Commission or similar independent panel set up for the task. We also suggest that there is a lack of data available to assist with addressing questions raised by the Draft Report. There is a need to invest in finding out, in a rigorous and informed way, how the current law operates. Until there is a willingness to make a public investment in such research with less reliance upon the anecdotal (often from well-meaning but ultimately inadequately informed participants and others) the government cannot be sure that the insolvency regime we have provides the most effective regime to underpin Australia’s commercial and financial dealings, nor that any change is justified. We also make the submission that there are benefits in a serious investigation into a merged regulatory architecture of personal and corporate insolvency and a combined personal and corporate insolvency regulator.