Competition and consumer law

Competition and consumer law lawyers Sydney

The Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law set out various key requirements regulating the standard of conduct that is expected of businesses generally as well as more stringent requirements when dealing with consumers.

In summary they ensure amongst other requirements:

Certain guarantees and warranty requirements when supplying goods and services to consumers are provided.
Businesses are restricted from engaging in certain conduct that is unfair, misleading, deceptive, or unconscionable;
Advertising and marketing related conduct is appropriately regulated;
Product safety and standards;
Anti-competitive behaviour is prohibited; and
Standard form contracts containing unfair terms are unenforceable.

Our team of highly skilled and experienced lawyers is dedicated to providing you with the highest quality legal advice and representation. With a deep understanding of competition and consumer law, we are well equipped to guide you through every step of the legal process.

Whether you’re a business facing competition law issues, or a consumer seeking protection under consumer law, we can help. Our services cover a wide range of legal issues, including anti-competitive conduct, misleading and deceptive conduct, and unfair contract terms, just to name a few.

We pride ourselves on providing our clients with a personalized and tailored approach to their legal needs. Our lawyers take the time to understand your specific situation and goals, and we work closely with you to achieve the best possible outcome.

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Guide to Statutory Demands – What to Do When Served

Intro If a company owes one or more debts which are due and payable to a creditor and which remain outstanding, it is possible that the creditor may decide to serve a statutory demand on the debtor company. The statutory demand may require the debtor company to either pay the debt(s) in full or provide security for the debt(s) to the creditor’s reasonable satisfaction within 21 days after the demand is served on the company[1]. Requirements for a valid demand In summary the requirements for a valid statutory demand on a company are as follows: If the demand relates to a single debt the demand must specify the debt and its amount. If the demand relates to 2 or more debts then the demand must specify the total; The total debt(s) owed must be more than $2,000; The demand must require payment of the debt or the debtor company to secure or compound the debt to the creditors reasonable satisfaction within 21 days of service of the demand on the debtor company; The demand must be in writing, in the prescribed form, and signed by or on behalf of the creditor; and If there is no judgement in respect of the debt then the demand must be accompanied by an affidavit which clearly verifies that the debt is due and payable in full and the affidavit must comply with the rules. Bear in mind the available grounds to have the demand set aside, and the likely costs outcome if it is set aside (discussed below). All of the circumstances should be considered before deciding to proceed with service of a demand. Time is of the essence If you are on the receiving end of a statutory demand, legal advice should immediately be sought. If the debtor company does not take any action (i.e. comply with the demand, ensure that the demand is no longer in effect, or apply to the relevant Court) within 21 days of service of the demand, and the demand is still in effect, the creditor[2] can immediately apply for the debtor company to be wound up and the Court “must” presume that the debtor company is insolvent[3]. Extensions of time are not possible. Aside from the very harsh effects of winding up proceedings on the debtor company, the onus will be on the debtor company to then prove that it is in fact solvent. In such circumstances the debtor company will not, without the leave of the Court[4], be able to oppose the application on a ground that it might otherwise be able to do so in an application to set aside the statutory demand. Application to set aside a statutory demand If however an application is made to set aside the statutory demand within 21 days of service, supported by an affidavit, and the application to set aside the statutory demand along with the supporting affidavit is served on the person who served the demand on the debtor company within the 21 day period[5], then the application to set aside the demand would be validly issued[6]. Grounds for setting aside the statutory demand The Court must be satisfied either: that there is a “genuine dispute” between the company and the creditor about the existence or amount of the debt; that the debtor company has an offsetting claim[7]; that there is a defect in the demand “and substantial injustice will be caused unless the demand is set aside”; or that some other reason exists why the demand should be set aside[8]. If the demand is set aside then there will be no automatic presumption of insolvency and it is likely that the creditor would have to pay the debtors costs of the application to set aside[9] unless the debtor has behaved unreasonably. ……………………… [1] S.459E of the Corporations Act 2001 (Cth) (Corps Act) [2] being one of the class of persons under s.459P of the Corps Act [3] s.459C (2) (a) of the Corps Act [4] the Court can only grant leave if it is satisfied that the ground is “material” to proving that the company is solvent under s.459S of the Corps Act. [5] Sufficient time must be allowed for service in compliance with s.109X of the Corps Act. Any person receiving a statutory demand must take action immediately. [6] s.459G of the Corps Act [7] s.459H of the Corps Act [8] s.459J of the Corps Act [9] s.459N of the Corps Act

How to Manage an Employee’s Performance & Associated Disciplinary Action

1 ISSUE You have an employee who is under-performing in their work or behaviour and you wish to manage their performance and monitor it moving forwards. You may consider that a failure to improve in accordance with set guidelines should result in some form of disciplinary action[1]. In doing so it is important to consider various factors. This article does not cover situations where immediate dismissal as a result of serious / gross misconduct is appropriate. 2 CONSIDERATIONS 2.1 The terms of the employment contract and any relevant industrial award You need to consider the terms of the relevant employment contract and any other relevant provisions which may apply as a result of an applicable award. These may dictate part of the process which must be undertaken and/or the available disciplinary actions the breach of which may result in an unfair dismissal claim. 2.2 Policy and procedure for dismissal & adherence to policy Ensure that you have in place a policy which covers performance management procedures and adhere to them. Contact us for assistance in this regard. 2.3 Unfair dismissal – Part 3-2 of the Fair Work Act 2009 (Cth) (Act) Protected employees: National system employees are protected against “unfair” dismissal if they have completed at least 6 months of employment and a modern award or enterprise agreement applies to them. Alternatively if they have worked for more than 6 months for the employer and their income is less than the high income threshold then they will also be protected[2]. Unfairness: A person has been unfairly dismissed if: the person has been dismissed[3]; the dismissal was harsh, unjust, or unreasonable[4]; the dismissal was not consistent with the Small Business Fair Dismissal Code; and the dismissal was not a case of genuine redundancy[5]. Harsh, unjust or unreasonable: The Fair Work Commission can take into account any matter that it considers relevant but “must” take into account the following in deciding whether or not the dismissal was harsh, unjust, or unreasonable: (a) whether there was a valid reason for the dismissal related to the person’s capacity or conduct (including its effect on the safety and welfare of other employees); (b) whether the person was notified of that reason; (c) whether the person was given an opportunity to respond to any reason related to the capacity or conduct of the person; (d) any unreasonable refusal by the employer to allow the person to have a support person present to assist at any discussions relating to dismissal; (e) if the dismissal related to unsatisfactory performance by the person, whether the person had been warned about that unsatisfactory performance before the dismissal; (f) the degree to which the size of the employer’s enterprise would be likely to impact on the procedures followed in effecting the dismissal; and (g) the degree to which the absence of dedicated human resource management specialists or expertise in the enterprise would be likely to impact on the procedures followed in effecting the dismissal. Therefore, be upfront (don’t ambush), reasonable, clear, give warning(s), and allow the employee to have a support person present during discussion(s). Listen to the employee before making a decision. Small businesses & unfair dismissal: Importantly, employers who employ fewer than 15 employees are covered by unique provisions contained in the Small Business Fair Dismissal Code. Furthermore, employees who have worked for less than 12 months for small business employers are not eligible to make a claim for unfair dismissal. Otherwise, small business dismissals which comply with the Small Business Fair Dismissal Code are deemed to be fair. 2.4 General protections provisions – Part 3-1 of the Act – adverse action and workplace rights Briefly, a person must not take adverse action against another person in relation to the exercise of a workplace right by that other person. The term “workplace right” is very broad in scope and includes, without limitation any process under a workplace law e.g. cashing out leave, making flexibility arrangements, taking parental leave, taking industrial action, temporary absences etc etc. The term “adverse action” is also similarly broad, and includes, without limitation, dismissal or the alteration of the employees position to the employees prejudice. Employees are also protected from coercion and undue influence as well as misrepresentation about workplace rights. So, seek advice, and make sure your reasons for disciplining are only performance related. 2.5 Bullying – Part 6-4B of the Act Behaving unreasonably towards the employee where that behaviour creates a risk to health and safety could also constitute bullying. However, reasonable management action carried out in a reasonable manner does not constitute bullying. 2.6 Discrimination legislation – protected attributes Ensure that you do not implement your performance management program in an inappropriate manner where the employee has a protected attribute[6] to minimise the risk of falling foul of anti-discrimination legislation. 2.7 Proportionality of the disciplinary action Any performance management program should be closely monitored. The disciplinary action taken should be proportionate to the conduct of the employee. Record and confirm everything in writing. ……………………………… [1] For example in the form of a warning or dismissal [2] s.382 of the Act. See also ss383 and 384. [3] Either terminated by the employer or because the employee was forced to resign because of the employers conduct. See s.386 of the Act for further details. [4] See s.387 of the Act [5] See s.389 of the Act [6] Race, colour, sex, sexual preference, age, physicial or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion or national extraction or social origin.

Valuation of Minority Interests in Shareholder Oppression Claims

In Australia, shareholders who feel oppressed or unfairly treated by the company or its directors can seek remedies under various statutory provisions. Here are some of the remedies available to shareholders: Oppression proceedings under the Corporations Act 2001 (Cth): Under section 232 of the Corporations Act, shareholders can apply to the court for relief if they believe that the company’s affairs are being conducted in a manner that is oppressive, unfairly prejudicial, or discriminatory to them. The court has broad powers to make orders to remedy the situation, including ordering the company to buy back the shareholder’s shares, ordering the company to pay compensation, or ordering the company to amend its constitution or replace its directors. Derivative actions under the Corporations Act: Shareholders can bring derivative actions under section 236 of the Corporations Act if they believe that the directors have breached their duties to the company. In such actions, the shareholder sues on behalf of the company to recover damages from the directors for any losses suffered by the company as a result of their breaches. Personal actions against directors under the Corporations Act: Shareholders can also bring personal actions against directors under section 180 of the Corporations Act if the director has breached their duty of care and diligence. This may occur if a director has made a decision that causes harm to the company, such as approving a risky investment without proper research or due diligence. Compulsory acquisition of shares under the Corporations Act: In some cases, shareholders may be able to force the company to buy their shares under section 461 of the Corporations Act. This may occur if the shareholder can show that they have been unfairly treated, and that it would be just and equitable for the company to buy their shares. The amount that is awarded will depend on the particular facts of the case. In BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192, the Federal Court of Australia provided guidance on the principles that should be applied in valuing company shares in shareholder oppression claims. The following are some of the key principles: Compensation for oppression: The purpose of granting a remedy between parties in an oppression case is to “to compensate the oppressed shareholder for the oppression which has taken place”. Wide discretion: In cases where the relief to be granted is the compulsory purchase of shares, that object is achieved by the Court having a wide discretion to fix a price that “represents a fair value in all the circumstances”. That does not necessitate fixing a price only by reference to ordinary valuation principles. The question is to identify the price which should be paid in the circumstances. No benefit to oppressor for oppression: Where shares are to be valued as a starting point for determining the price which should be paid, the usual date for valuation is the date of the filing of the proceedings, but that is by no means a universal approach. The valuation does not value the shares at that date as if nothing but the ordinary course of business had preceded it. That would effectively allow the oppressing party the benefit of the wrongful conduct as, inevitably, that conduct has diminished the value of the oppressed party’s interest in the company before the proceedings are commenced. In Scottish Co-operative Wholesale Society v Meyer [1959] AC 324 , Lord Keith identified (at 364) that the valuation process must negate the effects of the oppressive conduct. His Lordship said the amount to be determined was: … what would have been the value of the shares at the commencement of the proceedings had it not been for the effect of the oppressive conduct of which complaint was made. This is clearly not a matter on which a calculation can be made with mathematical accuracy or by the application of strict accounting principles … Fair price to put applicant into position as if no oppression: A fair price would be the value which the shares would have had at the date of the petition, if there had been no oppression. In relation to the claim for oppression, when the court is valuing the oppressed shareholder’s interest in the determination of the relief to be awarded for oppression, the aim is to put the applicant in the position as if there had been no oppression. There are different methods of valuation that might be deployed, and there is no one size fits all answer. Quite often, the outgoing shareholder will have been excluded from management, leaving the remaining shareholders / directors “in control”. It is clear however from the authorities that the oppressors will not be entitled to benefit from the relevant oppression. Our corporate lawyers in Sydney specialise in dispute resolution relating to shareholder disputes and directors duties. Be prepared to have to issue proceedings before the other parties properly come to the negotiating table.

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Australian Branch Overseas Business vs Australian Subsidiary Company

This article focuses on two frequently used methods for foreign companies to carry on business in Australia. Frequently, foreign companies do so either by establishing an Australian branch of their existing overseas business (i.e. it is the overseas business which trades in Australia) or, alternatively, the foreign company establishes an Australian company as a subsidiary of the overseas company (i.e. it is the Australian subsidiary company which trades in Australia). Australian branch of your overseas business A “foreign company” for the purposes of the Corporations Act 2001 (Cth) (Corps Act) can be a body corporate that is incorporated outside Australia, or even an unincorporated body that does not have its head office or principal place of business in Australia. Register as a foreign company: If your “foreign company” wants to carry on business in Australia, your foreign company must be registered as a foreign company under the Corps Act with the Australian Securities and Investments Commission (ASIC). Carrying on business in Australia: Whether or not a foreign company is carrying on business is a question of fact and depends on the circumstances. Section 21 (3) of the Corps Act provides that a body corporate does not carry on business in Australia merely because it: (a) is or becomes a party to a proceeding or effects settlement of a proceeding or of a claim or dispute; or (b) holds meetings of its directors or shareholders or carries on other activities concerning its internal affairs; or (c) maintains a bank account; or (d) effects a sale through an independent contractor; or (e) solicits or procures an order that becomes a binding contract only if the order is accepted outside Australia, or the State or Territory, as the case may be; or (f) creates evidence of a debt, or creates a security interest in property, including PPSA retention of title property of the body; or (g) secures or collects any of its debts or enforces its rights in regard to any securities relating to such debts; or (h) conducts an isolated transaction that is completed within a period of 31 days, not being one of a number of similar transactions repeated from time to time; or (j) invests any of its funds or holds any property. Registration requirements: The following documents must be provided to ASIC in order to register as a foreign company: Certified copy of a current certificate of incorporation or registration, or a document of similar effect; Certified copy of constitution; List of directors containing personal details of those directors; A memorandum stating the powers of any directors who are resident in Australia and members of a local board of directors; Certain information and documents relating to registrable charges on property of the foreign company; Notice of the registered office of the foreign company in its place of origin (if it has one) or otherwise its principal place of business; and Notice of the foreign company’s registered office in Australia which complies with s.601CT of the Corps Act[1]. Australian registered office, local agent, and public officer: In addition to an Australian registered office, you will need to appoint an Australian local agent / representative[2]. The local agent is personally liable for anything the foreign company is required by law to do. You must also appoint a public officer for taxation purposes. ARBN: ASIC will issue your foreign company with an Australian Registered Body Number (ARBN). Foreign companies must ensure that their ARBN and their name (as registered with ASIC) and place of origin are shown on their public documents. Reporting: There are ongoing reporting requirements to ASIC. Australian company as a subsidiary of your overseas business Foreign companies often choose as an alternative to register a proprietary company (i.e. one with less than 50 shareholders) as a subsidiary of the foreign company. In this scenario it is the Australian company which carries on business and trades in Australia. The requirements are similar to registration as a foreign company in the sense that registration with ASIC is required, there must be at least one Australian director, there needs to be an Australian registered office, and there are ongoing reporting requirements with ASIC. Australian companies must maintain a company register and unless an exemption applies lodge audited financial statements each year. The company will need to separately apply for an Australian Business Number, Tax File Number, and typically register for Goods and Services Tax (assuming GST turnover exceeds $75,000) as well as Pay As You Go withholding (if the business employs employees or contractors with whom the business has entered into voluntary agreements to withhold or if the business makes payments to other businesses that don’t quote an Australian Business Number). Other key associated considerations (a) Business name and trade mark search If the foreign company or Australian subsidiary company wishes to trade under a name other than its own name (as registered with ASIC) it must register it as a business name with ASIC. Whether or not the foreign company is trading under its own name or some other new name, it is important that a trade mark search is undertaken by a professional so as to minimise the risk of potential infringement of existing registered or unregistered rights in the proposed name and/or misleading or deceptive conduct under the Competition and Consumer Act 2010 (Cth). See here for further information. (b) Trade mark registration Trade mark registration in Australia confers a monopoly right upon the holder of the trade mark to use the mark in respect of the goods or services for which it is registered. You should ensure that your chosen name does not infringe the rights of other by commissioning a trade mark search and protect your brand by registering your trade mark in respect of your goods and services without delay. See here for further information. (c) FIRB approval of foreign investment Foreign investment approval may be required depending on the value of the investment, nature of the investment