Litigation and Dispute Resolution

Not a game: breaches of the Australian Consumer Law for digital goods

10 August, 2020

On 3 May 2018, the Farm Debt Mediation Amendment Bill 2018 (NSW) (the Amendments) was passed. The Amendments make several significant changes to the Farm Debt Mediation Act 1994 (NSW) (FDMA), including to its structure, scope of application and the procedure for the enforcement of farm debts. The Amendments will come into effect on proclamation, on a date to be confirmed.

Why is the FDMA being amended?

The FDMA was introduced in 1994 to provide for the efficient and equitable resolution of farm debt disputes. It recognises the need for farm businesses to be able to negotiate a financial solution, in circumstances where they can fall into financial hardship due to the risky environment they operate in, which is subject to the vagaries of weather, drought and downturn.

The Amendments are the ninth in the FDMA’s history and come following a review by the NSW Rural Assistance Authority (the Authority), which administers the FDMA.

The purpose of the Amendments is to:

  • ensure the FDMA continues to operate according to its objectives; and
  • begin the move towards national harmonisation of farm debt mediation legislation.

What changes are occurring to the FDMA?

The Amendments make some significant changes to the FDMA. Most notably, the Amendments:

  • clarify the applicability of the FDMA to farm debt matters[1] and that the FDMA does not apply to restructured farm mortgages where mediation pursuant to the FDMA has previously taken place;[2]
  • add new definitions and extend the scope of existing definitions within the FDMA – including, ‘mediation’,[3] ‘farm machinery’[4] and ‘farming operation’.[5]
  • create new offences relating to unauthorised enforcement action with penalties to apply;[6]
  • change the procedure for the enforcement of debts,[7] accreditation of mediators,[8] and conduct of mediation sessions (including the costs of mediation);[9]
  • replace the requirement to enter into a Heads of Agreement following a successful mediation, with a requirement to enter into a binding mediation agreement[10] and replacing a 14 day cooling off period with a 10 business day cooling off period that can be waived or varied by agreement; and
  • create an internal review process for decisions relating to prohibition certificates, exemption certificates, and mediator accreditation by the Authority.[11]

What does this mean for you?

At a general level, creditors and farmers should be aware of the FDMA’s new scope, as the Amendments will:

  • protect a broader range of primary producers, including on-farm and offshore aquaculture and farm forestry, which do not currently have the protection of the FDMA; and
  • extend coverage to a broader range of farm mortgages, as the definition of ‘farm machinery’ is now more expansive and includes any secured farm machinery commonly used on farms, such as vehicles, machines and other implements.

On a practical level, creditors and farmers should be alive to:

  • the incentives for early mediation as a farmer will be entitled to ask a creditor to mediate before they default on their loan, and if they later default on their loan a creditor will still need to provide one mandatory invitation to mediate before taking enforcement action;
  • the new procedures for enforcing farm debts, including the provisions for the service of notices under the FDMA (such as permitting service by email) and the more flexible and clearer timeframes for responding (within 20 business days after receiving a notice or request);
  • the right the Authority will have to require farmers and creditors to provide the necessary information to enable it to determine if the FDMA applies;
  • their right to access an internal review of certain decisions made by the Authority to be conducted by a person not substantially involved in the original decision; and
  • the FDMA’s new protections against the enforcement of farm debts before mediation. Now more than ever, creditors must fully appreciate their obligations to comply with the FDMA and to engage in mediation under the FDMA before enforcing farm debts. Once the Amendments come into effect, a failure to do so will result in a penalty for a maximum sum of $55,000 for individual creditors and $275,000 for corporation creditors for taking unlawful enforcement action.

End Notes

[1] Schedule 1, [1] of the Farm Debt Mediation Amendment Bill 2018 (NSW) (the Bill) amending s 3 of the Farm Debt Mediation Act 1994 (NSW) (FDMA).
[2] Sch. 1, [6] of the Bill inserting a new s 5(3) into the FDMA.
[3] Sch. 1, [5] of the Bill inserting a new s 4AA into the FDMA.
[4] Sch. 1, [2] of the Bill amending s 4(1) of the FDMA.
[5] Sch. 1, [5] of the Bill inserting a new s 4AB into the FDMA.
[6] Sch. 1, [9] of the Bill inserting a new s 8 into the FDMA.
[7] Sch. 1, [9] of the Bill inserting a new ss 9-15 into the FDMA.
[8] Sch. 1, [10] of the Bill inserting a new s 16 into the FDMA.
[9] Sch. 1, [10] of the Bill inserting a new ss 18A, 18B and 18I into the FDMA.
[10] Sch. 1, [10] of the Bill inserting a new ss 18J-18L into the FDMA.
[11] Sch. 1, [10] of the Bill inserting a new ss 18P and 18Q into the FDMA.

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Canadian Court elevates thumbs-up emoji to signature status

In June 2023, a Canadian Court in South-West Terminal Ltd v Achter Land and Cattle Ltd, 2023 SKKB 116, held that the "thumbs-up" emoji carried enough weight to constitute acceptance of contractual terms, analogous to that of a "signature", to establish a legally binding contract.   Facts This case involved a contractual dispute between two parties namely South-West Terminal ("SWT"), a grain and crop inputs company; and Achter Land & Cattle Ltd ("ALC"), a farming corporation. SWT sought to purchase several tonnes of flax at a price of $17 per bushel, and in March 2021, Mr Mickleborough, SWT's Farm Marketing Representative, sent a "blast" text message to several sellers indicating this intention. Following this text message, Mr Mickleborough spoke with Mr Achter, owner of ALC, whereby both parties verbally agreed by phone that ALC would supply 86 metric tonnes of flax to SWT at a price of $17 per bushel, in November 2021. After the phone call, Mr Mickleborough applied his ink signature to the contract, took a photo of it on his mobile phone and texted it to Mr Archter with the text message, "please confirm flax contract". Mr Archter responded by texting back a "thumbs-up" emoji, but ultimately did not deliver the 87 metric tonnes of flax as agreed.   Issues The parties did not dispute the facts, but rather, "disagreed as to whether there was a formal meeting of the minds" and intention to enter into a legally binding agreement. The primary issue that the Court was tasked with deciding was whether Mr Achter's use of the thumbs-up emoji carried the same weight as a signature to signify acceptance of the terms of the alleged contract. Mr Mickleborough put forward the argument that the emoji sent by Mr Achter conveyed acceptance of the terms of the agreement, however Mr Achter disagreed arguing that his use of the emoji was his way of confirming receipt of the text message. By way of affidavit, Mr Achter stated "I deny that he accepted the thumbs-up emoji as a digital signature of the incomplete contract"; and "I did not have time to review the Flax agreement and merely wanted to indicate that I did receive his text message." Consensus Ad Idem In deciding this issue, the Court needed to determine whether there had been a "formal meeting of the minds". At paragraph [18], Justice Keene considered the reasonable bystander test: " The court is to look at “how each party’s conduct would appear to a reasonable person in the position of the other party” (Aga at para 35). The test for agreement to a contract for legal purposes is whether the parties have indicated to the outside world, in the form of the objective reasonable bystander, their intention to contract and the terms of such contract (Aga at para 36). The question is not what the parties subjectively had in mind, but rather whether their conduct was such that a reasonable person would conclude that they had intended to be bound (Aga at para 37)."   Justice Keene considered several factors including: The nature of the business relationship, notably that Mr Achter had a long-standing business relationship with SWT going back to at least 2015 when Mr Mickleborough started with SWT; and   The consistency in the manner by which the parties conducted their business by way of verbal conversation either in person or over the phone to come to an agreement on price and volume of grain, which would be followed by Mr Mickleborough drafting a contract and sending it to Mr Achter. Mr Mickleborough stated, "I have done approximately fifteen to twenty contracts with Achter"; and   The fact that the parties had both clearly understood responses by Mr Achter such as "looks good", "ok" or "yup" to mean confirmation of the contract and "not a mere acknowledgment of the receipt of the contract" by Mr Achter.   Judgment At paragraph [36], Keene J said: "I am satisfied on the balance of probabilities that Chris okayed or approved the contract just like he had done before except this time he used a thumbs-up emoji. In my opinion, when considering all of the circumstances that meant approval of the flax contract and not simply that he had received the contract and was going to think about it. In my view a reasonable bystander knowing all of the background would come to the objective understanding that the parties had reached consensus ad item – a meeting of the minds – just like they had done on numerous other occasions." The court satisfied that the use of the thumbs-up emoji paralleled the prior abbreviated texts that the parties had used to confirm agreement ("looks good", "yup" and "ok"). This approach had become the established way the parties conducted their business relationship.   Significance of the Thumbs-Up Emoji Justice Keene acknowledged the significance of a thumbs-up emoji as something analogous to a signature at paragraph [63]: "This court readily acknowledges that a thumbs-up emoji is a non-traditional means to "sign" a document but nevertheless under these circumstances this was a valid way to convey the two purposes of a "signature" – to identify the signator… and… to convey Achter's acceptance of the flax contract." In support of this, Justice Keene cited the definition of the thumbs-up emoji: "used to express assent, approval or encouragement in digital communications, especially in western cultures", confirming that the thumbs-up emoji is an "action in an electronic form" that can be used to allow express acceptance as contemplated under the Canadian Electronic Information and Documents Act 2000. Justice Keene dismissed the concerns raised by the defence that accepting the thumbs up emoji as a sign of agreement would "open the flood gates" to new interpretations of other emojis, such as the 'fist bump' and 'handshake'. Significantly, the Court held, "I agree this case is novel (at least in Skatchewan), but nevertheless this Court cannot (nor should it) attempt to stem the tide of technology and common usage." Ultimately the Court found in favour of SWT, holding that there was a valid contract between the parties and that the defendant breached by failing to deliver the flax. Keene J made a judgment against ALC for damages in the amount of $82,200.21 payable to SWT plus interest.   What does this mean for Australia? This is a Canadian decision meaning that it is not precedent in Australia. However, an Australian court is well within its rights to consider this judgment when dealing with matters that come before it with similar circumstances. This judgment is a reminder that the common law of contract has and will continue to evolve to meet the everchanging realities and challenges of our day-to-day lives. As time has progressed, we have seen the courts transition from sole acceptance of the traditional "wet ink" signature, to electronic signatures. Electronic signatures are legally recognised in Australia and are provided for by the Electronic Transactions Act 1999 and the Electronic Transactions Regulations 2020. Companies are also now able to execute certain documents via electronic means under s 127 of the Corporations Act. We have also seen the rise of electronic platforms such as "DocuSign" used in commercial relationships to facilitate the efficient signing of contracts. Furthermore, this case highlights how courts will interpret the element of "intention" when determining whether a valid contract has been formed, confirming the long-standing principle that it is to be assessed objectively from the perspective of a reasonable and objective bystander who is aware of all the relevant facts. Overall, this is an interesting development for parties engaging in commerce via electronic means and an important reminder to all to be conscious of the fact that contracts have the potential to be agreed to by use of an emoji in today's digital age.

Published by Foez Dewan
29 August, 2023

Venues NSW ats Kerri Kane: Venues NSW successful in overturning a District Court decision

The McCabes Government team are pleased to have assisted Venues NSW in successfully overturning a District Court decision holding it liable in negligence for injuries sustained by a patron who slipped and fell down a set of steps at a sports stadium; Venues NSW v Kane [2023] NSWCA 192 Principles The NSW Court of Appeal has reaffirmed the principles regarding the interpretation of the matters to be considered under sections5B of the Civil Liability Act 2002 (NSW). There is no obligation in negligence for an occupier to ensure that handrails are applied to all sets of steps in its premises. An occupier will not automatically be liable in negligence if its premises are not compliant with the Building Code of Australia (BCA). Background The plaintiff commenced proceedings in the District Court of NSW against Venues NSW (VNSW) alleging she suffered injuries when she fell down a set of steps at McDonald Jones Stadium in Newcastle on 6 July 2019. The plaintiff attended the Stadium with her husband and friend to watch an NRL rugby league match. It was raining heavily on the day. The plaintiff alleged she slipped and fell while descending a stepped aisle which comprised of concrete steps between rows of seating. The plaintiff sued VNSW in negligence alleging the stepped aisle constituted a "stairwell" under the BCA and therefore ought to have had a handrail. The plaintiff also alleged that the chamfered edge of the steps exceeded the allowed tolerance of 5mm. The Decision at Trial In finding in favour of the plaintiff, Norton DCJ found that: the steps constituted a "stairwell" and therefore were in breach of the BCA due to the absence of a handrail and the presence of a chamfered edge exceeding 5mm in length. even if handrails were not required, the use of them would have been good and reasonable practice given the stadium was open during periods of darkness, inclement weather, and used by a persons of varying levels of physical agility. VNSW ought to have arranged a risk assessment of the entire stadium, particularly the areas which provided access along stepped surfaces. installation of a handrail (or building stairs with the required chamfered edge) would not impose a serious burden on VNSW, even if required on other similar steps. Issues on Appeal VNSW appealed the decision of Norton DCJ. The primary challenge was to the trial judge's finding that VNSW was in breach of its duty of care in failing to install a handrail. In addition, VNSW challenged the findings that the steps met the definition of a 'stairwell' under the BCA as well as the trial judge's assessment of damages. Decision on Appeal The Court of Appeal found that primary judge's finding of breach of duty on the part of VNSW could not stand for multiple reasons, including that it proceeded on an erroneous construction of s5B of the Civil Liability Act 2002 and the obvious nature of the danger presented by the steps. As to the determination of breach of duty, the Court stressed that the trial judge was wrong to proceed on the basis that the Court simply has regard to each of the seven matters raised in ss 5B and 5C of the CLA and then express a conclusion as to breach. Instead, the Court emphasised that s 5B(1)(c) is a gateway, such that a plaintiff who fails to satisfy that provision cannot succeed, with the matters raised in s 5B(2) being mandatory considerations to be borne in mind when determining s 5B(1)(c). 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Published by Leighton Hawkes
18 August, 2023
Litigation and Dispute Resolution

Expert evidence – The letter of instruction and involvement of lawyers

The recent decision in New Aim Pty Ltd v Leung [2023] FCAFC 67 (New Aim) has provided some useful guidance in relation to briefing experts in litigation.

Published by Justin Pennay
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