New consumer law protections in action: what is an unfair contract?

10 September, 2018

The recent Court of Appeal decision in Burke v Burke provides further commentary and clarification in relation to how estrangement will affect the Court’s determination of family provision proceedings brought by adult children of deceased persons.

The Facts

The deceased was the elderly mother of three adult children in their 60s. One of the adult children (‘Terry’) had not spoken with the deceased for approximately 20 years prior to her death, following an incident which took place at Ashfield Bowling Club (‘the Incident’). About two years prior to the death of the deceased, in 2010 she wrote a letter which stated she had not made provision for Terry in her will (executed in 2003), as a result of his decision to be estranged from the family.

The deceased’s will bequeathed a legacy of $100,000 to Terry’s son, with the residuary estate to be split equally between the deceased’s other two children. The net value of the estate was approximately $1,250,000 after legal costs and payment of the legacy to Terry’s son.

At the time of commencing proceedings for a family provision order out of the deceased’s estate, Terry was in financial need, and was discharged from bankruptcy shortly after commencing the proceedings. Terry’s financial need was not in dispute.

The question for the Court (at trial and on appeal) was whether Terry’s estrangement from his mother in the 20 years prior to her death precluded the Court from making an order for provision from her estate.

The decision

At first instance, it was found the deceased was entitled to regard Terry as a person undeserving of a benefit under the Estate, regardless of his financial circumstances. This was based on evidence which demonstrated Terry had decided he wanted nothing to do with the family. Having regard to prior authority, his Honour concluded at [57]:

“In my view, the deceased was entitled, notwithstanding the fact that the plaintiff was her son, to regard him as a person undeserving of any benefit from her estate whatever his financial circumstances at the time of his application…notwithstanding the poor financial circumstances and taking all matters favourable to him into account including the size of the estate I think no provision ought to be made out of the estate for him.”

Terry appealed the decision on the following bases:

The primary judge wrongly attributed little significance to the incident at the Ashfield Bowling Club, which Terry contended was the material cause of estrangement;
The estrangement was due to a misunderstanding for which both he and his mother were jointly responsible;
Terry had attempted a reconciliation with his mother in recent years;
In those circumstances, “having regard to the size of the estate and the relatively comfortable position of his siblings, absent callousness or hostility on his part the deceased was under a duty to make provision for him and there should have been both a finding that inadequate provision had been made for him in the will and an order for provision for him out of the estate” (Ward JA at [13]); and
The decision of the primary judge that no provision should have been made for Terry does not reflect current community attitudes and values, amounting to an error requiring appellate intervention.

Particularly, Terry relied on previous authority that the mere fact of estrangement between parent and child should not ordinarily result, on its own, in the child not being able to satisfy the jurisdictional requirements under the Act, and a state of estrangements or even hostility between a testator and a claimant does not terminate the obligation of the testator to provide for the claimant. His Honour considered the case of Andrew v Andrew [2012] NSWCA 308. That decision rejected the notion the Court should start with the principle that a testator is free to provide nothing for an adult child. However, his Honour did not accept that Andrew stood for the proposition that all that is required, for an adult child to have a provision made in his/her favour, is to prove the relationship and the fact of the need for financial assistance.

The amount sought by Terry on appeal was provision of $300,000, which constituted about 3/4 of the residuary shares that the other two adult children would then receive if the order were made, with no suggestion any provision be made out of his son’s legacy.

Succession Act considerations

There was no real dispute that Terry satisfied the first 2 limbs of the Succession Act. That is:

Terry was an eligible person (section 59(1)(a)); and
Adequate provision for the proper maintenance, education or advancement in life had not been made to Terry (section 59(1)(c)).

Under the third limb, the Court is to consider whether to make a family provision order and, if so, the nature of any such order. The matters which the Court may take into consideration for this purpose include (among others):

Any family or other relationship between the applicant and the deceased person, including the nature and duration of the relationship (section 60(2)(a));
Any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person (section 60(2)(j));
The character and conduct of the applicant before and after the date of death of the deceased person (section 60(2)(m)); and
Any other matter the Court considers relevant, including matters in existence at the time of the deceased person’s death or at the time the application is being considered (section 60(2)(p)).

The decision on appeal

The Court of Appeal dismissed the appeal and held, relevantly, that there is no rule or principle that in cases of significant need there is an obligation to make provision for an adult child irrespective of any estrangement expect in circumstances of hostility or callousness:

“… The proposition contended for by Terry, in effect, is that in cases of significant need there is an obligation to make provision for an adult son, irrespective of any estrangement except in cases of hostility or callousness. That, in my opinion, wrongly seeks to elevate statements made in particular cases (to the effect that ordinary estrangement will not preclude an application for provision succeeding on the facts of the particular case) to some form of overriding rule or principle.” (at [94]).

Additionally, the judges on appeal held:

The assessment of the primary judge as to the significance of the Ashfield Bowling Club incident was not in error;
Terry’s phone calls to the nursing home were not indicative of an attempt at reconciliation, and that the evidence did not contradict that his contact was motivated by enquiries as to inheritance;
Estrangement will not be a determinative factor against the making of a provision for an adult child; it is a factor to be taken into account; and
The primary judge’s assessment in all the circumstances was not so out of balance with community expectations to equate to an error.

Interestingly, the Court of Appeal noted that, had it been persuaded that making no provision was inadequate in all the circumstances, any provision which would have been appropriate would not have been sufficient to allow Terry to own his own home, but would rather be a buffer to assist in his day to day life.

In respect of the concept of “community expectations”, the Court referred to Andrew, which noted “the only guiding light, consistent with the rule of law, for the identification of community standards are those reflected in current legislation. No legislation other than the Succession Act itself is relevant to the present case.” (at [36]). Emmett JA noted section 60(2) of the Succession Act is broad, such as to leave a very wide discretion for the Court. His Honour suggested it may be preferable for the legislation to be more specific.

Decision implications

Whilst estrangement is not fatal to an application for family provision, it is a relevant matter for the purposes of section 60 of the Act and must be considered on a case-by-case basis.

The decision makes it clear that each family provision case is separate and unique, and facts from one cannot be applied to another. Particularly, there is likely to be a broad spectrum of community opinion on asset division upon the death of a parent, however the Courts will look to legislation as a guide in this regard.

This article is not legal advice. It is intended to provide commentary and general information only. Access to this article does not entitle you to rely on it as legal advice. You should obtain formal legal advice specific to your own situation. Please contact us if you require advice on matters covered by this article.

published by

Andrew Lacey

Managing Principal

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Litigation and Dispute Resolution

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 dictionary.com 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

Government

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). Ultimately, regarding the primary question of breach of duty, the Court found that: The stadium contained hazards which were utterly familiar and obvious to any spectator, namely, steps which needed to be navigated to get to and to leave from the tiered seating. While the trial judge considered the mandatory requirements required by s5B(2) of the CLA, those matters are not exhaustive and the trial judge failed to pay proper to attention to the fact that: the stadium had been certified as BCA compliant eight years before the incident; there was no evidence of previous falls resulting in injury despite the stairs being used by millions of spectators over the previous eight years; and the horizontal surfaces of the steps were highly slip resistant when wet. In light of the above, the Court of Appeal did not accept a reasonable person in the position of VNSW would not have installed a handrail along the stepped aisle. The burden of taking the complained of precautions includes to address similar risks of harm throughout the stadium, i.e. installing handrails on the other stepped aisles. This was a mandatory consideration under s5C(a) which was not properly taken into account. As to the question of BCA compliance, the Court of Appeal did not consider it necessary to make a firm conclusion of this issue given it did not find a breach of duty. The Court did however indicated it did not consider the stepped aisle would constitute a "stairway" under the BCA. The Court of Appeal also found that there was nothing in the trial judge's reasons explicitly connecting the risk assessment she considered VNSW ought to have carried out, with the installation of handrails on any of the aisles in the stadium and therefore could not lead to any findings regarding breach or causation. As to quantum, the Court of Appeal accepted that the trial judge erred in awarding the plaintiff a "buffer" of $10,000 for past economic loss in circumstances where there was no evidence of any loss of income. The Court of Appeal set aside the orders of the District Court and entered judgment for VNSW with costs. Why this case is important? The case confirms there is no obligation in negligence for owners and operators of public or private venues in NSW to have a handrail on every set of steps. It is also a welcome affirmation of the principles surrounding the assessment of breach of duty under s 5B and s 5C of the CLA, particularly in assessing whether precautions are required to be taken in response to hazards which are familiar and obvious to a reasonable person.

Published by Leighton Hawkes

18 August, 2023