Government and Administrative Law, Insurance

The High Court is strict yet flexible – statutory time limits for liquidators seeking to commence voidable transactions proceedings

12 March, 2015

On the afternoon of 21 May 2012 there was an altercation between Mr Sahade and Mr Smith (the appellants) and Mr Bischoff (the first respondent) at a property where Mr Sahade, Mr Bischoff and Mrs Bischoff (the second respondent) occupied separate residences.  CCTV cameras captured most of the altercation as it occurred.

Police attended the property after being called by Mrs Bischoff.  Having reviewed the CCTV footage and obtained statements, police arrested and charged Mr Sahade and Mr Smith with two assault offences.  In July 2012 they were charged with a further offence of assault occasioning actual bodily harm in company.  The charges against Mr Smith were withdrawn and dismissed in the Local Court in December 2012.  The charges against Mr Sahade were dismissed in the Local Court in April 2013.

Primary judgement

Following the dismissal of the criminal charges, Mr Sahade and Mr Smith commenced proceedings in the District Court of NSW against the Bischoffs claiming damages for malicious prosecution.  Mr Sahade also claimed damages against Mr Bischoff for 5 alleged assaults and batteries.  The Bischoffs brought a cross-claim against Mr Sahade for trespass to their property.  After a hearing lasting 8 days, the primary judge dismissed the claims of all parties (Sahade v Bischoff (District Court (NSW), McLoughlin DCJ, 10 October 2014, unreported).

In a second judgment, the primary judge determined that he was wrong as a matter of law in finding, in his first judgment, that actual damage was required to be proven in a claim for trespass to land before an award of damages could be made.  He set aside the verdict in favour of Mr Sahade on the Bischoffs’ cross-claim and awarded damages against Mr Sahade for trespass in the amount of $500 (Sahade v Bischoff (District Court (NSW), McLoughlin DCJ, 29 January 2015, unreported).

Appeal judgment

Mr Sahade and Mr Smith appealed.  The Bischoffs sought leave to cross-appeal against the award of damages and the costs orders made against Mr Sahade and Mr Smith.

Mr Sahade’s pleaded case in the District Court was that Mr Bischoff assaulted and beat him on 5 occasions during the altercation on 21 May 2012.  In addition, Mr Sahade and Mr Smith both alleged that the Bischoffs knowingly made false and misleading statements to the police claiming that Mr Bischoff was assaulted by Mr Sahade and claiming that Mr Smith held Mr Bischoff down whilst Mr Sahade assaulted Mr Bischoff.  It was further alleged that each of the Bischoffs were substantially and sufficiently involved in the procurement, institution and maintenance of the criminal charges to be a prosecutor in respect of those charges; that the proffering of the charges against Mr Sahade and Mr Smith was done maliciously and without reasonable and probable cause, and further, was not done in good faith.

The alleged assaults

The primary judge was confronted with conflicting oral testimony of the parties concerning the altercation and its aftermath.  He was assisted by the objective evidence contained in the CCTV footage, photo stills and mobile phone camera video recordings.  His Honour found each witness to be unreliable and gave reasons why he did not accept their evidence, except where the CCTV evidence supported it.

Mr Sahade contended that the primary judge’s factual findings were erroneous in a number of respects and did not accord with the CCTV footage and photographic stills.  The Bischoffs emphasised that selected extracts of the CCTV footage contained in individual photographs gave an incomplete picture of the events that occurred.  After reviewing the available evidence, the Court of Appeal held that the primary judge did not err in his findings.

Mr Sahade also submitted that his Honour applied the incorrect test and incorrect onus for the defence of self defence pursuant to sections 52 and 53 of the Civil Liability Act 2002 (NSW) (CLA).  In finding that the primary judge did not err in his approach to the defence of self-defence, the Court of Appeal confirmed that pursuant to section 52 of the CLA, the onus of proof is on the defendant to plead and prove, on the balance of probabilities, that the conduct was carried out in self defence: Presidential Security Services of Australia Pty Ltd v Brilley[2008] NSWCA 204; 73 NSWLR 241.  The Court of Appeal also noted State of New South Wales v McMaster[2015] NSWCA 228 that “unlawful” conduct is not confined to criminal conduct but extends to conduct which is tortious.  The Court of Appeal found that the onus of proof in respect of section 53 of the CLA rests with the plaintiff since the provision operates to prevent a court awarding damages against the defendant, unless it is satisfied of the matters required to make out the exception.

Malicious prosecution

The primary judge found that while there was some unreliability in relation to the evidence of Mr and Mrs Bischoff, neither was substantially and sufficiently involved in the procurement, institution and/or maintenance of the criminal charges against Mr Sahade and Mr Smith to become prosecutors.  His Honour reasoned that it was the police who decided to charge Mr Sahade and Mr Smith, relying partly on the statements provided by the Bischoffs, but after they had interviewed all of the prospective witnesses and viewed the totality of the CCTV footage.  His Honour also found that in providing statements to the police, the Bischoffs did not act maliciously or without reasonable or probable cause.

It was put in issue at trial and again on appeal whether the Bischoffs were prosecutors, and if so, whether they acted maliciously and without reasonable and probable cause in making certain statements to the police.  Mr Sahade and Mr Smith asserted that the statements given by the Bischoffs to the police were false and objectively false by reference to the CCTV footage.  They asserted that His Honour should have found that the Bischoffs’ statements were deliberately false.  They also contended that the police were not able to assess the truthfulness of the information provided by the Bischoffs and did not in fact do so.

The Court of Appeal observed that even though His Honour did not accept the reliability of part of the Bischoffs’ statements to police this does not mean that their police statements were false.  The Court of Appeal found that:

  • it is not in a position to make a credit finding that the Bischoffs’ statements to police were deliberately false.  On this point, the best the appellants could achieve would be a new trial;
  • the relevant facts were not so exclusively within the Bischoffs’ knowledge that it was virtually impossible for the police to exercise any independent discretion to prosecute the appellants.  The incident was captured by CCTV cameras and the police viewed the footage and obtained statements at the premises before charging Mr Sahade and Mr Smith.  Police were not compelled to lay charges based on the information exclusively in the Bischoffs’ knowledge;
  • the present case to be distinguishable from cases such as State of New South Wales v Abed [2014] NSWCA 419; and
  • His Honour did not err in concluding that the Bischoffs were not the prosecutors, in the sense of being the instigators of the prosecution by the police.

Mr Sahade’s contention that the Bischoffs maintained the prosecution required the acceptance of the proposition that they gave evidence before the Local Court which they knew was false.  In support of this assertion, Mr Sahade relied upon the CCTV footage to demonstrate an objective falsity of the Bischoffs’ statements to the police, which they adhered to in the Local Court prosecution.  After reviewing the evidence available to the primary judge, the Court of Appeal found that the appellants failed to make out the contention that the Bischoffs maintained a prosecution against Mr Sahade by giving deliberately false evidence before the magistrate.


The Court of Appeal’s judgment provides a useful analysis of the law in respect of sections 52 and 53 of the CLA and who is a prosecutor for the purposes of the tort of malicious prosecution.

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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
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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. 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Published by Leighton Hawkes
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