COVID-19, Insolvency, property

Chain of Responsibility amendments set to harmonise heavy vehicle and national safety laws

16 January, 2017

On 29 March 2020, the Federal Government announced its intention to place a six-month moratorium on landlords’ rights to evict residential and commercial tenants who are unable to meet their rental obligations as a result of financial distress arising from the COVID-19 pandemic. This moratorium comes as part of the Federal Government’s rental relief package and is expected to be operational shortly.

What does this moratorium mean for me?

Although the laws around eviction of tenants vary from State to State, a landlord typically has a right to terminate a lease if the tenant fails to pay rent (subject to satisfying the appropriate notice requirements), after which the landlord can evict the tenant and repossess the property.

However, following the Federal Government’s announcement late on 29 March 2020, landlords will be precluded from enforcing their termination and eviction rights for a period of six months from when the law comes into effect.

This means that during this period, landlords will be unable to repossess a property occupied by a tenant who is in arrears with their rent as a result of financial difficulties they are experiencing due to COVID-19.

Importantly, tenants who are not in financial distress as a result of COVID-19 are still required to meet their rental commitments.

Call to action for landlords and tenants alike

As we wait for further details regarding the rental relief to be delivered, the Federal Government has emphasised the need for communication and cooperation between landlords, tenants and banks.

Acknowledging that there will be no one-size-fits-all solution, the Government is encouraging landlords and tenants to develop customised solutions tailored to the specific needs of the parties to give the parties the greatest chance of success post-pandemic.

For landlords, this will mean maintaining a tenant who can pay rent, and in the case of commercial tenants, will mean being able to continue to trade and avoiding insolvency, so the tenant’s business can resume once COVID-19 passes.

The Government has warned the public that parties who fail to cooperate and communicate with each other will be precluded from relief that they otherwise would have been entitled to.

Banks set to come to the table for landlords

In conjunction with the above, a number of major banks have announced an intention to expand their business support packages. Commercial landlords with loans of up to $10 million will now be eligible for repayment relief for a period of six months, provided that they undertake not to terminate leases or evict tenants unable to pay rent as a result of COVID related financial hardship.

Similarly, a number of banks have indicated that they will offer non-commercial customers the option to defer mortgage repayments for up to three to six months, which will assist landlords of residential properties.

It is therefore important that landlords liaise with their banks to ensure they are aware of relief that may be available to them.

Status in New South Wales

Pre-empting the Federal Government’s announcement, the New South Wales State Government passed the COVID-19 Legislation Amendment (Emergency Measures) Act 2020 last week, coming into force on 25 March 2020.

The Act amended a number of other legislation, including the Retail Leases Act 1994 (NSW) and the Residential Tenancies Act 2010 (NSW), by inserting additional powers for the Minister to make regulations which:

  1. prohibit a landlord or owner from recovering possession of premises from a tenant;
  2. prohibit a landlord or owner from terminating a residential tenancy agreement, occupancy agreement or site agreement;
  3. regulate or prevent the exercise or enforcement of another right of a landlord or owner; and
  4. exempt a tenant, resident or home owner from the operation of a provision of a relevant Act or any agreement relating to the premises.

These powers will enable the New South Wales Government to enforce the moratorium in accordance with the Federal Government’s announcement in an expedited manner. Regulations made under these new sections will expire 6 months after the day the regulations commence unless an earlier date is resolved by Parliament.

What should I do to navigate these changes?

In light of the Federal Government’s announcement, and the anticipated implementation of the moratorium by the States and Territories, we provide the following tips for both landlords and tenants to keep in mind when considering your rights and obligations during this period:

  1. In line with the Government’s call to action, where the coronavirus is impacting a tenant’s ability to meet their obligations, the landlord and the tenant may wish to enter discussions to put alternative arrangements in place to balance both parties’ interests and allow them to weather the storm (such as temporary rent reductions, deferred rent arrangements, or others).  Landlords will want to ensure they have some rent coming in from their properties, to enable them to meet their own financial and other obligations, and commercial tenants will want to make sure they manage their rental obligations to ensure those obligations do not prevent them from being able to continue to operate.  Legal advice will often assist the parties to consider which arrangements may be appropriate to balance these interests, which will of course depend on the specific circumstances.
  1. Whatever arrangements landlords and tenants agree upon, both parties must ensure that all such arrangements (whether interim or otherwise) which vary the terms of a lease are accurately documented – so there is no doubt regarding (for example) what terms have been agreed and how long they will apply for.  We recommend seeking legal advice to ensure these variations are properly documented, and to save you from the risk of costly disputes arising from handshake agreements down the track.
  1. Both tenants and landlords should also liaise with their banks to understand relief that may be available to them to ease financial pressure, such as options to defer repayments. Bank customers should be aware though that some banks have indicated that interest will continue to accrue throughout any repayment relief period.
  1. If you are experiencing financial distress, you may also wish to consider whether you are entitled to benefit from the Federal Government’s recent stimulus measures. You can read more about some of the measures being implemented to support SMEs in our other articles: Key points on the new Federal Government economic stimulus package for SMEs, and An SME’s guide to the Federal Government JobKeeper subsidy.

McCabes has extensive experience in advising both tenants and landlords as to their rights and obligations. If you have any questions or concerns regarding a lease or your right to access relief, please do not hesitate to contact McCabes anytime.

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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 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). 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
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
10 August, 2023