The Bulletin - Law Society of South Australia - June 2021

THE

BULLETIN THE LAW SOCIETY OF SA JOURNAL

IN THIS ISSUE

Concussion in sport Regulation in the sports industry Legal implications of sports data

SPORTS LAW

VOLUME 43 – ISSUE 5 – JUNE 2021

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This issue of The Law Society of South Australia: Bulletin is cited as (2020) 43 (5) LSB(SA). ISSN 1038-6777

CONTENTS ENVIRONMENT & THE LAW 6

10 12

16

20

The potential liability of sporting clubs and their health professionals for concussion injury – By David Guthrie, Sophie Pennington & Angus Rooney Regulating the sports industry

By Dylan Fogagnolo & Jason Roberts The ownership & use of athlete data analytics in sports

By Alexandra Douvartzidis The National Sports Tribunal one year on: provisions & procedures

By Martin Frayne SC Caster Semenya’s legal battles are about more than the right to compete

By David Robertson

Executive Members President: President-Elect: Vice President: Vice President: Treasurer: Immediate Past President: Council Member: Council Member:

R Sandford J Stewart-Rattray A Lazarevich V Gilliland F Bell T White M Mackie M Tilmouth

Metropolitan Council Members T Dibden M Tilmouth A Lazarevich M Mackie M Boyle E Shaw J Marsh C Charles R Piccolo M Jones Country Members S Minney (Northern and Western Region) P Ryan (Central Region) J Kyrimis (Southern Region) Junior Members N Rossi Ex Officio Members The Hon V Chapman, Prof V Waye, Prof M de Zwart, Prof T Leiman

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The ‘Harman’ obligation and private interests: considering practical issues when a liquidator assigns a claim to a litigation funder – By Madeleine McCarthy

Wellbeing & Resilience: Balancing work with other disputes

By Georgina Portus

28

From the Conduct Commissioner: Obligations to respond to complaints

By Greg May

30

Vale: Brian Withers AM

29

36

Dr Ulrich Hübbe LLD and the true origins of the Real Property Act

By Rita Bogna

Young Lawyers: Getting the most out of your performance review

By Daisy MacLeod

31

Tax Files: Land Tax – Teething issues under the new regime

By Briony Hutchens

32

Risk Watch: Going electric a sign of the times

By Mercedes Eyers-White

41

Family Law Case Notes

By Craig Nicol & Keleigh Robinson

42

Gazing in the Gazette

FEATURES & NEWS 20

38

A mathematical approach to settling disputes – By Bernard O’Brien

REGULAR COLUMNS 4

From the Editor

5

President’s Message

KEY LAW SOCIET Y CONTACTS Chief Executive Stephen Hodder stephen.hodder@lawsocietysa.asn.au Executive Officer Rosemary Pridmore rosemary.pridmore@lawsocietysa.asn.au Chief Operations Officer Dale Weetman dale.weetman@lawsocietysa.asn.au Member Services Manager Michelle King michelle.king@lawsocietysa.asn.au Director (Ethics and Practice) Rosalind Burke rosalind.burke@lawsocietysa.asn.au Acting Director (Law Claims) Grant Feary gfeary@lawguard.com.au Manager (LAF) Annie MacRae annie.macrae@lawsocietysa.asn.au Programme Manager (CPD) Natalie Mackay Natalie.Mackay@lawsocietysa.asn.au Programme Manager (GDLP) Desiree Holland Desiree.Holland@lawsocietysa.asn.au

THE BULLETIN Editor Michael Esposito bulletin@lawsocietysa.asn.au Editorial Committee A Bradshaw P Wilkinson S Errington D Sheldon J Arena D Weekley B Armstrong D Misell R Scarabotti The Law Society Bulletin is published monthly (except January) by: The Law Society of South Australia, Level 10-11, 178 North Tce, Adelaide Ph: (08) 8229 0200 Fax: (08) 8231 1929 Email: bulletin@lawsocietysa.asn.au All contributions letters and enquiries should be directed to The Editor, The Law Society Bulletin, GPO Box 2066, Adelaide 5001.

Views expressed in the Bulletin advertising material included are not necessarily endorsed by The Law Society of South Australia.

No responsibility is accepted by the Society, Editor, Publisher or Printer for accuracy of information or errors or omissions.

PUBLISHER/ADVERTISER Boylen GPO Box 1128 Adelaide 5001 Ph: (08) 8233 9433 Email: admin@boylen.com.au Studio Manager: Madelaine Raschella Layout: Henry Rivera Advertising Email: sales@boylen.com.au

FROM THE EDITOR

Playing fair the most important element of sport MICHAEL ESPOSITO, EDITOR

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djudicating can be a thankless task.

Whether you’re a junior soccer referee or a Supreme Court judge, your decisions only tend to be focused on when they fail to meet expectations. Both such examples require the interpretation of a complex set of rules and involve two competing sides.

You don’t do the job to please everyone, and the feedback you receive is usually from the most displeased (however one might argue that it is reasonable for judges to be exposed to a high level of scrutiny but the referee of the local under 7s soccer match should perhaps not be subject to such vitriol!).

Sport seems to inflame passions to an outsized degree. Any ardent supporter knows how it feels to have their whole weekend mood turn on the result of their team’s game. I am writing this article the day after an umpire’s controversial decision not to call a deliberate out of bounds was potentially the difference between utter devastation and elation for Adelaide Crows’ fans, whose team held on for a one-point victory over Melbourne.

We also see the extreme level of interest in sport in the way the AFL Tribunal is scrutinised. Just as the language of sports games often echo the vernacular of war, the reporting of AFL tribunal hearings is often done with such grave solemnity that it can resemble serious criminal trials.

It is fair to say that the Tribunal has long grappled with perceptions of inconsistency.

As legal practitioners know, while every decision should be based on the individual facts, there needs to be a level of reliability with how laws are interpreted and applied.

We have seen the Tribunal run into particular problems with the introduction of rules designed to protect players from severe head injuries. The bewildering differences in penalties handed down for “sling tackles” betrayed an inconsistent approach to how they were assessed. For a time, two equally dangerous tackles would produce starkly different outcomes, because the victim of one of the tackles happened to be lucky enough to escape serious injury.

Pleasingly, the AFL recognised this and amended the rules half way through last

year to ensure the dangerous nature of the tackle was taken into account, regardless of the consequences.

Nevertheless, controversy erupted earlier this year when ALFW Crows player Ebony Marinoff was initially suspended for three weeks for a bump that resulted in her opponent Brid Stack suffering a fractured vertebra. Marinoff, represented by Sam Abbott QC, appealed the decision, and ultimately succeeded, arguing successfully that Marinoff did demonstrate a duty of care, could not have realistically avoided the collision, and that the severity of the injury should not have a bearing on the grading of the conduct. Injuries are part of sport, and there needs to be a clear difference between deliberately or recklessly dangerous conduct, and honest competitiveness.

Sport is an intense microcosm of life.

It generates passion, fosters belonging and identity, builds resilience and produces important role models. It is vital that the governance of sport prioritises integrity, fairness and a level playing field under the law. B

EDITOR’S NOTE – CLARIFICATION ON EQUAL OPPORTUNITY COMMISSION’S RECOMMENDATIONS WITH REGARDS TO THE LEGAL PROFESSION CONDUCT COMMISSIONER’S ROLE

T

he May 2021 Bulletin contained an article about the report of the Equal Opportunity Commission (EOC) on its review into harassment in the legal profession.

That article said that the EOC’s report recommended the following changes to the office of the Legal Profession Conduct Commissioner (LPCC) to “address the lack of engagement with existing complaint mechanisms”: • Expanding the current complaints mechanism within the LPCC to include two full-time investigative solicitors • Providing for a dedicated enquiries

4 THE BULLETIN June 2021

officer within the LPCC, to be the first port of call for victims seeking information and support, and to conciliate complaints made to the LPCC • Provide LPCC with powers to conduct compliance audits and issue practice management directions The LPCC considers that the first two dot points do not accurately reflect the EOC’s recommendations about his office.

In relation to the first dot point, the LPCC says that the relevant recommendation (Recommendation 8) that referred to two full-time investigative solicitors related to his newly introduced

confidential enquiry line, not to his complaints mechanism generally.

In relation to the second dot point, the LPCC says that this recommendation related to the Equal Opportunity Commission, not the LPCC. Recommendation 11 of the EOC report was that the Attorney-General “creates and funds an additional ongoing position within the EOC for a Designated Enquiries Officer to take enquiries and conciliate matters relating to sexual harassment”. The LPCC notes that he would not generally conciliate complaints of that nature. B

PRESIDENT’S MESSAGE

Have your say on guiding the future of the profession REBECCA SANDFORD, PRESIDENT

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s any sports fan would be well aware, strategy is a key element of success, and having a strong knowledge of the unique positioning and experience of each important element of the team is what grants a club or player a competitive edge.

But what does this strategic focus actually look like in ‘real life’? If we take the AFL as an example, it’s apparent that each club takes a different approach to strategy development. Some AFL clubs will opt to release parts of their strategic plans to the public - for example, Hawthorn have (some might say ambitiously) released their plans to achieve winning premierships up until 2050. Teams like the Adelaide Crows like to keep the lid on their strategic documents, whereas Port Adelaide has released part of its four-year plan (titled ‘Chasing Greatness’) to the public noting, amongst other things, goals to obtain commercial growth within the club. The Western Bulldogs kept their strategic planning document (which spanned 2019 to 2022) under wraps, although it’s fairly apparent that the Doggies are gunning for a 2021 premiership. Whether they opt to publish their strategies publicly or otherwise, I think we can probably pretty safely assume that all clubs had the same strategic goal of keeping Richmond out of the top 8 in 2021.

In business, as in sport, similar concepts apply. To be effective, an organisation needs to have a clear vision for, and understanding of, its purpose and future direction, and an important function of the governing body of any organisation is to anticipate and explore the business’ desired future direction, and develop strategic plans to guide staff and members to achieve identified objectives. Engagement with members and relevant stakeholders about priorities and expectations in the course of developing

those plans means that everyone involved can have greater clarity about what is driving future change in the organisation.

On that note, and as many would know, one of my priorities for my Presidency this year is to develop the Society’s next strategic plan, which is due to commence at the start of 2022.

The approach to the new Strategic Plan, proposed in light of significant discussion by the Society’s Executive earlier this year and as approved by the Council at its meeting in May, involves moving to a new, two-tiered structure, comprising an overarching Strategic Objectives document (covering the timeframe 2022-2025) which will then be supplemented by annual Strategic Plans.

Consultation on the Strategic Plan therefore involves two phases - firstly, consideration of the higher-level Strategic Objectives which will guide the next few years, and then secondly, consideration of the individual annual Strategic Plan, which will contain the detail of strategies to be implemented and pursued by the Society in line with those Objectives. Each individual strategy will need to come within at least one of the Strategic Objectives - this approach means we can more effectively allocate resources, be responsive to rapidly changing environments and the needs of the profession without straying from the organisation’s core mission, and be confident that steps taken by the Society align with our overarching intentions and objectives.

Phase 1 of the consultation process has now started, and involves seeking feedback from Members generally, via the Bulletin and InBrief. The Strategic Objectives (which can be viewed on pages 34-35 of the Bulletin) will also be considered by each of the Society’s Committees, raised with Members at my

upcoming meetings in regional areas and at Small Practice gatherings, and input will also be sought from managing partners of large and medium sized firms.

I am keen to have engagement from as many Members as possible into the development and finalisation of the Strategic Objectives (and, in turn, the 2022 Strategic Plan), so we can ensure the actions and resources of the Society over the next few years are appropriately concentrated towards the outcomes that you, our Members, want to see us achieve. It’s very important that this consultation process be as broad as possible to encourage diverse viewpoints and contribution. I strongly encourage you to use this opportunity to participate in the future direction of the Society and have your say on the matters you believe we should be prioritising.

Comments and feedback on the Strategic Objectives is requested from Members by no later than 31 July 2021.

Once the consultation process in relation to the Strategic Objectives is complete, phase 2 will be to consider the specific strategies for inclusion in the 2022 Strategic Plan.

The initial development of those strategies (having regard to the current consultation draft of the Strategic Objectives) is already underway, but when reviewing the Strategic Objectives document I encourage you to also give thought to specific strategies or ideas for actions which could come within those objectives and which you would like to see us focus on - ready to contribute to phase 2 of the consultation process later in the year.

Looking to the future, it will be interesting to see which clubs’ strategic objectives pay off in 2021, and if the clubs that have boldly publicised their future premiership targets, like Richmond successfully did, kick their strategic goals. B June 2021 THE BULLETIN

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SPORTS LAW

The potential liability of sporting clubs and their health professionals for concussion injury DAVID GUTHRIE (PARTNER), SOPHIE PENNINGTON (PARTNER) & ANGUS ROONEY (LAW GRADUATE), HWL EBSWORTH

A

s winter sport returns in earnest after the restrictions of the pandemic last year, there is a continued focus on concussion injury in sport and particularly in the context of its possible relationship with chronic traumatic encephalopathy (CTE). One athlete who has faced the consequences of repeated head knocks is former St Kilda Football Club player Paddy McCartin, who recently joined the Swans.

The young player parted ways with St Kilda following a string of concussions but has nonetheless followed a rehabilitation program and has stated ‘the doctors have told me I don’t have any greater risk than any other player on an AFL list when I go out and play footy [in terms of] getting concussion’.1 While his enthusiasm is admirable, his comment might pique the interest of those concerned with the potential liabilities around letting players with such histories return to regular play.2

THE MEDICINE - WHAT ARE THE RISKS OF REPEATED CONCUSSIONS? The adverse consequences of primary head injuries in sport have long been established. A recent increase in research into the repercussions of repetitive head impacts and multiple concussions in athletes3 has created further concern.

Contact sports remain ever popular but there is apprehension as to the public health implications of poor concussion understanding and management. Although there remains much to be learned about the risks associated with cumulative damage to the brain, the research is clear that neurological damage will accrue with consistent trauma.4 Regardless of the severity of the concussions, a link has been established between repeat injury and an increased risk of neurodegenerative

6 THE BULLETIN June 2021

conditions such as Parkinson’s disease, Alzheimer’s and CTE.5 CTE, a disease which can only be diagnosed postmortem, is also only known to be caused by repetitive blows to the head sustained over a period of time.6 The disease may manifest through a myriad of conditions including a decline of memory and cognition, depression, suicidal behaviour, poor impulse control and aggression.7 The most at risk group of contracting the disease are, unsurprisingly, athletes who may be exposed to hundreds if not thousands of strikes to the head throughout their career.

Although CTE is traditionally associated with ‘punch-drunk’ boxers, it has recently been linked to members of the American National Football League (NFL), and the first confirmed case of CTE in an Australian Rules footballer has now come to light.8 At 64, Graham ‘Polly’ Farmer was diagnosed with Alzheimer’s, with elements of depression or mood swings, explosivity, loss of attention and concentration, short-term memory loss and headaches. Following his death 20 years later, examination of Farmer’s brain confirmed that he had suffered from CTE. Now, after the recent diagnoses of two former NRL players,9 a condition that was previously viewed as a removed issue has become undeniably present within the Australian sporting profession.

THE LAW - THE DUTY OF CARE OF SPORTING CLUBS AND THEIR HEALTH PROFESSIONALS The cost of injury within sport is often gauged by lost championships or trade value without any thought to potential legal ramifications. While athletes rarely bring claims for damages resulting from

their sporting pursuits, the High Court has acknowledged that the law of negligence continues to apply, irrespective of the dangerous nature of many sports.10 Establishing a duty of care is the foundation of any action in negligence.

A positive duty of care could manifest itself in several ways from an athlete’s misfortune. A ‘sports supervisor’ such as a trainer, manager or medical advisor11 may be held liable for their conduct or treatment. An organisation or representative body exercising significant control over a game12 may be held liable for poor oversight or introduction of negligent policies. Clubs may also be held vicariously liable for the acts or omissions of an employee or player should a wrongful or reckless act be encouraged, or otherwise within the scope of their employment.13 Health professionals working for sporting clubs may also be potentially liable. For example, the law imposes a duty on medical practitioners to exercise reasonable care and skill in the provision of professional advice and treatment. This duty is comprehensive and covers all ways in which doctors may be called upon to apply their expertise and judgement in the management of their patients.14 The duty encompasses liability stemming directly from acts or omissions of a practitioner, including any failure to warn.15 It is not hard to posit that the scope of the duty encompasses a requirement to take reasonable care to advise a patient, who has suffered an injury, of risks and behaviours which may a contribute in a catastrophic manner to a worsening of that injury.

Practitioners are required at law to undertake tasks to the standard of the ordinary skilled practitioner exercising or professing to have that special skill.16 Negligence therefore cannot be established

SPORTS LAW

simply by virtue of a practitioner failing to attain the highest professional standards of their peers.17 However, wilful ignorance of substantially informed opinions in a relevant field will not provide an excuse for employing out of date practices.18 The Court will examine the state of medical knowledge at the time of any alleged failure and consider whether accepted standards have been met - practitioners are only expected to possess the level of knowledge of a reasonably competent practitioner in his or her field. So, as the knowledge of the risks of repeated head strikes increases, so too do the risks for health practitioners who fail to warn players of those risks, or who let players with relevant vulnerabilities continue to play.

Although an athlete may establish fault on the part of responsible parties, they will not always be successful in obtaining damages. Parties owing a duty of care to those injured during the course of sporting events may successfully defend an action citing the inherent risks associated with sports. It is established that sport is a distinct area of negligence, and that participants generally accept the risks that are present in participating in the game.19 To further diminish liability, many sporting contracts contain waivers or exclusion clauses for actions commenced as a result of injuries suffered during competition.

There are some circumstances where the courts give effect to such a clause, should there be a clear expression of the intention to exclude liability for negligence,20 but more often than not such exclusions will be void where there is a statutory liability to exercise reasonable care.

Agar v Hyde stands as an important ruling on sports law and the tort of negligence in Australia. The High Court heard two matters concerning liability

for spinal cord injuries suffered while playing rugby union. While a number of arguments were made, Hyde brought an action against the International Rugby Football Board (IRFB) and its domestic representatives, alleging that the negligent administration of game rules made them liable for his injury. The majority judgment found against this argument, regarding the proposition that an international body could owe a duty of care to players around the world to be ‘so unreal as to be absurd’.21 The High Court found that there was a significant absence of control by the IRFB over the circumstances that resulted in Hyde’s injury to allow for a duty of care to be imposed.22 Kirby J in a later decision pointed out that it was a ‘serious mistake’23 to consider sporting bodies as operating in a ‘law-free zone’, perhaps leaving room for future challenge to the finding in Agar.

THE AMERICAN EXPERIENCE AND ITS RELEVANCE FOR AUSTRALIAN SPORT While it may be difficult to establish negligence from a technical perspective, the commercial reality of legal proceedings - in particular potential class actions - should not be discounted. Concussion settlements with America’s National Football League have now eclipsed $600 million and are projected to continue rising over the coming decade. A group proceeding, bought on behalf of all players who were to suffer from degenerative conditions as a result of traumatic brain injury, levelled heavy criticism at the alleged cover up of the NFL and its committees of the risk associated with participation in the sport.24 The claimants argued that in the face of reliable evidence, the NFL concealed the dangers associated with the game and allowed players to return

to the field in disregard of their health.

While the settlement was made without acknowledgment of any wrongdoing, the allegations made against the league, franchises and medical officials did not appear to be without merit. Although there are stark differences between the United States and Australian jurisdictions, the NFL’s failure to ensure that its concussion protocols were adequate provides serious incentive for a proactive approach in Australian sports.

CURRENT CONCUSSION PROTOCOLS IN AUSTRALIAN SPORT The AFL has developed an internal policy regarding concussion symptoms, which includes mandatory non-play periods and sanctions for clubs flouting these restrictions.25 The encouraged use of concussion assessment tools allows for medical officers to assess players following a collision and to use discretion in clearing them for continued play. These tests are endorsed by the Australian Medical Association, which also promotes a conservative approach to management: ‘if in doubt, sit them out’.26 The AFL continues to invest in education surrounding the issue of concussion although experts acknowledge that not enough is known about the condition. The NRL guidelines do not differ greatly from their AFL counterparts, with an understanding that the welfare of the player should be the primary focus in the management of concussion.27 It is further noted that complications may occur should a player continue to play without fully recovering from a concussion.28 Both the AFL and NRL incorporate rigid guidelines on immediate return to play following head injury, with any suspected June 2021 THE BULLETIN

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SPORTS LAW

concussion resulting in immediate removal from the game.29 Following an incident, appropriate medical clearance is required prior to a return to the sport with conservative and gradual progression being strongly advised.30 However, despite acknowledging the prevalence of concussion within football, references to the impacts of repeated trauma and long-term effects on participants, and appropriate protocols, are noticeably absent from the relevant publications.

POTENTIAL LIABILITY - WHEN WILL CLUBS AND HEALTH PROFESSIONALS BE FOUND TO BE NEGLIGENT Consideration of the above factors perhaps does not provide a conclusive assessment of circumstances that may lead to clubs and health professionals being found to be negligent for their management of concussed players. It is evident that situations may arise in which the actions or omissions of those responsible for player management will give rise to an arguable claim for damages.

The law does not support an exemption from a duty of care over individuals engaged in sporting pursuits. Moreover, professional sporting organisations continue to widen the control they exercise over players, in turn creating a dependence of sportspersons on the organisations for their own medical wellbeing. It does not seem outside the realm of possibility that players would place a strong reliance on the information given by club medical practitioners, understanding that their health would be the primary concern. On one view, the guidelines enforced by the AFL and NRL seem to be at odds with the growing body of research on repetitive head impacts and multiple concussions in athletes. Whether the parameters defined by these guidelines fall below the accepted standard of care for athletes is yet to be seen. As medical literature becomes more voluminous and certain, it is possible that organisations, clubs and their medical professionals may suffer from the divide between guidelines and best practice.

Although it is improbable that we will see successful action against those who had cleared the likes of ‘Polly’ Farmer to play

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in the past, current clubs and their doctors may not be granted the same privilege.

Those involved in player management should seek to take a proactive approach, rather than becoming victim of their own complacency, as happened with the NFL.

THE ROAD AHEAD - RISKS FOR PADDY, CLUBS AND DOCTORS While the decision in Agar may have allowed governing bodies to breathe a sigh of relief, administrators of the game should continue to be wary. For parties with a direct hand in the administration game, a duty of care will likely be found to exist.31 Medical professionals applying the guidelines regarding concussion may see claims brought in respect of clearances to play given in circumstances where players ought to have been ruled out. The AFL is no small business, with the current broadcast rights deal alone standing in excess of $2.5 billion and average salaries for the league of more than $350,000,32 though the COVID crisis has affected these figures. As the media reports the potential for a class action reminiscent of the NFL, the possible liability for such a claim is worthy of consideration. For Paddy McCartin, his return to the field clearly needs to be balanced against the risks we now know to be present, not to mention the potential liability of any party should a further injury arise.

This is an updated version of an article that was originally was published on hwlebsworth.com. au on 27 April 2020. B

Endnotes 1 ‘Paddy McCartin eyeing an AFL return’, The Age (online at 13 April 2020).https://www.theage. com.au/sport/afl/paddy-mccartin-eyeing-an-aflreturn-20200413-p54jb9.html.

2 HWL Ebsworth is not advising McCartin, any AFL club or the AFL itself and has no information on his medical or contractual status.

This article is not to be taken as legal advice.

3 Carol Mason et al, Sports-Related Concussions in Youth: Improving the Science, Changing the Culture (National Academic Press, 2014).

4 The University of Queensland Brain Institute, ‘How long does a concussion last: long-term effects’ (online at 16 August 2018) https:// qbi.uq.edu.au/concussion/how-long-doesconcussion-last-long-term-effects.

5 Ibid.

6 Concussion Legacy Foundation, ‘CTE Resources’ (online at 11 July 2017).https:// concussionfoundation.org/CTE-resources/whatis-CTE. 7 Above n 3.

8 ‘Graham ‘Polly’ Farmer is the first Australian Rules player diagnosed with Chronic Traumatic Encephalopathy’, ABC News (online at 27 February 2020) <https://www.abc.net.au/ news/2020-02-27/australian-rules-great-grahampolly-farmer-diagnosed-with-cte/12005508>.

9 Glen Lauder, ‘Rugby League players found to have deadly brain disease linked to concussions’ ABC News (online 27 June 2019) https://www.abc. net.au/news/2019-06-27/rugby-league-playersfound-to-have-deadly-brain-disease/11254032.

10 Woods v Multi-Sport Holdings Pty Ltd [2002] HCA 9.

11 Natasha Schot, ‘Negligent liability in sport’ (2005) 2 Sports Law eJournal 1.

12 Agar v Hyde (2000) 201 CLR 552.

13 Budgen v Rodgers (1993) Aust Torts Reports 81-246.

14 F v R (1983) 33 SASR 189.

15 Rogers v Whitaker (1992) 175 CLR 479 16 Bolam v Friern Hospital Management Committee [1957] 2 All ER 118.

17 Ibid.

18 Ibid.

19 Rootes v Shelton (1967) 116 CLR 383.

20 Fallas v Mourlas (2006) 65 NSWLR 418.

21 Agar v Hyde (2000) 201 CLR 552 at 683 per Gaudron, McHugh, Gummow and Hayne JJ; 700 per Callinan J. 22 Ibid.

23 Woods v Multi-Sport Holdings Pty Ltd (2002) 186 ALR 145 at [101].

24 Jason Luckasevic, ‘The NFL Concussion Lawsuit from the Eyes of the Pittsburgh Lawyer who Originated the Case’ (online at 3 April 2017) https://www.jurist.org/commentary/2017/04/ the-nfl-concussion-lawsuit-from-the-eyes-of-thepittsburgh-lawyer-who-originated-the-case/.

25 Sam McClure, ‘AFL concussion crackdown: Protocol changes to sideline more players’ (online at 18 February 2020) https://www.theage.com. au/sport/afl/afl-concussion-crackdown-protocolchanges-to-sideline-more-players-20200218p5420x.html.

26 Dr Lisa Elkington, Dr Silvia Manzanero and Dr David Hughes, ‘Concussion in Sport Australia: Position Statement, February 2020.

27 Australian Rugby League Commission, ‘Guidelines for the Management of Concussion in Rugby League’ 26 February 2019.

28 Ibid.

29 Ibid; AFL Concussion working group scientific committee, ‘The Management of Concussion in Australian Football, June 2017.

30 Ibid.

31 Hayden Opie, ‘The sport administrator’s charter: Agar v Hyde’, (2001) 9 Torts Law Journal 147.

32 Wendy Carlisle, ‘The AFL’s concussion problem’ (online at September 2017) https:// www.themonthly.com.au/issue/2018/ september/1535724000/wendy-carlisle/afl-sconcussion-problem#mtr.

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FEATURE

Regulating the Sports Industry DYLAN FOGAGNOLO AND JASON ROBERTS, PUBLIC SECTOR AND IN-HOUSE LAWYERS’ COMMITTEE

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any industries throughout Australia and internationally are subject to regulation by various bodies, for example, well known national bodies include the Australian Competition and Consumer Commission and the Australian Securities and Investments Commission. The sports industry is no different, being subject to regulation from a variety of entities, both governmental and non-governmental. This article will provide a brief outline of some of the key entities that are involved in the regulation of sport, both internationally and in Australia, and the regulatory activities these entities perform.

INTERNATIONAL FEDERATIONS Internationally, many sports are regulated by International Federations (IFs), which are private, non-governmental bodies that oversee a sport, with varying degrees of control.1 Common functions of IFs include establishing and administering global rules, awarding championships, negotiating with sponsors and broadcasters and combating corruption and antidoping.2 While IFs oversee a sport at an international level, they often have many member organisations that oversee the sport at a national level, with the IF acting as an umbrella organisation for its national members.3 It is not uncommon for IFs and their national members, as part of regulating their respective sport, to impose penalties on players for misconduct. The legal basis for all internally imposed sporting penalties, such as those imposed by IFs and their national members, is a contractual one,4 arising out of a contract between the IF (or a member of the IF)

10 THE BULLETIN June 2021

and the players of the relevant sport. The basis for imposing the penalties may arise based on either the terms of the contract itself or a clause in the contract binding a party to a code of behaviour or conduct.5 This position can be contrasted with that of government regulators, such as those discussed further below, who derive many of their regulatory powers from legislation.

The International Cricket Council (ICC), founded in 1909, is an example of a prominent IF and is responsible for governing and regulating cricket at the international level.6 Cricket Australia (CA) is one of many national members of the ICC.7 Both the ICC and the CA have various codes which they enforce, including a code of conduct8 and codes dealing with anti-discrimination,9 anticorruption10 and anti-doping11 (with the anti-doping codes also being compliant with the requirements of the World AntiDoping Agency).12 The ICC and CA recently both performed their regulatory functions when responding to the ball tampering scandal that took place in March, 2018, which involved Australian cricketers utilising sandpaper to alter the condition of the ball in order to favour their bowlers.13 Cricketers David Warner and Cameron Bancroft, who were directly involved, and the captain of the team, Steve Smith, received sanctions from both the ICC and CA. The ICC imposed a one match ban on Smith and Warner and fined them their match fees, and fined Bancroft 75% of his match fee.14 The sanctions imposed by CA were more severe, namely, a twelve month ban for both Warner and Smith and a 9 month ban for Bancroft.15

SPORT INTEGRITY AUSTRALIA Governmental initiatives and bodies form another significant aspect of sports regulation in Australia. For example, in August, 2017, the then Minister for Sport, the Hon Greg Hunt MP, announced a review of Australia’s sports integrity arrangements to be led by the Hon. James Wood AO QC. The Wood Report was delivered in March, 2018 and recommended a range of reforms aimed at enhancing Australia’s capability to address threats to sports integrity.

In light of these recommendations, the Federal government passed the Sports Integrity Act 2020 (Cth) (SIA Act), establishing Sport Integrity Australia (SIA) as a single body to address issues relating to sport at a national level. Anti-doping is one of SIA’s primary regulatory areas.

Section 9 of the SIA Act together with Schedule 1 of the Sport Integrity Australia Regulations 2020 (Cth) establish a National Anti-Doping Scheme.16 Under this scheme various international conventions to which Australia is a signatory17 are implemented into Australian law in the form of antidoping rules. SIA then has the ability to investigate possible violations of these rules.18 If, after an assessment of the evidence obtained during an investigation, SIA finds a violation, it can present that violation to the Court of Arbitration for Sport, or a sporting tribunal such as the National Sports Tribunal or the Independent Sports Tribunal.19 Importantly, SIA’s role is broader than the regulation of doping in Australian sport. As set out in section 21(1) of the SIA Act, SIA’s functions extend to numerous other matters relating to sports

FEATURE

integrity.20 For example, section 21(1)(f) stipulates the functions of SIA to include “to work with domestic and overseas regulators, sporting organisations and operators of betting services in relation to matters connected with match-fixing in sport or fraud in sports-betting”.

WORK HEALTH AND SAFETY REGULATORS National work health and safety regulators also play a role in regulating the Australian sports industry, given that a number of participants in major sporting events owe a variety of duties pursuant to the work health and safety laws. For example, section 19(1) and 19(2) of the Work Health and Safety Act 2012 (SA) state: 1. A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of— b. workers engaged, or caused to be engaged by the person; and c. workers whose activities in carrying out work are influenced or directed by the person, while the workers are at work in the business or undertaking.

2. A person conducting a business or undertaking must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.

In the context of a major sporting event, a ‘person conducting a business or undertaking’ would likely include the entity that is directly charged with delivering the event as well as the variety of contractors involved, such as those contracted to provide security, catering and cleaning

services.21 Accordingly, these entities (and their employees)22 would all likely have work health and safety obligations that need to be complied with in the course of the sporting event.

Work health and safety regulators have also demonstrated a willingness to scrutinise the work environment provided to sports professionals. A wellknown example of this occurring was the investigation by WorkSafe Victoria of the Essendon Football Club and its supplement program that was in place between December, 2011 and February, 2013. Following these investigations, the Essendon Football Club pleaded guilty to breaching the obligation under section 21 of the Occupational Health and Safety Act 2004 (Vic) to, so far as is reasonably practicable, provide and maintain a working environment that is safe and without risks to health.23 As a result, the club was required to pay a penalty totalling $200,000.24

AUSTRALIAN SPORTS COMMISSION The Australian Sports Commission (ASC), whilst not strictly a regulatory body, is a statutory authority that plays a key role in the Australian sports industry.

The ASC, which is a body corporate,25 was established by the Australian Sports Commission Act 1989 (Cth) (ASC Act) and, in August, 2018, was rebranded as Sport Australia.26 Pursuant to the ASC Act, the objects of the ASC include providing leadership in the development of sport in Australia, encouraging participation in sport and providing resources, services and facilities to enable Australians to pursue and achieve excellence in sport.27

In order to achieve its objects, the ASC is prescribed numerous functions under the ASC Act, including advising the relevant Minister in relation to the development of sport, co-ordinating activities in Australia for the development of sport and developing programs that promote access to sport.28 The ASC must, for the performance of certain functions, operate under the name of the Australian Institute of Sport.29 Such functions include developing and implementing programs for the recognition and development of persons who excel or have the potential to excel in sport, as well as engaging in research related to sports sciences and medicine.30

OBSERVATIONS AND CONCLUSION This article demonstrates the complexity of regulating the sporting industry. Many sports exist at a state, national and international level, and by consequence are subject to multi-level regulation by bodies both governmental and non-governmental. Additionally, nonregulatory bodies and stakeholders can also influence the sporting landscape which further adds to the challenges associated with regulating the industry. The regulation of Australian sport is only likely to become more complex with time: advancements in technology and the growth of the industry may give rise to new regulatory questions and challenges. As demonstrated by the formation of SIA and the integration of International Conventions, in order to manage this complexity, we are likely to continue to see attempts in Australia to both unify this regulatory space where possible, and ensure cooperation with key stakeholders where appropriate. B Endnotes to page 15

June 2021 THE BULLETIN

11

FEATURE

THE OWNERSHIP AND USE OF ATHLETE DATA ANALYTICS IN SPORTS ALEXANDRA DOUVARTZIDIS, LEGAL TECHNOLOGY COMMITTEE (SA), HWL EBSWORTH LAWYERS

I

f you’re like me, you probably spend most of your weekends talking about Travis Boak and his impressive ability to carve up week in-week out. I also have had a fairly (un)successful career in division [redacted] in the Adelaide Footy League and I’ve been known to sacrifice many nights of sleep to watch my beloved Manchester United. Either way, 95%1 of my weekend is made up of talking about or watching some form of sport, which makes me (arguably) qualified to write an article on sports (more specifically, on the use of biometric data in sport).

Did you know, if we were to combine the running efforts of all players across the regular AFL season in 2019, the players would have travelled a combined total of 111,628 kilometres?2 That’s approximately 111,627 kilometres more than I ran myself in 2020 (impressive feat I know). But how did I know this interesting little fact?

Over the last decade we have seen Australian sports, such as AFL, NRL and Cricket, collect and use athlete data through wearable technology devices. Those of us who are AFL mad can get access to some of this data via the Telstra Tracker on the AFL App, which provides statistics on player speed, intensity and ground coverage during games in real time.3 It’s not just Australian sports that are interested in the collection and use of biometric data. The NFL in the US monitor players’ off-field recovery through the use of WHOOP armbands, which contain sensors that measure a range of data relevant to assessing an individual’s strain, recovery and sleep performance.4 In 2018, Formula 1 racing also introduced a new biometric race glove which is now used to monitor a driver’s heart rate as

12 THE BULLETIN June 2021

well as blood oxygen levels. The glove contains a 3mm sensor in the thumb which relays the driver’s health information to medical personnel providing support to injured drivers.5 Alpinestars (a MotoGP apparel brand) have also fitted a number of heat and physical sensors to collect data to determine what the riders were experiencing.6 Even the UFC is using wearable technology to identify “physiologically limiting factors” that might hinder mixed martial arts athletes from reaching optimal levels of performance.7 Overall, the analysis of biometric data supposedly enables sporting organisations and clubs to develop better training and rehabilitation programs for athletes to both reduce the risk of injury and enhance post-injury (including post-surgery) rehabilitation.

But the collection of biometric and positional data in sport poses some interesting questions, such as who owns the data and how can that data be used?

Can athletes use the data to their own advantage both on and off field? What are privacy law implications?

WHAT IS BIOMETRIC DATA? As a starting point, it is probably important to define what ‘biometric’ data actually is.

Biometric data refers to any kind of biological information which can be obtained from an individual player. These metrics could include everything from pulse rate and blood glucose, to oxygen levels, sweat rate and sleep rhythms. Some trackers used by athletes also collect positional data, which includes metrics such as position, acceleration, lateral motion, speed, and jump height.

WHO OWNS THE DATA BEING COLLECTED AND ‘USED’?

If we consider the ownership of data from an AFL perspective, there are numerous stakeholders potentially involved. There are, amongst others, the AFL itself, the 18 AFL clubs, the AFL Players Association representing the interests of the individual players, and the data collection partner who collated the data from the trackers. So, who owns the data being collected from the athletes?

Many might assume that the data would be owned by the individual athlete, or the AFL - but what about no one at all?

In order for something to be owned in law, we need to be able to categorise it as ‘property’.

When talking about ‘records’ and data, there is a distinction between the idea that ‘property’ exists in the physical item holding those records (for example, a system which collates and stores data collected from the athletes) versus the concept of ‘property’ (if any) in the data itself.

For the purposes of this article, we are interested in the concept of ‘property’ and therefore ‘ownership’ of the data itself. It is important to keep in mind that ‘ownership’ is distinct from ‘use’ - so although there may be the existence of rights which impact how data is ‘used’, this doesn’t necessarily determine ownership.

The concept of ownership of biometric data in Australia is not straightforward.

Superficially, no one actually owns biometric data. In effect, there can be no express ‘proprietary right’ or IP, in biometric data itself. In order for a proprietary interest to exist under copyright in Australia, it would need to be demonstrated that a human author has taken the data, and created an

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FEATURE

original work in a material form (i.e. the data put in writing). It must also be connected in some way to Australia, and must also fall into a category of work protected by the Copyright Act (i.e. a literary work).

For instance, the owner of a AppleWatch does not “own” the heart rate data relayed to the user. In its ‘bare’ or raw form, the data is unlikely to be a literary work, as it often lacks a human author and therefore is unlikely to attract IP protection.

However, don’t be fooled into thinking a person could rely on creating something like a database as a way of establishing a sufficient basis for asserting ownership of data under copyright laws in Australia. No specific law exists in Australia to protect databases.8 In the case of IceTV v Nine Network9, (which overturned the Telstra v Desktop Marketing Systems10 - a case which originally established a database right), it was affirmed that copyright does not protect mere facts or information. The commercial value of facts or information is irrelevant, as copyright will protect only the particular form of expression of facts or information. In effect, it was held that in order to determine if copyright exists, particular consideration will need to be given to the originality of the work in question.

On the other hand, an example of an instance where a proprietary interest may arise in respect of biometric data is if the data is used in research. For example, if it could be demonstrated that a human author has used the data to create an original work (such as a published study looking at the heart rates of players during matches), it may be considered a literary work for the purposes of the Copyright Act and attract IP ownership - and protection.

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PROTECTIONS UNDER OTHER AREAS OF LAW Of course, there are other rights that impact how data can be used and could offer protections in certain situations.

Arguably, quasi-proprietary rights could exist in confidential information. For example, parties can enter into agreements which create express or implied obligations. However, the information must be actually confidential.

Additionally, in the absence of property rights, parties could enter into contractual arrangements which impose limitations on how the data is collected or used. We know for example that the collective bargaining agreement (CBA) between the AFL and players requires the players to wear GPS units in matches if requested by their club.11 Section 45 of the CBA sets out how the data can be used, and in effect, leaves control of the data in the hands of the AFL.12 Interestingly, the CBA has left open the potential for further commercialisation of the data.

WHAT ABOUT PROTECTIONS IN PRIVACY LAW? Biometric data is considered personal and sensitive information for the purposes of the Privacy Act, which governs the ways in which certain private businesses and Commonwealth agencies can use personal information. For example, the AFL, which has an annual turnover of over $3 million dollars, is an entity which is required to comply with the Privacy Act. Under the Privacy Act, the collection or solicitation of biometric information from an individual without their consent by such an entity or agency would be inconsistent with the Australian Privacy Principles (APPs).13 Even if consent is given, APP 3 requires

that collection of biometric information to be reasonably necessary for one or more of the agency’s functions or activities.14 Under the Privacy Act, it may be possible to limit the way in which biometric data can be used or disclosed.

However, it is important to note that privacy laws in Australia do not create any ownership rights for individuals - it simply gives them some control over the way that biometric data is used. For example, it may allow individuals to request a copy of their own information,15 or provide a right for the individual to refuse the collection of biometric data if it can be demonstrated that it is not reasonably necessary in order for the agency to conduct its functions or activities.

There is also an employee record exemption for employees under the Privacy Act. The exemption allows an employer to collect personal information from an employee provided that information relates to the employment of that individual (known as an ‘employee record’). However, the employee record exemption doesn’t necessarily allow for the collection and use of biometric data.

Importantly, in Jeremy Lee v Superior Wood Pty Ltd, the Full Bench of the Fair Work Commission found that the employee records exemption in the Privacy Act did not apply to the collection of biometric data such as fingerprints or other sensitive information. So, in the context of team sports athletes having their sensitive information collected and used by the entity that employs them, employers will need to be mindful of whether they require the consent of the athlete in circumstances where the collection of the information isn’t required or authorised under law.

FEATURE

WHERE TO NEXT? Ultimately, there are clear difficulties in establishing any proprietary rights in respect of biometric data and it is unlikely that the IP laws in Australia will change any time soon in such a way that something like biometric data will attract proprietary rights. However, given the ever-evolving landscape of data collection and use globally, that’s not to say that other rights may not be established in the future (in particular, under privacy laws).

For the time being, athletes may have to look at other areas of laws to assert some sort of “quasi-ownership” over their biometric data, or at least consider ways that they can negotiate some contractual restrictions in respect of the use of the data collected by stakeholders.

That’s not to say that athletes whose biometric data is currently being collected and used by a third party cannot also use that data collection to their own advantage. Referring again to the AFL as an example, players are able to request their player information under the CBA. In theory, those players could

then refer to that data as an indicator of performance and use it as bargaining tool to renegotiate future contracts with clubs.

Athletes could also consider how the use of their data can be commercialised through other ways - such as creating their own fitness programs on Instagram (which is obviously ground-breaking and has never been done before). B Endnotes 1 These statistics might be incorrect.

2 ‘Our ambition to build one of the world’s most advanced sporting stadiums’, Luke Hopewell (23 December 2020) https://exchange.telstra.com.au/ tag/telstra-tracker/ 3 ‘Ibid. Another fun fact: Port Adelaide Football Club was also the first AFL club to display real-time data on the scoreboards during games at Adelaide Oval.

4 ‘NFLPA Provides WHOOP to All Active NFL Players’ (10 August 2020) https://www.whoop. com/thelocker/nflpa-provides-whoop-to-players/ 5 ‘Why biometrics is the future of F1 racing overalls’, Jonathan Noble (22 May 2020) https:// www.motorsport.com/f1/news/future-racingoveralls-alpinestars-biometrics/4795251/ 6 Ibid.

7 ‘UFC Performance Institute Adopts New Athlete Monitoring Technology’, Jen Booton (11 September 2018), https://www.sporttechie.com/

ufc-performance-institute-adopts-new-athletemonitoring-technology/ 8 However, this is not the case for foreign sports or Australian entities which may be subject to foreign data protection laws - like the European Union (EU) General Data Protection Regulation (GDPR). The GDPR applies to any business ‘established’ in the EU and any “controller” or “processor” of personal data who offers goods or services to individuals residing in the EU, or otherwise monitors the behaviour of individuals in the EU. Under the GDPR, database rights exist.

9 [2009] HCA 14.

10 [2001] FCA 612.

11 ‘Wearable technology in sport’, Sam Adams and Claudia Levings (12 August 2019) https://www. cgw.com.au/publication/wearable-technologyin-sport/?utm_source=Mondaq&utm_ medium=syndication&utm_campaign=LinkedInintegration 12 See the AFL’s Collective Bargaining Agreement for 2017 - 2022: https://www.aflplayers.com.au/ industry-home/cba 13 ‘Chapter 3: APP 3 — Collection of solicited personal information’ (22 July 2019) https://www. oaic.gov.au/privacy/australian-privacy-principlesguidelines/chapter-3-app-3-collection-of-solicitedpersonal-information/ 14 Ibid.

15 ‘Chapter 12: APP 12 — Access to personal information’ (22 July 2019) https://www.oaic. gov.au/privacy/australian-privacy-principlesguidelines/chapter-12-app-12-access-to-personalinformation/

Endnotes – Regulating the sports industry Endnotes 1 Lexis Nexis, Halsbury’s Laws of Australia (online at 26 March 2021) 175 Entertainment, Sport and Tourism, ‘II Sport’, [175-600].

2 David Shilbury and Lesley Ferkins, Routledge Handbook of Sport Governance (Routledge, 2020) 13.

3 Ibid.

4 Chris Davies and Sam Lansky, ‘Cricket and the Law: Ball Tampering, Contracts and Enterprise Bargaining Agreements’ (2018) 24 James Cook University Law Review 77, 83-86.

5 Ibid.

6 Memorandum of Association, The International Cricket Council Limited, 12 June 2018, clause 5 <https://resources.pulse.icc-cricket.com/ICC/ document/2020/12/16/d05409c6-7b62-40e097f3-5b864759ad62/ICC-Mem-Arts-Amendedand-Restated-filed-15-Dec-2020.pdf>.

7 The International Cricket Council, ‘About ICC - East Asia Pacific’, ICC-Cricket (Web Page) <https://www.icc-cricket.com/about/members/ east-asia-pacific>.

8 International Cricket Council Code of Conduct for Players and Player Support Personnel, 1 August 2019; Cricket Australia Code of Conduct for Players and Player Support Personnel, 4 October 2020.

9 International Cricket Council Anti-Discrimination Code for Participants, 1 August 2019; The International Cricket Council Anti-Discrimination Policy for International Cricket, 1 August 2019; Cricket Australia Anti-Discrimination Code for Players and Player Support Personnel, 4 October 2020.

10 International Cricket Council Anti-Corruption Code for

Participants, 1 January 2021; Cricket Australia AntiCorruption Code, 4 October 2020.

11 International Cricket Council Anti-Doping Code, 1 January 2021; Cricket Australia Anti-Doping Code, 4 October 2020 12 See World Anti-Doping Code, 1 January 2021.

13 Chris Davies and Sam Lansky, ‘Cricket and the Law: Ball Tampering, Contracts and Enterprise Bargaining Agreements’ (2018) 24 James Cook University Law Review 77, 83.

14 ‘Warner joins Smith and Bancroft in accepting sanctions’ ICC Cricket News (Web Page, 5 April 2018) <https://www.icc-cricket.com/ news/656582>; see also Peter Lalor, ‘Smith’s Shame’, The Australian, 26 March 2018, 1.

15 Sam Ferris, ‘CA Slaps Ban on Tampering Trio’, Cricket Australia (Web Page, 28 March 2018) <https://www.cricket.com.au/news/ player-sanctions-steve-smith-cameronbancroft-david-warner-australia-cricket-balltampering/2018-03-28>; see also Peter Lalor, ‘Banned Players ready for a fight’, The Australian, 29 March 2018, 32.

16 Sports Integrity Australia Act 2020 (Cth), s 9.

17 Sports Integrity Australia Regulations 2020 (Cth), Sch 2.

18 Sports Integrity Australia Act 2020 (Cth), s 13(1)(f).

19 Sports Integrity Australia Act 2020 (Cth), s 13(1)(k); Sports Integrity Australia Regulations (Cth), reg 4.13 of sch 1.

20 Sport Integrity Australia Act 2020 (Cth), s 21(1)(f).

21 Eric Windholz, ‘Securing Health and Safety at Major Sporting Events’ [2016] Sports Law eJournal 31:1-11, 5.

22 Work Health and Safety Act 2012 (SA), s 28 (which imposes duties on workers to, amongst other things, take reasonable care that his or her acts or omissions do not adversely affect the health and safety of other persons).

23 Prosecution Result Summaries and Enforceable Undertakings (Web Page) <https://www. worksafe.vic.gov.au/prosecution-resultsummaries-enforceable-undertakings>; see also Eric Windholz, ‘Professional Sport, Work Health and Safety Law and Reluctant Regulators’ [2015] Sports Law eJournal 28:1-14, 2.

24 Prosecution Result Summaries and Enforceable Undertakings (Web Page) <https://www. worksafe.vic.gov.au/prosecution-resultsummaries-enforceable-undertakings>; Mark Dunn, ‘Essendon Bombers fined $200,000 for workplace safety breaches over supplements saga’ Herald Sun (online, 28 January 2016) <https://www.heraldsun.com.au/sport/afl/ teams/essendon/essendon-bombers-fined200000-for-workplace-safety-breaches-oversupplements-saga/news-story/9376b7abd1c210 dbe9434cf3745f9695>.

25 Australian Sports Commission Act 1989 (Cth), s 5(2)(a).

26 Sport Australia launched to get nation moving (Web Page) <https://www.sportaus.gov.au/mediacentre/news/sport_australia_launched_to_get_ nation_moving>.

27 Australian Sports Commission Act 1989 (Cth), s 6.

28 Ibid, s 7.

29 Ibid, s 9.

30 Ibid.

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SPORTS TRIBUNAL

The National Sports Tribunal one year on: provisions & procedures MARTIN FRAYNE SC, JEFFCOTT CHAMBERS

T

he National Sports Tribunal (“the Tribunal” or “NST”) was established by the National Sports Tribunal Act 2019 (Commonwealth) (“the Act”) and commenced operation on 19 March 2020.

Its establishment followed a review into Australia’s Sports Integrity Arrangements commissioned by the Department of Health, by a panel chaired by James Wood QC (“the Wood Review”).1 Amongst other things, the review panel recommended2 the Tribunal’s establishment to address shortcomings of the then system and to provide an expert, central hearing body that could supplement the work of sports’ then current internal dispute resolution arrangements and to provide a dispute resolution forum for smaller sports.3 It was established as a pilot project initially for two years.4 The operation of the Tribunal, and the expectations for it, have been affected by the timing and impact of Covid-19, by reason of the disruption of the priorities of sports and the demand for dispute resolution services.

The pilot project has now been extended until 18 March 2023.

The Tribunal’s purpose5 is to provide an effective, efficient, independent, transparent and specialist Tribunal for the fair hearing and resolution of sporting disputes.

As it is established by Commonwealth legislation, it was necessary for it to be based upon Commonwealth power6 and its operation is directed to matters which come within that power. It is complementary to certain other Commonwealth legislation including the Australian Sports Anti-Doping Authority Act 2006. In part, it was established to give effect to certain obligations that Australia has as a party to the International Convention Against Doping in Sport.7 As to those matters not concerned with Anti-Doping, the Act only covers sporting disputes that the Commonwealth has a constitutional power to regulate, which essentially relates to those organisations that meet the definition of a national sporting organisation8 being (but not only) a sporting organisation recognised by the Australian Sports Commission.9

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The Tribunal does not replace internal mechanisms for dispute resolution which operate in some professional sports.

Administration The administration and management of the Tribunal is vested in the Chief Executive Officer10 but is subject to certain directions of the relevant Minister.11 Apart from the Act, the framework for the Tribunal is the National Sports Tribunal Rule 202012 and a notifiable instrument named the National Sports Tribunal (Practice and Procedure) Determination 202013 which separately address matters not covered by the Act and expand upon other matters required by the Act. There are comprehensive provisions designed to guide and control the processes of the Tribunal.14 In addition there is an instrument relating to the Principles for Allocating a Member to a Dispute,15 a Specification of Sporting Body Instrument16 and there is a Tribunal Bench Book prepared to assist parties in relation to applications and hearings before the Tribunal.

The Tribunal has a website17 which provides information about it and the services offered. A brief and non exhaustive overview of its operation is set out below.

OVERVIEW Divisions The Tribunal contains three divisions:18 the Anti-Doping division; a General division; and an Appeals division.

Anti-Doping Division The Anti-Doping division19 relates to applications for the arbitration of disputes with respect to anti-doping policies and the Act20 contains the pathways as to how that may occur, states who are to be the parties to the arbitration, and provides that the arbitration is to be conducted by that division.

The Tribunal becomes a default resolution body responsible for arbitrating anti-doping matters in Australia by reason that sporting bodies’ anti-doping policies must be approved by the CEO of ASADA21 under its framework. The Tribunal provides a method of avoiding

the Court of Arbitration for Sport (“CAS”) for those to whom that route may otherwise be available. Where a party has exercised a right to appeal to CAS, the Tribunal is to determine whether the arbitration should be suspended pending the outcome of the appeal to CAS or terminated.22 The Anti-Doping division must comply23 with the Practice and Procedure Determination 2020, Chapter 3 and the matters set out in it.

The sections of the Act and any other provisions relating to Anti-Doping, rely on the Commonwealth’s legislative power under paragraph 51(xxix) of the Constitution24 to give effect to the International Convention Against Doping in Sport.25 General Division The General division26 deals with the arbitration of disputes27 and applications for alternative dispute resolution,28 directed to disputes between either a person and a sporting body or between two or more persons in strictly confined circumstances as to the kinds of disputes it can consider.

It must comply29 with the Practice and Procedure Determination 2020, Chapter 4.

The parties to an arbitration or alternative dispute resolution in the General Division must act in good faith in relation to the conduct of the arbitration30 or alternative dispute resolution.31 Kinds of Disputes In relation to the General division and the other sections of the Act,32 which relate to general sporting matters, they are limited by reference to “a dispute of any of the following kinds:33 a. a dispute where the sporting body concerned is: ii. a constitutional corporation; or iii. a body corporate that is incorporated in a Territory; or iv. a body corporate that is taken to be registered in a Territory under Section 119A of the Corporations Act 2001; b. a dispute involving matters relating to a sporting event at which Australia is or was represented as a nation; c. a dispute involving matters that occurred beyond the limits of the States and Territories.”

SPORTS TRIBUNAL

The kinds of disputes that may be dealt with are further confined. Certain disputes are prescribed34 as the kinds of disputes for which applications may be made for arbitration and which are specified35 as: “(a) disputes about athletic eligibility or selection …; (b) disciplinary disputes …. (c) disputes relating to disciplinary action taken, or proposed to be taken by a sporting body against a constituent part of its sport where the constituent part is a body corporate.”

Certain other disputes must not be approved for arbitration and appeals or alternative dispute resolution.36 In relation to arbitration and appeals,37 the CEO must not approve the following kinds of disputes: “(a) disputes relating to remuneration or other benefits payable to an individual under a contract for services, or relating to the termination of a contract for services with an individual, except where those disputes arise in connection with an alleged breach of a disciplinary rule of the sporting body; (b) employment disputes, except where those disputes arise in connection with an alleged breach of a disciplinary rule of the sporting body; (c) anti-doping disputes; (d) disputes occurring in the field of play, however described or occurring; (e) disputes of any kind in which damages as a remedy are being sought from another party to the dispute. …

(2) In paragraph (1)(b), employment disputes means matters in respect of which a remedy is available: (a) under the Fair Work Act 2009 or a general State industrial law within the meaning of s 26(3) of that Act; or (b) at general law for the breach of a contract of employment. …”

Thus there is a range of disputes which may not come within those provisions and there is a potential for jurisdictional issues to arise.

Appeals Division The Appeals Division38 is governed

by Part 3, Division 6 of the Act. There is the capacity to appeal against decisions made in the Anti-Doping division39 and also decisions by sporting bodies,40 decisions made by sporting tribunals under an anti-doping policy,41 decisions made in the General division42 and by sporting tribunals as prescribed by the rules or approved by the CEO.43 These provisions are also constrained by the kinds of disputes that may be appealed to the Tribunal as provided in the National Sports Tribunal Rule – Rule 8 and those which cannot – Rule 9.

The kinds of disputes that may be appealed to the Tribunal are set out in NST Rule 8. Rule 8 states as follows: “… (a) disputes about athlete eligibility or selection, however described in the constituent documents of the sporting body; (b) disciplinary disputes, including but not limited to disputes relating to disciplinary action taken, or proposed to be taken, under a member protection policy of the sporting body; (c) disputes relating to disciplinary action taken, or proposed to be taken, by a sporting body against a constituent part of its sport, where the constituent part is a body corporate.”

The processes and procedures in relation to the Appeals Division are contained in Chapter 6 of the Practice and Procedure Determination.

Application The Act binds the Crown in each of its capacities.44 It extends to omissions, matters and things outside of Australia45 and has extraterritorial application.

Members The members of the Tribunal, their appointment, remuneration and related matters, including the duties of members

to discharge their duties honestly, in good faith and for a proper purpose, are governed by Part 1, Division 3 of the Act and also Part 3 of the NST Rule 2020.46 A number of initial Tribunal members47 were appointed in about July 2020. They are part time members, and are to have knowledge in at least one of the following fields:48 sports law; sports governance or sports administration; scientific or medical expertise in relation to sports; dispute resolution; ethics; investigative practices or techniques and any other appropriate field of expertise.

The names of the initial members of the Tribunal appear on the Tribunal website. It is suggested that there will be further Tribunal members appointed to supplement the existing panel during 2021.

Alternative Dispute Resolution There are also provisions for alternative dispute resolution49 being either mediation, conciliation or case appraisal.

The kinds of disputes which are identified for alternative dispute resolution are set out in NST Rule 7(2). The following kinds of disputes are prescribed: “(a) disputes about athlete eligibility or selection, however described in the constituent documents of the sporting body; (b) disciplinary disputes, including but not limited to disputes relating to disciplinary action taken, or proposed to be taken, under a member protection policy of the sporting body; (c) disputes about bullying, harassment or discrimination, however described in the constituent documents of the sporting body; (d) disputes relating to disciplinary action taken, or proposed to be taken, by a sporting body against a constituent part of its sport, where the constituent part is a body corporate.”

In relation to alternative dispute resolution,50 the CEO must not approve the following kinds of disputes: “(a) anti-doping disputes; (b) disputes occurring in the field of play, however described or occurring.”

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SPORTS TRIBUNAL

In the Practice and Procedure Determination there is an alternative dispute resolution chapter51 which relates to the pathway to seek52 one of either mediation, conciliation or case approval for those involved in a General division dispute and there are detailed processes set out in relation to each pathway.

The participants in mediation, conciliation or case appraisal must act in good faith in relation to that process.53 The General division encourages alternative dispute resolution.54 Standard of Proof and Publication For those matters that proceed to a hearing, the standard of proof for a dispute under the General division is stated55 as “the burdens and standards of proof and methods of establishing facts and presumptions that are to be set out in the constituent documents of the sporting body or in the separate agreement to the parties to the dispute referring the dispute to the Tribunal.” Where neither the constituent documents nor the separate agreement set out a standard of proof, the default standard of proof is to be the balance of the probabilities.

In the General division the CEO is not to publish a determination of a dispute but may do so where the parties agree or where the Tribunal members who prepared the determination agree that the determination of the dispute is of such precedential value that it is to be published,56 subject to any redactions.

In relation to the Anti-Doping division, “the burdens and the standards of proof and methods of establishing facts and presumptions is to be set out in the anti-doping policy of the sporting body to which the applicant belongs.”57 The hearing of a dispute in the Anti-Doping division is to be conducted in private unless the applicant request that the hearing be conducted in public and the Tribunal in its absolute discretion agrees.58 The Tribunal’s determination of an Anti-Doping dispute is to contain certain stated matters59 about the jurisdictional basis and the applicable rules and other specific matters about the findings made, the reasons for the decision, and where a violation is established the consequences, and subject to certain exceptions, the CEO is to publish all determinations of the Anti-Doping Division.60 Subject to some defined exceptions the CEO is to publish all determinations in Anti-Doping appeals61 but not General Division appeals.62

18 THE BULLETIN June 2021

At the time of writing, May 2021, there have been four published determinations,63 one in the Anti-Doping Division, two in the General Division and one in the Appeals Division, out of a total of 11 matters dealt with.

General Provisions The procedures and processes to be followed in making an application are stated in Part 3, Divisions 7 and the manner of conducting an arbitration is stated in Division 8 of the Act. The common law privilege against self incrimination is not abrogated64 and therefore applies.65 Division 9 of the Act deals with the charging of costs of an arbitration or alternative dispute resolution process. There are civil penalty provisions in Division 10 of the Act and the power to issue infringement notices under Division 11 of the Act. Part 5 of the Act provides for various protections of the processes and procedures of the Tribunal including establishing various offences, such as obstruction of the Tribunal or a member in the performance of their duties;66 intimidation of witnesses;67 secrecy by an entrusted person68 in relation to protected information.69 There is established protection and immunity for members of the Tribunal, lawyers and witnesses appearing in the process70 and protections from civil actions for acts or omissions done in good faith.71 There is provision for the Minister to make rules in relation to the Act.72 The Rule The National Sports Tribunal Rule73 provides, amongst other things, for the kinds of disputes to be heard,74 for the cost of the application to the Tribunal by way of fees,75 which vary depending upon the type of application made, and which are designed to be modest. There are time limits in relation to the making of certain applications.76 There is power for the CEO to make a determination in relation to charging a party or parties for the costs in each division, including alternative dispute resolution,77 and there is power for the waiver of charges in certain circumstances for financial hardship.78 The NST waived fees up to 30 September 2020 due to the financial repercussions of Covid-19 on sports and athletes. In certain circumstances there is power to suspend or terminate an arbitration or appeal79 including where criminal proceedings

have been commenced, where separate proceedings have been instituted in any other Court or Tribunal or an appeal to CAS has been exercised and other grounds.

The Practice and Procedure Determination The Practice and Procedure Determination made pursuant to the Act80 applies to all disputes81 before the Tribunal and provides for the use of approved forms,82 the lodging of documents,83 the signing of documents,84 the service of documents85 and generally matters of process. It deals with the expedited resolution of matters;86 and the management of the process of an arbitration by the Tribunal.87 The allocation of Tribunal members to a matter is by the CEO.88 A Tribunal appointment may be challenged.89 There are provisions for a pre-hearing conference90 and two or more applications can be dealt with together.91 Importantly, the Tribunal is not bound by the rules of evidence but is required to act in accordance with the principles of procedural fairness.92 Paragraph 28 of the National Sports Tribunal (Practice and Procedure) Determination 2020 states: “(1) The Tribunal is not bound by rules of evidence, but is required to act in accordance with principles of procedural fairness.

(2) The Tribunal is to conduct the arbitration of a dispute before it with as little formality and technicality, and as much expedition, as the fair and proper consideration of the matters before the Tribunal permit.

(3) In an arbitration of a dispute, the Tribunal may inform itself on any matter in such manner as it thinks appropriate, including but not limited to the following: (a) requiring a person to attend before the Tribunal; (b) inviting oral or written submissions; (c) requiring a person to provide copies of documents or records, or to provide any other information, to the Tribunal; (d) taking evidence under oath or affirmation; (e) recommending to the CEO that an expert witness be appointed under paragraph 68(1)(b) of the Act to prepare a report; (f) conducting a pre-hearing conference; (g) holding a hearing.”

SPORTS TRIBUNAL

There is the possibility of the appointment of an expert witness93 by the CEO to provide assistance to the Tribunal and for the parties to call an expert witness.94 An appointment of an expert witness by the CEO was adopted in the matter of RL v Equestrian Australia95 in relation to the effect of a substance upon the performance of a horse.

There are provisions as to witnesses96 who may provide witness statements by statutory declaration or affidavit. There is power to require a person to appear97 and to produce documents or things.98 The proceedings are confidential and are to be held in private99 and a recording of hearings may be permitted.100 Judicial Review As disclosed in the Explanatory Memorandum101 issued in relation to the Bill, although the Tribunal was established by statute, it resolves disputes through exercising powers of private arbitration in accordance with contractual arrangements agreed between the parties, and it was hoped the scope for judicial review of an arbitration will be limited.

The Tribunal is eager and available to be involved with any disputes that qualify for its consideration. B

Endnotes 1 Which report was published on 1 August 2018.

2 Recommendations 26 to 37.

3 Report of The Review of Australia’s Sports Integrity Arrangements, page 11.

4 By limiting the time limit for applications under Section 38(5) of the Act. 5 Section 3(1) of the Act. 6 For a discussion about the Commonwealth’s power in relation to sport see Goldsworthy: Glory Without Power: the Nationhood Power and Commonwealth Spending on Sport, (2021) 95 ALJ 274.

7 Section 3(2) of the Act. 8 Defined in Section 5 of the Act and also as specified in the National Sports Tribunal Act 2019 – Specifications of Sporting Body Instrument 2020 (No. 1).

9 There is a tool to assess whether an individual or sporting body can access the Tribunal on the Tribunal website.

10 Part 4 of the Act and also Part 2 of the National Sports Tribunal Rule 2020 including in relation to the procedural management function of any dispute.

11 Section 64 of the Act but not in relation to a particular dispute before the Tribunal or a particular athlete, support person or sporting body.

12 Made under Section 75(1) of the Act; NST Rule.

13 Made under Sections 29(2) and 41(2) of the Act; Practice and Procedure Determination.

14 See for example Section 29 of the Act in relation to mediation, conciliation or case appraisal and Section 41 of the Act in relation to the conduct of an arbitration which provides that the Tribunal must comply with the Determination.

15 Made under Section 52(4) of the Act. 16 Made under Section 5(3) of the Act, which relates to what is a “sporting body” for the purposes of the Act. 17 https://www.nationalsportstribunal.gov.au 18 Section 11 of the Act. 19 Established under Section 11(a) of the Act, is more particularly provided for by Section 22 in Part 3, Division 2 of the Act. 20 Section 22 of the Act. 21 Explanatory Memorandum to the National Sports Tribunal Bill 2019, page 11.

22 Practice and Procedure Determination 2020, paragraph 45 and also the NST Rule 2020, Rule 10(1)(c) and (3).

23 Section 29(2) of the Act. 24 Being the external affairs power.

25 Section 6(1) of the Act, which Convention is defined in the definitions in Section 5 of the Act. 26 Established under Section 11(b) of the Act, is more particularly provided for in Part 3, Division 3 of the Act. 27 Division 3 – Subdivision A and Division 4 of the Act. 28 Division 3 – Subdivision B and Division 5 of the Act. 29 Section 29(2) of the Act. 30 Section 40(2) of the Act. 31 Section 28(2) of the Act. 32 Sections 23, 24, 25, 26, 34 and 35 of the Act. 33 Section 6(2) of the Act. 34 Under Section 23(1)(c)(i) and 24(1)(c)(i) of the Act 35 In Part 4 of the NST Rule 2020, Rule 7(1).

36 NST Rule 2020, Rule 9 and Sections 23(4), 24(4) and 35(6) of the Act. 37 NST Rule 2020, Rule 9.

38 Established under Section 11(3) of the Act, and see also Chapter 6 of the Practice and Procedure Determination 2020.

39 Section 31 of the Act. 40 Section 32 of the Act. 41 Section 33 of the Act. 42 Section 34 of the Act. 43 Section 35(1)(c) or 35(2)(c) of the Act. 44 Section 7 of the Act. 45 Section 8 of the Act. 46 Which includes the disclosure of any conflicts of interest.

47 39 are named on the website.

48 Section 13(3) of the Act. 49 Sections 25 and 26 of the Act and also Part 3, Division 5 of the Act, which are more specifically dealt with in Chapter 5 of the Practice and Procedure Determination 2020 50 NST Rule 9.

51 Chapter 5 in the Practice and Procedure Determination.

52 Practice and Procedure Determination 2020, paragraph 58.

53 Section 28(2) of the Act. 54 Practice and Procedure Determination 2020, paragraph 51.

55 Practice and Procedure Determination 2020, paragraph 55.

56 Practice and Procedure Determination 2020, paragraph 56.

57 Practice and Procedure Determination 2020, paragraph 46(1).

58 Practice and Procedure Determination 2020, paragraph 17.

59 Practice and Procedure Determination 2020, paragraph 48.

60 Practice and Procedure Determination 2020, paragraph 49.

61 Practice and Procedure Determination 2020, paragraph 96.

62 Practice and Procedure Determination 2020, paragraph 97.

63 Which are available on the Tribunal website.

64 Section Sections 43 and 44 of the Act. 65 See Explanatory Memorandum pages 40 and 41.

66 Section 70 of the Act. 67 Section 71 of the Act. 68 Section 72 of the Act and “entrusted person” is defined in the definitions under Section 5 of the Act but is subject to matters in the NST Rule 2020, Part 8, Rule 15.

69 Which is defined in the definitions under Section 5 of the Act. 70 Section 73 of the Act, which is the same protection available as in the High Court.

71 Section 74 of the Act. 72 Section 75 of the Act. 73 Made under Section 75(1) of the Act. 74 NST Rule 2020, Part 4.

75 NST Rule 2020, Part 6, Rule 11.

76 NST Rule 2020, Part 6, Rule 12.

77 NST Rule 2020, Part 7, Rule 13.

78 NST Rule 2020, Part 7, Rule 14.

79 NST Rule 2020, Part 5, Rule 10.

80 Sections 29(2) and 41(2) of the Act (and which commenced on 19 March 2020, paragraph 2).

81 Practice and Procedure Determination 2020, paragraph 4.

82 Practice and Procedure Determination 2020, paragraph 10.

83 Practice and Procedure Determination 2020, paragraphs 11 and 12.

84 Practice and Procedure Determination 2020, paragraph 13.

85 Practice and Procedure Determination 2020, paragraphs 14 and 15.

86 In Part 2.

87 In Part 3.

88 Practice and Procedure Determination 2020, paragraph 24. See also Principles of Allocating a Member to a Dispute.

89 Practice and Procedure Determination 2020, paragraph 25.

90 Practice and Procedure Determination 2020, paragraph 26.

91 Practice and Procedure Determination 2020, paragraph 27.

92 Practice and Procedure Determination 2020, paragraph 28.

93 Paragraph 34 of the Practice and Procedure Determination 2020 and Section 68(1)(b) of the Act. 94 Practice and Procedure Determination 2020, paragraph 35.

95 Case number NST-E20-264864, paragraphs 22 and 23.

96 Practice and Procedure Determination 2020, paragraph 33.

97 Practice and Procedure Determination 2020, paragraph 36.

98 Practice and Procedure Determination 2020, paragraph 37.

99 Practice and Procedure Determination 2020, paragraphs 40 and 41.

100 Practice and Procedure Determination 2020, paragraph 42.

101 Page 10 and 11 of the Explanatory Memorandum and the Wood Review at page 205.

June 2021 THE BULLETIN

19

HUMAN RIGHTS

Caster Semenya’s legal battles are about more than the right to compete DAVID ROBERTSON, MEMBER, ADMINISTRATIVE LAW COMMITTEE

C

aster Semanya (born 7 January, 1991) is a South African 800-metre runner who has won two Olympic gold medals, one Commonwealth gold medal and three World Championships, most by impressive margins.

Her record is unique. Few athletes have come close to dominating an event as emphatically as her.

However, her remarkable ability has been placed under intense scrutiny.

A TIMELINE OF INVESTIGATIONS In July 2008, Caster Semenya competed in the World Junior Championships but did not qualify for the final. In October that same year, she won the final at the Commonwealth Youth Games (2’ 04.23”).

In July 2009, she won the 800m and 1500m events in the African Junior Championships. Her 800m time of 1’ 56.72” was an improvement of seven seconds in nine months.

The next month, she came first at the World Championships with a time of 1’ 55.45”, the world’s best time that year.

It was around this time that questions started being raised about Semenya’s sex.

Her rapid improvement and appearance led to the IAAF asking Semanya to take sex verification tests. These included psychological, gynaecological, endocrine tests and manual examination of the genitalia.

The IAAF said it was “obliged to investigate” after she had made improvements of eight seconds at 800m – “the sort of dramatic breakthrough that usually arouse suspicion of drug use.” Memories of the astonishing

20 THE BULLETIN June 2021

performances of East European females in the 80s led to similar suspicions of drugs. Semenya had been tested many times for drugs before but all came back negative.

IAAF never published results of the sex tests officially but some results were leaked in the media and were widely discussed, especially her alleged testosterone levels. The BBC reported that her testosterone level was three times higher than normal. Semenya was declared ineligible to compete but in July 2010 was cleared by the IAAF to take part in women’s competitions.

The IAAF released a brief statement that said: “The process initiated in 2009 in the case of Caster Semenya has now been completed.” The “process” the IAAF referred to is believed to be a regime of testosterone reducing medication.

In November 2010, the South African Minister of Sport announced he had reached an agreement with IAAF. Semenya could keep her world championship title.

There was widespread criticism of the IAAF plus additional outcry from South Africa alleging European racism and imperialism. The IAAF responded that the motivation for the test was not suspected drug cheating but to determine whether she had a “rare medical condition” giving her an “unfair advantage”.

In April 2011, the IAAF introduced new rules that the testosterone level of any female competitor could be no higher than 10 nmol/L. If it exceeded that level, the competitor would be required to take medication to reduce the level. As the normal male levels are 7.7 – 29.4 there was still the possibility of an overlap.

In August 2011, Semenya placed

HUMAN RIGHTS

The European Court of Human Rights. Photo: Adrian Grycuk - Own work, CC BY-SA 3.0 pl, https://commons.wikimedia.org/w/index.php?curid=66030266

second in the World Championship behind Russia’s Savinova, who was later disqualified for doping. Savinova admitted to using oxandrolone, an anabolic steroid similar to that allegedly used by Florence Griffith-Joyner.

At the 2012 London Olympics, Semenya again finished second to Savinova.

In July 2015, the IAAF policy on hyperandrogenism (high natural levels of testosterone) that had been in place since 2011 was suspended following Dutee Chand v Athletics Federation of India and the IAAF before Court of Arbitration for Sport (CAS), Lausanne, Switzerland. The Court found that there was a lack of evidence that testosterone increased female athletic performance and notified the IAAF that it had two years to provide such evidence.

Following this judgment, Semenya stopped taking hormonal treatment.

At the African National Championships in 2016, Semenya became the first woman to win the 400m, 800 m and 1500m in one competition.

Two months later she set a South African National Record for 800 m (1’ 55.33”), and then won gold in the 800m at the Olympic Games in Rio (1’ 55.28”).

Semenya’s performance re-ignited controversy over permissible testosterone levels.

She continued to dominate, winning the 800m at the World Championships in London.

In April 2018, the IAAF introduced new regulations entitled “Eligibility Regulations for the Female Classifications (Athletes with differences of sex development)” that required athletes with

specific disorders of sex development, to have testosterone levels of no more than 5 nmol/L and certain androgen sensitivity to take medication to lower their testosterone levels. The rules were to apply to anyone competing in events ranging from 400m to 1500m.

In June 2018, Semenya announced she would challenge the IAAF rules at the CAS on the grounds that it violated her human rights to be forced to submit to hormone treatment, with poorly understood side-effects, in order to lower her natural testosterone levels as a precondition for being allowed to take part in women’s international competitions.

In May 2019, CAS rejected her appeal, paving the way for the new rules to come into effect on 8 May 2019.

Semenya then appealed the decision to the Federal Supreme Court of Switzerland alleging, in particular, discrimination on the grounds of sex (and of sex characteristics against female athletes with DSD compared to female and male athletes who do not have DSD), and also violations of her human dignity and her personality rights.

On 3 June 2019, the Court advised that it had “super provisionally instructed IAAF to suspend the application of the ‘Eligibility Regulations for the Female Classification for athletes with differences of sex development’ with respect to the claimant [Semanya]” until the Court decides whether to issue an interlocutory injunction.

However on 30 July the Court reversed its earlier ruling that had suspended the CAD’s decision and the IAAF rules.

For that reason, Semanya missed the World Championships in October but continued her appeal.

In August 2020 The Swiss Federal Court issued a ruling denying Semanya’s appeal.

In November 2020 Semanya announced that she would file an appeal against the IAAF testosterone rule at the European Court of Human Rights, which she did in February 2021. On 17 March 2021, the Court decided to grant the case priority.

Semenya has filed complaints to the European Court of Human Rights that she has suffered violations of her human rights under several Articles of the European Convention of Human Rights, including: Article 3 (prohibition of inhuman or degrading treatment), Article 8 (right to respect for private life), taken alone and in conjunction with Article 14 (prohibition of discrimination), and also a breach of Articles 6 (right to a fair hearing) and 13 (right to an effective remedy) In the meantime, she has tried her hand at the “allowed” distances 200m and 5000m but has been unsuccessful. Her time for the latter was 45 seconds behind the Olympic qualifying time.

Despite her alleged advantage she still has not come within two seconds of the World Record set nearly 38 years ago. It does not sound much but it amounts to about seven metres, the same margin by which she usually wins. It also suggests that if even she cannot break the World Record then it is unlikely that none of the other eight world records set in the 80s will be beaten any time soon. B June 2021 THE BULLETIN

21

XXX SOCIETY GOLD ALLIANCE FIRM PROGRAM LAW

Law Society Gold Alliance Firm Program Strength in Numbers ne in two law firms in South Australia are registered as a Gold Alliance firm.

Of the 50% of firms that are not Gold Alliance firms, 59% are eligible to register!

A Gold Alliance firm is a firm which partners with the Society and shows a commitment to the profession and their employees by maintaining 100% membership.

The Society is the proud voice of the South Australian legal profession and symbolises the highest standard of professionalism, integrity and excellence.

To indicate you are a Member of the Society highlights that you are part of an organisation which promotes and adheres to strict professional and ethical requirements, and which provides resources to Members so that such standards are maintained.

O

Gold Alliance Firm 1878 Elix Lawyers 360 Private Legal Accelerate Family Law and Culshaw Miller Criminal Lawyers Access To Justice Law Firm ADCO Legal Adelaide Capital Lawyers Adelaide Criminal Law Adelaide Family Law Adelaide Injury Law Adelaide Lawyers Adelaide Legal Adelaide Legal Solutions Adelphi Legal Adelta Legal Adelta Legal AK Family Law Alan Oxenham Alan Wong Alex Mandry Legal Group Alison Bradshaw Legal Allen Burtt Almeida & Associates Alpha Family Lawyers AM Legal Anagnostou Business & Commercial Lawyers Andrew & Dale Barristers & Solicitors Andrew B Thiele & Co Andrew Hill & Co Andrew Rogers Lawyers Andreyev Lawyers Angela Ferdinandy Angela Pierce and Associates Angelopoulos Lawyers Anna Vicic Armour Allen Lawyers Arnold Costs Solicitors ASW Lawyers

22 THE BULLETIN June 2021

As our membership continues to grow, so does our ability to more strongly represent you and the legal profession before government, media and the community.

And, it’s not just the profession as a whole that benefits. When all of your staff are Members of the Society, you and your clients gain access to the latest information on issues and developments in the law, a network of talent and resources, as well as a gateway to education, support services, publications, savings and productivity.

Benefits include: • The Gold Alliance Firm logo may be placed on your website and email footers • The Gold Alliance Firm logo may be published on stationery such as letterhead and business cards

Avina Lawyers Awkar & Co Baggio Legal Bakker Vagnarelli Lawyers Ballinger Legal Bambrick Legal Bampton Law Barbaro Legal Bartel & Hall Bastiaan Sparreboom BBS Lawyers Beger & Co Belchamber Legal Belperio Clark Bennett Legal Bernadette Day Lawyer Bianca Barca Lawyers Birtsos Legal Boril Olds Botten Dnistriansky Kellis Bourne Lawyers Boylan Lawyers Bradbrook Lawyers Brite Legal Brown & Associates Commercial Lawyers BSG Lawyers Barrister Solicitors Notary Public Budden Law Budwal Lawyers Business & General Legal C B McDonough & Co CA Legal & Migration Cacas Legal Calabio Conveyancing Calderwood Atkinson Caldicott Lawyers Camatta Lempens Campbell Law Campbell Rankine

• Access to subscription discounts for the Standard Form Documents • Your firm will be listed on the Law Society website and in the Bulletin once each year.

This is a unique marketing opportunity for firms, both small and large, to promote to the community and your clients that all practitioners within your firm are Members of their professional association.

To enquire if your firm is eligible to become a Gold Alliance Firm, please contact the Society on (08) 8229 0200 or email reception@lawsocietysa.asn.au.

The Gold Alliance Firm program is an effective way to practice Strength in Numbers and to demonstrate your commitment to the profession and your employees.

Carbone Polvere & Co Cardone & Associates CARES Lawyers Carlin Lawyers Carmel Riordan Lawyers Carmine Barone Carter & Co Lawyers Cavalier Legal Caveo Partners Legal CCK Lawyers CCR Legal CG Family Law Chong & Co Christine Korobacz Solicitors CJL Family Law CJM Legal Clarke Hemmerling Lawyers Clelands Lawyers Coates Lawyers Codex Legal Comley Legal Commercial and Legal (Legal Services) Community Family Law & Mediation Con O’Neill Barrister & Solicitor Conatur Legal Connolly & Co Constantine Legal Corsers Lawyers Costi & Co Cowell Clarke CPC Lawyers Craig McKay Legal Crawford Legal Crescent Lawyers Culshaw Miller Divorce and Family Lawyers Culshaw Miller Lawyers Dadds Jandy Lawyers Daenke Lawyers D’Angelo Lawyers

David Barnfield Lawyer David Burrell & Co David Deakin Davies & Co David Johnson Debra Spizzo & Associates Barrister & Solicitors Denise M. Rieniets & Associates Devine Murdoch Dewar Legal Barristers & Solicitors Di Rosa Lawyers Di Sotto Lawyers Diane Myers Diaspora Legal Distinction Legal Dixon Gallasch DMAW Lawyers Doconade Adelaide Lawyers Donlan Lawyers Douglas Hoskins Legal Pty Ltd Duc Mai Lawyers Duddy Shopov Duncan Fowler Lawyer Eckermann Lawyers Edge Law Edwards Harris Lawyers/ Family Law Resolutions EMA Legal EMT Legal ENA Law Equality Lawyers Pty Ltd Ericson Legal Evans Testa Barristers & Solicitors EZRA Legal Fabbian Lawyers Fabrizio Porcaro Pty Ltd Fair Work Lawyers Family Law Outcomes Finniss Legal FJS Lawyers Adelaide Fletcher & Lawson

LAW SOCIETY GOLD ALLIANCE FIRM PROGRAM XXX

Fletchers Lawyers Fleurieu Lawyers Fuda Lawyers Furler & Co Barristers and Solicitors Gabito Lawyers Gardner Legal & Regulatory Gary Pearce Genders & Partners Georgiadis Lawyers Germein Reed Gilchrist Connell Gretsas & Associates Grope Hamilton Lawyers Guarna Legal H F Lambert Hackett Lawyers Haebich Law Hamilton Legal Harry Alevizos Hasda Legal Hau Pehn Yapp Hawker van Dissel Law Hepenstall & Associates Herve & Co Heuzenroeders Lawyers Howe Jenkin Family Lawyers Hume Taylor & Co Humphrey Legal Hutton Cragg Legal Interpret Contracts Interpret Legal J Caruso J Richard Croft Jaak Oks Lawyers Jackson & Associates Jane Moore Jankus Legal Janus Lawyers JD Legal JDC Law Jennifer Corkhill Jennifer M Bradley Jennifer Stefanac Barrister & Solicitor JKR Lawyers Johnson Lawyers Johnston Legal + Advisory Johnston Withers Jones Elferink Barristers & Solicitors Jones Harley Toole Joseph Ramsay Sanders Judith Jordan Family and Collaborative Lawyer Karydis-Frisan & Associates Kathryn Herriman Barrister & Solicitor Katrina Jacobs Estate Law KC Lawyers Kelly Kelly Legal Kin Lawyers Pty Ltd KJK Legal KP LAWYERS Kruse Legal Kudra & Co Kyrimis Lawyers Lachlan McAuliffe Laity Morrow LawCall LBD Legal

Lee & Partners Legal Projects Commercial Lawyers Legal Projects Family and Relationship Lawyers Lena Grant Les Rowe & Associates Leventis Lawyers Lewis & Shane Lieschke & Weatherill Lindbloms Lawyers Lins Lawyers Liptak Lawyers Lisacek & Co Lumond Lawyers M Riley Lawyer Mac and Co Lawyers Madsen O’Dea Mahony’s Lawyers Maione Lawyers Mandy Edwards & Co Lawyers Mantzoros & Partners Marie Alvino Marie Stokes Family Lawyers Mark Esau Mark Gustavsson & Associates Mark Mudri & Associates Martha Ioannides Martin Robinson Solicitors Mason Gould Matthew Mitchell Solicitors Matti Lamb & Associates Mayweathers Mazzocchetti Legal McGrath Lawyers Mead Robson Steele Meah & Co Meister Legal Mercurio & Co Micallef Lipson Chambers Michael F Lindblom Michael Hegarty & Associates Michael Rehberg - MR LAW Mildwaters Lawyers Minney & Associates Minotaur Law Mira Zacharia Mitcham Family Law MK Legal & Migration Moffat Lawyers Mont Legal Montague Law Moore Law Disability & Aged Care Moran & Partners Solicitors Motus Legal MPS Law MSM Legal Mullen Lawyers Nathan White Lawyers NDA Law NDEdwards & Co Nemer Essey Lawyers Nexus Law Group Nicholas Boswell & Co Lawyers Nicholas Eid Nick Xenophon & Co Lawyers NJ Ireland North East Lawyers Northside Lawyers

O’Briens Solicitors ORB Lawyers ORB Lawyers Christies Beach O’Toole Lawyers P. F. Hall Pace Lawyers Pallaras Legal Pascale Legal Barristers & Solicitors Patsouris & Assoc Paul D Bear Lawyer Paul Kirk Legal Pederick Lawyers Peripheral Blue Legal Perre Legal Perrotta Legal Perry Lawyers Peter Fisher Lawyers Peter Marker & Assoc PGC Legal Picotti-Ellis Legal Pittaway Lawyers and Conveyancers Playford Legal Polson Legal Precision Legal R J Cole & Partners R. A. English & Co Radbone & Assoc Randle & Taylor Rebecca Beasley Barrister + Solicitor Rebecca McDougal Regent Legal Pty Ltd Resolve Divorce Lawyers RI Consulting Richards & Evans Commercial Lawyers Richards Legal Riverland Commercial Lawyers Roach Corporate Law Robert F Floreani Robert Norman & Associates Robert Saunders & Associates Ronald Frank Bell Rosey Batt & Associates RSA Law Rudall & Rudall Ryan & Durey Solicitors Ryans Lawyers Ryder Family Law S J McKinnon & Associates SA Family Law Salandra Lawyers Sarah Grimwade Barrister & Solicitor Scales & Partners Scammell & Co Schirripa Evans Lawyers Scott Allard Scott Lawyers SE Lawyers (Warradale) Sedsman Legal SG Law Sharon Holmes Shaw & Henderson Silkwoods Chambers Sinoch Lawyers Sonia Petracca Lawyers Southern Coast Legal Specialised Dispute Management Spencer Gulf Law - Suzy Graham

Standon Lawyers Stanley Law Stephen Gibbons Lawyers Stevanja & Associates Steven M Clark Stewart-Rattray Lawyers Stokes Legal Strachan Carr Straits Lawyers Su and Associates Susan Cole Barrister & Solicitors Swan Family Lawyers Terese Wacyk Legal Teusner & Co The Family Law Project Thomas Rymill & Co Thompson Smyth Barristers and Solicitors Thomson and Associates Tim Clarke & Co Tim Dibden Tindall Gask Bentley Tolis & Co Lawyers Toward Lawyers Town & Country Lawyers Townsends Travancore Legal & Advisory Treloar & Treloar Tri-meridian Corporate & Commercial Law Union Legal SA Varga Lawyers VdV Legal Von Doussas Voumard Lawyers VP Lawyers Wadlow Solicitors Washyn Legal Washyn Legal (Grange) WBH Legal Wearing & Blairs Weatherly & Associates Websters Lawyers Welden & Coluccio Lawyers (Findon) Welden & Coluccio Lawyers (Prospect) Westley Di Giorgio Norcock Whatson Legal White & White (Wallaroo) White & White Lawyers White Berman Grant Legal Whitington Darby Williams Barristers And Solicitors Wills At Your Home Wills Direct Wilson Lawyers (SA) Winlaw & Associates Winters, Barristers, Solicitors and Notaries Woodburn & Co Woods & Co Lawyers Work Visa Lawyers WRP Legal & Advisory Xiao Lawyers Yan Robson Barrister & Solicitor You Legal Your Estate Lawyer YT Legal Zielinski Legal

June 2021 THE BULLETIN

23

WELLBEING & RESILIENCE

A Sporting Chance: Balancing work with other pursuits GEORGINA PORTUS, NORTHERN COMMUNITY LEGAL SERVICE INC

G

ruelling hours, challenging work and high-performance expectations are the common characteristics of many legal careers. I spoke to three highly committed and exceptionally accomplished individuals who manage these demands with the additional gruelling hours, challenging work, and high-performance expectations of high-level sports.

THE ATHLETES Mollie McKendrick was recruited to play basketball at Boston University when she was 18 years old. Following a successful college basketball career, Mollie returned to Australia and is now an Australian Government Solicitor. She has played basketball at competitive levels throughout her law degree and legal career.

Jamie Botten boasts a successful 36year legal career and is the principal of Botten Levinson Lawyers. His sporting achievements became concentrated in 1976, at the beginning of his legal career, when he was the national 800-metre champion. Jamie continued to represent Australia internationally for years.

Brittany Law is a Level 10 Rhythmic Gymnast, training 15 hours a week and has represented South Australia at the past 16 consecutive Australian Championships.

Brittany has been admitted since 2017, currently works at the Legal Service Commission and recently ranked 4th in Level 10 in the National Championships.

THE BENEFITS AND DEMANDS OF SPORTS It is common knowledge that sports, and exercise generally come with a myriad of health and wellbeing benefits. Mollie also found that it allowed her to have a space outside of work.

“It gives me a focus away from work and a commitment to having some ‘time out’. Playing on a team gives you a support network of

24 THE BULLETIN June 2021

people away from your career or work. I don’t play basketball with any colleagues, or to be frank, any other lawyers, and I like that. It’s a new set of people all with different careers, interests and personalities. You can show up to a practice or a game and not think about work or what tasks you need to get to. It’s a break from your career where you can just work with your team to achieve a common goal.”

Jamie learnt early on in his career that flexibility was vital in managing demands and juggling the commitment conflicts inherent in being a lawyer/athlete.

“Your work can interfere with your flexibility, and you have to learn to cope with that. In the depths of winter, you may decide you need a couple of 10-kilometre runs that are best done 5:30 AM, but in winter, you don’t have the flexibility to adjust and do a midday run.”

Brittany spoke to the same conflicts and the difficulties of coping both physically and mentally. Noting that management of this requires support and flexibility from your teams.

“One of the struggles I find is having [interstate] weekend competitions which make me feel like I need another two days to recuperate before heading back to the office.

However, I just remind myself (with the assistance of my coach) that I need to lower my performance expectations when that is the case.”

AN ATHLETE’S SKILLS IN THE PROFESSIONAL SETTING Each athlete had traits, skills, and strengths that they developed through involvement in high-level sports that apply to their professional careers. Resoundingly, there was a need for keen and disciplined time management skills.

Jamie’s experience gives him an in-depth understanding of the rigours and demands of both high-level sports and career.

“Something will suffer if you can’t manage, careful to make sure you are managing your time strictly. Learn to be conscious of it.

Both career and serious sport demand lots of attention…. if you are going to achieve at a high level in sport, you have to be disciplined in the way you live your life, sleep, eat.”

Brittany notes the value gained from juggling these demanding fields throughout law school and into her legal career.

“Throughout school and University, I have always had to juggle study, work and sporting commitments. This left me with little time to procrastinate, and therefore developed my organisation, productivity and time management skills.”

Mollie found the skill of discipline was applicable both on the court and in the courts.

“No short-cuts. You have to put in the work on every single occasion. Whether it was getting a certain amount of shots up, meeting targets for fitness, or doing 6 AM conditioning outside on the freezing cold track. You had to have the discipline to give it your all and push through the tough times. I think that also drives the work ethic and commitment. You leave ‘everything out there’ type mentality. I pride myself on my work ethic, and I think that’s something I have developed through my sporting opportunities.”

Commitments to various national and international sporting teams have also allowed Mollie to hone her interpersonal skills. She comments on the value of being able to work closely and under pressures with a small team. “[You] learn to work with and manage different personality types. Sport brings a group of people together from all different backgrounds, and it’s about learning ways

WELLBEING & RESILIENCE

to get the best out of the people around you.

You don’t always like all of your teammates, but you have to find ways to have common ground with them... I think learning to work with different people is really important in any career, but especially in law where we are often working with different people across different organisations or lines of work.”

such a competitive and high-intensity environment is hard work. You are under so much pressure to perform and feel like the spotlight is always on you. It is about recognising that pressure and working out ways to enjoy it and thrive in that environment.

On the flip side of that, I think it's about understanding that you are responsible for yourself. So how you handle a high-intensity environment, how you deal with tough times, how you manage competing demands, it all must come from within... It’s about working out ways to be self-motivated and relying on yourself to do the hard work or to get the job done.”

HOW TO TRAIN YOURSELF TO STAY ON TOP OF IT ALL Whilst we may not all achieve highlevel sporting accolades in our legal careers. Each professional has important commitments and endeavours outside of their careers. When juggling our pursuits, in whatever form they may come, we must employ self-care skills.

Mollie’s experience and perception emphasise the power in finding that strength and confidence from within ourselves.

Conversely, Jamie employs his keen time management skills to achieve that crucial balance and prioritise varying interests.

“You have to make sure you have balance in your life, not all grind and discipline. Manage your time so you can have other things in your life as well. You need balance. Make sure you don’t become isolated from friends… keep in

“Playing away from home and being around

touch with friends from all fields, go out and have a few drinks, go watch some other sports, read…do not get completely focused on these areas of your life.”

Brittany also spoke to achieving this balance and how she uses her recovery time.

“My best tip for keeping on top of your mental wellbeing is to make sure you have adequate downtime. While sport is great to get your mind off work, it is also important to allow time to relax and do nothing.”

The words of wisdom from each athlete are broadly thematic and focus on time management, discipline, and flexibility. The message received was that making time for yourself beyond any vast and seemingly consuming commitments is crucial for success and wellbeing. In whatever form we may apply it, we must bring the discipline that we commit to other endeavours to our own wellbeing.

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FEATURE

THE ‘HARMAN’ OBLIGATION AND PRIVATE INTERESTS: CONSIDERING PRACTICAL ISSUES WHEN A LIQUIDATOR ASSIGNS A CLAIM TO A LITIGATION FUNDER MADELEINE MCCARTHY, ASSOCIATE, LIPMAN KARAS

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ection 100-5 of the Insolvency Practice Schedule, which was introduced in 2017, provides that an external administrator of a company may assign his or her right to sue under the Corporations Act 2001 (Cth). The recent Federal Court decision of Stewart J in Re LCM Operations Pty Ltd, 316 Group Pty Ltd (In Liq) [2021] FCA 324 considered a number of practical issues that may arise where a right to sue has been assigned, including how the Harman obligation applies to an assignee and whether it would be an abuse of process for an assignee to obtain information by way of compulsory court processes usually relied on by external administrators.

Pursuant to section 477(2B) of the Corporations Act, the creditors of 316 Group Pty Ltd authorised the company’s liquidator to enter into an assignment deed with litigation funder LCM Operations Pty Ltd. Under the assignment deed, the liquidator sold 316 Group’s claim against another company, Rabah Enterprises Pty Ltd, to LCM for the sum of $10,000 plus 15% of the net proceeds.

In order to investigate the quantum and prospects of the claim, LCM

26 THE BULLETIN June 2021

sought orders from the Federal Court to conduct public examinations and to obtain documents. On the basis of the information obtained, LCM commenced proceedings in the Supreme Court of New South Wales against Rabah for $14.8 million. LCM sought to rely on the documents produced pursuant to the examinations and summonses.

Rabah objected, and the Supreme Court proceedings were put on hold while the Federal Court determined whether LCM was prevented from relying on the documents due to the operation of the Harman obligation. The Federal Court was also asked whether the examinations and summonses obtained by LCM were an abuse of process because they were in pursuit of LCM’s private interests, rather than the interests of 316 Group and its creditors.

OPERATION OF THE HARMAN OBLIGATION It was not in dispute that the documents were produced under the compulsory processes of the Court or that the Harman obligation not to use the documents for a purpose other than

which they were given applied. The real question was whether LCM required leave to use the documents in the Supreme Court proceeding against Rabah, and if so, whether leave should be granted.

The Federal Court held that it was necessary, in applying the Harman obligation, to consider the purpose for which the documents were produced and the purpose for which they were intended to be used in the Supreme Court proceeding. Here, the use of such documents “to get in and realise the assets of the company in liquidation” was not a collateral or ulterior purpose. There would have been little utility in authorising LCM to conduct public examinations if they were not entitled to have regard to the information or documents produced in resulting claims.

As the predominant purpose of the examinations and orders for production of documents was to investigate the claim against Rabah, the Federal Court held that no leave was required for LCM to rely on such documents in pursuing that very claim in the Supreme Court proceeding.

FEATURE

PURSUIT OF LCM’S PRIVATE INTERESTS Rabah submitted that it was an abuse of process for LCM to obtain documents by way of examinations and summonses on the basis that LCM pursued such orders for private purposes, rather than for the benefit of 316 Group and its creditors.

The Federal Court rejected this submission for a number of reasons: • The liquidator and creditors retained a 15% interest in the claim pursuant to the assignment deed, which was worth approximately $2.2 million. While the initial sum of $10,000 was insignificant, the 15% share was a substantial interest.

• The liquidator was not in a position to fund the examinations himself. The assignment to LCM was therefore a means of pursuing the interests of creditors, who authorised the assignment.

• It is not an abuse of process if the party seeking the summonses is doing so for a number of purposes, one which benefits the party and one which benefits the company and its creditors.

The Federal Court therefore held that

the documents were not obtained for a strictly private purpose. Rather, there was a mixed purpose, being “in part satisfaction of LCM’s own interests and in part the interests of the company and its creditors”.

OBSERVATIONS This decision demonstrates that where an assignee under section 100-5 has obtained information or documents by way of compulsory court processes for the purpose of investigating the assigned claims, they do not require leave of the court to rely on such information or documents when pursuing those claims in subsequent proceedings.

If an assignee utilises compulsory court processes to obtain information or documents for a strictly private purpose, it is clear that this will amount to an abuse of process. However, it is not an abuse of process if an assignee is doing so for a number of purposes, one which benefits the assignee and one which benefits the creditors of the company under external administration.

The Federal Court’s reasoning raises the question as to the extent to which an

assignment must benefit the company under external administration and its creditors. It leaves open the question whether the Federal Court would have reached a different conclusion had 316 Group and its creditors only received the initial sum or a less significant share of the proceeds.

KEY POINTS •

•

•

An assignee under section 100-5 does not require leave to rely on information and documents obtained through compulsory court processes in pursuing those claims in subsequent proceedings.

It is not an abuse of process if an assignee utilises compulsory court processes to obtain information and documents for various purposes, so long as there is a benefit to the company under external administration and its creditors.

It is possible that the Federal Court would have reached a different conclusion had the company under external administration and its creditors only received an initial sum or a less significant share of the proceeds. B June 2021 THE BULLETIN

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FROM THE CONDUCT COMMISSIONER

Obligations to respond to complaints GREG MAY, LEGAL PROFESSION CONDUCT COMMISSIONER

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have already said some of what I’m going to say in this article in previous articles in the June, 2015 and May, 2018 editions of the Bulletin. But it’s worth repeating, as some practitioners we deal with clearly didn’t read those earlier articles!

I am very much aware that having to deal with a complaint isn’t any fun. It will be time consuming, it will get in the way of other paying work you could otherwise be doing, and the client complaining may not have paid your fees. And you may be upset or annoyed that your client, for whom you consider you obtained a good outcome, has complained. Alternatively, you may be aware that you didn’t handle that matter as best you could, and be a bit afraid of what the outcome of our investigation might be.

Regrettably though, having a complaint made about you is one of the “costs of doing business” these days. If you are in legal practice for long enough, particularly in one of those areas of law in which a client’s emotions are often at or near breaking point (eg family law, estate administration), then having a complaint against you at some stage is almost inevitable.

When a complaint is published to you, your obligation is to respond to my office in a timely fashion, and to do so openly and honestly. It is one of the obligations that goes with being a part of the legal profession. See in particular rule 43 of the Australian Solicitors’ Conduct Rules.

You should also remember that, at that early stage, all we have heard is the complainant’s version of events. As the practitioner involved in the matter, you should be able to respond to a complaint by referring to your file to tell us all about what happened – because your file should of course have on it all of the things that you are told constitutes good practice management, namely file notes of all substantive discussions with your client, written advices you have given during the course of the matter etc. You should

28 THE BULLETIN June 2021

also have signed instructions to settle where appropriate, to help respond to a fairly common complaint these days that a practitioner “bullied” the complainant to settle their matter. And, of course, you should be able to produce your initial costs disclosure including your fee estimate, your costs agreement, and your ongoing disclosure about changes to your fee estimate – all of which are required by Schedule 3 of the Legal Practitioners Act (Act) to be in writing.

So, your time is best spent by responding factually to the complaint, with as much information as you can give us as well as supporting documentation from your file.

Your time is very poorly spent by telling us how “disgusted” you are with the complainant (as one practitioner told us recently) and how grateful the complainant should have been for your work, or otherwise criticising the complainant. Nor is there any point suggesting that we shouldn’t have bothered sending you a complainant’s response for you to comment on – we will always do so, as that’s part of carrying out a fully transparent and procedurally fair investigation.

My office will usually ask for information to be provided by a particular time. If you can’t respond by a due date, then ask for an extension – don’t just assume it, time deadlines are important.

We will not be unreasonable in providing an extension if you request one and you have a good reason for it. However, it isn’t a good reason, particularly the second or third time you use it, simply to say that you are too busy to respond. I accept that everyone is busy, but responding to a complaint is simply something that you must give some priority to.

If you are asked to provide one of your files, then you should provide the whole file including any part of it that is just kept electronically.

I described in my May, 2018 article the circumstances in which I will issue a formal notice under clause 4 of Schedule 4 of the Act. I won’t repeat here everything I said in relation to such a notice. Suffice it to say that, if I issue such a notice to you, you should give it your urgent attention. Not responding to such a notice will usually result in more drastic consequences than could have arisen even if I were to find misconduct as a result of the underlying complaint/investigation.

At the other end of the spectrum, if you have a misconduct finding made against you, take particular notice as to the requirements of any order I make.

For example, if I make an order requiring you to undertake some professional development, that order will say what topic you have to learn about, when you have to do the session(s) by, and when you need to provide evidence to my office that you have complied with the order. The dates are important, and will usually coincide with the MCPD year – for example, “you must do X units in costs disclosure no later than 31 March, and you must provide evidence of having done so by 30 April”.

I suggest that the evidence you should provide will include proof of registration for a session, as well as proof that you attended it. It is not sufficient for you to simply say that you have done it. It’s not that we don’t believe you, it’s just that that is not evidence. And if (as is usually the case) the order is that you must do that PD in addition to your usual 10 compulsory MCPD units, then you will need to provide evidence that you have done those 10 units too so that we can see that the PD you say you’ve done to satisfy my order is actually in addition to it.

Until you have done everything the order requires, then you haven’t complied with it, which of itself can amount to professional misconduct under section 77J (10) of the Act. Not a good outcome!! B

YOUNG LAWYERS

Getting the most out of your performance review

facebook.com/YLCSA

DAISY MACLEOD, WALLMANS LAWYERS “It’s not bragging if you can back it up”

– Muhammad Ali

P

reparation, self-reflection and growth was the running theme at this year’s “Performing at your Performance Review” Seminar. With the second Young Lawyers’ event for 2021 selling out in under 24 hours, it was clear everyone was keen to turn off their webcams, mute their microphones and get back to enjoying the company of their colleagues at an in-person event.

The Seminar featured panellists Rebecca Sandford (Special Counsel, HWL Ebsworth and President of the Law Society of South Australia), Michael Kay (Partner and Practice Leader, Employment, Wallmans Lawyers), Kate Maguire (Human Resources Manager, Wallmans Lawyers) and Paul Burgess (Director, Burgess Paluch Legal Recruitment) who shared observations they have garnered over their successful careers respectively, and offered practical advice on how practitioners can get the most out of a performance review.

It was interesting to observe that the impact of COVID-19 meant that a majority of the attendees were not afforded the opportunity to have a performance review in 2020. The panellists emphasised that a formal review should be a culmination of the regular informal discussions between a practitioner and their Partner and/or Manager throughout the year. This is so issues can be addressed as they arise, and feedback is provided on a regular basis, so that when the time comes, a performance review can be spent reflecting on the practitioner’s accomplishments and learnings, discussing individual goals, and forming productive plans for the year ahead.

The panellists agreed that the most stand-out performance reviews come from those who noticeably prepared and had done the groundwork prior to their review.

This meant having filled-out the associated

paperwork, and perhaps even sending it along with an outline of materials that the practitioner would like their Partner and/ or Manager to have the time to consider in the lead up to the review. Being thoroughly prepared can help to alleviate the stress of what may be considered a confronting experience for many young practitioners.

Collating a collection of achievements that a practitioner has reached throughout the year, affectionately dubbed by Rebecca Sandford as a “Brag File” was one major takeaway for the night. The panellists encouraged practitioners to save “brag” material to stow away, not only for one of those rainy days as a confidence booster, but also to serve as a helpful resource when preparing for a performance review. Examples of “brag” material included things such as positive feedback received from a client, work colleague or a practitioner outside the workplace, or a record of a great outcome achieved for a client.

The topic of salary was raised, with panellists flagging the importance of keeping in mind the difference between a performance review (open discussion about development and career progression) as opposed to a salary review (an evaluation of base salary).

On the topic of salary increases, the

panellists commented that it is uncertain how firms in Adelaide are going to respond in general, however there is an “air of expectation” as a result of most practitioners missing out on a salary increase last year.

The panellists agreed generating billable work is obviously important given the nature of businesses. However, as practitioners within the first five years of practice, a lot of time will be dedicated to developing and refining their skillset to bring more value to clients, and actively contributing to the success of the business. This could include things like drafting a summary from a webinar to circulate internally, or providing a case law update for clients, taking on internal firm responsibilities such as volunteering as a first aid officer or fire warden. The panellists highlighted that participation in extra-curricular activities outside of the workplace, such as sitting on a committee or board, does not go unnoticed and should not be underestimated by young practitioners.

The Young Lawyers’ Committee would like to thank Burgess Paluch Legal Recruitment and legalsuper for their ongoing support, Wallmans Lawyers for generously hosting and the panellists for their valuable time and insight.

June 2021 THE BULLETIN

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OBITUARY

Brian Withers remembered for lasting contribution to justice

B

rian Withers, who passed away on 13 April, 2021 will be remembered as a giant of the legal profession, with an unwavering commitment to access to justice and a person whose humility and humanity shone through in everything he did.

Brian was held in such high regard that the Law Society in 2005 introduced an award in his honour – The Brian Withers Award for Services to the Law Society and the Profession.

Brian, at the time a Master of the Supreme Court, responded to the news of the eponymous award with his typical self-deprecating humour. In a formal letter addressed to then Society President Alex Ward, Brian stated: “I thought you had to be dead before something like this was ever contemplated.”

In graciously accepting the honour, Brian went on to write that “I have never regarded myself as having contributed an excessive amount to the affairs of the profession.”

But Brian consistently went above and beyond throughout his career, even if he did not consider his service to the profession and community in such a way.

Brian was born in Mannum in 1945, moved to the city as a child and was educated at Unley High School, followed

by Adelaide University, where he graduated with a Bachelor of Laws in 1969.

He undertook articles with Haese, Davey and Mulligan, before working with Peter Waye for two years, and then commencing a long and fruitful career with Elliot Johnston in 1970. He joined as a Partner and the firm subsequently was re-named to Johnston Withers. Brian built up a large workers compensation and personal injury practice, and later took on a substantial volume of medical negligence work.

Andrew Collett, speaking at Brian’s funeral service, described Brian as the “engine room and the rudder of Johnston Withers.”

“The firm, past, present, and future, owes him an incalculable debt of gratitude,” Andrew said.

30 THE BULLETIN June 2021

Speaking to the Bulletin in 2015, Brian said of his time at Johnston Withers: “I acted for a lot of workers, people from overseas who were in a sense the cannon fodder for factories. That really fostered my interest in people getting a fair return in their circumstances.”

Brian said Elliot Johnston instilled in him a passion to help the vulnerable and disadvantaged.

This passion never waned, and was evident throughout Brian’s work with the Law Society, Legal Services Commission, Law Council of Australia, and numerous other organisations.

Brian joined the Law Society Council in the early 1980s, and was Society President in 1990-91. He held roles as Chairman of the Professional Standards Committee, Chairman of the Law Council’s Access to Justice and Pro Bono Committee, Chairman of the Legal Services Commission, Secretary of the Law Foundation of South Australia, and Chair of the Board of Examiners. He also Chaired the Society’s Justice Access Committee for 11 years.

One of his greatest legacies is as the driving force behind, and inaugural Chair of, the Litigation Assistance Fund (LAF), which commenced in 1992.

Brian was instrumental in the creation of the LAF, the charitable body which provides funding assistance for people to pursue legitimate civil claims, and Chaired the LAF’s Advisory Board for 12 years.

The Fund has assisted thousands of clients and has achieved more than $200 million in compensation for clients.

During his 13-year tenure on the Law Council’s Access to Justice Committee, Brian was prodigious in his contribution to national legal aid advocacy. He developed the “National Strategy for Legal aid”, he set up the first National Legal Aid Congress, and presented numerous papers and speeches to promote the implementation of a strategy to increase access to justice, which included focuses on remote, regional and indigenous legal issues.

During this period, he also served as Chair of the Legal Services Commission, from 1997 until his appointment to the Bench in 2004.

When Brian commenced his term as Chairperson, he had already been a board member of the Legal Services Commission since 1988. His appointment as Chair came at a challenging time, when the Commonwealth was significantly reducing the amount of funding it provided to legal assistance services. He oversaw a complete restructure of the Commission. During his tenure, Family Dispute Resolution Conferences were implemented, and Commission lawyers commenced visiting prisons to provide family law and child support advice to prisoners. Under his leadership, the Commission began offering child support advice, assistance with migration law and help in disputes with Centrelink. In his final Annual Report as Chair, he wrote that he believed the Legal Services Commission has “a mandate to ensure that poverty does not become an insurmountable barrier to justice”.

Former Supreme Court Justice John Mansfield, who also delivered a eulogy, said that Brian was “universally admired and respected for his integrity, his industry and his fairness and wisdom, whether performing Master’s functions or as a Judge of the District Court.”

In 2015, Brian was appointed as a Member of the Order of Australia for his service to the law through his leadership in a number of organisations and as a judicial officer.

Brian’s passion for access to justice was almost matched by his fondness for red wine, golf, and cricket, and eclipsed by his love of his family and friends, particularly his wife Mary, children Susie and Ken, grand children Hugo, Toby, Annabel, Phoebe, Jacqui and Pia, and step children Georgina and Louise.

Brian has left an indelible mark on the legal profession and will be greatly missed. B

TAX FILES

Land Tax – Teething issues under the new regime BRIONY HUTCHENS, DW FOX TUCKER LAWYERS

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ith the introduction of a new land tax assessment regime from 1 July, 2020, it was expected that there would be a few teething problems. 10 months into the financial year, a large number of taxpayers are yet to receive land tax assessments for the 2020/21 financial year, leaving many advisors and their clients in the dark as to the extent of their land tax liability and their obligations and options leading into the 2021/22 financial year. This article looks at some of the major issues being encountered by taxpayers and some of the things to be aware of moving forward.

ISSUE AND PAYMENT OF ASSESSMENTS A significant number of taxpayers have not yet received a land tax assessment for the 2020/21 financial year. While land tax is usually assessed and paid over four instalments, it is expected that any assessments yet to be issued for the current financial year will be issued on the basis that the tax for the whole of the year is payable in one instalment. Given that 2021/22 financial year assessments can be expected to be issued shortly thereafter, from a monetary perspective this could put a significant financial strain on many taxpayers. In these instances, it is open to the taxpayer to apply to RevenueSA for a payment arrangement in respect of any 2020/21 land tax assessment, once received, to spread the payment of that assessment out over the next 6-12 months. It is noted that taxpayers need to proactively apply for a payment arrangement, it will not be automatically offered by RevenueSA.

OBLIGATION TO ADVISE IF ASSESSMENT INCORRECT Given the significant changes made to the land tax provisions, it is likely that some of the assessments issued for the 2020/21 financial year will be incorrect, for example as a result of land not being properly aggregated, land not being assessed at the higher trustee rates, or rebates not being applied correctly.

Where the incorrect assessment results in the tax assessed being less than it should be, if the taxpayer does not notify the Commissioner of the incorrect assessment, they risk the failure to notify

being treated as a tax default, which could result in penalties being applied upon the Commissioner issuing assessments for the correct amount.

Accordingly, if taxpayers receive an assessment that is known to be incorrect, they should notify the Commissioner as soon as possible in order to mitigate against any potential imposition of penalties.

RE-APPLICATION FOR EXEMPTIONS In many instances, the transition over to the new land tax regime has meant that any exemptions that were previously granted in respect of land have not been carried over to the new system, resulting in land tax assessments being raised against property that should be exempt.

Taxpayers should therefore be aware that they may need to lodge new applications for exemption in respect of land previously determined to be exempt. In most instances, this will require the taxpayer to re-provide to the Commissioner information evidencing that the land meets the criteria relevant to qualify for the exemption.

NOMINATION OF BENEFICIARIES Taxpayers who hold land in a discretionary trust should consider whether to nominate a designated beneficiary in respect of the trust. Nominations can only be effectively made by the trustee of a discretionary trust in respect of “preexisting land”, being land held by the trust as at midnight on 16 October, 2019. If a nomination is effectively made, the preexisting land held by the trust will be taxed to the designated beneficiary at general rates (together with any other land that the designated beneficiary owns), rather than at the higher trustee rates.

Trustees of discretionary trusts have until 30 June, 2021 to nominate a designated beneficiary. If no nomination is made by this time, the right to make a nomination will be lost and the pre-existing land will be assessed to the trustee of the trust at the higher trustee rates.

If a nomination is made, it can be withdrawn at a later time, but cannot be changed to nominate a different designated beneficiary except in limited circumstances such as death or marriage breakdown.

Practitioners therefore need to consider whether their clients with discretionary trusts should nominate a designated beneficiary, and action any decision to nominate prior to 30 June, 2021.

LOSS OF “PRE-EXISTING LAND” STATUS As noted above, any nomination of a designated beneficiary by a discretionary trust is only effective in respect of any “pre-existing land” held by the discretionary trust. The current position of the Commissioner is that land will cease to be “pre-existing land” if there is any dealing in respect of the land that results in the issue of a new certificate of title in respect of that land, despite the physical asset of the trust remaining the same as that owned as at 16 October, 2019. Examples of dealings that may result in the loss of “pre-existing land” status include: • The subdivision of land into a number of separate titles • The amalgamation of separate titles into one title • The compulsory acquisition or other disposal of a portion of the land • The transfer of land to a new trustee following a change of trustee of the trust.

Any clients with pre-existing land who have made a nomination of a designated beneficiary therefore need to be careful not to inadvertently cause the land to lose that status.

NOTIFICATION OF TRUST HOLDING It is a requirement of the Land Tax Act that any person who acquires land as a trustee of a trust notifies the Commissioner of the trust holding within one month of becoming the owner of the land. This applies to both new acquisitions of land by a trustee, as well as acquisitions of land by a new trustee upon it being appointed as trustee of an existing trust that holds land.

Practitioners therefore need to ensure that practices are in place to ensure that notification of trust holding is not overlooked.

Tax Files is contributed by members of the Taxation Committee of the Business Law Section of the Law Council of South Australia. B June 2021 THE BULLETIN

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RISK WATCH

Going electric a sign of the times MERCEDES EYERS-WHITE, PROFESSIONAL INDEMNITY INSURANCE RISK MANAGEMENT COORDINATOR

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hilst “the new normal” may have become a hackneyed phrase, it is undeniable that the advantages of electronic communications and tools in this age of physical distancing have really come to the fore. Business, including the business of law, has only increased its use of technologies during this time and whilst all should be alive to the increased risk of cyber-based fraud, it is perhaps timely for practitioners to revisit the current state of the law when it comes to electronic signatures and the execution of agreements. No one wants to be embroiled in an argument about valid execution, let alone caught out by an unenforceable agreement.

WHAT IS AN ELECTRONIC SIGNATURE? A working definition of an electronic signature is that it is a visible representation of a person’s name or mark, placed by a person on a document or in a communication by electronic and/ or mechanical means, to identify the person and indicate that they have put their mind to adopting the document or communication. Some commonplace examples include typing your name in an email or word document, pasting a digitised image of your physical signature, signing an electronic document with a stylus or finger on a touchscreen, or using a digital signing platform (e.g. DocuSign).

The Electronic Communications Act 2000

32 THE BULLETIN June 2021

(SA), as in most states, essentially mirrors the provisions in the Electronic Transactions Act 1999 (Cth), although practitioners should take care to note that the law is not uniform throughout the country.

Some jurisdictions exclude particular transactions from the operation of the Act, for example where a document is required to be attested by a witness or where documents must be served personally.

Under the SA Act an electronic signature will be deemed effective under s9 if it meets three conditions, namely: • it identifies the signatory and indicates their intention to sign the document; • the method of signing is either as reliable as appropriate for the purpose of the document or transaction, or is proven in fact (by itself or with other evidence) to identify the signatory and their intention to sign; and • the person to whom the signature is provided consents to the method of signing.

The use of electronic signatures is not without risk, particularly if it is a matter of cutting and pasting a digitised image of a signature. Where such a method is employed by someone other than the signatory, it will require obtaining and retaining the authority from the signatory to affix their signature to a particular document. Section 9 requires there be some method employed to verify the identity

of the signatory, which is where digital signing platforms are particularly useful.

In general terms an electronic signature is just as enforceable and admissible as the traditional “wet ink” signature, but there are important exceptions and jurisdictional subtleties. Where the document is to be registered, it is also prudent to consider whether there are registration requirements that impact whether an electronic signature is appropriate.

WHAT ABOUT COMPANIES? As most would be aware, s127 of the Corporations Act 2001 (Cth) provides that a company may execute a document without using a common seal if the document is signed by two directors or a director and a company secretary (or where a sole director is also the sole company secretary – by that director). Where a document appears to have been signed in accordance with s127, a counterparty is entitled under s129 to assume that all internal requirements have been met and the document is binding on the company, unless it has actual knowledge, or suspects that assumption is incorrect. The Act also provides that a company may execute a document as a deed if the document is expressed to be executed as a deed and is executed in accordance with those signing procedures.

However, the Corporations Act is excluded from the operation of the

RISK WATCH

Electronic Transactions Act, so the electronic execution of an agreement or deed is not generally considered a valid method of execution under s127. A valid agreement can still have been made under common law despite failing to properly execute it but this is less likely in the case of a deed where a distinguishing feature is the lack of consideration.

The practice of split execution, where each company officer signs a copy or counterpart of the document in wet ink or electronically, should be avoided. In Bendigo and Adelaide Bank Limited & Ors v Kenneth Ross Pickard & Anor [2019] SASC 123, Stanley J considered that s127(1) contemplates a document being executed by two officers signing it and is therefore “good reason to consider that there must be a single, static document rather than a situation where two electronic signatures are sequentially applied to an electronic document… it is insufficient that two signatures appear on different counterparts or copies of the same document because no one counterpart or copy would be properly executed by the company under s127 (1)”.

To promote the continuance of regular business during the period of physical distancing requirements, the Treasurer issued the Corporations (Coronavirus Economic Response) Determination (No. 1) to provide specific relief in this respect. Under the Determination, the operation of s127 was modified to allow a company to execute a

document by signing a copy or counterpart of a document that is in physical form.

It also alternatively allowed a signatory to use a reliable and appropriate electronic method to identify themselves and to indicate their intention to execute the document. Whichever method was chosen, the physical or electronic communication must have included the entire contents of the document i.e. not just the signature page. It did not, however, need to include the signature of another person signing the document physically or electronically.

It also extended the definition of ‘document’ to include one in electronic form. This relief expired in April, 2021, and the position has reverted to the pre-COVID requirements.

for remote witnessing as was done, for example, in NSW, Victoria and Queensland. The position remains that witnesses must be physically present to certify that the document was signed by the signatory. For individuals, the validity of witnessing of electronic signatures is a somewhat grey area but may be possible where the witness is physically present, sees the signatory affix their electronic signature to the deed and then affixes their own electronic signature to the same version of the document at the same time.

Beyond doubt the safest course and most conservative option is to sign paper in wet ink, as the practical value of witnessing electronic signatures is fairly limited.

WHAT ABOUT DEEDS?

CHECK THE DETAILS

In South Australia the Electronic Transactions Regulations 2017 exclude, amongst other things, any transactions under a law of the state requiring a document to be witnessed, attested, verified or authenticated under the signature of a person other than the author of the document, from the operation of the Act. Therefore, the requirements set out in s41 of the Law of Property Act 1936 (SA) relating to the execution and attestation of deeds still need to be met. South Australia did not introduce any regulations to allow

Whilst in this age of electronic commerce it may seem a little anachronistic for the law to continue at times to insist on pen and paper, it is well to remember that it sometimes does. With the lapsing of temporary COVID-related variations and with only some jurisdictions enacting permanent amendments, executing deeds in particular will require a cautionary approach. Moves to permanently enshrine the recent variations to the Corporations Act have been flagged.

As always, it is prudent to check the details before signing.

June 2021 THE BULLETIN

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FEATURE

STRATEGIC OBJECTIVES 2022-25: MEMBER CONSULTATION VERSION EDUCATE

REGULATE

➢ Be the market leader in providing a relevant and comprehensive Continuing Professional Development program (including a Practice Management Course) which supports Members’ skills and knowledge across all areas of practice.

➢ Support the profession to maintain the highest standards and improve services.

➢ Provide a relevant and effective GDLP Program ➢ Educate the community to strengthen its understanding of the work of the profession and the justice system.

➢ Perform the Regulatory Functions Powers and Responsibilities1 appropriately, efficiently and in a timely manner. ➢A ssist the profession to comply with their responsibilities. ➢M aintain and promote high standards of professional conduct and etiquette within the profession. ➢A dvocate for improvements in the regulatory framework. ➢M aintain effective Professional Indemnity Insurance and Professional Standards Schemes.

The Regulatory Functions and Powers of the Society are set out in: 1. Legal Practitioners Act 1981 and Legal Practitioners Regulations 2014; 2. Chapter 17 of the Supreme Court Rules; and 3. A ppendix C to the LPEAC (Legal Practitioners Education and Admission Council) Rules 2018 (made pursuant to sections 14C and 17A of the Legal Practitioners Act 1981).

1

ADVOCATE ➢ Protect the independence of the profession. ➢ Effectively engage with and provide expert assistance to parliament and government agencies in policy development. ➢ Promote reforms of the law, its administration and advocate for adequate resources in the justice system. ➢ Provide leadership on issues affecting the membership and the community such that the Society is the first port of call on legal matters and proposed legislation through compelling media events, submissions, articles and media releases. ➢ Engage with the profession on policy. ➢ Fulfil the Society’s role as a constituent member of the LCA.

34 THE BULLETIN June 2021

PROTECT ➢F ocus on preserving and upholding the integrity and independence of the legal profession and courts as well as the Rule of Law. ➢U phold and protect legal rights and freedoms, particularly for vulnerable members of society. ➢ I mprove access to justice and strengthen the community’s confidence in the legal profession and the justice system. ➢M aintain high membership of the Society in all sectors so as to maintain relevance and credibility as the voice of the legal profession.

FEATURE

INFORM

SUPPORT

➢ Provide the membership with current and timely information on issues impacting them and their practices.

➢ Provide a range of useful services, events, resources, and other benefits to support Members throughout their careers.

➢ Promote the profile of the Society and the profession through credible and positive communication and advocacy.

➢ Ensure that in the delivery of all products and services the diversity of the membership is acknowledged.

➢ Provide the community with information pertaining to access to justice and the justice system.

ENGAGE ➢ Provide opportunities for appropriate professional and social interaction between Members. ➢ Provide and promote the opportunity to contribute to the Society’s activities and policy considerations. ➢ Address the diversity of the membership. ➢ Identify and address changing needs, issues of Member satisfaction or concern and trends within the profession.

➢ Support Members in practice through promoting the work of the profession and availability of services to the community.

INNOVATE ➢ Ensure prices charged to Members are perceived as ‘value for money’ and are discounted (from non-Member prices) such membership pays for itself. ➢ Allocate resources such that the interests and benefits to Members are the determinant for decision making. ➢ Continue to enhance internal processes to maximise efficiency and contain/reduce cost.

June 2021 THE BULLETIN

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FEATURE

Dr Ulrich Hübbe LLD (1805–1892) and the true origins of the Real Property Act RITA BOGNA, SENIOR ASSISTANT PARLIAMENTARY COUNSEL

It was perfectly well known at the time that Sir R. R. Torrens brought in the Real Property Act, that Dr. Hübbe provided the ideas, the brains, and the work of the measure. – —The Hon. Rudolph Henning M.P. (1880)1 During a visit to the Hahndorf Cemetery I came across a grave site that got my attention because of a memorial to the son and grandson of the deceased, both soldiers killed in action and buried overseas. Captain Samuel Grau Hübbe was killed in South Africa in 1900 during the Second Boer War at the age of 52, and his son, Captain Hermann Fritz Hübbe, was killed in 1916 in Pozieres, France, during the First World War at the age of 21.

When I researched Samuel’s father, Ulrich Hübbe, I found that he had studied law in Jena and Berlin and had been awarded the degree of Doctor of Laws in 1837 by the University of Kiel. After spending some time in a junior position in the Prussian Civil Service, Hübbe practised as a barrister in Hamburg, helping Old Lutheran congregations persecuted by the Prussian Government to obtain refuge in South Australia.

In 1842 Hübbe went to England and, with help from George Fife Angas, migrated to South Australia. Not being able to practice law here due to his foreign qualifications, Hübbe worked variously as a journalist, teacher, government interpreter and translator and land agent, but he was a passionate advocate of law reform, particularly in the areas of succession and property law. In 1857 Angas paid for the publication of Hübbe’s pamphlet, The Voice of History and Reason Brought to Bear Against the Absurd and

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Expensive Method of Encumbering Immoveable Property. The Evening Journal wrote that “Dr. Hübbe explained to Sir R.R. Torrens the form of certificates of title and encumbrances in force in the Hanseatic towns of his native land, and Sir Robert was pleased with the simple way in which the charges were detailed that, with Dr. Hübbe’s assistance, he transferred the idea as far as was practicable into the Bill”.2 From this source in particular was embodied the principle that mortgages should not change the freehold property, but that they should simply be charges on the property in priority one over the other.

Dr Hübbe, at his own suggestion, drew the very comprehensive repeal clause printed in the Act, and also spent a considerable time in remodelling the whole draft of the Bill. He submitted his alterations to Sir R.R. Torrens, and the draft Bill thus revised was placed before Parliament and was made law. It is to be regretted that these important services were never properly recognised by the State.3 Hübbe was also interested in reform of the law relating to inheritance in cases of intestacy, ardently supporting the abolition of the law of primogeniture.

He drafted a Bill for uniform law on succession on intestacy and gave evidence to the Commission on the Real Property, Intestacy and Testamentary Causes Acts in 1873. He also proposed a consolidation of statutes passed or applying in South

Ulrich Hübbe circa 1880. Photo State Library of South Australia Collections

Australia, with tables of amendments and repeals, and suggested an index of the colony’s laws. Unfortunately, none of these projects interested the Government.

By 1884 Hübbe was practically destitute. A deputation consisting of several Members of Parliament met the Premier and Chief Secretary, the Hon. (later Sir) John Colton M.P., and asked for the Government to make some provision to Hübbe’s poverty and remunerate him for his contributions to the Real Property Act. The Chief Secretary was also asked to present a petition to Parliament, and it was pointed out by the gentlemen who spoke that when Sir Richard Torrens was engaged in framing the Real Property Act the whole of the legal profession, without exception, were hostile to the measure.

FEATURE

Consequently, Sir Richard was unable to secure the assistance of any of the lawyers in drafting a Bill to lay before Parliament, but Dr. Hübbe, being a lawyer himself, and being acquainted with the principle, came forward and rendered him most valuable aid in securing the passing of the measure.

The correspondence the Doctor had been compelled to deal with in connection with the case had been very burdensome, and if it had not been for the energy and the tact he displayed in educating the people up to the Act the benefits derived from it would have been deferred for many years to come.

Dr. Hübbe, who had not yet made any claim upon the Government, was therefore entitled to some recognition of his services. At the present time he was

eighty years of age, blind and in destitute circumstances; and numerous friends of his had thought it proper to take steps to draw the attention of the Government to his circumstances, and if necessary, petition Parliament to support him during the declining years of his life. This was not asked in the light of charity, as man who had rendered such valuable service to the State should not be treated as a pauper, but have accorded to him some recognition of the service he had rendered to the public of South Australia.4 According to Anthony Forster, a Member of the Legislative Council who was prominent in guiding the Bill for the Real Property Act through the Council, the Act might never have come to fruition without Hübbe’s help. Hübbe was later given £250 by the Government, but his contribution to the authorship of the Torrens system of land title registration has never been properly recognised or acknowledged.

In 1932, a verbatim statement made

by Hübbe to his grandson Sam Hood in 1884 was published for the first time by The Advertiser. Hübbe revealed that after finding Torren’s idea of adopting the British legislation that provided for the transfer of title to ships unworkable, he “translated the German system as used in the Hanseatic cities of which Hamburg was one. Mr Torrens adopted this system and I drafted the Bill finally on those lines which Mr. Torrens piloted through the House of Assembly”.5 The legal profession was up in arms against the plans and Mr. Charles Fenn, a barrister and partner of one of the leading conveyancing firms then in Adelaide, was

especially loud and emphatic in a series of letters in the press, warning proprietors and lenders and everyone dealing in real property of the extreme unsafety of trusting their interests to a public office, and assuring them that no system of public booking of dealings in land had ever worked anywhere.6 Hübbe was reputedly fluent in 11 languages. He was blind for many years before his death but was able to read using William Moon’s raised type, a system of writing for the blind using embossed symbols derived mostly from Latin script, with raised curves, angles and lines. Moon’s system is said to be easier to understand than Braille, but is mostly used by adults who have lost their eyesight and were previously familiar with the shapes of letters. Hübbe imported Moon’s raisedtype versions of the four Gospels and the Book of Psalms in German for the use of his fellow German colonists who were blind.

Hübbe died at Mount Barker on 8 February ,1892 at the age of 86. B

Endnotes 1 South Australia, Parliamentary Debates, House of Assembly, 20 July 1880, 427.

2 ‘Obituary. Death of Dr. Ulrich Hubbe.’ Evening Journal, 10 February 1892, 3.

3 Ibid.

4 ‘Deputations. Dr. Ulrich Hubbe and the Real Property Act.’ South Australian Register, 29 August 1884, 6.

5 ‘Torrens and Dr. Hubbe. Authorship Of Real Property Act. Claim Produced’, The Advertiser, 19 March 1932, 8.

6 Ibid.

June 2021 THE BULLETIN

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ALTERNATIVE DISPUTE RESOLUTION

COMING TO AN AGREEMENT: A MATHEMATICAL APPROACH TO SETTLING DISPUTES BERNARD O‘BRIEN

INTRODUCTION

S

ince the early 1960s there has emerged amongst both academic lawyers and economists an ever-growing interest in the study of law and economics. This has now become such an amorphous and diverse field of academic interest that there are encyclopedias on law and economics. It has also become an intellectual discipline in its own right. So much so that it has readily spread across that great divide between the common law and the civil law traditions.

Whilst much of the scholarship in this area is essentially of theoretical interest only with no immediately foreseeable practical applications there are some areas where that is not quite true. One of those areas is what I would call “Settlement Theory”.

This is a formal theory about the way litigants and their legal advisers settle disputes.

What is sought to be developed in this endeavour is what is called a formal system. A formal system is a system of logic built on axioms or assumptions from which theorems or conclusions are derived by the application of a rigorous process of reasoning. Whilst this can be very mathematical, it doesn’t always need to be and in fact there are some outstanding examples which are devoid altogether of both numbers and mathematical symbols.

A famous example of which is Ronald Coase’s article on “The Problem of Social Cost”. For this work and others he was awarded the Nobel Prize in 1991.

That article contains no equations at all but makes copious reference to some 19th century English cases in actions in nuisance. From that article is derived the now famous Coase Theorem, one formulation of which states: “…that if trade in an externality is possible

38 THE BULLETIN June 2021

and there are sufficiently low transaction costs, bargaining will lead to a Pareto efficient outcome regardless of the initial allocation of property” Essentially the same methodology is adopted when analysing how the parties to a dispute would arrive at a settlement.

In the first instance the analysis shows that there is what is called the basic model.

Whilst this model represents a very good place to start, however, its effectiveness in terms of modelling the real world is limited by the assumptions upon which it relies. Initially the model proceeds as an application of Decision Theory but it quickly becomes an analysis in Games Theory.

Settlements in both criminal and civil matters are so pervasive that if a matter goes to trial that is seen as a failure. Why did the settlement process fail to resolve the dispute? That is a question which would be posed by those responsible for the administration of the court caseload, it is not the first question a practitioner would ask. A practitioner would ask what can this analysis tell me about how I can get the best result for my client?

This paper will look at this area of study principally from that point of view. In doing so I will put to one side settlements in crime and personal injuries and focus exclusively on commercial litigation.

THE BASIC MODEL As we all know the overwhelming majority of cases settle before a trial is concluded. The question is how is the decision to settle arrived at? There is a branch of mathematics which is formally known as decision theory which analyses decisions which involve risk. The mathematics involved in decision theory

is quite simple and straight-forward. It can best be explained by taking, as an example, a simple piece of litigation. P sues D for breach of contract and is seeking $100,000 in damages. We will assume that from the commencement of the action to judgment solicitor/client costs will be $40,000 and taxed costs will be $30,000. We will also assume, again for the sake of simplicity, that solicitor/client costs and taxed costs will be the same for both P and D. It is far from certain that P will win, however we can derive an estimate of P’s chances of success. Let us assume that P’s chances of success are 60%, we can now analyse the nature of the decision which P faces by the use of the following diagram.

FIGURE 1:

If P wins, he will get $100,000 in damages, he will have paid $40,000 in solicitor/client costs and will be paid in taxed costs $30,000. That information is set out at the top diagram. Therefore, if he wins, he will be paid a total of $90,000 and he has a 60% chance of that happening which is therefore 0.6 x 90,000 = 54,000.

If he loses, he will have paid $40,000 and will have to pay a further $30,000 in taxed costs, which gives a total of $70,000, which has a 40% probability of occurring, thus 0.4 x -70,000 = -28,000.

ALTERNATIVE DISPUTE RESOLUTION

The expected value of the litigation to P is the sum of those two products namely $54,000 +(-28,000) = 26,000. If we now undertake the same analysis in relation to D then we obtain the following diagram:

FIGURE 2:

Ed + Ep = -2S Equation 3 And (Ed + S) + (Ep +S) = 0 Equation 4

Undertaking exactly the same approach for D, as we did in respect of P, results in a very different outcome. Instead of it being an expected value for D of $-26,000, we have an expected value for D of -$106,000. Whilst the use of actual numbers is useful it is more revealing to examine the problem algebraically.

Let: Vp be the expected value of the litigation to P; Vd be the expected value of the litigation to D; J be the judgment sum (in the example $100,000); S be solicitor/client costs (e.g. $40,000); C be the taxed costs (e.g. $30,000); p is the probability of P winning; and (1 – p) is the probability of D winning.

The expected value of the litigation to P is: Ep = p(J + C - S) + [(1 – p)( - C - S)] Ep = pJ + pC – pS - C – S + pC + pS Ep = pJ + 2pC – C – S = $26,000 Equation 1 The expected value of the litigation to D is: Ed = p(- J - C - S) + [(1 – p)(C - S)] Ed = - pJ - pC – pS + C – S - pC + pS Ed = C – S – pJ – 2pC = - $106,000 Equation 2 If we add both Equations 1 and 2 together in order to arrive at the joint expected value of the litigation then that net amount is -2S, namely double the parties’ individual solicitor/client costs.

Thus, from the collective perspective of the parties, the litigation is a negative sum game with the only winners being the lawyers. Obviously once litigation is viewed in this light the most sensible course for the parties to take is to resolve the dispute and bring the litigation to an end. For the purposes of this analysis I will assume that both parties are risk neutral, that is they are neither gamblers nor unusually timid little souls. Whilst they are prepared to take a risk, they will only take risks when sensible and prudent.

Equations 1 and 2 set out the expected value of the litigation to P and D respectively. That is to say that if the matter goes to trial then P has an expectation which is valued at $26,000 and similarly D has an expectation of being out of pocket to the tune of $106,000. Thus, if D was offered a settlement by paying any amount greater than $106,000 then he would refuse, assuming that he was both rational and risk neutral. Similarly, P would refuse any offer which was less than $26,000 for the same reason. In each case the offer would fall short of the respective parties’ expected value of the litigation. Therefore, if this matter is going to settle the settlement offers will have to come within the difference between the expected value of the litigation to both P and D. In other words, the only settlement offers which will resolve the dispute are those that come within the -2S range or in the case of this illustration $80,000, that is from $26,000 to $106,000. This range is sometimes called the Settlement Range and sometimes called the Surplus. For the purposes of this paper I will adopt the term Surplus. In short, any offer greater than D paying P $26,000 and not more than D paying P $106,000 is better for both parties than if they went to trial. If they were to settle for say $66,000 then P gives up a claim worth $26,000 and gets an additional $40,000. Whereas D escapes a potential liability of $106,000 and incurs a cost of $66,000, thus, in theory,

saving $40,000. Note that that $40,000 each is the equivalent of the saving which each party makes by settling and therefore not having to pay their respective lawyers.

An “all in” settlement of $66,000 satisfies Equation 4 above. Indeed, it is the only amount which will satisfy Equation 4.

One may well object to the fact that this dual saving of $40,000 each is somewhat illusory in that it rests entirely on a speculative scenario as to what would happen if the matter did not settle and instead went to trial. The expected value of the litigation if it went to trial is necessarily hypothetical. Obviously if P is offered $26,001 in settlement, she would not be persuaded that by accepting such an offer she would be better off by a dollar than if she were to go to trial. Similarly, an offer of $105,999 made to D would not persuade him that this constituted an improvement in his position. However, the midpoint between these two expected values will ordinarily maximise the likelihood that both parties are better off by settling at that midpoint than if they went to trial.

STRATEGIES IN HOW TO DIVIDE THE SURPLUS The Surplus could in theory be divided in a variety of different ways. However, there is a certain intuitive appeal in simply splitting it down the middle, it is certainly the most equitable division, but it is ultimately a matter of negotiations between the parties and there is no guarantee that the concepts of fairness will drive those negotiations. One would have thought that the parties’ respective attitudes to risk would potentially play a critical role. Thus, if one party was risk averse and the other was either a risk taker or was risk neutral then that would shift the point of division in favour of the latter. In addition to attitudes to risk there is also the assessment of risk. Up to now I have assumed that the parties agree on the measurement of risk, namely that P has a 60% chance of success and conversely D’s prospects of success are 40%. If the parties disagreed on the extent of the risk which each were exposed to then that would add another dimension to the difficulty in arriving at a compromise.

In Table 1 below I have set out the variation in what is a fair settlement given different assessments of the risk: June 2021 THE BULLETIN

39

ALTERNATIVE DISPUTE RESOLUTION

TABLE 1:

Thus, if P put her chances at 70% a fair settlement to her would be $82,000, whereas if D’s estimate of P’s chances of success was say 50% then he would assess a fair settlement at $50,000. This of course assumes that both parties are not only fair but are also risk neutral. If, however, they are both risk takers and also refuse to be fair, that is refuse to split the Surplus down the middle, then if they were also both optimistic about their chances of success they would end up “hopelessly apart”. Thus, ideally for a matter to settle both parties have to be realistic, risk neutral and fair, unless of course optimism is matched by pessimism, risk taking is matched by risk aversion and feelings of over-entitlement are matched by feelings of being undeserving. We could describe this combination as a hawk-dove confrontation in which the hawk will always be significantly better off than the dove and, as a consequence, every litigator will be a hawk and hence the game will be transformed into a hawk against hawk contest in which relatively few matters will settle. For that reason, a perpetuation of hawk against hawk contests would not be sustainable. Of course, if one’s opponent is a dove then it would obviously profit the other party to play the role of a hawk.

However, assuming both parties are represented by experienced litigators one would not expect that there would be that many hawk-dove contests. A hawk against hawk contest is the best combination if one wants to prolong the dispute and maximise the costs arising out of it. A hawk against hawk contest takes a bad situation and only makes it worse.

It needs to be remembered that litigation is a negative sum game. Given that it is a negative sum game the best one can do, all else being equal, is to get out of it sooner rather than later. Consequently,

40 THE BULLETIN June 2021

a hawk is not an ideal litigator any more than is a dove. The obvious choice is therefore something in between in which the parties search for common ground.

I will call this the owl strategy. The owl begins by first determining what is at stake, namely undertakes an assessment of damages and costs and the respective parties’ chances of success. In order to undertake those evaluations both the lawyers and the parties need to familiarise themselves with the case which usually takes time and money. In addition, usually the parties have to move on from a relentless desire to see justice being done to a more pragmatic appreciation of the costs and the risks which litigation invariably entail. In short, the parties will typically need to arrive at least at a point of indifference between wanting the case to go on and wanting the case to settle. All of which takes both time and money. If, having arrived at that point of indifference, the parties share a common assessment of costs, damages and their respective chances of success then the matter ought to be ripe for settlement. The most likely point of settlement is the one that is perceived by both parties as being fair, namely one which splits the Surplus down the middle. A settlement which both parties, with some equanimity, can walk away from. The “all in figure” is therefore arrived at by simply adding S to both P and D’s expected value of the litigation and if one adds those two sums together one arrives at zero, which is Equation 4.

Thus, what began as a negative sum game becomes a zero sum game and by moving from a negative sum game to a zero sum game both parties are better off.

Such an outcome is fine if both parties will, in the end, want to cooperate and settle upon an objectively fair division.

However, what if one of the parties had no interest in being fair and all that he wanted was to take as large a share of the Surplus as he can get. How would he do that? One possibility is that he could play the role of the proposer in what is called the Ultimatum Game.

In an ultimatum game there are two players, a proposer and a responder.

The proposer is given, for want of a better word, an endowment of some description. Let us say $100. The proposer must share the endowment with the responder however the proposer gets to

determine the allocation of the shares.

So, for example, the proposer may offer $1 to the responder and retain $99 for himself, or he may offer to split the pie with the responder evenly, a 50:50 split or somewhere in between. However, that is not the end of the matter, before any division of the endowment can take place the responder must accept the proposer’s offer. If she rejects the offer then neither party gets anything. There is no opportunity for the responder to reject the proposed offer and to come back with a counter-offer. Likewise, the proposer cannot put a second offer if the first is rejected. Either the responder accepts the offer and goes away with something in her pocket or rejects the offer and both parties walk away empty handed. It is a take it or leave it situation.

This game has been studied in an experimental setting, typically employing university students as subjects, around the world for decades. A meta-analysis of the published literature shows that typically the proposer offers on average a 60:40 split in favour of the proposer and around 16% of offers are rejected.

Obviously such an outcome does not sit comfortably with the assumption of homo economicus namely that in their economic dealings with others people are essentially rational self-maximisers of their utilities. That is a fundamental axiom of neo-classical economics. However, all is not lost. When the proposer was given $100, he was actually given that sum of money and it was to be shared between himself and the responder, as per an agreed split. Otherwise it was forfeited if there was no agreed split. Carrying out this experiment using university students in advanced industrial economies imposed a practical limit on the size of the endowment. If the amount of the endowment was not $100 but rather $1million would an offer of a 1% share (i.e. $10,000) be so readily rejected?

Given the limits on the availability of research funds it was decided to conduct the experiments using villagers drawn from 8 rural villages in India where the endowments ranged from 20 rupees to 20,000 rupees (1.6 hours of work to 1,600 hours of work).

Thus there was a sufficient variation in the size of the pie in order to see what impact its size had on the rejection rate.

ALTERNATIVE DISPUTE RESOLUTION

As the size of the stake increased there was an exponential decay in the rejection rate. It went from 40% when the size of the pie was around the equivalent of one hour of work to zero when the amount involved reached the equivalent of 100 hours of work.

Hence when the stakes are low there is a lot of enthusiasm for fairness and cooperation, however as the stakes increase naked self-interest becomes the horse to beat.

In litigation, so far as the parties are concerned, the stakes are nearly always very high. However, as is superficially obvious, negotiations to resolve a litigious dispute is not an ultimatum game. The parties are not assigned roles, such as proposer and responder, and negotiations are not confined to a single round which concludes with a take it or leave it offer.

Nonetheless, one or both the parties can attempt to turn negotiations into an ultimatum game. A party who plays the role of a hawk would: • Always plays hard ball, • at every opportunity treat the other side’s case with contempt, • issue orders as to the procedural steps which the other party must take, as if he was a Master of the Court, • never miss an opportunity to be bloody-minded, and unpredictable.

If the other side is a dove then the hawk, by doing the above, is able to define the nature of the game and to assume the role of the proposer. When the hawk makes a proposal, he states emphatically that this is his client’s first and only offer and thus he attempts to define the negotiations as an ultimatum game in which he, without as it were a "by your leave", has assumed the role of the proposer and conversely this leaves the dove as a responder in a high stakes ultimatum game. If the offer is significantly better than that party’s expected value of the litigation, even though the offer gives the lion’s share of the Surplus to the hawk, the dove will, if persuaded that this is an ultimatum game, feel that she has no choice but to take the offer. However, once one realises that this is not an ultimatum game and there is no reason why any offer made by either party will be final, there is therefore no reason why the hawk would not come back with a better offer if the first offer was rejected,

so long as any subsequent offer left the hawk better off than if he went to trial.

Let us suppose in the first round of negotiations D offers as an “all in” settlement Ep + Q1S where Q1is equal to 0.2. In other words, he offers an 80:20 split in his favour. It is an offer which is not so small that it can be dismissed with contempt and if P is a dove then P would be under a lot pressure to accept, even though it is palpably an unfair offer.

FIGURE 3:

Figure 3 sets out P’s options. She can either accept the offer the value of which is Ep + Q1S or reject the offer in the hope or expectation that a better offer is sitting in the wings, namely p(Ep + Q2S) + Ep(1 – p), p is the probability that a further offer will be made and Q2 is P’s proposed share of the Surplus. Thus, P’s point of indifference (i.e. the point where P’s expected value of acceptance is equal to P’s expected value of rejection) is:

accept the original offer unless P is a risk-taker or wants to stand on her pride.

Nevertheless, there is more to the analysis than just that. As one can see D’s offer puts P in something of a pickle, however if P rejects D’s original offer and makes a counter-offer of a 50:50 split that would put him in a pickle as well. He is now the one facing a take it or leave it offer. The position which P presents to D is that either he accepts P’s offer or they will see each other in court. D is thus faced with four choices: • Insist on an 80:20 split and if necessary, go to trial, • Make a further offer of a 70:30 split, • Make a further offer of a 60:40 split, or • Accept a 50:50 split.

Of those four choices in reality there are only two that feasible. If D proposes either a 70:30 split or a 60:40 split he is signaling to P that his previous take it or leave it was just a bluff and that would only encourage P to hold out for a 50:50 split. Therefore, D’s choices in reality are either to accept P’s offer or to insist on an 80:20 split. In fact, D’s decision-tree will look essentially the same as was P’s in Figure 3. See Figure 4 below:

FIGURE 4:

p(Ep + Q2S) + Ep(1 – p) = Ep + Q1S or pEp + pQ2S + Ep – pEp = Ep + Q1S Equation 5 From the above it follows that p = Q1/Q2 at the point of indifference. Thus if P, for example, is hoping that D will come back with an offer of a 50:50 split then if P estimates that the probability of D making such an offer is 40% or less then the expected value of rejecting D’s original offer is no better than the actual value of accepting that offer. In which case, it may be thought, that P should

At D’s point of indifference, the following equation holds: p(Ed + Q1S) + Ed(1 – p) = Ed + Q2S Equation 6 From which it follows that p = Q2/ Q1. It will be recalled that Q2 equals 50% and Q1 equals 80% therefore p = 0.625.

June 2021 THE BULLETIN

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ALTERNATIVE DISPUTE RESOLUTION

In other words, unless the probability of P accepting D’s original offer of an 80:20 split is greater than 62.5% then P’s counter-offer of a 50:50 split has the same or better expected value for D than the hope that P will in the end accept an 80:20 split. Furthermore, if D doesn’t accept P’s offer then the situation will become a Mexican standoff and negotiations will be stalemated, meanwhile as each party continues paying their respective solicitors S gets smaller and smaller.1While this is a case of who blinks first, P is the one who is making a fair offer and D is the one who is seeking to profit from an unfair offer (although this would not be readily apparent to the casual observer) and for the reasons set out below, as a matter of principle, the parties should always adopt an even split of the Surplus.

If these negotiations were taking place on day one of the dispute, we would be looking at J = $100,000, C = $30,000 and S = $40,000. Whilst the values of J and C, assuming that the original calculations were accurate, will remain constant throughout the course of the litigation up to the time of judgment, however that is not true of S. S is the solicitor/client costs as will be incurred in the future. S does not include solicitor/costs which have already been paid or incurred in the past. This significantly effects the extent to which the parties are apart. If the offer of an 80:20 split was made by D on day one then it would come to an amount of $42,000 and P’s counter-offer of a 50:50 split would come to $66,000. Thus, they would be $24,000 apart. If those same offers were made half-way through the case when each party had spent $20,000 on their solicitors then they would only be $12,000 apart.

It will be recalled that Equation (1) is: Ep = pJ + 2pC – C – S; and Equation (2) is: Ed = C – S – pJ – 2pC. If there is a 50:50 split that is the equivalent of adding S to both equations. Equation (1) therefore has the value of Ep = pJ + 2pC – C = $66,000 and Equation (2) has the value of Ed = C - pJ - 2pC = -$66,000. A symmetrical split has the effect of removing the Surplus from the calculations, whereas an asymmetrical split retains the Surplus. Thus as time passes and more and more money is spent on the lawyers and the experts in which case an asymmetrical offer will, with the progressive payment of legal

42 THE BULLETIN June 2021

costs, approach a symmetrical offer and if the only point of difference between the parties is whether the split should be symmetrical or asymmetrical then it is definitely the case that the only winner is the lawyers and the experts. If, on day one, all that separated the parties was the terms on which the Surplus was to be split, D wanting 80:20 and P wanting 50:50, which leads to a difference in offers of $24,000, a gap too large to bridge, but after each party has spent $20,000 in legal costs we have halved the gap which is no longer too large to bridge then all that has been achieved is that an extra $40,000 has been spent on lawyers and other experts and the parties are commensurately worse off.

All of this would have been avoided had the parties from the outset adopted the principle of a 50:50 split of the Surplus.

SOME BRIEF OBSERVATIONS The key to understanding and applying a games theoretic approach to settlement negotiations is to look at the whole picture and, in particular, to look at the position from both parties’ points of view and not to solely focus on one’s own position.

One may be in a quandary but then one’s opponent may also be in quandary, which may or may not be as bad as one’s own position. Also, another important lesson to be drawn here is the fact that one should not be terrified of taking risks when reason and common sense tells one that these are risks worth taking. In short don’t be a dove. Similarly, it is far from obvious that there is any advantage in being a hawk and there is a very real risk that by adopting such a role one may only achieve lining the pockets of the legal profession.

At the end of the day litigious negotiations have a centre of gravity and that is a fair division of the pie. Not only is litigation a negative sum game but once it commences the parties lose control over their destiny insofar as their destiny is determined or shaped by the litigation. Apart from taking the matter through to a trial and judgment the only way for the parties to win back that loss of control is to cooperate with each other and ordinarily that can only be achieved through each treating the other fairly.

The desire to be in control of one’s own destiny is a very powerful magnet which draws parties into being cooperative and therefore into settling their disputes fairly.

In adopting these three categories, the hawk, the owl and the dove may be seen by many as an over-simplification. Human beings are not so easily defined, they are much more subtle and nuanced with no two people being exactly the same. None of which can be denied. However, the intention here is to identify different points on a spectrum which at one end there is an extreme version of the hawk strategy and at the other there is an extreme version of a dove strategy, with the centre being occupied by the owl. Essentially the hawk, the owl and the dove are conceptual models with each sufficiently delineated from the others to separate out three quite different strategies. The significance of which is to demonstrate that whilst an even division of the pie is the centre of gravity in respect of the negotiating process that point, however, is not set in stone. The point at which a dispute ultimately resolves is a matter which can be substantially affected by strategy, particularly in those cases where one of the parties/players adopts a bad strategy, such as being a dove.

Thus, so long as neither party is adopting a bad strategy the process of negotiations ought to arrive at a good approximation to a fair division of the pie. It will be recalled that the centre of gravity in the example is S + Ep (i.e. $66,000), in the case of P, and S + Ed (i.e. -$66,000), in the case of D. A properly informed intuition would ordinarily regard any offer which was substantially outside the range of $55k to $70k as not being acceptable to the party disadvantaged by that offer. In which case the offer would be refused leaving the offeror with the choice of going to trial the expected value of which would be less advantageous than to settle somewhere between $55k and $70k. Hence, so long as that range is more attractive to both parties than going to trial then in the majority of cases the matter ought to settle at some point within the range constituted by the Surplus.

Up to this point it has been tacitly assumed that the parties’ involvement in litigation is a one off or that it is only on rare occasions in which the parties find themselves involved in litigation. That of course overlooks those parties who are serial litigants, a classic example of which would be an insurer. In the case of a serial litigant that party has open to it the opportunity to make a credible threat

ALTERNATIVE DISPUTE RESOLUTION

of putting a take or leave it offer that is not a bluff. Let us suppose B always makes an offer which allocates 80% of the Surplus to it, leaving only 20% to the other party. If that offer is not accepted the matter will invariably go to trial and B develops a notorious reputation of doing just that. Whilst on those rare occasions when the other party courageously takes them on, they would on average be worse off than had they split the Surplus. That loss, however, would be relatively minor compared to the gains which they would make in the vast majority of cases wherein the other party accepted the only rational alternative which was available to them. In the case of serial litigants, it may well pay to be a hawk and in which case settlements would not be fair.

ATTITUDES TO AND ASSESSMENT OF RISK Civil litigation has, in the community, a bad reputation and one which is richly deserved. Going to court is an undertaking which only the foolhardy would ever embrace with enthusiasm.

One of the most common descriptions which experienced legal practitioners use in respect of litigation is that it is a lottery. Modern jurisprudence is a body of learning that no human being could hope to master in a lifetime. The tax legislation alone is impenetrable to all but those who do nothing but tax and have had years of experience in doing so and even they could not hope to master all aspects of their particular discipline. Over the course of a trial it is far from uncommon for everyone deeply involved in the matter to come away at the end of the trial knowing twice as much about that matter than when the trial first began and this is despite countless hours of pretrial preparation. It is therefore little wonder that litigation is such a lottery. Throw in the idiosyncrasies of individual judges and the whole thing becomes a very opaque process. If all of that wasn’t enough, before the trial even begins, the system opens up the case of each of the parties to attack through pleadings battles, discovery and a rich variety of other interlocutory proceedings, such as forum applications, Anton Pillar orders, third party discovery, medical and other expert examinations and reports.

On top of all of this is the irrepressible outflow of funds in the payment of lawyers and other experts.

The above description of the litigious process may not look pretty but it is extremely effective in achieving one of its primary functions. In this case the function which is sought to be achieved is to deflate the expectations of both parties in respect of the litigation. When litigation commences it is often common for both to feel a sense of profound indignation of how they have been treated, in the case of the plaintiff, or of what they have been accused, in the case of the defendant.

This deep sense of indignation leads to both sides developing overly optimistic expectations about their chances of success. With such high expectations it is very hard for either party to accept a settlement in which one, or the other or both feel they have sold themselves short.

Consequently, those expectations have to be deflated and at times that can be very hard to achieve and when that is achieved it is not only at considerable financial cost to the litigants but also it takes its toll in stress and anxiety on both them and their legal representatives. The most effective weapon which the system deploys in this regard is to engender a real fear that it is just a lottery, that both parties each have a 50% chance of success and also the fear that the whole exercise could quickly turn into a nightmare. The inscrutability of interlocutory proceedings also goes a long way in deflating expectations.

If properly conducted interlocutory proceedings should provide no sign or encouragement from any judicial officer to either party that their case is somehow blessed and that their decision to sue or defend was the right one. The appearance of impartiality is not only designed to give litigants confidence in the system but also to discourage them from any feeling of over-confidence in the system.

Not only does the litigious system deflate any exuberance of over confidence amongst litigants, the system isn't designed to cater for cases in which the outcome is either virtually certain or reasonably close to certainty. Take the example which I have used throughout this paper. If P’s chances of success were 90% then, according to Equation (4), the case ought to settle for $114,000 even though she has only claimed $100,000 and she has spent nothing in costs. Obviously, where the plaintiff has spent nothing in costs, the most she could hope to recover in a settlement is the amount of her claim.

If a defendant admits both liability and quantum then that ought to be the effective end of the litigation. The logic behind Equation (4) breaks down as the probabilities approach certainty. If, in the unlikely event, a plaintiff with a near certain chance of success were to refuse all reasonable offers to settle the matter then Calderbank offers and the making of formal offers under the Rules plus applications based on an abuse of process would arguably all come into play.

Such cases in extremis are not ordinarily the subject of litigation nor are they the subject of this analysis. Thus, one is looking at cases where the plaintiff ’s chances of success will range from say 35% to 75%. There will not be many parties who are involved in that litigation who will not take the risks seriously and be immune from having their exuberant expectations deflated.

Putting an actual number to the plaintiff ’s chances of success will not be capable of a high degree of precision.

One would be doing well if in theory one had a margin of error of say 5% or 10%. Assigning probabilities to different cases is little more than applying an impressionistic weighting of one case in comparison with another. At best one could rank different cases as to their respective chances of success and to convert those ranks into a number between 0 and 1. But beyond that, the hope that one could achieve any greater precision would be illusory. One could always independently poll 10 or 20 experienced litigators all of whom had studied the relevant material in depth, however that would not be practical, but at least in theory the assignment of probabilities could be meaningful and therefore impressionistic and unbiased estimates may be regarded as an inexact measure of a real and meaningful number.

Rather than making quantitative estimates of the plaintiff ’s probability of success one could begin by making qualitative statements with probabilities assigned to each rank. Thus, one could say that the plaintiff ’s case was: Very strong Strong Neither strong nor weak Weak Very weak

70% 60% 50% 40% 30%

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and leave at that. Over the course of time as more is discovered about a given case there may well be a need to reclassify and adjust all other calculations accordingly.

The full range could go from 25% to 75% and the numerical spaces between each grade could be used in respect of cases which fall between each grade. Cases which fall outside this range are either so strong or so weak that they should be regarded as falling into special categories and subject to a separate analysis. The underlying thesis here is that litigation, although not random, is drawn towards random outcomes. So that one begins the assessment of the chances of success at 50% and moves up or down from that point only where there is a clear justification to do so. Extreme assessments at either end of the scale should be viewed with suspicion.

Where extremes prevail with respect to either party, be it in terms of strategy, chances of success or in attitudes towards risk, the distance between offer and counter-offer will, more often than not,

44 THE BULLETIN June 2021

be too great to bridge. Consequently, the parties need first to converge on the middle ground in respect of strategy, attitudes towards risk and assessments of risk. Where the parties adopt an owl strategy, are realistic about the prospects of success and failure and are risk neutral then there is a sound basis for a settlement to be reached. If any of those three factors are allowed to go into overdrive then achieving a settlement will become ever more difficult B Endnotes 1 (1960) 3 Journal of Law and Economics 1- 44.

2 This is taken from Wikipedia. In this case an externality is a social cost, such as pollution, which doesn’t appear in the profit/loss statement of the polluter. In this context Pareto efficiency simply refers to maximising the profit which can be gained from a given resource. Unfortunately, in respect to the Coase Theorem there is a variety of ways in which it can be formulated. Put succinctly the theorem is that where bargaining is possible and transaction costs can be ignored an efficient allocation of resources is invariant to the initial legal assignment of property rights with respect to those resources. See also H

Hovenkamp: “Coase” Encyclopedia of Law and Economics Springer (2013) at 28-1.

3 Originally this methodology was first applied to criminal matters. See Landes WM “An Economic Analysis of the Courts” (1971) 14 Journal of Law and Economics 61-108.

4 See Bielen S, Marneffe W and Vereeck L: “Litigation Decision” (2015) Encyclopedia of Law and Economics; Springer at 589-1.

5 Both Decision and Games Theory are branches of mathematics and neither are particularly difficult to understand for a novice.

6 S is always the projected future solicitor/client costs so as time goes on and money is paid to the solicitor for work which has already been performed S gets smaller and smaller.

7 Oosterbeek, H., Sloof, R. & van de Kuilen, G. “Cultural Differences in Ultimatum Game Experiments: Evidence from a Meta-Analysis.”

Experimental Economics 7, 171–188 (2004). https:// doi.org/10.1023/B:EXEC.0000026978.14316.74 8 Andersen S et al “Stakes Matter in Ultimatum Games” American Economic Review 101 (December 2011): 3427–3439 http://www.aeaweb.org/ articles.php?doi=10.1257/aer.101.7.3427 9 Ibid at 3434.

10 As noted earlier, S are projected solicitor/client costs in the future therefore, with the passage of time, S gets smaller and smaller.

11 As noted earlier, S are projected solicitor/client costs in the future therefore, with the passage of time, S gets smaller and smaller.

FAMILY LAW CASE NOTES

Family Law Case Notes CRAIG NICOL AND KELEIGH ROBINSON, THE FAMILY LAW BOOK CHILDREN – MOTHER’S “FIXED” BUT UNFOUNDED ALLEGATIONS OF SEXUAL ABUSE BY FATHER WERE DAMAGING TO THE CHILDREN

I

n Syms [2021] FamCAFC 38 (26 March, 2021) the Full Court (Aldridge, Watts & Austin JJ) heard an appeal where a mother unsuccessfully argued that her three children were at unacceptable risk of sexual abuse by their father, the Court finding that the mother’s fixed but unfounded views posed an unacceptable risk of emotional harm and that the children live with the father.

The mother’s time was to be supervised after a four-month moratorium. Such supervision was to continue at the discretion of the father.

The Full Court said (from [93]): “… [H]er Honour was not satisfied that the children were describing actual events of abuse. …

[94] … [I]t was found that the allegations … [by the children to the mother] ‘began a course of action akin to a mission to establish that the children had been sexually abused by the father’ (at [170]). ( … ) [106] The single expert … considered that the probability of the father being a sexual abuser was ‘fairly low down the list’.

There is no reason whatsoever to consider that her Honour did not have regard to … the entirety of the single expert’s evidence.”

As to the risk posed to the children by the mother, the Full Court said (at [116]): “… [T]he most relevant time for considering whether the mother posed a risk of emotional harm ... due to her fixed belief that they had been sexually abused … was at the hearing before the primary judge. …”

As to the father’s discretion to determine when supervision would cease, the Full Court said (at [140]): “We do not accept that the order is … for permanent supervision. The primary judge expected that the father would act reasonably, but if he did not, the mother could return to Court to … lift the supervision requirement. In doing so, she would not be bound by the rule in Rice

and Asplund [1978] FamCA 84 because the primary judge expressly envisaged such an application. …”

The mother lost her appeal and was ordered to pay costs.

[112] … [I]it is clear from the authorities that the test of whether the same controversy is before each Court is not one that requires complete satisfaction that every aspect of the litigation is identical.”

PROPERTY – “WHOLESALE INJUNCTION” RESTRAINING WIFE FROM CONTINUING ALL PROCEEDINGS IN SINGAPORE SET ASIDE

PROPERTY – BANKRUPTCY – JUST AND EQUITABLE SETTLEMENT IDENTIFIABLE WITHOUT HUSBAND’S PARTICIPATION OR DISCLOSURE

In Obannon & Scarffe [2021] FamCAFC 33 (10 March, 2021) the Full Court (Kent, Watts & Austin JJ) heard the wife’s appeal from an order that restrained her from continuing all proceedings in the Family Justice Courts in Singapore.

After restating Voth v Manildra Flour Mills Pty Ltd [1990] HCA 5 and Henry [1996] HCA 51 (at 592–593), the Full Court said (from [106]): “The primary judge erred in principle … by ignoring or overlooking that the parties had resolved that the Singapore proceedings would continue with respect to [divorce, spousal maintenance, parenting issues and child support] …

[107] The authorities make clear that it is not the requirement to strictly compare the two forums … to decide which is the more appropriate forum. Here, the primary judge … appears to consider the central issue to be a direct comparison of the two countries’ family law procedures. ( … ) [110] One legitimate purpose of comparing the law in each jurisdiction is to identify the existence of any juridical advantage to a party. … However it is not a legitimate purpose of such a comparison for a trial judge to thereby assess the comparative merits of the manner in which a case is determined as between the local and foreign tribunal. In this case the primary judge appears to give emphasis to his conclusions about the merits of Australian law in the manner in which property cases are determined, as compared to Singapore, rather than confining the consideration to one of effective dealing with the dispute arising from the breakdown of the parties’ marriage involving divorce, parenting issues, spousal maintenance and child support. We consider that to be an error ( … )

In Hicks & Trustee of the Bankrupt Estate of Hicks [2021] FamCAFC 19 (18 February, 2021) the Full Court (Ryan, Aldridge & Kent JJ) heard an appeal by a trustee in bankruptcy from property adjustment orders made by Loughnan J in the absence of the husband.

The orders were such that the husband received $651,747, being the amount required to satisfy the husband’s proven debts in bankruptcy.

Addressing the justice and equity of the orders, the Full Court said (from [58]): “ … [H]is Honour considered Commissioner of Taxation & Worsnop and Anor [2009] FamCAFC 4 and … other [Full Court] decisions … in expressing the conclusion that the creditors, represented by the trustee, do not have priority over the wife ( … ) [89] … [F]ailure by parties to provide credible evidence relating to aspects of their financial affairs does not entitle the Court to dismiss applications or to relieve the Court of the responsibility of applying the provisions of the Act …

[90] In this case the primary judge recorded that the husband … had elected not to take part [in the proceedings] … and his Honour was satisfied that … it was appropriate to make orders on an undefended basis as against the husband (…)

[116] ... [T]he primary judge was plainly cognisant of the … cases as to the approach to attributing responsibility as between married parties for acquired debts in the s 79 process. It bears some emphasis that … [the] authorities identified guidelines for the exercise of the s 79 discretion, and not binding principles constraining that exercise. ( … ) June 2021 THE BULLETIN

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FAMILY LAW CASE NOTES

[119] … [I]t was within the ambit of a legitimate exercise of s 79 discretion for the primary judge to deal with the husband’s debts in the manner in which his Honour did. …”

The Full Court dismissed the trustee’s appeal but no order was made as to costs.

CHILDREN – HAGUE ABDUCTION CONVENTION – FATHER FOUND TO HAVE CONSENTED TO MOTHER’S WRONGFUL OVERSEAS REMOVAL OF CHILD In Commissioner of Police for State Central Authority of South Australia & Garnett [2021] FamCA 86 (3 March, 2021) Williams J heard an application by the Central Authority of South Australia for the return of a 10 year old child to the UK pursuant to the Family Law (Child Abduction Convention) Regulations 1986.

The mother had removed the child from the UK but said that when the father found

her packing suitcases, she informed him she wished to return to Australia, whereupon the father handed the mother the Australian passports for herself and the child and assisted her with her bags into a taxi. The mother and the child travelled to Australia that day.

Williams J found that X was habitually resident in the UK and that the father was exercising rights of custody at the time of removal ([80]).

After citing Wenceslas & Director-General, Department of Community Services [2007] FamCA 398 Williams J said (from [87]): “ … Consent has to arise before the act of removal or retention ( … ) [104] The father’s own evidence suggests … that he was acutely aware that the mother intended to leave the UK with X … and that notwithstanding the mother’s repeated intention of travelling to Australia with X, he handed her the passports which would enable her to do so. … … I do not

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accept that handing over passports … does not amount to consent for X to leave the country. …

[105] … It is not a situation where the father was advised by the mother for the first time in the heat of the moment … that the mother wished to end the relationship and return to Australia.

[106] The father’s … own evidence supports the contention that he knew implicitly and unambiguously that the mother intended to fly with the children and that is why she required the passports. ( … ) [109] I am satisfied that the conduct of the father, in handing the child’s passport to the mother, when he knew she intended to travel to Australia with the child, is clear and cogent evidence of the father’s real and unequivocal consent to X departing the UK and travelling to Australia.”

Williams J exercised her discretion not to return X to the UK and dismissed the application of the State Central Authority. B

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