Brief May 2018

VOLUME 45 | NUMBER 4 | MAY 2018

Crowd-Sourced Funding in Australia Also inside: What Young Lawyers Said: the Law, Collegiality and Mental Health Did You Miss the ILRA Amendments? Time to Catch Up! The Gig Economy: Rescuing the Scapegoat

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Volume 45 | Number 4 | May 2018

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CONTENTS

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FOLLOW US lawsocietywa.asn.au LawSocietyWA @LawSocietyWA

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ARTICLES 05

The Independent

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Law Week 2018

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Crowd-Sourced Funding in Australia

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The Gig Economy: Rescuing the Scapegoat

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Did You Miss the ILRA Amendments? Time to Catch Up!

What Young Lawyers Said: the Law, Collegiality and Mental Health

DISCLAIMER: The views and opinions expressed in Brief and the claims made in advertisements published within it, are not to be taken as those of, or as being endorsed by the Law Society of Western Australia (Inc.) or the Brief Editorial Committee. No responsibility whatsoever is accepted by the Society, or the Editorial Committee for any opinion, information or advertisement contained in or conveyed by Brief.

COPYRIGHT: Readers are advised that the materials that appear in Brief Journal are copyright protected. Copyright is retained by the author.

Readers wanting to cite from or reference articles in Brief Journal should reference as follows: (Month and Year) Brief Magazine (Perth: The Law Society of Western Australia) at page __). Readers wanting to reproduce a substantial part of any article in Brief Journal should obtain permission from individual authors. If an author’s name is not provided, or if readers are not able to locate an author’s contact details, readers should contact the Law Society of Western Australia (Inc.).

The trade mark BRIEF is the subject of registered trade mark 1253722 and is owned by the Law Society of Western Australia (Inc). Trade mark 1253722 is registered for Western Australia.

Published monthly (except January) Advertising enquiries to Manager Marketing and Communications: Madeleine McErlain Tel: (08) 9324 8650 | Email: mmcerlain@lawsocietywa.asn.au Communications and Media Officer: Andrew MacNiven Communications and Design Officer: Charles McDonald RRP $16.00 incl GST. Printed by Scott Print

Editor: Jason MacLaurin Editorial Committee: Gregory Boyle, Thomas Camp, Dr Rebecca Collins, The Hon John McKechnie QC, Fiona Poh, Dr Pat Saraceni, Robert Sceales, Verginia Serdev-Patterson, Eu-Min Teng Brief is the official journal of the Law Society of Western Australia Level 4, 160 St Georges Tce Perth WA 6000 Phone: (08) 9324 8600 | Fax: (08) 9324 8699 Email: brief@lawsocietywa.asn.au | Web: lawsocietywa.asn.au ISSN 0312 5831

REGULARS

Submission of articles: Contributions to Brief are always welcome.

For details, contact brief@lawsocietywa.asn.au

02 President's Report

38 Drover's Dog

04 Editor's Opinion

40 New Members

36 Aunt Prudence Juris: Your One Stop Solution to Problems After Law School

41 Family Law Case Notes

37 Ex Juris: Travel Tales from the Legal Profession

42 Law Council Update 43 Cartoon 44 Classifieds 45 Events Calendar

President: Hayley Cormann Senior Vice President: Greg McIntyre SC Junior Vice President & Treasurer: Jocelyne Boujos Immediate Past President: Alain Musikanth Ordinary Members: Brahma Dharmananda SC, Elisabeth Edwards, Catherine Fletcher, Emma Griffiths, Karina Hafford, Eric Heenan, Fiona Low, Marshall McKenna, Denis McLeod, Jodie Moffat, Nicholas van Hattem, Paula Wilkinson Junior Members: Zoe Bush, Sarah O’Brien-Smith, Brooke Sojan Country Member: Kerstin Stringer Chief Executive Officer: David Price

01

PRESIDENT'S REPORT Hayley Cormann President, the Law Society of Western Australia

Welcome to the May edition of Brief. How time flies – we are already approaching the halfway stages of the year! May is set to be a busy and enjoyable month, and I am delighted to update you on upcoming activities, as well as recent developments in the profession.

Law Week 2018 In 2018, Law Week will be held between Monday, 14 and Friday, 18 May. The history of Law Week can be traced back over three decades to the first Western Australian “Law Day”, organised by the Society in 1983. From its inception, the idea was to bring the law to the community, especially to those people who might not have utilised legal services in the past. At the first Law Day, free legal advice was a central feature, taking the form of eleven booths across the city. The event went from strength to strength, becoming known as “Law Week” in 1987.

The fundamental purpose of Law Week remains unchanged, with the theme of “A Focus on Law and Justice in the Community”. Law Week presents an opportunity for the legal profession to engage with our community, to build a shared understanding of the vital role of the law, and the important contributions made by lawyers, to our society.

Below I set out only a small selection of the more than 40 events for the legal profession and community being held around Western Australia during Law Week 2018. Please visit lawsocietywa.asn.au/community/lawweek to find out more.

First up, we will celebrate the official opening of Law Week 2018 at the Law Week Breakfast on Monday, 14 May from 7.15am in the Argyle Ballroom, Parmelia Hilton, Perth. The Society is delighted the Hon John Quigley MLA, Attorney General of Western Australia, has agreed to present a keynote address on "Enhancing Community Access to Justice and Legislative Reform".

The Attorney General’s Community Service Law Awards will also be presented at the Breakfast, recognising one individual legal practitioner and one organisation providing outstanding pro bono legal services to the Western Australian community. I encourage

02 | BRIEF MAY 2018

members to get together a group of colleagues and book a table for the event – visit lawsocietywa.asn.au/event/law-weekbreakfast for details and to register.

The following day, on the morning of Tuesday, 15 May, the annual Law Access Walk for Justice will be held, commencing in front of the Bell Tower on the CBD foreshore. This event celebrates the pro bono work of the legal profession of Western Australia and raises funds for Law Access, the vital service matching individuals and community organisations seeking legal assistance with pro bono lawyers. Participants will walk a 4.4 km return trip and then can enjoy a complimentary breakfast at Analakshmi Restaurant, opposite the Bell Tower. The Walk coincides with “National Pro Bono Day”, with similar events held that day around the nation by our counterparts.

On Wednesday, 16 May, the Society’s Young Lawyers Committee will host the Law Week Panel Discussion on access to justice for Aboriginal and Torres Strait Islander members of our community. This free event will discuss interactions with the criminal justice system, including the right to parole, bail for accused in regional and remote locations, access to interpreters as well as leadership and positive contributions of Indigenous communities.

On Thursday, 17 May, our Social Justice Career Opportunities event will explore how to pursue a meaningful career in the human rights and social justice areas of the law, with the opportunity to meet representatives of rights-focused organisations and talk to them about the work they do and how you can get involved.

Then on Friday, 18 May, the Society welcomes regional practitioners to Perth for a combination of professional learning and networking at our CPD Day for Country Practitioners. This has proven to be a most popular offering, and we are looking forward to welcoming as many of our country practitioners to Perth to meet and talk about issues they are facing, as well as to engage in a day of learning and development together.

Finally, Law Week culminates in a fun and relaxing night of celebration, at the 2018 Awards Night. Held at Bankwest Place in Perth, the event will include the

announcement of the 2018 Lawyer of the Year Awards, and also recognition of practitioners who have held a practising certificate for more than 50 and 60 years.

The evening will also acknowledge the Society’s newly accredited family law specialists.

I look forward to seeing as many of our members, friends and colleagues of the Society as possible during the week.

Supreme Court Appointment The Society congratulates the Honourable Justice John Vaughan, whose appointment as a judge of the Supreme Court of Western Australia was announced in April and who has since commenced his role. I was delighted to appear at His Honour’s welcome ceremony on behalf of the Society, to speak alongside the Attorney General, as well as Matt Howard SC on behalf of the Bar, about a highly respected and competent member of our profession, who will no doubt provide great service to the community through the administration of justice in the years to come.

We also congratulate and wish Justice Peter Martino all the very best upon his retirement from the Supreme Court. His Honour has provided 18 years of judicial service to the community through his role firstly as a judge of the District Court until 2015, and more recently, throughout his time as a Supreme Court judge.

Federal Court Retirement It was with pleasure also, that I appeared at the farewell ceremony for The Honourable Justice Siopis as the end of last month.

His Honour has provided many years of leadership and mentoring through both his role in the Federal Court, and also prior to that time as a member of the profession.

The Society congratulates and wishes His Honour all the very best in his next endeavours.

Gala Dinner Finally, please save the date for our Gala Dinner on Saturday, 4 August 2018, at Crown Towers, Perth. The night promises to be an unmissable occasion for the profession. Further details will be announced soon, but for now please keep the date in your diaries!

SALARIED/EQUITY PARTNERSHIP OPPORTUNITIES

2 YEARS’ PAE TO SENIOR ASSOCIATE/SPECIAL COUNSEL

PARTNER – CORPORATE ADVISORY/ECM – Rapidly growing Corporate/E&R group. KBE is working exclusively with a key client to secure a Corporate Partner to inherit/lead an established practice, with a strong focus on Corporate Advisory, IPO’s and Equity Capital Markets. This firm has experienced rapid and sustained growth with one of the best leadership teams in Western Australia. The successful candidate will be a lateral Partner hire or driven SA/SC, who is keen to work closely with the firm’s Senior Partners to further build the Corporate/E&R practice through leveraging your combined client networks and existing deal flow.

CORPORATE/M&A SENIOR ASSOCIATE to build and lead the junior/mid-cap Corporate Group of a boutique firm. We are currently advising a premier boutique law firm to secure an experienced Corporate Advisory/M&A Lawyer to build and lead a practice focused on the junior/mid-cap markets. Working closely with Boards and Directors, the incoming Senior Lawyer will provide strategic advice across M&A, corporate governance, director’s duties, IPOs, RTOs and back door listings, ASX/ASIC compliance and related Corporations Act advice. We are interested in speaking to Lawyers with 5+ years’ PAE with experience from a national/international or leading boutique firm. If you are seeking a genuine career progression role with the ability to transition into a Partner role within 2 3 years, then we would like to speak with you.

PARTNERS – FAMILY LAW – Market leading teams.

We are currently seeking two Senior Family Lawyers to take on Partnership/Leadership Roles as part of our client firms’ growth and succession plans. You will enjoy mentoring junior lawyers, taking part in BD activity, and oversee file strategy for HNW clients across complex property and children’s matters. You will be able to demonstrate a $100k+ transportable fee base or established referral network from which to build a quality HNW focused practice.

PARTNER – HEAD OF LITIGATION/INSOLVENCY – National top-tier firm. Join a rapidly growing national firm as a Partner and Head of Litigation/Insolvency. Working closely with the WA Managing Partner and Senior Lawyers across Australia, the incoming Partner will leverage the firm’s national client base to rapidly establish a presence in the Perth market. This is a unique opportunity for an established Partner to join as a lateral hire, or SA/SC who is looking to step into a Partner role in the very near team. No fee base is required for this role, with the ability to transition into an Equity Partner position upon successfully building up a client following.

PARTNER – PROPERTY LAW – Rapidly expanding mid-tier firm. Our client is a large and well regarded mid-tier firm with a strong and robust reputation across Commercial Law, Property and Litigation. As part of the firm’s strategic plan, they are seeking an established Senior Property Lawyer to transition directly into a Partnership role. You will have a $100k+ transportable fee base with the drive to take on some overflow work/clients from the firm’s existing Partners. You will have experience advising listed, private and government clients across commercial property, industrial and retail property, off the plan developments, acquisitions and disposals, drafting and negotiating real estate JV transactions, with the ability to oversee junior lawyers. The culture of this firm is collegiate, transparent and meritocratic, with equity available depending on the size of your transportable practice.

PARTNER – WORKPLACE RELATIONS – International firm. Leadership role within an international firm to replace a retiring Partner. Lead the strategic development of the practice and oversee a small team, advising listed and large private companies.

Rare opportunity given a minimal transportable fee base of $150k+ is required.

CORPORATE ADVISORY/M&A LAWYERS with 3-5+ years’ PAE for global firm. Our client is seeking two Corporate Lawyers with 3-5+ years’ PAE to join their high profile global team. The Partners in the Perth Corporate Advisory group are well known for valuing their people and investing significant time into training and mentoring. The successful applicants will act for a diverse range of international and domestic public/private clients, and gain exposure to broad industry sectors, including energy, infrastructure, mining and commodities, financial institutions, transport, technology and healthcare.

These positions would suit lawyers with 3-5 years’ PAE from a national/international or prominent boutique firm. The successful candidates will enjoy extensive client contact, be keen to manage large transactions with autonomy and take on additional responsibility through supervising the more junior lawyers in the group.

FAMILY LAWYER with 3-6 years’ PAE to join multidisciplinary WA firm. Advising HNW clients and with a strong focus on property matters, you will work closely with two highly regarded Family Law Partners and receive client referrals from throughout the firm’s other practice groups. We are interested in speaking to Lawyers with 3-6 years’ PAE, the ability to work autonomously in a supportive environment, and who are keen to join an innovative firm who are rapidly winning market share from their competitors.

ENERGY AND RESOURCES ASSOCIATE/SENIOR ASSOCIATE for leading boutique firm. This is an opportunity for a high calibre E&R Lawyer to join a leading boutique law firm and play a key role in supporting a newly appointed Partner. With a genuine commitment to their people and clients, this firm has a strong reputation in the marketplace for being an Employer of Choice. The successful candidate will advise on significant E&R projects and transactions, including the sale and distribution of natural gas and products, power projects, advising on rails/ports, competition and regulatory issues, energy and commodities trading, and related commercial law issues. We are interested in speaking with experienced E&R Lawyers with 4-8 years’ PAE with experience across national and international E&R projects. You will be confident liaising directly with clients and key stakeholders at the most senior levels, with the ability to run matters independently, subject to Partner sign off.

INSURANCE LAWYERS for multiple firms across all tiers. We are currently working with several key clients across multiple tiers to secure Insurance

Chris Bates

Siemone Neutgens

Sharon Apathy

Managing Director

Principal Consultant

Principal Consultant

M: 0411 645 984 E: chris@kbehc.com.au

M: 0403 383 326 E: siemone@kbehc.com.au

M: 0413 132 049 E: sharon@kbehc.com.au

Lawyers from 2 years’ PAE through Partner level.

These positions involve working with a range of insurers and high profile self-insureds across a variety of insurance matters. We are interested in speaking with suitably qualified Lawyers with 2+ years’ experience in some or all of: General Liability, Product Liability, Professional Indemnity, Property Liability, Public Liability, Medical Negligence, MVA/CTP claims, and Workers’ Comp.

The successful candidates will possess strong legal and communication skills gained in a top/mid-tier or leading boutique firms. Both plaintiff and defendant side applicants are encouraged to apply.

LITIGATION LAWYER with 3-7+ years’ PAE for leading boutique firm. Rare 2IC opportunity. This is a new opportunity for an experienced Litigation Lawyer to join a successful litigation team and advise listed, private, SME and HNW individual clients.

Working alongside Partners who are known for being exceptional mentors, this role will involve providing strategic Litigation and Dispute Resolution advice across general commercial litigation, contractual disputes, property and construction disputes. A 2IC role working closely with the firm’s Managing Partner, we are interested in speaking with driven mid-level Litigation Lawyers with 3 7+ years’ PAE from top/mid-tier or leading boutique firms. You will have the ability to manage your own file load with some autonomy and be comfortable with extensive client contact, with the desire to train and mentor the more junior members of the firm.

PROPERTY AND COMMERCIAL LAWYER with 2-5+ years’ PAE in a newly created “360 degree” role.

Following a period of rapid and sustained growth, our client is well ahead of its forecasted annual budget/ billing target for FY2018 and looking to appoint a Junior to Mid-Level Property and Commercial Lawyer to manage the increased workflow. You will work closely alongside two Property and Commercial Law Partners in a true “360 degree role” with the benefit of quality mentoring, and the opportunity to take part in BD activities within a business that is emerging as a key player in the Property/Commercial Law space.

WORKPLACE RELATIONS LAWYER with 3-8 years’ PAE to step into a leadership role. We are currently working with a long established and highly regarded firm to secure a quality mid-level Workplace Relations Lawyer who is looking to step into a leadership role and build a client base, alongside a Senior Partner. The firm is well-known for being leaders in both Workplace Relations strategy and Litigation, with a long established and loyal client base. With exposure to a range of complex matters, you will manage clients and work closely with the firm’s Partners and advise across employment contracts and awards, industrial action and disputes, recruitment and performance issues, workplace investigations, equal opportunity and workplace rights, dismissal issues and related litigation, and some OHS. The firm is looking to expand the Partnership in the coming years, and this is an opportunity to transition into a Partner role in the mid-term and inherit/build on a client base as part of the firm’s succession plan.

Please contact Chris Bates, Siemone Neutgens or Sharon Apathy to discuss the above positions, or for comprehensive market advice on the opportunities available throughout the Western Australian legal market.

KBE Human Capital P: 08 6467 7889 A: 1322 Hay Street, West Perth 036005 W: kbehumancapital.com.au

EDITOR'S OPINION Jason MacLaurin Barrister, Francis Burt Chambers, Editor, Brief

This month’s feature article, “CrowdSourced Funding in Australia” by Tony Chong and Amanda Meloni, analyses the recent amendments to the Corporations Law that introduce a crowd-sourced funding regime in Australia for smaller companies and startups.

The concept behind it was the production of DVD’s with “smokin’” impressions of famous people in bizarre and unlikely scenarios (such as Borat meeting Mr Bean, and conversations between Morgan Freeman and Shrek, and The Terminator and Austin Powers).2

While that promoter apparently managed to disappear, it might not be surprising if he made his way to Australia and his name, or that of his descendants, pops up at some point in the current proceedings before former High Court Justice, Commissioner Kenneth Hayne AC.

The new regime is yet another example of the changing nature of investment and commerce in the modern world, and an aspect of the broader phenomena of crowdfunding.

Being a few years ago, the promoters unfortunately missed their opportunity to display their talents in performing an outlandish and unbelievable scenario of President Trump meeting face to face with Kim Jong Un to secure the denuclearisation of North Korea and the bringing of peace to the Korean peninsula.

Indeed, while no pre-judgments should be made, on the face of what has been heard by the Commission to date, former Australian cricket team captain Steve Smith may well be genuinely puzzled as to why the Commonwealth Bank terminated his appointment as its sports ambassador, presumably because the ball tampering cheating scandal did not reflect its values.

Indeed, Smith may in fact be happy to be rid of the connection and, while at risk of contracting a case of high purity ironypoisoning, might see it as yet another example of his exquisite timing.

Crowd-funding is of great interest to lawyers, particularly because it has a dual significance for the profession.

Firstly, there is the response of the law, and of lawmakers, to crowd-funding, how it is to be regulated, and the legal rights and obligations that arise under the different forms of crowd-funding.

Secondly, on the other side of the equation, there is special significance for some lawyers given the growth in the crowdfunding of litigation.

There are a number of litigation crowdfunding sites in Australia, and the practice is widespread in the USA. One of the most successful recent internet crowd-funding litigation ventures in the USA is the raising of money for Stormy Daniels’ legal stoush against President Trump.

Apparently, in just one month, Ms Daniels raised $320,000, principally through small donors (almost 10,000 people). Though it is possible that a number of the contributors thought they were subscribing for something completely different.

It seems that there are many members of the anti-Trump resistance who are willing to contribute to any causes that create difficulties for the President.

At least that’s what they’re telling their wives who have access to their credit card statements.

Of course, some crowdfunding ventures fare better than others. It was curiously gratifying, in a parochial kind of way, to see that Perth has made a bit of a splash in reports upon poorly performing crowdfunding ventures. Most internet commentary available on the subject1 mentions a Kickstarter project from some Perth lads called “Impressive Impressions”.

The Kickstarter site for “Impressive Impressions” failed (by some margin) to reach the not-exactly-Icarus-heights of a $50 target.

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Nevertheless, the promoters of “Impressive Impressions” may have gotten the last laugh as it seems they might well have been hired as consultants for the closing ceremony of the Commonwealth Games, which involved the otherwise inexplicable spectacle of Melbourne-based singer Kira Puru impersonating Kate Ceberano – right in front of her – by singing Ceberano’s biggest hit, with Ceberano then subsequently launching into an impersonation of Chrissie Amphlett. This was followed by the Channel Seven presenters doing a pretty serviceable impression of that New Jersey radiocommentator covering the Hindenburg landing.

Of course, there have been, historically, other more rudimentary forms of crowdfunding, such as some ventures that were promoted during the South Sea Bubble in the first decades of the 1700s.

One of the greatest bubble companies had as its stated purpose: “for carrying on an undertaking of great advantage, but nobody to know what it was.”

Charles Mackay describes the stunning success (for the promotor) of that investment in his 1841 work Memoirs of Extraordinary Popular Delusions and the Madness of Crowds. Mackay opines that “were not the fact stated by scores of credible witnesses, it would be impossible to believe that any person could have been duped by such a project”. Mackay records that the promoter opened his office in Cornwall at 9.00am and that “crowds of people beset his door, and when he shut up at three o’clock, he found that no less than one thousand shares had been subscribed for, and the deposits paid. He was thus, in five hours, the winner of 2,000 pounds. He was philosopher enough to be contented with his venture, and set off the same evening for the Continent. He was never heard of again.”

Brief acknowledges that there have been many departures from, and appointments to, our Supreme, District Courts and Federal Courts this year (with some also upcoming).

Brief hopes to perform some catching up in the next few editions, to report upon some noteworthy parts of the welcome and farewell ceremonies, which are always filled with a mixture of profound insights and statements, as well as some lighter and more humorous observations.

Such ceremonies also benefit from not having been organised by Peter Beattie’s Commonwealth Games Committee.

Brief also notes the very significant announcement by the Chief Justice the Hon Wayne Martin AC, of his retirement, with effect from 27 July 2018 and hopes to include items in upcoming editions celebrating the Chief Justice’s 12 year service in that position, and the changing of the guard in July.

NOTES: 1

See, for instance, “The 12 most hilariously awful Kickstarter projects of all time”, B Widder and D Adams at digitaltrends.com.

2

It should be noted that the Editor has viewed the YouTube promotion and was actually quite impressed with the enthusiasm and the “so bad its great” vibe to it. Especially when compared to a viewing of Lindsay Lohan’s introductory video at lawyers.com (she is the ambassador and public face of the service) and every movie she made after Mean Girls.

Brief welcomes your thoughts and feedback. Send all letters to the editor to brief@lawsocietywa.asn.au

The Independent Gino Dal Pont Professor, Faculty of Law, University of Tasmania Ethics Column

• An ethical tension exists between the partisan nature of legal representation and the dictates of lawyer independence.

• The exercise of independent judgment by lawyers serves both the administration of justice and the interests of clients.

• Lawyer independence must function to moderate the trajectory and cost of litigation.

The ‘partisan’ role of a lawyer, in acting for and representing the interests of a client, is well understood, by lawyers and clients alike. Indeed, some lawyers and perhaps many clients perceive it as the lawyer’s paramount function. Lawyers are often, to this end, described as advocates for their client’s cause(s), in turn suggesting a one-eyed pursuit of client objectives.

Of course, this is an incomplete as well as inaccurate conception of proper legal representation. After all, it has long been recognised that lawyers’ paramount obligation is owed to the court or, more broadly, to the administration of justice, to which any inconsistent duty to clients (and others) must yield (in turn underscoring the notion of a lawyer being an ‘officer of the court’). It is thus unsurprising that some of the most entrenched ethical dilemmas probe the boundaries between these two duties. A High Court judge has observed, in this vein, that the difference between lawyers and other professionals is that in no other profession does the common law require its members to act contrary to their client’s interests.1 In a significant way, what lies at the core of setting the priority between duties is lawyer independence.

The ethical tension is revealed in the paradox that buttresses this independence: lawyers are expected to act in accordance with client instructions, and foster client interests thereby, while at the same time standing independently from the client. Lawyer independence has various permutations, none of which can be downplayed, and dovetails into what can be described as the exercise of an independent judgment in representing clients, whether or not before a court.

The requisite lawyer independence has ramifications when it comes to both a lawyer’s duty to the client, and his or her duty to the court (or administration of justice).

When speaking of the latter, its tentacles extend beyond merely not misleading the court (or another party in the course of litigation). That the court relies upon its officers to exercise an independent judgment informs its inherent jurisdiction to restrain lawyers from acting where that independence is threatened or undermined.

This may, for instance, be so where a lawyer is likely to be called as a witness,2 or otherwise has an interest (other than professional fees) in the outcome of the case.3 Associating too closely with the client’s cause or objective(s) can likewise threaten lawyer independence.

In this instance, as in others, being overly driven by a client’s desires and predilections, whether in an aim to please the client4 or by reason of being intimidated by the client,5 can spawn unprofessional conduct.

There are occasions, moreover, where lack of independent judgment can, even if ostensibly propelled by client desires, foster a conflict between lawyer and client interests. Perhaps the most obvious illustration targets lawyers’ costs. It is evidently in the lawyer’s interests to maximise what he or she can recover as costs from a client, and it can hardly be assumed that this necessarily aligns with the client’s interests. In a recent Family Court case, against a backdrop of a ‘win at all costs, concede little or nothing, chase every rabbit down every hole and hang the consequences approach to family law litigation’, the judge stressed lawyers’ duty to ‘minimise costs’6 (which had accumulated to around $860,000).

The call is for lawyers to be more proactive in confining the trajectory and cost of litigation, in the interests of both clients and the broader administration of justice. This call, which has witnessed replication in civil procedure reforms spanning most Australian jurisdictions,7 is hardly confined to family law. Ultimately, though, it drills down to a commitment to the exercise of independent judgment by lawyers, one nowadays enforced by the ‘stick’ of disciplinary and costs recovery sanctions.

NOTES: 1

D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [113] per McHugh J.

2

See, for example, Mitchell v Burell [2008] NSWSC 772.

3

See, for example, R & P Gangemi Pty Ltd v Luppino Pty Ltd (2012) V ConvR 54-815 (where the lawyer was propounding a cause on the client’s behalf prompted by the lawyer’s own error).

4

See, for example, Attorney-General v Bax [1999] 2 Qd R 9.

5

See, for example, Victorian Legal Services Commissioner v Merhi [2017] VCAT 1054.

6

Simic v Norton [2017] FamCA 1007 at [2], [28] per Benjamin J.

7

In Western Australia, see Rules of the Supreme Court 1971 O 1 r 4B(1).

LAW WEEK 2018 Monday, 14 May – Friday, 18 May 2018

A FOCUS ON LAW AND JUSTICE IN THE COMMUNITY The law affects each of our daily lives; from knowing our rights under the law, creating employment contracts, how a mediation works, setting up a business, having a will prepared or simply knowing what to do or where to go for legal assistance.

Law Week is an annual opportunity for the legal profession to engage with the Western Australian community to build a shared understanding of the vital role of the law in our society. In 2018, the Law Society of Western Australia showcases a series of events and information sessions focusing on law and justice in the community.

MONDAY, 14 MAY 2018

TUESDAY, 15 MAY 2018

LAW WEEK BREAKFAST Time 7.15am – 9.15am Venue Argyle Ballroom, Parmelia Hilton Perth, 14 Mill Street, Perth Description Join us as we celebrate the official opening of Law Week 2018, and recognise the contributions made by members of the legal profession to the WA community with a breakfast and keynote address from the Attorney General of Western Australia, The Hon John Quigley MLA. Register lawsocietywa.asn.au/community/law-week/ Cost Law Society members Members- $60 | Non-members - $85 Organiser The Law Society of Western Australia Award Sponsor Department of Justice For Profession

THE LAW ACCESS WALK FOR JUSTICE 2018 Time 7.30am – 9.00am Venue Commencing in front of the Bell Tower, Elizabeth Quay, Perth Description Celebrate the vital pro bono work of the profession and raise funds for the Law Access Pro Bono Referral Service. Breakfast will follow.

Register mycause.com.au/events/lawaccesswalkforjustice Cost Free, registration essential Organiser Law Access For Legal Profession and Community

REPRESENTING YOURSELF AT A MAGISTRATES COURT CRIMINAL TRIAL Time 9:00am - 9:30am Venue Court 52, Perth Magistrates Court, 501 Hay St, Perth Description Have you been charged with a criminal offence, and are representing yourself in a Magistrates Court trial? Find out how to prepare for your trial and learn about the resources that Legal Aid has created to assist you.

Register No registration required Cost Free Organiser Legal Aid Western Australia For Community

Special thanks to Law Week supporters and sponsors

06 | BRIEF MAY 2018

10 THINGS YOU NEED TO KNOW ABOUT THE CONSUMER LAWS THAT PROTECT YOU - PRESENTATION Time 10.30 - 11.30am Venue Law Society of Western Australia, Level 5, 160 St Georges Terrace, Perth Description Presentation by Consumer Protection who will provide information and advice to consumers and traders about their rights and responsibilities. Morning tea provided Register info@lawsocietywa.asn.au or phone 9324 8600 Cost Free Organiser Consumer Protection with Law Society of Western Australia For Legal Profession & Community THE INSURANCE INDUSTRY AND THE LEGAL PROFESSION – A COLLABORATIVE APPROACH - PRESENTATION Time 1:00pm – 3:00pm Venue The Law Society of Western Australia, Level 5, 160 St Georges Terrace, Perth Description Presentation by Maria Falas, Head of Mental Health & Wellness, OnePath (group insurer for legalsuper) to give insights into the direction the insurance industry is taking to support the mental health and wellbeing of members. Also to workshop with the legal community the ideas that are being considered and developed.

Maria’s team are in the initial stages of this work and it will be a great opportunity for the WA legal community to be involved in this process by giving their input and feedback.

Register Invitation only event Cost N/A Organiser Legalsuper For Legal Profession

WEDNESDAY, 16 MAY 2018

FRIDAY, 18 MAY 2018

WILLS & DECEASED ESTATE ADMINISTRATION Time 10:30am - 12:00pm Venue Level 1, Public Trustee, 553 Hay Street, Perth Description Learn more about making a Will and the duties of an executor Register trybooking.com/book/event?eid=363950& Organiser Public Trustee For General Public

PANEL DISCUSSION: MY CULTURE MY STORY; ABORIGINAL WOMEN LEADERS IN LAW Time 11:00am - 12.30pm Venue Old Court House Law Museum, Stirling Gardens, Cnr Barrack Street & St Georges Terrace, Perth Description Join us at the Old Court House Law Museum for a panel discussion led by Deanne Fitzgerald Senior Aboriginal and Torres Strait Islander Advisor at the Western Australian Museum. Deanne will be discussing the life experiences of our panellists, Kelsi Forrest who was awarded the inaugural Aboriginal Women’s Legal Education Trust Scholarship in 2012 and who now works for Roe Legal, Ashleigh Lindsay, who works at Herbert Smith Freehills and was also a recipient of the Aboriginal Women’s Legal Education Trust Scholarship, Kate George, the first Aboriginal person to commence law at the University of Western Australia, the first Aboriginal graduate from the Australian National University, and also the first Aboriginal woman admitted to practice law in WA, and Sue Gordon, who holds a Bachelor of Laws Degree from UWA, an Honorary Degree of Doctor of Letters from UWA, Order of Australia – Australia Medal, Centenary Medal, Defence Service Medal and was named Senior Woman Lawyer of the Year – 2014 by Women Lawyers of WA Inc. Other topics to be discussed will include the impact of the law, contribution to community issues and inspiration and the importance for education for young people.

Register eventbrite.com/o/old-court-house-law-museum-15993905082 Cost Free Organiser The Law Society of Western Australia’s Old Court House Law Museum Sponsor Herbert Smith Freehills For Legal Profession and Community

LAW WEEK PANEL DISCUSSION HOSTED BY THE YOUNG LAWYERS COMMITTEE - ACCESS TO JUSTICE FOR INDIGENOUS PEOPLES Time 6:00pm - 7:30pm Venue Court Room 1, Old Supreme Court of Western Australia, Stirling Gardens, Perth Description A complimentary Law Week event for all members and non-members of the legal profession, this panel presentation hosted by the Young Lawyers Committee will discuss Access to Justice for Indigenous Peoples. The discussion will focus on topics relating to Indigenous peoples' interactions with the criminal justice system, including: the right to parole, issues surrounding bail for Indigenous accused in regional and remote locations, access to interpreters and the leadership and positive contributions of Indigenous communities in this space.

Chair: Michael Lundberg, Partner, Quinn Emanuel Urquhart & Sullivan Panel members: The Hon. Justice Robert Mazza, The Supreme Court of Western Australia Peter Collins, Director of Legal Services, Aboriginal Legal Service of Western Australia

Register Cost Organiser For

Tommy Solonec, Amnesty International Further panel members to be confirmed in due course. lawsocietywa.asn.au/community/law-week/ Free The Law Society's Young Lawyers Committee Legal Profession and Law Students

THURSDAY, 17 MAY 2018 SOCIAL JUSTICE CAREER OPPORTUNITIES EVENING Time 6.00pm – 8.00pm Venue Argyle Ballroom, Parmelia Hilton, 14 Mill Street, Perth Description Learn about social justice career opportunities, and discover how you can get involved. Explore how law students, young lawyers and the wider legal profession can engage in the social justice space and understand the legal and professional skills required when embarking on related career pathways. Learn how to become actively involved in the work of a diverse range of rights-focussed organisations. Speakers from a number of organisations will explain what they do and how you can get involved. Drinks and delicious canapés are provided, with the opportunity to network with the panellists and a number of exhibitors present that work in the human rights space.

Register lawsocietywa.asn.au/community/law-week/ Cost Members - Free | Non Members - $25.00 Organiser The Law Society of Western Australia Sponsor The College of Law For This event is open to all members and non-members from the legal profession that have an interest in rights-focussed organisations.

CORRUPTION AND CRIME COMMISSION WORKSHOP Time 12:00pm - 12:45pm Venue Corruption and Crime Commission, Level 5, 45 Francis Street, Northbridge Description 'Encountering misconduct' This workshop will provide participants with a glimpse into the everyday experience of misconduct in the public sector. Come along to an information session with real life examples about how to identify and deal with misconduct.

Register CCCLawWeek2018@ccc.wa.gov.au Cost Free Organiser Avril Bartlett For People working in the public sector or likely to be working with government.

LAW WEEK AWARDS NIGHT Time 5.30pm - 8.30pm Venue Bankwest Place, Raine Square, Level 1, 300 Murray Street, Perth Description As Law Week comes to a close, join the legal profession in an evening of recognition to celebrate law and justice in the community and our much anticipated Law Week Awards. This cocktail celebration will announce recipients of the 2018 Lawyer of the Year Awards, recognise long-serving practitioners who have held a practising certificate for more than 50 and 60 years and welcome the Society’s newly accredited family law specialists.

Register lawsocietywa.asn.au/community/law-week/ Cost Law Society members - $20 | Non-members - $45 Organiser The Law Society of Western Australia (Hosted by Bankwest) Sponsors Principal Sponsor Bankwest. Murdoch University and Law In Order For Legal Profession LAW WEEK DINNER FOR LEGAL PROFESSION, STAFF & PARTNERS Time From 6:00pm pre dinner drinks, 7:00pm dinner Venue Mean Fiddler Restaurant, York Street, Albany Description Law week dinner hosted by the Aboriginal Legal Service of Western Australia Ltd Register lmettam@als.org.au or (08) 9841 7833 Cost Individual order and pay on the night Organiser Aboriginal Legal Service of Western Australia Limited For Legal Profession, judiciary, staff and partners

For more information and other events during Law Week 07 visit lawsocietywa.asn.au/community/law-week/ or call (08) 9324 8692

Crowd-Sourced Funding in Australia

By Amanda Meloni, Solicitor, Lavan and Tony Chong, Partner, Lavan This article is adapted from a CPD seminar paper presented at the Law Society on 16 October 2017

Small businesses and start-ups have historically faced difficulty raising funds from the public due to compliance costs and regulatory requirements under the Corporations Act 2001 (Cth) (Corporations Act). In response to this situation, the Australian Government acknowledged that support for small ventures through crowd-sourced funding (CSF) may foster innovation and lead to further productivity and economic growth.1 CSF provides a mechanism for businesses to raise funds to develop new ideas and expand existing projects.

CSF is a type of online equity fundraising where businesses offer capital to the crowd in exchange for cash. The process involves a start-up or small company (issuer) issuing securities to a pool of investors, often (but not always) unsophisticated investors and retail investors (investors), in return for financial contributions. The money is raised through a CSF online platform which publicises the offer and facilitates the trade (intermediary).

The CSF regime was introduced by 08 | BRIEF MAY 2018

the Corporations Amendment (Crowdsourced Funding) Act 2017 (Cth) (CSF Amendment Act) amending the Corporations Act. Prior to the commencement of the CSF Amendment Act, CSF was technically legal in Australia; however, the regulatory regime under the Corporations Act restricted its operation.2 CSF was only available in limited circumstances and was often costly, timely and complex. The CSF Amendment Act provides companies with a CSF regime with less onerous reporting requirements and lower compliance costs. The current CSF legislation only applies to public companies.

The purpose of this article is to address the following points: 1. How the law has changed; 2. How the new CSF regime works; and 3. Criticisms and developments.

Changes to the law The Australian Federal Government experienced a considerable amount of pressure to make CSF more accessible in Australia. Part of the pressure was due to a growing list of other countries that have already implemented a CSF framework, such as New Zealand and the United Kingdom.3

The old regulatory regime around CSF was criticised in the Corporations and Markets Advisory Committee’s (CAMAC) Report released in May 2014 (CAMAC Report),4 and by the Financial System Inquiry Committee in its final report released in November 2014,5 as well as other treasury consultation and discussion papers.

The issue was then acknowledged in Malcolm Turnbull’s National Innovation and Science Agenda in December 2015.6 A bill was finally introduced in Parliament in late 2015. However, this first bill lapsed in the Senate.

On 24 November 2016, the Government introduced the Corporations Amendment (Crowd-Sourced Funding) Bill 2016 in the House of Representatives. The bill was passed by both Houses of Parliament in early 2017.

The CSF Amendment Act received the Royal Assent on 28 March 2017.

Businesses in Australia have been able to utilise the CSF regime since its commencement on 29 September 2017.

The table below summarises the features and requirements of the CSF regime in Australia.

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Figure 1: CSF features and requirements after amendments to the Corporations Act.

Key features and requirements Issuer company

Eligible CSF companies • Public company limited by shares7 • Principal business in Australia8 • Majority of directors reside in Australia9 • Company < $25 million gross assets10 • Company < $25 million annual turnover11 • Not listed and no listed subsidiaries or related parties12 • Neither company nor related entity has purpose of investing in other entities/schemes13 • Share capital registered under chapter 2A of the Corporations Act; or • Bodies corporate registered as a public company under Part 5B.1 of the Corporations Act; or • Foreign companies registered as a public company under part 5B.1 of the Corporations Act.

Type of investors

Retail or ‘Mum and Dad’ investors • Retail investors have investment cap of $10,000 for CSF investments per year14 • Must complete an acknowledgement of risk15 • Cooling-off period allowing investors to withdraw applications16

Offer limits

New limits • Companies can raise up to $5 million a year (issuer cap)17 • Limited governance requirements if certain conditions are met18 • Restrictions on advertising and publicity19 • Cannot offer investors financial assistance20

Disclosure

CSF regime disclosure • Must produce a CSF offer document21 • CSF offer document must contain: • Risk warnings22 • Information about the company23 • Information about the offer24 • Information about investor rights25

Cost

For issuer • Intermediary fees charged to the issuer company under the hosting arrangement between the intermediary and the issuer26 • However, concessions are only temporary – applicable to eligible public companies for five years27

How CSF works

because of the compliance costs (namely, in chapter 6D of the Corporations Act); and/or

Issuer company Prior restrictions

•

Prior to the CSF regime, small businesses and start-ups had restricted access to public fundraising due to the regulatory settings in place under the Corporations Act.

Exempt public company

These businesses experienced what the CAMAC referred to as the ‘capital gap’.

The gap occurs where an enterprise requires additional finance in order to continue to the next stage of development and cannot obtain this finance because: •

access to the public company structure is not a viable option

10 | BRIEF MAY 2018

the company cannot attract the required amount of funding from traditional debt sources, such as bank loans, credit cards or donations.

The CSF regime provides for a new category of company referred to in the CSF Amendment Act as an ‘eligible CSF company’.

An eligible CSF company must meet the requirements and caps imposed under section 738H of the Corporations Act. For example, a company’s gross assets must

be less than $25 million,28 and its annual turnover must be less than $25 million.29 These restrictions are designed to capture small businesses and start-ups subject to the ‘capital gap’. Under the CSF regime, these companies will have the benefit of being able to raise funds from the crowd, and at the same time are relieved from some of the compliance requirements of regular public companies.

However, under the CSF regime, the relief from some of the compliance and disclosure duties is limited to a period of five years.30 After this period, the company, if it chooses to continue as a regular public company, will be subject to the usual duties under the Corporations Act. The five-year exemption period is aimed at preventing companies from: •

•

trying to obtain funds over the cap by using a series of issuers, each independent, but essentially linked to one person or group of persons;31 and individuals continually trying to raise funds without having to disclose past failed CSF issuers.32

are provided in regulation 6D.3A.03 of the Corporations Amendment (Crowdsourced Funding) Regulations 2017 (Cth) (CSF Amendment Regulations 2017).

In summary, the risk warning notifies investors with respect to the following matters: •

that an entire investment may be lost and investors should be in a position to bear this loss;

•

the value of an investment may be diluted if the issuing company issues more shares;

•

investments are likely to be illiquid;

•

fund may be difficult to recover in the event of misleading statements, misconduct or if the issuing company becomes insolvent; and

•

independent financial advice is recommended before committing to a CSF investment.

Cooling-off rights An investor may withdraw an application with respect to a CSF investment within five business days of making the application.40

Type of investors/protection for investors

The rationale of the cooling-off rights is to provide retail clients time to reconsider their decision to invest.41

The CSF regime is specifically targeted at retail investors. Generally, retail investors are individuals, small businesses or unsophisticated investors that have assets and income less than a certain amount specified in the Corporations Regulations 2001 (Cth) (not a professional investor or wholesale investor).33

Prohibition on financial assistance

A CSF retail investor is limited to invest a total amount of $10,000 in CSF issuers in any period of 12 months.34

Risk acknowledgment

The purpose of this $10,000 cap is to limit a retail investor’s exposure to high-risk investments likely to be associated with CSF. The CSF regime imposes other additional protections for retail investors, comprising:

Pursuant to section 738ZE of the Corporations Act, certain entities, including the issuer, are prohibited from providing or arranging financial assistance to a retail client to acquire securities under a CSF offer.

Retail clients cannot make a CSF application unless they complete a risk acknowledgement. The terms of the risk acknowledgement are set out in regulation 6D.3A.07 of the CSF Amendment Regulations 2017.

In summary, the risk acknowledgment requires investors to ensure they: •

have read and understand the CSF offer document;

2. cooling-off rights;36

•

3. a prohibition on providing financial assistance to enable investments;37 and

understand that the CSF offer document contains less information than a prospectus;

•

have read and understand the risk warning, particularly, that CSF investments are risky and the investment may be lost and they may never be able to sell the shares and that the value of the shares may be diluted over time; and

•

are aware of the communication facility (where the investor may ask questions to the intermediary

1. an online risk warning;35

4. a requirement to provide a risk acknowledgment prior to a CSF investment.38 Risk warning A CSF online intermediary is responsible for ensuring that a risk warning appears on the offer platform at all times.39 The prescribed terms of the risk warning

11

or issuer)42 and that there is a five business day cooling-off period in relation to the investment.

Limits on offers A CSF issuer is still subject to a number of limits and restrictions with respect to offers, notwithstanding it is exempt from many of the onerous duties of public companies under chapter 6D of the Corporations Act. Some of the limits include: •

the class of securities that can be offered;43

•

the prohibition on intending to use funds to issue a credit facility to a related party;44

•

issuer caps ($5 million within any period of 12 months);45 and

•

advertising (restricted to the online platform).46

Type of securities The only class of securities that an issuer can offer are fully-paid ordinary shares.47 Discretionary stop order If a CSF offer document is not presented in a clear and concise manner or does not comply with any other requirements prescribed by the CSF Amendment Regulations 2017, ASIC has the power to make a stop order with respect to issuing or transferring securities,48 or prohibit conduct relating to the advertising or publication of securities.49 No intention to issue credit facility An issuer is prevented from using the funds raised through CSF to any extent for investing in securities or interests in other entities or schemes.50 The reason for this restriction is to protect investors from investing into ‘blind pools’, especially because of the lower level of disclosure required with respect to CSF.51 The offer document prepared by the issuer must contain a description of how the company intends to use the proceeds from the offer.52 Issuer cap A CSF issuer can raise a maximum of $5 million in any one 12 month period.53 This includes any funds raised by a related party of the issuer.54 If a company attracts a strong public interest in its equity to exceed the $5 million, then it will need to consider making a regulated public offer in the form of a prospectus or short information statement.55 Advertising The CSF regime provides a general prohibition on advertising a CSF offer. The rationale for this restriction is to prevent 12 | BRIEF MAY 2018

companies from creating unrealistic expectations in relation to the potential rewards of such investments.56 The regime does provide some exceptions to the ban. An exception is the publication of the CSF offer on the online platform of an intermediary.57 Disclosure Pursuant to section 738J of the Corporations Act, a company must prepare a CSF offer document. The contents of the CSF offer document must include the information required by regulations 6D.3A.02 to 6D.3A.06 of the CSF Amendment Regulations 2017.

The disclosure provided in the offer document must deal with the following four matters:58 •

risk warnings;

•

information about the issuer company;

•

information about the offer; and

•

information about investor rights.

Costs and regulatory burdens The CAMAC Report provides a summary of the compliance costs associated with public companies under the Corporations Act and those under the CSF model recommended by CAMAC. Albeit not all recommendations in the CAMAC Report were adopted in the CSF Amendment Act, the Report provides a reasonable estimate of CSF compliance costs for issuers, intermediaries and investors over the next 10 years.

Generally, the CAMAC Report indicates that CSF in Australia will result in lower compliance costs for issuers and increasingly higher compliance costs for intermediaries and investors over time.59 More specifically, the CAMAC Report estimates the following: “Costs per issuer are expected to fall in net terms by $7,950 per year driven largely by temporary exemptions from audit and annual general meeting requirements and reductions in disclosure costs; Compliance costs for intermediaries are expected to increase in line with the expected increase in businesses raising funds via CSEF. Intermediary costs that vary with the number of issuers raising funds are expected to increase by $1,550 per fundraising campaign; Costs per investor are expected to increase by $75 per year as a result of investors monitoring their compliance with investment caps and acknowledging risk

disclosure statements prior to each investment.”60

Criticisms and developments Notwithstanding the progression of the law on CSF, the public has raised various criticisms in relation to the current CSF regime. One of the major criticisms is that the CSF regime is of limited use to most companies in Australia because the current legislation only applies to public companies,61 and 99% of the companies in Australia are proprietary companies.62 In response to this limitation the Government has released the Corporations Amendment (Crowdsourced Funding for Proprietary Companies) Bill 2017 (CSF Proprietary Companies Bill). The bill extends the operation of CSF to proprietary companies. The CSF Proprietary Companies Bill also makes adjustments to the CSF Amendment Act based on other comments from the public. For example, the CSF Amendment Act provides investors with an opportunity to withdrawal a CSF investment offer in circumstances where an intermediary publishes a supplementary or replacement CSF offer document.63 A CSF issuer company will provide an

intermediary with a supplementary or replacement CSF offer document in order to rectify a defect in the original CSF offer document. The CSF Proprietary Companies Bill shortens the period in which an investor may withdrawal their offer from one month to 14 days after receiving the notice of the replacement or supplementary offer document.64 Treasurer and Liberal Party Member of Parliament, the Hon Scott John Morrison, in his second reading speech of the CSF Proprietary Companies Bill noted that the shorter withdrawal period “still gives investors adequate time to reconsider their investment, while providing greater certainty about the outcome of the offer for other potential investors”.65 Under the CSF Proprietary Companies Bill, proprietary companies wishing to

utilise CSF will be subject to a number of additional obligations, such as:

by the CSF Amendment Regulations 2018 are as follows:

•

preparing annual financial statements (in accordance with accounting standards);66

•

•

having its financial reports audited if its public investment from CSF offers exceeds $3 million;67 and

a limit to the exemption to the takeover rules in section 606 of the Corporations Act to proprietary companies that meet the eligibility requirements under the Bill;69

•

•

having a minimum of two directors.68

a simplified structure and content for CSF offer documents for both public and proprietary companies;70 and

•

additional disclosure requirements on proprietary companies, including a requirement for financial statements to be provided in the CSF offer document.71

If passed, the CSF Proprietary Companies Bill will come into operation 6 months after it receives the Royal Assent.

Following the introduction of the CSF Proprietary Companies Bill into Parliament, the Government has released the draft Corporations Amendment (Crowd-sourced Funding) Regulations 2018 (CSF Amendment Regulations 2018). Some of the changes introduced

On 11 January 2018, ASIC issued CSF intermediary licences to seven companies.72 From this date, issuers in

13

Australia have been able to start raising funds through CSF.

More information and concluding comments Potential CSF issuers may be considering a number of viable options to kick-start a new business or expand an existing one. They may be deciding whether to register a new public company, transition an existing proprietary company to a public company or wait for the enactment of the CSF Proprietary Companies Bill in order to utilise the CSF regime. Potential CSF issuers may find more information in relation to the eligibility criteria and obligations by referring to the following resources: •

•

•

•

•

the eligibility requirements for CSF in Part 6D.3A of the CSF Amendment Act (particularly those set out in section 738H of the Corporations Act comprising a checklist of criteria that every company must meet); ASIC’s Consultation Paper 288: Crowd-sourced funding: Guide for public companies of June 2017 (which provides the rationale of the requirements); ASIC’s Regulatory Guide 261: Crowd-sourced funding: Guide for public companies; updated version of Form 206 (Application for change of company type) enabling an existing company to convert to a public company; and the obligations and options once the five-year exemption period comes to an end.

ASIC has also released information for intermediaries, including the following resources: •

•

ASIC Consultation Paper 262: ‘Crowd-sourced funding: Guide for intermediaries’; and ASIC Consultation Paper 289: ‘Crowd-sourced Funding: Guide for intermediaries’.73

Interested parties are able to check ASIC’s Connect Professional Registers to see if an online intermediary has an Australian Financial Services Licence.

Applications for a licence can be submitted via the existing electronic ‘e-licensing’ portal.

Since ASIC issued the first intermediary licences on 11 January 2018, investors and issuers have been able to utilise the CSF regime. ASIC Commissioner John Price states that “this marked a significant milestone for crowd-sourced funding in Australia”. However, there may be further

14 | BRIEF MAY 2018

millstones to come, particularly if the CSF Proprietary Companies Bill is passed by both Houses of Parliament.

NOTES: 1.

Corporations and Markets Advisory Committee, ‘Crowd sourced equity funding report’ (21 May 2014), Australian Government [2.2.3] <http://www.camac.gov.au/camac/ camac.nsf/byheadline/reportsfinal+reports+home. html>; Financial System Inquiry Committee, ‘Financial System Inquiry Committee Final Report’ (November 2014) Australian Government 178 <http://fsi.gov.au/ files/2014/12/FSI_Final_Report_Consolidated20141210. pdf>.

2.

Corporations Act 2001 (Cth) Ch 6D.

3.

Financial System Inquiry Committee, ‘Financial System Inquiry Committee Final Report’ (November 2014) Australian Government 179 <http://fsi.gov.au/ files/2014/12/FSI_Final_Report_Consolidated20141210. pdf>.

4.

Corporations and Markets Advisory Committee, ‘Crowd sourced equity funding report’ (21 May 2014) Australian Government [2.2.3], [2.3.3] <www.camac.gov.au/camac/ camac.nsf/...reports+2014/.../csef_report_21may2014. doc>.

5.

Financial System Inquiry Committee, ‘Financial System Inquiry Committee Final Report’ (November 2014) Australian Government 178-179 < http://fsi.gov.au/ files/2014/12/FSI_Final_Report_Consolidated20141210. pdf>.

6.

Malcolm Turnbull, ‘National Innovation and Science Agenda Report’, (7 December 2015) Australian Government <https://www.innovation.gov.au/page/ national-innovation-and-science-agenda-report>.

7.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738H(1)(a).

8.

Ibid s 738H(1)(b).

9.

Ibid s 738H(1)(c).

10.

Ibid s 738H(1)(d), 738H(2)(a).

11.

Ibid s 738H(1)(d), 738H(2)(b).

12.

Ibid s 738H(1)(e).

13.

Ibid s 738H(1)(f).

14.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738ZC(1)(b)(i).

15.

Ibid s 738ZA(3)(b).

16.

Ibid s 738ZA(8).

17.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738G(2)(d).

18.

Ibid s 738ZI.

19.

Ibid s 738ZG.

20.

Ibid s 738ZE.

21.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738J(1).

22.

Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (Cth) Schedule 1 reg 6D.3A.02(3)(a).

23.

Ibid Schedule 1 reg 6D.3A.02(3)(b).

24.

Ibid Schedule 1 reg 6D.3A.02(3)(c).

25.

Ibid Schedule 1 reg 6D.3A.02(3)(d).

26.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738ZA(9)((a), 738ZB(2).

27.

Ibid s 738ZI(d).

28.

Ibid s 738H(1)(d), 738H(2)(a).

29.

Ibid s 738H(1)(d), 738H(2)(b).

30.

Ibid s 738ZI(d).

31.

Corporations and Markets Advisory Committee, ‘Crowd sourced equity funding report’ (21 May 2014), Australian Government [3.2.2] <www.camac.gov.au/camac/camac. nsf/...reports+2014/.../csef_report_21may2014.doc>.

32.

Corporations and Markets Advisory Committee, ‘Crowd sourced equity funding report’ (21 May 2014), Australian Government [3.2.2] <www.camac.gov.au/camac/camac. nsf/...reports+2014/.../csef_report_21may2014.doc>.

33.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s761G, 761GA.

34.

Ibid s 738ZC(1)(b).

35.

Ibid s 738ZA(1).

36.

Ibid s 738ZA(8).

37.

Ibid s 738ZE(2)-(3).

38.

Ibid s 738ZA(3)(b).

39.

Ibid s 738ZA(1).

40.

Ibid s 738ZD(1).

41.

Explanatory Memorandum ,Corporations Amendment (Crowd-sourced Funding) Bill 2016 (Cth) [6.19].

42.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738ZA(5).

43.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738G(1)(c); Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (Cth) Schedule 1 reg 6D.3A.01(1).

44.

Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (Cth) Schedule 1 reg 6D.3A.01(2).

45.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738G(2)(d).

46.

Ibid s 738ZG.

47.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738G(1)(c); Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (Cth) Schedule 1 reg 6D.3A.01(1).

48.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738K.

49.

Ibid s 738ZG(6).

50.

Ibid s 738G(1)(e).

51.

Explanatory Memorandum, Corporations Amendment (Crowd-sourced Funding) Bill 2016 (Cth) [2.51].

52.

Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (Cth) reg 6D.3A.05(1)(e).

53.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738G(2)(c)-(d).

54.

Ibid s 738G(2)(b)-(c).

55.

Corporations and Markets Advisory Committee, ‘Crowd sourced equity funding report’ (21 May 2014), Australian Government [4.5.4] <www.camac.gov.au/camac/camac. nsf/...reports+2014/.../csef_report_21may2014.doc>.

56.

Corporations and Markets Advisory Committee, ‘Crowd sourced equity funding report’ (21 May 2014), Australian Government [4.8.2] <www.camac.gov.au/camac/camac. nsf/...reports+2014/.../csef_report_21may2014.doc>.

57.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s 738ZG(2).

58.

Corporations Amendment (Crowd-sourced Funding) Regulations 2017 (Cth) reg 6D.3A.02(3).

59.

Australian Government, ‘Crowd-sourced Equity Funding: Final Assessment Regulation Impact Statement’ (November 2016) [7.1] <http://ris.pmc.gov. au/sites/default/files/posts/2017/03/regulation_impact_ statement_2.pdf>.

60.

Australian Government, ‘Crowd-sourced Equity Funding: Final Assessment Regulation Impact Statement’ (November 2016) [7.1] <http://ris.pmc.gov. au/sites/default/files/posts/2017/03/regulation_impact_ statement_2.pdf>.

61.

See Australian Government, ‘Crowd-sourced Equity Funding: Final Assessment Regulation Impact Statement’ (November 2016) [7.1] <http://ris.pmc.gov. au/sites/default/files/posts/2017/03/regulation_impact_ statement_2.pdf>; Commonwealth, Parliamentary Debates, House of Representatives, 26 February 2018, 70 (Edham Nurredin Husic).

62.

Michael Bailey, ‘Equity crowdfunding bill passes, but proprietary companies still excluded’, Australian Financial Review (online), 20 March 2017 <http://www. afr.com/leadership/entrepreneur/equity-crowdfundingbill-passed-but-proprietary-companies-still-excluded20170320-gv1xvt>.

63.

Corporations Amendment (Crowd-sourced Funding) Act 2017 (Cth) s738X(7), (9).

64.

Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 s51.

65.

Commonwealth, Parliamentary Debates, House of Representatives, 14 September 2017, 10411 (Scott Morrison).

66.

Corporations Amendment (Crowd-sourced Funding for Proprietary Companies) Bill 2017 s16.

67.

Ibid s1, 16.

68.

Ibid s13.

69.

Exposure Draft, Corporations Amendment (Crowdsourced Funding) Regulations 2018, Schedule 1 item 12.

70.

Ibid Schedule 1 items 3-12.

71.

Exposure Draft, Corporations Amendment (Crowdsourced Funding) Regulations 2018, Schedule 1 item 8.

72.

Australian Securities and Investments Commission, ‘ASIC Licenses first crowd-sourced funding intermediaries’ (Media Release), 18-004MR, 11 January 2018) 1 <http://asic.gov.au/about-asic/media-centre/ find-a-media-release/2018-releases/18-004mr-asiclicenses-first-crowd-sourced-funding-intermediaries/>.

73.

Australian Securities and Investment Commission, ‘Consultation Paper 289, Crowd-sourced Funding: Guide for Intermediaries’ (June 2017) <http://download. asic.gov.au/media/4302087/cp289-published-22june-2017.pdf>.

What Young Lawyers Said: the Law, Collegiality and Mental Health

By The Law Society’s Young Lawyers Committee

In January 2018, the Young Lawyers Committee (YLC) received results of an electronic survey issued to junior members of the Law Society. The survey was disseminated to this pool through our monthly enewsletter YLC News. The demographic of the so-called ‘young lawyer’ is broader than the name may suggest, comprising of members who are either under the age of 35 or who have 0-5 years post-admission experience, whichever is later. This group is significant, making up about one-fifth of the membership of the Law Society. The survey was intended to be used to guide strategic planning by the YLC. However, certain themes emerged from the survey results which the YLC considered worth sharing with the wider profession.

Demographics In total, 66 young lawyers anonymously responded to the survey, no doubt enticed by the chance of winning a $20 voucher to Small Print (or perhaps they were coerced by friends or colleagues on the YLC? We may never know the truth). Approximately three-quarters of participants worked in the Perth city area (including adjacent suburbs such as Subiaco, East and West Perth) and an overwhelming majority worked in a firm (95%). By way of comparison, Australiawide statistics show 69% of lawyers work in private practice (with about 10% in government, 16% in corporate and 5% other)1.

47% of respondents to the YLC survey indicated they worked at a firm with 26 or more professional personnel. This aligns with the perception that many junior lawyers start their careers in private firms, and move into public law or an in-house role after gaining more experience. The allure of private practice might stem from its glamorous (and some might add, unrealistic) representation on the flat screen. Another explanation might be the “extras” those larger firms are able to offer practitioners.

Almost 80% of survey participants reported that their employer was paying for their Law Society membership.

Virtually all of those participants reported

working in a private firm. On the other hand, many government and in-house lawyers report having to personally meet the cost of their own membership, attending CPD events and renewing their Practicing Certificate. This may be prohibitive, particularly in the early stages of a legal career. Of those who stated their firm paid for membership, 62% of participants indicated they would be unwilling to pay for Law Society membership themselves.

Apart from the information collected above, the survey did not capture further demographics such as the gender, age and experience of participants.

Collegiality When asked the question, “What does collegiality mean to you and what are the benefits of a collegiate profession”, young lawyers surveyed were remarkably upbeat and predominantly expressed a positive view of collegiality within the profession: “Collegiality means that as a profession we stand together. The benefits are that we are stronger, healthier and more understanding of each other and as a result do better work for our clients.”

15

“Having supportive and helpful colleagues and mentors in your office is everything, especially at the beginning of your career.”

relied on support from colleagues (41%), followed by mentors (29%), and support networks outside of work, including family (21%).

“For me it is personally important as it helps me maintain a sense of perspective on my work - just one conversation with a fellow young practitioner can help me see that we are all experiencing similar challenges. I think this sense of support is invaluable.”

It is wonderful that so many young lawyers feel connected to colleagues and mentors within the profession. All of those surveyed were Law Society members, and a majority attend functions and maintain networks outside the office environment (79%). Nonetheless, there were some participants who reported feeling no collegiality.

“Having someone to turn to when you are not coping.”

“Feeling comfortable expressing true feelings with colleagues and being met with understanding not judgment.”

“Not competing with each other, but sharing knowledge.”

Participants rated collegiality on par with social impact as the second best thing about being a lawyer, behind challenging and stimulating work. Most young lawyers surveyed had a mentor (80%) and many also reported acting as a mentor themselves (42%). When times get tough at work, those surveyed said they mainly

16 | BRIEF MAY 2018

Mental health Over one-third of young lawyers surveyed ranked “dealing with mental wellbeing issues” highest when asked about key issues facing young lawyers, followed by “lack of flexible work arrangements”, “inadequate supervision” and “lack of career opportunities”. Question 9 of the survey, which asked simply, “What is your view of the conversation around mental health in the legal profession?” was also revealing. Many participants seemed to put a lot of effort into their answers, and the picture painted was overwhelmingly dim and tinged with skepticism. Of

the participants who opted for shorter answers, “lip service” and “buzz-word” were common responses. However, there were positive answers and many participants expressed the view that there seemed to be an increased focus on mental health and wellbeing in the profession. The following quotes from survey participants are illustrative: “It is being looked at and spoken about more, which is good. However the structure/system that causes mental health issues in the first place remains the same, so the increased focus is still quite superficial.”

“I feel like it is certainly developing and being spearheaded by younger generations.”

“It's all talk, as long as we have to hit billable hour targets nothing can change.” “… the elephant in the room – that unreasonably long hours, billable targets, and an expectation that your work will take priority over anything else at any time, are ruinous for mental health – is ignored in favour of buzzwords like wellness, resilience

and mindfulness.”

“It is all theoretical and somewhat impractical for junior practitioners.

The job market is so tough that people are so grateful to get a job and they feel too uncomfortable to actually asking for concessions.”

“Inconsistent. Some senior lawyers are mindful of the issues, others are stuck in their ways and won’t budge.”

Participants were also asked to answer “What do you think are the worst things about being a lawyer?” The multiple choice answer of “stress” ranked first, followed by “billing targets”, “work-life balance” and “hours”. Other answers included hierarchy, low salary, dealing with unethical lawyers and lack of employment opportunities.

YLC Planning for 2018 Those surveyed reported wanting to build and improve their technical legal skills, followed by building networks, developing ‘soft’ skills, moving firm or practice area or obtaining higher qualifications.

In order to assist the YLC in supporting and advocating for the needs of young

lawyers, many of the questions addressed what young lawyers want and expect from the YLC. Briefly, in this regard, young lawyers surveyed said that they wanted to see: •

more social events (comprising a mix of social and networking);

•

targeted CPD seminars for young lawyers and improved accessibility of CPD;

•

cheaper or free social, networking and CPD events;

•

initiatives and support for ‘new’ and not just ‘young’ (in age) lawyers; and

•

increased advocacy by the YLC generally.

The YLC hears you! We are eager to implement your suggestions and meet your needs.

We will be holding the YLC Assembly in July 2018. This event is intended to be a roundtable discussion between junior members of the profession and the YLC, and all attendees are welcome to voice their thoughts and concerns in an open forum. Watch this space!

The Law Society accepts expressions of interest from young lawyers (under 35 or less than 5 years post-admission) to join the Young Lawyers Committee on an ad hoc basis. Committee expression of interest forms can be submitted through the Law Society website at lawsocietywa.asn.au/committees.

You can also connect with the YLC on Facebook and the monthly YLC News enewsletter.

If you want to chat with someone on the Committee about anything, including this survey, please contact younglawyers@ lawsocietywa.asn.au Law Society members are eligible for three free counselling sessions per year through LawCare WA. You can contact LawCare on 1300 687 327 or visit www. lawsocietywa.asn.au/lawcare-wa.

If you or someone you know is experiencing difficulties, please contact on Lifeline Australia on 13 11 14 NOTES: 1

Urbis, National Profile of Solicitors 2016 Report (report commissioned by the Law Society of New South Wales, 24 August 2017)

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The Law Society’s wellbeing and resilience programme LawCare WA has a holistic approach to wellbeing and resilience.

Membership of the Law Society provides complimentary access to LawCare WA to help you manage your career, life, health and wellbeing.

Member Assistance Programme

Employee Relations Advice Line

The member assistance programme offers support with personal and work-related issues that may impact your job performance, health, mental and emotional wellbeing.

LawCare WA offers a free confidential telephone advice service to members on personal matters relating to a range of human resources and employee relations issues.*

Service provided by Converge International

Service provided by CCIWA

Phone: 1300 687 327

Phone: (08) 9365 7660

Practitioner Advice

Health and Wellbeing

Members of the profession connect with experienced practitioners for advice on ethical issues or complaints through the Senior Advisors Panel and Western Australian Bar Association Referral Service.

Working in the legal profession can be rewarding and challenging. It is important to find balance in your life as you juggle career, family, friends and hobbies.

Referral service provided by WABA

Phone: (08) 9220 0477

LawCare WA is available to members of

• • •

Attend complimentary Pilates classes provided by HBF twice a year Participate in sporting tournaments hosted by the Law Society’s Young Lawyers Committee Take advantage of exclusive offers through the Law Society’s member privileges programme

For more information about LawCare WA please visit

lawsocietywa.asn.au/lawcare

*This service is only for a Law Society member who is an individual employee (not an employer). If after speaking to CCIWA more substantial employee relations advice is required, members may use the Law Society’s Find a Lawyer service to find legal practitioners specialising in employee relations law. Disclaimer: The Law Society facilitates all the above services and does not warrant or guarantee the work undertaken by any third party organisation, firm or individual listed or provided and is not liable in relation to any aspect of services they may provide to you.

18 | BRIEF MAY 2018

The Gig Economy: Rescuing the Scapegoat

By Cory Fogliani, Fogliani.Lawyer This article is adapted from a CPD seminar paper presented at the Law Society on 15 February 2018

Introduction

The gig economy is often held out as a group of wealthy, multinational organisations that use mobile applications to skirt the edges of the law and exploit vulnerable workers.1 According to the General Secretary of the Independent Workers’ Union of Great Britain, no company better epitomises the gig economy than Uber.2 There can be little doubt that Uber has gone to great extents to disguise the relationships it has with its drivers so as to avoid labour laws. So far it has been successful in doing so in Australia.3 But is the gig economy the creature that enables companies like Uber to exploit their labour?

This paper will start by defining the gig economy. It will then suggest that the current gaps in Australia’s labour laws are not a by-product of the gig economy but are instead caused by the underregulation of dependent contracting. This

paper will then look at a selection of cases from the United Kingdom, the United States of America, and Australia involving labour law claims by Uber drivers against Uber. Finally, this paper will suggest that the state and federal parliaments could better protect the working class in Australia by extending Australia’s labour laws to cover dependent contractors.

What is the ‘gig economy’?

There has been a lot of academic work dedicated to talking about the gig economy. Despite that attention, it is surprisingly difficult to find any sort of consensus about what the gig economy is.

For example: a. In the Macquarie Dictionary, the term ‘gig economy’ is defined as ‘an economy in which individual workers are employed on a contract to do a particular task for a set time, with little connection to their employer, as dog walkers, people who do food shopping and deliveries, drivers in ride-sharing services, etc.’

b. Professor Wayne Lewchuk from McMaster University in Canada has described the gig economy as an economy ‘where the dominant forms of employment are short-term contract work, freelancing and selfemployment.’4 c. In 2016, the Prime Minister of the United Kingdom commissioned an independent review of ‘employment practices in the modern economy’.

The authors of that review defined ‘gig economy work’ as ‘people using apps to sell their labour.’5 d. Dr Arianne Barzilay from the University of Haifa in Israel and Dr Anat Ben-David from the Open University of Israel have referred to the gig economy as ‘the disaggregation of consumption and the segmentation of production via online platforms.’6 If you were to apply each of the above definitions to the entire workforce in Australia, then for each definition you would be left with a different group of people. This creates obvious problems for anyone advocating for better regulation of the gig economy.

19

It is difficult to define the gig economy without first considering what a gig is, and which types of workers are gig workers.

What is a gig?

A gig is a simple concept. It is the performance of a piece of work by a worker. All gig work is temporary.

Although, there can be considerable variance in how long it may take for a worker to perform a gig. A gig may last as little as a few minutes, or it may stretch out over a couple of months or even years.

Who are gig workers?

Gig workers can come in many different forms. Some will be employees. Some will be independent contractors. And others will be caught up in dependent relationships which do not neatly fit within the more traditional employee/ independent contractor construct.

The one thing that all gig workers have in common is that they will be engaged under either a fixed-term or fixed-task contract which is of a temporary nature.

Once the term of the contract expires, or the task is completed, the gig is over.

Actors, musicians, barristers, babysitters, dogwalkers, and home-handymen are some examples of gig workers. They all usually work under fixed-term or fixedtask contracts. In the usual course of business, none of them ought to have any expectation of ongoing, permanent work from a single purchaser of their labour. A fundamental aspect of a gig is that it will come to an end once the work has been performed.

To illustrate the point, let us take the example of a musician. Our musician is contracted by a publican to play a gig for two nights at a local pub.

Once the musician has completed the performances, she is paid by the publican. The work is gig work because the contract between the parties comes to an end once the work has been performed and paid for. Given the limited scope of the contract, neither party should expect that the relationship will continue beyond the two nights.

How a person is remunerated for their work very rarely assists in identifying whether that person is a gig worker.

Not all gig workers are paid piece rates or commissions. For example, in the construction industry, gig workers are normally paid either wages or a salary for the life of their role on a construction job.

Their method of remuneration does not make their work any less temporary in nature.

20 | BRIEF MAY 2018

So what then is the gig economy?

The gig economy is a market in which individual workers sell their labour through fixed-term or fixed-task contracts that are of a temporary nature.

Exonerating the gig economy and shifting focus onto dependent contractor relationships When we consider how the law might be reformed to better protect gig workers, it is most likely the case that we are not thinking about the legislature creating minimum work entitlements for the barristers over at Francis Burt Chambers.

Those types of gig workers are big

Gig workers can come in many different forms. Some will be employees. Some will be independent contractors.

And others will be caught up in dependent relationships which do not neatly fit within the more traditional employee/independent contractor construct.

enough to look after themselves.

If you can accept the premise that not all gig workers need protection from exploitation, then it should become apparent that the gig economy is not the real problem.

The types of workers that are not currently protected, but probably need protection, are those who: a. perform work for a third party in circumstances where that third party could not accurately be described as a client or a customer; and b. work as an integrated part of a profession or business undertaking carried on by that third party.7 One of the first concepts that a student of employment and industrial law will learn is the distinction between contracts of service and contracts for service. Under Australian law, the entire employment law universe is comprised of those two categories of relationship.

For the most part, employees are well protected under Australia’s labour laws.

Employees receive, amongst other things, guaranteed superannuation, workers’ compensation insurance, long service leave, and protection from being unfairly dismissed. There are statutory commissions that are entirely dedicated to resolving conflicts between employers and employees. Independent contractors, on the other hand, are not guaranteed any of those entitlements.

Back in 1965, Professor Harry Arthurs from York University in Canada identified the merits of extending employment laws to include a new category of worker called ‘dependent contractors’.8 Professor Arthurs argued that the binary employee/ independent contractor distinction, combined with the lack of minimum entitlements for contractors, meant that employers had an economic incentive to classify workers as contractors rather than employees.9 Professor Arthurs explained that incentive as follows: A fluctuating demand for services is often more economically met by casual arrangements with a dependent contractor than by a burdensome continuing employment relationship. The dependent contractor may work for less. His individual bargaining power is substantially less than that of an organized group of employees.

Capital and maintenance costs of equipment can be shifted to the dependent contractor, thereby further enhancing the bargaining power of the employer, while undermining the contractor’s ability to withhold his services. Not least of the attractions of dealing with a dependent contractor is his inability to claim the protection of the labour relations legislation. Finally, the dependent contractor may be used to undermine the union’s bargaining power, which stems from its control of the labour supply.10 A dependent contractor is a worker that is legally a contractor but is economically dependent on the work of a single purchaser of their labour.11 A dependent contractor is not quite an employee and not quite an independent contractor. They instead fall somewhere between the two.

Even in more recent times, scholars from around the globe have continued to debate the merits of the law recognising a third category of employment relationship known as dependent contractors.12 In support of the creation of a dependent contractor category, Professor Miriam Cherry and Antonio Aloisi have said:

Intuitively appealing, a third category would resolve many of the ongoing disputes over misclassification plaguing the on-demand sector.

Rather than litigate the issue of whether a particular worker or group of workers deserves employee status, gig workers would automatically be sorted into the hybrid “dependent contractor” category. This would eliminate the uncertainty that goes along with litigation connected to the “all or nothing” scheme and, at least, offer some labor protection to workers who “present only some characteristics of ‘employees’ but not others.”13 Professor Benjamin Sachs has questioned whether introducing a dependent contractor category would assist in fixing the issue that exists in parts of the gig economy.14 This is because some gig workers have multiple jobs or operate on multiple online platforms. These types of workers may not be dependent on the one employer as a source of income.15 A complete answer to Professor Sachs’ argument can be found in the United Kingdom’s labour laws.

The Uber problem under the United Kingdom’s labour laws The legislature in the United Kingdom has taken a liberal approach with the scope of its labour laws. It has extended them to cover ‘workers’.

The term ‘worker’ is defined in statute as: … an individual who has entered into or works under (or, where the employment has ceased, worked under)— a. a contract of employment, or b. any other contract, whether express or implied and (if it is express) whether oral or in writing, whereby the individual undertakes to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual; and any reference to a worker’s contract shall be construed accordingly.16 Limb (a) of that definition is straightforward. It captures employees.

Limb (b) casts the net much wider. It ropes in certain types of contractors.

In Bates van Winkelhof v Clyde & Co, Baroness Hale of Richmond said the following about limb (b):

21

… the law now draws a distinction between two different kinds of selfemployed people. One kind are people who carry on a profession or a business undertaking on their own account and enter into contracts with clients or customers to provide work or services for them. … The other kind are self-employed people who provide their services as part of a profession or business undertaking carried on by meone else.17 The Employment Appeal Tribunal explained the policy behind limb (b) in this passage from Byrne Bros (Formwork) Ltd v Baird: It seems to us that the best guidance is to be found by considering the policy behind the inclusion of limb (b).

That can only have been to extend the benefits of protection to workers who are in the same need of that type of protection as employees stricto sensu — workers, that is, who are viewed as liable, whatever their formal employment status, to be required to work excessive hours (or, in the cases of Part II of the Employment Rights Act 1996 or the National Minimum Wage Act 1998 , to suffer unlawful deductions from their earnings or to be paid too little). The reason why employees are thought to need such protection is that they are in a subordinate and dependent position vis-à-vis their employers: the purpose of the Regulations is to extend protection to workers who are, substantively and economically, in the same position.

Thus the essence of the intended distinction must be between, on the one hand, workers whose degree of dependence is essentially the same as that of employees and, on the other, contractors who have a sufficiently arm’s-length and independent position to be treated as being able to look after themselves in the relevant respects. 18 The industrial courts and tribunals in the United Kingdom have been reluctant to develop legal tests to assist with interpreting limb (b).19 They instead prefer to stick to the words of the statute.20 This is because the language used in limb (b) is intended to be flexible.21 Notwithstanding that point, in determining whether a person is a limb (b) worker the courts and tribunals will usually consider the following factors as being relevant: a. the nature of the obligations between the parties, bearing in mind that ‘the absence of a general obligation to work cannot be fatal to those

22 | BRIEF MAY 2018

cases where it is accepted that there are gaps between particular engagements or assignments’; b. the degree to which the purported worker is integrated into the business of the other party to the contract (i.e. the employer); and c. the degree to which the purported worker is truly independent in how they perform the services under the contract.22 The judiciary in the United Kingdom is aware that some organisations engage armies of lawyers to try and disguise workers as independent contractors.23 As will be illustrated below, the judiciary will push any carefully drafted contracts to one side if their terms do not accurately reflect the true nature of the relationship between the principal and the contractor.

The leading Uber case in the United Kingdom The leading labour law case against Uber in the United Kingdom is Aslam v Uber BV.24 In 2016, a group of Uber drivers that operated around London sued three of Uber’s corporate entities in the London Central Employment Tribunal.25 Only two of those entities were relevant to the proceedings. They were: a. Uber BV – a Dutch corporation which was based in Amsterdam and was the parent company of the other two Uber entities involved in the proceedings; and b. Uber London Ltd – a UK company which held a Private Hire Vehicle Operator’s Licence for London, and which made provision for the invitation and acceptance of private hire vehicle bookings.

The drivers claimed that Uber failed to pay them the minimum wage pursuant to an obligation in the Employment Rights Act 1996 (UK) and the National Minimum Wage Act 1998 (UK), and failed to provide them with paid leave in accordance with the Working Time Regulations 1998 (UK).

The ‘core issue’ in the proceedings before the Tribunal was whether the drivers fell within limb (b) of the worker definition.26 How Uber operated in practice in London27 Uber’s passengers would register an account with Uber London Limited.

During the registration process, they would provide their personal information and link their Uber account to a credit card or a debit card. Registered users could then download a mobile app on

their smartphones and start booking Uber rides.

All customer bookings were received and processed by Uber London Limited.

Uber London Limited would locate the closest available Uber driver from a pool of drivers who were logged onto Uber’s driver smartphone application. It would inform the closest available driver of the passenger’s request for a ride. The Uber driver would only be told the passenger’s first name and their customer rating.

After receiving a job request, the Uber driver had 10 seconds to accept that job. If the driver failed to accept the job within that 10 seconds, then Uber London Limited assumed that the driver was unavailable and moved on to the next closest Uber driver. If a driver missed or rejected three consecutive job requests, then Uber would kick that driver off the mobile application for 10 minutes.

If the driver accepted the job, then Uber London Limited would confirm the booking with the passenger and allocate the job to the driver. Uber’s mobile applications would then connect the driver and the passenger in a voice call. This was so that the driver and the passenger could discuss a pickup location. Neither party would be able to see the mobile number of the other.

Uber discouraged its drivers from asking passengers where they wanted to go during the phone hook-up.

The driver was not told where the booked passenger wanted to go until they picked up that passenger. Uber’s driver mobile application had built in satellite navigation.

It would provide the driver with detailed instructions about the route to the passenger’s destination. The satellite navigation would also track the driver’s mobile phone movements. Generally, an Uber driver could not detour from the recommended route unless the passenger asked them to, or there was another good reason to do so. If a driver did detour from the route suggested by Uber’s phone application, and a passenger complained, then that driver could receive a please explain letter from Uber.

Once a driver had dropped a passenger off at their destination, the driver would confirm the drop-off with Uber London Limited using the mobile phone application. Uber London Limited would then place the driver back into the pool of available drivers looking for work.

At the end of a ride, Uber’s computers calculated a recommended fare based on the satellite data collected from the driver’s mobile phone. The calculation considered the time spent in transit and

the distance travelled. It also factored in a multiplier when the passenger demand for Uber drivers exceeded the number of available drivers in the waiting pool.

payment would account for all the relevant driver’s fares less Uber BV’s service fee for the use of its mobile application.

The driver and the passenger were entitled to negotiate a fare that was less than the amount that had been calculated

by Uber’s computers. However, they could not agree to a higher fare. Uber discouraged its drivers from asking passengers for tips. Even if an Uber driver and passenger agreed to a lower fare than what was recommended by Uber, Uber would still take a percentage of the recommended fare for its involvement in the ride.

Uber had recommended to its drivers that they should not ask for a passenger’s phone number, nor should they provide their own phone number to a passenger.

Passengers did not pay the Uber driver directly. Instead, Uber BV would make a deduction from the credit or debit card that was linked to the passenger’s Uber account. Uber BV would then draft up an invoice and a receipt for the ride. Neither document would show the full name or contact details of the passenger. It would only show the passenger’s first name.

The passenger would receive a copy of the receipt, but not the invoice. The driver would receive both documents.

Uber BV would then make a weekly payment to its drivers. That weekly

Uber drivers; f.

g. Uber UK was entitled to:

The contractual documents between Uber and its passengers28 When a passenger logged into the Uber mobile application, they had to accept Uber’s terms of service document. Those terms of service required the passenger to agree that:

c. Uber UK was an intermediary between the passenger and the Uber driver; d. any contract for a ride was between the passenger and the Uber driver; e. Uber UK accepted passenger bookings as an agent for individual

i.

decline any ride requests made by the passenger;

ii.

determine which Uber driver would be offered the passenger’s ride request;

iii. keep records of each of the passenger’s bookings; iv. remotely monitor the progress of any ride; and

a. Uber UK (which for rides in London meant Uber London Limited) was an agent for each Uber driver; b. Uber UK was not a transportation provider and did not provide transportation services;

Uber UK was not a party to any transportation contract between the passenger and an Uber driver;

v. manage any lost property queries relating to Uber bookings; h. Uber UK provided its booking services ‘free of charge’ to the passenger; and i.

Uber BV was entitled to ‘facilitate’ the passenger’s payment of the fare on behalf of the Uber driver.

The contractual documents between Uber and its drivers29 Before a driver could sign up with Uber, they first needed to attend an interview

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and induction process. The induction pack supplied by Uber to its drivers contained various instructions about what Uber expected from them.

To use the Uber driver mobile application, Uber drivers were required to agree to Uber’s terms of service document. Those contractual arrangements were between the driver and Uber BV. Uber could unilaterally update its terms of service.

An Uber driver would need to accept any updated terms of service before they could continue to use the mobile application.

Uber’s terms of service were updated from time-to-time. In the terms of service that were considered by the Tribunal, Uber agreed to offer information and a tool (the mobile applications) to the driver to connect them with passengers.

The drivers agreed, amongst other things: a. that Uber was not a transportation or passenger carrier, and did not provide any transportation services; b. to provide their own vehicle which was: i. ii.

manufactured no earlier than 2006; was in good condition; and

iii. was within a list of acceptable makes and models released by Uber; 24 | BRIEF MAY 2018

c. to cover all costs incidental to owning and running the vehicle; d. that there was a direct legal relationship solely between the driver and their passengers; e. that the contract was not intended to create an employment relationship between Uber and the driver; f.

that the driver was not an agent of Uber;

g. that Uber did not intend to exercise any control over the driver (except as provided for in the contract); h. to support Uber in all communications; i. j.

to engage other drivers if requested to do so by Uber; to refrain from speaking negatively about Uber’s business and business concept in public;

k. to comply with the quality standards set by Uber; l.

to constant monitoring by Uber and the storage of any data collected during that monitoring process;

m. to take on sole responsibility for all liability, and indemnify Uber for all damages claims, which resulted from the provision of driving or transportation services by the driver;

n. that they were not allowed to: i.

transfer their right to use the app to another person;

ii.

share Uber accounts; or

iii. share their Driver ID which was used to sign in to the app; o. that if the law deemed a driver as an agent, employee or representative of Uber, then the driver would ‘indemnify, defend and hold Uber harmless from and against any claims by any person or entity based on such implied employment or agency relationship’.30 Either party could terminate the contract without notice if: a. the driver lost their licence to operate a vehicle or transport customers; or b. there had been a material breach of the agreement (including the receipt of a significant number of passenger complaints about the driver).

The arguments advanced by the parties about whether Uber drivers were workers The Uber drivers argued that the Tribunal should look past the written contracts between them and Uber BV.31 This was because those contracts were designed to misrepresent the relationship between them and Uber.32 The drivers claimed that

the practical reality of the relationship was that they worked for Uber, not the other way around.33 The drivers claimed that they were employed by Uber London Limited, or alternatively Uber BV.

available to accept customer requests.37 As a result, the Uber drivers could still be said to be working for Uber while they were waiting in the pool for a job to come up.38

Uber responded that the contracts between the drivers and Uber BV were valid and fairly defined the relationship between the parties.34 Uber said that it was unremarkable that it made and enforced stipulations about the way which its drivers could use the mobile application.35

To a certain extent, that outcome challenges the notion that Uber drivers are gig workers.

There were other arguments advanced by the parties relating to jurisdiction, conflict of laws, and the scope of certain entitlements if the Uber drivers were found to be workers. However, those issues are not relevant to the topic of this paper.

The Tribunal’s view about whether Uber drivers were workers The Tribunal accepted that Uber drivers were under no obligation to switch on the Uber mobile application. It also accepted that Uber drivers were under no obligation to work when they were logged out of the app.

The Tribunal was highly sceptical of the way in which Uber had drafted its contracts. It accused Uber of resorting to ‘fictions, twisted language and even brand new terminology’ to mask the true state of affairs.39 The Tribunal labelled the suggestion that Uber in London was a ‘mosaic of 30,000 small businesses linked by a common ‘platform’’ as ridiculous.40 The Tribunal refused to allow Uber to rely on its ‘carefully crafted documentation’ because it bore no relation to reality.41 The Tribunal rejected the idea that Uber drivers entered into transport contracts with each of their passengers. It said that the ‘supposed driver/passenger contract is a pure fiction which bears no relation to the real dealings and relationships between the parties’.42 The Tribunal added:

However, the Tribunal found that an Uber driver fell within the definition of a limb (b) worker when the following conditions were met: a. the driver had the mobile app switched on; b. the driver was within the territory in which they were authorised to work; and c. the driver was willing and able to accept assignments.36 The Tribunal said that while passengers may desire someone to perform a particular job (i.e. a gig), Uber’s business model required a pool of drivers to be logged into the mobile application and

1958 Our Story Begins

Uber’s case is that the driver enters into a binding agreement with a person whose identity he does not know (and will never know) and who does not know and will never know his identity, to undertake a journey to a destination not told to him until the journey begins, by a route prescribed by a stranger to the contract (UBV) from which he is not free to depart (at least not without risk), for a fee which (a) is set by the stranger, and (b) is not known by the passenger (who is only told the total to be paid), (c) is calculated by the stranger (as a percentage of the total sum) and (d) is paid to the stranger. Uber’s case has to be that if the organisation became

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insolvent, the drivers would have enforceable rights directly against the passengers. And if the contracts were ‘worker’ contracts, the passengers would be exposed to potential liability as the driver’s employer under numerous enactments …

The absurdity of these propositions speaks for itself.43 The Tribunal found that Uber’s claim that it was working for its drivers was false.44 The reality was that Uber was running a transportation business.45 Uber made its profits by recruiting and retaining drivers.46 The real bargain that was struck between Uber and its drivers was ‘that, for reward, the driver makes himself available to, and does, carry Uber passengers to their destinations’.47 The Tribunal found that Uber London Limited was the employer of the drivers in London.48 This was because Uber London Limited was the point of contact between Uber and its drivers.49 Uber London Limited recruited, instructed, controlled, disciplined and dismissed Uber’s drivers.50 Uber’s appeal of the Tribunal’s decision Uber appealed the decision of the Tribunal up to the Employment Appeal Tribunal.51 Eady J reviewed the first instance decision in detail. Her Honour found no error in the Tribunal’s reasons.

She dismissed Uber’s appeal.

The Uber problem under the USA’s labour laws The United States of America has maintained an employee/independent contractor construct in its labour laws.52 The difficulties that arise from maintaining that construct has been highlighted by Chhabria J of the United States District Court in the following passage from Cotter v Lyft:

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25

As should now be clear, the jury in this case will be handed a square peg and asked to choose between two round holes. The test the California courts have developed over the 20th Century for classifying workers isn’t very helpful in addressing this 21st Century problem. Some factors point in one direction, some point in the other, and some are ambiguous.

Perhaps Lyft drivers who work more than a certain number of hours should be employees while the others should be independent contractors.

Or perhaps Lyft drivers should be considered a new category of worker altogether, requiring a different set of protections. But absent legislative intervention, California’s outmoded test for classifying workers will apply in cases like this. And because the test provides nothing remotely close to a clear answer, it will often be for juries to decide. That is certainly true here.53 The ongoing case of O’Connor v Uber Technologies There is ongoing litigation in the Northern District of California about whether Uber misclassified a class of up to 400,000 Uber drivers that operate in the State of California as independent contractors rather than as employees.54 Early on in that litigation, Uber applied to the Court for summary judgement.55 The basis of the motion was that the plaintiff drivers were not employees but were instead independent contractors.

The legal test for employment in the State of California In the State of California, the test of employment operates slightly different to that in Australia. The test involves a twostage analysis. First, if the worker proves that they provided work and labour for the purported employer then that will give rise to a legal presumption that the worker was an employee of that employer.56 Second, once the presumption arises, the onus shifts to the employer to prove that the worker was an independent contractor.57 During the second stage of the test, the court will consider a range of indicia to work out whether the worker is an independent contractor. The primary indicia – that is, the factor that holds the most weight – is the degree to which the employer retains a right to control the work.58 It does not matter whether the employer actually exercises that control.

It only matters that the power to control rests with the employer.59 Secondary indicia that the court will consider include:

26 | BRIEF MAY 2018

a. whether the worker is engaged in a distinct occupation or business; b. the kind of occupation, with reference to whether that type of work is usually done under the direction of the employer or by a specialist without supervision; c. the skill required to perform the occupation, including whether that skill is special; d. whether the tools and place of work are supplied by the worker or the employer; e. the length of time for which the services are to be performed; f.

the method of payment;

g. whether the work is a part of the regular business of the employer; h. whether the parties believe they are creating an employer-employee relationship; i.

the worker’s opportunity for profit or loss depending on their managerial skill;

j.

the worker’s investment in equipment or materials to perform the job (including the hiring of employees);

k. the degree of permanence of the working relationship; and l.

whether the work performed by the worker is an integral part of the employer’s business.60

Stage 1: Did Uber drivers provide work and labour to Uber?

Uber’s case was that its drivers provided no work or labour to Uber.61 Uber argued that it was not a transportation company but ‘instead is a pure “technology company” that merely generates “leads” for its transportation providers through its software.’62 Uber described itself as a mere intermediary between drivers and their passengers.63 The Court rejected Uber’s characterisation of itself.

Chen J said that Uber was too focused on what its mobile applications do and that the real substance of Uber’s business was as a transportation company.64 His Honour said it was obvious that the drivers performed a service for Uber.

This was because ‘Uber simply would not be a viable business entity without its drivers’.65 In addition, Uber did not generate any revenue by distributing its mobile applications. Instead, its revenue was derived from the labour of its drivers.

His Honour found that Uber exercised significant control over its drivers. This was because:

a. Uber set the price of each ride; b. Uber prevented its drivers from soliciting future work directly from passengers; c. Uber had substantial control over the qualification and selection of its drivers; and d. Uber regularly terminated the accounts of drivers whose performance was not up to Uber’s standards.66 Chen J found that Uber’s drivers were presumptively employees of Uber.67 Stage 2: Were the Uber drivers independent contractors?

Whether Uber’s drivers were independent contractors was a mixed question of fact and law. In California, those types of questions cannot be answered by the judge; they must be answered by a jury.68 The only way that Uber could obtain summary judgment on the basis that its drivers were not employees was if ‘all the facts and evidentiary inferences material to the employee/independent contractor determination [were] undisputed, and a reasonable jury viewing those undisputed facts and inferences could reach but one conclusion – that Uber’s drivers are independent contractors as a matter of law.’69 Chen J was not satisfied that the only inference that could be drawn from the facts and inferences before him was that Uber’s drivers were independent contractors. In relation to the secondary indicia, His Honour said that there were ‘numerous factors point[ing] in opposing directions...’ and that there were disputed facts between the parties in relation to many of those factors.70 Uber’s summary judgement application was denied by the Court. The decision was a small win for the drivers. They were found to be prima facie employees under Californian law.

Further progress of the case As mentioned above, the litigation in O’Connor v Uber Technologies is ongoing.

In around August 2016, Uber and the drivers reached an in-principle settlement of $100,000,000 USD ($16,000,000 of which was contingent on the results of an IPO).71 The District Court refused to approve that settlement on the basis that it was not ‘fair, adequate, and reasonable’.72 Chen J was concerned that the settlement sum only represented 0.1% of the potential verdict value if the drivers

were to win their case against Uber.73 His Honour said that a 99.9% reduction did not adequately reflect the parties’ respective risks if the matter went to trial.74 This was especially so given that the Court had already ruled that the Uber drivers were presumed by law to be employees.75

The Uber problem under Australia’s labour laws Australian labour law does not recognise any distinction between independent contractors and dependent contractors.

It treats all self-employed workers as equals.

This means that industrial courts and tribunals in Australia are tasked with the difficult job of trying to work out whether a dependent contractor should be labelled as an employee or an independent contractor. To steal an analogy from Chhabria J, the legislature has essentially handed the judiciary a square peg and asked it to choose between two round holes. As will be explained below, this problem was recently highlighted in an unfair dismissal application before the Fair Work Commission.

B.V. were registered in the Netherlands.

Uber Pacific Holdings Pty Ltd was registered in Australia. Raiser Pacific ran the Uber brand in Australia.

On 11 August 2017, Rasier Pacific permanently disabled Mr Kaseris’ access to Uber’s driver mobile app.77 According to Rasier Pacific, this was because Mr Kaseris had failed to maintain an adequate overall rating.78 In response, Mr Kaseris made an unfair dismissal application against Rasier Pacific in the Fair Work Commission.

Only employees are entitled to make unfair dismissal applications under the Fair Work Act 2009 (Cth).79 Predictably, Rasier Pacific objected to the Commission hearing the matter on the basis that Mr Kaseris was not its employee and was therefore not entitled to make an unfair dismissal application.80 Just like its alter-egos in other countries, Rasier Pacific told the Commission that it was not a transportation company but was instead a technology business that supplied lead-generation software.81 The Commission rejected that argument.82 It found that Rasier Pacific was operating a transportation business.83

Fair Work Commission: Kaseris v Rasier Pacific V.O.F76

Kaseris v Rasier Pacific: The workwage bargain

Mr Kaseris was an Uber driver. He had entered into a services contract with Rasier Pacific V.O.F (“Raiser Pacific”).

The Commission said that there were certain fundamental conditions that must be present to establish that a work contract was a contract of service. One of those fundamental conditions was the work-wages bargain.84 The work-wages bargain requires:

Rasier Pacific was an unlimited partnership. There were two partners in the partnership: Uber Pacific Holdings B.V., and Uber Pacific Holdings Pty Ltd. Raiser Pacific and Uber Pacific Holdings

perform the work or services that the employer may reasonably demand under the employment contract; and b. an obligation on the employer to pay the employee for that work or those services.85 Rasier Pacific argued that there was no work-wages bargain between it and Mr Kaseris.86 Mr Kaseris, who was unrepresented in the proceedings, did not seriously challenge that argument nor did he contest important aspects of Rasier Pacific’s evidence relating to that issue.87 The Commission agreed with Rasier Pacific.88 It found that there was no workwages bargain between the parties. This was because: a. the contract between the parties did not require Mr Kaseris to perform any work or services for Rasier Pacific; and b. Rasier Pacific did not pay Mr Kaseris for any work or services.89 The Commission found that the uncontested evidence before it was that Rasier Pacific charged Mr Kaseris a service fee.90 That fee was calculated as a percentage of the fare that Mr Kaseris charged his passengers.91 The service fee was consideration for the services that Rasier Pacific provided to Mr Kaseris.92 The Commission’s finding that there was no work-wages bargain between Mr Kaseris and Rasier Pacific meant that there was no employment relationship between those parties.93 For this reason, Mr Kaseris’ unfair dismissal application wholly failed.94

a. an obligation on the worker to

27

Kaseris v Rasier Pacific: The multifactorial test Despite having found that Mr Kaseris was not an employee, the Commission went on to apply the multi-factorial test to further supplement its decision.

Control: In relation to the degree of control that each party to the relationship had, the Commission found that: a. Rasier Pacific had some control over Mr Kaseris.95 This is because Rasier Pacific could multiply the fares to be charged by Uber drivers at peak times, and it required its drivers to meet certain vehicle maintenance and safety requirements.96 b. Mr Kaseris had a complete control over how and when he did work. He could pick his own hours, pick which passengers he picked up, and decide whether he wanted to work at all.97 The high degree of control that Mr Kaseris had over his activities as an Uber driver indicated that he was an independent contractor.98 Provision of equipment: Mr Kaseris supplied his own vehicle, mobile phone, and internet connection.99 These factors indicated that Mr Kaseris was an independent contractor.100 Uniform: Under the service contract, Mr Kaseris was not allowed to display Uber’s logo.101 The service contract did not require Mr Kaseris to wear a uniform.102 These factors indicated that he was an independent contractor.103 GST: Mr Kaseris was responsible for registering for GST and passing that GST on to the Commissioner of Taxation.104 This indicated that Mr Kaseris was an independent contractor.105 The terms of the contract: The terms of the contract between Mr Kaseris and Rasier Pacific set out that Mr Kaseris was a contractor and not an employee.106 Other factors: The Commission found that the following other facts also indicated that Mr Kaseris was an independent contractor: a. Mr Kaseris did not receive a wage from Rasier Pacific; b. Mr Kaseris was responsible for managing his own tax affairs;

that Mr Kaseris was not an integrated part of Rasier Pacific business.108 The Commission treated this as a neutral factor.109 The Commission concluded that the overwhelming weight of the relevant indicia pointed at Mr Kaseris being an independent contractor rather than an employee.110 Closing remarks of the Commission At the end of its decision in Kaseris v Rasier Pacific V.O.F, the Commission remarked: The notion that the work-wages bargain is the minimum mutual obligation necessary for an employment relationship to exist, as well as the multi-factorial approach to distinguishing an employee from an independent contractor, developed and evolved at a time before the new “gig” or “sharing” economy. It may be that these notions are outmoded in some senses and are no longer reflective of our current economic circumstances. These notions take little or no account of revenue generation and revenue sharing as between participants, relative bargaining power, or the extent to which parties are captive of each other, in the sense of possessing realistic alternative pursuits or engaging in competition. Perhaps the law of employment will evolve to catch pace with the evolving nature of the digital economy. Perhaps the legislature will develop laws to refine traditional notions of employment or broaden protection to participants in the digital economy. But until then, the traditional available tests of employment will continue to be applied.111

An argument for extending Australia’s labour laws to cover dependent contracting The above passage from Kaseris v Rasier Pacific V.O.F is quite powerful. Arguably, it is recognition from Australia’s peak industrial tribunal that the scope of Australia’s labour law is inadequate.

d. Rasier Pacific did not make any superannuation contributions to Mr Kaseris’ superannuation fund.107

The social problems that arise from dependant contracting are not new.

Professor Arthurs was writing about them over 50 years ago. The United Kingdom extended its employment laws to cover dependent contractors more than 20 years ago. Unfortunately, in Australia, the problem has flown under the radar until relatively recently.

Unusually, the Commission also found

The expansion of companies like Uber

c. Rasier Pacific did not provide Mr Kaseris with annual leave, sick leave or long service leave;

28 | BRIEF MAY 2018

into Australia has increased the number of people in Australia that are working in dependent contractor relationships. The rapid expansion of those companies into the market has probably helped shine a light on the inadequacy of Australia’s labour laws when it comes to dependent contracting.

What can currently be done by dependent contractors in the gig economy?

At present, it is possible for a dependent contractor (such as an Uber driver) to challenge their work contract on the basis that the contract is harsh or unfair. This can be done through the Independent Contractors Act 2006 (Cth).

In assessing whether a contract is harsh or unfair, the court can consider whether the dependent contractor is being paid less than what an employee would be paid to do a similar task.112 As has been suggested by Professor Joellen Riley from the University of Sydney, there is no reason why an Uber driver could not challenge the fairness of the termination provision in Uber’s work contracts with its drivers.113 Of course, one can only hope that when the time comes where an Uber driver does make such an application, they do not go into the proceedings unrepresented.

The problem with the Independent Contractors Act 2006 (Cth) is that it does not provide any minimum, guaranteed entitlements to dependent contractors.

The ability of a court to cure unfairness or harshness in a contract, in practicality, does not adequately protect dependent contractors.

Extending workplace laws in a similar fashion as has been done in the United Kingdom If employees and dependent contractors are equally vulnerable to exploitation if not protected by statute, then it makes little sense that Australia’s labour laws would only enshrine the protection of employees.

A common-sense fix would be for the state and federal parliaments to amend their respective employment and industrial laws so that all the protections and entitlements that are afforded to employees are also afforded to dependent contractors (including workers compensation and superannuation).

Achieving such an outcome would be as simple as adopting the extended worker definition that is used in the United Kingdom. It appears from the Uber litigation that that wording is effective at capturing dependent contractors.

Cory Fogliani is an employment and industrial lawyer in Perth, Western Australia. This paper was prepared as a part of a seminar presentation to the Law Society of Western Australia on 15 February 2018. This paper was created and released for educational purposes only. It is not intended to be legal advice, nor to be used as legal advice. I acknowledge and thank Pearl Lim from the AMWU WA Branch for taking the time to proof read my work.

2

3 4

5

6

7

8

9 10 11 12

13 14

17 18 19 20 21 22 23

NOTES: 1

15 16

See for example: Peter Ryan, ‘Gig economy workers missing out on super’ (ABC News, 7 September 2017) [http://www.abc.net.au/news/2017-0907/gig-economy-workers-missing-out-onsuperannuation/8880932]; Richard Mcencroe, ‘A rose by any other name: Why the gig economy is just rebranded piece work’ (Greenleft Weekly, 4 August 2017) [https://www.greenleft.org.au/content/ rose-any-other-name-why-gig-economy-justrebranded-piece-work]; Caleb Goods, Alex Veen and Tom Barratt, ‘Exploitation or breaching your visa: The limited choices of the food delivery worker’ (ABC News, 21 August 2017) [http://www.abc.net.au/ news/2017-08-21/exploitation-or-visa-breach-thechoices-of-food-delivery-workers/8827744]; ACTU, ‘Gig economy creating two-tiered labour market’ (Media release, 21 August 2017) [https://www.actu.org. au/media/1033407/actu-release-170821-gig-economy. pdf]; Shalailah Medhora, ‘Do we need to redefine what classifies as work in the sharing economy?’ (Triple J Hack, 23 August 2017) [http://www.abc.net.au/triplej/ programs/hack/changing-definition-of-work-in-sharingeconomy/8834736] Jason Moyer-Lee, ‘Yes, Uber has lost its ludicrous appeal. But will its drivers get their rights?’ (The Guardian, 14 November 2017) [https://www. theguardian.com/commentisfree/2017/nov/13/uberlost-appeal-workers-employment-rights] Kaseris v Rasier Pacific V.O.F [2017] FWC 6610.

Wayne Lewchuk, ‘Precarious jobs: Where are they, and how do they affect well-being?’ (2017) 28(3) The Economic and Labour Relations Review 402, 403.

Matthew Taylor, Greg Marsh, Diane Nicol, and Paul Broadbent, ‘Good Work: The Taylor Review of Modern Working Practices’ (Department for Business, Energy & Industrial Strategy (UK), 2017) 25.

Arianne Renan Barzilay, and Anat Ben-David, ‘Platform Inequality: Gender in the Gig-Economy’ (2017) 47 Seton Hall Law Review 393, 396.

This is adapted from the definition of ‘worker’ in the Employment Rights Act 1996 (UK) at s 230(3)(b) and the National Minimum Wage Act 1998 (UK) at s 54(3).

H.W. Arthurs, ‘The Dependent Contractor: A Study of the Legal Problems of Countervailing Power’ (1965) 16(1) The University of Toronto Law Journal 89.

Ibid at 96.

Ibid.

Ibid at 89.

For more information about this debate see: Miriam A. Cherry, and Antonio Aloisi, ‘“Dependent Contractors” in the Gig Economy: A Comparative Approach’ (2017) 66 American University Law Review 635.

Ibid at 647.

Benjamin Sachs, ‘A New Category of Worker for the

24 25 26 27

28

29

30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59

On-Demand Economy?’ (OnLabor, 22 June 2015) [https://onlabor.org/a-new-category-of-worker-for-theon-demand-economy/] Ibid.

Employment Rights Act 1996 (UK) at s 230(3)(b); National Minimum Wage Act 1998 (UK) at s 54(3).

[2014] ICR 730 at [25].

[2002] IRC 667 at [17].

Bates van Winkelhof v Clyde & Co [2014] ICR 730 at [39].

Ibid.

Uber B.V. v Mr Y Aslam (2017) UKEAT/0056/17/DA at [101]-[102].

Ibid at [102].

Consistent Group Ltd v Kalwak [2007] UKEAT 0535_06_1805 at [57]; Uber B.V. v Mr Y Aslam (2017) UKEAT/0056/17/DA at [93]-[94].

[2016] UKET 2202551/2015.

Ibid.

Ibid at [12].

The facts summarised in this section are adapted from the decision in Aslam v Uber BV [2016] UKET 2202551/2015 (28 October 2016).

The facts summarised in this section are adapted from the decision in Aslam v Uber BV [2016] UKET 2202551/2015 (28 October 2016).

The facts summarised in this section are adapted from the decision in Aslam v Uber BV [2016] UKET 2202551/2015 (28 October 2016).

Aslam v Uber BV [2016] UKET 2202551/2015 at [32][38].

Ibid at [83].

Ibid.

Ibid.

Ibid at [84].

Ibid.

Ibid at [86].

Ibid at [100].

Ibid.

Ibid at [87].

Ibid at [90].

Ibid at [93].

Ibid at [91].

Ibid.

Ibid at [92].

Ibid.

Ibid [92]-[93].

Ibid [93].

Ibid at [98].

Ibid.

Ibid.

Uber BV v Aslam [2017] UKEAT/0056/17/DA (10 November 2017) S.G. Borello & Sons v Department of Industrial Relations [1989] 48 Cal.3d 341 at 350.

Cotter v Lyft [2015] 60 F.Supp.3d 1067 at 1081-2.

O’Connor v Uber Technologies (Case No. 13-cv03826-EMC) (Order dated 18 August 2016).

O’Connor v Uber Technologies (Case No. 13-cv03826-EMC) (Order dated 11 March 2015).

Narayan v EGL [2010] 616 F.3d 895 at 900-1.

Ibid.

S.G. Borello & Sons v Department of Industrial Relations [1989] 48 Cal.3d 341 at 350.

Ayala v Antelope Valley Newspapers [2014] 59 Cal.4th

60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 100 101 102 103 104 105 106 107 108 109 110 111 112 113

522 at 533.

S.G. Borello & Sons v Department of Industrial Relations [1989] 48 Cal.3d 341 at 351, 355.

O’Connor v Uber Technologies (Case No. 13-cv03826-EMC) (Order dated 11 March 2015).

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

O’Connor v Uber Technologies (Case No. 13-cv03826-EMC) (Order dated 18 August 2016).

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

[2017] FWC 6610.

Ibid at [42].

Ibid.

Fair Work Act 2009 (Cth) at s 382.

Kaseris v Rasier Pacific V.O.F [2017] FWC 6610 at [2].

Ibid at [5].

Ibid.

Ibid.

Ibid at [48].

Ibid.

Ibid at [51].

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid.

Ibid at [55].

Ibid.

Ibid at [54].

Ibid.

Ibid at [56].

Ibid.

Ibid at [57].

Ibid.

Ibid.

Ibid at [58]-[59].

Ibid.

Ibid at [60].

Ibid at [61].

Ibid at [62].

Ibid.

Ibid at [67].

Ibid at [66].

Independent Contractors Act 2006 (Cth) at s 15(1)(c).

Joellen Riley, ‘Sacked Uber driver case shows driver vulnerability under law’ (The Conversation, 20 May 2016) [https://theconversation.com/sackeduber-driver-case-shows-driver-vulnerability-underlaw-59677].

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29

Did You Miss the ILRA Amendments?

Time to Catch Up!

By James Healy Barrister, Francis Burt Chambers

There have recently been two major legislative bills that have significantly changed the regulation and practice of corporate and personal insolvencies within Australia. The purpose of those amendments has been to modernise and harmonise the undertaking of corporate and personal insolvencies, with a strong emphasis on the protection of unsecured creditors. This paper focuses on the main areas of change relevant to corporate insolvencies.

Framework Applying to Insolvency Practitioners in Australia”. The ILRA changes have been implemented through amendments which became effective on 1 March 2017 and 1 September 2017.

The first tranche of amendments are contained in the Insolvency Law Reform Act 2016 (Cth) (ILRA), which amended and streamlined the Corporations Act 2001 (Cth) (Act), Bankruptcy Act 1966 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). Those amendments arise from the proposals paper published on 14 December 2011 entitled “A Modernisation and Harmonisation of the Regulatory

30 | BRIEF MAY 2018

The Explanatory Memorandum described the purposes of the ILRA as being to: •

remove unnecessary costs and increase efficiency in insolvency administrations;

•

align the registration and disciplinary frameworks that apply to registered liquidators and registered bankruptcy trustees;

•

align a range of specific rules relating to the handling of corporate external administrations and personal bankruptcies;

•

enhance communication and transparency between stakeholders;

•

promote market competition on price and quality;

•

improve the powers available to the corporate regulator to regulate the corporate insolvency market and the ability for both personal and corporate regulators to communicate in relation to insolvency practitioners operating in both the corporate and

personal insolvency markets; and •

improve overall confidence in the professionalism and competence of insolvency practitioners.1

For a more comprehensive review of the ILRA amendments, I commend the speech delivered by Justice Black at the Australian Restructuring Insolvency & Turnaround Association (ARITA) 2017 National Conference.2 The second tranche of amendments are contained in the Treasury Laws Amendment (2017 Enterprise Incentives No 2) Act 2017 (Enterprise Act). Those amendments introduce safe harbour protection for company directors against insolvent trading claims under section 588G of the Act and from 1 July 2018 abolish the ability of counterparties to terminate contracts based upon an insolvency event occurring.

In a broad sense the ILRA and the Enterprise Act do not represent a wholesale change in the fundamental principles of how insolvency engagements are conducted in Australia.

However, the impact of the ILRA and the Enterprise Act is that these engagements have now become significantly more technical and therefore more complex, which may result in them being more

Corps Act

Corps Regs

IPS

Corporate Insolvency

IPR

Court Rules

Practice Code expensive to complete.

what the applicable obligations are when undertaking insolvency engagements.

What is the insolvency law reform act?

The IPS’s two principle objectives are: (i) to regulate persons registered as liquidators; and (ii) to regulate external administrations consistently and to give greater control to creditors.

The key features of the ILRA package of amendments are: •

a new Insolvency Practice Schedule (Corporations) (IPS), which is Schedule 2 of the Act;

•

new Insolvency Practice Rules (Corporations) 2016 (IPR);

•

amendments to the Corporations Regulations 2001 (Cth) (Regulations);

•

an insolvency practice code incorporated for ARITA members in the ARITA Code and for nonmembers in APES 330 “Insolvency Services”;

•

amended Court rules; and

•

a complete suite of new and updated forms.

The intent of the IPR is to allow for more expeditious changes to the operation of insolvency law, because it will not require amendment to the Act or Regulations.

There is a substantial degree of overlap between the IPS and the IPR, which warrants careful review when considering

The first objective is directed to registered liquidators and provides for changes around registration, insurance, obligations when undertaking engagements and disciplinary actions. The substantial and detailed amendments to the process of registration and discipline of insolvency practitioners are not considered in this article.

The second objective sees the introduction of provisions which impact on the role and powers of creditors in an external administration.

The IPR accompanying the IPS is key to understanding how insolvency practitioners and creditors are affected by the ILRA changes.

How do the changes affect creditors?

IPR

Division 5 – Definitions

Division 5 – Definitions

Division 10-50 – Registering & Discipline

Division 10-50 – Registering & Discipline

Division 60 – Remuneration & Benefits

Division 60 – Remuneration & Benefits

Division 65 – Funds Handling Division 70 – Information

Division 70 – Information

Division 75 – Meetings

Division 75 – Meetings

Division 80 – Committees of Inspection

Division 80 – Committees of Inspection

Division 85 – Directions by Creditors Division 95-105 – Other Matters

Powers of creditors One of the most significant changes implemented by the ILRA is the incorporation of vastly enhanced creditor rights. Creditors are now able to: •

request an external administrator to provide information, reports and documents: IPS ss 70-40, 70-45 and 70-46;

•

where the company is in liquidation, direct a liquidator to convene a meeting (either by resolution, in writing in certain circumstances, or through a committee of inspection).

The request must be complied with unless it is unreasonable;

•

by resolution or through a committee of inspection give directions to the external administrator;

•

by resolution, appoint a registered liquidator to carry out a review of the remuneration of, or any cost or expense incurred by, the external administrator, with the costs of the review to form part of the expenses of the external administration; and

•

by resolution at a meeting remove an external administrator (other than a provisional liquidator) and appoint another. Notice of the meeting must be given, and the external administrator is able to make a court application seeking reappointment.

This is a greater power than was provided for under the Act pre-ILRA, which only provided the power of removal at certain meetings and in certain forms of external administration.

The ILRA also incorporates in IPS s 100-5 a mechanism for the assignments of causes of action by an insolvency practitioner.

IPS

Division 90 – Review of External Admin

Under the IPS and IPR interested persons are afforded greater rights in respect to the discharge of an insolvency practitioners’ engagement. Creditors are also given powers to give directions to an external administrator, request the external administrator to convene a meeting or provide them with information or documents, and appoint persons to provide advice to the creditors or the committee of inspection. Outlined below are some of the key provisions that affect creditors.

Division 90 – Review of External Admin

The external administrator must give information to the creditors about these rights as soon as reasonably practicable after his or her appointment.

The IPR also require a liquidator to report to the creditors the likelihood of receiving a dividend before the affairs of the company are fully wound up within 3 months of his or her appointment: IPR s 70-40.

31

Where a request for information is received the external administrator is obliged to comply unless the information sought is not relevant to the external administration of the company, or the information would breach his or her duties in relation to the external administration, or if “it is otherwise not reasonable” to comply with the request. There is a strict 5 business day timeframe for compliance, and significant consequences to the external administrator for non-compliance.

Any extension must be done by way of a written notice to the creditor (or member) making the request. The notice must specify the reasons for the extension and the time period within which the request will be complied with.

What is an unreasonable request or direction?

IPR s 75-195 provides that it is not unreasonable for an external administrator to comply with a request or direction if the external administrator, acting in good faith, is of the opinion that: •

• •

complying with the direction would substantially prejudice the interests of one or more creditors or a third party and that prejudice outweighs the benefits of complying with the direction; there is insufficient available property to comply with the direction; a meeting of the members of the pooled group dealing with the same matters covered by the direction has already been held, or would be held

32 | BRIEF MAY 2018

within 15 business days after the direction is made; or •

the direction for the meeting is vexatious.

A reasonable request is one where the above does not apply and is in essence a subjective test. The onus will be on the external administrator to respond promptly to creditor’s requests and provide sufficient reasons if he or she is unable to do so.

What happens if the external administrator does not comply?

If an external administrator refuses a request made under IPS Part 3 Division 70, and ASIC is satisfied that the request ought to have been complied with, ASIC may make a direction that the external administrator provide the relevant material within 5 business days (provided that notice is given to the external administrator): IPS s 70-70.

If an external administrator does not comply with a direction made by ASIC, the court may order that the external administrator provide the information on the application by the person making the request, or by ASIC where there has been non-compliance with a direction: IPS s 70-90.

Committees of inspection The ILRA and the IPR make changes so that all creditors’ committees in an external administration are now known as committees of inspection.

A committee of inspection will be

able to give directions to the external administrator. An external administrator must have regard to the directions given by the committee of inspection but is not required to comply with them. A record of an external administrator’s reasons for not following such a direction must be made.

A committee of inspection also has the power to resolve that one of its members obtain specialist advice in relation to the external administration. Approval of the external administrator or the court needs to be obtained before expenses of doing so are incurred.

Large creditors Large creditors (being a creditor or group of creditors representing at least 10% in value of the creditors) have a right to appoint a person as a member of a committee of inspection.

The IPS provides that, where a large creditor appoints a person as a member of a committee of inspection, the creditor must not directly or indirectly become the purchaser of any part of the property of the company: IPS s 80-20. There are three exceptions: •

where the creditors resolve otherwise;

•

where the court gives leave to the creditor to purchase the property; or

•

where another provision of the Act or another law requires or permits the creditor to purchase the property.

Any such transaction entered into in contravention of this provision may be set aside by the court.

ILRA new court powers The powers of the court under the IPS are consolidated into two new divisions: Division 45 and Division 90. It is important to recognise that the scope of these divisions are very different to the Act pre-ILRA, and this distinction is a central feature of the IPS. The distinction is between orders in relation to a “registered liquidator” and orders in relation to an “external administrator”.

IPS s 5-20 defines an “external administrator” as a person who is: •

the administrator of the company;

•

the administrator under a deed of company arrangement that has been entered into in relation to the company;

•

the liquidator of the company; or

•

the provisional liquidator of the company.

However, a person is not an external administrator of a company for the purposes of the IPS merely because the person has been appointed as a receiver, receiver and manager, or controller in relation to property of the company.

A registered liquidator is someone registered under IPS Division 20 as a liquidator who can act as a: •

liquidator and provisional liquidator;

•

a voluntary administrator;

•

a deed administrator;

•

a scheme administrator; or

•

a receiver or receiver and manager.

IPS Division 45 The court may make such orders it thinks fit in relation to a registered liquidator on its own initiative (IPS s 45-1(2)) or on an application by the registered liquidator or ASIC (IPS s 45-1(3)). IPS s 45-1(4) specifies the factors that the court may

take into account when making such orders.

The ARITA Code of Professional Practice and APES 330 “Insolvency Services” (for non-ARITA members) are relevant benchmarks for assessing whether the conduct of practitioners meet acceptable standards.

The court is also given the power to make orders under IPS s 45-5 with respect to costs associated with a matter considered by the court, including that the liquidator be personally liable for costs or that they not reimburse the costs from the estate.

exercising its continuing supervisory jurisdiction under IPS Div 90, although the new provisions are, in some respects, wider than the pre-ILRA sections.3 Other court powers Other court powers are provided for in relation to practitioner remuneration (Div 60); creditor meetings (Div 75) and for committees of inspection (Div 80).

Where do you find the pre-ILRA sections in the Corporations Act post ILRA? The below table summarises where you will now find repealed sections of the Act post-ILRA in the Act pre-ILRA and the IPS.

Pre - ILRA

Post - ILRA

ss 449B, 447D, 473, 479, 503, 511, 1321 of the Act

IPS Division 90

s 471A of the Act

s 198G of the Act

IPS Division 90 IPS Division 90 provides a range of powers for the court to make such orders as it thinks appropriate, which will include directions and inquiries into the conduct of a particular matter. In corporate insolvencies these provisions replace section 1321 of the Act pre-ILRA. A court of its own initiative or on application by creditors may exercise broad supervisory powers over insolvency practitioners under IPS Div 90: ss 90-5 and 90-20. IPS s 90-15 allows the court to make such orders as it thinks fit in relation to an external administration. IPS s 90-15(4) specifies the factors that the court may take into account when making such orders.

Justice Black has observed that the court may well also have regard to the principles which previously applied to supervision of administrators and liquidators in

Assignment of rights to sue IPS s 100-5 allows an external administrator to assign any right to sue that is conferred on him or her under the Act, including in respect to voidable transaction claims for unfair preferences, uncommercial transactions and insolvent trading claims. Prior written notice must be given to creditors of the proposed assignment (or, where the action has already commenced, leave of the court is required). These provisions are complicated and caution should be exercised before they are used.

Safe harbour The Enterprise Act implemented a “safe harbour” for insolvent trading for directors through the incorporation of a new section 588GA in the Act. The Explanatory Memorandum to the

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33

Treasury Laws Amendment (2017 Enterprise Incentives No 2) Bill 2017 identified the issue to be addressed as follows: The threat of Australia’s insolvent trading laws, combined with uncertainty over the precise moment a company becomes insolvent have long been criticised as driving directors to seek voluntary administration even in circumstances where the company may be viable in the longer term. Concerns over inadvertent breaches of insolvent trading laws are frequently cited as a reason that early stage (angel) investors and professional directors are reluctant to become involved in start-up.

The new section 588GA(1) excludes liability for insolvent trading under section 588G of the Act if: •

•

at a particular time after a person starts to suspect a company may become or be insolvent, he or she starts developing one or more courses of action that are reasonably likely to lead to a “better outcome” for the company; and the debt is incurred in connection with that course of action and during a specified time period.

Although not subject to any judicial consideration, the question whether the course of action is “reasonably likely to have a better outcome” for the company seems to be an objective question. That better outcome for the company is to be assessed against what the position would be if there was an immediate appointment of an administrator or liquidator. There is no clarity though as to whether that better outcome is to be assessed from the viewpoint of the directors, creditors, shareholders, third parties, the community or someone else.

An earlier discussion draft of the amending legislation referred to a better outcome for the company and creditors, but the reference to “creditors” was removed from the final version of the Bill.4 In addressing that “safe harbour” question the court is to have regard to the inclusive list of matters in section 588GA(2) relevant to determining whether the course of action was reasonably likely to lead to a better outcome for the company, including whether: •

the director properly informed himself or herself of the company’s financial position;

•

the director took appropriate steps to prevent misconduct that could

34 | BRIEF MAY 2018

adversely affect the company’s ability to pay its debts; •

the director took appropriate steps to ensure the company was keeping appropriate financial records consistent with its size and nature;

•

the director was obtaining appropriate advice from an appropriately qualified entity which was given sufficient information to give appropriate advice; and

•

the director was developing or implementing a plan for restructuring the company to improve its financial position.

Pre-requisites to invoking the protection under section 588GA are that employee entitlements are paid up and taxation obligations are managed. There are no corresponding obligations that payments to contractors are up to date. If the company is actually insolvent, the safe harbour protection will not be effective.

The utility of this carve out is significantly eroded though because the usual director’s duties under sections 180 to 183 of the Act remain, as do the continuous disclosure obligations under the ASX Listing Rules.5 As a consequence, if a director is not discharging his or her obligations concerning the solvency of a company the safe harbour protection may not provide a complete protection against personal liability.

A further issue to watch is the interaction between directors and officers liability insurance and the obligation of directors to take reasonable steps to avoid liability.

That is, will a failure by a director to invoke safe harbour protection be a basis for an insurer to deny coverage under a director and officers insurance policy?

IPSO facto clauses Under existing insolvency laws, when a counterparty becomes insolvent, owners and principals typically exercise one or more of the following ipso facto rights under their contract to improve or protect their commercial position: •

suspend the works or take the works out of the counterparty’s hands on the ground of the counterparty’s insolvency;

•

terminate the contract on the ground of the counterparty’s insolvency;

•

call upon a bank guarantee, cash retention or other security to reduce their loss;

•

set-off their claims (whether liquidated or payable) against any payment claims by the counterparty;

and/or •

step-in and pay or engage essential subcontractors directly to mitigate loss and complete the outstanding works.

From 1 July 2018 those contractual protections will become unenforceable under the Enterprise Act, through the incorporation of a new section 415D into the Act. The new regime will mean that in the event that an administrator or receiver over substantial assets is appointed or a scheme of arrangement to avoid winding up is proposed, the above ipso facto rights will be unenforceable against the counterparty if they arise for the reason of: •

the administration, receivership or proposed scheme of arrangement;

•

the credit rating of the counterparty;

•

a breach of financial covenants such as net tangible assets or debt to equity ratios;

•

a change of control or material adverse effect based on the counterparty’s financial position; or

•

subject to court order, termination for convenience based on the counterparty’s financial position.

There are also significant anti-avoidance provisions in section 415E of the Act which extend the scope of the regime to capture contractual clauses that attempt to circumvent section 415D. This is achieved by suspending a contractual right to terminate that arises for a reason that is contrary to the regime “in substance”.

The stay (or suspension) of contractual rights also applies to “self-executing provisions”. These are defined under the Act as contractual provisions that apply automatically, for example, a provision that would activate upon a company entering into administration, receivership or a scheme of arrangement.

What’s the length of the stay?

The length of the operation of the “stay” will turn on whether the company is undergoing an administration, appointment of managing controller or receiver, or scheme of arrangement, and will be subject to any court orders that may be in force: •

voluntary administration – the stay will begin when the company enters administration and end when the administration ends (e.g. upon the entry into of a deed of company arrangement) or when the company is wound up;

•

receivership – the stay will begin when the managing controller or

•

receiver is appointed and end when the managing controller or receiver’s control ends; and

this will have to be expressly negotiated with the counterparty or a Court application commenced.

scheme of arrangement – the stay will begin when a public announcement or scheme application is made, and end 3 months after the announcement, when the application is unsuccessful or dismissed, or when the company is wound up.

If the company subsequently enters into liquidation the ipso facto default clause will be able to be enforced by the counterparty.

Because these amendments do not have retrospective effect, owners and principals who wish to maintain their ipso facto termination rights will need to consider a variation or extension of their existing agreements, rather than entering into new contracts. Greater risks will be borne by owners and principals, which will need to ensure that they have the ability to identify the warning signs of counterparty insolvency risk and act early to protect their position. For example, by ensuring that ongoing supplies are structured so as to avoid a debtor and creditor arrangement from arising.

Other observations The stay ends if a company transitions from administration to a deed of company arrangement. If the Deed Administrator wishes for there to be an ongoing stay

BWA-Ad264 200218.indd 2

I expect that default events limited to performance criteria will become prevalent, because properly framed they will arguably not offend section 415D and will permit a counterparty to terminate an agreement based on an actual or anticipatory breach of a contractual obligation.

Questions also remain as to how much an existing pre-1 July 2018 agreement can be altered before it will be considered to fall outside the “non-retrospective” application of section 415D. Because of the inability of counterparties to protect themselves against insolvency risk under ipso facto default provisions, there may also be a move in the market to companies preferring to enter into agreements with companies that have a strong financial position. A consequence of this may be a reduction in competition for certain types of work.6

Concluding Observations The ILRA and Enterprise Act represents a new paradigm in insolvency law. There is now a labyrinth of new provisions to consider when undertaking an insolvency engagement and the operation of those provisions will only become clear through practice and direction from the Court. I expect that there will continue to be numerous applications to the court seeking directions as to the proper operation and implementation of the recent amendments.

NOTES: 1

Explanatory Memorandum to the Insolvency Law Reform Bill 2015, p 3.

2

“Recent developments in insolvency law” http:// www.supremecourt.justice.nsw.gov.au/Documents/ Publications/Speeches/2017%20Speeches/ Black_20170809.pdf

3

“Recent developments in insolvency law” http:// www.supremecourt.justice.nsw.gov.au/Documents/ Publications/Speeches/2017%20Speeches/ Black_20170809.pdf – page 2.

4

Exposure Draft 28 March 2017 “Treasury Laws Amendment (2017 Enterprise Incentives No 2) B:11 2017”.

5

See update ASX guidance note “Continuous Disclosure: Listing Rules 3.1 – 3.13 dated 9 March 2018.

6

Australian Government: Corporations and Markets Advisory Committee: Rehabilitating large and complex enterprises in financial difficulties: Report 2004 – section 4.2.

20/2/18 11:09 am

35

Aunt Prudence Juris Your one stop solution to problems after law school Ever wondered about how to recover from a faux pas at work, how to reject work-social invitations without becoming a pariah, or whether honesty can cost you your job? Life as a junior is filled with perils, but it’s not all doom and gloom! The YLC is starting a column to answer those beleaguered questions of yours or to hear your side of the story.

Dear Aunt Pru,

Dear Cuppa Conflict,

A witness is absolutely insistent I take her out for a coffee after trial. She keeps bringing it up, and it's getting super awkward and uncomfortable.

Ahh, the subtle art of rejection. Auntie has had to turn down many a suitor in her day. I cannot tell if your witness wants more than coffee dear, but if you don’t want to partake in a caffeinated beverage with her, then you will need to firmly and politely decline. If you aren’t so sure she wants more than coffee, decline on grounds that are hard to challenge, such as that it could be unprofessional and inappropriate and not to mention, easily perceived to be a source of bias given that you both met during a trial! Remember, although a dispute may have concluded, it is the advocate's role to maintain a client's confidence and avoid conflicts of interest – a failure to do so may land you in hot water!

Help? Cuppa Conflict

No question is too big or small, and Auntie loves a nip of gossip!

So send your burning questions to Aunt Pru at http://freesuggestionbox.com/pub/iddzxds 36 | BRIEF MAY 2018

If this is all a storm in a teacup and the witness wants her own legal advice, by all means, skip that dreadful kitchen coffee and plan a trip to your coffee shop of choice. Of course, ensure you run the conflict checks and other ethical razzmatazz before agreeing to represent her. However dear, if you do reject her, be gracious; she’s interested in you, so she does have fabulous taste after all.

Your Auntie always, Pru

Copenhagen, Denmark

Ex Juris: Travel Tales from the Legal Profession Copenhagen

Australians are great travelers and lawyers are no different. Each month a reader of Brief tells us about their favourite travel destination.

There is something charming about a city that names its main thoroughfare after a writer of children's stories, Hans Christian Andersen. You can spend the morning in the Tivoli Gardens, a delightful 19th century adventure park, before strolling down Strøget with little shops to Nyhavn for lunch. This being Europe, Nyhavn (new Harbour) is 300 years old. If you weren't a respectable lawyer, you might find your way over the river to Christiania and the pervading smell of hashish.

Copenhagen, like Amsterdam, is a city of bicycles and is very walkable.

Most Danes speak perfect English which is unsurprising as one of their favourite fictional detective programmes is Midsummer Murders. However, Copenhagen and surrounds are a veritable feast for Nordic noire fictional detectives. Copenhagen is the setting for The Killing and The Eagle. A trip across

the Øresund Bridge leads to Malmö, the home of Saga Norén, the whipsmart socially awkward Swedish detective in The Bridge.

Take a day trip down the coast to Ystad, home of Henning Mankell's Kurt Wallander. You can visit the swimming pool which doubled as the police station in the Kenneth Branagh version and

the railway station which featured in the Swedish television series. You can even eat Wallander cake at the cafe Fridolf, an unusual cream sponge cake, topped with dark blue icing. Return by train from Malmö over the bridge for half of the journey and by tunnel under the water for the balance. If you are very lucky during the changing of the guards' ceremony every day at the Royal Palace, you might catch a glimpse of Princess Mary.

Tell us about your favourite (or not so favourite) destinations and why you travel there. Please send your contributions to brief@lawsocietywa.asn.au

37

Dr ver's Dog Send your submissions to the Dog via brief@lawsocietywa.asn.au

Your Dog often wondered what goes on at the Law Summer School. Being under the impression that it would be open to a relatively small number of judges, barristers and solicitors discussing legal issues of the time, your Dog elected to attend the School, jettisoning a day sitting in the sun in Hay Street Mall for a day at the University Club.

He was mightily surprised to find a couple of hundred practitioners there for breakfast, lunch and teas, with a wide range of topics, designed to enable practitioners to accumulate the specified number of hours to demonstrate their ongoing participation in education.

That they had attended each lecture or presentation was achieved by a process which requires them to sign attendance registers before and after an event in order to qualify for CPD points (as mandated by legislation).

Your Dog fell to wondering whether such red tape is necessary. The Dog is aware of the Continuing Competence Guidance established by the Solicitors Regulation Authority in the UK, introduced in April 2015 and operating since November 2016.

The Solicitors Regulation Authority identifies the difference between Continuing Professional Development and Continuing Competence Guidance as being: “The idea behind Continuing Competence is to replace the current inputs-based system of continuing professional development (CPD) – where a certain number of completed hours ensures compliance – with an outputs-based system where it’s the process and effect of learning activities that’s important.

For instance, the profession has told us it’s more beneficial to spend one hour reading a targeted journal which improves your legal knowledge of your practice area than to spend seven hours at a course which relates only tentatively to your area, because you are trying to fulfil a requirement.

Under the new system, there is no requirement to attend courses or learning by approved providers and so there will no longer be any approved providers of CPD courses. There is also no requirement to complete a certain number of hours and there are no longer any specified allowed activities. Anything that’s done to address learning needs can count towards your continuing competence.

Instead, solicitors are expected to review their learning needs and address them through CPD activities. They are then asked to reflect on the learning and look at ways they can incorporate this

38 | BRIEF MAY 2018

into their practice. This should, in turn, lead to a further review of any other learning needs.”

As a pup your Dog attended Obedience School, where he learnt to hold up one paw, to dive, to sit, to catch a ball – all of it specific to being a good dog, as opposed to catching rats – a skill which is the preserve of cats.

Your Dog has been wondering whether CPD in its present form would enhance the skills he learnt, not discounting for a minute the pleasures of meeting one’s colleagues in a congenial environment discussing aspects of practice. That process plays an important part in maintaining the ethos of a profession – a disciplined group of individuals who adhere to ethical standards – a group possessing special knowledge and skills in a recognised body of learning derived from education, training and research at a high level, and recognised by the public as such. Does a CPD programme enhance such skills, or is it simply a “feel good” process to satisfy the Legal Practice Board and other regulators?

Perhaps it’s time to revisit the purpose and requirements of CPD, to place the responsibility for maintaining one’s professional competence on the practitioner? The practitioner would develop his or her programme, undertake it, and certify in due course that he or she has maintained professional competence in the areas of practice which relate to him or her.

Early in the year your Dog enjoyed attending some events at the Perth Festival, one of which was Tim Winton discussing the release of The Shepherd’s Hut. When at Obedience School your Dog was taken by the UN Universal Declaration of Human Rights made in 1948, and the emphasis it placed on all people being equal, without regard to race, sex or religion. How far has the Declaration come in achieving those objectives?

The Australian Bureau of Statistics has reported that in 2016 there were 176 victims of Family and Domestic

Violence, 82% of which occurred in residential settings.

94 victims (i.e. 53%) were women killed in or who died as a result of such events. Mr Winton commented that 88 Australians died in the 2002 Bali bombing, a terrorist fuelled event. Here we are, 16 years later, with more than 88 women killed each year by people known to them largely in the setting of their own residence.

So nominate, nominate, nominate. Even self-nominate and remember the song from Frank Zappa and the Mothers of Invention: nomination is fun.

Why do we tolerate such behaviour, spending as much time and money as we do on defence against anticipated terrorist events, when similar events occur on almost a daily basis in our society? There is a disconnect in the way we approach headline grabbing news, such as a bombing attack, compared to barely a murmur when considering the ugly underbelly of the society in which we live, which these statistics represent.

Dear Dog, I was at a function on the weekend and had an engaging discussion with Mark Holler. We both were both pleased to see the return of the Dog. The wisdom of the Dog has long been missed.

We lamented the standard of reality television and discussed its application to the profession. We thought of a reality magazine article, penned through the Dog, of “I am a Celebrity Lawyer; get me IN here”. We canvassed ideas on how to do this and thought having a celebrity lookalike competition for lawyers may be possible; working on the DI principle [Dob In]. Perhaps a starting DI may be from the photo on the cover of February Brief. There is a delightful of a young lady who could be Pam Sawyer.

A perfect start for a celebrity lookalike DI! Once again it is pleasing to have the Dog return and terrorise the profession.

Kind regards, Martin de Haas Barrister Solicitor & Notary Public

The Dog is wondering whether it is the Dog’s role to help “Make Perth great again” through the “I am a Celebrity get me IN here” campaign.

Why not? The Dog will lift his hind leg (metaphorically speaking of course) wherever the Dog thinks appropriate. The Dog can’t do this alone. Too much to sniff out so the Dog seeks your assistance. Help the Dog find a new Celebrity from the profession to “Make Perth great again”.

So the Dog seeks nominations from you dear readers.

The Dog will present a bottle of fine red from the Dog’s cellar to the best nominee at the 2018 Xmas function.

Finding Dennis The Dog laments that Ipswich has become more noteworthy than Perth. For instance in 2017 there was a campaign to have the Ipswich Council sacked, it failed.

Yet Perth had its own campaign to have Perth City Council sacked and it succeeded, well sort of.

And then Ipswich has Pauline Hanson. Does Perth match up here? Maybe not quite.

But on the legal front Ipswich has discovered its own legal identity, its very own Dennis Danuto1. The Dog refers to the case Smith v Lucht [2015] QDC 289 (20 November 2015). In this case the defendant referred to the Plaintiff as “the Dennis Danuto of Ipswich”. The Plaintiff sued for defamation and lost at first instance and also on appeal.

What did interest the Dog were the insightful comments of His Honour Moynihan QC DCJ when he said “It was the plaintiff who, by making the claim, called in an airstrike on his own position. Once the pleadings were filed in the court they were public documents and liable to be published through various media.”

This has got the Dog thinking, does Perth have our own Dennis Danuto? Will he/she be of better calibre than the Dennis Danuto of Ipswich? Will he/she be worthy of being nominated for the Dog’s “I am a Celebrity get me IN here” campaign and will Perth’s Dennis Danuto help Make Perth great again?

The Dog was informed of a Western Suburbs firm who used a marketing slogan that traced its origins from The Castle.

The Dog had attempted to sniff out more about this firm but alas all that is left is a cold Google trail. They must have received wind of the Dog’s search and headed off for a spot of fishing at Bonnie Doon. Unfortunately no trees here.

NOTES: 1

Of The Castle fame.

39

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New Members New members joining the Law Society (April 2018) Ordinary Membership

Associate Membership

Ms Evelyn Abadines ANZ Bank

Mr Trevor Atkins Murdoch University - School of Law

Ms Katja Hoijtink DLA Piper Australia

Ms Rhianna Brims Curtin University - School of Business Law & Tax

Mr Liam McLagan Bigstone

Restricted Practitioner Ms Victoria Camp Allion Partners

Mr Tyla Ferguson Murdoch University - School of Law Miss Jenny Han Clifford Chance (Sydney) Ms Rebecca Henderson Curtin University - School of Business Law & Tax Mr Alastair Henderson Allens

40 | BRIEF MAY 2018

Ms Claira Jamieson Clifford Chance (Sydney) Ms Lily Robinson University of W A - Business & Law UWA Library Ms Kate Strachan Allens Ms Ashleigh Taylor Murdoch University - School of Law Mr David Voisey Curtin University - School of Business Law & Tax Ms Niamh Wilkins Curtin University - School of Business Law & Tax

FAMILY LAW CASE NOTES Robert Glade-Wright Former barrister and accredited family law specialist

Property – Parties suppressed evidence of husband’s $606,000 debt in their Application for Consent Orders In Trustee of the Bankrupt Estate of Hicks & Hicks and Anor [2018] FamCAFC 37 (26 February 2018) a majority of the Full Court (Strickland and Murphy JJ) allowed an appeal by the trustee in bankruptcy against Stevenson J’s dismissal of its s 79A application. Austin J dissented. The trustee argued at trial that consent orders should be set aside as the parties had entered into a scheme to defeat a creditor by applying for those orders without divulging that “Mr S” was suing the husband for $606,000 (judgment was entered against him a week after the orders were made) or notifying Mr S of the proposed orders.

The trial was bifurcated, the Court only hearing and determining the s 79A issue. At first instance, the wife conceded that there was a miscarriage of justice but persuaded Stevenson J not to exercise discretion to set aside the order, her Honour finding that the wife had no involvement in the husband’s debt to Mr S; that the debt was not incurred for a matrimonial objective; and that the trustee would find itself in no better position if the order were set aside.

Property – Husband’s tax debt and gambling losses produced net deficit – Wife’s initial contributions and s 75(2) needs – Wife to pay 10% of that debt

the husband’s tax debt. This … is 10 per cent of the husband’s debt … It is 18 per cent … of the net assets of $1,113,281 … the wife has after she has paid her tax debt.”

In Snipper & James and Anor [2018] FamCA 7 (12 January 2018) Watts J considered a 21 year marriage that produced 3 children and a net pool of $1.28m excluding tax debts. The husband owed the ATO $2.01m and the wife owed the ATO $113,000, creating a total net deficit of $842,000. The ATO intervened to seek $713,000 from the wife, being her debt plus $600,000 towards the husband’s tax debt.

Property – Pre-Part VIIIB order that husband pay wife 25% of his super when he qualified for payment – Wife’s attempt to enforce order after husband’s death dismissed

The wife and husband were found to have adopted “traditional roles” ([277]). The wife “brought in about $2.5 million from outside the marriage” ([283]). The husband’s gross annual salary was $589,000 but it was found that he lost more than $1 million from gambling ([294]). Without the tax debts, the Court assessed contributions as 80:20 in the wife’s favour and made a further 15% adjustment for her under s 75(2) ($1.2m before tax provision).

Strickland J said (from [46]):

After observing (at [252]) that if the whole of the tax debt was deducted the wife would receive nothing under s 79, the Court said (from [303]):

“This appeal highlights the difficulties in bifurcating the s 79A and the s 79 proceedings, rather than determining both issues together as is generally the preferred option … (e.g. see … Patching (1995) FLC 92-585).

“ … [T]he Commissioner submits that … where the husband’s … income has been used … to support the wife and the children there is no reason why the wife ought not, at least in part, ‘take the good with the bad’ ( … )

[47] The … difficulty … is … that in exercising … discretion [under s 79A] the court is entitled to take into account the likely outcome of the s 79 proceedings, if the orders are set aside ( … )

[305] The Commissioner maintains that the wife along with the husband should bear responsibility for the husband’s taxation debts … prior to separation. ( … )

[85] The debt was incurred during the marriage on any view of the date of separation. ( … ) [87] It is readily apparent that the … projects [linked to the loan] … were intended to benefit the marriage relationship. ( … )” Murphy J concluded his reasons by saying (at [195]): “ … It would in my view be … a highly exceptional case for a conscious abuse of the court’s process – in effect a fraud on the court – to not result in orders being set aside … ”

[306] The wife … argues that the monies lost in gambling … [and the capital introduced by her] were of such magnitude … that it would not be open to conclude that she received benefit from the husband’s … income in respect of which tax had not been paid. ( … ) [320] … [T]he husband … envisages that he will be employed … for the next 14 years. … [I]f the Commissioner entered into an arrangement over a 15 year period to receive payment of the outstanding debt then I could see no reason why … the debt could not be paid off ( … ) [323] … [I]t is just and equitable for the wife to make a payment of $200,000 towards

In Heyman & Heyman & Anor [2018] FCCA 129 (6 February 2018) a consent order made in 2002 (pre-super splitting) provided that the husband authorise his super trustee to pay the wife 25% of the funds available to him once he qualified for payment ([28]). The husband remarried in 2008 and notified the wife that he planned to transfer his super to a pension, saying that he would leave 25% in the fund for her. The wife requested payment by the trustee who replied requiring a splitting order to that effect (to which the wife did not respond).

The husband died in 2012, his new wife being executor of his estate. The trustee paid the rest of the husband’s super to the new wife as a dependent. The wife applied for the setting aside of the 2002 order under s 79A(1)(b) or (c) (impracticability or default) as she had not yet received 25% of the husband’s super. Upon the application of the new wife, Judge Middleton summarily dismissed the wife’s application.

The Court said (from [53]): “The Applicant had an opportunity to enforce the consent orders at the time the husband received 75% of his superannuation entitlement. She chose not to. (…)

[61] It is clear on the evidence that no monies were received into the estate of the late Mr Heyman from the relevant superannuation fund. Accordingly order 3.1 cannot be enforced. ( … ) [79] As against the Second Respondent the Applicant has no standing in which to bring Family Court proceedings for the adjustment of property against her.”

Robert Glade-Wright is the founder, principal author and editor of The Family Law Book, a one-volume, loose-leaf and online subscription service. thefamilylawbook.com.au. He is assisted by accredited family law specialist Craig Nicol.

41

Law Council Update

Community engagement champion becomes Young Environmental Lawyer of the Year The Law Council of Australia has announced Revel Pointon – Law Reform, Education and Advice Solicitor with Environmental Defenders Office Queensland – as the winner of the 2018 Mahla Pearlman Award for the Australian Young Environmental Lawyer of the Year.

The Award honours the memory of Mahla Pearlman AO, the former Chief Judge of the Land and Environment Court and former President of the Law Council of Australia. It is presented to a young practising barrister or solicitor who has made a significant contribution to environmental law.

The 2018 award was announced following the Mahla Pearlman Oration delivered by former High Court Chief Justice, Hon Robert French AM. Jess Feehely, Chair of the Australian Environment and Planning Law Group of the Legal Practice Section of the Law Council, said the calibre and diversity of nominees for this year’s award had been outstanding.

“Revel has topped a truly exceptional group of nominees. The aspect of her work that most impressed the Committee was her dedication to constructive community engagement,” Ms Feehely said.

“In a field of law often dominated by compliance and enforcement issues, the value of effective laws and a community that understands them can too often be overlooked.

“She has engaged on initiatives covering a wide range of successful law reform and outreach projects, including on the Great Barrier Reef, third party costs provisions, and emission reduction targets.

“Revel has developed easy to understand community resources, and made the time to meet with farmers, NRM officers, catchment managers, and community groups to make sure they understand how laws might affect them, and what they need to do to comply.

42 | BRIEF MAY 2018

“Her work demonstrates how effective collaboration can be across the environmental sector, legal profession, community, and government.

“Revel’s clients said her support gave them the tools and confidence to advocate for better environmental outcomes. They described her as pragmatic, considerate, and tireless.

The Committee agreed that these were traits that Mahla Pearlman embodied and applauded.”

The Mahla Pearlman Oration followed the Law Council’s Future of Environmental Law Symposium, which this year featured a presentation honouring former Federal Court judge, Hon Murray Wilcox AO QC. The tribute noted his Honour’s long-standing commitment to access to environmental justice and Aboriginal cultural heritage protection, and his continued calls for stronger action on climate change.

NT youth justice investment applauded, Gov must not lose sight of raising age of criminal responsibility The Law Council of Australia has welcomed the NT Government’s $229.6 million investment for child protection and youth justice but has repeated its call for the NT Government to give priority to raising the age of criminal responsibility from 10 to 12 and not detaining children under 14.

The NT Government’s five-year implementation plan, includes investments for: replacing Don Dale and Alice Springs Youth Detentions Centres; a new information technology system; expanding Child and Family Centres; diverting young people from crime and future offending; and empowering local decision making and community led reform.

Law Council of Australia President, Morry Bailes, said the peak legal body supported the new initiatives, particularly those relating to prevention, diversion and community led reform.

“There is no doubt that the extremely high rate of Aboriginal and Torres Strait Islander imprisonment is linked to

punitive criminal justice measures that bring them into contact with the justice system at a very young age.

“Approaches that prioritise diversion and take into account underlying causes of offending, are a vital means of providing alternatives to imprisonment and creating opportunities for rehabilitation.

“Similarly, as the Royal Commission found, community engagement and reform are critical to resolving issues in care, protection and youth justice,” Mr Bailes said.

Yet Mr Bailes said that it is important that the implementation plan is not undermined by any perception that the NT Government is dragging its feet in implementing the Royal Commission’s recommendations relating to raising the age of criminal responsibility from 10 to 12 and not detaining children under 14, except in the most serious of cases.

“We understand that the NT Government has a process underway to look at these two landmark recommendations, but we must reiterate that they are at the centre of meaningful and lasting change for the Territory,” Mr Bailes said.

“Raising the age of criminal responsibly will radically change how the criminal justice system responds to our youngest and most vulnerable children.

“Detaining children unnecessarily exposes them to the criminal justice system. This in turn dramatically increases their chances of becoming repeat offenders.

“Locking-up children should always be a last resort.

“We not only urge the NT Government to implement these crucial recommendations, but also other states and territories,” Mr Bailes said.

It is now important that the Australian Government works alongside the NT Government in implementing the Royal Commission’s recommendations.

43

Classifieds Missing Will

Missing Will

Any person knowing the whereabouts of any Will or a Will dated 29 August 1983, made by Helen Kentros late of Regents Garden Aubin Grove, 248 Lyon Road, Aubin Grove in the State of Western Australia, born on 28 August 1917, died on 13 January 2018, please contact MDS Legal, Level 2, 16 Irwin Street, PERTH WA 6000 on (08) 9325 9353 or email mds@mdslegal.com.au.

Could any person or firm holding a will made by the late JESSIE KINROSS BOOTHE formerly of 196 Damiper Avenue Kallaroo or with knowledge of the whereabouts of such a will please contact Peter Nevin of Taylor Smart Lawyers and Notaries on 08 9325 8266 or email pnevin@taylorsmart.com.au.

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Missing Executor Any person knowing the whereabouts of JAMES DAVID LINDSAY RIDE, Solicitor previously of Swanbourne, Western Australia please contact Lily Woods of HHG Legal Group, Level 1, 16 Parliament Place, West Perth, Western Australia 6005. Telephone 08 9322 1966 Email: lily.woods@hhg.com.au

BRIEF For advertising opportunities in Brief please contact: Madeleine McErlain Manager, Marketing and Communications T: (08) 9324 8650 E: advertising@lawsocietywa.asn.au lawsocietywa.asn.au

Professional Announcements

Claudia Lewin

Croftbridge

Family & De Facto team as Counsel.

Croftbridge is delighted to announce it has appointed Claudia Lewin as a Lawyer. Claudia previously worked as a Lawyer at Kott Gunning.

Directors of HHG Legal Group, Simon Creek and Murray Thornhill, note that Marnie strengthens an award-winning, twelvestrong family law team – one renowned for their commitment to client satisfaction.

HHG Legal Group HHG Legal Group is pleased to welcome back Marnie Parkinson, who started recently in the Marnie Parkinson

44 | BRIEF MAY 2018

“Marnie is a senior, highly experienced advocate with high level people skills and a passion for all aspects of divorce law,” Simon Creek said.

Marnie also brings experience in Native Title to HHG Legal Group, expanding an already wide breadth of services offered by the firm.

Legal Practice Board Election Results The following practitioners were elected members of the Legal Practice Board for a two year term commencing Thursday, 5 April 2018.

Anna Maria Liscia John Robert Broderick Ley John George Syminton John James Hockley Anna Ciffolilli Stephen John Lemonis

Events Calendar

With thanks to our CPD partner

Stay up-to-date with the latest Law Society member events and CPD seminars

MAY 2018 Membership Events Monday, 14 May Law Week Breakfast and the 2018 Attorney Generalâ&#x20AC;&#x2122;s Community Service Law Awards Tuesday, 15 May Law Access Walk for Justice Wednesday, 16 May Law Week Panel Presentation hosted by the Law Societyâ&#x20AC;&#x2122;s Young Lawyers Committee Thursday, 17 May Social Justice Career Opportunities Evening

Friday, 18 May Law Week Awards Night and Cocktail Evening Thursday, 24 May Sole Practitioner and Small Firm Forum CPD Seminars Wednesday, 2 May GST at Settlement Friday, 18 May CPD Day for Country Practitioners Thursday, 31 May QPS Accreditation Workshop 1

JUNE 2018 CPD Seminars Thursday, 7 June QPS Accreditation Workshop 2

Friday 22 & Saturday 23 June Essentials of Advocacy and Negotiation

Thursday, 14 June Leading in Law Part 1

For all CPD-related enquiries please contact cpd@lawsocietywa.asn.au or (08) 9324 8640.

For all membership-related enquiries please contact membership@lawsocietywa.asn.au or (08) 9324 8692.

For all upcoming events and further information please visit lawsocietywa.asn.au

45

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