Latest Legal Updates

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High Court dismisses SkyCity appeal in relation to Adelaide casino dispute (SkyCity Adelaide Pty Ltd v Treasurer of South Australia)

Date: 24 October 2024
Court: High Court of Australia
Judge(s): Gageler CJ, Gordon, Edelman, Gleeson and Beech-Jones JJ
Judgment date: 16 October 2024
Catchwords: Contract – Interpretation – Relief against penalties – Whether converted electronic gaming credits included in “gross amount received” under Casino Duty Agreement - Whether obligation under Casino Act 1997 (SA) to pay interest for late payment could be subject of relief against enforcement as penalty.

Abstract

The High Court has unanimously dismissed an appeal by casino operator SkyCity Adelaide Pty Ltd (SkyCity), and allowed a cross-appeal by the South Australian (SA) Treasurer, against an SA Court of Appeal decision involving a dispute about the interpretation of a Casino Duty Agreement (CDA) and the imposition of interest for late payment of casino duty. The decision provides insight into the principles that apply when interpreting a contract made under a statutory framework and the possible limits of the penalty doctrine in such a context.

Background

SkyCity operates electronic gaming machines (EGMs) and automated table games (ATGs) at its Adelaide casino. It also runs a "Rewards Program" where members accumulate loyalty points…

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Sanctions update - New sanctions on individuals involved in Iran’s missile program

Date: 23 October 2024
Source: Federal Register of Legislation

The Australian Government has imposed new autonomous sanctions on five Iranian individuals through the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Iran) Amendment (No. 3) Instrument 2024 (Cth). The sanctions target individuals involved in Iran's ballistic missile program, including the transfer of missiles to Russia for use in Ukraine.

The instrument designates the following individuals for targeted financial sanctions and travel bans:

• two directors and a senior official of Iran’s Aerospace Industries Organization (AIO);
• a commercial director of Shahid Hemmat Industrial Group (SHIG); and
• a director of Shahid Bagheri Industrial Group (SBIG).

AIO, SHIG and SBIG are all involved in Iran’s ballistic missile program and are already subject to Australian sanctions.

The sanctions have been made under the Iran criteria in reg 6 of the Autonomous Sanctions Regulations 2011 (Cth), which allows the Minister for Foreign Affairs to impose sanctions on persons where (among other reasons) the Minister is satisfied they have contributed to Iran’s nuclear or missile programs.

Read the full text of the instrument and explanatory statement.

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Department of Industry, Science and Resources publishes AI and ESG guidance documents

Date: 23 October 2024
Source: AI and ESG – An introductory guide for ESG practitioners

The Department of Industry, Science and Resources (DISR) together with the National Artificial Intelligence Centre have published a practical guide for Environmental Social and Governance (ESG) practitioners on how to understand the implications and opportunities of Artificial Intelligence (AI) in a guidance document “AI and ESG – An introductory guide for ESG practitioners” (Guide).

The Guide assists ESG practitioners by showing how AI can support ESG solutions and provides practical examples of where AI governance can intersect with ESG governance, along with supporting the implementation of the Voluntary AI Safety Standard.

The Guide has been released in conjunction an AI Impact Navigator resource that is designed to help businesses better understand, manage and report the impact and outcome of their AI systems use.

To access the Guide, see the DISR website here. To access the AI Impact Navigator, see the DISR website here.

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Email advising that purchaser would not be in a position to settle insufficient to demonstrate repudiation when all surrounding circumstances considered (Thousand Hills Property Pty Ltd v LBA Capital Pty Ltd)

Date: 14 October 2024
Court: Supreme Court of Victoria
Judge(s): Gorton J
Judgment date: 10 October 2024
Catchwords: Property – Contract of sale- Repudiation - Anticipatory breach

Abstract:

In a dispute over the retention of a deposit for the purchase of apartments, the court found that the purchaser's email stating it would not be in a position to settle did not amount to repudiation in the circumstances. The decision examines the legal principles on repudiation and highlights the importance that the surrounding circumstances have on any question regarding whether a repudiation has occurred.

Disagreements subsequently arose over whether the building required Class 3 certification due to its NDIS purpose, and to what extent the plans attached to the contract required alterations.

By October 2020, both parties were dissatisfied with the contract. LBA Capital's representative, Mario Charisiou, discussed with Thousand Hill’s agent, Scott Liu, cancelling part or all of the contract of sale and having LBA Capital purchase alternative NDIS apartments in Mentone instead.

On 7 October 2020, Scott Liu emailed…

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Treasury consults on remaking the Franchising Code

Date: 10 October 2024
Source: Treasury

Treasury has released an exposure draft of the Competition and Consumer (Industry Code – Franchising) Regulations 2024 (Cth) (Regulations) for public consultation. The Regulations seek to remake the Franchising Code of Conduct (Franchising Code) to implement the changes outlined in the government’s response to Dr Michael Schaper’s 2023 review (Review), as well as making other changes.

Proposed commencement on 1 April 2025

The Regulations will remake the Franchising Code with effect from 1 April 2025 (the current sunset date for the existing code). Under the changes, the new code will be moved into the body of the Regulations rather than being a schedule (as they currently are). The Regulations will require a statutory review of the Franchising Code every 5 years, with the first review commencing before 1 April 2030.

Clarifying the Franchising Code’s purpose

Following the Review’s findings that the current statement of purpose in the Franchising Code is unclear, the Regulations will include a new purpose statement in the code which identifies specific objectives. These include addressing power imbalances between franchisors and franchisees, and improving standards of conduct in the franchising sector through disclosure and franchise…

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Federal Court orders Qantas to pay penalties of $100M for misleading consumers by offering and selling cancelled flights

Date: 9 October 2024
Source: Federal Court of Australia

The Federal Court has ordered Qantas Airways Ltd (Qantas) to pay $100 million in penalties for misleading consumers by offering and selling tickets for flights that it had decided to cancel, and by failing to tell prior ticketholders of its decision to cancel.

As outlined in our previous Latest Legal Update, Qantas co-operated with the Australian Competition and Consumer Commission (ACCC) in the proceedings and made joint submissions with the regulator on an agreed penalty, arguing that $100 million in total penalties were appropriate for deterrence while recognising the early cooperation of Qantas. Qantas admitted that:

• its senior managers Qantas knew that the cancelled flights were not immediately removed from sale, that consumers bought tickets for cancelled flights and that existing ticketholders were not notified of the cancellations; and
• Qantas benefitted from its conduct by profiting from consumers who would otherwise have chosen a different flight and saved costs by delaying notification regarding the cancellations.

Qantas’ contravening conduct

The Court made declarations under s 21 of the Federal Court Federal Court of Australia…

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ASIC calls for licensing of cryptocurrency industry

Date: 3 October 2024
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

Australian Securities and Investments Commission (ASIC) Commissioner, Alan Kirkland, has announced that most cryptocurrency businesses in Australia will need to obtain a financial services license.

“ASIC’s message is that a significant number of crypto-asset firms in the Australian market are likely to need a licence under the current law. This is because we think many widely traded crypto assets are a financial product,” Mr Kirkland announced, prior to speaking at the Australian Financial Review’s (AFR) Crypto and Digital Assets Summit on 23 September 2024.

ASIC has announced that it is preparing to update Information Sheet 225 by November 2024 which will clarify how particular crypto tokens (which represent digital ownership rights) and certain products will be treated.

The Government has previously released a token mapping consultation paper to identify how crypto assets and related services should be regulated. The Government subsequently released a proposal paper “Regulating Digital Asset Platforms” paper in October 2023 (submissions closed in December 2023) which proposes a new regulatory framework in Chapter 7 of the Corporations Act 2001 under which certain activities would require an Australian Financial…

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Sanctions update - Australia imposes cyber sanctions on Russian cybercriminals

Date: 3 October 2024
Source: Federal Register of Legislation

The Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Thematic Sanctions) Amendment (No. 5) Instrument 2024 (Cth) designates three Russian individuals for targeted financial sanctions and travel bans under Australia's autonomous sanctions regime on the grounds of their involvement in the Russian cybercrime syndicate known as “Evil Corp”.

The sanctioned individuals are:

• Maksim Viktorovich Yakubets, founder and leader of Evil Corp;
• Igor Olegovich Turashev, senior administrator of Evil Corp and DoppelPaymer ransomware group; and
• Aleksandr Viktorovich Ryzhenko, second-in-command of Evil Corp and affiliate of Lockbit ransomware group.

The Minister for Foreign Affairs was satisfied that these individuals were involved in significant cyber incidents within the meaning of regulations 6A(2) and (3) of the Autonomous Sanctions Regulations 2011 (Cth) by virtue of being involved in Evil Corp as well as its precursors and subgroups.

For more information, see the full text of the instrument and explanatory statement.

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Federal Court imposes $12.9 million penalty for Vanguard’s misleading claims about ESG exclusionary screens (Australian Securities and Investments Commission v Vanguard Investments Australia Ltd (No 2))

Date: 26 September 2024
Court: Federal Court of Australia
Judge(s): O’Bryan J
Judgment date: 25 September 2024
Catchwords: CONSUMER LAW – pecuniary penalty for infringement of ss 12DF(1) and 12DB(1)(a) and (e) of the Australian Securities and Investments Commission Act 2001 (Cth) – application of s 12GBA to contravening conduct that commenced prior to 13 March 2019 – application of s 12GBB to contravening conduct that occurs wholly on or after 13 March 2019 – relevant considerations
EVIDENCE – statement of agreed facts tendered in evidence – where agreed facts contained footnote references to documents also tendered in evidence – observations concerning the practice of including documentary references to a statement of agreed facts and the extent to which the practice is permissible under s 191 of the Evidence Act 1995 (Cth)
COSTS – where one party wholly unsuccessful on single issue for which discrete hearing was required but otherwise successful in the proceeding

Abstract:

Vanguard Investments Australia Ltd (Vanguard) has been slugged with a huge $12.9 million fine for greenwashing after misleadingly marketing an investment fund as “ethically conscious”.

Background

Vanguard…

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Non-disclosure of potential contamination not misleading conduct or misrepresentation (191 Bells Pty Ltd v WJ & HL Crittle Pty Ltd)

Date: 25 September 2024
Court: Supreme Court of New South Wales — Court of Appeal
Judge(s): Ward P, Payne and Stern JJA
Judgment date: 16 September 2024
Catchwords: Misleading or deceptive conduct — Reasonable expectation of disclosure — Whether positive representations made on contamination status — Whether disclosures amounted to half-truths
Sale and purchase of land — Whether positive obligation to disclose actual or potential contamination — Construction of contractual obligations — Exclusivity agreement and contract of sale warranties

Abstract:

In a dispute over alleged non-disclosure of contamination on land, the Court of Appeal dismissed the appeal, finding no misleading or deceptive conduct under the Australian Consumer Law (ACL). The exclusivity agreement (Exclusivity Agreement) did not impose a positive obligation on the vendor to disclose contamination, and the draft contract of sale (Draft Contract) warranties and disclosures, and surrounding circumstances, did not give rise to a reasonable expectation of such disclosure.

 

Facts:

191 Bells Pty Ltd (the appellant) sought to acquire land in Meroo Meadow, New South Wales, from WJ & HL Crittle Pty Ltd (the first respondent) for residential development.

The first respondent had acquired the…

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Digital Platform Regulators Forum release third working paper on multimodal foundation models of generative AI

Date: 23 September 2024
Source: Australian Competition and Consumer Commission

Abstract:

The Digital Platform Regulators Forum (DP-REG) has released its third working paper on multimodal foundation models (MFMs) and its impacts on consumer protection, competition, privacy and online safety.

MFMs are a type of generative artificial intelligence (AI) that can work with different data types, such as images, text and audio. MFMs are a significant improvement from large language models (LLMs) which process text and have potential for future adoption by businesses and consumers.

The potential harms of MFMs include:

• the difficulty of determining whether content is genuine or AI-generated without clear disclosure and labelling;
• the use of personal information by MFMs to produce highly personalised content that is more persuasive and more likely to be distributed; and
• subsequent challenges for enforcement and regulation across the competition and consumer, privacy and online safety sectors.

The DP-REG’s regulatory members recognise the specific risks of MFMs for each of their sectors:

• Australian Competition and Consumer Commission (ACCC): Scams and misleading conduct may be exacerbated by MFMs which can be used to create deepfake videos and images that misrepresent…

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ASIC releases 2023-2024 report on greenwashing misconduct within the financial sector

Date: 23 September 2024
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

The Australian Securities & Investments Commission (ASIC) has released Report 791 which outlines the actions taken by the regulator between 1 April 2023, and 30 June 2024 to address greenwashing in the financial sector.

 

ASIC’s Greenwashing Interventions

ASIC's interventions during the reporting period targeted four main areas of concern:

1. Inconsistent Underlying Investments: ASIC identified several instances where underlying investments did not align with the ESG (Environmental, Social, and Governance) screens and policies disclosed to investors. This led to significant regulatory actions, including the initiation of two civil penalty proceedings and the finalisation of one, resulting in an $11.3 million penalty against Mercer Superannuation. Additionally, ASIC issued eight infringement notices and secured 37 corrective disclosure outcomes across various sectors, including listed companies, investment managers, and superannuation trustees.
2. Unsubstantiated Sustainability Claims: ASIC found that several entities made sustainability-related claims without reasonable grounds, leading to potential harm to investors. These claims included overstated environmental impacts and misleading statements about investment exclusions. For example, Future Super was fined for claiming that its entire $400 million fund had been moved…

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Electronic Transactions Amendment Regulations 2024

Date: 17 September 2024
Source: Electronic Transactions Amendment Regulations 2024 (Cth)
Jurisdiction: Commonwealth

Abstract:

The Electronic Transactions Amendment Regulations 2024 (Cth) (the Regulations) and its Explanatory Memorandum were released 12 September 2024.

The Electronic Transactions Act 1999 (Cth) (the Act) prescribes how electronic means may be used to complete transactions that are typically done in paper formats. Section 7A(2) of the Principal Regulations provides that the certain provisions of the Act do not apply to certain specified Commonwealth Laws.

The Regulations serve the purposes of lessening the scope of certain exemptions contained in the Electronic Transactions Regulations 2020 (Cth) (the Principal Regulations). The Regulations remove two exemptions, items 8 and 9 of clause 1 of Schedule 1 to the Principal Regulations, and amend a further two exemptions, table items 19 and 78 of clause 1 of Schedule 1 of the Principal Regulations.

These amendments come in response to amendments made to the Australian Passports Act 2005 (Cth) and the Australian Passports Determination 2015 (Cth) and will aid in the facilitation of online applications for Australian travel documents.

Amendments have also been made to the exemptions applying to the Commonwealth Electoral Act 1918 (Cth) as well…

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Mandatory climate reporting legislation is passed by Parliament

Date: 11 September 2024
Source: The Treasury

Abstract:

The Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Bill) was passed by Parliament on 9 September 2024 and Royal Assent of the Bill is expected to occur within the next 7-10 days.

Schedule 4 of the Bill introduces a mandatory climate-related reporting regime in Australia that is aligned with global sustainability standards released by the International Sustainability Standards Board. Under the regime, in-scope entities will be required to include climate-related financial disclosures as part of a new annual sustainability report (in addition to the obligations to prepare annual financial reports under Chapter 2M of the Corporations Act).

The disclosure of climate-related financial information will be in accordance with the final version of the Australian sustainability reporting standards (ASRS) set by the Australian Accounting Standards Board (AASB). The AASB will hold a virtual public meeting soon after Royal Asset to consider and vote on the draft ASRS.

The Bill was previously passed by the Senate on 22 August 2024 with an additional amendment to be passed by the House of Representatives. The amendment requires in-scope entities to report against both a…

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ASIC enforcement and regulatory update: January to June 2024 (Report 794)

Date: 11 September 2024
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

ASIC has released its Enforcement and Regulatory Update (Report 794), detailing its key actions and policy developments from January to June 2024. The report outlines enforcement and regulatory actions taken by ASIC aimed at strengthening the safety and integrity of the financial system and protecting consumers and includes a regulatory developments timetable and case studies by sector.

 

Consumer Protection

ASIC reinforced its commitment to protecting consumers, especially those vulnerable to financial harm. ASIC noted that it took significant action against entities involved in predatory lending practices, misleading conduct, and greenwashing. For example, ASIC targeted crypto-asset businesses, emphasising the importance of ensuring that providers of financial products have the required Australian Financial Services (AFS) licenses.

The regulator also flagged issues in the superannuation sector, particularly in relation to persistently underperforming investment options that eroded members' savings. ASIC highlighted that that it will soon publish the results of its surveillance into how superannuation funds are handling death benefit claims, reflecting its ongoing focus on accountability in the sector. ASIC also noted that their actions have led to criminal convictions…

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Treasury releases final statutory report on meetings and documents amendments

Date: 11 September 2024
Source: The Treasury

Abstract:

The Treasury has recently released its final statutory review report on the amendments to the meetings and documents legislation, examining the impact of changes introduced in 2021 and 2022 through the Treasury Laws Amendment (2021 Measures No. 1) Act 2021 and the Corporations Amendment (Meetings and Documents) Act 2022. These amendments were made in response to the COVID-19 pandemic and aimed to facilitate virtual and hybrid meetings, electronic distribution of meeting-related documents, and technology-neutral document signing and execution

Key Findings:

• Hybrid and Virtual Meetings: The review found that while hybrid meetings are generally well-received, wholly virtual meetings are more contentious. Stakeholders raised concerns about the potential for virtual meetings to diminish transparency and member participation, particularly for listed public companies. However, hybrid meetings, which combine physical and virtual attendance, are viewed positively as they increase accessibility for members who cannot attend in person.
• Voting and Member Participation: The review emphasised the need for clear communication regarding the format of meetings, especially when using virtual technologies. Companies must ensure that members have a reasonable opportunity to participate, ask questions, and vote in real…

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Consultation on the proposed mandatory guardrails for the safe and responsible use of AI in Australia opens

Date: 10 September 2024
Source: Department of Industry, Science and Resources

The Department of Industry, Science and Resources (Department) is seeking feedback on the mandatory guardrails for the use of artificial intelligence (AI) following the release of the proposals paper on “Safe and responsible AI in Australia”.

 

Principles for defining high-risk AI

The consultation will seek feedback on the proposed approach to defining high-risk AI into two broad categories that relate to:

• uses of AI systems or general-purpose AI (GPAI) models that are known and foreseeable; and
• advanced and highly capable GPAI models where all possible applications and risks cannot be foreseen.

In designating AI as high-risk based on intended and foreseeable uses, the proposed considerations include the risks of adverse impacts to human rights, health and safety as well as the wider legal, systemic impacts to the broader Australian society, environment, economy and rule of law.

 

Mandatory guardrails for safe and responsible AI use

The 10 proposed mandatory guardrails aim to address harms and risks from AI, provide greater regulatory certainty for businesses and foster public trust. The proposed guardrails would require…

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Attorney-General’s Department publish Guidance on adequate procedures to prevent the commission of foreign bribery

Date: 29 August 2024
Source: Attorney-General’s Department

The Attorney-General’s Department has published the finalised Guidance on adequate procedures to prevent the commission of foreign bribery (Guidance).

The Attorney-General’s Department was required to publish this Guidance as a result of the passage of the Crimes Legislation Amendment (Combatting Foreign Bribery) Act 2024 (Cth) which introduces an offence of ‘failure to prevent’ foreign bribery under section 70.5A of the Criminal Code Act 1995 (Cth) commencing on 8 September 2024. A defence to this offence is available to a corporation if it can prove it had ‘adequate procedures’ in place to prevent foreign bribery. The Guidance sets out what constitutes ‘adequate procedures’ and suggests steps that corporations can take to ensure their anti-bribery controls are adequate.

The Guidance takes a principles-based approach and notes that ultimately, what constitutes ‘adequate procedures’ will ultimately be determined by the courts on a case-by-case basis. The corporation will have to show that the procedures were in place and that they were adequate to the circumstances of their organisation. Considerations include the scale, location of the corporation’s activities and the nature and level of risk identified.

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ASIC expands strategic priorities in updated Corporate Plan

Date: 27 August 2024
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

ASIC has announced an expanded Corporate Plan, adding a new strategic priority focused on Australia’s public and private markets and emerging financial products. ASIC Chair Joe Longo highlighted that strengthening market integrity is essential for maintaining trust in the financial system, which fosters investment and creates job opportunities. Although Australia's private markets are smaller than its listed equity markets, their lack of transparency poses significant risks, particularly as more investors become involved. The new priority aims to enhance consistency and transparency across all markets and products, signalling tougher regulatory expectations.

Over the past three years, ASIC has undergone significant transformation to sharpen its focus. While the core strategic priorities remain consistent, the updated Corporate Plan reflects the agency’s response to a changing environment. The new structure, implemented last year, enables ASIC to better anticipate and address emerging threats and opportunities, optimising the use of its limited resources.

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Mandatory climate reporting requirements and financial regulator powers laws pass the Senate

Date: 23 August 2024
Source: Treasury portfolio

The Treasury Laws Amendment (Financial Market Infrastructure and other measures) Bill 2024 (the Bill) has passed the Senate. The Bill introduces mandatory climate reporting requirements for large listed and unlisted companies and financial institutions commencing on 1 January 2025. Reporting for other large companies will be phased over time according to size and revenue.

The Treasurer has stated that these reform aims to provide investors and companies with clarity and certainty to support net zero transformation and strengthen Australia's reputation as an attractive destination for international capital. The climate reporting reforms are a significant step towards addressing climate risks and promoting investment in cleaner and more sustainable energy sources.

Standardised climate-related financial disclosures will be aligned with international standards to be issued by the Australian Accounting Standards Board (AASB).

Further detailed guidance on the new reporting requirements will be provided shortly however by way of summary:

• All eligible companies will be required to keep sustainability records.
• Eligible companies will be required to prepare sustainability reports that include climate statements and notes, any statements required by legislative instrument and a directors’ declaration.

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Consultation on further extension of small business exemption from responsible lending obligations

Date: 14 August 2024
Source: Treasury.gov.au

The Federal Government has released for consultation draft regulations to extend the small business exemption from responsible lending obligations (RLOs) under the National Consumer Credit Protection Act 2009 (NCCP Act) for another two years until 3 October 2026.

The RLOs set out in Chapter 3 of the NCCP Act and in the National Consumer Credit Protection Regulations 2010 require lenders to give certain documents and information to consumers to assist them in making decisions about dealing with their lender and understanding their rights and the credit services being provided to them. While these obligations generally do not apply to business and commercial lending, they apply to mixed-purpose loans (eg where a small business or sole trader applies for a single loan that may have both personal and commercial benefits) where the predominant purpose is not business-related.

In April 2020, a temporary exemption was introduced to exempt small business loans from RLOs if there is a genuine business purpose that is not minor or incidental. This exemption has been extended three times and is currently set to expire on 3 October 2024. For the purposes of the exemption, a small business is one that has less than 100 employees or revenue of $5 million or less in the previous financial year.

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NSW Court of Appeal finds that COVID-19 restrictions did not frustrate World Square commercial lease (Cao v ISPT Pty Ltd)

Date: 13 August 2024
Court: Court of Appeal – Supreme Court of New South Wales
Judge(s): Meagher JA, Kirk JA and Griffiths AJA
Judgment date: 8 August 2024
Catchwords: CONTRACTS - Frustration - Whether COVID public health restrictions frustrated lease of commercial premises - Frustration does not apply as supervening event was risk for which tenant had assumed responsibility under the lease – Public health restrictions did not require radical or fundamental change in what was contracted for

Abstract:

The Court of Appeal has dismissed an appeal by guarantors of a commercial lease, finding that COVID-19 public health orders restricting restaurant operations did not frustrate the lease. The case illustrates that, while the doctrine of frustration may apply to leases, there is a high threshold for a contract to be frustrated.

Background

The respondents own the World Square shopping centre in the Sydney CBD. The appellants guaranteed a 3-year lease of restaurant premises operated by the tenant in the shopping centre from 1 August 2017. The tenant's restaurant closed on 23 March 2020 due to the first NSW COVID-19 public health order restricting restaurants to takeaway service only. Subsequent orders gradually eased restrictions but imposed capacity limits based on square metre rules. The tenant never reopened and went into liquidation in May 2021.

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ASIC greenwashing victory against Mercer Superannuation

Date: 8 August 2024
Court: Federal Court of Australia
Judge(s): Horan J
Judgment date: 2 August 2024
Catchwords: Corporations — False and misleading statements — Greenwashing — Pecuniary penalties

Background:

The Federal Court of Australia has ordered Mercer Superannuation (Australia) Limited (Mercer) to pay a $11.3 million pecuniary penalty for making false or misleading representations under the Australian Securities and Investments Commission Act 2011 (Cth) (ASIC Act).

Mercer was the trustee of the large Mercer Super Trust superannuation fund (Fund) with almost 300,000 members and around $29 billion in net assets during the relevant period from November 2021 to March 2023. The Fund’s Sustainable Plus Investments were promoted on via statements and videos on Mercer’s website as well as Vimeo and YouTube as excluding investments in companies involved in or deriving profit from alcohol production, gambling operations, and the

However, the court found that, contrary to these representations, six of the seven Sustainable Plus Investments held investments in companies involved in fossil fuel extraction or sale, alcohol production or sale and gambling operations.

Horan J noted that in July 2022, after being alerted by environmental group Market Forces about investments in fossil fuel companies, Mercer had removed some statements referring to "carbon intensive fossil fuels like thermal coal" from its website. However, it did not conduct a full review of the accuracy of all representations about its stated exclusions until after ASIC had commenced proceedings in September 2023.

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Federal Court imposes $10.95 million penalty on Secure Parking for misleading representations about parking services (ACCC v Secure Parking Pty Ltd)

Date: 8 August 2024
Court: Federal Court of Australia
Judge(s): Perram J
Judgment date: 8 August 2024
Catchwords: CONSUMER LAW - misleading or deceptive conduct - false representations - parking reservation service - Australian Consumer Law contraventions - appropriate penalty

Abstract:

The Federal Court has imposed a $10.95 million penalty on Secure Parking Pty Ltd for misleading consumers about its "Secure-a-Spot" online parking reservation service. Secure Parking admitted to breaching the Australian Consumer Law by falsely representing that bookings guaranteed a reserved parking space, when in reality availability was based on forecasts. The case highlights the serious consequences of misleading marketing claims and provides guidance on penalty assessment for widespread consumer law breaches.

Background

Secure Parking Pty Ltd (Secure Parking) operates over 600 commercial car parks across Australia. Between 2017-2022, it offered a "Secure-a-Spot" service where consumers could purportedly reserve a parking space for a specific date, time and location by booking online or through Secure Parking's app.

Secure Parking marketed Secure-a-Spot extensively through its website, emails, social media and videos, representing that bookings would reserve a parking spot as specified. However, this was untrue - Secure Parking's system relied on vacancy forecasts rather than actually reserving individual spots. When forecasts were inaccurate, booked customers were unable to park as promised.

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NSW Court of Appeal confirms when forbearance will constitute valid consideration for a contract (Yi v Park)

Date: 2 August 2024
Court: Court of Appeal – Supreme Court of New South Wales
Judge(s): Bell CJ, Mitchelmore JA and Adamson JA
Judgment date: 31 July 2024
Catchwords: CONTRACTS - formation - consideration - forbearance to sue - requirements for valid forbearance
EVIDENCE - failure to make findings on critical factual issues - effect on establishing consideration

Abstract:

In Yi v Park, the Court of Appeal of the Supreme Court of New South Wales unanimously allowed an appeal in relation to a loan agreement, holding that the primary judge failed to make critical findings necessary to establish that the agreement was adequately supported by consideration. The decision illustrates that under established legal principles, forbearance will only constitute good consideration for a contract if there is a presently existing debt owed when the contract is made.

Background

In 2012, a daughter provided funds to her mother to renovate the mother's property, pursuant to an agreement that the daughter would live there rent-free and eventually inherit the property. In 2017, after the mother made a new will contrary to that agreement, the parties entered into a loan agreement documenting the 2012 funds as a $300,000 loan plus $200,000 interest, repayable when the property sold or upon the mother's death.

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Duty imposed following change in sole director and secretary of trustee company of a landholder unit trust (Tao v Commissioner of State Revenue (Review and Regulation))

Date: 26 July 2024
Court: Victorian Civil and Administrative Tribunal
Judge(s): R Tang AM
Judgment date: 11 July 2024
Catchwords: Duties Act 2000 (Vic) – Dutiable transactions – Acquiring control of landholder treated as relevant acquisition under section 82 – Change in sole director, secretary and shareholder of trustee company of a landholder unit trust treated as acquiring control

Abstract:

The Victorian Civil and Administrative Tribunal has determined that the change in control of a trustee company, in particular the appointment of a new sole director and company secretary, was a change in control of the related landholder unit trust. The new director and company secretary was found to have acquired control of the landholder, and duty was imposed as a result of s 82 of the Duties Act 2000 (Vic).

Background

66 William Road Pty Ltd (Trustee Company) was the trustee of the unit trust WCT Unit Trust (Unit Trust). At the relevant time, the Unit Trust held a development property worth over $1 million, meaning the Unit Trust was a landholder within the meaning of s 71(1) of the Duties Act 2000 (Vic).

On 11 February 2014, Mr Zhiyong Tao became the sole shareholder in the Trustee Company.

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American Express fined $8 million for breach of design and distribution obligations (Australian Securities and Investments Commission v American Express Australia Limited)

Date: 19 July 2024
Court: Federal Court of Australia
Judge(s): Jackman J
Judgment date: 19 July 2024
Catchwords: CORPORATIONS — Design and distribution obligations — Target market determinations — Knowledge requirements for review triggers — s 994C, Corporations Act 2001 (Cth) (Corporations Act)

Abstract:

The Federal Court has imposed an $8 million penalty on American Express Australia Limited (American Express) for contravening its design and distribution obligations (DDOs) by continuing to issue credit cards despite high cancellation rates suggesting that the target market determinations for these products were no longer appropriate.

Justice Jackman’s judgment provides guidance about the obligations imposed on retail financial product issuers under s 994C of the Corporations Act to review a target market determination when they know, or ought reasonably to know, that the determination is no longer appropriate.

Background

American Express issued the “DJs Amex Card” and “DJs Amex Platinum Card” co-branded with David Jones, which were primarily distributed through David Jones stores. As required by the DDOs in Pt 7.8A of the Corporations Act, American Express made target market determinations (TMDs) for these cards in October 2021.

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Federal Court finds retail financial product issuer breached design and distribution obligations (Australian Securities and Investments Commission v Firstmac Limited)

Date: 10 July 2024
Court: Federal Court of Australia
Judge(s): Downes J
Judgment date: 10 July 2024
Catchwords: CORPORATIONS — s 994E, Corporations Act 2001 (Cth) (Corporations Act) — design and distribution obligations — obligation to take “reasonable steps” that are “reasonably likely” to result in conduct consistent with target market determination

Abstract:

The Federal Court has found that Firstmac Limited (Firstmac) contravened its design and distribution obligations (DDOs) in s 994E of the Corporations Act by failing to take reasonable steps in relation to the distribution of its “High Livez” investment product.

The case provides important guidance on the steps that retail financial product issuers must take to comply with the DDOs in Pt 7.8A of the Corporations Act. In particular, the decision clarifies the scope of the obligation on product issuers to “take reasonable steps that will, or are reasonably likely to” result in their conduct being consistent with the product’s target market determination.

Background

Firstmac is a non-bank lender that offered various financial products to retail clients between October 2021 and September 2022, including term deposits and a unit trust investment product known as “High Livez”.

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Court determines lender’s offer letter not a standard form contract and outside scope of UCT regime in DCZ Early Learning v Semper Mortgage Management

Date: 12 June 2024
Court: Supreme Court of Queensland
Judge(s): Freeburn J
Judgment date: 7 June 2024
Catchwords: Unfair contract terms-standard form contract-letter of offer

Abstract:

An indicative letter of offer (Offer letter) was determined to be outside the scope of the unfair contract terms (UCT) regime because the Offer letter was not a ‘standard form contract’ for the purposes of s 12BA of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

Certain boilerplate contract terms which imposed liability on potential borrowers for various fees at the time of signing the Offer letter (regardless of whether a loan was made) were considered not to be unfair under s 12BG of the ASIC Act.

Background

DCZ Early Learning Pty Ltd (DCZ) as borrower signed an Offer letter issued by Semper Mortgage Management Pty Ltd (Semper) as lender for the purpose of obtaining funding to assist with the purchase of a childcare business. The loan did not proceed.

Under the terms of the Offer letter DCZ was liable to pay Semper various fees including establishment fees, administration fees and broker fees.

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High Court dismisses appeal of Cessnock City Council and requires payment of $3.7 million in reliance damages (Cessnock City Council v 123 259 932 Pty Ltd)

Date: 10 May 2024
Court: High Court of Australia
Judge(s): Gageler CJ, Gordon, Edelman, Steward, Gleeson, Jagot and Beech-Jones JJ
Judgment date: 8 May 2024
Catchwords: WORDS AND PHRASES — “Breach of contract” — “Expectation loss” — “Reliance damages” — “Presumption of recoupment” — “Wasted expenditure”

Abstract:

The High Court has unanimously dismissed the appeal of Cessnock City Council (Council) in their dispute over a lease agreement with 123 259 932 Pty Ltd, formerly Cutty Sark Holdings Pty Ltd (Cutty Sark). In line with the Court of Appeal’s decision, the High Court found that Cutty Sark’s expenditure of $3.7 million on an aircraft hanger in reliance of the Council’s promise in the lease agreement entitled Cutty Sark to reliance damages.

Background

The Council entered into a 30 year lease agreement with Cutty Sark over a lot of airport land. The Council contracted to take all reasonable action to apply for and register the plan of subdivision of the land by 30 September 2011 and granted Cutty Sark a licence to occupy the lot in the interim. During its occupation of the lot and in reliance on the lease agreement, Cutty Sark built an aircraft hanger costing over $3.7 million. The Council breached the lease agreement by failing to register the plan of subdivision by the deadline.

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ASIC appeals Federal Court decision against finding of unfair contract terms in Auto & General’s insurance contracts

Date: 19 April 2024
Source: Australian Securities and Investments Commission

The Australian Securities and Investments Commission (ASIC) has appealed the Federal Court’s decision to dismiss proceedings against Auto & General Insurance Co Ltd (A&G) in relation to alleged unfair contract terms under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

ASIC had alleged that a term in A&G’s insurance contracts was unfair for requiring policyholders to notify it if “anything changes about your home or contents” and that a failure to provide a notification may allow A&G to reduce or refuse to pay claims, cancel or not offer to renew their contracts.

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ACCC initiates greenwashing proceedings against GLAD bags manufacturer

Date: 18 April 2024
Source: Australian Securities and Investments Commission

The Australian Competition and Consumer Commission (ACCC) has initiated proceedings against Clorox Australia Pty Ltd (Clorox) for the alleged false or misleading representations that its GLAD-branded kitchen tidy bags and garbage bags were made from 50% recycled ‘ocean plastic’ when the bags were instead made from plastic not sourced from the ocean or sea.

Clorox is a manufacturer, supplier and marketer of food care and waste disposal products to supermarkets and online retailers. During the period of June 2021 to July 2023, Clorox supplied GLAD-kitchen tidy bags and garbage bags which were blue in colour and had a “wave top” design.

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Government announces sweeping changes to Australia’s merger laws

Date: 10 April 2024
Source: Department of Treasury

The government has announced that Australia’s merger review system will undergo significant reform in its response to the Treasury’s consultation on merger processes. Treasurer Dr Jim Chalmers MP also discussed the reforms in his address to the 2024 Bannerman Competition Lecture on 10 April 2024. The government is proposing to replace Australia’s current voluntary merger-notification regime with a formal, mandatory, suspensory and administrative mechanism from 1 January 2026.

The reforms must still pass through Parliament which may result in some changes to the government’s proposals, but the announcements provide a strong indication of what’s to come for Australia’s merger system.

Changes to the merger review process

The key changes to the merger review process proposed by the government are summarised below.

• Formal mandatory suspensory clearance model: Merger transactions will be suspended from completing until approval from the Australian Competition and Consumer Commission (ACCC) is obtained, in line with other OECD jurisdictions.
• Mandatory notification based on materiality thresholds: Australia currently operates a voluntary informal merger clearance model, under which parties are not obligated to notify the ACCC of their merger transactions.

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Federal Court finds Vanguard engaged in greenwashing by misrepresenting ESG credentials of investment fund (Australian Securities and Investments Commission v Vanguard Investments Australia Ltd [2024] FCA 308)

Date: 3 April 2024
Court: Federal Court of Australia
Judge(s): O’BRYAN J
Judgment date: 28 MARCH 2024
Catchwords: CONSUMER LAW – ss 12DB and 12DF ASIC Act – greenwashing – ESG representations

Abstract:

In proceedings brought by the Australian Securities and Investments Commission (ASIC), the Federal Court has found Vanguard Investments Australia Ltd (Vanguard) liable for breaching the consumer protection provisions in ss 12DB and 12DF of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) by making false or misleading representations about the ESG screening criteria for its Ethically Conscious Global Aggregate Bond Index Fund (the Fund). A hearing as to penalties will occur at a later date.

The case:

ASIC alleged that in Product Disclosure Statements (PDS), media releases, website content, a Youtube video interview and at a promotional event presentation later published online, Vanguard had made representations that the Fund offered an ethically conscious investment opportunity by seeking to track the Bloomberg Barclays MSCI Global Aggregate SRI Exclusions Float Adjusted Index (Index)) and that before being included in the Index (and thus, the Fund), securities were researched and screened against ESG criteria and those that breached the criteria were excluded or removed.

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Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 introduced

Date: 3 April 2024
Source: Parliament of the Commonwealth of Australia

Abstract:

On 27 March 2024, landmark climate reporting legislation was introduced into the House of Representatives as Schedule 4 of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Bill).

The Bill was introduced following consultation on an exposure draft of the Bill and, if enacted, would introduce a new mandatory climate disclosure reporting regime in Australia which is aligned with international standards.

The Senate has referred the provisions of the Bill 2024 to the Senate Economics Legislation Committee for inquiry and report by 30 April 2024.

Mandatory climate-related reporting regime

The specific details of the new mandatory climate disclosure requirements will be set out in new accounting standards which are currently being developed by the Australian Accounting Standards Board (AASB) and based on the International Sustainability Standards Board (ISSB) standards: IFRS S1 and IFRS S2.

There are a few key differences in the Bill compared with the exposure draft. For example, the reporting requirements which apply to Group 1 entities.

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Autonomous Sanctions Amendment Bill 2024 (Cth) passes both Houses

Date: 28 March 2024
Source: Parliament of Australia

Abstract:

The Autonomous Sanctions Amendment Bill 2024 (Cth) (Bill) has been passed by both Houses of Parliament. The amendments made by the Bill will take effect on the day after Royal Assent.

Amendments to autonomous sanctions regime

The Bill amends the Autonomous Sanctions Act 2011 (Cth) (ASA) to:

• confirm that autonomous sanctions can be imposed on persons based on their past conduct or status; and
• retrospectively validate existing sanctions imposed based on past conduct or status or in circumstances where it is unclear if the Minister for Foreign Affairs considered whether they should exercise their discretion to designate a person for financial sanctions, declare a travel ban, or both.

Passage of Bill

Before passing both Houses, the Bill was referred to the Senate Standing Committee for the Scrutiny of Bills and the Parliamentary Joint Committee on Human Rights.

The Senate Standing Committee noted in its scrutiny digest of 28 February 2024 that it is unclear whether the retrospective validation of sanctions may have a detrimental effect on any persons, and that individual rights may also be detrimentally affected by extinguishing a person’s right to seek judicial review on the basis that a previously imposed sanction was not enforceable.

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Federal Court dismisses ASIC claim in relation to alleged unfair contract terms in insurance contracts (Australian Securities and Investments Commission v Auto & General Insurance Company Limited)

Date: 25 March 2024
Court: Federal Court of Australia
Judge: Jackman J
Judgment date: 22 March 2024
Catchwords: INSURANCE — Unfair contract terms regime — Where term of product disclosure statement required insured to “tell us if anything changes while you’re insured with us” — Whether term unfair — How lack of transparency should be taken into account under unfair contract terms regime.

Abstract:

The Federal Court (Jackman J) has dismissed the Australian Securities and Investments Commission’s (ASIC’s) claim that certain terms in insurance contracts issued by Auto & General Insurance Company Limited (A&G) were unfair under the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act).

Background

A&G issued approximately 1.4 million home and contents insurance contracts between April 2021 and May 2023 under numerous brands such as Budget Direct, ING and Virgin Insurance.

Each contract contained terms requiring the insured to notify the insurer of certain events during the insurance period. These notification obligations included broadly-worded obligations to “[t]ell us if anything changes while you’re insured with us” and “[w]hile you’re insured with us… tell us if anything changes about your home or contents”.

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ASIC commences first proceedings against director for failing to obtain DIN

Date: 25 March 2024
Source: Australian Securities and Investments Commission

The Australian Securities and Investments Commission (ASIC) has commenced proceedings against a director for failing to obtain a director identification number (DIN).

The DIN regime, administered by the Australian Business Registry Services and enforced by ASIC came into effect on 1 November 2021 and existing company directors had until 30 November 2022 to apply for a DIN.

Failure to have a DIN is both a civil contravention and a criminal offence (s1272C(1) Corporations Act 2001 Cth) This is the first time proceedings have been brought against a director for contravening section 1272C(1). The defendant faces a maximum penalty of $13,320.

Read ASIC’s media release here.

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VIC — Commercial and Industrial Property Tax Reform Bill 2024 (Vic)

Date: 21 March 2024
Source: Victorian Legislation 
Jurisdiction: Victoria

Abstract:

The Commercial and Industrial Property Tax Reform Bill 2024 (Bill) was read for the second time in the Legislative Assembly on 21 March 2024.

What does the Bill do and what is the commercial and industrial property tax?

The Bill introduces a new commercial and industrial property tax (CIPT) for commercial and industrial properties (CIPs) in Victoria. From 1 July 2024, CIPs will begin to transition to the new CIPT regime.

Under the new CIPT regime, a CIP will become exempt from stamp duty after stamp duty is paid for the CIP one last time, which will be upon the first dutiable transaction of the CIP to occur on or after 1 July 2024.

Once a CIP is in the new CIPT regime:

• no stamp duty will be payable on any dutiable transaction relating to the CIP, provided that the CIP continues to have a qualifying commercial and industrial use; and
• an annual CIPT, equivalent to 1% of the unimproved land value of the CIP, will be imposed and will first become payable 10 years after the last dutiable transaction for which stamp duty was imposed, occurred.

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VIC: Victorian government cracking down on underquoting by real estate agents

Date: 19 March 2024
Source: Premier of Victoria

The Victorian government has provided an update on its efforts to investigate underquoting within the real estate agent industry.

Underquoting is addressed in ss 47A to 47D of the Estate Agents Act 1980 (Vic), and is generally described as an estate agent advertising, or advising a potential purchaser of, a property price that is less than:

• the estate agent’s estimated selling price (if a single figure is estimated) or the lowest estimated selling price (if a range is estimated);
• the vendor’s auction reserve or minimum sale price; or
• an offer price the vendor has already rejected on the basis it was too low.

Underquoting may also be an offence under s 18 of the Australian Consumer Law which prohibits persons from engaging in misleading or deceptive conduct in trade or commerce, and s 30(1)(c) which prohibits persons, in trade or commerce, making false or misleading representations about the price payable for land in connection with the sale (or promotion of any sale) of that land.

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Federal Court indicates broad reach of sanctions and highlights importance of force majeure provisions in managing sanctions risk (Alumina and Bauxite Co Ltd v Queensland Alumina Ltd)

Date: 15 March 2024
Court: Federal Court of Australia
Judge: O’Bryan J
Judgment date: 1 February 2024
Catchwords: CONTRACT —Where Australian Government imposed sanctions against Russia and certain Russian business-people pursuant to the Autonomous Sanctions Regulations 2011 (Cth) (Russia Sanctions) as a result of Russia’s invasion of Ukraine — Whether the actions of QAL and the Rio parties are in breach of contracts with the applicants — Whether imposition of Russia Sanctions rendered performance of the contracts by QAL illegal and was therefore a supervening illegality to excuse performance — Whether imposition of Russia Sanctions was an event of force majeure for purposes of contractual provision to excuse performance.

Abstract:

The Federal Court of Australia (O’Bryan J) has dismissed claims by three subsidiaries of Russian company United Company Rusal IPJSC (UC Rusal) for declarations, injunctions and damages for breach of contract. The claims arose in the context of arrangements in relation to a Queensland alumina refinery conducted by Queensland Alumina Ltd (QAL).

The decision shows the potentially broad reach of Australia’s autonomous sanctions and highlights the importance of drafting adequate force majeure and sanctions provisions in commercial contracts to mitigate sanctions risks.

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Federal Court dismisses Russian oligarch’s challenges to sanctions (Deripaska v Minister for Foreign Affairs [2024] FCA 62)

Date:14 March 2024
Court: Federal Court of Australia
Judge: Kennett J
Judgment date: 8 February 2024
Catchwords: ADMINISTRATIVE LAW — Judicial review of Instruments made by the Minister designating and declaring the applicant pursuant to item 6A(a) of reg 6 of the Autonomous Sanctions Regulations 2011 (Cth) (Regulations) — Whether Regulations infringe common law right to be represented by lawyer of one’s own choice — Whether Minister misunderstood nature of power being exercised by failing to appreciate scope of her discretion.

CONSTITUTIONAL LAW —Whether regs 14 and 15 have applications that would subvert the exercise of jurisdiction under s 75(v) of the Constitution or s 39B(1) of the Judiciary Act 1903 (Cth) — Whether Regulations are invalid by reason of inconsistency with the constitutional entrenchment of that jurisdiction — Whether designation under the Regulations prevents designated persons or entities from obtaining legal representation to challenge decision — Whether terms of Regulations can be read down to exclude actions taken for the purpose of challenging designation or other things purportedly done under the Autonomous Sanctions Act 2011 (Cth) in proceedings commenced under s 75(v) or 39B(1).

Abstract:

The Federal Court of Australia (Kennett J) has dismissed a Russian businessperson’s challenges to autonomous sanctions imposed on him by the federal government.

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ACCC’s 2024 compliance and enforcement priorities reinforce focus on consumer protection

Date: 12 March 2024
Source: Australian Competition & Consumer Commission (ACCC)

On 7 March 2024 the Australian Competition and Consumer Commission released its compliance and enforcement priorities for 2024/25. ACCC Chair Gina Cass-Gottlieb announced the priorities in her address to the Committee for Economic Development Australia.

The ACCC’s priorities span across both competition and consumer law. Many of the issues identified in the ACCC’s 2022 and 2023 compliance and enforcement priorities remain a focus for the ACCC again this year. Other priorities have gained further prominence due to prevailing economic trends and conditions including the cost-of-living crisis (and price increases across a range of products and services) and the drive towards green and sustainable alternatives for the benefit of consumers and the environment.

Exclusive arrangements by firms with market power and competition and consumer issues relating to digital platforms and in global and domestic supply chains are among the enforcement priorities from 2023/4 that were not listed in the 2024/5 priorities.

New ACCC compliance and enforcement priorities for 2024:

• Supermarkets: In view of the ACCC’s 12-month price inquiry into competition in the supermarket and grocery sector, the inclusion of this new priority is not surprising.

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ACCC releases 2024 compliance and enforcement priorities

Date: 7 March 2024
Source: Australian Competition & Consumer Commission (ACCC)

The ACCC has released its compliance and enforcement priorities for 2024. ACCC Chair, Gina Cass-Gottlieb outlined these regulatory priorities in the annual Committee for Economic Development Australia (CEDA) address. The priorities span across both competition and consumer law and many of the issues identified in the ACCC’s 2022 and 2023 compliance and enforcement priorities remain a focus for 2024 including essential services, the environment and sustainability and the digital economy. New priorities for the ACCC in 2024 include competition and consumer issues in the aviation and supermarket sectors.

A full transcript of Ms Cass-Gottlieb’s speech is available here and a summary of the Compliance and Enforcement Priorities for 2024 is here. The ACCC’s press release is here.

A further Latest Legal Update containing more detailed analysis of the ACCC’s 2024 compliance and enforcement priorities will be published shortly.

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ACCC takes action against Grays for false or misleading representations in car auction listings

Date: 26 February 2024
Source: Australian Competition and Consumer Commission

The Australian Competition and Consumer Commission (ACCC) has initiated legal proceedings in the Federal Court against Australia-wide online auction business Grays eCommerce Group Ltd (Grays) for false or misleading listings about cars involving their features, characteristics, legal title or undisclosed obvious faults.

Grays has admitted to engaging in misleading or deceptive conduct in making false or misleading representations about cars listed for sale between 1 July 2020 and 30 June 2022 contravening ss 18, 29 and 33 of the Australian Consumer Law (ACL). At least 750 consumers purchased vehicles with misleading descriptions. Some then had to convince Grays to provide a remedy and waited months to have an outcome while others paid for vehicle repair themselves or resold their vehicles at a loss.

On 23 February, the ACCC accepted a court-enforceable undertaking from Grays under s 87B of the ACL that will commence once the court’s final orders are made. The undertaking includes:

• jointly seeking declarations, compliance program orders and a pecuniary penalty of $10 million;

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Targeted sanctions imposed on a further 93 persons under Russia and Ukraine listing criteria

Date: 26 February 2024
Source: Federal Register of Legislation

Abstract:

The Minister for Foreign Affairs has made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Russia and Ukraine) Amendment (No. 1) Instrument 2024 (Cth) to designate a further 56 individuals and 37 entities for targeted financial sanctions and travel bans under the Russia and Ukraine listing criteria.

The Instrument lists:

• 55 individuals for targeted financial sanctions and travel bans under the Russia listing criteria, on the grounds that they have been engaging in activities of economic or strategic significance to Russia and/or are current or former senior Russian government officials. These individuals include Russian politicians, heads of regional governments, media and business figures.
• 1 individual for targeted financial sanctions and travel bans under the Ukraine listing criteria, on the grounds that they are responsible for or complicit in the threat to the sovereignty and territorial integrity of Ukraine. The individual is the Chief Executive Officer of an Iranian company producing parts for unmanned aerial vehicles used by the Russian army in Ukraine.

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Sanctions imposed in connection with death of Russian opposition leader Alexei Navalny

Date: 26 February 2024
Source: Federal Register of Legislation

Abstract:

The Minister for Foreign Affairs has made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Thematic Sanctions) Amendment (No. 2) Instrument 2024 (Cth) to list 7 individuals for targeted financial sanctions and travel bans under the thematic human rights criteria in connection with the death of Russian opposition leader Alexei Navalny.

The individuals include the Head and the Deputy Heads of the Russian IK-6 penal colony and the Deputy Director and Lieutenant of the Federal Penitentiary Service of Russia, all of whom were involved in the management or oversight of the IK-6 prison in Russia where Alexei Navalny was imprisoned.

The sanctions were imposed on the basis that these individuals have engaged in, been responsible for, or been complicit in, a serious violation or serious abuse of a person’s right not to be subjected to torture or to cruel, inhuman or degrading treatment or punishment.

Read the full text of the Instrument and the explanatory statement.

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Autonomous Sanctions Amendment Bill 2024 (Cth) introduced into Parliament to validate sanctions for past conduct

Date: 15 February 2024
Source: Parliament of Australia

Abstract:

The Autonomous Sanctions Amendment Bill 2024 (Cth) (Bill) has been introduced into the House of Representatives.

If passed, the Bill would amend the Autonomous Sanctions Act 2011 (Cth) (Act) to expressly confirm:

• that autonomous sanctions can be imposed on persons based on their past conduct or status;
• the validity of existing sanctions imposed based on past conduct or status; and
• that existing sanctions are valid even when it is not explicitly clear that the Minister for Foreign Affairs considered their discretion to sanction the person or to decide what type of sanctions to impose (ie financial sanctions, travel bans, or both).

The amendments would not otherwise change the existing autonomous sanctions framework, but rather aim to ensure the validity of sanctions imposed in response to past situations of international concern.

Details of changes

The Bill would insert a new section 10A into the Act expressly enabling sanctions to be imposed under the Autonomous Sanctions Regulations 2011 (Cth) on the basis of past situations of international concern, past actions committed, or past positions held.

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Legislation to establish ACCC designated complaints framework introduced into Parliament

Date: 15 February 2024
Source: Parliament of Australia

Abstract:

Legislation providing for certain consumer and business advocacy groups to make complaints to the Australian Competition and Consumer Commission (ACCC) has been introduced in the Federal Parliament.

The Competition and Consumer Amendment (Fair Go for Consumers and Small Business) Bill 2024 (Cth) (Bill) provides for groups designated by the Minister to be empowered to make complaints to the ACCC regarding significant or systemic market issue affecting Australian consumers or small business, and which relate to a breach of the Competition and Consumer Act or the Australian Consumer Law. The ACCC would be required to assess and publicly respond to such designated complaints within 90 days, specifying what if any further action it will take.

A designated complaints mechanism, also sometimes referred to as “super complaints”, was an election commitment of the Labor Government and has since been subject to Treasury consultation with industry stakeholders. The framework draws on a similar super complaints function which has operated in the United Kingdom since 2003.

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Final Report into Franchising Code finds it is generally fit for purpose but recommends some regulatory changes

Date: 9 February 2024
Source: Federal Treasury

The Final Report on the review of the Franchising Code of Conduct (Franchising Code) conducted by Dr Mihael Schaper was released on 8 February 2024 with 23 formal recommendations and 34 suggestions for implementation.

The Franchising Code is a mandatory industry code under the Competition and Consumer Act 2010 (Cth), which regulates franchisor-franchisee relationships.

The review spanned from August to December 2023. Input was received in over 40 meetings with industry stakeholders, 95 submissions and a total of 544 survey responses.

The Report concludes that the Franchising Code is generally fit for purpose, however recommended some changes to existing provisions to ensure wider coverage across franchisees and promote best practice across the sector’s operations.

Key findings and recommendations of the Report include:

• Franchising sector: the need for better statistical metrics to measure demographics and success of franchise sector;
• Scope and structure of the Code: a lack of understanding about the Franchising Code’s purpose and scope, especially amongst franchisees;
• Entering into a franchise agreement: detailed disclosure requirements are burdensome for franchisors to comply with and franchisees to understand;

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Department of Finance invites industry consultation in relation to the draft Commonwealth Supplier Code of Conduct

Date:  1 February 2024
Source: Department of Finance

The Department of Finance has developed a draft Commonwealth Supplier Code of Conduct (Code) setting out minimum expectations for suppliers who deliver goods and services while under contract with the Commonwealth.

The draft Code includes expectations of:

• ethical behaviour, including to manage conflicts of interest and duty against Commonwealth contracts, uphold business integrity, protect sensitive, privileged and confidential information and to emulate Australian Public Service Values;
• corporate governance and business practices, including to manage risk, maintain appropriate records, meet tax obligations, make prompt payments and maintain sustainable business practices and minimise environmental impacts; and
• health, safety and employee welfare, including to act to prevent involuntary labour and human rights abuse, act to prevent discrimination and harassment and to respect employee rights.

Breaches of the Code could result in termination of or remedial action under existing supplier contracts.

It is not intended that the draft Code will act to supersede or alter a supplier’s legislative, regulatory, policy or other contractual obligations.

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Sanctions update – Australia imposes first sanctions in response to Medibank cyber incident

Date:  24 January 2024
Source: Federal Register of Legislation

Abstract:

The Minister for Foreign Affairs has made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Thematic Sanctions) Amendment (No. 1) Instrument 2024 (Cth) to impose sanctions on an individual for the first time under the “significant cyber incident” thematic sanctions criteria in the Autonomous Sanctions Regulations 2011 (Cth) (Regulations).

The sanctions have been imposed on Russian citizen Aleksandr Ermakov (also known as Alexander Ermakov, GustaveDore, aiiis_ermak, blade_runner and JimJones) for his alleged involvement in the Medibank significant cyber incident in 2022.

The Regulations allow the Minister to impose targeted financial sanctions and travel bans on a person if the Minister is satisfied that the person has caused, assisted or been complicit in a significant cyber incident. In determining whether a cyber incident is “significant”, the Minister may have regard to (among other things):

• the maliciousness of the conduct;
• the impacts on essential services and critical infrastructure;
• whether the conduct involved loss of or risk to life;

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Climate-related financial disclosure - Exposure draft legislation

Date:  22 January 2024
Source: Treasury

Summary originally published by Capital Monitor.

This consultation follows the government's announcement of the final policy design for corporate climate-related financial disclosure requirements, as outlined in the Policy Statement. The Exposure Draft legislation seeks to amend parts of the Australian Securities and Investment Commission Act 2001 and the Corporations Act 2001 (Cth) to introduce mandatory requirements for large businesses and financial institutions to disclose their climate-related risks and opportunities. Treasury is seeking views on the Exposure Draft legislation and accompanying explanatory materials by 9 February 2024. Late submissions cannot be considered.

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ALRC recommends confronting complexity in corporations and financial services legislation

Date:  19 January 2024
Source: Australian Law Reform Commission

Summary originally published by Capital Monitor.

The Australian Law Reform Commission (ALRC) Final Report, Confronting Complexity: Reforming Corporations and Financial Services Legislation (Report 141, 2023), was tabled in Parliament by the Attorney-General, the Hon Mark Dreyfus KC MP. The report found that the legislation governing Australia's financial services industry is a tangled mess - difficult to navigate, costly to comply with, and unnecessarily difficult to enforce. Judges have described the current laws as being like 'porridge', 'tortuous', 'treacherous', and 'labyrinthine'.

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Statutory Declarations Regulations 2023 (Cth) give effect to new Commonwealth statutory declaration regime from 1 January 2024

Date:  4 January 2024
Source: Federal Register of Legislation

Abstract:

Following the passing of the Statutory Declarations Amendment Act 2023 (Cth) (Amendment Act) allowing Commonwealth statutory declarations to be made and witnessed electronically from 1 January 2024 (including through certain online digital verification platforms), the Governor-General has made the Statutory Declarations Regulations 2023 (Cth) (Regulations).

The Regulations repeal and replace the Statutory Declarations Regulations 2018 (Cth) from 1 January 2024 and give effect to the amendments made to the Commonwealth statutory declaration regime by the Amendment Act, including by prescribing:

• *who can witness Commonwealth statutory declarations; and
• *the technical requirements for making Commonwealth statutory declarations under the new digital statutory declaration provisions.

Prescribed witnesses

The Regulations do not change who can witness a Commonwealth statutory declaration.

As with the previous regulations, the Regulations provide that a Commonwealth statutory declaration can be witnessed by any of the following “prescribed persons” in person or by video link:

• a person enrolled as a legal practitioner on the roll of a state or territory Supreme Court or the High Court of Australia;

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ACCC provides guidance on unfair contract terms in franchise agreements

Date: 18 December 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

The ACCC has released a report detailing key findings of recent targeted compliance checks on franchisors under the Australian Consumer Law’s unfair contract terms (UCT) regime. The report also sets out the ACCC’s recommendations for reducing UCT risk in franchise agreements.

Background

The ACCC’s compliance checks involved reviewing the franchise agreements of 10 newly established and small franchise systems (2 to 32 franchisees) in a variety of industries.

In its report, the ACCC indicates that many franchise agreements are likely to be standard form small business contracts that are subject to the UCT regime, given that prospective franchisees “generally have limited or no opportunity to meaningfully negotiate the terms within a franchise agreement”.

The ACCC found that all 10 franchise agreements contained potentially unfair terms. The key terms of concern were:

• unilateral variation clauses;
• withholding or set-off clauses;
• audit power clauses;
• restraint of trade clauses; and
• termination clauses.

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Franchisor of “Delicia” health food stores gives ACCC undertaking and pays infringement notice for Franchising Code breaches

Date: 13 December 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

Delicia Franchising Pty Ltd (Delicia), the franchisor of approximately 10 “Delicia Acai & Protein Bar” stores predominantly based in South Australia, has given an enforceable undertaking to the ACCC for admitted breaches of its marketing fund obligations under the Franchising Code of Conduct (Franchising Code). Delicia also paid an infringement notice for its most recent contravention.

Franchisors’ marketing fund obligations

Under the Franchising Code, a franchisor with a marketing fund must:

• prepare an annual marketing fund statement within 4 months after the end of each financial year that includes sufficient detail to give meaningful information about income sources and expenditure items (cl 15(2)); and
• give franchisees a copy of that statement within 30 days after preparing it: cl 15(4).

Delicia’s breaches

The ACCC alleged, and Delicia admitted, that although Delicia prepared an annual statement for each of the 2020-2022 financial years, Delicia breached the Franchising Code by:

• failing to give franchisees copies of those statements within 30 days; and
• failing to include sufficient detail in those statements (the statements only described significant expenditures at a high level without providing further explanatory information).

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Higher fees for foreign investment in housing

Date: 11 December 2023
Source: Treasury

The Treasurer has announced the following proposed changes to the fees payable on foreign investment applications and actions involving land and land entities:

• *tripling the fees payable when a foreign person purchases an established residential dwelling;
• *doubling vacancy fees for all foreign-owned dwellings purchased since 9 May 2017;
• *strengthening the enforcement regime administered by the Australian Taxation Office;
• *applying the commercial foreign investment fees for investment applications and actions for Build to Rent projects from 14 December 2023 onwards.

Legislation will be required to implement the changes and is expected early in 2024.

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Sanctions update — Australia imposes targeted sanctions in response to North Korea satellite launch

Date: 7 December 2023
Source: Federal Register of Legislation

Abstract:

The Minister for Foreign Affairs has made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Democratic People’s Republic of Korea) Amendment (No. 2) Instrument 2023 (Cth) and the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Democratic People’s Republic of Korea) Amendment (No. 3) Instrument 2023 (Cth) to impose financial sanctions and travel bans on seven individuals and one entity in response to a satellite launch by North Korea on 21 November.

In the Minister’s media release, the Minister condemned the launch as involving the use of ballistic missile technology in violation of United Nations Security Council (UNSC) resolutions and flagged that the sanctions were being issued in coordination with similar sanctions imposed by the United States, Japan and the Republic of Korea.

The two instruments amend the Autonomous Sanctions (Designated Persons and Entities and Declared Persons – Democratic People’s Republic of Korea) List 2012 (Cth) to:

• impose sanctions on a further seven individuals (six North Korean nationals and one Russian national) and on Parsek LLC, a Russian entity; and
• renew sanctions listings for ten individuals and ten entities,

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Sanctions update — Australia imposes further sanctions on Russians involved in human rights violations

Date: 7 December 2023
Source: Federal Register of Legislation

The Minister for Foreign Affairs has made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Thematic Sanctions) Amendment (No. 3) Instrument 2023 (Cth) to impose “Magnitsky-style” thematic sanctions on three Russian Federal Security Service officers based on their involvement in serious violations or abuses of human rights. The Minister’s media release explains that the sanctions relate to the officers’ involvement in poisoning Vladimir Kara-Murza, a Russian opposition figure and pro-democracy activist who was poisoned twice and subsequently sentenced to 25 years’ imprisonment for criticising the Russian Armed Forces.

The Minister has also made the Autonomous Sanctions (Designated Persons and Entities and Declared Persons—Russia and Ukraine) Amendment (No. 11) Instrument 2023 (Cth) to impose sanctions on a further ten individuals under the Russia listing criteria. The individuals were involved in the politically motivated arrest, trial and sentencing of Mr Kara-Murza and include a Russian Deputy Minister, senior Russian officials, a Russian prosecutor and members of the Russian judiciary.

Read the explanatory statements for the instruments here and here.

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High Court finds class action waiver clause unfair, allows Ruby Princess appeal

Date: 6 December 2023
Court: High Court
Judge(s): Gageler CJ, Gordon, Edelman, Gleeson, Jagot JJ
Judgment date: 6 December 2023

Catchwords: CONSUMER PROTECTION - Extraterritorial application of s 23 of Australian Consumer Law - Whether s 5(1)(g) of Competition and Consumer Act 2010 (Cth) extended application of s 23 of ACL to contract- Whether class action waiver clause constituted unfair term under s 23 of ACL and void.

REPRESENTATIVE PROCEEDINGS - Whether class action waiver clause unenforceable as contrary to Pt IVA of Federal Court of Australia Act 1976 (Cth)

PRIVATE INTERNATIONAL LAW – Forum – Exclusive jurisdiction clause – Whether strong reasons not to grant stay of proceedings.

Abstract:

In Karpik v Carnival plc [2023] HCA 39 the High Court determined an interlocutory application arising out of representative proceedings brought on behalf of passengers of the Ruby Princess cruise ship against Carnival plc and Princess Cruise Lines Ltd (Princess) claiming losses caused by illness and deaths caused by the COVID-19 outbreak. The main proceedings were recently determined by the Federal Court in In Karpik v Carnival plc (The Ruby Princess) (Initial Trial) [2023] FCA 1280.

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Digital ID Bill 2023 (Cth)

Date: 6 December 2023
Jurisdiction: Commonwealth

Abstract:

On 30 November, the Digital ID Bill 2023 (Cth) (the Bill) was introduced in the Senate. The aim of the Bill is to strengthen existing Digital ID schemes by increasing governance, privacy, and consumer protections as well as to provide legislative backing to the expansion of the schemes.

The Bill strengthens privacy requirements for accredited providers under the Trusted Digital Identity Framework (the government’s existing voluntary digital ID accreditation scheme). These include prohibitions on the use of single identifiers, the disclosure of information for marketing, and restrictions on the collection, use and disclosure of biometrics and other personal information. Penalties for non-compliance are included in the Bill. This aims to ensure individuals using digital ID services from accredited providers can be sure their information and privacy is protected.

The Bill also provides for expansion of the Australian Government Digital ID System (AGDIS). Phases 1 and 2 of the expansion will see the reciprocal use of digital IDs and attribute providers in Commonwealth and state and territory services. Eventually the government’s digital ID services and attribute providers will expand to the private sector under Phase 3.

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Privacy and Personal Information Protection Act 1998 (NSW) amendments come into effect

Date: 29 November 2023
Source: Privacy and Personal Information Protection Act 1998 (NSW)

Amendments to the Privacy and Personal Information Protection Act 1998 (NSW) (PPIP Act) have now come into effect as of 28 November 2023.

Passed by the NSW Parliament in November 2022, the amendments impact the responsibilities of agencies under the PPIP Act. Under the new Mandatory Notification of Data Breach Scheme, agencies must now provide notifications to the Privacy Commissioner and affected individuals in the event of an eligible data breach involving personal or health information.

Read the full Privacy and Personal Information Protection Amendment Bill 2022 here.

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ASX announces product based solution for CHESS replacement – industry consultation on next phase to commence in 2024

Date: 24 November 2023
Source: Australian Securities Exchange

Summary originally published by Capital Monitor.

ASX has entered into an agreement with TCS for the delivery of its TCS BaNCS for Market Infrastructure product, which offers a modular technology platform for clearing and settlement services. ASX considers that the chosen product will allow it to provide a reliable, supportable and scalable platform that meets the needs of the Australian market now and into the future. It can satisfy the licence obligations of ASX Clear and ASX Settlement, and is capable of supporting potential new services and innovation from ASX or other providers.

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ASIC announces 2024 enforcement priorities

Date: 24 November 2023
Source: Australian Securities and Investments Commission

Summary originally published by Capital Monitor.

ASIC announced its enforcement priorities for 2024, indicating its enforcement focus for the coming year and communicating its intent to industry and stakeholders. In 2024, two new priorities have been added in relation to the superannuation industry, including a focus on member services failures and misconduct relating to the erosion of superannuation balances. New priorities relating to insurance claims handling, compliance with financial hardship obligations and the reportable situation regime have also been added. In addition, ASIC will be taking action against misconduct relating to used car financing to vulnerable consumers and gatekeepers such as auditors, registered liquidators and financial services and credit licensees who do not comply with their legal obligations.

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ASIC and RBA acknowledge ASX's CHESS solution design announcement

Date: 24 November 2023
Source: Australian Securities and Investments Commission

Summary originally published by Capital Monitor.

The product-based solution and vendor announced by ASX is a foundational step in getting the CHESS replacement program back on track. This follows advice provided by the ASX Cash Equities Clearing and Settlement Advisory Group (Advisory Group), a small group of recognised industry leaders established to advise ASX Clear and ASX Settlement on strategic clearing and settlement issues led by independent chair Alan Cameron AO. ASIC Chair Joe Longo said, `It will be critical for ASX to now focus on engaging with the market on the detailed design of the CHESS Replacement program with a realistic and achievable timeline for implementation.'

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Hungry Jack’s trade mark not deceptively similar to McDonald’s mark, found to breach ACL (McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412)

Date: 20 November 2023
Court: Federal Court of Australia
Judge(s): Burley J
Judgment date: 16 November 2023 
Catchwords: Trade marks – Application for cancellation – Infringement – Deceptive similarity

Abstract:

Mcd Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412 involved a trade mark dispute where the Applicants (collectively referred to as McDonald’s) alleged that the Respondent (Hungry Jack’s) infringed upon two registered trade marks through the usage of two deceptively similar marks. Burley J found that the infringement case failed, as BIG JACK and BIG MAC are not deceptively similar; nor were MEGA JACK and MEGA MAC. However, Hungry Jacks was found to have engaged in misleading and deceptive conduct in breach of s 18 of the Australian Consumer Law when it represented its burger contained 25% more Australian Beef.

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Sanctions update – Australia imposes counter-terrorism sanctions in response to Hamas attacks

Date: 20 November 2023
Source: Federal Register of Legislation

Abstract:

The Minister for Foreign Affairs has made the Charter of the United Nations (Listed Persons and Entities) Amendment (No. 3) Instrument 2023 (Cth) to impose targeted financial sanctions under the Charter of the United Nations Act 1945 (Cth) on one entity and 8 individuals associated with Hamas.

The sanctioned entity is located in Gaza, is owned by a sanctioned individual, and operates a currency exchange linked to Hamas.

The sanctioned individuals include Hamas members, operatives and financial facilitators, including individuals located in Algeria, Gaza, Qatar, Sudan and Türkiye.

Read the full text of the instrument and explanatory statement.

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Sanctions update – Australia imposes counter-terrorism sanctions in response to Hamas attacks

Date: 20 November 2023
Source: Federal Register of Legislation

The Minister for Foreign Affairs has made the Charter of the United Nations (Listed Persons and Entities) Amendment (No. 3) Instrument 2023 (Cth) to impose targeted financial sanctions under the Charter of the United Nations Act 1945 (Cth) on one entity and 8 individuals associated with Hamas.

The sanctioned entity is located in Gaza, is owned by a sanctioned individual, and operates a currency exchange linked to Hamas.

The sanctioned individuals include Hamas members, operatives and financial facilitators, including individuals located in Algeria, Gaza, Qatar, Sudan and Türkiye.

Read the full text of the instrument and explanatory statement.

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Electronic signing, remote witnessing and digital verification of Commonwealth statutory declarations from 1 January 2024

Date: 17 November 2023
Source: Parliament of Australia

The Statutory Declarations Amendment Act 2023 (Cth), allowing Commonwealth statutory declarations to be made and witnessed electronically, has received Royal Assent. The amendments will commence on 1 January 2024.

In addition to allowing for electronic signing and remote witnessing, the amendments introduce a new way of executing Commonwealth statutory declarations through a digital verification process conducted on a prescribed online platform.

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Electronic signing, remote witnessing and digital verification of Commonwealth statutory declarations from 1 January 2024

Date: 17 November 2023
Source: Parliament of Australia

The Statutory Declarations Amendment Act 2023 (Cth), allowing Commonwealth statutory declarations to be made and witnessed electronically, has received Royal Assent. The amendments will commence on 1 January 2024.

In addition to allowing for electronic signing and remote witnessing, the amendments introduce a new way of executing Commonwealth statutory declarations through a digital verification process conducted on a prescribed online platform.

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Nature-related risks pose a risk for directors

Date: 16 November 2023
Source: Commonwealth Climate and Law Initiative

Abstract:

The question as to whether directors’ existing duty under section 180 of the Corporations Act 2001 (Cth) (Corporations Act) permits or requires directors to consider nature-related risks has been recently considered in a legal opinion: “Nature-related risks and directors’ risks” authored by Sebastian Hartford-Davis and Zoe Bush (Opinion). The Opinion was commissioned by the global climate and nature investment and advisory law firm Pollination in collaboration with the Commonwealth Climate and Law Initiative.

The Opinion follows on from previous landmark opinions by Noel Hutley and Sebastian Hartford-Davis in 2016 and 2019 and a supplementary opinion in 2021 which concluded that directors’ had a duty under the Corporations Act to address climate-related risks or face legal consequences. These opinions are considered to have influenced the prioritisation of climate risk issues by directors and it is expected that the Opinion will have a similar impact on the prioritisation of nature-related risks across board rooms in Australia.

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Statutory Declarations Amendment Bill passes both houses of Parliament

Date: 10 November 2023
Source: Parliament of Australia

The Statutory Declarations Amendment Bill 2023 (Cth), allowing Commonwealth statutory declarations to be made and witnessed electronically, has passed both houses of Parliament. The amendments will commence on the later of 1 January 2024 and the day after Royal Assent.

In addition to allowing for electronic signing and remote witnessing, the amendments introduce a new way of executing Commonwealth statutory declarations through a digital verification process conducted on a prescribed online platform.

Read the full text of the Bill and the explanatory memorandum on the Parliament of Australia website.

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Treasury releases Australia’s Sustainable Finance Strategy for consultation

Date: 5 November 2023
Source: The Treasury

Abstract:

On 2 November 2023 the Federal Treasury released Australia’s Sustainable Finance Strategy for consultation. The Sustainable Finance Strategy supports Australia’s transition to net zero and affirms the Government’s commitment to driving sustainable finance and investment in Australia. The Sustainable Finance Strategy includes 12 policy priorities across three key pillars.

Pillar 1: improving transparency on climate and sustainability:

1. Establishing a framework for sustainability-related financial disclosures.
2. Developing a sustainable finance taxonomy, providing a common language and classification system for identifying and reporting on sustainable economic activities and investments.
3. Supporting credible net zero transition planning.
4. Developing a labelling system for investment products marketed as sustainable.

Pillar 2: Enhancing financial system capabilities:

5. Enhancing market supervision and enforcement.
6. Identifying and responding to potential systemic financial risks, by strengthening the financial system’s resilience to climate change and other sustainability shocks and stressors.
7. Addressing data and analytical challenges.
8. Ensuring fit for purpose regulatory frameworks.

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Treasury consults on two-year review of continuous disclosure reforms

Date: 2 November 2023
Source: Treasury

Abstract:

Treasury is seeking views from interested parties as part of its review of the continuous disclosure amendments made under the Treasury Laws Amendment (2021 Measures No.1) Act 2021.

The amendments introduced a permanent fault element for civil penalty proceedings brought under the continuous disclosure regime. As a result, for:

• ASIC to succeed in a civil penalty proceeding against; or
• A plaintiff to succeed in a proceeding for damages from,

a company or its officers for alleged breaches of continuous disclosure laws, they must show that the entity or its officers acted with “knowledge, recklessness or negligence”: s 674A, Corporations Act 2001 (Cth) and s 12DA, Australian Securities and Investments Commission Act 2001 (Cth).

As set out in the consultation paper, the review will consider, among other things, whether the amendments are working in support of an efficient, effective and well-informed market.

Consultation is open until Friday 1 December 2023. Submissions may be emailed to continuousdisclosurereview@treasury.gov.au.

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Further modernising business communications measures for corporations, competition, consumer, superannuation and insurance sectors

Date: 30 October 2023
Source: Federal Register of Legislation

Abstract:

The Governor-General has issued the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Commencement Proclamation 2023 (Cth) (Proclamation) to prescribe 1 January 2024 as the start date for the modernised publication measures under the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023 (Cth) (Modernising Business Communications Act).

The Governor-General has also made the Treasury Laws Amendment (Modernising Business Communications) Regulations 2023 (Cth) (Amendment Regulations) to modify corporations, consumer credit, insurance and superannuation regulations in line with the Modernising Business Communications Act.

Proclamation

The Proclamation fixes 1 January 2024 as the start date for the modernisation of certain publication requirements in the Corporations Act 2001 (Cth) (Corporations Act), the Competition and Consumer Act 2010 (Cth) (CCA) and other legislation, as set out in Pt 4, Sch 1 of the Modernising Business Communications Act.

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Sanctions update — Further goods designated as export sanctioned goods under Russia/Ukraine autonomous sanctions regimes

Date: 27 October 2023
Source: Federal Register of Legislation

Abstract:

The Minister for Foreign Affairs has made the following designations under Australia’s autonomous sanctions regime to expand the categories of goods that are prohibited from being exported to Russia and to specified areas of Russian-controlled Ukraine:

• the Autonomous Sanctions (Export Sanctioned Goods—Russia) Amendment (No. 1) Designation 2023 (Cth) (Russian Amendment Designation); and
• the Autonomous Sanctions (Export Sanctioned Goods—Specified Ukraine Regions) Designation 2023 (Cth) (Ukraine Designation).

Both designations designate certain machinery and related parts as “export sanctioned goods” for the purposes of the regime.

This includes goods classified under Australian Harmonized Export Commodity Classification (AHECC) codes relating to:

• interchangeable tools for hand tools or machine tools (AHECC code 8207);
• nuclear reactors, boilers, machinery and mechanical appliances (AHECC code 84); and
• electrical machinery and equipment, sound recorders and reproducers, and television image recorders and reproducers (AHECC code 85).

The effect of the designations is that persons are now prohibited from supplying, selling or transferring the designated goods to Russia or to specific regions of Ukraine controlled by Russia and from providing services related to those supplies.

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Exposure Draft for Australian Sustainability Reporting Standards: disclosure of climate-related financial information

Date: 26 October 2023
Source: Australian Accounting Standards Board (ASSB)

Abstract:

The AASB has released an Exposure Draft for Australian Sustainability Reporting Standards: Disclosure of Climate-related Financial Information (ED SR1) which outlines the proposed climate-related financial disclosure requirements for Australian companies.

The ED SRI Sustainability Reporting Standards are based on the Global Sustainability Standards: IFRS1 (sustainability-related financial information) and IFRS2 (climate-related disclosures) released by the ISSB on 26th June 2023.

The AASB is inviting stakeholders to provide feedback on the sustainability standards proposed by ED SR1 by submitting a comment letter on the AASB website or completing an online survey. An invitation to a roundtable discussion will also be offered. Submissions from stakeholders will be accepted until 1st March 2024.

See the full release by the AASB here.

Please see our previous LLU on the Global Sustainability Standards released by the ISSB here.

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ASIC revises licensee obligations under the reportable situations regime

Date: 24 October 2023
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

The Australian Securities & Investments Commission (ASIC) has made the ASIC Corporations and Credit (Amendment) Instrument 2023/589 (Instrument), which enacts key alterations to the reportable situations regime. Under the prior regime, Australian financial services (AFS) licensees and Australian credit licensees were mandated to notify ASIC regarding certain reportable situations, particularly ‘significant’ infringements of ‘core obligations’ under s 912D of the Corporations Act 2001 (Cth) (Corporations Act) and s 50A of the National Consumer Credit Protection Act 2009 (Cth).

Under the Instrument , certain breaches relating to misleading or deceptive conduct under subsection 1041H(1) of the Corporations Act and subsection 12DA(1) of the Australian Securities and Investments Commission Act 2001, and false or misleading misrepresentations under s12DB(1) of the ASIC Act, are no longer considered significant breaches of core obligations requiring reporting. For a breach to be eligible for these exemptions, it should:

• Affect only a single individual or those jointly involved in financial or credit-related products;
• Not cause, nor be likely cause, financial harm to anyone, irrespective of potential remediation ; and
• Not lead to or likely lead to another reportable scenario.

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ACCC/AER annual report summarises annual enforcement outcomes

Date: 24 October 2023
Source: Australian Competition and Consumer Commission

Summary originally published by Capital Monitor.

The Australian Competition and Consumer Commission (ACCC) and Australian Energy Regulator have released their annual report for 2022–2023 which highlights the performance of both regulators in their enforcement of Australia’s competition, consumer and electricity and gas laws. The information contained in the report demonstrates the ACCC’s continued commitment to its compliance and enforcement priorities.

Competition law enforcement

In 2022–2023, the ACCC:

• assessed 305 mergers and 23 non-merger authorisation applications;
• commenced 11 court cases with 14 court cases continuing;
• completed 19 in-depth competition investigations;
• increased activity for Consumer Data Right, accrediting 40 data recipients; and
• continued focus on cartel conduct, including litigation involving Alkaloids of Australia, BlueScope Steel and Bingo Industries.

Consumer law enforcement

The ACCC also continued rigorous enforcement of consumer laws, including:

• product safety monitoring with 2,586 mandatory injury reports assessed;
• achieving 6.95 million ScamWatch website views; and
• completing 48 in-depth Australian Consumer Law and industry code investigations.

View the ACCC annual report 2022–23 here.

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ASIC Annual Report 2022-23

Date: 20 October 2023
Source: Australian Securities and Investments Commission

Summary originally published by Capital Monitor.

ASIC continued its strong focus on enforcement action in the last financial year, driving positive outcomes for consumers and small businesses, and maintaining trust and integrity in Australia's financial system. Releasing ASIC's 2022-23 Annual Report, Chair Joe Longo said ASIC actively litigated and sought significant penalties to address misconduct. 'Our enforcement action resulted in 35 criminal convictions and almost $190 million in civil penalties and fines imposed by the courts. In addition, we commenced more than 130 new investigations in 2022-23.'

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ASIC's Impact in 2022–23

Date: 16 October 2023
Source: Australian Securities & Investments Commission (‘ASIC’)

Abstract:

The Australian Securities & Investments Commission (ASIC) has released its 2022–23 Annual Report, which has reinforced its commitment to robust enforcement actions to benefit consumers and small businesses while upholding trust in the financial system.

ASIC's efforts in the period resulted in 35 criminal convictions, nearly $190 million in civil penalties and fines imposed by the courts and the initiation of over 130 new investigations. ASIC noted that its’ priorities aligned with emerging trends and challenges in the regulatory landscape, including sustainable finance, the aging population, digital technology risks, and product design and distribution obligations.

ASIC also referenced a number of important outcomes including its first enforcement action against alleged greenwashing, preventing predatory behaviour targeting vulnerable consumers, halting the distribution of poorly designed financial products, prosecuting breaches of directors' duties, and enhancing cyber resilience practices among Australian businesses and overseeing consumer remediation programs. Finally, the agency reinforced that it will continue to focus on partnerships with stakeholders to enhance industry conduct and trust while rigorously enforcing the law.

See the media release here and 2022-23 Annual Report here.

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New Federal Court and NSW Supreme Court practice notes on schemes of arrangement

Date: 16 October 2023
Source: Federal Court of Australia

Abstract:

The Federal Court and Supreme Court of NSW have released new guidance on members’ schemes of arrangement, following the significant streamlining changes put forward by Jackman J in Re Vita Group [2023] FCA 400.

The new Federal Court Schemes of Arrangement Practice Note (GPN-SOA) and the Supreme Court’s Reissued Practice Note SC EQ 04 - Corporations List are available on each Court’s website.

More to come.

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Court rules in favour of ASIC in major ANZ continuous disclosure case

Date: 16 October 2023
Source: Australian Securities & Investments Commission (ASIC)

Abstract:

The Federal Court has issued a ruling against the Australia and New Zealand Banking Group Limited (ANZ), asserting that the bank had violated continuous disclosure laws (under s 674(2) of the Corporations Act) during a $2.5 billion institutional share placement in 2015. The breach resulted from ANZ's failure to disclose crucial information concerning the allocation of shares to underwriters. ASIC Deputy Chair Karen Chester highlighted that ANZ had neglected to inform the market that underwriters for the share placement had purchased nearly a third of the shares, amounting to approximately $790 million.

Ms Chester added that proper disclosure is fundamental to ensuring fair and efficient markets and investors must be fully apprised of information likely to significantly impact the price or value of a security. This significant decision reinforces the essential role of continuous disclosure rules in upholding market integrity. It also underscores that a substantial acquisition of shares by underwriters during capital raising can constitute price-sensitive information necessitating public disclosure. ASIC will proceed to submit its recommendations regarding suitable penalties, with the final judgment on…

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ACCC warns caravan industry against misleading price and caravan weight claims

Date: 12 October 2023
Source: Australian Competition and Consumer Commission (ACCC)

Abstract:

The Australian Competition and Consumer Commission (ACCC) has put the caravan industry on notice that misleading representations are in contravention of the Australian Consumer Law (ACL) and may result in strong enforcement action.

In July 2022, the ACCC published the New caravan retailing: Ensuring industry compliance with the Australian Consumer Law report, which identified issues relating to the treatment of consumers and compliance with consumer law in the market for new caravans. The ACCC has continued to receive and investigate consumer complaints about caravans.

Some recent examples of misrepresentation include:

• statements about ‘price certainty’ in which the retailer told customers that the price of the caravan they ordered was fixed, but subsequently sought to increase the price while also giving the customer an option to cancel the contract; and
• inaccurate statements about the important features of the caravan, including weight and tonnage.

These caravan retailers have removed the false and misleading representations from their marketing materials and have committed to training their staff to improve compliance with the ACL.

See the ACCC’s media release here.

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Sanctions update – Australia lists additional persons for terrorism-related

Date: 11 October 2023
Source: Federal Register of Legislation

Abstract:

The Australian government has made the Charter of the United Nations (Listed Persons and Entities) Amendment (No. 2) Instrument 2023 (Cth) to list an additional 8 persons for targeted financial sanctions under the terrorism-related criteria in Pt 4 of the Charter of the United Nations Act 1945 (Cth) (COTUNA).

Basis for listing

Under reg 20(1) of the Charter of the United Nations (Dealing with Assets) Regulations 2008 (Cth), the Minister for Foreign Affairs must list a person for COTUNA sanctions if satisfied that they are a person mentioned in para 1(c) of Resolution 1373 (2001) of the Security Council of the United Nations, including:

• a person who commits, attempts to commit, or participates in or facilitates the commission of, terrorist acts;
• an entity owned or controlled by such persons; or
• a person or entity acting on behalf of, or at the direction of, such persons and entities.

Listed persons

The instrument lists 7 individuals and one entity on the above grounds, so that persons are prohibited from using or dealing with assets owned by the listed persons, or from making assets available…

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Australian Institute of Company Directors releases Mandatory Climate Reporting

Date: 11 October 2023
Source: Australian Institute of Company Directors

The Australian Institute of Company Directors (AICD) has launched a Mandatory Climate Reporting Guide in partnership with Deloitte and MinterEllison to help organisations prepare for the introduction of mandatory climate reporting obligations. Developed after consultation with government, industry experts and directors, the guide provides recommendations and practical steps to prepare for climate reporting, recognising the need for organisations to carefully manage and integrate climate disclosures and climate-related considerations across their businesses as a whole.

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ASIC appeals Federal Court findings in case against ACBF Funeral Plans

Date: 4 October 2023
Source: Australian Securities & Investments Commission (ASIC)

In September 2023, the Federal Court of Australia ordered ACBF Funeral Plans Pty Ltd (ACBF) to pay a $1.2 million penalty for misrepresenting the sale and promotion of a funeral expense insurance policy (ACF Plan) to consumers, primarily Indigenous people, in contravention of ss 12DA(1), 12DB(1)(a) and 12DB(1)(e) of the Australian Securities and Investments Commission Act 2001 (Cth) (ASIC Act) (ACBF Funeral Plans Pty Ltd [2023] FCA 1041; BC202312500). See our previous Latest Legal Update here.

The court accepted the Australian Securities & Investments Commission’s (ASIC) claim that ACBF, by offering, promoting and selling the ACF Plan and representing that the ACF Plan provided a lump sum payout, had engaged in conduct that was misleading or deceptive and had made false or misleading representations. ASIC also alleged that ACBF falsely represented that it was owned or managed by Indigenous persons. Dismissing this claim, the court found that ACBF did make such representations, but that the representations were not false. ASIC is appealing this part of the decision.

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Australian government extends additional customs duty on Russian and Belarusian goods to October 2025

Date: 3 October 2023
Source: Federal Register of Legislation

Abstract:

The Minister for Home Affairs has extended the temporary additional customs duty on Russian and Belarusian goods for a further 24 months, from 24 October 2023 until 24 October 2025, under the Notice of Intention to Propose Customs Tariff Alterations (No. 4) 2023 (Cth).

The Notice extends the period prescribed by s 18A of the Customs Tariff Act 1995 (Cth), which imposes an additional 35% customs duty on unmanufactured raw products of Russia or Belarus, or goods manufactured in Russia or Belarus, imported into Australia between 25 April 2022 and 24 October 2023.

According to the Explanatory Statement, the measure underlines Australia’s continuing commitment to imposing costs on Russia for its unilateral, illegal and immoral aggression against the people of Ukraine and aims to provide certainty to the Australian trading community by giving Australian businesses a longer planning horizon to adjust their supply chains.

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Government seeks independent review of Continuous disclosure regime reforms

Date: 26 September 2023
Source: The Treasury

Abstract:

On 19 September 2023 the Federal Government announced the appointment of Kevin Lewis as an independent reviewer to evaluate recent changes to Australia's continuous disclosure regime under the Corporations Act 2001 (Cth) (Corporations Act). The review will examine the operation of the changes to the regime enacted by the Treasury Laws Amendment (2021 Measures No 1) Act 2021 (Cth) which had the effect of limiting civil liability for continuous disclosure breaches to conduct which meets a subjective fault element of knowledge, negligence or recklessness.

The Amending Act introduced a sunset provision for the reforms (sections 1683B and 1683C) which required the Minister to seek an independent review of the new provisions within 6 months of their two-year anniversary.

Mr Lewis previously served as the Chief Compliance Officer at the ASX and practiced in financial services and corporate law.

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TNFD releases final recommendations for nature-related disclosures

Date: 25 September 2023
Source: The Taskforce on Nature-related Financial Disclosures(TNFD)

On 18 September 2023 at Climate Week NYC, the TNFD released its final recommendations for nature-related risk management and disclosure (TNFD recommendations). The TNFD recommendations provide a framework for reporting and assessing nature-related risks and opportunities to assist companies and financial institutions to better understand, report and act on their dependencies and impacts on nature, and to align their activities with global goals for biodiversity and climate.

The final recommendations build on the previous draft framework that was published in July 2023, and incorporate feedback received during an extensive market consultation and testing process. Consistent with the approach of the Task Force on Climate-related Financial Disclosures, the TNFD recommendations cover four pillars: governance, strategy, risk & impact management, and metrics & targets, and are designed to enable integrated nature-related and climate-related disclosures. The TNFD also provides additional guidance for financial institutions and specific biomes.

To assist companies and financial institutions in (voluntarily) adopting its recommendations, the TNFD has also published implementation guidance and other supporting materials including guidance on the identification and assessment of nature-related issues, found here.

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Illegal phoenixing activity prompts ASIC to disqualify shadow director, Mr Philip Whiteman, from managing companies for five years

Date: 25 September 2023
Source: ASIC disqualifies Philip Whiteman from managing corporations for maximum five years after engaging in illegal phoenix activity

Investigations by the Australian Securities & Investments Commission (ASIC) into the role of Mr Philip Whiteman in five business advisory companies that entered liquidation over a 4-month period have prompted the regulator to disqualify Mr Whiteman from managing companies five years allowed under s 206F, Corporations Act 2001 (Cth).

ASIC found that Mr Whiteman was a shadow director of A&S Services Australia Pty Ltd (ACN 165 857 321), Bolton & Swan Pty Ltd (ACN 153 647 360), ACN 147 341 991 Pty Ltd (ACN 147 341 991), Armstrong and Shaw Pty Ltd (ACN 148 949 375), and Ainslie Harding & Wood Solicitors Pty Ltd (ACN 607 552 741), and that in that role, he breached various directors’ duties. Those breaches included improper use of his position as a director, failure to act in good faith in the best interests of the companies, failure to exercise care and diligence, and, in respect of certain companies, failure to meet statutory lodgement requirements…