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Arbitration

The Federal Court of Australia has held that parties who agree to arbitration or exclusive jurisdiction clauses are bound by their agreements. Only in exceptional circumstances will the court grant a stay that has the effect of overriding an exclusive jurisdiction agreement.

The federal Parliament has finally passed the Tax Laws Amendment (Long-Term Non-reviewable Contracts) Bill 2005. The bill sets out a new arbitration process to be used in cases where a supplier and a recipient cannot reach agreement on the consideration to account for the imposition of goods and sales tax.

In the absence of any legal precedent, it is unclear how an Australian court faced with an application for security for costs in respect of an international arbitration would respond. However, the courts appear to have the power to order such security notwithstanding the lack of an express legislative foundation.

The Supreme Court of Victoria has overturned a tribunal decision that characterized an expert determination as arbitration. Although the procedures are similar, the distinction can be crucial, particularly in areas such as domestic construction where arbitration is prohibited. The decision illustrates how to ensure that an agreement is characterized as expert determination.

The Supreme Court of Western Australia recently held that under Western Australia's Commercial Arbitration Act, an appeal lies from the refusal of leave to appeal an arbitral award on a question of law. The decision is consistent with the policy of a uniform platform for arbitration in Australia and brings Western Australia into line with other Australian states.

The Victorian Civil and Administrative Tribunal recently held that an expert determination agreement was in reality an agreement to arbitrate. Looking at the substance of the agreement, the tribunal was persuaded by the fact that the agreement required a judicial enquiry, allowed the right to be heard and required a determination of the dispute in accordance with the law.

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Banking

A recent decision by the Supreme Court of Victoria demonstrates how a material adverse change clause can be relied upon to terminate a commercial bill facility pursuant to a non-monetary event of default. If a lender reasonably believes that a material adverse change has occurred, an interlocutory application to restrain a lender from terminating a finance facility is unlikely to succeed.

In May 2005 the Australian Prudential Regulation Authority (APRA) released a draft Prudential Standard on the governance of APRA-regulated institutions. The draft standard sets out the minimum governance requirements that all authorized deposit-taking institutions such as banks, building societies and credit unions must adhere to as part of their overall governance arrangements.

The Ministerial Council on Consumer Affairs has published a discussion paper proposing a uniform national regulatory scheme for finance and mortgage brokers. The scheme would require all brokers to undergo a licensing process involving a 'fit and proper person' test with various solvency and criminal probity checks.

Basel II revises the existing regime by creating a stronger link between risk and capital requirements. The Australian Prudential Regulation Authority has announced that Basel II will, over the next three years, be implemented in Australia and believes that the Australian banking system will be even safer and more efficient under the new regulatory structure.

The government is proposing to reform Australia's anti-money laundering system in accordance with recommendations made by the Financial Action Task Force on money laundering. Although a risk-based partnership approach should allow businesses to tailor policies, stricter reporting and due diligence obligations will be imposed on financial service providers in Australia.

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Capital Markets

Overview
Including: General Framework; Legislative Framework; Institutional Framework; Taxation.

A number of class orders have been announced which relieve certain wholesale foreign financial services providers from the requirement to hold an Australian financial services licence. As a result, certain providers in the United Kingdom, the United States, Hong Kong and Singapore will be able to provide limited financial services with respect to specific financial products.

The Australian Stock Exchange has proposed changing its Listing Rules to broaden the spectrum of capital-raising mechanisms available to listed entities. Amendments would include raising the percentage of equity securities that may be issued without investor approval and facilitating two-stage 'jumbo offers', open to both institutional security holders and existing investors.

The Australian Securities and Investments Commission recently issued a new class order which provides conditional relief from the investor disclosure, financial services licensing and hawking provisions of the Corporations Act for certain offers of shares, options and other financial products made to full-time or part-time employees and directors under an employee share scheme.

The Federal Court recently found an expert liable for misleading and deceptive statements in a report contained in a prospectus for a managed investment scheme. Among other things, the decision warns that a negative assurance will not protect an expert from liability where an opinion included in a prospectus would have been misleading if expressed in positive terms.

The government has issued a proposal to widen the scope of the 'public offer' exemption from interest withholding tax. The restrictions applicable to the issuance of securities to certain associates of the issuer and the payment of interest to them will be relaxed, and the exemption will be extended to cover interest derived from certain sales of discounted securities.

The Australian Stock Exchange is to restructure its clearing and settlement functions by creating a single central counterparty, the Australian Clearing House. The National Guarantee Fund will be terminated when the new structure is established, but it is anticipated that the new entity will have direct access to sufficient capital to manage its counterparty risk in the event of default.

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Commercial Property

Several recent cases have examined the particular issue of what steps an occupier should be required to take to guard against obvious risks. They suggest that the long-term trend of expanding liability and damages in negligence cases has been decisively stopped and reversed.

The Privacy Act 1988 (Cth) has far-reaching consequences for landlords in dealing with existing and prospective tenants. In light of the existing ambiguity in the privacy regime, prudent landlords and agents should ensure that tenants' personal information is dealt with on the basis that each has a statutory obligation to comply with the act.

The Statute Law Amendment (Relationships) Act 2001 is designed to give legal recognition to same-sex couples and their domestic relationships, and to eradicate persisting discrimination in the specified legislation. This article examines the new law's effect on the Property Law 1958 and the Duties Act 2000.

Recent amendments to the Environment Protection Act 1970 (Vic) will have a significant impact on commercial property transactions in Victoria, particularly for prospective purchasers and developers of industrial sites.

The Victorian government has implemented an extensive review of the workings of the Retail Tenancies Act 1986 and the Reform Act 1998 with a view to eliminating inconsistencies, addressing anomalies and identifying other reforms that are necessary or desirable to provide retail tenants with appropriate protection.

The common law duty of care owed by a landlord to his/her tenants, members of the tenant's household and other third parties has long been a source of concern. This update examines three recent cases that help to resolve the issue.

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Company & Commercial

The government has released an exposure draft of the Personal Liability for Corporate Fault Reform Bill 2012, which contains proposed amendments to certain Commonwealth laws governing the derivative liability of directors for offences by their company. The majority of the proposed amendments concern provisions of the Corporations Act 2001, but they also extend to other pieces of federal legislation.

Three recent landmark court decisions on directors' duties have involved consideration of when directors are entitled to rely on the advice of advisers in the context of an allegation of a breach of their duty of care and diligence. Despite their different factual circumstances, these cases demonstrate some common threads that are emerging on the reliance issue, which are worthy of closer scrutiny.

The Australian Securities and Investments Commission (ASIC) has released a long-overdue regulatory guide on the related party provisions. It provides a synthesis of the regulator's views on the few judicial decisions that exist in respect of the provisions and, among other things, sets out new guidance on the criteria that ASIC expects boards to apply in determining whether a related party transaction is on arm's-length terms.

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Competition

Overview
Including: Changes in Merger Review; Changes to Misuse of Market Power Prohibition; Criminalizing Cartel Conduct; Creeping Acquisitions; Unit Pricing Code; Meaning of 'Understanding' in Section 45.

The Federal Court has dismissed applications by Emirates and Singapore Airlines challenging the validity of Section 155 notices issued by the Australian Competition and Consumer Commission for the purpose of compulsorily obtaining information and documents relating to an alleged international air cargo cartel.

The government has introduced legislation to criminalize serious cartel conduct. The revised cartel bill introduces appropriate exceptions to the application of the cartel laws. These exceptions are intended to ensure that legitimate commercial arrangements and conduct that are not prohibited under the Trade Practices Act are not inadvertently captured as cartel conduct.

The Senate recently passed significant amendments to the Trade Practices Act 1974. They include amendments to the misuse of market power provisions which are designed to make the prosecution of predatory pricing cases easier by specifically stating that recoupment is not required.

Minister for Competition Policy and Consumer Affairs Chris Bowen recently released a revised draft of the Trade Practices Amendment (Cartel Conduct and Other Measures) Bill 2008 that proposes to criminalize serious cartel conduct. The government has provided no additional guidance to coincide with the release of this bill.

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against 28 parties for misleading and deceptive conduct and exclusive dealing. The ACCC claims that the respondents used a business model called ‘bundled services deals’ to enter into contracts to provide small businesses with services.

The minister for competition policy and consumer affairs has directed the Australian Competition and Consumer Commission to conduct an inquiry into the rising cost of groceries that will consider all aspects of the supply chain in the grocery industry, including the nature of competition at the supply, wholesale and retail levels.

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Construction

The long-awaited amendments to the Building and Construction Industry Security of Payment Act 2002 have come into force in Victoria in respect of construction contracts entered into on or after March 30 2007. Many of the changes make the act unique in Australia and very different from the construction industry payment legislation in other states.

The recent bans imposed on contractors preventing them from tendering for federal government-funded construction projects serve as a reminder of the importance of complying with the National Code of Practice for the Construction Industry. Three companies were precluded from tendering for government work for three months following a breach of the principle of competitive behaviour.

The Victorian Supreme Court has given further support to superintendents and contract administrators granting an extension of time under Australian Standards 2124 and 4300 when they decide it is just and equitable to do so, even if the extension of time claim would otherwise be time barred.

A recent decision demonstrates how a latent conditions claim can be pursued successfully by the contractor against the principal under the Trade Practices Act. It also highlights the broad nature of potential relief for contractors and liability for principals under Sections 82 and 87 of the act.

The Queensland government has implemented the Queensland Building and Other Legislation Amendment Act 2006. The act amends the Building Act 1975, consolidating provisions set out in various pieces of legislation to establish a framework for the process of making, assessing and ruling on a building application through to the certification of building work.

It is illegal for a union to threaten or take action with an intent to coerce or apply undue pressure to make or prevent a collective agreement. If an employer in the building industry considers that it has been the target of such action, it can notify the Australian building and construction commissioner to apply for an order against that union.

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Corporate Finance/M&A

Overview
Including: Legislative Reforms to Australian Corporations and Investment Laws; Changes Over the Past Year; Further Reforms Planned; Timing of Further Law Reform; Timing of Further Law Reform; ASIC Policy For New Fundraising Regime

A break fee arrangement in an M&A transaction that was triggered by a target's independent directors withdrawing their recommendation has been criticized on review. As the fee was not triggered by the target's shareholders or a rival bidder, two review panels held that the directors should have been allowed to respond to changes in circumstances without triggering the fee.

The Australian Takeovers Panel has released for public comment a draft guidance note on financing arrangements for takeover bids, suggesting that a bidder must only announce a takeover offer when it believes that it will be able to implement the offer. Among other things, the note describes unacceptable circumstances for funding arrangements.

Off-market takeover offers usually include a number of conditions which, if not satisfied or waived, result in the withdrawal of the offer. The Takeover Panel recently issued guidance on actions which would frustrate a takeover bid by breaching such conditions. Such actions will usually result in the panel making a declaration of unacceptable circumstances.

In two recent decisions the Takeovers Panel stated that while bidders are free to make bids subject to due diligence-type conditions, target directors are under no absolute obligation to comply with the conditions. Target directors ultimately have the right to choose to whom, and on what terms, to provide information, in the best interests of the company and its shareholders.

Arrangements to pay break fees are becoming more common in Australian-based transactions. However, given the anti-competitive effect that a large break fee can have, the validity and enforceability of break fees is still a matter of some uncertainty. This update examines the existing legislation and case law on the subject.

Recent amendments to the Corporations Act have introduced onerous telephone monitoring requirements on bidder and target companies during takeover bids, with the aim of giving shareholders additional protection against misleading and deceptive conduct.

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Corporate Immigration

The Department of Immigration and Citizenship is changing its charging structure. A new visa fee structure recently came into effect, with increases being rolled out over the next 18 months. Minister for Immigration Chris Bowen claims that the move is necessary, stating that "these changes will bring Australia's visa application charge structures in line with comparable countries".

Corporate Tax

The government has published a revised exposure draft on the Tax Laws Amendment (Taxation of Financial Arrangements) Bill 2006 containing proposals for the tax treatment of financial arrangements. These proposals will introduce Division 230 into the Income Tax Assessment Act 1997, which will provide new tax timing rules as they apply to financial arrangements.

Parliament has approved the Taxation Laws Amendment (2006 Measures No 4) Bill 2006, which amends Australian income tax law to target better and strengthen capital gains tax laws for non-residents. Non-residents' liability to Australian capital gains tax will be limited to capital gains tax events involving Australian real property or business assets of a foreign resident's Australian permanent establishment.

Australia imposes interest withholding tax according to Part III, Division 11A of the Income Tax Assessment Act 1936. Interest withholding tax is imposed at a rate of 10%; however, this rate may vary subject to the operation of applicable double taxation agreements entered into by Australia.

The federal government has introduced draft legislation which proposes to reduce the Australian capital gains tax base as it applies to non-residents who hold a direct interest in Australian entities. It may also potentially broaden the Australian capital gains tax base as it applies to non-residents who dispose of interests in Australian entities indirectly.

As part of the 2006 Federal Budget the government included a number of changes to Commonwealth taxation. These changes are intended to foster and promote saving, investing and working in Australia. Although the proposed changes are still to be approved by Parliament, it is envisaged that they will take effect from either July 1 2006 or July 1 2007.

The government has released exposure draft legislation setting out proposed rules for the tax timing treatment of a broad range of financial arrangements. The provisions will be inserted as a new Division 230 in the Income Tax Assessment Act 1997.

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E-commerce

Overview
Including: Intellectual Property; Recognition of Electronic Transactions; Privacy; Consumer Protection; Defamation; Objectionable Material and Censorship; Tax Issues; Jurisdictional Issues

The Internet Corporation for Assigned Names and Numbers has now signed agreements to introduce two new global internet top level domains into competition with .com: .biz and .info. This update describes the pre-registration process for these domains.

The Privacy Amendment (Private Sector) Bill 2000 (Cth) received royal assent on December 21 2000. The new regime will potentially have an impact on e-commerce transactions. Senate amendments to the bill were rejected, although may be considered at a later date.

There have been over 2,000 cases this year of individuals and businesses laying complaints with the World Intellectual Property Organization, as the international body responsible for determining who is entitled to register domain names. This update looks at some high-profile Australian cases and what Australia will be doing next to protect and enhance the use of domain names.

The Internet poses a challenge for Australian regulators. They have to deal with fraud that could impact on Australia even though it is perpetrated on a global scale.

The government has announced that certain provisions of the Privacy Act will be extended to cover the private sector, motivated in part by a desire to provide a solid legislative structure to support the growing e-commerce sector.

Employment & Labour

Overview
Including: National Review of Model Occupational Health and Safety Laws; Safe Work Australia Bill; Fair Work Bill 2008.

Safe Work Australia has released the exposure draft of the model occupational health and safety legislation for public comment. This update provides an overview of some of the key proposals in the model act, including provisions on the primary duty of care, incident notification, the regulator's enforcement and information-gathering powers, and offences and penalties.

The Workplace Relations Ministers Council has agreed to a framework for model occupational health and safety (OHS) laws and has given instructions for the drafting of model OHS laws to commence. During a recent meeting the council provided its response to the recommendations of the Panel for the National Review into Model OHS Laws regarding the optimal structure and content of a model OHS act.

The Fair Work Bill has passed through the Senate after an agreement was reached with Senator Steven Fielding on phasing in its definition of a 'small business' for the purpose of excluding unfair dismissal claims. The agreement means that the government can implement its timetable of amendments to unfair dismissal and enterprise bargaining laws from July 1 2009.

The National Review Panel into Model Occupational Health and Safety Laws has delivered its second report. This update provides a preliminary summary of the key recommendations in the report, including recommendations regarding definitions of certain terms, the roles of inspectors and codes of practice.

The closing date for submissions to the national review into model occupational, health and safety legislation was July 11 2008. The panel received over 240 submissions from various parties, including public and private sector organizations, government, industry groups and the unions. This update outlines some of the key points arising from the submissions.

The panel established to review national occupational health and safety laws and possible harmonization recently released an issues paper to stimulate discussion and encourage written submissions to the review. The issues paper was developed following a six-week consultation period across the country with key stakeholders, including businesses, unions and other interested parties.

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Energy & Natural Resources

A new policy body, the Energy Reform Implementation Group (ERIG), has been established in order to consider further reforms to the Australian energy markets. The ERIG will initially address three key areas for possible reform, including transmission grid planning, governance and investment.

Australia and China have recently signed a nuclear material transfer agreement and a nuclear cooperation agreement which will allow for the exportation of uranium from Australia to China. However, as Australia's uranium production is fully committed for the next two years, exports to China are not expected to start until 2008.

The federal government has introduced into Parliament the Renewable Energy (Electricity) Amendment Bill 2006, which proposes amendments to the Renewable Energy (Electricity) Act 2000. The bill is the result of extensive government consultation carried out since 2002 and is designed to improve the administrative integrity, effectiveness and efficiency of the act.

In 2000 Australia was the first country in the world to introduce a mandatory national renewable energy certificate scheme, designed to encourage the development of renewable energy generation. However, in light of concerns regarding possible impediments to the continued development of renewable energy, the Ministerial Council on Energy Standing Committee of Officials has released a discussion paper.

The South Australian Essential Services Commission has lifted its ban on the issue of new wind farm licences and released a statement of principles for the licensing of wind power generators in South Australia. The statement sets out the minimum obligations which the commission will require of wind generators in addition to those obligations already imposed by the National Electricity Rules.

On October 28 2005 the New South Wales (NSW) government made an Energy Savings Order and a Water Savings Order, requiring approximately 200 large users of energy to prepare an energy savings action plan and approximately 200 large users of water to prepare a water savings action plan. These plans must be submitted to the NSW Department of Energy, Utilities and Sustainability for review.

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Environment

Parliament has taken the first steps towards making companies responsible for the full lifecycle of their products by passing the Product Stewardship Act 2011 as part of its National Waste Policy initiative. The act is essentially designed to reduce wastage, improve recycling rates, eliminate hazardous substances and reduce the overall environmental impact of products as they reach the end of their useful life.

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Franchising

Overview
Including: The Franchising Code of Conduct; The Trade Practices Act; Taxation.

A recent prosecution by an Australian workplace safety regulator has highlighted the increasing responsibilities which franchisors operating in Australia may have under occupational health and safety legislation. In the case, the way in which the franchisor conducted its own business gave rise to a duty to employees of the franchisee.

The English Privy Council recently concluded that a franchisee was in fundamental breach of the franchise agreement and that the franchisor was therefore within its rights to terminate that agreement. The court found that strong action can be taken after a fundamental breach by the franchisee, even where a dispute exists on other issues.

Compliance is an important factor in the success of a franchise system. Legal compliance is often overlooked, and may be just as important as systems compliance in terms of penalties and damage to brand image. The Australian Standard on Compliance Programme establishes the structural and operational elements of a successful compliance programme.

There is considerable uncertainty about what constitutes unconscionable conduct. Recent case law suggests that the scope of the unconscionable conduct provisions found in the Trade Practices Act may be narrower than previously thought and franchisors must tread carefully in commercial dealings.

On December 21 2001 new national privacy laws applying to private sector organizations came into effect in Australia. These new laws regulate the way that businesses collect and handle personal information and will affect the way in which most franchisors and franchisees operate in Australia.

The Trade Practices Act regulates the franchising sector in Australia and is critical to the structure and operation of franchise systems. Executives of franchise companies can no longer rely on having a superficial understanding of the act. Compliance programmes are essential and must extend beyond the Franchising Code of Conduct to the pricing, supply and conduct aspects of the act.

Information Technology

Overview
Including: Copyright Developments; Y2K Disclosure; Other Government Initiatives; IT in Civil Litigation

The High Court recently upheld Google's appeal against the Federal Court ruling that the company had breached the Trade Practices Act in relation to advertisements placed by customers of its AdWords programme. In a unanimous decision, the High Court found that Google was not responsible for any misleading and deceptive representations contained in such advertisements.

While the application service provider (ASP) model is still developing, both the providers and the users of ASP services should take care to manage the business risks. These risks, and the strategies available to combat them, are considered here.

Insolvency & Restructuring

In January 2010 the government announced it would legislate to abolish the general principle confirmed by the High Court that shareholder claims for compensation are not subordinate to the claims of ordinary unsecured creditors. The amending legislation has now been introduced into the Commonwealth Parliament and has been considered without comment by the Senate Economics Legislative Committee.

The High Court of Australia recently published its reasons for dismissing the appeals of Lehman Brothers Holdings Inc and Lehman Brothers Asia Holdings Limited against orders made by the Federal Court that had declared void deeds of company arrangement that Lehman Brothers Australia Limited had entered into with its creditors and an order that Lehman Australia be wound up.

Lenders and other third parties dealing with companies in distress are often concerned that by exercising legitimate legal rights they can become shadow directors, especially when the directors allege that they have no choice but to do what the lender wants because receivership is the only alternative. In a recent case the Supreme Court of New South Wales gave important guidance on where the limits really lie.

Section 553C(2) of the Corporations Act provides that a person is not entitled to claim the benefit of a set-off if, at the time of giving credit to the company or receiving credit from the company, the person had notice of the fact that the company was insolvent. In a recent case the Victorian Court of Appeal considered a creditor's right to claim the benefit of a set-off in the liquidation of a company.

The government has released a discussion paper outlining proposals for the reform of Australia's insolvent trading laws designed to ensure that the insolvency laws complement and assist the conduct of workouts. The paper seeks submissions on issues that arise for directors from operation of the insolvent trading laws, particularly in the context of attempts at business rescue outside formal insolvency administrations.

In a recent case liquidators brought proceedings against 16 defendants challenging transactions whereby investors that had received payments in what was effectively a Ponzi scheme were ordered to repay them as uncommercial transactions under Section 558FB of the Corporations Act. The judge found that in the majority of cases the defendants could not discharge the onus of showing that they had acted in good faith.

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Insurance & Reinsurance

Overview
Including: Insurance Law; Insurance Contracts Act; Recent Significant Cases.

The federal government has released a proposal outlining 25 refinements to improve the practical operation of the financial services regulation introduced by the Financial Services Reform Act 2001. One proposed refinement is the streamlining of product disclosure statements as they relate to general insurance products.

In a decision that has significance for all insurers, the Court of Appeal has extended the rights and obligations owed to third-party beneficiaries. Although this case dealt with the insurer of a superannuation fund trustee, the decision is significant for all insurers.

Recent High Court decisions have illustrated the court's strict approach to the construction of policy terms. The decisions emphasize how important it is for insurers and insureds alike to ensure that policies clearly identify the cover provided.

The review panel looking at the Insurance Contracts Act 1984 has found that the act is generally operating satisfactorily and to the benefit of both insurers and insureds. The government will now prepare a draft bill to address the main recommendations - the bill will be released for public comment before its introduction.

A court has indicated that settling a claim made by a third party is not, in itself, sufficient proof of liability on which an insured may base a claim for civil liability indemnity, and damages cannot be recovered for settlements made by an insured before any breach of contract by the insurer, regardless of whether such a breach subsequently occurs.

The Court of Appeal of the Supreme Court of New South Wales has ruled on the distribution of the assets of an insolvent reinsurer. The case has clarified aspects of the Corporations Act and Insurance Act, including that Section 116 of the Insurance Act gives rise to accrued rights at the commencement of the winding-up of a company.

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Intellectual Property

'Location' is the catchcry of the real estate industry, but a recent case shows that where a particular location is trademarked, other parties wishing to mention that location in their advertising must tread a fine line between legitimate descriptive use and infringing trademark use.

If your sweet tooth has you wandering the confectionery aisle in your local supermarket, you have probably noticed the range of imitation chocolate confectionery products. A recent decision suggests that in some cases there is little a well-known confectionery manufacturer can do to prevent this activity, no matter how famous the product or how closely the imitation product replicates non-distinctive elements of its packaging.

Have you ever picked up a new brand of your favourite product in the supermarket and noticed that its packaging looks suspiciously similar to that of your trusted old brand? A recent case between the producers of NutrientWater and Grassroots Enhanced Water acts as a reminder that it is difficult to stop a little shrewd copying of packaging unless it infringes registered rights or is likely to confuse customers.

The Designs Act 1906 (Cth) was replaced by the Designs Act 2003 (Cth), in part because of concerns about the weak protection for design registrations under the old act. However, since the new act came into force, decisions in old act infringement cases have taken a sudden turnaround in favour of registered design rights. After a century of weak protection, a number of cases have shown that old act design registrations have teeth.

Trademarks are a shorthand expression of culture and meaning and thus an attractive target for parodies. In countries where freedom of speech is protected, parody may operate as a defence to trademark infringement. However, under Australian law, there is no constitutional guarantee of freedom of speech. Therefore, courts have approached the question of parody only incidentally as part of the application of black-letter trademark law.

Twitter, a social networking page through which users sum up current events in their lives in 140-character updates or 'tweets', has proven a fruitful arena for attacks on trademark rights through the registration of marks as usernames. On the face of it, this is nothing new. However, Twitter differs slightly from more familiar forms of online trademark infringement, particularly for the purposes of Australian trademark law.

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Litigation

The High Court and the New South Wales Court of Appeal have recently provided much-needed clarification about the proportionate liability regime detailed in the New South Wales Civil Liability Act 2002. Although the regime has been in place since 2004, there had previously been relatively little judicial guidance as to its practical application.

Australia is a party to the New York Convention, which provides an international framework for the resolution of commercial disputes between parties in different countries. Under the convention, arbitral awards are to be enforced unless narrow exceptions apply. The High Court recently considered whether the act requires courts to enforce arbitral awards that are legally wrong.

The Federal Court of Australia recently handed down a landmark decision in which ratings agency Standard & Poor's was held accountable for the ratings opinions that it is paid to assign to financial products. The decision highlights the capacity for a duty of care to arise between investors and their financial advisers, and between investors and the parties involved in structuring and rating the financial products that they purchase.

A recent Queensland Supreme Court decision highlights the risks to buyers of failing to conduct sufficient due diligence before settling on a purchase. Developers should also consider whether the resolutions that they pass while in control of a body corporate are in the best interests of such body corporate as it will be constituted once the developer is no longer part of the complex.

The Federal Court of Australia recently found that comments made on Facebook by an Australian swimwear designer about a rival swimwear label amounted to misleading and deceptive conduct. The decision highlights the importance of making proper enquiries before making allegations, particularly in an online forum such as Facebook, where allegations can be widely and quickly propagated.

The Fair Work Commission recently upheld a claim for unfair dismissal, following a flight attendant's alleged failure to comply with Virgin Australia's policy on grooming standards. While the commissioner was critical of the company's handling of the matter and ruled that the employee should be reinstated and compensated, the company's right to have a strict policy on appropriate grooming standards was not in dispute.

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Media & Entertainment

The Federal Court recently ruled in the first civil penalties case under the Broadcasting Services Act 1992 (Cth). 2UE Sydney Pty Ltd, broadcaster of the John Laws Morning Show, was ordered to pay a pecuniary penalty of A$360,000, calculated as penalties of varying amounts in respect of 13 breaches of the Broadcasting Services (Commercial Radio Current Affairs Disclosure) Standard 2000.

A recent decision of the High Court of Australia in IceTV Pty Ltd v Nine Network Australia Pty Ltd has limited the protection of copyright in compilations and databases in Australia. This decision will have a significant impact on businesses that publish information of a generic nature. Other businesses may now be able to use such information without licence and without fear of copyright infringement.

In the early 1980s actions were brought against newspaper publishers and television broadcasters under Section 52 of the Trade Practices Act alleging misleading or deceptive news stories. This led to new Section 65A, which provided a statutory exemption for "prescribed information providers". A recent High Court decision appears to narrow significantly the scope and availability of the publisher's defence.

Freedom of information (FOI) laws provide an important means of access to government information for journalists, film makers and the public. The government has announced major changes to FOI legislation and procedures which it says will "promote a new system and culture of pro-disclosure for government information".

'Complex' is the word used by many producers to describe official international co-productions. However, with the ability to gain access to finance and incentives in Australia (including the producer offset) and other countries, official international co-productions are becoming more attractive in this difficult time of obtaining finance, and tackling the associated complexities has become even more worthwhile.

A number of Australian film and television distributors have taken legal action against the internet service provider (ISP) iiNet, the third-largest ISP in Australia after Telstra and Optus. The distributors are suing iiNet for its failure to stop customers illegally downloading a number of their film and television programmes over the iiNet network.

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Product Liability

A resurgence in product liability class actions has been predicted in Australia since May 2012. In line with this trend, two product liability class actions have recently been settled in Australia - a class action concerning faulty knee implants manufactured by DePuy and a case brought against Merck in relation to its VIOXX arthritis drug, although the latter still requires court approval.

Insurers often play an important role in product liability litigation as manufacturers often effect liability policies over claims in relation to their products. Although the application ultimately failed on evidentiary issues, a recent case demonstrates that a third party may be able to bring a claim against the insurer directly as if it were recovering damages and compensation against the manufacturer.

In an April 2012 New South Wales Supreme Court decision, KFC was held liable to pay A$8 million in compensation for brain damage suffered by a plaintiff as a result of food poisoning. However, KFC recently lodged its appeal against the first instance decision, arguing there had been a failure to consider evidence and errors in the judge's factual findings and the weight given to certain evidence.

A recent decision of the Queensland Supreme Court has held the manufacturer of Winnebago motorhomes liable for the damage to property caused by a fire that originated from one of its motorhomes. The case confirms that liability under the consumer protection and product liability provisions of the legislation is strict and has significant implications for manufacturers.

In a high-profile decision the New South Wales Supreme Court decided that KFC was liable for a plaintiff's severe brain damage caused by salmonella food poisoning from a 'Twister'. Two matters of potential significance may be noted for other product liability proceedings. Together, they suggest that stringent product safety procedures may be less useful to defendants in avoiding product liability than might be expected.

The High Court of Australia has refused special leave to appeal from the full court of the Federal Court of Australia in the VIOXX class action. The decision confirmed the traditional approach to issues of causation - the defendant's act or omission must be a necessary condition of the plaintiff's injury. It also illustrated that causation is no less difficult to prove in large-scale class actions than in individual proceedings.

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Professional Negligence

A new bill establishing far-reaching tort reforms has introduced a new standard of care for professionals, under which a professional will not be held liable if he or she acted in a manner that was "widely accepted" by peer professional opinion at the time. The bill also adopts proportionate liability, which will have favourable consequences for professionals.

In response to problems in the insurance industry, the federal government has set up an inquiry into far-reaching tort reforms. The first stage of the review examines limitation periods, the standard for medical negligence and the scope of the physician's duty to inform patients.

Shipping & Transport

The New South Wales Supreme Court has considered whether court costs should be included in the limit of liability under the 1976 London Convention on Limitation of Liability for Maritime Claims. The court adopted a literal construction of the convention, holding that the limitation applies only to "claims in respect of life" and not costs arising from the resulting dispute.

Litigation on deep vein thrombosis (DVT) is continuing following two recent cases in the Victoria and Queensland courts. The Victoria court found that an airline's failure to warn of the risks of DVT could constitute an 'accident' under Article 17 of the Warsaw Convention, while the Queensland court rejected this approach. The Victoria case has been further appealed.

Parliament recently passed the Transport Safety Investigation Act. The act consolidates the statutory basis for the investigation of air, shipping and rail accidents by the Australian Transport Safety Bureau within a single act. The act defines the investigative powers of the bureau and controls information flows resulting from investigations.

The Federal Court recently examined whether a company which held all units in a trust fund thereby owned a vessel which was property of the trust. The court considered that the company had an equitable interest in each asset in the trust, but that the terms of the trust deed precluded recognition of the company as the equitable owner of the vessel.

A ship's master and owner pleaded guilty to charges under Section 8(1) of the Marine Pollution Act after the High Court held that they could not be excused from liability on the grounds of 'damage' caused by fair wear and tear. However, the Land and Environment Court subsequently found that there were extenuating circumstances justifying an order for dismissal of the charge.

The government recently introduced the Maritime Legislation Amendment (Prevention of Pollution from Ships) Bill 2003, which will implement changes to Annex 4 of the International Convention for the Prevention of Pollution from Ships. The annex regulates the discharge of sewage from ships on international voyages and requires ports to provide adequate facilities to receive sewage.

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Telecommunications

Overview
Including: Liberalization; Telecommunications Act 1997; Radiocommunications Act 1992; Trade Practices Act 1974; Regulatory Bodies; Universal Service Obligation; Customer Service Guarantee; Mobile Number Portability; Closure of Analogue Networks; Broadcasting Scheme

Recent changes include the introduction of a code that provides standards for suppliers to meet when performing bill functions and the news that Telstra has been selected as the preferred tenderer for the provision of untimed local calls and upgraded services.

A new joint venture between Australia's Telstra and Hong Kong-based Pacific Century Cyberworks brings together the technical expertise and business experience of two of the market leaders in the Asia Pacific region. This update traces the background of the new project and its hopes for the future.

The Besley Inquiry was set up to independently assess telecommunications services in metropolitan, rural and remote Australia. The federal government reacted to this report by announcing a funding package to further improve aspects of the telecommunications industry, including mobile phone coverage and internet speed, throughout the country.

The Privacy Amendment (Private Sector) Act will come into force by the end of 2001 and will amend the Privacy Act so provisions related to personal information will now apply to the private sector. This update examines the ways in which this previously unregulated sector is likely to be affected.

The recent auction of 3G (third generation) licences raised $1.168 billion. The licences commence in October 2002, ushering in technology with significant implications for the way Australians work and communicate.

Channel Nine sought an interim injunction restraining the Australian Broadcasting Corporation (ABC) from broadcasting aspects of the New Year's Eve fireworks display on Sydney Harbour. Channel Nine claimed copyright vested in four elements of the display.

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