In this issue:

• How to be sure it's an end of year celebration
• Driving Offences
• High Court finds in favour of the little guy vs.big business
• Thinking of becomming a Director?
• Potential personal liabiltiy in insolvency
• How is your product labelled in Australia
• Sign of the times
• Solicitor/Client confidentiality
• Useful links for Women

 How to be sure it's an end of year celebration

Many businesses organise or participate in end of year Celebrations inviting staff, clients and others. It is not uncommon for legal issues to arise following these events arising from perceived or actual misconduct by members of staff or perhaps other guests. An Employer has a duty under the Occupational Health and Safety Act to provide a safe working environment for its staff. Additionally, Employers are also responsible to ensure that staff are not harassed.

There may be a number of ways of complying with the obligations. The various sugges- tions include:
(a)  Guidelines as to appropriate behaviour;
(b)   Responsible serving of alcohol;
(c)  Training of staff.

Whilst some organisations have now cancelled these types of functions out of serious potential litigation threat, the majority of Employers would adopt guidelines recom- mended to ensure a happy deliberation to the conclusion of the working year.

 Driving Offences

 Demerit Points

In New South Wales, Demerit Points are  recorded on a Demerit Points Register kept by the Roads and Traffic Authority.

At present, Section 16 of the Road Transport (Driver Licensing) Act    requires  the recording of Demerit points. A Driver’s License will be suspended if that person incurs 12 or more Demerit Points within a 3 year period. The suspension periods are as follows:

12 to 15 points    3 months
16 to 19 points    4 months
20 or more           5 months

When a person has a “good” driving record but no defence to the relevant driving offence, a plea of guilty should be entered to the offence and an application under Section 10 of the Crimes  (Sentencing Procedure) can be made. Upon such an application being made, the court can, without pro- ceeding to a conviction, either dismiss the charge, require the person to enter into a good behaviour bond or require that that person enter into a driving offenders program.

This is another reason to comply with the Road Rules or expose yourself to the risk of losing your license.  Before you attend to the payment of a fine, please do not hesitate to contact us in order to obtain legal advice.

In New South Wales, Demerit Points are  recorded on a Demerit Points Register kept by the Roads and Traffic Authority.

At present, Section 16 of the Road Transport (Driver Licensing) Act    requires  the recording of Demerit points. A Driver’s License will be suspended if that person incurs 12 or more Demerit Points within a 3 year period. The suspension periods are as follows:

12 to 15 points    3 months
16 to 19 points    4 months
20 or more           5 months

When a person has a “good” driving record but no defence to the relevant driving offence, a plea of guilty should be entered to the offence and an application under Section 10 of the Crimes  (Sentencing Procedure) can be made. Upon such an application being made, the court can, without pro- ceeding to a conviction, either dismiss the charge, require the person to enter into a good behaviour bond or require that that person enter into a driving offenders program.

This is another reason to comply with the Road Rules or expose yourself to the risk of losing your license.  Before you attend to the payment of a fine, please do not hesitate to contact us in order to obtain legal advice.

 High Court finds in favour of THE LITTLE GUY vs. BIG BUSINESS

In a recent judgment, the High Court  found that “mod- chips”  installed  in  Sony  PlayStations  did  not  constitute “illegal copyright  circumvention devices” due to the fact that playing a game does not constitute copying.

Sony Corporation, the Play Station manufacturer, brought proceedings against PlayStation repairman Eddy  Stevens, for installing chips into the console that permitted players to override the manufacturer’s access codes. Mr Stevens also sold  cheaper versions of PlayStation games designed for overseas markets.

The Copyright Act  gives the owner of a “technological pro- tection measure” a cause of action against someone who makes or sells a “circumvention devices” which would enable  the  player  to  overcome  the  protection  measure. Sony claimed that the coding  system, which means the machine can only play games with a recognised code, was a technological protection measure.

At   first Sony’s claim was rejected by the Federal  Court however the Full Bench of theFederal Court found in favour of the manufacturer.   In the Federal Court, the Australian Competition and Consumer Commission, as an amicus curi- ae (literally meaning a friend of the court but generally a person  who  with  the  courts  permission  may  advise  the Court  on a point of law or on a matter of procedure), said that regional coding was detrimental to consumer choice.

The High Court found that a technological protection meas- ure must prevent or inhibit copying in breach of copyright. Unanimously, the High Court found that the chips installed by Mr Stevens were legal.

Are you a DIRECTOR of a Company or are you thinking of BECOMMING DIRECTOR?

 DO YOU KNOW YOUR RIGHTS?

Over the last few years, a number of cases and legislative changes have operated to refine the responsibilities and duties of company directors. Because  of the constantly ongoing nature of these redefinitions, it is important to keep abreast of the most contemporary developments in this area.

Who is a Director?

A  legal definition of a director is found in Section 9 of the Corporations Act  2001.   There can be many types of direc- tors but the common characteristic is that they are involved and to some extent control and direct the action of the com- pany.

The different types of Directors are as follows:

1.   Executive Director
This is a director who is employed full time by the corpora- tion. Their main role is carrying out the day to day manage- ment of the business.

2.   Non-Executive  Director
An  executive who is not an employee of the corporation.

3.   Independent  Director
A  non executive director who is also free of any business relationship that could interfere – or be perceived to inter- fere - with the exercise of their unfettered and independent judgement.

4.   Shadow Director
Someone who instructs the directors of the company,  but who is not officially called a ‘director’.

5.   Director  By Conduct
A  person can be deemed a shadow director without having directed or instructed the board on every level of corporate management. A court, in determining whether a person is a shadow director or not may consider whether the person:

is responsible to and has the trust of the shareholders;
manages the business of the company;
Signs the cheques;
Has authority to use the company seal, or if the  seal can only be used with their authority;
Is reasonably perceived as such by outsiders; or has Acted  as the company.

6.   Professional Advisors
It is possible for professional advisors who have a key role in a company’s management to considered  directors. The court will examine the relationship between the advisor and the directors. Certain  precautionary steps can be taken to prevent too close an association. For example, advisors can desist from becoming cheque signatories, or putting all their advice in writing.

7.   Corporations  As  Shadow Advisors
A  holding company can also be considered a director if its director’s control the subsidiary company’s board.

8.   The   Differing   Roles   And   Responsibilities   Of  Chair, Executive  And  Non-Executicve  Directors
A  recent court case, ASIC v Rich has been  heralded as a landmark event for the definition of director’s duties. In this case, a non-executive chairman, John Greaves, argued that his position was almost identical to that of the other direc- tors. He stated that while he was chairman his responsibili- ties were no greater than the other directors except for mere “ceremonial or procedural matters”. Through analysing the specific nature of his position, the court  decided that his role did amount to being more than just a director; in other words that he was a company chairman in substance as well as in name.

Potential personal liabiltiy in insolvency

Recent amendments to Corporations Act  have increased potential claim being brought against Directors personally. Directors can now be liable for claims if they allow a company to incur debt at a time when they should known that the company was not in a position to pay the debt.

HOW IS YOUR PRODUCT LABELLED IN AUSTRALIA?

If you are a director of a foreign company or import foreign goods for sale in Australia  please note that foreign compa- nies should be careful when labelling goods as a “Product of Australia”.  Recently a Japanese company admitted to the Federal Court that it had mislabelled a Chinese  honey drink subsequent to the Australian    Competition and Consumer Commission having brought the proceedings against  the Japanese company, Ixon Japan KK and its Australian affili- ate Ikuson Trading Company Pty Ltd. The Trade Practices Act  1974 gives the Court jurisdiction over foreign company carrying on business in Australia  either by itself or through the conduct of its servants and agents.

The companies had promoted the “Ixon Club Propolis Drink” as a “Product of Australia”   containing Tasmanian Leatherwood honey.   However the product was  manufac- tured and bottled in China from mostly Chinese honey.  The drink comprised of only 2 per cent of Australian honey.  The Court declared that the companies had breached Section 52 of the Trade Practices Act 1974 which provides general pro- hibition against misleading or deceptive conduct. They also contravened Sections 53(a) and Section 53(eb) which pro- hibited false representations concerning the quality, compo- sition and country of origin of goods.

Ixon Japan KK was restrained from representing that any Ixon Club product is from Australia  unless the product was wholly or substantially produced or manufactured in Australia   and the goods wholly or substantially contained Australian  ingredients. The ACCC commented that the decision would make foreign companies think twice about labelling non Australian  products as “Product of Australia” to boost sales and that it was keen to protect the reputation and trade of developing export industries. The Court action confirmed that the Trade Practices Act  has a strong role to play in the ever expanding global market place protecting not only Australian exporters but also international  customers of their products.

The purpose of Statutory Confidentiality is to ensure  that any client can obtain the best possible legal advice without fear of providing his or her instructions and  confidential information being passed on to others.

This means that your solicitor cannot pass on any confiden- tial information to others without your  permission. Your solicitor cannot be subpoenaed to give evidence in which he or she is required to disclose information provided by you or advice you have received. Similarly a solicitor who has acted on your behalf is not entitled in most instances to act against you in another occasion. What this means that you should feel free to fully disclose and provide all information relevant to your enquiry to your lawyer without fear of it being used against you.