$750k damages for fake online reviews

The recent case of Cheng v Lok [2020] SASC 14  (Cheng v Lok) should serve as a warning about the potential severe consequences of posting fake reviews out of spite or to harm a competitor.   This was clear in the recent case of Cheng v Lok [2020] SASC 14 where the Supreme Court of South Australia awarded $A750,000 in damages to a lawyer whose business was defamed through fake and negative online. [Read more…]

Sophisticated investors: precisely what are they?

Section 708 of the Corporations Act 2001 (Cth) (Act) contains what’s known as the small scale offerings exception to the obligation to issue a disclosure document.  This is more commonly known as the “20/12 rule”.  Subsection 708(8) provides an exception to ‘sophisticated investors’ where a qualified accountant provides a certificate dated not more than 6 months before the date that the offer (of securities) is made attesting that the person is ‘sophisticated’. [Read more…]

e-Signatures – legally binding on companies?

The rise of e-signing software such as docuSign (e-signature) has become commonplace for the execution of contracts electronically.  Each state of Australia and the Commonwealth has its own equivalent to the Electronic Transactions Act 2001 (Qld) (ETA).  The use of E-signatures has streamlined the contract execution process, however a recent case in the Supreme Court of South Australia has highlighted their vulnerability.  The decision of Stanley J in Bendigo and Adelaide Bank Limited v Kenneth Ross Pickard [2019] SASC 123 (Adelaide Bank) is illustrative of this. [Read more…]

Risks of making financial forecasts

When a business is seeking to raise capital or advertise as being for sale financial forecasts are often made in a way so as to appeal to the target audience – investors or potential buyers.  In some cases however, the forecasts made do not translate into reality giving rise to potential legal consequences.  As forecasts are indicators often relied used by investors to make decisions on whether or not to invest, statements that are incorrect may amount to misleading and deceptive conduct under the Australian Consumer Law (ACL) (being Schedule 2 to the Competition and Consumer Act 2010 (Cth)) and have potentially serious legal consequences. [Read more…]

IP contracts now subject to restrictive trade practice provisions

Agreements providing for the conditional licensing or assignment of intellectual property (IP) rights are now subject to the restrictive trade practice provisions of the Competition and Consumer Act 2010 (Cth) (CCA).  On 13 September 2019 section 51(3) of the CCA was been repealed removing the exception which applied to the licensing and assignment of IP.   This means commercial transactions involving the assignment of IP rights will be subject to the anti-competitive prohibitions, as are other transactions involving property. [Read more…]

What is a risk management framework?

A risk management framework is a key component of an overall governance framework.   As the name suggests it focuses on risks faced by the business.  Typically, a governance framework will document the approach an organisation takes to managing risks and include details of:

  • Risk appetite – being a measure of the level of risk an organisation is willing to assume;
  • Risk tolerance – being a measure of the amount of risk an organisation is capable of absorbing; and
  • Risks – being details of the types of risk which the organisation faces and seeks to avoid, mitigate or accept.

In developing a risk management framework an organisation should refer to AS ISO 31000:2018 Risk Management Guidelines which sets out the process principles and framework for risk management.

[Read more…]

A bet or a game? The Lottoland case

On 16 August 2019, the Supreme Court of New South Wales (Supreme Court) ruled in favour of the plaintiff, Lottoland Australia Pty Ltd ACN 602 590 429 (Lottoland), in its action against the Australian Communications and Media Authority (ACMA) for their investigative findings against them stating their online products were in contravention of the relevant legislation: Lottoland Australia Pty Ltd v Australian Communications and Media Authority [2019] NSWSC 1041. [Read more…]

The doctrine of repudiation – when good deals go bad

Contracting in business can get complicated, particularly if one party appears unwilling or unable to hold up their side of the bargain.   The common law doctrine of repudiation is one basis for terminating a contract and seeking appropriate damages for the other party’s ‘repudiatory’ conduct. [Read more…]

Changes to ACL – suppliers of services to use compulsory wording

On 9 June 2019, amendments to Schedule 2 of the Competition and Consumer Amendment (Australian Consumer Law Review) Regulations 2018 (Cth) (Amendments) came into effect.  The Amendments require suppliers of goods and services to use a mandatory wording if they provide a “warranty against defects”.  Mandatory wording of such warranties were previously required only for the supply of goods.  However, these changes extend the prescribed warranties to situations where there is a supply of services or a supply of both goods and services. [Read more…]

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