Wednesday, 30 November 2016

Vicarious liability - when will an employer be liable for the wrongful acts of an employee?

The recent High Court decision of Prince Alfred College Incorporated v ADC [2016] HCA 37 (PAC) provides guidance on the approach to be taken by courts in determining whether an employer is liable for the wrongful (criminal) acts of an employee. The previous leading case, New South Wales v Lepore [2003] HCA 4 (Lepore), provided no majority view in respect of this issue.

PAC is highly relevant to government departments and agencies, as it specifically concerns the approach to be applied in cases dealing with the abuse of vulnerable persons in educational, residential or care facilities, by persons employed in special positions with respect to these vulnerable persons.

Background

In 1962, ADC was a 12-year-old boarder at Prince Alfred College in Adelaide (College). A senior housemaster and three housemasters, including Dean Bain (Bain), were in charge of the dormitories. Although the housemasters were present during meal times, prefects supervised the day-to-day activities of the junior boys, including showering and lights out. Bain was rostered on a few times a week, was often around during shower time, and told stories to the boys in the dormitory after lights out. The other housemasters did not supervise lights out and did not come into the dormitory. ADC alleged that Bain first molested him when Bain was telling a story during lights out, progressing to being molested in Bain's room, and on one occasion when Bain took him to a house where they spent the night together.

Primary proceeding 

ADC sued the College, arguing (among other things) that it was vicariously liable for Bain's abuse, which had caused him to suffer psychological injury. It was not in dispute that ADC had been abused by Bain, as he had been previously convicted of two counts of indecent assault against ADC. The primary judge dismissed the proceeding, declining to extend the time for ADC to bring proceedings. In respect of the vicarious liability claim, Vanstone J concluded that the sexual abuse was 'so far from being connected to Bain's proper role that it could neither be seen as being an unauthorised mode of performing an authorised act, nor in pursuit of the employer's business, nor in any sense within the course of Bain's employment'.

Appeal to Full Court

ADC appealed to the Full Court of the Supreme Court of South Australia, and was granted an extension of time to bring the proceeding. Each member of the Full Court also found the College to have been vicariously liable, but the approaches taken by the judges differed from that taken by the primary judge and differed as between themselves. Factors considered by the judges included the 'spectrum' of intimacy (in this case, ADC being a 12-year-old boarder with a housemaster exercising quasi-parental authority in respect of 'intimate' matters such as showering and bed), that the College enhanced the risk by allowing Bain access to the children without supervision, and that Bain was in a position of power over ADC, with respect to matters of order and discipline.

Appeal to High Court 

The High Court allowed the appeal by the College on the basis that an extension of time to commence the proceeding should not have been granted by the Full Court, and that the issue of liability should not have been considered by the primary judge (ie after the judge had determined the proceeding was out of time). However, the High Court acknowledged that, since Lepore, lower courts have been left in an uncertain position about the approach that should be taken in vicarious liability cases of this kind, and that there was a need for guidance to reduce the risk of unnecessary appellate processes arising out of the existing uncertainties.

The relevant approach 


The majority judgment held that the fact that a wrongful act is a criminal offence does not preclude the possibility of vicarious liability, it being possible that in the commission of that act, the employee used or took advantage of the position in which the employment placed the employee in relation to the victim.

Their Honours considered therefore that the relevant approach in determining vicarious liability is to consider any special role that the employer has assigned to the employee, and the subsequent relationship between the employee and the victim, with particular regard to the following features:

  • Authority;
  • Power;
  • Trust;
  • Control; and
  • The ability to achieve intimacy with the victim. 

It was noted that the latter feature may be especially important, it being conceivable that where an employee takes advantage of his or her position in these circumstances, that may suffice to determine that the wrongful act should be regarded as being committed in the course or scope of employment, and as such render the employer vicariously liable. However, their Honours also noted that it was conceivable that while unlawful acts committed in a workplace would attract vicariously liability, some or all of such other unlawful acts committed outside the workplace would not (for example, the offending by Bain which occurred in a house).

The minority judgment accepted that the relevant approach described in the majority judgment will now be applied in Australia, but noted that it does not and cannot prescribe an absolute rule, and that applications of the approach must and will develop case by case.

Andrea Robinson
Principal Solicitor

Anna English
Managing Principal Solicitor




Wednesday, 16 November 2016

As a landlord, do I have to comply with the Retail Leases Act 2003?

As a general rule, landlords, particularly landlords of commercial properties, enjoy superior bargaining power when it comes to leasing their properties.  The terms and conditions of leases are set by the landlord and, subject to market conditions and the bargaining power of a potential tenant, are often non-negotiable.  In these circumstances, the only option for a potential tenant may be to walk away from the transaction.

The Retail Leases Act 2003 (Act) addresses this imbalance in bargaining power for leases of retail premises in a number of ways, for example by providing that:

  • a landlord cannot pass on to a tenant the cost of preparing and negotiating the lease; 
  • a landlord must consent to a tenant's request for assignment of the lease except in limited circumstances;
  • a tenant has a right to a minimum term of 5 years, even if the lease provides for a shorter term.  However, a tenant can contract of out this right if the tenant obtains a certificate from the Small Business Commissioner under s 21(5) of the Act and gives the landlord a copy of the certificate; and
  • a landlord is responsible for undertaking certain repairs and maintaining the premises in certain ways.

What are 'retail premises'?

The Act applies to leases of 'retail premises' entered into or renewed after 1 May 2003.
'Retail premises' are premises that, under the terms of the lease, are used wholly or predominantly for:

  • the retail sale or hire of goods;
  • the retail provision of services; or
  • the carrying on of a specified business or specified kind of business as determined by the Minister.

Exemptions to the Retail Leases Act 2003

Not all retail tenancies are leases of 'retail premises'.  Some types of leases are exempt from the application of the Act, and the Minister for Small Business, Innovation and Trade has the power to exempt further kinds of business, premises, tenant or leases.
In Government, some of the more commonly encountered categories of exempted leases are:

  • Local council premises used wholly or predominantly for public or municipal purposes;
  • Leases for premises used wholly or predominantly for public or municipal purposes with a rent of $10,000 or less;
  • Premises where occupancy costs under the lease are more than $1,000,000 p/a;
  • Premises where the tenant carries on the business as the landlord's employee or agent;
  • Premises where the tenant is a listed corporation or its subsidiary;
  • Premises located above the first three storeys in a building used for retail purposes; and
  • Leases 15 years or longer in duration that impose substantial obligations on the tenant.

Why does it matter?

The Act alters the balance of power between tenants and landlords by imposing a number of obligations on landlords and creating various tenant rights.  In order to understand their rights and obligations, landlords and tenants must know whether their lease is governed by the Act.  Departments and Agencies proposing to grant a lease of retail premises should always check whether an exemption applies.
As property law experts within Government, the VGSO Property Team is well placed to assist you with land use arrangements and other property issues.  For further advice and assistance, please contact:

Anthony Leggiero
Managing Principal Solicitor
9947 1430

Elizabeth Wortley
Senior Solicitor
9947 1433

Tuesday, 8 November 2016

For their eyes only? When can an employer access and use information on an employee's Facebook page?

Supreme Court confirms public sector employer has privacy obligations with respect to personal information on an employee's Facebook page but may use that information where there's a legitimate reason to do so (such as reasonably conducting a legitimate employment misconduct investigation).

A recent decision of the Supreme Court of Victoria (Jurecek v Director, Transport Safety Victoria [2016] VSC 285) provides guidance about when a public sector employer may access an employee's social media publications without breaching privacy laws.
The proceeding was brought under the Information Privacy Act 2000 (the Act), but the Court's findings are relevant to the Privacy and Data Protection Act 2014  because the Information Privacy Principles (IPPs) under both Acts remain the same in all material respects.

The Facts

The employee engaged in various Facebook activity, including posts and messages that were abusive and critical of her employer and other employees.  The employee operated her Facebook page under a pseudonym with privacy settings, although these did not fully restrict access to the Facebook page.
The employer was made aware of the activity and initiated a disciplinary investigation.  For the purposes of that investigation the employer accessed the employee's Facebook page, initially without her knowledge, and took screenshots of the content.

The employee was disciplined following findings of misconduct.

The employee lodged a complaint with the Privacy Commissioner, alleging that the employer had breached the IPPs by accessing her Facebook page.  The Privacy Commissioner dismissed the complaint and the matter was referred to the Victorian Civil and Administrative Tribunal (VCAT).  VCAT also dismissed the complaint and the employee appealed VCAT's decision to the Supreme Court.

Social media posts may be 'personal information' for the IPPs

The employer contended that, because the employee’s Facebook posts were accessible by anyone, they possessed the character of a 'generally available publication' and were therefore exempt from the operation of the IPPs under the Act.

The Court disagreed, taking the view that the mere publication of information on Facebook or the Internet does not necessarily make it a ‘generally available publication’.
Whether such information is a 'generally available publication' will depend on the facts and circumstances as a whole, the nature of the information, the prominence of the site, the likelihood of the access and the steps needed to access the site.

In this case, the Court found that the employee's Facebook posts were not 'generally available' and, because the posts expressed her opinion, they satisfied the definition of ‘personal information’ for the purposes of the Act.  Accordingly, the IPPs applied and the Court needed to determine whether they had been breached.

Employers may access an employee's social media posts if reasonably necessary for an investigation

The employee claimed that the employer was not lawfully entitled to access and collect her personal information (ie her Facebook posts) because such collection was not 'necessary for one or more of the organisation's functions or activities'.

The Court agreed that the employer could only access and collect the employee's personal information if it was necessary for the organisation's functions or activities.  However, the Court found that the disciplinary investigation was a function of the employer’s organisation and that accessing the employee’s Facebook account for that purpose was legitimate and necessary and not unlawful, unfair or unnecessarily intrusive.

Employers need to inform employees when they collect personal information from social media, but not necessarily immediately


The employer delayed notifying the employee about its collection of her personal information.  The employee claimed that this delay constituted a breach of the IPP notification obligations.
The Court rejected that claim.  It held that the IPPs do not impose an obligation of immediate notification but rather an obligation to take such steps as early as practically possible.  In this case, it was reasonable for the employer not to notify the employee earlier because it could have jeopardised the integrity of the disciplinary investigation.

Key implications


  • Public sector employers may collect personal information from an employee’s social media page, but only when it is necessary for one or more of the organisation’s functions.
  • If access to an employee's social media page is reasonably necessary for a disciplinary investigation, accessing that page and collecting relevant information is unlikely to breach the IPPs.
  • If an employee's personal information is collected, employers must take steps to notify the employee as early as is reasonable in the circumstances.  Employers do not need to notify an employee immediately if doing so would jeopardise a disciplinary investigation or other legitimate purpose.


As the Court noted, 'matters of fact and degree are involved' and it is necessary to balance, 'in a reasonably proportionate way', 'what is at stake for the individual' with the 'nature and importance of any legitimate purpose' and 'the extent of the interference'.  This means that each situation needs to be considered on its merits.

To discuss workplace relations further contact:

Rosemary Robins
Solicitor
Workplace Relations & Occupational Safety
9032 3036

Jacqueline Parker
Assistant Victorian Government Solicitor,
Workplace Relations & Occupational Safety
9032 3011

Thursday, 27 October 2016

Its raining cats and dogs!

What is the issue?
A recent decision of the Court of Appeal identifies seven factors to be considered and assessed in determining whether an overflow of water onto land is reasonable.[1]  These factors may have relevance to statutory agencies, Departments, Ministers and authorities responsible for public land or public infrastructure in particular, at times of heavy rainfall.

What was decided?
The Court of Appeal in Hazelwood Power Partnership v Latrobe City Council[2] held that the Morwell Main Drain was not a public drain for the purposes of the Water Act 1989.  Following that conclusion, the Court of Appeal considered whether the flow of water from the Morwell Industrial Estate and from the township of Morwell into the Morwell Main Drain was unreasonable.

Historically, the test of lawfulness for flow of water related to whether the landowner was uphill or downhill.  Called the 'free flow principle', it was considered that an owner of lower land was obliged to receive all flows of surface water onto his or her land that occurred naturally from the higher land.  The Water Act 1989 replaced the 'free flow principle' with a 'reasonableness' test.  That is, the question is no longer whether a flow of water is 'natural' but whether it is 'reasonable'.

The Court of Appeal agreed with the trial Judge's finding that the flow onto the Hazelwood land of waters generated in substantial part by the municipal drains on higher ground was reasonable.  The seven key factors considered in concluding that the flow of water was 'reasonable' were:

  1. the contours of the land;
  2. the use of the lands concerned and the lands in the vicinity;
  3. the limited sense in which the water flow complained of from the Council drains could be said to be something other than a natural flow (ie, the 'free flow' principle);
  4. the purpose for which and degree of care with which the Morwell Main Drain was originally constructed by the SECV in 1949;
  5. there was no evidence of a lack of appropriate regard to the cumulative impact of the subsequent drainage works which occurred over time;
  6. the fact that all drainage works were assumed to have appropriate statutory authority;
  7. the fact of prior consent or acquiescence to the flows of water for more than 60 years, since the Morwell Main Drain was first constructed by the SECV for the purpose of diverting flows of storm and rain water run-off from entering the open cut mine. 
The Court of Appeal noted that the flow of water carries an ongoing risk of serious damage to the Hazelwood land and the northern batters in particular.  However in this case, the flow was considered to be reasonable.

What does it mean for me?

The Court of Appeal has provided decision-makers (and those who advise them) guidance in assessing the question of reasonableness of flow of water from public land or infrastructure into private drains or onto privately held land, identifying seven relevant considerations.

Alison O'Brien
Acting Victorian Government Solicitor

Eliza Bergin
Principal Solicitor



[1] Hazelwood Power Partnership v Latrobe City Council [2015] VSCA 129 (Warren CJ, Osborn and Beach JJ).  See further, section 20 of the Water Act 1989
[2] [2015] VSCA 129

Wednesday, 19 October 2016

Attorney-General v Honourable Mark Dreyfus: When can burdensome freedom of information requests be refused?

Freedom of information (FOI) schemes in both Victoria and the Commonwealth give public entities the power to refuse unreasonably burdensome FOI requests.  In the case of agencies, requests may be refused where they would substantially and unreasonably divert the resources of the agency from its other operations. In the case of ministers, requests may be refused where they would substantially and unreasonably interfere with the performance of the minister's functions. 

A recent decision of the Full Court of the Federal Court, Attorney-General v Honourable Mark Dreyfus [2016]FCAFC 119, provides guidance as to when a request can be refused on this ground.

The decision, which was handed down on 6 September, concerned an FOI request made by the Hon Mark Dreyfus, a Member of the Commonwealth Parliament, seeking access to the diary entries of Commonwealth Attorney-General George Brandis.  Mr Dreyfus requested entries for the period 18 September 2013 to 12 May 2014 in a 'weekly agenda' format.  The diary entries were generally brief, containing the time of the meeting, the person to be met and occasionally a short description. 

The Attorney-General initially refused the request, on the basis that processing it would 'substantially and unreasonably interfere' with the performance of his functions.  The Attorney-General estimated that the process would take around 630 hours, including time spent gathering information that could not be gleaned from the entries alone and consulting with third parties mentioned in the entries.

The Administrative Appeals Tribunal set aside the Attorney-General's decision, a finding that the Full Court of the Federal Court upheld. 

The Federal Court's decision turned on the following two questions:
  • When would the Attorney-General be required to consider extrinsic documents in determining whether a claimed diary entry could be released?
  •  When would the Attorney-General be required consult with third parties to determine whether such a party might wish to claim an exemption?

In relation to both questions, the Court held that the Attorney-General would only be required to consider extrinsic documents or consult with third parties if it appeared from the face of the entries that this would be necessary.  The Court found that most of the entries did not require this.  The request could not, therefore, be rejected for substantial and unreasonable interference with the performance of the Attorney-General functions. 

The Federal Court's judgment is consistent with past determinations on similar issues.  In Fletcher and Prime Minister of Australia[2013] AICmr 11 (22 February 2013),  for example, the Australian Information Commissioner upheld a request for access to cross-bench meeting entries in the Prime Minister's diary for the period of about one year.

The decision is a useful reminder for public entities to adopt a pragmatic approach when considering whether a FOI request would be a substantial and unreasonable diversion of resources, and to keep in mind that it will be necessary to prove, with persuasive evidence, to the Freedom of Information Commissioner, or VCAT, that any claim that the processing of a particular FOI request would constitute a substantial and unreasonable diversion of resources would in fact do so.

Acting Managing Principal Solicitor

Managing Principal Solicitor



Monday, 10 October 2016

Foreign Resident Capital Gains Withholding Tax

Sales of certain taxable Australian property made after 1 July 2016 are subject to a new withholding regime introduced by the Tax and Superannuation Laws Amendment (2015 Measures No 6) Act 2016 (Cth).  Under this regime, purchasers are required to withhold 10 percent of the purchase price on all acquisitions of certain taxable Australian property and remit it to the Australian Tax Office (ATO) unless the vendor provides a clearance certificate.

This measure has been introduced to improve compliance with capital gains tax rules by foreign residents, but will have widespread implications for Australian residents involved in property transactions.

When does the measure apply?

The regime applies to contracts entered into after 1 July 2016 by which the purchaser acquires certain taxable Australian real property, including:

  • Real property in Australia, including land, buildings, residential and commercial property;
  • Lease premiums paid for the grant of a lease over real property in Australia;
  • Mining, quarrying or prospecting rights;
  • Company title interests; and
  • Options or rights to acquire such property or such an interest.

Certain transactions are excluded, including real property interests of less than $2 million, transactions listed on an approved stock exchange, or where the vendor is under external administration or in bankruptcy.


What does this mean for purchasers of property with a market value of $2 million or more?

If the purchaser receives a valid clearance certificate from the vendor, withholding tax is not to be withheld from the transaction and the purchaser can rely on the certificate without making further enquiries.

If the purchaser is not provided with a valid clearance certificate before settlement, the purchaser must withhold 10 per cent of the purchase price and pay it to the ATO on or before the day the purchaser becomes the owner of the asset.  A short grace period applies before interest begins accruing.
Prior to settlement, all purchasers involved in the sale must complete an online Purchaser Payment Notification form, including the details of the vendors and the relevant asset. Once the form is processed, each purchaser will receive a payment reference number, payment slip and barcode.  These are used when making the payment to the ATO via electronic transfer, in person at Australia Post or mailed with a cheque.
There are significant penalties for failing to withhold the required amount, and administrative penalties may also apply.


What does this mean for vendors?

Australian resident vendors of relevant real property will need to apply for a clearance certificate and provide this to the purchaser before settlement to ensure no funds are withheld from the sale proceeds.

Vendors can apply for a clearance certificate at any time via the ATO's online application form.  Where the names of the registered proprietor and the taxpayer are consistent a certificate should be issued automatically within days.  Vendors should apply as early as practicable and check for consistency between ownership and tax records to avoid delays in the process.

A clearance certificate is valid for 12 months from the date of issue and can be used for multiple transactions, provided it is valid at the time the certificate is given to the purchaser.  If there are multiple vendors, each vendor will need to supply a clearance certificate to the purchaser.
Vendors will only receive credit for the tax withheld if the purchaser pays the relevant amount to the ATO.  Vendors should therefore ensure that appropriate contractual mechanisms are in place to cover these new obligations.

Significance to clients

This measure will need to be considered for every transaction involving Australian real property or any entity whose underlying value is principally derived from Australian real property.  The regime has broad application and will impact on a significant number of transactions, including where vendors are in fact Australian residents for tax purposes.

The Law Council of Australia, the Law Institute of Victoria and the Law Society of New South Wales have raised concerns about this initiative in a submission to the Federal Government, specifically that it will generate 'uncertainty, delays and a significant administrative burden' for Australians who purchase real estate with a market value of $2 million or more.
We will keep you informed if the ATO  issues rulings which exempt Australian government departments from the need to:

  • obtain clearance certificates when they are a vendor; or
  • remit the withholding tax to the ATO when they are a purchaser.

You can find out more on the ATO website.If you would like to discuss the impact on your department or agency, please contact:

Anthony Leggiero
Managing Principal Solicitor
03 9947 1430


Friday, 2 September 2016

Policeman defamed

Barrister who ran Tyler Cassidy website ordered to pay $150,000


The Supreme Court of Victoria decision Dods v McDonald shows that aggravated damages will be awarded where defamatory implications are grave and maintained without any apology offered.

Facts

Tyler Cassidy was 15 years old when he was shot by police in a park in Melbourne.  Colin Dods, the plaintiff, was one of the Victoria Police Members who fired at Tyler.  The plaintiff was exonerated of personal responsibility and was found not to have contributed to Tyler's death in findings which followed a coronial inquiry conducted in 2011.

The defendant, a Queensland based barrister, was aware of the Coroner's Court findings when he published two statements about the plaintiff's involvement in Tyler's death on pages of his website (which was focussed on Tyler's death) in 2012.  The plaintiff alleged that the natural and ordinary meaning of these statements included that: the plaintiff had executed, shot and killed, gunned down, and chose to shoot Tyler; used excessive force out of proportion to the threat posed by Tyler; and committed manslaughter by shooting Tyler.

The defendant denied the plaintiff's repeated requests for an apology although he did modify the relevant pages of his website and ultimately closed the website down.  After amending his defence a number of times prior to trial, the defendant denied that the publications were defamatory, denied that the plaintiff was entitled to aggravated damages and sought to rely on the defence of triviality (ie that it was unlikely in the circumstances that the plaintiff sustained any harm).  The defendant maintained the defence of justification (ie truthfulness) until shortly before the trial.

Decision

A jury found that the publications were defamatory and the defence of triviality was not established.

His Honour Justice Bell ordered that the defendant pay the plaintiff $150,000 in damages, including aggravated damages.  His Honour found that certain aspects of the defendant's conduct of his defence had been improper and unjustified and, even though the scope of publication had not been large, the jury had found that the defamatory content had been grave.

Read more about compensation awarded to a woman who was the subject of sexually explicit Facebook posts here or about the tweet that led to former Treasurer Joe Hockey being awarded $200,000 here.

If you would like to know more about the law of defamation please contact:

Max Steed
Solicitor

Anna English and Dianna Gleeson
Managing Principal Solicitors