Thursday, 30 April 2015

Identity crisis: The importance of identifying the correct party to a contract

The importance of identifying the correct party when entering into a contractual arrangement is paramount.

When working as a government lawyer, you can often find yourself in unusual situations, like buying chaff for horses, bullet proof vests for dogs and canned soup for prisoners.  In the context of purchasing goods from local suppliers, knowing who is responsible when the goods are faulty is essential.  Getting this wrong can create significant issues when it comes to disputes and when seeking to enforce terms of the contract.

It is easy to make mistakes and errors can arise in a number of ways:
  • referring to a non-existent company;
  • not referring to the correct individual or correct company; or
  • referring to a business name, rather than the holder of that business name.

Sometimes it is difficult to identify the correct party - there are multiple ways to set up and manage a business and just navigating company searches can be  a challenge. Companies can trade under numerous business or trading names, but it is the holder of that business or trading name that is the legal entity for contracting purposes.

Although courts will strive to ascertain the correct contracting party by applying a test of what a reasonable person would think, it is important to know how to undertake this process correctly from the outset.  Fortunately, post-contractual communications may be of aid to a court that is asked to determine the correct contracting entity.  However, it is preferable not to have to rely on, for example, email chains with a supplier, to overcome an incorrect party name in the contract.

To avoid the risks associated with contracting with the wrong entity, it is important to:
  • have a written contract or written confirmation of an oral contract , not an oral one;
  • confirm the contracting entity by:
    • asking the other party to provide their business details (i.e. ABN/ACN); and
    • undertaking company searches on ASIC (via ASIC Connect) to verify those business details are for the correct entity, 
  • if the entity uses a business name, confirm that the holder of the business name (via ASIC Connect) is the entity listed in the contract; and
  • ensure that signature blocks clearly set out the capacity in which a person signs on behalf of their company, partnership or as a sole trader.

If you are unsure who you are contracting with, please seek legal advice.

Carolyn Doyle
Managing Principal Solicitor
9947 1403

Sanishya Fernando
9947 1439

Friday, 24 April 2015

To retain or not to retain, that is the question: PROV's new record keeping policy

 Interest in records management tends to be events driven.  Last year the release of the Privacy and Data Protection Act 2014 (PDP Act) heightened awareness of data security issues for government entities.  Then in the lead up to the 2014 State election, minds were turned to which documents should be retained, or not retained, as the case may be.  

But best-practice records management presents constant challenges in respect of both form and content of records.  Records now come in diverse forms - not only traditional paper documents and record-keeping or business systems, but also email and social media accounts and network drives, for example.  But their significance is premised on their nature and content, which in some cases can be difficult to assess. 

Additional guidance is now to hand.

New policy released

In February this year, Public Record Office Victoria (PROV) released an over-arching policy on record-keeping for the Victorian Government, pursuant to its responsibility for collecting and preserving records from all Victorian government and local governing bodies whose records are public records under the Public Records Act 1973 (PR Act).    

PROV's new 'Record Keeping Policy: Appraisal Statement for Public Records required as State Archives' (Appraisal Statement) sets out the key appraisal considerations for specifying and identifying those Victorian records that are of permanent value to the Government and people of Victoria.  

What is 'appraisal'?

Appraisal is the process by which those records that are required for preservation as State Archives are identified by Government agencies.  In PROV's words:
appraisal is a planned and documented process based on research and analysis to provide transparent, reasoned and consistent reasons for the retention or non-retention of records. It is a reasonably complex, judicious and somewhat subjective process that involves the evaluation of the continuing value of records for the government and community against the cost of retaining and keeping the records accessible in perpetuity.
PROV has divided the characteristics of records of enduring value into the following six categories:
  1. The authority, establishment and structure of government;
  2.  Primary functions and programs of government;
  3. Enduring rights and entitlements (of individuals and groups);
  4. Significant impact on individuals;
  5. Environmental management and change; and
  6. Significant contribution to community memory.
Some of these activities and associated records are relatively self-evident.  For example, in respect of the second category, PROV lists the State budget papers as an example of 'Records that illustrate the government's role in the management of the Victorian economy'. 
However other categories, notably the fourth, are potentially more problematic.  Here PROV's guidance is particularly useful in circumstances where appraisal decisions may affect the 'most vulnerable members of Victorian society'.  Records listed as potentially falling into category four include:
  • Collections and analyses of data compiled for planning and decision making;
  • Representations and appeals against the decisions/actions of government or legislature; and
  • Petitions documenting significant community opposition to government actions or policies.

Records not of permanent value

But what about those records appraised as not being of permanent value? All public records must continue to be retained for as long as they're needed to meet Government's administrative needs and legislative requirements, and to support accountability and community expectations. Section 19 of the PR Act has the effect that it is unlawful to dispose of or destroy a public record other than in accordance with a Standard made under s 12.  Minimum periods are set out in the Standards, or Retention and Disposal Authorities, issued by PROV for use by Government agencies.

Retention periods and personal information

Since opinions may differ as to how an individual record should be categorised in light of the Standards, these minimum periods are not without controversy, particularly in light of the requirements of Information Privacy Principle (IPP) 4.2 of the PDP Act (and its predecessor in the Information Privacy Act 2000).  IPP 4.2 requires destruction or permanent de-identification of personal information 'if it is no longer needed for any purpose'. 

The PR Act prevails over IPP 4.2 as a result of s 6 of the PDP Act (and previously s 6 of the IP Act).  Decisions of the Victorian Civil and Administrative Tribunal have accepted that personal information retained pursuant to a requirement of the PR Act is still relevantly 'needed' for a purpose (Caripis v Victoria Police(Health and Privacy) [2012] VCAT 1472; Zeqajv Victoria Police (Human Rights) [2013] VCAT 2105). 

Agencies should therefore be aware that retention of personal information beyond the retention period specified in a relevant Standard increases their risk if a complaint is made under IPP 4.2.  Moreover, when protective data security standards are released this year under the PDP Act, agencies may need to reevaluate the cost of managing any records that they are not required to retain.

If you are in the Victorian Government and would like assistance in respect of your agency's records management or privacy obligations, contact:

Managing Principal Solicitor
9947 1403

Senior Solicitor
8684 0483

Friday, 17 April 2015

Pranking doesn't pay: when can a licensing authority inquire into criminal conduct by a licensee?

In Australian Communications and Media Authority v Today FM (Sydney) Pty Ltd, a judgment handed down on 4 March 2015, the High Court considered the circumstances in which a regulator can investigate and make findings with respect to alleged criminal conduct by a licensee. The case arose out of a now infamous incident in which Australian commercial radio personalities Mel Greig and Mike Christian telephoned nurse Jacintha Saldanha claiming to be members of the British royal family and sought information regarding the health of the Duchess of Cambridge. The prank call was recorded and broadcast on Today FM's Hot 30 Countdown program on 5 December 2012. Ms Saldanha later committed suicide.

Action by the Australian Communications and Media Authority

ACMA investigated the conduct of Greig and Christian for the purpose of determining whether action should be taken with respect to Today FM's commercial radio broadcasting licence. In a preliminary investigation report, ACMA concluded that Greig and Christian had committed a breach of the Surveillance Devices Act 2007 (NSW). ACMA therefore determined that Today FM had breached a condition imposed upon its commercial radio broadcasting licence by the Broadcasting Services Act 1992 (Cth) (the Act) that it not use its broadcasting service 'in the commission of an offence against … a law of a State'.

Court Proceedings

Today FM sought a declaration in the Federal Court that the Act does not authorise ACMA to make a finding that a licensee has committed a criminal offence. It submitted that the Act only authorises ACMA to take notice of the fact that a licensee has been convicted of an offence by a court. In the alternative, Today FM submitted that the Act breaches the separation of powers mandated by the Commonwealth Constitution by investing ACMA with judicial power.
Today FM's application was dismissed by Edmonds J. An appeal to the Full Federal Court was allowed. ACMA appealed to the High Court.

Judgment of the High Court

French CJ, Hayne, Kiefel, Bell and Keane JJ stated that 'it is not offensive to principle that an administrative body is empowered to determine whether a person has engaged in conduct that constitutes a criminal offence as a step in the decision to take disciplinary or other action.' ACMA was required to determine, to the civil standard of proof, whether criminal conduct had occurred. However, this was to be done as a step in determining whether ACMA should take administrative action in response to a breach by Today FM of its licence conditions. ACMA was not required to determine criminal guilt as a step in the infliction of punishment. According to the majority, there was nothing 'incongruous' about conferring upon a licensing authority power to determine whether a broadcasting service had been used in the commission of a criminal offence.

The majority rejected Today FM's constitutional argument in peremptory fashion, stating that 'none of the features of the power conferred on the Authority to investigate and report on breach of the … licence condition and to take consequential administrative enforcement action support the conclusion that it is engaged in the exercise of judicial power.' Gageler J delivered separate concurring reasons.

What does this case mean for decision-makers?

Administrative decision-makers are often called upon to determine whether conduct amounting to the commission of a criminal offence has taken place. Thus, for example, a Tribunal exercising functions under the Health Practitioner Regulation National Law may be called upon to determine on the balance of probabilities whether a health practitioner has engaged in professional misconduct amounting to the crime of rape or indecent assault.

The Court's decision in Today FM is a reminder that the treatment of criminal offences in the context of administrative decision-making is a wholly different matter from the conduct of criminal proceedings. Administrative decision-makers are not bound by the rules of evidence and must take into account all information that is relevant to the performance of their statutory functions. They apply standards of satisfaction as to factual matters that are fundamentally different from the standard of proof applied by criminal courts. Thus an administrative decision-maker may properly conclude that an offence has been committed even where an acquittal has been entered in respect of the offence by a criminal court. In addition to confirming the scope of ACMA's jurisdiction under the Act, Today FM provides a valuable caution against implying principles of criminal law into administrative decision-making.

Of course, Today FM is a corporation and is not entitled to the privilege against self-incrimination. The issues considered by the High Court in Commissioner of the Australian Federal Police v Zhao were therefore not relevant to this matter. It should, however, be borne in mind that in an appropriate case, an injunction may issue to restrain an administrative decision-maker from acting in circumstances where the performance of its functions may undermine an accused's right to silence.

For queries relating to any of the issues identified in this blog, please contact:

Principal Solicitor
Janine Hebiton
Managing Principal Solicitor