DCCL COVID-19 Resource Centre

DCCL COVID-19 Resource Centre

DCCL COVID-19 Resource Centre

Issue date: 8 April 2020 

This is our second publication of useful resources for our clients. A link to the first publication is here. Clients are welcome to raise specific issues which they would like us to comment upon in future publications.

COVID-19 privacy issues in the workplace

Business owners face a dilemma if an employee or visitor displays symptoms of COVID-19. The information is clearly personal to the individual, but at the same time of direct relevance to colleagues in the workplace. Queries have arisen as to where (and if so, what) health information can be collected from employees and visitors, and to whom it can be disclosed. These issues are analysed in an article which appears on our website.

Competition law: COVID-19 and cartel conduct

In response to the emerging COVID-19 pandemic, Australian businesses are being encouraged to come together to support the ever-evolving needs of the community. In doing so, however, businesses must ensure that they do not fall foul of Australian competition laws and, in particular, the anti-cartel conduct provisions. We have published an article on our website providing an update on recent developments in this area, including an update on a number of interim authorisations issued to businesses (including to banking and insurance providers, supermarkets, medical device suppliers, pharmaceutical suppliers, internet providers, airlines and shopping centres) to engage in what (without an authorisation) might be prohibited conduct.

Consumer rights regarding COVID-19 event cancellations

Government directives banning “non-essential” gatherings have led to the cancellation of many ticketed events, such as concerts and music festivals, around Australia. In ordinary circumstances, the cancellation of an event would entitle all ticketholders to a full refund under warranties contained in the Australian Consumer Law. However, the Australian Competition and Consumer Commission (ACCC) has published guidance that, where an event is cancelled due to government restrictions, these warranties may be impacted and the right to a refund may not apply. We have published an article on our website which considers the effect of these guidelines, the rights of consumers, and the obligations of event organisers regarding events cancelled due to the government’s coronavirus measures.

COVID-19 medicines receive Australian Therapeutic Goods Administration exemption

Special measures have been passed which exempt specified treatments for COVID-19 from requirements to be registered on the Australian Register of Therapeutic Goods prior to their supply. We report on these exemptions in our website article.

Contractual obligations; force majeure and frustration

Force majeure clauses are included in many contracts and serve to excuse non-performance or delays in performance in certain situations. A force majeure clause must be expressly included and will not be implied by law. The wording of the clause will determine whether and how the clause might apply in the present circumstances. Parties to contracts where the current circumstances have or are threatening to make performance unlikely or impossible in accordance with the contractual terms should look at their contracts to determine whether and how the clause might apply to excuse one or other party from performance.

In situations where unforeseen circumstances have caused such a fundamental or radical change that performance has become impossible, a Court might hold that the contract has become frustrated. New South Wales, South Australia and Victoria have legislation dealing with frustration in a contractual context, whereas the other States and Territories rely on the common law.

There is a high hurdle for establishing that a contract has been frustrated and a contract will generally not be regarded as being frustrated if it contains a force majeure clause. We have published an article on our website, which provides further detail on frustration and force majeure clauses in a coronavirus context.

Changes to Corporations Act, Bankruptcy Act in relation to insolvency and financial distress

The Australian Government has passed legislation providing a range of mechanisms for the support of individuals and businesses in the current economic environment. Amongst the package of support are amendments to the Bankruptcy Act and the Corporations Act designed to give relief to individuals and companies in financial distress. 

The first of such measures is the temporary increase to the time within which a response is required to a statutory demand to avoid the commencement of insolvency proceedings. Individuals and companies now have 6 months to comply with any such demands rather than 21 days. Furthermore, the minimum threshold for issuing such a demand in each case has been raised to $20,000.00. 

The legislation also amends the Corporations Act to provide a safe harbour for directors from the prohibition on insolvent trading. For the period of 6 months from 25 March 2020, directors will be relieved of personal liability which would otherwise attach to insolvent trading where a debt is incurred in the ordinary course of business during the 6 month period and which is incurred before an administrator or liquidator is appointed to the company.

Details of these and other temporary relief measures now available are set out in the Federal Government’s Fact Sheet.

Increased review of foreign investment in Australian-based assets

Changes to the foreign investment framework have been made which are designed to prevent corporate raiding of distressed Australian companies by foreign investors. Notably, the threshold investment amount for which Foreign Investment Review Board (FIRB) approval is required has been reduced to $0 and the time period for the FIRB to review applications has been extended to 6 months. 

Estate planning and business succession planning

We have published an article on our website which provides information about six important areas clients may wish to consider, namely: (1) business succession plans, (2) control and succession of family trusts and self-managed superannuation funds, (3) wills, (4) testamentary trusts, (5) estate planning and (6) enduring powers of attorney. 

Our previous publications

A link to our 31 March 2020 Legal Resource Centre publication is here. In brief, it provides information about:

  • the continuing operation of the Australian courts (more information is available here);
  • electronic signing (more information is available here); and
  • ACCC information for consumers and businesses (more information is available here).

If you have any queries, please get in touch with one of the principals in our COVID-19 Legal Resource Team:

Dr Gordon Hughes AM

Principal Lawyer

E: GHughes@davies.com.au

P: +61 3 9254 2582

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Craig Finlayson CTA 

Principal Lawyer 

E: CFinlayson@davies.com.au

P: +61 3 9254 2716

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Paul Dewar

Principal Lawyer

E: PDewar@davies.com.au

P: +61 2 9293 1048

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