by Amy Lowry | Apr 4, 2024 | Insights
The Facts
The Ruby Princess class action involves claims under Australian Consumer Law (‘ACL’) against Carnival for damage and loss suffered by the passengers of the cruise that took place in March 2020. It is alleged passengers contracted COVID, resulting in instances of death because of Carnival’s failure to take appropriate measures to protect the passengers. Of those passengers existed a sub-category of 696 passengers referred to as the ‘US subgroup’. The US subgroup held contracts with Carnival that were formed outside of Australia and contained ‘US Terms and Conditions’.
The US Terms and Conditions contained a choice of law clause applying the general maritime law of the United States, an exclusive jurisdiction clause in favour of the Central District of California and a class action waiver clause. Carnival sought to rely upon the class action waiver clause to stay the US subgroup’s representative proceedings whereas Karpik asserted s 23 in Pt 2-3 of Ch 2 of the ACL (unfair contract terms) applied to the US Terms and Conditions and that the class action waiver was unfair and therefore void.
Extraterritorial Application of the ACL
The extraterritorial application of s 23 of the ACL was the centre point of this appeal. The common law presumption against extraterritoriality, being that subject to contrary intent, statutes describing acts, matters or things will not have an extraterritorial effect, is based on interpretation. It was found that s 5(1)(c) and (g) of the Consumer and Competition Act 2010 (Cth) (‘CC’), extends the application of the ACL protections to conduct outside of Australia where a business carries on business within Australia. When further read alongside s 23 of the ACL, the statute is a clear departure from a presumption against extraterritoriality. The High Court further went on to state that there would be nothing irrational in extending these protections onto those who carry out business in Australia and it be that Parliament’s intention is to require corporations conducting business in Australia to meet the norms of fairness irrespective of where those contracts are made.
One of the issues Carnival took with s 23 of the ACL applying to contracts made outside of Australia concerned the potential for “absurd and capricious results”. The example provided was where a company manufactures vehicles in Europe and sells them in Australia and therefore is subject to s 23 in relation to the other cars it sells within Europe. The High Court rejected this argument, finding that whether Australian law or judgments are recognised in other jurisdictions is a matter for foreign law and in any event, it would always be open for a respondent to stay a proceeding on the basis the Court is an inappropriate forum for the proceeding. In that example, whether an Australian court is an inappropriate forum to bring a claim, will depend on the general circumstances of the case including the connection of parties to the jurisdiction.
Unfair Contract Terms
After finding that s 23 of the ACL applied to the US Terms and Conditions contained in contracts formed outside Australia, the High Court considered whether the class action waiver clause was an unfair term or not. In finding the class action waiver was an unfair term, the High Court addressed the elements of s 23 as follows:
- Does the class action waiver cause a significant imbalance in the parties rights under the contract?
The High Court found the class action waiver did cause a significant imbalance in the Us subgroup’s rights under the contract because whilst the waiver did not remove the existence of a Us subgroup’s right to sue or their capacity to sue Carnival, it acted to prevent or discourage them from bringing a claim where the cost of doing so as an individual may be uneconomical.
- Does the term protect the legitimate interest of a party?
It was found that there was no legitimate interest in Carnival preventing the Us subgroup from participating in class actions.
- If the term is applied or replied upon, does it cause detriment?
It was stated that this question does not require significant detriment, not does it need to be limited to a financial detriment and can extend to a party being disadvantaged in a practical effect.
- On the balance, is the term transparent?
It was found the term was not transparent because it was not presented clearly or readily available. Once passengers booked the cruise and received their booking confirmation email, that email contained a link to a website which displayed three contracts and it was for the passenger to ascertain which of those contracts applied to them. It was in one of those contracts that the class action waiver term is found.
Exclusive Jurisdiction Clause
Whilst the exclusive jurisdiction clause was found valid and not an unfair contract term, the High Court retained a discretion whether to stay the proceedings and in exercising that discretion, found the Us subgroup had a strong judicial advantage in remaining in the class action and fracture the litigation. It was also found to stay the proceeding may result in denying the Us subgroup access to justice.
Practical Implications
This case highlights the importance of businesses engaging in business within Australia yet forming or entering contracts outside of Australia to be mindful of their obligations with respect to unfair contract terms. The High Court has made it clear that unfair contract terms have an extraterritorial reach. There has also been much debate about the benefit (or not) of class actions, particularly with regard to the significant cost of litigating class actions, it has also been made clear that terms limiting consumer’s access to participating in class actions is at the detriment of the consumer and of no legitimate protection of the business.
by Amy Lowry | Apr 4, 2024 | Insights
In Queensland, any person that has been charged with an indictable offence must have their matter heard in either the District or Supreme Court of Queensland, and have their matter heard before a jury. Indictable offences are offences that encompass a serious element, such as rape, murder, manslaughter, and robbery.
Whilst these matters are to be heard in the higher Courts, all criminal matters are commenced in the Magistrates Court. In order for the charges to be moved from the Magistrates Court to the District or Queensland Court, they must go through the process of committal. Committal is the process whereby the Court must be satisfied that there is a prima facie case that should be heard by the higher court, prior to it being moved.
Brief of evidence
The purpose of the committal hearing is not establishing a person’s guilt, it is a preliminary step in proceedings that allows the court to determine if there is sufficient evidence to proceed to a jury trial. During this preliminary step, the prosecution must serve on the defence the brief of evidence that they seek to rely upon. The evidence must outline all witness statements, contain relevant documentation; including recordings, photographs and any other relevant evidence that pertains to the charge.
Committal hearing involving oral evidence
Committal hearings can proceed with or without oral evidence. Hearings with oral evidence allows the defence to cross examine the Crowns witness to test the accuracy and creditability of their witness. The oral hearing is generally reserved for non-guilty pleas and provides the chance for the defence to determine weakness in the prosecution’s case. If the court determines that there is insufficient evidence, then the matter will be dismissed. However, if the Magistrate determines that there is enough evidence for the jury to be satisfied beyond reasonable doubt, then the Magistrate will commit the matter to a higher court.
Committal hearing without oral evidence
Generally, committal hearings will not require oral evidence and can be committed by consent. One way that a matter can be committed by consent is by a full hand up. A full hand up committal requires the prosecution to provide the brief of evidence to the Magistrate who will determine if there is sufficient evidence to commit the matter to a higher court.
Another way a committal can occur is through a registry committal. This process is an administrative avenue and allows the charges to be committed by the registry and without appearance in court. For a registry committal to be permitted, the accused must have legal representation, not be in custody, and must not be in breach of an undertaking of bail. The prosecution must serve the brief of evidence to the defence who then makes the application for registry committal.
The committal hearing process is a vital mechanism for determining whether there is sufficient evidence to commit a person to stand trial. The process ensures that due process is followed and that all actors of the process are ensuing that justice is being administered.
by Amy Lowry | Apr 4, 2024 | Insights
A discretionary trust has long been established as the most common form of asset protection, it has been thought to be the one way to shield your assets from creditors and divorce.
In 2008, the High Court held in Kennon v Spry that for assets held in a discretionary trust to be called into the property pool available for division in a family law property settlement, one of the parties needed to have both effective control of the trust and a right as a beneficiary of the trust in order to constitute property under section 79 of the Family Law Act 1975 , it was held that if a party only has a right as a beneficiary under the trust deed and no effective control it is merely a financial resource under section 75(2).
The recent decision in Woodcock (No 2) challenged this previous decision by asserting that a beneficiary’s rights in a discretionary trust, specifically the right to due administration and consideration, constitutes property under section 79 of the Family Law Act 1975. The trial judge found that despite the lack of control over the potential benefits of the trust, the husbands rights as a beneficiary were considered property, influencing the division of the property pool.
The decision in Woodcock has created uncertainty as to how a court will treat a party’s interest in a discretionary trust in family law matters. There is a possibility that following the decision that there could be an appeal as to the trial judge’s decision but if upheld, it could have a significant impact on how discretionary trusts are dealt with in the division of assets, with the potential of not favouring the party who benefits under the discretionary trust.
by Amy Lowry | Apr 4, 2024 | Insights
In estate planning and preparation, an often overlooked yet indispensable document is the Enduring Power of Attorney (EPA). In Queensland, this legal document empowers individuals to plan for unforeseen circumstances ensuring that their financial and personal affairs are managed accordance with their wishes.
The EPA is a legal document which designates a trusted person, known as an attorney, to make decisions on behalf of the individual if they become incapacitated or unable to make decisions independently. This authority extends to financial and health/personal related decisions offering a comprehensive safeguard for the individual’s interests. Moreover, an EPA allows individuals to remain in control of their affairs, by carefully selecting an attorney they can ensure that their values and preferences are respected, providing a peace of mind for themselves and family members during a difficult time.
The EPA serves as a proactive measure to avoid potential complications and family disputes, without this document family members may face legal hurdles (such as QCAT appointed Guardianship) and delays in making decisions for their loved ones potentially causing financial strain and emotional distress.
In Queensland, the enduring nature of the EPA is particularly crucial, as it remains effective even after the loss of capacity, this durability offers a seamless transition of decision-making authority to the attorney.
An EPA is an essential tool that that empowers individuals to plan proactively for unforeseen events, it is a significant and vital step in estate planning which promotes autonomy and ensures a smooth transition in times of need and in securing one’s future.
by Amy Lowry | Apr 4, 2024 | Insights
Following separation of a marriage or de facto relationship, parties usually need to arrange how they are going to divide assets and liabilities owned both individually and jointly between the parties. There is a common misconception that both parties are always entitled to an equal division of the property pool. This is not always the case.
In order to determine a just and equitable division of the property pool, there are a broad range of factors that the Court considers under Family Law Act 1975 (Cth).
These factors are used to analyse contributions made by or on behalf of each party towards the acquisition, maintenance, or improvement of property in addition to homemaking and parenting contributions. Consideration is given to the contributions prior to commencement of, during, and following separation of the relationship. The weight given to each of these factors is also consider in addition to the length of the relationship and the overall property pool. For example, initial contributions prior to the relationship will likely be considered with more weight for a 4-year relationship compared to a 14-year relationship. However, each separation is different, and the weight given to each factor is heavily dependent on the surrounding circumstances.
Contributions by the parties can be broken down into the following general categories:
- Initial contributions – whether either party had a greater income or owned more assets and liabilities than the other at the commencement of the relationship.
- Financial Contributions – whether either party made greater contributions than the other by way of payment towards general living expenses, bills, mortgage payments, payment of maintenance, purchasing property, and liabilities taken out such as credit cards. This also takes into account each parties employment throughout the relationship.
- Non-financial Contributions – whether either party made greater contributions than the other by way of gifts or inheritances from family, managing investments, running a business, or performing renovations to property.
- Homemaker & Parenting Contributions – whether either party contributed more than the other towards the welfare of the family and household such as proportion of care for children of the relationship, cooking meals, general house cleaning and yard maintenance.
In addition to the contributions by the parties as set out above, consideration is also given to the future needs of each party. This includes age, health, current financial situation, caring responsibilities of children and earning capacity. For example, a party who is unable to maintain employment due to ongoing health issues requiring expensive treatment presents a greater future need than someone who is healthy and working full time.
In instances where there is a vast difference in income between the parties, the party with a low or nil income may also have the ability to seek spousal maintenance. Spousal Maintenance is a sum of money that can be paid by periodic instalments or lump sum payment. In order to determine the eligibility and sum of spousal maintenance, the court considers what are reasonable financial needs based on the surrounding circumstances on a case-by-case basis. This is determined based on future need factors previously discussed alongside the lifestyle of the parties during the relationship and whether either party is making child support payments.
Due to the extensive scope of factors taken into consideration, a party’s entitlement in a property settlement cannot be determined on mathematical basis. Rather, it is determined in each matter by taking into consideration of all surrounding circumstances. Therefore, it is important to obtain legal representation upon separation to ensure that you obtain a just and equitable outcome.
