The Self-Storage Business and The PPSA

The facts in this scenario are very loosely based on some of the facts in Carson, in the matter of Hastie Group Limited (No 3) (2012) APPSR 701-001; [2012] FCA 719 (Hastie).

The Tenant Business had a loan from the Bank to assist in establishing its restaurant business. The Bank secured that loan against all the real and personal property of the Tenant Business and registered that interest on the Personal Property Securities Register (PPSR). After registration of the security interest was effected by the Bank, it provided notice of that registration to the Tenant Business, as per s 157(1 ) of the PPSA.

Under the security agreement between the Bank and the Tenant Business, it would be a breach for the Tenant Business to move the secured items without giving notice to, and obtaining permission, from the Bank. It would also be an event of default under the agreement which would enable the Bank to call in the outstanding portion of the loan.

The Tenant Business stored some of its goods in premises owned by a third party, a self-storage company. The Self-Storage Company had a contractual right of entry to the premises when money was owing on the storage.

The Self-Storage Company secured its interest under the contract with the Tenant Business against all personal and real property of the Tenant Business. In so contracting with the Tenant Business, it was aware of the earlier security interest granted by the Tenant Business to the Bank. After the security interest was registered by the Self-Storage Company, it provided notice of that registration to the Tenant Business, as per s 157 (1) of the PPSA.

The Self-Storage Company privately acknowledged that the security interest of the Bank had higher priority than that of the Self-Storage Company, as it was created earlier in time and was perfected by registration.

Hard times hit the Tenant Business and its restaurant business folded. In breach of the agreement with the Bank, the Tenant Business moved some of the property from the restaurant business premises to the self-storage premises. Subsequently, as a result of an application made to the court by the Bank, the Administrators were appointed to take control of the affairs of the Tenant Business.

The Administrators were responsible for identifying property that was subject to third party security interests. The PPSR proved extremely difficult for the Administrators to rely upon for that purpose:

• where the registration in the PPSR was general, rather than specific, and
• because many transitional security interests were not registered.

Once they commenced their task proper in respect of the Tenant Business, the Administrators discovered there were many registrations noted against the Tenant Business in the PPSR.

On 28 May 2012, the Administrators wrote to all creditors who had an interest recorded against the Tenant Business in the PPSR . Enclosed with each letter was a Pro Forma Security Interest Summary that each creditor was requested to complete in respect of each security interest the creditor held. Each creditor was requested to provide notification of its interest as a matter of urgency and, in any event, by no later than 31 May 2012. Those secured creditors who failed to respond to that correspondence would be taken as waiving any interest in the subject property.

In order for the Administrators to understand the identity of the property in which a security interest was claimed, the response from the creditors should have adequately particularised:

• the property, or
• the security agreement under which the security interest was said to arise.

On 26 June 2012, the Administrators wrote to several financiers who appeared from the books and records of the Tenant Business to have a secured claim in respect of plant and equipment. The financiers were asked to consent to the sale of the plant and equipment referable to their interests or give notice that they did not consent to such sale before 2 July 2012. They were also asked to advise, on or before 2 July 2012, whether, to the best of their knowledge, any of the listed items of plant and equipment formed a key component of another piece of plant or equipment and whether that plant and equipment was recorded on the lists that had been provided to them. In each case the letter stated that if no response was received on or before 2 July 2012, the Administrators would assume that the rights of the relevant financier (with respect to the Tenant Business) did not include any interest in any of the items in the listed plant and equipment; or, alternatively, that the financier waived that interest.

On 28 June 2012, the Administrators caused an advertisement to appear in The Australian newspaper. The advertisement requested that creditors notify the Administrators of claims concerning assets, plant and equipment, stock, inventory, leased assets or other items in the possession of the Tenant Business by 4 July 2012. The advertisement contained the following statement:

“If you do not contact the Administrators within this time frame, the Administrators will assume that:
•    any rights you may have regarding the Tenant Business do not include any interest or claims in any of the items currently in the possession of the Tenant Business; or alternatively
•    you waive and do not pursue that interest which may result in their sale.” (cf Hastie, [12])

Seizure of Collateral
As a result of this property identification exercise by the Administrators on behalf of the Bank, the Self-Storage Company became aware of the situation in which the Tenant Business found itself. The Self-Storage Company also noticed that money was owing to it by the Tenant Business under their agreement.

The Self-Storage Business exercised its rights under its agreement with the Tenant Business and gained access to the subject premises. Once it did so it took an inventory of all the contents of the premises and subsequently conducted a search of the PPSR in respect of any of the property that looked like it may have been the subject of a security interest.

Both the Bank and the Self-Storage Company sought to seize the property of the Tenant Business as collateral under their respective security agreements (see s 123 of the PPSA). Section 127 of the PPSA requires the Self-Storage Company to give notice to the Bank of the collateral it has seized from the Tenant Business, because the Bank has a higher priority security interest under the PPSA and the Self-Storage Company was aware of that higher priority at the time it contracted with the Tenant Business.

In the process of their negotiations, the Bank agreed with the Self-Storage Company that the goods would be stored at the premises of the Self-Storage Company until the matter was resolved.

Disposing of The Seized Collateral
When disposing of the seized collateral both the Bank and the Self-Storage Company have a duty to obtain market value (see s 131 of the PPSA). The question arises as to whether that entitles the Bank to entertain a fire sale of the seized collateral.

It is submitted that a fire sale would not be entertained because of:

• the obligation on a secured party to act honestly and in a commercially reasonable manner: s 111 of the PPSA; and
• the obligation to obtain market value: s 131 of the PPSA.

Section 131 is very similar to s 420A (Controller’s duty of care in exercising power of sale) of the Corporations Act, which has been interpreted as requiring a controller to take reasonable steps to obtain market value, including appropriate advertising, engaging an experienced agent, undertaking an adequate marketing campaign and obtaining a valuation.

Conclusion
Registration of security interests is a significant step in the process of dealing with personal property in the commercial world. The introduction of the PPSA has made that commercial world significantly larger, in the author’s view. Enforcing rights under the PPSA involves a process. The extent to which one complies with that process can affect the outcome of the matter.

This scenario speaks of the self-storage industry, but much of the process is applicable to other industries and can be a useful reminder of the prudence required in commercial dealings with personal property now that the PPSA is a part of our lives.

Criminal Law: Mal Brough and AshbyGate

Friday 20 April 2012
On Friday 20 April 2012 James Hunter Ashby commenced legal proceedings against the Commonwealth of Australia and Peter Slipper under the Fair Work Act 2009 (Cth). Mr Slipper subsequently applied to have those proceedings dismissed as an abuse of the process of the Court.

Wednesday 12 December 2012
On Wednesday 12 December 2012 Rares J granted the application of Mr Slipper and dismissed the proceedings on the grounds that they were an abuse of process of the Court. In so doing His Honour made several very damning findings against Mal Brough.

“[58] Later on 29 March 2012, Mr Brough exchanged texts with Mr Ashby. Mr Brough asked whether Mr Ashby could email a document because, what Mr Ashby had sent is “hard to read”. Mr Ashby said that he would email it and Mr Brough later responded: “Will need to get daily printouts tomorrow with greater detail”. I infer that this exchange related to Mr Brough having been sent, and later emailed, copies of printouts from Mr Slipper’s electorate diary from 2009 made by Mr Ashby or Ms Doane.”

“[197] For the reasons above, I am satisfied that these proceedings are an abuse of the process of the Court. The originating application was used by Mr Ashby for the predominant purpose of causing significant public, reputational and political damage to Mr Slipper. It contained the scandalous and irrelevant 2003 allegations and assertion that Mr Ashby intended to report to the police Cabcharge allegations. To allow these proceedings to remain in the Court would bring the administration of justice into disrepute among right-thinking people and would be manifestly unfair to Mr Slipper: Jeffery & Katauskas 239 CLR at 93 [28]. Even though Mr Ashby has now abandoned the 2003 and all the Cabcharge allegations, the features that I have criticised did the harm to Mr Slipper that Mr Ashby and Mr Harmer intended when those allegations were included in the originating application. A party cannot be allowed to misuse the Court’s process by including scandalous, irrelevant or damaging allegations knowing that they would receive very significant media coverage and then seek to regularise his, her or its pleading by subsequently abandoning those claims.”

“[199] Even though I have not found that the combination was as wide as Mr Slipper alleged in his points of claim, the evidence established that there was a combination involving Mr Ashby, Ms Doane and Mr Brough of that kind. Mr Ashby acted in combination with Ms Doane and Mr Brough when commencing the proceedings in order to advance the interests of the LNP and Mr Brough. Mr Ashby and Ms Doane set out to use the proceedings as part of their means to enhance or promote their prospects of advancement or preferment by the LNP, including by using Mr Brough to assist them in doing so. And the evidence also established that the proceedings were an abuse of the process of the Court for the reasons I have given. Accordingly, I am satisfied that the exceptional situation that enlivens the Court’s power to dismiss (or stay) proceedings as an abuse has been proved to the heavy standard required: Williams 174 CLR at 529. The duty and power of the Court to protect its own processes require that I give effect to the findings I have made by dismissing the proceedings under r 26.01.”

Thursday 29 March 2012 – Text Messages

• Can that be emailed James it is hard to read Mal.brough2@bigpond.com – 29/03/2012 11:31:19 am UTC (Network) – Read by Ashby
• Done. Coming thru in minutes – 29/03/2012 11:31:53 am UTC (Device) – Sent by Ashby
• Thanks – 29/03/2012 11:32:11 am UTC (Network) – Read by Ashby
• James can you give me a call please. Mal – 12/04/2012 10:09:04 am UTC (Network) – Read by Ashby

Saturday 5 May 2012
On Saturday 5 May 2012 Mal Brough told The Sunday Age: ”I have nothing to hide and I have nothing to be ashamed of.”

Monday 30 July 2012
On Monday 30 July 2012, Mal Brough appeared on ABC Radio National and participated in an interview with Fran Kelly. During this interview, Mal Brough appeared to admit that he had received these allegedly stolen diary pages from Mr Slipper.

Fran Kelly: You were sent photocopied pages of Peter Slipper’s diary, it’s alleged, were taken without his permission

Mal Brough: Did not answer this question

…

Fran Kelly: Were you comfortable when they were sent to you

Mal Brough: No I wasn’t, but he did do that. I never forwarded them to anyone.

It seems there is at least one other interview Mal Brough conducted that day. Michelle Grattan quoted the following in her article on Tuesday 31 July 2012:

• “He sent me a text of three pages . . . I didn’t forward them to anybody. I couldn’t read them . . . He sent them to me because in the course of our first conversation he alleged criminal behaviour.”
• “If asked to do what I did before, I would do it again.”

It has been reported that “in an interview with SkyTV [on Monday 30 July 2012], Mr Brough was asked why he had needed the [Peter Slipper] diaries and why he did not advise Mr Ashby to take his complaints to the police.”

Mal Brough: “I did tell him to go to the police, and you will find no record there of me asking him for those, those diaries.”

Thursday 24 January 2013
On Thursday 24 January 2013 during his train ride interview with Kathy Sundstrom from the Sunshine Coast Daily Mal Brough said “I have addressed, in full, my involvement with the matter and there is nothing further that I can add,”

Thursday 7 February 2013
On Thursday 7 February 2013 Mal Brough was interviewed by Simon Cullen of ABC News.
Mal Brough is reported as saying:

• “There is nothing more to add. There is no other meetings, connections or whatever else,” he told ABC News.
• “All of the discussion, the text messages – of which there is about half a dozen at most – are all there for anyone to read.
• “I have nothing to be ashamed of or would change.
• “A person (James Ashby) came to me for assistance. I suggested that they go and get legal advice. I suggested they go to police if they believed a crime had been committed.
• “And that is the sum total of my involvement.”

Commentary
It can be clearly seen from his interviews of Thursday 24 January 2013 and Thursday 7 February 2013 that Mal Brough:

• Accepts and adopts the text messages of Thursday 29 March 2012;
• Acknowledges and does not resile from his interviews of Monday 30 July 2012 in which he appears to have confessed to receiving the stolen diary pages;
• Acknowledges the judgment of Rares J of Wednesday 12 December 2012.
• Acknowledges he is not a party to the Ashby -v- Slipper proceedings.

The focus upon Mal Brough derives from the Ashby -v- Slipper case, but the issues which relate to him are separate and distinct from the issues the subject of the appeal. Mal Brough is in the spotlight due to possible breaches of the criminal law, not any sexual harassment that may have occurred between Peter Slipper and James Ashby.

Receiving Tainted Property
Sect 432 of the Criminal Code (Qld) provides as follows:

432 What is tainted property for ch 41
(1)     In this chapter–

tainted property means –
(a)     a thing that has been obtained by way of an act constituting an indictable offence; or

(b)     if tainted property mentioned in paragraph (a) is converted into other property—any of the other property; or

(c)     if tainted property mentioned in paragraph (a) is mortgaged, pledged or exchanged for other property—any of the proceeds of the mortgage, pledge, or exchange.

(2)     However, a thing stops being tainted property after a person acquires a lawful title to it.

Sect 433 of the Criminal Code (Qld) provides as follows:

433 Receiving Tainted Property

(1)     A person who receives tainted property, and has reason to believe it is tainted property, commits a crime.

Maximum penalty–

(a)     if the property was obtained by way of an act constituting a crime—14 years imprisonment; or

(b)     if the property is a firearm or ammunition—14 years imprisonment; or

(c)     if the offender received the property while acting as a pawnbroker or dealer in second hand goods, under a licence or otherwise—14 years imprisonment; or

(d)     otherwise—7 years imprisonment.

(2)     For the purpose of proving the receiving of anything it is sufficient to show that the accused person has, either alone or jointly with some other person, had the thing in his or her possession, or has aided in concealing it or disposing of it.

Conclusion
The text messages of Thursday 29 March 2012 support the contention that Mal Brough received tainted property. The decision of Rares J supports that contention.

It is open to conclude that during his interviews of Monday 30 July 2012 Mal Brough confessed to receiving tainted property.

At no time during his interviews of Thursday 24 January 2013 and Thursday 7 February 2013 does Mal Brough resile from his confession of Monday 30 July 2012. There is no apparent material to suggest those interviews with Mal Brough would not be admissible against him at any criminal trial.

The false denial by Mal Brough of Monday 30 July 2012 in relation to requesting the Peter Slipper diaries goes to his credit as a witness and does not detract from his confession to receiving the stolen diary pages.

The decision in R v Cowan; R v Cowan; Ex parte Attorney-General (Qld) [2015] QCA 87 supports the confessions of Mal Brough being admissible against him.

By his behaviour Mal Brough appears to have brought himself within the umbrella of the Queensland Criminal Code and the Queensland Criminal Law.

There is no defence within the Queensland Criminal Code or Queensland Criminal Law that a person should not be prosecuted because Mal Brough says so.

Family Law Property Adjustments: Sentimental Arguments are Not Always Persuasive

Family law property adjustment cases see a wide variety of reasons proposed and considered for keeping particular items of property.  Sentimental reasons are relevant considerations in that regard, but they are not the only consideration, nor are they always the deciding factor.  In Moss & Moss [2012] FamCA 538 (16 July 2012) Austin J had to consider the significance of a claim of sentimental reasons for retaining some real property. The following facts, with some minor editing on my part, are taken from paragraphs [141] to [146] of that judgment.

The husband desired sole ownership of the X property. He asserted he only reluctantly departed the X property following separation. Significantly for him, the urns containing the ashes of his deceased parents are kept in a memorial garden upon the property, making it a place of sentimental value. There is no evidence the ashes are interred and no evidence the memorial headstones are immovably fixed.

The asserted intention of the husband was to return to work on the X property as a farmer. However over the preceding four years the agricultural businesses conducted on the farm by the parties showed relatively poor financial performance and there was little evidence to suggest the husband could make the property particularly profitable as a commercial farming enterprise.

The property has never carried more than a couple of dozen animals and, although the property has olive trees planted on it, the husband admitted in cross-examination he had only ever sold 10-20 bottles of olive oil to guests.

The husband adduced no evidence of any formulated plan about how he could rationally transform the X property from a hobby farm, as it was regarded by the parties, into a genuinely commercial enterprise. The chances of the husband deriving income from the farm that would even remotely compare to his current income are inestimably small.

The husband conceded in cross-examination:

• The past income generated by the farm would not cover his current living expenses.
• That he may well need to obtain paid employment elsewhere.
• He was unsure whether his plans to farm X property would actually be successful.

The husband acknowledged:

1  The wife intended using the property to continue the hospitality business as a source of her income.
2  The wife had always worked hard:

• Around the house;
• In the garden around the “house block”; and
• In the conduct of the hospitality business.

The Court Held
1  The sole ownership of X property by the wife is the more just and equitable result.
2  The following considerations sway the decision:
•    The continuity of her occupation;
•    Her greater need for the property as a source of income; and
•    The transportability of the mementos of the husband.

3  The orders:
•    Make provision for the retention of the X property by the wife; and
•    Permit the husband a short period within which to attend the property to recover:
•    The ashes of his deceased parents; and
•    Any other sentimental accoutrement from the memorial garden.

Conclusion
The ultimate order in a family law property adjustment matter is required to be just and equitable between the parties on the facts before the Court.

The Court found a way to compromise the wishes of the parties here to give the husband the ashes of his deceased parents and any other sentimental accoutrement from the memorial garden, while ultimately enabling the wife to retain the property on which they were currently held. That compromise was held to be the most just and equitable outcome between the parties on the facts before the Court.

Decisions such as this one can often be difficult to make. However giving proper weight to items of sentimental value can aid significantly in planning family law property adjustments and can help ease the burden of the emotional difficulties dealing with such matters can cause.

An Overall Period or Episode of Work: Is The Interval or Interlude an Interruption?

An employer induces or encourages an employee to be at a particular place in an overall period or episode of work, which is not the usual location for that work, and there is an interval or interlude during that overall period or episode of work, to what extent is the employee acting “in the course of employment”? That was a question which confronted Nicholas J in PVYW v Comcare (No 2) [2012] FCA 395 (19 April 2012).

The Facts
The Applicant was required by her employer to travel with a fellow employee to a town away from her normal employment location and residence. She stayed at a motel which was booked by her employer. The Applicant made arrangements to meet up with a male friend who lived in that town. She met him at her motel, they went to a restaurant for a meal and then later that evening went back to the motel room of the Applicant, where they had sex. Whilst engaging in that sexual activity on the bed in the motel room the Applicant was injured. She was later taken to hospital for treatment.

The Applicant did not advise her employer how she intended to spend her time while she was at the motel or with whom, if anyone, she intended to associate while staying there.

There was no dispute that:

• At the relevant time, the Applicant was an employee of the employer temporarily away from her usual workplace at the request of her employer.
• The injuries suffered by the Applicant were both a physical and a psychological injury for the purposes of the Act, resulting in incapacity for work or an impairment.
• There was no “gross impropriety” in the behaviour of the Applicant on the day she suffered her injury.

The Court Found

• An employee who is at a particular place at which he or she is induced or encouraged to be by his or her employer during an interval or interlude in an overall period or episode of work will ordinarily be in the course of employment;
• Absent serious and wilful misconduct or an intentionally self-inflicted injury.
• The lawful sexual activity of the Applicant was not an interval or interlude that interrupted the relevant overall period or episode of work.
• The relevant connection or nexus to employment continued while the Applicant was in the motel room in which her employer had induced or encouraged her to stay.
• The injuries of the Applicant were suffered while she was in the motel room in which her employer had encouraged her to stay.
• The injuries were suffered by the Applicant while she was at a particular place where her employer induced or encouraged her to be during an interval or interlude between an overall period or episode of work.

Family Law: Mediation and Alternative Dispute Resolution – The Role of a Barrister

The unique features of Family Law litigation have previously been discussed, as have the similarities to criminal law and civil law litigation, in terms of the role of the barrister.  Clients in Family Law litigation often talk of settling or compromising the matter at a much earlier stage than is the case in much of the criminal law and civil law litigation. That has an impact on how legal representatives are required to prepare that litigation.

We have already established from our previous discussions about criminal law, civil law and family law litigation that:

1 The client is entitled to be advised as to all the forms of mediation and alternative dispute resolution available in respect of the case.

2 Only when:

• Full instructions have been taken from the client in the subject case; and
• A conference is held with the barrister and solicitor and client discussing all aspects of the case;

is the client in a position to make an informed decision as to:

• The merits of the case sought to be run; and
• What the client might wish to do in respect of that case.

3 The client is then optimally enabled to discuss:

• The extent to which mediation and alternative dispute resolution is appropriate in the case; and
• What the client may stand to gain or lose by compromising the matter.

In the circumstances any attempt to compromise family law litigation prior to that complete preparation being undertaken, including a comprehensive advice from and conference with the barrister, must:

• Necessarily deny the client the opportunity to be fully informed about their matter; and
• Colour any compromise accordingly.

It is even conceivable that in some circumstances the compromise might be able to be subsequently set aside by a Court as being one that was made without proper appreciation of the rights available to the client at the time.

Conclusion
Given the impact such a decision can have on your relationship with your children and/or your personal property, would you want to compromise your family law rights without being fully informed?

Family Law: The Role of a Barrister

Having discussed criminal law and civil law, I now propose to talk about family law and the demands it might make upon a barrister.

Whilst family law has its own unique features, it is most definitely a constituent part of the litigation arm of the law and those aforementioned rules of litigation apply to family law, as we shall see.

No decision can be made by a Court exercising family law jurisdiction without it being based on the evidence lawfully before the Court.  That evidence gets before the Court through witnesses, whether that occurs by way of affidavit or the witnesses giving evidence in the witness box.

On that basis the similarity with criminal law and civil law matters is significant and the extent to which family law matters might be subjected to a similar regime of obligations as those in criminal law and civil law matters is interesting.

In the circumstances I see no reason to distinguish between the obligations that will apply to advising a civil law client and a family law client when it comes to assessing the matter and being prepared for trial.

Accordingly in my view a family law client can expect to be advised by the barrister on these issues:

• The strengths and weaknesses of their own case;
• The relative strength of the case of any and all opponents, to the extent that that information is available;
• The possible impact upon both cases from the course of the cross-examination;
• Each witness making a sworn statement before the Judge;
• Whether there was some unanswerable problem that the witness might confront in giving evidence;
• Earlier versions given by the witness which might be difficult to reconcile with the current evidence of the witness;
• How the Client would conduct themself as a witness;
• How any other witness might conduct themself as a witness;
• The likely impression of the Client upon the Judge, when the Client gave evidence;
• All the forms of mediation and alternative dispute resolution available in respect of the case.

In order for the family law client to be given such advice that client would need to talk to a solicitor. The solicitor could then use their professional skill and judgment to obtain all the relevant material for the advice, omit all the irrelevant material and compile it into a coherent brief for the barrister. Upon reading and considering the contents of that brief the barrister is then in a position to confer with the solicitor and the client. Using their professional skill and judgment gained from going to Court and arguing such matters, the barrister is able to discuss the case with the solicitor and the client and advise them in respect of it. At the end of that conference the family law client would be fully informed as to the strengths and weakness of their case and what options might be available in respect of it.

That interplay of professional skills and responsibilities between the barrister and solicitor best serves the family law client in answering their enquiries and educating them as to their position.

Litigation: The Role of a Barrister

Over the next couple of blogs I propose to deal with the role barristers can play in the legal system.

Criminal Law
The role of the barrister in criminal law matters is reasonably well known and understood.

Advice On Giving and / or Calling Evidence
Once full and proper written instructions have been taken from the Accused by the solicitor, the Accused is entitled to be properly advised in respect of giving and / or calling evidence at the trial.  That advice invariably comes from a barrister and the Court of Appeal has said that advice should include a discussion of the importance of:

• The relative strength of the Crown case;
• The impact upon that case from the course of the cross-examination;
• Making a sworn denial before the jury;
• Whether there was some unanswerable problem that the Accused would have confronted in giving evidence;
• Earlier versions given by the Accused which might be difficult to reconcile with the current evidence of the Accused;
• How the Accused would conduct himself as a witness;
• The likely impression of the Accused upon the jury, if he gave evidence;
• Any possible relevance of his not giving evidence at trial to determination of an appeal against conviction;
• A potential advantage in the case of being last to address the jury.

It is also very proper to record the advice given in a complete fashion. (See R -v- ND [2004] 2 QdR 307; [2003] QCA 505)

Having had those discussions with the accused, the barrister is then in a position to advise the accused the prospects of success at trial and what might occur if the matter was compromised by way of a plea of guilty.

The accused is then in a position to make a fully informed decision as to how the matter ought proceed, either at trial or by way of plea of guilty and sentence.

Civil Litigation
Whilst civil law trials are different to criminal law trials in many respects, there are also many similarities.  The focus of criminal law trials is on the accused and all of the disclosure is expected to have occurred well before the matter comes to trial. Civil trials see the focus more evenly spread across the witnesses and a failure to disclose evidence may not be a reason to delay or adjourn the trial.

Bearing in mind the standard of proof in a civil trial is on the balance of probabilities, as opposed to beyond reasonable doubt in a criminal trial, let us look at how the aforementioned list of obligations and entitlements in a criminal law trial might apply in a civil trial.

The civil law Client would be entitled to be advised as to:

• The strengths and weaknesses of his own case;
• The relative strength of the case of any and all opponents, to the extent that that information is available;
• The impact upon both cases from the course of the cross-examination;
• Each witness making a sworn statement before the Judge or jury, as the case may be;
• Whether there was some unanswerable problem that the witness might confront in giving evidence;
• Earlier versions given by the witness which might be difficult to reconcile with the current evidence of the witness;
• How the Client would conduct himself as a witness;
• How any other witness might conduct himself as a witness;
• The likely impression of the Client upon the Judge or Jury, if he gave evidence;
• Any possible relevance of the Client not giving evidence at trial to determination of an appeal against liability or damages, as the case may be;
• A potential advantage in the case of being last to address the Judge or Jury; nowhere near as significant in a civil trial.
• All the forms of mediation and alternative dispute resolution available in respect of the case.

Conclusion
In my submission the obligation to advise a Client in respect of a civil trial is very similar to the obligation the Court has identified in respect of criminal trials. Accordingly comparable preparation for that civil trial can be expected to be required of the legal representatives.

This would then enable the Client to make an informed decision as to the merits of the case sought to be run and what the Client might wish to do in respect of that case.

It would also enable optimum discussion about the extent to which mediation is appropriate in the case and what the Client may stand to gain or lose by compromising the matter.

What obligations do you see that fall to a barrister when it comes to advising a client before a trial?

Family Dealings and Intention To Create Legal Relations

It is said that love is blind.  It is also said that love can make people do some funny, perhaps even crazy things.  Those observations might explain why acts are done within families and personal relationships that would not be advised by a sage, circumspect legal practitioner.  Often those acts within families occur without any contemplation of the love apparently underlying those acts ever going wrong.  It is usually only when that love has gone wrong that the family members seek legal advice to recover the goods, possessions and / or money that were part of the original transaction.  Sober, dispassionate attention is required when considering such family arrangements and the introduction of that attention to the family fold is not always greeted with great love and affection by the family members.

Almost without exception the ultimate question the Court will ask in respect of those now seemingly controversial family arrangements is whether in all of the circumstances “the parties intended to subject their agreement to the adjudication of the courts”.   (See Morais & Anor -v- Mills [2010] QDC 237 per Dorney QC DCJ at para [9])

A Court charged with the responsibility of determining whether particular family arrangements enjoy the benefits and responsibilities that derive from an intention to create legal or contractual relations will tell you that for there to be a legally enforceable duty the following must be present:
•    Identifiable parties to the arrangement;
•    Certainty in the terms of the arrangement; and
•    Generally, real consideration for the agreement, unless recorded as a deed.
(See Morais & Anor -v- Mills [2010] QDC 237 per Dorney QC DCJ at para [7])

The Court will make an objective assessment of the state of affairs between the parties to determine what the terms of any family arrangements may mean, rather than enquire as to what each of the parties subjectively intended to achieve. (See Morais & Anor -v- Mills [2010] QDC 237 per Dorney QC DCJ at para [7])   The onus of proof lies on the party alleging that legal relations have been created. (See Morais & Anor -v- Mills [2010] QDC 237 per Dorney QC DCJ at para [10])

Relevant considerations for an inquiry in relation to the existence of such an intention are as follows:
•    The subject matter of the agreement;
•    The status of the parties to the agreement;
•    Their relationship to one another; and
•    Other surrounding circumstances.
(See Morais & Anor -v- Mills [2010] QDC 237 per Dorney QC DCJ at para [7]

Two areas where one might see family arrangements lead to enquiries about litigation are:
•    Leasing real property to family and friends; and
•    Lending money to family and friends .

Leasing Real Property To Family and Friends
It is not uncommon for families to let out real property they might possess to family or friends. Often such an endeavour is undertaken without anyone involved obtaining legal advice as to the implications of the arrangements or perhaps even recording the arrangements in writing. Should that relationship not progress as planned, such as the tenant not making the rental payments in accordance with the agreement, the landlord might seek to enforce the tenancy agreement he or she contends is in place.  In those circumstances the Plaintiff Landlord would need to demonstrate that:
•    Legal relations have been created between the Plaintiff Landlord and the Respondent Tenant; and
•    The subject tenancy agreement was always one where the Tenant would be sued in the courts for any outstanding rent.
A failure to do so will invariably lead to the Court concluding that no relevant intention to create legal relations existed between the parties.   The Landlord would then not be able to rely upon that avenue of potential recovery.

Lending Money To Family and Friends
Other family dealings worthy of consideration here are those that involve the lending of money to family or friends.  Once again it is not uncommon for money to be loaned to family members or friends in circumstances where none of the participants involved obtain legal advice as to the implications of the arrangements.  Further it is also not uncommon for those arrangements not to be recorded in writing.

Should a situation arise within that relationship whereby the lender contends that the borrower has not made relevant payments under the loan agreement, the lender may wish to have recourse to the courts in order to recover the money he / she says is outstanding under the loan agreement.  Unless the Plaintiff Lender can prove that he / she would subject that Defendant Borrower to being sued in the courts for the return or repayment of the money, the Court is unlikely to find a relevant intention to create legal relations existed between the parties.   What was contended by the lender to be a loan would be seen to more akin to a gift.  Once again the borrower would then not be able to rely upon that avenue of potential recovery.

Conclusion
When relationships sour and/or love goes wrong the parties involved tend to look at their relevant relationships differently from when they were first created.  Return or recovery of goods, possessions and/or money is sought in circumstances where it may not have been, had the relevant relationship conformed to its originally planned path.  The path the court takes in such circumstances is not one similarly prone to change.  If it can be demonstrated that the parties intended to subject their agreement to the adjudication of the courts, then the courts will continue to entertain the matter. A failure to demonstrate that intention to create legal relations on the part of the relevant parties will invariably leave the parties without the assistance of the courts to resolve their dispute.

Those seeking to embark upon family dealings which do not manifest an intention to create legal relations would do well to consider the implications of that failure before they conclude their dealings.

Consumers and The PPSA

Consumers can not only be affected by the Personal Property Securities Act 2009 (Cth) (“PPSA”), they may have rights that warrant enforcing. This hypothetical factual scenario hopes to shed some light on that world.

The Student Share-House
Four university students live in rented accommodation whilst they undertake their full-time studies. With their combined resources they are also able to afford to furnish that accommodation with some relevant necessities by undertaking a chattel lease of some personal property. In so doing they may find that they come within the reach of the PPSA.

Homeware Rentals is a business that rents out such personal property in the ordinary course of its business and its customers sign contracts of lease recording the terms and conditions of that rental. For the purpose of this exercise I will assume that lease is simple and not controversial. The students would undertake to make the lease payments in accordance with the contractual terms and Homeware Rentals agree to provide the relevant subject personal property to them for the duration of the lease.

It should be noted that the transaction with the students is considered to be a consumer transaction under the PPSA. This gives it special status, as we will see. (See ss.42, 46-47 PPSA)

Register Security Interest
In order to protect its interests Homeware Rentals registered the security interest that arose in respect of that property and obligation on the Personal Property Securities Register (PPSR). As the students do not have a security interest in the relevant property, they had nothing to register in respect of the property.

Importantly also, Homeware Rentals has borrowed money from Worstpac Bank. To secure its obligations, Worstpac Bank registers a security interest over all of the goods of Homeware Rentals. These goods include the ones leased by the students. Therefore the goods of the students are subject to the following security interests:
1     In favour of Homeware Rentals (first security interest); and
2     In favour of Worstpac Bank (second security interest).

Receivers Appointed
Hard times fell upon Homeware Rentals and Hardball Receivers were appointed to it as a result of an application to the Court by a major secured creditor, Worstpac Bank. On behalf of Worstpac Bank, Hardball Receivers would seek to recover as much of the money owing to Worstpac Bank by Homeware Rentals as possible, if not all of it. One of the ways open to it to do this is by seizing the goods of Homeware Rentals and selling them. (Ss.123, 125, 128) It seems though that Worstpac Bank cannot take possession of the subject goods because the students are protected by s47(1) PPSA. Under this section, the students take free from any security interest, because the goods are consumer goods.

The effect of this is that the students will only need to deal with Homeware Rentals; they will not face the prospect of Worstpac Bank showing up and resuming or repossessing the subject goods. In a way this retains the contractual nexus between Homeware Rentals and the students.

Power To Seize Collateral
Homeware Rentals is a secured party in respect of the goods by virtue of the first security interest. S123 (1) of the PPSA gives it the power to seize collateral or the goods the subject of the lease, by any method permitted by law, if the students are in default under the first security interest.

While Worstpac Bank is not entitled to exercise its rights to seize the goods under the second security interest (s47(1) PPSA), s53 PPSA allows Homeware Rentals to stand in the shoes of Worstpac Bank to recover the chattels.

Position of The Students
There are two relevant considerations for the students:

1     They are not in default under their lease with Homeware Rentals – so Homeware Rentals has no right to seize the goods on its own account (under the first security interest).

2     But what about the interest of Worstpac Bank under the second security interest? While Worstpac Bank itself seems to have no rights directly over the goods (they are exempt – s47(1)), Homeware Rentals may stand in its place to recover money owing. The way in which this provision will operate is perhaps a little unclear. However, it is likely that so long as the students are not in breach of their agreement with Homeware Rentals, they can continue to keep the goods free from threat.

How Do Consumers Go About Enforcing Their Rights?
There is plenty of assistance available for consumers, such as our students, to enforce their rights. Community legal centres, consumer law advice services and even student service centres in universities are equipped to provide advice and education on consumer rights. See for example Caxton Consumer Law Service

Conclusion
What is your view of the operation of these provisions? They seem to point towards protection of the consumer: is it feasible that the students would lose their goods to Worstpac Bank?