Defamation – defence of absolute privilege

September 19, 2019 Roger Blow

A recent defamation Court judgment caught our attention.

In Ogbonna v CTI Logistics Ltd the court was asked to determine whether the issuing of a judgment containing the defamatory words (in an email) and the subsequent publication of that judgment in the public Austlii database amounted to republication, exposing the defendants to a claim for damages for defamation.

The court found that the judgment was published in circumstances of absolute privilege (s27 Defamation Act) by Austlii under the protection of s28(1) Defamation Act, which says:

It is a defence to the publication of defamatory matter if the defendant proves that the matter was contained in –

(a) a public document or a fair copy of a public document; or

(b) a fair summary of, or a fair extract from, a public document.

A judgment is therefore not capable of being regarded as republication of the original defamation complained of and does not give rise to a further claim by the plaintiff against the defendants. A victory for common sense. The Court observed:

“Were the position to be otherwise, no successful defamation action would ever be concluded, the publication of the decision being a republication of the original defamation giving rise to a further claim and so on and so on.”

Cove Legal specialises in resolving legal disputes with particular expertise in bringing and defending defamation claims. Principal Roger Blow is recognised as a media law expert, particularly in liability arising from the use of social media. He regularly provides commentary concerning media law issues to television, radio stations and newspapers.

Roger Blow

P: +61 8 6381 0326 or e: roger@covelegal.com.au

This publication is not intended to provide and does not provide legal advice. You should seek professional legal advice relating to your specific situation(s) before taking any action based upon its contents.

Tough penalties for Directors involved in phoenix transactions

August 13, 2019 Roger Blow

The Federal Government has introduced into Parliament tough new criminal and civil penalties for Company Directors who engage in illegal phoenix activity.

Illegal phoenix activity is when a new company is created to continue the business of a company that has been deliberately liquidated to avoid paying its debts, including taxes, creditors and employee entitlements.

The Treasury Laws Amendment (Combating Illegal Phoenixing) Bill 2019 will give the ATO, ASIC and liquidators a range of new powers to target directors, individuals and advisors who conduct illegal phoenix transactions, such as where a Director sells the assets of the company at less than market value (known as a creditor-defeating disposition).

The other key reforms include:

New powers to ASIC to recover property that is the subject of a creditor-defeating disposition and return it to the company for distribution to the creditors;
Preventing directors from resigning and leaving the company with no directors and from backdating their resignation to avoid personal liability;
Extending the existing director liability provisions by making directors personally liable for their company’s GST liabilities;
Increased power of the ATO to withhold tax refunds where tax lodgments are still outstanding.

Company directors and their advisers should be aware of the proposed changes.

Cove Legal provide specialist advice to clients facing possible insolvency outcomes or facing actual or threatened ATO debt action. If you are attempting to address director personal liability issues, director penalty notices, garnishee orders, winding up applications, statutory demands or need advice on an insolvency situation generally, speak to us today.

Roger Blow, Principal, Ph: +61 8 6381 0327 or roger@covelegal.com.au

The ATO's model litigant obligations

July 18, 2019 Roger Blow

With the ATO’s debt recovery powers again coming under fire in the press for being excessive, what rights does a small business have when the way the ATO handles its claims and litigation is considered to be contrary to its obligations as a ‘model litigant’?

The model litigant rules, or model litigant obligations, are guidelines for how a government body ought to behave before, during, and after litigation.[1] The ATO, like any other Commonwealth agency, is subject to model litigant obligations and has an obligation to:

act with complete propriety, fairly and in accordance with the highest professional standards in handling claims and litigation. This also requires that the ATO not start legal proceedings unless it is satisfied that litigation is the most suitable method to resolve a dispute. [2]

In Shord v Commissioner of Taxation [2017] FCAFC 167 Justice Logan discussed at length the role of the Commissioner and how he is to conduct proceedings to which he is a party. His Honour made the following comments with respect to model litigant obligations:

The ‘standard of fair play to be observed by the Crown in dealing with subjects’ in litigious business, termed the duty to act as a model litigant, antedates and, if anything, is more onerous than the duty which all parties and their lawyers have in proceedings before this Court to assist in the achieving of the ‘overarching purpose’ of facilitating the just resolution of disputes according to law and as quickly, inexpensively and efficiently as possible: s 37M and s 37N, Federal Court of Australia Act 1976 (Cth). [3]

His Honour went on to say:

Departures from model litigant behaviour can, in particular circumstances, constitute professional misconduct, a contempt of court or an attempt, contrary to s 43 of the Crimes Act 1914 (Cth), to pervert the course of justice. [4]

However, it has also been confirmed by the Courts that an alleged failure on the part of a Commonwealth Agency to act in accordance with its obligations does not exist in Australian law as a distinct cause of action. As a result, such failures (aside from a potential complaint to the Attorney General) can only be actioned via a request that the Agency pay the legal costs within existing proceedings, that it can be argued arise from the breach(es) of those obligations.

Cove Legal offers specialist expertise in the area of tax disputes and insolvency. We represent clients in Court winding up applications and bankruptcy petitions and provide strategic advice on ATO payment plans and all other aspects of ATO debt recovery action (such as director penalty notices, garnishee notices, freezing orders, default assessments, audit requests and ATO criminal prosecutions).

Roger Blow, Principal, Ph: +61 8 6381 0327 or roger@covelegal.com.au

[1] https://www.ruleoflaw.org.au/priorities/model-litigant-rules/

[2] https://www.ato.gov.au/General/Dispute-or-object-to-an-ATO-decision/In-detail/Avoiding-and-resolving-disputes/Litigation/Litigation---our-policies/

[3] Shord v Commissioner of Taxation [2017] FCAFC 167 at [169].

[4] Ibid at [174].

Changes to Debt Agreements provide greater protection for financially vulnerable

July 11, 2019 Roger Blow

Following on from last year’s legislative reforms to the Bankruptcy Amendment (Debt Agreement Reform) Bill 2018, a number of changes have recently been introduced to debt agreements.

Debt agreements were introduced as an alternative to bankruptcy and can be a flexible way to come to an arrangement to settle debts without the additional requirements and formalities associated with bankruptcy. The legislative changes are set to provide greater protection for financially vulnerable people who are entering into legally binding debt agreements that they perhaps cannot afford.

The main changes include:

Limiting the length of a debt agreement;
Eligibility requirements to enter into a debt agreement;
Increased investigative powers of the Inspector-General to address misconduct with respect to debt agreements and debt agreement administrators;
Use of a registered debt administrator or registered trustee to administer a debt agreement (cannot self-administer);
Increased protections against debt agreements that cause financial hardship.

The changes came into effect from 27 June 2019. People currently in debt agreements will not be affected by the changes.

Roger Blow, Principal, P: +61 8 6381 0326 or E: roger@covelegal.com.au