Monthly Archives: December 2016

New Queensland workers’ legislation voids contractual clauses

It is a serious matter to interfere with the rights of parties to agree between themselves, to whatever contractual terms they chose. Recent amendments to the Queensland workers’ compensation legislation1 have effected a significant change to the way businesses are allowed to contract with each other and allocate risk for injury to workers. The amendments render void and unenforceable, certain contractual clauses where an employer, effectively indemnifies another entity against contribution claims the employer might otherwise have had for damages for injury to a worker. It is doubtful the full ramifications of this proposal have been adequately considered.

The utility of the reform is questionable and has the potential to cause great uncertainty and dispute. Parties who think they have agreed on certain carefully crafted or well understood terms may find the validity of those terms stripped or challenged. Insurance arrangements placed on the basis of agreed risk allocations may prove inadequate or erroneous, causing overlap or gaps in cover, increased premiums and increased litigation. Is this aspect of the reform necessary, economically sound and wise?

The relevant amendments to the legislation stem from the recent judgment in Byrne v People Resourcing (Qld) Pty Ltd & Anor2. Byrne confirmed a long line of court authority that if WorkCover is liable directly to the claimant in negligence or contract, then it must pick up and indemnify all related liabilities of the employer. Therefore contractual variations of the employer’s negligence liability that alter contribution apportionments between defendants will still be indemnified by WorkCover.

Understandably WorkCover Queensland took issue with insuring this additional contractual liability. Its premiums are not based on a careful review of all contractual risk allocation arrangements and it is effectively funding its insured’s contractual concessions out of its own coffers.

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Hall & Wilcox boosts public sector practice with new appointment

Leading independent law firm, Hall & Wilcox, has boosted its public sector expertise by appointing Peter Ryan as Special Counsel to further develop the firm’s Victorian government practice.

Peter Ryan joins Hall & Wilcox from Victorian Managed Insurance Authority where he undertook several roles, including as General Manager Insurance Services, CEO Domestic Building Insurance and General Counsel. His previous roles include a Senior Legal Counsel Manager with the Victorian WorkCover Authority (now WorkSafe Victoria), and seven years in various in-house roles with the Transport Accident Commission.

Hall & Wilcox was appointed to the Victorian Legal Services Panel across several areas earlier this year (click here for further information).

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DOL Appeals Temporary Injunction on Overtime Laws – Employment Law This Week

Featured on Employment Law This Week: A Texas federal court ruled that the U.S. Department of Labor (DOL) does not have the authority to implement new salary thresholds for overtime.

The district judge issued a nationwide preliminary injunction on the DOL’s new rules and the department appealed. The DOL has now asked for an expedited briefing on its appeal to be completed by February 7, followed by oral arguments as soon as possible. But the Trump administration will be in place by then, and that could change the DOL’s position.

Watch the segment below and read our recent post.

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NLRB Uses Hyper-Technical Rule to Overturn Employer’s Landslide Election Victory

As we previously reported, the ambush election rules implemented by the National Labor Relations Board (“Board”) last year tilted the scales of union elections in labor’s favor by expediting the election process and eliminating many of the steps employers have relied upon to protect their rights and those of employees who may not want a union. We warned that in addition to rapidly expediting election timeframe, the regulations were full of technical and burdensome procedural mandates on employers.  The Board further emphasized the pro-union impact of these requirements in a Decision last week when it overturned the results of an election that a union overwhelming lost based on a hyper-technicality.  Even though there was no prejudice to the union, the Board gave the union another bite at the apple despite the employees’ resounding rejection of union representation; effectively denying the employees their voice and imposing even more burdens on the employer.

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Royalties: When to Include in Customs Value

Royalties: When to Include in Customs Value

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RSS in the leading role in a seminar on insurance

December 12, 2016 — The Bar of Quebec’s annual seminar on recent developments in insurance law, presented on December 9 at the Palais des congrès in Montréal, reflected RSS’s major involvement:

  • Pierre Visockis presented a paper on theft and intentional fault: “Le vol et la faute intentionnelle —  Discordances, spéculations et mobile : qu’en est-il du fardeau de preuve de l’assureur?”
  • Benoît Chartier spoke on cyber risks in the insurance industry: “Cyber responsabilité et cyber risques dans l’industrie de l’assurance”
  • Katherine Delage was moderator and co-organizer, in preparation for the 2017 edition, when she will be head of the organizing committee
  • Gilbert A. Hourani was the coordinator of this activity, which he has been masterminding since joining RSS in 2002.

    The papers presented at the symposium will soon be published by Thomson Reuters / Éditions Yvon Blais.

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ILN Today Post

Guidelines on Cross Border Trade of Electricity Issued

LexEnergy Update – December 9, 2016

India has been trading in electricity with Bangladesh, Bhutan and Nepal under bilateral MoUs/power trade agreements. Further to the Framework Agreement for Energy Cooperation signed on November 27, 2014 amongst South Asian Association for Regional Cooperation (“SAARC”) countries, the Ministry of Power in consultation with the Ministry of External Affairs has issued guidelines on cross border trade of electricity with the objective of harmonizing laws governing trade in electricity as also facilitating cross-border trade of electricity with greater transparency, consistency and predictability, and minimizing perception of regulatory risks.

Main features of the Guidelines:

· Ministry of Power to designate an authority (who will coordinate with the nodal agencies of neighbouring countries) for facilitating the process of approval and laying down the procedure for cross border transaction and trade in electricity.
· Central Electricity Regulatory Commission (“CERC”) to frame appropriate regulations for facilitating cross border trade of electricity with neighbouring countries.
· Participating entities complying with the following conditions will be eligible to participate in cross border trade of electricity after obtaining a one-time approval from the designated authority:

(a) import of electricity by Indian entities from generation projects located outside India and owned or funded by the Government of India or by Indian public sector undertakings (“PSUs”) or by private companies with 51% or more Indian entity (entities) ownership;
(b) import of electricity by Indian entities from projects having 100% equity by Indian entities and/or the Government / Government owned or controlled company(ies) of neighbouring countries;
(c) import of electricity by Indian entities from licensed traders of neighbouring countries having more than 51% Indian entity(ies) ownership, from the sources as indicated in the foregoing paragraphs (a) and (b); and
(d) export of electricity by distribution licensees/PSUs, if surplus capacity is available and certified by the concerned distribution licensee or PSU. However, export of electricity from any coal based Indian thermal power project (other than PSUs) to neighbouring countries will be allowed only if surplus capacity is certified by the designated authority.

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Q9000 Gold Grade Certification

HOMS Solicitors are again very pleased to have been awarded a gold grade score of 96% for our Q9000 Legal Quality Standard by the Institute of Legal Research and Standards. This was after a full and comprehensive audit by the Institute of Legal Research and Standards in October 2016. The Q9000, which is recognised by the Law Society of Ireland, is the most advanced strategic, risk and quality management standard awarded by the Institute to law firms demonstrating exceptional levels of strategic, innovation and quality management.

Our gold grade score of 96% was awarded after a comprehensive audit of the following areas:-

  • Client management
  • File management
  • Regulatory and claims management
  • Practice management
  • Systems management
  • Advanced financial management
  • Strategic and innovative management
  • Advanced IT, information and knowledge management.

We have a dedicated Risk Management Partner, Robert Kennedy, who in conjunction with the Legal Information Systems Executive, Naoise O’Donnell, and Associate Solicitor, Anna Owens, ensure that all risk management policies and procedures are implemented and compliance levels are strictly adhered to. All of our employees are trained extensively in our systems, procedures and policies. Well done to all of the staff at HOMS who are instrumental in implementing our Q9000 systems, procedures and policies.

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Week of December 5, 2016 on ILNToday – A Roundup!

roundupThe ILN was thrilled to officially welcome our newest member this week, Connolly Gallagher, in Delaware! For more information about Connolly Gallagher, please check out our press release welcoming the firm and stay tuned here for additional thought leadership from their talented lawyers! Before you head out for your mid-morning coffee, take a look through our roundup of posts from this week on ILNToday!

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Hall & Wilcox successfully defend de facto director claim

Before the Swan Group was placed into liquidation on 27 June 2013, it was the fifth largest cleaning contract business in Australia. It held significant contracts with major corporate groups, shopping centres, universities, airports and other public facilities.

In the proceedings, the Group’s liquidator, Anthony Elkerton, claimed that the Group traded whilst insolvent from 1 November 2012 to 22 May 2013. The liquidator sought to recover the debts incurred during this period – totalling approximately $11 million – from Bob Swan, the sole appointed director, and Mr Swan’s then wife, Judy Swan, on the basis of an allegation that she was a “de facto” director of each of the companies in the Group.

A de facto director is someone who acts in the position of a director despite never being formally appointed. If someone is found to be a de facto director then they can be held liable for insolvent trading under the Corporations Act 2001 (Cth) as if they were a duly appointed director.

Ms Swan, in addition to being married to the Group’s sole director, was at times the Group’s general counsel, human resources manager and chief executive officer. She had also lent significant sums of money to the Group and considered herself to be its secured creditor (it was ultimately found that the security was invalid due to the uncertain language of the charge documentation entered into in 2003).

The proceedings were heard by Justice Black from 13 September to 7 October 2016 in the Supreme Court of New South Wales. In defence of the claim, evidence was led from a number of people including previous employees of the Group, external accountants and Mr and Ms Swan. There was also a substantial amount of documentary evidence led by the liquidator extending over the period from 1999 to 2013. His Honour found that whilst the evidence showed that Ms Swan had at times played a significant role in the Group and had aspired to exert an even greater influence, these aspirations were not accepted by Mr Swan or others in the Group and were ultimately not achieved.

His Honour recognised that part of Ms Swan’s interest in the Group could be attributed to her being married to its sole director. However, his Honour stated that he would not treat a family member differently from any other person who becomes involved in a company’s management in determining whether they should properly be characterised as a de facto director. This was a departure from the observations of Justice Madgwick in Deputy Commission of Taxation v Austin [1998] FCA 1034 to the effect that care should be exercised before characterising a member of a director’s family, who provides assistance in a period of crisis, as a de facto director.

His Honour also recognised that another part of Ms Swan’s interest in the Group could be attributed to the fact that she considered herself to be one of its secured creditors. His Honour accepted the proposition that a secured creditor may make demands of a debtor company without the company’s compliance with those demands establishing that the secured creditor had become a de facto director. However, his Honour went on to note that a secured creditor who acted on a company’s behalf in appropriately significant matters “may more readily be characterised as a de facto director than a secured creditor which set requirements which a company may have to meet as a condition of continuing financial support”.

In this case, the evidence did not support a finding that Ms Swan had acted as a “de facto” director of the Group. Mr Swan remained the sole signatory for all Group accounts and was identified by employees as holding a position superior to that of Ms Swan. Ms Swan received limited financial information and her appointment of advisors and dealings with the ATO was explicable by reference to her position as a secured creditor. Whilst Ms Swan attempted to challenge directions given by her husband, it was not established that she ever succeeded. His Honour held that Ms Swan, in fact, failed to exercise any real authority and had a more limited role within the Group than that to which she had at one point aspired, or on occasions had suggested that she held. Mr Swan continued to exercise authority as to significant matters within the Group throughout the relevant period.

The decision is significant as an example of an alleged de facto director having a multifaceted involvement with an insolvent company but never exerting the level of authority or control required to be found to be a “de facto” director.

It is also significant in clarifying an important legal point in relation to which there were divided authorities from appellate decisions of state courts: that a liquidator must, in proving loss or damage for the purposes of an insolvent trading claim, bring to account any anticipated or estimated return to creditors in the relevant insolvencies.

Hall & Wilcox represented Ms Swan in this matter.

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