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									October 2005                                                                                                                                    VOL 7         ISSUE 3

  WELCOME                           1

  Auctioneers must disclose
  GST on property sales     1
                                                    I hope you are all enjoying the lovely warm             to time, please send an email to Debbie on
  Crackdown on Pay TV                               spring weather that’s now arrived. As always,           ddavis@bradleybray.com.au with a subject line
  Signal Theft                      1               the newsletter contains many interesting articles       of “newsletter”, together with your name and
                                                    so sit back and enjoy the warm spring sunshine          address and we will be happy to forward all
  Australian ‘royals’                               with a cuppa and our newsletter.                        future issues to you by email.
  convicted                         2
  A man and his two sons who claimed                Any suggestions as to the content of our                If you do not wish to receive the newsletter any
  their property in northern Victoria was           newsletter are always welcome, feel free to             longer, simply contact us and we will remove
                                                    contact Debbie with those suggestions at any            you from our mailing list.
  an independent kingdom have been
  convicted of fraud after failing to pay
                                                                                                            Should you receive your newsletter at the
  income tax and fraudulently collecting            If you would like to receive our newsletter by          incorrect address or more than once, please
  welfare payments.                                 email (in PDF format) or other information that         let us know so that we can amend our records
                                                    we feel may be of interest to you from time             accordingly.
  HIGH COURT - negligence
  in playground           2
  The High Court has ruled that a primary           Auctioneers must disclose GST on property sales
  school was not responsible for a
  playground accident in which a student            The Australian Competition and Consumer                 GST, and there was no clear disclosure to potential
  was injured when she was pulled off a             Commission (ACCC) has warned auctioneers they           bidders prior to the auctions whether GST applied
  flying fox by two other students.                 must make it clear to all bidders at the start of an    to the land sales.
                                                    auction if bids are inclusive or exclusive of GST.
  The limits of ‘unlimited’                                                                                 In one auction, the auctioneer made a representation
  Broadband                         2               Under the ACCC’s GST pricing guidelines,                that he did not believe GST was applicable when in
  The Office of Fair Trading (OFT) has              auctioneers have some flexibility in deciding           fact there was GST liability on the hammer price.
  reminded Internet Service Providers (ISPs)        whether they conduct auctions on either a GST-
  that using the term ‘unlimited’ to describe       inclusive or exclusive basis. However, under the        The ACCC believes that the conduct of the real
  broadband plans that have download                Trade Practices Act 1974, both auctioneers and          estate agent may have been in breach of sections 52
  limits can be misleading.                         vendors must make it clear to consumers whether         and 53A of the Trade Practices Act, which prohibits
                                                    the bidding price includes or excludes GST – or         misleading conduct and false representations
  Who will inherit the farm 3                       they may be required to make good the consumer’s        being made in relation to the sale of land.
  Proper succession planning and vigilance          loss.
  in protecting the rights of all parties                                                                   The real estate agent offered a court-enforceable
  are critical in avoiding what can be              The ACCC has accepted court-enforceable                 undertaking to ensure that future property
  catastrophic results in rural succession.         undertakings from Manningham Real Estate Pty            advertising and conduct of auctions complied with
                                                    Ltd, trading as Barry Plant Doherty, relating to        the Act.
  New general insurance                             the auctions of three allotments of residential land
                                                    in Melbourne. The land was sold on behalf of the        The buyers will receive a full refund totalling $48,350
  code of practice                  3
                                                    Manningham City Council.                                of the GST paid. The ACCC believes the council
                                                                                                            had not been involved in any alleged contravention
                                                    In March 2004, the ACCC received several                of the Act.
  Court rules on                                    complaints about the advertising and auction of land
  music piracy                      4               in the Melbourne eastern suburb of Doncaster. The       For more comprehensive advice on GST on
                                                    land was promoted in newspapers without showing         property sales, contact your local solicitor.
  Take care at tax time             4               whether the prices were inclusive or exclusive of the
  The Australian Tax Office (ATO) has urged
  people who use a tax agent to prepare their tax
  return to check that the agent is registered.       CRACKDOWN ON
  Lawyer’s long -                                      PAY TV SIGNAL
  winded speech                     4                      THEFT
  Chatterbox                        4               Accessing pay TV services without
                                                    paying for them will be criminalised
                                                    under new measures foreshadowed
                                                    by Commonwealth Attorney-General
    MOVED???                                        Philip Ruddock.                                         distribute a subscription broadcast to
                                                                                                            other premises or for a subscriber to use
                                                    After a six-month review by the Attorney-               the broadcast for commercial purposes
    We would appreciate it if you could             General’s Department, the Government                    if the appropriate subscription fee has
    let us know so that you can continue            has decided that criminal penalties                     not been paid.
    to receive Bradley & Bray in Brief.             should apply for accessing pay TV
    Please advise us of your new address            broadcasts without authorisation and                    Pay TV signal theft is a major concern
    by sending us a letter; forwarding              payment of subscription fees.                           for Australia’s pay television industry,
                                                                                                            which estimates it costs the industry
    an email to info@bradleybray.com.au             Under the new measures it will also be                  more than $50 million a year in lost
    or simply giving us a call.                     an offence for a pay TV subscriber to                   revenue.

October 2005

                                                           HIGH COURT - negligence in playground
                                                           The High Court has ruled that a primary        In Trustees of the Roman Catholic Church
                                                           school was not responsible for a playground    for the Diocese of Canberra and Goulburn
                                                           accident in which a student was injured        (as St Anthony’s Primary School) v Hadba
                                                           when she was pulled off a flying fox by two    the High Court considered;
                                                           other students.
                                                                                                          • whether the standard of care owed
                                                           The court held the school was not negligent      by school authority extended to the
                                                           because there were adequate supervision          necessity to provide constant
                                                           and safety measures in place.                    supervision over play equipment
                                                                                                          • whether constant supervision of
                                                           In February 1999, during recess, eight-          dangerous equipment was reasonably
                                                           year-old Farrah Hadba, a student of St           practicable and
                                                           Anthony’s Primary School in Canberra,          • whether a different system would have
                                                           was playing in the playground on the flying      prevented the respondent’s injuries.
                                                                                                          The court found that Farrah’s injuries were
       AUSTRALIAN                                          Two teachers were rostered on for
                                                           playground duty at the time, with one
                                                                                                          not the result of any defect in the flying
                                                                                                          fox but rather the result of the two other
                                                           teacher responsible for supervising the        children having behaved in breach of the
       ‘ROYALS’                                            area of the playground including the flying
                                                                                                          ‘hands off’ rule.

                                                                                                          Chief Justice Gleeson and Justices Hayne,
      CONVICTED                                            However, the teacher was momentarily           Callinan and Heydon (Justice McHugh
                                                           distracted for 20 to 30 seconds to call a      dissented) found it unlikely that a teacher
                                                           group of students away from an out-of-         watching the equipment uninterruptedly
      A man and his two sons who claimed                   bounds classroom. During the time the          would have been able to prevent the
                                                           teacher turned away, two fellow Year 3         plaintiff’s fall once the other two children
      their property in northern Victoria was an
                                                           students each grabbed one of Farrah’s          had grabbed her legs.
      independent kingdom have been convicted
      of fraud after failing to pay income tax and
                                                                                                          “It was suggested in argument that children
      fraudulently collecting welfare payments.
                                                           Farrah struggled to free herself and called    will only behave mischievously if they think
                                                           on the children to stop but she was pulled     that no adult is watching. The scope for
      The Age reported that Virgilio Rigoli and his        off the flying fox, hitting her face on the    juvenile mischief is, however, greater than
      sons, Philip and Little Joseph, declared their       platform as she fell to the ground. She lost   that,” the joint judgment stated.
      family farm the Principality of Ponderosa and        four teeth and smashed her jaw.
      claimed it had seceded from Australia.                                                              Chief Justice Gleeson and Justices
                                                           The school had a ‘hands off rule’, where       Hayne, Callinan and Heydon also found
      Fences were erected around the 24 hectare            children were not allowed to touch each        that constant supervision of the flying
      property and it was surrounded by a moat.            other in the playground. This rule was         fox was unreasonable. “The number of
      People were required to present passports to         displayed on posters throughout the            staff required, the financial and other
      enter and leave.                                     school and was repeated in assembly and        costs of providing them and the narrowly
                                                           in the classroom. The ‘hands off rule’ was     specialised responsibility required of
      The Victorian County Court heard the family          enforced, and children breaching this rule     them are going well beyond the bounds of
      earned $6.9 million between 1991 and 2000            were told to stop.                             reasonableness,” they wrote.
      through its polystyrene box manufacturing firm
      and refused to pay income tax.
                                                           THE LIMITS OF ‘UNLIMITED’ BROARDBAND
      The men were convicted of charges including
      failing to declare taxable income. Virgilio Rigoli   The Office of Fair Trading (OFT) has           material is accurate, and prices quoted
      was sentenced to a minimum of 24 months in           reminded Internet Service Providers            are not misleading. Any business found
      jail for failing to declare income between 1993      (ISPs) that using the term ‘unlimited’ to      engaging in false and misleading
      and 2000 and obtaining an invalid pension            describe broadband plans that have             advertising may face fines of up to
      between 1992 and 2001. He was also fined             download limits can be misleading.             $40,500 under the Fair Trading Act
      $25,000.                                             OFT received over 50 complaints about          1989.
                                                           ISPs last financial year, many from people     OFT      urges    people      considering
      Philip Rigoli received a $2500 fine and a            believing the services they received were      broadband to:
      suspended 20-month jail term, for failing to         worth less than what they had paid for.        • understand the difference between
      declare his income between 1993 and 1994             ISPs that advertise the term ‘unlimited          unlimited hours and unlimited
      and obtaining a carer’s allowance between            hours’ while not making it clear that            downloads
      1996 and 1998. The court was told Philip,            a download limit exists, along with            • check if deals promoting unlimited
      who was released on a good behaviour                 additional costs if that limit is exceeded,      hours have limits on downloads
      bond, left the farm and broke all ties with the      may be misleading their customers.             • check if deals offering unlimited
      family in 1997.                                      In addition, a customer who signs up for         downloads cost you more than your
                                                           ‘unlimited’ broadband should not have            actual ISP usage.
      Little Joseph Rigoli received a $2500 fine and       their access restricted to slower dial-up
      was sentenced to a minimum 16-month jail             speeds at any stage.                           If you believe you have been the victim
      term for failing to declare his income between       Under Queensland laws, traders have            of false and misleading advertising, seek
      1994 and 2000.                                       a responsibility to ensure all advertising     legal advice.

                                                                                                                           VOL 7      ISSUE 3

                                                                                               N E W G E N ERAL
          Who will inherit                                                                       I N S U R A NCE
            the farm?
                                                                                                   C O D E OF
                                                                                                   P R A C T I CE
                                                                                              A new General Insurance Code of Practice
                                                                                              will require general insurers to meet a variety
                                                                                              of measurable performance standards,
                                                                                              including settling claims in set time periods
                                                                                              and providing clearer information about

                                                                                              Developed by the Insurance Council of
                                                                                              Australia (ICA), the code covers all types
                                                                                              of general insurance for individuals and
Proper succession planning and vigilance                                                      business policyholders, but does not cover
in protecting the rights of all parties                                                       workers’ compensation, compulsory third
are critical in avoiding what can be                                                          party (CTP), medical indemnity and marine
catastrophic results in rural succession.                                                     insurance, which all have their own set of
                                                                                              rules under statute.
Research conducted by the Australian           Both ‘solutions’ are still used, and they
Bureau of Agricultural and Resource            are the source of expensive, emotive and       The code aims to improve service standards
Economics (ABARE) in 1994 found                difficult-to-resolve succession disputes.      throughout the industry and create a better
that 99.6 percent of the 85,000 farms in                                                      deal for the consumer.
Australia were family owned.                   Questions of fairness and equity
                                               necessarily arise as to who gets the farm.     All ICA members, who represent about
The question of ‘who will inherit the farm?’   If no provision is made for a surviving        90 percent of the market, will adopt the
when one generation dies is problematical      spouse, then a family provision application    code over the next 12 months and all other
enough, but too often the more important       (FPA) is an inevitable consideration.          general insurance industry representatives
question of ‘who owns the farm?’ is not                                                       are encouraged to do so.
asked until someone dies.                      But family provision applications are
                                               not the only claims made by children. It       Compliance with the code will be
Historically, common methods of farm           is at this point that the question of ‘who     monitored by the independent Insurance
succession involved leaving everything         owns the family farm’ becomes relevant,        Ombudsman Service, who consumers will
to the oldest son, or alternatively dividing   because that question needs to be              be encouraged to contact if they feel their
the farm between the children. The             answered before the question of ‘who           insurer has breached the code.
first approach has obvious problems            gets it’ can be resolved.
of fairness and equity. The second is                                                         The code requires general insurers to:
workable at most for a few generations,        The theme emerging from qualitative
and only then when the original parcel         studies in Australia, New Zealand and          • meet agreed timeframes for handling
is large enough to be divided into viable      the United States is that the topic of ‘farm     claims or responding to complaints.
portions.                                      transfer’ rather than ‘farm succession’        • fast-track claims or make advance
                                               should be discussed.                             payments when customers show they
Both ‘solutions’ effectively assumed that:                                                      are in financial hardship as a result of
• the farmer was male                          This is more than different terminology;         the damage or loss leading to their
• the children who would take the farm         it reflects an attempt to use lawyers,           claim
   were male                                   accountants, and other specialist advisors     • enable claims arising from a natural
• the children already worked the farm         to develop a proper appreciation of the          disaster to be reviewed after they
   and would continue to do so and             farm business and to develop a realistic         have been settled, recognising that
• the parents would stay on the farm           and structured transfer plan before the          communities are often traumatised when
   when they became old and would              patriarch dies.                                  they assess their losses
   be looked after by their family until                                                      • if insurers are unable to provide cover,
   they died.                                  It is not a suggestion that everything           they will give reasons for the decision
These ‘solutions’ do not address               necessarily be disposed of prior to              and they will refer customers to another
significant contemporary considerations,       death. Rather, it is an attempt to identify      insurer, the Insurance Ombudsman
such as:                                       problems and solutions prior to a problem        Service or the National Insurance
• What if the farmer wants to or has to        or a dispute being triggered by the death        Brokers Association (NIBA) for further
   retire?                                     of a stakeholder.                                information about insurance options
• What about the widow? How does                                                              • provide better and clearer information to
   she adequately maintain herself,            It is also an opportunity to explore             consumers regarding what is covered in
   without relying on her children, for the    strategies which go beyond a simple              their policies
   rest of her life?                           division of land and the exclusion of some     • handle disputes and rectify mistakes in
• What about children who, for whatever        beneficiaries, in order to address properly      a transparent and efficient manner and
   reason, have moved off the farm?            the considerations set out above.                in a specified time.
• What about the daughters?
• What about second wives or                   For more information on rural succession       For more information on the new Code of
   stepchildren?                               planning, seek legal advice.                   Practice, go to www.codeofpractice.com.au.

October 2005

       A CASE IN POINT... Court rules on music piracy
      On July 14, 2005, the Australian Federal Court      The terms and conditions emphasised the linking        E-Talk and Comcen argued they were unaware of
      ruled that former Queensland policeman              function provided by the website and stated that       Mr Cooper’s actions.
      Stephen Cooper, operator of the website             links to third-party websites were not necessarily
      MP3s4free.net, and his ISP were guilty of           under MP3s4FREE’s control or endorsed by the           Decision
      music piracy. Although the website did not host     site.                                                  Tamberlin J found all five respondents liable
      pirated music sound recordings, it did provide                                                             for copyright infringement. Mr Cooper was
      hyperlinks to remote websites that contained        The disclaimer stated: “... When you download          found liable for authorising an act that infringed
      pirated recordings and was therefore found to       a song, you take full responsibility for doing so.     copyright and was therefore liable for copyright
      be in breach of copyright.                          None of the files on this site are stored on our       infringement. However he was not found to
                                                          servers. We are just providing links to remote         have infringed copyright by communicating the
      Background                                          files.”                                                recordings to the public.
      The proceedings were brought against Mr
      Cooper, his ISP Comcen, Comcen parent               ComCen began hosting the website in December           The court found that Comcen and E-Talk were
      company E-Talk Communications, Comcen               2000. Mr Cooper received free web hosting from         responsible for hosting the website and providing
      employee Chis Takoushis, and Comcen and             E-Talk/ComCen in return for advertising their logo     the necessary connection to the Internet and
      E-Talk director Liam Bal, by 31 record              on the website.                                        therefore had the power to prevent the doing of
      companies, including major record labels such                                                              the infringing acts. Tamberlin J concluded: “They
      as Sony, EMI, Universal Music and Warner.           In 2003, the website was shut down after a series      could have taken the step of taking down the
      Six of the applicants were Australian record        of complaints were made and investigations took        website. Instead, they took no steps to prevent
      companies who claimed to be owners or               place in relation to allegations of unauthorised       the acts of infringement.”
      exclusive licensees in Australia of the copyright   use by Mr Cooper of music recordings without a         Both Mr Takoushis and Mr Bal were found liable
      in large catalogues of music sound recordings.      licence.                                               due to their knowledge of the content of the
      The applicants alleged that in the course of                                                               website and their failure to take action to prevent
      operating the website, Mr Cooper had infringed      The case                                               the unlawful activity.
      their copyright of the music sound recordings.      The principal claims against Mr Cooper and his
                                                          ISP were based on the infringement of copyright.       The court found that the disclaimers, published on
      The website                                         Namely, the applicants alleged that Mr Cooper          the website, did not ‘amount to reasonable steps
      The website was established by Mr Cooper in         directly infringed their exclusive rights to make      to prevent or avoid’ the infringements and that Mr
      1998 and contained hyperlinks to thousands          copies of the music sound recordings and to            Cooper had sufficient control of his own website to
      of unauthorised sound recordings located            communicate those recordings to the public.            take steps to prevent the infringement.
      on remote websites. Users could search a            They also alleged that Mr Cooper authorised
      catalogue of sound recordings in MP3, which         Internet users to make copies of the music sound    Implications
      they could download directly from those             recordings and to communicate them to the           This is the first ruling on the legality of hyperlinking
      websites to their computer. Users could also        public.                                             under Australian copyright law and indicates that
      post their own hyperlinks on the site linking to                                                        hyperlinking, and not just downloading, is an
      available MP3 files.                                The court heard Mr Cooper was unaware he may infringement of copyright.
                                                          have infringed copyright law and his lawyers
      At the bottom of each page of the website, there    argued that because his website only provided The judgment is also significant for ISPs and
      were hyperlinks to the website’s privacy policy,    links to other files and did not contain any actual their potential liability for the activities of their
      terms and conditions and disclaimer.                music files, there was no infringement by him.      customers.

          TAKE CARE AT
            TAX TIME
                                                                      LONG - WINDED
                                                                                                                  Join us in welcoming our new Junior,
      The Australian Tax Office (ATO) has urged                          SPEACH                                   Jennifer Banks.
      people who use a tax agent to prepare their tax
                                                                                                                  Jennifer has joined us after a short time
      return to check that the agent is registered.
                                                                                                                  working for a local Newsagent.
      The reminder comes after two companies
                                                                                                                  You may get to speak to Jennifer from
      were sentenced in the Downing Centre local
                                                                                                                  time to time as her duties include helping
      court for breaches of the Tax Act and fined
                                                            A lead counsel for the Bank of England has            with the answering of the phone and
      over $8,000.
                                                            delivered what is believed to be the longest          assisting clients attending at our office.
                                                            speech in British legal history.
                                                                                                                   OTHER OFFICES
      The companies, H L & Associates Pty Ltd & H
      Lal & Associates, were found guilty of falsely
      advertising as registered tax agents and              The Mirror reported Nicholas Stadlen QC took
      charging clients a fee to prepare tax returns.        119 days to outline the Bank’s defence of a                                             CHANCELLOR PARK
                                                            £850 million compensation claim by creditors                                                        Shop 2
      Tax Commissioner Michael Carmody said                 to collapsed bank BCCI.                                                    Chancellor Park Shopping Centre
                                                                                                                                                         1 Scholars Way
      only a registered tax agent could charge a
      fee to prepare and lodge your return, so it           Mr Stadlen went through 125 lever-arch files              (Please ring us on 5441 1400 for details of when this

      was important to check that you are using a           holding 40,000 documents during his opening                            office is manned and for appointments.)

      registered tax agent.                                 comments.                                             The information in this newsletter is merely a guide and
                                                                                                                  is not a full explanation of the law. This firm cannot take
      A list of registered agents can be found at           The epic speech surpassed the previous                responsibility for any action readers take based on this
                                                                                                                  information. When making decisions that could affect your
      www.tabd.gov.au, or you can check with the            record set by his rival, Gordon Pollock QC, in
                                                                                                                  legal rights, please contact us for professional advice.
      Tax Agents’ Board on 1300 362 892.                    the same case, which lasted 73 days.


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