Leasing and Property Newsletter – November 2017
In this edition our team report on the following topics:
- Two recent matters providing some indication as to how the ACCC will police the new Unfair Terms rules;
- Whether you need to give a disclosure statement at the start of an option lease;
- A recent tribunal case looking at whether a heads of agreement can be binding;
- The importance for retailers to be careful with their data in light of new data breach reporting requirements.
The Carroll & O’Dea Leasing and Property Team
Keeping contracts out of the trash: Recent matters involving new Unfair Terms rules
As was noted in an earlier Property Newsletter, the Australian Consumer Law (ACL) protections against unfair terms in standard form contracts was expanded last year to not only cover consumers but also small businesses with fewer than 20 employees. The first indication of how the ACCC would enforce these new rules occurred when the consumer watchdog took Sensis (owner of Yellow Pages and White Pages) to task over its standard contract for business customers. However the first real victim of the new rules was waste management company JJ Richards who had a number of terms in their standard contract declared void by the Federal Court.
Do you need to give disclosure statements for options leases?
The answer differs from State to State (and changes from time to time).
In some states, Victoria, the Northern Territory, Queensland and the ACT (at the tenant’s election) for example, the retail legislation specifically requires disclosure statements for option leases.
In Western Australia, the retail legislation specifies that an option lease does not require a disclosure statement.
And in the other states, New South Wales, South Australia and Tasmania, the retail legislation does not specify. What should a lessor do in these States?
Matthew Rafferty, Partner
Landlord not able to enforce a Head of Agreement
Casdar Pty Ltd v Fanous (Building and Property)  VCAT 1464
In this case, a landlord tried to enforce a Heads of Agreement, claiming that it was a binding lease. The Heads of Agreement had many elements that might indicate that it was binding.
The Tribunal found faults in those elements. The Tribunal also looked at both party’s behaviour after the Heads of Agreement was signed, and found that their behaviour was not consistent with an understanding that the Heads of Agreement was binding.
The case demonstrates the difficulty that a lessor may face when seeking to enforce a Heads of Agreement.
Matthew Rafferty, Partner
The danger of data: How data breaches can cost retailers
The loss of personal data is now a common story worldwide, with over 143 million people recently having their private information including names, Social Security numbers, birth dates, addresses and even some credit card numbers being stolen in the Equifax data breach. A study by IBM has found that the average cost for a data breach is $3.62 million USD. As such, it is not surprising that the Australian Government has introduced new laws regarding data breaches and the requirement of mandatory disclosure where a data breach has occurred or is suspected as having occurred.