Williams + Hughes Earns Recertification in Meritas, the Leading Global Alliance of Independent Business Law Firms

Williams + Hughes is pleased to announce that it has been awarded recertification in Meritas, a global alliance of independent business law firms. Williams + Hughes joined Meritas in 2014 and, as a condition of its membership, is required to successfully complete recertification every three years. 

Meritas is the only law firm alliance with an established and comprehensive means of monitoring the quality of its member firms, a process that saves clients’ time validating law firm credentials and experience. Meritas membership is selective and by invitation only. Firms are regularly assessed and recertified for the breadth of their practice expertise, client satisfaction and high standards of cybersecurity to keep legal information safe. Meritas’ extensive due diligence process ensures that only firms meeting the tenets of Meritas’ unique Quality Assurance Program are allowed to maintain membership. The measurement of the firm’s performance, based on input from clients, is reflected in a Satisfaction Index score, which is available online on the Meritas website.

“Our values of quality service and client satisfaction align with the Meritas mission to provide a safe and responsive global offering to clients,” said Damian Quail, Director. “We’ve successfully collaborated with colleagues in many jurisdictions around the world to solve client issues and help them seize opportunities outside of this market. We look forward to keeping those vital connections through membership in Meritas.”

The recertification process Williams + Hughes completed to maintain its membership status included exacting self-assessment, peer review by other law firms and client feedback.  

“Businesses trust the Meritas alliance of law firms for top-tier quality, convenience, consistency and value,” said Sona Pancholy, president of Meritas. “Williams + Hughes has demonstrated its commitment to world-class legal standards, and therefore has successfully earned its recertification in Meritas.”

For more information about our our membership in Meritas, please see here

About Meritas 

Meritas’ global alliance of independent, market-leading law firms provides borderless legal services to companies looking to effectively capture opportunities and solve issues anywhere in the world. Companies benefit from local knowledge, collective strength and new efficiencies when they work with Meritas law firms. The personal attention and care they experience is part of Meritas’ industry-first commitment to the utmost in quality of service and putting client priorities above all else. Founded in 1990, Meritas has member firms in 259 markets worldwide with more than 7,500 dedicated, collaborative lawyers. To locate a Meritas resource for a specific need or in a certain market, visit Meritas.org or call +1-612-339-8680

Meritas Welcomes DMAW Lawyers, Adelaide, to the Membership

Leading Adelaide commercial Firm, DMAW Lawyers has been selected to be South Australia’s representative firm for Meritas, the premier global alliance of independent law firms.

DMAW Lawyers will become an integral part of the Australia & New Zealand network of firms as well as the worldwide network of 191 law firms located across 96 countries.

This alliance will enhance DMAW Lawyers’ ability to support South Australian business interests both nationally and internationally.

DMAW’s Lawyer’s Managing Director, Mr Leo Walsh said “One of most attractive benefits of belonging to this network was the opportunity for our lawyers to participate in national and global conversations on business and legal issues. Not only does this expand our thinking, and add to our technical skills, but it help our lawyers build trusted, reliable relationships with lawyers in the regions that matter to our clients. Already we’ve participated in meetings with Insolvency experts across the country and with Senior Partners in Shanghai and Tokyo.”

Mr Mike Worsnop, Partner with Martelli McKegg in New Zealand and Co-Chair of Meritas ANZ: “We are delighted to have DMAW Lawyers join our group. Not only was their quality apparent but they’ve been very easy and responsive to deal with during our discussions.  They clearly demonstrated the type of service clients look for when using a firm in a different market.”

“DMAW Lawyers had to meet the rigorous requirements to become members of Meritas, the only law firm alliance with a Quality Assurance Program that ensures clients receive the same high-quality legal work and service from every Meritas firm.”

Meritas membership is extended by invitation only, and firms are regularly assessed for the breadth of their practice expertise and client satisfaction.

Ms Sona Pancholy, Meritas CEO: “In today’s environment having a commitment to a reliable network is more important than ever. Independent law firms, Corporate Counsel, Business Owners and their Commercial Advisors, all choose their portfolio of trusted legal relationships to match the issues and the markets they want to navigate. For 30 years, Meritas has cultivated a group of the best firms for this purpose.”

About DMAW Lawyers

DMAW Lawyers was established in Adelaide in 2002. The firm has ten Principals and a team of 50 staff. DMAW Lawyers focus on three areas of specialization being Corporate, Transactions, and Disputes for Business Clients.

Website: DMAW Lawyers

About Meritas

Founded in 1990, Meritas is the premier global alliance of independent law firms. As an invitation-only alliance, Meritas firms must adhere to uncompromising service standards to retain membership status. With 192 top-ranking law firms spanning 96 countries, Meritas delivers exceptional legal knowledge, personal attention and proven value to clients worldwide.  

Website:  Meritas 

In Australia and New Zealand, Meritas is represented by leading independent commercial law firms in each of these six major capital cities:

In Australia

Adelaide DMAW Lawyers

Brisbane Bennett & Philp

Melbourne Madgwicks Lawyers

Perth Williams+Hughes

Sydney Swaab  

In New Zealand

Auckland Martelli McKegg

Covid-19 relief for commercial tenants in Western Australia

The State and Commonwealth Governments are in the process of enacting legislation to provide relief to commercial tenants affected by Covid-19. 

The West Australian State Government has recently passed legislation that limits the ability of a landlord to take certain action against tenants under a "small commercial lease" during the "emergency period" (the Commercial Tenancies (COVID-19 Responses) Act 2020).

The emergency period roughly aligns with the Commonwealth Government's Jobkeeper payment period, being 30 March – 29 September 2020, unless another end date is specified. This new State legislation is not yet in force, but it should be very soon.

The relief provided by the new Act operates in favour of tenants under "small commercial leases". A small commercial lease means:

• a retail shop lease as defined in the Commercial Tenancy (Retail Shops) Agreements Act 1985
• a lease where the tenant is a small business as defined in the Small Business Development Corporation Act 1983
• a lease where the tenant is an incorporated association as defined in the Associations Incorporation Act 2015
• another type of lease as prescribed in Regulations to the new Act (yet to be determined). 

During the emergency period protections in the new Act include:

• A six-month moratorium on evictions due to non-payment of rent
• A freeze on rent increases
• A restriction on penalties for tenants who do not trade or reduce their trading hours
• A prohibition on landlords making a claim on any form of security (e.g. a bank guarantee or security deposit) for the performance of the tenant’s obligations under the lease
• A prohibition on landlords progressing action against a tenant for a breach that occurred after 30 March 2020, but before commencement of the new Act
• A resolution mechanism for disputes arising out of, or in relation to, the operation of the legislation or a proposed new Code of Conduct (see below), including a mechanism to protect landlords where tenants are refusing to pay rent despite the capacity to do so.

The West Australian Government will soon pass Regulations to operate in conjunction with the new Act. These Regulations will deal with specific points not set out in the Act. For example, the Regulations might exclude certain small businesses from the protection that is given by the Act.  

The Regulations will also set out a new Code of Conduct equivalent to the National Cabinet Mandatory Code of Conduct  – Small to Medium (SME) Commercial Leasing Principles during COVID. This is the Code of Conduct developed by the Commonwealth Government and released on 7 April 2020 to regulate how a landlord must negotiate with tenants who have suffered Covid-19 related downturns. 

Of note, the Code of Conduct requires that landlords must offer tenants proportionate reductions in rent payable in the form of waivers (i.e. a reduction in rent that will not be recovered by the landlord) and deferrals (i.e. a delay in payment of part of the rent which will be recovered) of up to 100% of the amount ordinarily payable, on a case-by-case basis, based on the reduction in the tenant’s trade during the Covid-19 pandemic period and a subsequent reasonable recovery period. 

So, if a tenant's turnover is affected by Covid-19, it may be able to rely on the new Act and the Code of Conduct to negotiate a rent reduction and waiver with their landlord. 

The Regulations may impact on the matters outlined above. Specific advice is needed on a case by case basis. However, many small businesses should take some comfort that if they suffer a Covid-19 related decline in turnover, protection from adverse action by their landlord may be available. 

Other legislation is also currently before the West Australian Parliament which, if passed, is expected to allow tenants to request a termination of their lease if their business will not recover from a Covid-19 related decline in turnover. If passed, this legislation may limit a tenant's liability if they have to terminate their lease early for that reason. 

Please contact Amy Knight for further advice.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Disclose the full upfront price or risk breaking the law: new upfront pricing laws apply

It is not uncommon for businesses to advertise a headline price for goods and services to their customers, and to only disclose optional costs in the fine print or in a manner that is not necessarily clear to customers. This is no longer permitted. Some businessess will need to change their pricing practices, particularly businesses selling goods online.

The Treasury Laws Amendment (Australian Consumer Law Review) Bill 2018 amends the Australian Consumer Law contained within the Competition and Consumer Act 2010, and imposes an obligation on businesses operating in Australia to ensure transparent pricing for consumers. As of 26 October 2019, businesses must display the total price for the goods and services including all pre-selected optional items. In other words, if optional components are pre-selected or automatically applied by the seller, these options must be included in the headline price. The customer then has the option to remove the pre-selected options selected in order to pay a lower price.

These new laws will especially affect businesses who sell goods and services online. The Explanatory Memorandum to the new legislation provides some helpful examples in relation to airlines. For example, if an airline fare is $500 and a website pre-selects an optional carbon offset fee of $5, then the headline price must be $505, not $500. However, if the carbon offset fee is not pre-selected or automatically applied, then the ticket can be advertised at $500.  

The same approach is applicable for promotions which display only a portion of the total price. Businesses must ensure that the total price is displayed just as clearly as the fractional price. Essentially, the new laws aim to avoid the situation where headline prices are advertised initially, but once the customer clicks through the website the price is increased to include pre-selected options and charges. 

Businesses should ensure that their pricing strategies conform with the new laws. 

If you would like further information regarding the new laws please contact Damian Quail. 
 

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.

Franchising: Federal Court freezes assets of franchisor to protect franchisees who claim they were misled

Background

Jump Swim is an Australian-based franchisor that sells franchises to franchisees wishing to operate their own Jump Swim School to supply learn-to-swim services to children. According to its website Jump Swim has over 65 swim school locations in Australia, and has established operations in Brazil, New Zealand and Singapore.

ACCC secures freezing order against Jump Swim

On 7 June 2019 Justice O’Bryan of the Federal Court made orders freezing the assets of Jump Loops Pty Ltd (Jump Loops) and its parent company Swim Loops Holdings Pty Ltd (collectively Jump Swim), various associated entities of Jump Swim  and Jump Swim’s managing director, Ian Campbell.  His Honour also ordered that Jump Swim and the associated entities identify their liquid assets world-wide comprising cash securities and deposits of any kind held with a financial institution.

Why is the ACCC taking action?

The ACCC instituted proceedings against franchisor Jump Swim in the Federal Court, alleging that it made false, misleading or deceptive statements about Jump Swim School franchises, in breach of the Australian Consumer Law (the ACL). The freezing order was sought prior to commencing the misleading and deceptive conduct action, for reasons as explained below.

The ACCC is alleging that Jump Swim made representations in its promotional material that a prospective Jump Swim School franchisee would have an operational swim school within 12 months of signing a franchise agreement, when it did not have reasonable grounds for making that statement.

The ACCC claims that there are over 90 Jump Swim franchisees who did not receive an operational swim school within 12 months or at all. The initial costs of setting up a Jump Swim School generally ranged from approximately $150,000 to $175,000.

What is a freezing order?

A freezing order is a form of injunction restraining a party from parting or dealing with property prior to a final court judgment. 

The purpose of a freezing order is to prevent the frustration or inhibition of the Court’s process by seeking to avoid the danger that a judgment or prospective judgment of the Court will be wholly or partly unsatisfied because assets have been dissipated. 

The principles for granting a freezing order are well established:

• the applicant must show that there is a reasonably arguable case
• the applicant must show that there is a risk of dissipation if the injunction is not granted
• the applicant must show that the balance of convenience favours granting the injunction. 

The Court’s judgement on the freezing order application

In regards to the first condition, Justice O’Bryan was satisfied that the evidence produced by the ACCC shows that there was at least a serious question to the tried whether the alleged conduct of Jump Swim amounted to contraventions of the ACL. This appeared to include conduct that the franchises were sold on a ‘turn-key’ basis, to be handed over and ready to operate and, a representation in the promotional material that there would be a “12 month turnaround from sign to open” of the franchise. The Court referred to the ACCC’s claim that representations made were false, misleading or deceptive and/or likely to mislead or deceive because some 90 franchisees were not provided with an operational franchise within 12 months. 

As to the second condition, His Honour was also satisfied that there was a reasonable apprehension that assets owned directly or indirectly by Jump Swim and Mr Campbell would be dissipated so as to frustrate the relief sought by the ACCC. This apprehension arose from the fact that Mr Campbell and Jump Swim were facing multiple proceedings in Australia, new corporate entities had been recently created to acquire and take over the franchise business and Mr Campbell had established similar business operations in America and New Zealand (and there was evidence of material financial transactions between the Jump Swim Group and the overseas entities).  

Lastly, in relation to the balance of convenience, Justice O’Bryan noted that the application was brought on an ex-parte basis to avoid risk of the dissipation of assets. An ex-parte application is a Court proceeding where only the party seeking the Court order appears before the Court. In those circumstances, His Honour ordered that the orders would continue until 12 June 2019, at which time the prospective respondents and associated entities would have an opportunity to be heard. On this basis, it was found that the prejudice to the prospective respondents and associated entities would be temporarily confined. The freezing orders have now been extended until the hearing and determination of the substantive proceedings.

The misleading and deceptive conduct proceedings in the Federal Court

After obtaining the freezing orders the ACCC instituted proceedings in the Federal Court against Jump Swim, alleging that it made false, misleading or deceptive statements about Jump Swim School franchises in contravention of the ACL, as described above. Mr Campbell is also a respondent in the proceedings. The ACCC claims that Mr Campbell was involved in the conduct.

According to the ACCC’s Concise Statement dated 17 June 2019, the ACCC claims that Jump Swim made false or misleading representations in its promotional material about the time it would take to set up an operating swim school business franchise in breach of sections 18 and 29 of the ACL, and that Jump Loops accepted payment from franchisees without providing operational franchises within the time specified or within a reasonable time, and in circumstances where it did not have reasonable grounds to believe it could do so in contravention of section 36 of the ACL. 

In a media release dated 18 June 2019 the ACCC says that many franchisees were not provided with an operational swim school within the represented time frame of 12 months or at all. The ACCC Chair Mick Keogh also said “Franchisors need to take their obligations under the Australian Consumer Law seriously. Purchasing a franchise is a big decision, and people looking to open a franchise business rely on the information from the franchisor being accurate…We allege this conduct caused substantial harm to franchisees who paid significant sums but did not receive an operational swim school within the time specified, or at all”.

The ACCC is seeking injunctions, declarations, pecuniary penalties, redress for franchisees, disqualification orders, and orders as to findings of fact, and costs.

What this means for Jump Swim franchisees 

Jump Swim franchisees should keep informed of the ACCC’s action as it proceeds, as the outcome may directly affect them. Should there be orders made against Jump Swim or if Jump Swim becomes insolvent, this could have immediate repercussions for them. 

Are you a franchisor or franchisee?

These proceedings act as a reminder to all potential franchisees to do their own due diligence before entering into a franchisee agreement and making payment. 

Franchisors also need to be very careful about what promises they make to prospective franchisees.

Williams + Hughes can assist you in several ways, including the following:

• drafting or reviewing franchise agreements
• advising in relation to exiting a franchise arrangement
• advising in relation to misleading and deceptive conduct by franchisors
• advising in relation to disputes concerning the franchise agreement, non-solicitation and restraint of trade of former franchisees, and claims relating to competition by the franchisor or other franchisees.

For further information on how we can assist please contact Leanne Allison or Damian Quail on +61 8 9481 2040 or leanne.allison@whlaw.com.au and damian.quail@whlaw.com.au.

This article is general information only, at the date it is posted.  It is not, and should not be relied upon as, legal advice.  This article might not be updated over time and therefore may not reflect changes to the law.  Please feel free to contact us for legal advice that is specific to your situation.