Rotary Clubs are not Charities for Victorian Stamp Duty Purposes

The Supreme Court of Victoria (“the Supreme Court) determined in Rotary Club of Melbourne Inc v Commissioner of State Revenue [2018] VSC 699 (29 November 2018) that the Rotary Club of Melbourne Inc (“Rotary Club”) was not a body established for charitable purposes within in the meaning of section 45 of the Duties Act 2000. Therefore, the Rotary Club was not exempt from stamp duty on the purchase of real estate for office space.

This case was an appeal from the Victorian Civil and Administrative Tribunal (“VCAT”) which firstly required leave from the Supreme Court for the Rotary Club to appeal. The Supreme Court noted:-

“ In the interests of expedition and economy in terms of time and cost, this proceeding was heard as a combined or “rolled up” application for leave to appeal the Tribunal’s decision and, if leave were to be granted, the hearing of the appeal itself.”

The Supreme Court found that VCAT had not erred in law when it determined that the Rotary Club was not a body established for charitable purposes and therefore confirmed the decision of VCAT.

VCAT determined that a significant and independent object of the Rotary Club is the moral improvement of its members as they conduct themselves in their own personal, business and community lives, divorced from the activities of the Rotary Club. “The moral improvement of members, while ‘admirable and, indeed, praiseworthy’, is ‘beyond the purposes accepted by the law as charitable’.”

The Supreme Court considered that whilst the promotion of ethical standards in business and the professions may be a purpose that falls within the general law understanding of charitable purposes, the purpose must be beneficial to a sufficient section of the community. The Supreme Court held that the Rotary Club concerned itself with the conduct of its members to be of a high ethical and moral standards.

Therefore, it did not sufficiently benefit a section of the public with the improvement of ethical standards in business and the professions.

This case is a further example of not-for-profit organisations seeking traditional charitable purpose status for the purpose of state and federal revenue law.

 

Date Published: 1 February 2019

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Like with caution: Social media Defamation

Bolton v Stoltenberg [2018] NSWSC 1518 found that the mere act of “liking” a defamatory post on social media sites, such as Facebook, was not enough to attract liability. Although, New South Wales Supreme Court Justice Payne added that liability could still be attracted if there is evidence to suggest that the “like” had drawn the attention of many users to the post.

The Supreme Court of New South Wales held that a series of Facebook posts about the former Mayor of the Narrabri Shire Council, Mr. Conrad Bolton, were defamatory, and awarded Mr. Bolton $110,000 in damages. This included Mr. Stoltenberg being ordered to pay $80,000 in general damages and $20,000 in aggravated damages plus $10,000 in interest. Ms. Loder was ordered to pay $10,000 resulting from a defamatory post.

This case shows the powerful influence that social media sites can have over individuals. Mr. Stephen Stoltenberg, a former town clerk who had previously maintained a professional relationship with Mr. Bolton published a Facebook page called “Narri Leaks” which he used to post his defamatory opinions about Mr. Bolton.

From 2015 to 2016, Mr. Stoltenberg published six defamatory posts about Mr. Bolton, claiming that he was corrupt and dishonest in his actions as Mayor of the Council and acted unprofessionally and corruptly in his selection process for appointing a new General Manager to Council. Furthermore, Ms. Ann Loder, who was a sitting Narrabri Councillor at the time, actively interacted with the posts, including “liking” 64 posts in the group, and uploaded a comment on a defamatory post encouraging others to “like” the post as well.

Mr. Stoltenberg attempted to argue that despite the fact that he was the author and publisher of the defamatory posts, he could not be held liable unless there was evidence that a third party had read the posts, who was not Mr. Stoltenberg or Mr. Bolten. Justice Payne rejected this argument and found that there was a plethora of evidence that the posts had been read and downloaded by many other people who were not Mr. Bolten. The Court relied in part on material published in Mr Stoltenberg’s posts and provided in his answers to interrogatories that others had read the posts.

In contrast to Mr. Stoltenberg’s liability, Ms. Loder’s liability was much harder to define. The question at hand was could “liking” of posts and encouraging others to do the same make her liable for defamatory posts.

Citing the cases Google Inc v Duffy [2017] SASCFC 130 and Visscher v Maritime Union of Australia (No 6) [2014] NSWSC 350, Justice Payne came to the conclusion that Ms. Loder’s action of “liking” a post was not sufficient to warrant liability as a secondary publisher to the defamatory material. Despite this, however, Justice Payne added that her comment on a post encouraging others to “like” the post did make her liable, as she had attracted the attention of others to the defamatory posts. She was then ordered to pay $10,000 in damages to Mr. Bolten for her comment.

This case illustrates the influence that social media can have. Cases like this encourage us to reflect on what we post and how we act on social media.

It is clear that the law is applying the principles of defamation to adapt to the new technology. In Google Inc v Duffy [2017] SASCFC 130 [see our previous articles here], the provision of a hyperlink to the defamatory material lead to liability for Google.

Similarly, In the South Australian case of Johnstone v Aldridge [2018] SADC 68 [see our previous article here] allowing defamatory posts made by others nevertheless led to liability for the host. Interestingly, in Bolton v Stoltenberg [2018] NSWSC 1518, Mr Stoltenberg was not held liable for a defamatory post made by another because Mr Stoltenberg removed the post within 2 hours.

Advice of caution in social media is well placed.

 

*Oliver Hamit served as an intern at Wentworth Lawyers Pty Ltd

Victor Hamit is Principal Director at Wentworth Lawyers Pty Ltd

 

 Date Published: 7 January 2019

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Ladies a plate! Ladies only Bowls Tournament allowed

In a Victorian decision delivered in Portarlington Bowls Club – Exemption (Human Rights) [2018] VCAT 1571 (11 October 2018) the Tribunal determined that the ladies of the Portarlington Bowls Club (“the Club”) could conduct a ladies only bowls tournament.

The Tribunal noted the background to the tournament as follows:-

“The Club has a long-standing tradition of holding an annual ‘Ladies Section Open Day’. The next Ladies Section Open Day is 11 November 2018 and invitations will be issued to women in local clubs. Men are not invited (the conduct). Since 2013, the Club has operated the open day competition subject to an exemption granted by this Tribunal on 18 July 2013. The Club has made an application for a further five-year exemption to enable it to continue to run the competition under section 89 of the Equal Opportunity Act 2010 (the Act).”

Section 89 of the Act permits the Tribunal to grant an exemption from any of the provisions of the Act in relation to a person or class of persons or an activity of class of activities by publishing a notice in the Government Gazette.

Section 90 of the Act requires the Tribunal, in deciding whether to grant, renew or revoke a decision to consider:-

(a)     whether the proposed exemption is unnecessary because-

(i)    an exception or exemption in the Act already applies to the conduct sought to be exempted; or

(ii)   the conduct sought to be exempted would not amount to prohibited discrimination; and

(b)     whether the proposed exemption is a reasonable limitation on the right to equality set out in the Charter of Human Rights and Responsibilities; and

(c)     all the relevant circumstances of the case.

Accordingly, the question to be determined by the Tribunal in this matter was “whether an exception already applies, primarily whether the open day constitutes a ‘special measure’ under section 12 of the Act.”

Section 12 (3) of the Act provides as follows:-

 “A special measure must-

(a)    be undertaken in good faith for achieving the purpose set out in subsection (1); and

(b)    be reasonably likely to achieve the purpose set out in subsection (1); and

(c)    be a proportionate means of achieving the purpose set out in subsection (1); and

(d)    be justified because the members of the group have a particular need for advancement or assistance.”

Section 12 (1) of the Act provides as follows:-

“A person may take a special measure for the purpose of promoting or realising substantive equality for members of a group with a particular attribute.”

The Tribunal noted:-

“…..some persons might find the use of the term “Ladies” inappropriate and might consider “Women” or “Female” more suitable. However, I consider that the term is reflective of the long tradition of the Club and of the demographic that this event serves. It is the term with which the relevant players are most comfortable and therefore the term most likely to attract players and teams to the event. Hence, I have adopted that term in these reasons.”

The Tribunal then indicated that it was satisfied with the evidence presented that:-

“…the Ladies Section Open Day provides assistance to women, particularly older women, to continue participation in bowls competitions and to develop leadership and tactical skills that they would not otherwise develop in a mixed-sex team. I am also satisfied that women, particularly older women, have a particular need in these circumstances for that assistance.

Given the declining numbers of women in the Applicant club [the Club], I consider that the continuation of the traditional Ladies Section Open Day assists in preventing further decline of female membership or, in other words, I am satisfied that the proportional loss of female membership would be greater in the absence of the single-sex competition days.”

The Tribunal further considered that the one day per year of the Ladies Section Open Day was proportionate to the purpose. The Ladies Section Open Day constituted a “special measure” and therefore an exception already applies to the conduct in these circumstances. Accordingly, an exemption is not required.

The Tribunal considered it lawful for the Club to conduct the Ladies Section Open Day as it constitutes a special measure and therefore no special exemption is required to be sought.

The Victorian Equal Opportunity & Human Rights Commission has produced a document “Equal Opportunity in Lawn Bowls – What you need to know about holding single-sex competitions” which can be found here.

Date Published: 23 October 2018

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Facebook posts by others on your profile can be defamatory and your responsibility!

Johnstone v Aldridge [2018] SADC 68 held that liability for defamatory comments on Facebook posts were attributable to the host notwithstanding some of the defamatory comments were made by others (or “friends”).

Mr Aldridge was ordered to pay $100,000 in damages (including aggravated damages) with costs yet to be determined at the time of writing.

The Court held that Mr Aldridge’s initial Facebook post was defamatory but so were a number of the approximately 4,500 subsequent comments by “friends” and “supporters”. Whilst Mr Aldridge was clearly the author and publisher of his posts, the Court held he was a “secondary” publisher of the subsequent defamatory comments.

The case shows how common situations can escape common sense and easily transgress into liability inducing defamation. Mr Aldridge had lodged a town planning application to relocate his fresh fruit and vegetable “market”. Mr Johnstone was the owner of several fruit and vegetable shops and objected against the town planning application made by Mr Aldridge.

Mr Aldridge then embarked on a campaign through Facebook and in the media against Mr Johnstone with what turned out to be speculative and unsubstantiated comments. The only apparent reason for the campaign was to exert pressure on Mr Johnstone to abandon his objection against the town planning application lodged by Mr Aldridge. The campaign was apparently widespread with about 4,500 comments on Mr Aldridge’s post on his Facebook profile covering over 190 pages from “friends” and “supporters”. Unfortunately, the Court found that not only were Mr Aldridge’s comments defamatory but he was also responsible for allowing publication of some of the subsequent comments which were defamatory.

The Court held that Mr Aldridge had a responsibility to monitor the comments and to “remove those which were inappropriate or suffer the consequences irrespective of the inconvenience involved.” The effect is that a person must use reasonable diligence in monitoring and removing inappropriate comments.

Mr Aldridge had argued that the comments were not his, nor could he control the content of the comments and due to the large volume and speed of the comments it was impractical if not impossible for him to remove offending comments.

Apart from the Court doubting some of Mr Aldridge’s evidence as credible, it firmly determined that in these circumstances, it was not “unreasonable” nor “unrealistic” for him to monitor and remove comments that were inappropriate. The Court noted that he had at least two other persons to assist in such a task.

In our opinion, the decision is welcome to limit the “wild west” frontiers of social media by holding those accountable for defamatory conduct.

Accordingly, for those businesses using Facebook, it may be time to revisit social media policies and procedures with monitoring protocols being given special attention.

Mr Aldridge represented himself in this case and claimed he had “exhausted his finances and gone into debt in defending the claim and attempting to protect his reputation….”

Nevertheless, an appeal may be possible.

 

Date Published: 22 August 2018

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Servcorp consents to court orders that contract terms with small business unfair

Australian Competition and Consumer Commission v Servcorp Limited [2018] FCA 1044 determined that Servcorp Limited (“Servcorp”) and its subsidiaries had caused contracts with small business to be entered into which contained unfair terms. This was an action commenced by the Australian Competition and Consumer Commission (“ACCC”) against Servcorp and some of its subsidiaries.

Servcorp is a publicly listed company and a holding company of a range of companies providing office space and office support services across Australia. Servcorp, through its subsidiaries, entered into contracts with small business for the provision of office space and office services.

ACCC argued that pursuant to the Australian Consumer Law (“ACL”) contained in Schedule 2 of the Competition and Consumer Act 2010, the relevant contracts were in standard form (Section 27 ACL) and would cause detriment to the small businesses (Section 24 and 25 ACL).

The Federal Court determined that the contracts between the Servcorp subsidiaries and the small business customers contained unfair terms (Section 24 ACL) and therefore, those terms were void (Section 23 ACL) because those terms:-

  • would cause a significant imbalance in the parties’ rights and obligations;
  • were not reasonably necessary in order to protect the legitimate interests of the Servcorp subsidiaries; and
  • would cause detriment (whether financial or otherwise) to the small business customers if they were to be applied or relied upon by the Servcorp Subsidiaries.

Specific terms that were considered unfair included:-

  1. There was an automatic renewal of the small business contracts which allowed Servcorp to increase the price at its absolute discretion and without notice.
  2. Permitted Servcorp to unilaterally terminate the contract and limit the small business’s termination rights.
  3. Unreasonably limit Servcorp’s liability and/or imposing unreasonable liability on the small business.
  4. Allowed Servcorp to terminate a contract where a claimed breach may not have constituted a material breach and without giving notice to the small business or the opportunity to remedy the claimed breach.
  5. Permitted Servcorp to retain a small business’s security deposit without notice if the small business failed to request its return.

The ACL was extended with effect from 12 November 2016 to cover “standard form contracts” (Section 27 ACL) involving “small business contracts” (Section 23(4) ACL). Interestingly, the Federal Court considered contracts that although originally entered into prior to the commencement of the extended provisions of the ACL, the contracts had been renewed after that date and were therefore subject to the ACL.

Section 23(4) of the ACL states:-

“A contract is a small business contract if:

(a) the contract is for a supply of goods or services or a sale of grant of an interest in land; and

(b) at the time the contract is entered into at least one party to the contract is a business that employs fewer than 20 persons; and

(c) either of the following applies:

(i) the upfront price payable under the contract does not exceed $300,000; and

(ii) the contract has a duration of more than 12 months and the upfront price payable under the contract does not exceed $1,000,000.”

The final outcome of the case is that orders were consented to by the parties that Servcorp and its subsidiaries, at their own expense, would:-

  • Establish and implement a program which has the purpose of ensuring compliance with the ACL with the program terms being agreed between ACCC and the subsidiaries.
  • That Servcorp employees and agents would participate in the program.
  • Pay costs of $150,000 to the ACCC on account of costs of and incidental to the proceedings.

This is now the second case in recent times in which the ACCC has initiated and won proceedings involving the protection of small business in dealing with standard form contracts and the imbalance of power by larger organisations. See Australian Competition and Consumer Commission v JJ Richards & Sons Pty Ltd [2017] FCA 1224.

Accordingly, small business owners may wish to consider their positions in a range of industries including franchising, shopping centre leases and supplier agreements. The imbalance in bargaining position between large or multinational organisations and small businesses has been apparent for some time but it would appear that the amendments to the ACL have merit and that the regulator is willing to act.

 

Date Published: 17 August 2018

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