Issue 59 - January 2009

• Lessor's recovery rights under leases
• Contracts with the click of a mouse
• Companion animals and your Will
• Changes to NSW parking laws
• The Verdict

Considerations when entering into a sub-lease  Lessor's recovery rights under leases

It is common knowledge that lessees have, amongst other things, an obligation to pay rent to a lessor.   However, does this obligation continue when a lessee sub-lets the premises to a sub-lessee and the sub-lease expires or is terminated?

These issues were raised in the High Court decision of Gumland Property Holdings Pty Limited v Duffy Bros Fruit Market (Campbelltown) Pty Limited (Gumland case).

In the Gumland case, the lessee stopped paying rent for the sub-let premises following expiration of the sub-lease.  The lessee was of the view that, following a deed entered into with the lessor to allow for the sub-letting of the premises, that the lessee no longer had any obligation to the lessor for payment of rent for the sub-let area.  The High Court found that the lessee (and the directors of the lessee, who had provided personal guarantees) were obliged to pay:

rent arrears;
the lessor’s damages for re-fitting of the sub-let premises and reletting costs; and
damages for the difference in rent and outgoings the lessor would have received from the lease termination date until the lease expiry date.
Accordingly, if a lessee intends on entering into a sub-lease, the lessee should always keep in mind that in most cases, the lessee will remain liable for the sub-let area in the event of default by the sub-lessee and on the termination of the sub-lease. In an attempt to overcome some of these issues, the lease and sub-lease documentation needs to be appropriately drafted to properly give effect to the intention of the parties.

If you have any questions in relation to your leasing arrangements or any other property law related matters, please contact Rebecca Flynn or Melissa Grant on 9525 8688 or email rebecca@wmdlaw.com.au or melissa@wmdlaw.com.au.

Online contracts  Contracts with a click of a mouse

The NSW Supreme Court case of Peter Smythe v Vincent Thomas has confirmed that the fundamental principles of offer and acceptance in contract law are also applicable when forming contracts online.  

In Smythe v Thomas, the purchaser made a successful $150,000 bid on eBay for a vintage aircraft.  This was the lowest possible amount that the seller had stated the aircraft could be sold for.   At the time of exchange however, the seller refused to sell the aircraft at such a low price.   The Court held that the listing of the product on eBay was an offer and that the purchaser had accepted this offer by making the highest bid.  The Court found that the contract formed on eBay was a binding agreement and ordered that the seller complete the transaction.

This case sets an important precedent for buyers and sellers engaging in the formation of online contracts.  Since a binding contract can be formed by a few clicks of the mouse, sellers must be prepared to sell items advertised for sale and buyers must be prepared to pay for items they have purchased online.  Online shopping sites, like eBay, usually require all users to agree to terms and conditions before proceeding with a transaction.
 
An online contract is accepted and ‘signed’ when the purchaser clicks the relevant link to accept the terms.  Courts in the United States have held that the purchaser must have ‘reasonably conspicuous notice’ of the terms for the click signature to be valid.  For example, terms should be displayed in reasonably sized text in a scroll box.  Hyperlinks may be sufficient to put consumers on notice of terms.  However, a click signature may not be valid if the consumer does not reasonably know that a webpage contains contractual terms.

Please contact Craig Pryor or email craig@wmdlaw.com.au if you have any questions in relation to enforcing an online contract for the sale (or purchase) of goods or for advice in relation to your online terms of trade.

Don't forget about your pets when you are planning for your estate  Companion animals and your Will

Australians have a very high per capita rate of pet ownership – particularly dog ownership.  We all know the great benefits of sharing your life with a pet but often there is insufficient thought or planning given to the need to care for your pets after your death. 

Sensational news stories often emerge of dogs being left millions of dollars in estates but, in New South Wales this cannot occur.   A dog or pet cannot be a beneficiary of an estate because animals don’t have legal personality.  The law regards pets as articles of property rather than identities capable of taking a gift under a Will.

There are, however, a number of ways in which you can ensure that your pets are comfortably and safely provided for after your death.  These arrangements can be made through a trusted family member or friend who will care for the pet or, if no such person is available, through a number of institutions which will provide life time care and accommodation for the pet using funds that you set aside in your Will for this purpose. 

This type of planning gives you peace of mind about your pet's safety and comfort after your death but also frees your Executors and other family members from what may be to them a burden in trying to decide what to do with your companion animal. 

For further information regarding estate planning please contact Greg Dickson or Jayne Humphreys or email greg@wmdlaw.com.au or jayne@wmdlaw.com.au.

Road rules explained Changes to NSW parking laws

From 1 December 2008 all "no standing" zones in NSW became "no stpping" zones in a move that has brought NSW parking laws in line with Australian Road Rules.

If there is a "no stopping" zone, you may not stop your vehicle for any reason in the area indicated by the sign. Even in instances where a "no standing" sign has yet to be changed, the rules for "no stopping" apply and a $189 fine may be incurred for any violation.

Importantly, "loading zone" and "no parking" signs continue to exist and the rules relating to these signs remain unchanged.

If there is a "loading zone" sign, you may only stop or park if you are driving a bus that is dropping off or picking up passengers, or a truck that is dropping off or picking up goods and in any of those circumstances, you may not stay longer than 30 minutes in the "loading zone".

A "no parking" sign means that you may not stop for longer than 2 minutes and only to drop off or pick up passengers or goods (ie, you must remain within 3 metres of your vehicle whilst it is in the "no parking" zone.

If you find yourself in trouble with the law on the roads, please contact Kevin Dwyer or Kieran Haydon on 9525 8688 or email kevin@wmdlaw.com.au or kieran@wmdlaw.com.au.

Your questions answered  The Verdict

In this section, we answer your general questions in relation to any area of law. Obviously, we are not able to provide specific legal advice or advice in relation to a current legal matter. If you have a question you would like us to answer, please submit it by email to melissa@wmdlaw.com.au.

Can I keep using a power of attorney after the death of the person who gave me that power?

We often have clients and prospective clients who contact us in relation to the affairs of a person who has provided them with a power of attorney but has recently died.

Generally, a power of attorney becomes inoperative on the death of the person who made the power of attorney (the grantor). The person appointed as the attorney is unable to continue to use the power on the death of the grantor (and becoming aware of his or her death) as the death of the grantor operates to revoke the power of attorney.

The deceased’s persons affairs are placed on hold after their death pending their executor or legal personal representative taking steps to get in their assets and distribute them in accordance with their will or otherwise as required by law (such as where there is no will).

We can prepare powers of attorney which continue to operate in the period between death and the granting of Probate of Letters of Administration in a deceased person’s estate however, to do this, a specific form of wording is required and it does not always work for all purposes.

For assistance in relation to powers of attorney, enduring guardians, wills or estate planning, please contact Craig Pryor on 9525 8688 or email craig@wmdlaw.com.au. 

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