Illegal Movie Downloads – Is it you?

Illegal Movie Downloads – Is it you?

All of us at some point know someone that has told us about illegally downloading a movie via an internet site. It seems unfair for those of us who pay full price through iTunes but most of us just figure that the younger generation are smarter than us. A new Federal Court case sheds some light on the rights of the movie makers as owners of the copyright and those pesky downloaders. What happens when they get caught and how do they get caught? It seems from the evidence in the Dallas Buyers Club Movie (DBC) and a group of Internet Service Providers (ISP), including IINet, Internode and Dodo, that the fight continues. On 14 August the Federal Court gave an indication of the compensation copyright owners can expect to claim in future copyright breach matters and how the illegal downloaders might expect to receive a bill. What happened here was a digital investigator found 4,726 IP Addresses from which the DBC movie was illegally downloaded and shared on “Bit Torrent”. The owner sought a Court Order requiring the relevant ISP to provide details of the owners of the IP Addresses. To get an Order like this they had to demonstrate a right to obtain relief against potential Defendants, namely the ISP account holders. The judge ordered the ISP to provide this information but DBC had to provide the letter of demand to the account holders. The concern here was an unreasonable demand for the level of damages suffered from the copyright infringement. In terms of the amount of money the owner of the copyright intended to claim, the...

Is my email a binding Contract?

It is a surprise to many of our clients that the exchange of emails can constitute a binding Contract. The courts are frequently holding people to these Contracts and it is a topic that requires some careful consideration in times where email is the dominant method of communication. Stodgy old paper Agreements with a lengthy witnessing clause might get left on the desk when parties are talking. However, if there is sufficient dialogue and certainty of terms by email, that may be enough to create a legally binding agreement. When parties are negotiating it is a real danger time and there are some rules that should be followed during those exchanges. Although the Courts are often perceived as being backwards in regards to technology, they have in fact responded to this shift in communication by accepting email as a means of creating binding agreements. Not all business managers have caught up with this trend and are regularly placing their company at risk.  It is a mistake to believe that what is said or agreed over email is not binding, and that a legally binding contract is only made when a formal written document is signed. Take a look at some recent cases with us and let us know if you have a similar issue in your business. EMAIL NEGOTIATIONS – BINDING OR NOT? If you have started to negotiate by email but don’t want your emails to be a binding contract, then you must clearly state in your emails that “no binding agreement is formed unless and until a formal contract has been executed”. If you don’t expressly state...

The Real Value of Due Diligence and Independent Advice

It never ceases to amaze me how people can be so trusting when entering into a business transaction with someone they don’t know very well. As part of small business management, it is usual when acquiring an asset that the director exercises a reasonable level of due diligence before committing to the transaction. Certainly, a high level of scrutiny is given to the purchase of such items as plant and equipment or stock. One can only wonder why a director would leap into a financial or structural change without the same degree of scepticism. Recently, I encountered another example of a business that had been created with a potential significant time bomb lodged in the structure. My clients were skilled construction individuals who had created a unique method of surface material application and decided to start their own business. Lacking the acumen, advice and funding, they accidentally discussed the matter with an unknown third party, who decided to offer them start up finance. A company was duly formed and, on the advice of the accountant for the third party, a change in the constitution occurred. This was a significant moment in the life and destiny of the business. The accountant made it clear that he was acting only in the interests of the third party investor, but for some inexplicable reason, this did not trigger a warning to the other two to seek independent advice. As a result, a special class of shares was issued to the third party and highly restrictive voting powers imposed upon the two original shareholders. In fact, the third party forced a change to...

Director’s duties become more onerous

Carefully consider your responsibilities. Many of us are company directors and often sit on boards to assist in the efficient management of the business operations. Below are a couple of cases worth noting as they have wide implications for those bold enough to put themselves up as an ‘officer’ of a Corporation. Shafron v. Australian Securities and Investments Commission [2012] HCA 18 considered the extent of the duty owed under s.180(1) of the Corporations Act 2001 (Cth). In particular, it considered the extent of the phrase ‘in their position and with their responsibilities’ and the definition of ‘officer’ under the Corporations Act. The applicant was the company secretary and general counsel of James Hardy Industries Ltd (JHIL) and it was alleged that he had failed to display an appropriate degree of care and diligence in that he failed to give appropriate advice to the board of JHIL on two separate occasions, and on one occasion also failed to give appropriate advice to the chief executive officer. The principle question before the trial judge, Court of Appeal and High Court was whether the applicant’s responsibilities under s.180(1) extended to his duties as general counsel or were limited to his responsibilities as company secretary. There was no argument that, as company secretary, the applicant was an officer of JHIL, but the applicant argued that his ‘responsibilities’ as an officer should be limited to the role that made him an officer, i.e. his position as company secretary. Notwithstanding that the Court ultimately found him to be an officer in either capacity, the High Court held that the duties of an officer under s.180(1) extends to all roles undertaken by the officer within the corporation unless...

Business Succession and Property

Each business will have its unique requirements. I assisted some clients in relation to a business succession agreement for four partners in a successful business. At the time of formation of the original business entity, there was a simple husband and wife team. Over the years, the business grew. They were joined by their management executive and they sold shares in the company as a result. The business expanded again and they sold a further tranche of shares to another key management person. During the expansion phase they also had the opportunity to purchase the business real property from which the business was conducted. As it was around the time of the last manager’s buy in, he could not afford to purchase an interest in the property as well. So the end reality was four business owners and three property owners. They acquired the property in a separate family discretionary trust as tenants in common in one-third shares each. A commercial lease was established between the business trading entity and the three trusts as owners of the property. All simple so far… The question arose as to how to deal with the property interests upon death of a principal in the business. It is a simple matter for the one that did not buy in, as it is simply the value of his interest in the shares of the trading entity. However, when it comes to the buy/sell agreement for the three that have an interest in the property, this was a completely different matter. The issues are Does the deceased business owner need a continuing interest in the...