Category

Business Law

What to do if Your Business Receives a Bad or Defamatory Google Review

What to do if Your Business Receives a Bad or Defamatory Google Review

By | Business Law

The power of Google, with more than four billion users of the search engine around the world, is now unquestionable.

A bad review of a business posted as a review on its Google listing can be highly damaging to the enterprise’s reputation.

There have now been a number of cases brought in Australia by those adversely impacted by a negative or defamatory Google review by a disgruntled client or vexatious reviewer.

The costs of legal action mean not every business has the funds to bring a defamation action. Additionally, the owner who brings such an action will need to demonstrate actual loss or harm as a result of the negative review.

This article takes a closer look at what options are available to a business the subject of a bad Google review. You should always seek the guidance of experienced lawyers with specialist knowledge in this area, such as Felicio Law Firm, before embarking on a defamation action over a negative Google review.

How does defamation work in relation to Google reviews?

A business that believes its reputation has been damaged by a negative Google will most commonly take legal action in defamation.

Defamation relies on the accusation that the review in question opened the business to hatred, contempt or ridicule.

It’s important to note not all companies can take action for defamation. Under NSW’s Defamation Act, an action for defamation is only possible by an ‘excluded corporation’. That is one that employs fewer than 10 persons and is not related to another corporation. The corporation must also not be a public body.

There are other causes of action a company can take, such as injurious falsehood, to combat the effects of a Google review, though they are generally more difficult to prove.

It’s open to a director or officer of a company to take personal action for defamation against a reviewer provided they are identified with sufficient certainty in the review that allegedly carried the defamatory imputation.

Significantly, a Google review can still be defamatory even if it does not specifically name a person or business. A reference in the review that is specific enough to allow identification – ‘the men’s hairdresser on Smith Street’, for example – can sustain the defamation action. Similarly, if there is a reference to a class of people such as ‘Everyone working at the fish and chips shop on Smith St’, may also support a claim for defamation.

Some recent case examples

In the recent case of Dean v Puleio [2021] VCC 848, Ms Puleio wrote four Google reviews on the business listing of Dr Dean, a periodontist who owns Kew Periodontics and Dental Implants. Ms Puleio had been a client at the clinic until Dr Dean terminated the relationship due to Ms Puleio’s manner and constant cancelled appointments.

Ms Puleio then posted reviews that levelled accusations at Dr Dean including being unprofessional, overcharging, failing to diagnose illness, and being someone who bullied patients. Another post stated that Kew Periodontics provided ‘unprofessional and undermining service’.

Two further reviews stated other accusations about Dr Dean’s ethics and falsely stated the doctor had apologised to Ms Puleio.

Evidence supporting Dr Dean’s defamation application included the number of times the review had been viewed online, including the ‘grapevine effect’ when posts are shared, as well as data on the downturn in the page views on Kew Periodontics’ website and a drop in new patient referrals after the negative posts.

The court accepted the reviews had damaged Dr Dean’s reputation amongst her peers and in the eyes of the broader community, plus had an effect on her wellbeing.

It awarded damages in the amount of $170,000. That figure included aggravated damages because Ms Puleio had published the statements solely to harm Dr Dean’s reputation. She also refused to apologise, take down the reviews, attend mediation or participate in the court process.

Around the same time in February 2020, Melbourne dentist Matthew Kabbabe took Google to the Federal Court in order to force the search engine giant to identify a person who anonymously posted a bad review about his practice on his Google business page. Google had refused to either take down or reveal the identity of the poster, ‘CBsm 23’.

The Federal Court justice made an order compelling Google to turn over any identifying information of the reviewer, including names, phone numbers, IP addresses, location metadata, and any other information about the person’s Google accounts so that Mr Kabbabe could pursue a defamation action against the reviewer.

Can Google itself be liable? The Dylan Voller case

International social media platforms such as Google and Facebook have for many years strenuously resisted the idea that they are ‘publishers’ of reviews hosted on their platforms.

The High Court of Australia’s recent decision in the case of Dylan Voller, a former detainee of the Northern Territory’s juvenile detention system, where it dismissed an appeal from Australian news outlets who claimed they were not responsible for third-party comments on their public Facebook pages, may also have implications for Google reviews.

Voller is seeking to pursue an action for defamation against the news organisations for allowing defamatory material about him to be published in comments on their Facebook pages.

The High Court rejected the appeal, finding instead that by creating a public Facebook page and posting content, the media outlets facilitated, encouraged and assisted the publication of comments from third-party Facebook users. These actions made them, therefore, the publishers of those comments.

Similar reasoning could be applied to Google’s facilitating of business reviews which are defamatory in nature.

In April 2020, Melbourne lawyer George Defteros had won $40,000 in damages from Google by arguing it had defamed him as the publisher of Google searches on his name which linked him to Melbourne gangland figures.

Call Felicio Law Firm for further advice

If you believe your business has been harmed by the appearance of a negative review on Google or another social media platform, call Felicio Law Firm today.

In this fast-changing and evolving area of the law, we are always up-to-date on the latest developments to be able to advise clients on the most sensible and practical course of action to combat a negative review.

Contact our friendly team today on (02) 4365 4249.

What You Need to Know About Joint Venture Agreements

What You Need to Know About Joint Venture Agreements

By | Business Law

There are many reasons why two parties may decide to enter a joint venture (JV).

Each may bring complementary skills which they believe will work in combination. In other situations, the joining of finances from each side may help the parties realise involvement in a project that would otherwise be beyond them if they attempted it on their own.

It also allows the parties to share risk and liability if profits of the project do not eventuate. In Australia, a JV is also one way to allow foreign investment in a project.

In United Dominion Corporation Ltd v Brian, Justice (later Chief Justice) Mason described a JV as “an association of persons for the purposes of particular trading, commercial, mining or financial undertaking or endeavour with a view to mutual profit, with each participant usually (but not necessarily) contributing money, property or skill.”

Parties may create a JV for a business project or to buy a property interest but in either example, it is wise to create a JV agreement that sets out the obligations, rights and responsibilities of each party.

This agreement will benefit from being drafted by legal professionals with wide experience in corporate law matters, such as Felicio Law Firm.

What should be included in a joint venture agreement?

These agreements will generally cover the obligations of each party entering into JV, including:

  • what each party will initially contribute to the JV;
  • what actions each party will be obliged to perform during the life of the JV;
  • terms on the reporting and governance of the JV;
  • dispute resolution processes between the JV parties, and;
  • what should happen at the end of the life of the JV.

What type of joint ventures are there?

It should be stated at the outset that unlike corporate structures, such as a limited liability company, the definition of joint venture remains largely undefined in Australian corporate law.

While joint ventures are subject to common law principles and different parts of various pieces of legislation, their essential nature is best described as a commercial arrangement between two or more independent parties, organised under one of several legal forms for the purpose of a business project.

There are three main forms of JV in Australia: unincorporated, incorporated and unit trust JVs.

Unincorporated JVs: Also referred to as a ‘contractual JV’, this form sees the parties enter into a contract that sets out the rights and obligations of each party.

The terms of the contract will typically address:

  • That the rights and obligations of each party are several rather than joint.
  • Operation of the JV may be undertaken by a manager that may be either of the parties, a third party, or a third party contracted manager.
  • The operator is appointed separately by each party.
  • The parties are not agents for each other, except where one of them is appointed the manager of the operator.
  • The JV is conducted so as to give the parties a right to share in the product of the undertaking as a proportion of their financial interest in the JV.
  • The management structure of the JV ensures that each party contributes its agreed percentage interest; and that decisions about the JV are made by an operating committee comprised of representatives of each party.
  • The undertaking is a JV and not a partnership.
  • Assets are held as tenants in common by the parties at common law rather than beneficially.
  • Any transfer of the interests of the parties is usually subject to a pre-emptive option held by the other parties.
  • The parties may decide to be in a fiduciary relationship with each other or deny such a duty by express terms in the contract.

Incorporated JVs: In this arrangement, each party agrees to incorporate a separate legal entity to undertake the joint project. Each party then holds a percentage of shares in the new company, which is why this form is sometimes called an equity JV.

In this form, the details of ownership of the business or asset will be set out in a shareholders’ agreement, though other rights and obligations may be separately negotiated in a JV agreement.

Formation of a new company under an incorporated JV means there is a different legal relationship between the parties governed by the provisions of the Corporations Act 2001 relating to shareholders.

Unit trust JVs: This hybrid form sees the parties to the JV create a unit trust with each holding units which reflect its equity in the business or property asset. The potential benefit of the trust structure is a reduced tax liability for the JV.

The trust should be formalised in a clear written agreement.

Case example: In Coyte and Anor v Norman and Anor; Centre Capital (Newcastle) Pty Ltd and Anor, a 2016 NSW Supreme Court case, claims of a breach of contractual obligations in an oral agreement relating to a unit trust JV did not succeed because the court did not find the agreement existed.

Speak with expert legal professionals

If you’re considering a joint venture to purchase a property asset, undertake a business venture, or participate in a one-off project, it’s important to establish at the outset which form is appropriate and what sort of agreement should govern its operation.

Felicio Law Firm has the expertise to advise on the best structure of JV to ensure expectations are managed on both sides and to create an agreement that covers the possibility of disagreement or dispute. Call us Erina lawyers today.

Planning for the Future of Your Business

By | Business Law

The COVID-19 pandemic has affected every area of the way we live. And at the moment, we are not sure how long our changed circumstances will last, or what the legacy of this disease will be.

One group in society most obviously and directly affected has been those who operate businesses. Shut-downs, stand-downs, and the sudden disappearance or inactivity of customers and clients has had – and continues to have – a dramatic and damaging affect on business owners and operators.

As a law firm embedded in its community, with many long-term relationships with valued business clients, we at Felicio Law Firm are particularly aware of the challenges our friends are facing. We are here to help during this unprecedented time, which the subject of this article is addressed to.

How we can help

With many business clients facing severely reduced revenue and even insolvency, it’s important for them to know that there are legal options which are affordable, accessible and effective in helping protect and aid their business during this trying time. But these options do require placing your trust in us by providing necessary information we can utilise to assess your business position and what might be done to ensure it survives the pandemic.

Some of the records we might request in order to give you informed legal advice on your options might include:

  • Details on the business’ current operations, including active contracts, and any planned acquisitions or divestitures.
  • The company’s most recent financial statements. The most important details within these are:
  •  a depreciation schedule, if available;
  •  any recent valuations relating to plant, equipment and intellectual property owned by the business;
  • debtors’ and creditors’ ledger;
  •  details of related party creditors;
  •  current balances in all business-related bank accounts;
  •  details on employee entitlements.
  • Whether any payment arrangements have been entered into between the business and other agencies, such as the Australian Taxation Office (ATO).
  • ATO balance and income tax account details.

Provision of these details by your business’ financial adviser is certainly a great start in helping us understand the financial position of the enterprise and our capacity to suggest useful legal avenues for protecting your position.

What else could be provided?

In addition to those documents listed above, our legal help can be provided where a director of a business may have provided a personal guarantee in order to make sure the business meets its debt and financing obligations.

This process may require you to furnish us with the details of any insurance policies held by the company, particularly those that relate to the liabilities of directors and other company officers.

In these times of economic contraction, it’s advisable our business clients contact us as soon as possible if they receive any statements of claim, default judgement or applications to wind up as part of insolvency proceedings. Equally, if there are creditors of the business demanding payment, provide us with details of any payments made as soon as you’re able.

At Felicio we can help where the business has secured creditors. By providing us with information on the amounts owing to secured creditors, the extent of the charge they hold, and any details of repayment plans to meet obligations, we can help advise on cost effective ways to protect your business.

Likewise, where suppliers retain title over stock or goods of the business which are registered on the Personal Property Security Register (PPSR), or there are rental assets held by the business which may be subject to charges by the bailor under the PPSR, we can help you understand the legal position. This will require you providing details on current rental/lease agreements held by the business, including the lease period and the amount and frequency of repayments.

Why legal advice is crucial

These are trying times. Many experienced economic commentators have openly predicted many businesses won’t survive the effects of the global downturn caused by COVID-19.

Many businesses are also unaware of their legal rights and obligations, or what they can legally do to protect their interests. We understand all of these issues and are here to help our business clients through these difficult times.

Call us Erina Lawyers today (02) 4365 4249 for an initial consultation to discuss any of the issues raised in this article. Our firm is dedicated to long-term relationships with clients where we listen with compassion and understanding and then act in your best interest to ensure your business is protected.

Liquidation

What You Need to Know About Liquidation

By | Business Law

Incompetence. Mismanagement. Bad luck. Some combination thereof. There are lots of reasons businesses experience catastrophic financial difficulties. There are also lots of consequences, including liquidation. Here’s what all business owners should know about liquidation, and how it differs from the other repercussions of crushing debt.

What is liquidation?

To understand liquidation, one most first understand the concept of insolvency. A business (usually a company) goes into insolvency or becomes insolvent when its debt is such that the company is incapable of meeting past, current or future financial obligations.

Depending on the circumstances, insolvency can lead to receivership, administration, bankruptcy (generally applicable to individuals/sole proprietors) and liquidation. Each of these includes different protocols and mechanisms for the resolution of debt, which we will discuss briefly here.

Receivership

This happens when a secured creditor or creditors enlist the help of someone called a “receiver” to recover money owed.

The receiver’s job is to oversee the sale of any business assets and/or the business and the distribution of the proceeds to the secured creditors, followed by any unsecured creditors and other relevant parties in accordance with applicable rules. The receiver is also responsible for notifying the Australian Securities & Investment Commission (ASIC) about any related  offences.

There are two things to keep in mind here. The first is that receivership can be implemented without a court order. The second is that receivership does not change the legal status of the company; your directors can carry on, but the scope of their power will be restricted.

Administration

Administration is similar to receivership, in that someone is recruited to put things right. This person is called an administrator, and he/she has two responsibilities. The first is to ensure that outstanding debts are paid and the second is to see that the sale of the business/business assets goes smoothly.

Depending on the situation, administration may result in liquidation or restoration of control to the company’s directors.

Bankruptcy

As we have noted, bankruptcy does not apply to companies. Instead, it applies only to individuals/sole proprietorships. Accordingly, it is carried out on a much smaller scale.

Instead of an administrator or receiver, a trustee is chosen to oversee the process. In this role, he or she may coordinate the sale of assets, secure your income for a given period for the repayment of debts, or secure property wrongfully given or ‘sold’ to someone else in an effort to prevent its sale for repayment of debts.

Another consequence of bankruptcy is placement of your name, along with a mark, on the National Personal Insolvency Index (NPII) for up to five years. The NPII is a widely accessible database that includes the individual/business names and addresses of anyone who has declared bankruptcy.

What happens when a business is ‘liquidated’?

Liquidation – the process whereby which the business is done away with and all of its assets are sold – usually applies only in the most dire situations. It includes the following steps:

  1. The conversion of the company’s assets to cash (through sales).
  2. Distribution of the proceeds to creditors.
  3. Distribution of any remaining funds to shareholders.
  4. Formal request to ASIC to remove the company from the register, thereby ending its legal existence.

You should also be aware that this process is carried out by someone called a liquidator and that it can happen after the business has gone through receivership and/or administration.

How to tell when liquidation is forthcoming

Insolvency – particularly liquidation – may be warranted when a business:

  • Cannot meet its monthly expenses;
  • cannot sustain fair market salaries for its employees;
  • can no longer afford to pay its taxes or make required contributions to employee superannuation;
  • cannot recoup sufficient funds from its debtors or ongoing work to meet the cash flow demands.

There are other warning signs that should also be taken into consideration. For example, liquidation may be imminent if your business is hemorrhaging so much money that the bank secures a mortgage on your home to ensure it can recover the amount owed. It may also be forthcoming if growing business debt prompts a creditor or creditors to obtain personal guarantees. Liquidation may be on the cards if your business continues to incur debt after it is declared insolvent and goes through receivership or administration. Finally, liquidation is likely inevitable if you (or any other director) receives a Director Penalty Notice from the Australian Tax Office that the company is incapable of paying.

Ignorance is not bliss

One of the more unfortunate aspects of human nature is our tendency to ignore unpleasant situations. But as we all know, wishing something away doesn’t work. If your business is facing financial difficulties, the best thing to do is seek advice from qualified legal and financial professionals as soon as possible. Our Central Coast lawyers is here to help so contact us by phone on (02) 4365 4249 or through our website, today.

debt recovery in NSW

What You Need to Know About Debt Recovery in New South Wales

By | Business Law, Litigation

There are few more frustrating experiences for a company than chasing debts incurred by clients and customers. That frustration is compounded by how much time and money it can take to recover outstanding amounts owed to the business.

While many creditors are inclined to immediately threaten court action to enforce collection of what is owed, this course can prove costly and time-consuming, and should always be seen as a last resort.

Upfront communication with the debtor, payment plans, alternative dispute resolution and a letter of demand are all steps that could be taken to try and recover the debt before the matter needs to proceed to court. Below is some more detail on methods of debt recovery in NSW.

Preliminary methods of debt recovery

Ideally some honest communication with the debtor via phone, email or other means can resolve the issue. This is a process of investigation as to why the debt has not been paid and what is possible – such as instalments, a downpayment or some other payment plan – in order for the debtor to make headway in resolving the issue.

Should this means be unsuccessful, or the results uncertain, the parties might use alternative dispute resolution (ADR) as a way to reach agreement on debt repayment. So long as both parties are amenable, an independent third party can manage negotiations between them to find a mutual agreement on how to resolve the debt.

If ADR fails to recover the debt, most companies will proceed to a letter of demand. In general, this should be drafted after consulting with a lawyer experienced in debt recovery, and constitutes a formal request for payment which will detail the amount owing; the deadline for payment; and the consequences if payment is not forthcoming, including progressing to legal proceedings to recover the debt.

The court process for debt recovery

If the terms set out in the letter of demand are ignored, legal action can commence. A creditor must file a Statement of Claim with the relevant court in order to begin the legal process of debt recovery.

The size of the debt and its nature (business-related, personal, etc.) will determine which court hears the matter and also what the process will eventually cost.

The path to resolution is also complicated when a debtor raises a defence as to why they haven’t paid the debt. When this happens both parties will be required to submit evidence and attend a hearing in court.

Where a debtor does not file a defence, the creditor can apply for a default judgment where the court can order the debtor to pay back the money – known as a ‘judgment debt’ – without a hearing. Once ordered, a judgment debt can empower a creditor to take further enforcement action.

Creditors can begin enforcement proceedings at any time up to 12 years from the judgment date where debtors ignore orders of the court.

Types of enforcement

A creditor can seek court orders for a number of different ways to enforce debt recovery. These include:

  • Garnishee order: this orders a third party who holds money on behalf of the debtor, such as a bank, or someone who owes money to the debtor, to have money deducted and paid towards the debt amount.
  • Writ of execution: an order by which the sheriff’s office can seize and sell property of the debtor to pay off the creditor.
  • Writ for possession of property: directs the sheriff’s office to seize and sell property of the debtor in order to pay the creditor.

Additionally, when the debt is over $5,000 in NSW , a creditor may ask the court to declare the debtor bankrupt. Doing so may result in the debtor surrendering control of their money and other assets to a trustee. The trustee will then try to resolve the bankrupt’s debts.

Where a debtor is a company and the debt is over $2,000, a creditor may issue a statutory demand under section 459E of the Corporations Act 2001 (Cth) which requires the debtor to pay the debt within 21 days. This demand can be made with or without a judgment debt but it should be noted that to do so without may see the debtor challenge the demand on the basis that the debt is in dispute.

A debtor who fails to comply with a statutory demand leaves itself open to a creditor commencing proceedings to find it insolvent. Conversely, should the debtor have limited or no assets, this process may see the creditor never recovering the debt.

In conclusion

The various steps in trying to recover a debt can be complex and consume a lot of valuable company time. Moreover, different strategies apply depending on the amount and type of debt, and different time limits can also apply.

If you need advice on a debt recovery matter, contact our Central Coast Lawyers today on (02) 4365 4249 for an expert assessment of your situation and how we can achieve your desired outcome in a prompt and cost-efficient fashion.

Uncovering Unclaimed Money

Commercial Law – Uncovering Unclaimed Money

By | Business Law

Commercial law is also known as the area of Business and Corporate law.

This aspect of law focuses on commerce, trade, sales alongside individuals and businesses who conduct particular financial activities. At Felicio Law Firm, we will support you in navigating and addressing issues you face in respects to your business affairs.

Uncovering Unclaimed Money

Do you have unclaimed money waiting to be retrieve in an account somewhere?

In Australia alone, there is over $1 Billion dollars’ worth of lost money waiting to be claimed by its rightful owner at any given time. This is due to the fact that the money has become unclaimed for a number of years. Keeping track of different accounts from superannuation, shares, insurance policies, bank accounts and investments can be quite hard, however if not tracked properly, it can lead to the result of your own money becoming unclaimed and lost.

When money in these accounts convert as unclaimed, the funds are then paid to the Australian Securities Investments Commission. Once unclaimed money is received by the ASIC, it is then transferred to the Commonwealth of Australia Consolidated Revenue Fund where the legitimate owner can request for the money at any given time.

Felicio Law Firm is a registered agent to the ASIC, and we able to conduct the lodgements and searches for any unclaimed money in Australia linked to you. We will be able to assist you in finding unclaimed money you may have lost, and conduct the correct procedure in claiming this money back for you.