Publication
Generative AI: A global guide to key IP considerations
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Author:
Australia | Publication | abril 2020
Just before the Easter Break on 7 April, the National Cabinet agreed for the Mandatory Commercial Tenancy Code (the Code) to be legislated in each state and territory jurisdiction.
The Victorian Government has today introduced the COVID-19 Omnibus (Emergency Measures) Bill 2020 (the Bill). The bill has the support of the Liberal / National opposition and will be passed into law shortly.
The Bill provides the ability for the Governor in Council, on the recommendation of the Minister for Small Business, to make regulations in respect of “eligible leases”. The areas under which the Minister may make regulations are extremely broad, and are set out below. These include regulations which can temporarily amend the terms of a lease, imply terms into a lease, restrain parties to a lease from exercising rights, and extend the term of a lease.
At this stage, the specifics of the measures to be contained in the regulations have not been released, however it can be expected that (at a minimum) the terms of the Code will be given effect.
An “eligible lease” will be:
To be an eligible lease, the lease must be in place on the date that the regulations come into effect, and the tenant must also be an eligible tenant.
An eligible tenant is one which is both an “SME entity” and an employer who both qualifies for and is a participant in the JobKeeper Scheme.
An “SME entity” is one which:
Despite being an “eligible lease”, the regulations can exclude a tenancy from being covered by the measures. This can be applied to a tenant:
There is no detail yet on what the prescribed group of entities will contain, however the intention is to aggregate turnovers of members of a corporate group, so that only small to medium enterprise tenants receive the protection.
The reference though to “relationship or connection” is extremely wide and unless this is clarified by the regulations this will create uncertainty as to whether a tenant is or it not a member of an aggregated group.
Consistent with the Code we would expect the “prescribed amount” of turnover to be $50 million per annum.
As above, the regulations are extremely broad, and can have the following effects for an eligible lease:
In making the regulations, the Minister for Small Business must consider that the regulations are reasonably necessary for responding to the COVID-19 pandemic.
The regulations may impose a penalty of up to 20 Penalty Units (currently $3,304.40) for a contravention of the regulations.
If there is a dispute between a landlord and tenant under an eligible lease, then the regulations can require that the landlord and tenant participate in mediation arranged by the Small Business Commission.
If the mediation does not resolve the dispute, then if either the landlord or the tenant wishes to commence proceedings in VCAT (for retail leases) or Court (for other leases), then the regulations can require that they must:
There are no details of what the parties will be required to do in order to obtain a “mediation certificate”, or what matters the Court must consider in determining whether to grant leave. We would expect that to obtain a “mediation certificate” the Small Business Commission must be satisfied that the parties have made a genuine attempt to resolve the dispute.
The requirement to participate in mediation will not apply to proceedings commenced prior to 29 March 2020, and will not prevent a party from commencing proceedings at any time (noting that leave of the Court to commence the proceedings may still be required).
Of note is that the principles in the Code required “binding mediation” in respect of any dispute. The Victorian Government has interpreted this to mean that the parties are bound to mediate a dispute, and not that the mediation itself must produce a binding outcome.
The measures can be applied retrospectively back to 29 March 2020. The Bill, and any regulations made under the Bill, will expire six months after commencement – i.e. we would expect that the measures will apply until late October 2020. This is subject to any further revisions by the Victorian Parliament.
The Bill expressly states that the State is not liable for any losses suffered by a person as a result of any regulations made. This is significant, as the regulations will almost certainly have the effect of temporarily re-writing the commercial deals which have been struck between landlords and tenants, in a manner which will likely be detrimental to landlords.
The Small Business Commission will be tasked with:
A copy of the Code is attached to the statement issued by National Cabinet and is available here.
If you would like to read our previous update on the Code, it is available here.
Norton Rose Fulbright are providing advice to both landlords and tenants who are seeking guidance around their present rights and obligations, as well as how best to navigate through the Code and how to approach negotiations. We are also developing a suite of documents to record the types of arrangements that we expect will come into play over the next few months, including rent abatement deeds, variation documents, and checklists.
If you require any assistance with negotiations, including being properly prepared with a tailored checklist for your business needs, please contact us. In the meantime, we will keep you updated on relevant matters, including the details of the regulations once they are made.
Subscribe and stay up to date with the latest legal news, information and events . . .
© Norton Rose Fulbright LLP 2023