In Newcastle Permanent Building Society Ltd v Allan Crew[2009] ATMO 55 the Building Society failed in its attempt to prevent words (Our Town and Our Town Newcastle) that had been used by it in previous marketing campaigns from being registered as Trade Marks for a proposed television series about Newcastle.

The Registrar of Trade Mark’s Delegate decided that he was not satisfied that the Building Society’s residual reputation in its trade mark was extensive enough for the use of these substantially identical trade marks in the entertainment field to deceive or cause confusion in the Australian marketplace.

In October 2008, ASIC released its second consultation paper on the review of the Electronic Funds Transfer Code of Conduct (EFT Code).

Its report is expected to be issued soon.

The EFT Code applies to credit cards (other than those authorised by manual signature) and non-cash (including digital) payment facilities such as direct debit, ATM, EFTPOS, Internet banking, stored value/prepaid cards, telephone/IVR banking and BPAY.

What changes can we expect ? Apart from drafting and procedural changes to reflect technology changes, ASIC is expected to announce its attitude to resolution of disputes relating to mistaken electronic payments. These are not currently covered by the EFT Code.

For example, what happens when an online funds transfer (eg pay anyone) is credited to the wrong financial institution account (ie an account with a different account owner or account number than intended because the customer keyed in the wrong account number or because they have been given the wrong account number). I discussed the Banking and Finance Ombudsman’s approach here.

The current difficulty is the lack of a simple agreed method of recovering mistaken payments. ASIC has said it does not intend to create new legal rights that do not currently exist. It also acknowledged the potential for abuse and fraud.

Should any new procedure be limited to keying in errors or extend to payments where the wrong details have been selected (eg from a drop down pay anyone list). Will it exclude disputes over the quality of goods or services purchased online?

Other changes will cover the requirement for receipts and complaints handling. ASIC is also considering extending the Code to small businesses.

In Re Octaviar Ltd; Re Octaviar Administration Pty Ltd 2009] QSC 37 the Queensland Supreme Court decided that variations to a company loan needed to be registered to be secured by the charge over the company's assets (see here). That decision created significant concern for company lenders.

That decision has now been set aside by the Queensland Court of Appeal: Re Octaviar Ltd (No 7) [2009] QCA 282.

The charge was not an "all accounts" charge. It secured all money loaned under a "Transaction Document". The subsequent loan was recorded in a document agreed by the parties to be a "Transaction Document" but it was not registered with ASIC. The Court of Appeal decided it did not need to be as it was neither a variation of charge nor a new charge as defined in the Corporations Act.

UPDATE 20 October 2009: This decision is being appealed to the High Court.

UPDATE 1 September 2010: The High Court has dismissed the appeal from the Court of Appeal’s decision overturning the initial decision. Public Trustee of Queensland v Fortress Credit Corporation (Aus) 11 Pty Ltd [2010] HCA 29

As discussed here APRA expects to release its final changes to remuneration issues in the APS 510 governance standards in November 2009.

APRA has announced the standards will come into effect on 1 April 2010 and will not differ substantially from the draft.

By that date, APRA requires regulated institutions to ensure that all contracts negotiated or renegotiated after the release of the final standards, comply with the standards.

Contracts already in force at that time must be fully compliant at the first opportunity for renegotiation, but no later than 31 March 2013.

What contracts are affected?

APRA has identified 3 groups of persons who are affected by the changes:

1. The first group is ‘responsible persons’,defined in APRA’s ‘fit and proper’prudential standards (APS 520) to include directors, executives and senior managers who make or participate in making decisions that affect the whole, or a substantial part, of the business of the regulated institution. The remuneration standards will exclude non-executive directors from this first group.
2. The second group are those whose primary role is risk and financial control (including risk management, compliance, internal audit, financial control and actuarial control roles).
3. The third group are those persons who receive a significant proportion of performance-based remuneration such as through bonuses or commissions.

Could contractors be affected? Yes.

APRA's draft Prudential Practice Guide states:

The persons covered individually or collectively by the Remuneration Policy may not be employees of the regulated institution but may be third party bodies corporate or other contractors who provide services to the regulated institution…

Where third parties perform material functions on behalf of a regulated institution and these functions may expose the regulated institution to risk, the remuneration of such third-parties is subject to the governance standard…

Among other things, contracts regarding third party sales and distribution activities would be expected to be constrained by the same or similar risk adjustment and deferral arrangements that would apply if this business were undertaken in-house by persons employed by the regulated institution.

You should examine your executive agreements and consultancies to identify whether they are affected and, if so, their review and expiry dates to determine when the agreements need to be amended to conform with the standard.

In its second round of consultation on remuneration policies APRA has made the following responses to submissions on its initial draft standards:

• APRA is now proposing that the composition of the Board Remuneration Committee be consistent with that of the Board Audit Committee. This entails that all members be nonexecutive directors with a majority independent and an independent chair, rather than all members needing to be independent directors.
• The definition of ‘risk and finance control personnel’ to whom the standard applies has now been modified to refer to those personnel whose roles are primarily related to risk or financial control.
• The draft standards now better reflect APRA’s intention that, beyond the responsible person cadre, prudent remuneration arrangements are intended to be established for classes of personnel rather than at the individual level.

We have previously discussed the need to adequately advertise mortgagee sales here, here and here to ensure that the mortgaged property is not sold for less than market value.

The Banking & Finance Ombudsman has updated his views on adequate advertising to include his views on internet advertising:

“… an advertising campaign should include print advertisements in local, regional or state-wide newspapers, specialised real estate magazines and agents’ franchised publications.

However, we acknowledge that internet listings have become an acceptable and widely used medium by which estate agents promote a property for sale and potential purchasers search for available properties within their buying criteria. Internet listings are also available at a price substantially less than the cost of print advertising.

Therefore, we accept that advertising on a well known and well regarded Australian real estate sales website may be an acceptable alternative to advertising in a local, regional or state-wide newspaper. However, for remotely located properties not serviced by such websites, an advertising campaign in a local, regional or state-wide newspaper may still be required for a mortgagee to discharge its obligation to advertise the property for sale.”