Legal Update

Legal Update

Commercial Arbitration Act in force – The Commercial Arbitration Act 2012 (WA) (New Act) was passed by the Western Australian parliament a year ago to repeal the former Commercial Arbitration Act 1985 (WA) (1985 Act).  The substantive provisions of the New Act came into full force by proclamation on 7 August 2013.

The New Act adopts the provisions of the UNCITRAL Model Law and harmonises the procedures for resolution of domestic commercial disputes with the procedures applicable for the resolution of international commercial disputes under the International Arbitration Act 1974 (Cth).

There is a clear benefit to businesses which operate both domestically and internationally being able to have regard to a common procedural framework for managing commercial disputes.

The paramount objective of the New Act is to ‘facilitate the fair and final resolution of commercial disputes by impartial arbitral tribunals without unnecessary delay or expense’ and by ‘enabling parties to agree about how their commercial disputes are to be resolved….and providing arbitration procedures that enable commercial disputes to be resolved in a cost effective manner, informally and quickly’ (Sections 1C(1) and (2)).

Pastoral Lease renewals – Pastoral leases in Western Australia are due to expire in 2015. All but a few leases have previously been offered renewal, and last month the Department of Regional Development and Lands released a draft of the new 2015 pastoral lease agreement.  As foreshadowed by the Department, the draft lease document is significantly different from the current lease and many pastoralists have expressed concerns about its unfamiliar content.

For the most part, the “new” provisions of the draft lease merely import the provisions under the Land Administration Act 1997 (LAA) as they relate to pastoral leases.  These obligations already exist under legislation and their inclusion in the lease document will do little to change the status quo.

The grant of the new leases must also comply with the Native Title Act 1993 (NTA) and in order to prevent triggering the future act procedure, the 2015 leases must not confer greater rights than the existing pastoral leases. For this reason, although all renewals will commence on the same date (1 July 2015), each lease will be for the same term as its predecessor.

There are, however, some new substantive obligations contained in the draft lease. While not intended to be an exhaustive list, some new provisions include:
• broad indemnification and release in favour of the lessor;
• a lessor right of termination (without avenue for appeal) as distinct from the right to forfeit the lease;
• new grounds of termination including if the lessee becomes insolvent of if any action is commenced under the Animal Welfare Act 2002 against the lessee; and
• requirements for lessee to comply with environmental provision and regulations.

What can I be doing now?

Pastoral lessees should be familiar with their obligations under the LAA. Breach of the LAA can result in forfeiture of their current pastoral lease as well as after the renewal. Understanding your obligations now will help prevent any surprises in 2015.

The implications of the new lease provisions may be significant, particularly in light of recent industry developments, such as the snap ban on live exports, which have potential to cause overstocking, environmental and animal welfare issues for pastoralists. Lessees should be familiar with the new obligations and consider the potential compliance risks and costs.

A parliamentary committee has commenced an inquiry into pastoral leases in WA that will look at issues including the draft 2015 pastoral lease.

For advice in relation to current or draft 2015 pastoral leases and related legislation please get in touch with your Hunt & Humphry contact.

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