Conventus Law

Conventus Law

by

26 June 2020

 

The weekly briefings are prepared to assist you with keeping up to date with the effects of any legislative, regulatory or general changes as a consequence of Coronavirus (COVID-19).
 

Also, Clyde & Co also has a dedicated COVID-19  Information Hub which hosts many articles from around the world that provide different perspectives and in-depth analysis on many of these issues.
 

The re-opening of gyms and indoor recreational facilities – nature and scope of the duty of care
 

Gyms will be able to reopen across NSW as of 13 June 2020 under certain restrictions.
 

There is a limit of one person per four square metres and in any case no more than 10 people per class and 100 people per venue.
 

The rules will also apply to other indoor recreational facilities, such as pilates, yoga and dance studios.
 

It appears that providers will have autonomy in terms of keeping their facilities clean but a NSW Health spokesperson has said that gyms should use detergent and disinfectant regularly, particularly on high-touch surfaces.
 

It will also be up to facilities to implement their own systems for monitoring patronage but it is expected that advanced booking requirements will be common.

 

On 14 June 2020, a local fitness enthusiast attends a cycling class at her local gym, contracts COVID-19 and becomes gravely ill – what is the exposure of the gym?
 

The gym participant's claim would be governed by the Civil Liability Act 2002 (NSW) and the Australian Consumer Law.
 

The gym owes its patrons a duty to take reasonable care for their health and safety and to render the services it provides with due care and skill.
 

Whether that duty has been breached will depend on the foreseeability of the risk, whether the risk was not insignificant and whether the operator failed to take precautions that a reasonable person in its position would have taken. In turn, the reasonability of certain precautions will depend on the probability of harm occurring if care is not taken, the likely seriousness of the harm, the burden of taking those precautions and the social utility of the activity creating the risk.
 

The gym participant would also need to prove that she contracted the illness at the gym (rather than, for example, the café next door). If others from the same class are diagnosed with the illness around the same time, or the COVIDSafe App alerts her that she came into contact with an infected person at the gym, this would increase the exposure of the gym.  

 

When determining matters such as the burden of taking precautions, statutory defences of the CLA may apply or alternatively may lessen the scope and content of any duty of care owed. For example, if the gym was operated by a local council with less funding than a private gym where the same incident occurred, the local council may have a "resources" defence to the claim (S42 CLA).
 

The general health benefit to the community of providing exercise facilities is also likely to be a relevant factor in assessing what precautions the gym should have taken.
 

Furthermore, with patronage revenue being limited and cleaning costs increased, a court may decide that the burden of taking certain precautions to avoid the risk of the illness spreading was not warranted.
 

There are also likely to be grounds to allege contributory negligence by the gym participant if, for example, she did not wipe down her bike's handlebars before the class and touched her face during it. In any case, she would almost certainly be taken to have known of the risk of the spread of Covid-19 and is therefore required to take reasonable care for her own safety, failing which any award of damages may be reduced or even defeated.
 

Indeed, from a public policy perspective, consideration must be given to the discretion of the gym participant in deciding to attend and use the gym. This is a central objective and one of the overriding purposes of the CLA i.e. personal responsibility.
 

It will certainly be interesting to see what the courts decide is and is not reasonable on the part of gyms and infected patrons in defending or prosecuting personal injury claims with the above circumstances.
 

Public Transport
 

As people begin to return to work and school, the Commonwealth Department of Infrastructure has released principles to provide guidance on public transport for operators and passengers.
 

The principles apply to most forms of public transport but not school transport, long distance coach services, taxis, rideshare services and aviation. They are also subject to directions implemented and enforced by individual states and territories.
 

The principles applying to public transport operators include:
 

  • Encouraging passengers to maximise physical distancing to the extent possible;
     

  • Considering additional services or pre-booked seating;
     

  • Considering the use of real-time capacity notifications;
     

  • Encouraging contactless payment;
     

  • Providing passengers access to the card reader furthest from the driver;
     

  • Restricting access to areas immediately around drivers;
     

  • Requesting passengers to enter and exit through different doors (if appropriate);
     

  • Opening windows or adjust air conditioning to increase ventilation (if appropriate);
     

  • Ensuring cleaning and sanitising of high-touch areas;
     

  • Providing hand sanitising stations for workers and passengers;
     

  • Providing appropriate signage to point to available hygiene facilities and encouraging use of same;
     

  • Monitoring the health of employees; and
     

  •  Ensuring workers maintain physical distancing.
     

However, Operators are not recommended to supply PPE to workers or to install a Perspex screen between drivers and passengers due to the short length of interaction times.
 

There is also a requirement that individuals take personal responsibility for their decision to use, and their behaviour on, public transport. Specifically, they are advised to:
 

  • Not use public transport if feeling unwell, except in an emergency;
     

  • Maintain good hand-washing and cough/sneeze hygiene;
     

  • Maintain physical distancing whenever possible and avoid contact with the driver and other passengers;
     

  • Consider the most efficient route to minimise time spent on public transport;
     

  • Observe all operators' requirements, such as contactless payments and seating restrictions.
     

It is also suggested that individuals use the COVIDSafe app and use off-peak services where possible.
 

A commuter boards a public bus and contracts a severe case of Covid-19 from an infected passenger sitting two rows behind him. Is the bus operator likely to be held liable?
 

In NSW, the commuter's claim would be governed by the Civil Liability Act 2002 (NSW) and the Australian Consumer Law.
 

The bus operator owes passengers a duty to take reasonable care for their health and safety and to render transportation services with due care and skill.
 

Breach of that duty will be depend on a variety of factors, including the foreseeability of the risk, whether the risk was not insignificant and whether the operator failed to take precautions that a reasonable person in its position would have taken.
 

In assessing the reasonableness of certain precautions, the court will consider the probability of the risk occurring if care were not taken, the likely seriousness of harm, the burden of taking precautions and the social utility of the bus service.
 

The court might consider whether a reasonable bus operator would have blocked off the commuter's seat and required passengers to sit further apart from each other. Expert evidence might be required to prove what distance would have made a significant difference and the court would then consider whether it would have been reasonable to expect the operator to space passengers out accordingly. Whether it would have been reasonable depends on factors such as the number of vehicles available to the bus operator and the level of demand.
 

The fact that public transport offers a high degree of social utility would also be likely to lessen the degree of some precautions the operator might be required to take. Indeed, no one is able to give a 100% guarantee that there is no risk and it has been noted by various commentators that some level of risk must be accepted in order to revitalise the economy.
 

Moreover, if the operator were a local council, a statutory defence would be available, which may narrow the scope of its duty, depending on the resources available to it.
 

Noting the principle requiring transport users to take personal responsibility, the operator might be inclined to contend that the commuter voluntarily assumed an obvious risk by boarding the bus. The operator would be relieved of the duty to warn passengers of the risk if it is deemed an 'obvious risk'. However, to escape liability altogether on this basis, the operator would need to prove that the risk could not have been avoided even by the exercise of reasonable care and skill – an unlikely conclusion in circumstances where a detailed list of principles has been provided by the government to minimise the risk of spread on public transport.
 

Nonetheless, the commuter's claim may fail by reason of difficulties proving that he contracted the illness on the bus as opposed to anywhere else on his travels, particularly given that the other passengers would be difficult to trace.
 

On balance, claims against transport operators are likely to be less common than claims against the operators of venues that record entrants' details but are still entirely conceivable.
 

COVID-19 and Clinical Trials
 

The Australian Government has recently committed an additional $66 million towards clinical research and investment for development of a vaccine, treatments and responses to future pandemics in response to COVID-19. The funding is available through the Australian Government’s Medical Research Future Fund (MRFF), extending the $30 million already allocated to the Coronavirus Research Response.
 

There are four main areas the research aims to target: developing a vaccine for COVID-19; investment in antiviral therapies for COVID-19; clinical trials of potential treatments for COVID-19; and improving the health system’s response to COVID-19 and future pandemics.
 

While there has been an uptake of the additional funding by many Australian research facilities, including universities, existing clinical trials both locally and globally are being adversely affected by the COVID-19 pandemic.
 

With medical research ethics committees for clinical trials focused on the safety of their medical staff, deviations from existing protocols and administration of investigational drugs are impacting on the ability for existing clinical trials to continue. The delay has also been associated with site activation, enrolment, patient visits and/or data collection and cleaning. In addition to the ability for patients to mobilise to research treatment, COVID-19 lock downs have also impacted on the ability to transport medical and related diagnostic equipment for use in clinical trials.
 

Clinical research platform Medidata has been monitoring the enrolment data from nearly 4,600 current clinical trials and more than 182,000 study sites worldwide. The recent reports for this data show significant decreases in the number of new patients entering clinical trials for actively recruiting studies. The impact of COVID-19, however, varies across therapeutic areas. For example, enrolment in studies for respiratory diseases has decreased by 34%, while there has been an 80% decline for studies of endocrine diseases, 47% in infectious disease studies, and 70% for cardiovascular diseases. Data from ClinicalTrials.gov also indicates that over 200 interventional oncology studies were suspended in March and April 2020 owing to COVID-19.
 

Locally, the Australian Government has recognised that COVID-19 may also be affecting research involving animals, including delays to existing research projects, or new research relating to the pandemic that proposes to use animals.
 

From a claims perspective, management of staff, patient and volunteer safety is paramount for those persons involved in both COVID-19 clinical trials, as well as other research programs. Infection control measures require strict enforcement in order to ensure the management of disease and health of both patients and staff. This is particularly relevant to the categories of persons most at risk of health impacts from SARS-CoV-2 exposure, including the immunocompromised and those with various co-morbidities.
 

In addition to managing the exposure to SARS-CoV-2 in persons participating in clinical trials from a medical malpractice and personal injury claim perspective, insurers should also be cognisant of the potential impact of delays in existing clinical trials. For example, while the commercial impact of delays in clinical research and drug development is not yet known, the subsequent impact on contractual obligations and supply chains is likely to have a bearing on business interruption policies and overall industry profit margins.
 

Public Health and Mental Health
 

Having met on 29 May 2020, the National Cabinet is due to have their next meeting on Friday 12 June 2020. Given that, in the time between these meetings, the States and Territories have continued to relax their restrictions and enter Stage Two (at minimum) of the Roadmap, the National Cabinet will likely review and assess the impact of these relaxations as well as the public health conditions for any further removal of restrictions.
 

Although the majority of these relaxations have been aimed at public places and venues for entertainment, dining and socialising, the ACT has also eased restrictions relating to visitor access at health services. Patients will be able to have up to two visitors per day (although only one visitor is permitted to remain with the patient at a time).
 

At the time of writing, all States and Territories, except NSW, Victoria and the ACT, continue to have border restrictions for interstate travel.
 

On 29 May 2020, the Commonwealth Department of Health released the Australian National Disease Surveillance Plan for COVID-19 (Disease Surveillance Plan), which establishes the national response to how health-related information will be collected, analysed and interpreted. In addition to providing the rationale for why certain health-related information will be collected, the Disease Surveillance Plan sets out a number of goals in relation to COVID-19 surveillance and indicators, including those relating to testing counts, contact tracing and clusters.
 

The COVID-19 orders and directions can be accessed at the following State and Territory websites (as at 9 June 2020):
 

In the mental health space, the Australian Government's Deputy Chief Medical Officer for Mental Health, Dr Ruth Vine, has penned an opinion article on the Government's response to mental health and suicide prevention. Dr Vine notes that the actions at the Commonwealth, State and Territory level are being coordinated by the National Mental Health and Wellbeing Pandemic Response Plan (which we reported on in an earlier update). Dr Vine states that her priority is to improve the connectivity between the existing services and ensuring that the mental health system is easily navigable for those who need resources.
 

Environment and Planning
 

Home Builder Grant
 

The federal government has launched a $688 million HomeBuilder grants scheme, aiming to support 140,000 jobs in the construction industry and a million workers in the wider residential building sector through Australia's first recession in 29 years.
 

Australians who are earning less than $125,000 a year or $200,000 as a couple are eligible for the $25,000 grant, which can be used for new homes valued up to $750,000 including land, or renovations worth between $150,000 and $750,000, resulting in the property being priced at $1.5 million or less.
 

Crown Reserves Improvement Fund
 

On 4 June 2020, Crown land managers and community groups that use Crown land were invited to apply for a share of $14 million in grants to upgrade and maintain community facilities and reserves across NSW.
 

Applications for the NSW Government's Crown Reserves Improvement Fund are open until 10 July 2020 and aims to support, maintain and upgrade Crown reserves for residents to use and enjoy to support community engagement and organisations.
 

Planning and Public Spaces Minister Rob Stokes said that this year's funding will "prioritise restoring and strengthening the resilience of public facilities and Crown reserves that have suffered through bushfires, drought and restrictions due to the COVID-19 pandemic".
 

Grant applications are open to Crown reserve managers, community groups who use Crown land, and freehold showgrounds for projects that can deliver social, cultural, environmental or economic benefits to their local communities.
 

For further information and to apply, visit the following link – https://reservemanager.crownland.nsw.gov.au/funding/crif
 

Real Estate
 

On 28 May 2020, the Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (QLD) (Regulation) was given effect.

The Regulation implements the National Cabinet's Mandatory Code of Conduct to mitigate the impacts of the COVID-19 pandemic on landlords and tenants in Queensland.
 

What is an affected lease?
 

The Regulation defines an 'affected lease' as a lease:
 

  1. which is a binding lease;
     

  2. where the lessee is an SME Entity; and
     

  3. where the lessee is eligible for the JobKeeper scheme.
     

Obligations to negotiate
 

A party to an affected lease may, in writing, ask another party to the lease to negotiate the rent payable. After this initial request, the parties must, give each other information relating to the request. Within 30 days after a party receives sufficient information, the lessor must offer the lessee a reduction (in the form of a waiver and/or deferral) in the amount of rent payable under the lease, and any proposed changes to other stated conditions.
 

For landlords and tenants who have already agreed to variation of leases in anticipation of the Regulation, it is important to note that any such variations remain valid, even if the agreed rent relief and the terms are inconsistent with the Regulation.
 

Further rent negotiations
 

Parties may seek to have terms of any agreement re-negotiated in two circumstances:

1. where an agreement is made prior to the commencement of the Regulation; and

2. where one party seeks to negotiate a further reduction in rent during the response period (which is the period from 29 March to 30 September), where a ground on which the agreement is based changes in a material way.
 

Response Period is the period from 29 March 2020 to 30 September 2020.
 

Rent deferrals
 

The variation of the lease or agreement between the parties –
 

  • must not require payment of the deferred rent to commence until the day after the end of the response period; and
     

  • must require payment to be amortised over a period of at least 2 years but no more than 3 years; and
     

  • must provide that the lessor must not require the lessee to pay interest or any other fee or charge.
     

Extending lease for period of waiver or rent deferral
 

If rent under an affected lease is waived or deferred for a period, the lessor must offer the lessee an extension to the term of the lease on the same conditions as those contained in the lease (except that the rent payable during the extension must be adjusted for the waiver or deferral).
 

The extension offered to the lessee must be equivalent to the period for which rent is waived or deferred.
 

Restrictions on enforcement
 

A landlord under an affected lease (during the response period) must not:
 

  • increase the rent payable; and
     

  • take prescribed action (prescribed action is defined in section 9 of the Regulation).
     

Dispute resolution
 

If there is a failure to agree during the response period, either party may submit a Dispute Notice to the Office of the Small Business Commissioner. 
 

A person may only apply to QCAT for relief subject to the conditions set out in section 41 of the Regulation.
 

Clyde & Co

 

For further information, please contact:

 

Michael Tooma, Partner, Clyde & Co

michael.tooma@clydeco.com

Register for your monthly Asia legal updates from Conventus Law

Error: Contact form not found.

RELATED ARTICLES