In this first edition of The Memo, we cover some of the latest legal developments including changes to enforcement in data privacy, expanded definitions of retail shops, a number of ASIC director disqualifications and under ‘Interesting Tidbit’, changes to medical usage of psychedelic substances.

The long of it…

1. Increases in fines and enhanced regulatory powers for data privacy

The Privacy Legislation Amendment (Enforcement and Other Measures) Act 2022 (Cth) “Amendment Act” became effective on 13 December 2022.

The Amendment Act:

  • (a) increases the maximum civil penalty for serious or repeated interference with privacy. Whilst the previous maximum civil penalty that may be imposed was $2.1 million per contravention, the Amendment Act increases the maximum civil penalty for body corporates to the greater of:
    • (i) $50 million;
    • (ii) three times the value of the benefit obtained from the contravening conduct; and
    • (iii) if the court cannot determine the value of that benefit, 30% of the body corporate’s adjusted turnover during the breach turnover period (minimum of 12 months).
  • (b) expands the investigation and enforcement powers of the Office of the Australian Information Commissioner “OAIC”. The Amendment Act provides the OAIC with statutory power to make declarations following the conclusion of a privacy investigation and to issue infringement notices for failing to provide information as required by the Privacy Act.

2. Recent director disqualifications by ASIC

2.1 Aaron Luke Vasicek

  • (a) ASIC has disqualified a Queensland-based director from managing companies for five years for his involvement in four failed companies providing tyre and retail services.(b) ASIC mainly found that this director breached his directors’ duties by engaging in phoenix activity when he transferred the assets of two companies in which he was the director to other companies for no consideration.

2.2 Kevin Prakash Verapen

  • (a) ASIC has disqualified a Victorian director from managing companies for three years for his involvement in the failure of three companies providing different services.
  • (b) ASIC mainly found that this director:
    • (i) failed to exercise his powers and discharge his duties with a degree of care and diligence and in good faith and in the best interests of the companies and for a proper purpose;
    • (ii) received $24,500 in cash to become a director of eighteen companies;
    • (iii) had limited involvement and oversight of companies;
    • (iv) signed documents without reading them and assisted in opening bank accounts as signatory without having any involvement in these accounts and received cash payments for his services;
    • (v) failed to comply with the companies obligations to keep written financial records, to lodge Business Activity Statements, Income Tax Returns, etc.; and
    • (vi) failed to prevent one company from incurring debt totalling approximately $1,058,835 when the company was most likely insolvent.

3. Bars, Gyms, etc. to be considered retail shops

3.1 Proposed amendments
The Retail Leases Regulation 2022 (Draft 2022 Regulation) remains in public consultation. The following companies are proposed to be included in schedule 1 of the Retail Leases Act 1994 (NSW):

  • (a) Business tenancies in the health and fitness industry (including gymnasiums, yoga, barre and dance studios) that provide services directly to consumers; and
  • (b) Small bars (with a modification to remove the current exclusion for ‘beer wine and spirit shops’).

3.2 Purpose of the amendments
The proposed inclusions have the potential to remove the distinction between those businesses located in shopping centres and those outsides of them, for example, standalone premises or those located within shopping strips. The amendments seek to decrease the number of conflicts by improving access to affordable dispute resolutions.

4. Interesting Tidbit: Opportunities for Psychedelic substances

On 3 February 2023, the Therapeutic Goods Administration (TGA) confirmed that the Secretary of the Department of Health and Aged Care has decided to include MDMA and psilocybin in Schedule 8 (Controlled Drugs) with effect from 1 July 2023. Following this amendment, these substances will be able to be supplied on prescription by psychiatrists approved by the TGA for use in treating patients with particular mental health conditions. Psychiatrists who have been approved under the Authorised Prescriber Scheme (Scheme) will now be able to prescribe:

  • (a) Psilocybin for treatment resistant depression; and
  • (b) MDMA for the treatment of post-traumatic stress disorder.

There are currently no approved products containing psilocybin or MDMA on the Australian Register of Therapeutic Goods. Following the TGA’s decision, authorised psychiatrists will be able to access and supply ‘unapproved’ medicines containing these substances for their patients under the existing Scheme.

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