Fraud, Contracts & Mergers: Critical legal updates for 2025

FRAUDULENT BANK ACCOUNT PAYMENT EMAILS:

Mobius Group Pty Ltd v Inoteq Pty Ltd 2024

Mobius issued an invoice to Inoteq.  

A third party hacked Mobius's system and sent an email to Inoteq changing the payment bank details and attaching a fraudulent new invoice. 

An employee of Inoteq called Mobius to verify the change in bank details. 

The phone connection was poor, and the employee could not properly hear the telephone call. Instead of calling back, the employee emailed seeking verification. The third party promptly responded by return email, attaching a fraudulent letterhead, and Inoteq paid the amount owing to the new account. 

Mobius sued for payment. 

The Court ordered Inoteq to pay the actual original invoice and it said could not recover the erroneous payment from Mobius. It had to pay twice.

There were two reasons that led to this conclusion:

• Although Inoteq had attempted to confirm the change in bank details, its verification efforts had not gone far enough
• Inoteq had not proved that Mobius had failed to appropriately secure its email accounts.

Practical advice:

• Add footers on emails and invoices containing a warning to verify any change of account details by telephone
• Add a recommendation in your Terms & Conditions to verify the authenticity of any request for payment
• Ensure you have some form of security in your IT system to protect from hacking.

SIGNING CONTRACTS:

A signature is simply a written representation of the signatory's name on a document. 

At law, a valid act of signature serves as evidence of each signatory's:

• identity, and by extension their capacity to enter into obligations for the relevant party; and
• intention to be legally bound by the terms of the document.

Australian law does not require "wet ink" signatures (except for certain specific documents such as land transfers).

Almost any means of inserting a name, initials, mark or other act of lasting visible acknowledgment on a document can constitute a valid signature, provided that the signatory has either expressly or impliedly represented that the name can be treated as a signature. 

Historically, court cases have confirmed that any of the following can constitute valid signatures:

• a mark, stamp or seal
• a printed or typed name on a physical or facsimile document
• electronic signatures (e.g. typed names or initials, or digitised images of handwritten signatures created by either scanning or photographing a wet-ink signature, or by stylus or finger on a touchscreen device)
• more advanced biometric and cryptographic forms of signature
• a name appearing in the "From:" field in an email, together with an express acknowledgement of an agreement

and recently in Canada even:

• use of a thumbs-up emoji "👍" !!

This was the judgement in the Canadian Superior Court in South West Terminal Ltd v Achter Land & Cattle [2023]. 

SWT supplied grain to Achter, who after an exchange of emails relating to a supply of grain, had sent an email to SWT with a thumbs-up emoji. SWT argued that the emoji demonstrated Achter's acceptance of the contractual terms and that the contract was enforceable. The Achter representative had often previously accepted such grain sale contracts with responses such as "looks good", "ok" or "yup".  However, Achter denied that the👍emoji constituted acceptance and claimed that it merely confirmed that the contract was received. 

The Court disagreed and stated that the question was not what Achter "may or may not think a 👍 emoji means. It is what the informed objective bystander would understand."

Practical advice:

• There is some risk during negotiations by email or chat that shorthand statements by a sender such as "I agree", "I don't have a problem with that" or "that's fine" can be taken as statements of intention that can, together with the email header or footer or similar identifying data, be interpreted as an act of inadvertent contractual signature
• This assumption can be countered by ensuring that there is some record and acknowledgement at an early stage in correspondence to the effect that no contract is to be formed until an agreed form of the written agreement is executed, for example by including the words “subject to contract” in correspondence.

MERGER REGIME:

The new Australian merger regime comes into force on 1 January 2026 (with voluntary compliance available from 1 July 2025).

The rules will provide that any acquisition of shares or assets that:

• meets the notification thresholds; and
• results in a change of control; and
• will be put into effect (i.e. completes) after 1 January 2026, 

must be notified to the Australian Competition and Consumer Commission (ACCC) and cannot be completed unless and until the ACCC (or the Australian Competition Tribunal on review) determines that the transaction may be put into effect.

Failure to comply with these requirements will mean the transaction is void and may also result in penalties of up to A$50 million, or three times the benefit of the illegal conduct, or 30% of the Australian group turnover.

Notification thresholds

There are a number of proposed tests to trigger the notification requirement. Note that the amounts are in AUD$.

In addition, notification is mandatory for every merger in the supermarket sector, and potentially also fuel, liquor and oncology-radiology, childcare, aged care, medical GP, and dentist sectors.

The new rules will also apply to acquisitions of land, including leases and exercises of lease options, but residential property development and commercial property transactions are exempt.

Once an acquirer group meets either of the cumulative thresholds in a given three year period, every additional transaction over A$2 million that the acquirer group makes in the same or substitutable goods or services in that three year period will need to be notified to the ACCC. 

Control

Generally this refers to a holding of more than 50% of the ownership interest (e.g. shares), or the ability to control the decisions of the entity (e.g. the right to appoint a majority of the board of directors of the entity).

However the purchase of an interest above 20% in an unlisted or private company is notifiable if one of the companies involved in the deal has turnover of more than A$200 million.

ACCC powers following notification

Following notification, the ACCC will be able to block an acquisition if it is satisfied that the acquisition would have the effect or be likely to have the effect of substantially lessening competition in any market. 

For these purposes, an acquisition may substantially lessen competition in a market if it would, in all the circumstances, create, strengthen or entrench a substantial degree of power in the market, even if the change is not, itself, substantial. 

Note that the existing prohibition contained in section 50 of the Competition and Consumer Act 2010 has not actually been repealed. This prohibits any mergers that are likely to substantially lessen competition in a market (even if they do not meet the higher thresholds set out in the new regime). This means that falling below the merger notification thresholds does not necessarily provide a ‘safe harbour’ for a transaction that may still substantially lessen competition in a market, and the old rules will still apply in addition to the new rules. 

Timing

The timeline for reviews is up to 120 business days (ie. 6 months) for ACCC determination. Then a public benefits review can be requested which may take another 50 business days (ie. 2.5 months). Then an appeal can be made to the Australian Competition Tribunal which is anticipated to involve another 90-150 days (ie. 3 – 5 months).

After a determination by the ACCC (i.e. clearance or conditional clearance), parties have 12 months to complete the transaction or they must reapply for approval.

Details still to be confirmed

There are still a number of details to be confirmed in relation to the new rules. These include:

• the final threshold amounts
• the criteria for waivers under the rules
• the information which will be required in the ACCC notification forms
• the ACCC application fee (this is anticipated to be around A$50,000 – A$100,000).

Guidance on the new rules is expected from the ACCC in due course.

For further information please contact Alistair Jaque at AGA's legal representative in Sydney, Deutsch Miller.

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