9 October 2024

Issues for Landowners when dealing with Developers of Wind or Solar Farms




By Julian Peters

Where a landowner has been approached by Developers of Wind or Solar Farms, it is important to consider the following issues so that the documentation finally entered satisfactorily protects you.

Below are some issues to consider when dealing with Developers of Wind and Solar Farms:

Who is the developer?

  • Who is the Developer proposing to operate the wind or solar farm and what is their track record? It is not uncommon for these developments to be put in place and then on sold to a third party who will take over the Development and whose track record may not be as good. Assignment arrangements need to be fully disclosed in the documentation and a degree of control needs to remain with the Landowner in this regard.
  • At what stage has discussion reached regarding the Purchaser of the power from the proposed wind or solar farm.

Location, draft plans, facilities

  • It is important that the actual location of the turbines or solar panels are known at the early stage of discussions, together with the size and dimensions of the area required for wind or solar farm and any conditions precedent, particularly as to draft plans in the initial documentation and final plans. These arrangements need to be locked into the documentation to avoid later disputes.
  • Whether easements, use of tracks, transmission lines, battery storage facilities and substation locations need to be identified and the cost to be paid for these by the Developer are to be clearly specified in the documentation.

Government Bodies

  • What is the current position regarding the Developer’s discussions and negotiations with the various government bodies who are to approve the development and the timeframes for final approval together with funding arrangements. These approvals often take a long time to get and may influence the decision of whether to proceed with the developer as opposed to dealing with another developer

Fees

  • What are the fees to be paid? This include the fees for the option to grant a Lease, access licenses and the rent to be paid under the terms of the Lease for each turbine and its output and the area upon which the solar panels are to be located and output from those solar panels including increases in rents need to be fully understood and locked into the documentation.

Construction

  • How is construction of the wind or solar farm to take place, is it to be a staged construction or not? The times for completion of the works need to be considered carefully as the construction activity will impact upon the landowners’ use, not only of the land the subject of the wind or solar farm but the remaining land. Consideration needs to be given as to what operations currently carried out on the land will need to be retained.
  • A Construction Bond needs to be considered to cover the construction works in the eventuality of the developer not finishing them.
  • The timing and delivery of a Decommissioning Bond will need to be included in the documentation. The earlier the bond is put in place and regularly updated is important so that the decommissioning works can be carried out by the landowner if the operator fails to carry them out when the wind or solar farm ceases operation.

Documentation

  • There is a need to ensure that the terms of the documentation do not affect the salability of the land.
    The documentation needs to further provide for:

    • the maintenance or construction of fences, gates and improvements
    • the control of pests, weeds and erosion
    • the ability of the landowner to mortgage the property
    • the standard that the property is to be restored to when the wind or solar farm operations come to an end, particularly the removal of the substantial platforms used in conjunction with the erection of the turbines
    • the ability of the landowner to control who comes onto the land and what notice is required for such access
    • the construction area height and width of the project.
    • what acts constitute default by the operator and/or the landowner
    • compensation and indemnities for damage to persons, animals or property of the landowner and third parties
    • public liability and workers compensation insurance amounts
    • the legal costs to be paid upfront by the operator to the landowner in connection with the negotiation and completion of all of the documentation
    • what other infrastructure is the landowner permitted to put on their land
    • whether or not transmission lines are to be placed underground or overhead
    • the obligations of the operator to continue the flow of electricity and provide the maximum return to the landowner
    • how are disputes to be dealt with, including those that may arise with adjoining landowners.
    • the prohibition of pests coming onto the land, together with weed and erosion control
    • the sharing arrangements for increased rates and taxes resulting from the change in land use
    • the ability of the landowner to sell the land to third parties or transfer the land to related parties by way of their will or otherwise
    • the specific locations for any substations and/or battery storage facilities and whether to leases or sell those sites to the operator or electricity providers
    • the use of existing tracks and location of easements to be created, including the amount to be paid for the easements.
    • that the rents offered are competitive and are regularly increased and include a share of the output from the turbines and solar panels
    • that there is a minimum number of turbines and panels to be installed so that the developer cannot reduce those during the life of the project.
    • the rights granted to the operator allowing their lenders to take over the project, in the event of default, are no greater than the rights allowed by the landowner to the operator

30 September 2024

Coercive Control: First Charge of New Offence Laid in New South Wales




Written by Despina Bouletos

On 1 July 2024, new laws came into effect in New South Wales criminalising the act of coercive control. Although this legislation was passed by State Parliament in 2022, its implementation was delayed in order to allow sufficient time for training of police and the rollout of a public awareness campaign.

The changes to legislation were prompted by the NSW Domestic Violence Death Review which found that coercive control was a precursor to 97% of intimate partner homicides between 2000 and 2018.

What is Coercive Control?

Coercive control refers to a repeated pattern of behaviour (that can be physical or non-physical) used to control or dominate another person. Examples of behaviour that may constitute coercive control include, but are not limited to:

  • Financial, emotional or physical abuse;
  • Intimidation and threats to a person, their loved ones or their pet;
  • Tracking a person’s movements; or
  • Isolating them from family and friends.

Broadly, any steps taken to intimidate, hurt, humiliate, harass, isolate or monitor another person could constitute coercive control. Coercive control can be targeted at either a current or former intimate partner.

The Legislation

The new offence against coercive control is set out in s54D of the Crimes Act 1900 (NSW) (“the Act”).

A person is guilty of the offence of coercive control if:

a. They engage in a course of conduct against another person that consists of abusive behaviour;

b. They were or are an intimate partner of that other person;

c. They intend for the course of conduct to coerce or control the other person; and

d. A reasonable person would consider the course of conduct is likely, in all the circumstances, to cause:

 i.        Fear that violence will be used against the other person or a third party; or

ii.        A serious adverse impact on the capacity of the other person to engage in some or all of their ordinary day-to-day activities.

 

The Act sets out a detailed definition of “abusive behaviour”, which consists of:

• violence or threats against or intimidation of a person; or
• coercion or control of the person against whom the behaviour is directed.

In order for the offence to be made out, the accused must engage in a “course of conduct”, that is, their behaviour must be either repeated and/or continuous.

The maximum penalty for this new offence is imprisonment for a period of 7 years.
It is a defence to the offence if the course of conduct engaged in by the accused was reasonable in all the circumstances. At this early stage, it remains to be seen how the Courts will determine whether conduct was “reasonable” or not.

Implementation

Stakeholders have already raised several potential issues as to the application of the legislation, in the two months since it has been operative. One concern is that victims seeking to establish coercive control may be required to document what is happening to them in order to be able to satisfactorily establish a pattern of conduct. Further, it may be difficult for some victims to report coercive control to police, depending on the level of control exercised by the alleged offender.

On 4 September 2024, the first charge of coercive control was laid under the new legislation. The accused was charged with a range of domestic violence offences including coercive control, stalking and intimidation, intending fear of physical harm and assault occasioning actual bodily harm.

To date, police have received approximately twenty-three reports of coercive control since the new laws came into effect. Figures released by the NSW Bureau of Crime Statistics and Research indicate that:

  • 91% of the people who placed reports were female;
  • 60% of the reported incidents involved allegations of threats and intimidation;
  • 48% involved alleged shaming, degrading or humiliating behaviour;
  • 50% of the reported cases involved alleged harassment, monitoring or tracking; and
  • 39% involved financial abuse.

Ultimately, the offence of coercive control is a complex one containing a number of elements, and is likely to be refined as further prosecutions occur. Consideration will also need to be given as to the nature of the evidence required in order to make out the offence.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such. If you require legal advice or representation for your criminal matter, please contact our experienced criminal law team.

19 September 2024

The bank of Mum and Dad




Family Loan Agreements – Inter Family Loans

Written by Justine Taylor

With more and more frequency, we are assisting our clients with inter family loans which can be documented with different levels of security. Options to document or secure investment from parents or relatives might include:

1. Registered title. Where parents are assisting in the acquisition of property, it is open to them to pay such money and acquire a percentage or interest in the property, as a legal holder registered on title and reflective of the percentage of funds they would contribute.

The advantage of this is that a percentage of the property would be owned absolutely and remains an asset of the parents, fully protected in that way.

There are, however, disadvantages which include loss of first homeowner incentives, tax matters to consider, potential difficulties with any mortgagee (bank), and a desire for the Borrower to be the owner of the property and have autonomy and independence in that regard.

2. Loan agreement. A loan agreement is an instrument that confirms it is a loan and the amount advanced. The loan agreement can be tailored to preference but should include commercial terms that require the repayment of that money on certain conditions, within a certain time and the consequences of default.

There are different ways in which a loan agreement can provide security for the enforceability of the loan, which include the following:

a. Loan agreement secured by registered mortgage: this is where (like a bank) the loan agreement gives rise to the Lender’s entitlement to register a mortgage which secures the repayment of the loan to the Lender in priority to other unsecured creditors. A mortgagee also has certain rights in the event of a default, including to obtain possession and exercise power of sale, or to appoint a receiver and manager to sell the property.

A mortgage provides a significant degree of security in relation to the funds to be loaned. On the other hand, a mortgage may interfere with a first-tier lender, such as a bank, and their preparedness to loan money to the Borrower. The mortgage can also psychologically be seen as invasive from the Borrower’s perspective.

You can also have an unregistered mortgage which is not reflected on title but capable of registration at a later date.

b. Loan agreement secured by unregistered mortgage or charge over property: this gives rise to a secured interest which can be protected by caveat. A charge may be simply imposed by a clause in the loan agreement that secures the repayment of the loan in priority to other unsecured creditors. An unsecured mortgage or charge usually gives the Lender the right to lodge a caveat, which prevents the property from being sold or dealt with in any way until the caveat is removed such as on repayment of your debt from the

proceeds of sale. They afford a level of security in relation to loan, but not as much as a registered mortgage.

c. An unsecured loan: this is a loan recorded by way of deed of loan or loan agreement, that does not give rise to any secured interest and does not entitle the Lender to lodge a caveat on title. This means that in the event of any default, the Lender would be an unsecured creditor with the same ranking as all other debts that Borrower may owe at that particular time. If there are more debts than assets, the Lender would not receive payment in full, and would usually only receive a percentage (if at all).

Estate planning: We can incorporate family loans into wills and estate planning documents, such as assignment of the loan to a testamentary trust after death to continue the security.

Contact our team to discuss tailoring documents that are right for your family.

24 July 2024

Dryandra Investments Pty Ltd v Hardie [2024] WASC 248: What happens when the guardian and appointor of a trust has lost capacity?




Written by Despina Bouletos

The Western Australian Supreme Court recently published its decision of Dryandra Investments Pty Ltd as trustee of the Dryandra Trust v Hardie by her guardian ad litem Ian Torrington Blatchford. This judgment addressed two separate proceedings (heard together) relating to:

1. the Dryandra Trust (“the Trust”) of which Isobel Hardie (“Isobel”) was the appointor and guardian (“the Trust Proceedings”); and

2. Isobel’s will (“the Will Proceedings”).

Isobel suffers from dementia and was represented in the proceedings by her Guardian ad Litem.

In the Trust Proceedings, the trustee sought orders, pursuant to s90 of the Trustees Act 1962 (WA), that the Court approve and assent to variations to the Trust deed of the Trust. A similar power exists under Division 3A of the Trustee Act 1925 (NSW). The variations sought would allow:

1. Isobel’s enduring attorney, Timothy Ryan (“Attorney”) to exercise the powers of appointor and guardian in place of Isobel, so long as she lacked capacity; and

2. Isobel’s legal personal representative to exercise the powers of appointor and guardian in the event of a default of appointment (including upon Isobel’s death).

Alternatively, the trustee sought orders under the Court’s inherent jurisdiction, for the replacement of Isobel as appointor and guardian of the Trust.

In the Will Proceedings, Isobel’s Attorney, as plaintiff, sought an order pursuant to s40 of the Wills Act 1970 (WA) that the Court authorise the making of a codicil to Isobel’s last will dated 13 November 2006 (“2006 Will”), seeking to appoint the Attorney as Isobel’s successor as guardian of the Trust.

In both proceedings, the critical issue was the fact that Isobel did not have (and had not had since her appointment) capacity to act as appointor or guardian of the Trust. Accordingly, there was no guardian capable of consenting to the reserved and restricted powers set out in the Trust deed which, among other things, governed the trustee’s discretion in making distributions of Trust income.

Isobel also lacked capacity to appoint a replacement guardian to act in her stead, as there was no provision in the Trust deed for the appointment of a replacement guardian if Isobel lost capacity or died. As such, the Trust would be left without a guardian upon Isobel’s death.

The Court found that a lack of mental capacity did not, of itself, affect the validity of Isobel’s appointment as appointor and guardian (both as a general principle and on the basis of the terms of the Trust deed). However, the consequence of a lack of capacity was such that it prevented the valid exercise by Isobel of the powers conferred on her. That is, Isobel, by reason of her incapacity, was incapable of giving effective consent or of exercising such powers as conferred on her by her appointment.

Under the Trust deed, while there was a guardian appointed, the trustee was not able to exercise the reserved powers or restricted powers except with the consent of the guardian. The effect of this was that, while Isobel was the guardian but had no capacity to give her consent, none of those powers could be exercised by the trustee.

Practically, this meant that the trustee was confined to accumulating the Trust income or distributing it to Isobel only (which would have resulted in the income being taxed at the highest marginal tax rate).

In order for the Court to vary the Trust Deed under s90 of the Trustee Act, it was required to be satisfied that the person on whose behalf the variation was sought had an interest in the Trust. Although Isobel was a beneficiary under the Trust, the Court in this case was being asked to assent to the variation sought on behalf of Isobel in her capacity as a guardian, rather than as a beneficiary.

The Court was not persuaded that s90 extended to a power to approve a variation that required the consent of a guardian who lacked capacity to provide such consent. As such, the Court declined to approve the variations to the Trust deed as proposed.

However, the Court then considered whether it was able to exercise its inherent supervisory jurisdiction to appoint a replacement or substitute guardian and appointor. The Court considered that the effect of Isobel’s loss of capacity in this case meant that, despite there being a guardian of the Trust, the trustee could not consult the wishes of the guardian as contemplated by the Trust deed. Further, no one was capable of exercising the guardian’s power of consent to the trustee’s exercise of any of the reserved or restricted powers.

For those reasons, the Court was satisfied that it could exercise its inherent supervisory jurisdiction to replace Isobel as guardian and appointor of the Trust, in order to secure the proper administration and due execution of the Trust. Accordingly, the Court made orders to replace Isobel as guardian and appointor with her attorney. Upon making this order, the orders sought in the Will Proceedings were redundant.

This case has significant implications for the preparation of discretionary family trusts and testamentary trusts. When creating such a trust, it is imperative for clients and their lawyers to consider whether appropriate provisions have been put in place to replace an appointor, guardian or trustee in the event that they lose capacity and/or upon their death. Doing so is critical to avoid the potential for complex and costly Court proceedings.

The contents of this post are for informational purposes only. They do not constitute legal advice, are not intended to be a substitute for legal advice and should not be relied upon as such.

To discuss your estate planning matter, please contact our office for advice from our experienced estate planning team.