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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?

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Case Updates, Legal Knowledge

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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.

15 July 2024

A Thousand Miles From Care: Steve Johnson Publishes Memoir on Scott Johnson’s Death

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Case Updates

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On 17 July 2024, A Thousand Miles from Care, a memoir canvassing Steve Johnson’s thirty-year effort to uncover the truth about the murder of his brother, Scott Johnson, will be published in Australia by Harper Collins.

Vivian Evans (Vivian) of Uther Webster & Evans has worked closely with Steve and his US Legal team, and John Agius SC (John) over the last decade, in his attempt to obtain justice for Scott. Vivian and John assisted Steve to secure a third coronial inquest into Scott’s death, which resulted in a finding that Scott’s death was a homicide and led to a new police taskforce being appointed and the arrest and sentencing of Scott’s killer. Steve’s work also paved the way for the recent New South Wales inquiry into gay hate crimes.

In December 1988, Scott, who was a 27-year-old American PHD student living in Australia, was found dead at the bottom of a cliff at North Head, in the Manly area. Following an autopsy that concluded no foul play, Scott’s death was initially ruled a suicide.

Steve, who was unsatisfied with this finding, commenced what would ultimately be a three-decade-long investigation into uncovering the truth of what happened to Scott. Refusing to believe that Scott had any reason to end his life or that his death was the result of an accident, Steve lobbied police to continue the investigation into Scott’s death.

However, at a coronial inquest held in March 1989, the coroner found that Scott’s death was the result of a suicide, despite acknowledging that there was no apparent reason for Scott to take his own life. Steve continued to campaign for further investigation into Scott’s death, particularly in light of a number of homophobic killings which occurred around Sydney beaches in the 1980s.

Despite repeated attempts to progress the matter, it was not until 2012 that a second coronial inquest was authorised, in which the coroner overturned the initial suicide verdict and replaced it with an open one. The coroner also called for further police investigation into Scott’s death.

In 2017, a third coronial inquest was held. Following the evidence of several key witnesses, who testified to regular assaults against gay men by gangs in the North Head area, the coroner reached a verdict that Scott fell from the clifftop as a result of actual or threatened violence by an unidentified person or persons who attacked him because they perceived him to be homosexual.

Following this finding, police launched a further investigation into Scott’s death and announced a $2 million reward for information on Scott’s killer, $1 million of which was contributed by Steve personally. Ultimately, the police investigation led to the arrest of Scott White, who was charged with the murder of Scott on 12 May 2020.

On 13 January 2022, White was found guilty of murdering Scott, after entering a plea of guilty. Despite an attempt by White’s lawyer to have his guilty plea withdrawn, on the basis that White was not fit to make an admission of guilt, White was sentenced to 12 years and 7 months imprisonment, with a non-parole period of 8 years and 3 months.

However, six months later, White appealed his conviction, and a re-trial was ordered. On 23 February 2023, following discussions, White pleaded guilty to manslaughter and was subsequently re-sentenced to 9 years in prison, with a non-parole period of 6 years. He will be eligible for parole in 2026.

Following White’s sentence, a special commission of inquiry into LGBTIQ hate crimes was commissioned, appointing Justice John Sackar as Commissioner. The inquiry looked into the unsolved deaths of LGBTIQ people that may have been hate crimes between 1970 and 2010, which were previously the subject of investigation by the NSW Police Force. Specifically, the inquiry was focus upon the deaths of 88 men, potentially motivated by gay hate bias.

On 21 December 2023, the inquiry published its final report comprising almost 3,500 pages. The report calls for an audit and review by NSW Police of all unsolved homicides for the period from 1970 to 2010, and for the implementation of mandatory and ongoing training for NSW Police officers concerning the LGBTIQ community.

UWE is pleased to have been able to work closely with Steve Johnson in achieving not only justice for Scott but also important and long overdue reform in relation to the approach taken by the NSW Police Force in regard to LGBTIQ hate crimes.

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 criminal law matter, please contact our office for advice from our experienced criminal law team

10 July 2024

Updating financial circumstances in Family Provision Claims

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Case Updates, Legal Advice

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Written by Hilary Monteith

“Don’t let the dough rest for too long” – Lessons learned from Baker v Baker – Updating financial circumstances for a family provision claim

Updating financial circumstances in Family Provision Claims

You have made a claim for family provision out of a deceased person’s estate. At the time of filing the Summons, the Court requires an Affidavit to be filed setting out various matters in accordance with a prescribed form of affidavit pursuant to Practice Note SC Eq 7 (the Practice Note). Importantly, as plaintiff, that affidavit will go into detail in relation to your financial resources (including earning capacity), including the financial circumstances of any person you cohabit with.

However, a hearing in the matter may not be listed for several months, if not over a year, after the proceedings being filed.

Do you need to update your circumstances or is the primary affidavit enough?

A recent decision of Hammerschlag CJ in Eq Baker v Baker [2024] NSWSC 559 makes clear that evidence as to financial resources must be updated prior to a hearing, reliance should not be placed on the primary affidavit as it will not be accurate at a final hearing.

Section 59(1)(c) of the Succession Act 2006 (NSW) requires the Court to be satisfied at the time the application is being considered that adequate provision has not been made by the Will. If it is satisfied that adequate provision has not been made, the Court may make such order for provision it thinks ought to be made having regard to the facts known to the Court at the time the order is made (s 59(2)).

The Succession and Probate Lists Practice Note SC Eq 7 (recently re-issued in June 2024) at Paragraph 35 now states:

If the matter does not settle, there will be a timetable to prepare the matter for final hearing, which may include provision for the filing and service of a costs affidavit and an updating affidavit by any party or beneficiary. Irrespective of whether provision is made for an updating affidavit, practitioners are reminded of the obligation on an applicant to place the relevant facts before the Court.

In Baker, heard before the amendment to the Practice Note, no order to file updating evidence was made by the Court, and no updating evidence was filed. During cross-examination evidence came to light as to a change in the financial resources of the Plaintiffs in the matter. The Court stated:

[48] [Denise’s] claim falls to be dismissed by reason of her non-disclosure alone. Whether the additional material, had it been disclosed, would have helped or hindered her application is unknown to the Court…

…

[53] Given the fundamental nature of the obligation to disclose and the impediment to success of a claim which such a failure may bring about, it is elementary that a legal practitioner appearing for an applicant ascertains from the applicant, at or about the time of the hearing, whether there has been any change in their financial circumstances necessitating disclosure. Plainly, that did not happen here.

Isn’t the obligation on my solicitor?

Yes, Baker makes clear that your legal representative should make the necessary enquiries to ascertain any change in your circumstances. Best practice might include inspecting documents produced on subpoena or by notice to produce to check instructions regarding a Plaintiff’s financial and material circumstances.

But what if I think there has been no change?

Well, you may think there has been no significant change, in that you may not have sold a house or won the lottery, but, if you have even just one bank account there will always be some change, however small, that must be updated so that the Court has your current financial circumstances at the date of the hearing.

As in Baker the change could be to living arrangements, to receiving a Centrelink payment, or to employment. A full update of your circumstances should be provided prior to the hearing. Whilst the primary affidavit is lengthy, an updating affidavit can be short as it is specifically directed to updating the Court as to any change (or indeed simply to confirm there has been no change).

While not specifically adverted to in Baker updating evidence should likely extend to any person with whom a Plaintiff is cohabiting and to beneficiaries who have raised their financial resources as competing claimants on the bounty of the deceased.

31 January 2024

Death on your own terms: Voluntary Assisted Dying in New South Wales

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Legal Advice

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In November 2023, the Voluntary Assisted Dying Act 2022 (the “Act”) came into effect allowing some people or “eligible persons” under the Act to access voluntary assisted dying.

What is voluntary assisted dying?

Voluntary assisted dying allows eligible persons to request medical assistance to end their life voluntarily and legally. Voluntary assisted dying is not a form of suicide.

Voluntary assisted dying is defined as “the administration of a voluntary assisted dying substance and includes steps reasonably related to the administration” (Schedule 1 of the Act).

The administration of a lethal substance is one of the last steps in the voluntary assisted dying process. To get to this stage, there is a strict eligibility criteria which must be met and several steps which must first be taken.

So, who is an eligible person?

To access voluntary assisted dying, a person must meet the eligibility criteria which is set out below. A person must:

  1. Be an adult (18 years old) who:
    1. Is an Australian citizen; or
    2. Is a permanent resident of Australia; or,
    3. has been a resident in Australia for at least 3 continuous years.
  2. Be a resident of NSW for at least 12 months.
  3. Have at least one disease, illness, or medical condition that:
    1. Is advanced, progressive and will cause death, and
    2. Will, on the balance of probabilities, cause death within a period of 6 months (12 months for a condition that is neurodegenerative, for example, motor neurone disease); and
    3. Is causing suffering that cannot be relieved in a way that the person considers tolerable.
  4. Have decision-making capacity. This is defined under section 6 of the Act which sets out a number of factors, for example, that the person can understand and remember the information or advice given to them about voluntary assisted dying.
  5. Be acting voluntarily.
  6. Not be acting under any pressure or duress.
  7. Have an enduring request for voluntary assisted dying.

If a person only has a disability, dementia, or a mental health impairment, they will not be eligible for voluntary assisted dying.

If someone is an eligible person, what is the process involved with voluntary assisted dying?

There are 11 steps in the voluntary assisted dying process. Below is a summary of what will occur at each step.

  1. The First Request: The patient makes a clear and unambiguous request for voluntary assisted dying to a doctor. No one can ask to undergo voluntary assisted dying on behalf of a patient. Only the patient can ask for medical assistance to die.
  2. The First Assessment: If the doctor accepts the first request, they will coordinate the voluntary assisted dying process and assess the patient’s eligibility for voluntary assisted dying.
  3. Consulting Assessment: After the first assessment, another doctor will provide a second opinion on whether the patient is eligible for voluntary assisted dying.
  4. Written Declaration: If the patient is determined by both doctors to be eligible for voluntary assisted dying, they will write a declaration.
  5. Final Request: This final request makes it clear whether the patient would still like to access voluntary assisted dying.
  6. Final Review: A final review is then undertaken by the first doctor.
  7. Administration decision: At this stage, the patient decides whether they would like to take the voluntary assisted dying substance by self-administration (taking the substance themselves) or by practitioner administration (a nurse or doctor will administer the substance to them).
  8. Medication Authorisation: The patient’s doctor will apply for the medication and the Voluntary Assisted Dying Board will need to grant approval.
  9. Medication prescription: The voluntary assisted dying medication is prescribed.
  10. Take medication: The medication is taken or given to the patient, depending on their choice.
  11. Notification of death: After the patient’s death, the relevant forms are completed.

The voluntary assisted dying process can be stopped at any time. Further, if at any stage throughout the process, the person permanently loses the capacity to make decisions in relation to voluntary assisted dying, i.e. they no longer have decision-making capacity, they are no longer eligible for voluntary assisted dying.

You can read more information about this process here: https://www.health.nsw.gov.au/voluntary-assisted-dying/Pages/process.aspx

If I am not happy with a decision, can I review it?

The Supreme Court of NSW can review decisions made at various stages of the process.

Can I make a direction for voluntary assisted dying in my appointment of enduring guardian?

No. Voluntary assisted dying cannot be prescribed through an enduring guardian or a power of attorney. The request for voluntary assisted dying can only be made by the patient, no one can request that it take place on their behalf.

Contact us

The Act has only recently come into force, and it is in the early stages of implementation.

If voluntary assisted dying is something you are considering, it is important to obtain current medical and legal advice about this issue. Uther Webster and Evans has extensive expertise in succession and estate matters and can provide you with advice and guidance. Please contact our offices on (02) 9290 1177.

Disclaimer: The contents of this article is for informational purposes only and does not constitute legal advice, nor is the contents of this article intended to be a substitute for legal advice or to be relied upon as such.