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Written by Bailey Brown

It is generally recommended that a person reviews and considers their will every three to five years. It may be that no material changes have occurred in that person’s life and their will still accurately reflects their testamentary intentions. However, there are a number of circumstances where, by certain acts, a person’s testamentary intentions may be altered in ways that they did not intend, and it will be very important for them to update their will in those circumstances, including:

1. The disposition of property specifically gifted in their will;

2. Marriage or divorce; and

3. The loss or accidental destruction of their original will.

Disposition of Property Specifically Gifted Under Will

Where a testator leaves a specific gift in their will, for example, a specific property, but that asset is no longer available or owned by that person when they die, then the asset is adeemed and the gift will be of no effect. In those circumstances, in relation to that gift and subject to certain limited circumstances, the beneficiary will not receive any gift of equivalent value from the estate.

If you had allowed for a specific gift to be made to a beneficiary under your will and have subsequently sold that property but you still wish for the beneficiary to receive under your will, it will be important to review and update your testamentary intentions.

Divorce and Marriage

Pursuant to s13 of the Succession Act 2006 (NSW) (the “Act”), unless a contrary intention appears in the will, the divorce of a testator revokes any gift made to the testator’s former spouse and any appointment of the former spouse as the testator’s executor. The balance of the testator’s will remains effective.

Similarly, pursuant to s12 of the Act, unless a will is made in contemplation of marriage, the subsequent marriage of the testator will revoke the testator’s will, except for gifts made to the person the testator married and the appointment of the person who the testator married as executor.

A recent decision of the Supreme Court of NSW clearly highlights the importance of updating your will as your personal circumstances change. In this case, Re Estate Grant, deceased [2018] NSWSC 1031, the Court had to consider whether a testator’s will was revoked by his subsequent marriage to his second wife.

The will in question appointed the deceased’s brother as executor and gifted the whole of his estate equally to his three children from his previous marriage, being two twin biological sons and a stepson who he treated as his own child. This will was executed by the deceased on 3 January 2014 and his second marriage occurred on 19 September 2015.

The deceased’s widow contends that the will was not made in contemplation of marriage and so was revoked by her marriage to the deceased. The deceased’s three children contend that it was made in contemplation of the deceased’s marriage and therefore not revoked.

If the deceased’s will was revoked by marriage, and he accordingly died intestate, his beneficiaries (by operation of Chapter 4 of the Act) would be:

1. The deceased’s widow (under ss104(a) and 113 of the Act), as to:

(a) the deceased’s personal effects (as defined by s101 of the Act);

(b) a statutory legacy (as defined by ss101 and 106 of the Act); and

(c) one-half of the remainder of the deceased’s estate; and

2. The deceased’s twin sons (under s127(2) of the Act), as to the other half of the remainder of the estate. The deceased’s stepson would not receive anything from his estate on intestacy.

Of a net estate with an estimated value of about $4.4 million, on intestacy, the widow’s share was estimated to be worth about $2.4 million and the respective shares of the deceased’s twins were estimated to be worth about $990,000 each (subject to orders for costs made in the proceedings). If the deceased’s will was admitted, the deceased’s widow would not receive anything from the estate (subject to determination of her alternative family provision claim).

In considering whether the will was made in contemplation of his subsequent marriage, his Honour, Lindsay J, stated:

“It is not enough, for a will to have been “made in contemplation of a particular marriage” within the meaning of section 12(3) of the Succession Act, that the will-maker was, when the will was made, merely conscious of a possibility of a future marriage, or that he or she had been conscious of the possibility. To get beyond “a mere consciousness of a possibility” of a future marriage a will-maker, at some time in the process of making his or her will, must have brought to mind not only the possibility of a formal act of marriage but also claims on his or her bounty associated with the marriage. The expression “contemplation of a particular marriage” refers to contemplation of “the rights and obligations which stem from” a “legally recognised status of marriage”, not merely a casual contemplation of the bare formalities of a marriage ceremony.”

His Honour found that at the time the deceased made his will, his de facto relationship was not bound to end in marriage, and he did not consider the possible claims his widow might have on his estate at the time of executing the will. At that time, the deceased was more concerned with the claims his ex-wife and estranged stepchild might have on his estate.

For these reasons, his Honour concluded that the will was not made in contemplation of marriage and accordingly it was revoked by that marriage. Therefore, the deceased died intestate, and his estate must be administered on intestacy (subject to family provision proceedings brought by the deceased’s stepchild).

Loss or Destruction of Original Will

A person’s will will not automatically be revoked in circumstances where it is accidentally lost or destroyed by that person as the relevant act of destruction must be accompanied by an intention to revoke the will1. However, while it will not automatically revoke the will, if you accidentally lose or misplace your original will in circumstances where it was last known to be in your possession, such that on your death it cannot be found, there is a rebuttable presumption that you destroyed it with the intention of revoking it.

Justice Campbell in the matter of Cahill v Rhodes/Rhodes v Cahill [2002] NSWSC 561 (10 July 2002) [59] stated that the strength of that presumption will depend on how the deceased maintained custody of the will as follows:

“It refers to facts concerning the physical arrangements the testator has for security of the Will – for instance, whether it is kept in a place which is locked or unlocked, if kept in a locked place, how many keys there are and who has them or has access to them, or whether the testator keeps his will in his coat pocket – who knows of the location of the Will, whether anyone besides the testator has access to the Will, and the extent to which the testator has been careful in looking after his Will. All these are matters which can affect the likelihood of the Will being missing because the testator himself destroyed it, or because there is some other explanation for its absence, like that someone else removed it, or that the testator has merely lost it.”

In the recent case of The Estate of Smith [2024] NSWSC 568, his Honour, Hammerschlag CJ in Eq considered an application made by a deceased’s son where the original will of the deceased could not be located and therefore, the presumption that it was destroyed by the deceased applied.

In this matter, the deceased was survived by his three children and had left a will gifting the whole of his estate to them equally, however, the original will could not be located. Although the position on intestacy would result in the same outcome as the gifts made in the will, the matter was required to be considered by a Judge as the Registrar was unable to issue a grant of probate without the original will.

The deceased’s son and executor appointed under the will sought orders that he be granted probate of a copy of the deceased’s will, or in the alternative, a declaration that the deceased died intestate, together with orders for the grant of letters of administration.

Hammerschlag CJ in EQ stated:

“Where an original will cannot be found, a rebuttable presumption of revocation by destruction arises. The rebuttal of the presumption is not difficult where the will makes a careful and complete disposition of the testator’s property, and there are no other circumstances to point to a probable destruction: see Heffernan v Innes [2021] NSWCA 1033 at 433 and following, and the authorities cited there.”

His Honour ultimately went on to state that he was satisfied that there was sufficient evidence to rebut the presumption of revocation, and the copy of the will was admitted to probate.

Although the presumption was ultimately rebutted in this case, the parties still had to go to the expense of bringing the proceedings, and the administration of the estate was delayed until orders were made by the Court.

Ensuring that your will remains up to date is essential to protecting your wishes and providing certainty for your loved ones. Life events such as marriage, divorce, changes in asset ownership, or the loss of the original will can have significant legal consequences, potentially altering how your estate is distributed. Regularly reviewing and updating your will can help avoid unintended outcomes, disputes, and costly legal proceedings. If you need assistance in drafting, reviewing, or updating your will, our experienced estate planning team is here to help

Written by Despina Bouletos

On 26 November 2024, the Supreme Court recently handed down its decision of Chester v Cowin [2024] NSWSC 1554. This case concerned the estate of the late Malcolm Chester, who died intestate on 25 May 2022. Malcolm left two daughters, Geraldine and Penelope, who were each entitled to 50% of his estate pursuant to the rules of intestacy. Malcom’s estate consisted primarily of a property at Reindeer Place, Werrington (valued at $760,000) and cash at bank (valued at $109,055).

Factual Matrix

Geraldine had, for the majority of her lifetime, resided at the Reindeer Place property with Malcolm. Geraldine had four children, Matthew, Mitchell, CW and TW (CW and TW being minors) who also resided at the property with Geraldine.

Geraldine and each of her children commenced proceedings seeking further provision from Malcolm’s estate. The provision sought by each of the plaintiffs was, in effect, that Geraldine and her children have the right to reside in the Reindeer Place property until the youngest child attained adulthood.

Both Penelope and Geraldine had a close and loving relationship with Malcolm, and there was no evidence to the contrary.

Importantly, although Malcolm died intestate, he left a handwritten document dated March 2020 indicating his intention that Geraldine and her children be allowed to remain living in the property, until her youngest child attained adulthood.

Geraldine and her two adult children provided limited and incomplete evidence of their financial circumstances. In respect of Geraldine’s two minor children, no evidence whatsoever was provided as to their financial or social needs, including where they attended school, their extra-curricular activities and the quantum of any financial support received from their father.

Findings by the Court

The Court held that each of Geraldine and her four children were eligible persons to bring a family provision application. Further, the Court held that there were factors warranting the making of such an application by each of Geraldine’s children, such factors being the close relationship of dependency each child had with Malcolm for the whole of their lives, with Malcolm supplying their housing and taking responsibility for a considerable portion of their upbringing.

The Court then considered what bearing the incomplete financial disclosure by each of the plaintiffs had on their applications. The Court referred to the case of Sgro v Thomson [2017] NSWCA 326 in which it was held that, financial need is one indicator as to whether adequate provision has been made, but not the sole or predominant consideration.

The Court held that, if it had been required to be satisfied that the plaintiffs had not been left adequate provision in terms of financial need, it likely would have dismissed the plaintiffs’ summons, as the evidence did not demonstrate their financial need in any meaningful way and was “manifestly deficient”.

However, it was necessary to consider financial need as only one of the factors set out in s 60 of the Succession Act 2006 (NSW). The Court found that several other factors enumerated in s 60 were relevant, including:

· Each of the plaintiffs were dependent on the deceased for a long period;

· The nature of Malcolm’s estate was such that he was able to make provision for both his daughters and grandchildren;

· Malcolm’s testamentary intentions (set out in his note); and

· Gerladine’s minor children had lived their entire lives at the Reindeer Place property. Accordingly, any provision which did not provide them the opportunity to continue residing in that property until attaining adulthood would be inadequate.

Ultimately, the Court made a finding that Geraldine and her two minor children had not been left adequate provision, because, under an intestacy position, they could not continue living in the Reindeer Place property.

The Court made an order for further provision by granting each of them the right to occupy the house until each of the minor children attained adulthood. However, the Court made an order that Geraldine was to pay a fee equal to one third of the market rental for the property for the duration of that time. The Court made no order in relation to the claims by Geraldine’s adult children.

Implications

This case has important implications for family provision applicants and serves as a timely reminder of the need to provide detailed evidence of financial need in order to avoid inviting criticism from the Court. However, this case makes clear that it is possible for a finding of provision to be made, notwithstanding a lack of meaningful evidence regarding financial need by an applicant.

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 succession matter, please contact our experienced succession law team.

Written by Despina Bouletos

The Supreme Court of Queensland delivered an important judgment on 12 November 2024, Re Allan (Dec’d) [2024] QSC 277, in relation to the revocation of a will and its impact on the revival of a prior will. Although Re Allan was dealt with on the papers and the judgment itself is only twenty paragraphs long, it has significant implications for how a prior will may be revived.

Factual Matrix

 Re Allan concerned an application by Mark Allan for a grant of letters of administration of the estate of his wife, the late Joanne Allan, who died on 5 November 2009.

Mark and Joanne had been married since 1992 and had two children together. On 17 October 1997, both Joanne and Mark prepared wills (“1997 Wills”) in which they left the entirety of their estates to one another. The 1997 Wills also contained a clause that Mark’s and Joanne’s parents would be appointed as joint guardians of their children, if both Mark and Joanne died.

On 22 November 2003, Joanne and Mark prepared new wills (“2003 Wills”). Each of the 2003 Wills were identical to the 1997 wills except that, instead of nominating both Joanne’s and Mark’s parents as guardians of their children, only Mark’s parents were nominated. Both the 1997 and 2003 Wills were prepared by a solicitor and the 2003 Wills were held at that solicitor’s office.

In July 2009, two months prior to Joanne’s death, she and Mark attended on their solicitors and recovered the 2003 Wills. Mark gave evidence that he and Joanne proceeded to destroy the 2003 Wills with the intention of revoking them and that it was his and Joanne’s understanding that in doing so they had reinstated the 1997 Wills.

Earlier Application

In 2020, Mark sought letters of administration of Joanne’s 1997 Will. The Court rejected Mark’s application on the basis that:

1. There was an inference that Joanne’s 2003 Will contained a provision revoking all previous wills;
2. Upon execution of the 2003 Will, Joanne revoked her 1997 Will;
3. In July 2009, Joanne revoked her 2003 Will by destroying it with the intention of revoking it; and
4. As a matter of law, the revocation of the 2003 Will was not sufficient to revive Joanne’s 1997 Will, as none of the circumstances set out in Section 17 of the Succession Act 1981 (QLD) (“Queensland Act”) allowing for the revival of an earlier will that has been revoked, were enlivened.

Legislative Provisions

Section 17(1) of the Queensland Act states that a will that has been revoked is revived by re-execution or by execution of a new will that shows an intention to revive the prior will. Importantly, section 15 of the Succession Act 2006 (NSW) (“NSW Act”) contains an identical provision.

Current Application

For the purpose of the current application, Mark accepted that Joanne had died intestate (given the Court’s findings in the prior application) and therefore sought a grant of letters of administration on the basis of intestacy. The Court allowed Mark’s application.

Implications

The finding of the Court in Re Allan has significant implications for the revival of wills in NSW and the enlivening of s15 of the NSW Act. It will not suffice simply for a testator or testatrix to revoke a will which itself revokes a prior will, in an effort to revive that prior will.

Rather, more actives step will be required to revive a prior will, being either re-execution of that will or execution of a new will that reflects an intention to revive the prior will. If such steps are not taken, there is a very real risk that a testator or testatrix may be found to have died intestate, notwithstanding their contrary intentions. Practitioners will also need to give careful consideration as to how to give effect to a client’s intentions to revive a prior will.

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 estate planning, please contact our experienced succession law team.

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

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.

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.

Do I get a copy of the will? When is there a reading of the will?

It is often assumed, as in movies, that following the death of a family member the solicitor will call the relevant family into a room and engage in the dramatic exercise of ‘reading of the will.’

Solicitors often receive requests in the recent weeks and months following death to read the will or provide a copy of the will, estate planning documents, relevant inventory, draft probate applications and beyond.

In NSW, s54 of the Succession Act requires a person that has possession or control of a will of a deceased person to allow certain categories of persons to inspect or be provided with a copy of the will (at their own expense).

Categories of persons entitled to inspection include; any person that is referred to in the will, (or in an earlier will), the surviving spouse or defacto, a parent or guardian, any person that would be entitled on intestacy (if there was no will), any person who may have a claim at law or in equity, a creditor or former attorney.

Requests that go beyond inspection of the will should usually be raised between solicitors, who will need to understand and assess the basis of that request, and will need to be mindful of a solicitors obligation to retain confidentiality under Solicitors Conduct Rule 9.

The Supreme Court recently considered the solicitor’s obligation to share information about the circumstances in which a will was prepared, before a grant of probate has been made in Re Estates Brooker- Pain and Soulos [2019] NSWSC 671. The Court observed that the sharing of confidential documents prior to a grant by the solicitor may be problematic, absent Court order.

If pertinent information is required to assess the prospects or merit of an estate claim, it is important to obtain advice and assistance from a solicitor and UWE have specialists in wills & estates that can assist.

Written by Daniel Bennett

Too many Australians fail to properly consider whether they need a will. They assume they don’t either because the assets they have are minimal or the rules of intestacy will carry out their intentions anyway. Perhaps they may simply be afraid to actually think about the topic at all.

The answer might be no, but have you come to that answer knowing exactly what would happen when you die with or without appropriate estate planning in place? Do you know, or have you simply assumed, how the rules of intestacy would apply to your circumstances? Do you know that your superannuation does not automatically form part of your estate? What do you expect to happen to jointly owned property or bank accounts? Are you aware of what kinds of claims your estate might have to defend and who may be eligible to make such claims?

The more likely answer to the question is that you should have at least a valid will. If not only to ensure that your estate is left to those you intend and in the way you expect, but also to ensure that the decision has been made with the best taxation and asset protection strategies in mind. You might also want to avoid the unfortunate litigation that can often arise regarding burial rights and who will become the testamentary guardians of your infant children.

What are the requirements of a valid will?

In New South Wales, according to s. 6 of the Succession Act 2006 (NSW) (“the Act”) a will is not valid unless:

• It is writing and signed by the testator or by some other person in the presence of and at the direction of the testator;
• The signature is made or acknowledged by the testator in the presence of 2 or more witnesses present at the same time; and
• At least 2 of those witnesses attest and sign the will in the presence of the testator (but not necessarily in the presence of each other).

Who can be a witness?

There are benefits having the drafting (or another) solicitor as one of the two witnesses to your execution of the will. Doing so will ensure the best chances that the formal requirements are complied with. Further, should the will ever be challenged, for example due to a lack of testamentary capacity of the testator, a solicitor ought to have undertaken the necessary steps in determining the testator’s capacity and should have files notes to that effect. In the event of contested probate proceedings that solicitor would then be a required witness in the proceedings.

That said, there is no formal requirement that a solicitor be a witness to the will in order to comply with s. 6. Your witnesses should be independent (not a beneficiary under the will or your spouse) and over the age of 18.

What if these requirements are not met?

Where a will fails to satisfy these formal requirements all hope is not lost. Pursuant to s.8 of the Act it is possible for a Court to dispense with these formal requirements where the document or part of the document in question purports to state the testamentary intentions of the deceased person and has not been executed accordingly.

There have been a number of interesting decisions as to probate of informal wills in the past few years in different Australian states, including where an unsent text message, an audiotape, a videotape or a DVD recording have been accepted by the Court as the testator’s last will ( for example, see decisions such as Cassie v Koumans [2007] NSWSC 481, Treacy v Edwards; Estate of Edwards (2000) 49 NSWLR 739 and Re Nichol; Nichol v Nichol & Anor [2017] QSC 220).

For such order to be made in New South Wales the Court must be satisfied that the person intended it to form his or her will or to form an alteration to his or her will. The Court would need to look at any evidence relating to the manner in which the document or part was executed and any evidence of the testamentary intentions of the deceased person, including evidence of statements made by the deceased person.

Should I simply prepare my own informal will?

Unless your circumstances are such that you are moments from death and unable to contact a solicitor or to otherwise prepare a formal will, no.

At the planning stage and where no such dire circumstances exist, it should not be your intention to rely upon the Court’s ability to grant probate in respect of informal wills. Doing so will expose you to significant risk that your testamentary intentions are not carried out if the Court is not ultimately satisfied that such document forms your testamentary intentions due to the obvious evidentiary considerations underpinning the provision.

DIY Will Kits: Don’t do it

You may appreciate the need for a will but consider a Do It Yourself Will Kit to be the way to go. Do so at your own peril. Such approach might very well see the formal requirements of s. 6 complied with. However, in our experience, this approach carries obvious and significant risks in the event that:

• Execution is not properly carried out, including where the will has not been properly signed in the presence of two witnesses, or subsequent changes are made to the original document after execution.
• The executors or beneficiaries are identified incorrectly.
• The witnesses are also beneficiaries under the will.
• The will is lost.
• You misunderstand what actually forms part of your estate, including with respect to superannuation and jointly owned property or bank accounts.

Contact a solicitor of our Wills and Estates Team to further discuss your estate planning needs at your earliest convenience.

Written by Jessica Swain

The economic impact felt by many Australians as a result of COVID-19 has had significant financial implications for many families.  These challenging financial circumstances may be increased if you have recently separated from your spouse or partner.

Pursuant to Section 72 of the Family Law Act 1975 (“the Act”), parties to a marriage have a right to make an Application for spousal maintenance following the breakdown of their marriage.  Spousal maintenance can also be sought by one party following the breakdown of a de facto relationship pursuant to Section 90SE of the Act.

The right to spousal maintenance involves a “threshold test” which involves:-

1. If one party to a marriage is unable to support himself or herself “adequately” due to:i. Care and control of a child of the marriage;
   ii. Age, physical or mental incapacity for appropriate gainful employment;
   iii. Any other adequate reason; and
2. The capacity of the other party to pay the maintenance sought.

As a result of COVID-19, many people have experienced a loss of employment, loss of investments such as rental income or a reduction in business revenue. In light of the ongoing economic uncertainties during the COVID-19 pandemic, it is important that clients who have recently separated from their spouse or partner, have adequate financial support and are aware of options available to them.

If the threshold test is met, spousal maintenance can be paid by way of interim spousal maintenance, lump sum or on an urgent basis.

Lump Sum Spousal Maintenance

Pursuant to Section 77A of the Act (parties to a marriage) and Section 90SH of the Act (parties to a de facto relationship), lump sum spousal maintenance may be ordered where one party who is to provide maintenance does not have the income to make payments periodically and on an ongoing basis to the other party.  This may be a lump sum payment by way of cash or transfer of property.  In the event this lump sum Order is made, the Court must specify the portion of the property which is referable to the spousal maintenance being received by the party in need.

Interim Spousal Maintenance

Orders for interim spousal maintenance are made pursuant to Section 74 (for parties to marriage) and Section 90SE (for parties to a de facto relationship) of the Act and may be ordered in circumstances where a party requires maintenance immediately following the breakdown of the relationship or marriage.  Importantly, an Application for interim spousal maintenance cannot be made until both parties have filed material before the relevant Court including a Financial Statement and Affidavit outlining their respective financial positions and evidence as to the proposed payer’s capacity to pay spousal maintenance.  An interim Order is a temporary Order that can be put in place for a fixed period (reserving the liberty for the applicant to apply for an Order for the payments to continue), until a lump sum payment or transfer of property can be made, the matter is resolved between the parties on a final basis or the matter is listed for hearing before the Court in relation to that issue.

Urgent Spousal Maintenance

Where it appears to a Court that a party is in immediate need of financial assistance, but it is not practical to determine what (if any) Order should be made, the Court can make payment of a periodic payment of periodic spousal maintenance or other sums pending resolution of the proceedings pursuant to Section 77 of the Act (for parties to a marriage) and Section 90SG of the Act (for parties to a de facto relationship).

Urgent spousal maintenance Applications are heard before the Court at a time when not all evidence is at hand.  In other words, an Application for urgent spousal maintenance is made in emergency circumstances where there is an obvious need but not time for the parties to provide evidence in support of the claim for spousal maintenance.

Variation to Existing Spouse Maintenance Order

In the event that one party has had a reduction in their income or earning capacity, and there is a preexisting spouse maintenance Order in place, pursuant to Section 83 of the Act (in married couples) and Section 90SI of the Act (in de facto relationships), the Court has power to discharge, suspend, revive or vary a spouse maintenance Order.  In order for the Court to be satisfied that there should be a modification made to an existing Order, it must be found that one of the following applies:-

1. That, since the Order was made or last varied, the circumstances of a person for whose benefit the Order was made have changed, the circumstances of the payer have changed, or
2. The cost of living has changed to the extent as to justify a modification of the spouse maintenance Order; or
3. If the preexisting Order was made by consent, that the amount ordered to be paid is not proper or adequate; or
4. That material facts were withheld from the Court that made the Order or from a Court that varied the Order on material evidence previously given before a Court was false.

Every matter is different and will depend on the unique circumstances of the case as to whether someone is entitled to spousal maintenance and what type of spousal maintenance may be ordered.

In the event you have separated from your spouse or partner recently and are questioning whether you are entitled to receive or should pay spousal maintenance, particularly in light of financial circumstances as a result of COVID-19, please do not hesitate to contact the Family Law Team at Uther Webster & Evans Pty Ltd on (02) 9290 1177 so that we may assist you with your query.

Under Sections 588FE and 588FA of the Corporations Act 2001 (Cth), a payment constitutes an unfair preference and is a voidable transaction if:

1. the company and you were both parties to the transaction;
2. the transaction occurred within six (6) months of the commencement of liquidation;
3. the company was insolvent at the time of entering into the transaction, in that it could not pay its debts when they fell due; and

the transaction resulted in you receiving from the company, in respect of an unsecured debt that the company owed to you, more than you would have received from the company in respect of that debt, than if the transaction was set aside and you were to prove for the debt in the liquidation of the company.

There are however a number of options available in responding to the liquidator and/or defending proceedings by a liquidator for unfair preferences.

There are several defences that may be available and reasons why you should not be required to pay back to a liquidator an amount.

Some of these include:

• where you are a secured creditor because:

  i. you may have a charging clause or an equitable interest over real property owned by the company;

  ii. you may have a security interest such as under a Retention of Title clause which has been registered on the PPSR; oriii. you may be the beneficiary of a common law lien which is not required to be registered on the PPSR.

• the statutory defence contained in Section 588FG (1) of the Corporations Act 2001 (Cth) which is commonly known as the “good faith defence.” This defence is essentially that you were not aware that the company was insolvent at the time it made the payments to you. To succeed on this defence, the onus is on you to establish:

  i. that you had no reasonable grounds for suspecting that the company was insolvent or would become insolvent as a result of making the payment/s (i.e. the subjective test); and

  ii. a reasonable person in your circumstances would not have reasons to suspect the company was insolvent or would become insolvent (i.e. the objective test).

In addition, another defence that may be available is called the “Doctrine of Ultimate Effect.” In Beveridge v Whitton [2001] NSWCA 6 it was argued by a liquidator that an accountant’s audit of an insolvent company’s books, prior to that company being placed into liquidation, that the payment of those fees being the professional fees for the accountant constituted an unfair preference. In the NSW Court of Appeal, the Court determined that the payment of those fees was not an unfair preference because:

1. the accountant only accepted the engagement to do the work on the proviso fees were paid speedily;
2. the value of the services should be treated as the price charged for them;
3. that it was not the case that the failure to show any quantifiable addition to turnover or inventory meant that the services supplied were without value, or that a payment made for them necessarily decreased the company’s assets; and
4. the doctrine of ultimate effect does not depend on a transactions ability to improve or worsen a company’s position, but rather it was the ultimate effect of the transaction itself that is relevant.

This defence may be useful in circumstances where the company was insolvent, a liquidator can prove that you knew the company was insolvent and where the goods or services provided (that the payments were for) were of substantial benefit to the company.

It is important to remember that in circumstances of a demand made by a liquidator that these matters are often open to negotiation and the cost involved in defending litigation brought by a liquidator will often exceed a settlement amount which could have otherwise been arrived at had you instructed solicitors to negotiate and defend the claim on your behalf.

If you require further information regarding any of the defences available to a demand or proceedings bought in relation to a preference payment, you should contact Uther Webster & Evans.

Written by Robert O’Harae

Powers of Attorney: The Golden Rule

A Power of Attorney is a legal document that allows the person making the Power of Attorney (referred to as the principal) to nominate one or more persons (referred to as attorney or attorneys) to act on the principal’s behalf.

An Enduring Power of Attorney grants an attorney authority to manage the principal’s legal and financial affairs including buying and selling real estate, shares and other assets as well as operating the principal’s bank accounts and spending money on their behalf, even after the principal has lost the capacity to make financial decisions for themselves. Typically, a letter from the principal’s treating general practitioner or geriatrician should be obtained to confirm that the principal has lost capacity to manage their financial affairs and this can be a condition of the instrument being operable.

It is not surprising that with a position of such importance and trust, an attorney must only act only in the best interests of the principal. This means an attorney must:

1. Avoid doing anything as an attorney which would mean that their own interests conflict with the principal’s interests;
   
2. Obey the principal’s instructions while they are mentally capable and any directions set out in the Power of Attorney document;
   
3. Act according to any limits or conditions placed on their authority within the Power of Attorney document;
   
4. Not give gifts to themselves or to others, enabling them to benefit from the principal’s finances unless it is specifically authorised to do so. Even if authorised, any gift must be seen as reasonable in the circumstances;
   
5. Keep their finances and money separate from the principal’s; and
   
6. Keep accurate and proper records of their dealings with the principal’s finances or property.

The importance of these obligations were brought to light in the recent case of Case 662814 concerning Westpac Banking Corporation which came before the Australian Financial and Complaints Authority (AFCA).

In this instance an elderly person in their nineties opened a Westpac bank account and their daughter was added as a signatory to that account. In July 2019 (about 4 years after the account was opened) the elderly person and the daughter requested a withdrawal of $100,000 in cash. A few days after that request was made, the elderly person was admitted to hospital. On that occasion Westpac refused to provide the money to the daughter after her parent’s admission to hospital.

Shortly after Westpac declined the transaction, a Power of Attorney was made by the elderly person appointing their daughter as their attorney.

Using the Power of Attorney, the daughter sought to withdraw $800,000 from her parent’s Westpac account to purchase gold bullion. The daughter informed the bank that the gold was to be purchased in her sole name and not in the name of her parent, effectively transferring the value of the funds to the daughter.

Westpac again blocked the transaction and made direct enquiries with the parent, who when questioned by the bank seemed unsure, uncertain and lacked understanding of the requested transaction to purchase gold bullion.

Following Westpac’s blockage of the transfer, the daughter brought a complaint to AFCA who upheld the bank’s actions.

AFCA found that Westpac had a duty to exercise reasonable care and skill in carrying out transactions for its customer, particularly if the customer is vulnerable.

AFCA considered that the ninety-year-old bank account holder was vulnerable to potential elder and financial abuse by their daughter. Within its decision, AFCA advised noted that “financial firm employees may be in the best, and sometimes the only, position to recognise financial elder abuse when it occurs. Financial firm employees need to be encourage to trust their instincts”.

This case illustrates the importance for those considering making Power of Attorney of choosing the right attorney to appoint due to the importance of that appointment and the trust required within the role. Further, it highlights the diligence the employees of banks and other institutions should exercise when receiving instructions from an attorney under a Power of Attorney.

UWE advises on the preparation and implementation of Power of Attorneys as well as recovery against inappropriate transactions. Please contact us on (02) 9290 1177.

Written by Montana Messina.

Release of Family Provision Rights

Chapter 3 of the Succession Act 2006 (NSW) (“the Act”) enables defined classes of eligible persons, found at section 57 of the Act, to institute proceedings seeking a Family Provision Order out of the estate of a deceased person. Applying to the Court for such an Order seeks provision or further provision out of the deceased’s estate.

Pursuant to section 57 of the Act, a former spouse is an eligible person entitled to make a family provision claim on a deceased’s estate, regardless of any Family Court property orders or settlement, unless a release has been approved by the Supreme Court.

So despite going through a financial settlement under the Family Law Act 1975 (Cth) with the intention to sever the financial relationship between former spouses, if one spouse predeceases the other, the former spouse is entitled to make a claim on the deceased’s estate for provision.

However, pursuant to section 95 of the Act parties are able to release their rights to apply for a family provision order. Parties to family law financial settlements, are able to enter into a written agreement releasing each other from their right to make a claim under Chapter 3 of the Act. Prior to entering into such a deed, each party is required to seek independent legal advice as to the advantages and disadvantages of the release, which will only be effective on approval by the Supreme Court of NSW. An application for approval can be made at any time, and can be made by the executors of the deceased’s estate, if required.

A Court will consider all the circumstances and the following when determining an application for approval:

(a) it is or was, at the time any agreement to make the release was made, to the advantage, financially or otherwise, of the releasing party to make the release, and

(b) it is or was, at that time, prudent for the releasing party to make the release, and

(c) the provisions of any agreement to make the release are or were, at that time, fair and reasonable, and

(d) the releasing party has taken independent advice in relation to the release and, if so, has given due consideration to that advice.

Once approved, the release is binding on the parties in NSW. It is important to note that this release is only binding in NSW.

In Kelly v Kelly [2019] NSWSC 994, Hallen J articulated in some detail, the matters the Court will take into account when determining an application for approval of release under section 95.

While this is beneficial for parties who own assets in NSW, there is no equivalent in the other Australian states. Other states do not have an equivalent section to enable parties to release their rights. A section 95 release approved by the Supreme Court of NSW, would show an intention to release the estate from a Family Provision claim, however would not be binding on the Courts of other states.

In other states, you are not able to contract out of your rights to make a Family Provision claim on a former spouse’s deceased estate. It is an important consideration for parties who are going through family law settlements and who hold or intend to hold assets in other jurisdictions.

The disconnect between the states is due to family law being governed by federal law, while succession legislation is determined state by state.

Uther Webster and Evans has extensive expertise in both family law matters and succession and estate litigation. Please contact our offices to discuss your matter with our experienced family law and succession litigation team.

Written by Danielle Rosano

Generally, financial support for parents or other persons with the care of a child under the age of 18 years are governed by the provisions of the Child Support (Assessment) Act, 1989, which is administered by the Department of Human Services in the form of child support.  This support ceases upon a child attaining the age of 18 years or upon completion of their secondary school education, whichever is the later.

However, there are certain circumstances where the Family Court and the Federal Circuit Court (collectively “the Family Courts”) may make orders for one party to pay child maintenance to a child who is over the age of 18 years and has completed his or her secondary education.

The power of the Family Courts to make orders for payment of child maintenance for adult children is contained in Section 66L(2) of the Family Law Act, 1975 (“the Act”), which provides that a child maintenance order for a child over the age of 18 years can only be made if the Court is satisfied that the provision of child maintenance is “necessary”  for a child:

1. To enable the child to complete his or her education; or
2. Due to a mental or physical disability of the child.

Under the Act, a child, a parent, grandparent or any other person concerned with the care, welfare or development of the child can apply for orders from the Court for a parent to pay child maintenance for a child over the age of 18 years.

If the Court determines that the requirements of Section 66L(2) of the Act have been met, the Court must then have regard to Section 66H of the Act, which requires the Court to consider the following factors:

1. The level of financial support necessary for the maintenance of an adult child; and
2. The financial contribution able to be made by a party for the maintenance of the adult child.

In determining the financial contributions able to be made by one party for the maintenance of a child, the Court will consider the income, assets and financial resources of each party to the proceedings. This will generally involve each party filing with the Court a document  known as a “Financial Statement”. A Financial Statement is a sworn document which sets out that party’s weekly income, expenses, assets, superannuation, liabilities and financial resources.

The Family Courts have a wide discretion in determining whether or not an adult child maintenance order is appropriate in the circumstances. There are a myriad of factors that the Court will have regard to in determining any application for child maintenance however, the Court is ultimately required to assess the capacity of any person to pay a child’s reasonable costs on the basis of their financial circumstances.

In some of the adult child maintenance cases that have been determined by the Court to date, when considering whether adult child maintenance is “necessary” for a child to complete his or education, the Court considered the following factors:

1. Whether the level of dependence between a child and the parents had previously ceased and whether the application for a child maintenance order constitutes a ‘resurrection’ of that previous dependence;
2. The time that has elapsed since the initial cessation of dependence (if applicable) and the time of any application for adult child maintenance before the Court;
3. Whether or not a child has completed the level of education initially intended by the parents of that child for that child to then obtain employment to support himself/herself;
4. Whether or not the child receives, or has previously received, any form of assistance, benefits or other form of education;
5. The ability and likelihood of the child completing the form of education that is in question;
6. The financial capacity of the child to support himself/herself after the completion of the education in question;
7. the financial circumstances of anyone who is primarily responsible for financially supporting the child (which is generally the parents); and
8. the biological relationship between the child and the person from whom maintenance is sought.

In determining whether adult child maintenance is necessary as a result of any mental or physical disability of a child, in previous cases the Family Courts have made clear that the term “necessary ” in the context of adult child maintenance applications is more than morally or socially “desirable” but something less than “absolutely necessary”.

From the cases where adult child maintenance has been ordered by the Family Courts for a child with a mental and/or physical ability, factors considered by the Court in addition to the factors above, included as follows:

1. Whether the disabled child lacks mental capacity, physical capacity or both;
2. Whether the child is restricted in the way he or she lives;
3. The extent of any personal care required for the child;
4. Whether the child’s disability impacts upon their ability to obtain and/or maintain employment.

If the Court determines that an adult maintenance order is appropriate, the Court can make an order for such maintenance to be paid in different forms, including by way of periodic payments, a one-off lump sum or in any other manner the Court deems fit.

Although the Family Courts have discretion in respect of the duration of any adult child maintenance order, the duration of such an order is generally finite.

The Court may decide that a child maintenance order ceases upon the child completing their education or qualification.

In the case of a child with a disability, the Court may order that a child maintenance orders ceases when the child no longer has the particular illness or disability (if such disability was a temporary one) or after a particular period of time has elapsed with a view to then reviewing the status of the child’s disability within that specified timeframe to determine whether any further orders are appropriate.

Written by Yvonne Furfaro & Kyle Rowston-Wolcott.

A new Code of Conduct has imposed a set of good faith leasing principles that aim to protect tenants who are eligible for the Commonwealth Government’s JobKeeper programme.

 Who’s Eligible?

The Code of Conduct (‘the Code’) aims to assist small to medium sized commercial tenants who expect a significant reduction in turnover due to COVID-19.

To be eligible a commercial tenant must:

1. Have an annual turnover of no more than $50 million; and
   1. For franchises, this will be assessed at the franchisee level
   2. For corporate groups, this will be assessed at the group level (and not by individual retail outlet)
2. Be an eligible business for JobKeeper, which requires a business to demonstrate that turnover will be reduced by more than 30% relative to a comparable period (of at least one month) last year.

What’s involved?

The Code applies to all eligible tenants ( ‘SME tenants’) and requires that negotiations should take place between both SME tenants and landlords to “share, in a proportionate, measured manner, the financial risk and cashflow impact” caused during the COVID-19 period. This period has been defined by the operational period of the JobKeeper programme, which is in effect for a maximum of 6 months from 30 March 2020. However, it has been recommended that the Code should apply “in spirit” to all leasing arrangements for affected businesses, which might extend beyond the 6 month period.

The Code is encouraging good faith negotiations that acknowledge the specific impacts of COVID-19 and provide a case-by-case solution for each SME tenant’s circumstances. The general goal of the Code is to avoid mass insolvency at the tenant level, which would ultimately leave landlords at a disadvantage and slow economic recovery after the COVID-19 period.

A full copy of the Code may be found here, while an explanation of the principles is provided below.

Key Principles

1. Landlords must not terminate leases due to non-payment of rent during the COVID-19 pandemic period (or reasonable subsequent recovery period).
2. Tenants must remain committed to the terms of their lease (subject to the amendments made under the Code). Please note, a failure to abide by the substantive terms of the lease will forfeit protection under the Code.
3. Landlords must offer rent reductions in the form of waivers and deferrals based proportionately (up to 100%) on the reduction to the tenant’s trade during this period and a reasonable recovery period.
   1. Reasonable recovery is left to the parties to negotiate in good faith but should be consistent with assessments made by the JobKeeper programme.
4. When applying principle #3, at least 50% of the rent reductions made by the Landlord should be in the form of waivers (as opposed to deferrals). If a tenant would be unable to fulfill their ongoing obligations with 50% of the reductions as waivers, further waivers should be offered having regard to the financial ability of the Landlord as well. Tenants may waive their right to the 50% waiver minimum.
5. Deferred rental payments must be amortised for at least 24 months or over the balance of the lease term, whichever is greater.
   1. This is the default position; however, the parties may agree to another time frame instead.
   2. Amortisation in this instance refers to the gradual reduction of a debt through regular payments (a payment plan essentially) over at least 24 months.
6. Any reductions in statutory charges (e.g. land tax, council rates) or insurance must be passed on to the tenant in the appropriate proportion under the terms of the lease.
7. Landlords should share any benefits they receive from loan deferrals provided by a financial institution as part of the Australian Bankers Association’s COVID-19 response, or any other case-by-case deferral proportionately with tenants. The proportions used should relate to the reduction in trade experienced by the tenants.
8. Landlords should seek to waive the recovery of any other expense (or outgoing) during the period that a tenant is unable to trade. This is a right reserved for Landlords to exercise when they deem it appropriate in the circumstances.
9. If the negotiated arrangements under the Code still require repayment, this should be spread out over an extended period to avoid an undue financial burden on the tenant.
   1. Repayment should not commence until either the lease has expired or the Government has announced the end of the COVID-19 pandemic, whichever is earlier.
   2. A reasonable subsequent recovery period should also be taken into account.
10. Rental waivers should not have any fees, interest or other charges attached to them. Similarly, deferrals should not have any fees, charges nor punitive interest. Deferrals will still be allowed some interest, but it will likely need to be in line with current standards.
11. Landlords must not draw on a tenant’s security for the non-payment of rent (be this a cash bond, bank guarantee or personal guarantee) during the period of the COVID-19 pandemic and/or a reasonable subsequent recovery period.
12. The tenant should be given an opportunity to extend its lease for at least as long as the period given for rental waivers and deferrals. This is intended to allow the tenant additional time to trade under the existing lease terms during the recovery period.
13. Landlords must agree to a freeze on rent increases (except for retail leases based on turnover rent) for the duration of the COVID-19 pandemic and a reasonable subsequent recovery period. This will take effect regardless of any arrangements between the landlord and the tenant.
14. Landlords must not apply any prohibition or levy any penalties if tenants reduce opening hours or cease to trade due to the COVID-19 pandemic.

Is It Legally Binding?

At the moment this is still a recommended mandatory code, which lacks legal force. However, the Government does plan to give legal force to these principles by implementing similar Codes through relevant state and territory legislation. These will exist alongside the existing laws and will likely provide a complimentary position rather than superseding existing rules.

What If Negotiations Fail?

Should landlords and tenants fail to reach an agreement on leasing arrangements (as a direct result of COVID-19), the matter must be referred and subjected to a retail/commercial leasing dispute resolution process. This will impose a binding mediation outcome and may result in large delays due to the COVID-19 pandemic disrupting normal processes. Importantly, these negotiations must only concern issues related directly to COVID-19 and any attempt to rely on these principles for non-COVID-19 related matters will likely fail and may result in penalties (once the legislation is enacted).

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

Uther Webster & Evans can provide you with advice and assist you with your commercial and personal affairs call or email us to discuss.

Written by Kyle Rowston-Wolcott.

Up to $100k for Small and Medium Businesses…

The Government has announced two rounds of payments for businesses paying wages, to be compensated by at least $20,000 in the next 6 months. Businesses that withhold tax on employee wages and salaries may be eligible to up to $100,000 (including the $20,000 minimum).

If you are an employer who is required to withhold tax…

You may be eligible to receive a payment equal to 100 per cent of the amount of the withheld from your employees’ salaries and wages, up to a maximum payment of $50,000. This payment will occur twice (one in April, and one in the July-October period) for a combined maximum of $100,000.

If you are an employer who is not required to withhold tax…

You may be eligible to receive the minimum payment of $10,000, even if you are not required to withhold tax.

Conditions for Payment…

The first payment will be delivered by the ATO as an automatic credit in the activity statement system from 28 April 2020 upon employers lodging eligible upcoming activity statements.

The payments will only be available to active eligible employers established prior to 12 March 2020.

There will be a second identical payment made to eligible entities during the July-October 2020 period to further assist businesses.

To Apply…

1. Your business must have an annual turnover under $50 million (based on your previous year);
2. Your business must employ workers; and
3. Your business must have been an active employer since 12 March 2020.

These applications should be completed and submitted as soon as possible to guarantee your eligibility by 28 April 2020.

For assistance in completing these applications please consult your accountant or the Government website for more information.

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

Uther Webster & Evans can provide you with advice and assist you with your commercial and personal affairs call or email us to discuss.

Written by Kyle Rowston-Wolcott.

Up to $1,500 per fortnight (before tax) for eligible employees…

The Government will pay eligible employers a subsidy that will guarantee a minimum income for every eligible employee. This subsidy is unaffected by the employee’s previous wage and provides employers with a payment that can be directly passed to the employee or used to offset the cost of their wages for a maximum period of 6 months from 30 March 2020.

What about superannuation?

Superannuation is not included in this payment, though employers must still pay superannuation guarantees for current wages. They are not required to pay superannuation for any amount of the subsidy that would exceed the employee’s wages but can do so if they wish.

For example, if an employer currently pays its employee $1000 per fortnight and receives the JobKeeper payment, they must pay the current wage ($1000) plus the superannuation guarantee as well as an additional $500 (with an optional superannuation payment) to maintain the minimum income of $1500 required. Here the JobKeeper payment will offset all employee costs apart from the superannuation guarantee required for the original wage.

Who is an eligible employee?

Australian Citizens, Permanent Residents, Protected Special Category Visa Holders and non-protected Special Category Visa Holders.

All full-time and part-time employees (including those stood down and re-hired) as well as casual employees that have been with their employer for at least 12 months.

Note: to be eligible an employee must have had an employment relationship with the eligible employer as at 1 March 2020. If you are currently receiving JobSeeker payments at the moment, this may affect the employment relationship and prevent you from seeking the JobKeeper payment.

Business conditions for eligible employers…

Your business must not be subject to a Major Bank Levy; and

If your business has a turnover of less than $1 billion, you must demonstrate that your turnover will be reduced by more than 30 per cent relative to a comparable period (of at least one month) last year; or

If your business has a turnover of more than $1 billion, you must demonstrate that your turnover will be reduced by more than 50 per cent relative to a comparable period (of at least one month) last year.

Self-employed or Non-Profit?

If your business meets the above criteria and turnover tests, you will still be eligible to apply.

How to apply as an employee…

Most employees will not need to do anything more than receive a notification from their employer

However, the following employees will have additional tasks:

1. Employees that have multiple employers must notify the employer that is their primary employer.
2. Employees that are not Australian citizens must notify their employer of their visa status, to allow their employer to determine if they are an eligible employee.
3. Employees that are currently in receipt of an income support payment must notify Services Australia of their new income.

How to apply as an employer…

At the time of writing, the ATO has yet to create an application portal, however, interested businesses may register their interest and receive updates from the ATO here.

Once applications open, employers will need to:

1. Identify eligible employees for the JobKeeper Payments and provide monthy updates to the ATO;
2. Provide information on previous turnover for a period of no less than one month during the previous year; and

Notify employees if and when the JobKeeper Payment has been approved

For assistance in completing these applications please consult your accountant or the ATO fact sheet for more information.

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

Uther Webster & Evans can provide you with advice and assist you with your commercial and personal affairs call or email us to discuss.

Written by Kyle Rowston-Wolcott.

The temporary changes made by the Government will delay winding up proceedings based upon any new statutory demands for 6 months.

For the next 6 months…

The required minimum amount to issue a statutory demand for corporate debt has been increased from $2,000 to $20,000;

The time to respond to a statutory demand has increased from 21 days to 6 months.

This Means…

If another company owes you or your company money, your claim must be at least $20,000 to issue a statutory demand and your company may have to wait up to 6 months for a response before you can file an application to wind up the company.

To Issue a Statutory Demand…

1. Your claim must be undisputed and have a minimum value of $20,000
2. You must sign and complete the mandatory Form 509H as well as an accompanying Affidavit; and
3. You must allow the debtor at least 6 months to respond to your statutory demand.

If a company fails to respond to a statutory demand within the 6-month period it will be deemed insolvent, and the creditor may apply for the appointment of a liquidator.

Given the likely increase in court proceedings following this 6-month period, it is essential to file your claims as soon as possible to pursue any outstanding debts to avoid delays when the crisis is over.

Further, if you receive a demand, don’t wait until the last moment or ignore it. If you do, you may find your company the subject of winding up proceedings.

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

Uther Webster & Evans can provide you with advice and assist you with your commercial and personal affairs call or email us to discuss.

Written by Kyle Rowston-Wolcott.

The temporary changes made by the Government will effectively extend protection from unsecured creditors to 6 months for voluntary insolvency and temporarily suspend the duty for Director’s to prevent insolvent trading (see conditions below).

For the next 6 months…

There will be no liability for Directors trading in the ordinary course of business while insolvent.

Directors’ Liability for Insolvent Trading?

There will be no personal liability if directors continue to trade for the next 6 months while insolvent, so long as they continue to trade in the ordinary course of business. This means that you can continue to operate your business despite being unable to pay your debts.

For Directors to benefit from this temporary measure,

1. The debt must be necessary to allow the business to continue during the six-month period (eg, this includes debts to pay employees and even improvements to allow your business to continue online);
2. The debt has been incurred during the six-month period; and
3. The debt is incurred before an administrator or liquidator is appointed during the period.

Please note:

• Once this temporary 6-month respond period has passed your creditors may begin to wind up your company if you are deemed insolvent.
• A failure to respond to a statutory demand will create a presumption of insolvency.
• In addition, any dishonest or fraudulent acts in relation to insolvent trading will not be exempt from liability.

If you are a Director then it is still important to seek legal advice first before considering insolvent trading as you may not be eligible for the above temporary benefits.

If you are considering insolvency, it is also important to seek legal advice to ensure that you have fully considered all the options available to you, especially in light of the Government’s temporary measures.

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

There are several strategies that can take advantage of these new laws and help extend the continuation of your business during these times.

Uther Webster & Evans can provide you with advice and assist you with your commercial and personal affairs.

Written by Christian McMahon, Solicitor

RPS v R [2000] 199 CLR 620

This is a High Court case where Uther Webster & Evans’ very own Vivian Evans represented the Appellant to successfully appeal the former decision of the NSW Supreme Court of Criminal Appeal.

The case primarily concerned itself with the giving of evidence and the Silence of the Accused (commonly referred to as an accused’s “right to silence”) and directions from the Judge given to the Jury concerning such a right. It clarified circumstances when a jury may take account of an accused’s failure to give evidence.

There were five particular disputed comments given by the Trial Judge to the Jury which became the determinative issue of these proceedings.

1. Firstly, the judge told the jury that the appellant’s decision not to contradict evidence given by the complainant was said to be a partial admission and that it could be taken into account by the jury in “judging the value of or the weight of” the prosecution’s evidence.
2. Secondly, the judge told the jury that in absence of denial or contradiction of the evidence given they could “more readily” accept that evidence.
3. Thirdly, the judge instructed the jury that it may be reasonable in the circumstance for the jury to conclude that the absence of any evidence of the accused to contradict or deny the evidence given by the complainant could lead them more readily to accept the prosecution’s evidence.
4. Fourthly, the Judge said the appellant’s decision not to give evidence could allow the jury to feel more confident in relying on the evidence given by the prosecution.
5. Finally, the judge said that the absence of evidence from the accused meant that the version of events put in cross-examination of the witnesses for the prosecution was not supported by evidence.

Consideration of the trial Judge’s above directions about the absence of evidence from the accused was analysed with respect to s20 of the Evidence Act 1995 (NSW). That section provides:

“The Judge or any party (other than the prosecutor) may comment on a failure of the defendant to give evidence. However, unless the comment is made by another defendant in the proceeding, the comment must not suggest that the defendant failed to give evidence because the defendant was, or believed that he or she was, guilty of the offence.”

The respondent crown argued that the trial judges directions were no more than a “comment” with no such suggestion of the accused’s guilt.

It was held that the comments given by the trial judge contravened s 20(2) of the Evidence Act 1995 because they suggested that the appellant failed to give evidence because he believed that he was guilty of at least some of the offences concerned. It was wrong to say that the accused’s decision could allow the jury to feel more confident in relying on the prosecution evidence.

Furthermore, the High Court held that the disputed comments should not have formed part of the judicial commentary given in this case due to the accused’s “right to silence”.

This case helped clarify the scope of the power conferred on the Judge to give directions and ‘comments’ to a jury, by reason of S20 of the Evidence Act 1995 (NSW).

This case also led to the recent changes in the Law of the Right to Silence as a result of the Evidence Amendment (Evidence of Silence) Act 2013.