A common document that many people put in place when completing their estate planning is a Power of Attorney. This allows another person to make financial and legal decisions on behalf of that person.
A person’s financial affairs can be quite intricate and the person who is acting as the Attorney can sometimes be required to make some complicated decisions.
Specifically, the Attorney can be put into a difficult position when the person they are acting for has significant expenses, but there is not enough money to pay for them. The Attorney does not have much of a choice other than to sell some of the person’s assets.
This is quite common when a person becomes elderly or their care needs increase.
In order to pay for care facilities, many people will have to sell some of their assets, such as property, to be able to afford the entry payments.
An Attorney generally also has the power to sell these assets on behalf of another person, but what if by doing so, they are effectively stripping a third-party of their benefit under that person’s Will?
S22 of the Power of Attorney Act 2003 deals with this very issue.
When a Power of Attorney, which has been drafted in accordance with this legislation, sells an asset that has been gifted to a third party under a Will, the Estate of that person will be obligated to account for this, by way of Ademption. This is a fancy way of saying that the Beneficiary, who was disadvantaged by the Attorney’s actions, will receive a cash payment of the net proceeds of sale (or whatever is left over) out of the Estate, before the rest of the estate is distributed.
So even if a person’s gift is sold by an Attorney, they will be compensated for the value of that asset, so far as possible.
If you have questions about Attorney’s duties or more generally Estates contact Everingham Solomons because Helping You is Our Business.
From 1 January 2021, businesses dealing with consumers in New South Wales (NSW) are liable to penalties if they do not disclose to consumers:
terms of contracts that substantially prejudice the interests of the consumer;
if the business receives a commission or referral fee when recommending the consumer buys goods or services from another supplier.
The legislation applies to businesses (companies and individuals) whether located inside NSW or not that are dealing with “consumers” in NSW.
Disclosure of substantially prejudicial terms
Businesses caught by the new law must take reasonable steps to make customers aware of the substance and effect of terms that may ‘substantially prejudice’ the interests of consumers.
Currently there is no clear provision defining what constitutes a substantially prejudicial term.
Disclosure of substantially prejudicial terms must be made before supplying the goods or services. For example, before the consumer signs the contract or makes a payment.
Disclosure of commission or referral arrangement
Where a business acts as an intermediary receiving a financial incentive from another supplier, it must take reasonable steps to make customers aware of any commission or referral arrangements with another supplier when recommending goods or services provided by that supplier.
Disclosure must be made before acting under such commission or referral arrangement. For example, before the consumer is redirected from the intermediary to the supplier or before the consumer makes the purchase.
What constitutes “reasonable steps”?
There is no guidance in the legislation as to what constitutes “reasonable steps”. According to the NSW Department of Fair Trading, “reasonable steps” means taking actions that “one would reasonably expect would create awareness in a consumer” and should be:
appropriate in the circumstances; and
sufficient to create awareness in the consumer.
What businesses need to do if they supply goods or services to NSW consumers
If your business supplies goods or services to NSW consumers, you should:
Step 1 Identify any terms which might “substantially prejudice” the interests of a consumer.
Step 2 Consider what “reasonable steps” you need to take to alert consumers of these terms before supplying the consumer with the relevant goods or services.
Step 3 Take those reasonable steps.
In light of the lack of guidance in the legislation, steps 1 and 2 will very much depend on the nature of your business and how you supply your goods and services.
The fines for breaching this law are substantial – up to $110,000 for corporations and $22,000 for individuals so don’t take the risk. We are here to help.
If you need assistance in reviewing your terms and conditions of supply, please contact Everingham Solomons because Helping You is Our Business.
After your funeral and your family has had time to process the loss of a loved one, it is necessary for the executor to deal with the deceased’s assets and liabilities.
As land is involved and a Will was made, Probate will need to be obtained. This is a document issued by the Supreme Court acknowledging the validity of the deceased’s Will and authorizes the executor/s to administer the Estate.
If a Will was not left, the next of kin of the deceased will need to apply for Letters of Administration. This is a document issued by the Supreme Court authorizing the next of kin (known as the “Administrator”) to administer the Estate according to intestacy rules.
The executor needs to contact the Bank to advise of the death and provide certified copies of the Death Certificate and Probate in due course.
There are three ways you can hold land in NSW and transfer the land.
They are:-
Sole Owner
The deceased holds land only in their name. The land will be dealt with as part of the deceased’s Estate. Subject to the deceased’s Will, the land may be sold or left to a beneficiary. If left to a beneficiary, a new loan needs to be prepared. Written consent from the Bank needs to be obtained prior to the land being transmitted to the beneficiary. A Transmission Application form is required to be lodged with NSW Land Registry Services through the electronic conveyancing platform called PEXA.
Joint tenant
The deceased and another person holds the land as joint tenants. This is the most common way married or de facto couples own land. Whilst each person holds an individual interest in the land, when one person dies, the legal concept of “survivorship” takes place. That is, the interest of the deceased person will automatically pass to the surviving joint tenant. The land does not form part of the deceased’s Estate. The surviving joint tenant needs to speak to the Bank about continuing on the mortgage payments and the Bank needs to provide their consent prior to the lodgement of a Notice of Death form to NSW Land Registry Services by PEXA.
Tenants in Common
The deceased and another person are co-owners of the same land holding as tenants in common in equal shares or hold an unequal share, for example 80/20. When a person dies their individual share in the land does not automatically pass to the other surviving owners. Instead, the deceased person’s share in the land will form part of their Estate and be distributed in accordance to their Will or if they did not leave a Will, by the laws of intestacy. If the land is not to be sold but instead to be transmitted to a beneficiary, the beneficiary needs to prepare new mortgage documents. A Bank’s written consent needs to be provided prior to lodgement of Transmission application to NSW Land Registry Services by PEXA.
At Everingham Solomons, we have the expertise to assist you with all legal matters regarding your land, because Helping You is Our Business.
Click here for more information on Suzanne Hindmarsh.
A Power of Attorney (POA) and Appointment of Enduring Guardian (AEG) are documents that allow you to appoint another person to make major decisions on your behalf, usually when you do not have capacity to make such decisions yourself.
While these are very useful and practical documents to have, many people do not have a POA or AEG. So what happens if a family member or someone you know loses capacity to make decisions in their own best interests without having a POA and AEG in place?
For small decisions it is usually fine for close family members or carers to act informally on behalf of the person that does not have capacity. However, they do not have authority act on that person’s behalf to make major decisions; such as if they needed to sell their house or dispose of other assets, make decisions in relation to the medical treatment that person receives or give consent for them to be cared for in an institution.
In order to legally make decisions on behalf of someone that does not have capacity and does not have a POA or AEG you must make an application to the NSW Civil and Administrative Tribunal (NCAT).
An application for a Financial Management Order is required when you need to make financial or legal decisions on behalf of someone else and an application for a Guardianship Order is required to make medical and lifestyle decisions.
These applications require you to provide information about yourself, the person you are making the application for and any other family member or persons who may be affected if the orders are granted. You will also be required to provide details of why you are making the application and evidence that the person you are making the application on behalf of, no longer has capacity to make decisions in their own best interests.
Once the application has been received by NCAT you will receive a hearing date. Usually, both the person or people making the application and the person whom the application is made for are required to attend the hearing. At the hearing, the application will be considered and the Tribunal Members will want to hear evidence from the person making the application as well as any other significant person, which may include family members or treating doctors of the person that no longer has capacity.
This will allow the Tribunal to decide if the desired order should be made, and if so, who the best person or people are to grant the order to. Simply submitting the application to NACT does not guarantee that such an order will be made in your favour to make decisions on behalf of the person who does not have capacity.
If you need assistance or advice regarding Financial Management Orders or Guardianship Orders or wish to submit an application to the NCAT office in Tamworth, contact a solicitor at Everingham Solomons because Helping You is Our Business.
In my previous column published 27 November 2021, we reviewed the law regarding traveling overseas with or removing a child from Australia, when the child is a subject to family law proceedings.
In summary, Section 65Y of the Family Law Act 1975, prohibits the removal of a child unless it is done with the consent of both parties, or by Court Order.
Doing so is a contravention of certain provisions the Family Law Act, and may be looked upon as a criminal offense. The penalty may be up to three years imprisonment.
With the Covid-19 pandemic, which forced a moratorium on international travel, largely ending the opportunity for a parent involved in family law proceedings to unilaterally abscond with a child to proceedings, the recent resumption of international travel has once again opened the door.
We now turn to the remedies available to prevent this situation occurring, and in contrast to the words of 1980’s rockband Starship, something can stop them now.
If a party to a family law proceeding is concerned that the other party is planning to unlawfully remove a child from the country, the Federal Circuit and Family Court of Australia informs us there are three immediate remedies which can be sought to prevent this occurring:
Prevent the issuing of a passport to the child. This is done by Application to the Court for a ‘child alert order’ which warns the Department of Foreign Affairs to prevent issuing a passport. It remains in place for either 12 months, until the child turns 18, or a Court orders otherwise.
Delivery of passport to the Court. In circumstances where a passport has already been issued, a party may present the child’s passport to the Court and the Court will make orders to keep it for a specified amount of time.
Court Order. The Court may make orders which restrain the child from being taken overseas, request the Australian Federal Police put the child on an Airport Watch List, or request the Australian Federal Police assist in enforcing the aforementioned orders.
In certain circumstances however, the horse may have bolted and a party, whether they are an Australian citizen or an international, may have taken the child overseas before any of the above injunctive restraints could be implemented to prevent it.
Matters involving the retrieval of a child from another country are often referred to as ‘Hague Convention Cases’, named for the governing legislation (and somewhat wordy) 1980 Hague Convention on the Civil Aspects of International Child Abduction, to which Australia is a signatory. Part three of this gripping series will discuss how family law practitioners may engage with international law to bring a child to family law proceedings back to Australia.
For advice and assistance on all matters associated with Family Law disputes, contact Everingham Solomons where Helping You is Our Business.
The wheels of justice will continue to turn with the help of one Tamworth teenager.
Despite online learning and COVID-19 disruptions, Oxley High School graduate Isabella Clapham’s outstanding year 12 results were recognised with the Sir Adrian Solomons Memorial Law Bursary from Everingham Solomons Solicitors on Friday, as she embarks on a law and commerce degree at the University of Newcastle.
Ms Clapham said she was thrilled to receive the bursary, which provides her with a paid clerkship at the firm and $1,500 to assist with her relocation and study needs.
“I know heaps of people at law school who are very jealous because they all want that work experience, and it’s a really good law firm so I’m really excited,” Ms Clapham said.
While she’s yet to decide what area of law she wants to go into, Ms Clapham is hoping the work experience gives her a taste of all her options.
Director at Everingham Solomons, George Hoddle, said the work experience would help Ms Clapham stand out from the crowd.
“The practice of law is very different from the study of law,” Mr Hoddle said.
“So knowing that they have practical exposure holds them in good stead.
Each year the bursary is awarded to a local student with the hope they’ll return to Tamworth to help service the region.
Deputy principal at Oxley High School Mark Baldwin said he wasn’t surprised by Ms Clapham’s achievements given her work ethic.
“She’s the classic example of what we try and say to students,” Mr Baldwin said.
“If you put in the hard yards, it’s a long process, but in the end you’ll get the reward.”
Article published in The Northern Daily Leader, 26 February 2022
This is an often asked question by Purchasers and Real Estate Agents. Typically, someone will have bought a property at auction in their own name or for an off the plan development and then decide they want to buy the property in the name of their spouse or some other entity like their Superannuation Fund.
The decision to change names often happens after the purchaser has discussed the purchase with their accountant and/or solicitor and considered things like asset planning, funding and asset protection.
Most people seem to think they can simply change the “purchaser’s name” on the contract by inserting the words “or nominee” on the contract.
That process in most cases will not work and will result in you paying double Stamp Duty.
In New South Wales the name on the Contract needs to be the same name on the Transfer. On a $1 million purchase price the Stamp Duty payable is over $40,000.00.
If the purchaser on the Transfer document is different from the Contract, then the Transfer will be treated as a sub-sale, resulting in a second or additional Stamp Duty amount of over $40,000.00 being payable, (total of $80k plus).
There is a limited exemption set out in the Duties Act that allows the ultimate purchaser to be a different person from the purchaser in the Contract, so long as they are “related persons” as defined.
A related person includes a spouse, parent and child. It can also be a private company where the person is a director or majority shareholder of that company. It can also be a Trust where the natural person is a beneficiary of the Trust. There is a catch. For that section of the Duties Act to apply, the ultimate purchaser must have been in existence when the Contract was entered into. You cannot form the Company or Trust after the date of the first Contract.
If the “related person” exemption is not available, then your only real alternative is to persuade the seller to rescind the original Contract by agreement and enter into a new Contract.
There is no obligation on the seller to do this and if they do, undoubtedly you will end up paying the sellers legal costs of the rescission of the initial Contract and the preparation and exchange of the new Contract.
The best option is to seek appropriate advice as to the purchasing entity, prior to buying and entering into the Contract in the correct name from the beginning.
Our property team at Everingham Solomons can assist you with all your property related matters, because Helping You is Our Business.
Up to the late middle ages, business was pretty steady – one family owned a cow, another some cabbages, there was mutual jealousy and so they swapped. In time, money was used to facilitate more complex exchanges but, all in all, relatively few people were involved and there wasn’t a huge need for capital.
Around the 1600s though, people started exploring the world. Trade followed exploration and trade was very profitable so naturally the great families of the era liked to keep it to themselves. Notwithstanding, there were two major problems:
firstly, intercontinental explorers were thin on the ground and trade required the wealthy to give some brash upstart a great deal of money and send him to some remote corner of the globe; and
secondly, trade exploration required tonnes of capital, and given the risks, often more capital than one family was willing to contribute on their own, so there was a need for joint investment from unrelated parties.
A system was needed to record who was trustworthy and who had whose money and because everyone knew they could trust their King, the monarch assumed the right to allow these early joint stock companies to operate.
One of the earlier companies to receive a Royal Charter was the British East India Company. Regrettably, it developed a reputation for oppressing and pillaging India over a few centuries, so they changed their name to the Honourable East India Company and, obviously, that cleared things right up.
Through the colonial period, trade increased Gross Domestic Products which even royal families saw as a good thing, so seizing the opportunity to do less and get more, the regulation of companies was lowered and stock certificates came to be traded amongst progressively more common people.
The industrial revolution increased business size and technicality to unprecedented levels and the essential problems were heightened:
investors didn’t have the foggiest understanding of Carnegie’s Steel or Rockefeller’s oil, and while they didn’t like these risks, they didn’t want to forgo their profits either; and
companies had become so big, that they required continual diversified funding from a large number of investors to continue expansion and operation.
Thus emerged the concept of limited liability. To get people to invest it was necessary to create a law that separated the shareholders from the company itself, and limited their liability for the company’s risks up to the amount they had paid for the share capital.
That remains the essence of a limited liability company today and explains why a right to sue a company does not include a right to sue its directors or shareholders. Without the rule, which sometimes seems harsh, our economy could not have developed as it has.
If you have any commercial law enquiries, contact Everingham Solomons because Helping You is Our Business.
Psychological injuries as a result of work are significant workers compensation claims, however there is a potential defence for employers to prevent psychological claims.
The Workers Compensation Act 1987 states at section 11A, “No compensation is payable under this Act in respect of an injury that is a psychological injury if the injury was wholly or predominantly caused by reasonable action taken or proposed to be taken by or on behalf of the employer with respect to transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal of workers or provision of employment benefits to workers.”
There are three main elements of the test. Firstly, that the injury was wholly and predominantly caused by work. Therefore, if there were other extenuating circumstances, which may have been the cause of the injury, then the injured worker is not successful with passing this test.
Secondly, whether the actions fall under a transfer, demotion, promotion, performance appraisal, discipline, retrenchment or dismissal.
Thirdly, what is considered reasonable action by the employer will depend on the facts of the case. For example in the case of Northern New South Wales Local Health Network v Heggie [2013] NSWCA 255 it was noted that when considering what is reasonable, the employer is not required to consider everything; they are only required to consider the facts that are known to the employer at the time or could be known with reasonable diligent inquiries.
In the case of Green v Secretary, Department of Regional NSW [2021] NSWPIC 37, Member Snell reviewed each element of the test and while she found the first two elements were satisfied, the third element of reasonableness was not. The employer failed to reassure the worker’s concerns in relation to a transfer and therefore the employer’s actions were not reasonable.
If you have suffered a psychological injury as a result of work and the insurer has denied the claim based on section 11A, or you are an employer with an employee that has suffered a psychological injury, please contact our office to speak with one of our IRO approved solicitors because Helping You is Our Business.
Click here for more information on Libby Campbell.
Whilst the role of executor of a will cannot be forced upon a person, the role if accepted, means the executor “owes a fiduciary duty to the estate in exercise of each of the duties of an executor”. If an executor prefers his or her own personal interests to those of executor and intends to neglect his or her executorial duties, they can be removed from the office of executor and stripped of power as a recent case illustrates.
The deceased died in 2019 survived by three (3) adult children Scott, Marla and Donna. By her will, the deceased appointed Scott as executor and left shares in a company to Scott and the rest of her estate to a discretionary Trust. The beneficiaries of the Trust included Scott, Marla and Donna. The effect of the will was to transfer the estate either to Scott or to the Trust for which Scott controlled the Trustee. Donna and Marla, having effectively been excluded from the estate, commenced family provision proceedings.
About 17 months before the deceased died, the deceased entered into what the Court described as a ‘series of extraordinary documents’ which had no commercial purpose but were designed only to avoid the existence of a fund upon which a family provision application could be made.
Of significance was a conversation that took place between Scott and Marla in 2019. The Court noted “The recorded conversation shows a deep-seated animosity of Scott towards Donna. In my view, in the recorded conversation, Scott reveals his intention to access the estate’s funds to fight any claim knowing that Donna will have to fund any legal fees herself. There is a plan stated by him to run her out of money”.
Probate of the deceased’s will was granted to Scott in early 2020.
Donna made an application to remove Scott as executor and revoke the grant of probate.
The Court noted “The starting point is that the choice of an executor is that of the testator and that choice ought to be honoured unless there is some good reason why the chosen executor ought not continue to administer the estate”. “Here, the applicant has made out an overwhelming case for the removal of the executor”. The transactions that took place 17 months before death “were designed… to defeat any family provision application by Donna and Marla. Scott has a clear interest in defending the inter vivos transactions. Therefore, a central question is whether that circumstance is likely to lead Scott to prefer his own interests to the due administration of the estate”.
The Court held “The proper administration of the estate will be frustrated by Scott continuing as executor. An executor should be appointed who will objectively consider the issues facing the estate”. Accordingly, the grant of probate to Scott was revoked and Scott was removed as executor of the will.
Whether you are an executor of a will, or wishing to make or update your own will, we have the expertise and experience to assist you because Helping You is Our Business.
Click here for more information on Lesley McDonnell
A common document that many people put in place when completing their estate planning is a Power of Attorney. This allows another person to make financial and legal decisions on behalf of that person.
From 1 January 2021, businesses dealing with consumers in New South Wales (NSW) are liable to penalties if they do not disclose to consumers:
After your funeral and your family has had time to process the loss of a loved one, it is necessary for the executor to deal with the deceased’s assets and liabilities.
A Power of Attorney (POA) and Appointment of Enduring Guardian (AEG) are documents that allow you to appoint another person to make major decisions on your behalf, usually when you do not have capacity to make such decisions yourself.
In my previous column published 27 November 2021, we reviewed the law regarding traveling overseas with or removing a child from Australia, when the child is a subject to family law proceedings.
The wheels of justice will continue to turn with the help of one Tamworth teenager.
This is an often asked question by Purchasers and Real Estate Agents. Typically, someone will have bought a property at auction in their own name or for an off the plan development and then decide they want to buy the property in the name of their spouse or some other entity like their Superannuation Fund.
Up to the late middle ages, business was pretty steady – one family owned a cow, another some cabbages, there was mutual jealousy and so they swapped. In time, money was used to facilitate more complex exchanges but, all in all, relatively few people were involved and there wasn’t a huge need for capital.
Psychological injuries as a result of work are significant workers compensation claims, however there is a potential defence for employers to prevent psychological claims.
Whilst the role of executor of a will cannot be forced upon a person, the role if accepted, means the executor “owes a fiduciary duty to the estate in exercise of each of the duties of an executor”. If an executor prefers his or her own personal interests to those of executor and intends to neglect his or her executorial duties, they can be removed from the office of executor and stripped of power as a recent case illustrates.