ByLawyers News and Updates

Practice management – superannuation

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FROM 1 JULY 2017 Concessional Contributions Cap for superannuation reduced to $25,000 for all ages. Before-tax contributions include compulsory employer contributions and salary sacrifice arrangements. Contributions greater than $25,000 from before-tax income may mean payment of extra tax.

Music copyright

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Following a recent mentor question the Sale & Purchase of Business commentary in all states was updated to discuss the licensing requirements  for business owners when playing background music in their businesses. Amendments were also made to the Retainer Instructions in each state.

Plain concord – Clarity’s ten commandments

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Plain language – A paper by the Hon. Michael Kirby AC CMG*

OPENING LAWYERS’ MINDS TO PLAIN LANGUAGE

It is not always easy for lawyers to write and speak plain language. For many of us, we need to be rescued from our “heretofores”, “whereas” and “party of the first part”. Desirably, the process has to start early in our lives. We have to learn in our childhood the beauty and elegance of simple expression. By the time we get to law school (and certainly when we ascend to a judicial bench or the professorial seat) it may be too late.

In my upbringing, I was fortunate in the choice of my parents. Both of them had great comprehension and verbal skills which they deployed and communicated to their children. My father was, and is, a fine storyteller. From him, I learned the importance of clear speaking. And from my mother, clear writing. And it was copperplate in those days.

Learning how to tell a story is quite important for communication in life. For a life in the law, it is essential. Every case that comes before a court is a story of sorts. Our bookshelves are full of the human tales of greed, lust, envy, cruelty and love. The greatest of judges have a gift in telling the law’s stories in a brilliant way. Lord Denning was probably the greatest legal story teller in my lifetime. Who else would start a judicial opinion with the immortal words: “It was bluebell time in Kent”?

Learning the great classics of the English language is also important for plain expression. In my day, people like me learned from the King James Bible and The Book of Common Prayer. The beauty of Thomas Cranmer’s language in the latter has always stayed with me. My partner tells me that he is fed up with hearing me declaim its words in the bathroom.

I grew up in Concord, then a western suburb of Sydney. Now, it is fashionably “inner west”. As an infant, I attended St. Andrew’s Anglican Church just across Parramatta Road in Strathfield. Actually, I would often pretend that I lived in ‘Strathfield’, because it was a far more fashionable suburb than Concord. However, every Sunday, I would learn from the second Collect, for Peace that Concord had a special place in God’s love1:

“Oh God, who art the author of peace and lover of concord. Whose service is perfect freedom. Defend us … in the same through thy mighty power. That we, surely trusting in thy defence, may not fear the power of any adversary. Through the might of Jesus Christ Our Lord. Amen.”

The beauty and simplicity of this language burst into my brain like rays of sunlight. It is still there. Sixty years later, I still search for this capacity of plain speaking. And it was always comforting to know that the Almighty is paying particular attention to us who came from Concord.

My training in the law was fairly orthodox, except for the instruction I received in jurisprudence and in interna­tional law from Professor Julius Stone. It was he who taught the law students at the University of Sydney Law School in the 1950s, about the judicial choices that exist; about the considerations of principle and policy that influence their outcomes; and about the duty of judges and other lawyers to be transparent about such considerations. And to explain them simply so that all citizens would understand2.

My most specific instruction in plain language, however, came after university. It was as well that it did. For in those days, even more than today, there was little or no instruction at university in plain speaking, drafting and writing. Nevertheless, it was a fine university scholar, who gave me the instruction.

I refer to Professor David St. L. Kelly. He was the first full-time Commissioner of the Australian Law Reform Commission. In 1975 I had taken up appointment at the inaugural Chairman of that Commission (as the office was then called). David Kelly was the first full-time Commissioner, apart from myself. He came to us from Adelaide. Like an Old Testament prophet, he was constantly full of fire and brimstone.

David Kelly taught me two very important lessons that have stuck with me throughout my career as an appellate judge. The first was the importance of conceptual thinking. The defect of the common law is that it tends to stumble from case to case. It is a highly pragmatic system. But it often lacks concepts and readily discernible principles. David Kelly taught me, in law reform, to search for those principles. That search continued throughout my judicial life.

His second lesson was about the importance of plain language. I do not know whether he had a deep knowledge of that subject before he came to the Law Reform Commission. However, he was soon put in charge of two projects, each of which attracted his interest to plain language. The first was a project on debt recovery3. Because we were dealing with often disadvantaged people, complex forms and contracts were commonly a source of legal and other problems for them. The need for clear expression in legal documents was specially apparent.

It became more so in the project to reform the law of insurance contracts. The report on that subject analysed hundreds of such contracts. It concluded that there was a need for clearer expression, for standard plain language contracts, and for fairer principles of law4.

In the course of undertaking these projects, David Kelly made contact with a legal scholar in the United States, Professor Vernon Countryman. He was an early expert in the “plain English” movement, as it was then described. I remember a lengthy telephone consulta­tion with him, in the United States, when Professor Countryman elaborated the fairly simple rules that could be followed in expressing legal concepts and docu­ments in clearer language. By the time my service in the Law Reform Commission concluded in 1984, I was a convert.

It was at about this time that two great Australian scholars entered the field of plain expression. I refer to Professor Robert Eagleson and Professor Peter Butt. The former was not a lawyer at all, being an expert in linguistics. The latter was one of the finest lawyers in the land. His chosen area of discipline has been land law. This is not a topic for the faint-hearted. He threw himself into dialogue with Robert Eagleson. Between them, they initiated the plain movement in Australia. They link us to the world Clarity movement. They are doyens of plain language in this country. Rightly, they are honoured for their outstanding contributions, devotion and persistence.

I am here to honour such brilliant Australian scholars. But also the scholars from other lands who are joined in this common enterprise.

There are, of course, limits on the extent to which we should change too quickly established ways of doing things, and saying things in the law. Some legal expressions in the Latin language, for example, are still commonly used. Yet, because very few students, and thus lawyers, now study Latin at school, a switch to English language equivalents is essential. My one-man campaign during my service on the High Court, to get my colleagues to drop “lex loci delicti” failed5. However, the time will come when even Australian judges will substitute the simple English words: “the law of the place of the wrong”. What is so hard about that? Perhaps the answer is that those who conceive of themselves as members of an expert priestly caste, prefer a dead language because it conveys the mystery of technicality. English, after all, is a very mixed up tongue. And clients may be more willing to pay more for Latin.

Complex ideas are sometimes inescap­able in law. Taxation legislation and statutes of limitations are prime examples of complexity. Yet simpler expressions can often be secured by analysing more closely the concepts that are at stake. It was not a coincidence that David Kelly’s legal obsessions were conceptualisation and plain expression. The two are intimately connected.

PLAIN STORIES FROM MY PAST

The earliest contribution of mine to this subject dates from March 1982, when I was under the spell of David Kelly. In an address to a luncheon of the Constitutional Association of Australia, I described “the monumental task of simplifying the law”6. The reference was to the statutory obligation of the Australian Law Reform Commission to “reform, modernise and simplify” federal laws. Not long after, in another speech to the Australia Britain Society at the Plain English-speaking Awards at the Sydney Opera House in August 1993, I gave an aria on “Plain English and the Power of a Wink and a Sniff”7 . The reference in the title was to the capacity to communicate in many ways, including by body move­ments and facial expressions8. Yet most legal communication is made in words and hence the attention paid to them.

Rummaging through speeches I have given over the past thirty years, I found a number on plain writing of the law. The earliest was on “Plain Legal Language”, attributing wisdom to Professor John Lindsey, another American expert on the topic. This was given in 19909.

In July 1998, I gave a talk, later published, on “Speaking to the Modern Jury – New Challenges for Judges and Advocates”10. I explained that the jury of the 1990s was more than likely made up with a sprinkling of jurors from Generation X. Now, jurors from Generation Y and later generations have joined their ranks. The different capacities and inclinations of those raised on electronic communica­tions, to listen to a talking head for hours, obviously affects the way in which judges and advocates must today speak to such a group of individuals.

In 2006, I undertook an interview by Kathryn O’Brien on judicial attitudes to plain language and the law11. I had to confess to her the element of resistance to plain language in judicial ranks. Not to put too fine a point on it, some judges are positively hostile to the endeavours of the plain language movement to support clearer statutory expression and simpler judicial communication. My interrogation followed the publication in 2006 of my very favourable review of the excellent book by Professor Joe Kimble, Lifting the Fog of Legalese12.

These and other efforts on my part show, at the very least, a longstanding commitment to the plain movement. For this, I have been rewarded with appointment as a patron of Clarity, the global body committed to simpler and clearer expression in legal language.

It is not all that difficult to improve the simplicity of legal expression. Long ago, Professor Kimble gave a number of very simple rules that all of us can follow. During my judicial years, I certainly tried:

  • Complex statements of facts and law should begin with a summary to let the reader know where he or she will be travelling;
  • Short sentences and shorter words should replace long;
  • The passive voice should generally be banished and replaced with active voice. This assumes that lawyers of today have learned what „active‟ and „passive‟ voice means. But it can be explained.
  • Words of connection should be at the beginning of sentences. Words of emphasis should generally be at the end.
  • Where there is a choice, the shorter word (ordinarily from a Germanic root) should be preferred to the longer word (ordinarily from the French language of the Norman Conqueror);
  • Sexist and obviously ambiguous language should be removed;
  • Vagueness is sometimes necessary in legal drafting. However, ambiguity should generally be tackled head on;
  • Those old potboilers “whereas”, “hereinunder”, “cognisant”, “requisite” should be deleted;
  • Lay out is a technique of communica­tion that matters. It can assist human understanding. As can headings and sub-headings; and
  • In legal texts that will cross borders, it will generally be necessary to be especially careful in the use of words. Mr. Keating found this when he used the word “recalcitrant” in describing the attitudes of the then Prime Minister of Malaysia. Seemingly, the word had a more pejorative meaning in Malay than in the English language.

If we all observed these simple rules in our legal communications, how much clearer would our voices be. One of the reasons why students feel attracted to my reasons in the High Court of Australia, they tell me, is that I followed the Kimble commandments. I also used layout and white space to take the eye through the reasons. Even so great a judge as Sir Owen Dixon sometimes wrote in uninterrupted prose. Just take a look at the reasons published in the Communist Party case13. Great prose. But frequently obscure and hard to keep in one’s mind. Likewise, the use of graphs and tables and other means of communication, photographs, charts and maps can often improve the clarity of judicial, statutory and other expressions14.

These are not hard rules to follow. They should be taught to every law student. But are they taught? The answer is a resounding no. Are they embraced by the judiciary of this country? The answer is, not wholly. I find it significant that no judge in the entire hierarchy of the judicature of Australia has attended this conference. But I am here. And will continue to support the endeavours of David Kelly, Robert Eagleson, Peter Butt, David Sless and all of you present. Clarity International could strike a blow for plain expression by propounding the foregoing Ten Clarity Commandments. If they alone were observed by increasing numbers of lawyers worldwide, the result would be a marked improvement in written and oral legal expression.

NEW CHALLENGES AND A NOBLE CAUSE

I conclude with words of thanks and praise for those who participate in the plain language movement. Do not be discouraged. The movement continues to gather force. We must press on with the effort to include in every law course and every legal practice course education in clear expression. It is not very hard; but it needs instruction. Above all, it needs examples and good illustrations. All of us must contribute to this endeavour.

With each new generation of lawyers, there are fresh challenges to plain language. Because the English language changes over time, according to usage (and no learned committee of experts dictates the permissible course that it will be allowed to take), a never-ending stream of new words and expressions enters the language. Some of these present new challenges to the aims of plain language, including in legal expressions. Take, for example, the rapid introduction of computer language with its words (“website”, “webmaster”, “download”, “upload”, “hard copy”, “tweet” etc) adapted from earlier generic words. Take also the abbreviated spelling of words in new text, designed for use in “texting” as in the social networks such as Twitter). Examples include the use of “b4” for “before” and “cu” for “see you”. Will these changes become standard and accepted in legal language? Stranger things have happened. Only time and the market place of mass practice will answer this question.

Some contemporary use of language agitates writers who pride themselves on clear and elegant prose. Books are now being written aimed at stopping this development in its tracks. Attempts to debase the English language with a new generation of clichés and politically correct expressions. Don Watson, at Australia master of clear and powerful political speech, has written a new text targeted at his special hates in this respect, (such as “homeland security”, “mission statement”, “factual matrix”, “medical termination”, “a range of foci”)15. Just when the proponents of plain language thought they had the objects of their reforming zeal in sight, fresh challenges have presented for the attention of the next generation of disciples.

At stake in the plain movement is not just the theoretical objective of improving the understanding of the law by lawyers. It is the noble objective of making the law speak with a clearer voice to the people who are bound by the law. This is an idea central to the notion of democratic governance. It is a concept that gives a moral dimension to the plain language movement and to the worldwide mission of Clarity International.

* Patron of Clarity International. Past Justice of the High Court of Australia.
1. The Book of Common Prayer, Eyre and Spottiswoode, London, 1558, (1951), Service of Morning Prayer, 54.
2. J. Stone, Social Dimensions of Law and Justice, Maitland, Sydney, 1966, 649.
3. Australian Law Reform Commission, Insolvency: The Regular Payment of Debts, AGPS, Canberra, ALRC 6, 1977, 52-3 [118].
4. Australian Law Reform Commission, Insurance Contracts, AGPS, Canberra, ALRC 20, 36 [58].
5. John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 at 563 [157]; cf at 539 [84]; 544 [103].
6. M.D. Kirby, “The Monumental Task of Simplifying the Law”, unpublished, Constitutional Association of Australia, 15 March 1982 (Kirby Speeches 314).
7. M.D. Kirby, “Plain English and the Power of a Wink and a Sniff”, unpublished, Australia-Britain Society, 19 August 1983 (Kirby Speeches 450).
8. Cf. Levy v. Victoria (1997) 189 CLR 579 at 637-638.
9. M.D. Kirby, “Is Law Properly Written? Plain Legal Language”, ALJ 1990 (Kirby Speeches 1091)
10. M.D. Kirby, “Delivering Justice in a Democracy. The Jury of the Future”, (1998) 17 Australian Bar Review 113.
11. M.D. Kirby, “Judicial Attitudes to Plain Language and the Law” – Interview 1 November 2006 (Kirby Speeches 2143).
12. M.D. Kirby, Review of J. Kimble Lifting the Fog on Legalese: Essays on Plain Language, Carolina Ac. Press, NC, 2006 published in (2006) 80 Australian Law Journal 623.
13. Australian Communist Party v The Commonwealth (1951) 83 CLR 1.
14. See e.g. the use of tables and graphs in Forge v Australian Securities and Investment Commission (2006) 228 CLR 45 at 97-109 [135]-[154].
15. Don Watson, Bendable Learnings. The Wisdom of Modern Management, Knopf, Sydney, 2009.

Acknowledgement
Reproduced with the kind permission of The Hon. Michael Kirby AC CMG.

This paper was first presented at the Plain Language Conference Sydney, 17 October 2009.

WILLS AND POWERS OF ATTORNEY VIC

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Wills and Powers of Attorney

MAY 2017
  • Commentary updated to take into account changes introduced by Powers of Attorney Amendment Act 2016 and Powers of Attorney Amendment Regulations 2017. See commentary and article ‘Powers of Attorney – Evolution’. Changes include:
    • impact of new enduring power of attorney on previous powers;
    • clarification of the number of alternative attorneys that can be appointed;
    • forms updated in line with substituted forms as introduced by amending regulations.
  • Commenced 1 May 2017.
JANUARY 2017
  • New Commentary on Challenging the validity of a will
    • Challenging a will questions its validity. Contesting a will questions the fairness of its provisions. The circumstances and processes when challenging a will are similar across all the states in legislation and in the common law principles that govern this interesting area of the law. This addition to commentary covers helpful tips for practitioners if they are faced with a client wishing to challenge the validity of a will.
  • Updated information on LIV Capacity Guidelines and Toolkit
OCTOBER 2016
  • Powers of Attorney Commentary- Author update regarding witnessing execution by the attorney.
  • Costs Agreements
    • Included reference to time limit for bringing costs assessment, total estimate of legal costs section with provision for variables, and authority to receive money into trust.
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
  • Wills Commentary – Author update regarding superannuation as part of the estate.
JUNE 2016
  • Added new precedent – Individual will creating multiple testamentary discretionary trusts
  • Case law – Succession has been enhanced with addition of discussion on Badenach v Calvert re duty of care to intended and disappointed beneficiaries.
MAY
  • Added to commentary – New content re Interstate powers of attorney and Interstate instruments.
APRIL
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
MARCH
  • Commentary enriched to include a new section ‘What an attorney can’t do’. Commentary also enriched to include Instruments made in other states
FEBRUARY
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

Powers of Attorney – Evolution

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By Rosslyn F. Curnow Nolch, Principal

Rosslyn Nolch Solicitors

Amendments to the Powers of Attorney Act 2014 (Vic) will be made by the Powers of Attorney Amendment Act 2016 (Vic) which has now received royal assent. The latest default implementation date is 1 May 2017. One of the purposes of the amending Act is to clarify a number of ‘operational’ matters.

Some of the main changes, also referring to the Explanatory Memorandum, are below.

Summary format:

Section 22 – Scope of power

[Clause/section 4 amending Act]

Current
  1. By an enduring power of attorney a person may authorise anything that a person can lawfully do by an attorney.
  2. Without limiting (1) make a power for personal or financial matters or both.
Changes

Substituted s 22(2) clarifies that, without limiting s 22(1), the power can be confined to personal matters only, or financial matters only, or to matters specified in the power.

Prescribed form being revised.

Section 31 – Appointment of alternative attorneys

[Clause/section 5 amending Act]

Current
  1. The principal may appoint an alternative attorney for any attorney – subject to s 28 eligibility.
Changes

Substituted s 31(1) clarifies that more than one alternative attorney can be appointed for each attorney, and/or that an alternative attorney can be appointed for more than one attorney – subject to s 28 eligibility per new s 31(1A).

Section 55 – Revocation by later enduring power of attorney

[Clause/section 6 amending Act]

Current
  1. An enduring power of attorney is revoked by a later enduring power so far as the later power is inconsistent – subject in s 55(2) to the later enduring power of attorney specifying otherwise.
Changes

To create consistency in revocations of ‘old’ enduring powers of attorney under the Instruments Act 1958 or ‘old’ appointments of enduring guardian under the Guardianship and Administration Act 1986 and a new enduring power of attorney under the Powers of Attorney Act 2014, the words in s 55(1) ‘so far as the later enduring power of attorney is inconsistent’ are deleted.

The amendment enables an enduring power of attorney under the Powers of Attorney Act 2014 to be automatically revoked by a subsequent enduring power of attorney, unless specified otherwise.

[Also see below new ss 152 and 153 in particular].

Section 56 – Resignation – of attorney/alternative – when principal has decision making capacity

[Clause/section 7 amending Act]

Current
  1. An attorney or alternative attorney who has power for a matter may resign as attorney/alternative attorney for that matter at any time the principal has decision making capacity.
  2. On the resignation of the attorney or alternative attorney, the enduring power of attorney is revoked so far as it gives power to the attorney/ alternative attorney.
Changes

Section 56(2) amended to clarify that on the resignation of an attorney/ alternative attorney who has power for a matter under an enduring power of attorney, the enduring power of attorney is revoked insofar as it gives power to the attorney/ alternative attorney for that matter.

Section 62 – Ending of attorney’s power where more than one attorney

[Clause/section 8 amending Act]

Current
  1. The ending of any power of a joint attorney does not affect the ability to exercise that power of any remaining joint attorney/s who have that power.
  2. The ending of any power of a joint and several attorney does not affect the ability to exercise that power of any remaining joint and several attorney/s who have that power.
  3. The ending of any power of a several or majority attorney does not affect the ability to exercise that power of any remaining several or majority attorney/s who have that power.
  4. Unless specified otherwise in the enduring power of attorney.
Changes

New s 62(3A) inserted, vis-à-vis s 62(3), to provide that if any power of a majority attorney ends, which results in the remaining majority attorneys no longer being able to exercise that power as majority attorneys, then the remaining attorneys must exercise that power jointly.

Section 62(4) also amended to include reference to s 62(3A).

Section 63 – Duties of Attorney – vis-à-vis conflicts

[Clause/section 9 amending Act]

Current
  1. An attorney under an enduring power of attorney … “(d) must avoid acting where there is or may be a conflict of interest unless the power so authorises;” …
Changes

To ensure consistency with s 65, in s 63(1)(d) the words ‘power so authorises’ are deleted, and in lieu the words ‘attorney is authorised by the power, the principal or VCAT’ are inserted – noting the principal must have capacity to authorise.

Section 93 – Appointment of alternative supportive attorneys

[Clause/section 11 amending Act]

Current
  1. A principal may appoint an alternative supportive attorney for a supportive attorney – subject to section 91 eligibility.
Changes

Section 93(1) replaced to clarify that more than one alternative supportive attorney can be appointed for each supportive attorney, and (or) an alternative supportive attorney can be appointed for more than one supportive attorney – subject to s 91 eligibility per new s 93(1A).

Section 130 – Who can apply for a rehearing

[Clause/section 13 amending Act, noting clause 13 refers to the original proposed amendment]

Changes

Amended to broaden the categories of persons who can apply.

[See also new section 154].

Division 3 – Amendment of other acts

[Clauses/ss 14 and 15 amending Act]

Current

Sections 149-165 refer to transitional amendments to other Acts, all of which provisions are now in operation.

Changes

New Division 3/ss 149-154 inserted:

Section 149 – defines an enduring power of attorney (2014) to mean a power of attorney under s 22 Powers of Attorney Act 2014 as in force immediately before the commencement of s 4 amending Act (see above s 22 amendments re scope of power).

Section 150 – nothing in this new Division limits the operation of the Interpretation of Legislation Act 1984.

Section 151:

  1. Notwithstanding the commencement of s 4 amending Act (see above amendments re scope of power, amending s 22), an enduring power of attorney (2014) continues to exist for so long as it is in force on and after the commencement of s 4 amending Act.
  2. On and from the commencement of s 6 amending Act (see above amendments to s 55 providing for the revocation of an enduring power of attorney on the making of a new enduring power of attorney), s 55 as amended applies to an enduring power of attorney (2014).
  3. Notwithstanding the commencement of s 8 amending Act (see above amendments to s 62 re ending of attorney’s power), s 62 as in force immediately before the commencement of s 8 continues to apply to an enduring power of attorney (2014).

Section 152 – notwithstanding s 142(2) (transitional provision), on and from the commencement of s 6 amending Act (see above amendments re revocation):

  1. Divisions 1 and 2 of Part 5 apply to an old enduring power of attorney in force immediately prior to that commencement as if it were an enduring power of attorney made under this Act; and
  2. Division 3 of Part 5 as amended by s 6 (see above amendments re revocation) applies to an old enduring power of attorney in force immediately before that commencement as if it were an enduring power of attorney made under this Act.

i.e. “… despite s 142(2) of the Principal Act not applying any of the provisions of Part 5 to an old enduring power of attorney, Divisions 1, 2 and 3 (as amended by clause 6) of Part 5 of the Principal Act will apply to the revocation of an old enduring power of attorney in force immediately before the commencement of clause 6 of this Bill.”

Section 153 – notwithstanding s 143(2) (transitional provision), on and from the commencement of s 6 amending Act (see above amendments re revocation):

  1. Divisions 1 and 2 of Part 5 apply to an old enduring power of guardianship in force immediately before that commencement as if it were an enduring power of attorney made under this Act; and
  2. Division 3 of Part 5 as amended by s 6 applies to an old enduring power of guardianship in force immediately before that commencement as if it were an enduring power of attorney made under this Act.

i.e. “… despite s 143(2) of the Principal Act not applying any of the provisions of Part 5 to an old enduring power of guardianship, Divisions 1, 2 and 3 (as amended by clause 6) of Part 5 of the Principal Act will apply to the revocation of an old enduring power of guardianship in force immediately before the commencement of clause 6 of this Bill.”

Section 154 – provides that s 130 (who can apply for a rehearing) as amended applies to an application for a VCAT rehearing made but not yet determined.

[Clause/section 16 amending Act]

Current

Section 28(2)(a) Privacy and Data Protection Act 2014

Changes

Substitute s 28(2)(a) inserted to provide that a supportive attorney can consent or make a request or exercise a right of access to personal information on behalf of the principal as part of their role.

Witnesses
Current

All subject to preconditions listed in the respective sections as to independence from the matter etc.

Section 35 (EPA):

“Who can witness the signing of an instrument creating an enduring power of attorney?

  1. As to the 2 persons who, under section 33(b), witness the signing of an instrument creating an enduring power of attorney:
    • both persons must be eligible to do so under subsection (2); and
    • one person must be either authorised to witness affidavits or a medical practitioner.”

Section 48 (EPA):

“Who can witness the signing of the instrument of revocation?

  1. As to the 2 persons who, under section 46(b), witness the signing of the instrument of revocation:
    • both persons must be eligible to do so under subsection (2); and
    • one person must be either authorised to witness affidavits or a medical practitioner.”

Section 97 (supportive attorney appointment):

“Who can witness the signing of an appointment form?

  1. As to the 2 persons who, under section 95(b), witness the signing of an appointment form for a supportive attorney appointment:
    • both persons must be eligible to do so under subsection (2); and
    • one person must be a person who is authorised by law to witness the signing of a statutory declaration; …”

Section 107 (supportive attorney appointment):

“Who can witness the signing of the form of revocation?

  1. As to the person who, under section 105(b), witnesses the signing of the form of revocation:
    • the person must be of or over 18 years of age; and
    • the person must be authorised to witness the signing of a statutory declaration; …”
Changes

Unchanged.

Further amendments are also foreshadowed, of which some will ‘change the landscape’ in respect to Enduring Powers of Attorney (Medical Treatment):

Administration and Probate and Other Acts Amendment (succession and related matters) Bill 2016

The following is a brief summary of proposed amendments to the Powers of Attorney Act 2014 introduced by the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Bill 2016 (other proposed amendments relating to the Administration and Probate Act 1958 appear below):

  • Proposed latest implementation date 1 November 2017.
  • Insertion of new s 83A providing an exception to ademption for property dealt with by an attorney (as with the exception for property dealt with by an administrator under s 53 Guardianship and Administration Act 1986).
  • Insertion of new s 83B providing that s 83A applies regardless of whether or not the principal has testamentary capacity.
  • Insertion of Division 7 giving VCAT powers in relation to wills where there is an enduring power of attorney; namely that VCAT may open and read a will of a person who has given an enduring power of attorney and does not have testamentary capacity, or of a deceased person who had granted an enduring power of attorney before their death; VCAT can compel production of a will if the will maker has granted an enduring power of attorney and has lost capacity or died; and VCAT may make a copy of a will (full or redacted) available to an attorney under an enduring power of attorney where the principal does not have testamentary capacity.

[Note: Consequentially it is proposed to amend s 53 of the Guardianship and Administration Act 1986 to substitute ‘a beneficiary of a represented person’ in lieu of ‘her or his heirs, executors, administrators, next of kin, devisees, legatees and assigns’ to clarify that the protection from ademption only applies to beneficiaries under a will and not to an intestacy, and to include a definition of ‘beneficiary of a represented person’ for this purpose; insert a new s 53A into that Act clarifying that s 53 applies whether or not the represented person has testamentary capacity; and insert a definition of ‘next of kin’ in s 56 of that Act.]

Medical Treatment Planning and Decisions Act 2016 (Vic)

[Note: For ease of readability together with the other information in this article we have used the term ‘power’ (in lieu of ‘appointment’ in respect to medical treatment), ‘principal’ for the person giving the directive or power, and ‘appointee’ for the person exercising a medical treatment power (although the full term in the Act is the ‘appointed medical treatment decision maker’)].

The following is a very brief summary of some of the main points contained in the Medical Treatment Planning and Decisions Act 2016, particularly those of a ‘practical’ nature. [Consequential amendments to the Powers of Attorney Act 2014 appear below.]

General
  • Latest default date 12 March 2018.
  • Repeals (and replaces) the Medical Treatment Act 1988 (Vic).
  • The principles are similar, but incorporating formalised advance care directives (binding, or expressing preferences and values), processes for consent and approval to medical research procedures, and the facility to appoint a ‘support person’.
  • The documentation must be in English, and if an interpreter is used, then an interpreter’s certification is also required to be included on the document: ss 16, 28 and 99.
  • Defines ‘decision-making capacity’ (essentially in the same terms as included in the Powers of Attorney Act 2014), and VCAT may be applied to in order to determine whether a person does in fact have decision-making capacity: s 4.
  • The appointee (or person performing a function or duty) must have regard to specified overarching principles (quite similar to those in the Powers of Attorney Act 2014, but in a medical context): s 7.
  • As well as the principal’s full name etc., their date of birth must be included in each of an advance care directive and medical power and support person appointment: ss 16, 28 and 33.
  • Required details of the appointee, to be included, may be prescribed: ss 28 and 33.
  • A number of sections have been included prescribing steps to be taken, and records kept, by health practitioners (in respect to both advance care directives and medical treatment powers).
  • Advance care directives or medical treatment powers properly made in another State or Territory are recognised: ss 95 and 96.
  • Any unlawful instruction or direction in any of an advanced care directive, medical treatment power or support person appointment, will be void: s 97.
  • Specific changes are made to the Mental Health Act 2014 in relation to approval procedures for electroconvulsive treatment, and to the Guardianship and Administration Act 1986 in respect to ‘special medical procedures’.
  • New prescribed forms are anticipated.
  • Transitional provisions will apply in respect to an existing refusal of treatment certificate and/or enduring power of attorney (medical treatment), as per s 102; and also to enduring powers of attorney with power to make medical treatment decisions pursuant to s 155 of the Powers of Attorney Act 2014 and/or enduring powers of guardianship with power to make medical treatment decisions saved by s 143 of the Powers of Attorney Act 2014, as per s 103.
Advance care directives
  • An advance care directive constitutes the principal’s ‘binding instructions or preferences and values in relation to the medical treatment of that person in the event that the person does not have decision-making capacity for that medical treatment’: s 12.
  • Directives are divided into ‘instructional’ and ‘values’ directives, and either or both can be included: ss 6 and 12.
  • Any person, including a child, may give an advance care directive, provided the prerequisites are met – s 13, although only an adult may appoint a medical treatment decision maker.
  • Formal requirements apply, and at least one witness to an advance care directive must be a registered medical practitioner: s 17.
  • A third (independent adult) person may sign at the direction of the principal: s 16.
  • Any amendment must be made on the face of the original document: s 20.
  • Advance care directives must not include unlawful statements, e.g. directing that an unlawful act be carried out: s 18.
  • If the formal requirements of an advance care directive are not complied with, the directive may be ratified by VCAT: s 21.
  • The advance care directive comes into force when it is made, and remains in force until any expiry date specified in it or until it is revoked: s 19.
  • Under s 20 formal requirements apply to revocation (or VCAT can effect revocation: s 21), and an advance care directive will be revoked by any later advance care directive: s 20.
  • Specific penalties apply for inducing a principal to give an advance care directive (s 14); or for knowingly making false or misleading statements in relation to advance care directives (s 15).
  • VCAT can revoke, vary or suspend an instructional directive if the person giving the directive does not have decision-making capacity in relation to that directive, where VCAT is satisfied that either circumstances have changed or the person relied upon incorrect information/assumptions when giving the directive: s 23.
Medical treatment powers
  • The appointment of a medical appointee can be made at the same time as an advance care directive or at any other time: s 26.
  • The appointee has the powers in Part 4 Medical treatment decisions and Part 5 Medical research of this Act, or in any other Act, subject to any specified limitations or conditions in the power: s 27.
  • More than one appointee can be appointed, and ‘(t)he appointed medical treatment decision maker of a person is the first person listed in the appointment who is reasonably available and willing and able to act at the particular time’ – s 28; and also s 55 and the priority order of decision makers, and the decision maker in respect to a child.
  • Under ss 28 and 30 formal requirements apply to the power and/or revocation, with at least one adult witness of two being an authorised witness – s 36; and see s 3:

“authorised witness” means either of the following –

  1. a registered medical practitioner;
  2. a person authorised to take affidavits by section 123C of the Evidence (Miscellaneous Provisions) Act 1958;
    • A third (independent adult) person may sign at the direction of the principal: s 37.
    • The power comes into force on the day it is made, and remains in force until revoked or the appointee resigns: s 38; and the resignation must be effected formally: s 39.
    • The power has to be formally accepted on the same document by each appointee (and certified/witnessed) before it is effective: ss 28 and 29.
    • As well as a statement of acceptance similar to what is currently in effect, the appointee must state that they have read and understood any advance care directive the principal has given before or at the same time as the power: s 29.
    • In exercising the power, there are particular matters the appointee must address – s 61; with the health practitioner being obliged to report to the Public Advocate in certain instances: s 62; and with recourse to VCAT for an advisory opinion if the appointee (or health practitioner) is in doubt: s 70 (or in respect to medical research, ss 82 (including a person with a ‘special interest’) and 83) — and particular matters apply to medical research, Part 5, as opposed to medical treatment, Part 4.
    • An appointee is entitled to access or collect health information relevant to a medical treatment decision: s 94.
    • If the formal requirements of a power are not complied with, it may be ratified by VCAT: s 45.
    • Certain requirements apply if the appointee wishes to resign: s 39.
    • Formal requirements apply to revocation as above (or VCAT can effect revocation) – s 30; a revocation may also be signed at the direction of the principal by an independent adult: s 37; see also ss 43-46 as to VCAT’s powers and matters to be taken into consideration.
    • Specific penalties apply for purporting to be/act as an appointee or induce the principal to appoint them: ss 41 and 42.
Support person appointment
  • Any person with decision-making capacity, including a child, can appoint one other person, including a child, as their support person: s 31.
  • The role of the support person is not to make the principal’s medical treatment decisions, but to support the principal ‘to make, communicate and give effect to the person’s medical treatment decisions; and’ represent their interests, including when the principal does not have decision-making capacity in respect to medical treatment decisions: s 32.
  • Under ss 33 and 35 formal requirements apply to the power and/or revocation, with at least one adult witness of two required to be an authorised witness – s 36; and see s 3.

authorised witness means either of the following –

  1. a registered medical practitioner;
  2. a person authorised to take affidavits by section 123C of the Evidence (Miscellaneous Provisions) Act 1958:
    • A third (independent adult) person may sign at the direction of the principal: s 37.
    • The appointment comes into force on the day it is made, and remains in force until revoked or the support person resigns – s 38; and the resignation must be effected formally: s 39.
    • The appointment must be formally accepted on the same document by the support person (and certified/witnessed) for it to be effective, including that the support person understands their role: ss 33 and 34.
    • A support person is entitled to assist in accessing or collecting health information relevant to a medical treatment decision: s 94.
    • If the formal requirements of an appointment are not complied with, it may be ratified by VCAT: s 45.
    • Certain requirements apply if the support person wishes to resign: s 39.
    • Formal requirements apply to revocation as above (or VCAT can effect revocation), and the appointment will be revoked by any later appointment of a support person – s 35; a revocation may also be signed at the direction of the principal by an independent adult: s 37. See also ss 43-46 as to VCAT’s powers and matters to be taken into consideration.
    • A specific penalty applies for purporting to be/act as a support person: s 41.
Medical Treatment Planning and Decisions Act 2016 (Vic) continued – Consequential amendments to the Powers of Attorney Act 2014 (Vic)

[insertions/deletions]

Section 3(1) Powers of Attorney Act, as it will be amended by s 150

Definitions –

“medical treatment has the same meaning as it has in the Medical Treatment Planning and Decisions Act 2016;”

“medical research procedure has the same meaning as it has in the Medical Treatment Planning and Decisions Act 2016;”

“personal matter, in relation to a principal under an enduring power of attorney, or a supportive attorney appointment, means any matter relating to the principal’s personal or lifestyle affairs, and includes any legal matter that relates to the principal’s personal or lifestyle affairs, but does not include any matter that relates to medical treatment or medical research procedures;”

Examples

The following are examples of personal matters—

  • where and with whom the principal lives;
  • persons with whom the principal associates;
  • whether the principal works and, if so, the kind and place of work and employer;
  • whether the principal undertakes education or training, the kind of education or training and the place where it takes place;
  • daily living issues such as diet and dress;
  • health care matters, including matters provided for in Part 4A of the Guardianship and Administration Act 1986.

Note

See the Medical Treatment Planning and Decisions Act 2016 for matters relating to medical treatment and medical research procedures.”

Section 85(1) Powers of Attorney Act, as it will be amended by s 151

“Power to make and scope of appointment

(1) A person may appoint an eligible person to support the person in making and giving effect to decisions by exercising any of the powers set out in sections 87, 88 and 89 that are specified in the appointment in relation to any personal or financial or other matters personal matters, financial matters or other matters (excluding matters concerning medical treatment and medical research procedures) specified in the appointment.”

Part 10 Powers of Attorney Act, as it will be amended by s 152

“Division 4 — Transitional—Medical Treatment Planning and Decisions Act 2016

155 Saving—effect of broader definition of personal matter

Despite the amendment of the definition of personal matter in section 3(1) by the Medical Treatment Planning and Decisions Act 2016—

  1. an enduring power of attorney as in force immediately before that amendment that applies in respect of medical treatment or medical research procedures continues to apply in the same manner on and after that amendment as if that amendment had not been made; and
  2. a supportive attorney whose appointment is in force immediately before that amendment that applies in respect of medical treatment or medical research procedures continues to apply in the same manner on and after that amendment.”

Enduring powers of attorney as they relate to Australian legal practitioners, particularly those who are sole practitioners

It would be remiss, in an article about powers of attorney and changing landscapes, not to also mention sole practitioners.

Have you ever thought about what would happen to your law practice if you suffered a substantial impairment?

If not, the following are excellent resources:

ALRC inquiry into elder abuse

Discussion paper Elder Abuse (DP 83), released on 12 December 2016, includes a number of proposals, bearing in mind that not all jurisdictions have similar legislation currently in force, and that some listed below already apply in Victoria:

  1. Establish a national register of enduring documents (and related Court/Tribunal orders).
  2. Require that an enduring document be registered in order to be valid, with registration of a subsequent enduring document automatically revoking a previous document of the same type.
  3. Allow transitional arrangements to ensure registration of existing enduring documents and the validity of unregistered enduring documents for a prescribed period.
  4. Limit authorised witnesses to a legal practitioner, medical practitioner, justice of the peace, registrar of the Local or Magistrates Court, or police officer with the rank of sergeant or above.
  5. Vest state and territory courts/tribunals with power to order compensation where loss was caused by the enduring attorney or guardian failing to comply with their obligations.
  6. Require attorneys to avoid conflicts unless express authorisation is in the power or a tribunal gives advance authorisation.
  7. Mandate that proposed attorneys be ineligible if an undischarged bankrupt, prohibited from acting as a company director, convicted of an offence involving fraud/dishonesty, or where they are/have been a care worker etc. for the principal.
  8. Introduce legislation to explicitly list transactions that cannot be completed by an enduring attorney or guardian, such as making or revoking the principal’s will.
  9. Require enduring attorneys and guardians to keep records, and enduring attorneys to keep their own property separate.
  10. State and territory governments to introduce nationally consistent laws governing enduring powers of attorney – including financial, medical and personal – enduring guardianship, and other substitute decision makers.
  11. Re-name substitute decision makers as ‘representatives’, and develop model ‘representatives agreements’.
  12. Require representatives to ‘support and represent the will, preferences and rights of the principal’.

Administration and Probate and Other Acts Amendment (succession and related matters) Bill 2016

[Note: Prior to reading these notes, it is recommended that you refer to the second reading speech by the Hon. Martin Pakula Attorney-General made on 23 November 2016 – Hansard, page 4540. It incorporates a very succinct synopsis of the proposed changes and the reasons behind them.]

The following is a brief summary of proposed amendments to the Administration and Probate Act 1958 introduced by the Administration and Probate and Other Acts Amendment (Succession and Related Matters) Bill 2016:

General

  • A beneficiary entitled to a pecuniary legacy is entitled to interest if not paid within 12 months of the date of death: new s 39B(3).
  • The offence of concealing or ‘aiding and abetting in the concealment of’ a will is extended to being ‘involved in’ concealment: amendment to s 66.
  • The amendments apply in respect to the estate of a person who dies on or after the amendment commencement date — new s 106; and regulations may be made to deal with transitional matters: s 107.

Executor/administrator commission and fees

  • The Supreme Court may review and reduce fees, charges and commissions by executors and administrators – excluding state trustees – including reimbursement of expenses or disbursements: new s 65A.
  • An executor is not entitled to payment under a remuneration clause in a will unless the testator gave informed written consent before executing the will: new s 65B.
  • Where there is no remuneration clause, or if it is inadequate, then an executor may charge fees or commission if the informed consent of each interested beneficiary is obtained, other than a trustee company: new s 65C.
  • Where an executor seeks to be paid they must provide information to each interested beneficiary of the basis of the payment (whether that be a clause in the will, consent of the beneficiaries or Court order), whether fees are charged or commission (and if commission, the percentage), the estimated value of the payment, and that the interested beneficiaries have the right to apply to the Supreme Court for review; and also requiring notification of any substantial change; with the executor not being entitled to commission or fees unless these requirements are met (other than a trustee company): new s 65D.
  • An executor can elect to charge fees instead of commission, provided they are less than commission, are not charged at a professional rate, and are distinguished from professional services fees: new s 65E.
  • Consequentially the Wills Act 1997 will be amended to provide that a remuneration clause, as defined, in a will is void unless the testator has given informed consent to its inclusion, and that this applies to wills executed on or after commencement of this Bill: new ss 49A and 56 Wills Act 1997.

Ademption

  • A beneficiary under a will who gains an unjust advantage or suffers an unjust disadvantage because of the application of s 83A Powers of Attorney Act 2014 or s 53 Guardianship and Administration Act 1986 may apply to the Supreme Court for remedy: new s 50.
  • A beneficiary under a will is entitled to any traceable income or capital gain generated from the disposal of property under either s 83A of the Powers of Attorney Act 2014 or s 53 of the Guardianship and Administration Act 1986: new s 51.

Intestacy

  • Includes a definition of ‘residuary estate’, and moves the definition of ‘intestate’ into the main definitions section: s 3.
  • Repeals s 37A (partner obtaining an intestate’s interest in a shared home) and s 38 (trust for sale on intestacy), and a number of other sections.
  • Inserts a new Part 1A relating to intestacy (whole or partial):
    • Division 1 – Application and definitions
    • Incorporates definitions for the purposes of Part 1A, including a definition of ‘distribution agreement’ (distribution of an intestate’s estate between multiple partners) and a definition of ‘partner’ (including registered caring partner)
    • Includes a 30-day survivorship requirement (except where this would result in bona vacantia)
    • Allows for participation in a distribution in more than one capacity
    • Preserves the rights of creditors and the rights of the Crown
    • Specifies the date of valuation, other than in respect to a partner’s property election, as being the date that the value of the residuary estate is ascertained.
    • Provides that the distribution of an intestate’s estate is not affected by gifts made during their lifetime or gifts made by will, repealing the ‘hotchpot’ rule.
    • Division 2 – Trust for sale of intestate’s property
    • Provides that the intestate’s estate is held o1n trust by their personal representative, with discretionary power to sell and convert – and invest – with the requirement for payment of funeral and administration expenses, debts or liabilities, and setting aside monies to pay legacies in any will.
    • Division 3 – Distribution if intestate leaves a partner
    • Includes new rules for distribution where the intestate leaves a partner:
      • Where there is only one partner, the surviving partner is entitled to the whole of the estate where there are no surviving issue
      • Where there is only one partner, if an intestate leaves a partner and issue – children, grandchildren or more distant lineal descendants – of that partner, the partner is entitled to the whole of the intestate’s estate
    • If an intestate leaves a partner and some issue who are issue of the intestate from another relationship, the surviving partner is entitled to the whole of the estate if worth less than the partner’s statutory legacy amount; but if worth more then the surviving partner is entitled to the personal chattels, statutory legacy plus interest, and one half of the balance, with the other half of the balance being shared between any children of the intestate
    • A new method will be included for determining the value of the partner’s statutory legacy, with the statutory legacy for the next financial year published in the Government Gazette.
    • Referring to the second reading speech, for the purpose of improving the position of the deceased’s partner in case of an intestacy by implementing the recommendation in the 2013 VLRC Succession Laws Report ‘that where all the deceased’s children are also the children of the deceased’s surviving partner, the partner should receive the whole of the estate, and the children should not receive anything’, allowing the partner to remain in the home and continue to care for the children; rather than the current situation where the deceased and his/her partner might be a couple with a young child, owning the property they lived in, and the minor child would inherit a greater share of the deceased’s property than the partner. In situations where the deceased’s partner is not the parent of the deceased’s children, the deceased’s estate will be distributed between the partner and children, but the partner will receive a much greater share of the estate as well as expanded election rights.
    • Division 4 – (Sole) Partner’s rights as to estate property by election
    • Only relevant to sole surviving partners where there are children or issue of the intestate who are not the surviving partner’s children or issue
    • Provides for a sole surviving partner’s rights – even if a minor – to property by election
    • Provides for procedures and timing, including where the property forms part of a larger aggregate and the election could substantially diminish the value of the remainder or make the administration of the property substantially more difficult or the election is of a kind where a court determination of the partner’s legal or equitable interest in the property is required.
    • Division 5 – Distribution if intestate leaves multiple partners
    • If the intestate leaves multiple partners then different distribution rules will apply depending upon whether children or other issue also survive the intestate – and also depending upon whether they are children/issue of the partner/s or of a person who is not a partner. Again referring to the second reading speech, the changes will be made to achieve an outcome more likely to satisfy all beneficiaries than is the case with the current formula.
    • Division 6—Distribution if intestate leaves no partners
    • Sets out the entitlements of ‘next of kin’ – as noted in the second reading speech, limiting distributions on intestacy to relatives no more distant than the deceased’s first cousins – and then only in the event their parents had died – in this order:
      • children, grandchildren and more distant lineal descendants
      • parents if the intestate leaves no partner and no children or other issue
      • brothers and sisters
      • grandparents
      • aunts and uncles, and the entitlement of cousins if aunts and uncles predecease the intestate
      • the Crown.

Information sources include Bills, Acts, and Explanatory Memoranda, all sourced from www.legislation.vic.gov.au unless otherwise noted: Powers of Attorney Amendment Bill (Act) 2016, Medical Treatment Planning and Decisions Bill (Act) 2016, Administration and Probate and Other Acts Amendment (Succession and Related Matters) Bill 2016; Australian Law Reform Commission Elder Abuse Discussion Paper and related materials (https://www.alrc.gov.au/); Legal Practitioners’ Liability Committee and Law Institute of Victoria educational materials as noted. R Curnow Nolch information included for educational purposes only – this article is an individual interpretation and does not constitute legal advice, and no liability is accepted for any person’s reliance upon this information – the reader must read the legislation, Discussion Paper and materials referred to for him or herself and make his or her own enquiries and determination as to the nature and effect of the ‘as passed’ changes and proposed changes. This article first appeared in the January-February 2017 issue of The Legal Executive.

Conveyancing VIC

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Conveyancing

FEBRUARY 

  • Commentary updated to include a discussion of priority notices which were introduced in Victoria in late 2016.

JANUARY 

  • Additions to the commentary to discuss caveats and special conditions concerning the conduct of auctions.
OCTOBER
  • Commentary update regarding Land Tax Regulations 2015 and notices of dispossession of land no longer required by SRO.
  • Commentary added discussing valid clearance certificates for foreign residents.
  • Costs Agreement
    • Clause added on payment of fees when purchaser not proceeding.
    • Disputes section improved, fields for client and firm details added, trust account details added, solicitor’s lien added, execution clauses for individuals and corporations added and general formatting and grammatical improvements.
    • Included reference to time limit for bringing costs assessment, total estimate of legal costs section with provision for variables, and authority to receive money into trust.
AUGUST 
  • Sale of Real Property – commentary updated to include discussion on bringing co-ownership arrangements to an end via partitioning.
  • Sale and Purchase of Real Property commentaries – further content on Foreign Resident Capital Gains Withholding Payments added
  • Purchase of Real Property – major restructure to ensure commentary follows the natural progression of a typical purchase.
MAY
  • Included foreign resident capital gains withholding payments when over $2 million to all necessary precedents, commentaries and contracts.
APRIL 
  • New precedent added – General advice to purchasers.
  • File Cover Sheets for all publications have been completely re-formatted for a better look.
MARCH
  • New section included in the commentary on powers of attorney for land transactions to accompany power of attorney precedents.
FEBRUARY
  • Making life a little easier for practitioners – look out for Blank Deed, Agreement and Execution Clauses folder in the matter plan at the end of each Getting the Matter Underway.

Disclosure of death

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By Russell Cocks, Solicitor

First published in the Law Institute Journal

Does a vendor of real estate have an obligation to disclose that a death occurred on the property in the past?

The underlying principle governing the relationship at common law between a vendor and a purchaser is caveat emptor – let the purchaser beware. The application of that principle would mean that a purchaser should conduct its own inquiries in relation to the antecedents of the property and that the vendor has no obligation to voluntarily disclose the circumstances of any deaths and, indeed, whether such deaths occurred.

The vendor could not actively mislead the purchaser, as misrepresentation is an exception to caveat emptor, but only in the limited circumstances of a positive misrepresentation. Misrepresentation by silence is not known to the common law in this regard and a vendor who avoided making any positive misrepresentations was safe.

However the vendor’s common law disclosure obligations have been substantially supplemented by the statutory obligations set out in s 32 Sale of Land Act 1962. These include the obligation to disclose title restrictions, planning obligations and the service of any notices affecting the land, but none of the many obligations imposed by s 32 appear to extend to an obligation to disclose that a death occurred on the property.

There is much to be said for the argument that a vendor should not have any obligation in this regard. There are many practical difficulties of deciding which deaths attract the obligation. A sensational murder immediately prior to sale might attract the obligation, but what of the natural death of a long term owner? There are infinite possibilities between these two situations and striking a fair balance would be difficult. And would the obligation be limited to death? What about other crimes like drug production or paedophilia? The law must not shy away from difficult tasks, but these practical considerations highlight the potential difficulties.

Some American States, which also apply caveat emptor, have created specific disclosure obligations for what are known as ‘stigmatised properties’, which cover not only death but also other criminal activity and, perhaps only in America, paranormal activity. An arbitrary period of 3 years prior to sale (or leasing) provides some recognition that death is a natural event.

Estate Agents

Agents are subject to regulation designed to protect both vendor and purchaser. Thus, whilst the vendor might not owe a duty to the purchaser, the agent does.

A NSW case involving the sale of a home in which two sons had murdered their parents led to an outcry and the vendors voluntarily terminated the contract, preventing a Court determination of the issue. However the agent was found guilty of disciplinary charges for failing to inform the prospective purchaser and NSW agents are now subject to a specific rule requiring them to bring such matters to the attention of the purchaser. New Zealand has similar requirements in relation to suicide.

No such specific ethical obligation exists for Victorian agents but there is a general duty of honesty and best practice that might be used as a basis for a claim by a purchaser. Agents are also subject to the general duties not to mislead or deceive, positively or by silence, created by the Australian Consumer Law and this is likely to be the direction of attack from a disaffected purchaser.

Charles Lloyd Property Group Pty Ltd v Buchanan [2013] VSC 148

This case provides some hope that the Walls of Jericho will not crumble in the face of the trumpets playing the ACL tune. The purchaser sought to avoid a contract based on post-contract discovery that a suicide had occurred on the land. There were many factors against the purchaser, not least of which was a confirmation of the contract by the purchaser AFTER the knowledge of the suicide had been acquired, that resulted in the failure of the complaint but it was somewhat re-assuring that the Court found that the complaint should be dismissed as it ‘had no reasonable prospect of success’.

Tip Box

  • Whilst written for Victoria this article has interest and relevance for practitioners in all states.
  • Properties may be stigmatised by criminal activity.
  • Vendors presently probably have no disclosure obligations.
  • Estate agents may be obliged to disclose as a result of their duty to purchaser.

Caveats

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By Russell Cocks, Solicitor

First published in the Law Institute Journal

Lodging a caveat in Victoria is intended to be, and in fact is, reasonably simple. As with all Land Use Victoria forms the preparation of the form of caveat has been changed to accommodate electronic conveyancing and the universal obligation to verify the identity of participants in the conveyancing process applies to the caveator. Whether the purpose of the caveat is to operate as a notice to all of the world of the caveator’s claim or as an entreaty to the Registrar not to register a competing dealing without notice to the caveator is a question that has occupied the attention of the courts on a number of occasions but the fact is, irrespective of the law, the caveat does achieve both of those outcomes.

Until electronic lodging of dealings becomes compulsory (presently planned for August 2018) it is still possible to lodge a paper caveat, but the preparation of the document is largely an on-line process conducted on the Land Use Victoria website and the form has been standardised and options provided for each of the categories to be filled in on the form. From there the caveat is either lodged electronically through PEXA or is printed and lodged as a paper dealing.

The fundamental requirement for the lodging of a caveat is that the caveator must establish, for the purposes of recording of the caveat on the Register, grounds of claim. These are divided into three categories:

  • statement of claim;
  • estate or interest; and
  • prohibition.

Each caveat must address each of these three categories but only ONE of the various options available in respect of each category may be adopted for each category.

Statement of claim

A common caveat is a caveat lodged to protect the interest of a purchaser under a contract of sale. The drop-down menu includes an option to complete details of the parties to the contract and the date of the contract.

Other options include caveats based on mortgages, charges, leases, trusts and some more obtuse relationships, including an option for the registered proprietor ‘to prevent improper dealings’.

Estate or interest

Like the statement of claim category, the estate or interest claimed may be selected from a wide variety of options including a freehold estate, a leasehold estate, an interest as mortgagee, an interest as charge, even an interest arising pursuant to a restrictive covenant or easement.

Prohibition

Unlike the other two categories, prohibition is limited to 5 options. Traditionally the ‘absolutely’ option is commonly used but there are other, more limited, options such as ‘an interest that affects my interest’ or ‘unless I consent’.

Whilst a caveat is a reasonably simple form to complete and lodge, that does not mean that care should not be exercised in its preparation. A poorly worded caveat may fall foul of judicial analysis and be removed pursuant to s 90(3) Transfer of Land Act 1958, notwithstanding a discretionary power to amend a defective caveat. In Percy & Michele Pty Ltd v Gangemi & Anor [2010] VSC 530 a caveat that claimed ‘an estate in fee simple’ was removed because the appropriate claim was ‘an equitable interest as chargee’ and the Court was not prepared to allow an amendment. Equally, a caveat claiming ‘an interest as chargee’ based on an alleged trust (which claim, if proven, would justify a claim of an ‘an estate in fee simple’) was removed in Wells v Rouse & Ors [2015] VSC 533.

Care must also be exercised in relation to the prohibition. It is common for an ‘absolute’ prohibition to be claimed, indeed this situation was described as the default position in Sim Development Pty Ltd v Greenvale Property Group Pty Ltd [2017] VSC 335, but given the clear choices that are now presented by the on-line form a Court may refuse to allow amendment of an obviously inappropriate ‘absolute’ prohibition.

Joint registered proprietors also present a challenge to a caveator. In Lawrence & Hanson Group Pty Ltd v Young [2017] VSCA 172 an ‘absolute’ prohibition based on a charge given by one of the joint proprietors resulted in the caveat being defeated at first instance as it was held to unjustifiably encumber the interest of the other joint proprietor. However, the Court of Appeal upheld the caveat as the Court concluded that the wording of the interest claimed was sufficiently clear to be limited to encumbering the interest of the joint proprietor who gave the charge.

Tip Box

Whilst written for Victoria this article has interest and relevance for practitioners in all states.

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