ByLawyers News and Updates

101 Succession Answers – NSW

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Following an author review new cases have been added and other enhancements made to the By Lawyers Reference Manual 101 Succession Answers (NSW).

Nobarani v Mariconte [2018] HCA 36

This case supports the requirement of an ‘interested’ party wishing to challenge the validity of a will to show that they have rights which will be affected by the disputed grant of probate or administration.

Re Estates Brooker-Pain and Soulos [2019] NSWSC 671

Considerations regarding disclosure of documents and information in contested probate proceedings were extensively discussed. This case analysed the applicable law, practice and procedure in the context of applications to set aside subpoenas and notices to produce which called for documents relating to the making of the disputed wills. This included solicitors’ notes and files. The interplay between subpoenas, the court’s Practice Note SC Eq 11 and case management orders was examined in detail.

The court addressed the determination of ‘legitimate forensic purpose’ in such cases, especially where pleadings had not closed and the issues in dispute were uncertain. This decision has therefore been added to the By Lawyers Reference Manual 101 Subpoena Answers too.

The court also commented on the practice of sending ‘Larke v Nugus’ letters to ‘…a person involved in the preparation or execution of a will…[seeking] disclosures about the circumstances in which a will was prepared or executed’.

Application of NSW Trustee & Guardian; Estate of Dudley Keith Vaughn [2019] NSWSC 850 and In the Estate of Hansie Hart [2019] ACTSC 317

These two recent cases each dealt with issues relating to the presumption of death.

Gregory Joseph Mills as trustee v Julie Elizabeth Mills and Ors [2018] NSWSC 363

This case is instructive as to the considerations the court applies when giving judicial advice and determining construction issues on testamentary trusts.

Finnegan & Anor v Garner & Ors [2019] QSC 100

Here the estate faced claims which, if they were resolved by litigation would result in the estate being consumed by legal costs. The court noted, at [10], that:

It is the duty of trustees of the estate not to embark upon expensive litigation which will have the effect of depleting the estate. In Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar The Diocesan Bishop of The Macedonian Orthodox Diocese of Australia and New Zealand Gummow ACJ, Kirby, Hayne and Heydon JJ said that: “a trustee who is sued should take no step in defence of the suit without first obtaining judicial advice about whether it is proper to defend the proceedings.”

Koellner v Spicer [2019] NSWSC 1571

On a family provision claim, an adult child with a medical condition and meagre financial resources was awarded a 35% legacy from the reasonably small estate even though the deceased had expressly excluded him on the basis they had no relationship.

Grant v Roberts; Smith v Smith; Roberts v Smith; Curtis v Smith [2019] NSWSC 843

The court emphasised, including by reference to the ‘overriding principles’ of the Civil Procedure Act, the duty on parties to contain costs in family provision litigation. The court heavily criticised disproportionate costs being incurred.

 

Like all By Lawyers Reference Materials, 101 Succession Answers (NSW) is updated regularly to cover developments in case law and procedure.

Presumption against bail – WA

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A presumption against bail has been created via recent amendments to the Bail Act 1982 (WA). There is now a presumption against bail for those charged with terrorism offences. This brings WA into line with other states.

The Bail Amendment (Persons Linked to Terrorism) Act 2019 (WA) amends the Bail Act 1982. Its purpose is the implementation of the 2017 Council of Australian Governments agreement for a presumption against bail to apply to persons with links to terrorism. A presumption against bail now applies in WA in relation to certain ‘terrorism offences’ and for ‘persons linked to terrorism’, as newly defined in s 3 of the Bail Act.

A person has links to terrorism for the purposes of the Bail Act if:

  • they are charged with, or have been convicted of, a terrorism offence; or
  • they are subject to an interim control order or confirmed control order made under the Criminal Code Act 1995 (Cth); or
  • they have been the subject of a confirmed control order within the last 10 years.

It is not necessary for these links to terrorism to have any connection to the charge currently before the court for which bail is being considered.

The amendments commenced on 1 January 2020.

The full commentary in the By Lawyers Criminal Magistrates Court guide for Western Australia has been updated accordingly.

Contract of Sale of Land – VIC

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With the LIV contract not currently available through LEAP, the By Lawyers Contract of Sale of Land is available to all LEAP users until 1 March 2020. Beyond that date it will remain available to LEAP users who have By Lawyers as a companion product to their LEAP subscription. It can also be accessed by non-LEAP users through the By Lawyers website by subscribing to our Victorian Conveyancing Guide, which has many associated benefits such as full access to 1001 Conveyancing Answers.

Adapting to the use of the Russell Cocks authored By Lawyers contract should present few problems as Russell was the principal author of the LIV contracts, including the 2008 version which effectively overhauled the previous contract and established the current format, making the terms of the By Lawyers contract familiar and making numerous improvements.

The By Lawyers Contract of Sale of Land for Victoria was introduced on 1 March 2018 and its use has been increasing steadily among Victorian legal practitioners and conveyancers. The By Lawyers contract removes the need for special conditions other than those covering special circumstances. It has a number of other advances over the LIV contract which further simplify the conveyancing process.

The By Lawyers legal and editorial teams ensure that the contract is immediately brought up to date with any changes in law or practice.

Recent amendments to the By Lawyers Contract of Sale of Land – Parts 1 and 2.

  • The ‘Payments’ section in Part 1 of the By Lawyers Contract of Sale of Land (VIC) has been amended for clarity regarding payment of GST;
  • A new clause has been added to Special Condition 14(f) of Part 2 which attaches a Flight v Booth type test to the purchaser’s ability to end the contract for unsatisfactory pest or building report;
  • The time for settlement has been moved from 3 pm to 4 pm to reflect current practice.

For further information see our previous post Seven reasons to use the By Lawyers contract.

Retail lease outgoings

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By Russell Cocks, Solicitor

First published in the Law Institute Journal

Phillips v Abel is significant as it continues the march of the Retail Leases Act in terms of the application of the Act to premises that might not, in the past, have been thought to have been retail premises. The April 2017 column considered CB Cold Storage Pty Ltd v IMCC Group (Australia) Pty Ltd [2017] VSC 23, which was subsequently confirmed on appeal, and since that case there has been a general understanding that the Act applies to many more premises than retail shops servicing the public. Phillips v Abel concluded that the Act applies to a quarry that supplied sand and other soil products in bulk. VCAT concluded that, as the buyers of the sand products basically used that sand “for their own purposes” as opposed to being “passed on by the purchaser in an unaltered state”, the buyers were the “ultimate consumer” of the goods and the Act applied.

Having satisfied the jurisdictional question, VCAT then moved on to consider the ability of the landlord to recover outgoings. This question is going to be of considerable significance in the current situation of many leases that may previously been thought not to be retail, now being held to be retail.

A landlord of a non-retail lease that has a right to recover outgoings may seek to exercise that right in a number of ways:

  1. by giving rate notices and other outgoings documents to the tenant for payment during the rating year;
  2. by paying the outgoings as they fall due and seeking reimbursement from the tenant;
  3. by calculating the anticipated outgoings and adding a fixed amount to the recurring rental figure; or
  4. by estimating the annual outgoings and seeking payment in advance from the tenant.

The method is not particularly significant, the important point is that the landlord has the freedom to adopt any of these, or other, methods of recovery of outgoings. However, the unexpected application of the Act means that recovery of outgoings is subject to a far more prescriptive statutory regime.

Section 46 requires a retail landlord to give particulars of outgoings to the tenant prior to entry into the lease, which will be by way of the Disclosure Statement, and again in respect of each of the landlord’s accounting periods during the lease, at least one month BEFORE the start of that period. Assuming that the landlord adopts the financial year as the relevant accounting period, the landlord must give an estimate of outgoings at least one month BEFORE the commencement of each financial year. Failure to provide the estimate means that the tenant is not obliged to contribute to outgoings.

An unexpected retail landlord will now find that a tenant may refuse to contribute to outgoings if, as will be the case, a Disclosure Statement has not been given. This refusal will be extended to each subsequent year unless the landlord has given the prescribed estimates prior to the commencement of the accounting year, which will not have been given as the landlord was of the view that the Act did not apply. Exacerbating the problem for the landlord is the decision in Phillips v Abel that subsequently giving details of prior outgoings does not satisfy the requirement to give estimates in advance. The tenant had not paid land tax or outgoings and the landlord could not recover either, because recovery of land tax is prohibited and the landlord had not complied with s 46 in relation to outgoings.

Australian Asset Consulting P/L v Staples Super P/L [2016] VCAT 1726 held that subsequent provision of a s 46 estimate DID enliven the tenant’s obligation to pay previous outgoings but this case was distinguished, perhaps tenuously, on the basis that the tenant had in fact mistakenly paid the outgoings and was seeking recovery.

Richmond Football Club Ltd v Verraty [2011] VCAT 2104 held that a retail tenant who mistakenly pays land tax is entitled to a refund as recovery of land tax is prohibited, but that a landlord who fails to comply with s.46 is not obliged to refund the outgoings, as the landlord had given good consideration for those payments.

Disputes relating to land tax and outgoings are likely to be a feature of the ever-widening retail leasing landscape.

Tip Box

•retail landlords must provide estimates of outgoings in advance

•if a timely estimate is not given the tenant is not obliged to pay

•a tenant who has paid is not entitled to a refund

Land tax – VIC

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Land tax Victoria – Absentee owner surcharge

The land tax surcharge where applicable to Victorian property increases from 1.5% to 2% with effect from 1 January 2020.

The By Lawyers  Victorian Conveyancing publications, as well as the Trusts publication, have been updated accordingly.

By Lawyers wish everyone a happy holiday season.

Land tax – NSW

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Land tax NSW – Increases to threshold values

Land tax thresholds are indexed to rise on 1 January each year.

The 2020 threshold combined land value will increase to $734,000 for all liable land. Special trusts and non-concessional companies are excepted.

A marginal tax rate of 1.6% of the aggregate taxable value above the tax-free threshold plus $100 applies.

If the aggregate taxable value exceeds the premium rate threshold of $4,488,000 then $60,164 is payable plus a marginal tax rate of 2% over that amount.

All relevant commentary and precedents in By Lawyers Conveyancing & Property Guides have been updated accordingly.

By Lawyers wish everyone a happy holiday season.

 

Paid parental leave – Fed

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Employment law – Paid parental leave amendments

The Paid Parental Leave Amendment (Work Test) Act 2019 has made the following changes to the ‘work test’ under the Paid Parental Leave Act 2010:

  1. The insertion of s 33(2A) which provides for the work test period for a pregnant woman in an unsafe job. The period begins 13 months immediately before the woman had to cease work if the cessation was due to the hazards connected with her work posing a risk to the pregnancy; and
  2. The permissible break in the work test period provided for in s 36 has increased from 8 weeks to 12 weeks between two working days.

These amendments commence form 1 January 2020.

The By Lawyers Employment Law commentary has been updated accordingly.

By Lawyers wish everyone a happy and safe festive season.

Testamentary discretionary trusts – Foreign person – NSW

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Testamentary discretionary trusts holding residential property – Surcharge duty and land tax

Where a foreign person acquires or holds residential property, duty and land tax surcharge can apply. Foreign person surcharge duty and land tax can also apply to testamentary discretionary trusts where foreign persons are beneficiaries or potential beneficiaries.

The NSW Commissioner of State Revenue issued a ruling in March 2017 allowing exemption of discretionary trusts from surcharge duty and land tax if the trust deed was amended to exclude foreign beneficiaries within six months of the exemption being granted.

The State Revenue Legislation Further Amendment Bill 2019 is currently before the NSW Parliament. If this Bill is passed, the ability to amend a trust deed to avoid the surcharge will be restricted. Once the Bill passes, the exemption is likely to be removed. The second reading speech for the Bill states: ‘the Government considers that the end of 2019 allows sufficient time for any remaining trustees and their advisers to make necessary changes to trust deeds’.

There is two-year period of grace, from the commencement of the proposed new s 104JA of the Duties Act 1997. During that period, the trustee of a testamentary discretionary trust will not be deemed a foreign person if the deceased was not a foreign person, even if the trust does not prevent a foreign person from being a beneficiary of the trust.

In order to avoid the application of surcharge duty and land tax, the By Lawyers wills creating testamentary discretionary trusts and library of testamentary discretionary trust provisions include a clause titled ‘Foreign beneficiaries’ that prohibits the trustee from making trust distributions to, or otherwise benefiting, a foreign person. The clause must also prohibit an amendment that has the effect of including a beneficiary or potential beneficiary who is a foreign person. Where it is intended for a foreign person to benefit under a testamentary discretionary trust, this clause should be appropriately amended or removed when drafting the will.

It is important to review existing testamentary trust provisions arising under a will and consider whether it is necessary to amend to avoid the application of surcharge duty and land tax.

See the commentary in the Wills (NSW) Guide for further details.

Trusts – Foreign person – NSW

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Discretionary trusts – foreign person

Where a foreign person acquires or holds residential property, duty and land tax surcharge can apply. Foreign person surcharge duty and land tax can also apply to discretionary trusts where foreign persons are beneficiaries or potential beneficiaries.

The NSW Commissioner of State Revenue issued a ruling in March 2017 allowing exemption of discretionary trusts from surcharge duty and land tax if the trust deed was amended to exclude foreign beneficiaries within six months of the exemption being granted.

The State Revenue Legislation Further Amendment Bill 2019 is currently before the NSW Parliament. If this Bill is passed, the ability to amend a trust deed to avoid the surcharge will be restricted. Once the Bill passes, the exemption is likely to be removed. The second reading speech for the Bill states: ‘the Government considers that the end of 2019 allows sufficient time for any remaining trustees and their advisers to make necessary changes to trust deeds’.

It is therefore important for trustees to review existing discretionary trust deeds and consider whether they require amendment.

In order to avoid the application of surcharge duty and land tax, discretionary trust deeds must include a clause that prohibits the trustee from making trust distributions to, or otherwise benefiting a foreign person. The deed must also prohibit an amendment that has the effect of allowing the trustee to make distributions to, or to otherwise benefit, a foreign person.

The By Lawyers Discretionary Trust deed precedents and commentary have been amended accordingly. A note has also been added to the ‘Retainer Instructions – Trusts’ precedent, to prompt practitioners to raise this issue with clients when drafting trust deeds.

See the commentary in the By Lawyers Trusts Publication for further details.

 

Amendments to domestic violence law – SA

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Recent amendments to domestic violence law have commenced in South Australia. They are contained within the Statutes Amendment (Domestic Violence) Act 2018.

Variation of interim orders

The new s 26A of the Intervention Orders (Prevention of Abuse) Act 2009 enables an applicant to apply to the court to vary an interim order issued by police.

Where such an application is made the court must hold a preliminary hearing as soon as practicable and without summoning the respondent to appear. An application can be made by telephone or other electronic means, and the preliminary hearing may occur by oral questioning of the applicant and any other available witness, or by other means contemplated by the rules including affidavit evidence. If the court thinks it appropriate, it may adjourn the hearing so the applicant can attend for questioning.

At the preliminary hearing, the court may:

  • issue an interim variation of the intervention order if it appears to the court that there are grounds for issuing the variation; or
  • determine that the application should be dealt with under s 26 without the issuing of any interim variation order; or
  • dismiss the application on any ground considered sufficient by the court.

Any interim variation issued by the court must require the defendant to appear before the court within eight days.

An interim variation of an intervention order issued by the court comes into force against the defendant when:

  • the order is served on the defendant personally; or
  • the order is served on the defendant in some other manner authorised by the court;
  • the defendant is present in the court when the order is made.

Admissibility of recorded evidence

Pursuant to the new s 13BB of the Evidence Act 1929 and the new s 28A of the Intervention Orders (Prevention of Abuse) Act 2009, the applicant, or someone else for whose protection an intervention order is sought, may give evidence via a recording. Section 28A applies in addition to, and does not derogate from, any other power of the court to receive evidence or to determine the form in which evidence may be received, including evidence in the form of a recording.

Domestic violence strangulation offence

The new s 20A of the Criminal Law Consolidation Act 1935 introduces a specific domestic violence strangulation offence—namely, choking, suffocating or strangling a person without consent with whom the offender is, or was, in a relationship. The maximum penalty for the offence is seven years imprisonment.

Amendment to publications

These amendments to domestic violence law have been incorporated into the commentary in the By Lawyers Intervention Orders guide for South Australia.

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