ByLawyers News and Updates

Estates cases – VIC

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New estate cases have been added to the By Lawyers 101 Succession Answers (VIC) reference manual.

The new cases under the Estates section of the publication relate to:

Vesting of interest in beneficiaries – Rule in Saunders v Vautier

A beneficiary can apply to the court to have their interest vest earlier than provided for in the will. The rule in Saunders v Vautier possibly provides such a mechanism.

The High Court set out the modern formulation of the rule in Saunders v Vautier in CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53 at [47]:

Under the rule in Saunders v Vautier, an adult beneficiary (or a number of adult beneficiaries acting together) who has (or between them have) an absolute, vested and indefeasible interest in the capital and income of property may at any time require the transfer of the property to him (or them) and may terminate any accumulation.

If the beneficiaries are ascertained, have capacity and all consent then ‘they may put an end to the trust by directing the trustee to transfer the interest in the estate to themselves, notwithstanding any direction to the contrary in the trust instrument’: Krstic v State Trustees Ltd [2012] VSC 344 at [15].

For a case where the rule was not upheld due to the beneficial interest being classed as contingent, see Arnott v Kiss [2014] NSWSC 1385. This case also suggests that a gift over clause may defeat application of the rule.

Accordingly, whether there is any reason for the executor to resist the application would depend upon there being any terms of the will that might support such a position. If the executor is in any doubt then the trustee can and should seek judicial advice.

The addition of these new estate cases to 101 Succession Answers (VIC) is part of our continuing commitment to enhancing our content and helping our subscribers enjoy practice more.

Estate cases – QLD

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New estate cases have been added to the By Lawyers 101 Succession Answers (QLD) reference manual.

The new cases under the Estates section of the publication relate to:

Vesting of interest in beneficiaries – Rule in Saunders v Vautier

A beneficiary can apply to the court to have their interest vest earlier than provided for in the will. The rule in Saunders v Vautier possibly provides such a mechanism.

The High Court set out the modern formulation of the rule in Saunders v Vautier in CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53 at [47]:

Under the rule in Saunders v Vautier, an adult beneficiary (or a number of adult beneficiaries acting together) who has (or between them have) an absolute, vested and indefeasible interest in the capital and income of property may at any time require the transfer of the property to him (or them) and may terminate any accumulation.

In Re Tracey [2016] QCA 194 the Court of Appeal at [10] stated that:

The context of that reference makes it clear that the rule may be invoked only by a beneficiary who is sui juris. The expression sui juris connotes in law “a person who can validly contract and bind himself by legal obligation uncontrolled by another person”.

For a case where the rule was not upheld due to the beneficial interest being classed as contingent, see Arnott v Kiss [2014] NSWSC 1385. This case also suggests that a gift over clause may defeat application of the rule.

Accordingly, whether there is any reason for the executor to resist the application would depend upon there being any terms of the will that might support such a position. If the executor is in any doubt then the trustee can and should seek judicial advice.

The addition of these new estate cases to 101 Succession Answers (QLD) is part of our continuing commitment to enhancing our content and helping our subscribers enjoy practice more.

Estates cases – NSW

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New estates cases have been added to By Lawyers 101 Succession Answers (NSW) reference manual.

The new cases under the Estates section of the publication relate to:

Additional assets after grant

The administrator’s obligation to disclose is a continuous one. Any assets not disclosed in the initial affidavit must be disclosed to the court by way of further affidavit: r 78.91 Supreme Court Rules 1970. If an asset has come to light after the grant has been finalised, an Affidavit of Additional Assets needs to be filed.

If an updated copy of the grant is required, an Application for Exemplification also needs to be filed. An exemplification is a certified and sealed copy of a grant. The Inventory of Property does not need to be amended.

The Affidavit of Additional Assets and the Application for Exemplification are available in the By Lawyers Estates guide, on the Probate and Letters of Administration matter plans.

Vesting of interest in beneficiaries

A beneficiary can apply to the court to have their interest vest earlier than provided for in the will under the rule in Saunders v Vautier.

The High Court set out the modern formulation of the rule in Saunders v Vautier in CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53 at [47]:

Under the rule in Saunders v Vautier, an adult beneficiary (or a number of adult beneficiaries acting together) who has (or between them have) an absolute, vested and indefeasible interest in the capital and income of property may at any time require the transfer of the property to him (or them) and may terminate any accumulation.

In Beck v Henley [2014] NSWCA 201 the Court of appeal at [35] stated that:

Adult beneficiaries who are absolutely and indefeasibly entitled have power to “overbear and defeat the intention of a testator or settlor to subject property to the continuing trusts, powers and limitations of a will or trust instrument”.

A case where the rule was not upheld has been added –  Arnott v Kiss [2014] NSWSC 1385.

The addition of these new estates cases to 101 Succession Answers (NSW) is part of By Lawyers continuing commitment to enhancing our content and helping our subscribers enjoy practice more.

New succession cases – NSW

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New succession cases have been added to the By Lawyers 101 Succession Answers (NSW) reference manual. These helpful recent cases fall under the Estates and Family provision claims sections of the publication.

Proof of death by inference

The Estate of Alan Bruce Beeby [2020] NSWSC 1512 concerned proof of death by inference. A court may declare a missing person dead, without a death certificate and before the seven-year period relating to the presumption of death is met. At [53] Hallen J explained:

…an inferred death is one where, although a body is not found or recovered, the death can be inferred from the surrounding circumstances, and where it can be inferred that it is more probable that the person has died, rather than that he, or she, is living.

Judicial advice for trustees

Re Perpetual Trustee Company Limited as a trustee for the Joseph Banington Davis Settlement [2020] NSWSC 1574 concerned the dual purpose of an application for judicial advice by an executor/trustee. Robb J at [72] noted that:

It is…not right to see a trustee’s application for judicial advice about whether to sue or defend proceedings as directed only to the personal protection of the trustee. Proceedings for judicial advice have another and no less important purpose of protecting the interests of the trust.

Intermeddling by executors

The Victorian case of Re Abat [2020] VSC 560 contains a discussion of when intermeddling in an estate might deprive an executor of the right to renounce. It should be read in conjunction with the NSW case of Mulray v Ogilvie [1987] 9 NSWLR 1 which is already in 101 Succession Answers.

Costs in Family provision claims

Shelly v Prager (No 2) [2020] NSWSC 1553 concerned the court assessing the overall justice of a case when determining whether special provision for costs should be made in a family provision claim. Williams J at [18] stated the following factors may be relevant:

– whether one party has engaged in unreasonable conduct in the commencement or maintenance of the proceedings which has resulted in the other party (or parties) to the proceeding incurring unnecessary costs;

– whether an applicant’s claim for provision out of an estate is frivolous, vexatious or made without reasonable prospects of success;

– whether an applicant’s claim, although unsuccessful, was otherwise reasonable, meritorious or borderline; and

– the relative size of the deceased estate.

The addition of these recent cases to 101 Succession Answers (NSW) is part of By Lawyers continuing commitment to enhancing our content and helping our subscribers enjoy practice more.

Wills guide reviewed – QLD

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The continuing commitment of By Lawyers to updating and enhancing our publications has seen the Queensland Wills guide reviewed.

Subscribers using this popular publication will find a re-ordered and extended matter plan, revised and updated commentary and a number of new precedents. Execution is now a top-level heading on the matter plan, with dedicated commentary on issues such as blind witnesses, gifts to witnesses and solicitors as witnesses. The revisions also include:

  • First steps and taking instructions for wills
  • Testamentary capacity and the test in Banks v Goodfellow
  • The formal requirements for a valid will
  • Informal wills
  • Intestacy
  • Executors
  • Execution
  • Challenges to the validity of a will

New and amended precedents

  • Letter to client to confirming instructions
  • To do list
  • Instructions for signing
  • Letter reminding client that will is ready for signing

Other resources in the Wills guide reviewed

Links have been added to the By Lawyers reference materials Other trusted and useful resources. New cases have been added to 101 Succession Answers (QLD).

Both of these resources can be found in the Reference materials folder on the matter plan.

Wills guide reviewed – VIC

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The continuing commitment of By Lawyers to updating and enhancing our publications has seen the Wills guide reviewed.

Subscribers in Victoria using this popular publication will find a re-ordered and extended matter plan, revised and updated commentary and a number of new precedents. Execution is now a top-level heading on the matter plan, with dedicated commentary on issues such as blind witnesses, gifts to witnesses and solicitors as witnesses. The revisions also include:

  • First steps and taking instructions for wills
  • Testamentary capacity and the test in Banks v Goodfellow
  • The formal requirements for a valid will
  • Informal wills
  • Intestacy
  • Executors
  • Execution
  • Challenges to the validity of a will
New and amended precedents
  • Initial letter to client enclosing costs agreement
  • Letter to client to confirming instructions
  • To do list
  • Instructions for signing
  • Letter reminding client that will is ready for signing
Other resources in the Wills guide reviewed

A number of links have been added to the Other trusted and useful resources.  A number of new cases have been included in 101 Succession Answers (VIC). Both of these resources can be found in the Reference materials folder on the matter plan.

Wills guide reviewed – NSW

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The continuing commitment of By Lawyers to updating and enhancing our publications has seen the Wills (NSW) guide reviewed.

Subscribers using this popular publication will find a re-ordered and extended matter plan, revised and updated commentary and a number of new precedents. Execution is now a top-level heading on the matter plan, with dedicated commentary on issues such as blind witnesses, gifts to witnesses and solicitors as witnesses. The revisions also include:

  • First steps and taking instructions for wills
  • Testamentary capacity and the test in Banks v Goodfellow
  • The formal requirements for a valid will
  • Informal wills
  • Intestacy
  • Executors
  • Execution
  • Challenges to the validity of a will
New and amended precedents
  • Initial letter to client enclosing costs agreement
  • Letter to client to confirm instruction, advice and arrangements
  • To do list
  • Instructions for signing
  • Letter reminding client that will is ready for signing
Other resources in the Wills guide reviewed

A number of links have been added to the Other trusted and useful resources and a number of new cases have been included in 101 Succession Answers (NSW). Both of these can be found in the Reference materials folder on the matter plan.

101 Succession Answers – Vic

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By Lawyers is delighted to release the latest in our 101 Reference Series – the comprehensive reference guide 101 Succession Answers – VIC. This useful resource provides more detailed information than the By Lawyers commentaries on the various areas and issues in succession law. It includes discussion, with links to legislation and cases, on:

  • powers of attorney and supportive attorney appointment;
  • medical treatment decision-making;
  • wills;
  • appointments of guardianship and administration;
  • estates – probate and administration; and
  • family provision.

101 Succession Answers VIC is now a related guide in LEAP – and included for new and existing website subscribers – to these Victorian By Lawyers publications:

  • Wills, Powers of Attorney and Advance Health Directives;
  • Estates; and
  • Family Provision Claims.

This is a must-have, easy-reference, resource providing detailed information in a quickly accessible and searchable format. Tricky questions can be answered quickly using the guide’s alphabetical headings, ‘Ctrl+F’ searchability and plain English format. Practitioners can quickly address specific technical issues as they arise in a matter.

The By Lawyers team will be keeping 101 Succession Answers VIC updated with all relevant new cases and legislation as developments in these areas of law occur.

Electronic Transactions – NSW

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Schedule 1 to the Electronic Transactions Regulation 2017 (NSW) came into operation on 22 April 2020 . It allows for witnessing of documents by audio visual link in New South Wales.

This is a practical step by NSW parliament. It allows wills, powers of attorney, deeds and agreements, enduring guardianship appointments, affidavits and statutory declarations to be witnessed through audio visual means. Formats such as Zoom, Skype or Microsoft Teams, which integrates with LEAP, can be used.

Practitioners can send a document to a client by email, if the client has printing facilities, or by post. A meeting can then be arranged via any audio visual format to witness the client signing the document.

Under the regulation the practitioner witness must:

  • Observe the client sign the document in real time – this may involve ensuring that the practitioner can view the document on screen as the signature is made;
  • Sign the document or a copy of the document themselves;
  • Be reasonably satisfied that the document that they sign is the same document, or a copy of the document, signed by the client; and
  • Endorse the document, or copy, with a statement specifying the method used to witness the signature and that the document was witnessed in accordance with the regulation.

The following wording is suggested for the endorsement:

This document was signed in counterpart and witnessed over audio visual link in accordance with clause 2 of Schedule 1 to the Electronic Transactions Regulation 2017.

The regulation allows a witness to sign a counterpart of the document, or have the client scan and email the signed document back to the practitioner, who may then print and witness the copy. Of course, the client may also post the original back to the practitioner, who may then sign the original document on receipt.

The regulation also allows for swearing or affirming the contents of an affidavit by audio visual link.

This is a temporary, COVID-19 related measure. Schedule 1 expires 6 months from the date of commencement, being 22 October 2020.

Remote signing – All states

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Practical issues relating to the remote signing of documents such as agreements, deeds, wills and powers of attorney by companies and individuals

Remote signing of documents has become an important issue for solicitors and their clients due to the coronavirus pandemic. Face to face meetings are now largely excluded meaning clients are unable to attend at their lawyer’s office to sign documents.

Documents which must be signed need to be mailed or emailed to clients and then signed remotely.

Signatures

Signatures establish the identity of the person signing and their intention to create legal relations.  It is this intention indicated by placing their mark on a document that gives it its legal character or functionality, not the mark itself. There is no real distinction made at law between handwritten signatures, marks or electronic signatures. Signing a document electronically might be done by typing one’s name, pasting an image of one’s usual signature, using a stylus or finger on a touchscreen or using e-signing software.

Agreements

An agreement can be in electronic form and executed electronically, if witnessing is not required.

Most contracts, such as the contract for the sale of land, do not require a witness.

If witnessing is required, it can be done electronically provided the witness is present when the deed is signed. If witnessing is not possible this way due to virus related isolation, then the counterparty will need to agree to another method.

Electronic conveyancing requirements

A Client Authorisation Form may be electronically signed, subject to specific jurisdictional requirements. Whilst the Verification of Identity Standard requires a face-to-face in person interview, compliance with the standard is not mandatory and taking ‘reasonable steps’ to verify the identity of the client, such as by video meeting, is sufficient.

The By Lawyers Contract for Sale of Land in NSW and in VIC allows for electronic exchange and electronic settlement in compliance with electronic transactions legislation and the Verification of Identity Standard rules.

Deeds

Deeds usually require signatures to be witnessed and to be in writing.

An electronically-signed deed that is immediately printed out on paper may satisfy the common law requirement for paper with the first printed version being the original deed rather than a copy. However, parties to a transaction are better served to agree in advance to the acceptability of a particular form of deed and its electronic signature. Similarly, checking before execution  the requirements of organisations such as registries with whom the deeds must be registered will ensure their acceptability.

As mentioned above, witnessing can be electronic provided the witness is present when the deed is signed. If this is not possible then the counterparty will need to agree to another method.

An acceptable method might be by video attendance of the party’s lawyer who on return of the signed deed certifies it to be identical to the one submitted for signing and that the signing was witnessed by video.

Wills

The issue with executing wills remotely given social distancing, is the availability of two witnesses who are not themselves beneficiaries.

Where the required two disinterested witnesses are not available, the will may be executed informally, by the testator, who after signing it, returns it to their solicitor with a statement that they intend it to be their last will and testament. Accompanied by an affidavit explaining the signing in the prevailing circumstances, perhaps with video witnessing, a grant of probate of the informal will is likely to be made if required. Once the pandemic ends the will can be properly signed.

Powers of attorney

A general power of attorney does not need a witness and can be signed remotely.

However, an enduring power of attorney must be witnessed by a prescribed witness – usually the principal’s solicitor – who must also certify that they explained the effect of the document to the principal and that they appeared to understand it. On that basis remote signing is technically impossible.

Where a face to face meeting – even one at an outdoor location with appropriate distancing – is not possible, the document could be sent to the client by post or email for their written or electronic signature. Their lawyer could hold a video conference with the client and explain the document and see it signed by their client. When returned the lawyer can certify that they gave the explanation and were satisfied as to the principal’s understanding, but whilst unable to personally witness the document being signed, they witnessed the signing in video conference.

In this practical way the power is likely to be acceptable in most cases where there is no issue raised.

Where this approach is taken, the risks that the document may not be effective need to be explained to the client and appropriate file notes made.

Appointments of enduring guardian and Advance medical directives

The same witnessing and certification procedures apply to these instruments as for enduring powers of attorney. Similar practical, emergency measures might be undertaken.

Company execution

It is arguable whether a company can execute a document electronically under s 127 of the Corporations Act 2001.

However, in this busy world of commerce it is common for documents to be signed by duly authorised officers, or one director, or by a duly appointed attorney.

Generally

The ongoing response to Coronavirus means that emergency measures are rapidly being introduced to modify the usual signing and witnessing requirements. For example, some courts will currently accept unsigned affidavits on the basis that they will later be formally executed if necessary. The website of each court should be referred to as required.

 

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