Your Will is a document that if drafted properly should be legally sound for the remainder of your lifetime. This does not necessarily mean that a Will made 60 years ago will be as secure as one made 5 years ago.
A Will made a very long time ago may no longer perform the legal operation you anticipated, as happens from time to time with changes to the law. Alternately your old Will may not represent your current wishes, asset structure, or the circumstances of your family. There are many reasons to update your Will, but when is the right time to do it? We examine life decade by decade to identify some of the opportune moments to update your testamentary documents. Overall, we recommend that you review your estate plan every 3 to 5 years to ensure it reflects your circumstances.
Your Twenties (when should you draw up a will)
While your twenties are probably more about partying than planning, as soon as you start acquiring assets, whether it is property or your first car, you should have a Will to ensure that your assets pass to your intended beneficiaries.
Death seems like an unlikely event when you are young and healthy, but young people are over-represented in injury statistics. Even if you don’t have substantial assets, if you work full time and have superannuation, you are likely to have a considerable sized insurance policy as part of your super. If you’re living with a de-facto spouse and don’t have a Will, under intestacy law (the law which determines how assets pass if you don’t have a Will), your girlfriend or boyfriend may automatically receive benefits from your estate and this may not be your intention.
Thirties (kids come along)
Your thirties can be a bit like the children’s verse – ‘first comes love, then comes marriage, then comes baby in the baby carriage’. Your Will needs to be updated to reflect your changing family circumstances.
Even if you did a Will in your twenties, what most people don’t realise is that marriage actually revokes a Will. Marriage can also bring more than two people together. Where partners have children from previous marriages, whole families are combined and it’s important to decide whether you will favour your biological children in your Will or whether all children will be treated equally.
If you have children, you should also consider who will look after them and act as their guardian should something happen to you. You need to ensure that you leave your estate in a manner that will protect vulnerable children from third parties and from themselves. This may mean ensuring that 18 year-old children do not have unfettered access to their inheritance, but instead, their inheritance can be used for productive purposes and managed on their behalf until they reach a particular age. A testamentary trust may be more suitable in this circumstance.
You should also consider what would happen if the bread winner in the family died. Would the surviving parent have to work? Could they stay at home and continue to look after the children? What are the existing debts and would there be sufficient assets and funds to cover these? If you have young children, a testamentary trust can offer your children both tax effectiveness and asset protection benefits.
Stay tuned to conclude our journey in part 2 of this article.
In the matter of Yu [2013] QSC 322 (“Yu”) the Supreme Court of Queensland found that a document typed on an iPhone was a valid Will, and granted probate to the person named as executor. In this particular case, the Judge (Lyons J) was compelled by factors including the clear testamentary intent of the note, as the document began with the words ‘This is the Last Will and Testament…’.
The inclusion of necessary elements was also a factor of Lyon J’s decision, as it specified the name and address of the deceased, and appointed an executor. Lyon J noted that the deceased had also typed his name at the foot of the document, where on paper his signature would have been.
Are these all the elements that a formal Will requires? No. A Will is a significant and powerful legal document, and, for this reason, it must satisfy certain formal requirements. An important requirement is that it must be signed at the foot, by the person making the Will (the testator) in the presence of two adult witnesses, and signed by those witnesses.
As the iPhone Will was not witnessed, there were strong arguments against finding that such a document to be a valid Will. Where a document is created with no witnesses, there is no way of showing that it was in fact the deceased who authored it. In addition, a phone can be accessible to others, meaning that another person may have written the ‘Will’.
A document which fails to meet one or more of these criteria will not necessarily fail. A court may be satisfied that a deceased person intended a document to be their Will if it purports to embody their testamentary intentions. In weighing up the validity of such a document, the court will have regard to the manner in which the document was executed and any evidence of the deceased’s testamentary intention. The standard of proof is ‘on the balance of probabilities’ and the courts generally take an expansive approach, as there is a preference to respect, where possible, the stated intentions of a deceased person.
Why is this important?
It may be necessary when administering an estate to consider whether the deceased left any testamentary wishes or intentions on electronic devices such as an iPhone, as it may constitute an informal Will.
Applications to have an informal Will recognised however, can be uncertain and are also costly for the estate. For this reason, it is important you seek legal advice regarding your own estate planning to ensure the key requirements are met when implementing a Will.
In Western Australia, default judgment may be entered under the Rules of the Supreme Court 1971 (WA), District Court Rules 2005 (WA), or Magistrates Court (Civil Proceedings) Rules 2005 (WA), depending on the court. Default judgment arises when a defendant fails to file a defence or otherwise respond within time.
Once entered, the plaintiff becomes the judgment creditor, and the defendant becomes the judgment debtor. The consequences can be significant and immediate.
Upon default judgment being entered, a judgment creditor may pursue enforcement through:
A default judgment may also negatively affect your credit record and ability to obtain loans. Additional legal costs may accrue if enforcement action is taken.
The rules governing setting aside default judgment vary slightly depending on the court, but all WA courts have broad powers to set aside default judgment.
Key rules include:
These rules give courts wide discretion to set aside default judgment where the circumstances justify it.
Western Australia applies similar principles to other states. An applicant generally must show:
This must be more than speculation. In Chapman v Garrigan [2017] WASC 336, the Court emphasised that evidence must be cogent, and mere assumptions or suspicions are insufficient.
Failure to act promptly can cause the application to fail.
You must show that your defence is arguable, not that it will succeed. The threshold is low. WA courts have repeatedly confirmed that matters should, where possible, be resolved on their merits rather than through technical default.
Courts also consider whether setting aside the judgment would cause unfair prejudice to the judgment creditor.
Ignoring a default judgment rarely makes the problem go away. Instead, it usually makes the situation worse. If a default judgment has been entered against you, acting quickly to set it aside is essential to protecting your rights and avoiding unnecessary financial harm.
Default judgment in the Australian Capital Territory is entered when a defendant fails to respond to legal proceedings within the time required under the Court Procedures Rules 2006 (ACT) (“CPR”).
Under Rule 1117 CPR, a defendant is taken to be in default if they fail to file a Notice of Intention to Respond or a Defence within the required timeframe or any extension granted by the Court.
Default judgment is administrative in nature and can be entered by the Registrar without a hearing. Once entered, the plaintiff becomes the judgment creditor, and the defendant becomes the judgment debtor.
If default judgment is entered against you, the judgment creditor may commence enforcement action, including:
Enforcement may significantly impact your credit rating and financial stability. Additional costs may also accrue if enforcement steps are required.
Enforcement procedures arise under Part 2.16 CPR (ACT).
Applications to set aside default judgment in the ACT are made under Rule 6572 CPR, which gives the Court a wide discretion to set aside a judgment where the interests of justice require it.
Because default judgment is not a decision on the merits, ACT courts are generally prepared to set it aside provided certain requirements are met.
To succeed in an application to set aside default judgment, an applicant will generally need to establish the following elements.
The Court requires a credible explanation for why no response was filed within the required timeframe.
A leading ACT example is Eastman v Commissioner for Housing for the Australian Capital Territory (2006) 200 FLR 272. In this case, the applicant failed to appear because of mail delays and communication issues. The Court held these to be reasonable explanations, and that refusing even a short adjournment denied natural justice. The appeal was allowed.
The case demonstrates that a reasonable explanation may include:
What matters is that the explanation is genuine and adequately supported by evidence.
You must act promptly once you become aware of the default judgment.
Unexplained delay can result in refusal of the application.
The ACT Supreme Court has repeatedly emphasised the importance of timeliness to avoid prejudice to the judgment creditor.
The applicant must demonstrate a prima facie defence, a low threshold requiring only that there is a genuine issue to be tried.
In Stormer Building Group Pty Ltd v Johnson [2014] ACTSC 23, the Court held that the defendants had an arguable defence where they alleged:
The Court found no significant delay, no real prejudice to the respondent, and therefore set aside the default judgment.
This case illustrates that:
ACT courts balance the importance of finality in litigation with the need to avoid injustice. Because default judgment is not a determination on the merits, the Court will generally set it aside if these elements are met and the interests of justice require it.
Ignoring a default judgment only increases the financial and legal consequences. Prompt action gives an applicant the strongest chance of success.
Default judgment occurs when the court enters judgment in favour of one party—usually the plaintiff—because the defendant has failed to file a defence or otherwise respond to the claim within the time required under the Uniform Civil Procedure Rules 1999 (Qld) (“UCPR”). Once default judgment is entered, the plaintiff becomes the judgment creditor, and the defendant becomes the judgment debtor.
Having default judgment entered against you can have serious financial and legal consequences. Fortunately, Queensland courts allow applications to have default judgments set aside in appropriate circumstances.
Once default judgment is entered, the judgment creditor may immediately commence enforcement action. This may include (without limitation):
A default judgment can also negatively affect your credit rating and your ability to obtain future credit. Additional legal costs may accrue if enforcement action is pursued.
The Queensland courts have the power to set aside default judgment under Rule 290 UCPR (setting aside judgment by default). Courts often take a flexible approach, recognising that default judgment is a procedural, not merits-based, determination.
However, to succeed, an applicant must satisfy the Court that certain key elements are met.
To set aside default judgment in Queensland, you generally must establish:
You must provide a credible explanation for why you failed to file a defence or respond in time. Examples may include incorrect service, misunderstanding of process, illness, or other circumstances affecting your ability to comply.
The application to set aside must be brought promptly after you become aware of the judgment. Unexplained delay can hinder your prospects of success.
The threshold is low. You do not need to prove you will win—only that there is a genuine, arguable defence. Affidavit material setting out the nature of your defence will be required.
These principles are consistently applied by Queensland courts, including in cases such as Cook v D A Manufacturing Co Pty Ltd [2004] QCA 52, where the Court emphasised that justice is usually best served by resolving matters on their merits.
It is common for parties to ignore default judgment in the hope that the matter will resolve itself. As noted above, this can lead to serious adverse consequences. If default judgment has been entered against you, seeking to set it aside promptly is essential.
Section 54 of the Insurance Contracts Act 1984 (Cth) aims to protect policyholders by preventing insurers from denying claims based on policy conditions that have no causal connection to the loss or damage suffered by the policyholder.
For example, if a policyholder breaches the conditions of their policy by failing to notify their insurer of a claimable event as soon as possible, the insurer cannot deny coverage unless that delay caused (or contributed to) the loss the policyholder seeks to be covered for. In other words, the insurer cannot rely on a technical breach of the policy because the breach (the delay) played no part in the loss for which cover is sought.
If a policyholder’s breach of a policy causes, or contributes, to the loss for which they seek cover, the insurer is not necessarily entitled to deny the claim but may reduce the amount paid in settlement of the claim to an amount that fairly represents the extent to which its interests were prejudiced by the policyholder’s acts.
Section 54 has been considered and applied in cases involving different types of insurance and scenarios. Some examples are:
The insurer argued that the insured hospital had breached a condition of the policy by failing to notify the insurer of any circumstances that might give rise to a claim as soon as possible. The court found that the hospital’s delay in notifying the insurer did not cause or contribute to the liability and that the insurer was not prejudiced by the delay. Therefore, the insurer could not refuse to pay the claim by reason only of the breach of the policy.
The insurer argued that the policy only covered drivers who had passed a specific test and that the driver of the truck (in respect of which cover was sought) had not passed the test. The court found that the driver’s failure to pass the test did not cause or contribute to the accident and that the insurer was not prejudiced by the driver’s lack of qualification. Therefore, the insurer could not refuse to pay the claim by reason only of the driver’s failure to have taken the test.
The insurer argued that the insured financial planner had breached a condition of the policy by failing to maintain certain records and documents. The court found that the financial planner’s breach did not cause or contribute to the liability created by the financial planner’s alleged professional negligence. As such, the insurer was not prejudiced by the failure to maintain documents and was prevented by section 54 from refusing to provide indemnity against the claim.
It is important for policyholders to be aware of the role of section 54 if their claim is being denied for acts/omissions said to have prejudiced the insurer’s position.
Unless that act/omission cause or contributed to your loss, you may be able to rely on section 54 to obtain a better insurance settlement.
Default judgment is when the court enters a judgment in favour of a party (typically, a plaintiff) as a result of the other party’s (typically, a defendant) failure to respond to legal proceedings or meet court deadlines. If default judgment is entered against a defendant for a sum of money, the plaintiff becomes the ‘judgment creditor’ and the defendant becomes the ‘judgment debtor’.
Having a default judgment against you can have negative consequences. However, there are circumstances in which default judgments can be set aside. In this article, we will provide you with a guide on setting aside default judgments in NSW.
If default judgment is into entered against you, the judgment creditor might take enforcement action to recover the amount that the Court has ordered that you are liable to pay. This may result in (without limitation) your assets being seized and sold or your wages being garnished and paid to the judgment creditor.
The judgment can also negatively impact your credit rating, affecting your ability to obtain loans.
Further, you may become liable to pay additional costs if a judgment debtor has to take enforcement action against you.
Courts are often readily willing to set aside default judgments. This is because default judgment is an administrative form of judgment as opposed to a judgment based on the merits of a legal argument.
However, to set aside judgment an applicant will have to satisfy the Court that the following elements are present:
It is not uncommon for parties to ignore default judgment in the hope that the matter will go away. As above, this can have negative consequences that can be avoided by making an application to set aside default judgment.
A recent case from the Federal Court of Australia looks at the circumstances in which a Court may (or may not) be persuaded to vary orders already made in a matter.
Background
In Mountain Trail Engineering Pty Ltd v Foster [2023] FCA 718, an interlocutory application was filed by the Respondents in the proceedings to vary an earlier order made by the Court.
The proceedings related to allegations by the Applicant that its former employee Mr Foster, and Mr Foster’s new employer (the Respondents), had misused the Applicant’s confidential information to design the “Seisia Caravan”.
During the proceedings, an order was made against the Respondents that:
“restrained [them] from, without the licence or authority of the Applicants manufacturing or continuing to manufacture, promoting, offering for sale or selling the Seisia Caravan.. promoted and sold to date and any other products developed (either entirely or in part) by using any of the MTRV documents (or any part of such documents) (to be referred to as Order 5).
Order 5 was made in circumstances where the affidavit evidence of the Respondents confirmed that Mr Foster had retained copies of the Applicant’s files after his employment with the Applicant had ended. He had also transferred this data to the Respondents’ computer and used that material to design the Seisia caravan.
Application to vary Orders
During the proceedings, and pending a final determination of the matter, the Respondents wanted to send their newly designed caravan on a promotional trek
On 23 June 2023, the Respondents filed an application to vary Order 5.
The Respondents sought to vary Order 5 to allow them to use a redesigned version of the caravan for a promotional trek.
The Respondents’ evidence in support of the application included:
The Respondents’ application was heard by O’Callaghan J]. O’Callaghan relied on the following comments made by Young J in Paras v Public Service Body Head of the Department of Infrastructure (No 2) [2006] FCA 652 to summarise the principles that apply to the Court’s power to vary orders:
“…the power is discretionary, and the authorities in this Court indicate that it is ordinarily only exercised in exceptional circumstances … The authorities indicate that the kind of exceptional circumstances that might attract the power of discharge or variation include where an interlocutory order was obtained by fraud or non-disclosure of material facts, or through an accident or mistake that occurred without the fault of the parties … The court’s discretion to vary aside an order is to be exercised with great caution having regard to the importance of the public interest in the finality of litigation … In my opinion, these principles apply, a fortiori, where the party applying for discharge of an interlocutory order seeks to reargue the issues that have already been determined by reference to additional evidence that was available to it on the earlier occasion but which it chose not to advance[.]”
Ultimately, his Honour held that the Respondents did not make a good case to vary Order 5 on the basis that:
Takeaways
This decision is a reminder of the limited circumstances that will be considered when the Court decides whether to exercise its discretion to vary previous orders. Commercial inconvenience will not necessarily be persuasive. It may also be that new information presented to the Court in an effort to vary orders will be given little weight if that information should have been presented to the Court at an earlier stage in proceedings.
The Treasury Laws Amendment (More Competition, Better Prices) Act 2022 (the Act) received Royal Assent on the 9th of November 2022, introducing various amendments to the Competition and Consumer Act 2010 (Cth). Included in this were changes to the previous Unfair Contract Terms (UCT) regime.
The majority of the reforms to the UCT regime had a 12-month transition period, with it being recommended that businesses review their standard form contracts to remove or alter existing unfair contract terms. The reforms will be applicable to any standard form contract, or term of a contract, made or renewed on or after the 9th of November 2023.
Standard form contracts are often relied upon by businesses as they are both time and cost effective. However, consumers and small businesses often lack the power and resources to effectively negotiate their terms. The reforms to the UCT regime were designed to increase protections available to consumers and small businesses subject to unfair contract terms, while disincentivising anti-competitive and unfair practices.
Changes
Increased penalties
Under previous legislation, UCTs did not attract penalties, with courts only able to declare UCTs void and unenforceable. Now, the maximum financial penalties for use of UCTs (by corporations) will be the greatest of:
Every unfair term within a contract constitutes a separate contravention of the law, with pecuniary penalties able to be imposed on this basis.
Broader definition of small business
The bracket of small businesses who can rely on these protections has been expanded. While previously defined as a business which employs under 20 persons, small businesses now include those who employ fewer than 100 people or have a turnover of less than $10 million for the previous income year.
Changes to designation of standard form contracts
Under the reforms, a contract may be deemed a standard form contract even in the following circumstances:
Application
What is considered ‘unfair’ is not explicitly defined by the Act. For a court to decide that a term is unfair they must be satisfied that the term (s 24(1) ACL):
Relevant considerations a court may take into account when deciding a term’s fairness include the transparency of the term, the context of the broader contract (s 24(2)), the particular interests of the consumers affected, and the broader interests of consumers.
For an adverse finding, the court must find that the application of the term would cause detriment to a party, either financial or non-financial. Claimants do not need to demonstrate actual detriment, just its substantial likelihood.
Court powers
The reforms included an expansion of the court’s discretionary powers with respect to UCTs. If a court finds that a term is unfair, it possesses the power to:
Examples
Commonly seen unfair contract terms include:
A convertible note is a short-term debt instrument that later converts into equity. A convertible note is issued when investors make a loan to a company, with the note then ‘converting’ into shares in that company under circumstances known as ‘trigger events’. They provide an alternative to basic debt instruments (e.g., loans) or straight equity (e.g., ordinary shares).
Trigger events may include:
Advantages
As opposed to issuing shares, issuing convertible notes doesn’t require a company valuation. This is particularly beneficial for start-up businesses who may not have sufficient data to accurately set a valuation, or during times when a company valuation is uncharacteristically low.
Issuing convertible notes are also often more cost and time-efficient than other alternatives – such as shares – as they require less legal documentation and have comparatively minimal regulatory requirements.
Further, convertible notes can provide flexibility. For example, you can include a right to choose whether to receive shares upon a trigger event, or have the note repaid in cash. You may also request that the note contains an option to convert into shares at any point in time, even if a trigger event hasn’t occurred. Convertible notes can often be negotiated on more favourable terms for earlier investors (e.g., discounted rates, valuation caps, or interest accrual (to be paid upon conversion)) as opposed to those who invest in later rounds.
Given a convertible note is a type of loan, if a company goes into liquidation, it will be required to repay this debt. This is unlike shareholders, who are not entitled to receive the money they paid for shares if a company goes into liquidation. This can reduce the risk associated with investment, with convertible notes expected to increase in popularity during periods of uncertain or unstable equity market conditions.
Disadvantages
Convertible notes can, however, also be associated with greater risk exposure. Particularly concerning start-up businesses, if a company goes into liquidation while the note is outstanding, there may be no funds remaining to repay the debt. Further, there are additional risks that a trigger event may not occur, meaning that the loan will not be repaid (if there are no clauses providing otherwise).
While holding a convertible note, you may also not have shareholder rights (e.g., voting power, or a claim to dividends). This means that your influence over the company’s operations will be limited compared to a shareholder or director. Issuers of the convertible note may consider this beneficial, however, as the company can gain funding without providing rights to lenders.