When drafting your Will and organising your affairs after your death, it is essential to consider whom you would like to benefit from your estate.
Most people already know their primary beneficiaries (for instance: Husband/wife, then children), however many neglect to consider whom they would like to benefit in the event that their primary beneficiaries are predeceasing them or “dying before attaining a vested interest”.
Many people may not acknowledge the importance of naming more than one beneficiary, and may even consider the phrase “dies before attaining a vested interest” to be a largely unimportant, throwaway line.
However, the recent decisions in ‘In the Estate of Koppie [2019] ACTSC 106 and Serwin v Dolso [2020] NSWSC 370′ emphasise the importance of naming alternate beneficiaries.
Children of Beneficiaries Inheriting the Share their Parent Otherwise Would
In the Estate of Koppie dealt with a clause bequeathing the rest and residue of the deceased’s estate to her “children as shall survive me and attain the age of eighteen (18) years and if more than one in equal shares as tenants in common”. The deceased had four children, one of whom predeceased her, and the Court was left to consider, in the absence of any clause stating otherwise, whether the deceased child’s children (i.e. grandchildren) were to inherit the share their parent would have otherwise inherited.
The Court considered the operation and effect of Section 31(1) of the Wills Act 1968 (ACT). Section 31(1) states that if a testator gifts property in their Will to a beneficiary who is their child, and the beneficiary dies in their lifetime but is survived by children of their own (being the testator’s grandchild or grandchildren), and the grandchild survives the testator by 30 days unless a contrary intention appears in the Will, the grandchild is to benefit as though they were the original beneficiary.
The Court considered a possible contrary intention in the Will, and therefore the exclusion of the testator’s grandchildren as beneficiaries, in the words “to such of my children as shall survive me and attain the age of eighteen years”. It was found, however, that this was a general requirement and not evidence of a contrary intention.
Furthermore, the Court reviewed “and if more than one as equal share as tenants in common” for evidence of possible contrary intention, but found that it was not evidence of contrary intention either, and actually confirmed the operation of Section 31.
The testator’s grandchildren were therefore found to be entitled to their deceased parent’s share under the Will due to the operation of the Wills Act 1968 (ACT). Legal proceedings could have been avoided, however, if this had simply been appropriately drafted in the Will.
When a Named Beneficiary Dies Before Attaining a “Vested Interest”
Serwin v Dolso contemplated the circumstances where a beneficiary dies while the testator’s estate is still in the administration phase.
In this case, the testator left the rest and residue of his estate to his brother, and in the event that his brother predeceased him or died before attaining a vested interest, the rest and residue of his estate were to go to his niece. The testator died on 27 June 2014, probate was granted on 21 October 2014, and the brother who was to benefit died on 18 November 2014.
The Court found that the phrase “dies before attaining a vested interest” means dies “before the estate is fully administered and available to be distributed”. The term “died before attaining a vested interest” therefore means that the beneficiary is not to be treated as having a vested interest simply because they survived the testator.
So the niece was entitled to the residue of the testator’s estate as a beneficiary in place of the testator’s brother.
In summary, planning for how you would like your estate to be administered, and particularly whom you would like to benefit from your estate after your death is incredibly important. It is vital that you consider all future possibilities, and think about whom you would like to benefit from your estate as alternate or secondary beneficiaries if your original beneficiaries are not able to benefit.
Making sure your Will is drafted properly, can prevent drawn-out litigation over your estate in the future, and ensure that your estate is administered smoothly and according to your wishes. Get in touch with our Wills and Estates specialists team today.
**Assisted by; Caroline Reilly**
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In this episode, Chamberlains’ Managing Director, Stipe Vuleta, is joined by Accross Business Principal & Director Kieran May, to discuss all things Jobkeeper, SGC Amnesties and strategy about recovery post COVID-19.
As with all Chamberlains Lawcast episodes, the information provided cannot be considered as legal advice, if you have any questions in relation to any information presented, please contact our office on 02 6188 3600 or visit our website at chamberlains.com.au
Stipe Vuleta: Hi viewers, it’s Stipe from Chamberlains again, and I’m here with Kieran May from Accross Business talking all things, Jobkeeper, SGC amnesties and strategy about recovering post-Corona. Kieran, how are you going?
Kieran May: Yeah good Stipe. Good yourself.
Stipe Vuleta: Really, well, I’m chilling at home in the home office and enjoying a coffee, which is already complete and finished and looking forward to the next one.
Um, what about you? What are you up to today?
Kieran May: Having a coffee. Yeah, well, actually I’m very, very busy. Um, there’s a few, you know, initiatives starting to kick goals, but it was interesting, um, you know, you mentioned there you are in your lounge recording this conversation, I’m sitting in my home office allowing you to record the conversation.
And it, it just occurred to me that, that here I am, and here you are, doing what we plan to do pre-COVID. Yeah. Um, and suddenly with COVID hitting us now, our opportunity to work from home is what everybody’s doing! It’s becoming, this is the way to do business.
Stipe Vuleta: Oh, absolutely. I mean, can I say, you know, say in, in a, in a way share, uh, an insecurity, I have pre-Corona because I’ve always been a pretty relaxed and casual guy. And, you know, you want to be doing things like this, but I, but I, I think prior to COVID-19, there was always an expectation. You do a corporate video, it’s you and I in suits in front of a white or a blue background and, you know, jazzy images and stuff like that. Whereas I think this is a, a lot more honest, lot more accessible and, you know, hopefully the viewers get some value out
Kieran May: And in marketing speak, they say it’s “authentic”.
Stipe Vuleta: Well, well speaking of being authentic, you’re a bit of a master on LinkedIn Keiran, do you want to tell us a bit about your business and where people can find you?
Kieran May: Sure. Yeah. Uh, accross.com.au, is the web address and that’s accross with two C’s. You have to watch your spellcheck there. And it’s got two C’s in it because we talk about accountable. We talk about accessible.
Stipe Vuleta: Yeah.
Kieran May: Um, hence the two C’s to play on that. Um, but I do get around on LinkedIn quite a bit. You can follow my personal posts it’s probably the, the most common, um, source of information. Then I do like the comment of, I’ve got an opinion on a lot of things.
Stipe Vuleta: Speaking of conversations, I’m not going to hold you to it, but, uh, you know, Jobkeeper’s a hot mess, but an exciting, hot mess at the moment. What are your thoughts on it? What developments, where do you think it’ll land?
Kieran May: Jobkeeper?! The big, the big downside to it, of course, is that, that circumstances around jobkeeper, keep changing, so the rules keep changing. Um, and you know, we, we can go back to the jobkeeper one when the first announcement was made, and then we’re all confused because the tax office kept changing the rules. Every, every day, they kept making more exceptions and whatever. But interestingly, right from the start, they said, “Hey, this is where it’s at, we don’t know what’s going to happen tomorrow”. We’ll keep tweaking it. And eventually on the 28th of May was the, the cutoff date for it all to start happening. But their promise was by the 28th of May, we will have it all sorted out. People panicked in the meantime, because they kept changing the rules. 28th of May came, bang, tax office had it all sorted out.
Stipe Vuleta: Yeah.
Kieran May: The, the scheme itself was, was, you know, in some people’s eyes was poorly thought out because it, it, um, basically plumped everybody into the same basket. And sadly, there were some people who probably should’ve qualified for jobkeeper,well, deserved jobkeeper missed out because the rules changed. Well, the rules didn’t fit, but if you look at it in the context that the government was backed, almost backed into a corner where they had to do something, and they couldn’t sit around and consider every permutation or possibility. It was like bang, quickest thing we can do is pick a number, make it available, set some rules around it, and if there’s a good case to make exceptions, we’ll make exceptions on the fly.
So then jobkeeper two. And all the kerfuffle about jobkeeper it two, you know, the government needs to, you know, you can’t end jobkeeper and, well, my view always was well, politics says, they can’t just cut it off on the 30th of September. Won’t work.
Stipe Vuleta: Yeah.
Kieran May: There’s always going to be something. So anyway, they came out and they announced that the jobkeeper version two, and that included, um, a review of your income for the April, May, June quarter.
Stipe Vuleta: Yeah.
Kieran May: As, as the first step. And if you had a, you met the benchmarks there, you would then look at your, um, July, August, September quarter and see if you still qualify, and then you would go into the pool and, and continue on with a reduced number. And of course, circumstances quickly changed, the comparison of the April, May, June quarter is now out the door.
Stipe Vuleta: Yeah.
Kieran May: And to qualify for a jobkeeper two, you only now need to look at, um, July, August, September.
Stipe Vuleta: Yeah.
Kieran May: And, uh, and there’s a few things that happen around there. And of course, what we haven’t seen yet is the alternate tests.
Stipe Vuleta: Of course, yes.
Kieran May: Which have been promised, but they haven’t. And I’m sure that will be based on the original alternate tests, but they haven’t been announced yet. So, we’ve just gotten to that point with jobkeeper right now where everybody, and I’ll say everybody in inverted commas, I guess, is wanting to have all the answers now.
Stipe Vuleta: So, I guess takeaways from that, uh, jobkeeper is still uncertain. Uncertainty causes stress, call a good Bookkeeper or a good Accountant. And Kieran May is [00:06:00] a great find, if you find him on LinkedIn, he’s always there to answer questions if you need them. But I guess from something that’s probably a bit more, important to me, given that I do a lot of restructuring work, particularly corporate restructuring work, the, the SGC Amnesty, tell us about it, what’s happening?!
Kieran May: Hasn’t that slipped under the radar with all the talk of jobkeeper?!
Stipe Vuleta: Oh, absolutely!
Kieran May: So back in, uh, the end of April at around about the time COVID-19 hit, there was some legislation, was passed through the parliament to introduce a superannuation guarantee, amnesty for unpaid, super, dated back prior to 1st, the 31st of March, the previous year.
Stipe Vuleta: Yeah,
Kieran May: They’re talking about really old stuff, and the amnesty wasn’t about excusing businesses from paying it. It was about a system to bring them back into, into compliance, to allow them to declare what they hadn’t paid, and to pay what they hadn’t paid.
Stipe Vuleta: Yeah.
Kieran May: But not impose penalties on those amounts as you, as you would do without the amnesty. Now, this was actually legislated and incorporated into that legislation was an end date for the amnesty. And that is, 7th of September.
Stipe Vuleta: Wow! That’s coming up.
Kieran May: So, and this is this, and this is legislated. The tax office, all the flexibility they’ve been able to show with jobkeeper, and with late payments on PAYG installments and GST installments. They cannot extend any leniency on jobkeeper because there is an end date. I’m sorry, on superannuation guarantee. Cause there is an end date in the legislation and unless parliament sits down next week, when they come, after their 14-day consolation, unless they sit down and change that end date, the amnesty finishes on the 7th of September.
So, what’s required? Is for businesses to declare all their unpaid superannuation, and, either pay by the 7th of September. And they will get the full benefit of the amnesty.
Stipe Vuleta: Yep.
Kieran May: That is there’ll be, there’ll be no penalties and they will be able to claim those deductions, on their income tax this year. Um, if they don’t pay or don’t declare number one, then the amnesties off and the tax office will start chasing them, because they do know who hasn’t paid. They do know that.
Um, and if you do declare, but don’t that do not pay by the 7th of September, they expect that you will have entered into an arrangement to make those installments over the next couple of years.
Stipe Vuleta: Right.
Kieran May: Without those installments, they are within the amnesty rules, but they will not have the same extent of forgiveness. Um, the, tax deductibility of some of that, disappears, uh, and that there will be no interest charged on it. They’re not, no additional penalties provided they stick with the rule. So, there’s a bit going on there as well. There’s probably a lot of people who have just ignored it. Number one, because they want to shut their eyes, and number two have put it on the back burner because jobkeeper’s more immediate and more important right now.
Stipe Vuleta: Yeah.
Kieran May: So, people need to be aware that that’s coming up, then it’s not too late to do something about it.
Stipe Vuleta: Yeah.
Kieran May: Um, and again, that can be managed by a tax agent or a BAS agent. So, they’re starting to call it that group tax professionals.
Stipe Vuleta: Yeah.
Kieran May: But they must be registered tax agents or registered BAS agents, and you can find them on the tax practitioner board website, tpb.gov.au. Um, or generally, if you go to, um, the website for the Institute of certified bookkeepers, for example, they will provide you with a list of BAS agents, and of course, most accountants who are tax agents can do the job as well.
Stipe Vuleta: Yeah, of course.
Kieran May: People need to get in quick! The complication is your records need to be up to date, so the paperwork can just be filled out and then dealt with.
Stipe Vuleta: Alright. So, I mean, takeaways on SGC. are, it’s real, it ends on the 7th of September, and people need to get in quick.
Kieran May: And third one don’t ignore it. And then the tax office knows who has not paid.
Stipe Vuleta: Yeah.
Kieran May: And they probably know exactly how much has not been paid
Stipe Vuleta: Absolutely! So, so speaking about, you know, the daunting things coming out of COVID-19, we’re talking about an extension and contentual future and to jobkeeper two, we’re talking about the SGC amnesty, but you know, bringing it all back together, what can someone do today to make sure they’re still around and prospering 12, 24 months from now?
Kieran May: Yeah, absolutely. And again, I guess it’s, it’s a bit like the SGC amnesty, jobkeepers come along and it’s taken out of this, our focus away from tomorrow, and everything’s about making sure we’re still here at the end of the day, and tomorrow can take care of itself. But I keep asking the question of, of LinkedIn, you know, will you still be here, delivering what your customers will want when the crisis is over?
Stipe Vuleta: Yes.
Kieran May: And sadly, the answer for a lot of businesses is no, jobkeeper is propping them up. Uh, and fair enough, it it’s doing the job it should do, and that was to give people breathing space… And to keep, keep their employees engaged with their business.
But throughout this period, I mean, we’re living and breathing right now of how the world of businesses changed because of COVID and that is, we need our, our office less than we did before we won’t travel as much as we did, because we’re not out and about, we’re not drinking as many coffees at cafes that we did.
Um, you know, and there’s a lot of things that, that we are not necessarily, um, avoiding. But just don’t have occasion to consume. So, what every business needs to do now is to have a look at ‘what are my customers doing now that’s different?’.
Stipe Vuleta: Yeah.
Kieran May: What would they be doing different when everything goes back to normal? As normal as it can be. And how do I change my business to make sure that when we come out the other side, that number one, I’m still in business. And number two, I’m delivering what my customers will want when it’s all over, knowing of course that crystal ball gazing is sometimes a little bit dangerous, but nonetheless, if we don’t look to the future and explore the options and play out some scenarios, at least in our mind, chances are we’re going to go along blissfully unaware that the world’s changed around us.
And it’s never going to go back to what it was. So, sitting at the top of the tree, the strategy, people, and sometimes people get confused with that word, but what is strategy? Its only about, you know, what does my business look like? What will it look like? You know, what, will my customers want? Where will I need to operate? And, you know, maybe even, why am I bothering?
For some people it might be just look, let’s take the opportunity to, to, to bow out gracefully while I still got a bit of equity in the business. And you see that all the time in your work, with company liquidations, the number of times that people who are in trouble just hold on too long.
Stipe Vuleta: Yeah.
Kieran May: And, if you pull back a little bit, if they took some, some right consultation and advice, you can call it advice or guidance or whatever, however you want to go. If they took the right advice and the right sort of thinking six months, 12 months earlier, one of two things might have happened. One is that they might have changed the direction of the business.
Stipe Vuleta: Yeah.
Kieran May: Made it profitable or sustainable again. Or, two, they might have made that decision 12 months ago, to wind it up. While they still had some equity in the business.
Stipe Vuleta: Yeah absolutely. And I guess that’s a, probably a good jump off point as we approach sort of a comfortable listening and viewing time. But. Really, what you’re saying is, you know, if people want to get ‘accross’ their business, you know, pun intended, then they should be reaching out to you today because there’s no better time than right now to take advantage of the opportunities, and some of the amnesties in the market. But also, there’s no time to waste if you need to make a bad decision or a hard decision, uh, sooner rather than later. And I guess, um, it’s been a pleasure hearing your thoughts Kieran, and I’m looking forward to doing it again. I hope you have a great day
Kieran May: And the coffee is good!
Stipe Vuleta: Indeed! Ciao.
In this episode, Chamberlains’ Managing Director, Stipe Vuleta, is joined by Adrian McKenna, founding partner of McKenna Taylor Lawyers, to discuss the recent developments surrounding Cannabis use in the ACT.
As with all Chamberlains Lawcast episodes, the information provided cannot be considered as legal advice, if you have any questions in relation to any information provided, please contact our office on 02 6188 3600.
Presented by; Stipe Vuleta ft. Adrian McKenna
Date; 06/10/2020
at Chamberlains Law Firm, Canberra, ACT.
Available on all good Podcast providers now by clicking Subscribe below.
Stipe Vuleta: Good morning listeners. I’m Stipe Vuleta from Chamberlain’s law firm, and I’m very excited to have everyone here for the Chamberlain’s law cast, apologies on behalf of Mr. Hugh Smith, our regular presenter, he couldn’t make it today, but very excited to have Adrian McKenna founding partner from McKenna Taylor lawyers, a specialist criminal law firm in the nation’s capital and expanding in the region. Adrian, how are you going today?
Adrian McKenna: I’m great Stipe thanks for having me on this podcast. I’m excited to have a chat about this new area for Canberra and really the rest of the country.
Stipe Vuleta: Yeah, it’s pretty, it’s pretty exciting. Should we tell listeners, I mean, we’re going to be chatting about cannabis and not just cannabis, but the limits of the recent legislation, the legalization of cannabis in the Australian capital territory.
Adrian McKenna: Yeah. I mean, to be honest, I didn’t expect that I’d be having a chat like this a few years ago. Um, Australia, probably to put it fairly, not exactly been leading the way with cannabis legalization or reform in the world. But, um, I think it’s fair to call this a fantastic small first step in the right direction.
Stipe Vuleta: Well, I guess now that we’re talking about this small step, um, what is it? Can you tell us a bit about what’s been implemented?
Adrian McKenna: Yeah, sure. So, Canberra has for at least a few decades now been close to having a legalization of low level cannabis use and personal use of sorts. So it used to be the case for the last 25 odd years that, uh, if you possessed, uh, less than 50 grams of cannabis on yourself, or you had one or two, uh, cannabis plants that you’ve been cultivating at your own place, uh, basically the penalty was a fine only so, or recently $150. So not a big deal, but technically still a criminal offense.
Adrian McKenna: Now police could issue an infringement notice, they could take you to court for it. You could still get a criminal conviction for it so very much still a crime, but the next step has been taken. That is, well, now it’s not a crime at all. If you’ve got a it’s less than 50 grams, um, possessing cannabis, and that’s you as an individual, not with your mates and so on.
Adrian McKenna: Um, or if you’re growing one or two cultivating one or two cannabis plants, at your premises say in your backyard, um, for adults. And there are some limitations of course, to this, um, as a starting point, that is not a crime in the ACT, at least on the ACT law. And we’ll get onto the complication soon enough, that arises, but, um, a small step. Um, but you can actually say that that part of cannabis use and possession and cultivation, it’s now legalized.
Stipe Vuleta: Wow, I mean, as much as you say, it’s a small step in the context of Australia’s enforcement of many drugs of addiction and other drugs, it seems like a somewhat big step. So I’m sure there are a lot of industry participants that are quite excited. Uh, but tell us a bit more about, you know, the limitations in and around the local legislation.
Adrian McKenna: Sure. So, so the first rule as I said before, or you have to, um, when it comes to cultivating plants you have to live at the premises where you’re cultivating. Um, so for example, if you’re in a share house with four people, that’s fine. Um, you can only as an individual grow one or two cannabis plants, you can’t have responsibility for more than that. And the household in total can have four plants. Um, so for example, if, of course, if there are four people, that’s one each, it can’t be one person has three, another person has one, right.
Adrian McKenna: That has actually complications of, all right, well, how do you establish if police turned up at the house and there were four plants, how do you establish, who owns, what plant? How do you establish that, oh, these two are mine? Uh, these two, uh, uh, Ms. Smith’s next door to me. Um, so there might need to be some work for people who are going down this road, might be silly, but having a name tag or something, I mean, who knows next to your plants?
Adrian McKenna: This is Adrian’s one and two cannabis plants. This is miss Smith’s. Um, once you’ve cut off, uh, cannabis from the plant that you’ve cultivated, uh, you are while it’s still wet, recently removed, allowed to have 150 grams. And that recognizes that, um, you know, it’s not quite reasonable to have two giant plants in your backyard, but only allowed to have 50 grams of that, of those giant plants at a time. So they’ll have that sort of transitional phase of recently harvested wet cannabis.
Adrian McKenna: You can have 150 grams once it’s dried, though. I guess these are gray areas. Uh, 50 grand is the maximum now you’re allowed to consume it at home. You can’t smoke it in public. Um, um, you can’t have your cannabis, either your plants or the cannabis that you’ve, you’re storing for personal use, accessible to people under the age of 18.
Adrian McKenna: Um, so for example, if you’ve got kids in the house. In theory, it’s possible to get away with it, but it would have to be locked away and you don’t have to smoke where they can’t reasonably consume the fumes. So obviously that would make it difficult if you’ve got children. Um, and obviously the same laws about crimes against supplying as in giving. Your cannabis to someone else applied, can’t sell it. Of course. Um, that that’s the nuts and bolts of it.
Stipe Vuleta: It sounds deceptively simple, but, but what you’re really saying is it’s, it’s probably more than the proverbial Tupperware container in the fridge, in the office, you know, telling people that it’s, you know, your, your cannabis, it has to be secure and identified and you have to have, I guess, custody and possession of that in, right.
Adrian McKenna: It doesn’t have to be secure per se. It’s just adults in the house, but. But if you want to be careful, um, and, and, and, and make clear that this is on the and I’m missing your poor house mate who, has nothing to do with the operation is going to get done for it. You know, uh, having a little name, uh, on it, can’t hurt. Having it in your bedroom obviously is a good start.
Stipe Vuleta: Well, you know, you raise, you raise a comfortable spot for a segue to my next question, which is the limits of legislation. I think it’s quite exciting, but it interacts with federal law and that’s quite exotic in the territory, but also its interaction with. You know, effectively capitalism, commercial enterprise also very different. So, I mean, take us through that, Adrian.
Adrian McKenna: Yeah. I mean, there’s a few elephants in the room, I guess I’m one of them that have different shapes and sizes, but one of them is that, whilst it’s legalized under ACT law. It’s still a crime under Commonwealth legislation, which seems a bit odd and I’ll be the first to admit it, that, that is odd.
Adrian McKenna: Um, so basically, uh, police have the power to charge anyone under any state or territory under the state crimes that you’re in, or territory, or the federal or Commonwealth, uh, offense provisions, whether you’re in Tasmania, Queensland, whatever. So technically, even though if I’m there with Ms. Smith in my house and I’ve done everything right with marking my stuff, in theory, a police officer can say, well, you have still committed the offense of possessing, a prohibited drug or controlled drug under the Commonwealth criminal code.
Adrian McKenna: That’s an offense that still is a crime. It carries a maximum of up to two years in prison. I say in theory, because it hasn’t happened since this legislation’s coming, as far as I’m aware since the beginning of the year, but equally this two year maximum penalty offense has been in place forever. And it’s very rarely if ever being applied during the 25 years before, as I said earlier, um, when it was only $150 fine.
Adrian McKenna: Right. Under ACT legislation. So, can any guarantees be made to Canberra citizens? I suppose, technically not, but my sense of it is that police are taking a common sense approach to this. Now there are technically, some defenses you can raise under Commonwealth law, that haven’t been tested in this context. That is if something is a crime under Commonwealth law, but lawful under state or territory law, you can say that that’s potentially a legal defense to the charge, or if you believed that it was as an individual, that it was.
Adrian McKenna: Uh, lawful under the state or territory law. Big gamble to of course be the one to test that, but it’s a great unknown. Um, so it is a slightly awkward place. And then there’s the politics of it. So, some months ago, the Commonwealth attorney general Christian Porter was. Uh, speaking out how he believed Australian federal police officers in Canberra should be enforcing Commonwealth law, obviously ACT, uh, politicians urged against it very much.
Adrian McKenna: And there’s been a lot of public correspondence between the two. Then there’s the, uh, other elephant, um, of the Commonwealth having the power and this is something I’m that only applies to territories, of being able to override, believe it or not any ACT law. Can’t do it, in the States and can do it to the ACT and they can do with the Northern territory.
Adrian McKenna: And they’ve done it before. They’ve overridden euthanasia laws in the Northern territory. The ACT came in with same-sex legislation, um, uh, civil unions. I should clarify many years before, um, uh, the changes that went through the rest of the country that was overwritten by the Commonwealth government. So at any time, this party could be over.
Adrian McKenna: If there’s, the, political will. And I say that in a negative sense, um, to want to stamp on this attempt to try and take a step in the right direction. In my view, if I can just complete the, a, the point of the, third, um, potential, elephant in the room that is if you’re supposed to be growing your cannabis in your backyard and harvesting it and smoking it, where do you get it from? What’s the law that says, you may lawfully purchase some seedlings from Joe blow down in South Canberra. There ain’t one. Um, um, obviously there’s things to iron out here and it is only a beginning.
Stipe Vuleta: No, I mean, you raise a number of very interesting legal points and, and frankly, the plethora of complications from the criminal law and enforcement perspective is.
Adrian McKenna: Well, just interesting. It’s very interesting. Someone who’s not knowledgeable in the area. I could listen to you talk about this type of stuff all day, but what really concerns me is, I guess the fact that there isn’t clarity for our commercial clients and those clients that we help in their strategic investment in the territory or in the cannabis sector, whether it’s medicinal or whether it’s for recreational use, who are keen to start, making developments in Australian markets. But as you said, there isn’t a natural entry point yet is there? It’s, it’s really some, some novel ideas about accessibility and sharing information, sharing, land, sharing, access, um, rather than opening up the scope for a full scale recreational cannabis market in the ACT.
Adrian McKenna: It’s a good point. It’s a lovely idea. And I don’t mean to be overly critical about it. A lovely idea that we want to encourage only personal use, but I mean, that’s thinking of it a bit in a vacuum there. Where does this come from? Where does cannabis come from? Um, how do a lot of people, I mean, what about people who live in apartments and cant possibly grow, wherever you are kids, um, how do they get access to cannabis in a safe way?
Adrian McKenna: If harm and minimization is the goal. So, um, I think it would be a serious mistake to say, great, we’ve got a mechanism for some personal use and cultivation, job done! Uh, let’s rest on our laurels and assume it’s over. There’s a tonne of work that needs to be done here. Um, and I say needs to, because still again, we all sort of wander through, or at least a lot of our politicians do, saying simple things and believing simple things, ‘drugs are bad, war on drugs’. Um, we’re going to win the war on drugs. Everyone knows it’s a joke to think of it that way. Um, and is it a nasty concept to talk about commercialization of this field? Some might say so others might say, well, you’re actually starting to get into real harm minimization. If you go down that path.
Stipe Vuleta: Yeah, well, I guess, um, as final comments for me, I’ve always thought about, you know, access, you know, as lawyers we talk about access to justice, because we operate in an industry, which is very expensive and you know, a lot of people may not have access to it for purely socioeconomic or demographic grounds. But, um, when you’re talking about something that’s targeted about harm minimization, then, access in a safe, consistent way really does lend itself to the concept of commercialization. And so, you know, probably it’s something to talk about at the subsequent podcast, but, but some interesting developments that are happening maybe happening some, some general discussion about what, what might be on the horizon for harm minimization and commercialization in the ACT. We’d love to have you back.
Adrian McKenna: Yeah. I’d love to be back. It’s a, a real watch this space area. And hopefully there is something more to report on soon enough, hopefully in another jurisdiction as well. Come on board I say, join us! Stipe, thank you very much for having me on. It’s been a really great chat and I hopefully look forward to having another one.
Stipe Vuleta: Adrian. Yeah. Thanks for coming on board and chatting with us today. And I’m excited to chat again with you and listeners, thanks for listening to this special edition of law cast and, and keep an eye out and, your ears listening for another development in this space. When we have Adrian back on.
Chamberlains: We hope you enjoyed the podcast as with all Chamberlain’s law firm podcast. The information that you’ve heard in this podcast is not legal advice and cannot be considered legal advice. If you have any questions or queries, please do not hesitate to contact our office on 02 6188 3600 or otherwise, look us up on our website, which is chamberlains.com.au. Our team of corporate and commercial lawyers can help you.
Trust deeds are vital for managing your trust assets, a fact that was emphasised recently in a judgment by the NSW Supreme Court in Sutton v NRS(J) Pty Ltd.[1] In this case, during routine bank procedures, the bank discovered the trustees only had access to a photocopy of the trust deed and froze their account. The trustees then made an application to the Supreme Court to use the photocopy to administer the trust
Why did this end up in court?
In 1972, a discretionary trust was established which then lay dormant for 35 years until a portfolio of the property was transferred into it in 2007. It was at this point that the trust began to generate a substantial amount of income for its beneficiaries in accordance with the original trust deed. The trust account was frozen when the original trust deed couldn’t be found, despite a signed photocopy being provided.
Sutton applied to the Supreme Court requesting that the photocopied deed be accepted as a true copy of the original trust deed. The court directed the trustees that it was appropriate for the trust to be administered in accordance with the photocopy as though it were a genuine copy (noting that the court did not grant the specific order sought). This is because the court uses declarations to formally determine a legal state of affairs rather than matters of fact. The court considered it inappropriate to make such a declaration around the status of property unless all parties had been heard, instead opting to provide advice under its power found in s63 of the Trustee Act 1925 (NSW). The direction permitted the trustees to administer the trust as per the photocopy.
Which factors did the court consider?
Parker J noted that there was no need to prove by inference if the formalities had been complied with since the photocopied deed had been signed. There is evidence that over the last 35 years, the parties had acted in accordance with the terms outlined in the trust document. This made it “overwhelmingly likely” that it would be identical to the original.
What to do if my trust deeds are lost?
Recent cases are reviving the presumption of regularity. [2] The presumption of regularity is that it will be presumed that deeds have been validly executed and made unless there is some contrary evidence.
As the first course of action, approach all third parties for a copy of the trust (Banker, accountant, lawyer). If this fails, approaching the firm that drafted the deed may make it possible to accurately determine the terms of the trust deed by reference to the version in print at the time. Where an almost identical copy can be found, prepare a deed of confirmation or variation to restate the terms of the trust. This will allow the trust to be administered in accordance with the terms of the other trust.
1. b) Where there are no copies and no evidence of an identical trust
In Sutherland v Woods the NSW Supreme Court considered an incomplete SMSF. Sutherland contended that the fund was valid because parties had acted as though it was correctly established and therefore, it must have been at some point. Importantly the parties had exhausted the enquiry options available to find the deed including contacting the bank, the ATO and the titles office. The court agreed and held that it was possible to infer that the trust had been created. Similarly, in Re Thomson[3], which dealt with amending deeds, the court applied the presumption to infer that the missing deeds indicated the true state of affairs based on the actions of the parties.
For the presumption to apply, it is necessary that a considerable amount of time must have passed since the deed was made with no other way to prove the validity of the deed. Furthermore, there must be evidence indicating the deed was valid and that the parties acted as though it was reasonable. The Supreme Court may then make an order to adopt a new restated trust deed.
It is also possible to administer the trust in accordance with state legislation if the court is too expensive or not worthwhile. This may be a useful option for simple trusts as it allows for basic powers of administration with minimal obligations.
Key points:
Whether you are a company or an individual, ask your law firm to hold your trust deeds in their files. Be sure to note their location with the people that need to know, for example, your family or directors. Ensure your lawyer also notes the location of the trust deed on their records to ensure it can be located in the future to avoid stress and costs.
If a trust deed is lost, recent case law indicates the presumption of regularity will permit the existence of the deed to be inferred based on the actions of the parties if all actions to find the deed have been exhausted.
[1] Sutton v NRS(J) Pty Ltd [2020] NSWSC 826.
[2] Sutherland v Woods [2011] NSWSC 13.
[3] Re Thomson [2015] VSC 370.
**Assisted by; Jacqueline Healy**
If you have any legal questions about commercial and corporate law, reach out to our specialists at Chamberlains Law Firm!
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Chamberlains have put together a list all newlyweds need to do. It may not be as fun as finding your special outfit or sampling wedding cakes, but it will ensure you and your spouse are cared for. We guarantee it will cost less than the wedding and it has the added bonus that it doesn’t involve the in-laws (unless you want it to).
Marriage revokes former Wills. If you have made a Will and later get married, that Will is revoked by virtue of the marriage (with only a few exceptions). Your spouse doesn’t ‘automatically’ get your estate. If you don’t make a new Will after marriage, you will die ‘intestate’, which means, dying without a will, which has its own set of troubles. This is not to say your spouse won’t have some automatic rights to your estate, they do, but to enforce those rights, they will have to go through a bit of a process that can be avoided by having a Will.
Marriage revokes former Powers of Attorney. If you have made a Power of Attorney nominating a person other than your spouse as an attorney unless it expressly states that the document is made in contemplation of marriage than that document will be void. Like Wills, your spouse is not ‘automatically’ your enduring attorney. This document is still needed to enable your spouse to make critical decisions if you have lost capacity. The alternative is a trip to the Guardianship Tribunal to get an order of the Tribunal to allow you to make decisions for your spouse.
If you are taking your partner’s name, be prepared for a bit of an administrative battle. It’s nothing that can’t be handled, so long as you are equipped with your marriage certificate, some faithful statutory declarations, certified copies of ID and a healthy dose of patience. Be mindful that many assets owned in your maiden name (e.g. property) do not need to be changed right away, if at all, however, you may have to prove your identity for any subsequent dealings (say, if you sold the property).
If you have or are planning to have kids, your Will should nominate a guardian in the event that you and your spouse predecease them. If you don’t, the matter goes to the Guardianship Tribunal for them to decide who the fit and proper person would be. Marriage may also mean welcoming your partner’s children as your own.
This implies a stepchild will have rights to make a claim against a stepparent if they have not been adequately provided for in their stepparents’ will. The success of a claim will depend on your circumstances, of course, but there is no way to ‘extinguish’ this right. Suppose you are planning your wedding. Congratulations. If you need advice concerning some post-wedding planning, get in touch with Chamberlains Wills and Estates law team today.
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Have you considered how your business will move forward in the event that you or your business partner have a falling out, death or catastrophic injury?
The breakdown of a business partnership can seriously impact the business, causing stress, anxiety, lawsuits and in many cases, can see the end of the company altogether.
When the time comes to end a business partnership, aside from the obvious personal and financial stresses, several legal issues need to be carefully considered.
Carol and Dana, the Best-Friends-Turned-Businesswomen:
Best friends, Carol and Dana, started their new business together with enthusiasm. In the early days, Carol and Dana worked long hours to get the company up and running, but as time went on, Dana was putting fewer and fewer hours in while Carol continued to slog away. Their relationship soured, and after three years, Carol told Dana she wanted to sell up.
The business was running at a loss and Dana couldn’t pay Carol anything for her share of the company, but Carol was just happy to get out – the 16 hour days were killing her. Carol and Dana each signed a one-line letter saying Carol was no longer a partner and Dana was the new sole owner of the business.
Carol’s sigh of relief was deafening. But, one year later, the business came back to haunt her. Dana had racked up debts of over $100,000.00, owing money for unpaid rent and unpaid suppliers. Dana declared herself bankrupt and so the landlord and suppliers sought payment from Carol. Carol tried to rely on her one-line letter from a year ago to show she was no longer an owner of the business, but the response she received was “so what?”.
What Carol should have done:
Carol needed to release herself from the lease with the landlord and the personal guarantees with the suppliers when she left the business. Sadly for Carol, since she was still guaranteeing the payment of the debts of the company, she was still liable for the $100,000.00. After negotiations, it ended up costing Carol $50,000.00 plus legal costs to get out of the mess, which was financed by a new mortgage over her home.
Instead of signing that one-liner, Carol should have:
If you are looking to get out of a business, our team of corporate and commercial lawyers at Chamberlains can assist you in making sure you have all the necessary safeguards in place before you leave.
Contact us today for more information.
The ride-sharing app Uber is now many people’s preferred choice when it comes to getting from A to B. Faster, cheaper, and easier. But what happens if you are involved in an accident whilst in an Uber? Are you covered for personal injury compensation?
The short answer is yes.
All rides arranged using the Uber app in Australia are covered by a Compulsory Third Party (CTP) insurance policy, so if you are in an accident, you can claim for personal injury under the CTP scheme. Also, every uberX trip is covered by Uber’s contingent vehicle liability policy which provides at least $20 million cover for third party bodily injury and property damage. It doesn’t matter if the accident is caused by your Uber driver or the other vehicle; you can rest assured you will be covered for your claim.
What to do if you’re in an accident
If you are injured as a passenger in an Uber vehicle, be sure to:
If you’re involved in a motor vehicle accident, the team at Chamberlains will ensure your rights are protected and make sure you receive the compensation you deserve.
If you or someone you know would like to discuss a claim or has any questions please contact Alison McNamara on alison.mcnamara@chamberlains.com.au or Jon May jon.may@chamberlains.com.au from Chamberlains injury compensation team to see how we can help.
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At Chamberlains we have seen too many times the expense, delay and angst caused when a DIY Will doesn’t quite make sense or doesn’t meet the legal requirements of a Will.
Chamberlains recently represented a beneficiary in the first ACT Will rectification case before the ACT Supreme Court. In this case the Court was asked to determine what the testator intended meant when he amended his Will. This was the first case of its kind in the ACT and it involved some complex issues such as the proper execution of a Will, the interpretation of a Will where the intention is not quite clear and the power of the Court to ‘rectify’ a Will.
The Court found that:
1. Evidence of intention and the meaning of the term “most of the rest and residue”
In making its decision, the Court took into account evidence such as an email sent by Mr Rummer to his former solicitors regarding the “minor changes” he wished to make to his Will, as well as notes written by the Executor detailing her recollection of events that took place on the day that the amendments to the Will were made. In considering the evidence, the Court found that Mr Rummer’s statement in his email “minor changes” was inconsistent with the Executor’s recollection of events.
The Court also considered the ordinary meaning of the word “most” of which means ‘in the greatest quantity, amount, measure, degree, or number’ (Macquarie Dictionary, 7th ed) and said “the plain meaning of the word [most] is not ‘half.”
2. Construction of “amounts as directed to my executor”
In considering the construction of the phrase “amounts as directed to my executor”, the Court held that it was not satisfied that Mr Rummer’s intention at the time of amending the Will was to gift Pat and Peter a quarter each of the residue of his estate.
In light of this uncertainty, the Court moved on to consider what Mr Rummer probably intended.
The Court took into account the Plaintiff’s notes regarding what Mr Rummer had hoped Pat and Peter would use the money for, as well as the previous gift Mr Rummer had made to his friend Roy in the first instance (i.e. the sum of $25,000.00). The Court then held that Mr Rummer’s probable intention was to gift an amount of $35,000.00 to each of Pat and Peter.
This was an expensive lesson for Mr Rummer’s estate to learn about being clear and precise when drafting a Will and making sure your Will complies with the legal formalities.
If you are involved in an estate dispute or want to want to make sure your Will makes sense, get in touch with Chamberlains Wills and Estates specialists team today.
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Have you been appointed as an Attorney? Are you clear on what powers you can and cannot exercise as an Attorney?
An Attorney is someone who has been appointed under a Power of Attorney to manage the affairs of another person, often but not always, when they have lost capacity to do so themselves.
Most people (quite rightly) seek legal advice when drawing up a Power of Attorney. But when the time comes to carry out the duties as an Attorney, very few people seek legal advice. A failure to seek advice can have some dire consequences. See our example below for the first in our series of ‘Powers of Attorney – Do’s and Don’ts’.
Attorney’s have a duty as Attorney to act in the best interests of the Principal (the person you are Attorney for). But what does that mean? Let’s use Dorothy’s situation as an example.
Dorothy’s husband predeceased her, and after having a stroke, Dorothy had to leave her beloved home in favour of a nursing home. Luckily Dorothy had a Power of Attorney appointing her 3 adult children together and separately, and the two children who also lived in Canberra (her daughter Olivia lived and worked overseas) were able to look after the vacant home, cleaning and maintaining the property. The only other asset to Ruth’s name was $20,000 in the bank, and so this allowed her to receive a Centrelink pension as the family home is excluded in the means test. She was not required to pay an accommodation bond and her nursing fees were set at 85% of her Aged Pension.
After a year her two Canberra children got tired of maintaining the property and decided to sell the family home. They couldn’t contact Olivia as she was working in a remote area, but this was ok as the children were appointed together and separately. They managed to sell the property for $900,000, but instead of giving the proceeds to their mother, the money was split between the three children as ‘they were going to get the money when mum died anyway’. Olivia found out, was shocked, and immediately transferred her $300,000 to her mother as it was her money. The sale of the house was also reported to Centrelink, and this triggered the loss of Dorothy’s pension, and also meant that she was now required to pay an accommodation bond and fortnightly nursing home fees in the realm of $800 which she couldn’t afford (as Dorothy’s asset situation now exceeded the means test).
The two Canberra children breached their legal obligations as attorneys to act in the best interest of their mother and caused a fallout in the relationship with their sister Olivia.
Using the example above, not only did Olivia have to make an application to the Guardian division of the ACT Civil and Administrative Tribunal (ACAT) to have her siblings removed as attorneys and to appoint herself as sole attorney, she also had to commence legal action against her siblings to recover the $600,000 from the sale of her mother’s property.
An Attorney may think they have good intentions and are acting in the best interests of the Principal, but we recommend that you seek advice on your duties as an Attorney before making any major decisions. The financial and emotional ramifications of a dispute can be far more costly.
If you are an attorney and would like some advice, or would like draw up your own Power of Attorney, contact our team at Chamberlains to ensure your affairs are in order.
Canberra is the cycling capital of Australia, with more cyclists per capita than any other city. It wouldn’t be uncommon if your weekend involved a relaxing ride around the lake, sun shining, taking in our stunning cityscape. You are probably aware of some of the cycling etiquette; stick to the left, ringing your bell when approaching pedestrians, but have you ever considered how you might be liable to other cyclists?
Last year a Canberra cyclist was ordered to pay $1.66m in damages, plus legal costs, to another cyclist. The case concerned two cyclists who were travelling together in a dedicated bicycle lane, with the defendant, Mr Blick, cycling slightly in front and to the left of the Plaintiff (Mr Franklin). The defendant failed to see a piece of wood lying on the ground and hit the wood, causing him to veer and collide with the plaintiff. As a result, the plaintiff fell from his bicycle onto the road and was subsequently struck by a passing motorist. The Court awarded the plaintiff $1.6 million in damages – a decision which was upheld by the Supreme Court of Appeal last year – finding that the plaintiff’s injuries flowed directly from the negligence of the defendant. The Court found that the defendant breached the duty of care that he owed to the plaintiff by failing to keep a proper lookout, stating that a cyclist in his position ought to have seen the piece of wood lying on the ground and taken evasive action.
In this case the claim was covered by the defendant’s home insurance policy, crucial in situations when the injured person has suffered significant loss but the at-fault party has limited assets from which to pay any damages. If the defendant had no appropriate insurance policy, he would have had to pay the sum from his personal assets.
This case is a reminder about the obligation for cyclists to keep a proper lookout when riding, as a failure to do so could see you liable for any injuries caused to others. It’s also a reminder for all cyclists to ensure you are covered by insurance for your actions as a cyclist.
If you are a cyclist looking for advice on whether your insurance policy covers you for accident liability, or if you have been involved in a cycling accident and need to know your rights, contact Chamberlains injury compensation team for an obligation free appointment. We’re in your corner.
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