As many of our readers will know from previous posts by our Sydney and Canberra Insolvency and Restructuring Lawyers, in June 2018 the High Court of Australia confirmed the validity of holdings DOCAs or deeds of company arrangement pursuant to the Corporations Act 2001.
In the case of Mighty River International Ltd v Hughes, the High Court considered what a holding DOCA is and whether it was valid.
What is a holding DOCA?
ASIC’s Regulatory Guide 82 gives the following description of a Holding DOCA:
“holding DOCAs are typically used as a means of providing more time for a voluntary administrator (or the directors or third parties) to develop proposals for restructuring or otherwise resuscitating the company, thereby avoiding the need for the voluntary administrator to seek an extension from the court of the convening period for the second creditors’ meeting under s439A. Typically, holding DOCAs do not contain any concrete provisions on the future of the company or any immediate benefits for creditors”
In essence Holding DOCAs are tools for extending the time of a moratorium period of a voluntary administration rather than using an extension of time application.
Is a holding DOCA Valid?
In a unanimous decision the High Court held that holding DOCAs are valid on amongst other things the following bases:
How can a Holding DOCA help me with business interruption and COVID-19?
With cashflow drying up very quickly for many businesses during this COVID-19 crisis, particularly in Sydney, Canberra, Brisbane and Melbourne, a good insolvency and restructuring lawyer, working with a business and a qualified insolvency practitioner can assist business to use the Voluntary administration process and a holding DOCA to withhold certain creditor claims for an extended period of time whilst the COVID-19 crisis abates and business returns to normal.
In recent times we have seen large scale panic in the supermarkets with people preparing for potential isolation due to the ever-increasing spread of the coronavirus in Australia. However, have you considered whether you have your legal affairs in order prior to isolation?
In uncertain times such as this, it is important to consider whether you have a current, valid Will and Power of Attorney.
The legal requirements of a Will.
In all Australian jurisdictions there are laws governing what constitutes a valid Will.
Section 9 of Wills Act 1968 (ACT) and Sections 4-7 and 9 of the Succession Act 2006 (NSW) provides that for a will to be valid it must:
If you are currently in isolation or expect you may need to go into isolation, you may not be able to satisfy point 4 of the legal requirement if you do not have contact with two independent witnesses over the age of 18 years who can witness your will.
Why it is important to have an Enduring Power of Attorney (EPOA)
An EPOA allows another person to act as your attorney to make decisions and act on your behalf while you are alive. If you have self-quarantined yourself or are admitted to hospital and do not have an EPOA, no one will be able to make important financial or business decisions on your behalf, or attend to your affairs. An EPOA (or in NSW, an Enduring Guardian) also gives power to another person to make medical decisions on your behalf if you no longer have the capacity to make these decisions on your own behalf.
In these times of preparation for COVID-19 and potential isolation we strongly recommend that you ensure you have a current Will and EPOA prior to being placed into isolation.
For more information please contact our office on the contact details below.
Preparation of your documents can be done electronically and by telephone, and if you cannot attend our office to sign the documents, we can give you proper instructions for having your documents properly signed and witnessed.
Chamberlains Law Firm is currently running a promotional offer with a 15% discount on all our Standard Wills and Estate Packages until the end of April 2020.
This is a limited time offer, take advantage today and contact our Wills & Estate Team.
It is well known that a Will is a legal document which sets out how a person wants their assets to be distributed once they die. If you are over the age of 18 you can make a Will – provided you have testamentary capacity. Testamentary capacity is often a legal test.
In general terms a person will have the necessary testamentary capacity if they:
A person is presumed to have testamentary capacity until proven otherwise. There have been many cases where a person with dementia or Alzheimer was found to have moments of clarity and accordingly had testamentary capacity.
Where there is the likelihood of the Will being challenged on the basis of lack of testamentary capacity, it is important to obtain contemporaneous medical evidence from the Will maker’s treating doctor or geriatrician about the deceased’s cognitive state on the day of signing the Will.
It is difficult to challenge a Will on grounds that the Will maker lacked testamentary capacity if the Will is prepared by a competent solicitor. The test for capacity is a legal test and lawyers are experienced in determining if a person has testamentary capacity.
If you are concerned that a person may not have capacity then it is prudent to encourage them to consult experienced estate lawyers as soon as possible who can then refer the person to appropriate specialist for assessment or provide alternative solutions regarding the person’s estate such as a statutory or court made Will.
Chamberlains Law Firm is currently running a promotion offers 15% discount on all their Standard Wills and Estate Packages until the end of April 2020.
BBQ Smokers Australia Pty Ltd Mainfreight International Pty Ltd [2019] NSWSC 1733
APPEAL FROM LOCAL COURT — Local Court Act 2007 (NSW) — Assessment by Magistrate of economic loss — Whether Magistrate erred in determining award for loss of profits — Whether Magistrate gave sufficient reasons — Where the plaintiff’s shipment of BBQ smokers was delayed and damaged
Interested in learning more about Insurance?
Click on our articles below to find out more:
Insurers to Appeal Landmark Business Interruption Insurance Decision
Enforcement Of Judgments: What You Need To Know About Garnishee Orders
You can’t wear a tracksuit to court
Introduction
This guide explains the basic steps involved when selling a property in the ACT. We’ve included are some notes on timing as well as some tips to ensure the purchase of your house runs as smoothly as possible. As always, if you have any questions along the way, just ask. We’re with you.
Time Frame
Chamberlains will send the Contract to the Buyer’s solicitor within 24 hours of receiving Sales Instructions. Exchange will generally occur within 2 — 3 weeks after this, as the Buyer must obtain unconditional finance prior to exchange. Unless anything unexpected occurs (e.g. yours or the Buyer’s bank is not ready to proceed due to an administrative issue, or the buyer finds the property to be unsatisfactory at the pre-settlement inspection), settlement will occur on the date agreed in the Sale Contract. This date is usually 30, 60 or 90 days after exchange.
Top Tips for Buying a House in the ACT
Tip 1 – Engage a Real Estate Agent you know and trust
Selling your house is one of life’s major financial transactions so it is important that you engage the right person. They will be marketing your house as well as negotiating with the Buyer on your behalf. You must be confident that they have your best interests at heart and will efficiently perform their responsibilities.
Tip 2 – Use an experienced conveyancer or solicitor
This is important because they have likely seen it all before and know the best way to handle all kinds of situations involved in the process. An experienced solicitor/conveyancer will have a high level of knowledge of the process and the law, and will have close relationships with other important people in the industry.
Tip 3 – Ensure your property is in good shape
Any defects identified in reports will compromise your ability to sell the property and most likely will need to be fixed for a sale to occur (or you will need to cut your price to account for the defect). Depending on how serious the defect, it may delay an exchange of contracts by several weeks.
Tip 4 – Understand that things can go wrong
We have listed some of the problems we come across from time to time. Remember that a solution can generally be found, especially with some patience and flexibility.
1 . Your bank unable to settle –
a. It has been known to happen that your lender will lose or misplace the original Certificate of Title. If this does happen, it is the Lenders responsibility to replace the title but unfortunately this can cause delays due to government procedures.
b. Your lender has not been given sufficient time to prepare the discharge of mortgage, however an experienced conveyancer will be familiar with the timeframes your bank will require to ensure a smooth hassle free settlement.
2. Buyer unable to settle –
a. The main reasons a buyer would be unable to settle would be due to delays with their finance. We will work hard on your behalf to keep the pressure on the buyer to finalise the sale as soon as they can.
b. The other main reason would be that they are unhappy with the state of the property in the lead up to settlement. We can advise you on your rights and obligations in this situation. These are all issues that an experienced conveyancer can assist with and resolve, so that your sale will go through with minimal stress and fuss.
A Power of Attorney is a legal document that appoints a trusted person your attorney. Your attorney has the legal authority to do what you can do, and make legally binding decisions on your behalf. You can place directions or limitations on you the authority of your Attorney. Below are 6 common questions dealing with Powers of Attorney:
What are the benefits of having a Power of Attorney?
Does the Attorney need to be a lawyer?
You can appoint anyone your attorney, although some States do not allow carers or social workers to be attorneys. You should carefully consider who you appointment to be your attorney as they will be able to do what you can’t do.
An ideal attorney should:
Are there different types of Powers of Attorney?
Yes, there is a General Power of Attorney and an Enduring Power of Attorney. A General Power of Attorney is:
An Enduring Power of Attorney (EPA):
Note that in NSW there are two documents:
Is it better to have more than one attorney?
We recommend that you appoint more than one Attorney as it gives them more flexibility.
If you appoint more than one you should decide if they are to act together, together and separately or separately. You can appoint a spouse and a child as an alternative in the event the spouse dies. You can also appoint attorneys to act “jointly” or “severally”.
Should I pay my attorney?
This is not necessary to give legal affect to the power. If you appoint a professional as your attorney they would normally charge their usual fees for their time.
How do I know if a person has sufficient mental capacity to make a power of attorney?
There is no simple formula, but in general terms they must be able to:
If there are any doubt about a person’s capacity, a doctor’s written opinion can be obtained. It is important to remember that different powers require different levels of understanding. If there are doubts it is best to have the Power of Attorney signed on the same day as you get the doctor’s written opinion so there can be no dispute as to capacity in the future.
The need for a Power of Attorney can be numerous. In case of accident, sudden illness, planned or unexpected absence, or when you just can not cope, you may need someone to manage your financial affairs. It is irrelevant if you are old or young, in business or not, if you do a lot of travelling or not, there are benefits in having a Power of Attorney.
Chamberlains currently has a limited 15% discount offer on all Wills & Estate Packages. Call the Wills & Estates Team today to find out more.
Interested in learning more about Wills & Estates?
Click on our articles below to find out more:
The Fundamentals: Wills and Estates
Deceased Estates and Bankrupted Beneficiaries
Errors That People Can Make – Even When Using a Will Kit
The loss of a family member is always a difficult time, but it can become more distressing to learn that you have not been included in the family member’s Will or if you have to defend a claim.
Generally, a person free to leave their assets to whomever they wish. However, the law recognises that there are people whom the deceased had an obligations to make ‘adequate provision for their proper maintenance, education and advancement in life but are sometimes left out of the deceased’s Will. Those persons may therefore be able to claim that the Will is invalid or make a claim for a share or larger share of the estate so that their needs are adequately provided for.
There are two ways to challenge a Will:
Family Provision Claims are the most common challenges to Wills. Only persons who qualify as eligible persons under the relevant State or Territory Act may apply to the Court for further provision from the estate. Eligible persons are often next of kins.
To show that you are entitled to receive some benefit from the estate you must show that the deceased had an obligation to provide for you and the Will does not make adequate provision for your proper maintenance, education or advancement in life.
It is important to note that family provision claims are subject to strict time limits, which in the ACT is within 6 months of the grant of Probate or Administration, and in NSW is within 12 months from the date of death.
If you are concerned, please be sure to contact us as soon as possible or you may be prevented from making a claim.
Certain people have a statutory right to a copy of the Will of a deceased person. It is a good idea to get a copy of the last Will of the deceased so that we can discuss your options more actually and in detail.
In early August 2019, Attorney-General, Christian Porter (Mr Porter) announced to the Family Court and Federal Circuit Court judges, his plans to reintroduce legislation to abolish the specialist Family Court of Australia as a stand-alone court and merge it with the lower level Federal Circuit Court. Prior to the 2019 election, this legislation failed to receive the support of both houses.
Mr Porter has maintained that this reintroduction has taken into account the opinions from various stakeholders. In his address, he states that “the problems associated with having two separate courts dealing with family law was a structural failure that needed fixing”. For Mr Porter, this change will act as a means of improving the efficiency in family law cases and will aid in clearing the vast backlog of matters that the Family Court already faces. This comes as a shock to some critics, who argue that the key solution to fixing the current problems lies in resourcing and further funding, rather than merging the two Courts.
Referred to as the “flawed family court merger bill”, the Law Council of Australia earlier this year highlighted that the act of merging the two Courts would not solve the underlying issues of the significant underfunding and under-resourcing, the Court users already experience. The merger would merely remove the specialist forum that the Family Court currently has, which is at the detriment of those in need of specialist family law assistance. This was further emphasised by the President of the Law Council of Australia who highlighted that under the existing requirements of the Family Law Act 1975 (Cth), Federal Circuit Court judges are not required to meet the same statutory requirement of specialisation as those of the Family Court.
Notwithstanding the Law Council of Australia’s criticisms of Mr Porter’s proposed legislation, more than 60 legal organisations have urged Parliament to reconsider the proposal. Many of these organisations are of the belief that merging the two Courts will place the victims of family violence at an even greater risk than before. In particular, a concerned spokesperson of the Women’s Legal Services Australia stated that a high percentage of matters in the Family Court involve family violence and the proposed amendment reintroduced by Mr Porter does not prioritise child and victim safety.
With the growing concerns raised by these bodies from stepping away from our current specialised Family Court Model, it will ultimately be up to Parliament to determine whether this new legislation will be passed. Chamberlains Law Firm will keep you regularly updated in relation to this.
In the best-case scenarios, separating couples are able to agree on how to separate their assets. When they do so, we are often asked the question, “If we already agree, do we need to formalise our property settlement.”
When a Court adjusts assets between separating spouses, it will do so at the date of a hearing, not at the separation date. This can often lead to scenarios where a couple will agree on an outcome, not formalise those arrangements, and find out some time later that assets they have accumulated individually and after separation are still open to division between them and their former spouse.
If you do not formalise your property settlement, the limitation period (or ‘when you are in the clear’) expires:
There are exceptions to this, for example if a party has a reasonable excuse for a delay or if there would be hardship if a party was not able to formalise the arrangements for a property settlement out of time.
The period following separation can be one of great uncertainty around the treatment of assets an individual may have. In particular, parenting arrangements may change, your assets may grow as a consequence of hard work post separation, you could receive an inheritance or even (if you are super lucky) win the lottery.
This may mean that if one party reneges from the deal reached post separation and not yet formalised, you may find yourself with a legal entitlement that is significantly different from what you anticipated in an earlier deal that was not properly documented.
There are other, less risky, reasons to formalise your property settlement as soon as you are able to. This can include:
Often, the cost of legally formalising an agreement with the help of a lawyer is far less than the costs of litigation in the event the deal falls over.
The ACT Civil and Administrative Tribunal (ACAT), unlike the Courts system generally, is well known as for being a ‘no costs’ jurisdiction, meaning that each party bears their own legal costs. This is consistent with the essential purpose of ACAT – to be an inexpensive, informal and less cumbersome avenue for civil disputes to be resolved.
Importantly, ACAT proceedings are not ‘inexpensive’ per se, they are simply an inexpensive alternative to ACT Magistrates Courts proceedings. ACAT proceedings may still costs hundreds or thousands, especially in circumstances where legal practitioners are required. This amount of money, despite being cheaper than the Courts, is still not affordable for some parties, which is why the question of legal costs is still crucial.
An unfortunate consequence of ACAT’s default position on costs is that parties to a civil dispute may not commence proceedings on account of their inability to afford to do so. As a result, parties may be left without a feasible mode for remedy or be forced the pay legal costs regardless of the outcome of the matter. This contributes to the popular notion that the justice system is grossly inaccessible.
There is some good news, however. Recent cases have shown that ACAT will abandon their default ‘no-costs’ setting in certain circumstances:
In the 2017 case, Trustees of the Roman Catholic Church for the Archdiocese of Canberra and Goulburn as Trustees for St Mary Mackillop College Canberra v Kenningham [2017] ACAT 97 (Kenningham Case), it was established that legal costs may be recovered in ACAT if a party to an agreement reserves the right to claim as such under a term of the agreement.
The Applicant commenced proceedings in order to recover unpaid school fees from Ms Kenningham, who sent her children to the St Mary Mackillop College Canberra (College). A clause in the enrollment form, which was signed by Ms Kenningham, provided that the College may recover any legal costs incurred as a result of the late or non-payment of school fees. Accordingly, the College commenced proceedings to recover the sum of the unpaid school fees as well as the legal costs incurred as a result of the proceedings.
ACAT ordered the Ms Kenningham pay the College the sum of the unpaid fees as well as the reasonable legal costs that were incurred by the College. Notably, this was done so without a “costs order,’’ but instead, the legal costs form part of the contractual debt pursuant to the specific clause in the enrollment form. Also noteworthy, there is an emphasis on the term ‘reasonable’ which will be determined on a case-by-case basis.
Section 48(1) of the ACT Civil and Administrative Tribunal Act 2008 (Act) provides the default position that parties must bear their own costs. Section 48(2) of the Act provides the discretionary power for ACAT to make costs orders in certain circumstances:
In the case CIC v ACT Planning and Land Authority [2013] ACTSC 96 (CIC Case), the proper operation and scope of ACAT’s powers to make costs orders was considered.
The judgment established that despite there being discretionary powers, the Act only confers narrow powers that are limited by notions of reasonableness, interests of justice and only an exhaustive list of circumstances under which such discretion can be exercised.
There is no question that ACAT’s default position in relation to costs is that each party bears its own costs. Despite there being a discretionary power in the Act, the power confers limited rights for ACAT to vary the default position. Applicants to ACAT should therefore be mindful of the limited circumstances in which costs can be recovered.
Prior to pursuing any legal action in ACAT or otherwise, it is essential that parties understand not only their prospects of success, but also what the chances are of recovering legal costs are.