Ex-de factos & your Will – Isn’t a property settlement enough?

The incidence of de facto relationships has been increasing for some time, and that trend is likely to continue. Since 2009, the legal regime for property settlement has been the same whether the separating couple had been married or living in a de facto relationship. However, the law doesn’t always treat married and de facto couples the same. The law relating to what happens to your assets after you die is one area where there are some differences.

This article explores what might happen if a de facto couple made Wills during their relationship leaving their assets to each other, then, as often happens, were forgotten and unchanged after the relationship ended.

Isn’t your property settlement enough?

Many people think that once they have divided up their assets, neither partner could have a financial claim on the other in the future (except, of course, for child support if that is relevant). Some people also think that, because they weren’t married, their ex-de facto has no future financial claim. Those assumptions aren’t always correct.

The laws dealing with Wills and inheritances are completely distinct from those relating to division of assets after a relationship breakdown. A family law property settlement does not change someone’s Will, nor can it necessarily prevent someone receiving a gift left to them in their ex-partner’s Will.

So, can your ex-de facto inherit?

The answer to this question will depend on factors such as whether you had a Will, what were its terms, how long you lived together, whether you and your partner had joint children, and any financial support being provided by the deceased to the former partner. The answer may also depend on where you live.

According to a recent Western Australian case, Blyth v Wilken, another relevant factor could be the precise words you used to refer to your ex-de facto in your Will.

That case dealt with a Will in which the deceased left his assets to his now ex-de facto, with the parties having separated three years before the deceased’s death. The Will, made when the couple was living together, left the deceased’s estate to “my de facto wife Kathrine”.

The Court placed considerable importance on the words “my de facto wife Kathrine”, and decided that the deceased didn’t merely intend to benefit Kathrine; he intended to benefit Kathrine because she was his de facto wife. Accordingly, the Court concluded that the deceased would not have wanted Kathrine to benefit from his estate as she was no longer his de facto wife at the time of his death.

Would different words have made a difference?

As the decision in this case depended on the use of the words “my de facto wife Kathrine”, the outcome may have been different if the Will had merely referred to Kathrine by name, without also describing her as “my de facto wife”. That is, despite separating from the deceased years before he died and regardless of whether she had also received a property settlement, Kathrine could have received her former partner’s estate.

Some words of caution

The case of Blyth v Wilken is only one decision of a single Master (not a Judge). The decision is not binding and a Court could come to a different decision on similar facts. Hence, a reference in your Will to “my de facto partner such and such” will not necessarily guarantee that that person will not benefit from your estate in the event that your relationship ends before your death.

In NSW, Victoria, South Australia, Western Australia and the Northern Territory separating from your de facto partner will not change your Will and any gift in your Will to your ex-de facto could still be valid, despite the fact that you have separated and divided up your assets. In the ACT, Tasmania and Queensland, termination of a registered de facto relationship will revoke any gift in your Will to your ex-de facto partner. However, this only applies to registered relationships and registered terminations of them; and in the ACT it only applies to registered same sex relationships.

Depending on the State or Territory in which you live, you may also need to be wary of ex-partners making a claim for financial provision from your estate, even if you have changed your Will and had a property settlement. In general terms, in NSW, Tasmania, Western Australia and the Northern Territory your former de facto could make a claim on your estate if he or she was being maintained by you at the time of your death. Similar provisions apply in Queensland if your ex-partner is also the parent of your minor child. In Victoria, the entitlement to make such a claim is dependent on you and your ex-de facto not having finalised a property settlement by the time of your death.

The ACT and South Australia represent the two extremes. In the ACT, any ex-de facto from a relationship exceeding two years could be entitled to extra provision from your estate, regardless of whether or not he or she was dependant on you at the time of your death. However, the Court will take into account the terms of any post-separation property settlement. In South Australia, on the other hand, ex-de facto partners are not entitled to make such a claim at all.

Conclusion

Regardless of where in Australia you live, if you are going through a relationship breakdown, always speak with your family lawyer about what might happen if you or your former partner dies, even after you have completed your property settlement. It is important to review, and if necessary change, the terms of your Will as soon as possible after the ending of any relationship. In addition, in NSW your family lawyer could assist you to apply to the Supreme Court for approval of an agreement between you and your former partner that neither of you will make a claim on the other’s estate after the other’s death.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Verification of Identity in property transactions

Verification of Identity (VOI) is a process used to confirm the identity of a person.

Lawyers and other parties involved in property transactions have an obligation to ensure that the person claiming authority to deal with land is legally permitted to do so.  This includes confirming a person’s capacity to act as agent for a company or as an attorney.

The VOI process is particularly important in land and property dealings as it assists in reducing identity theft and land title fraud.  Verification of Identity has always formed part of good practice however from 1 August 2016 it became mandatory for land transactions.

Lawyers and other parties must take ‘reasonable steps’ to verify the identity of their clients, their client’s agents and persons to whom title deeds are being provided.

This means that your Lawyer will need to formally verify your identity during a face to face interview or use other approved methods to confirm your identity and authority to enter into the contemplated transaction.  The VOI requirements extend to any person authorised to act on behalf of the client.

When do I need to prove my identity?

Land and Property Information (LPI) is the central registration authority for real property (land) dealings in New South Wales.  The LPI registers hundreds of transactions affecting land every week.

New provisions under the Real Property Act 1900 (NSW) allow the Registrar-General to make rules (Conveyancing Rules) regarding the verification and identity of particular classes of persons with respect to certain transactions (Conveyancing Transactions).

The Conveyancing Rules set out the framework required for VOI processes which also reflect the methods used by recently-introduced electronic conveyancing procedures.

Broadly, a Conveyancing Transaction is a transaction between one or more parties involving the creation, disposal or transfer of an interest in land.  A typical conveyance, mortgage, charge or lease over property falls within this category.

The registration, recording or removal of an interest or notation in the titles register are also Conveyancing Transactions and will be subject to VOI processes.  Examples include the registration of an easement, caveat or plan of subdivision.

The VOI process must also be used for documents that do not require registration at LPI (such as a contract for sale and purchase of land and agreement for lease).

How does the VOI process work?

Your Lawyer must be satisfied that he / she is dealing with the person claiming to be authorised to enter transactions regarding the property.  Likewise, Lawyers acting for the party on the other side to your property transaction must confirm the identity of their client.  The idea is to create an ‘even playing field’ in the conveyancing and property transaction setting.  By ensuring all sides to a transaction undertake diligent VOI measures the parties are better protected against property fraud.

If you are involved in a property transaction such as the sale or purchase of land or borrowing money secured by a mortgage, you will need to meet personally with your Lawyer or other agency to provide documents and formally prove your identity.

During the VOI process you will be asked to produce original documents so that your identity can be compared (ideally) with a document containing photo identification.

The documentation required for the VOI process is similar to the present ‘100 points’ system commonly used for banking and other identification processes.  There are various categories and combinations of documents which may be used to prove your identity.  These include an Australian or foreign passport, drivers licence or photo card, birth or citizenship certificate, Medicare, Centrelink or Department of Veterans’ Affairs card.  For those persons who are not Australian citizens or residents, other types of documents may be used.

The types of documents you need to produce are categorised with the higher category documents being the preferred VOI source, for example an Australian passport and driver’s licence.

If sufficient identification documents are not available, an Identifier Declaration may be used which enables another person to identify you.  Your Lawyer can advise you on this process.

Verification of Identity documentation relating to a property transaction must be kept securely by your Lawyer for seven years.  Once the VOI process is carried out, further verification need not take place for two years.  This means that you need not undertake a further VOI process for a subsequent property transaction that occurs within two years of the initial VOI.


 

What if I cannot visit my Lawyer?

If you are unable to attend a face to face interview with your Lawyer, an Identity Agent can be used to confirm your identity.  This is practical for clients who are travelling or do not reside close to their Lawyer’s office.

Australia Post and other reputable agents offer this service and your Lawyer can refer you accordingly.  The Identity Agent will complete the VOI process in a similar manner as required by your Lawyer and provide an Identity Agent Certification.

What about companies and attorneys?

If a party involved in a Conveyancing Transaction is a corporate entity, a company search will be obtained to confirm the existence of the company and to establish those persons authorised to sign on behalf of the company.  The authorised representatives will then need to undergo the VOI process.

Similarly, attorneys entering transactions on behalf of their principal must provide the document authorising such a transaction and complete the VOI process to verify their identity.

Conclusion

Identity theft leading to the registration of fraudulent documents and dealings over land is not a new phenomenon and can have devastating financial and other affects.  Verification of Identity is an important safeguard against fraud and is an essential risk management tool.

By imposing standard and reciprocal requirements for Lawyers and Conveyancers to identify their clients, mandatory VOI rules are likely to offer better protection and safeguard you against a possible fraud in connection with your property transaction.

For more information about VOI, talk to one of our experienced Property Lawyers or if someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Was it a loan or a gift? – Big difference!

Housing affordability is a big issue for young Australians. When discussing that issue recently, the Prime Minister infamously remarked that the solution is for parents to “shell out” to help their children buy a home. For those lucky enough to have parents able to assist them financially in adulthood, whether by helping them into the property market or otherwise, could that “solution” be creating more problems than it solves?

How might that money be treated if the recipient separates from his or her spouse or de facto? Almost certainly, the parents who had “shelled out” to help their adult child won’t want the child’s now ex-partner to benefit from or keep some of that money.

Family law property settlement – the basics

The Family Law Act sets out the steps that must be followed to divide up a separating couple’s property. If it is considered necessary to alter the legal ownership of the parties’ property in order to reach a just and equitable property division, then all of the parties’ assets and liabilities, whether owned jointly or separately, must be identified and valued.

One then assesses each party’s financial and non-financial contributions to the acquisition of those net assets and to the welfare of the couple or family unit, before, during and after the relationship. Having determined respective contributions, the parties’ future needs are compared and taken into account, in order to reach a just and equitable property settlement.

Was it a loan?

If money had been received by one or both parties from parents, for example, the first question that must be answered is whether that financial assistance was a loan or a gift. When the recipient’s relationship breaks down, he/ she will almost always want to argue that the money he/ she received from his/ her parents was a loan. The ex-partner will, in turn, want to argue it was a gift. How do you tell which it was?

The say so of the recipient child and his/ her parents will not necessarily be enough to convince the Court that the money was a loan. The Court will have regard to all of the evidence surrounding the “giving” and receipt of the money, such as:

  • Conversations between the child, the ex-partner and the parents
  • Any relevant documents. For example, did the parents record the transaction in their bank account as something like “Loan to John/ Jane”? Perhaps one of the parties kept a spreadsheet of monies received entitled “Loan from mum & dad”
  • Were any repayments made?
  • A formal loan agreement would be the best evidence in trying to resolve this question.

Unfortunately, when money and families become intertwined, things have a remarkable propensity for becoming messy. Notwithstanding that, it is equally unfortunate that few people take the trouble to properly document loans between family members. The lack of clear documentation can turn a messy situation into an ugly one.

If it was a gift, to whom was it given?

Having successfully argued that money received from the ex-partner’s parents was a gift not a loan, that person may now want to argue that the money was gifted to both parties, not just the parents’ child. He or she might bring evidence of conversations where the parents said things such as “We want you both to have this money because we’re all family now”. Or she or he might claim that the money was given in recognition of, for example, the care provided by a child-in-law to her/ his parents-in-law.

While the Court will take into account all of the relevant evidence and each case will turn on its own facts, it is usually the case that the Court would find that money gifted by parents was a gift to their child, not to the parties jointly.

How is this relevant to a property settlement?

The characterisation of whether money received from a parent or someone else was a loan or a gift could be very important to a property settlement, especially if large sums are involved.

Firstly, the money would be taken into account when ascertaining the parties’ assets and liabilities. If the money was a loan, that will be a liability of the parties, reducing the net assets to be divided between them. Legally, there would be an expectation that the loan would be repaid; however, in practice, the lending parents often allow, even want, their child to keep the loan money after the property settlement is finalised, providing a windfall to that person.

If the money was a gift, then it, or whatever had been purchased with it, would form part of the parties’ net assets available for distribution between them.

However, it doesn’t end there. The money would be taken into account in determining each party’s contributions. If the money was a loan, it may have little or no impact on the Court’s determination of who contributed what. Although, the recipient of the loan could be given credit for having contributed the benefit of, for example, a low- or no-interest loan.

If the money was a gift, then, except in the unusual circumstances of the Court finding that it was a gift to both parties, it will be treated as a financial contribution by the party whose parents gifted the money. Factors such as how long ago the money was received and the size of the gift compared to the parties’ overall net asset pool will decide the extent of the gift’s impact on the final determination of the parties’ respective contributions. The larger and more recent the gift, the greater impact it will have on the recipient’s percentage contributions.

Conclusion

Whether money received by a couple from parents or others is properly characterised as a loan or a gift could have a considerable effect on the separating couple’s final property settlement. People’s memories can fade, even change, over time, and it can later be difficult to determine if the money was intended as a gift to one or both parties or a loan requiring repayment.

If parents want to take the Prime Minister’s advice and “shell out” to help their children into the property market, those parents should think carefully about whether they intend to gift or lend the money, and should seek advice about the pros and cons of those options and the proper documenting of any loan.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Does a Pre-Nup have to be fair?

It is now more than 10 years since the Family Law Act was changed to allow Australians to enter into pre-nuptial agreements (known as Financial Agreements or Binding Financial Agreements).

Under the Act, the Court does not have to approve a Financial Agreement for it to be binding. That is, the Family Law Act allows parties to enter into a bad or grossly unfair pre-nuptial or other sort of Financial Agreement. However, that does not necessarily mean that all Financial Agreements will necessarily be binding.

The Court’s attitude to BFAs

There is a widely held belief among family lawyers that the Family Court judges were not happy that the Family Law Act was changed to allow people to enter into pre-nuptial style agreements without the Court’s oversight. Throughout the last decade or so, the Court has used various technical legal difficulties to find that certain Financial Agreements were not binding, even though the Agreements had been signed by the husband and the wife, both of whom had received independent legal advice.

The government then changed the law again, to make it more difficult for judges to rely on legal technicalities to overturn a Financial Agreement. But some judges were still not happy that they couldn’t impose their version of fairness on an Agreement the parties had made.

Pre-Agreement conduct

Having been thwarted in their efforts to overturn Financial Agreements on the basis of legal technicalities, some judges started to turn their attention to the conduct of the parties prior to entering into the Agreement, in an attempt to find a way to undo a Financial Agreement that the judge didn’t think was fair.

That is what occurred in the first instance hearing in a case called Saintclaire & Saintclaire. In her Judgment, the trial judge expressed her view that there was “no doubt that [the] transaction should not have proceeded”, because of her view of its perceived unfairness to the wife.

However, as the Act does not allow the Court to overturn a Financial Agreement just because the judge considers it to be unfavourable to one party, her Honour had to find another way to undo the Agreement the parties had signed. To do that, she turned to the law of undue influence and unconscionable conduct.

The facts of the case

The parties, then aged in their mid – to late-thirties, moved in together in 2005 or 2006. They were both educated professionals, earning good incomes. They had two children, born in late 2006 and early 2008. The wife suffered some post-natal depression after the children’s births; which had resolved by about October 2008. The parties were otherwise in good health.

In 2007, they entered into a de facto relationship agreement, by which they each agreed to make no claim on the other party for property settlement or “spouse” maintenance in the event their relationship ended.

Sometime later, the parties decided to marry. They agreed to enter into a pre-nuptial agreement on essentially the same terms as their de facto relationship agreement. Through their lawyers, they commenced negotiations for that agreement in March 2009. They married the following month, without having finalised or signed their pre-nuptial agreement.

Negotiations for the now post-nuptial agreement re-commenced in June 2009 and continued for the succeeding four months, during which time the husband agreed to various amendments to the agreement proposed by and beneficial to the wife.

One of those amendments required the husband to pay $100,000 to the wife so that she could discharge her credit card debts, of which the husband had previously been unaware. The Financial Agreement was ultimately signed in late September 2009.

Sadly, the parties separated less than 12 months later. By then, the wife’s financial circumstances had worsened and she wanted to get out of the Financial Agreement.

The trial judge’s decision

At first instance, the wife argued that as a result of her post-natal depression, the husband’s violence and the wife’s difficult financial circumstances, the Agreement should be set aside on the basis of either undue influence or unconscionable conduct. The trial judge agreed, notwithstanding that the post-natal depression had resolved itself 11 months before the Agreement was signed, the husband’s alleged violence consisted of two disputed incidents some eleven and five months prior to the signing of the Agreement, and the wife, herself a financial planner, was the author of her own financial difficulties.

In agreeing with the wife, it seems that the trial judge was swayed more by her view of the unfairness of the Agreement than by the law of unconscionability and undue influence.

The Appeal Court’s decision

The Appeal Court disagreed with the trial judge. It found that she had been confused and mistaken as to the law relating to undue influence and unconscionable conduct. Specifically, the Appeal Court reiterated that the Family Law Act allows parties to enter into Financial Agreements which will be binding, notwithstanding that the Agreement might seem to be unfair or unjust to one of the parties.

Conclusion

It is clear from both the Family Law Act and the Appeal Court’s decision in Saintclaire & Saintclaire that a Financial Agreement can be binding on both parties, even if one of them or the Court thinks it is unfair. While there may be other avenues available to a party to try to get out of a Financial Agreement that he or she has signed, the perceived unfairness of that Agreement is not, of itself, a good enough reason. This applies to all Financial Agreements, whether entered into before, during or after a marriage or de facto relationship.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Extension of the unfair contracts regime to small businesses

The Federal Government has enacted legislation extending the unfair contract term protections of the Competition and Consumer Act 2010 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth) to the small business sector.

Under the new laws, a Court is able to declare that a term of a standard form small business contract is void if the term is unfair.

The laws are an extension of existing provisions which have been available to consumers since 1 July 2010.

The intent of the legislation is to level the playing field and prevent “take it or leave it” standard form contracts, which are commonly one-sided, from including unfair terms. The amendments are based on the assumption that small businesses, like consumers, often lack the resources or skills to understand and negotiate contract terms and are vulnerable to the inclusion of unfair terms.

Agreements which could be caught by the provisions include retail leases, supply agreements, franchise agreements and finance contracts.

In this article, we look at what the new regime will mean for your business.

 

What transactions will be captured by the new regime?

The amendments extend the unfair contract term protection laws to contracts that are defined as a “small business contract”. A small business contract is one where:

  • the contract is for the supply of goods, services or a sale or grant of an interest in land;
  • at the time at which the contract is entered into, at least one party to the contract is a business that employs fewer than 20 persons; and
  • the upfront price payable on the contract is no more than $300,000 (or $1 million if the duration of the contract is more than 12 months).

The protections only apply to standard form contracts. Although there is no express definition of a standard form contract, a standard form contract generally includes situations where:

  • one party has all or most of the bargaining power relating to the transaction;
  • one party prepared the contract before discussions between the parties;
  • one party was required to either accept or reject the contract as presented;
  • one party was not given the opportunity to negotiate; or
  • the terms of the contract are not specific to one party or the particular transaction.

A contract will be presumed to be a standard form contract unless a party proves otherwise.

The regime will not only apply to new small business contracts, but also pre-existing small business contracts which are renewed and to the terms of pre-existing contracts which are varied.

 

What is an unfair contract term?

A term of a contract is unfair if it:

  • would cause a significant imbalance in the parties’ rights and obligations arising under the contract;
  • is not reasonably necessary to protect the legitimate interests of the party who would be advantaged by the term; and
  • would cause detriment (financial or otherwise) to a party if it were to be applied.

The legislation sets out some examples of unfair contract terms, including terms that:

  • allow one party to unilaterally vary, renew or terminate the contract;
  • penalise one party for a breach or termination of the contract;
  • allow one party to vary the upfront price under the contract without the right of the other party to terminate the contract; and
  • allow one party to unilaterally determine whether the contract has been breached.

 

Enforcement of the new provisions

If a party considers that a term of a small business contract is unfair, it can apply to the Federal Court seeking a declaration that the term is void and unenforceable. The remainder of the contract will bind the parties if it is capable of operating without the unfair term. Once a term is declared unfair, the party could also seek an injunction preventing the other party from relying on the unfair term.

There are no specific penalties or offences associated with a contract term being held to be “unfair”.

Applications to the Court can be made by a small business, the ACCC or by State regulators. The ACCC has been provided with $1.4 million in funding to assist in the implementation of and compliance with the new legislation.

 

What can your business do going forward?

The new laws will apply to contracts entered into or varied from 12 November 2016, which means that any business that uses a standard form contract when dealing with a small business will then have to comply with the new regime.

Companies which deal with small businesses should review their standard terms of trade to ensure that they do not include unfair terms. This might include:

  • examining whether the company utilises standard form contracts;
  • assessing the extent to which standard form contracts are entered into with businesses which employ less than 20 people and which fall within the upfront price thresholds;
  • identifying existing contracts which might be renewed after the commencement of the new regime; and
  • reviewing any standard form contracts to identify terms which might be deemed “unfair” and considering whether they should be amended.

 

Conclusion

The new legislation will affect a large number of industries which rely on standard form contracts. Businesses should review their standard form contracts immediately to minimise the risk of key contractual terms being found unenforceable.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

Strata Law Reforms NSW

In 2015 the New South Wales Parliament passed the Strata Scheme Management Bill 2015 and the Strata Scheme Development Bill 2015, with more than 90 law changes. The new pieces of legislation set out comprehensive reforms of NSW strata laws modernising the law to reflect the reality of living in a strata townhouse or apartment today.

The changes are aimed at improving strata living and providing greater opportunity for strata redevelopment. The new strata laws commenced operation on 30 November 2016.

Before the new laws commenced research and community consultation was undertaken:

  • new regulations were developed setting out how the laws will operate;
  • key information was developed and released for strata schemes; and
  • a public awareness campaign took place.

We examine some of the more significant reforms set out in the new legislation below.

Collective sale of a strata scheme

Previously, a strata scheme could only be ended or “collapsed” with the unanimous support from all owners in a strata scheme. The new provisions allow for the collective sale or redevelopment of a strata scheme by a 75% majority of lot holders. The rights of the owners are protected by the inclusion of certain checks and balances. For example, if a strata sale is agreed to, the owners are to receive the market value of their lot plus an extra amount to cover costs associated with moving.

The purpose of the amendment is to prevent individual owners from blocking redevelopment of aging and high-maintenance unit blocks.

Proxy Voting

The number of proxies a member of a strata scheme can hold is now limited to:

  • one proxy vote only for schemes with less than 20 lots; and
  • 5% for schemes with more than 20 lots.

The intention is to restrict “proxy farming”, whereby members gather up the votes of uninterested or absent members in the strata scheme to enable them to pursue their own agenda.

Inspection reports

In relation to all future strata developments, a developer must appoint an independent building inspector to provide both an interim building report (identifying any defective building work) and a final report on completion of the building work.

Building defects

A developer of a high rise strata building is required to place a bond of 2% of the contract price of the building work, to cover potential defects identified after completion and those which are set out in the final inspection report. The building bond must be claimed or realised 2 years after completion of the building work or within 60 days after the final report is given.

The reforms are aimed at protecting buyers of new units, encouraging early identification and rectification of defects and helping improve the standard of building construction.

Other notable changes

The new legislation also includes provisions which:

  • make it easier for owners to complete cosmetic and minor renovations to their units;
  • address issues of parking, pets and smoke drift;
  • allow an owner’s corporations some flexibility in deciding when their general meetings will be held and allowing more modern forms of communication to be used to attend meetings, such as video and teleconferencing.

What about the other states and territories?

NSW is not the only state turning its attention to strata law reform. In Queensland, discussion papers for similar reforms were prepared in 2014 at the request of the previous State Government. Similarly, in Western Australia a Strata Reform Project Team has been tasked with undertaking research into strata reform to ensure Western Australia has a modern Strata Titles Act. Victoria’s last round of reforms of owner’s corporation legislation took place in October 2014.

Conclusion

The reforms are intended to promote redevelopment of strata apartment buildings, assist in urban renewal and increase housing supply. Apartment owners are encouraged to make themselves aware of the strata reforms and consider the impact the changes may have on their strata living.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

Swimming Pools – new compliance laws

Across the country, thousands of homes have backyard swimming pools. With drowning being a leading cause of preventable death in young children, swimming pool safety is an important issue for the community.

New compliance laws came into effect in NSW in April 2016, requiring that any property with a swimming pool now needs a certificate of compliance before it can be sold or leased. Similar requirements are already in place in Queensland.

 

New laws for properties with swimming pools

The new laws are a result of an amendment to the Swimming Pools Act 1992 which took place in 2012. They provide that:

  • swimming pool owners must register their swimming pool or spa pool on the NSW Swimming Pool Register; and
  • from 29 April 2016, a copy of a certificate of compliance or relevant occupation certificate must be attached to the sale contract or new residential tenancy agreement to sell or rent any property with a swimming pool or spa pool.

For the purposes of the provisions, swimming pools or spa pools are defined as structures that are:

  • capable of being filled with water to a depth of greater than 300mm; and
  • solely, or principally used, designed, manufactured or adapted for the purposes of swimming, wading, paddling or other aquatic activity.

The new laws apply to a number of properties including private houses, units, hotels, motels and other tourist and visitor accommodation. For units, the owner’s corporation must obtain the compliance certificate. Individual lot owners can then inspect the certificate through the Swimming Pool Register website.

 

Swimming pool certificate of compliance

A swimming pool certificate of compliance is a document which confirms that the pool and pool barrier meet safety requirements.

An occupation certificate that is less than 3 years old and that authorises the use of the swimming pool can be used instead of a certificate of compliance. A certificate of compliance is valid for a period of 3 years from the date of issue.

Local councils and accredited certifiers can carry out a swimming pool barrier inspection and issue a certificate of compliance.

 

Contracts for sale of land

A valid swimming pool certificate of compliance, or a valid certificate of non- compliance, must be attached to the contract of sale of properties with a swimming pool or spa pool.

This requirement does not apply:

  • to a lot in strata or community schemes with more than two lots, or
  • for any off-the-plan contract.

Failure to attach a certificate or relevant occupation certificate will allow a purchaser to rescind the contract at any time within 14 days of exchange of contracts, unless settlement has already occurred. However, vendors are able to shift the responsibility of obtaining a certificate of compliance by attaching a certificate of non-compliance.

Should the purchaser complete the sale with a certificate of non-compliance attached to the contract, the purchaser will have 90 days from settlement to fix the non-compliance issues.

 

Conclusion

As an owner of a pool you may request your local council or private certifier to carry out an inspection in order to obtain a certificate of compliance. This must be done by the authority within 10 business days if the purpose is to sell or lease the land.

It is too early know the implications of the new requirements however it may affect your property’s value should the cost of fixing a non-complying pool be deemed excessive by a prospective purchaser. Or, it may even affect your ability to rent a house you own which has a pool as part of the rental agreement.

If you own a property that has a swimming pool consideration should be given to arranging a swimming pool inspection and obtaining a certificate of compliance even if a sale is not planned for some time.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

Social media and family law – Just don’t do it !!!

Social media – Facebook, Instagram, Twitter, Snapchat and the like – can be a lot of fun and have become an accepted part of modern life.  Many of us use such forms of electronic communication to share the exciting, as well as the banal events in our lives, to express our views and to stay in touch with loved ones.  But what happens when people going through a relationship breakdown take to social media?  Usually little good comes of it, and sometimes quite a lot of bad can result.

 

Social media as evidence

If you are going through a separation, you should expect your former partner, their lawyer or the children’s lawyer to search social media to see if they can find out anything damaging about you that could be used as evidence. For example, if you are involved in a financial dispute and might be claiming that you cannot afford to pay spouse maintenance or increased child support, it would probably not be a good idea to share on Instagram photos of your latest holiday or new car.

Similarly, when involved in a parenting dispute, you would be wise not to post to Facebook about your latest “big night out”, especially if the children were in your care at that time.

When making a decision about where children are to live and with whom they are to spend time, the Court can take into account the ability of the parents to communicate and cooperate with one another.  So, it is not likely to be helpful if the Court is shown evidence of abusive or derogatory posts you have made on social media about your former partner.

Of course, many people have social media privacy settings which limit the information that can be seen by non-“friends”. If you haven’t set your social media privacy in that way, you would be wise to do that while you’re sorting out the issues arising from your relationship breakdown. However, even with tight privacy settings, it’s still better to be very careful about what you post, or just don’t do it at all.

 

Social media and prosecution

The law prohibits the publication, including by electronic means, of information relating to family law proceedings which identifies the parties involved, people associated with those parties or any witnesses. Anyone who breaches that rule is guilty of an offence, the maximum penalty for which is 12 months imprisonment.

That prohibition has not prevented some people involved in family law proceedings from using social media as a weapon against their former partner, by carrying out a campaign of cyber-bullying against their former partner, his or her lawyers, the children’s lawyers and the judicial officers involved in the case.

In two recent cases involving such unlawful social media publication, the Court focused primarily on two things.

Firstly, the Court invoked its child protection jurisdiction and concerned itself with the harm that might befall the children if, as a result of social media publication of information relating to family law proceedings, members of the public could identify the children involved, such that the children might then be exposed to ridicule, curiosity or notoriety.

Secondly, the Court considers it in the public interest to preserve public perception of the integrity and impartiality of the Courts and judicial system, which some litigants have used social media to attack.

In both cases, the Judges commented on the difference between unlawful publication of information about family law proceedings in a one off newspaper article, for example, and publication on the internet, which is and remains available for quick and easy access by anyone, anywhere, at any time.

In one of those cases the offending parent was ordered to remove all references to the parties and the proceedings from the website he or his family had set up to cyber-bully the mother and to expose the lawyers and judges involved in the case as “corrupt”. In addition, the Court ordered the Federal Police to investigate whether the father had committed an indictable offence.

Similar orders were made in the other case in which the offending party, again the father, had used Facebook to denigrate the mother and her lawyers, the Court, the Department of Community Services and the children’s lawyer.

 

Can social media be good?

The cases referred to above involved ongoing bitterness and acrimony between the separated couple. Happily, that isn’t always the case, and some separating parents can respectfully communicate and cooperate with each other for the benefit of their children. In such a situation, tech savvy parents may find a way to use electronic communication or social media to their mutual advantage, for example privately sharing necessary information about the children and their activities.

 

Conclusion

Unless you and your former partner can find a way to privately use electronic communication to help you co-parent your children after separation, the general guideline when it comes to social media and family law disputes is just don’t do it.

Not only would you not want to find your Facebook posts being used as evidence against you in court proceedings, you could even expose yourself to prosecution by the Federal Police for breaching the law against publication of information relating to family law proceedings.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Do you know when to update your Will?

Most people know that a valid Will determines how their assets are dealt with after they are gone. Wills generally provide for the appointment of a trusted executor/s and the leaving of gifts to chosen beneficiaries. They may also appoint guardians for minor children and give direction for specific funeral and burial arrangements.

When to review your Will

Many people make a Will, arrange for it to be safely stored and then forget about it. However, in many situations reviewing your Will is just as important as preparing it, particularly when events occur and your Will no longer reflects your wishes.

Your Will should be reviewed when your personal or financial circumstances change.

The following events might prompt you to review your Will.

Marriage

The Succession Act 2006 (NSW) revokes a Will when the testator marries but does not revoke a gift to a person to whom the testator marries nor the appointment of that person as executor. Marriage however may void other parts of the Will.

Wills made ‘in contemplation of marriage’ remain effective when the marriage (to the person nominated in the Will) occurs. This avoids statutory provisions that might otherwise void certain parts of the Will because of marriage.

If you have married since preparing your Will then it may be time to review it. Even if the Will was made in contemplation of marriage to your present spouse, if some time has passed since preparing it, certain other terms of the Will may no longer be desired.

Separation

The Succession Act 2016 (NSW) provides that gifts to a former spouse upon divorce are revoked as well as the appointment of a former spouse as executor. A Will should always be reviewed on separation from your spouse or de facto partner to take account of new circumstances. Bear in mind also that many partners are separated for some time before finalising their divorce.


 

Birth of a child

Obviously the birth of a child will warrant revision of your Will to ensure that child is adequately provided for. Your Will can be drafted to distribute assets equally amongst your children, even those born after your Will is made.

Death or ill health of an executor

You may have appointed an executor/trustee of your estate who is no longer alive, aging, mentally or physically unwell, or who has moved away. In these circumstances you might consider appointing a new executor. Your Will can provide for a substitute executor if your appointed executor is unable or unwilling to act. There is no limit to the number of executors you may appoint. Your executors should be capable of administering your estate in accordance with your wishes, which is often carried out under the guidance of a solicitor.

Death of a beneficiary

A gift to a beneficiary who dies before, or within 30 days of the testator, may fail unless a contrary intention is stated in the Will.

If the beneficiary was a child of the deceased then the Succession Act 2006 (NSW) provides that the deceased child’s children will instead take the gift. If the testator has no children and a substitute beneficiary is not nominated the gift falls to the residuary estate. This can have unintended effects.

A Will that nominates a beneficiary who has passed on should be reviewed to ensure that it still has the desired effect.

Disposal of a specific gift.

A specific gift is clearly identified and separate to other property of the estate; such as a prestige motor vehicle. If you sell or dispose of such an asset after you make your Will then that gift will fail.

The result is that the intended recipient of the gift may receive nothing at all or a much lesser share of the estate than what you intended. This may have a significant effect, particularly if the asset is of substantial value.

Acquisition of interests in a company or partnership

Property owned by a company cannot generally be disposed of by Will, however the shares in a company may be gifted. If you acquire an interest in a partnership you should consider what happens to that interest when you die. Most partnership agreements set out what happens when one partner dies and how that partner’s share of the partnership is distributed. New business interests should always prompt reviewing your Will.

Increased wealth, potential challenges to a Will, vulnerable beneficiaries

Your Will may incorporate a testamentary trust to provide for minors, protect beneficiaries under legal incapacity, safeguard beneficiaries’ assets from creditors or family provision claims and provide certain income tax advantages.

If you would like these protective measures incorporated in your estate planning and the value of your assets warrant the administrative and accounting costs of a testamentary trust then it is worthwhile discussing this option with your solicitor.

Summary

Life is unpredictable and change inevitable. For better or worse life changes are likely to impact upon your estate planning. For good measure, you could diarise to review your Will each time your tax return is prepared. Remember that your superannuation, binding death benefit nominations, appointments of power of attorney and enduring guardians also form part of effective life and estate planning. These should also be regularly reviewed.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Does your Employment Contract measure up?

employment-contract-imageIf you are entering into an employment contract do you know what should be included? If you are an employer and using an old contract, should it be reviewed first? It is clear contracts should be individually structured to meet the needs of those involved and in reality both employer and employee should seek legal assistance first before offering or accepting an employment contract.

This article is intended to provide a starting point only and attempts to clarify some of the important information all parties should know.

What terms should always be in an Employment Contract?

Naturally there are some preliminary matters. For example, the identity of the parties needs to be set out as well as the duration of the contract (if fixed).

The contract then needs to specify the terms.

Before the terms are considered, the application of any statutory provisions or award or collective agreement must be considered. Generally speaking, employers and employees cannot contract out of such instruments unless the instrument itself facilitates that.

The following are critical to mention and the particular entitlements need to be specified, including:

  • The remuneration;
  • The frequency of remuneration reviews;
  • The period of the contract (if fixed term);
  • The basis of remuneration adjustment and performance management/appraisal;
  • Termination conditions;
  • Any professional indemnity;
  • Specific employment conditions including
    • hours of work;
    • annual leave;
    • annual leave loading;
    • public holidays;
    • long service leave;
    • superannuation;
    • reimbursement of expenses;
    • sick leave or carer’s leave;
    • parental leave; and
    • other leave.

Depending on the nature of the employment and industry it may be important to also include:

  • Intellectual property;
  • Restrictive covenants;
  • Professional development and training; and
  • The location of employment.

A statement of duties should be attached to the contract. For this attachment to itself become part of the terms of the contract, it should be expressly incorporated into the contract by a statement which makes it part of the contract in the body of the contract itself or as an annexure.

Workplace policies

Some workplace policies will be incorporated into the contract because of the nature of their content, some will not, and it is often hard to know what matters a court will find are incorporated. If an employer definitely wants to incorporate a policy into the contract, they can expressly do so by reference in the contract.

Employees and contractors

There is often ambiguity in a workers’ status, as to whether they are a true employee of an independent contractor. Employment law differs from other law, such as tax law, on these questions.

There are also significant legal consequences of incorrectly assuming an employee is a contractor, or vice versa. The true nature of the working relationship should be considered at the time of drafting an employment contract or a contract for services.

Superannuation

The employer is responsible to ensure that appropriate superannuation contributions are paid into the employee’s nominated superannuation fund. Generally a contractor will be responsible for their own superannuation contributions.

Implied entitlements

Some entitlements and obligations that exist in the employment relationship are implied. This means that they are not written down or stated, but they still exist.

The implied terms include:

  • An employee must exercise reasonable skill and care in their performance of duties;
  • A general duty exists for an employee to obey all lawful and reasonable directions by their employer;
  • There must be fidelity and confidentiality within the employer/employee relationship; and
  • If no provision for termination within the contract then “reasonable notice” for termination must occur unless in circumstances of “serious misconduct”.

Conclusion

When negotiating an employment contract it is essential for both employers and employees that the contractual arrangements should be specific to the individual and the terms say what you want them to mean. Parties entering into these arrangements are wise to seek legal assistance beforehand to ensure they are right.

 

If you want to know more or if you run a business and would like your draft employment contracts reviewed please call us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

 

Business Structures: Company

When commencing a business venture, it is necessary to consider the most appropriate type of business structure to put in place. Different business structures have different benefits and disadvantages. This article looks at companies – how to set one up and the pros and cons of a company structure.

Key Features

A company is a separate legal entity capable of holding assets in its own name and liable for its own obligations. A company is owned by shareholders. The liability of shareholders is usually limited to the amount of their shareholding guarantee. This means that shareholders can limit their personal liability and are not generally liable for the debts of the company.

Directors manage the day to day business affairs of the company. There are a number of duties and obligations for company directors including an obligation that a director must act in the best interests of the company.

In Australia, the most common forms of company are:

  • Private company (or a proprietary limited company): this is a company which does not sell its shares to the public and cannot raise money from the general public through share issue.
  • Public company: is a company whose shares are owned by the public at large, with the company’s shares usually listed for trade on a stock exchange.

Companies are regulated by the Australian Securities Investment Commission (ASIC) and governed by the Corporations Law.

How to Set up a Company

An Australian company must be registered with ASIC. When ASIC registers a company, the company will be given an Australian Company Number (ACN). An application must nominate a principal place of business and registered office for the company.

Prior to lodging an application for registration, consideration should be given to:

  • the proposed company name. A check should be undertaken to confirm the availability of the proposed name. If no name is specified in the application, the company will be referred to by its ACN.
  • what rules will apply to govern the company. This can generally be the replaceable rules from the Corporations Act (which means that the company does not require its own written constitution), a constitution or a combination of the two.
  • who will be the shareholders and directors of the company.

A company needs its own Tax File Number, which can be obtained online from the Australian Taxation Office (ATO) and an annual tax return must be filed.

A company must be registered for GST if its annual turnover is $75,000 or more. An Australian Business Number (ABN) is required to register for GST and can be obtained online.

Pros and Cons

The advantages of forming a company include:

  • liability for shareholders is limited
  • easier to raise finance for expansion
  • ownership can be easily transferred
  • taxation rates can be favourable

The disadvantages include:

  • expensive to form, maintain and wind up
  • reporting requirements can be complex
  • must publicly disclose key information
  • owners cannot offset losses against other income

Conclusion

A company might be a suitable business structure for unrelated parties who want to commence a business venture together, where there is a degree of risk and limited liability is wanted or where there is a desire to list the company on the stock exchange.

Establishment of a company and ongoing administrative and compliance costs associated with the Corporations Law can be high. An accountant or lawyer can help you understand the cost and risks of a company and explain whether a company structure would be suitable for your business going forward.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

business-structures-imagebusiness-structures-image

Airbnb Legal tips for property owners

air-bnb-image

If you have looked at booking holiday accommodation recently chances are you have come across Airbnb or maybe you know someone who rents out their spare room and is always talking about the extra money they are making.

But what is Airbnb exactly, how does it work and what are the potential pitfalls and legal implications of making money out of your spare room on a casual basis?

What is Airbnb?

Airbnb styles itself as a “Community Built on Sharing” and an easy way in which people can make money from their extra space. The idea of making money out of spare space or an empty property is not new. The difference with Airbnb is that both hosts and guests must create a profile which is rated after every stay. So both hosts and guests are rated.

Airbnb started in San Francisco in 2008 and from quite modest beginnings has grown to a worldwide network of both hosts and guests with in excess of 2 million listings in over 34,000 cities worldwide. Airbnb claims to have had in excess of 60 million guests use its services.

So how does it work?

Both hosts and guests start by creating an Airbnb profile. If you are planning to host you then add details of the accommodation you wish to offer.

Accommodation options currently offered on Airbnb range from rooms in private home with shared facilities through to sole use of a castle and everything in between.

The price for the accommodation is set by the host and Airbnb add a service fee to every booking.

Is it legal?

When you sign up as a host on Airbnb you agree, under the terms and conditions that any accommodation you list will not breach any lease or rental agreements or any homeowners’ association rules and that you are complying with all applicable zoning laws that govern the renting of residential properties. But is this true?

At the present time whether you are likely to run into strife with your local council will depend on where you live and whether your neighbours lodge a complaint about you, as Mr Wally Salinger, a resident in the popular inner west suburb of Annandale in Sydney recently found out.

Mr Salinger recently received a notice from his local council threatening him with a $1.1 million fine for using his home as an Airbnb rental after a neighbour lodged a complaint. Mr Salinger sought advice from the council as to what he needed to do to make sure his property could be legally rented out on Airbnb but met with a brick wall in terms of any clear solution.

Presently different council areas have different rules governing what they will and won’t allow in terms of home sharing and short term rentals. There is pressure on state governments to clarify the rules around home sharing so that there is consistency. Some councils will allow bed and breakfast arrangements (with appropriate approvals) and some councils prohibit these types of short term rentals altogether.

In Victoria and other states there is also a similar level of uncertainty. Although a recent decision of the Victorian Civil and Administrative Tribunal (“VCAT”) may bring some comfort to would be Airbnb hosts.

VCAT recently held that the owner’s corporation at the Watergate Apartments located in Melbourne’s Docklands area did not have the power to make a rule which prohibited stays of less than 30 days paving the way for Airbnb style rentals to be permitted in that particular complex.

What about insurance?

While noting on its website that it provides a “Host Guarantee” for certain types of damage done to a host’s property, Airbnb’s terms and conditions stress that any agreement between a host and a guest is strictly between those parties and that Airbnb is simply a limited authorised payment collection agent for the host for the purpose of accepting the guest’s payments.

Airbnb recommends that hosts obtain appropriate insurance for any accommodation they are offering and also that hosts review their insurance policies to make sure the insurance coverage extends to the property when it is being rented out.

Importantly, the Host Guarantee is not insurance and should not be considered to replace the host’s own home or renters insurance. The Host Guarantee does not protect cash and securities, pets and personal liability and certain types of property such as jewellery and artwork have more limited protection than say furniture.

What if someone is injured while staying at an Airbnb property?

A recent tragedy at an Airbnb rental in Texas highlighted the potential issues that can arise with this type of rental. In a tragic accident a man died after a tyre swing that he was sitting on fell when the tree trunk that it was tied to broke in half and fell on the man’s head.

In that particular instance the man’s family did not pursue a claim against Airbnb as the host’s homeowner’s insurer responded to the claim and there was no commercial activity exclusion on the policy. If the host’s insurance policy had not responded then the host could have faced potential financial ruin if a claim had been made by the family. Whether a claim against Airbnb would have succeeded remains untested.

It is always best to check first

If you are thinking of renting your home out for short term accommodation it is important to sort out all necessary insurances and permits before you offer the accommodation to potential guests. As regulations vary widely between local government areas it is always a good idea to seek legal advice first rather than waiting until a complaint or some other problem arises.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Retirement Living – Life beyond bingo and bowls!

retirement-livingRetirement Living

Life beyond bingo and bowls!

 

Not surprisingly people talk about buying their first home as being a life changing event and it is. However, in the past it has been rare for people to talk so excitedly about moving into some form of retirement living.

Given that sooner or later most of us are likely to have to deal with this issue either because we are assisting our parents, another family member or friend in making the transition from their home to a retirement community or because we are considering such a move for ourselves, it is important to know what your options are and to understand the legal and financial implications that come with this type of move.

 

A world of options

In days gone by the very notion of a retirement home was enough to send a shiver down many people’s spines. Thoughts of early dinners and endless games of bingo did little to encourage our more mature citizens to view this as a desirable life stage.

The good news is that things on the aged care front have changed considerably in the last decade and there is now a wider choice of accommodation options available than ever before.

Choices range from luxurious apartment complexes for the “Over 55” community through to multi-functional retirement communities where a variety of accommodation and services are provided on the one site ranging from independent living right through to around the clock nursing care of the more traditional nursing home variety.

 

Things to think about

The key to any successful life change usually starts with learning about the options available and understanding the legal and financial obligations that come with each option, so get out and start looking at what is available in the area where you or the person you are assisting would like to live. Then once you have an idea what is available in the area and price range you are looking for start considering the legal and financial issues that go hand in hand with the more emotional part of the process.

 

Remember not all retirement communities are created equal

First up ask “Is this the right retirement community for me?” If you are helping someone else it might not be right for you personally but is it what they are looking for?

Now this may sound like an obvious question, but it is important not to be dazzled by a new fancy fit out if on closer inspection the retirement community does not offer the range of services needed or if it is so far from family and friends that visitors will be few and far between and social isolation is likely to occur.

Just as every suburb and neighbourhood has its own quirks every retirement community is different and this is definitely not a case of one size fits all.

 

The Wish List

Make a wish list of what you are looking for.

At the top of the list put the “must haves” and at the bottom of the list add the “would be nice but not essential” things.

Things to consider including might be:

  • being close to public transport,
  • a range of on-site activities,
  • nursing assistance being available if needed,
  • a one-stop shop with different care levels all catered for in the one complex, or
  • proximity to current neighbourhood and family and friends.

Each person will have a different set of priorities.

The more you are able to focus on what is most important the easier it should be to eliminate options that are not the best for you and also the easier it will be to avoid getting side tracked by things that really don’t matter quite as much.

 

Some important things to think about

Making a move into a retirement community is a significant life change and there are emotional, financial and legal issues that will come up along the way.

Some things to consider before signing any paperwork and making a commitment of this kind include:

  • Do I need to sell my home first before I can afford to move?
  • If I buy into a retirement community what exactly am I buying?
  • Is the property strata or community titled or does some other form of ownership apply?
  • Does the property I am buying form part of my estate after I die or does ownership revert to some other entity (such as the company that operates the retirement community)?
  • Exactly what does the contract say – what are my rights and responsibilities under the contract?
  • Are there any ongoing fees and charges in addition to the purchase price?
  • What other costs do I need to factor in when I move? Don’t forget to include moving costs and possibly storage costs if you won’t be able to take all your possessions with you and are not yet ready to part with things you cannot fit into your new home.
  • Do I have to pay the whole price upfront or can you pay a portion of the cost and then pay the balance in ongoing instalments? Are they any other payment options such as pension sacrifice available?
  • Will the move into a retirement community affect any pension or rent assistance currently received?
  • Is the facility able to provide a higher level of care later on if your needs change or would you need to move to a different facility if your care needs increased?
  • What costs are associated with any care provided?

Ask for help

This type of move can prove to be a challenging one for both the person involved and anyone assisting them and it is important to understand exactly what is involved legally and financially before entering into any contracts.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Ex-de factos & your Will – Isn’t a property settlement enough?

ex-defacto-and-willEx-de factos & your Will – Isn’t a property settlement enough?

 

The incidence of de facto relationships has been increasing for some time, and that trend is likely to continue. Since 2009, the legal regime for property settlement has been the same whether the separating couple had been married or living in a de facto relationship. However, the law doesn’t always treat married and de facto couples the same. The law relating to what happens to your assets after you die is one area where there are some differences.

This article explores what might happen if a de facto couple made Wills during their relationship leaving their assets to each other, then, as often happens, were forgotten and unchanged after the relationship ended.

Isn’t your property settlement enough?

Many people think that once they have divided up their assets, neither partner could have a financial claim on the other in the future (except, of course, for child support if that is relevant). Some people also think that, because they weren’t married, their ex-de facto has no future financial claim. Those assumptions aren’t always correct.

The laws dealing with Wills and inheritances are completely distinct from those relating to division of assets after a relationship breakdown. A family law property settlement does not change someone’s Will, nor can it necessarily prevent someone receiving a gift left to them in their ex-partner’s Will.

So, can your ex-de facto inherit?

The answer to this question will depend on factors such as whether you had a Will, what were its terms, how long you lived together, whether you and your partner had joint children, and any financial support being provided by the deceased to the former partner. The answer may also depend on where you live.

According to a recent Western Australian case, Blyth v Wilken, another relevant factor could be the precise words you used to refer to your ex-de facto in your Will.

That case dealt with a Will in which the deceased left his assets to his now ex-de facto, with the parties having separated three years before the deceased’s death. The Will, made when the couple was living together, left the deceased’s estate to “my de facto wife Kathrine”.

The Court placed considerable importance on the words “my de facto wife Kathrine”, and decided that the deceased didn’t merely intend to benefit Kathrine; he intended to benefit Kathrine because she was his de facto wife. Accordingly, the Court concluded that the deceased would not have wanted Kathrine to benefit from his estate as she was no longer his de facto wife at the time of his death.

Would different words have made a difference?

As the decision in this case depended on the use of the words “my de facto wife Kathrine”, the outcome may have been different if the Will had merely referred to Kathrine by name, without also describing her as “my de facto wife”. That is, despite separating from the deceased years before he died and regardless of whether she had also received a property settlement, Kathrine could have received her former partner’s estate.

Some words of caution

The case of Blyth v Wilken is only one decision of a single Master (not a Judge). The decision is not binding and a Court could come to a different decision on similar facts. Hence, a reference in your Will to “my de facto partner such and such” will not necessarily guarantee that that person will not benefit from your estate in the event that your relationship ends before your death.

In NSW, Victoria, South Australia, Western Australia and the Northern Territory separating from your de facto partner will not change your Will and any gift in your Will to your ex-de facto could still be valid, despite the fact that you have separated and divided up your assets. In the ACT, Tasmania and Queensland, termination of a registered de facto relationship will revoke any gift in your Will to your ex-de facto partner. However, this only applies to registered relationships and registered terminations of them; and in the ACT it only applies to registered same sex relationships.

Depending on the State or Territory in which you live, you may also need to be wary of ex-partners making a claim for financial provision from your estate, even if you have changed your Will and had a property settlement. In general terms, in NSW, Tasmania, Western Australia and the Northern Territory your former de facto could make a claim on your estate if he or she was being maintained by you at the time of your death. Similar provisions apply in Queensland if your ex-partner is also the parent of your minor child. In Victoria, the entitlement to make such a claim is dependant on you and your ex-de facto not having finalised a property settlement by the time of your death.

The ACT and South Australia represent the two extremes. In the ACT, any ex-de facto from a relationship exceeding two years could be entitled to extra provision from your estate, regardless of whether or not he or she was dependant on you at the time of your death. However, the Court will take into account the terms of any post-separation property settlement. In South Australia, on the other hand, ex-de facto partners are not entitled to make such a claim at all.

Conclusion

Regardless of where in Australia you live, if you are going through a relationship breakdown, always speak with your family lawyer about what might happen if you or your former partner dies, even after you have completed your property settlement. It is important to review, and if necessary change, the terms of your Will as soon as possible after the ending of any relationship. In addition, in NSW your family lawyer could assist you to apply to the Supreme Court for approval of an agreement between you and your former partner that neither of you will make a claim on the other’s estate after the other’s death.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Employee or Contractor – do you know the difference?

Employee or Contractor – do you know the difference?

It’s important for all businesses to have systems in place to determine whether workers should be classified as employees or independent contractors, as tax, super and other government obligations are different depending on whether the working arrangement is employment or contracting.

Employees generally have PAYG withholding, super and fringe benefits tax paid by the employer. Contractors generally look after their own tax obligations.

 

If you get it wrong and fail to meet your obligations, you risk having to pay penalties and charges.

 

What factors do you need to consider?

 

There are a number of factors which need to be taken into account which help determine whether a worker could be classed as an employee or an independent contractor.

 

It is important to realise that no single factor can determine if a person is an independent contractor or an employee. To correctly determine whether a worker is an employee or contractor, you need to look at the whole working arrangement.

 

A worker isn’t automatically a contractor just because they have an ABN or specialist skills or you only need them during busy periods.

 

Courts will look at the whole relationship between the parties when determining the status of a person’s employment.

 

The Fair Work Ombudsman has produced a table of common indicators that may contribute to determining whether a person is an employee or independent contractor:

Indicator Employee Independent Contractor
Degree of control over how work is performed Performs work, under the direction and control of their employer, on an ongoing basis. Has a high level of control in how the work is done.
Hours of work Generally works standard or set hours (note: a casual employee’s hours may vary from week to week). Under agreement, decides what hours to work to complete the specific task.
Expectation of work Usually has an ongoing expectation of work (note: some employees may be engaged for a specific task or specific period). Usually engaged for a specific task.
Risk Bears no financial risk (this is the responsibility of their employer). Bears the risk for making a profit or loss on each task. Usually bears responsibility and liability for poor work or injury sustained while performing the task. As such, contractors generally have their own insurance policy.
Superannuation Entitled to have superannuation contributions paid into a nominated superannuation fund by their employer. Pays their own superannuation (note: in some circumstances independent contractors may be entitled to be paid superannuation contributions).
Tools and equipment Tools and equipment are generally provided by the employer, or a tool allowance is provided. Uses their own tools and equipment (note: alternative arrangements may be made within a contract for services).
Tax Has income tax deducted by their employer. Pays their own tax and GST to the Australian Taxation Office.
Method of payment Paid regularly (for example, weekly/fortnightly/monthly). Has obtained an ABN and submits an invoice for work completed or is paid at the end of the contract or project.
Leave Entitled to receive paid leave (for example, annual leave, personal/carers’ leave, long service leave) or receive a loading in lieu of leave entitlements in the case of casual employees. Does not receive paid leave.

 

A simple way to help tell the difference

 

The Australian Taxation Office on its website uses the following simple descriptions:

  • Employees work in your business and are part of your business.
  • Contractors run their own business and provide services to your business.

 


 

Why is the distinction important?

 

Employment relationships are regulated by specific labour protection laws and various awards and workplace agreements. These laws generally provide a higher degree of protection to employees than the general commercial laws that regulate contractor relationships.

 

This protection includes minimum conditions and standards of employment for employees including minimum entitlements for leave, public holidays, notice of termination and redundancy pay.

 

Adopt good business processes

 

Business owners need to keep records to support any decision on whether a worker is an employee or contractor and the factors relied on to make that decision.

 

Most of the information needed to support the decision can be found in a service contract for independent contractors or an employment contract for employees, which should accurately reflect the actual conditions of the working arrangement.

 

All contracts should:

  • be in writing
  • specify whether it is a contract for services or an employment contract;
  • set out the period of engagement and the remuneration;
  • include dispute resolution provisions;
  • specify if/how the relationship can be terminated.

 

Penalties

 

It is illegal for an employer to misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement or make a knowingly false statement to persuade or influence an employee to become an independent contractor.

 

Under the Fair Work Act inspectors can:

  • seek the imposition of penalties for contraventions of sham contracting arrangements.
  • apply to the courts to grant an injunction or an interim injunction if an employer seeks (or threatens) to dismiss an employee for the purpose of engaging them as an independent contractor. The purpose of the injunction would be to prevent the dismissal from occurring, or otherwise remedy the effects. Courts can also make other orders to have the employee reinstated or compensated.

 

If you need more information or if you need assistance or advice on how to proceed please call us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

The Family Court and de facto relationships

Over the last decade an increasing number of Australians are living in de facto relationships, while marriage rates have fallen.  Reflecting this societal change, the law was changed in 2009 (2002 in Western Australia) so that the same law now applies to separating de facto couples as applies to separating married couples.  That is, any financial dispute arising from the breakdown of a de facto relationship is decided by the Family Court and the Family Law Act (the Family Court Act in WA), rather than State law and the States’ Courts.

 

What is a de facto relationship?

The basic test is whether the parties, of the same or opposite sex, lived together as a couple on a genuine domestic basis.  In applying that test, the Court will consider factors including:

  • the length of the relationship
  • how and for how long they lived together
  • any sexual relationship
  • the financial arrangements, particularly whether the parties intermingled their finances or if one person financially supported the other
  • any joint purchase of property
  • whether there were children of the relationship and how they were cared for
  • the public reputation of the relationship and the degree of the parties’ commitment to a shared life
  • any registration of the relationship.

If a party wishes to apply to the Court for property settlement following a de facto relationship breakdown, one or more of the following criteria must also be met:

  • the parties lived together for a total of at least two years
  • there were children of the relationship
  • the applicant made substantial contributions to the other party’s property.

A de facto relationship can exist even if one or both parties were, at that time, in a relationship or living with or married to someone else.  Indeed, a mistress may satisfy the definition of having been in a de facto relationship with her married partner.

 

Registering a de facto relationship

Just as the State governments maintain a register of births, deaths and marriages, they also maintain a register of de facto relationships.  While it is compulsory to register a birth, death or marriage, de facto relationship registration is voluntary.  The registration regimes differ from one State to another, however they are similar.  Registration requires both partners to complete an application form, provide identification documents, sign a Statutory Declaration stating that they are in a relationship with the other person and pay the relevant fee.

Registration should limit or avoid disputes as to whether there was a de facto relationship should that relationship end.

If the relationship does break down, there is a relatively straightforward process by which to revoke registration of the relationship.

 

De facto property settlement

The laws that now determine a property settlement between a separating de facto couple are the same laws as apply to a separating married couple.

In general terms, if the Court determines that there should be a property division between the parties, the first step is to work out what is in the pool of net assets to be divided.  That pool includes all the assets and liabilities in each person’s name and in the parties’ joint names, as well as each person’s share of an asset owned jointly with another person.

Next, the Court must consider what contributions each partner made and consider their respective future needs, in order to work out the percentages of the net assets they will each receive.  Contributions include financial contributions – i.e. who earnt what, who brought what lump sums into the relationship, who bought and paid for what – and non-financial contributions – such as being a homemaker and parent, physically renovating a home or landscaping a garden, managing the parties’ financial affairs, etc.  Future needs are things like income, earning capacity, financial resources, ongoing care of children, age, health, etc.

 

De facto spouse maintenance

Following the breakdown of a de facto relationship, as is the case following the end of a marriage, one party may be entitled to “spouse” maintenance from the other party, although usually only for a limited period of time.  Such maintenance will only be ordered if:

  • the applicant cannot support her or himself because of childcare responsibilities or if she or he cannot work due to health, age or other incapacity, and
  • the other party has the capacity to pay such maintenance once he or she has met his or her financial obligations to any children and his or her own reasonable living expenses.

 

Conclusion

De facto relationships are an increasingly common part of modern life in Australia.

There are a range of factors of which the Court must be satisfied to find that someone was in a de facto relationship, although it is possible to register your de facto relationship to reduce any uncertainty.  When such relationships end, the same law regarding property settlement and spouse maintenance applies as applies to separating married couples.  Arrangements for children are also decided in the same way, regardless of whether their parents were married, in a de facto relationship or not even living together.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Traps to Avoid when buying a Property – pre contract inspections

Traps to Avoid when buying a Property – pre contract inspections

 

Buying a home is the biggest investment or financial outlay that most of us will make in a lifetime. It is critical to your financial future that you make well-informed decisions when you purchase a property, whether it be for your own home or an investment.

The Contract for Sale of Land basically follows the common law of “caveat emptor”– let the buyer beware. This means that the purchaser must make their own enquiries and investigate the quality of the improvements on the property before they enter into a contract to buy that property.

A vendor or seller of the property is not allowed to deliberately hide defects or deceive the buyer by fraud but the purchaser should undertake searches and inspections of the property to discover any defects in the property. Failure to do this may result in the buyer losing their deposit and being sued by the seller for breach of contract, or the buyer can end up with a property that needs expensive repairs.

 

Pre-contract inspections

There are various inspections that a purchaser should get done prior to entering into a contract to buy a property. The number of inspections and searches depend on the location and type of property you are purchasing, the inspections may be different for a residential house in town, a strata unit, vacant land, rural property or industrial property.

In this article we shall look at pre-contract inspections for a standard residential house.

 

Timber Pest Inspection

In locations which are susceptible to pest infestation a qualified and insured pest inspector will conduct a visual inspection of the property to discover if there is any termite or other pest activity at present or in the past.

More detailed inspection such as thermal imaging or photographs of the walls and bathrooms to highlight any damp areas that should not be present may also be conducted if required. The inspector will also conduct a moisture meter reading of the bathrooms and other wet areas as termites are attracted by damp timber. They will also examine the property for any wood decay, borers or rot that will affect the structure of the home.

Termite damage undiscovered can not only increase but can cost many thousands of dollars to repair. Sometimes if the damage is really bad that part of the house might have to be demolished and rebuilt wreaking damage on your investment.

 

Building Inspections

A qualified and insured building inspector should be commissioned to inspect the property including the house, any garage or other buildings located on the property.

The Inspector will investigate the interior and exterior of the buildings including the most costly items to repair being the roof, kitchen and bathroom/s, looking for any defects that are not usual “wear and tear”.

In an existing home there are usually small defects which accumulate over time due to use and are readily visible but it is the not so visible defects that are costly like a leaking roof that can cost tens of thousands of dollars to repair.

If the inspection reports show issues of concern, other specialist tradesmen may be required to check specific areas or issues.

 

Plumbing and Electrical

A licensed plumber may be required to inspect drainage issues.

If the property has a septic waste system that is not connected to the town sewerage supply, a plumber’s report should be obtained as a new septic system can cost $10,000+ to install plus excavation works in trenching a faulty system.

If there is any indication that electrical wiring may be faulty or the house is very old, an electrician may be requested to evaluate the property.

 

Pools and spas

If the property includes a pool or a spa then the pump and any ancillary equipment as well as the pool or spa itself should be investigated to ensure good working order.

 

Council records

It may be necessary to make application to the local Council for a copy of the building records for the property which will include any development applications (DA), building site records and floor plans.

The DA for the original dwelling house and other buildings should be carefully matched to the existing structure to make sure that the plans approved by council have been complied with. If an owner builds structures on a property that require council approval and the owner builds without an approved DA, the council can lodge a demolition order against the property or require it to be approved as “continuing use” after payment of hefty fees to council.

Structures such as decks, large sheds, pools and pergolas can also fall into this category.

Building Certificate

If there are unapproved structures on the property you should consider obtaining a building certificate to ensure that council will not look to you after the sale to demolish, rectify or obtain approvals.

 

Survey

A survey shows the dimensions and boundaries of the property. It will also identify any encroachments by structures erected on the land.

In areas inhabited for a long time the fences are often not right on the boundary or there may actually be part of a building encroaching on your land. In more extreme cases, a driveway which appears to be on the property you are buying may actually be on the next door neighbour’s property which would mean you may end up with no access to your new home.

 

Strata

If you are purchasing a strata property then a full examination of the strata management records should be undertaken by an experienced person. The strata records will show not only the financial details of the administrative and sinking funds but will also show plumbing, drainage, fencing, driveway and other problems that may exist or which have been repaired in the past. Any proposal for additional works or levies should be identified via a strata inspection.

 

A penny saved is a penny earned

Your lawyer can advise you of the pre-contract inspections which should be carried out for each property. Not doing pre-contract inspections before you buy a property is not only risky but it is also false economy. Considering that the cost of a building and pest inspection for an average house costs about $500-$650 the outlay represents about 0.15% of the purchase price of an average home!

The traps when buying a property are easily avoidable and the risk far outweighs the cost of proper and diligent investigation before you buy.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Choosing a Business Structure

Choosing a Business Structure

 

There are 4 main types of business structures for doing business in Australia, each with their own advantages and disadvantages. A person can carry on business as a sole trader, partnership, trust and company.

The choice of business structure is an important decision to make at the start of a business venture, as the structure can impact on tax implications and reporting requirements during the lifetime of the business. When setting up a business structure, consideration should be given to factors such as how many people will be involved in the business, what the business will do, how much income is likely to be earned from the business and the intended growth of the business.

 

Sole Trader

A person can carry on a business on his or her own behalf, as a sole trader. A sole trader can trade under his or her own name or a registered business name. The income earned as a sole trader is taxed at the same rate as individual tax payers.

This is the simplest form of business structure, with lower establishment costs and with minimal legal and compliance requirements. The main disadvantage to this type of business structure is that a sole trader is personally liable for all obligations incurred in the course of the business.

 

Partnership

Two or more individuals can carry on business in partnership, where the income from the business is received jointly. Partnerships are relatively inexpensive to form and operate. Most partnerships are established by a partnership agreement which sets out the rights and obligations of the partners. A partnership itself is not taxable, rather each partner pays tax on their share of the net income of the partnership.

The downside to this type of business structure is that partners are severally and jointly liable for the obligations of the partnership. There is also potential for dispute and loss of trust between the partners.

 

Trust

Under a trust, a trustee owns the property or assets of the trust and carries on the business on behalf of the beneficiaries of the trust. A trustee can be an individual or a company. A formal Deed is required to set up a trust and there are annual tasks for a trustee to undertake. As such, it can be expensive and complicated to set up and administer a trust.

The advantages of a trust are that there is flexibility in income distribution and income can be streamed to low income tax beneficiaries to take advantage of their lower marginal tax rate. Furthermore, assets can be protected through a properly drafted Deed. The disadvantages are that trusts can be costly to set up and there are more compliance and legal requirements.

 

Company

A company is a separate legal entity capable of holding assets in its own name. The words “Pty Ltd” after a business name show that the business is a registered legal entity trading in its own right. A company is owned by shareholders and directors manage the company’s day to day business and affairs. The shareholders of a company receive any company profits in the form of dividends. Shareholders can limit their personal liability and are not generally liable for the company debts. Instead, the financial liability of the company is limited to the company assets.

Companies are governed by the Corporations Law and there are a number of duties and obligations for company directors. Primarily, directors have an obligation to act in the best interests of the company. Establishment of a company and ongoing administrative and compliance costs associated with the Corporations Law can be high. There is also a requirement to publicly disclose key information.

 

Conclusion

Each business will vary and no business owners’ circumstances will be the same. It is advisable to talk to an accountant or solicitor about the costs and risks of each business structure to make sure that the business structure used is the right one for the business and its needs going forward.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

The perils of not making a Will

What do Michael Jackson, Abraham Lincoln, Picasso, Jimi Hendrix, Stieg Larsson and Robert Homes a Court all have in common? You would be forgiven for thinking, not much. But in fact they do—all six died intestate which means, they died without leaving a Will.

Even the rich and famous can fail to plan ahead when it comes to their estate.

What happens if someone dies without leaving a Will?

According to New South Wales law, if you don’t have a legal Will you have died intestate and your estate will be divided according to the rules of intestacy which is set in legislation.

This means that even if a friend or relative is appointed to obtain administration of your estate, the law decides who your beneficiaries are and how your estate is divided.

According to some statistics up to two-thirds of adults do not have a valid Will, potentially their leaving families with serious problems if they die. In all likelihood many more would make a valid Will if they knew what would happen if they died intestate.

Under New South Wales law, if a person dies without a Will and has a spouse who survives them by at least 30 days (including a de facto relationship as set out in the law) the estate is automatically given to the surviving spouse. This is the case even if there are children of the relationship.

After this, seemingly straight forward application of the law, the legislation provides a specific order of distribution of an intestate estate’s assets, depending on the particular situation.

Common scenarios in which an intestate’s assets are distributed include:

Spouse and Children

Where all the children are children of the relationship between the intestate and the spouse, the spouse takes the whole estate.

Children and No Spouse

The children are entitled to the whole estate. If there is more than one child then the estate is distributed in equal shares between the children. Where a child has died before the interstate any grandchildren will take in equal shares the share the deceased child would have taken

No Children and No Spouse

The whole estate passes to the intestate’s parents in equal shares.

No Children, No Spouse and No Parents

Brothers and sisters will take in equal shares the estate provided they survive the intestate by at least 30 days. If a brother or sister does not survive the intestate but leaves children, then that share passes to the children of the deceased brother or sister.

These are just some common examples of how an estate will be divided according to the rules of intestacy which is set in legislation. There are other situations that might arise and your lawyer can advise you about the law depending on your personal circumstances.

Famous People who died without a Will

Famous or not, everyone should have a valid Will. It’s simple to do and it saves your family a lot of money and headaches as illustrated below:

Abraham Lincoln

Probably the most famous person not to leave a Will was Abraham Lincoln, the 16th president of the United States; even though he was assassinated and died unexpectedly in 1865, he was a lawyer.

Jimi Hendrix

In 1970 Jimi Hendrix the famous musician died intestate and left a massive fortune to no nominated beneficiaries. The battle to control his millions took place over 30 years. His estate had the added complication of generating huge income after his death through record sales.


 

Stieg Larsson

More recently in 2004 the Swedish author Stieg Larsson who wrote The Girl with the Dragon Tattoo died without leaving a Will. As a consequence Swedish law dictated that Larsson’s estate was to be divided up between his father and his brother. Sadly his lifelong partner of 32 years, Eva Gabrielsson, received nothing, although the family did grant her ownership of the couple’s apartment.

Robert Holmes a Court

In Australia Robert Holmes a Court, Australia’s richest man before the October 1987 stock market crash, left no Will when he died of a heart attack. At the time his property and shareholdings were worth almost $460 million, while Heytesbury Holdings, the family’s private company, had estimated cash reserves of more than $154 million.

Interestingly, he had carried an unsigned Will with him for 18 months before his death.

Pablo Picasso

Pablo Picasso died in 1973 at the age of 91. He was one of the most famous artists of the 20th century and left behind a fortune in assets that included artwork, homes, cash, gold and bonds.  It took 6 years and $30 million to sort out his estate with his assets eventually being divided up among six heirs.

Michael Jackson

Although a Will was later discovered, immediately following Michael Jackson’s death in July 2009, his mother filed court papers claiming that Jackson died intestate. Like Hendrix, Jackson’s estate continues to generate money. In the years since his death, his estate generated over $242 million.

Summary

As illustrated by the stories above, you’re never too young, or too smart or too powerful, not to need a Will.

To ensure that your estate and your desired beneficiaries are protected into the future and to avoid these avoidable dramas talk to an experienced wills and estates lawyer.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Marijuana and the Law

You may well have heard someone say “Marijuana is legal now – it is legal in Canberra, it has been decriminalised in New South Wales. You just aren’t allowed to sell it.” Is this true?

Well, in simplistic terms – no! Marijuana (or ‘cannabis’ as it known in law enforcement circles) is illegal everywhere in Australia. The penalties that one can incur for having, selling or growing marijuana varies a lot from state to state.

We have set out below the state by state position so that the bigger picture of laws relating to cannabis in Australia can be shown.

 

New South Wales

  • Any cannabis offence is a criminal offence and therefore can carry a criminal record.
  • Cautions may be given at police discretion to persons found with up to 15 grams of cannabis, on up to two occasions.
  • Cautions are accompanied by information regarding cannabis usage and a number for an advice line.

Victoria

  • Cannabis offences are criminal offences, but are tried in a specialised drug court rather than a regular criminal court.
  • It is at the discretion of the arresting officer whether to charge a person found with less than 50 grams cannabis or refer them to a ‘diversion’ program for help and education, this discretion by the police is only given on two occasions.

Queensland

  • Possession and use of cannabis is a criminal offence in Queensland.
  • A person found to have less than 50 grams of cannabis must be offered a drug diversion program on their first offence.

Western Australia

  • Cannabis offences are criminal offences in Western Australia and Western Australia has some of the toughest laws in Australia regarding cannabis use.
  • A person found to have less than 10 grams of cannabis or a used smoking instrument (such as a pipe or water pipe) must attend a Cannabis Intervention session within 28 days or they will receive a criminal conviction.

Tasmania

  • Possession of cannabis carries a criminal charge in Tasmania.
  • A person found with up to 50 grams of cannabis can be cautioned, at the police officer’s discretion, up to three times in ten years.
  • The nature of each caution differs, growing in severity from the person being given information in the first instance to the possibility of being sent for treatment for drug use in the third instance.

South Australia

  • Minor cannabis offences have been decriminalised in South Australia. This does not mean it is ‘legal’.
  • Persons who are found to have up to 100 grams of cannabis, 20 grams of hash resin, one non-hydroponic plant (which means it is grown in soil) or smoking equipment are issued with a fine of up to $150 and given 60 days to pay the fine.

Northern Territory

  • Cannabis has been decriminalised in the Northern Territory, however it is still illegal.
  • Persons found in possession of up to 50 grams of cannabis or 1 gram of hash or cannabis seeds or two non-hydroponic plants can face fines of up to $200 and 28 days to pay the fine to avoid a charge.

Australian Capital Territory

  • Cannabis has been decriminalised in the Australian Capital Territory but is still not legal.
  • Persons found with less than 25 grams of cannabis or up to two non-hydroponic cannabis plants are offered the choice to pay a fine or attend a treatment program.

 

Cannabis or Marijuana is not legal in any state or territory of Australia.

Contrary to what seems to be a reasonably popular belief, there is no part of Australia where marijuana and its products are legal to grow, possess or sell. When examined on a state-by-state basis, it is clear that while in some states and territories the personal use of marijuana has been decriminalised, users and possessors still face repercussions if they decide to use or possess any cannabis or cannabis related products.

If you or someone you know wants more information or needs help or advice, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Immunisation and Family Law

 

Some Australian parents have recently begun to question whether to immunise their children, expressing concerns about possible side-effects risks associated with childhood vaccinations.  But what happens if parents are separated and can’t agree?

 

Background

Childhood vaccines, introduced in 1932, are said to have greatly reduced illness and deaths from diseases such as whooping cough, polio, measles and mumps.  However, in recent years immunisation rates have fallen amid some parents’ fears about the safety of vaccines, whether vaccines have been adequately tested and concerns about vaccines’ links to conditions such as autism, sudden infant death syndrome and multiple sclerosis.

 

Approximately 92% of Australian 5 year olds are fully immunised; however, in some areas the figure is lower than that.  Some diseases, whooping cough for example, previously thought to be “extinct”, seem to again be on the rise.

 

The Australian government maintains a register of the vaccinations received by children under 7 years of age.  Parental eligibility for some family payments is now linked to children’s immunisation status, and in some circumstances unimmunised children may not remain at school or daycare if there is an outbreak of a particular disease.  Exemptions can be obtained if there are approved medical reasons why the child is not immunised.

 

Who gets to decide?

It is hoped that parents would agree on whether or not to vaccinate their children, perhaps after discussing any concerns with their family doctor.  But what if they can’t agree?  Who gets to decide?

 

Equal parental responsibility

In the absence of a Court order, both parents, whether separated or not, have equal parental responsibility for their children.  In addition, except in unusual situations, the Court normally orders that both separated parents have equal shared parental responsibility.

 


 

What is equal shared parental responsibility?

Equal shared parental responsibility means that the parents both have the right to consult with each other, hopefully agree on and then implement decisions about their children’s long-term care, welfare and development.  Those long-term issues include decisions such as a child’s name and religion, schooling and major health decisions.  Major health decisions are things like an operation, treating a broken bone, commencing certain medication such as Ritalin, or arranging for a child to see a psychologist.  Whether or not to vaccinate a child probably also constitutes a major health decision.

 

In other words, where parents have equal shared parental responsibility, they share the right to be consulted about and hopefully agree on whether or not to vaccinate their children.  Neither parent has the right to make that decision without consulting with and obtaining the other parent’s consent.

 

What if we cant agree?

For some parents, the immunisation debate can become emotionally charged, as they may approach the decision from different lifestyle, wellness and health care philosophies.  One parent may also be concerned not to lose government benefits if the children are not fully vaccinated.

 

In such circumstances, no matter how much the parents consult with one another, they may never be able to reach agreement.  In addition, the immunisation debate is quite “black and white” – it would not be easy to reach a compromise or middle ground. The parent who opposes vaccination is not likely to agree for the children to receive half their vaccinations, for example; just as the other parent would probably equally strongly believe that the children should get all, not half, their necessary jabs.

 

Can we go to Court?

If parents cannot agree about how to exercise their equal shared parental responsibility, they may have to ask the Court to decide for them.  Before going to Court, they must first try to resolve their issue through mediation with a family dispute resolution practitioner.

 

If the parents still can’t agree, going to Court and asking a Judge to decide may be the only option.  The Court generally prefers not to make these sorts of decisions for parents, but if the parents really cannot reach an agreement, then a Judge would ultimately impose his or her decision about whether or not the children should be vaccinated.

 

Summary

Although childhood vaccines against a range of diseases have been in use for many decades, in some parts of Australia today there is strenuous debate about the need for and safety of immunisation programs.  This debate could be a source of conflict for separated parents.

 

In most situations, parents have equal shared parental responsibility, meaning that parents share the right to consult with one another and hopefully agree on issues relating to their children’s long-term welfare, which would include decisions about vaccinating their children.  However, if they cannot agree, the Court can be asked to decide for them.

 

To find out more about your rights regarding the immunisation of your children, call us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

The importance of character references in a Court case

If you know someone who is being sentenced in Court and they ask you for a character reference do you know what to do?

The purpose of a character reference for a person who has pleaded guilty to a criminal or traffic matter is to being to the Courts attention details of good character about the accused. Lawyers will acknowledge that in many cases the character reference will not make any difference to the penalty imposed, however all lawyers would agree that a poorly framed character reference will not help at all.

Address the reference to the Court

References that are not addressed to the Court are basically unusable. An unaddressed reference is likely to be met with a comment from the Judge or Magistrate that it could be a job application or some club membership with the implication being that it will be ignored.

So it is best to see the Court papers so you can address it to the relevant Court. You do not need to address it to a particular Judge or Magistrate, “The Presiding Magistrate (insert district) Court” will do.

This immediately indicates it is for the person who is before the Court. For the same reason it needs to have a date and preferably be kept clean, businesslike and typewritten. Overall the reference should not exceed one page. Often the best ones are succinct.

Specify the time you have known the person

It should include details stating how long the person writing the reference has known the person they are writing about and set out the details about how that happened, for example through work or a sporting team.

The person writing the reference should say in their own words and (hopefully) make relevant and positive comments about the character of the subject.

Acknowledge the offence

You need to put yourself in the shoes of the judicial officer. A reference will carry more weight if the person writing the reference has been told by the accused about the offence (not just some of the offences but the lot). If the writer can make the point that the accused person has discussed it with him/her the writer can then say, if applicable, that it is out of character. It is advisable that a person writing a character reference include note this in the opening of the reference so the judicial office is made aware early on and can read with that in mind as in addition, that notwithstanding the offence, the writer is still prepared to write such a reference.

Discuss the offence with the person

For the same reason it can be helpful for the person writing the reference to actually discuss the offence with the person they are writing about. They might then be able to say that they are aware that the person is sorry or remorseful for what they have done or cite examples of why it is out of character.

Family or Community involvement

If you know the accused through a family or community association then you can cite examples of you observations about family commitments or involvement with community activities that the offender may have undertaken that you know about.

Summary

Sometimes references won’t help at all but in other circumstances they can have a positive effect in the sentencing process. Nevertheless it is better to be in a position to provide them than not. You don’t want to provide too many but if you ask say three people you may want to use the best two.

If you are ever in need of one or of having to write one it is useful to have these tips in mind.

If you need more information or if you need assistance or advice on how to proceed please call us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Can you be separated and live under the same roof?

Before a person can apply for a divorce they have to be able to establish to the Family Court that their marriage has irretrievably broken down. This can be established if the Court is satisfied that the parties to the marriage have separated and have lived separately and apart for a continuous period of not less than twelve months prior to the filing of the Divorce application.

The twelve month period commences from the date of communication of an intention to separate.

Separated but living under the one roof explained

Being separated and living under the one roof is when a husband and wife separate but continue to live in the same home. It may be for any length of time – a few days, weeks, months or years following separation.

If the husband and wife lived in the same home during part or all of the required 12 months separation period, they need to provide additional details to the Court before they can apply for a divorce.

Two practical examples of how it works:

  1. The parties have been separated for 18 months. They have lived in the same home for the first 8 months after separation. They need to provide additional details about living under the one roof for two of the last months to the Court.
  2. Husband and wife have been separated for 4 years. They lived in the same home for 2.5 years after separation but for the past 1.5 years have lived in different homes. Here they do not need to provide extra information to the Court

Additional proof required

The additional details are provided through an affidavit (which is a document sworn or affirmed by the party). The affidavit needs to establish evidence before the Court that there has been a change in the marriage, gradual or sudden, showing that the parties have separated. If the parties are making a joint application each must file a separate Affidavit.

If the Application for Divorce, relying on separation under one roof, is made by one party alone then there must be an additional Affidavit from someone else corroborating the evidence – and this could be a relative, close friend, or family member over the age of 18 years.

The Affidavit should contain the details that show the ending of the marital relationship and this usually includes the following:

  • Not sleeping in the same bed
  • Separation of financial affairs such as separate bank accounts
  • Separating household tasks
  • Reduction in or cessation of shared activities
  • Not representing that you are still in a relationship, such as no longer socialising together
  • Communicating to family and friends that you have separated
  • Notifying Government Departments that you have separated if you receive Centrelink benefits or Child Support and attach any correspondence showing this

It is easier to prove separation under one roof if you can show there were good reasons why they had to continue or resume sharing the same accommodation (such as for the sake of the children or one party could not find or afford separate accommodation) and that husband and wife intend to live apart in the near future.

Household services still being done can be explained

The Court understands that sometimes following a separation, husband and wife may still have to share the same accommodation and one party may still perform some household services for the other, such as washing or ironing, for example, where it is necessary for the running of the home and the convenience of others who live there. This does not adversely affect the application.

Attendance at Court

If there are children under 18 years (whether relying on separation under one roof or not), the Applicant and/or their legal representative must also attend Court for the Divorce hearing. However, the party seeking to rely on separation under one roof and/or their lawyer must attend court.

In cases where there is a joint application and both parties are relying on separation under one roof and there is Affidavit material from both, then there is no need to attend.

In all other cases the Applicant and/or their legal representative need not attend so long as the Court has sufficient detail about the circumstances of your separation in your Application and Affidavit.

Conclusion

If you know someone who may need family law assistance, particularly if they are thinking of divorcing and continue to live under the one roof they should seek legal help from a lawyer experienced in family law. As you can see more details need to be placed before the Court to explain the circumstances.

For any help call us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

Enduring Powers of Attorney explained

A lot of people have heard of a Power of Attorney however most do not fully appreciate the extent of its power, the benefits it delivers or the types of Powers of Attorney that exist.

A Power of Attorney is a useful legal document used to allow someone to handle your affairs in a variety of circumstances. It is often used if you are planning to go overseas, taking an extended holiday, suffer from poor health, have an accident or reach a stage in your life when you need greater assistance managing your affairs.

In this article we examine why appointing a Power of Attorney is so strongly recommended by lawyers and explain the difference between a General Power of Attorney and an Enduring Power of Attorney.

Selecting a person to act in your place

The appointment of your Attorney enables that person (or people) to act in your place, and do the things you would normally do yourself. Such as signing documents, paying the bills and doing the banking. The person you choose, your Attorney, has the right to stand in your shoes when you wish them to look after your affairs. In reality they can enter into agreements in your name and on your behalf.

Therefore as a result of the power of the appointment it is critical that you select the right person to act in that capacity. The person does not have to be a lawyer. In fact it is important for the person to know you well and for you to trust them. It is often a trusted family member but whoever it is must be over 18.

The difference between a General and an Enduring Power of Attorney

Not all Powers of Attorney are the same.

A General Power of Attorney is a legal document that gives the Attorney the authority to make decisions about financial and legal matters on behalf of the person who appoints them. This power lasts only for as long as the person who appoints them has mental capacity. The general power ceases to operate if the person that has made the Power of Attorney loses capacity to make decisions. A General Power of Attorney is often used as a tool of convenience. For example, a person might appoint a General Power of Attorney to look after their financial and legal affairs in Australia while they travel overseas.

An Enduring Power of Attorney is similar to a General Power of Attorney except that the powers continue, or endure, in the event the donor loses mental capacity.

In New South Wales, a document appointing an Enduring Guardian can be used alongside an Enduring Power of Attorney to authorise medical and health decisions.

An Enduring Power of Attorney, unlike the General Power of Attorney, must be explained to you by a prescribed witness, that is, a lawyer.

It is important to be aware that an Enduring Power of Attorney becomes void when you die.

What happens if you lose capacity without having a Power of Attorney?

The probability that someone can lose capacity is often not properly considered by people. However if you do not have an Enduring Power of Attorney and develop a mental incapacity you are therefore unable to manage your financial affairs. It is too late then to have a lawyer prepare such a document as you do not have capacity to sign it.

The difficulty is that no person automatically has the right to manage your assets. Not even if they are your husband or wife.

This therefore has a colossal effect on all the financial decision making thereafter with your bank accounts, your jointly owned home, shares or other jointly owned assets or liabilities.

To have decisions made in these circumstances would then involve an application to the NSW Civil and Administrative Tribunal (formerly the Guardianship Tribunal).

The applicant, usually a family member, would apply to become your financial manager. However this is subject to that person being deemed fit (as in ‘fit and proper’) by the Tribunal. Failing this finding of being ‘fit’, the Tribunal may appoint the NSW Trustee and Guardian to manage your affairs.

If the NSW Trustee and Guardian is appointed, your spouse may need to consult with a government department to deal with your ongoing financial decision making until your death.

When does the Attorney’s power begin?

You may nominate when your Attorney’s power is to begin.  If you do not name a date or an occasion, it begins immediately.  On the other hand, if you lose the capacity to make such decisions before the date or occasion you name, the power begins at that point.

It is important to note that even if you give your Attorney power immediately, you may also continue to make decisions yourself while you are able to do so. By providing a Power of Attorney you do not restrict or give up the right to make financial decisions as you do today.

Summary

Today Powers of Attorney are used as a precautionary step by sensible adults rather than as a stop gap measure for an overseas trip. Professional groups such as accountants and financial planners, along with lawyers all strongly recommend that their clients of all ages and walks of life, make a Power of Attorney so their assets are not locked up if a person loses legal capacity to sign documents and their loved ones are put through avoidable stress.

If you or someone you know wants to know more don’t leave it to late, please contact us on 02 6372 3388 or email richard@richardwisesolicitor.com.au.

 

Debt Recovery Basics for Business

  1. Send a Letter of Demand to the debtor setting out the amount of money outstanding and giving the debtor say seven (7) days within which to make payment or face legal action.
  2. The debtor has the right to dispute the debt.
  3. Proceedings for small debts (less than $10,000) are dealt with in the Local Court. Proceedings start with filing a document called a Statement of Liquidated Claim which sets out the amount claimed including Court costs, Solicitor costs and interest.
  4. The Claim is then served on the debtor. The debtor has twenty eight (28) days within which to file a Defence. If no Defence is filed, the creditor can enter Default Judgment, to recover all the money and costs.
  5. Thereafter, a Writ can issue from the Court, so that the Sheriff can seize the debtors goods and sell them to satisfy the Judgment.

KEY BENEFITS OF MAKING A WILL

Parents with young children need to make Wills:-

  • Appointing Guardians to look after their children should anything happen to the parents; and
  • Appointing Trustees to manage any property, superannuation & money for the maintenance, education & benefit of the children until they turn, say, 21.

These are very important considerations and should not be left to chance, so make a Will.

STRICTER PENALTIES FOR HIGH RANGE DRINK DRIVERS

The Mandatory Alcohol Interlock Program came into effect on 1 February 2015.

On conviction the Court imposes a Licence disqualification ranging from a minimum of 6 months to a maximum of 9 months. This is followed by an Interlock period of 24 months.

Interlocks are electronic breath testing devices linked to a vehicle’s ignition system. It prevents the vehicle from starting if any alcohol is detected (zero tolerance).

The driver pays all the installation & leasing costs for the device. This can run into thousands of dollars.

The aim of the Program is to reduce road deaths & injuries.

More information can be obtained at http://www.rms.nsw.gov.au/…/drug-alc…/interlock-program.html

GUIDE TO SENTENCING IN THE LOCAL COURT

All Court proceedings for criminal offences start with Police issuing a Court Attendance Notice (CAN).

An Accused should be given information (particulars) about the alleged offence to decide whether to plead guilty or to defend the matter.

If the Accused pleads guilty, the Prosecutor hands the Court a Facts Sheet describing the offence. The Facts Sheet must be checked for accuracy by the Accused or their Solicitor as the Court hands down its Sentence based on its contents.

The Prosecutor also hands up a record of any previous criminal convictions. In traffic related matters the Accused’s traffic history is also handed up.

The Solicitor then puts forward any character references & expert reports & addresses the Court to mitigage (lessen) the penalty. For example, the Solicitor may explain the hardship that will be caused to an Accused by the loss of their Licence.

3 MUST KNOWS OF BLOOD ALCOHOL LIMITS

NSW has 3 blood alcohol limits:-

  • Zero applies to all learner drivers, all Provisional 1 drivers & all Provisional 2 drivers.
  • 0.02 applies to drivers of vehicles of ‘gross vehicle mass’ greater than 13.9 tonnes, drivers of vehicles carrying dangerous goods & drivers of public vehicles such as taxi or bus drivers.
  • 0.05 applies to all other licences not subject to a 0.02 or zero limit.

NB Breath testing devices in pubs & clubs cannot be relied upon in Court. Only Police testing devices are considered accurate.

WHAT IS THE EFFECT OF DIVORCE?

Divorce breaks the legal bonds of marriage between a couple.

It does NOT deal with matters such as where the children will live, maintenance & the division of property. These are separate issues.

The only grounds for divorce is “irretrievable breakdown of the marriage”. The Court will not consider accusations of fault, such as having an affair.

The breakdown is considered to have occured when the couple have lived separately & apart for at least 12 months.