Meeting with Amanda Delvin

Paternalism v capacity to choose

Paternalism v capacity to choose
February 28, 2020 /

Patriarchy…is a word in modern context that often forms part of a certain expletive phrase.

It is a word that can stir emotions, as was demonstrated by the reactions to journalist Mona Eltahawy when she appeared on the ABC’s Q&A last year. It is certainly not a word we encounter all that often in judgments. Yet a derivative of it – paternalism1 – was a central aspect to a recent ACT guardianship decision involving a capacity assessment: In the Matter of Pari 2 (Pari).

Pari emphasises that our right to make our own decisions includes our right to make choices that others would not make. It affirms that a capacity assessment is not merely evidenced by poor choices with which better educated, psychologically sound, well-meaning and better resourced people do not agree,3 and that the capacity assessment ought not be conflated with a best interests assessment.4 

In Pari, the ACT Civil & Administrative Tribunal (the tribunal) carefully considered the importance of a vulnerable older woman’s right to autonomy, the critical role of close family relationships, and the intersection with the wellmeaning objectives of a number of professionals who sought to protect her from herself, utilising the ACT guardianship legislation. Pari5 is a 73-year-old “non-English speaking woman who needed to communicate through an interpreter”.6 Born in Afghanistan, she moved to Iran 30 years ago. Then, in “2014 Pari and her daughters, Roya aged 52 and Tela aged 48, came to Australia as refugees (Women at Risk Status)”.7 They have a highly traumatic history8 and their experience of life in Australia included “sleeping rough” over a
number of years.9 

Pari and her daughters were close and “extremely dependent upon each other”.10 Leading a peripatetic life, at the time of the matter they were living on the streets of Canberra and were well known to local police.11

An incident occurred which resulted in Pari being admitted to hospital. Two social workers, concerned for Pari’s welfare, “brought an application for the appointment of the Public Trustee and Guardian (PTG) as guardian and manager for Pari”. At the time of the application, Pari was living in the hospital, it seems “because no one ha[d] found a suitable place to which she can be discharged”.12 

The social workers were of the view that Pari was a great risk because of her advanced age and her unwillingness to engage with support and service providers, including housing. A report provided by a Dr Choudhry found Pari was “severely malnourished, very hungry”, had “poor dentition” and had “a lot of skin
damage”…so that she required “full assistance with all her ADLs including showering, dressing, meal set-up and toileting”.

Dr Choudhry stated that “this all points towards advanced cognitive impairment”. 

However, Dr Choudhry caveated his assessment as being “potentially incomplete” as a result of the “language barriers”13.

In reaching its determination to dismiss the application, the tribunal had regard to the criteria of the Guardianship and Management of Property Act 1991 (ACT),14 giving careful consideration to Dr Choudhry’s evidence.15 The tribunal expressed doubt as to the conclusion to be drawn by his evidence and others that Pari probably had “advanced cognitive impairment”.16

The tribunal expressed real doubt that Pari’s “lifestyle and circumstances are a product of impaired decision-making ability”,17 concluding “that how she lives is primarily a function of her lifestyle and ‘situation’ in life, rather than impaired decision making-ability”.18

The tribunal affirmed:

“There is a need for caution about…treating a poor decision as demonstrating lack of insight and poor reasoning and as supporting an inference of a cognitive impairment.”19

The tribunal emphasised that “when making decisions about a person, the views and wishes of the person should receive paramount consideration unless doing so is likely to significantly adversely affect their interests”.

Citing the binding ACT Supreme Court decision in A v Guardianship and Management of Property Tribunal,20 the tribunal affirmed the court’s statement about “the importance of ensuring that the proviso does not override the general rule, and to guard against paternalism or protection overriding individual autonomy”.21

Relying on the decision of Justice Baker of the Court of Protection (England and Wales) in KK v STCC, the tribunal affirmed this statement: “There is, I perceive, a danger that professionals, including judges, may objectively conflate a capacity assessment with a best interests analysis. …I remind myself again of the danger of the ‘protection imperative’ identified by Ryder J in Oldham MBC v GW and PW ([2007] EWHC136 (Fam) [2007] 2 FLR 597). These considerations underpin the cardinal rule, enshrined in statute, that a person is not to be treated as unable to make a decision merely because she makes what is perceived as being an unwise one.”22

In Queensland, the Guardianship and Administration Act 2000 underscores this statement, by requiring such an assessment to be approached from this perspective: 

“(a) an adult’s right to make decisions is fundamental to the adult’s inherent dignity;

(b) the right to make decisions includes the right to make decisions with which others may not agree.”23

On 1 January this year the Human Rights Act 2019 (Qld) became operative.24 Its objects are set out in section 3. Succinctly, these are to protect and promote human rights, to help build a culture in the Queensland public sector that respects and promotes human rights, and to help promote a dialogue about the nature, meaning and scope of human rights.

The Act ties in its operation with provisions of the Guardianship and Administration and Other Legislation Amendment Act 2019 (GAOLA),25 which are yet to commence. 

GAOLA introduces two different definitions of capacity. The tests are set out in section 41 (1) to define general capacity and a specific definition of capacity to make an enduring document. Section 42(2) contains a list of factors the person must be able to understand.

GAOLA also removes the General Principles and replaces them with new principles which are more closely aligned with the United Nations Convention on the Rights of Persons with Disabilities. Relevantly, the Human Rights Act binds public entities such as hospitals.

Accordingly, a person or entity performing a function will be required to comply not just with this new GAOLA regime26 but also the newly operative Human Rights Act.

Neuroscience is a relatively new discipline27 from which our understanding of cognition and the factors that impact it and the extent to which they impact it is yet to mature. It is therefore understandable that it is difficult for us all, including professionals, to distinguish between impaired decision making and the right to make choices with which others do not agree, regardless of how illogical.

It is made all the more difficult in an environment in which we are just beginning to understand the extent of elder abuse and the influence of others in taking advantage of vulnerable elderly people.

Dr Jane Lonie, in her paper ‘The Cognitive Mechanics of Elder Abuse’, explains that “[a]n understanding of the relationship between cognitive impairment and elder abuse is required to differentiate undue influence from supported decision making and to facilitate the selection of appropriate forms of decision-making support in
cognitively impaired elderly clients”.

Pari stands as a timely reminder of the necessary balance to be struck between a caring and supportive society and the risk of overreach by our institutions in a quest for neat, efficient solutions to complex problems.

Christine Smyth is a former President of Queensland Law Society, a QLS Accredited Specialist (succession law) – Qld, QLS Senior Counsellor and Consultant at Robbins Watson Solicitors. She is an executive committee member of the Law Council Australia – Legal Practice Section, Court Appointed Estate Account Assessor, and member of the QLS Specialist Accreditation Board, Proctor Editorial Committee, QLS Succession Law Committee and STEP.

Notes
1 “The term paternalism first appeared in the late 19th Century as an implied critique predicated on the inherent value of personal liberty and autonomy, positions elegantly outlined by Immanuel Kant in 1785 and John Stuart Mill in 1859.” Paternalism by Lindsay J. Thompson. britannica.com/topic/paternalism. “Paternalism is the interference of a state or an individual with another person, against their will, and defended or motivated by a claim that the person interfered with will be better off or protected from harm. …At the theoretical level it raises questions of how persons should be treated when they are less than fully rational.” Paternalism – Stanford 
Encyclopedia of Philosophy, first published 6 Nov 2002; substantive revision 12 Feb 2017. 
2 In the Matter of Pari (Guardianship and Management of Property) [2019] ACAT 120. 
3 J v Guardianship and Administration Board [2019] TASSC.
4 At [21] citing Justice Baker of the Court of Protection (England and Wales) in KK v STCC.
5 A pseudonym given by the tribunal at [1].
6 At [9].
7 At [3].
8 Ibid.
9 Ibid.
10 Ibid.
11 At [4]-[5].
12 At [5].
13 At [7].
14 At [17]; the provisions are similar to the Guardianship and Administration Act 2000 (Qld).
15 At [17]-[22].
16 At [21].
17 At [22].
18 Ibid.
19 Citing and approving J v Guardianship and Administration Board [2019] TASSC 15.
20 At [25].
21 Ibid.
22 At [26].
23 The Guardianship and Administration Act 2000 (Qld) Chapter 2 section 5.
24 See legislation.qld.gov.au/view/html/inforce/current/ act-2019-005.
25 With relevant provisions to commence on 30 March 2020. See legislation.qld.gov.au/view/html/asmade/
act-2019-009#sec.66.
26 For a broader analysis of the GAOLA, refer to Mehera Saunders’ paper, ‘Guardianship and Administration and Other Legislation Amendment Act 2019’, changes to powers of attorney/guardianship legislation’ presented
at a Sunshine Coast DLA seminar on 28 January. 
27 ‘The Emergence of Modern Neuroscience: Some Implications for Neurology and Psychiatry’ – Annual
Review of Neuroscience, Vol. 23:343-391 (Volume publication date March 2000) W. Maxwell

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Putting off property settlement? Now’s the time to get it sorted

Putting off property settlement? Now’s the time to get it sorted
February 27, 2020 /

Has the prospect of paperwork and having another argument meant your property matters still haven’t been sorted out?  Now may be the time to make that financial break from your ex.

Why should I?  a second programme is about to be rolled out from 2 March 2020 targeting property settlements matters. The scheme is again designed to identify, case manage and resolve small property matters in an effort to reduce delay and promote parties “taking ownership of their dispute resolution planning at an early stage”.

Whether you fall under this new scheme or the discrete property list, it is now quicker and easier than ever to get your property settlement.  

What happens if I don’t? Until you formalise your property settlement, you are not yet financially separated from your former partner or spouse. This means that any asset or debts either of you have is usually included in the “property pool” to be divided between you. There are also time limits which apply for sorting out property settlement as well which you don’t want to miss.

What do I need to do? Talk to one of our dedicated family lawyers about how property settlement works, getting it sorted out by agreement or taking advantage of the Court’s new schemes to get it resolved as quickly as possible. Call us on 5576 9999 or message us to book a free 30 minute consultation.

Should you wish to download a copy of this article please click HERE.

Property Settlement After Death

Property Settlement After Death
February 5, 2020 /

When one party passes away during property settlement litigation, it’s not the end of the matter. Proceedings can still continue with the estate of the deceased party becoming the litigant AND … some or all of their assets can still form part of the matrimonial property pool to be divided between the parties.

As a recent case highlights, navigating this area is not simple and if it’s not done correctly, costs orders are at stake.

The Wife commenced Family Law property settlement proceedings and a few days later, the Husband passed away. After separation the Husband had completed a new Will naming his sister as the executor and his children as beneficiaries, and changed the beneficiary of a life insurance policy to a Trust which was to be managed by the executor for the benefit of his children. After the Husband’s death, the insurance payment was made into the Trust.  The first dispute which arose was whether the insurance money formed part of the estate which could be dealt with in property settlement. Ultimately it was conceded by the estate that it did, however by this time the lawyers for the estate had paid out over $28,000 for legal advice to the executor with respect to the litigation from the insurance funds. (The estate was at that time represented by different lawyers).  The Wife brought an application with respect to the payment.

The Court refused the Wife’s application to join the estate’s former solicitors or to recover the $28,000. The Court said that this was  a legitimate expense as the executor/Trustee was well within her rights to obtain legal advice for the purposes of administering the estate, and for that advice to be paid for from the estate funds. The sum paid was around 5-6% of the money when the Wife was only applying for 80% of the money, so there was still enough to satisfy the Wife’s claim in property settlement at the time. The Court did note an “illogical” and “curious aspect of this case” that only the one payment of around $28,000 was sought to be recovered on the basis it would defeat the Wife’s claim in property settlement, however the estate had paid more legal fees after the $28,000 and yet the Wife was not claiming to recover those costs.

There were other blows for the Wife’s case. The Court also refused to order the previous solicitors (not the estate) to pay any of the Wife’s costs on an indemnity basis, there were simply no grounds for the order to be made against the lawyers themselves, let alone on the indemnity basis.

The Court also refused the Wife’s application for an order that the legal advice obtained by the executor be provided to the Wife.  Legal advice is, of course, protected by legal professional privilege – a long established right that is crucial to the fair operation of the legal system.  The Wife had claimed that the privilege had been waived (an argument based on the particular facts of the case).  The Judge did not agree that the executor had waived the privilege over that advice and the Wife’s application was described as “a fishing expedition”.

The Court did however restrain the executor from spending any more estate money, including on legal fees, as this further depletion could start to defeat the Wife’s claim in property settlement. This order was made notwithstanding the Judge’s acknowledgment that an executor is entitled to have reasonable litigation expenses paid for from those funds.  The Judge took into account that the Wife was in difficulty paying her legal fees as well and considered that a restraint would “put the parties on the same footing”.

Overall, some of the wife’s application was successful, but most of it was not. The basis of the Orders sought by the Wife was changed between filing the application and the time of the hearing, so the arguments advanced at the hearing were different from how the case, and the documents, had been prepared. Costs of the application are being dealt with separately but no doubt this will be hotly contested as to bring, and defend, applications like this would have involved significant cost for all parties involved. Of course, in light of the order not to expend any more funds, the executor is now in a difficult position.

Clearly, this was not your average family law case.  However, our experience is that links between estate issues and family law issues are quite common. We have specialised teams of lawyers both in family law and in all aspects of estate administration and litigation, and can assist with complex issues such as arose in this case.    

Call us on 5576 9999 for a free 30min consultation with one of our lawyers.  

The full case reference is Chards & Echols as Executor of the estate of Chards [2019] FCCA 2433

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‘Disgraceful and dishonourable’1

‘Disgraceful and dishonourable’1
January 31, 2020 /

Powers of attorney and elder abuse

Staunchly, I defend Queensland solicitors, and proudly I celebrate the good we achieve in our community. Sadly, this article is not about one of those occasions. 

In the past few years, our profession has done much to support our community as it suffers the insidious increase of elder abuse. Our community looks to us, the legal profession, to support and protect our vulnerable from such abuse. Equally as important, newer practitioners look to more experienced practitioners for guidance and support in this complex legal framework. What then, when it is one of our own, a lawyer 75 years of age with 53 years of legal experience, who engages in elder abuse?

In the matter of Legal Services Commissioner v Poole [2019] QCAT 381 the tribunal found Ivan Poole, a practising solicitor since 1966,2 guilty of four charges brought under the Legal Profession Act 2007 arising from his conduct involving the making of wills, powers of attorney and property transactions. The sustained charges were:

Charge 1 – Dishonest and disreputable conduct in breach of rule 5 of the Australian Solicitors Conduct Rules 2012 (ASCR)

Charge 2 – Duties concerning current clients in breach of rule 11 of the ASCR3

Charge 3 – Communication with another solicitor’s client in breach of rule 33 of the ASCR4

Charge 4 – Unfounded allegations in breach of rule 32 of the ASCR.5 

In finding Mr Poole guilty of each charge, QCAT ordered that Mr Poole be publicly reprimanded, suspended his practising certificate, prohibited him from applying for a practising certificate for five years, and ordered him to pay costs.6

So, what did Mr Poole do?

ABC7 was an 87-year-old8 man with significant property interests, whose estate was estimated to be in the region of $50 million. In 2007, ABC appointed his longstanding solicitor, Sean McMahon, as his personal and financial power of attorney.9 Later, and at the relevant time, a property deal was in train involving MDG who were seeking to be appointed managers of a property involved in the deal. Simultaneously, the relationship between ABC and Mr McMahon was under strain. Mr Ivan Poole represented MDG.

In 2013, ABC suffered a heart attack, was admitted to hospital by his attorney, Mr McMahon, at which time ABC was diagnosed as having also suffered a stroke and diagnosed with dementia.10

Despite Mr McMahon writing to Mr Poole “on 16 April 2013 advising him of ABC’s medical condition including capacity issues” and advising that “ABC was his client and direct[ing] him to cease dealing with ABC directly”,11 on 17 April 2013 Mr Poole and MDG removed ABC from the hospital without the knowledge or permission of the hospital staff and his attorney, Mr McMahon.12 

That same day, Mr Poole had ABC sign a costs agreement in favour of Mr Poole. Mr Poole then shepherded ABC into the offices of “Mr Field of Aylward Game Lawyers seeking to revoke the Power of Attorney”.13 Mr Poole was unsuccessful in that attempt. However, the next day Mr Poole “arranged for ABC to attend at the offices of Mr Hughes of Small Meyer Hughes where ABC revoked the Power of Attorney and made certain changes to his will including appointing [Mr Poole] as an executor”.14

Mr McMahon filed an application and obtained orders that the revocation of attorney was invalid and that ABC lacked capacity.15 Immediately thereafter, the Legal Services Commission (LSC) corresponded on at least two occasions with Mr Poole confirming the court’s order as to ABC’s lack of capacity.16

In the meantime, Mr Poole became aware that ABC’s will did not leave him a bequest. Undeterred by the court’s finding as to lack of capacity, the correspondence from the LSC and correspondence from Mr McMahon, Mr Poole arranged for another solicitor, this time one known to him, to consult with ABC over the phone while ABC was in hospital. 

Mr Poole, did not disclose any of the history of the matter to the solicitor, and directed the solicitor not to ask ABC any questions. A will was ultimately made in which Mr Poole, MDG and a certain doctor were to each receive a 16% share of the $50 million dollar estate – about $24 million.17 During this time, Mr Poole wrote to ABC and made certain allegations against Mr McMahon.

In paragraphs 64 to 84 the tribunal discusses the law and its application to the agreed facts. Justice Daubney properly found “these were serious incidents of misconduct. The public interest and the interests of the profession require that it be clearly understood that practitioners who engage in disgraceful and dishonourable conduct, as occurred here, will be subject to serious sanctions.”18

In his 2014 paper, ‘Current Issues In Probate Law Administration: Life, Death, Form, Function And History’, Justice Geoff Lindsay forecast that “[c]ulturally, death has become more of a process, and less of an event, than it once was”.19 He observed that, while the “expression ‘elder law’ genuflects in the direction necessary”,20 there is a greater “need to redefine the whole subject area”,21 and that “[a]s a process, with different dimensions for ‘person’ and ‘property’, death requires different but interrelated approaches to management before and after the event of ‘physical death’.22

“The legal process of passing property from one generation (or, more broadly, from one person) to the next may commence during a period of incapacity before the arrival of physical death.”23 “[W]ithin the limits of the protective jurisdiction, the interests of an incapable person’s family might be taken into account in the deployment of an enduring power of attorney or during the course of protected estate management,”24 fundamentally changing the character of probate litigation.25

Practitioners in the field of succession law may increasingly find themselves thrust unwittingly into the process of the abuse, or indeed aid in the abuse. Poole’s decision amplifies the importance of proper enquiry and fulsome understanding of our responsibilities. 

On 30 March this year, the amendments to the Powers of Attorney Act will commence, and with that there will be new capacity guidelines made under the Guardianship and Administration Act 2000. Once published, practitioners will be well served in making them a familiar and staple resource.

Christine Smyth is a former President of Queensland Law Society, a QLS Accredited Specialist (succession law) – Qld, QLS Senior Counsellor and Consultant at Robbins Watson Solicitors. She is an executive committee member of the Law Council Australia – Legal Practice Section, Court Appointed Estate Account Assessor, and member of the QLS Specialist Accreditation Board, Proctor Editorial Committee, QLS Succession Law  Committee and STEP.

Notes
1 Legal Services Commissioner v Poole [2019] QCAT
381 per Daubney J at [90].
2 At [8].
3 At [41].
4 At [50].
5 At [57].
6 At [94].
7 “The narrative has, however, been anonymised to
prevent identification of certain affected parties, there
having previously been a non-publication order made
in this proceeding and a further non-publication order
made in the course of the present hearing.” Per
Daubney J at [4].
8 At [28].
9 At [11].
10 At [16].
11 At[50].
12 At [16]-[18.]
13 At [30].
14 At [19].
15 At [19]-[22].
16 At [33]-[34].
17 At [35]-[40].
18 At [90].
19 At [49].
20 At [45].
21 At [46].
22 At [50].
23 At [51].
24 Ibid.
25 At [53].

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Get it done right the first time

Get it done right the first time
January 13, 2020 /

Prenuptial Agreement and lawyers fees

Financial Agreements, including prenups, are really important documents because they often deal with hundreds of thousands of dollars in assets, superannuation and debt. It will finally determine a wife, Husband or de facto partners claim for a large amount of money.

So it’s absolutely crucial that they are done properly.  If not, then a Court can set them aside and this means that your Agreement is not worth the paper it’s written on.

This happened in a case recently before the Family Court about a prenuptial agreement. The parties separated and the Wife sought spousal maintenance from the Husband. The Husband sought to rely upon the prenuptial agreement that said no spousal maintenance should be paid.  The part of the Agreement dealing with spousal maintenance was not properly drafted in accordance with s90E of the Family Law Act, the Court set aside the Agreement and ordered the Husband to pay $500 per week to the wife and various other expenses (for any geeks out there see Guild & Stasiuk [2019] FamCA 167).

Be confident that your Agreement was done right the first time by retaining an experienced, specialist family lawyer. It’s well worth it for both of you.  

For assistance regarding Binding Financial Agreements, contact our experienced family law team on 5576 9999.

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More experiments in the family courts – another pilot programme for property settlement announced

More experiments in the family courts – another pilot programme for property settlement announced
December 15, 2019 /

Lawyers and separating couples who have property settlement applications before the Court in Brisbane may have already met Registrar Turnbull and the Discrete Property List pilot programme.

Well there is another trial programme being piloted in Brisbane for property matters.

Separated couples whose property pool is less than $500,000 are being diverted to the government’s new Small Claims Property Pilot.  Why? This programme ‘aims to ensure families do not exhaust their limited assets on legal expenses’. It is also another attempt to streamline the Court’s procedures, reduce caseload and thus reduce delay and expense for people seeking access to the Courts for property settlement.  

The Small Claims Property Pilot will commence in January 2020 in Brisbane, Parramatta, Adelaide and Melbourne. The Pilot will run for 2 years.

For assistance in navigating property settlement matter, contact our experienced family law team on 5576 9999

https://www.attorneygeneral.gov.au/media/media-releases/pilot-program-save-time-and-money-separating-couples-29-november-2019

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What’s in a word? Family law orders – words really do make a difference

What’s in a word? Family law orders – words really do make a difference
December 11, 2019 /

A recent case highlights how careful you have to be when preparing Court Orders

In a de facto property settlement, the Order for division of the property included a requirement for the de facto wife to pay the de facto husband a fixed sum of money, and if she could not make the payment within 60 days then a house was to be sold and the fixed sum paid from the sale proceeds, with interest. The effect of the Order as a whole was that the net property pool was divided 70% / 30% between them. 

The payment could not be made so the de facto wife sold the property and paid the fixed sum (with interest) in accordance with the Order.

The issue that arose was the house sold for a higher amount. At trial the value for the house was given as $725,000 (and the 70% / 30% split calculated on that basis) but the house then sold for $920,000. The Orders meant this increase was kept by the de facto wife.

The De facto Husband brought an application on the basis that the De facto Wife had defaulted and caused the sale of the house and by doing so she received more than 70% of the pool contemplated in the Orders. He sought Orders to remedy this.

The Court did not accept this or make any other Orders as;

  1. there was no default because the payment was made in accordance with the Order as it was written; and
  2. the Order did not say that he should receive a payment being a percentage of the total net property pool. The Order said he should be paid a fixed sum, the result of which was a 70% / 30% at the time. The effect is that any change in the value of the property would “lie where it fell”, meaning the one party would have to bear the result in any change in value, whether higher or lower.

Crafting property Orders are not simple. There are traps and pitfalls.  Call 5576 9999 to speak to an experienced family lawyer who can assist you to navigate this complex area. 

http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/cth/FCCA/2019/1880.html

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De factos – the I do’s and I don’ts

De factos – the I do’s and I don’ts
November 28, 2019 /

Love and marriage go together like a horse and carriage…1

It seems for many Australians the crooner’s chorus is not a melody which resonates, because, as of 2016, some 1,751,424 Australians had chosen to be in a de facto relationship. Nationally, that equates to just over 10% of our population, but in Queensland it is as high as 12%.2

Perhaps it was for that reason the Queensland State Parliament saw fit to amend the Succession Act 1981 (Qld) in 2017,3 inserting a new section 15B which provides for the effect of the end of a de facto relationship on a will. In short, the ending of a testator’s de facto relationship now revokes: 

– a disposition to the testator’s former de facto partner made by a will in existence when the relationship ends

– an appointment, made by will, of theformer de facto partner as an executor, trustee, advisory trustee or guardian

– any grant, made by will, of a power of appointment exercisable by, or in favour of, the testator’s former de facto.

The amendments alter a longstanding difference between the effect of the end of a marriage on a will and the end of a de facto relationship on a will. While some might consider the amendments have harmonised and equalised the circumstances, they may in fact create more problems than they solve. 

This is because no other state or territory has an equivalent provision. This provision only exists in Queensland. That will likely create a conflict of laws issue on their death, if the testator executes a will in any jurisdiction and then moves interstate and the de facto relationship ends. At the very least it creates a risk management issue for both estate planning lawyers and family lawyers, not just in Queensland but Australia-wide.

It is also important to note that this Queensland provision only impacts the will on the ending of a de facto relationship. Entry into a de facto relationship does not impact on the will. A further anomaly is that entry into and ending of a marriage impacts a Queensland enduring power of attorney, however there is no corresponding amendment to s15B Succession Act 1981 made to the Powers of Attorney Act 1998, nor within the recent amendments to that Act passed in April this year. 

A further conundrum is that, while we are legislatively prohibited from having more than one marriage at a time, there is no prohibition on having multiple de facto relationships, or being married and in a de facto relationship simultaneously. 

So that we can properly advise our clients, we and they need to understand what a de facto relationship is for the purposes of succession law and when does it end? This is important because currently Australia has no less than 33 different legislative definitions of de facto status.4 

For the purposes of Queensland succession law, the answer lies in the combination of the definition of ‘spouse’ under S5AA of the Succession Act 1981, which then refers to section 32DA of the Acts Interpretation Act 1954 (the AIA). However, neither the Succession Act 1981 (Qld) nor any other provides guidance on when a de facto relationship ends. For that, we are left looking to the common law and there we are faced with a wide array of approaches and outcomes.

Most recently, in In the Matter of the estate of Benjamin John Gleeson, deceased [2019] VSC 589, the court found that the onus is on the propounder to positively demonstrate that the defining characteristics of a de facto relationship are in existence, with the court taking a cautious approach to the evidence, because the deceased party is not able to give evidence.5 

In attempting to demonstrate the ending of a de facto relationship, in Dow v Hoskins [2003] VSC 206 the court considered it must take into account the human reality and not apply a narrow and pedantic view of living together in the circumstances. There the court considered that the propounder must demonstrate the shared intentions of the parties to continue their relationship, despite the existence of extenuating difficulties.

In Estate Hawkins; Huxtable v Hawkins [2018] NSWSC 174 Justice Lindsay determined that whether there was or was not a de facto relationship was a question of how the parties conducted their relationship.

In that context the family law decision of Cadman & Hallett [2014] FamCAFC 142 evidences just how complicated that can be. The matter involved a gay couple in a non-exclusive relationship for 19 years. They were not always residing together. One party left Australia to study overseas and did not return full time but did return from time to time. Despite living in different countries and not having a sexual relationship, the determination as to whether the relationship had come to an end came down to a question of whether communication of  the end of the relationship had occurred. The  court looked at a number of things, including ongoing financial contributions and when one of the parties made changes to his will. 

Levers v Superannuation Complaints Tribunal [2016] FCA 936 involved an application for judicial review of a trustee’s determination to pay 100% of super to the de facto husband. Mrs Levers, the mother of the deceased, was the legal personal representative of her deceased daughter’s estate, Ms Redfearn. She died tragically on 22 April 2011, as a consequence of an attempted suicide on 20 April 2011. Mr Hattingh, the third respondent, contended he was living with Ms Redfearn at the time in a relationship. He lodged a complaint in relation to the trustee’s decision with the Superannuation Complaints Tribunal, the first respondent. The tribunal set aside the trustee’s determination and determined that 100% of the death benefit should be paid to Mr Hattingh.

There was evidence as to the history of domestic violence between the couple. Relevantly, Mr Hattingh was imprisoned for a period for breach of a domestic violence order. Central to this was the interaction between the couple after Mr Hattingh was released from jail. Mrs Levers asserted that the cause of the testator’s suicide was because Mr Hattingh had ended the relationship. However, it was found there was no evidence supporting that. Further, the existence of domestic violence in a relationship was not considered a relevant factor in determining whether the relationship existed.

So, what practical steps can practitioners take to address these complexities? 

– When discussing de facto status with the client, identify for them what it means in succession law terms.

– Conflict of laws – advise the client that if they change their domicile, then they should review the situation with a succession lawyer in that state or territory. 

– Be aware that clients can have more than one spouse, and multiple de factos, and raise that with them.

– Recommend the client seeks legal advice if they are concerned about whether they have ended the de facto relationship.

Christine Smyth is a former President of Queensland Law Society, a QLS Accredited Specialist (succession
law) – Qld, QLS Senior Counsellor and Consultant at Robbins Watson Solicitors. She is an executive 
committee member of the Law Council Australia – Legal Practice Section, Court Appointed Estate Account Assessor, and member of the QLS Specialist Accreditation Board, Proctor Editorial Committee, 
QLS Succession Law Committee and STEP.

Notes
1 Love and Marriage, Frank Sinatra, 1955.
2 2016 Census – Australian Bureau of Statistics.
3 See the Court and Civil Legislation Amendment Bill 2017passed on 5 June 2017. cabinet.qld.gov.au/
documents/2017/Mar/CandCBill/Attachments/Bill.PDF.
4 For list of the various pieces of legislation defining ‘de facto’ see the writer’s Proctor column, August 2015,
discussing de facto matter of Spence v Burton QCA 104.
5 At [31].

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Important Issues to Consider When Buying a Business

Important Issues to Consider When Buying a Business
November 10, 2019 /

If you are planning on buying a business, whether it be a small coffee shop or a multi-million dollar construction business, there are a number of important factors that you need to take into consideration.

Some of the main issues to consider are:-

  1. Buying entity/structure

Before you sign a contract, you need to get good advice as to the proper structure for your business and the correct buying entity.

For instance, it would often be beneficial for you to establish a discretionary trust with a corporate trustee to buy the business.  This structure can have the benefit of asset protection for you as well as having tax benefits.

If the business is heavily reliant upon certain Intellectual Property (“IP”), such as a trademark or patent, you may want to establish a further separate entity which would own that asset so that it is protected from the other assets of the business. 

  1. Due diligence

It is of course always prudent to carry out extensive due diligence enquiries of the business.  Due diligence can cover a vast array of issues and you should seek the assistance of your solicitor and accountant or financial adviser in relation to the various due diligence enquiries which may be necessary.

Common due diligence investigations are:-

  • Business name – you need to ensure that any name that you are acquiring with the business is properly registered and owned by the party selling the business.
  • IP – again, you need to ensure that any IP is owned by the party selling the business and that you will be taking ownership of the IP upon settlement.
  • Figures – you will of course want to ensure that any figures provided to you by the seller are accurate and you should have your accountant and financial adviser carefully scrutinise these.
  • Regulatory requirements – it is crucial that you ensure that you will have all of the necessary licenses, permits and qualifications to enable you to lawfully operate the business.
  1. Lease

A major part of buying a business is dealing with the lease for the premises from which the business operates.  You will need to determine whether you will be taking an assignment of the existing lease or negotiating a new lease with the landlord.  In either case, you will need to obtain the agreement of the landlord and ensure that you are satisfied with the terms of the lease.

  1. Employees

Of course, the most important part of any business is the staff. You will need to determine which staff you wish to retain, and enter into appropriate agreements with them.

The issue of who pays accrued entitlements of the staff needs to be dealt with in the contract.  Generally, an adjustment is made in the buyer’s favour for a portion of accrued leave and long service leave entitlements. 

  1. Stock

Stock is a crucial component of some businesses, and not so important in other service-based businesses.  In any event, the contract will need to stipulate whether or not stock is included in the purchase price. If not, a maximum figure you will be required to pay in addition for stock should be included in the contract.  A stock-take would then need to be carried out prior to settlement. 

  1. Restraint

In buying the business, you will of course want to ensure that you are protected against the seller opening a similar competing business nearby, or going to work for a competitor.  It is therefore crucial that you include appropriate restraints on the seller in the contract. 

Restraints must be reasonable and carefully drafted, or they will be found to be unenforceable by a court. 

  1. GST

Generally with a business, you will be buying the business as a going concern, and therefore, GST will not be payable in addition to the purchase price.  You will of course need to meet the requirements of the “going concern” provisions in the GST legislation and in particular, your buying entity will need to be registered for GST.  There will be some cases where the purchase doesn’t qualify as a going concern, and accordingly it is important to get good advice in this regard. 

  1. Earnouts

In some businesses, you will want to ensure that the seller stays in the business for a period of time after settlement to ensure continuity and also to ensure that the purchase price is justified.  In these cases, you can require that the seller remain in the business for a fixed period of time and that a portion of the purchase price will be contingent upon certain sales or profits being achieved.

Every business is different and presents its own challenges. If you are going to pour your heart and soul as well as a substantial amount of money into a business, you need to give yourself every chance of succeeding. This means doing your homework before you buy!

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