Our Christmas/New Year Office Hours

 

The Directors and Staff wish you the compliments of the season and advise that this office will close at 1.00 pm on Tuesday, 24 December 2019 and will re-open at 8.30 am on Monday, 6 January 2020.

 

 

Blog authored by Tim Cullenward (Email: tac@peacockes.com )
   

Tim Cullenward, Douglass McKay and Andrew Cannon recently attended the Law Society of NSW Rural Issues Conference 2019 held on Friday 25^th October 2019 at the InterContinental Hotel Sydney. The Conference was aimed at highlighting and shining the focus on the unique and current topical issues which confront rural practitioners and their clients daily in the status quo of arguably the harshest drought on record in rural and regional NSW. In addition to providing legal practitioners present with 6.5 points to be credited between substantive law and practice management and business skills units compulsorily required for continuing professional development, the Rural Issues Conference also provides rural legal practitioners the opportunity to openly network with other rural practitioners and discuss the familiar issues of concern to them.

The event, which culminated and merged distinguished speakers such as members Law Society of NSW President Elizabeth Espinosa, The Hon. Melinda Pavey Minister for Water, Property and Housing, Jodie Thurgood and Andrew Boog of the Rural Issues Committee, Barristers The Hon. Ian Coleman SC and Andrew Rider SC, explored the following topical issues including:

‘Legislative Framework around authorised filming and surveillance’ presented by The Hon. Ian Coleman SC Culwulla Chambers examined a comparison of the state and Commonwealth legislatures in relation to the illegal invasions on properties by animal activists and the use of remotely piloted aircraft systems (“RPAS”) (more commonly known as drones), their potential effects on landholders and farmers and the current protections (or lack thereof) for landholders and farmers as a result of physical and non-physical invasions from users of drones amongst property and livestock;

‘Climate change through a commercial risk lens – implications for rural practitioners’ presented by Keith Rovers, Partner, Minter Ellison explored the currency of new issues and range of risks that have been created as a consequent of climate change and the unique impacts on respective fields of legal practice, particularly in rural areas and the importance for legal firms to be adaptable in the face of our deteriorating and ever- changing climate. Such issues explored included the concept of ‘un-insurability’ by insurance providers, issues of commercial contract interpretation regarding new understanding and definitions of force de majeure and acts of gods events and the growing trend and recognition of Australian ASX listed companies disclosing and holistically defining the term ‘climate risk’ and categories of ‘climate risk’ within legal and corporate policies;

Emma Heuston, Founder of The Remote Expert, an online regional legal practitioner discussed in ‘A practical look at working differently’ the inherent ability and necessity of rural legal practitioners to be innovative, outlining the various ways technology can be harnessed to circumvent and support rural legal firms struggling to attract and retain legal talent within their often isolated communities, such as through the use of virtual legal assistants (VA’s). The seminar also explored the range of alternative modes for legal practice management in the bush as well as emerging acceptance of ‘face-to-face’ client contact through video technologies such as skype and zoom for rural legal firms;

Hanna Jaireth, Farm Debt Mediation Officer for the NSW Rural Assistance Authority in her aptly titled ‘Rural & regional farm debt & franchising mediations: national reforms?’ seminar brought to the fore the poor statistics regarding the use of farm debt mediation and associated services under-utilised by rural legal practitioners such as complaints lodged by primary producers with the Australian Financial Complaints Authority (AFCA). Additionally, the seminar also shed light on how the aftermath of the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry on lending has impacted primary producers as well as the respective rural agribusiness and franchising sectors in Australia and NSW in respect to farm debt mediations;

Barrister Andrew Rider of Level 22 Chambers in his address on ‘Primary Production land: maximising tax exemptions’ set out the authorities and criteria for some of the most commonly applicable tax exemptions used on behalf of clients for rural legal practitioners, discussing the merits and requirements for land tax exemptions for primary production land as well as duties exemptions available for various goods transferred with farmland. However, somewhat of a focus at the Rural Issues Conference was the analysis of the oft cited and applied s274 of the Duties Act 1997 (NSW) (Transfer of certain business property between family members). Whilst discussing the merits the provision has brought to many struggling farming families for rural succession planning broadly, particular emphasis and criticism was also drawn to the undefined and uncertain meaning of “control” referred to within the section.

Tony Cahill presented a current and practical view of the most recent and notable real property and conveyancing amendments in NSW in his seminar on ‘Rural property law update’. As per the Conveyancing (Sale of Land) Amendment Regulation 2019 (NSW), the seminar provided an well informed summary of some of the key changes to the NSW Contract for the Sale of Land including, but not limited to:

• Changes to the cooling off notice in the Contract of Sale and transitional requirements for changing the notice for legal practitioners and firms;
• Implied term regarding occupation certificate for strata units;
• An expanded definition of ‘service’ pursuant to s170 of the Conveyancing Act 1919 (NSW);
• Features regarding changes and additions to standard contract clauses for residential off the plan properties; and
• The potential inoperability between electronic lodgement network operators (ELNO’s) currently in Australia’s electronic conveyancing market, PEXA and Sympli.

However the focal point of the Rural Issues Conference was the open panel discussion titled ‘Rural succession planning: business structures for the family farm presented from experienced rural legal practitioners Peter Moffitt of Gordon Garling Moffitt as chair with John Hennessey and Georgiena Ryan, Principals of Regional Business Lawyers of Wagga Wagga NSW.

The panel, taking questions and responding interactively with solicitors present on a range of rural succession issues, discussed points such as:

• the applicability and challenges of CGT concessions in light of decline rural farming property values such as the maximum net asset value test and turnover threshold of $2 million present in many rural family farming trust and partnership structures;
• the payment of creditors and securitisation of family properties and assets as the most common and profound issues to be dealt with in rural succession planning;
• the omnipresent effect the recent banking royal commission has had on rural succession planning with particular emphasis on the increasing levels of debt to equity ratios amongst farming families today; and
• the ‘revolution’ that has been s 274 of the Duties Act 1997 (NSW) in rural and remote communities since its enactment in assisting the continuance of family bloodlines inheriting and conducting family farming businesses through transfer duty exemptions.

Disclaimer of Gifts - Blog by Andrew Cannon - email aac@peacockes.com
 

Do I have to accept a gift left in a Will ?

Whilst it is uncommon and unusual for someone to want to refuse or be unwilling to accept a gift left to them in a Will, also known as a renouncement or disclaimer of gift, it is well-recognised that a beneficiary has the free will and discretion to do so. Courts of Equity, both past and present in Australia have confirmed the fundamental principle that a person cannot, under any circumstances, be forced to accept a gift left to them in a Will. This draws upon an authoritative statement set out by Justice Holroyd at 577 in the English authority of Townson v Tickell (1819) 3 B & Ald. 31 that:

“I think that an estate cannot be forced on a man. A devise, however, being prima facie for the devisee’s benefit, he is supposed to assent to it, until he does some act to show his dissent. The law presumes that when the contrary, however, is proved, it shows that he never did assent to the devise, and, consequently, that the estate was never in him”.

Today, this statement on the disclaimer of gift has been endorsed in principle as evinced by Justice Ward in Tantau v MacFarlane [2010] NSWSC 22 at 77 that:

“… there is no doubt that it is open to a beneficiary to disclaim a gift made in its favour under a Will, though it is said that generally the disclaimer must be absolute (not partial) in its operation…”

Since Townson, Equity in Australia has arguably evolved the principles regarding disclaimer of gift in a Will. This ‘evolution’ is in the form of more modern requirements set out by the Courts which provide that a disclaiming beneficiary:

1. Cannot disclaim a gift (where left to them in a Will) before the passing away of a testator;
2. The gift must be refused by deed or positive conduct, to avoid any inference of ambiguity (It is confirmed that a beneficiary cannot disclaim a gift in a Will left to them merely by silence or a period of inactivity. Conversely, a beneficiary wishing to disclaim a gift is arguably best served to confirm such a decision in a deed of agreement, which is signed and witnessed by all the parties);
3. The beneficiary cannot disclaim the gift/ beneficial interest after it is accepted (however the judicial and academic commentary on this point has been somewhat ‘stretched’ and unsettled by the concept of ‘initial acceptance‘ and retraction: See Tantau at [75] – [122] );
4. Once the gift is disclaimed, the position of the disclaiming beneficiary is final and absolute;
5. The beneficiary disclaiming their gift cannot choose whom is to inherit what would otherwise have been their share of the beneficial interest/gift.

When may a disclaimer/renunciation of a gift left in a Will be appropriate ?

In some circumstances, a beneficiary may have very good reasons for disclaiming a gift or beneficial interest left to them in a Will.

Such circumstances may include, but are not limited to:

• A beneficiary of a trust may wish to disclaim their beneficial interest held in a Trust structure in order to avoid an undesired capital gain from arising ( ie. Cost/benefit where the cost of the possible adverse tax consequences may outweigh the financial benefit of receiving the gift/ beneficial interest; See Federal Commissioner for Taxation v Ramsden [2005] FCAFC 39; Smeaton Grange Holdings Pty Ltd v Chief Commissioner of State Revenue [2016] NSWSC 1594;
• A beneficiary may not wish to be restrained by a potentially onerous provision in a Will (such as a life estate) ; and
  
• Personal, family and ‘moral’ reasons (particularly where accepting a gift/ beneficial interest would then create conflict and acrimony amongst family members and/or other beneficiaries).

Centrelink and testamentary gifts

Testator: When considering who you wish to benefit in your Will you should take into account whether an intended beneficiary is receiving or is likely to be receiving Centrelink and/or Veterans’ Affairs benefits.

A testator wishing to leave a gift/ beneficial interest to a current recipient of Centrelink and/ or Veterans’ Affairs benefits should carefully consider the nature and extent of the gift to provide for that person, and possible consequences of that person receiving it - for example, depending on the size of the gift and the circumstances of the beneficiary, it may reduce the beneficiary's entitlement to a pension.

See: Tantau v MacFarlane [2010] NSWSC 22, O’Sullivan Partners (Advisory) Pty Ltd v Foggo [2012] NSWCA 40, Commissioner of Taxation v Ramsden [2005] FCAFC, R v Skinner [1972] 1 NSWLR 307, De Santis v De Santis [2002] NSWSC 729, Lewis v Lohse [QCA] 199, Lawson v Lawson NSWSC (unreported) and Aljaro Pty Ltd v Weidmann [2001] NSWSC 206.”

Beneficiary: Care should be taken before disclaiming or renouncing a testamentary gift, particularly if the person who wishes to disclaim is in receipt of a Centrelink pension or payment or intends to apply for a Centrelink pension or payment within 5 years.

For a period of 5 years, a disclaimed gift may potentially be deemed  by Centrelink to still be an asset of the person who disclaimed it - despite that person never having actually received the gift.

As such, legal advice should be sought prior to disclaiming or renouncing any gift.

Blog post by Kathleen Clark (Email:  kjc@peacockes.com )
 

Subpoenas – My Health Records Act 2012 (Cth) (the Act)

With the increased use in My Health Record, it’s only natural for all the litigators in the room to view it as a potential gold mine of information for various Court proceedings. Thinking of subpoenaing the Australian Digital Health Agency (the Agency)? Before you do, cast your mind to section 69 of the Act, which provides that unless proceedings fall into the class of proceedings as set out in section 69(1) or (2), then the Agency is not required to comply with the subpoena without the consent of the person who’s records you propose to subpoena.

Section 69 provides:

1)If:

a)a court or tribunal other than a coroner orders or directs the System Operator to disclose health information included in a healthcare recipient's My Health Record to the court or tribunal; and

b)the order or direction is given in the course of proceedings relating to:

i.this Act; or

ii.unauthorised access to information through the My Health Record system; or

iii.the provision of indemnity cover to a healthcare provider; and

c)apart from this Part, the System Operator would be required to comply with the order or direction;

System Operator must comply with the order or direction.

System Operator to disclose health information included in a healthcare recipient's My HealthRecord to the coroner, the System Operator must comply with the order or direction.

3)Except as mentioned in subsection (1) or (2), a participant in the My Health Record system, or a healthcare recipient, cannot be required to disclose health information included in a healthcare recipient's My Health Record to a court or tribunal.

4)Except as mentioned in subsection (1) or (2), the System Operator is not authorised to disclose health information included in a healthcare recipient's My Health Record to a court or tribunal unless the healthcare recipient consents.

5)Subsections (1) and (2) do not authorise the System Operator to disclose healthcare recipient-only notes.

General Counsel for the Agency has recently advised the President of the Law Council of Australia that the Agency will apply to set subpoenas aside if they fall foul of section 69 – which potentially will have cost implications the client.

For more information on the information held by the My Health Record system, see www.myhealthrecord.gov.au

 

 

Blog authored by Geoff Yeo (email: gjy@peacockes.com )

Driving under the Influence (DUI)

It is a criminal offence to drive a motor vehicle on a public road whilst under the influence of alcohol or drugs and we commonly refer to this as ‘DUI’.

This is a general offence and usually only applied where the police have not been able to obtain a breath or drug test. The prevalence of testing equipment, has meant that this general offence is not often utilised by the police.

Prescribed Concentration of Alcohol (PCA) offences

It is also a criminal offence to drive a motor vehicle on a public road whilst having blood alcohol reading greater than the allowable Prescribed Concentration of Alcohol (PCA).

A person's PCA is measured using a breath test and/or blood test.

PCA offences fall into different categories, including low range, mid range, high range and special range.

Changes to Low Range PCA offences

The offence of Low Range PCA is committed when a person drives a motor vehicle on a public road with a blood alcohol concentration from 0.05 to 0.079 (inclusive).

From the 20^th of May 2019 stronger penalties for low range offences were implemented.

Police can now issue to first time offenders an immediate three-month licence suspension and fine of $561 if your blood alcohol reading is between 0.05 – 0.079.

 Before the changes if you were found with a low range PCA you were issued with a court attendance notice to have your penalty determined in court.This meant you had to attend court, but it did allow you to continue driving until your court date, gave you time to prepare your defence and gave you time to prepare your circumstances to be living without a license.

The police now have the discretion to either issue the first-time offender an infringement notice, immediate suspension notice or court attendance notice.

• An Infringement notice involves a fine of $561 for the offence of low range drink driving, with the driver then being sent a letter from the RMS advising them that their licence will be suspended for a period of three months.The suspension is not immediate.It gives you some breathing space.
• An Immediate suspension notice involves the issuing of the infringement notice and at the same time the issuing of the immediate suspension notice of your license which will be effective for 3 months and effective immediately.
• A Court attendance notice can still be issued by police. If a driver receives such a notice, then this means they will need to appear before the court on the date specified in the notice.On that date, the driver can choose to either plead guilty or not guilty to the offence at court. Ultimately, if found guilty then a conviction may be recorded the court and a period of disqualification may be imposed. In most cases a conviction and disqualification period will be imposed, however, it may be possible where there are appropriate circumstances to request the court to deal with the matter more leniently and this is where an experienced solicitor may assist.

If you have had your licence suspended for low range PCA your options are as follows:

1. Pay the fine and live without your license for 3 months; or
2. Appeal the immediate suspension of your licence at your local court.If doing so you must lodge the appeal within 28 days of receiving notice of your licence suspension.In lodging your appeal, you are seeking a ‘stay of the suspension’ which means you are asking for the suspension to be lifted before the appeal is heard.For the court to do so it will need to be satisfied that there are exceptional circumstances as to why the suspension should be lifted.

Note appealing the suspension will not mean that the appeal is heard straight away.

Conclusion 

If you have had an immediate suspension of your licence or have received and believe that there are appropriate circumstances to argue for the suspension to be lifted, then you may be able to appeal your suspension in the Local Court.

However we recommend that you obtain legal advice first, especially as these penalties have only been recently introduced.

For more information, please contact our office on 02 6882 3133 for an appointment.

 

 

Blog authored by Tim Cullenward  (Email: tac@peacockes.com )

Usually if you are involved in a dispute that cannot be resolved amicably, it will end up in the Local or District Court. If you find yourself in the position where you need to commence legal proceedings against someone (or if you are being sued yourself), then you should consider the consequences before it goes too far.

Legal Costs

Generally, a Magistrate or Judge will order the losing party to pay the victor's legal costs. There are many variables to this and not every Court practises such measures, but it is generally accepted practice in the NSW Local and District Courts that "costs follow the event".

One major issue to consider before embarking on any litigation is whether the proposed defendant has any funds or assets in which to meet any costs orders against them, as well as the judgment. If they don't have any assets or funds, then there will be nothing to pay your costs if you are successful. This means that whilst you may have "won", you have lost more money than what you started with, depending on what legal costs you incurred along the way.

Local Court Division and Costs

Ordinary, if you want to commence any litigation you should speak to a solicitor. Many solicitors have an initial conference fee or similar and will disclose their fees once they have a full grasp of what your matter is about. These fees can be substantial, depending on the matter and the issues at hand, and also upon the amount of evidence and complexity of the case.

If, however, you commence civil proceedings yourself without the assistance of a lawyer, then you should consider what division you should file your Statement of Claim in. This will determine what costs you can obtain from your opponent if you are successful (and also tell you what costs orders you might be exposed to if you lose the litigation).

For instance, if you commenced legal proceedings as the Plaintiff in the General Division of the Local Court, then you may be subject to a maximum costs order limiting the amount of legal costs awarded in your favour (where the defendant would have to pay your legal costs). The Local Court hears civil cases for matters up to $100,000, with matters less than $20,000 in the Small Claims Division.

General Division Costs Orders

If you have commenced legal proceedings in the General Division of the Local Court, and you were successful, then the Court would usually direct that "costs follow the event." This means that the Defendant would have to pay your legal fees. However, the Court will usually award costs on an "ordinary basis". This means that the most you could expect to receive would be around (roughly) 70% of your legal costs upon costs assessment. These are commonly referred to as "party/party" costs. A costs assessment takes place in matters for more than $20,000 where a costs assessor carries out a review of the legal costs sought by a party to determine the amount to be paid.

If you wanted to seek your full costs i.e. 100%, then you would need to make an application for indemnity costs. These are commonly referred to as "solicitor/client costs". To obtain such a costs order you would need to provide evidence to the court as to why you should obtain such an order. For claims above $20,000, this can be done if an offer of settlement was made during the proceedings and the judgment in your favour was for more than what you offered. Such offers are usually called "Offers of Compromise" or "Calderbank Offers". A further blog on these matters will be published later.

Small Claims Costs Orders

In proceedings in the Small Claims Division of the Local Court (claims less than $20,000), the maximum legal costs awarded would depend on the amount of the claim. There are limits and the amount of costs can vary depending on whether a lawyer helped you (and to what degree), and how the proceedings were finalised. For instance, if you received assistance from a lawyer and the proceedings ended with the court giving a judgment after a hearing, the maximum amount of legal costs that can be awarded are between $252.00 and $1,259.29.

If either party makes a genuine offer to resolve the matter, and the offer was rejected or ignored, and the refusal was not reasonable, the court can increase the maximum amount of legal costs for giving a judgment after a hearing by 25%.

If the Claim is for between $10,000 and $20,000, the maximum costs that you could be awarded would be 25% of the amount awarded by the Local Court in respect of the claim, plus any amount that might be allowed in relation to costs incurred up to the filing of the first defence in the proceedings. For example, if you commenced proceedings for a claim of $15,000 in the Local Court, and the court awarded you the full amount of $15,000, the most you could be awarded in legal costs would be $3,750 (25%). This is despite any additional costs you may have incurred up to this point.

If you wanted to vary the maximum costs order, you would need to provide evidence to the court explaining why the maximum costs order should be varied considering the complexity and subject matter of the proceedings.

Remember, if you are unsuccessful in the proceedings, the Local Court may award costs in the defendant’s favour, i.e. you might be required to pay the defendant’s legal costs and the same considerations above would apply.

Conclusion

Before commencing proceedings in the Local Court, it is always necessary to consider the legal costs consequences, particularly in circumstances where legal costs can exceed the amount of the claim. Even if you are successful, you will not recover the whole amount of your legal costs. For more information, please contact our office on 02 6882 3133 for an appointment.

 

If you operate a business or hold assets then you may be exposed to loss arising from a variety of sources which could include:

• bankruptcy or liquidation; 
  
• a liability/damages claim;
  
• a family provision claim on your death; or
  
• a divorce (either your own divorce or in the case of family succession planning, the divorce of your children).

 

However there are a variety of strategies that may be able be used to potentially protect your assets or reduce the risk of your assets being accessible to a claimant.

Of course, there are varying degrees of protection that are able to be achieved and it is particularly difficult to protect your assets from loss through your own divorce, although a binding financial agreement (which can be entered into before cohabitation commences or before marriage or during cohabitation/marriage) may be able to assist. However it would require the co-operation of your spouse.

 

In other cases, such as family succession/divorce of children and protection from potential bankruptcy/liquidation there are a number of other strategies that can be implemented to protect your assets  - providing that you plan and implement your strategy at the appropriate time, in general, the earlier the strategy is implemented, the more beneficial it is likely to be.

One strategy which could be considered is a gift via a promissory note and loan-back. This involves the owner of the asset gifting the value of the equity in the asset (but not legal title in the asset itself) to a discretionary trust and simultaneously the same amount is loaned back from the trust to the property owner, secured by a mortgage in favour of the trust.

As a result, the asset is still legally owned by the same person, but its equity has been transferred to a trust and therefore may be better protected from a liquidator, providing that the transfer of  the equity and  the mortgage/loan-back is undertaken well prior to any relation-back (claw-back) period.

There are pros and cons of undertaking such a strategy, including issues that may arise with any current financiers,  and depending on your situation there may be more effective or simpler strategies available to you.

Accordingly, the strategy in this example should not be implemented without first seeking legal and accounting advice specific to your situation. If you would like to discuss this or any other potential asset protection strategy then please do not hesitate to contact Andrew Graham or Jeremy Tooth on 02 6882 3133.

 

Blog authored by Andrew Cannon   (email aac@peacockes.com )

Between the competing tensions of the all enveloping emergence and dependence of technology in modern Australian society, the innovation of legal firms to increasingly deliver digital services to clients’ against the fading abyss of traditional ‘paper’ conveyancing practices, the time for property and conveyancing transactions to be completed ‘paperless’ and electronically has come of age. Conversely, with the rise of the brave new world of breakthroughs consequence of technology’s introduction into the legal, property and conveyancing spheres, lawyers and conveyancers are also in equal measure becoming increasingly exposed to an unprecedented number and forms of cyber-risks, fraud and ethical dilemmas when transacting with clients and other parties digitally.

To date, such examples of the forms of cyber-risk and fraud omnipresent online are cited from, amongst others, Astell v Australian Capital Territory [2016] ACTSC 238, Infotrack’s ‘The Increasing Threat of Identity Crime – A guide to the VOI landscape’ and the Legal Practitioners’ Liability Committee ‘Security Warning for PEXA users’ in response to the well covered ‘Masterchef case’.

Subsequently, relevant government, law and policy makers have responded in kind to these examples of very real and present cyber threats of fraud and identity theft. As evinced in s12E of the Real Property Act 1900 (NSW) (“RPA”) practitioners must satisfy their professional obligations in conveyancing and property transactions for verifying a person’s identity or (“VOI”) of clients’ and/or their agents’ acting by either:

1. Applying the “VOI standard”; or
2. Verify the identity of a person “in some other way that constitutes reasonable steps”.

This requirement also applies to the identity verification of mortgagees.

Authorities and best practice guidelines derived from sources such as the Electronic Conveyancing National Law (NSW) section 23 and the Model Operating Requirements prescribed by the Australian Registrars National E-Conveyancing Council (ARNECC) Verification of identity confirm VOI is now a mandatory requirement for lawyers and conveyancing representatives in NSW, applicable to both traditional ‘paper’ and ‘new-age’ electronic settlements. VOI is also a mandatory requirement for all conveyancing transaction in Qld, SA, WA and VIC. However, NT, TAS and the ACT are yet to ‘get onboard’ and recognise formal requirements for VOI in conveyancing and property transactions.

Both electronic settlement platforms PEXA and Sympli also recognise the necessity for representatives to complete verification of identity for each of their client’s and/or acting agents’ in order to complete settlement, through the mandate of their respective participation rules and agreements with network users (ostensibly law firms).

Section 12E of the RPA, which also deals with the requirements of gaining client authorisation and certification, provides:

“…The Registrar-General may from time to time determine, in writing, rules for or with respect to the preparation and lodgment of documents to give effect to conveyancing transactions (the
"conveyancing rules" ), including rules for or with respect to the following:

(a) the verification of identity and authority, including:

(i) the standards to which identity and authority are to be verified, and

(ii) the classes of persons in respect of whom identity and authority are to be verified, and

(iii) the classes of documents in relation to which verification of identity and authority requirements apply, and

(iv) the classes of persons who can undertake verification of identity and authority, and

(v) any supporting evidence and retention requirements…”

Subject to s12 E of the RPA, the Office of the Registrar General’s Conveyancing Rules (“Conveyancing Rules”) sets out that a representative must take ‘reasonable steps’ to verify the identity of both:

• Each client; and
• Each agent that acts for the client (such as an adult child giving /taking instructions for their parents or a buyers’ agent etc).

The necessity for practitioners (lawyers and conveyancers) to verify the identity of clients and their agents’ applies to a broad range of conveyancing transactions and dealings with property to ‘cover the field’ including:

• To create, transfer, dispose of, mortgage, charge, lease or deal with in any other way an estate or interest in land;
• To register, note or record anything on the title to a property; or
• To get the registration, note or record of something on title changed, withdrawn or removed.

As per rule 4.1.1, the Conveyancing rules took effect on 26 November 2016 and places the onus on lawyers and conveyancer representatives to take “reasonable steps”, which are imposed as a professional ethical obligation owed to each client and their agents’, for identity verification. Furthermore, rule 4.1.5 of the Conveyancing rules provides a higher standard of ‘reasonableness’ for representatives to make further inquiries’ to verify the identity of each client and their agents’ in dubious or suspicious situations where:

“the Representative knows or ought reasonably to know that:

(i) any identity Document produced by the Person Being Identified and/or any Identity Declarant is not genuine; or

(ii) any photograph on an identity Document produced by the Person Being Identified and/or any Identity Declarant is not a reasonable likeness of the Person Being Identified or the Identity Declarant; or

(iii) the Person Being Identified and/or any Identity Declarant does not appear to be the person to whom the identity Document(s) relate; or

(b) it would otherwise be reasonable to do so.”

In the event that representative cannot be satisfied of a person’s identity to a transaction, arguably legal practitioners are availed the benefit under the s12E of the RPA and chorus of VOI best practice guidelines from property and conveyancing institutions to cease acting any further in the conduct of the conveyancing/property transaction in lieu of the exercise of due diligence and professional responsibility owed.

The Australian Registrar’s National Electronic Conveyancing Council (ARNECC) provides some guidance to lawyers and conveyancers on what ‘reasonable steps’ means under RPA legislation and the Conveyancing Rules when taking a client’s or their agent’s VOI. However, whilst “reasonable steps” is not a defined term under either the RPA or the Conveyancing Rules in NSW, the concept of “reasonable steps” does allow practitioners to demonstrate professional judgment and exercise their discretion and independence to assess what is reasonable in the circumstances of each case and the client when applying the VOI standard.

What is the VOI standard ?

The VOI standard, which is one method for representatives to verify a person’s identity, can be read as a two-tiered process requiring that:

• A “face-to-face” interview with the client/client’s agent to be identified; and
• Examination of original identity documents, from the list of approved and acceptable documents, be tendered and produced by a person to be identified.

Face-to-FaceTime interview ? – Issues with video technology for “face-to-face” for VOI interviews

Pursuant to ARNECC Model Practice Rules Guidance Note 2, “face-to-face” interviews conducted via video technologies such as Zoom, skype, FaceTime and others can be “manipulated and forged” and carry inherent risks for legal representatives to be cautious and aware of. As advised by ARNECC, when applying the VOI standard, such modern video technologies “…do not constitute a face-to-face in person interview, nor does it allow identification of original documents, as required by the Verification of Identity standard…” .

Where a representative “uses some other way that constitutes the taking of reasonable steps” to verify a client’s or their acting agent’s identity, there is scope within this ‘less rigid’ method and it may be more suitable and appropriate in some circumstances, particularly where currently the Verification of Identity standard is not. Examples where the use of skype or other similar technologies may be appropriate include for remote/regional clients with no or limited access to VOI agent services or the ability to attend their legal representative’s office. However, given the currency of the VOI laws (in NSW and Australia wide), there is yet to be a ‘test-case’ in NSW or another Australian jurisdiction on this point, determining the legitimacy and suitability for video technology to be used to conduct “face-to-face interviews”. ARNECC arguably eludes to the latter point by stating that:

“use of the (Verification of Identity) Standard is not compulsory and may not be practical in some circumstances.”

However, this was qualified with its submission that:

“where the standard is not used and there is a dispute the subscriber will be required to establish that the method used to verify the identity of a Person constituted “taking reasonable steps” in the particular circumstances.”

How can I complete my VOI ? – Paper and Digital services

Despite the strict requirements on all parties including buyers, sellers and legal representatives to ensure compliance with VOI, identity verification in NSW can be satisfied in several ways such as:

• In the office with your conveyancer/lawyer (usually at the time of, or just after the completion of exchange); OR
• VOI agent services such as Australia Post Land Title verification, ZipID, ID Secure and MaxID. These services aim to provide quick and accessible services, paper-based or digital forms. Additionally, most practitioners now have accounts with these VOI agent providers which allows them the equal convenience to access secure and confidential portals which produces and stores a client’s verification of identity, usually sent to the representative as a report.
• However, depending on the priority required/ordered, both your conveyancer/lawyer representative or VOI agent will likely charge a fee for the service of verifying your identity and authority (express or non-express) according to the standards prescribed by the RPA and the Conveyancing Rules.

To the latter point, only equal to the embrace of technology in the  conveyancing and property spheres has been the rising tide of tech enabled identity agents and providers, free from the constraint of legal ethical obligations, to make identity verification a viable ‘market’ and the ‘clients’ of law firms and conveyancing practices their ‘consumers’. In concert with settlements ever-increasingly being settled more efficiently electronically, VOI services today are arguably most popularly offered and delivered digitally, via tech enabled and online identity verification agents offering the convenience of well branded and trendy VOI apps. Most digital VOI agents’ services via apps are tailored for both apple and android powered tablets and smartphones, which comprise amongst other features, GPS mapping and sophisticated ‘real-time’ video and photographic technologies allowing identity verification to occur “some other way that constitutes reasonable steps” and in the broadest sense of the meaning, “face-to face”. As such, these digital VOI agent providers offer their services ‘anytime’, from either the convenience of work or from the comforts of home.

Who is required to complete VOI ? Natural/legal persons and Australian/foreign and overseas status

VOI in NSW is required to be taken for all applicable conveyancing and property transactions regardless of whether the entity is:

• A natural or legal person; or

On the basis of citizenship status is:

• Australian citizen or resident;
• Foreign citizen or resident;
• Overseas at the time of the relevant conveyancing/property transaction.

The Registrar General’s Guidelines for Verification of Identity on the NSW Land Registry Services (“LRS”) website sets out the minimum documents requires for persons who are Australian citizens or residents, including a identifier declaration, as well as the requirements for foreign persons and/or residents. The documents which most readily satisfy the identity verification standards in NSW include, but are not limited to:

• A current valid Australian drivers’ licence;
• Australian passport; and
• Birth certificate.

During the conduct of the examination of the original documents to be verified, the (lawyer/conveyancing) representative or VOI agent must be satisfied, so far as reasonably possible, that the original documents tendered, photographs taken (if any) and/or searches conducted for verification are true and confirm the identity of the person to the transaction. A representative lawyer or conveyancer should also verify the identity of such entities like appointed individual acting for a company or as power of attorney. For a Company, VOI can be satisfied by:

• Conducting and producing an ASIC search confirming such records of the existence and identity of the registered company name; and
• The identity of the individual duly appointed Officers (Directors and Secretaries) whom are authorised to sign or witness documents on behalf of the Corporate body in such capacity, including the affixation of the Company seal.

Reasonable steps for taking VOI in NSW for a power of attorney can also be satisfied by:

• Confirming the currency and validity of a certified original copy of the power of attorney appointing the person as power of attorney for another party to the property/conveyancing transaction; and
• Verifying the identity of the person appointed to act as power of attorney.

In relation to overseas clients and/or their agents’, one method legal/conveyancing representatives may use to satisfy the requirements for VOI in NSW involves:

• Instructing clients and or their agents’ acting to have their ID documents certified at their nearest Australian embassy or Australian Consulate office which will sign, date and endorse copies of the original identity documents; and
• The certifying Australian embassy or Australian Consulate officer completing with the client and/or their agent acting the approved Australian Embassy/High Commission/ Consulate identity/ witnessing certification (certification) and client authorisation. Other methods may include, with the legal representative taking further ‘reasonable steps’, having overseas client verify their identity at an international law firm.

How long does my VOI last for once completed?

However, once a person’s VOI is confirmed, it need not be updated for a period of 2 years and should be held securely (either paper or electronically) by the representative (lawyer or conveyancer) for a period of 7 years.

 

Expiry of Personal Property Security Interests:

The Personal Property Securities register reached its 7 year anniversary on 30 January 2019.

The default registration period for a security interest starts at 7 years (although a security interest may of course be registered for a different period).

In any case, anyone who manages security interests should regularly check whether their registered interests are due to expire and consider whether the registration of their security interests may need to be renewed/extended.

If you have registrations that need to be extended, they must be extended before they expire to maintain priority.

If you require our assistance to renew/extend any registrations or have any other queries in relation to securities interests then please contact our office on 02 6882 3133.

 

 

Blog authored by Tim Cullenward

Criminal Law Changes and Impacts

The Rural Issues Conference held in Sydney on 26 October 2018 was attended recently by several members of the firm and proved informative on a number of relevant issues. Once such issue was the recent changes to the Crimes (Sentencing Procedure) Act 1999.

Many people would have heard the term “section 10” mentioned in professional and social contexts, when discussing potential outcomes to PCA offences or other criminal matters. The expression "section 10" refers to section 10 of the Crimes (Sentencing Procedure) Act 1999. This section allows a Court that finds you guilty of an offence, to discharge you without recording a conviction. Because there is no conviction, there is no criminal record. This blog intendeds to demonstrate the changes to that section and others, in terms of relevant sentences available to offenders.

As of 24 September 2018, sentencing options available to offenders changed in accordance with the Crimes (Sentencing Procedure) Amendment (Sentencing Options) Act 2017. They include the following amendments:

1. Section 10(l)(a) dismissal without proceeding to conviction.
2. Section 10(l)(b) order discharging the defendant under a Conditional Release Order (CRO) referred to in s9(l)(b) without proceeding to conviction (CRO without conviction)
3. Section 10(l)(c) order discharging the defendant on condition that the defendant entered into an agreement to participate in an intervention program
4. Section 9(l)(a) Conditional Release Order proceeding to conviction (CRO with conviction)
5. Section 10A conviction with no other penalty
6. A fine (Fines Act 1996)
7. Section 8(1) Community Correction Order(CCO)
8. Section 7(1) Intensive Correction Order(ICO)
9. full-time imprisonment.

In addition, if a court finds a person guilty of a domestic violence offence, the court must impose on the person either: (a) a sentence of full-time detention, or (b) a supervised order under section 4A of the Sentencing Act. A "supervised order" is an order (being an intensive correction order, community correction order or conditional release order) that is subject to a supervision condition.However, a court is not required to impose full-time detention or a supervised order if the court is satisfied a different sentencing option is more appropriate in the circumstances of the case and records its reasons for reaching that view.

The court must consider the safety of the victim of the offence before imposing a community correction order or conditional release order on a person guilty of a domestic violence offence. A court cannot make an order for an ICO unless it is satisfied that the victim of the domestic violence offence, and any person with whom the offender is likely to reside, will be adequately protected by conditions of the ICO or for some other reason.

If a court finds a person guilty of a domestic violence offence, the court must not impose a home detention condition if the court reasonably believes that the offender will reside with the victim of the domestic violence offence.

New Orders: CRO, CCO and ICO

These Orders have standard conditions that must be imposed. For CRO's and CCO's the standard conditions are that the offender must not commit any offence and must appear before court during the term of the order if called upon to do so. The standard conditions of an ICO are that the offender must not commit any offence and must submit to the supervision of a community corrections Officer. This is substantially similar to the previous model that most people are aware of.

Intensive Corrections Orders

A court that has sentenced an offender to imprisonment for one or more offences may make an ICO directing that the sentence(s) be served by way of ICO, in the community. There is no non-parole period, and the Order is not available if the offender is under the age of 18 years. The Court will require an assessment report on suitability for such an order.

Before a Court will consider an ICO, it will consider the safety of the community as the foremost issue. There are a number of considerations and restrictions in place regarding ICO’s, and these orders are usually imposed in severe circumstances. For more information, please contact our office.

Community Correction Orders

Instead of imposing a sentence of imprisonment, a court may make a community correction order (CCO) in relation to an offender. The maximum term of a CCO is 3 years, and it commences on the date when the Order is made. The standard conditions on a CCO include not to commit any offence and to appear before the court if called on to do so during the term of the CCO. A Court may also impose additional conditions or vary/revoke any such additional conditions. Additional conditions include curfew, community service work (not exceeding 500 hours or hours prescribed by regulations) rehabilitation or treatment, abstention condition alcohol or drugs or both non-association place restriction and supervision by community corrections or juvenile justice.

Home detention and electronic monitoring or a curfew exceeding 12 hours in any 24-hour period cannot be imposed on a CCO. Community service work cannot be imposed without an assessment report confirming the offender is suitable.

Conditional Release Orders

Instead of imposing a sentence of imprisonment or a fine (or both), a court may make a conditional release order discharging the offender if (a) the court proceeds to conviction, or (b) the court does not proceed to conviction but makes an order under sl0(l)(b).

In deciding whether to make a CRO with a conviction, the court must have regard to:

1. character, antecedents, age, health and mental condition;
2. whether the offence is of a trivial nature;
3. extenuating circumstances in which the offence was committed;
4. any other matter proper to consider.

 

Additional notes:

• A court cannot impose a fine and a CRO on the same offender for the same offence.
• A CRO with conviction may be made as an alternative to imposing a fine.
• The maximum term of a CRO is 2 years and commences on the date it is made.
• The court must impose the standard conditions on a CRO. Those conditions are not commit any offence, and to appear before court if called upon to do so during the term of the CRO.
• The Court also has discretion to impose additional conditions, as discussed above.

For more information, please contact our office.