The Law Society of NSW Specialist Accredititation 

BLOGS

Any information contained in a blog on this website is general in nature only. The content of any blog posted below reflects information which is known to us as at the date of the posting of the blog. Please be aware that the law regularly changes. Please do not rely on the general information contained in the below blogs, instead we recommend that you contact us to obtain legal advice tailored to your own specific situation.

 

Dec05

WILLS AND ESTATES

Amanda Quin - Thursday, December 05, 2019

Blog by Andrew Graham Contact Email: amg@peacockes.com

 

REVENUE ISSUES RE WILLS AND ESTATES 

A.Testamentary Trust 

The use of testamentary trusts has been widely promoted over recent years by those in the financial planning industry and also by accountants and lawyers. The principal reason for the use of the testamentary trust, from the point of view of potentially saving tax, is due to the notion of “excepted trust income” under Section 102AG(I) of the Income Tax Assessment Act, 1997 (“the Act”).

Normally minors who derive non-personal service income by a distribution from a discretionary trust are taxed at penalty rates under Division 6(iv) of the Act where the income received exceeds $416.00. However, where the minor receives income from a trust created in the Will of a person, the income is treated as “excepted trust income” and the minor is taxed on that income as if the minor were an adult. This allows the recipient of the trust income to receive the first $18,200.00 tax free (if the minor has income from no other sources) and also allows the minor the benefit of the progressive tax rates where the income received exceeds $18,200.00 up to the maximum tax rate of 47% (including the 2% Medicare levy) where the income exceeds $180,000.00.

Accordingly, potentially significant amounts of tax may be saved where the children of an elderly person have children under the age of eighteen (18) years. The testator, instead of leaving the whole or part his estate to his child or children could instead establish a testamentary trust for the benefit of that child or children and their wider family members. Typically, each child is appointed as the trustee of the testamentary trust and the beneficiaries, being discretionary, include members of that child or children’s family. The tax payable by the family unit will be significantly less than it would have been had the testator left his estate directly to his child, or children.

There are other potential advantages of use of testamentary trusts, but this blog concentrates solely on the revenue implications (both positive and negative) of such trusts.

Whilst significant tax savings may be achieved where minor beneficiaries are eligible to receive income of the testamentary trust, caution should be exercised before concluding that testamentary trusts are the panacea of estate planning. The following potential disadvantages of testamentary trusts should also be taken into account:-

1.Principal Place of Residence – A testamentary trust does not enjoy the principal place of residence exemption for capital gains tax purposes. Accordingly, if it is intended that a beneficiary of a testator use a property received under the Will of a deceased as his or her principal place of residence, if such property were devised to the trustee of a testamentary trust (as indicated above, usually by a child of the deceased) any profit realised on the eventual sale of the property by the testamentary trust will not be free of capital gains tax. The net capital gain may be reduced by 50% if the property is held for more than twelve (12) months, but the CGT free status of the principal place of residence will be lost.

2.Whilst stamp duty will not be payable upon the transmission of any dutiable property from the deceased to the Trust (so long as it “passes” under the Will of the deceased), any transfers by the Trust to any beneficiary of the trust will be liable to stamp duty. Careful consideration therefore needs to be given to the actual assets, especially real property, which are left to a testamentary trust by the testator.

3.A discretionary trust, unless the trust deed establishing the trust specifically excludes any foreign person from being a beneficiary, will be treated as a “foreign person” for the purposes of the Duties Act, NSW. This means that if a discretionary trust owns real property, not only does it pay land tax on the full value of the property (i.e. does not get the benefit of the tax free threshold, it is also required to pay the surcharge rate of land tax of 2% (in addition to standard land tax). Furthermore, for land tax purposes, the principal place of residence is not exempt, even though it may be used by the beneficiary as his home. The common testamentary trust is really a discretionary trust embodied in the will of the testator which comes to light upon the death of the testator. Significantly the terms of the trust cannot be amended (for example to exclude foreign persons as beneficiaries), unless the will permits it.

4.If the trustee of a testamentary trust uses money of the trust (inherited from the deceased) to purchase real property, foreign surcharge duty (calculated at the rate of 8% on the value of any residential land) could be payable even if the deceased was not a foreign person.

B.Partition of Estate

A device which can produce potentially large stamp duty savings is to partition an estate, rather than to agree on the division of specific assets under a deed of family arrangement.

The following simple example illustrates the potential savings in stamp duty:-

Assume that properties A and B are left to the two beneficiaries, X and Y equally, but that X wants to take Property A and Y wants to take Property B..

If property A has a value of $2,000,000.00 and

property B has a value of $5,000,000.00 then:

Option 1: Deed of Family Arrangement

Under a Deed of Family Arrangement X gets A (worth $2,000,000.00) and Y gets B (worth $6,000,000.00).

The total duty payable is  calculated as follows:-

   i.   A – duty payable on 50% of $2,000,000.00 ($1,000,000.00) = $40,490.00

   ii.  B – duty payable on 50% of $6,000,000.00 ($3,000,000.00) = $150,302.00

Total duty = $190,792.00.
 

Option 2: Partition

The alternative would be to partition the estate under Section 30 of the Duties Act, NSW.

Under the partition X gets 100% of A and Y gets 100% of B. The duty payable is then:

      i.  X – Duty payable $50.00

     ii. Y – Duty payable on $2,000,000.00 ($6,000,000.00 – 50% x $8,000,000.00) = $95,302.00

Total duty = $95,352.00

Therefore the stamp duty saved by choosing to Partition, rather than to use a Deed of Family Arrangement is $95,440.00

                  - - - - - - - - - - - - - - - - - - - - - -

The above demonstrates that careful planning can result in significant revenue savings by beneficiaries following the death of the testator.

It pays to get advice from a professional person having experience and expertise in revenue implications of estate planning and deceased estates and we at Peacockes Solicitors can guide you in the right direction.


 

Dec04

Deposit Bonds

Amanda Quin - Wednesday, December 04, 2019

Blog authored by Amanda Quin

What is a Deposit Bond?

A Deposit Bond is a document which a lender or an insurer or other entity issues which states that the issuer will guarantee the payment of the cash deposit in respect of a contract for sale of a property and will pay the deposit, if called on to do so. There may be other terms and conditions or restrictions noted in the Deposit Bond. For example many Deposit Bonds have an expiry date and will require the original Deposit Bond to be provided to the issuer prior to that expiry date in order for a claim to be made.

Is there a fee for a Deposit Bond to be issued?

Generally a Deposit Bond issuer will charge a fee to provide the Deposit Bond. A full credit application is also usually required to be made by the Purchaser.

When are Deposit Bonds used?

A Purchaser of a property may wish to provide a Deposit Bond if they do not have sufficient money at hand to pay a cash deposit. This may be because they have other investments that they do not wish to liquidate or perhaps because they are borrowing the full purchase price.

Does a Vendor have to accept a Deposit Bond?

A Vendor can refuse to accept a Deposit Bond and may instead insist on a cash deposit being paid.

However if the Purchaser does not have the money available to pay a cash deposit, then this may mean that the sale does not proceed.

Are there any risks if a Vendor accepts a Deposit Bond instead of a cash deposit?

Yes there are some risks including:

(a) That the Deposit Bond may be fraudulent. (NB this risk can be reduced by your legal practitioner or conveyancer checking the authenticity of the Deposit Bond directly with the issuer prior to exchanging contracts); and

(b) Although it has not happened often, there have been instances where a Deposit Bond issuer has been placed into administration/liquidation - which effectively makes the guarantee worthless. NB In such a case, the Purchaser does still remain liable to themselves pay the Deposit and to complete the Contract and in most cases, the Purchaser will proceed to settlement and the deposit will be paid on settlement.

However, there is a risk that if both the Deposit Bond issuer and the Purchaser are unable to pay the deposit, then the Contract will not complete and the deposit will not have been paid. Court action could still be taken against the Purchaser to recover the deposit - but that would only be practically viable if the Purchaser has financial resources to meet any judgement that may be handed down.

A prudent Vendor may need to carefully consider the reliability of the Deposit Bond issuer prior to deciding whether or not to accept a Deposit Bond instead of a cash deposit.

 

Dec04


Blog by Andrew Cannon – Contact email: aac@peacockes.com

In the midst of the early arrival and the destructive widespread bushfire already throughout Eastern Australia, more than ever it is important to know and understand what rules and laws are applicable to you and your district over this festive season before commencing any activities with fire such as BBQ’s and outdoor pizza ovens.

Fire safety in NSW is mainly regulated by the following legislation in NSW:

  • Rural Fires Act (NSW);
  • Rural Fires Regulations 2013 (NSW);
  • Protection of the Environment Operations Act 1997 (NSW);
  • Fire and Rescue NSW Act 1989 (NSW);
  • As well as by public authorities such as Local Council regulations via their Local Environmental Plans (LEPs) and rules, news and updates maintained and monitored regularly by the NSW Rural Fire Service.

What is a total fire ban ?

Section 99 of the Rural Fires Act 1997 (NSW) sets out the definition, requirements of and exemptions in relation to total fire ban orders in NSW.

A total fire ban (pursuant to section 99 (1) (a) and (b) of the Rural Fires Act) prohibits the lighting, maintenance or use of fire in the open air for an affected district. These fire bans are declared in the interests of public safety by the Minister. The ban extends also to any activity in the open air that directly causes, or is likely to cause a fire.

Total fire ban orders are declared according to district and on days where there is likely a culmination of weather conditions that are fore-cast as likely to be very hot and dry (conducive to fire) and very high to catastrophic risks of bushfire (including additional factors such as any surrounding impacting bushfires and volume of dry vegetation present).

Potential penalties

Pursuant to section 99 (11) of the Rural Fires Act and Schedule 2 Part 1 of the Rural Fires Regulations, a person who fails to comply whilst a total fire ban order is active is liable to:

  • $2200 fine issued on the spot;
  • If found guilty in Court, up to a maximum fine of $5,500 and/or 12 months gaol.

Exemptions

Certain exemptions may apply to fire activities during total fire bans.

These exemptions are specified in the Rural Fires Act, Regulations and the NSW Rural Fire Service Schedule of Standard Exemptions to Total Fire Bans, which can be found at www.rfs.nsw.gov.au/fire-information/fdr-and-tobans/schedule-of-standard-exemptions-to-total-fire-bans .

Table of Uses

ACTIVITY IS IT PERMITTED DURING A TOTAL FIREBAN? CONDITIONS

Operating an Electric BBQ’s

 

 

Yes – subject to conditions

 

 

The electric BBQ must be under the direct control of a responsible adult present at all times whilst operating it and no combustible material is to be within two (2) metres of the BBQ at any time whilst it is operating.

 

Operating a Gas BBQ’s

 

 

 

 

Yes – subject to conditions

 

 

 

 

Only if the BBQ is under the direct control of a responsible adult who is present at all times and no combustible material is within two (2) metres of it whilst operational and there is a system of applying an adequate stream of water, such as a hose, to the BBQ and its surrounds and such water is able to be applied for immediate and continuous use. In addition - the BBQ needs to either: (a) be within 20 metres of a permanent private dwelling such as a home; or

(b) If in a Park, National Park or State Forest, must be within a designated picnic area and the appliance must have been approved by Council, National Parks or State Forest – as the case may be.

Operating Wood/ coal fired BBQ’s and pizza ovens

Must not be used if outside or if lit in the open air. Any oven or BBQ using solid fuel must not be used during a total fire ban.

 

 

 

Burning of Garbage, refuse and putrescent material

 

 

Yes – but subject to conditions and subject to any permit requirements.

 

 

 

The fire may only be lit if in an incinerator designed to prevent the escape of sparks and burning material and the incinerator is clear of all combustible matter for a distance of at least 5 metres. A permit may also be required. See clause 26 of the Rural Fire Regulations and rule 7 of the Schedule of Standard Exemptions to Total Fire Bans.

 

General hot works

 

 

 

 

 

 

 

General hot works and activities such as welding, grinding, gas cutting and activity that produces a spark or flame are prohibited and not to be done in the open environment. However exemptions apply to limited activities such as: -Fireworks (but only if part of an organised public display);

-Bitumen roadworks;

-Beehive smokers;

-Mining operations; and

-Building, construction or demolition

(all of the above are subject to individual and respective conditions).

 

Light, use or carry tobacco

 

 

Generally permitted – but – there are certain locations where this is not permitted. It is NOT permitted to light, use or carry any lighted tobacco product, match or other material within 15 metres of any stack of grain, hay, corn or straw or any standing crop, dry grass or stubble field.. Any persons caught in breach risk receiving a $660 fine on the spot (see s99A (1) of the Rural Fires Act and clause 28 of the Rural Fires Regulations.  

 

Bush Fire Danger Period and Fire permits

Even if a total fire ban order has not been made, there are also general restrictions regarding the lighting of fires in the open during the statutory Bush Fire Danger Period (ie from 1 October to 31 March).

If you are planning to light a fire in the open during the statutory bush fire danger period, from 1 October to 31 March, a fire permit is generally required.

If you do obtain a fire permit, then under Part 4 Division 5 of the Rural Fires Act it will be suspended on days declared as a total fire ban. The suspension of the permit will continue until the ban is lifted as notified by the Minister (which can be found on the NSW RFS website and app).

NB Providing it is a non-bush fire danger period, then fire permits are not required for any fires that are lit and maintained for the purposes of land clearance or creating a fire break or for the purpose of cooking food. In the case of cooking food, the fire needs to be in a permanently constructed ground fireplace, at a site surrounded by ground that is cleared of all combustible materials for a distance of at least 2 metres all around and completely extinguished before leaving.

Other considerations

Under section 133 of the Protection of the Environment Operations Act 1997, the EPA also reserves the right to prohibit fires burning in the open air or incinerators where it is of the opinion of the EPA that, because of forecast weather conditions and current fire activity and danger, further burning is likely to contribute to the build up of air pollution.

The Rural Fire Service NSW on www.rfs.nsw.gov.au and app “Fires Near Me” are critical and valuable sources of information for staying up-to-date with changing conditions and fire dangers, as well as local news and radio bulletins and programs for ensuring your safe management and compliance with fire safety this festive holiday season.

 


Nov14

Peacockes Solicitors' Christmas/New Year Office Hours (2019/2020)

Amanda Quin - Thursday, November 14, 2019

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.

 


 

Oct30

Rural Issues Conference Roundup

Amanda Quin - Wednesday, October 30, 2019

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 25th 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.

Oct22

Acceptance and Disclaimer of Gifts left in a Will

Amanda Quin - Tuesday, October 22, 2019

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.

Oct08

Subpoenas – My Health Records

Amanda Quin - Tuesday, October 08, 2019

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

 

Oct03

Low range drink driving – immediate loss of licence

Amanda Quin - Thursday, October 03, 2019

 

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 20th 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.



 

 

Oct02

COSTS IN THE LOCAL COURT

Amanda Quin - Wednesday, October 02, 2019

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.


 

Sep30

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.