COVID-19 & Retail or Commercial Leases

Omnibus (Emer­gency Mea­sures) (Com­mer­cial Leas­es and Licences) Reg­u­la­tions

On 24 April 2020 Vic­to­ria passed the COVID-19 Omnibus (Emer­gency Mea­sures) Act 2020 (Act) for the pur­pose of tem­porar­i­ly mod­i­fy­ing cer­tain laws in response to the COVID-19 pandemic. The Act made changes to a large number of Acts of Parliament including the laws concerning Retail and Commercial Leases.

On 1 September 2015, power of attorney laws in Victoria changed. The new legislation is the Powers of Attorney Act 2014 (the Act). Also, on the 12 March 2018, the new Victorian Medical Treatment Planning and Decisions Act 2016 came into effect. The new medical treatment laws laws replace the previous laws dealing with medical treatment decisions and allow people to make binding directives regarding their future medical treatment, permit medical treatment to be administered that reflects that person’s individual preferences and values, and appoint a medical treatment decision maker to make medical treatment decisions when a person has lost decision making capacity

What is a power of attorney?

A power of attorney is a legal document authorising a person (the appointed attorney) to act on another person’s (the principal’s) behalf. Depending on the type of power given, the appointed attorney(s) may be able to make financial, legal and personal decisions for the principal.

The principal should discuss his or her options with their lawyer as this is a position of great responsibility and careful thought should be given to whom is appointed.

Powers of attorney should be kept in a safe place such as a lawyer’s office or a bank. Also, the principal and their attorney(s) should keep certified copies of your power(s) of attorney.

Types of powers of attorney

In Victoria there are three main types of powers of attorney:

• general non-enduring power of attorney
• enduring power of attorney (financial and/or personal)
• supportive attorney.

The principal is the person who gives the power of attorney to another person. For a power of attorney to be valid, it must be in writing. Also, the principal must be over 18 years of age and have decision-making capacity.  Decision-making capacity means the person can understand, retain, evaluate and weigh up relevant information and communicate their decisions.

The principal must understand:

• the nature of the document they are signing
• what powers are being granted to the attorney
• what powers the principal  is retaining
• the options to cancel or change their attorney or terms of the appointment.

The attorney is the person who is given the power to act on the principal’s behalf. The attorney must be over 18 years of age and:

• agree to be the attorney
• have capacity.

The attorney should be someone you trust, and someone who you think will look after you and your affairs the way you would look after them yourself.

Documents signed by your attorney on your behalf should include a note stating they sign in their capacity as your attorney.

General non-enduring power of attorney

A general non-enduring power of attorney authorises a person or persons to act on your behalf for specific purposes. You can determine the scope and terms of the power by specifying in the appointment what you are authorising your attorney(s) to do.

For example, you could grant a general non-enduring power of attorney to:

• sell your house for a specific figure
• operate your bank account
• give someone control of all your business affairs, or
• act on your behalf while you are overseas or in hospital.

The general power ends once your attorney has completed the task or tasks you specified or when you withdraw it. Your lawyer can advise you how the power can be withdrawn.

A general power of attorney ceases immediately when the principal dies, becomes bankrupt or permanently loses capacity to run his or her affairs.

Enduring power of attorney

An enduring power of attorney authorises the attorney to make financial and/or personal decisions on your behalf. A financial power includes anything related to your financial or property matters. Personal matters relate to personal matters, such as your lifestyle. An enduring power of attorney differs from a general power of attorney in that the authority to act on your behalf does not cease if you become physically or mentally incapable of managing your own affairs.

Many elderly people grant enduring powers of attorney in case of future situations where dementia or a medical condition later inhibits their ability to manage their affairs.

A principal of an enduring power of attorney must have decision making capacity at the time the power is made and signed and must be able to understand:

• the powers the principal gives to the attorney, including any limitations or conditions the principal has put on these powers
• when the attorney can exercise these powers
• that while the principal has capacity, the principal can revoke or vary the power of attorney
• that the power will still operate if the principal loses the ability to make decisions
• that once the principal has lost capacity, it is unlikely they will be able to oversee their attorney’s work and decision making.

Also, a principal should know something about the nature and extent of his or her financial affairs.

You can appoint different people to make financial and personal decisions. You can provide instructions or place conditions on your attorneys’ powers. You can also appoint more than one attorney to make decisions on your behalf and can have a back-up (called an “alternative”) attorney in case your appointed attorney(s) cannot or will not act on your behalf.

A person appointed as a financial attorney must not be insolvent and must disclose to the principal any convictions of an offence involving dishonesty.

Formal requirements

An enduring power of attorney must be in the approved written form and comply with the requirements outlined in the Powers of Attorney Act 2014 (Vic):

• The enduring power of attorney form must be signed and dated by two adult witnesses in the presence of each other and the principal.
• One witness must be a medical practitioner or a person authorised to witness the signing of an affidavit, such as a lawyer.
• Each witness must sign a certificate containing information required by the legislation. This includes a statement that the principal has signed the enduring power of attorney freely and voluntarily in the presence of the witness and appears to have decision-making capacity.
• Each attorney must sign and date a statement of acceptance in the appropriate form for the enduring power of attorney to be valid.
• The attorney must keep accurate records of all dealings and transactions made pursuant to the enduring power of attorney.

Enduring power of attorney (medical treatment)

Under the Medical Treatment Planning and Decisions Act 2016 (VIC), it is no longer possible to appoint someone as a medical agent under an enduring power of attorney (medical treatment).

Instead, you can appoint a medical treatment decision maker. You can also appoint a medical treatment support person and make an advance care directive.

A medical power of attorney made under the Medical Treatment Act 1988 (Vic) and executed prior to 12 March 2018 will still be valid and will be treated as if it was an appointment of a medical treatment decision maker.

Refusal of medical treatment

Under the Medical Treatment Planning and Decisions Act 2016 (VIC), it is no longer possible to make a refusal of treatment certificate.

Instead, you can refuse treatment for a current or future medical condition through an instructional directive in your advance care plan. With very limited exceptions, your instructional directive must be followed by a health practitioner.

A refusal of treatment certificate made under the Medical Treatment Act 1988 (Vic) and executed prior to 12 March 2018 will still be valid. It will be treated in the same way as an instructional directive. Health practitioners must follow it.

Revoking a power of attorney

Powers of attorney and enduring powers of attorney can be withdrawn by signing the appropriate revocation of power of attorney form when the principal still has capacity to do so.

You should give your attorney a copy of the revocation of power of attorney form.

For any enduring power of attorney, anyone who believes your attorney is not acting in your interests can apply to the Victorian Civil and Administrative Tribuna (VCAT)l to revoke the power. VCAT may revoke the enduring power of attorney if it finds the appointment is no longer serving your best interests.

What a lawyer can do for you

• Advise whether or not a power of attorney could assist in your circumstances.
• Advise what types of powers can be made and their specific uses and limitations.
• Draft a document that meets your particular needs and legal requirements, including any conditions you would like placed on the exercise of the power(s).
• Review any existing enduring power of attorney to make sure the appointments are still aligned with your wishes and on the desired terms
• Advise on the powers of the principal and the role of the attorney

Supportive power of attorney

Under the new Powers of Attorney Act 2014 (Vic), a person who has decision-making capacity can appoint an attorney to support them in making decisions (called a “supportive power of attorney”). The supportive power of attorney can be limited to assisting with financial or personal matters or both, or for a specific purpose. It is different to the general non-enduring power (discussed above) because a supportive power of attorney cannot make decisions on your behalf. Once you lose decision-making capacity, the power automatically ends.

The types of help the attorney can provide are determined by the principal and include one or a combination of:

• communication powers – these enable your attorney to communicate with organisations, such as banks and supplier companies on your behalf
• information-gathering powers – these enable your attorney to access information or assist you to access information that is relevant to the decision(s) they are helping you make
• power to give effect to decisions – these powers include anything that is reasonable to make sure your decisions are carried out in accordance with your wishes.

Importantly, supportive powers of attorney cannot (even with consent of the principal):

• assist the principal in real estate transactions, or
• assist the principal to enter into a financial transaction over $10,000.

Attorneys who assist the principal in these ways are breaking the law and can face criminal charges and financial penalties.

The principal can only appoint one person as their supportive attorney, but, as with other types of powers of attorney, they can appoint another person (an “alternative”) in case the first person is not able or willing to be their attorney.

A person appointed as supportive attorney to assist with financial decisions must not be insolvent and must disclose to the principal any convictions of an offence involving dishonesty.

Formal Requirements

The person making the supportive power of attorney must fill-in the prescribed form and sign in the presence of two independent witnesses, one of whom must be a person authorised by law to take statutory declarations. Neither witness can be the person(s) appointed as your supportive attorney(s) or related to those persons or related to you. Further, if someone signs the form on your behalf because you are physically unable to do so, that person cannot be a witness to your signature.

Witnesses to a supportive attorney must state that the principal appeared to sign freely and voluntarily in their presence and that they appeared to have capacity to understand their decision.

The person(s) you appoint as supportive attorneys must accept the appointment by signing the prescribed forms in the presence of two independent witnesses.

More information

If you would like to make a Power of Attorney or appoint a Medical Treatment Decision Maker please call our office on 03 9306 4000 to make an appointment to see one of our lawyers.

Our fixed price fee for a Power of Attorney is $165.00 including GST. Our fixed price fee for an Appointment of Medical treatment Decision Maker is $110.00 including GST.

In family law property cases one aspect that parties sometimes have difficulty with is the legal requirement that both parties make”full and frank disclosure” of their financial circumstances to the other party.  the “full and frank disclosure” rule in effect requires that each party disclose everything about their personal financial situation – income, assets & liabilities – and that they provide the other party with copies of any documents they have or can get relating to their finances. These documents include things like payslips, bank savings and credit card statements, Superannuation statements, bills and any correspondence they have concerning financial matters. Obviously it is an invasion of a person’s privacy, made even more objectionable by the fact that this private information has to be given to an “ex” in the context of a history of emotional conflict and possibly also because the relationship broke down over financial issues in the first place.

As much as it may be an invasion of privacy the important point for people to understand however is that it is a lawful and mandatory invasion of privacy that cannot be ignored. The reason for the “full and frank disclosure” requirement is that it is just not possible to have a “just and equitable” (fair)  division of matrimonial property for both parties if one party keeps information about that property secret from the other.

The importance of the “full and frank disclosure” requirement was demonstrated in a recent Federal Circuit Court of Australia case called Lane and Lane – you can read the full judgment here

In Lane’s case the husband had failed to disclose to the Wife, and the Court, that a mortgage on the real estate property from which he ranhis business was also secured by a mortgage the family home.  The Court proceeded to make Final Orders for the division of all the property in the belief that the mortgages were separate from each other and that the Husband would assume sole responsibility for the mortgage on the business property, thereby leaving more of the equity in the family home available to be paid to the wife when it was sold under the Court Orders. However when the family home was sold the bank demnaded that the proceeds of sale be used not only to payout the home loan secutred on that rpoeprty but also part of the husband’s business  loan which it turned out was secured by mortgages onboth properties. This substantially reduced the net proceeds of sale available to be paid tot he wife on the sale of the family home.

The wife was none to happy about this so she applied to the Court to have the previous “final” orders set aside on the ground that not to do so would result in a miscarriage of justice for her and that the previous Orders were based on incomplete infromation as a result of the husband’s failure to make “full and frank” disclosure of his financial situation. Mr. Lane opposed the application saying that he didn’t know that the family home was collateral security for the business property loan. Unfortunately for Mr. Lane the wife’s lawyers, as a result of a Subpoena sent to the bank, obtained a copy of a letter from the bank toMr. Lane from when he took out the business loan that made it clear that the family home would also be security for the business loan.

Judge Brown accordingly said:

“I am satisfied that the non-disclosure of this document, whether inadvertent or otherwise, given its moment, is sufficient to constitute a miscarriage of justice by reason of any other fact or circumstance, within the parameters envisaged by section 79A(1).  In particular, I accept that both Mr Lane and Ms Lane are likely to have conducted their respective cases in a significantly different manner if the letter had been before the court.

The parties to property proceedings, brought under the Family Law Act, in this court, are under a duty to make a “full and frank disclosure” of their financial circumstances. This duty has been described as being “fundamental to the whole operation of the Family Law Act in financial cases…”.

In Weir & Weir the Full Court of the Family Court said as follows: “…the failure to disclose undermines the whole process of adjudication of proceedings for a settlement of property in that the court is unable to identify the property of the parties, to properly assess contributions, or to properly assess section 75(2) factors.”

Accordingly, the duty to make a full and frank disclosure, in financial matters brought under the Family Law Act, does not arise merely by virtue of the rules or practice of the court but rather is a fundamental rule of law, which arises because of the necessity for the court, in each property proceeding arising before it, to consider all aspects of the financial circumstances of the parties concerned.

I accept that Mr Lane is a busy professional person with many calls on his time.  I do not suggest that he deliberately suppressed the letter from the (omitted) Bank.  However, in my view, the absence of the document and Ms Lane’s obvious ignorance of its potential consequences has caused a miscarriage in the exercise of the court’s discretion in the orders of February 2015.  It follows therefore that the court must re-exercise the relevant discretion in the light of the fresh evidence available”.

So, because of the non-disclsoure of this letter from the bank the Court ordered that the previous final Order be set aside and proceeded to order that the husband pay to the wife an extra $132,000.00.

Although this case does not break any new legal ground it is a good example of the importance of making “full and frank” disclosure in family law matters … and of the perils in not doing so.

 

Peter McLeod

Buller McLeod Lawyers

 

On 29 July 2016 the Supreme Court of Victoria Court of Appeal delivered its judgment in a case called Edward Jones v Constance Smith (not the parties’ real names) which highights the importance of a parent making adequate provision for their children when making their Will.

It was a sad case in that the history was that the Respondent “Constance Smith” had been sexually abused by her father as a child, and although her mother “Abigail” knew of the abuse she didn’t leave her husband or remove Constance from exposure to her abusive father. To make matters worse once Constance grew up and had a child of her own she discovered that her father was also sexually abusing her child. Constance acted to make sure that her son never had any further contact with her father. When Constance’s son grew older he recalled the abuse and reported it to the Police. When Constance criticised her mother for not going to the Police about her and her grandson’s abuse Abigail told her that she was trying to protect her and her brother Edward’s inheritance and that she, Constance, would get an equal share with her brother when Abigail died. However once Abigail dies it was discovered that she had changed her WIll and had left more of her estate to her son Edward than to her daughter Constance, apparently as punishment for Constance’s son reporting his granfather’s sexual abuse of him to the Police.

The Court of Appeal upheld Constance’s right to have greater provison made for her in her late mother’s Will saying:

“For the reasons which follow, I would grant leave to appeal and would dismiss the appeal.  Abigail ignored the moral obligation that she had to make adequate provision for the proper maintenance and support of Constance.  In those circumstances, the Court’s jurisdiction to intervene and alter the manner in which Abigail had bequeathed her estate was enlivened.”

“As noted previously, the question of need is relative.  So too is whether the provision that has been made is adequate for the proper maintenance and support of Constance. Those matters were to be assessed in light of all the circumstances having regard to the factors in s 91(4) (e) – (p). It is not a case of looking in isolation at the value of the assets that the claimant has and deciding whether the person has enough to get by on whether comfortably or otherwise. Rather, the claimant’s assets and income are just two facts that go into the melting pot in determining whether there has been adequate provision made. Another important element for this consideration is the size of the estate. If there is more money to go around, then that will affect what is adequate for the proper maintenance and support of the claimant.

Leaving to one side any moral culpability on the part of Abigail, the fact is that Constance and her son were sexually abused.  This has led to Constance having a significantly greater financial need than may otherwise have been the case.  Abigail must be taken to have been aware of this need at the date of her death.  A wise and just testator in the position of Abigail would have recognised this need and have made provision for it in her Will taking into account the size of the estate that she would bequeath and the other calls on it.  Viewed in this way, one can see that Constance is not being compensated for some wrongdoing of Abigail or her husband but rather that the estate is responding by providing the necessary financial support that would be expected regardless of any involvement of Abigail.  That there may have been some connection between the conduct of Abigail and the effect that the sexual abuse had on Constance only serves to heighten the moral obligation that the wise and just testator would be under to provide for a daughter such as Constance.

Instead of giving such support, in her last Will Abigail ignored her moral obligations and reduced the bequest that her daughter would have received under her earlier 1990 Will.  That it was her intention to ignore her obligations was made clear by the reduced legacy and by cl 7 of the Will set out at [12] above which, as the judge observed only referred to Constance — not to either Edward or Phillip.  In essence, as the judge observed, Abigail chose to punish Constance for supporting David in going to the police to report John.”

People sometimes complain that everyone should have the right to do as they wish in their Will and that the law should not interfere. If everyone who made a Will did so fairly and made proper provision for their spouse, children and other dependants this would be true. Unfortunately the case of Edward Jones v Constance Smith is a good example of the fact that not everyone makes their Will this way, and highlights the need for laws to ensure that family members do not have to suffer injustice and hardship when a spouse or parent dies.

If you need legal advice about your rights and entitlements under a Will please send us an email by CLICKING HERE or call 03 9306 4000 to make a no obligation first 30 minutes free appointment.

On the 31st August 2016 the High Court delivered its’ much anticipated decision in the case of The Queen v Baden-Clay. Anyone who has opened a newspaper in the past 2 years knows about this Queensland case of the husband accused of having murdered his wife and then feigning distress in his public pleas for her to be found safe and well, until her body was found dumped under a bridge.

At his trial the Jury rejected his protestations of innocence from the witness box and found him guilty of murder. He then appealed against his murder conviction to the Queensland Court of Appeal. The Court of Appeal decided that the murder conviction should be set aside and replaced with a conviction for the lesser charge of manslaughter. The reason the Ocurt of Appeal did this was because it considered that the Jury ought not have been satisfied beyond reasonable doubt, on the available evidence, that when he killed his wife Mr. Baden-Clay intended to kill or cause her grievous bodily harm. In particular, the Court of Appeal accepted his lawyers’ submission, made for the first time on appeal, that the prosecution had not excluded the possibility that the respondent had struck his wife in the course of a struggle and that she had died as the result of a fall, or in some other manner, that did not involve an intent on his part either to kill her or to cause her grievous bodily harm. This reasoning by the Court of Appeal raised more than a few eyebrows in legal circles (and the ire of the public) given that during the trial Mr. Baden-Claay had not argued in his defence that he had killed his wife without meaning to do so during an argument, rather he simply said that he didn’t do it. It seemed a bit rich to many that on appeal he would have the gall to then argue that even if he did do it he didn’t mean to, and that the jury should have seen it this way too despite his blanket denials of having harmed his wife – it seemed even richer that the Court of Appeal accepted this argument.

The High Court found it all too rich for its’ stomach too, and overturned the Court of Appeal decision and reinstated Mr. Baden-Clay’s murder conviction. Although worded in polite legal language it is obvious that the High Court’s judgment in the case of The Queen v Baden-Clay represented the legal equivalent of a “smack down” to the Queensland Court of Appeal. As the High Court said:

“The Court of Appeal’s conclusion to the contrary was not based on evidence.  It was mere speculation or conjecture rather than acknowledgment of a hypothesis available on the evidence.  In this case, there was no evidence led at trial that suggested that the respondent killed his wife in a physical confrontation without intending to kill her.  There were “no positive proved facts from which the inference” drawn by the Court of Appeal could be made.”

and

“The Court of Appeal appears to have reasoned that the respondent’s evidence could be disbelieved by the jury, as it plainly was, so that there was no evidence at all in relation to the hypothesis.  If it were truly the case that there was no evidence from the respondent as to the circumstances of his wife’s death, the application of the principles explained in Weissensteiner would have required consideration; and they were not adverted to by the Court of Appeal.  But the respondent chose to give evidence.  To say that the respondent’s evidence was disbelieved does not mean that his evidence could reasonably be disregarded altogether as having no bearing on the availability of hypotheses consistent with the respondent’s innocence of murder.  His evidence was important, even if it was disbelieved, because it was open to the jury to consider that the hypothesis identified by the Court of Appeal was not a reasonable inference from the evidence when the only witness who could have given evidence to support the hypothesis gave evidence which necessarily excluded it as a possibility.”

The High Court also emphasised the importance of the role of the Jury in a criminal trial saying:

“It is fundamental to our system of criminal justice in relation to allegations of serious crimes tried by jury that the jury is “the constitutional tribunal for deciding issues of fact.” Given the central place of the jury trial in the administration of criminal justice over the centuries, and the abiding importance of the role of the jury as representative of the community in that respect, the setting aside of a jury’s verdict on the ground that it is “unreasonable” within the meaning of s 668E(1) of the Criminal Code is a serious step, not to be taken without particular regard to the advantage enjoyed by the jury over a court of appeal which has not seen or heard the witnesses called at trial.  Further, the boundaries of reasonableness within which the jury’s function is to be performed should not be narrowed in a hard and fast way by the considerations expressed in the passages from the reasons of the Court of Appeal explaining its disposition of the appeal.”

The High Court’s decision was not interesting to lawyers as revealing some new interpretation or application of the criminal law – rather it was a clear re-statement of the law as it has always been, and a timely reminder to all lower appeal Courts that they should not replace a Jury verdict with their own opinion unless there has been a clear and serious miscarriage of justice.

… please all the people all of the time” (Poet John Lydgate as made famous by Abraham Lincoln).

That well known saying came to mind when I read a recent judgment of the Full Court of the Family Court of Australia about an appeal case called Grier & Malphas [2016] FamCAFC 84 (24 May 2016). I thought of it because I knew that half my clients would be happy about it, and the other half would be furious. I leave it to you to work out which half is which, after you’ve read my explanation of the case.

The husband and the wife started living together in June 2000, got married in 2002 and separated in April 2009. They had one child, a daughter, who was born in 2007. After separation the child lived with Mum and spent two weekends out of three with Dad, plus half the school holidays.

When they started living together neither of the parties had much in the way of assets. In May 2001 the husband quit his then job and set up his own business, a professional services company (the judgment doesn’t explain what sort of “professional services” the business provided). Due to the husband’s skill and hard work the business was extremely successful, and grew at the rate of 100% a year until the husband sold it for $19.5 million in 2008. After separation the husband used some of this money to buy himself two real estate properties at a total cost of about $5.5 million.

At the first trial before a single judge of the Family Court the husband argued that because most of the matrimonial asset pool of several millions of dollars came from his “unique skill set” that he brought to the marriage, and used to make a success of the business, he should get 75% of the asset pool. The trial judge agreed that the husband had made a greater contribution than the wife, but gave him 60% of the asset pool because of this, and 40% to the wife. The husband was happy with this decision but the wife was not, and she appealed to the Full Court of the Family Court.

On appeal the Full Court unanimously rejected the husband’s argument that his “skill set” and greater financial contribution should be given more weight than the wife’s non financial contribution as a homemaker and primary carer of the child of the marriage, finding the wife’s contributions should not have been judged inferior simply because they were in a “different sphere”. “What skill or skills a person brings to a relationship which are said to result in the making of money or accumulation of capital is no more or less relevant than the skill set a person brings to a relationship as a homemaker and parent, or as the performer of two roles as a homemaker and parent and income-earner,” said Justices Murphy and Kent. “It is not a party’s skill set which must be considered, but their contributions. Contributions are the product of many things: talent, industry, selflessness and, indeed, luck, to name a few”. Assuming that we’re talking about a traditional nuclear family where the husband is the main breadwinner and the wife is the primary carer of the kids and homemaker what the Court was really saying is that a wife’s non-financial contributions looking after the children, cooking, washing, ironing etc., is worth just as much as the husband’s financial contricbution from his paid employment.

There is really nothing that much new in the judgment – it has long been the Court’s view that non-financial contributions as a parent and homemaker should be given equal weight with normal financial contributions, and that greater weight should be given to a party’s financial contributions only when there is something out of the ordinary or special about them. But the judgment serves as a timely reminder that this principle is still the law.

As I said before: half my client’s will be rapt & the other half, not so much.

 

Well, this has put the cat amongst the pigeons. As a timely reminder that buying and selling real estate is a serious, and complex, legal transaction, that everyone should get proper legal advice on from a qualified lawyer, we have the bomb shell Supreme Court of Victoria decision of Tan v Russell [2016] VSC 93, handed down on 11th March 2016.

What happened was that in early 2014 the Vendor (Russell) appointed a real estate Agency to be his estate agent to sell his property. In April 2014 the Purchasers (Tan and Lo) negotiated through the Agent to buy the property and signed a contract of sale to buy the property for $4.48 million. They paid to the Agent a part deposit on signing of $350,000, with the balance of deposit of $98,000 due on 30 June 2014. So far, so normal.

But then three business days after signing the contract the Purchasers emailed the real estate Agent, advising that they had decided not to proceed with the purchase and purporting to exercise their ‘cooling off’ rights to end the contract. Section 31 of the Sale of Land Act 1962 (Vic) (the Act) says that a purchaser can in certain circumstances give the vendor “or his agent” notice that they wish to terminate the contact before the end of three clear business days after the purchaser signed the contract.

The Vendor however disputed that the contract was validly terminated by the Purchasers under the ‘cooling off’ laws and said that the Purchasers had wrongfully breached the Contract and that the Vendor was therefore entitled to be paid 10% of the sale price as forfeit by the Purchaser. The Purchasers disputed this saying that they were entitled to, and had, validly “cooled off”, and that they were entitled to a refund of the $350,000 part deposit they had paid the the real estate agent. The Purchasers sued the Vendor for the return of the deposit – and they lost!

At Court the main issue was whether the Purchasers’ email to the real estate agent had validly terminated the contract under the cooling off provisions.The Court decided that the email was invalid because, for the purposes of section 31 of the Act, the Vendor’s real estate was not an ‘agent’ of the Vendor with the necessary authority to receive the notice of termination. The court decided that the Vendor had not ‘held out’ that the real estate agent was the Vendor’s agent for all purposes. The Purchasers had assumed that real estate agent had authority to receive legal notices, such as a notice by the Purchasers exercising their right to cool off pursuant to the Act. The Purchasers failed to prove that the real estate agent had any authority of the Vendor, beyond “the usual authority granted to an estate agent by a vendor client.”

The Court said that although it is “a common occurrence in commercial life for parties to assume that a real estate agent is an agent for the vendor of a property for all purposes… that is not necessarily the case.” In seeking to exercise their cooling off rights the Purchasers mistakenly assumed that communicating with the Vendor’s real estate agent was sufficient. So the Court ordered that the Vendor was entitled to retain the $350,000 paid and the residue of the deposit of $98,000, plus any further losses on resale of the Property, including interest and costs. A big win for the Vendor, but a terrible loss for the Purchasers – and one we suspect many Vendors, Purchasers and real estate agents hadn’t given much thought to previously.

So the moral of the story is that: even though real estate agents are extensively involved in the marketing and sale of a property, they do not usually have authority to receive legal notices on behalf of the Vendor once the contract is executed. Purchasers wanting to exercise their cooling off rights should make sure that the notice is validly served on the vendor directly or an agent of the vendor (e.g. the vendor’s lawyer, whose contact details should appear on the Contract) with express authority to accept such notices. Purchasers should have a lawyer give the cooling off notice on their behalf, to make sure that it is done correctly.

For Vendors the lesson is that they should not just assume that a Purchaser has validly “cooled off” but rather they should first get legal advice from a lawyer before accepting that a purchaser has ended a contract of sale pursuant to section 31 of the Act and refunding any deposit paid.

And remember – the only persons able to give you legal advice about your real estate property problems is a qualified lawyer (like me 🙂 – Conveyancers are not lawyers, and they are not qualified to give anyone legal advice about property and conveyancing matters.

I have written before about the law concerning what is referred to as Testator’s Family Maintance or Family Provision claims against deceased estates pursuant to Part IV of the Administration and Probate Act (Vic.) 1958. This is the law that allows a Court to vary the distribution of a deceased person’s estate from what they had in their WIll, so as to make adequate provision for family that the Court decides the deceased had an obligation to provide for. As mentioned in my previous blog the law in Victoria was changed earlier this year so that, for deceased estates where the deceased dies after 1st January 2015,  the categories of people who can make such a claim is limited to:

• A spouse or domestic partner of the deceased at the time of the deceased’s death;
• A former spouse or domestic partner in a situation where a property settlement was not reached following their separation;
• A child, step child, or adopted child of the deceased who at the time of death was under the age of 18 years, or a fulltime student between the ages of 18 and 25 or who is under a disability;
• A person who believed the deceased was their parent for a substantial period of their life and was treated by the deceased as their natural child an “assumed child”);
• A registered caring partner;
• A grandchild of the deceased who was wholly or partly financially dependant on the deceased ;
• A spouse or domestic partner of a child of the deceased if the child dies within 1 year of the deceased’s deathwho was wholly or partly financially dependant on the deceased ;
• A member of the household of the deceased, or a former member who would have resumed being a member of the household but for the deceased’s death, who was wholly or partly financially dependant on the deceased
• other family mewmbers such as parents, nices, nephews, siblings, cousins, unregistered non-partner carers etc. are only eligible to make a claim if they fall into one of the other above categories, i.e. household member or assumed child.

I have also mentioned before that there is a time limit within which Court proceedings for any such a claim must be commenced, i.e. within 6 months of Probate being granted. It is possible to ask the Court for leave (permission) to extend this time limit but whether or not the Court will do so is entirely in its’ discretion and depends on the facts of each case. What is very important to understand though is that the Court has no power to extend time once the estate has been finally distributed. Last week the Supreme Court of Victoria handed down a judgment, in the case of Robbins v Hume which highlights this, and the importance of commencing any proceedings for a claim against a deceased estate within the 6 month time limit.

The background to Robbins v Hume was that the deceased died on 7th June 2013, leaving behind 6 children – his son, the Defendant,  Mr. Hume and 5 daughters, one of whom was the Plaintiff Ms. Robbins. In his Will the deceased made his son the Executor and left him his house in Vermont, worth about $600,000.00. The deceased left all the rest of his property, worth a total of $141,593.00, equally between his five daughters – in other words each of the daughters got only $28,228.20. Probate of the Will was granted to the Executor on 30th August 2013. On 21st January 2014 the Executor’s Solicitors wrote to each of the daughters to let them know what was in the Will, and how much each of them would get. In mid April 2014 the Executor sent out cheques to each of the daughters (his sisters) for their $28,228.20 share of the estate. In June 2014 the Executor settled the sale of the Vermont property that had been left to him, and recieved the proceeds of sale. Once all of the assets of the estate had been distributed amongst the benficiaries the administration of the estate was finished.

On 2nd March 2015 the Plaintiff made application to the Supreme Court for an injunction against her brother to try to stop him from disposing of any more of the money he had recieved from the sale of the Vermont property than he may already have done, and asking the Court to extend time for her to make a Family Provision claim against the estate.

The Plaintiff herself had suffered a stroke in April 2012 and was in hospital until September 2012. In April 2013 she went to live in a nursing home. In July 2014 the Plaintiff accidentally overdosed hereself on her prescription medication, so thereafter her medication had to be administered to her by the nusring home staff.

First, the Court made it very clear that it had no power to extend time for the Family Provision claim once the 6 months from the date of the grant of Probate had elapsed and the final distribution of the estate had occured. The only question that then remained was whether it should grant an injunction to freeze disposal of the Vermont sale proceeds in the hands of the Defendant, on the ground that he had breached his fiduciary duty as Executor to the Plaintiff and he continued to hold that money on constructive trust for her. After reviewing the relevant law the Court analysed and decided the Plaintiff’s claim as follows:

“61 The starting point for the administration of an estate is that an executor’s primary obligation is to carry out the wishes of the testator, as expressed in the will. All of the deceased’s children were beneficiaries under the deceased’s will and, in the case of the plaintiff, she received a copy of the will with an explanation of what she was to receive under it. As a beneficiary, the plaintiff was entitled to the share that she was left by the deceased. As a potential claimant for further provision from the estate, she has the right to make a claim, which could have been rejected or accepted by the executor. Generally, an executor has a duty both to uphold the will, as well as seeking a compromise where a proper claim is made against the estate, so as to minimise any legal costs. In Victoria, there is no duty on an executor to notify claimants in the category of the plaintiff. An executor is not under an obligation to bring the fact of the availability of a right to make a claim to the attention of a potential claimant. If there were, one would think that the Victorian Parliament would have provided for that, just as the New Zealand Parliament did when they included the special provisions for a person not of full age or mental capacity. Executors are entitled to distribute an estate if there is no notice of a claim within the statutory timeframe. Executors and beneficiaries are entitled to certainty of administration against a reasonable time limit for claimants to take proceedings against an estate. These provisions support the conclusion that the claims asserted by the plaintiff cannot be upheld.

62 The defendant has acted in accordance with long-established practice in his administration of the estate. He has not concealed what he was doing in the administration of the estate of the estate. I reject the plaintiff’s submission that the defendant failed to inform the plaintiff that he was about to make a final distribution of the estate or that he proceeded to appropriate the sale proceeds of the Vermont property to himself. Insofar as the plaintiff claimed the defendant ‘proceeded to appropriate’ the sale proceeds of the Vermont property, there is no basis to make such a claim. Inherent in the submission is that the defendant has taken the sale proceeds when he is not entitled to them and that is not the case.

63 It is also wrong to submit that the defendant failed to inform the plaintiff that he was about to make a final distribution of the estate. The defendant’s solicitors sent the letter dated 21 January 2014 to the plaintiff in which she was given a copy of the deceased’s will, told what she was entitled to receive under it, told that distribution could not be made until after 28 February 2104 and told that she could contact the solicitors if she wished to discuss any matters. The plaintiff did not contact the defendant’s solicitors with any queries. Subsequently, on or about 14 April 2014, the plaintiff received her distribution of the residue of the estate. The plaintiff deposed that she thought this amount ‘was an interim distribution and that I was entitled to more money from the estate’. After receipt of the distribution and bearing in mind her thought, the plaintiff still did not contact the defendant’s solicitors with any of ‘her thoughts’ regarding the dates of any further distributions to which she believed she might be entitled from the estate.

64 In any event, the defendant in his personal capacity has no duty to safeguard the plaintiff’s interests or a duty of even-handedness towards the plaintiff. He has received the net proceeds of sale of the Vermont property as a beneficiary of the deceased’s estate, as is his entitlement. There is no cause of action against the defendant in his personal capacity.

65 In respect of the defendant’s capacity as the executor of the estate of the deceased, as discussed, the defendant as executor does not have any duty to safeguard the plaintiff’s interests or a duty of even-handedness towards the plaintiff of the type submitted by the plaintiff. In any event, the defendant’s executorial duties have finished with the estate finally distributed in accordance with the deceased’s will. The plaintiff is not entitled to any injunctive relief claimed by her against the defendant.”

So unfortunately the Plaintiff was not successful. This case is a clear example of why it is so important to make any desrtied claim against a deceased estate within the 6 month time limit or, if for some genuine reason that has not been possible, then definitely before the distribution of the assets of the estate is completed.

Peter McLeod

Apart from reading the latest Court judgments to keep up to date with the latest developments in the law I also try to keep an eye out for those cases that are just good, modern examples of well established law.

As I was trawling through the usual dry case reports I came across one from the Supreme Court of South Australia in November 2014 that ticked that box for me called Menz v Menz , which illustrates the importance of  both having your Will prepared properly by a lawyer, rather than trying to do it yourself,  and doing so promptly once your marriage breaks down. In this case the Supreme Court had to decide whether a Will made 36 years earlier was still valid, or whether another later document was the deceased’s correct last Will and testament.

Mr. & Mrs. Menz got married in 1978 and shortly after Mrs. Menz made her Will with a lawyer that said that, so long as he outlived her, she left everything to her husband. So far so good, but by 2010, after 32 years of marriage, the honeymoon glow must have faded because Mr. & Mrs. Menz then separated. In 2012, proceedings were commenced in the Family Court of Australia for a divorce order between the not happy couple. On 16 April 2013, a “decree nisi” divorce order was made in those proceedings (divorce orders do not usually become “absolute”, or final,  immediately – first a decree nisi is made and then after 30 days, provided nothing has happened in the meantime to prevent it, the divorce decree then becomes absolute).

The Wills Act (both in South Australia and in Victoria) says, in effect, that once you are divorced then any bequest to your “ex” you may have made in a previous Will while you were married is revoked. So, once the Menz’s divorce order became final, the bequest Mrs.Menz had made in her 1978 Will leaving everything to to her then husband would be revoked.

Sadly however on 8 May 2013, just 8 days short of her divorce becoming final, Mrs. Menz passed away – and Section 55 (4) of the Family Law Act says that “A divorce order does not take effect by force of this section if either of the parties to the marriage has died”. So the decree nisi divorce order never became absolute, and at the time she died Mrs. Menz was still legally married to Mr. Menz. It therefore looked like the 1978 Will in which she left everything to her then (but since estranged) husband would stand. By the way, this was no small issue as, by the time of her death, Mrs. Menz’s estate had become worth about $1.3 million.

But then, and to his credit, the Plaintiff (i.e. the husband) produced to the Court an old, coffee stained envelope he had found amongst his late wife’s personal effects after her death which had written on it:

“House + car to Tilda for as long as she needs.
$50000 in bank – 2/3 to Tilda, the rest equal between the 3 kids. Pictures & jewellery as agreed.
[signed]
25/9/12
NOT to go to any hospital.”   (FYI the “Tilda” referred to on the envelope was one of Mrs. Menz’s daughters – so according to the envelope Mrs. Menz wanted her house and car to go to Tilda “for as long as she needs” plus two-thirds of the $50,000.00 she then had in the bank, and the remaining one third of the money in the bank to be divided up equally between her other children).

In its’ judgment the Court said this about the envelope and the relevant law:

“The nature of the writing appearing on the envelope, as extracted above, gives rise to the possibility that the document is testamentary in nature. The document appears to have been signed by the deceased, but has not been signed by any witness. No party has come forward to propound the document as an informal will in accordance with section 12(2) of the Wills Act.

1. In the recent decision of Spoehr v Health Services Charitable Gifts Board,[4] I considered the situation that arises where the court is presented with a document of an apparently testamentary nature which no party seeks to propound. That case concerned an application for judgment by consent that the Court pronounce against the force and validity of a document of an apparently testamentary nature. It was alleged that the testator lacked capacity at the time of the making of the document. Pursuant to a settlement agreement, the sole beneficiary under the document consented to an order being made pronouncing against the validity of the document and a grant of letters of administration of the deceased’s estate being made to the plaintiff. After reviewing the relevant authorities, I concluded:[5]

In summary, the authorities give rise to the following principles regarding contentious probate actions where orders are sought by consent, in default or by reason of being undefended. The Court does not have a duty to conduct any independent investigation in relation to the validity of the will. However, in cases where an order is sought pronouncing against a will, the Court should conduct an investigation where circumstances exist which give rise to a well founded suspicion that the document is not valid and no party comes forward to rebut those circumstances.

1. In Kwog v Ng,[6] the testator had executed a will in 2002. A later document, apparently a copy of the earlier will with handwritten amendments, was found following the testator’s death. No party sought to propound the later document. After reviewing the evidence before the Court, I ordered that there be a grant of probate in solemn form of the 2002 will and observed:[7]

The later document has not been proved to be anything more than a possible draft testamentary disposition. The evidence does not establish that the deceased had intended the document to be testamentary in effect. I am not prepared to find that the later document represents anything more than the views of the deceased about possible changes to his will.
…
When regard is had to the terms of section 12(2) and to the findings that I have set out above, it is evident that the later document does not meet the terms of section 12 and that accordingly, there is no later testamentary disposition and in particular, there is no document seeking to revoke the 2002 will.

1. In James v Gaye, the testator had executed a will in 2000.[8] There were a series of apparently informal testamentary documents. No party came forward to propound those documents. White J stated:[9]

If no beneficiary who might take under any of the informal testamentary instruments seeks a declaration that any of those instruments forms the will, or the amendment or revocation of a will, of the deceased, then the plaintiff is entitled to a grant of probate in solemn form of the 2000 will. Whilst there is evidence that the deceased suffered a mental illness, there is no evidence to displace the presumption of capacity in 2000 arising from the due execution of that will. The deceased’s then capacity is attested to by the solicitor who prepared the will. There would be questions concerning the deceased’s capacity to make wills in 2010 as well as whether the deceased intended the documents to form his will. If none of the potential beneficiaries under an informal instrument seeks to propound it, there is no reason not to make a grant of probate in solemn form in respect of the 2000 will (Re Grey Smith [1978] VicRp 56; [1978] VR 596; Wheatley v Edgar [2003] WASC 118; (2003) 4 AS TLR 1; Buckley v Buckley [2011] WASC 184).

1. Returning to the present application, I consider that the nature of the handwritten writing appearing on the envelope is such as to give rise to a well founded suspicion that the document is not a valid testamentary instrument. The existence of the 1978 will indicates that the deceased was aware of the process of attending a solicitor and formally executing a testamentary document. Despite this, there is no evidence before the Court to suggest that the deceased took any steps during the period of more than seven months between the writing of the envelope and her death to formally execute a new will or codicil. No party has come forward to propound the envelope as a will. In these circumstances, I consider it appropriate to make an order pronouncing against the validity of the envelope.”

So the Court declared that the envelope was not a valid testamentary document (i.e. not a Will), and declared that the 1978 Will leaving all to Mr.Munz was the last valid Will of the deceased.

Fortunately for the Munz children however their father gave evidence to the Court that, even though the 1978 Will left everything to him, he had reached an informal agreement with his children that the deceased’s estate would be distributed in accordance with her wishes as expressed in the writing on the envelope. In particular, it was agreed that Matilda would receive two thirds of the deceased’s estate and that the rest would be shared equally between the other children. The sum of $75,000.00 in the deceased’s bank account would be kept separate and used for shared activities, such as family holidays. It must be stressed thugh that if he had wanted to Mr.Munz could have stuck by the provision sof the 1978 WIll and insisted on having it all for himself (although the children may then have been entitled to make a TFM claim against the estate).

So, two important morals come out of that story – first, if your marriage breaks down for good make a new Will revoking your old Will asap and secondly, get a lawyer to do it properly for you. Time and again I see people bring in “home made” Wills they have done for themselves on a bit of paper (including envelopes), or by filling out one of thse “will kits” you can buy at the Newsagents, and I shudder each time I see one: because as often as not it has not been done properly and is wholly or partly invalid. Given the value of real estate nowadays, any deceased estate that includes a house or land is probably going to be worth hundreds of thousands, if not millions, of dollars; so it is really being “penny wise and pound foolish” to try saving a few dollars by doing your Will yourself, even if you use a kit. If it is not done promptly and properly then a deceased’s family could find themself in a “Munz situation”, but without someone like Mr. Munz – who was still prepared to honour the intent of his ex-wife’s last wishes, even though it cost him over a million dollars.

 

Peter McLeod

As explained in my last post “Where There’s a Will There’s a … Court Case” there are significant changes to the law about who can, and cannot, make a claim for provision out of a deceased estate. Basically the classes of people who can still make such a claim are now restricted to:

• A spouse or domestic partner of the deceased at the time of the deceased’s death;
• A former spouse or domestic partner in a situation where a property settlement was not reached following their separation;
• A child, step child, or adopted child of the deceased who at the time of death was under the age of 18 years, or a fulltime student between the ages of 18 and 25 or who is under a disability;
• A person who believed the deceased was their parent for a substantial period of their life and was treated by the deceased as their natural child an “assumed child”);
• A registered caring partner;
• A grandchild of the deceased who was wholly or partly financially dependant on the deceased ;
• A spouse or domestic partner of a child of the deceased if the child dies within 1 year of the deceased’s deathwho was wholly or partly financially dependant on the deceased ;
• A member of the household of the deceased, or a former member who would have resumed being a member of the household but for the deceased’s death, who was wholly or partly financially dependant on the deceased
• other family mewmbers such as parents, nices, nephews, siblings, cousins, unregistered non-partner carers etc. are only eligible to make a claim if they fall into one of the other above categories, i.e. household member or assumed child.

 

These changes came into effect on the 1st January 2015 but, and it’s an important “but”, they only apply to the estate’s of people who die on or after this date.

This is important because it means that if you were someone who could have made a claim under the old law against the deceased estate of someone who died before 1st January 2015 then you may still be able to successfully make such a claim provided  (I couldn’t bring myself to put in another “but”) you act quickly, because there is a time limit of 6 months from the date that Probate of the Will of deceased is granted within which to file wour application with the Court. So, for example, if the deceased passed away on the 1st. November 2014 then the old Testator’s Family Maintenance (Family Provision) law applies, and if Probate of the deceased’s Will was granted on the 18th December 2014 then anyone who wants to make a claim for provision must file their claim with the Court within 6 months, i.e. by the 18th June 2015. Sometimes the Court will grant extensions of time to make a claim outside the 6 month time limit, but it will only do so in certain circumstances,  so it’s best not to have to apply for an extension of time if it can be helped.

Under the old law the classes of people who could make a claim for provision against a deceased estate were those to whom a deceased “had a moral responsibility to make provision”. This could include a spouse and children of a deceased but also others who had a special relationship with the deceased or were in some way financially dependant on the deceased during their life – for example it might include a boyfriend/girlfriend or fiance of the deceased (but who was not in a full blown de facto relationship with the deceased),  a non family member who cared for or helped the deceased (but was not their registered carer), or a niece or nephew of the deceased who was being wholly or partly financially assisted by the deceased.  Obviously the categories of people who could make a claim under the old law were much wider than they are now under the new law and unfortunately under the new laws these types of people will not be able to make a TFM claim, no matter how deserving their claim may otherwise have been. So if you know of someone in such a situation where the deceased passed away before the 1st January 2015 you should brin gthis to their attention so they can have the merits of their potential claim properly assessed bya qualified lawyer as soon as possible.