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Lost trust deeds – a forgotten saviour?

August 20th, 2019

Lost, destroyed or missing trust deeds can sometimes lead to tears, misery and heart attacks.  But is the situation as dire as it seems if a document, crucial to organising your financial affairs, disappears?

Maybe it is the advent of trusts as a useful financial planning structure, or the rise of the self‑managed super fund (“SMSF”) (read our previous article on self-managed super funds here), but in recent times, well recent for the law, there have been a number of cases which are resurrecting a seemingly forgotten principle of law, the presumption of regularity.

The presumption of regularity is that deeds and other documents will be presumed to have been validly executed and made, unless there is some contrary evidence.  The cases below illustrate the point, and highlight that the presumption is only applied in very limited circumstances, often where there is a substantial lack of evidence.

Sutherland v Woods[1]

In Sutherland v Woods there was a question as to whether a SMSF had been validly established.  The trust deed could not be located, and because there was no deed, Woods claimed that it was not a valid SMSF.

Sutherland sought to rely upon the presumption of regularity and contended that despite the absence of the deed, the fund was valid.  The subsequent conduct of the parties, including their bank and the ATO, led to the conclusion that the SMSF must have been correctly established, even if the deed was now missing.

Importantly, the parties did all they could to locate a signed copy of the original deed, contacting Westpac, the ATO and titles office to see if any of those entities held a signed copy.  These enquiries were unsuccessful, and the parties were forced to rely upon an unsigned copy of the alleged deed.

The court ultimately agreed with Sutherland, and held that although a true signed copy of the deed was unavailable, that did not prevent the inference that the trust had been validly created.

The missing deed would have been conclusive evidence that the SMSF was established correctly.  In absence of the deed, Sutherland was instead required to prove the validity of the SMSF through other means, such as subsequent dealings.

It was apparent that through the actions of the parties, and third parties, relying upon the existence of the deed, the trust had always been intended as a superannuation fund and had been validly created as such.

The absence of the missing document did not invalidate the fund, and indeed the evidence in the circumstances led to the presumption that the establishing deed must have existed at some point.

Re Thomson[2]

In Re Thomson, the deed establishing the trust was not an issue.  Instead, there were two subsequent amending deeds, one was missing and the other unsigned.

The first deed, which was missing entirely, purported to remove two of the original trustees.  The second deed, which was unsigned, referred to the first deed and amended the trust so that if both of the remaining trustees were to pass away, the trust would vest in the estate of whomever survived the longest.

The dispute arose around the validity of the two amending deeds. If they were not valid, then the two trustees who were allegedly removed would be entitled to the property of the trust.  If both were valid, then the trust would vest in the estate of Thomson.

Such matters around the validity of documents when it comes to the administration of an estate are not uncommon, and is the context in which the presumption is commonly applied.

In determining the validity of the irregular deeds, the court again looked at similar factors as in Sutherland.

In particular, the court relied on the fact that since the removal of the trustees, only the two remaining trustees had been signing off on the trust’s financial reports, indicating that the deed existed, and the parties had been acting as if it were the true state of affairs.

The court found that the two irregular deeds could be presumed to be regular because the evidence indicated that was probably the correct and true situation.  The executor was therefore entitled to include the trust property in the deceased’s estate.

So what is the presumption?

So now that we have reviewed a couple of examples of the presumption, when should you be considering relying upon it?

The presumption will only apply in limited circumstances, it should not be considered a cure-all for any trust problems you have.

The courts have held that before applying the presumption:

  1. a considerable amount of time must have passed since the event happened;
  2. there is no other way to prove the existence or validity of the missing deed;
  3. there is some other extrinsic evidence indicating the deed, or missing instrument was valid and people have since acted as if it were valid; and
  4. the presumption must only be applied to a procedural or formal detail.

Point 3 above is clearly identified in the two cases.  The evidence from the bank, the ATO, and financial reports all indicated the legitimacy of the actions being undertaken, even where the deed was not located.

The presumption should not be thought of as applying in all situations, indeed, its limited application throughout the last 50 years suggests it should only be thought of as a last resort.

In many circumstances, simply claiming the deed is lost, without exhausting all possibilities will not be enough.

Before relying on the presumption, consideration should be given to some of the following alternatives:

  1. preparing a deed of rectification;
  2. relying on the trustee powers in the Trusts Act;
  3. for a SMSF, where practicable, rolling the assets over to another SMSF which does not have any issues with documentation; and
  4. last but certainly not least, no effort should be spared in locating the original deed.

Of course, these options are not always available, some may rely on the original trustees still being available, or simply be inapplicable in the circumstances.

Lost or irregular trust documents often have circumstances unique to each case.  For that reason, when irregularities are detected, efforts should immediately be made to correct them.

In most cases involving the presumption, it is not raised until there is a crisis, for example the breakdown of a marriage or the administration of a deceased estate.  By taking proactive steps, most of these situations, and possibly expensive litigation, can be avoided.

The experienced team at Miller Harris can help you, or your clients in dealing with lost or irregular deeds.  Many situations will require a bespoke solution, and our experience across many areas of the law enable us to come up with the right solution to your problem.

Should you have any questions or enquiries, please do not hesitate to contact Ashley Jan on 07 4036 9700, or ashleyjan@millerharris.com.au.

[1] Sutherland v Woods [2011] NSWSC 13 ( http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/nsw/NSWSC/2011/13.html ).

[2] Re Thomson [2015] VSC 370. ( http://www.austlii.edu.au/cgi-bin/viewdoc/au/cases/vic/VSC/2015/370.html )

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Debunking 4 common family law myths

July 30th, 2019

There are many misconceptions or “myths” in family law that can lead to separating couples making poor decisions that are not in their best interests.  We debunk some of these common myths below.

Myth 1: I am not married so I don’t need to have a property settlement”
Not true; save for very limited exceptions, all de facto and married couples are required by the Family Law Act to formally end their financial relationship through a property settlement within a specific time period.  If in doubt, it is always best to seek advice on whether a formal property settlement is required.

Myth 2: “Property acquired after separation is not relevant”
This is also incorrect.  Whilst the inclusion of assets acquired post-separation will always depend upon the circumstances surrounding the acquisition of the asset, as a general rule, the asset will usually be included in the property pool.  For example, in a recent court case, the court made a decision to include in the property pool, an inheritance of $715,000.00 received by the husband five years after separation.  This is a classic example of why property should be divided and a property settlement formalised soon after separation— not years later.

Myth 3: “If my ex and I agree on the division of our assets, we do not need a lawyer”
Once an agreement is reached, it is important that it is formalised in one of the two ways recognised as binding and enforceable by the family courts.  The parties can apply to the court for consent orders or they can execute a binding financial agreement in accordance with the family law legislation and regulations.  It is important that legal advice is sought in the drafting of these documents.  If a property settlement is not formalised in one of these ways, the family courts will not recognise that a property settlement has occurred, which may leave parties vulnerable to a later court application seeking a further adjustment of property interests.  There are additional benefits in formalising a property settlement including eligibility for an exemption on transfer duty on any property transferred between spouses.

Myth 4:  “Most property settlements are 50/50”
This is another common misconception.  What percentage of the property pool a spouse is entitled to is calculated by applying complex legal principles and precedents.  It includes consideration of many factors.  We encourage clients to obtain legal advice as to their entitlements before discussing the division of their property with their former spouse.

At Miller Harris Lawyers, we understand that separation is stressful and emotional.  We work with our clients to provide strategic legal advice which empowers people to make informed decisions about the future and to move forward with their lives.  If you are going through a separation, contact our expert family lawyers today on 07 4036 9700 to enquire about our fixed fee initial consultations offered at both our Mareeba and Cairns offices.

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When do children get to decide which parent they will live with?

July 4th, 2019

One common misconception that parents often have following separation is that their child will get to decide who they live with and how much time they spend with the other parent.

The living arrangements for children after separation is a decision to be made by both parents, not the children.  If parents cannot agree to the living arrangements for their children, they are required to attempt mediation to see if they can agree with the assistance of an independent third party.  If there is still not agreement after mediation, then ultimately either parent may need to commence court proceedings asking the court to decide on the arrangements for the children.

The next obvious question is—If children do not get to decide who they will live with, do they get a say in the decision at all?  The answer to this question will depend on the circumstances of the particular family.

For example, we are commonly now seeing that parents who agree to attend a mediation to discuss and try to reach an agreement on the arrangements for their children are adopting one of the two following practices to ensure their children also have a voice in the decision:

  1. Attend a child inclusive mediation.

Unlike the suggestion of the name, the children do not actually attend at the mediation with their parents.  Whilst mediations are run differently by different mediators, generally the mediator will spend time with the children prior to the mediation.  The mediator is trained to create a comfortable and safe environment for the children to share their views on the issues to be discussed at mediation.  Those views can then be brought into the mediation through the mediator.

  1. Obtain a family report prior to mediation

A family report is written by a family report writer, who is usually a social worker or psychologist.  The purpose of the report is to provide recommendations on what parenting arrangements are in the best interests of the children.  In making recommendations, the report writer gathers information through interviewing both parents and significant others, the children (if they are old enough) or observing the children with their parents (if they are not old enough to be interviewed).

A family report is often ordered by a court in parenting proceedings to assist the court in gathering evidence as to what arrangements are in the best interests of the children.  Increasingly however, parents are choosing to obtain a family report privately to assist them in making decisions for their children outside of the court process.

A family report is another way in which children can have their views heard by both parents and is an asset in a mediation. However, ultimately it is the parents or court who have the final say in the children’s care arrangements.

It should be noted that how much weight is given to the views of children will depend on the individual circumstances of the case, and in particular, the age of the children and their maturity.  Whilst children do not get to decide their own care arrangements, the more mature and older they are, the more weight that will usually be given to their views.

The recent High Court decision of Bondelmonte confirms that even children who are mature and approaching the age of 18 are not able to decide their care arrangements.  In that case, the children who were 15 and 17 at the time, were ordered by the court to live with their mother, despite both children expressing that they wanted to live with their father.

If you are going through a separation and would like to discuss your parenting matter, contact one of our family lawyers today on 4036 9700 to find out about our fixed fee initial consultations offered in both our Mareeba and Cairns offices.

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Rotary FNQ Field Days Update

May 24th, 2019

The largest field days in Northern Australia returns this year to the Mareeba Rodeo Grounds on 29, 30 and 31 May.

The Rotary FNQ Field Days is a biennial event running since the mid 1980’s and delivering the largest community event on the Tablelands.

A combined event of the Rotary Clubs of Atherton and Mareeba, the event raises funds for charities and local community organisations.

With a focus on Farm Safety, Innovation and Mental Wellness, not to mention the tractor pull, the event is not to be missed.

Be sure to visit the friendly team from Miller Harris Lawyers at the event, or drop into our new Mareeba branch in the meantime.

We look forward to seeing you there!

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The Great Wheelbarrow Race

May 13th, 2019

The annual Mareeba-Chillagoe Wheelbarrow Race is on this weekend.

Each year, competitors gather to run the 140 km along the Wheelbarrow Way from Mareeba through to Chillagoe, and this weekend will be no different.

Starting on Friday 17 May 2019 in Mareeba, individuals and teams in 12 different categories will set off on their journey with wheelbarrows in tow.

Last year, “The Fit Bucks” set the fastest ever time for the race at a cracking pace of 6 hours, 6 minutes and 12 seconds, which will set a tough challenge for competitors this year.

If you are looking to see the action, the event starts Mareeba with a parade down Byrnes Street, directly past the new Mareeba office of Miller Harris Lawyers.

The parade then proceeds to Vaughan Street, with the main event starting at 9.30 am.

If you are in the area, be sure to get along and support this unique and incredible local event.

Additional information can be found on the official website.

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Changing your child’s name after separation

April 30th, 2019

After separation, it is not uncommon for one spouse to change their name back to their maiden name as opposed to keeping their married name.  But what about changing a child’s name?

As family lawyers we are often asked about the process for legally applying to register a change of a child’s name.

Section 17 of the Births, Deaths and Marriages Registration Act 2003, provides that:

  1. the parents of a child may apply to the Registrar for registration of a change of the child’s name; and
  2. an application for registration of a change of a child’s name may be made by one parent if the applying parent is the only parent named in the registration of the child’s birth (on their birth certificate), or there is no other surviving parent, or a Magistrate approved the proposed change of name.

This essentially means that if both parents are registered on the child’s birth certificate they must agree to the name change.  If both parents do not agree, then the only way to register a name change is if an application is made to the court and the court makes an order for the name to be changed.

When considering whether or not a name change is in the child’s best interests, the court will have regard to, among other factors and the particular circumstances of the matter:[1]

  1. any embarrassment likely to be experienced if his or her name is different from the parent with residence or care and control;
  2. any confusion of identity which may arise if his or her name is changed or is not changed;
  3. the effect any change in surname may have on the relationship between the child and the parent whose name the child bore during the relationship;
  4. the effect of frequent or random changes of name;
  5. the contact that the non-custodial parent has had and is likely to have in the future with the child;
  6. the degree of identification which the child or children have with their non-custodial parent; and
  7. the degree of identification which the child or children have with the parent with whom they live.

This article focuses on the legal process to register a change in name.  A child’s name can be informally changed through use of a different name.  You should seek legal advice before informally changing your child’s name, especially if there are court orders already in place.

If an informal name change is made through use, the other parent can make an application to the court for the child to only be known by their legal name.

If you are wanting to change your child’s name we recommend that you first obtain legal advice.  Please do not hesitate to contact one of our experienced Cairns family lawyers today to discuss your matter.

[1] Reagan & Orton [2016] FamCA 330.

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Certificates of title – soon a thing of the past

April 16th, 2019

An exciting development in property law has been announced.  After much anticipation, the Queensland Government has now passed legislation which will mean that from 1 October 2019, original paper certificates of title (also known as title deeds) for property in Queensland will no longer have any legal effect.

The titles of property in Queensland have been maintained electronically for many years and the dispensation of paper certificates of title marks one of the final changes to fully electronic titling.  While older certificates of title can be retained for historical value, many a grey hair is likely to be avoided from the stress of trying to locate lost certificates after many years or explaining the inadvertent destruction of certificates.  Currently the process for dispensing with a paper certificate of title is a fairly arduous process involving extensive enquiries, advertising and declarations.

Prior to 1994, every property in Queensland had a paper certificate of title issued for it.  This certificate was required in order to deal with property, by sale, transfer, mortgage or otherwise.  However, from 1994 the Queensland Titles Registry converted to an electronic titles register and has not automatically issued paper titles for property since then.  A paper certificate could only be obtained on request and for a fee.

Where a paper certificate of title is issued, it must be produced when any dealings with the land are to be registered with the Queensland Titles Registry.  Without it, a dealing affecting land (where a paper certificate is issued) cannot register.  It is an important document, that by itself, evidences ownership of property.  As a result, lost or stolen certificates can (and historically have been) a huge concern for owners of property, particularly when trying to complete a sale of their property within the time frames of a standard conveyance.

More recently, the Titles Registry has been working to phase out the paper certificate of title.  When a certificate of title has been issued for a property and a dealing lodged for registration (such as a transfer of ownership which required the deposit of the original paper title), the original certificate would be destroyed and not reissued.

As a result many properties no longer have paper certificates issued today.

Please feel free to contact us on 07 4036 9700 if you have questions about how these changes will affect your property if you have a paper title for your property issued.  Miller Harris Lawyers would be happy to assist you with all your property law questions.

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Online business and retail shop leasing – is it a retail shop?

March 26th, 2019

If a tenant conducts an online retail business, but uses premises predominantly for producing or storing goods, is it a retail shop?  The Victorian Civil and Administrative Tribunal (“VCAT”) recently considered this question.

The Retail Shop Leases Act in Queensland and its equivalent across other states in Australia (“Retail Shop Legislation”) imposes additional tenant protections in leases of retail shop premises.  These additional protections do not apply to premises that are not considered retail shops under the legislation.  The concept of what is a retail shop is not always a straightforward determination to make, as illustrated in the decision of VCAT in Bulk Powders Pty Ltd v Seicon Pty Ltd (Building and Property).

Bulk Powders Pty Ltd v Seicon Pty Ltd (Building and Property) [2018] VCAT 2000

Bulk Powders Pty Ltd (the tenant) leased premises in an industrial area in Victoria where it developed and produced sports nutrition and supplement products.  While the tenant sold the items it produced as a retail business, the sales were mostly online, except in limited circumstances where some customers could collect products by appointment.  The tenant sought a declaration from VCAT that the premises was a retail shop.  The reason the tenant did this was that the lease included outgoings which would not be permitted to be recovered by the landlord if the premises were a retail shop.

The Retail Shop Legislation defines retail premises as premises that are “used wholly or predominantly for the sale or hire of goods by retail or the retail provision of services”.

Upon reviewing the law on this point, VCAT considered that to be retail premises, it was necessary that the premises have a retail characteristic of being open to the public, which in this instance, it was not.  The premises were used for predominantly production and storage of products and even though those products were sold online, that did not make the premises retail premises.

With so many businesses being conducted online today, this is an important clarification for both landlords and tenants about when the Retail Shop Legislation will apply to a leasing arrangement.  The consequences of the Retail Shop Leases Act applying to a lease are significant, for example, as illustrated in this case, the inability of the landlord to recover certain types of outgoings and charges.  There are also further disclosure obligations on the landlord that, if not complied with, can give the tenant extensive rights to terminate a lease.  This decision also goes to show that what does constitute a retail shop is not always a straightforward answer and there are a number of considerations in making a determination about this.

You can access the full decision of VCAT here.

Our team at Miller Harris Lawyers has extensive experience in commercial and retail leasing in Cairns and surrounding areas.  We would be happy to assist you with all of your leasing requirements.  Please contact our office on 07 4036 9700.

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Family Law Judges are not mediators, or are they?

March 7th, 2019

In another surprising development in the ever-changing landscape of Australian family law, Judges in the Federal Circuit Court of Australia can now act in certain cases, as mediators.  “Judicial Mediations” as they are called, are an entirely new service now being provided by Judges of the Federal Circuit Court of Australia; Judges who, it is well-documented, are already overburdened by huge case loads.

The rules surrounding Judicial Mediations are set out in Practice Direction No. 1 of 2019 which commenced on 1 January 2019 and is available on the Federal Circuit Court website.

A brief summary of the main rules of Judicial Mediations is as follows:

  • a party to a case before the Federal Circuit Court may make an oral or written application for Judicial Mediation;
  • the “docket Judge” who the parties ordinarily appear before, determines, according to certain criteria, whether the case is suitable for Judicial Mediation;
  • in considering whether a matter is suitable the docket Judge will consider a list of suitable matters provided for in the practice direction; however he or she may determine that another matter not provided for in that list is still suitable;
  • suitable matters include:
    • those where both parties are legally represented;
    • those where one or both parties are self-represented and the docket Judge determines the matter is suitable for judicial mediation;
    • property disputes;
    • parenting disputes where there is no  allegation of  serious risk and/or family violence;
    • appropriate child support matters;
    • compliance with orders for a prior unsuccessful private mediation; and
    • a risk that the costs and time of the trial will be disproportionate to the subject matter of the dispute;
  • it is expected that all mediation alternatives (including private mediation with a family dispute resolution practitioner) will be exhausted prior to a Judicial Mediation;
  • if ordered, a new Judge will be appointed as the Judicial Mediator so the case is not mediated by the docket Judge or the trial Judge (who is usually one and the same);
  • significant preparation is required for Judicial Mediation, similar to that required for a trial; and
  • all parties and any legal representatives must attend the Judicial Mediation.

How frequently Judicial Mediations are ordered and how effective they are, remains to be seen.  It is hoped that this new service will not significantly increase the already large case loads being handled by Federal Circuit Court Judges, and in the process increase waiting times being experienced in the courts.

For more information about Judicial Mediations or any other family law issues, feel free to contact Julie Hodge, family lawyer & Senior Associate on 07 4036 9706.

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What is SaaS? Software as a service and how to approach it with the right attitude

February 26th, 2019

With developments in technology, and especially cloud computing capabilities, more people are opting to use software as a service (“SaaS”) than ever before.

SaaS differs from traditional software programs.  Rather than installing a program on your computer or device, the software is accessed directly via the internet, usually by means of cloud software.  As a result, these arrangements often involve a subscription fee as opposed to a one off licensing fee.

While SaaS brings with it many benefits, it often involves complex arrangements and confusion as to who owns what intellectual property, and what each party’s obligations are.

These questions are normally resolved with a SaaS agreement. The SaaS agreement not only clarifies the responsibilities and rights of each party, but the written contract also helps to secure both parties’ interests into the future.

A well written SaaS agreement will usually cover the following items:

  1. the nature of the program/service;
  2. who owns the intellectual property, such as:
    • the software itself;
    • the data inputs; and
    • content generated by users;
  3. what happens if one party breaches the agreement;
  4. how the contract can be terminated;
  5. what happens to the data and software if the provider goes out of business;
  6. dispute resolution;
  7. the jurisdiction, or law that applies;
  8. what ongoing support and update services are available; and
  9. payment terms.

SaaS agreements are designed to  be comprehensive documents, and, like many contracts, they can end up being incredibly complex.  Given the broad range of topics an agreement needs to address, and the importance of those topics, it is crucial to ensure you have a properly drafted agreement.

As a consumer, you should ensure any agreement provided by a supplier suits your needs.  No matter how good the product is, if there is something fundamentally wrong with the contract, you will regret signing it.

As a provider, you should remember that SaaS agreements are not a one size fits all type agreement.  Consider what the software does, the business model used, and whether there are international laws that apply, particularly in relation to data and privacy.

A properly drafted agreement, prepared by a professional, can save both consumers and providers a great deal of stress in the long run.  If you would like to speak with someone about drafting or reviewing an agreement for you, please contact our experienced commercial law team on 07 4036 9700.

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