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Feb 15
What to Expect from the Relationship Between a Client and a Lawyer

What to Expect from the Relationship Between a Client and a Lawyer

By General News

Most people likely hope they will never need the services of a lawyer during their lifetime but in fact, at some stage many will require professional legal advice. Whether it’s guidance on making a will, or making an application in a family law matter, or for expertise on a commercial or real estate contract, for example, the services of a lawyer are both necessary and advisable.

The relationship between a client and a lawyer is a well-established ‘fiduciary’ one, governed by professional standards legislation for lawyers, to ensure legal professionals act in the best interests of their clients. Lawyers, however, as part of their obligations on being admitted to practice, also have a paramount duty to the court and the administration of justice, which prevails in the case of any inconsistency with any other duty. All lawyers are bound by a code of ethics set out in the Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015.

The key aspects of the relationship between a lawyer and their client are discussed in this article, helping a person needing legal advice to better understand how to find legal representation right for them.

A lawyer’s duties in relation to their client

As set out by the Law Society of NSW, a lawyer’s most important duties when they take on a client are:

  • to act in the client’s best interests;
  • to be honest and courteous in all dealings in the course of legal practice;
  • deliver legal services competently, diligently and as promptly as reasonably possible;
  • avoid any compromise to their integrity and professional independence;
  • provide clear and timely advice to assist their clients;
  • follow a client’s lawful, proper and competent instructions;
  • avoid any conflict of interests;
  • maintain client’s confidences;
  • disclose any updates or changes regarding costs to the client, and;
  • honour any undertakings given in the course of legal practice.

At the outset of the relationship between lawyer and client a key step is disclosure, whereby the legal professional must provide in writing details of how much they will charge the client, including expenses, before they begin the necessary work. The subsequent agreement between lawyer and client is known as a costs agreement or a retainer, which comprises the client’s assent to paying the lawyer and the lawyer’s agreement to fulfil certain obligations.

Under such an agreement the lawyer agrees to act on your behalf; engage other people (eg, accountants, valuers or barristers) to do work on your behalf; and accept certain documents. It should also provide for the solicitor sending the client regular bills clearly setting out the work completed and itemising the costs of each service. A lawyer may ask for some fees to be paid in advance to cover expenses – this money must be held in trust and cannot be paid out without the client’s permission.

Other important aspects of the lawyer-client relationship

A lawyer must follow stringent procedures to maintain complete confidentiality of conversations, correspondence and documents shared between themselves and their clients, with this material only revealed in limited situations. This is known as Legal Professional Privilege (LPP), protecting the rights of individuals to seek legal advice.

A solicitor must avoid conflicts between their own interests, or those of an associate, with the interests of a client. Where a lawyer has previously provided legal advice to or represented a person a client is now in dispute with, they can generally not continue to represent the client. A lawyer is also not able to act for more than one party in the same matter.

A person’s solicitor must provide clear and regular advice on all the client’s legal options and can only progress the matter after taking instructions directly from the client.

Termination of a retainer, including in ‘No win no fee’ arrangements

Once on a retainer a lawyer is expected to act for a client until the legal matter is resolved. Where a client terminates a retainer before resolution of the case, the client will be required to pay for the work done up to that date. If payment is not forthcoming, the lawyer is entitled to retain the client’s documents or other personal property until the fees are paid, known as a ‘lien’.

In personal injury cases, the popular ‘no win, no fee’ costs arrangement generally sees legal fees paid out of any settlement monies awarded to the client. In this situation, if a client transfers their case to a new solicitor, the former legal representative may only release relevant cases files to the new representative if they agrees to pay the former solicitor’s costs. The client will also need to agree for the new solicitor to pay the former lawyer’s assessed or agreed costs out of any settlement monies.

If a lawyer terminates the retainer and stops working for a client before resolution of the matter, they will generally have to return the client’s documents and will not be entitled to payment unless there is good cause, such as a client not paying for expenses, or where a client failed to provide the lawyer with sufficient instructions, or refused to accept and follow the lawyer’s advice, for example.

Speak with our experienced, trusted team

As long-standing, trusted law practitioners, we are happy to provide you with more information on the nature of the lawyer-client relationship as a means to helping you make a decision about the best legal representation for your case. If you need clarification on costs agreements and retainers, our duties in representing you and how we will work to resolve your particular legal matter, contact our expert team at Felicio Law Firm for more information.

Feb 09
Why do Solicitors Engage Barristers?

Why do Solicitors Engage Barristers?

By General News

While both solicitors and barristers are professionals with legal qualifications, the difference between the two roles is often not well understood by those who don’t have a law degree. In fact, the roles are quite different, with solicitors generally engaging barristers in order to advocate for their clients in court. We’ll explain more about how these important roles differ in this article.

How the roles of solicitors and barristers differ

For most people who need a legal representative, their first contact with a lawyer will be a solicitor within a law practice. Whether it’s a wills and estate matter, a compensation claim, a family law case, a commercial issue or even a more serious criminal matter, contacting a solicitor will generally be a person’s first step in the legal process.

A solicitor can advise a person of their legal rights and responsibilities, and the steps they need to take to progress their legal matter to an acceptable resolution. A solicitor will do a lot of the ‘leg work’ involved in making a legal claim – collecting evidence, drafting correspondence, contacting insurance companies, managing files and preparing applications to courts and other bodies in relation to the matter.

Another thing a solicitor will do is contact a barrister either to represent their client as an advocate in court, or to provide specialist advice in the client’s particular matter.

In contrast to solicitors, barristers do not generally deal directly with clients and their day-to-day legal issues. A barrister is usually a specialist in arguing on behalf of the client before a judge or judges, and/or is a specialist in a particular area of the law, such as contracts, defamation, or criminal defence, for example.

In their work barristers are obliged to comply with what is known as the ‘cab rank rule’, which means they must generally accept any brief brought to them by a solicitor that is within their area of expertise, regardless of their own personal opinion of the matter.

A barrister must accept a brief from a solicitor to appear before a court in a field in which the barrister practises if:

  • the brief is within the barrister’s capacity, skill and experience;
  • the barrister would be available to work at the time required and is not already committed to other work which would prevent them from working in the client’s best interests;
  • the fee is acceptable (the barrister is obliged to disclose the proposed fee in the same way as a solicitor); and
  • the barrister is not obliged or permitted to refuse the brief. Situations in which a barrister is obliged to refuse a brief include where there is a conflict of interest.

An easy way to spot a barrister, as opposed to a solicitor, is the formal wig and gown they wear in (and also, often, to and from) court.

Briefing a barrister

The decision by a solicitor to engage a barrister on behalf of a client will often be confined to large, weighty legal matters such as a criminal trial or a major commercial dispute. Once engaged, a barrister takes instruction from the solicitor, who briefs the barrister on the intricacies of the case and provides all the relevant evidence, witnesses and other legal information. The barrister then works as an advocate in the court on the client’s behalf as well as provides specialist advice.

Deciding on whether a barrister is needed

A person who needs legal representation will be advised by a solicitor whether they also need a barrister to achieve the outcome they desire. It should be noted that the roles of a solicitor and a barrister often overlap, and legal professionals dubbed ‘solicitor advocates’ often perform a role very similar to a barrister in lower courts for matters such as drink driving, AVOs and smaller drug matters. But in general, barristers are engaged because of their experience and talent in conducting cases in court when a trial is necessary, while the solicitor manages the large administrative workload inherent in any legal matter.

If you’re unsure about the distinction between a solicitor or a barrister, and whether you need one or the other for your legal matters, contact our highly experienced team at Felicio Law Firm for more information as soon as possible.

Jan 22
Everything You Need to Know about the Introduction of Voluntary Assisted Dying in NSW

Everything You Need to Know about the Introduction of Voluntary Assisted Dying in NSW

By Family Law

In a landmark move, New South Wales has recently become the last state in Australia to provide individuals with the option of Voluntary Assisted Dying (VAD). This significant development reflects years of work by campaigners and a wider community debate about end-of-life choices and the right to die with dignity.

This article provides more detail on the introduction of VAD in NSW, which is available as of November 28, 2023, in particular the criteria which govern this particularly sensitive and complex area of health management.

More detail on the new Voluntary Assisted Dying law in NSW

In order to take advantage of the VAD law in NSW, the essential criteria are as follows:

  • A person must be diagnosed with at least one disease, illness or medical condition that:
    • is advanced, progressive and – on the balance of probabilities – will cause death within six months, or 12 months for neurodegenerative conditions, and;
    • is causing suffering that cannot be relieved in a manner the person finds tolerable.
  • An eligible individual must also have:
    • decision-making capacity in relation to VAD, meaning they comprehend and remember everything related to a VAD decision and its consequences, and are able to clearly and coherently communicate their decision;
    • be acting voluntarily and not because of pressure or duress from another person;
    • be aged 18 or over;
    • be an Australian citizen or permanent resident who has lived in NSW for at least 12 months;
    • have an enduring request for VAD.

In addition, the VAD Act emphasises the importance of an individual acting with informed consent, meaning they are fully informed about their medical condition, prognosis, and the potential implications of choosing this method of death. This step includes exploring alternative options such as palliative care.

Once eligibility is established, how does a person access VAD?

The Act mandates a comprehensive medical assessment by two medical practitioners, including at least one with expertise in the relevant condition. This process involves the eligible person making a first request to a medical practitioner, of their own volition and not as part of an advanced health directive or through an enduring power of attorney. This first request must be decided within two days, after which the practitioner will refer the individual to a second assessor.

If the second assessment confirms eligibility for VAD, a second request to access the law must be made in front of two independent witnesses. A third request is then made to the co-ordinating practitioner (generally the doctor who received the first request) – with a period of at least five days between the first and last request – where a doctor will check the individual is still eligible as a candidate for VAD. This final request demonstrates the person’s wish to proceed represents a sustained and informed desire. A person may change their mind about VAD at any stage of this process.

An individual who wishes to access VAD must retain capacity to make an informed decision throughout the steps described above. Loss of capacity between initially making the decision and a final request means a person cannot go forward with VAD. Likewise, a person who it is suspected to be suffering from dementia, depression or some other impairment of their reasoning process, will be referred for specialist help before being able to undertake the VAD steps.

Proceeding to the VAD process

Once a person decides to proceed with VAD and passes all eligibility tests, they may self-administer the drug or have a practitioner do so with the guidance of the co-ordinating medical practitioner.

Only medical practitioners trained and registered to provide this service can administer the medication, and there are specific guidelines to ensure a peaceful and dignified process. A doctor acting as a coordinating or consulting practitioner must have at least one years’ experience if they are a specialist, or 10 years’ experience as a general practitioner (GP). An administering practitioner must be a specialist, a GP with at least five years’ experience, an overseas-trained specialist with the appropriate registration, or a nurse practitioner.

There is mandatory training for health professionals involved in a VAD decision which covers their legal obligations, the strict eligibility criteria for the patient and how a practitioner assesses whether an individual meets those criteria, including identifying any signs of pressure, duress or coercion by others towards the requesting individual.

Need more information? Discuss your case with our understanding team

The introduction of Voluntary Assisted Dying in NSW represents a significant step in the evolution of end-of-life care, acknowledging the complex and deeply personal nature of the choices individuals face when confronted with unbearable suffering. The criteria established by the Voluntary Assisted Dying Act 2021 attempts to strike a delicate balance between compassion for those in pain and the need for strict safeguards to prevent abuse. If any of the information offered in this article raises questions or concerns for you, contact our professional team at Felicio Law Firm and we can provide more detail on the steps involved for you and your family.

Jan 15
What’s Involved in Acting as a ‘Litigation Guardian’ in Australia’s Federal Circuit and Family Court

What’s Involved in Acting as a ‘Litigation Guardian’ in Australia’s Federal Circuit and Family Court

By Family Law

In some situations a person is not physically or mentally well enough to take part in family law proceedings in Australia’s Federal Circuit and Family Court of Australia (FCFCOA), lacking the capacity to manage their case or instruct legal representatives. The elderly, the disabled and the chronically ill are examples of people who may require a litigation guardian.

In such cases, as a measure of last resort, a ‘litigation guardian’ may be appointed in their place. The guardian is empowered to do anything for the benefit of the litigant that they would be ordinarily allowed to do in the proceedings. In matters heard by the FCFCOA, the need for a litigation guardian may arise in family law matters such as divorce, child custody, or property settlements.

This article looks more closely at how a litigation guardian is appointed in FCFCOA proceedings.

When is a litigation guardian needed?

Firstly, it’s important to note that the Court begins with the presumption that a person does not require a litigation guardian unless there is evidence to prove otherwise. Where a person does not understand the nature or consequences of the court proceedings, or cannot conduct their case or give instruction to legal representatives for how the case should be conducted due to some incapacity, then a litigation guardian may be necessary. It should also be noted any person under the age of 18 requires a litigation guardian.

Who can be a litigation guardian – and the appointment process

Those who are eligible to be a litigation guardian are:

  • an adult;
  • persons who have no interest in the proceeding adverse to the interest of the person needing the litigation guardian, and;
  • persons who can fairly and competently conduct the proceeding for the person needing the litigation guardian.

A person who is a guardian of another person under state legislation – known as ‘a manager of the affairs of a party’ – is entitled to be the litigation guardian provided the party does not understand the proceedings, or is not capable of conducting the proceedings.

If a suitable person is not available to serve a party as a litigation guardian, the Court may request that the Federal Attorney-General appoint a person to be a manager of the affairs of the party to then act in the role.

A litigation guardian is appointed through an application to the Court by an incapacitated litigant, or through the Court’s own initiative. The application can be made either before proceedings begin or during the course of the matter, and must be supported by an affidavit setting out the facts as to why the party needs a litigation guardian. The person seeking appointment as the litigation guardian must also provide an affidavit consenting to the appointment. The court considers the circumstances of the litigant and may appoint a family member, friend, or professional guardian.

Once appointed, the litigation guardian must provide notice of their appointment to other parties and any independent children’s lawyer. The Court may also make orders about the payment of the costs and expenses of the litigation guardian.

Responsibilities of a litigation guardian

The litigation guardian must at all times act in the best interests of the incapacitated party as their paramount duty. This duty extends to both the legal strategy pursued during the proceedings and decisions related to settlement negotiations. Courts closely scrutinize the actions of litigation guardians to ensure that they align with the wellbeing of the person they represent.

For elderly or unwell litigants, the guardian must be acutely aware of the party’s potential cognitive impairments, health-related issues, and emotional vulnerabilities. The guardian must work closely with the litigant, legal representatives, and healthcare professionals to ensure a comprehensive understanding of the individual’s needs and preferences.

Clear and effective communication is paramount when acting as a litigation guardian for elderly or unwell litigants, maintaining open communication with the litigant, legal representatives, and other relevant stakeholders. In family law matters, the role of a litigation guardian becomes particularly complex. Decisions related to child custody, spousal support, and property settlements require careful consideration of the individual circumstances of the incapacitated party. The guardian may need to collaborate with family members, healthcare professionals, and financial advisors to make informed decisions.

Litigation guardians must also diligently adhere to court procedures and deadlines – from diligent filing of necessary documents, attending court hearings, and participating in mediation or settlement conferences. Failure to meet these requirements can have serious implications for the case and the wellbeing of the incapacitated party.

Termination of a litigation guardian

The court has the authority to review and, if necessary, terminate the appointment of a litigation guardian. This may occur if there are concerns about the guardian’s ability to act in the best interests of the incapacitated party or if the circumstances that led to the appointment have changed.

Seek expert legal advice

Acting as a litigation guardian in the FCFCOA for litigants unable to conduct their case is a challenging yet essential role. Particularly for elderly or ill litigants, the guardian must not only understand the legal complexities of the case but also navigate the litigant’s unique needs and vulnerabilities.

The guidance and advice of experienced family lawyers can be absolutely crucial in the appointment of a competent litigation guardian who protects and manages the litigant’s best interests. At Felicio Law Firm our expert team can provide you with the right advice if you need a litigation guardian to represent you at the FCFCOA to ensure your case proceeds as smoothly as possible.

Dec 04
The Importance of Appointing an Alternative Executor When Making a Will

The Importance of Appointing an Alternative Executor When Making a Will

By Estate Planning

Creating a will is an important and foresightful act to ensures one’s assets are distributed according to their wishes after their passing. When a person drafts a will, selecting an executor is one of the most crucial decisions they make as this person or persons are entrusted with the responsibility of distributing assets to beneficiaries and ensuring a smooth transition of the estate. An executor is often a close family member, friend, or legal professional whom the testator deems trustworthy and reliable.

Life, however, is inherently unpredictable. An appointed executor’s ability to fulfil their role may be hindered by any number of circumstances, including their own passing or losing their legal capacity to carry out their duties. Under succession laws, where the executor is also a beneficiary of the will, they must survive 30 days after the passing of the testator in order to receive any disposition of property in the will.

These rare but not unheard of situations establish the wisdom of a testator appointing an alternative executor, who can carry out the original executor’s duties. If the alternative, or substitute executor is called on to act, they are bound by the same legal responsibilities and fiduciary duties as the original executor.

In some situations, however, where an executor is also the sole beneficiary, a clause in the will may provide for other beneficiaries to become executors in the event the original executor is unable to perform the role. But if the original executor remains alive they are unable to become executors. We’re look more at this situation and how alternative executors are appointed in this article.

Why appoint an alternative executor

Appointing an alternative executor has a number of advantages. Firstly, it acts as a safeguard, ensuring that the testator’s intentions are carried out in a timely manner when the appointed executor is unable to carry out their duties. Timely distribution of the estate is essential to meet legal obligations and provide beneficiaries with the resources they need, particularly once probate of the will has been granted.

Appointment of an alternative executor can also be important in preventing or mitigating legal challenges. In situations where the original executor faces legal disputes or is unable to perform their duties due to litigation, the alternative executor can step in and try to minimise the risk of contested probate.

There are also obvious disadvantages to the appointment of an alternative executor, including where there is disagreement or significant difference between the original and alternative executors on interpretation of the testator’s intentions. An alternative executor may also introduce more complexity in decision-making, particularly if there are differing perspectives on asset distribution or estate management. This potentially complicated situation underscores the importance of selecting individuals who share a common understanding of the testator’s wishes.

What to do when the original executor can’t perform the role

A person making a will is strongly advised to obtain written agreement from their nominees as executor before including them in the will, and also regularly check on them once named to ensure they are willing and able to administer the estate.

Many people will name more than one executor so that in cases where an executor dies before the will is administered, another executor assumes responsibility. If there is no ‘back-up’ executor named, an application may be made to the Supreme Court by another beneficiary or even a creditor to be appointed as administrator of the estate.

If an executor is unable to perform their duties for reasons including ill health, unsound mind or prolonged absence (among others), and no substitute executor is named, beneficiaries or other interested parties can apply to the Supreme Court to have the executor ‘passed over’ – meaning they are removed before they have the chance to act in the role.

The Court considers what is necessary for the due and proper administration of the estate and the interests of its beneficiaries. It will also consider whether the executor is temporarily or permanently incapacitated. A limited order may be made appointing someone to act on the executor’s behalf while they are incapacitated or, if the incapacity is permanent, appoint someone to take over permanently as executor.

Importance of appointing the right person as executor and regularly reviewing a will

The issues discussed in this article reinforce the importance of appointing a person who is willing and able to perform the duties of executor in your will. Equally important is regularly reviewing the document to ensure the appointment remains realistic and actionable. Spouses often appoint each other their executors (and sole beneficiaries) and then forget about the document. Years pass and the testator dies and the spouse is unable to perform the duties due to lack of capacity but no alternative executor was appointed. This situation can potentially lead to the testator’s wishes for their estate not being carried out.

If you need guidance on this issue, please contact our wills and estate experts at Felicio Law Firm today for timely advice on how to ensure you have all bases covered when it comes to your will.

Nov 28
Recent Amendments to the Family Law Act: What it Means for Parental Responsibility and Equal Time With Children

Recent Amendments to the Family Law Act: What it Means for Parental Responsibility and Equal Time With Children

By Family Law

Australia’s Family Law Act 1975 (‘the Act’) provides the framework for deciding parental and financial arrangements when couples separate or divorce. One of the important presumptions within the Act since 2006 has been that of equal shared parental responsibility (ESPR) of children from the relationship. This presumption – which can be rebutted by evidence from either party – represented a shift away from notions of ‘sole custody’ to encourage parents to make joint decisions in the best interests of their children.

But the passing of the Family Law Amendment Act on October 19, 2023 brings a number of significant changes to the Act, with one of the most notable the removal of the presumption of ESPR. The overriding concern in making a parenting order no longer involves ESPR but instead focuses on what is in the child’s best interest, considering six factors (plus two additional ones for Aboriginal and Torres Strait Islander children) including a child’s safety, the child’s own views, the benefit of having relationships with both parents, and the child’s developmental, psychological, emotional, and cultural needs.

This article looks in more depth at this landmark change and what it means for those seeking parenting orders through the Federal Circuit and Family Court of Australia. It’s vital to seek professional legal advice in family law matters, particularly in light of the recent amendments.

More on ESPR and why it has been removed

Under the 2006 framework, there was a strong presumption that it was in the best interests of the child for parents to share equal responsibility for major decisions, such as education, health, religious and cultural upbringing.

Section 61DA of the Act provides for ESPR in parenting matters. The presumption does not apply if there are reasonable grounds to believe that a parent has engaged in child abuse or family and domestic violence, and can be rebutted if the court determines it is not in the best interests of a child to apply the presumption. Until the recent amendments, if the Court made an order under this section for ESPR, it was also obligated to consider – under section 65DAA of the Act – whether an order should be made for children to spend ‘equal time’ between separated parents, if it is reasonably practicable and in the best interests of a child to do so.

The result in practice has been confusion for parents, many of whom believed that an order for ESPR also meant they were entitled to equal time with children. This was not the case and often resulted in unnecessary litigation and unrealistic expectations in applying to the Court for parenting orders.

A further motivation for the amendments is acknowledgment of the diverse nature of modern families, ensuring Australia’s family law is more inclusive and accommodating of a range of family structures and dynamics. The additional flexibility the amendments provide allow for a more nuanced and individualised response to each family’s circumstances.

What do the changes mean in practice?

Under the new amendment, the Court may make a parenting order with the flexibility to give one parent the responsibility for making long-term decisions about the child’s upbringing, or it may provide for joint decision-making. An order may also stipulate that one parent has sole responsibility for certain issues related to raising the child, but that major long-term issues require joint decision-making between the parents. The allocation of responsibility for major long-term decisions is to be based on what is in the child’s best interests, as set out in section 60CC of the Act.

When the Court makes an order for joint decision-making about any issue related to the child, the parents are required under section 61DAA to:

  • consult each other person with joint responsibility in relation to each such decision; and
  • make a genuine effort to come to a joint decision (if it is safe to do so, i.e. family or domestic violence is not present).

Under section 61DAB of the amendments, once an order has been made about parental responsibility for major long-term decisions about a child, the parent the child lives with is not required to consult the other parent about minor, day-to-day issues related to the child’s upbringing.

Similarly, the changes make it clear that third parties involved with the child, such as schools, sports clubs and medical practitioners, for example, do not need to first establish a joint decision has been made about the child if they have communicated with the parent who has decision-making responsibility.

The amendments also formalise the principle first espoused in the case of Rice v Asplund (1979) FLC 90. That is, where a parenting order has been made and one party wishes to vary or set it aside, that party must show that there has been a ‘significant change in circumstances’ relating to the child, and that it would be in the best interests of the child for the final parenting order to be changed.

Speak with our family law experts

The best interests of the child has always been the paramount factor in Court decisions on parenting orders but the concept has additional primacy now that ESPR is no longer in effect. While it’s not expected the amendments will significantly change the nature of parenting orders made by the Court, the changes may lead to some parents seeking an order to be re-opened and varied based on a change in circumstances. Others may undertake new legal action if they are denied joint decision-making responsibility or believe they will see their child less under the new laws.

This is a sometimes difficult and emotionally draining area of the law. If the issues discussed are pertinent to your situation and you need more information or guidance, contact our understanding family law team today for the right advice.

Oct 30
What to Do if You are Arrested by Police in NSW

What to Do if You are Arrested by Police in NSW

By Criminal Law

Whether you’ve done anything unlawful or not, being arrested by the police is a distressing and often confusing experience, one in which it’s important to be aware of your rights and responsibilities.

There are certain things police can and can’t do when they arrest a person in NSW, which is the subject of this article. Firstly it’s important to acknowledge that should you be arrested by police, it’s crucial to remain calm and cooperative despite your fear of the situation. The next thing to do is make contact with a legal representative with experience in criminal law matters as soon as possible.

What happens when the arrest takes place

Under the Law Enforcement (Powers and Responsibilities) Act 2002 in NSW, police have the power to arrest any person who they reasonably suspect of having committed an offence, or who is about to commit an offence. Police can also arrest a person if there is a warrant for their arrest, if they have breached bail conditions, failed a roadside breath test or if they have breached the peace.

When conducting an arrest, the police officer should make it clear they are, in fact, arresting you and give you instructions on how to comply with the order, such as coming with them to a police station. They should also provide their name and place of work. Police are permitted to use reasonable physical force to conduct the arrest but if you believe the force used was unreasonable, advise your legal representative as soon as possible after the arrest.

A person being arrested is perfectly entitled to ask why they are being arrested and the nature of the offence police believe they have committed.

You do not need to answer any police questions and police are not able to arrest you simply to answer questions as part of an investigation. Ideally you will have a legal representative with you before you answer any police questions. It’s important to note, however, that resisting lawful arrest is a serious offence and so the wisest course of action is to comply with police requests, even if you know you are innocent of the offence they suspect you committed.

What happens after you’ve been arrested

Generally speaking police will take an arrested person to a police station to conduct an interview as part of an investigation. They will ask you for basic details such as your name, address and occupation, and possibly take fingerprints and photographs. A search of your person may also be conducted but it is limited to a search of outer garments and bags and/or scanning by a metal detector. The search must be conducted so as to preserve a person’s dignity and respect.

The station’s custody manager will then inform you of your rights to contact a relative, friend or legal representative. You must also be informed that you will be held for a period of six hours. After being held for that period police must seek a warrant to hold a suspect for an additional eight hours. You may then be subjected to an interview about the alleged offence, where you should have a legal representative present, as is your right. You have the right to not answer any specific questions, unless compelled by a specific law (such as investigations into terrorist activities) to do so. An arrested person also has the right to an interpreter, if required, and medical treatment if needed.

Police must inform you that any answers you give may be used in evidence against you in court, which requires you to be cautious about making any statements without legal advice. A special caution must also be given to those arrested on a serious indictable offence – one punishable by a term of imprisonment of more than five years – indicating that a failure or refusal to mention something that is later relied upon in court may harm the arrested person’s defence. This caution must be given in front of the person’s lawyer.

Police may then charge you with a crime before a Magistrate or release you. A person may not be held for an unreasonable period without being charged.

To protect your rights and gather evidence, it is advisable to document the arrest process as much as possible. This might include taking note of the names and badge numbers of the arresting officers, recording the time and location of the arrest, and collecting contact information from any potential witnesses.

Seek urgent legal advice

As is clear from the information in this article, it is crucial to seek legal representation as soon as possible if you’ve been arrested. At such a stressful time, most people are unaware or forget their rights when faced with allegations of criminal behaviour. At Felicio Law Firm, we have wide experience in criminal law matters and can provide prompt, clear advice on what you should do if arrested by police. If anything raised in this article is relevant to your situation, contact our professional team now.

Oct 24
The Importance of Making Binding Nominations of Beneficiaries in a Self-Managed Superannuation Fund

The Importance of Making Binding Nominations of Beneficiaries in a Self-Managed Superannuation Fund

By Estate Planning

Self-Managed Superannuation Funds (SMSFs) have become an increasingly popular choice for Australians seeking to take control of their retirement savings, offering flexibility and autonomy about which type of investments they want to make, including property, shares, and other assets.

SMSFs also offer other advantages including tax benefits, lower fees and charges, and more estate planning options when it comes to the transference of wealth from one generation to the next.

An important aspect of that last advantage is the making of binding death benefit nominations (BDBN) of beneficiaries, determining a person’s superannuation benefits are distributed upon their death. A BDBN is particularly important in safeguarding assets when estates are disputed by beneficiaries.

Why binding death benefit nominations are important

A BDBN is a legally binding document that directs the trustee of a person’s SMSF on how to distribute the deceased member’s superannuation benefits. A BDBN can specify who the beneficiaries are and the proportion of benefits each beneficiary is entitled to receive. In the absence of such a nomination, the trustee of the SMSF has discretion on how the funds are distributed, often leading to dispute. In the context of a contested estate, BDBNs provide:

  • Clarity and certainty about how the deceased member’s superannuation benefits will be distributed, ensuring their final wishes are respected as to who receives distributions from the fund.
  • Pre-empting costly and time-consuming legal challenges by specifying the intended beneficiaries and the distribution of assets. When beneficiaries are already defined in the nomination, it becomes more difficult for disgruntled family members to contest the distribution.
  • Protection of vulnerable beneficiaries, such as children or dependent family members. A BDBN safeguards these interests by legally obligating the trustee to follow the member’s instructions. This is particularly crucial when there are concerns about vulnerable beneficiaries being left without support.
  • Tax efficiency for beneficiaries, with the BDBN allowing them to plan for the most tax-effective distribution and help preserve the wealth for their loved ones.
  • Simplicity in estate planning by clearly outlining the distribution of superannuation benefits’, reducing the burden on the executor or trustee and allowing for smoother administration of the rest of the estate.

Things to consider when making a BDBN

In most cases it’s important to specify the BDBN is ‘non-lapsing’, as opposed to lapsing. A lapsing BDBN can expire after three years and, if not updated, means the trustee of the SMSF can choose how and to whom the super benefits are distributed. This is problematic if there is a dispute among beneficiaries with various claims on the fund. For this reason it’s essential to regularly review and update BDBNs to ensure they reflect changing circumstances, such as the birth of new family members or the dissolution of a marriage.

BDBNs must also meet certain legal requirements to be considered valid, which is why consulting experienced estate planning lawyers when making one is highly advisable. Witnesses to a BDBN must be over the age of 18 and not be the designated death benefit nominee. The BDBN is also only valid once received by the trustee. It is also part of Australian superannuation law that only dependants of the deceased – being a de facto partner or spouse of the deceased, a child or anyone in an interdependent relationship with the deceased – is eligible to inherit their superannuation death benefits.

The importance of legal advice

Superannuation can be a complex area, with different rules about how benefits are distributed on the death of the member compared with distributions from their will. By specifying the beneficiaries and distribution of assets through a BDBN, SMSF members can ensure their superannuation benefits go to the beneficiaries they intended.

Seeking the assistance of very experienced estate planners like our team at Felicio Law Firm can help you clarify the issues involved and make a valid BDBN to give you peace of mind about how your important superannuation asset will be dealt with once you die.

Oct 01

What to do When Loss of Mental Capacity Prevents the Making of an Enduring Power of Attorney and Guardianship Appointment?

By Estate Planning

Australia’s society is aging as medical science and improvements in diet and lifestyle allow Australian to live longer than they ever did before. But this development comes with a range of challenges – to government budgets, policy-making and aged care – to name a few.

At a more personal level, more people are living to an age where their mental capacity diminishes to the point where they can no longer make informed decisions about their personal, financial, or health matters. This is an important reality to acknowledge in areas such as estate planning and the topic addressed in this article, making an enduring power of attorney (EPOA) or guardianship appointment, with a focus on how solicitors and medical professionals determine mental capacity and the role of the NSW Civil and Administrative Tribunal (NCAT).

Understanding and determining mental capacity

Mental capacity refers to an individual’s ability to make decisions and understand the consequences of those decisions. When a person’s mental capacity declines due to factors such as aging, illness, or cognitive impairment, they may no longer be able to manage their affairs effectively.

In cases of suspected loss of mental capacity, medical professionals play a crucial role in assessing an individual’s cognitive abilities. This assessment typically involves a thorough evaluation of the person’s mental and physical health, including cognitive testing and psychological assessments. A medical diagnosis and evaluation is valuable and essential evidence in determining whether an individual still has capacity to make decisions.

Solicitors, too, are often involved in the process of determining mental capacity, especially when it pertains to legal matters like creating an EPOA or guardianship appointment. While no-one expects a solicitor to have expertise in assessing a client’s mental capacity, they can make a ‘legal’ assessment of the person’s capacity through their dealings with the individual to evaluate their understanding of the legal documents and the implications of their decisions.

The Law Society of NSW recommends solicitors can:

  • Make a preliminary assessment of mental capacity – looking for warning signs or ‘red flags’ using basic questioning and observation of the client.
  • If doubts arise, seeking a clinical consultation or formal evaluation of the client’s mental capacity by a clinician with expertise in cognitive capacity assessment.
  • Making a final legal judgment about mental capacity for the particular decision or transaction.

Role of mental capacity in creating an EPOA and guardianship appointment

An EPOA is a legal document that allows an individual (the principal) to appoint someone (the attorney) to manage their financial and legal affairs when they are unable to do so themselves. It is crucial that the principal has the requisite mental capacity when creating this important document to avoid potential later legal repercussions.

A guardianship appointment differs from an EPOA in that it relates to designating a ‘guardian’ who can make decisions regarding an individual’s health and lifestyle when they no longer have capacity to do so. Choices about care accommodation, healthcare, medical procedures and other personal matters become the responsibility of the appointed guardian.

Role and process of NCAT in EPOA and guardianship matters

When an individual loses mental capacity and has not previously established an EPOA or guardianship, it can create a challenging situation for family members and caregivers who may disagree about the best way to protect the person’s wellbeing and interests. In such cases, NCAT can step in to address the person’s needs and make decisions on their behalf.

NCAT is a legal authority in NSW that specializes in resolving disputes and making decisions related to guardianship, financial management, and other civil and administrative matters. When mental capacity is lacking, and no prior legal arrangements exist, a family member, friend, or concerned party may apply to NCAT for orders regarding the appointment of a guardian or financial manager for the person who has lost capacity.

NCAT will carefully consider all relevant evidence, including medical assessments and input from family members and healthcare providers, to determine the person’s best interests. If necessary, NCAT may appoint a guardian to make decisions related to the person’s healthcare, accommodation, and lifestyle. Additionally, a financial manager may be appointed to handle their financial affairs. NCAT may also review an existing EPOA or guardianship appointment.

NCAT also has the power to regularly review its decisions to ensure that the appointed guardian or financial manager continues to act in the person’s best interests.

Talk to our expert team

The loss of mental capacity is a challenging and sensitive issue for both the individual and their family, with significant legal and personal implications. It’s crucial to consult with legal professionals with experience in elder law and estate planning where an individual with diminished capacity needs to make an EPOA or guardianship appointment, or an application to NCAT is required.

The process of engaging medical professionals to assess capacity, or navigating the requirements of an NCAT application, can be stressful and time-consuming. Contact our friendly and approachable team today if any of the information in this article raises questions or concerns.

Sep 26

Understanding Apprehended Domestic Violence Orders (ADVOs) – Including How to Defend One

By Family Law

Apprehended Domestic Violence Orders (ADVOs) are a key legal tool in NSW to protect individuals from domestic violence or the threat of such violence.

Increasingly domestic violence is understood to encompass a wide range of behaviours within a family relationship, from physical, emotional and financial abuse, to harassment, stalking and coercive control. An ADVO aims to provide immediate protection to victims by imposing restrictions on the alleged perpetrator’s behaviour.

This article provides an overview of ADVOs, including the legal grounds for obtaining one, what happens before the matter is dealt with in court, how to seek an ADVO and how to defend against one.

Understanding the legal grounds for obtaining an ADVO

To obtain an ADVO in NSW, an applicant must establish certain legal grounds, including:

  • Fear of violence or harm: The applicant for an ADVO must have a reasonable fear of violence, threats, harassment, or intimidation from the alleged perpetrator. This fear must be based on actual or perceived actions, and it can extend to not only the victim but also any other person whom the victim believes is at risk.
  • Domestic or family relationship: There must be a domestic or familial relationship between the applicant and the alleged perpetrator. This can include current or former spouses or de facto partners, family members, or people living together in a domestic setting.
  • Acts of domestic violence: The applicant must provide evidence of specific acts of domestic violence, such as physical assaults, verbal abuse, stalking, or any other behaviour that causes fear or harm. These acts must be recent or ongoing.
  • Protection and safety: The court will consider whether the ADVO is necessary to protect the safety and wellbeing of the applicant and any other person at risk.

Some of the actions a person is prevented from taking under an ADVO includes assaulting or threatening the protected person; stalking and intimidating; destroying or damaging property; going within a certain distance of the other person; attending the protected person’s house, or contacting them.

An ADVO lasts for 12 months from the date the order it was made unless the court specifies a different time period.

What happens before the matter is dealt with in court

The process begins with the victim (or someone on their behalf) filing an ADVO application with the local police station or the court registry. NSW Police will most commonly apply for an ADVO on the basis of a report of domestic violence, even where the alleged victim thinks that the order is unwarranted or unnecessary.

In cases of immediate danger, the court may grant interim orders to provide protection right away to the applicant. These orders can be issued without the alleged perpetrator being present or informed. The police are responsible for serving the ADVO application and any interim orders to the alleged perpetrator. This serves as notice of the legal proceedings.

A person the subject of an ADVO should consult a legal professional with experience in domestic violence matters as soon as possible after becoming aware of the order to discuss the steps they should take to possibly have the order dropped.

The matter will typically be listed for a first court appearance where both parties are required to attend. During this appearance, the court may make further orders, including extending interim orders or setting a hearing date. Both parties will have an opportunity to gather evidence to support their case. This may include witness statements, photographs, text messages, or medical reports.

In some cases, the court may suggest mediation or dispute resolution services to attempt to resolve the matter without a full hearing.

The person who is the subject of the ADVO can defend the application at the first hearing by attempting to prove, on the balance of probabilities, one of the following to the court:

  • that the complainant or protected person does not fear the defendant;
  • the complainant does not have reasonable grounds to fear a personal violence offence from the defendant;
  • it is inappropriate for the ADVO to be made.

A person the subject of an ADVO may also consent to it without admissions, meaning they do not agree with the grounds on which the order was granted. A legal representative with experience in this area may then be able to negotiate with police and/or the other party to amend the conditions of the order. Legal advice is highly advisable before agreeing to an ADVO in this manner as it has the potential to affect current family law proceedings, particularly in relation to parental rights.

A person subject to an ADVO may also file a cross-application against the protected person, claiming that they fear the other person and have reasonable grounds to do so. In the case of this type of application, the court will generally hear both applications at the same time.

An ADVO may be appealed within 28 days of a final order being made by the court. It’s possible the ADVO may be ‘stayed’ – or has no effect, in other words – once the appeal is filed and until it is decided.

What factors influence acceptance of the application?

The chances of being granted an ADVO by the court in NSW depends on several factors, including:

  • The strength and reliability of the evidence – witness statements, photos, text messages, and medical reports can all play a significant role in supporting the application.
  • Credibility of both parties – in considering an ADVO application, the court will assess the consistency of the statements and any evidence presented by both parties.
  • Testimony of witnesses – first-hand accounts of the alleged domestic violence may strengthen the applicant’s case.
  • Conduct and past incidents – the court may consider any past examples of domestic violence and the alleged perpetrator’s conduct in determining whether an ADVO is warranted.

Other important things to consider

Both parties have the right to legal representation – the presence of a solicitor with experience in ADVO proceedings can be essential to the application being granted.

In some cases, mediation may lead to a resolution that does not require a full ADVO hearing but this depends on the willingness of both parties to engage in the process. In cases where there has been long-term or repeated instances of serious domestic violence, mediation is unlikely to be a suitable suggestion.

The court’s primary concern is the safety and wellbeing of the victim and any other person or persons at risk. If the court determines that an ADVO is necessary to provide protection, it will issue the order, outlining the conditions and restrictions imposed on the alleged perpetrator.

Our expert team can help

Family law matters, including how to approach domestic violence matters, are one of our specialities at Felicio Law Firm. We can advise on ADVO whether you need urgent protection from the violence of a partner or family members, or you are the subject of an ADVO you believe is unwarranted or unnecessary. Call our professional team today for more details on anything raised in this post.

Aug 14
Why you should check whether your strata scheme has complied with the new reporting requirements if you're buying or selling property

Why You Should Check Whether Your Strata Scheme Has Complied with New Reporting Requirements if You’re Buying or Selling Property

By Property Law

Designed to enhance transparency and accountability in the strata management sector, NSW Fair Trading launched the NSW Strata Hub online portal on April 1, 2023. The portal’s purpose is to streamline reporting obligations for strata management companies and create a more efficient and accessible system for managing strata schemes.

The online portal followed the implementation of the Strata Schemes Management Amendment (Information) Regulation 2021 (‘Information Regulation’), introduced to address long-standing issues in the strata management sector, including inadequate reporting, lack of transparency, and the challenges faced by owners in accessing vital information about their strata schemes.

The hub is also designed to improve monitoring of maintenance and defect management in more than 83,000 strata buildings across NSW.

Under the new regulation, strata management companies were mandated to submit comprehensive reports on their clients’ strata schemes by December 31, 2022. These reports provided crucial financial data, operational details, and other relevant information for the purpose of creating a centralised database of strata scheme information accessible to owners, tenants, and other stakeholders (including local council and emergency services).

These stakeholders plus other authorised individuals are able to log in to the portal to securely view essential information such as financial statements, meeting minutes, maintenance schedules, and insurance details.

Other key information entered on the portal includes:

  • Strata plan number and address;
  • Number of lots;
  • Classification as residential, commercial or mixed use, for example;
  • Contact details for the strata committee, strata managing agent, building manager, etc;
  • Date of most recent annual general meeting;
  • Cash balance held within the capital works fund (updated annually);
  • Due date for annual fire certification; and
  • Insurance replacement value.

Deadline for compliance

NSW Fair Trading set a final deadline of June 30, 2023 for all strata schemes within the state to comply with the regulation. The introduction of this grace period was designed to allow strata schemes extra time to gather and organise their data to make the transition to the NSW Strata Hub effective. Non-compliant schemes face potential penalties and restrictions until they fulfil their reporting obligations – these are not intended to be punitive but to encourage compliance for overall improvement of the strata industry in NSW.

For those buying or selling a property within a strata scheme, it’s important to consider whether the scheme has complied with the regulation. Those schemes that embraced the new reporting system have provided confidence for owners, tenants, and prospective buyers, and easier access to financial records so that owners have sight on how strata levies are employed for greater financial accountability.

An additional claimed benefit is improved communication between strata managers and owners, with prompter responses to queries and concerns on issues such as property maintenance and improvement, and faster dispute resolution.

Administration and enforcement of the new portal is funded through a lodgement fee of $3 per lot (GST exclusive) with the strata scheme’s annual report, inclusive of parking and other utility lots if they are deemed to be separate lots for levy contributions. The fee will need to be included in the scheme’s annual budget as an ongoing compliance cost.

Seek expert advice if unsure

At Felicio Law Firm, helping both buyers and sellers with the complexities of strata schemes is one of our specialities. If you have questions or concerns about a strata scheme’s compliance with the requirements of the NSW Fair Trading’s Strata Hub online portal, contact us today for a discussion about how we can help.

Aug 04
What is the Difference Between Buying a Business Through a Franchise or a Licence Agreement

What is the Difference Between Buying a Business Through a Franchise or a Licence Agreement?

By Business Law

Two popular ways to get into running a business are through franchise and license agreements, both offering the benefit of allowing an entrepreneur to realise their goals through an established business model. Both types of agreements have different requirements in an operational and legal sense, which we’ll try and address in this article.

What are the basics of each type of agreement?

Franchise agreements: A franchise agreement is a legally binding contract between the franchisor (the established business owner) and the franchisee (the buyer), granting the franchisee the right to operate a business using the franchisor’s brand, products, and systems. In return, the franchisee pays initial fees and ongoing royalties to the franchisor.

The franchise agreement should cover matters such as the key terms of the business, training and support, non-compete clauses, how long the franchise relationship will last, royalty payments, renewal and sale rights, dispute resolution and a termination clause.

License agreement: A contractual arrangement between the licensor (the business owner) and the licensee (the buyer). The license agreement grants the licensee permission to use the licensor’s intellectual property, such as trademarks, patents, or proprietary technology, to operate their business. Unlike a franchise agreement, licensees usually have more independence in operating the business under license.

Typically the license agreement should cover the scope of the property being licensed, the agreed purpose for using the property, confidentiality clauses, exclusivity, payments or royalties, and any rights to transfer the license.

One of the key distinctions between a franchise and license agreement lies in the level of control and support provided by the original business owner. Franchises typically offer a higher level of support, as generally speaking the franchisor will provide comprehensive training, ongoing assistance, and a proven business model. In return the franchisee is also expected to adhere to specific guidelines and standards set by the franchisor, maintaining uniformity across all franchise locations in terms of factors such as business appearance, staff policies, and more.

License agreements, by contrast, tend to grant the licensee more autonomy in operating their business. While they gain access to the licensor’s intellectual property, the licensee will often receive limited other support and guidance. The licensee has the freedom to implement their own business strategies and practices as long as they stay within the terms of the license agreement.

Other key differences between franchising and licensing

When buying a business through a franchise agreement, the franchisee benefits from the established brand recognition and reputation of the franchisor. Customers are more likely to trust and frequent a business with a well-known brand, potentially leading to a faster return on investment.

License agreements, on the other hand, may not offer the same level of brand recognition, as the focus is primarily on accessing specific intellectual property. The success of the business largely depends on the licensee’s ability to market the product or service effectively under their own brand identity.

Franchise agreements will generally involve higher upfront costs than license agreements. In addition to an initial franchise fee, the franchisee is required to pay ongoing royalties to the franchisor, usually based on a percentage of their sales. These ongoing fees contribute to the support and resources provided by the franchisor.

License agreements often come with lower upfront costs, as they typically require a one-time licensing fee. The licensee may also negotiate a share of their revenue with the licensor, but this is usually less than the ongoing royalties associated with franchises.

Legal and regulatory requirements

Franchise agreements are subject to more stringent legal regulations compared with license agreements. In Australia, franchises are governed by the Franchising Code of Conduct, a mandatory regime that forms part of the Australian Consumer Law and which demands specific disclosure requirements, dispute resolution processes, and cooling-off periods for potential franchisees. This ensures transparency and protects the interests of both parties.

License agreements are generally less regulated, offering greater flexibility in their contractual terms. However, businesses should still seek legal advice to ensure that their licensing arrangement complies with relevant laws and regulations.

The importance of expert legal advice

Choosing between a franchise and a license agreement when buying a business requires careful consideration of various factors, including the level of support, brand recognition, costs, and legal requirements. Franchise agreements offer a turnkey solution with established support and a recognisable brand, but they come with higher costs and stricter regulations. License agreements, on the other hand, provide more independence and lower upfront expenses but may require the licensee to take on greater responsibilities for the business’s success.

Ultimately, prospective buyers must assess each agreement based on their individual preferences, circumstances, resources, and long-term business objectives to make an informed decision. At Felicio Law Firm our professional team regularly provide expert advice on the benefits and drawbacks of both franchising and license agreements, and can help clarify the issues involved for you, so contact us today.

Jun 26
How Does the Small Business Restructuring Process Work

How Does the Small Business Restructuring Process Work?

By Business Law

The small business sector is one of the engine rooms of the Australian economy, driving economic growth and employment for millions of people. But running a small business can also be highly challenging in an environment where bigger picture events such as Covid-19 and rising inflation can present a threat to the sector’s growth and survival.

In response, the Australian government introduced the Small Business Restructuring (SBR) process in 2021, aimed at providing a simplified and efficient framework for debt restructuring. SBR allows a small business to create and propose a plan to its creditors to restructure its debts while the directors remain in control of the business and still trading.

In this article we’ll look in more detail at the SBR debt restructuring process and how it empowers entrepreneurs to regain control of their financial future.

Understanding the Small Business Restructuring process

The SBR reform introduced as part of the Australian government’s insolvency reforms allows eligible small businesses with debts up to $1 million to reorganise their financial affairs and operations while continuing to trade. The primary objective of the SBR process is to provide struggling small businesses with a chance to turn around their operations and avoid insolvency, thereby preserving jobs and fostering economic stability.

To qualify for the SBR process, small businesses must meet specific eligibility criteria, including:

  • being incorporated in Australia;
  • having liabilities of $1 million or less (exclusive of employee entitlements)
  • being insolvent or likely to become insolvent;
  • with none of its directors having been a director of another company that has gone through another Small Business Restructuring or a Simplified Liquidation process within the last seven years;
  • and, the company is up to date with its tax lodgements and all employee entitlements..

Upon meeting the eligibility requirements, the small business appoints a registered restructuring practitioner to assist in formulating and implementing the restructuring plan. The ASIC website maintains a list of Registered Liquidators, including those who can only take the work of a small business restructuring practitioner.

Developing a restructuring plan: The appointed restructuring practitioner works closely with the small business to develop a restructuring plan tailored to its unique circumstances. The design of the plan should propose strategies and actions to address the company’s financial challenges and give insight into how it can secure future sustainability.

The plan may detail the need for the directors to negotiate with creditors for extended payment terms, debt forgiveness, or partial debt repayment. Under the SBR process, the restructuring plan must be presented to the creditors within 20 business days of the appointment of the restructuring practitioner.

Voting and approval by creditors: Once the plan is presented, the creditors hold a meeting to vote on approving its terms within 15 days. To be accepted, the plan must receive support from a majority in both value and number of the creditors. If the plan is approved, it binds all unsecured creditors, and the small business can proceed with its implementation.

If creditors accept the plan, the company pays what is agreed in the document then is free of the balance of the debt. SBR has quickly become a popular alternative to negotiating a payment arrangement with the Australian Tax Office.

If creditors don’t accept the plan, the company can proceed to choose its preferred course of action, such as another company liquidation process, voluntary administration or other actions.

Effects and benefits of the SBR process: The SBR process provides several advantages for small businesses facing financial distress. Firstly, it offers a cost-effective alternative to traditional insolvency processes, reducing the financial burden on the business. Secondly, it allows business owners to retain control and continue operating, preserving jobs and maintaining relationships with suppliers and customers. Furthermore, SBR facilitates open communication between the small business and its creditors, fostering collaborative solutions and better outcomes for all parties involved.

Seek expert legal advice for more detail on the SBR process

The SBR process in Australia provides a vital lifeline for struggling small businesses, offering a simplified and efficient debt restructuring framework. In uncertain times where the economy is still shakily emerging from the shock of the Covid-19 pandemic, SBR provides a cost-effective and time-saving way for a business owner to try and regain control of their finances and get the enterprise back on its feet.

If you need some expert guidance on utilising the SBR process, contact our friendly team at Felicio Law Firm. We have the skills and experience to offer you the right advice on restructuring debt for your small business.

Jun 23
Disputes When a Parent Gives Money to a Child to Buy a Property: Explaining the Presumption of Advancement

Disputes When a Parent Gives Money to a Child to Buy a Property: Explaining the Presumption of Advancement

By Estate Planning

A recent case in the New South Wales Court of Appeal, Koprivnjak v Koprivnjak 2023 NSWCA 2, dealt with the presumption of advancement and the application of this equitable doctrine to a property transaction between a father and a daughter.

The case revolved around a payment of $75,000 made by the father to his daughter for the purchase of a real estate property. To understand the dispute, in which the father said the money given to his daughter was a loan, while she claimed it was a gift, it is first necessary to briefly explain the presumption of advancement doctrine.

The legal concept dates back to 17th century England and presumes that transfers of assets from husbands to wives, male fiancés to female fiancés and from parents to children are gifts, in the absence of any evidence to the contrary. In relation to parents and children, as the Koprivnjak case deals with, the presumption is based on society’s expectation that parents naturally intend to advance their children’s interests and promote their financial wellbeing.

The presumption, however, can be rebutted if sufficient evidence is presented to prove that the transfer was intended as a loan or an investment rather than a gift. In this case, a resulting trust may be presumed where the legal title of the property – in this case in the name of the daughter – does not reflect the contributions to the purchase price, so that the person with legal title holds the property on trust for the person who made the contribution.

The details of the Koprivnjak case

In the case of Koprivnjak, the daughter purchased a rental property in Shoal Bay, NSW for $300,000 in 2011. Her father provided $75,000 to his daughter to assist her in purchasing the property, comprising $15,000 for the deposit and a further $60,000 towards the purchase price. The property was later sold and the proceeds placed in a trust account until the dispute between the estranged family members was resolved.

The father argued that the payment was a loan that gave him a beneficial interest in the property, while the daughter claimed it was a gift. The primary issue before the court was whether the presumption of advancement applied, and if so, whether the father had successfully rebutted it.

The court heard evidence from both parties to determine the true nature of the transaction and considered factors such as the relationship between the father and daughter, the financial circumstances of both parties, and the intention behind the transfer. The court noted that the presumption of advancement applies when a parent provides financial assistance to a child, particularly in cases involving property transactions.

The findings of the court

In the first instance the court rejected the father’s claim the property was held on trust for him by his daughter, finding he failed to discharge his onus of establishing a trust to rebut the presumption of advancement. His loan claim, however, was accepted and an order made that the loan and interest be paid to the father from the sale proceeds, with the remainder to be paid to his daughter.

The father appealed the judgement in relation to the trust argument. His appeal was dismissed with costs, the court of appeal finding in the father’s evidence that he could not prove the intention was for the property to be held on resulting trust, determined at the time of purchasing the property.

Instead, the evidence suggested that the father had intended the payment as a gift, supporting the daughter’s claim. The court emphasised that the presumption of advancement can only be rebutted through clear and compelling evidence that demonstrates a different intention.

The judgement cited the High Court case of Bosanac v Commissioner of Taxation [2022] HCA 34 (‘Bosanac’), whereby the court must look at the objective facts and enquire into the parties’ words or conduct at the time of the transaction (or immediately after the transaction) to determine the parties’ objective intention as to who has beneficial ownership of the property.

Lessons from the case and the need for good legal advice

While the presumption of advancement has been described as ‘anomalous, anachronistic, and discriminatory’ by the Australian Taxation Office (in Bosanac), the ruling in the Koprivnjak case reinforces the significance of the doctrine in property transactions between parents and children. Where parents make substantial financial contributions to their children, these transfers are generally presumed to be gifts. The burden of proving otherwise generally requires strong documentary evidence the parent/s intended the money as a loan giving them a beneficial interest in the property.

If you’re still uncertain about how this legal principle operates and are in a family situation where you’re lending money to a child, or receiving funds from a parent for a property purchase, contact our friendly, professional team at Felicio Law Firm before doing so to avoid any later disputes.

Jun 07
What You Need to Know About Adverse Action by an Employer

What You Need to Know About Adverse Action by an Employer

By Employment

In Australia an employee is protected from ‘adverse action’ by an employer under the Fair Work Act 2009 (‘the Act’). This means that an employer cannot take certain actions against a worker because:

  • the employee exercises a workplace right – such as expressing an entitlement, benefit, role or responsibility that is provided by a workplace law or instrument, or an order made by an industrial body; initiating or participating in a process/proceeding under a workplace law or instrument; or making a complaint or inquiry to an industrial body or person under law or in relation to employment;
  • the employee partakes in industrial action against the employer;
  • of a protected characteristic of the employee, such as their race, gender, sexuality, pregnancy, age, disability, etc.

A worker who believes they have been the subject of adverse action by their employer may bring a general protections application in the Fair Work Commission for compensation for both economic and non-economic loss. In this article, we’ll provide more detail on what constitutes adverse action and the process for making a compensation claim.

It should be noted that an employee may also take adverse action against an employer if the worker threatens or takes action by:

  • ceasing work in the service of the employer, or;
  • taking industrial action against the employer.

Examples of adverse action by an employer

Section 342 of the Act provides examples of adverse action, including where an employer:

  • Dismisses an employee;
  • Injures the employee in their employment (injury meaning an action or behaviour which can harm a person, such as demoting them or treating them differently);
  • Alter the position of the employee to their prejudice, or;
  • Discriminate between the employee and other employees.

These actions may also include an employer’s decision not to hire someone, or where a potential employee is offered different (unfair) terms and conditions compared to other employees, or where an employer ends or refuses to enter into, or alters, a contract with an independent contractor.

Deciphering the language of the Act with examples, employers must be cautious about taking action against an employee who takes leave to care for a sick relative, or who raised a health and safety concern about the workplace.

Conversely, not all actions by an employer will fit the adverse definition. Offering a worker a lower salary because they lack experience, or refusing to employ a job applicant because they do not meet all the criteria for the position (such as possessing a driver’s licence, for instance), or a supportable decision to make a person’s role redundant, are examples of management decisions that may not be described as adverse action.

Other protections in the Act guard against coercion, undue influence or pressure, misrepresentation or inducement in a range of matters, including a person’s characteristics. The only exception to these protections is where the action is permitted by discrimination legislation or is taken because of the inherent requirements of the position.

What is the process of an adverse action claim?

In a ‘general protections’ complaint, an employee claims adverse action against them based on their expression of a workplace right, involvement in an industrial activity, or on grounds of discrimination. If the employee was dismissed, their application may be for unfair dismissal.

The onus is on the employer to show that the reason for their action against the employer was lawful and not in breach of the general protections. To this end they will generally need to prepare a formal response setting out their defence to the claim. Mediation will then ensue to see if employer and employee can negotiate a resolution to the dispute but if not, will proceed to the Federal Circuit Court, the Federal Court or in some cases, a formal arbitration in the Fair Work Commission.

Remedies for a person who brings an adverse action claim include compensation for non-economic loss and the financial impact of the employer’s action. The Federal Court has unlimited jurisdiction to award damages.

Case example

The High Court of Australia provided guidance on adverse action claims in Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32. In this case, Mr Barclay, a TAFE team leader who was also a union official, sent an email to union members at his workplace warning of producing ‘false and fraudulent documents’ as part of the Institute’s process of applying for re-accreditation. He was subsequently suspended from his role and brought an adverse action claim.

The trial judge found Mr Barclay was not suspended because of his email but because he had not reported the allegation of fraud to the CEO. The full federal Court overturned this decision on appeal, finding the decision was based on Mr Barclay’s role as a union official. In restoring the trial judge’s verdict, the High Court found among a number of reasons that:

  • The fact a person claims a protected attribute, such as union membership or activism, does not make them immune from adverse action;
  • An employer’s reasons need to be ‘substantial’ and ‘operative’ in the decision-making process;
  • The employer’s reasons for the action need to considered against all the facts and circumstances, including the evidence of the decision making.

The High Court’s decision confirmed that the subjective reasons of the employer are significant and important in working out whether adverse action was taken for a prohibited reason. In conjunction with the decision in Construction Forestry Mining and Energy Union v Endeavour Coal Pty Ltd [2015] FCAFC 76, the High Court has confirmed that a distinction exists between the impact and the exercise of a workplace right by an employee.

Contact our expert employment law professionals

If you’re an employee who believes your employer has taken an adverse action against you, or an employer who has this type of claim brought against you, set up a meeting with one of our employment law experts at Felicio Law Firm. An adverse action claim can be complex, is subject to time limits and require strong supporting evidence to succeed. Our professional team will explain the issues we’ve raised in this article in greater depth to help assess your case.

May 31
More Changes to Stamp Duty in NSW As New Government Takes Power

More Changes to Stamp Duty in NSW as New Government Takes Power

By Conveyancing

Paying stamp duty on a property transaction in NSW is an area of government policy currently undergoing rapid change. We’ll look at these changes in a series of articles, beginning with the current state of play.

First Home Buyer Choice scheme – introduced but soon to be abolished

In November 2022 the former Perrottet government introduced the First Home Buyer Choice scheme (FHBC), allowing those getting into the property market to choose between either paying stamp duty in a lump sum, or paying an annual property tax on the property. The scheme’s aim was to reduce the initial cost of purchasing a property for a first home buyer by paying a tax calculated on the land value and paid each year of ownership, instead of the lager lump sum amount required by an upfront stamp duty payment.

Under the scheme first home buyers in NSW could choose to pay $400 plus 0.3 per cent of their property’s land value if they reside in the property (or $1,500 plus 1.1 per cent of land value for investment properties). The property tax option applied to properties up to the value of $1.5 million. Stamp duty exemptions remained, comprising a full exemption for homes valued up to $650,000, and a partial exemption for homes valued up to $800,000.

But with the election of the new Minns Labor government in March, further changes to stamp duty in NSW were announced. Crticising the FHBC as ‘a lifetime tax’ on the family home, the new government said it would instead rely on expanding stamp duty concessions to help first home buyers. From June 30 this year the new government proposes to abolish the FHBC. Instead, first home buyers will receive a full concession on properties up to $800,000 and a concessional rate for homes valued up to $1 million (believed to be about 50 per cent). The NSW Parliamentary Budget Office has estimated up to 95 per cent of all first home buyers will save money on stamp duty under the new rates.

Implications for home buyers

Those who have already opted in to the FHBC will have a grace period in which their arrangements remain the same. It’s also expected a window will remain open before the scheme is phased out in which new buyers can still make a choice between land tax and stamp duty. If not, those looking to buy a property up to $1.5million who had chosen the land tax option will not be required to pay the full stamp duty amount.

While the FHBC made it easier for first-home buyers to get into the market by reducing the overall amount needed for a deposit, it was also critiqued for potentially inflating property prices by artificially encouraging demand at a time of limited housing supply. The scheme also only applied to first home buyers and not other segments of the market such as existing homeowners and empty nesters.

Unsure? Speak with our property experts

In this period of transition between governments in NSW, where earlier schemes may be abolished and new rates of stamp duty on property transactions come into effect, the guidance of our property and conveyancing specialists at Felicio Law Firm can be vital. We can help clarify the issues involved, particularly if you have already opted in to the FHBC or want to choose to pay land tax before the scheme expires at the end of June. Contact us today for more detail on any of the issues raised in this post.

Feb 17
Shareholder and Partnership Disputes that Lead to the Appointment of Liquidators

Shareholder and Partnership Disputes that Lead to the Appointment of Liquidators

By Business Law

Most business ventures are entered into in good faith and with hope and expectation for success among the parties involved.

Unfortunately, original intentions are not always realised. Companies and other corporate partnerships such as joint ventures can often turn into acrimonious affairs when the vision for the business is not realised, the people involved wish to go their separate ways or some other dispute arises.

These situations can be avoided if the shareholders or partners in the business enter into a properly drafted agreement at the start of the venture. But where such a document doesn’t exist or is contested, the dispute can become intractable with threats of legal action which can leave all parties to the venture worse off.

One way to avoid such an expensive and lengthy resolution of the issues involved is to appoint a liquidator to assist the parties to exit the business in an orderly fashion. It’s important to note that a company or partnership between companies does not need to be insolvent for it to be placed in the hands of liquidators.

What situations are suitable for the appointment of a liquidator?

There are a number of scenarios where corporate partnerships or shareholders may apply for the appointment of a liquidator:

  • Where there is a dispute between directors/shareholders or partners that is adversely affecting the company’s business or assets and can’t be resolved through dispute resolution or by agreement;
  • Where a creditor of the venture has fears that directors or partners are inappropriately dealing with assets or removing them from the company;
  • Where a shareholder or partner has concerns that other executives may be acting in their own interests and diminishing the venture’s financial position.

In any of the scenarios outlined above, the appointment of a liquidator is designed to protect and preserve the company’s assets until the dispute can be resolved or the venture wound up. An independent arbiter in the form of the liquidator can manage the ongoing affairs of the company, and also protect the interests of the aggrieved party who applied for their appointment.

How does the process work?

Once appointed, usually by agreement of the shareholders or partners and even when the company is solvent, the liquidator’s role becomes to:

  • realise the company’s assets;
  • maximise the return on those assets to repay the company’s creditors;
  • pay any surplus funds to creditors.

The liquidator’s role is to provide parties to the dispute with solutions in order to realise a ‘just and equitable’ outcome. One solution may be to sell the business either privately or via an open market process, using the proceeds to repay creditors and distribute the remainder to shareholders or partners. In other circumstances, a structured wind-down of business operations might be undertaken, with creditors repaid as assets are realised and remaining value in the business distributed to shareholders/partners.

The provisional liquidation option

Applications to the court for the appointment of liquidators can occur on various grounds under sections 459Q and 461 of the Corporations Act 2001.

Court-appointed liquidation – where the Court orders that a company be wound up and a liquidator be appointed – occurs on application by a creditor, director or shareholder of the company, or the Australia Securities and Investments Commission (ASIC). Once this application is made, a further application can be made to the court for a provisional liquidator to be appointed prior to any winding up of the company or joint venture. The provisional liquidator operates in the period between when the liquidation application is made and the winding up application is heard by the Court, and generally happens when there is a dispute between shareholders or partners.

This is appointment will be made by the court on ‘just and equitable’ grounds to the parties involved. Such an application should only be made once all avenues of dispute resolution and mediation are exhausted.

A court may make this appointment if on the evidence available it is satisfied that the business’ assets are at risk of being diminished. The liquidator will be charged with maintaining the status quo of the business or partnership and preserving its assets, meaning it is not empowered to conduct investigations into the venture’s affairs, recover voidable transaction of distribute funds to creditors. The provisional liquidator may also, however, have the power to sell a business and/or its assets.

Meaning of ‘just and equitable’ outcome

Consideration of what is a just and equitable outcome for those involved in the business is complex and the court will only consider liquidation as a last resort where the business is solvent.

But it will order the company to be brought to an end through liquidation where the dispute is at a deadlock and can’t be resolved through normal dispute resolution. In some cases, the possibility of winding up the company will change the minds of the disputants and force them to the negotiating table.

The need for expert legal advice

This can be a complicated area of law and legal advice from professionals with experience in corporations law is essential. At Felicio Law Firm we have advised many clients on the advantages and drawbacks of appointing a liquidator to try and end an impasse in the operation of a business, both for shareholder disputes and corporate partnerships. Consult one of our Erina lawyer’s experts in this field if anything in this article applies to your situation.

Feb 09
Contesting a Will for Failure to Make Adequate Provision for a Spouse

Contesting a Will for Failure to Make Adequate Provision for a Spouse

By Estate Planning

It’s a sad fact of modern life that two-thirds of marriages in Australia will end in divorce. But that statistic does not necessarily deter people from saying ‘I do’ again with a new partner. In 2016, 12 per cent of marriages in Australia were between couples where both people had previously been married, while a further 16 per cent of marriages involved one spouse who was entering into their second marriage.

The implications of multiple marriages for estate and succession planning are significant. Particularly where a person had children from an earlier marriage (or marriages), ideally that person’s will should be written so as to anticipate a claim on the estate from an ex-spouse.

This article looks at what happens when an ex-spouse makes a family provision application (FPA), which is a claim to the court contesting the terms of their ex-partner’s will because they do not feel adequate provision was made for them from the estate.

What happens to a person’s will when they separate from their partner?

In NSW the legal process for dealing with a dispute about a will is covered in the Succession Act 2006 (‘the Act’). Under section 12 of the Act, when a person gets married their existing will is revoked. Similarly, when a person officially divorces, any bequest to their former spouse in the will is also revoked, as is the appointment of the ex-spouse as an executor, guardian or trustee of the will. The only situation in which this is not the case is when the will-maker includes a statement expressly preserving the bequest to the former spouse, regardless of the divorce.

The eligible people who can contest a deceased person’s will through an FPA is limited – usually their spouse and their children – but in NSW, significantly, this class of persons also includes a testator’s former spouse or de facto partner under section 57. Where a person has been married two or more times, the potential for complex, drawn-out and expensive claims on the will becomes apparent.

How is an ex-spouse’s claim assessed by the court?

FPAs are heard by the Supreme Court of NSW. A number of factors are taken into account to determine whether an ex-spouse or spouses should be adequately provided for from the estate. These considerations include:

  • the nature and duration of the relationship between the ex-spouse and the deceased (including whether they maintained an ongoing relationship after the marriage ended);
  • the obligations and responsibilities owed by the deceased to the ex-spouse;
  • the ex-spouse’s financial resources and needs (for example, whether any other person is legally obligated to support the ex-partner);
  • whether the deceased and the ex-spouse had any children together (and the children’s age and needs);
  • the ex-spouse’s physical, intellectual, or mental capacity;
  • the ex-spouse’s contribution to the deceased’s estate, or their welfare;
  • any benefit the ex-spouse has received from the deceased’s estate during their lifetime; and/or
  • any orders and/or agreements made in family law proceedings.

These factors are considered to determine whether there is any moral claim by the ex-spouse that needs to be provided for.

An ex-spouse’s claim may also be looked on more favourably in the case where the parties failed to come to a property settlement when the relationship ended. In the 2009 NSW case of Scott v Scott, the FPA claimant was entitled to adequate provision from the estate, the court found, because there was no final property settlement when the parties divorced.

By contrast, where a divorcing couple reach a property settlement and then go on to maintain separate financial arrangements in post-married life, the court is less likely to find in favour of an ex-spouse contesting a will based on continuing financial dependence.

In the 2019 case of Stockwell v Beaumont; O’Donnell v Beaumont, an ex-spouse was granted half the estate when she contested the will of her former husband by proving their finances were never fully separated despite the end of the relationship, arguing that she remained financially dependent on the deceased.

Writing a will in blended family situations

In situations where a person has remarried but has children with former partners, the terms of a will are all-important to try and prevent costly court action among family members once the testator has passed.

While a person’s estate will generally be inherited by the testator’s surviving partner and then, when the partner dies, surviving children (including from the earlier marriages), this is not always appropriate for blended families. The children from the earlier relationship/s may not wish to wait until the step-parent dies to inherit from the estate, while the new partner may decide to change their will to benefit others, including favouring only the children from the new relationship. The assets from the estate may also be significantly reduced by the surviving partner, preventing the testator’s children from an inheritance.

Will-makers should consider whether it is better to provide immediate gifts to children from former relationships on the event of their death, or create a testamentary trust, to avoid the possibility of an FPA against the estate. Legal advice should be sought from expert succession lawyers such as Felicio Law Firm.

Time limits and expert advice

An ex-spouse who wishes to make an FPA must do so promptly when their ex-partner passes away – the deadline to file is 12 months after the death.

If you need advice about writing a will to deal with the situation of multiple ex-partners, or need guidance on making an FPA to contest an ex-spouse’s will for provision from the estate, speak with our Erina wills & estates planning lawyers at Felicio Law Firm. We have many years’ experience in helping people makes the right decisions when it comes to their succession plans.

Dec 09
Important Things to Know about Changes in NSW for First Home Buyers

Important Things to Know about Changes in NSW for First Home Buyers

By Conveyancing

Property ownership in Australia has become a major political issue as younger people aspiring to own their own home have mostly been priced out of the market.

Government schemes to support first home buyers to achieve home ownership were introduced a number of years ago and continue to evolve. In NSW, new legislation was passed in November 2022, known as First Home Buyer Choice (FHBC). It allows first-home buyers to pay an annual property tax instead of stamp duty, which prevents many young people from entering the market. The initiative is designed to lower the upfront costs of purchasing a home in NSW and speed up the time in which new buyers can save in order to enter the market. The annual tax option allows a first home buyer to pay $400 plus 0.3 per cent of their property’s land value if they reside in the property (or $1,500 plus 1.1 per cent of land value for investment properties).

The new property tax option will be available for properties up to the value of $1.5 million. The NSW government expects the measure to assist 97 per cent of all first home buyers, or about 57,000 people per year. Existing stamp duty concessions for first home buyers are available for purchases of up to $800,000, and these concessions will continue.

How can someone find out more about FHBC?

The government body responsible for rolling out the new annual tax option for first home buyers is Revenue NSW. It is currently developing new systems, forms and educational materials primarily directed at industry and conveyancing professionals who will be responsible for advising prospective first home buyers about the new scheme.

To this end, Revenue NSW has provided more detailed information about FHBC on its website, while webinars will be offered for relevant parties. A professionals guide is currently being developed and should be available at Revenue NSW’s Resource Centre for Professionals from early December 2022, while the FHBC application form and lodgement guide will also available from mid-December.

The application process

As of January 16, 2023 a new document will be available by which ‘First Home Buyer Assistance’ and ‘First Home Buyer Choice’ applications can be processed.

FHBC applications will be processed as a duties assessment through an electronic duties return (EDR).

For new home buyers currently in the process of settling on a new house, the following information may be relevant ahead of the processing of applications from January 16.

Where a contract is entered into from November 11, 2022 and settlement is occurring before January 16, 2023, duty will need to be paid at settlement through an Electronic Lodgement Network Operator (ELNO).

Any first-home buyer who makes a purchase from November 11 until January 15, 2022 is entitled to apply for a refund of their stamp duty and choose to opt into the tax instead. Refund requests can be applied through Revenue NSW from January 16.

Professionals can lodge relevant forms and supporting evidence through Revenue NSW’s eDuties system on behalf of the purchaser, or purchasers will also be able to lodge relevant forms and supporting evidence directly with Revenue NSW through a portal.

For contracts entered into from November 11, 2022 where settlement occurs on or after January 16, 2023, professionals acting on behalf of a purchaser can process the FHBC transaction through EDR using the new ‘First Home Buyer’ document type from January 16, 2023.

Contracts for off-the-plan purchases signed on or after November 11, 2021 which settle on or after that date may be eligible to opt in to Property Tax, however these transactions cannot be processed through EDR and must be lodged through the eDuties system.

It should be noted that if a property that becomes subject to the property tax because of the first home buyer’s choice is sold, a subsequent owner is not subject to the tax.

More advice on the changes for first home buyers

If you have purchased your first home on or since the announcement of the new ‘choice’ policy in November 2022, or are about to make a purchase and need more information on how the FHBC scheme works, contact our Erina conveyancing professionals at Felicio Law Firm. It’s our job to be across important government policy changes such as this – we can help explain the advantages and disadvantages of choosing the annual property tax option over stamp duty, as well as how the new application process works.

Contact us today if this article raises any questions or concerns.

Dec 05
How to Verify Your Identity to Complete a Property Transaction Online

How to Verify Your Identity to Complete a Property Transaction Online

By Conveyancing

As many basic legal processes move online, issues around security and verification of identity become ever more important. One of the most common legal processes people deal with is conveyancing of property.

PEXA is Australia’s national system for online settlement and lodgement of property transactions. Verification of identity (VOI) is a crucial step in the process, to guard against the possibility of fraudulent property transactions and ensure the person named in the Register of Land is actually the registered proprietor. Settlements of land through PEXA became particularly popular during the Covid-19 pandemic, to avoid the need for face-to-face property transactions.

Only registered subscribers are able to use PEXA. Persons, partnerships or bodies corporate who meet the eligibility criteria, as well as solicitors and financial institutions, are eligible to become subscribers in PEXA. In some Australian jurisdictions, licensed conveyancers may also become subscribers.

For the majority of Australians, who use a solicitor to conduct a property transaction, the law firm and conveyancers must verify the identity of clients in order to complete e-conveyancing transactions.

Under the PEXA rules, a solicitor or other qualified witness must take reasonable steps to verify the identity of the individual, and the right of the individual to deal with the property if e-conveyancing is being used.

What is the VOI process to use PEXA?

There are a number of ways for a person to provide VOI when using a conveyancer. The easiest way is through a face-to-face appointment between the client and the firm conveying the property. Another method is the uploading of scans of key ID documents to a secure digital platform, along with a picture and video verifying the person’s identity. Such services generally require a fee. Finally, Australia Post’s Identity Verifier service allows a person to visit a participating post office to verify their identity. Again, this service attracts a fee but makes VOI easier for those located remotely.

What documents are required to verify identity?

The documents required for the VOI process are similar to the ‘100 points’ system commonly required for a person to open, for example, a bank account. A variety of categories and combinations of documents can be provided to prove your identity for the purposes of PEXA, outlined below.

Category 1: Australian passport OR foreign passport and an Australian Visa Grant Notice evidencing an Australian Resident Visa PLUS an Australian driver’s licence or photo card. A Change of Name or Marriage Certificate is also required, if a person’s name as displayed on their passport or licence has since changed.

Category 2: Australian passport OR foreign passport and an Australian Visa Grant Notice evidencing an Australian resident visa PLUS full birth certificate or citizenship certificate or descent certificate PLUS Medicare or Centrelink or Department of Veterans’ Affairs Card. Change of Name or Marriage Certificate, if necessary.

Category 3: Australian driver’s licence or photo card PLUS full birth certificate or citizenship certificate or descent certificate PLUS Medicare or Centrelink or Department of Veterans’ Affairs Card PLUS Change of Name or Marriage Certificate, if necessary.

Category 4: (a) Australian passport OR foreign passport PLUS another form of government issued photographic identity document PLUS Change of Name or Marriage Certificate, if necessary, or (b) Australian passport OR foreign passport PLUS full birth certificate PLUS another form of government issued identity document PLUS Change of Name or Marriage Certificate, if necessary.

Category 5: (a) Identifier Declaration plus full birth certificate or citizenship certificate or descent certificate PLUS Medicare or Centrelink or Department of Veterans’ Affairs Card PLUS Change of Name or Marriage Certificate, if necessary, or (b) Identifier Declaration by a person specified in Verification of Identity PLUS Medicare or Centrelink or Department of Veterans’ Affairs Card PLUS Change of Name or Marriage Certificate, if necessary.

Once completed a lawyer can rely on a completed VOI for a person to conduct online transactions within a period of two years.

Ask our property experts

Erina Conveyancing is one of our core specialities at Felicio Law Firm. If you have questions about how to verify your identity to enable us to complete your property transaction online, or what combination of documents are needed in order to do so, please get in touch to allow us to assist you and ensure your purchase or sale is conducted smoothly and without interruption.