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Bradley Allen Love Lawyers is comprised of devoted teams covering a wide range of legal services. We have a strong focus on commercial and business law, property, local government, employment, dispute resolution, estate planning and litigation.

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  • BAL Estates Team Listing in Doyles Guide 2018

    BAL Estates Team Listings in Doyles Guide 2018

    The 2018 Doyles Guide listing of leading Wills & Estates Litigation and Wills, Estates and Succession Planning lawyers and law firms has just been released and details solicitors and law firms practising within those areas who have been identified by their peers for their expertise and abilities.

    Congratulations to our Estates Team for their 2018 Doyles Guide listings.

    Keith Bradley AM

    • Preeminent, Wills & Estates Litigation Lawyers – Canberra
    • Leading, Wills, Estates & Succession Planning Lawyers – Canberra
    • Recommended, Wills & Estates Litigation lawyers – Australia

    David Toole

    • Recommended, Wills & Estates Litigation Lawyers –Canberra
    • Recommended, Wills, Estates & Succession Planning Lawyers – Canberra

    Golnar Nekoee

    • Recommended, Wills & Estates Litigation Lawyers –Canberra
    • Recommended, Wills, Estates & Succession Planning Lawyers – Canberra

    Ellen Bradley

    • Rising Star, Wills, Estates & Succession Planning – Australia

    BAL Lawyers has been listed as a First Tier Firm in Wills & Estates Litigation Law Firms and Wills, Estates & Succession Planning Firms – Canberra.

    Full listings for all categories can be found here.

    Our Estates Team take a holistic approach to estate planning, considering your broader personal, family and financial circumstances to ensure your wealth is passed onto the people you wish to benefit in an efficient and tax-effective way.

    If we can assist you with a making a will, appointing a power of attorney, estate litigation or helping you set up a business succession plan, please contact us.

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  • Business Breakfast Club - Illegal Phoenix Activity

    Business Breakfast Club September Summary - The Phoenix and the Regulators: A Liquidators Perspective

    This month at Business Breakfast Club, Lachlan Abbott and Fergus McFarlane of Ernst & Young provided the liquidator’s perspective on legal and illegal phoenix activity. Owing to growing concerns around phoenix activity there has been an increase in regulatory attempts to deter and disrupt illegal phoenix activity.

    What is Phoenix Activity?

    Phoenix activity involves registering a new company to take over the failed or insolvent business of a predecessor company. This is legitimate where there is genuine company failure and liquidation. Directors may responsibly manage a company, but the company may be unable to pay its debts. If the directors then hand the insolvent company over to a liquidator and register a new company after liquidation to continue the previous business, this will constitute legal phoenix activity.

    What is Illegal Phoenix Activity?

    Phoenix activity involves registering a new company to take over the failed or insolvent business of a predecessor company. This may constitute a legitimate business restructure where there is genuine company failure and the assets are sold at market value and in the best interests of creditors

    Directors may responsibly manage a company, but the company may still be unable to pay its debts. If the directors then hand the insolvent company over to a reputable liquidator and the assets are sold at or above market value (before or after liquidation) this would normally constitute legal phoenix activity, even if the assets are sold to a related party.

    Regulatory Approaches for Reform

    In the 2018-19 Budget, the Government announced several proposed reforms to corporations and tax laws to deter and disrupt illegal phoenix activity. The draft legislation includes reforms to:

    • make it an offence for directors to engage in transfers of company assets that prevent, hinder or significantly delay creditors’ access to those assets;
    • make it an offence for pre-insolvency advisers and other facilitators of illegal phoenix activity to incite, induce or encourage a company to make these creditor-defeating transfers of company assets;
    • prevent directors from backdating their resignations to avoid personal liability;
    • prevent sole directors resigning and leaving a company with no director;
    • extend the director penalty provisions to make directors personally liable for their company’s GST and related liabilities;
    • expand the ATO’s powers to retain refunds where there are outstanding tax lodgements;
    • introduce a Director Identification Number (DIN) to allow enforcement agencies to verify and track the current and historical relationships between directors and the entities they are associated with; and
    • restrict the voting rights of related creditors of the phoenix operator at meetings regarding the appointment or removal and replacement of an external administrator.

    For more information, please contact Shaneel Parikh. The next Business Breakfast Club will take place on 12 October 2018. If you would like to attend, please contact us.

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  • Baiting Buyers The Risks of Underquoting in the ACT

    Baiting Buyers: The Risks of Underquoting in the ACT

    You’d be hard pressed to find a real estate agent who is unfamiliar with the term ‘underquoting’. Indeed the practice of underquoting has become a significant problem in NSW and Victoria, where the average difference between the sale price and the agent’s quote in some suburbs can be as much as 30%.[1] Thankfully, the practice of agents deliberately undervaluing the selling price of a property to ‘bait’ buyers has been relatively infrequent in the ACT, although not without precedent.[2] It is in such a climate of high scrutiny being placed on agents however that you must be aware of the potential penalties of underquoting.

    The current law in the ACT

    Real estate agents in the ACT who underquote the likely sale price of a residential property face liability under two statutory regimes: the Agents Act 2003 (ACT) and the Australian Consumer Law, found in Schedule 2 of the Competition and Consumer Act 2010 (Cth). Interestingly, these statutory regimes could also apply to an agent over quoting the sale price of a Property.

    The Agents Act 2003 makes it an offence for an agent to make a statement about the agent’s business which is false or misleading or to make a dishonest representation (to the Seller or the Buyer) about the agent’s estimate of the selling price of the property. These offences apply to any advertisement published by an agent and cast a wide net in capturing potential dishonest conduct. There are also significant penalties for a breach, being 100 penalty units ($15,000 for an individual or $75,000 for a corporation).

    This is supplemented by the misleading and deceptive conduct provisions of the Australian Consumer Law, which make it an offence to engage in misleading and deceptive conduct in the course of trade and commerce (including a specific offence which applies this to conduct in connection with the sale of an interest in land). The potential penalties for being found to have engaged in misleading and deceptive conduct include fines of up to $220,000 for an individual and $1.1 million for a corporation.

    In addition to this, agents face a potential disqualification under the Agents Act 2003 should the offence be sufficiently serious.

    Cracking down – the response to underquoting in NSW and Victoria

    Despite similar penalties being present, in recent years NSW and Victoria have introduced legislative reforms imposing more comprehensive obligations on agents when estimating selling prices and harsher penalties for those who make misrepresentations. Although these types of reforms have not yet been introduced in the ACT, they may be on the agenda of the Legislative Assembly.

    In NSW, agents are now required to keep records substantiating selling price estimates and are prohibited from publishing an indication of the sale price less than the estimated selling price for the property (this even extends to advertisements that indicate a sale price of “offers above” or use similar words or symbols). Similar restrictions apply in Victoria, where agents are also required to prepare a statement of information (taking into account at least three properties considered most comparable) available for inspection by prospective buyers.

    Conclusion

    While the current ACT regime provides for significant penalties should agents be found to have made false or dishonest representations in underquoting the selling price of a property, legislative amendments in other Australia jurisdictions pose the possibility that a more direct and stricter regime may be legislated in the ACT in the near future.   Property agents should ensure that they are aware of these implications.

    [1] https://news.realas.com/underquoting-frustrating-home-buyers/

    [2] See http://www.canberratimes.com.au/act-news/canberra-real-estate-agent-investigated-for-underquoting-20180412-p4z94y.html

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  • Procedural Fairness in Estate Law - Recent High Court of Australia Case - Nobarani v Mariconte

    Procedural Fairness in Estate Law - Recent High Court of Australia Case - Nobarani v Mariconte

    It has been some time since there was a High Court decision concerning estates and succession law. Earlier this month the High Court of Australia considered whether procedural fairness was afforded to a self-represented litigant, Mr Nobarani during a trial in the New South Wales Supreme Court.

    Background

    Mr Nobarani was a friend of the late Iris McLaren (“the deceased”).  In December 2013, the deceased made her last Will which named her friend Ms Mariconte as her executrix and sole beneficiary of her estate.

    Mr Nobarani was named as a beneficiary of an earlier Will of the deceased. He claimed that the deceased’s 2013 Will was invalid for a number of reasons – he claimed that the deceased’s signature was forged at the time of making her Will, that she lacked testamentary capacity and that she had been under the influence of medication.

    Mr Nobarani proceeded to file 2 caveats against a Grant of Probate for the 2013 Will. The executrix then brought proceedings seeking orders that the caveats cease to be in force. The executrix also sought probate of the 2013 Will and also filed a Statement of Claim in which Mr Nobarani was not named as the defendant (and therefore, was not party to the case concerning the validity of the 2013 Will).

    NSW Supreme Court decision

    Less than a week before the trial concerning the validity of the caveats, Justice Slattery was called upon to determine an issue raised by the executrix, which was to point out that the caveats filed by Mr Nobarani had in fact expired.

    The executrix sought that the trial be held as a final probate hearing and the Court accepted. It should be noted that:

    • the Court made the decision to change the nature of the proceedings on the 14th May, noting that the trial was set down a few days afterwards on 18th May;
    • throughout the matter, Mr Nobarani was not a defendant in the executrix’s Statement of Claim concerning the validity of the 2013 Will, and as such, had only filed evidence in relation to the opposition of the caveat motion. The preparation of his case was limited therefore only to the caveat motion and nothing else; and
    • at the Trial, the executrix was represented by solicitors, junior counsel and senior counsel while Mr Nobarani remained unrepresented.

    At the trial Mr Nobarani advised the Court that he required more time to prepare for the hearing, that he had been denied an opportunity to issue subpoenas, cross examine witnesses and prepare an adequate defence.

    Ultimately, the Supreme Court held that the 2013 Will was valid, granted probate to the named executrix and ordered Mr Nobarani to pay costs.

    Court of Appeal

    Mr Nobarani appealed to the Court of Appeal on the basis that he had been denied procedural fairness.

    The Court of Appeal unanimously held that Mr Nobarani had been denied procedural fairness, but what happens next was important….

    Justice Ward and acting Justice Emmett held that although Mr Nobarani had been denied procedural fairness, that the miscarriage of justice was not so substantial to warrant a retrial, and that the denial of procedural fairness did not deprive Mr Nobarani of the possibility of a successful outcome.

    Justice Simpson had a different opinion and found that there was a possibility that retrial would have resulted in a different outcome and therefore there had been a miscarriage of justice.

    As the Court was divided, the majority decision took precedence and Mr Nobarani’s appeal was dismissed. A retrial was not ordered.

    High Court of Australia

    Mr Nobarani then appealed to the High Court of Australia.

    The High Court unanimously allowed Mr Nobarani’s appeal from the Court of Appeal and held that a new trial should be granted on the basis that Mr Nobarani was denied procedural fairness.

    Some of the notable points made by the High Court included the following:

    1. Denial of Procedural Fairness

    Citing Stead v State Government Insurance Commission, the High Court stated that “[a]ll the Appellant needed to show was that the denial of natural justice deprived him of the possibility of a successful outcome”.[1] The High Court confirmed that there were several denials of procedural fairness through the course of the trial however they mostly arose from the last minute change of the issue to be decided during the hearing. Ultimately, this was determined to be sufficient enough to deny the appellant “the possibility a successful outcome”.

    1. Insufficient Time for the Appellant to Prepare a Defence

    The High Court held that contrary to the assertions of the trial judge, the appellant did not have sufficient time to prepare for his matter.

    Mr Nobarani only had 3 clear business days to:

    • consider the statement of claim;
    • prepare and serve a defence;
    • issue any subpoenas with an abbreviated return date before trial; and
    • locate any witness and secure them for the trial.

    The trial judge had made this assertion of the basis that the matter had been set down for some time. However, the trial judge had not taken into account that the trial date was set for the issues surrounding the appellant’s caveats and not the substantive Will challenge. In fact, no directions had been given in relation to the substantive Will challenge.

    1. Issues surrounding self-represented litigants generally

    Mr Nobarani had a limited understanding of court procedure and evidence rules. In addition, his command of the English language was lacking.

    The High Court found it unsurprising therefore that his case was vague and disordered but was careful not to give the appellant a privileged status as a self-represented litigant. The fact that Mr Nobarani was a self-represented litigant did play a factor in the High Court’s decision.

    Unfortunately for the parties involved, due to the procedural irregularity, the matter remains unresolved and is now set for a new trial at the New South Wales Supreme Court. Interestingly, Mr Nobarani does not stand to benefit significantly under the earlier Will of the deceased, and receives only some specific items of the deceased jewellery. Given the matter has now spanned over 2 years, one wonders whether the parties (and particularly Mr Nobarani who may continue to be unrepresented and is due to receive little from the earlier Will) still have the “stamina” to continue with the re-trial.

    This case will serve as a warning to all practitioners (and judges alike) of the importance of affording sufficient time to both sides of a case in order to allow adequate case preparation and therefore afford each party procedural fairness.

    Written by Golnar Nekoee, Director, Wills and Estate Planning

     

    [1] (1986) 161 CLR 141 at 147.

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  • Business Breakfast Club August Summary - Asset Protection and Voidable Transactions: Controlling Risks

    Business Breakfast Club August Summary - Asset Protection and Voidable Transactions: Controlling Risks

    This month at Business Breakfast Club, we discussed asset protection strategies and transactions which are voidable by a Trustee in Bankruptcy. There are a number of asset protection strategies to consider, particularly when carrying on a business, and there is no one perfect strategy. BAL Director, Katie Innes shared some of her insights on the topic. In addition to discussing some of the more common asset protection strategies Katie touched on:

    Voidable Transactions

    There are a number of transactions that are voidable by a Court where companies are in administration or liquidation, and when individuals become bankrupt. In particular, we focused on three types of voidable transactions under the Bankruptcy Act 1966 (Cth).  

    Undervalued Transactions – s 120 Where a transfer of property may be void if the transfer took place in the period of 5 years before the commencement of the bankruptcy and the transferee gave no consideration (or less than market value) for the transfer.

    Intention to Defeat Creditors – s 121 Where a transfer of property may be void if the property “would probably have” become part of the bankrupt’s estate or “would probably have” been available to creditors if the property had not been transferred. The transferor’s main purpose in making the transfer must be to either to prevent the property from becoming divisible amongst their creditors or to delay the process of making the property available. This purpose can be reasonably inferred from the circumstances, particularly if the transferor was, or was about to become, insolvent at the time of the transaction.

    Avoidance of preferences – s122 A transfer of property by a person in favour of a creditor can be void if the transfer had the effect of giving the creditor a preference, priority, or advantage over other creditors and was made within certain time periods.

    Cases & Practical Lessons

    Case studies help demonstrate how transactions can be scrutinised in practice. We looked at the seminal case of Cummins v Cummins[1] and whether quarantining assets against possible future liabilities can be for the purpose of defeating creditors, and Silvia v Williams[2] which reiterates the benefits of documenting loans contemporaneously and seeking professional advice on protection of assets (to show the intention behind certain transfers).

    For more information, please contact Katie Innes. The next Business Breakfast Club will take place on 14 September 2018. If you would like to attend, please contact us.

    [1] The Trustees of the Property of John Daniel Cummins, a Bankrupt, v Cummins [2006] 227 CLR 278.

    [2] Silvia (Trustee) v Williams, in the matter of Williams (Bankrupt) [2018] FCA 189

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