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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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  • Capital Raising things are about to get Mutually Friendly

    Capital Raising – things are about to get Mutually friendly!

    Co-operative and mutual enterprises account for approximately 8.3% of Australia’s GDP when including the member-owned super funds, and eight in ten Australians are a member of at least one co-operative or mutual business. Operating across the economy from health care to motoring services, in banking and finance and insurance services, social services to retailing, these businesses are a staple in the Australian economy.

    Historically mutuals have had difficulties in raising capital without jeopardising their mutual status. Mutual enterprises are incorporated as public companies under the Corporations Act 2001 which must have a special constitution that imports the co-operative principles and provides for one member-one vote, democratic governance and a community driven ethic. The members of mutual enterprises are its customers.

    In July 2017 the Report on Reforms for Cooperatives, Mutuals and Member-owned Firms (commonly known as the Hammond Report) was handed down. The report set out eleven recommendations which aimed to improve access to capital, remove uncertainties facing the mutual sector and reduce barriers to enable cooperative and mutual enterprises to grow.

    On 4 October 2018 the Government released draft legislation for consultation to give effect to two of the eleven recommendations by:

    1. introducing a definition of a ‘mutual entity’ into a new section 51M of the Corporations Act 2001; and
    2. amending what the trigger event is which requires a company to disclose a proposed demutualisation in Schedule 4 of the Corporations Act 2001.

    The amendments will address the lack of recognition and understanding of the mutual sector, make it easier to determine when an entity has or is intending to “demutualise”, and to allow mutual entities to raise capital without risk of demutualisation or the risks associated with a failure to adhere to the disclosure provisions (which are civil penalty provisions).

    To date, mutual enterprises have been restricted in the ways they could raise capital to avoid triggering the demutualisation provisions. The Corporations Act 2001 currently provides that if there is a proposed constitutional change or share issue, which may vary or cancel a member’s rights in respect of shares, then the company must disclose ‘the proposed demutualisation’ (even if that may not be the intention of the company).

    The proposed legislative amendments would make it clear that the disclosure provisions are only triggered if a constitutional change would result in a mutual entity no longer being a ‘mutual entity’. Provided the mutual entity retains its “one member-one vote” requirements, it remains a mutual entity.

    While there are still restrictions on the process of capital raising, as Melina Morrison, chief executive of the Business Council of Co-operatives & Mutuals has said, “this will ensure there is genuine competition for member-owned business to compete with the big corporates and create real competition to benefit all Australians”.

    If you have any questions about the proposed changes or mutual enterprises, please get in touch with our Business Team.

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  • Significant Focus on Digital Assets Estate Planning in Australia

    Significant Focus on Digital Assets & Estate Planning in Australia

    The increasing importance of digital assets to an individual’s estate planning has been recognised by the NSW State Government. The NSW Attorney General has asked the NSW Law Reform Commission to review and report on the laws that effect who can access a person’s digital assets after they die or when they become incapacitated, and in what circumstances. The purpose of the Commission’s report is to consider whether NSW needs new laws in this area and if it does, what should be included in those new laws.

    It is evident from this development that the significance of considering digital assets as part of an individual’s estate planning continues to be an issue that is front of stage.

    After requesting preliminary submissions from interested parties, the Law Reform Commission has published a Consultation Paper[1]. This paper, in addition to outlining how the Commission intends to conduct the review, also describes the current laws that impact access to digital assets in circumstances where a person is incapacitated or is deceased. The very apparent and extraordinary increase in the use of digital assets by many of us has clearly motivated these questions being referred to the Law Reform Commission.

    The paper also outlines the approaches that have been taken in other jurisdictions including the United States, Canada, the European Union and the Council of Europe.

    The Commissioners have noted that their “preliminary view” is that there are substantial policy grounds for legislative reform to govern when third parties can access a person’s digital assets upon death or incapacity.

    The timing of the comparable legislative reforms in other jurisdictions is relatively recent. For example, the Uniform Law Commission in the US adopted the Uniform Fiduciary Access to Digital Assets Act in 2014. It is encouraging that an Australian jurisdiction is now embarking on a review of the relevant laws in Australia.

    In response to the suggestion that it is an area of reform that should be conducted on a national level rather than by a State Government, the Consultation Paper notes that national coverage can be achieved where one State or Territory enacts model provisions that are adopted elsewhere. The approach of each jurisdiction “following suit” may take significant time and national coverage is not guaranteed.

    Digital Assets

    The Consultation Paper also includes an overview of what is included in the term “digital assets”.[2] The overview is not intended to be exhaustive but confirms the concept of digital assets includes the following:

    • Personal assets such as email accounts, text messages, social media profiles and accounts and similar accounts;
    • Financial assets such as online bank accounts and cryptocurrency;
    • Business assets such as online store accounts (such as eBay);
    • Intellectual property rights that are attached to assets such as domain names and images;
    • Loyalty program benefits such as frequent flyer points;
    • Sports gambling accounts; and
    • Online gaming accounts.

    In addition to being a useful reminder of the extensive nature of the term ‘digital assets’, the overview in the Consultation Paper confirms the proposed  reforms should  extend to all categories of digital assets.

    The focus on ‘Access to Digital Assets’

    It is clear from the above that the question being asked is in relation to access of those digital assets upon death or incapacity. The Consultation Paper also identifies the importance for this right of access for the relevant people including executors, attorneys, financial managers and personal representatives generally. The paper confirms these reasons[3] as follows:

    • Financial value. For example, the deceased person may have significant funds in a bank account or a bitcoin account, or there may be other social media accounts which generate value. There may even be a valuable copyright interest in a literary work that only exists online;
    • Sentimental value. This reason will be relevant where a deceased person has family members that have an attachment to electronic photos or messages on social media such as Facebook;
    • Loss of paper trails. Access to certain account statements will be important for personal representatives to manage business accounts or personal banking accounts of the deceased or incapacitated person;
    • Protecting privacy and confidentiality. Often online accounts will contain personal information which a personal representative will look to protect by either closing or deleting the relevant account; and
    • Reducing the risk of identity fraud. Where the relevant individual is not monitoring their online accounts, it clearly will be more open to hacking by others.

     Guidelines for current practice

    The Consultation Paper notes the growth in the creating of “digital asset registers”[4] and digital asset inventories especially as part of the estate planning process.

    As the Commissioners note in the Consultation paper, there are currently some significant limitations with how individuals can successfully deal with their digital assets as part of their estate plan. This point is important for estate planning practitioners and their clients.

    The existing laws effecting third party access to digital assets (including for the nominated representatives) as noted in the Consultation Paper[5] include the following:

    1. The definition of “property” in succession laws may not extend to the rights that are commonly referred to as digital assets;
    2. The legislation dealing with the administration of an estate does not specifically cover access by the executor to “digital assets” of the deceased. Without the required access to these assets there is a real problem for an executor or administrator being able to demonstrate that they have fully  discharged their responsibilities in respect of the administration of the estate;
    3. The service agreements of internet and social media platform providers often maintain the intellectual property rights to material that form part of the “ digital asset”. In particular, on the death of the owner of the account, there is no right to transfer any rights to the material to another party (the rights are often non-transferable);
    4. Existing criminal law legislation makes it an offence for a person to cause any unauthorised access to or modification of restricted data held in a computer.[6] As a result, an executor who accesses a computer upon death or incapacity of a person when they should know that they do not have clear authorisation, is at risk of having committed a criminal offence. As indicated in the Consultation Paper, the scope of the offence is quite broad as there is no requirement for intention to commit or facilitate the commission of the offence. There is no defence of lawful excuse in these circumstances. It is quite likely that the executor or administrator will know, or should know that the access to or modification of the material on the computer is unauthorised. The phrase “unauthorised access” is defined in the legislation in broad terms.

    Preliminary suggestions for reform

    The Law Reform Commission also identifies some difficult situations for the State Government to address. For instance, in relation to the service agreements where the service provider is a foreign entity, the agreement will often nominate the foreign law as the proper law for dispute resolution rather than a law of Australia even if the client signing the service agreement is in Australia.

    The paper foreshadows that the final report may include a legislative approach that tries to address some of the issues referred to above. As part of that suggestion, it identifies some examples of what has been done overseas and potential approaches.

    As the paper is a preliminary report with a final report to follow after further consultation, at this stage these suggestions are only preliminary ideas.

    Importantly, in respect to the definition of a digital asset, the paper makes the following comment:

    “The definition of digital asset should be defined in a way that “is sufficiently broad to cover the types of assets currently in existence, but also flexible enough to encompass relevant classes or types of assets that may come into existence in the future”.[7]

    At the end of the paper, there are a number of suggestions in relation to potential reforms. The following suggestions by the Commissioners are particularly relevant to the area of estate planning:

    • To determine which third parties should have access rights to the assets;
    • Who should have the authority to decide what happens to a person’s digital assets;
    • What should happen if the relevant parties disagree;
    • To clarify how the wishes of a person should be taken into account when deciding about their digital assets where upon death or incapacity; and
    • To be able to freeze or suspend a person’s digital assets after their death or incapacity to avoid issues of identity theft.

    The Consultation Paper produced by the NSW Law Reform Commission is an excellent summary of the issues and makes some thought provoking suggestions as to the reform.

    There is already eager anticipation by many for the release of the final report by the Law Reform Commission and the discussion that will follow the release of the final report.

    Written by David Toole, Legal Director and Ellen Bradley, Senior Associate. To create or review your will and estate plan, please contact our Estate & Business Succession team

     

    [1] Consultation Paper 20 – New South Wales Law Reform Commission – Access to digital assets upon death or incapacity

    [2] Consultation Paper 20 – New South Wales Law Reform Commission – Access to digital assets upon death or incapacity , August 2018 (the “ Consultation Paper) at page 4

    [3] Consultation Paper at page 4

    [4] Consultation Paper at page 9

    [5] Consultation Paper from pages 11 to 24.

    [6] Criminal Code ((Cth) s478.1 and Crimes Act 1900 (NSW) – s308H

    [7] Consultation Paper at page 35

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  • Assignment of Lease Dealing with an initial request

    Assignment of Lease: Dealing with an initial request

    A lease grants a tenant exclusive use to a premises for a period of time. Often circumstances change within that period of time and lead to the tenant seeking an assignment of the lease to a new party. This is often as a result of the sale of the tenant’s business.

    Assignments of lease are not at all uncommon, however there are a few things to remember to ensure that they run smoothly and both parties comply with their obligations under the lease and the relevant legislation.

    From a tenant’s perspective, it is important to be aware of what you are required to do under your lease when seeking the consent of your landlord to an assignment. The Leases (Commercial and Retail) Act 2001 states that, before requesting the landlord’s consent to an assignment of lease, a tenant must give any proposed new tenant a copy of the disclosure statement (if any) that was given to them in relation to the lease.

    It shouldn’t be taken for granted that a landlord will consent to an assignment, here in the ACT the legislation allows a landlord to request particular information on a proposed new tenant and, if that information is not satisfactory to the landlord, they are able to refuse to provide consent. Further information that the landlord can request may include (but is not limited to):

    • the financial position of the prospective tenant;
    • information in respect of the tenant’s prospective ability to conduct the nominated business; and
    • information about what the tenant intends to use the premises for.

    Once the landlord obtains this further information they are able to make an informed decision and provide their consent, or not.  However, it should be noted that a landlord is not able to unreasonably withhold consent.  The refusal of consent can often cause dispute between the parties which may be drawn out and costly to both parties, so it is important to obtain the appropriate legal advice early on in the process.

    From a landlord’s perspective, arguably the most important factor when dealing with assignments are the time frames stipulated under the Leases (Commercial and Retail) Act 2001. If a tenant requests an assignment of lease, the landlord must either consent or refuse within 28 days of receiving the request – or within 21 days of receiving further information or documents (the request for which must be made within 14 days of receiving the request for assignment).  If a landlord does not comply with these strict timeframes they can be deemed to have consented to the assignment of lease.

    In order to ensure compliance with the legislation and your obligations under a lease, we recommend that you contact our office as soon as an assignment of lease is considered. We can assist in managing the strict timeframes and help you achieve a smooth transaction, resulting in a positive outcome for all involved.

    For more information, please contact our Leasing Team.

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  • The Current Law regarding Death Organs Bodies Burials and Sperm

    The Current Law regarding Death, Organs, Bodies, Burials and Sperm

    What better time to write about organs, bodies and burials than now as we approach Halloween. In June last year I wrote an article which looked at the then recent case of Darcy v Duckett – a case which examined the Common Law principles regarding the right to dispose of a body as well as Court’s regard to traditional Aboriginal Law.

    In this article I wanted to give a quick summary of the law as it stands today with regard to death, organs, bodies, burials and tissue transplantation (in light of the recent landmark Queensland case of Re Creswell [2018] QSC 142)

    Basic principle

    The basic principle that there is no property in a body (Doodeward v Spence (1908) 6 CLR 408) means that there can be no ownership in a corpse. As such, one cannot “dispose” or direct what will occur with their body after death.

    The Exception

    There is an exception to the basic rule (outlined by Griffith CJ in Doodeward) – where a person has, by the lawful exercise of work and skill, dealt with a human body (or body part) in such a way that it has acquired some attributes differentiating it from a mere corpse awaiting burial and the body (or body part) is displayed in the public interest, then the body (or body part) can be considered property capable of being disposed of.

    In the case of Doodeward, a stillborn baby with two heads was preserved by a doctor who displayed it in his office (this was a 1908 case…).  The Doodeward exception would apply to say, a mummy that is displayed in a museum.

    Burial and Funeral Instructions

    Given the basic principle above, a person’s wishes with respect to the disposal of their body is not legally binding (Smith v Tamworth City Council (1997) 41 NSWLR 680)).  Whatever funeral and burial  instructions  you communicate via your Will, personal documents or verbally can be disregarded at law.

    Who has the right to dispose of a person’s body after death?

    Where there is a Will, the executor (and if there is more than one, then the executors jointly unless contrary intention is expressed in the Will) has the right and responsibility to arrange for the disposal of the deceased person’s body.

    Where there is no Will, then the person with the highest rank to apply for a Grant of Representation in that jurisdiction has the same rights as an executor.

    (references contained in previous article)

    The person with the right to dispose may do so in any manner they choose provided it is not unlawful or unreasonable (Leeburn v Derndorfer (2004) 14 VR 100, 104), or exercised in a way that prevents family and friends from reasonably and appropriately expressing affection for the deceased  (Smith v Tamworth City Council (1997) 41 NSWLR 680, 694.)

    Where more than one person has an equal right to dispose of the body…

    The Court will generally decide a conflict between them in a “practical way paying due regard to the need to have a dead body disposed of without unreasonable delay, but with all proper respect and decency” (Calma v Sesar (1992) 106 FLR 446 at [14])

    The practicalities of burial without unreasonable delay will prevail.

    Cremation

    A person can be cremated in any outfit but pacemakers and other such devices must be removed from the body before cremation. The body must be contained in a coffin, casket or some other container and must be cremated one body at a time.

    Cremation can take one to two hours. Once cooled, the ashes are packed into a plastic container and a name plate is attached before being stored ahead of collection.

    In the ACT, the operator of the crematorium must give the ashes to the person who applied for the cremation (which may be at odds with the common law) (Cemeteries and Crematoria Regulation (ACT) 2003 Reg 10).

    In the ACT, a statement by a person that his or her body is not to be cremated is legally binding. An injunction or other relief can be obtained against the operator of the crematorium if necessary (Reg 8).

    Do Burials have to be at the Cemetery (and Cremations at the Crematorium)?

    We have three cemeteries in the ACT – Woden, Hall and Gungahlin Cemeteries.

    It is an offence (which can be punishably by imprisonment) to bury human remains other than at a cemetery unless the Minister’s prior written permission has been obtained (Cemeteries and Crematoria Act (ACT) 2003 Section 24)

    Cremations can only occur within the crematorium (Section 25 of the Act).

    What can you do with the ashes once they are collected?

    Ashes can be:

    • Buried in a cemetery in a small plot, or placement in columbarium or niche wall;
    • Preserved in an urn or kept at home in some other favourite spot; or
    • Scattered on private land, beach, river, public park, at sea or some other place that is significant to the deceased person or their family.

    If ashes are scatted on private land, permission must be obtained by the owners of the private land.

    If the ashes are scattered in a public park or other public place, permission may need to be obtained from the local council or park. Councils and local government may set a place and time when these activities can be undertaken and can impose other restrictions.

    You may want to carefully consider where you scatter the ashes and in particular, to scatter them at a place that you can revisit later (e.g. if ashes are buried in your backyard and you later move, you may not be able to visit the site in the future).

    Ashes can be scattered at sea if permission of the vessel operator is obtained.

    Taking ashes overseas

    Ashes can be taken overseas but it is good practice to:

    • contact the consulate of the country the ashes are being taken to in order to comply with the local requirements; and
    • Carry the ashes in a sealed contained and have a copy of the death certificate of the deceased person along with a copy of a statement from the crematorium identifying the deceased person and where the body was cremated (in case you get picked on by customs!)

    Can you bury a body in a vault or tomb?

    The short answer – yes! But the operator of the cemetery must not bury human remains in a vault or tomb unless the body has been embalmed and is in a selected corrosion resistant mental container (Reg 10)

    Removal of tissue, organs and sperm from the body

    In the case of Re Creswell which was handed down earlier this year in Queensland, an application made by a de facto partner to access the deceased sperm the day following his death was granted by the Queensland Supreme Court. His sperm was removed at the Toowoomba Hospital by medical staff and preserved at the Queensland Facility Group Laboratory.

    Subsequent to the application for removal of the sperm, Ms Creswell applied to the Queensland Supreme Court seeking a declaration that she be entitled to possession and use off the sperm in assisted reproductive treatment.

    The Respondent to the Application, the Attorney-General for the State of Queensland, neither opposed nor consented to Ms Creswell’s application.

    It was held that:

    1. The removal of sperm for use in assisted reproductive technology was for a medical purpose  pursuant to section 22 of the Transplant and Anatomy Act 1979 (Qld) (note that section requires the deceased not to have expressed an object to the removal of his sperm)
    2. Once removed, the sperm was property capable of possession given that work and skill was exercised in relation to its removal, separation and preservation (note the case of  Doodeward above); and
    3. Discretionary factors including best interest of the child, whether Ms Creswell’s decision was a rational one and community standards, weighed in favour of making the declarations sought by Ms Creswell and the declarations sought were granted.

    In the ACT, a distinction is made in the legislation (Transplantation and Anatomy Act 1978) with regard to the removal of tissue during lifetime as opposed to after death.

    In both cases, tissue can be removed where the person expressed their consent for the removal of the tissue for the purposes of donation to the body of another living person, or for the purposes of other therapeutic or medical or scientific purposes.

    However, the definition of “Tissue” in the legislation does not include spermatozoa (sperm).

    In the ACT case of Roblin v the Public Trustee for the Australian Capital Territory and Labservices Pty Limited [2015] ACTSC 100, the deceased had consented to the removal of his sperm during his lifetime. His sperm was collected and stored cryogenically during his lifetime.

    He subsequently died intestate (without a Will) and his wife brought an Application seeking a declaration from the ACT Supreme Court to have the sperm form part of his estate where it would be received by his wife. The Court held that the sperm constituted property of the estate where it was passed to the wife in accordance with the intestacy laws.

    Written by Golnar Nekoee, Director, Wills and Estate Planning

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  • Technology and Witnessing Documents

    Technology and Witnessing Documents

    As advancements in communication technologies are increasingly bringing people on the other side of the world into our living rooms or office spaces, there is new uncertainty about the extent to which the law is adaptable. One example is the witnessing of documents through electronic means such as Skype or FaceTime. Generally, legislation refers to the need for “presence” without necessarily providing whether virtual presence is sufficient for witnessing purposes. While, for all intents and purposes, Skyping or FaceTiming someone signing a document has the same effect as being physically present, the law generally looks upon both situations differently.

    The rationale for the witnessing requirements of certain documents is to reduce the risk of people entering into fraudulent agreements without consent. Ensuring that a document is appropriately witnessed is important for both the signor and witness. The signor may end up with an invalid legal agreement and the witness may be subject to a fine if they fail to comply with his or her obligations. For the most part, witnesses need only be over 18, of sound mind, and not subject to a conflict of interest. In some instances, however, the witness will need to be authorised person who is listed under the Statutory Declarations Regulations 2018 (Cth) such as a doctor, pharmacist or bank officer.

    In keeping with the rationale of witnessing requirements, the Attorney-General’s Department provides that a document cannot be witnessed via webcam or Skype on the grounds that the person witnessing the signing must be able to “authorise and validate the identity of the declarant”. This may seem out of step with modern technology that would enable a witness to identify the signor as they sign the relevant document. However, the New South Wales Law Reform Commission, when considering the joint signing of wills, stressed that physical presence allows for witnesses to pick up on facts relevant to issues of the testator’s capacity, understanding or freedom from pressure. The only jurisdiction that has shown any movement toward accepting witnessing via electronic means is the United Kingdom where, in the case of Re ML (Use of Skype Technology) [2013] EWHC 2091, the Court allowed the signing of adoption consent forms to be witnessed via Skype. However, it is important to note this ruling was specific to the facts of the case and has not yet been heavily relied on.

    Although it may seem that the law is lagging behind the realities and opportunities presented by modern technology, it remains the case that in Australia documents must be witnessed physically rather than virtually for the time being.

    If you require legal advice regarding contracts or witnessing documents, please contact us.

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