News & Events

  • Catastrophic Injuries - A Cautionary Tale

    Catastrophic Injuries - A Cautionary Tale

    Background

    In 2009, a (then) 15 year old boy ran across a road after his two friends in Richardson, when he was tragically struck by a passing vehicle.  The impact caused the infant plaintiff to suffer catastrophic injuries. When the two friends ran across the road, the driver of the vehicle looked across the road, took her foot off the accelerator.  The driver’s foot hovered over the brake pedal in the fear the two would run back onto the road. In looking in the direction of those two boys, the driver did not see the plaintiff then step onto the road.  By then it was too late.

    The plaintiff commenced an action in negligence against the driver in the ACT Supreme Court, which was heard before Elkaim J in June of 2018.  The plaintiff was ultimately unsuccessful in his action, which led to an appeal being hearing this year in the ACT Court of Appeal.

    First Instance Findings

    The first instance judge found that the plaintiff failed to prove that the driver was negligent, essentially because she acted reasonably in the (albeit unfortunate) circumstances.  In particular, it was found that the plaintiff himself was more negligent than the driver for stepping onto road when it was not safe to do so.  The driver, in the court’s view, was not acting unreasonably by having her attention on the two other boys.

    In case his decision on liability was appealed, Elkeim J went on to assess the plaintiff’s damages (notwithstanding he would not received any sum with an unsuccessful verdict against him).  Had he won though, Elkaim J assessed the plaintiff’s damages quite highly; in excess of $8 million, though held that sum should be reduced by 75% for the plaintiff’s own contributory negligence.  As it turns out His Honour’s liability decision was appealed.

    The Appeal – Lee v McGrath [2019] ACTCA 6

    On appeal, the ACT Court of Appeal upheld the first instance judge’s findings, concluding that the driver was not liable in negligence. The plaintiff argued that the driver should have looked back across the road to the plaintiff’s direction faster than she did, as to do so may have allowed her to slow down faster to prevent the collision. However, the Court of Appeal accepted that the driver’s distraction by the two boys running across the road was a reasonable response to their emergence. The Court of Appeal also did not find that plaintiff was necessarily visible to the defendant when the first two ran across the road, meaning there was no reason for his presence to have been anticipated.  Whilst the outcome of the accident, and the litigation, was tragic for the plaintiff, the duty of care owed by the defendant driver was high, as motor vehicle drivers owe a higher standard of care to pedestrians, due to the level of harm that can be caused. The courts generally look at the circumstances of each case in determining, whether or not, a standard of care has been met. Section 45(1) of the Civil Law (Wrongs) Act 2002 (ACT) (the CL Act) establishes a ‘but for test’ for causation, whereas, section 46 of the CL Act addresses the burden of proof. In determining liability for negligence, the plaintiff always bears the burden of providing, on the balance of probabilities, any fact relevant to the issue of causation.  That the driver “may” have done things differently to have avoided the accident, is a distinct question to whether she was acting reasonably – which the courts accepted she was.

    Key Lessons

    This case demonstrates the harsh reality of negligence law, which can leave an individual that is injured in a motor accident without an award of damages if they are unable to prove that the driver was negligent or at fault.

    Although such an injured individual may be unable to claim compensation through the courts, they may be eligible for care, support, treatment and rehabilitation under the ACT Lifetime Care and Support Scheme. Individuals that have been catastrophically injured in motor accidents in the ACT, regardless of fault, may be eligible for the scheme. The scheme covers pedestrians, cyclists, motor bikes and motor vehicles as long as one vehicle involved in the motor accident had compulsory third party cover. Catastrophic injuries include:

    • traumatic brain injury
    • spinal cord injury
    • amputations
    • burns
    • permanent blindness.

    For more information on the scheme please visit: https://apps.treasury.act.gov.au/ltcss/home

    If you need advice about being injured in a motor vehicle accident, please contact the Litigation team at BAL Lawyers.

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  • Principals with Professional Principles

    Principals with Professional Principles Seminar

    At the heart of Australia, the Canberra local community encompasses a diverse range of professions, all united by initiative, ambition and drive. Such traits have recently been seen in a meeting of the minds between the ACT Public School Principals, and Canberra’s largest local law firm, Bradley Allen Love Lawyers (BAL), in an initiative created to exchange knowledge between the managers of legal practice and the manager of schools. 

    The Canberra Community: Principals with Professional Principles
    Gabrielle Sullivan and Jason Holmes at the seminar: Principals with Professional Principles

    Although at first glance it may seem odd for lawyers and teachers to come together – the world of corporate law seems poles apart from primary and secondary school educators – reflection on the role of principals reveals some areas of intersection. School principals are managers (amongst many other things). They need to make peace and order through setting standards and resolving disputes. When you think about, this is not so different from what lawyers do every day.

    The professional learning program of the ACT Principal’s Association acknowledges the increasingly complex and diverse role of principals. It aims to engage principals with other non-teaching professionals, to broaden their horizons and learn how the work practices of non-teaching professionals may strengthen their own work.  

    On a cold winter’s afternoon this week, Gabrielle Sullivan, lawyer and Director in BAL’s Employment and Investigations Group, volunteered her time to welcome the ACT Principals to BAL’s city boardroom. Over wine and hors d’oeuvres, Gabrielle initially noted the ‘unusual gathering’, and commented that such a meeting is ‘potentially highly constructive – when we realise that we all have something to offer to others and to learn

    Gabrielle shared her insights as to how lawyers ‘get the facts straight’, how they negotiate, and how they manage time, staff, documents and emails.  Acknowledging that that how  principals relate to their staff, students and parents is critical to inspiring Australia’s next generation of leaders, she concluded with tips for persuasive personal and virtual presentation.

    The Principals were very engaged in the presentation, and honest and lively exchanges were had. BAL Lawyers was delighted to provide their offices and event coordinator on a pro bono basis for this community –building event.

    Attendees of the Principals with Professional Principles seminar

    Mr Jason Holmes, principal of Harrison School, who initiated the venture with BAL, was delighted with the event. He and the ACT Principals Association are looking forward to continuing to explore more professional linkages with the Canberra community.

    If you would like more information about this seminar, or have a speaking request, please contact our Employment and Industrial Law Group or call 02 6274 0999.

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  • Law Graduate – Business and Corporate

    We're Recruiting: Law Graduate – Business and Corporate

    This role will consist of you handling all the intricacies of Business and Corporate law and a fantastic development opportunity to work with a successful business, gain professional development, and the opportunity for personal growth within the legal sector. 

    The successful applicant must have:

    • A completed Bachelor of Laws;
    • Some experience working in some capacity within a law firm (i.e. as a Paralegal, Law Clerk, Legal Assistant, Law Graduate);  
    • Experience working in a commercial environment;
    • A solutions focused attitude, with commitment to delivering an exceptional standard;
    • A proactive and enthusiastic approach to seeing tasks through to completion;
    • A collaborative attitude and approach in all aspects of working life; 
    • Commitment to providing exceptional client service at all times;
    • Excellent interpersonal and communication skills, both written and verbal;
    • High levels of attention to detail;
    • Strong IT, computer and research skills and willing and able to adapt to new technologies quickly; and
    • Motivation for continuous learning.

    If you think that this role would suit you and you have the relevant experience, please email helen.parrett@ballawyers.com.au with your CV and a covering letter outlining what experience you have that would make you an ideal candidate for the role.

    Applications that do not have a covering letter WILL NOT be considered.

    If you have any questions please do not hesitate to contact Helen Parrett on helen.parrett@ballawyers.com.au. 

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  • Appointing a Testamentary Guardian for your Minor Children in the ACT – 5 points you should know

    Appointing a Testamentary Guardian for your Minor Children in the ACT – 5 points you should know

    1. The Legislation

    Every State and Territory in Australia has legislation which gives each parent the right to appoint a guardian by Will to take effect after his or her death.

    In the ACT the relevant legislation is the Testamentary Guardianship Act 1984 (“the Act”). Section 8 of the Act states that:

    “Each parent and each guardian of a child may, by Will or codicil, appoint a person to be a guardian of the child or persons to be guardians of the child”

    The State and Territory Acts are similar but in no way identical – there are differences and intricacies among the States and Territories.

    You should seek advice on which legislation applies to you.

    2. Changing Times and Changing Lingo

    Times have changed – the State and Territory legislation across the Australian jurisdictions refer to the older concepts of “guardianship” and “custody”. These concepts and terminology were removed from the Family Law Act 1975 in 1996.

    Part VII Div 2 of the Family Law Act  1975 introduces the concept of “parental responsibility” and defines the term in Section 61B as meaning “all the duties, powers, responsibilities and authority which, by law, parents have in relation to children”.

    “Custody” and “Guardianship” Orders have been replaced with “Parenting Orders” that can govern the long term or day to day care, welfare and development of the child.

    3. The interplay between the State and Territory legislation and the Family Law Act 1975

    The appointment of a testamentary guardian may be affected by the provisions of the Family Law Act 1975.

    Section 51(xxi) of the Australian Constitution empowers the Commonwealth to make laws with respect to marriage and Section (xxii) empowers the Commonwealth to make laws with respect to “divorce and matrimonial causes; and in relation thereto, parental rights and the custody and guardianship of infants”.

    In all Australian jurisdictions therefore, the Commonwealth can make laws with respect to guardianship of the child of the marriage.  However, without a referral of power from the States, the Commonwealth could not legislate in respect of a child who was not a child of the marriage.

    Changing familial values over the years and the increase in more and more people having ex-nuptial children meant that between 1986 and 1990, all Australian States (with the exception of Western Australia) referred their powers with respect to guardianship, custody, maintenance and access in relation to ex-nuptial children to the Commonwealth.

    A referral of power to the Commonwealth is not required from the ACT, the Northern Territory and Norfolk Island because s 122 of the Australian Constitution assigns to the Commonwealth plenary power to “make laws for the government” of the Territories.

    What this means is that each State and Territory legislation regarding the appointment of testamentary guardians must be read in the context of the Family Law Act 1975. It is said that the Family Law Act 1975 is intended to completely “cover the field” with regard to the parental responsibility of children and notwithstanding that Part VII of the Family Law Act 1975 does not deal with the appointment of  testamentary guardians it is intended to comprehensively cover parental responsibility.

    4. Appointing a Testamentary Guardian in the ACT

    In the ACT, where there is a no surviving parent of the child and no relevant Parenting Order on foot then the appointment of a testamentary guardian allows the appointed guardian to have daily care and control of the child and the rights and responsibilities to make decisions concerning the child.

    But, where there is a surviving parent and/or relevant Parenting Order in place, then the appointment of a testamentary guardian might require a joint guardianship arrangement, or might not take effect at all.

    As a general rule of thumb therefore, it is good practice for a parent to appoint a testamentary guardian in their Will to take effect:

    a. immediately where they are the sole surviving parent or

    b. if the other parent has predeceased the appointing parent.

    In all cases, the appointment of a testamentary guardian should be done with the knowledge and acceptance that the Family Law Act 1975 may ultimately take priority and precedence. In all cases, a Court will of course have regard to the best interests of the child at the time of their parent’s death.

    5. Things you should consider when appointing a Testamentary Guardian

    Though not an exhaustive list, the following is a list of some of the matters you should consider when deciding who to appoint as at testamentary guardian for your child or children:

    • Do I trust my testamentary guardian to always act in the best interests of my child or children?
    • Where does my testamentary guardian live and will my child or children need to relocate after my death?
    • Does my testamentary guardian have children of their own and can they assume the responsibility of my child or children?
    • What is my testamentary guardians religious and political views and position in respect to disciplining my child?
    • What is my testamentary guardian’s view on education?
    • Can (and will) my testamentary guardian ensure my child or children maintain ongoing contact with my extended family after my death?
    • Is my testamentary guardian likely to survive me?
    • What does the mother/father of my child or children think about the testamentary guardian I have appointed? What does my child or children think about them (a question to ask your child or children if they are old enough);
    • Should I make some financial provision for my testamentary guardian? A gift in my Will or perhaps just allow for reimbursement of the costs associated with the guardianship of my child or children?

    If you need advice on appointing a Testamentary Guardian please contact Golnar Nekoee  from our Wills and Estate Planning Team for more information.

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  • Outgoing, going, gone – Recovery of outgoing costs in leases

    It is common knowledge that commercial rates have increased substantially since the commencement of the Territory’s tax reform in 2012. For many owners, the increase in commercial rates now poses the question of affordability and viability. Whether an existing owner or a potential buyer, it is now essential that the terms of the lease and the information contained in the disclosure statement are scrutinised to determine whether the recovery of outgoing costs is valid.

    If you are a landlord of a commercial or retail lease that falls within the parameters of the Leases (Commercial and Retail) Act 2001 (the Act), Part 9 is worth a read.

    So what are outgoings? And how can they be recovered?

    In summary:

    An outgoing includes:

    • an expense directly related to the operation, repair or maintenance of the building that contains the premises or, if located in a retail area of a shopping centre, an area used in connection with the retail area;
    • rates, taxes, levies and other statutory charges; and
    • for premises located in the retail area of a shopping centre, the cost of promoting the premises or centre.

    To be recoverable:

    • the nature of the outgoing must be stated in the disclosure statement; and
    • the lease must state the outgoings that may be recovered, how the amount is to be calculated or apportioned and how the outgoings may be recovered.

    The above seems relatively simple, right? Surprisingly, it is not uncommon for a landlord to fall short of the above requirements and for a dispute to then arise between the parties. To reduce the likelihood of a dispute arising, consider the following tips:

    • The nature of the outgoings not being properly stated in the disclosure statement.

      Pay particular attention to the type or nature of the outgoing being recovered. For example, the City Centre Marketing and Improvements Levy (applies to commercial properties in the City and some area of Braddon) is a separate charge to general rates. To be recoverable, the Levy should not be lumped under ‘general rates’ but should be specifically stated in the disclosure statement.
    • The lease failing to clearly state the outgoings to be recovered.

      Though many leases will contain a broad definition of outgoings, it is important to revisit this definition to ensure consistency between the lease and the disclosure statement. If not stated in the lease, the outgoing will not be recoverable.
    • The lease failing to clearly state how the amount is to be calculated. 

      This is particularly important for commercial building that contains a number of tenancies but is not unit titled. In that particular circumstance, care should be given to the proportion payable by each tenant. For instance, where one tenant is liable to pay 100% of the general rates amount and another is liable for increases in the general rates amount over a base year, the landlord will not be able to validly recover the full general rates amount from the first tenant as it will likely have recovered part of the rates from the second tenant. This then leaves the provisions of the lease (for the first tenant) unclear as to what proportion the first tenant remains liable and is open to interpretation.

    If you have any queries relating to commercial leasing in the ACT or NSW, please contact our Real Estate Team.

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  • A PPSA Priority Reminder

    A PPSA Priority Reminder

    In O’Keeffe Heneghan Pty Ltd (in liquidation); Aus Life Pty Ltd (in liquidation); Rocky Neill Construction Pty Ltd (in liquidation) trading as KNF Group (a firm) (No 2) [2018] NSWSC 1958, the NSW Supreme Court strongly reminded us of the superior priority that an authorised deposit-taking institute’s unregistered security interest (perfected by control) has over the interests of secured creditors perfected under the personal property securities regime. The proceedings involved three companies in liquidation (together known as KNF Group).

    The Important Facts

    In mid-2016 the KNF Group entered into a loan arrangement with IFG Network Australia Pty Ltd (IFG) that was secured by a General Security Deed which extended IFG’s interest over all present and future acquired property of the KNF Group. On 25 July 2016, IFG registered and perfected this security interest on the PPSR.

    KNF Group also held two bank accounts with the Commonwealth Bank of Australia (the Bank). KNF Group’s obligations to the Bank were secured by a general security interest over KNF property but the Bank failed to register its security interest. On the 12, 13 and 15 March 2017 KNF transferred money out of one of their accounts with the Bank to an offshore bank account held by OzForex Ltd for the purpose of acquiring property in Ireland.

    On 16 March 2017, KNF Group directors resolved to place each of the three companies into voluntary administration. The OzForex transfer failed and the administrators of the KNF Group were paid $224,409.

    The Bank and IFG then started a battle over which party had better security over (and therefore priority to) the $224,409.

    The Priority Battle

    The Court upheld that under section 21(1) of the Personal Property Securities Act 2009 (Cth) (the PPSA), a bank with an ADI security interest perfected by control, has automatic priority over any other security interest.

    The NSW Supreme Court made the following important findings regarding the priority of creditors under the PPSA regime:

    • The Bank successfully argued that the account held with the Bank was “collateral” to which its security interest attached;
    • The transfer of money out of the ADI account in the lead up to the voluntary administration did not prevent the Bank from asserting control over that money. Importantly, the Court held that the PPSA allowed for a secured creditor to follow collateral into the hands of a third party. As such, the proceeds of collateral were identified as traceable property; and
    • The Court held that it would be irrational to prioritise IFG’s security over an ADI’s security simply because the money was wrongly transferred out of the account.

    The Court concluded that the Bank (as an ADI), successfully perfected its security interest by control under the PPSA. Therefore, the Bank had priority ahead of IFG’s perfected registered secured interest.

    This case is a reminder to registered secured creditors that perfecting your interest under the PPSA regime may not protect their interests against ADI’s.

    If you have any questions regarding the priority of your secured interest under the PPSR regime, contact Katie Innes.

    Written by Katie Innes with the assistance of Felicity Thurgate

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  • Do Your Due Diligence - Buying Property In The Act bw

    Do your Due Diligence - Buying Property in the ACT

    Purchasing real estate is a significant investment for most people. It stands to reason then that a prudent buyer will want to know as much about a property as is possible before proceeding with the purchase. Though it is a common misconception that the contract contains all information pertaining to the property,  the cornerstone of property law in Australia rests in the concept of buyer beware and due diligence in relation to any real estate purchase is a serious consideration. Where possible, buyers should make all relevant enquiries of the property prior to entering into a contract.

    In respect of residential property in the Territory, buyers are afforded some protection under the Civil Law (Sale of Residential Property) Act 2003 and the Unit Titles Act 2001. Under the legislative regime, obligations are imposed on the seller to attach a set of ‘required documents’ (a defined term) to a Contract for Sale before a property is marketed.

    These Required Documents include copies of all interests and encumbrances registered against the title, an extract of the title, the Crown Lease or Units Plan and the Deposited Plan. Also included is an extract noting any notices or breaches of the Crown Lease and any relevant notifications pertaining to development applications lodged over the site and adjacent land, heritage status, and contamination. The seller is also required to attach a current building, compliance and pest report (for town houses and stand-alone dwellings) and an energy efficiency rating. If the property is a unit, the seller must also include a report (called a Section 119 Certificate) detailing the relevant fees, charges and administrative information of the Owners Corporation.

    The disclosures required for a residential sale contract offer buyers a considerable understanding of the title and condition of the property and to an extent, negates the need for further investigations of the property. It should be understood, however, that the building, compliance and pest reports are not conclusive evidence of the state or repair of the property. These reports are based on a visual inspection of the property only and, particularly where the property is furnished, may not identify all defects. For this reason, buyers should always undertake their own inspection of the property and, where deemed prudent, obtain their own building, compliance and pest report from a trusted contractor.

    The above situation is distinctly different if the property does not fall under the ‘residential’ regime, that is, if the property is classed as commercial, industrial or rural premises. For these types of premises, the disclosure obligations of the seller are limited to information concerning dangerous substances such as the provision of an asbestos report, register or management plan (if any) as is required under the Work Health and Safety Act 2011 and Work Health and Safety Regulation 2011. Beyond such instances, however, the obligation for disclosure is largely a commercial decision for the seller and the onus rests squarely on the buyer to undertake its own investigations. This can often be an expensive and timely exercise but the risks, both monetary and legal, which can arise from a failure to undertake proper due diligence far outweigh such costs and the costs of obtaining appropriate legal advice.

    Our property team have extensive experience dealing with contracts for all types of properties. Get in touch with a member of our Real Estate team and do your due diligence before you sign.

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  • One Year of Mandatory Data Breach Reporting Insights and Lessons

    One Year of Mandatory Data Breach Reporting: Insights and Lessons

    The strength of the global economy is inextricably tied to data. Information has never before been created, stored, used and shared on so large a scale, underpinning trade and commerce, government and public services across the world. The corollary of our total data-dependence is that concerns about information security are at an all-time high. Australia is now just one of many countries to have introduced a mandatory data breach reporting regime, with the EU, Canada and New Zealand following soon after.

    The Notifiable Data Breaches (NDB) scheme came into effect in February 2018, requiring Australian Government agencies and private organisations that are subject to privacy obligations under the Privacy Act 1988 (Cth) to report data breaches where personal information they hold has been lost or subject to unauthorised access or disclosure. If that event is likely to cause ‘serious harm’, the entity has to alert both the individual(s) concerned and the Office of the Australian Information Commissioner (OAIC).

    One year on, the OAIC has released a 12-month Insights Report to mark the recently held Privacy Awareness Week, in addition to the four Quarterly Statistics Reports it has published since the introduction of the NDB scheme.

    One important—if expected—result to note was the substantial increase in reported data breaches. Compared to the previous 12 months under the earlier voluntary scheme, the OAIC has seen a 712% increase in notifications. It seems that entities understand their obligations, bringing to light the scale of the challenges we face as a nation in the field of information security.

    So, what else have we learned?

    Key Findings

    Of the 964 eligible data breaches reported in the 12 months leading up to 31 March 2019, a disquieting 60% of those were related to malicious or criminal attacks. The most common method among these was phishing, with many attackers succeeding in obtaining credentials like usernames and passwords to gain access to protected systems and information.

    Also concerning was human error as a significant cause of data breach. Over a third of all reported breaches were occasioned by human error, such as unintended disclosures (accidentally mis-sending an email, anyone?), lost devices, and so on.

    Another interesting finding was to do with affected sectors. In this regard, health service providers took first place by a long shot, with over 200 eligible data breaches reported. A startling 55% of these were due to human error, putting in stark relief the need to have robust policies, procedures and training in the health sector. This is particularly so with the advent of My Health Records, rendering the potential scale and impact of a breach much larger as the health data ecosystem continues to grow.

    Lessons

    Whether or not your organisation is regulated by the NDB scheme, the OAIC’s Report serves as an important reminder of what can go wrong and the need to take steps to better protect the information you hold.

    One key take-away arising out of the staggering proportion of malicious attacks and human errors is the need for comprehensive and regular staff training. All personnel within your organisation should be alert to the ways in which they may unwittingly facilitate access to—and misuse of—personal and sensitive information, and should be reminded that everyone has a role to play in the maintenance of information security.

    The NDB scheme has played an important role in highlighting the importance of swift and proactive management of data breaches. As put by the Australian Information Commissioner and Privacy Commissioner, Angelene Falk:

    The requirement to notify individuals of eligible data breaches goes to the core of what should underpin good privacy practice for any entity—transparency and accountability.”

    “It’s also an opportunity for organisations to earn back trust by supporting consumers effectively to prevent or manage any potential harm that may result from a breach.”

    Even if your organisation is not caught by the obligations, or in cases where you determine that a given data breach does not meet the eligibility threshold, working with affected individuals to minimise the consequences of data breaches promptly and openly represents a positive change in the privacy landscape.

    If you have any questions about your privacy risks or obligations, feel free to get in touch with our Business team.

    Written by Katie Innes with the assistance of Bryce Robinson. 

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  • How much is enough for a Widow Recent Guidance from the NSW Court of Appeal

    How much is enough for a Widow? Recent Guidance from the NSW Court of Appeal

    The New South Wales Court of Appeal has overturned a decision of the New South Wales Supreme Court after it deemed that an indexed annuity of $52,000 per annum was inadequate for a widow and instead awarded the widow a legacy of $1.75 million.

    The judgement in the matter of Steinmetz v Shannon [2019] NSWCA 114 can be found here.

    The facts of the case were as follows:

    • the widow (the Appellant in this case) was the second wife of the deceased. The widow and the deceased had been in a relationship for about 28 years;
    • the deceased left his widow an indexed annuity of $52,000 for the remainder of her life, to be paid in quarterly instalments. The remainder of the estate was left to the deceased’s two children from his first marriage;
    • the Estate was valued at approximately $6.8 million;
    • the deceased and his widow were financial independent of each other. Their assets were kept largely separate, they resided in separate homes, though, the deceased would spend his funds on mutual expenses, entrainment and holidays;
    • at the time of the appeal, the widow’s assets (including the value of her home) were just over $700,000. She declared her income as just over $70,000 and expenses just under $40,000 per annum;

    The Supreme Court Trial Judge dismissed the widow’s application for further provision on the basis that the annuity was adequate provision to the widow’s proper maintenance.

    The Trial Judge further mentioned that the annuity would enable the widow to continue living in the same house as she did during her relationship with the deceased, and to maintain the same lifestyle. In concluding that the annuity was adequate, the Trial Judge stated the following:

    She will not be in a position to live extravagantly, but she did not do so when married. She will not have the benefits, the security, the holidays, the comforts and the additional financial advantages that she enjoyed during her relationship with the deceased. But as a matter of law, should she be entitled to expect more?”.

    The widow appealed to the Court of Appeal. The Court of Appeal held:

    1. that an indexed annuity of $52,000 for the remainder of the widow’s was not considered to be adequate provision.
    2. that insofar as it is necessary to resort to concepts of “moral duty” or “community standards” as a measure of proper provision, the former is preferable.
    3. that “to leave a 65 year old widow reliant for the rest of her life on quarterly payments by the children of her deceased husband’s first marriage, rather than placing her in control of her own resources, is in this day and age not an appropriate form of provision for a widow who is well and truly capable of managing her own affairs and when there have historically been tensions between her and at least the first respondent. However reliable the respondents might be, this form of provision effectively obliges her to have an ongoing relationship with them, and to trust them to perform the obligation, and does not afford her the independence and self-reliance which, according to today’s community standards, a widow should have. It is not only rigid and paternalistic, but demeaning and controlling” [emphasis added]

    The Court of Appeal allowed the appeal, set aside the orders of the Trial Judge made in the previous year and awarded the widow a legacy of $1.75 million.

    The Respondents (the children of the deceased’s first marriage who opposed the application) were ordered to pay the widow’s costs of both the appeal and the proceedings in the first instance.

    The “Take away points” from this case

    Whilst not a ground-breaking decision, this case serves as an important warning and a reminder to both Willmakers and litigants as to considerations the Court takes into account when reviewing the adequacy of provision for a widow/widower.

    The following two points should be taken into consideration:

    1. viability of an ongoing relationship – the Court of Appeal held that the present value of the $52,000 per annum annuity was $880,000.

    In awarding a legacy of $1.75 million to the widow, the Court almost doubled her entitlement but was primarily motivated by ensuring that the widow was not left at the “mercy” of the respondents (the children from the first marriage).

    The Court was very much conscious that an ongoing relationship between the widow and the respondents would not be appropriate.

    1. “moral duty” is preferable to “community standards” – as a measure of proper provision, the Court held that that an emphasis should be placed on what a testator is morally obliged to do as opposed to what the community would expect a testator to do.

    Whether you are considering your Estate Plan, or are a litigant in Court proceedings, it is important to consider the interplay between the parties left behind, in addition to whether provision is adequate to each party. Please contact Golnar Nekoee for more information.

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