Blog

Power of attorney duties, often people will appoint a trusted person to act as their attorney for health and financial matters if they lose capacity.  When that person loses capacity (and for the period of time that they have lost capacity, as it is not always permanent), the attorney becomes entitled and responsible to manage the financial affairs of the person appointing them (the principal).  So what are the power of attorney duties in relation to the investments? The Powers of Attorney Act provides that (save for Enduring Powers of Attorney made before the commencement of the Powers of Attorney Act in 1998), the attorney can invest only in “authorised investments” but that if the principal had investments at the commencement of the power which were not authorised investments, then the attorney can continue with them. The Act goes onto identify authorised investments as being investments which would be permitted for a trustee exercising a power of investment under the Trusts Act 1973, or as may be approved by the Tribunal. While historically, the Trusts Act set out fairly rigid types of investments that trustees were permitted to engage in, the Trusts Act now simply provides (at section 21) that unless expressly forbidden by the trust instrument, the trust funds may be invested in any form of investment.  Section 22 then sets out duties of the trustee, including: The trustee is obliged to comply with whatever trust instrument binds them, and must at least once in each year review the performance, individually and as a whole, of trust investments.  Section 23 goes on to preserve principles of law and equity insofar as they are not inconsistent with the trust instrument, including: Section 24 sets out various matters that a trustee can take into account when exercising a power of investment, so far as they are appropriate to the circumstances of the trust.  These include: Section 24 provides that a trustee may obtain and must consider if obtained independent and impartial advice reasonably required for the investment of trust funds and its management from a person that the trustee reasonably believes to be competent to give the advice. So these duties have become the duties of an attorney when investing for a principal. An attorney can be responsible if it breaches its obligations in relation to the management of the fund.  As an example, in the guardianship matter of HLB v Trust Company Ltd [2010] QCAT 40 – where the appointed guardian has similar obligations to those of an attorney under a Power of Attorney – The Trust Company Limited was ordered to compensate their client for failing to comply with their obligations in relation to their management of the client’s funds. In that case, the funds were maintained in a fund paying a low rate of interest for approximately one year when they could (and should) have been invested in investments which were equally safe and having a far greater rate of return. As a consequence, when managing the affairs of a principal, an attorney would often be wise to take advice from a qualified person and have regard to that advice when making investments.  For matters concerning Power of Attorneys, please contact Jessica Murray at jessicam@qbmlaw.com.au or Peter Muller at peterm@qbmlaw.com.au

In a recent decision of the Queensland Supreme Court (Rocky Point Holdings Pty Ltd v TEB Enterprises Pty Ltd [2023] QSC 20), the Court considered a number of issues arising out of a transaction involving call options in respect of land.  Relevantly, the landowner had given a call option right to an interested party (“the Buyer”).  The parties came into dispute whereupon the Buyer lodged a caveat. In Queensland, except in very limited circumstances, caveats lapse three months after lodgement.  In order to preserve the continuation of the caveat, proceedings must be commenced within three months of lodgement and the Land Title Office given notice of those proceedings.  In this particular case, proceedings were commenced, however notice was not given to the Registrar of Titles as a result of which, the caveat lapsed on 20 October 2022.  The first observation (at paragraph 17 of the judgment) was that the Buyer “at least from the time it purported to exercise the option, had an interest in land sufficient to support the caveat”.  This comment relates to the question of whether a call option itself gives rise to an equitable interest in the land which is sufficient to support a caveat, or a “mere equity” in the land which may not be. In any event, being satisfied that given that the Buyer had given notice of the exercise of the option, it would have an interest capable of supporting a caveat, the Court went onto consider whether it should allow the lodgement of a second caveat.  In that regard, section 129 of the Land Title Act provides that “a further caveat with the same caveator can never be lodged in relation to the interest on the same or substantially the same, grounds as the grounds stated in the original caveat unless the leave of the Court of competent jurisdiction to lodge the further caveat has been granted.” In this matter, ultimately it was the position of the caveator that the failure to notify the Registrar of Titles that proceedings had been commenced was an oversight on the part of their lawyers.  While the Court criticised the evidence in that regard, the Court accepted that there was an error on the part of the lawyers which led to the notification not being given, and that it was satisfied that it had been the intention to maintain the caveat and press for the claim for specific performance of the agreement which arose by the exercise of the option.  As a result, the Court considered it appropriate to give leave for the Buyer to lodge a second caveat claiming the same interest as claimed in the first caveat.  A further issue was considered by the Court in the course of its assessment of the application and that was the question of whether an unstamped document (ie a document which has not been assessed for the payment of stamp duty) can support a cause of action.  This is something that does arise quite frequently in commercial litigation, but is still surprisingly unclear.  In this case, the Court found that the giving of an undertaking by the Buyer to stamp the call option document (that undertaking being to submit the call option deed to the Commissioner of State Revenue for assessment, and to cause any duty assessed on it to be paid) was sufficient, and in that regard, the Court declined to follow previous comments of the Supreme Court to the effect that giving the undertaking might make the document admissible in the court proceedings, but until it was stamped, it would not be effective to found a cause of action. The judgment provides very useful guidance in relation to these issues. For matters concerning caveats, please contact Jessica Murray at jessicam@qbmlaw.com.au Megan Hanneman at meganh@qbmlaw.com.au, or Peter Muller at peterm@qbmlaw.com.au

In administering an estate, it is necessary to have the original of the last Will.  This is for a number of reasons, one of which is that there is a presumption that if an original Will cannot be found, then the Will maker destroyed it so as to revoke it. If there is no last Will because it has been revoked, and if that Will (before being revoked) revoked previous Wills, then the Will maker will have died in testate and the Will maker’s estate will be given in accordance with the rules of intestacy.  Occasionally however, circumstances arise where a Will might be lost or destroyed without the intention of it having been revoked.  For example, the Will might be destroyed in a fire or flood, or it might have been lost.  Situations in which photocopies of Wills that had been lost have been admitted to probate have been considered by the Supreme Court.  The NSW Supreme Court, in Cahill v Rhodes [2002] NSW SC 561 found that in order to admit the record of a lost Will to probate, five matters must be established: That test has been approved by the Queensland Supreme Court and relied upon in various matters including in circumstances where it appeared that the original Will had been lost by a hospital, and in circumstances where it appeared that the Will had been stolen from the lawyer’s car. For matters concerning estate planning, Wills, probate and estate litigation, please contact Jessica Murray at jessicam@qbmlaw.com.au or Peter Muller at peterm@qbmlaw.com.au

Yet another person trying to use a will kit to create a will and getting it wrong. There tends to be at least several of these each year in Queensland alone, although that doesn’t seem to cool the passion that some people have for their beloved will kits. This one however was a little different. It seems that the will maker had signed the document, but had not completed important parts of the will before signing it. In particular the parts of the will saying what was to be done with the estate were completed after it had been signed. So ultimately the will had no effect and orders were made to administer the estate as though the will maker had died without a will. The decision can be found here https://www.sclqld.org.au/caselaw/QSC/2022/303 Problems with will kits are frequent. Gifts can fail for various reasons, there can be partial intestacies (where part of the estate isnt dealt with properly, there can be issues with signing, sometimes the will fails entirely. When these problems arise, often court intervention is required costing thousands of dollars in legal fees, with delays associated with the administration. For example, in the matter referred to in the decision, the will maker died in mid 2020, the application was brought in May 2022 and even though uncontested, the orders were not made until January 2023. As a result an estate which most likely could have been administered within 6 months is incomplete after 2 1/2 years. It is prudent to use a lawyer who understands the fundamentals of preparing wills, and who takes the time to understand the will maker’s assets and family relationships – after all personal dealings are complex and there is a lot to consider – see https://qbmlawyers.demo2.website/estate-lawyers-gold-coast/writing-a-will/