People use Powers of Attorney to appoint one of more people to manage their financial affairs.
A General Power of Attorney enables a principal or donor to appoint an attorney to manage their financial affairs on the happening of certain events and subject to any conditions listed in the document.
An Enduring Power of Attorney is one that continues to be in place or “endures” beyond any subsequent loss of capacity of the donor.
An Attorney under an Enduring Power of Attorney must, during any period of legal incapacity of the donor, exercise their powers as attorney with “reasonable diligence to protect the interest of the donor and if he fails to do so, should be liable to compensate the donor for loss occasioned by the failure”.
Seems clear enough?  What about the reality of circumstances for most people?  It is not that clear cut.  For example, if a person wants to appoint their spouse as their attorney, the spouse might be prevented from providing financial support to him or herself and the children (often in a way intended by the donor and consistent with how they had managed their affairs prior to any loss of capacity).  A spouse might be prevented from providing financial support to dependent children as being inconsistent with the general duties of an attorney.
Many people creating a Power of Attorney may intend their attorney to have the ability to provide financial assistance to others, including the attorney in what can be deemed to be a “conflict transaction”.  These types of powers need to be specifically considered and dealt with in a Power of Attorney document so as to ensure that dependents are not adversely affected.
Power of Attorney documents should never be a “tick and flick” type document and the powers conferred should always be carefully considered.
Other provisions and powers that might be desired include the ability to make or revoke or renew a superannuation binding death benefit nomination, requirements to have financial affairs audited annually, ability to reside in the donor’s home, to make loans and so on.
A Power of Attorney is just as important as a Will.
For further information, please do not hesitate to contact us.

Tim Donlan
Principal, Donlan Lawyers (a member of Nexus Law Group)
[email protected]
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
The post Powers of Attorney: all the same…right? appeared first on Nexus Lawyers.

Clients are often concerned about leaving an inheritance to a “problem” beneficiary.
Common examples of a “problem” beneficiary may include:

an alcoholic
a drug addict
a compulsive gambler or spendthrift
a bankrupt beneficiary
a beneficiary going through a matrimonial break up involving property settlement proceedings under the Family Law Act
a person suffering from a disability
a person subject to potential harmful influence of another
a member of a cult
a person suffering a lack of legal capacity
a person who receives a means tested benefit such as a Centrelink pension
a person whose spouse is any of the above.

There are a number of different approaches that might be taken in the circumstances.  There is no right or wrong answer.
Sometimes people choose to simply dis-inherit such beneficiaries.  That approach might often be met with an application by the beneficiary if they are an eligible claimant for further provision from the estate.
Some people take an approach of indifference and notwithstanding that beneficiary’s circumstances, treat their inheritance in the same fashion as other beneficiaries, as though such problem does not exist and leave it to that problem beneficiary to deal with the consequences.
Often Willmakers stage payments of an inheritance for example, a certain percentage of the inheritance at the age of 18 years, a further percentage of the inheritance at the age of 25 years etc.
Others put conditions upon an inheritance that need to be satisfied prior to the inheritance being paid, for example it must be used to buy a house or “a gift to X provided that he is no longer a spendthrift”.  Such provisions in a Will can be problematic and might be scrutinised by the courts.
Many clients implement protective trusts in their Wills and appoint a trustee to manage the inheritance on behalf of the problem beneficiary.
There is no one approach that fits all circumstances and often a solution involves a combination of strategies. 
If the approach of indifference to the situation is taken, there may be adverse consequences for that beneficiary, which could be avoided, and an inheritance protected.
For further information, please do not hesitate to contact us.

Tim Donlan
Principal, Donlan Lawyers (a member of Nexus Law Group)
[email protected]
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
The post Inheritances and “problem” beneficiaries appeared first on Nexus Lawyers.

The High Court of Australia has been called upon to hear an appeal regarding the legal parentage of a child “B” born as a result of an artificial insemination procedure.  In this case the donor “X” is a person known to the donee mother.  The donor’s name appeared on the child’s birth certificate and he, at all times, believed that he was fathering a child with whom he would be involved by way of both financial support and physical contact.  The mother also had a child from another donor.  Both children believed that the respondent donor was both of their father and only recently discovered otherwise.
When the mother and her partner sought to relocate with the children to New Zealand, X opposed the application.  At first instance he argued to the Family Court that when B was conceived, the mother and her partner were not in a de facto relationship at the time he donated the sperm (this is a relevant factor in considering parentage under certain provisions of the Family Law Act) and that he had provided his sperm for the agreed purpose of fathering a child, to which he expected to be involved with as a parent.  The mother and her partner were denied permission to relocate and it was ordered that X and the mother have equal shared parental responsibility and that the mother must consult with him before making any long-term decisions involving the child.
The mother appealed and the decision of the primary Judge was overturned in the Family Court on the basis that X was not a legal parent.  X has subsequently appealed to the High Court of Australia to determine issues of B’s parentage.
This case has the potential to affect an unlimited number of cases involving children born as a result of artificial conception procedures.  The Family Law Act currently creates a presumption in favour of intended parents and currently excludes known sperm donors as a “legal parent” of a child, regardless of what the parties may intend.  Other provisions of the Family Law Act entitle a person, such as X, as a person potentially playing a significant role in a child’s life (in the subject case, this had been the case in the child’s life).  In many cases, some parents may prevent a sperm donor’s involvement, removing such entitlement in practice.
The Family Law Act may not deal well with circumstances where a child has three or four parents.  The Federal Attorney General, Christian Porter, has intervened in the High Court case, arguing the term “parent” might be expanded to include sperm donors in certain cases.  If that position is upheld, it may mean that single women who use sperm donors may not be able to exclude a donor from a role as a parent in the child’s life.  This will obviously have far reaching implications for mothers, donors and children.
For further information, please do not hesitate to contact us.

 
Carrie Eames
Solicitor, Donlan Lawyers (a member of Nexus Law Group)
[email protected]
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
The post Sperm donation and parentage – High Court to decide appeared first on Nexus Lawyers.

Joel practices primarily in Estate Planning and Deceased Estate Administration and is a member of the Society of Trusts and Estate Practitioners (STEP).  He focuses on providing clear and concise advice regarding complicated estate planning and administration concepts to clients in an approachable manner.
The post Joel Siepmann appeared first on Nexus Lawyers.

In late 2018, Gerald Cotton, CEO of Quadriga CX (Canada’s largest crypto currency exchange), died, age 30, taking with him the company’s “digital wallets” and their password to his grave; wiping out an estimated almost $283 million worth of crypto currency forever. A complex string of passwords were required to gain access to the wallets, which were known only to Cotton and not left for anyone else to access (or at least not as far as they have yet found!), leaving the company, its creditors and investors unable to gain access to those funds.  This is not the first time this sort of thing has happened.
The passwords were so secure that no one knows where they are!
Great security – Poor succession planning!
Whilst there are specific crypto currency solutions, this example simply highlights the importance for us non-crypto executives of making arrangements for our digital assets on death or incapacity.
For further information, please do not hesitate to contact us.

Tim Donlan
Principal, Donlan Lawyers (a member of Nexus Law Group)
[email protected]
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
 
 
The post A short word on digital estate planning appeared first on Nexus Lawyers.

Carrie works primarily in the area of family law.
Possessing both practical experience and a degree of pragmatism, her lateral approach to issues provides clients with sensible advice and solutions.
Carrie is passionate about achieving excellent results and offers assistance to clients across a range of family law matters.
The post Carrie Eames appeared first on Nexus Lawyers.

Tim is the leader of the South Australian hub of Nexus Lawyers based in Adelaide.
He has previously worked in both private legal practice as well as working in-house as a solicitor and state manager for a major national trustee company. He sits on various not for profit community boards and committees. Tim is a member of the international Society of Trust and Estates Practitioners (STEP) and holds a full TEP Designation for his recognised expertise in that field.
The post Tim Donlan appeared first on Nexus Lawyers.

You may have heard of the concept of a business succession or “buy/ sell” that deals with the exit of a business proprietor in the event of an event such as death or disablement.  Here is how it works based on a case study and solution.
For further information, please do not hesitate to contact us.

Tim Donlan
Principal, Donlan Lawyers (a member of Nexus Law Group)
[email protected]
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
The post How the buy sell agreement works appeared first on Nexus Lawyers.

While family businesses account for approximately 70% of all business in Australia, inter-generational longevity is limited with few businesses surviving to the third generation.  Why is this?
The advantages of family businesses commonly include:

stability, with the same people in leadership roles for long periods of time
commitment, having a sense of “skin in the game”
a greater sense of accountability to the family
flexibility of working arrangements and job descriptions
a longer term business outlook
often decreased employment costs and capital finance costs

Unfortunately, the very same issues that can make family businesses successful can lead to their downfall.
Disadvantages can include:

family conflict (being able to leave personal life outside of the workplace and vice versa)
lack of structured business governance
a degree of nepotism, causing management to operate a business without appropriate insight from outsiders. Even when outsiders are employed, it may be difficult to retain good staff if they feel they are not being listened to or that their skills are being overridden by what they perceive as family management incompetence

A primary reason for a family business’s lack of longevity across the generations is simply a lack of proper succession planning.  It is often seen that it “goes without saying” as to who will succeed to leadership and ownership of the business.  Sometimes, it is simply too hard to contemplate and the family might ignore the issue and hope that it goes away.
It is best to start planning early but even if the family business has been in existence for a while, it is never too late to turn your attention towards addressing these issues.
Many disputes can be avoided by:

having open and frank discussions about who will contribute in the business, in what way and for what reward
properly documenting how the business will run including Partnership or Shareholder Agreements and Trust Deeds
ensuring that the business complies with corporate governance requirements
addressing succession issues and documenting plans to be implemented where exit events occur

Governance documents can include Shareholder Agreements that determine shareholder and family members’ rights to participate in management, salary entitlements including bonus entitlements, dividend policies, leave benefits and other profit share entitlements.
Business Succession Plans can include funding for the exit of a principal and arrangements for succession to various roles and ownership.
Consider a Family Office and a Family Constitution.
A Family Office can involve nominated family members representing the family in business meetings and strategic directions.
A Family Constitution may include provisions that are binding or non-binding.  A Family Constitution is a document which sets out the rights, values, responsibilities and rules applying to shareholders, family members and other stake holders in the family business, and processes to deal with issues as they arise in the course of the business operations.  It can be implemented at any time and it can serve as a valuable tool to help keep family members to a shared vision and participate in policy and strategic decisions. Involving as many members as possible to participate in the preparation of a Family Constitution can be a very powerful process. Even if the Constitution is not legally binding, the input and agreement of family members goes some way to ensuring that the Constitution is one that is “emotionally binding” on the participants.

Joel Siepmann
Lawyer, Donlan Lawyers (a member of Nexus Law Group)
[email protected]
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
The post Family Business – keeping it together appeared first on Nexus Lawyers.

Nexus is delighted to announce the addition of leading planning and environment lawyer, Grant Long to our team.

For further information, Grant can be contacted by email [email protected] or telephone +612 4961 0002.

The post Nexus welcomes planning & environment lawyer – Grant Long appeared first on Nexus Lawyers.

A preliminary agreement is generally a contract for works undertaken by a builder prior to a commencement of construction and are often used in circumstances where the land, subject to the construction, has not been registered or purchased by the owner due to the fact the subdivision works have not been completed.
Preliminary work generally includes services such as:

Preparation of plans and designs for the building work;
Demolition work;
Site inspections for the purposes of conducting surveys or obtaining measurements for the plans; and
Applications to the appropriate authorities for approval or certification.

In providing these services, the builder may incur considerable costs prior to works under a building contract being commenced.
There are various ways that builders attempt to obtain payments for these services prior to construction and some of them may lead to the builder being in breach of the Home Building Act 1989 (Act) in the way building contracts are formatted or compiled, or because payment is made before a HBCF certificate of insurance is provided.
Section 92 of the Act provides that no payment can be received or demanded under a residential building contract unless a HBCF certificate of insurance is provided for the work. If payment is made and no certificate is provided, the owner may succeed in a claim for refund of the payment and a builder may be fined or penalised by Fair Trading.
While preliminary works are not considered residential building work for the purposes of section 92, they may be if they are included in a contract for residential building work or the preliminary agreement is part or associated with the contract.
It is recommended therefore that a preliminary agreement be a separate agreement and not part of the building contract. Even where separate, payment should not be associated with the building contract as a deposit or percentage of the building contract to be deducted from the contract price in the future.
It was found in the matter of Syed Ahmad Shraib Aly Pty Ltd V Jandson Pty Ltd [2018] NSWCATAP 228 in September 2018, that where the preliminary work is included as a necessary integral part or a result of the construction of a dwelling as set out in the contract, such work is connected by participation or association with that dwelling by the terms of the contract between the owner and the builder.
Hence, the importance of a separate contract and a clear difference between the execution of a building contract and a preliminary agreement. If, however a HBCF certificate is provided or if no money is demanded or received until it is provided, the agreements can be jointly executed. It would be prudent however to get advice on this format to ensure it complies with the Act.
The HIA information sheet (NFSCON 1241, current at December 2018) recommends what not to do under preliminary agreement as:

Ensure the scope of works does not cover any residential building work as defined under the Act;
Ensure the amount you claim under the preliminary agreement is relevant only to the preliminary works and not expressed as a percentage of the future residential contract or has an initial deposit or a credit for the later residential building contract;
Keep your preliminary agreements separate from your residential building contract; and
Do not execute the preliminary agreement at the same time as the residential building contract.

The contractual arrangements in these circumstances can vary according to the circumstances, however it is recommended that advice be obtained as to the arrangements in order to limit future risk. As  a penalty for failing to comply with the Act may impact your licence conditions or your HBCF eligibility.
This is a complex area of law so please contact Kelvin Keane if you require further information or advice on this issue.

Kelvin Keane
Group Principal, Nexus Law Group
[email protected]
+612 9016 0141
 
 
 
This publication is © Nexus Law Group and is for general guidance only. Legal advice should be sought before taking action in relation to any specific issues.
The post Traps in preliminary agreements appeared first on Nexus Lawyers.

It is common in claims made under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOP Act) for a Respondent to assert that the claimant’s claims have been “grossly embellished” (to put it politely).  The Court of Appeal’s judgment in YTO Construction Pty Ltd v Innovative Civil Pty Ltd[1] serves as a stark warning to contractors who think making exaggerated claims in Payment Claims are a good idea.
Background
The background can be summarised as follows:

YTO Construction Pty Ltd (YTO) engaged Innovative Civil Pty Ltd (Innovative) for bulk excavation piling works;
Innovative submitted a Payment Claim, which included a variation for $493,950.00 (Variation) for the removal and disposal of 66 loads of bulk waste by its subcontractor, Elkordi;
Innovative claimed that this amount was for the removal of general solid waste (GSW) as opposed to the removal of virgin excavated natural material (VENM), which is less difficult and (more importantly) less expensive to dispose of;
Unfortunately for YTO, it did not challenge the Variation in its Payment Schedule beyond stating that variations generally were not allowed under the contract. This meant that it could not include further reasons for disputing the Variation in the Adjudication Application;
The Adjudicator largely found in Innovative’s favour, awarding the sum of $462,000 in respect of the Variation;
YTO appealed to the Supreme Court to have the determination set aside. Its alleged fraud in respect of the Variation on two bases:
The loads removed were known by Innovative were known to not be GSW; and
The cost of removing the loads was known by Innovative to not be $7000 per load as alleged (Ground 2);
At first instance, the primary judge held against YTO because YTO had not proven all 66 loads were not GSW that YTO had not made out the case for fraud.
YTO appealed and, in a significant development for SOP cases, overturned the primary decision.

The Appeal Decision
The Court of Appeal analysed two of the Subcontractor Elkoridi’s invoices (with supporting dockets) that were submitted to the Adjudicator.  These invoices demonstrated that only 26 loads were in fact GSW and therefore a false representation had been made.
His Honour found that for YTO to establish the falsehood, it was sufficient to prove that one of more of the 66 loads was not GSW material.[2]  For this reason alone, the matter was remitted to the primary judge for redetermination.
In respect of the allegation of fraud specifically, the Court of Appeal did not find for YTO.  It concluded that Innovative’s director’s (Mr Bhatt) view that $7,000 per load to be the commercial rate for removal of GSW was not necessarily false but a matter of opinion, and therefore did not satisfy the necessary elements to be considered fraudulent.
Conclusion
What this case shows is that the appeal Courts are more than willing to open up Adjudication determinations on the basis of false representations and fraudulent behavior. Obviously if they do, there are significant penalties for the party who made the falsehood.
Despite being considered a ‘rough and ready’ process for enforcing construction debts, the SOP Act should definitely not be utilised as a means of obtaining payment for exaggerated or unsupportable claims.  It’s  important that expert advice is used to properly establish claims in the first instance, as the costs and consequences of getting it wrong, even inadvertently, are significant.
If you need help preparing claims or are on the receiving end of a ‘dodgy’ claim, we strongly recommend you contact the Nexus construction team to set up your SOP matter properly and avoid pitfalls like this.
[1] [2019] NSWCA 110
[2] Ibid, [52]
The post Warning – Don’t use the SOP Act to make dodgy claims appeared first on Nexus Lawyers.

Welcome to the next in our series of learning opportunities for Nexus’ interdisciplinary network of professionals.
Managing Your Business for Growth
Date: Tuesday, 9 April 2019
Time: 12.30pm to 2.30pm
Location: Level 11, 66 Clarence Street, Sydney
RSVP: [email protected]
From the continuing threat of trade wars, to credit constraints, plunging consumer confidence and the uncertainties of Federal politics, the Australian business outlook appears to be facing unaccustomed headwinds.
As a former Senior Managing Director of Deutsche Bank, our speaker, Chris Collings offers hands-on experience of both leading teams and growing businesses in the face of both external crises and cultural transformations.
Following on from his superbly received talk last year, Chris will focus in this next presentation upon some of the practical strategies that business leaders can reach for today to best equip their businesses to grow and prosper in the current environment.
Topics discussed will include:

Identifying the right areas for attention
Changing the nature of the client dialogue and improving alignment
Improving strategic focus
Establishing the right risk appetite for the current environment

We hope you are free to join us and, of course, feel free to pass on the invitation to those you think this seminar may benefit. While numbers are limited, we repeat sessions where there is sufficient demand.
Come along, meet some like-minded professionals, learn something new and we promise to have you fed and out by 2.30pm.  Please RSVP to [email protected].
If you would like further information or would be interested in presenting at one of our events, please contact our COO, Jacqueline Keddie ([email protected] | +612 9016 0141).
The post Managing Your Business For Growth – a NEXUS Lunch & Learn appeared first on Nexus Lawyers.

By now everyone would have heard of the structural issues affecting the Opal tower.  The spotlight has fallen onto failed industry regulation and the ultimate responsibility for defects arising from, design and certification. The cladding issue is another example of this ever-increasing problem.
Can it really be the case that innocent builders or even worse, owners end up footing the bill for this fiasco? What options are available to address this significant problem? A proactive approach needs to be taken to address these issues rather than collective ignorance and shirking responsibilities.
Many builders are worried about jobs with design issues, especially in light of the case The Owners Strata Plan No 66375 v King [2018] NSWCA 170, which affirmed that builders are held liable for design defects by virtue of the warranties contained in section 18B[1] of the Home Building Act 1989 (NSW) (“the Act”).
Naturally, the builder or contractor is the first port of call for a claim in the event of defective work, even when the builder knows the defect is a design or product issue and the builder has been instructed to carry out the works anyway. In those cases, a builder can use section 18F of the Act as a defence (if managed correctly).
However, even if the 18F defence is setup well:

The builder is still being sued in the first instance, causing a high cost and stress burden on the business.
The defence is not available on commercial projects and on residential projects above 3 stories as the Home Building Compensation insurance scheme does not apply.

Several things are required to enliven the 18F defence, which are;

the builder/contractor must give written notice to whom the work was contracted to be done that the works have a design problem and, advising against proceeding; and
the builder is subsequently instructed, preferably in writing, to perform works that go against advice given by the builder; or
The builder/contractor relies on advice (preferably in writing) from a relevant independent professional

It should be noted that even though the 18F defence does not apply to larger projects, the exact same approach should be taken to establish a defence in any other construction dispute.
Change of Plans?
Where the builder receives instructions that differ from the plan in the absence of design detail, or there has been a change in design that may affect the build, they should keep the requirements of the defence firmly in mind.
The onus is entirely on the builder/ contractor to manage this and set itself up for this available defence. Builders should adopt adequate verification of change procedures to avoid ambiguity and reduce their risk exposure.
Should a builder/contractor identify a change in their instructions that may prove to be unsatisfactory for any purpose, it is extremely important for the builder/contractor to immediately provide written advice on that change, providing:

what the new instructions are;
what the builder has suggested and why or how it differs from the change proposal;
a note that the builder has been instructed to proceed, despite their advice on the contrary; and
a request that the new instructions be confirmed before works commence.

Relevant Professional
A builder may also approach what is known as a ‘Relevant Professional’ under the Act, who is someone with specialised knowledge in a particular aspect of the building such as an architect, engineer or surveyor to provide written advice.
The Relevant Professional must be independent and must not have been a close associate of the builder/contractor for 3 years prior to the job.
Relying on written advice provided by a Relevant Professional will also provide the builder with a complete defence under section 18F of the Act, or in the context of a commercial project, the basis for a very strong defence in contributory negligence.
KEY TAKEAWAY
When dealing with design issues, it pays to be extremely cautious. Despite the extra cost, ensuring all instructions and advice relied on is in writing (as required by the Act) will provide the builder/contractor with a complete defence in the event of a dispute and defective works arising from design issues.
Verbal discussions are not sufficient and ‘just getting on with it’ is no longer an option. Should the builder suspect any issues a second opinion is strongly recommend, including from a lawyer or ‘Relevant Professional’.
Although this may be time consuming and will increase the cost of the job, it is far better than being dragged into litigated proceedings. Builders should implement project management systems that facilitate a section 18F defence protocol to minimise risk in the event of a dispute, in the face of seemingly lacking favorable industry regulation.
The Opal Tower showcased the eye-opening insight of when design issues arise. There is a lack of clear regulation which, in any other case, can leave innocent builders exposed to significant risk. In this regard it is prudent that builders keep on top of this aspect of project management and seek advice where applicable.
If you would like further information on the section 18F defence, contact our lawyers, Nicholas Achurch or Marcus McCarthy.

Nicholas Achurch
Lawyer, Nexus Law Group
[email protected]
+612 9016 0141
 
 

Marcus McCarthy
Principal, Nexus Law Group
[email protected]
+612 4961 0002
 
 
The post The Devil in Design – Builders in the Firing Line appeared first on Nexus Lawyers.