The Voluntary Assisted Dying Bill 2021 passed by Queensland Parliament

Finally the Voluntary Assisted Dying Act (VAD) has come into force in Queensland after much debate and news coverage. But when does it start and what does it allow?

The commencement date for the legislation is important because it excuses medical practitioners from liability or criminal offence if they follow the procedures set out in the Act and regulations. The Act does not commence until January 2023 so there is a lot of time to see how this will work.

The principles that underpin this Act:

  • Human life is of fundamental importance;
  • Every person has inherent dignity and should be treated equally and with compassion and respect;
  • A person’s autonomy, including autonomy in relation to end of life choices, should be respected;
  • Every person approaching the end of life should be provided with high quality care and treatment, including palliative care, to minimise the person’s suffering and maximise the person’s quality of life;
  • Access to voluntary assisted dying and other end of life choices should be available regardless of where a person lives in Queensland;
  • A person should be supported in making informed decisions about end of life choices;
  • A person who is vulnerable should be protected from coercion and exploitation; and
  • A person’s freedom of thought, conscience, religion and belief and enjoyment of their culture should be respected.

It is important to note that the Powers of Attorney Act is not an Act that applies to the VAD Act, which means an attorney cannot give consent to assisted dying under this legislation as per section 159. This is also not a matter that is able to be decided under the Guardianship and Administration Act, if a person has a guardian appointed or the Public Trustee is acting where the person has lost capacity.

The way it will work is that a person who is affected by disease or illness can make a first request to a medical practitioner for voluntary assisted death, strictly under the terms of the Act. The major purpose is to ensure consent is properly obtained and that prohibited drugs are controlled as per the Medicines and Poisons Act 2019.

A death under this Act is not a “reportable death” under the Coroners Act 2003, meaning it is not to be investigated or requiring an autopsy. Grim stuff but someone has to make these decisions!

Section 155 states that “technical errors” or minor compliance issues will not affect the ability of a medical practitioner to assist with the process of dying of a person.

The “effectiveness” of the Act will be reviewed after 3 years by the relevant minister.

Probably one of the most important sections is:

149 Protection for health practitioners and ambulance officers:

  1. This section applies if a protected person, in good faith, does not administer life sustaining treatment to another person in circumstances where:
    • the other person has not requested the administration of life sustaining treatment; and
    • the protected person believes on reasonable grounds that the other person is dying after self-administering or being administered a voluntary assisted dying substance in accordance with this Act.
  2. No civil or criminal liability attaches to the protected person for not administering the life sustaining treatment.

So, good protection for front line health workers.

147 Protection for persons assisting access to voluntary assisted dying or present when substance administered.

Criminal liability does not attach to a person only because:

  1. The person, in good faith, does an act or makes an omission that assists another person who the person believes on reasonable grounds is requesting access to or accessing voluntary assisted dying in accordance with this Act; or
  2. The person is present when another person self-administers or is administered a voluntary assisted dying substance under this Act.

There are however various offences for giving prescribed medicines without obtaining proper authority, inducing consent, giving false or misleading information. This has a potential penalty of up to 7 years imprisonment.

The act provides for a review of decisions to QCAT regarding a person seeking access to voluntary assisted dying. This is to determine eligibility to apply including whether the person had the required capacity to seek consent or there was coercion or other intervening issue. The person must be an Australian resident for at least 3 years prior to the application and a Queensland resident for at least 12 months.

The procedure requires a First Request and First assessment by a qualified medical practitioner and then a follow up second request and final assessment before the process of voluntary assisted dying can occur.

Medical practitioners and qualified nurses can administer the prescribed medicines to assist the voluntary assisted dying process.

The key is a determination of capacity to make the final decision:

11 Decision-making capacity

A person has decision-making capacity in relation to voluntary assisted dying if the person is capable of:

  1. Understanding the nature and effect of decisions about access to voluntary assisted dying;
  2. Freely and voluntarily making decisions about access to voluntary assisted dying; and
  3. Communicating decisions about access to voluntary assisted dying in some way.

The person is to be “suffering” meaning suffering, caused by a disease, illness or medical condition, includes a physical or mental suffering; and suffering caused by treatment provided for the disease, illness or medical condition.

10 Eligibility

A person is eligible for access to voluntary assisted dying if:

  1. The person has been diagnosed with a disease, illness or medical condition that is advanced, progressive and will cause death; and is expected to cause death within 12 months; and is causing suffering that the person considers to be intolerable;
  2. The person has decision-making capacity in relation to voluntary assisted dying;
  3. The person is acting voluntarily and without coercion; and
  4. The person is at least 18 years of age.

Under section 8, voluntary assisted dying is not taken to be suicide and this will have an impact on many life insurance policies.

Please call us today on 07 3839 7555 if you would like to know more about this Act.

Key functions of an Agreement to Lease and its enforceability

From both the perspective of a potential Landlord or a tenant, an Agreement to Lease is often an important document that can highlight key points that are in agreement, prior to a Lease being prepared. If done correctly, it can reduce the points of negotiation or amendment that may be necessary after the Lease, as well as the costs involved. However, if not properly drafted, a tenant or a landlord may find themselves either:

  1. unintentionally bound to a lease or lease terms; or
  2. being unable to enforce the Agreement once the other party decides to not proceed.

When should there be an Agreement to Lease?

An Agreement to Lease is common for both commercial and retail shop leases as it allows the parties to agree on key terms prior to a Lease being drafted. It is especially common when there are remaining conditions, which prevents the immediate start of a Lease including:

  • fit-outs or other works required by the Landlord or Tenant prior to commencement;
  • an existing Lease yet to expire; or
  • finalising the conditions required before a Lease can commence such as:
    • In a Retail Shop Lease – review of the Landlord’s disclosures;
    • Deposit requirements;
    • Bank Guarantee or cash bond; and
    • Evidence of insurances as agreed.

What is included in an Agreement to Lease?

While an Agreement to Lease serves as a precursor to a Lease to be executed (and registered if required), key elements should still be specified including:

  • Parties’ details;
  • Rent and review amount;
  • Estimated Outgoings and the tenant’s required contribution;
  • Term including any options for renewal.

If specific work or condition is required during the period between the signing of the Agreement to the Lease being formalised, then those conditions should also be specified within the Lease.

I have changed my mind since signing the Agreement to Lease – is it binding?

Whether an Agreement to Lease is binding on the parties will depend on if the agreement intends to bind the parties and if there are any conditions to be fulfilled beforehand.

Commonly, the Agreement to Lease will not be binding immediately on the parties but will instead be binding upon specified conditions being fulfilled. Examples of conditions, per the above paragraph, can include the tenant’s requirement to pay a deposit or the fit-outs being completed within a certain time frame.

In other cases, the Agreement may make it clear that no parties intend to be bound to the Agreement to Lease until the formalising and the signing of the Lease itself. In this case, the Agreement to Lease serves as a drafting tool for the Lease in the current points that are in agreement. Such Agreements may set out the rights of termination, including a right to terminate if a Lease is not formalised within a specified time frame.

Lastly, an agreement can intend for the parties to be immediately bound upon signing. In a Queensland case in Colvin v Lennard & O’Brien the prospective tenant withdrew from an agreement two days after signing an agreement to lease. The Court found that the agreement intended for the parties to be bound on the basis that the agreement:

  • contained all key terms including the property, the parties, the lease period (including the commencement date), rent & outgoings; and
  • contained signing clauses by both parties in the form of an execution page that was akin to an offer and acceptance.

While the agreement contained conditions to be fulfilled before the Landlord passed on the possession of the Premises, it had no conditions precedent for it to be binding.

As the landlord in the case was unable to find another tenant from July 2006 to January 2007, the tenant was ordered to pay the equivalent rent and outgoings plus interest totalling over $150,000 plus costs.

To avoid a similar catastrophe arising from an Agreement to a Lease, it is important to ensure that all key terms are highlighted and understood by seeking legal advice, especially as many agreements are prepared by one of the parties or a commercial agent that may be involved.

If you have any concerns before signing an Agreement to Lease and whether the agreement will be immediately binding on you, please do not hesitate to contact us at

When to update your Estate Plan

23 August 2021 to 29 August 2021 is ‘Wills Week’ and a timely reminder to anyone who needs to update their estate plan. 

1. What documents are included in my estate plan?

Your estate plan includes more than just your Will.  It also includes:

  • Enduring Power of Attorney – who is appointed to make decisions on your behalf in the event you become incapable to make those decisions;
  • Advance Health Directive – who is appointed to make specific medical decision on your behalf;
  • Death Benefit Nominations for your superannuation;
  • Statement of Wishes;
  • List of Specific Gifts;
  • Digital Asset Register;
  • Trust Deeds and Deeds of Variation;
  • Business Succession documents.

2. When should I update my estate plan?

While we future-proof your estate plan as much as possible when drafting, circumstances change and it is important to review your estate plan every 3-5 years.  Your estate plan should also be reviewed when specific events occur, including the following:

  1. If you have a significant change in your assets.

You may have left a specific gift (particularly real estate) of one asset to a beneficiary and you have since sold that asset.  You may have new companies or family trusts and need to deal with the gifting of shares or control of the trusts in your Will.

  1. Significant change in your personal and family circumstances. 

There may be new children or grandchildren that you want to include.  You may need to update your enduring power of attorney so that your attorney can provide benefits for the needs of your new child.

A beneficiary may have passed away or no longer be part of the family through divorce.  One beneficiary’s needs might have changed meaning they need a greater share of the estate.

  1. Change in your relationship, including marriage, divorce or separation. 

It is important to note that divorce can render certain clauses invalid.  Marriage can revoke part of a Will, unless your current husband/wife is your executor and beneficiary or unless your Will states that it was made in contemplation of your marriage.  This can lead to parts of your Will being valid and other parts subject to the rules of intestacy. 

Separation does not revoke your Will.  Parties need to wait 12 months from separation before they can file for divorce.  It is particularly important on separation to update your estate plan to ensure your former spouse does not remain your attorney, executor or beneficiary.

  1. Changes to your attorney or executor. 

Acting as attorney or executor can be an onerous task.  It may be that your attorney or executor is no longer suitable for or willing to undertake the role.  Has your estate become more complex? Have the circumstances of your executor changed, such as health circumstances or a job with significant travel?

  1. Lapsing nominations

Superannuation is treated differently from the rest of your estate.  You can specify how your death benefits are to be distributed on your death through ‘death benefit nominations’.  Depending on your superannuation fund, some nominations lapse every three years.  It is therefore essential to update your nominations regularly to ensure they remain in effect and do not expire.

3. Do I need to prepare a whole new Will?

Sometimes it may be necessary to complete a new Will which has the effect of revoking any previous Will you have made.  If the change is only minor you can execute a Codicil, which is a separate document that either adds extra clauses or changes existing clauses in your current Will.  It is important that you do not make any handwritten amendments to your Will which could invalidate the document.

A valid and up-to-date estate plan is an investment for your future.  It ensures that your wishes can be carried into effect and that your proposed beneficiaries are able to receive the distributions you have provided for them.  This also makes it easier for your attorneys and executors and can make the administration of your estate smooth and cost-effective.

We would be delighted to assist you updating your estate plan.  Please email Lauren Nolan at if you have any questions.

Queensland REIQ Contracts – Never Simple

Now a “Who’s Who” in the contract clause “zoo” would be incomplete without a quick coverage of the other big addition to most residential sale contracts. The “peas” to the finance conditions metaphorical “carrots” if you will. Of course, I am referring to the Building and Pest condition, or Clause 4. Similar to the Finance condition, the contract being subject to the results of Building and Pest inspections is dependent on the inspection dates being completed in the reference schedule. Clause 4.1 requires the buyer to obtain a written report from a building inspector (and pest inspector, although often they are in the same report) on terms satisfactory to the Buyer. The Buyer is required again to act reasonably, but subject to this requirement, may terminate the contract should the report be unsatisfactory. A few points to note on this. Unlike some other contract forms (read: the ADL sale contract) the REIQ sale contract does not require the provision of the report in order to activate any purported termination by the Buyer. However, it should be noted that if the seller actively requests the report, it is required to be provided to them.

The second noteworthy issue with the Building and Pest clause that deserves mention, and indeed, another point of difference between these two contracts is their approach to white ants. With ADL contracts, the risk of white ants is insufficient to terminate the contract. The REIQ version however is silent on this point, the suggestion being that a buyer acting reasonably, may be able to terminate on the same grounds. Another issue that often arises is the Building Approvals, or rather, the lack of building approvals. It is important to note that as a general rule, finding out that a property contains unapproved structures (for example, a shed without the appropriate council approvals) will not be grounds to terminate under the Building and Pest condition. Whilst I have seen some exception to this where a very diligent building inspector (already, you can see the rare terrain we are navigating here) has raised this in their building report, this is often not the case. Even raised under the report, grounds for termination as a result of the note is tenuous at best. The better option to avoid disappointment, and potentially costly litigation, would be to include a separate condition making the contract subject to an inspection of the council records (otherwise known as a “due diligence” clause).

Notwithstanding the above distinctions, it is clear that a recurrent thread bleeds through both the Finance and the Building and Pest clause, and that is the overarching requirement to act reasonably or in good faith. Neither of these clauses should be used as a veritable ‘wild card’ to escape your contractual obligations.

Finally, in the new age where Electronic Conveyancing or PEXA is fast becoming the platform of choice for effecting settlements (every solicitor’s dream), one cannot look past the clause that makes it all possible, Clause 11 or the Electronic Settlement Clause. As I promised brevity at the start (and am fast approaching a word length that really blows that promise out of the water) I will refer you to my learned colleague’s detailed article on PEXA that you can read on our Blog. But for now, I will say this. PEXA has a host of amazing benefits not the least of which include:

  1. No need to sign paper documents including a Transfer;
  2. Faster access to your funds,
  3. Instantaneous (or veritably instantaneous) lodgment of documents;
  4. Minimal paperwork;
  5. No bank cheques (my personal favourite); and
  6. All completed online (in a post-COVID world, a true blessing).

In an increasingly uncertain time, it is important to insert some stability in your life where you can. How can this be achieved you ask? First and foremost, ensuring you are using a contract that provides for Electronic Conveyancing platforms. In the REIQ sale contract, that is covered in Clause 11. However, as with everything in Law, this is not the end of the story. Clause 11 provides that reliance can only be activated, by agreement between all parties: that is, buyers, sellers and both banks, where required. This means that in order to take advantage of this great platform, you need to ensure agreement can be guaranteed. To achieve this end, I recommend including a special condition that mandates the operation of clause 11. Of course, this is only recommended where you know your solicitor and bank can comply with such a requirement.

The second point worth noting in relation to Clause 11 is the waiver at 11.5 which allows a party to withdraw from the Electronic Settlement with 5 Business days notice to the other party. Obviously, this can be incredibly inconvenient and costly, especially close to settlement. To avoid this last-minute change (and cost) I recommend including in your special condition, a clause to remove the application of this provision from the contract.

At Perspective Law, we understand the importance of contract review prior to signing. This will give you the opportunity to discuss anything that might be of concern at the property. The standard contract clauses are incredibly beneficial, especially to the buyer. But as I hope this article has shown, Law is a fickle mistress. What may work well for one situation, may not be suitable for you. Perspective Law takes a horses-for-courses approach. We tailor the solutions to suit your problems and approach each matter as if it where our own. If you need any assistance regarding REIQ contracts, feel free to email us at

PEXA: 101 And Why It Matters To Me

You may have heard of the term “PEXA” hovering in recent news or in the Australian Financial Review, specifically as the PEXA Group Ltd went public in an IPO on 1 July 2021. So, what exactly is PEXA, how does it work, and why does it matter to you where you are looking to sign a contract to buy or sell a property?

The What…

The PEXA Group Ltd provides the service of the same name, which stands for Property Exchange Australia, and was developed to serve as an electronic platform for a property transaction in Australia.

The first transaction via PEXA was in November 2014 and while it took time for property lawyers and conveyancers to learn the new process,  in 2021 most firms and banks in Australia now use PEXA as the preferred method for property transactions.

In NSW, the usage of PEXA has been mandatory for all property transactions since 2019, and it is expected that the rest of Australia will grow more into e-settlements in the future.

The Why…

  1. Convenience – transactions online have obvious conveniences over the traditional settlement requiring hand signed papers, cheques and postage. The parties are no longer required to meet in person on the settlement date to exchange documents and therefore the transaction is much less susceptible to delays for unexpected events (such as lockdowns or indoor restrictions in this current pandemic).

Electronic payments on the day of the settlement, also means that the settlement funds will clear faster, compared to depositing bank cheques which may take up to 3 business days to clear.

  1. Accuracy – In PEXA, all parties are in one electronic platform, including the buyer, the seller, incoming and outgoing banks, where all parties can see visually the progress of the transaction and the next steps. In our experience, this availability of information and transaction status, decreases the risk of errors or miscommunication between parties and potential delays. All communications are through the platform, so messages through phone calls or emails do not get missed and parties are all given live information immediately.
  1. Costs – while PEXA has fees associated with its service ($117.92 for Transfers as of 1 July 2021), in our view, this fee easily offsets the usual costs associated with traditional settlements including, fees for settlement agents, postage and administrative work, associated with preparing cheques and paper documents.

The How…

In states where PEXA is not mandatory (including Queensland), a property transaction can only occur via PEXA if all parties in association with the transaction agree to use and are registered to use PEXA (or has an agent that is registered). If your lawyer appointed for your property transaction is registered with PEXA, they will first confirm with you whether you are agreeable to proceed with an electronic transaction.

If having your property transaction proceed via PEXA is necessary because of a remote location of a party, you should request your lawyer or the  estate agent insert into the Contract,  a special condition requiring that PEXA must be used. This will ensure that all parties can only engage firms that can use the platform.

Perspective Law is one of the earliest users of PEXA in Queensland and we have highly experienced lawyers that will be able to assist you in your property transactions. If you would like to enquire about a potential property contract or have any questions about PEXA, please do not hesitate to contact our office on (07) 3839 7555.

Binding Death Benefit Nominations: What happens to your superannuation after death?

If you have a valid will, you may assume that when you die your superannuation will automatically form part of the estate. However, this is not the case. Where you have not made a Binding Death Benefit Nomination, the superfund trustee has the power to decide who receives your retirement savings. This will be the case even where you have a self-managed superfund.

Unlike the executors of your will, the trustee is under no obligation to take your wishes into account, meaning your entitlements may not be distributed to your intended beneficiaries. For this reason, it is important that you nominate a beneficiary to ensure your superannuation is distributed in accordance with your wishes.

Requirements for a Valid Binding Death Benefit Nomination

When you create a Binding Death Benefit Nomination, you don’t have the power to nominate just anyone as a beneficiary. In order to be valid, you must only nominate someone who is considered your ‘dependant’. In the context of superannuation, a dependant can include your spouse or de facto partner, your children, any person who is financially dependent on you, a person with whom you have an interdependent relationship, or as is often preferable, your legal personal representative. Failure to comply with this requirement could render your nomination invalid.

Once you have determined who should receive your superannuation, you will need to ensure your nomination is signed in the presence of two witnesses over 18 years of age. These witnesses will be required to each complete and sign a witness declaration. It is common for people to assume that they can have their beneficiaries witness the nomination, but this is not the case. To preserve the validity of your nomination, it is essential that witnesses be entirely independent.

Importantly, a Binding Death Benefit Nomination will not become immediately valid after it is signed. It will only take effect once received by your superfund’s trustee. You must make your nomination in writing, clearly setting out the proportion of benefit to be paid to each person nominated. In most cases, your superfund will have a standard form where you can your nomination.

Provided your Binding Death Benefit Nomination satisfies these requirements, it will generally be binding for three years or until you change, update, or revoke it. The trustee will be bound to follow the instructions contained within your nomination even if your circumstances have changed. For example, if you have separated from your spouse or de facto partner but are not yet divorced, your ex-partner may still be entitled to the benefit. A divorce, however, will nullify your nomination. For this reason, it is essential that you regularly reassess your nomination to ensure the protection of your superannuation.

Taxation of Superannuation Death Benefits

It is important to make the distinction between the definitions of a ‘dependant’ within tax law and superannuation law. There are a number of similarities between the definition of dependency within these contexts. For example, your spouse or de facto partner, any children under 18 years old, and persons in an interdependency relationship are all considered dependants under both superannuation and tax law. However, while children over 18 years old will always be considered dependants in the context of superannuation, this is not necessarily the case for tax law.

Tax law provides that your dependants may pay a lower tax rate for superannuation death benefits compared to non-dependants. Many people presume that this means that nominating a legal personal representative as beneficiary will negatively impact dependants seeking taxation benefits. However, tax law adopts what is called the ‘look through’ approach.  In determining the amount of tax payable by your beneficiaries, the ‘look through’ approach considers whether the final recipient of your superannuation disbursement is a dependant according to tax law. Therefore, even where a legal personal representative is nominated as your sole beneficiary, your dependants will still be eligible to receive taxation benefits.

Perspective Law specialises in establishing clear and comprehensive estate plans individualised to the needs of our clients. If you are interested in nominating our firm as your legal personal representative or wish to ensure your assets and superannuation are adequately protected, please call Tony today on 3839 7555 or email

More Changes -Six member SMSFs

As we have come to expect, the federal Government has enacted further changes to self managed super funds. From 1 July 2021 self-managed super funds (SMSF) are able to have up to six members.  Previously a maximum of four members were allowed.  The majority of funds have either one or two members, usually established for the benefit of spouses.

The increase in members may suit larger families and can decrease the administrative costs of operating more than one SMSF.  However, there are certain matters to consider if you are intending on expanding your SMSF. 

  1. SMSF Structure

Members are required to be represented at the trustee level, either by individual trustees or a corporate trustee. For funds with more than one member:

  • Each member must be an individual trustee; or
  • Each member must be a director of the corporate trustee.

It is important to note that State and Territory Legislation governs the number of trustees that a trust can have. The Legislation should be checked prior to making any change if you currently have individual trustees.  It is likely that a corporate trustee will be required and this is strongly recommended.

The company constitution may stipulate rules regarding meetings of directors and voting rights and these need to be carefully considered.  It is possible for the voting rights of members to be based on their member balance as opposed to each director having one vote.  This is critical when considering th emanagement of the super fund in the context of a death benefit to be paid to the estate of a member or a nominated dependent.

The increase in members can reduce efficiencies in decision making and the management of the fund if the members do not agree on investment or other matters for the fund.

  1. Dispute resolution

Steps can be put in place to reduce the difficulties with decision making and to assist in dispute resolution.  This may include tailoring the deed or other documents, including:

  • Providing members with exit rights that do not jeopardise investments;
  • A co-ownership agreement to deal with assets that are difficult to divide;
  • Modifying the constitution for the trustee company regarding decision-making, such as restricted issues, voting rights according to member balances or where a unanimous decision is required.

It is essential that advice be obtained to ensure that adding specific provisions to the trust deed does not cause the SMSF to cease being a regulated fund.

  1. Investment

How superannuation is invested can be key.  Having additional members to the fund can provide additional investing power.  The intergenerational transfer of assets can also be tax-effective.

It is important that all members agree on the long-term goal for the fund.  Younger members may seek longer investments or have different interests.  They may be more prepared to invest with a higher risk level.  These differences can cause issues when investing.

  1. Paying Benefits

The control of the SMSF after one member dies and the release of their death benefits needs to be carefully considered.  If the remaining trustees have control over the payment of death benefits then there is a risk that they could pay the benefits according to their own wishes.  

Ensuring you have a valid death benefit nomination in place is even more important in a fund with multiple members to ensure that your superannuation is paid in accordance with your wishes. Alternatively you can establish a reversionary pension depending on your dependents. 

It is possible to have your legal personal representative automatically become a director of the corporate trustee on your death.  You should review your trust deed to ensure it provides for this and that the process cannot be hindered by any remaining members of the fund.

  1. Conclusion

If you are considering increasing the number of members in your SMSF you will need to review your current SMSF Trust Deed to see what it allows.  SMSFs with several members can provide greater opportunities for investment.  However, it is important that all members understand the purpose of the fund and are able to work well together.  Steps should be put in place to minimise disputes, particularly to cover members who wish to leave the fund. If we can assist you with your SMSF, including establishing the fund or updating the terms of your trust deed, please contact Tony Crilly at

Insurers – Claims for Business Interruption and Coronavirus

We all hate to pay for the premiums, but insurance policies are a necessary element for managing business risk. We have taken a look at the regime regarding insurance and the effect on policies during Covid and found a surprising result.

The unprecedented impact of the global pandemic has been detrimental to thousands of businesses across Australia. In the face of Government regulations, businesses have been forced to close temporarily causing them significant financial and emotional burden. Despite holding business interruption insurance, many insurers have led policyholders to believe that losses as the result of COVID-19 will not be protected by their coverage. However, a recent unanimous decision of the NSW Court of Appeal favouring policyholders indicates that insurance companies may still be liable to pay these claims.

The Insurance Council of Australia (ICA) has commenced two test cases to be heard by the Court in order to seek clarity regarding the interpretation of Business Interruption Insurance policies in the context of the pandemic. The first case heard by the NSW Court of Appeal contemplated whether exclusion clauses for claims related to ‘quarantinable diseases’ under the Quarantine Act 1908 will extend to exclude losses caused by COVID-19.

The Quarantine Act 1908 is no longer in force, but it has since been replaced by the Biosecurity Act 2015. COVID-19 has been defined as a ‘listed human disease’ under this new legislation. Though this concept is arguably similar to that of a ‘quarantinable disease’ under the Quarantine Act 1908, the Court held that the clear wording of the policies meant the exclusion could not extend to an application of the Biosecurity Act 2015.

On 25 June 2021, the High Court denied insurers’ application to appeal this decision. Consequently, businesses who have experienced disruption due to COVID-19 are afforded substantial protection. Insurers who have failed to update their policies after the repeal of the Quarantine Act 1908 will likely be compelled to pay businesses who faced loss due to the pandemic.

While the decision in this first test case favours the interest of businesses, there is still ambiguity concerning the interpretation of policies in the context of COVID-19. However, these ambiguities will inevitably be clarified during the second test case. This case, which will likely commence trial in August, will consider the meaning of wordings related to the definition of disease, proximity of an outbreak to a business, and prevention of access to premises due to a government mandate. Until the court provides such guidance, insurance companies should be hesitant denying claims arising due to the impacts of COVID-19.

If you believe your insurer has incorrectly denied your business interruption insurance claim, or if you want to find out whether you may be protected for COVID-19 related loss, email us at to talk about how we can help.  

Executors – Know Your Duties!

One of the most important pieces of advice that a person should receive if appointed to act as executor in a Will, is that the duties of an executor in administering a deceased estate are onerous.

The duties of an executor are set out in the legislation, case law and the deceased’s Will or other testamentary document.

This blog will highlight some of the principal duties of an executor and provide practical examples to illustrate how these duties are performed in reality. It is not intended to be a comprehensive summary of the duties and should you wish to find out more information about these, please do not hesitate to contact us.

This is arguably the most important duty of an executor. An executor must collect and get in the personal and non-personal assets of a deceased person.

  1. Get in the Assets of the Deceased

Some obvious examples of personal assets include real property, motor vehicles, household possessions and bank accounts. Non-personal assets are sometimes more complicated, such as debts owing, interest in a partnership, shares and superannuation (if there is a valid nomination in favour of the estate).

Likened with this duty, is the duty of an executor to manage and preserve assets or income earning investments of the estate for the benefit of those entitled them. 

For example, executors must maintain a policy of insurance over estate property and in cases where the deceased held an interest in rental properties, continue to collect rent. In more complex scenarios, the Court has recognised this duty extends to commencing legal proceedings to collect in estate property.

If a solicitor is assisting with the estate administration, the solicitor’s account will usually be used to collect estate monies.

  1. Duty to Account

An executor can be called upon by the Court to exhibit a full inventory of the estate and render an estate account if required.

Whether or not a demand has been made, an executor has a duty to account to the beneficiaries of an estate. This can be done informally, if no demand has been made. There is no format for accounting in an informal way. However, an executor must provide the beneficiaries with an itemised list of the following:

  • assets transferred;
  • assets realised and still held;
  • funds received from all sources;
  • payments for estate liabilities, distributions and money retained; and
  • provision for liabilities not yet paid – attention must be taken to ensure sufficient funds are withheld to pay all tax assessments.

If a formal account is demanded, further details are required, in addition to original supporting documents of the estate administration. These include receipts, statements and invoices. It is therefore imperative that an executor maintain accurate and detailed records during the estate administration.

  1. Fiduciary Duties

It is important for an executor to understand that they are in a position of trust and therefore, owe fiduciary duties to beneficiaries of an estate. 

An executor must not place themselves in a position of conflict between their duties to the estate and their personal interest.  For example, there is a conflict if an executor entered into a transaction for the sale of estate property to a related party (i.e. his or her spouse) for less than market value.

Another key fiduciary duty is to not obtain any unauthorised benefit from the fiduciary relationship, often referred to as the “no-profit rule”.  

An executor also has a fiduciary duty to exercise the powers and perform the duties of an executor in good faith, in the interests of the beneficiaries and to use reasonable care in doing so.

Other duties of an executor including paying the debts of the deceased, paying legacies given by the Will (and interest where applicable) and distributing the estate according to law.

As mentioned above, there are duties that we have not discussed here, and if you would like information on those, please do not hesitate to contact us on 07 3839 7555.

Company Loans and Record keeping – Where can it go wrong?

For many business owners, tax time is fraught with complexity and additional time spent searching for documents to give to the accountant.

But what if we have not prepared our records for the company in the movement of cash out of the company accounts? Will there be deemed dividends that bites us on the backside giving rise to large tax assessments payable when we least expect it.

Below is a short summary of some key points regarding internal loans and Division 7A ITAA 1936.

The practice of using dividends to make minimum yearly repayments on Division 7A loans, or to fully repay loans, has been common since the introduction of Division 7A of Part III of the ITAA 1936 (Div. 7A) on 4 December 1997. Division 7A is intended to prevent the tax-free use of company profits by shareholders and their associates. For tax purposes declared dividends can still be franked so the dividend strategy is commonly used to prevent unfranked dividends arising.

A journal entry cannot create or constitute a transaction in its own right, it can only record a transaction that has already occurred. If the records are not carefully maintained at the right time there is serious risk the ATO will overturn the entry and further tax will become payable. The intention of a taxpayer is irrelevant.

The law is very black and white, and the courts do not accept ‘backdated’ documentation.

You must be extremely careful when it comes to complying with rules governing the payment of a dividend by journal entry, to ensure on a complying Div. 7A loan.

What are the rules?

Under s. 109 E of the ITAA 1936, an unfranked “deemed dividend” arises to a shareholder (or associate of a shareholder) of a private company if they fail to make a minimum yearly payment by 30 June each year for a complying Div. 7A loan. Preferably a cash payment is made to the company, but often the company’s profits are used to pay a dividend by journal instead to demonstrate this obligation owed by the shareholder or associate.

Can there be a set off between parties to the loans?

A journal can only constitute a payment where the principle of “mutual set-off” applies. This requires two parties who mutually owe each other an obligation recording an agreement to set-off their respective debts due against each other. The liabilities are either fully or partly discharged and this allows the actual movement of cash to become unnecessary. The ATO provides guidance, in context of FBT in the miscellaneous tax ruling MT 2050.

The journal entry will only be effective if the shareholder’s obligation to the company to make the minimum yearly payment is set-off against an obligation owed by the company to the shareholder to pay the dividend. This dividend strategy is not available where the money is owed by an associate of a shareholder.

If the company owes no obligation to the shareholder — because no dividend was validly declared by 30 June to create the company’s indebtedness to the shareholder — the payment of the minimum yearly repayment by journal is ineffective.

Corporations Act 2001

What else do we need to worry about in record keeping for this journal entry?

The circumstances in which a dividend may be paid by a company are set out in section 254 T of the Corporations Act 2001 (Cth) and are also restricted by the company’s formal constitution. (which really should be signed by the Directors). The decision to declare and pay a dividend is recorded in a minute of meeting or a signed resolution (this must be filed in the corporate register within one month of the meeting or decision (see section 251 A of the Corporations Act).

Assuming the dividend is declared on 30 June (and not any earlier), the directors’ minute or resolution needs to be filed in the corporate register by 31 July following the end of the income year in which the dividend is declared.

What does the tax law say?

A company that makes a distribution which is able to be franked for tax purposes is required to give the shareholder a “distribution statement” (see section 202-75 of the ITAA 1997).

The distribution statement must be provided no later than:

  • if the company is a public company — the day on which the distribution is paid;
  • if the company is a private company — before the end of four months after the end of the income year in which the distribution is made, or a later time allowed by the Commissioner.

As Div. 7A applies only to private companies, the company must give a distribution statement to the shareholder within four months of year end, that is, by 31 October in that year.

What really happens in practice in the real world?

Consider the implications for doing anything that is contrary to the provisions in the tax law as breaches may carry significant penalties. Perhaps the amount of the dividend is unknown on 30 June, so the document can’t be prepared by that date. However, the dividend being set-off against the minimum yearly repayment is in respect of a loan made in a previous income year, so the amount of the minimum yearly repayment will be known in advance.

Since the High Court decision in Commissioner of Taxation v Bamford; Bamford v Commissioner of Taxation [2010] HCA 10,   making trustee resolutions by 30 June has become critical. The declaration of dividends is just as important in terms of record keeping.

All business owners should know their position within reasonable accuracy leading up to the 30 June deadline. Ask you accountant now whether declarations, resolutions or mutual set off should be recorded in writing, by Deed or signed and by what date, to ensure that the rules are complied with. Give us a call on 07 3839 7555 if we can assist with Div. 7 A Loans or Deed of Offset of loans between entities or email me at