What to do if you can’t find your trust deeds

Losing a trust deed is not something anyone plans to do. Not only is a lost trust deed inconvenient it can also have serious consequences.

Even though it may be possible for the trust to continue operating, without having the trust deed, it may be very difficult, if not impossible, for trustees to be certain that they are administering the trust in accordance with the terms of the trust deed.

When a trust deed goes missing there is always a risk that the actions of the trustees may be open to challenge from third parties or government authorities that have dealings with the trust. In addition, the beneficiaries of the trust may challenge decisions that are made and trustees will not have the terms of the trust deed readily available to fall back on to justify their decisions.

Can the trust continue to operate if the deed is lost?

Practically speaking continuing to operate the trust in the absence of the trust deed is a short term solution at best. However, replacing a trust deed is not necessarily as simple as creating a new deed. Doing so may result in a new trust being created with consequent tax and stamp duty implications and every effort should be made to avoid this occurring.

Preliminary precautions

When a trust is created it is prudent to make multiple hard and digital copies of the executed trust deed. Copies (as well as the original) should be stored in secure locations.

A record of where both the original and are copies are stored should also be kept.

Search, search and search again

Prior to taking steps to replace a trust deed you should undertake an extensive search to locate the original. Even if your search does not locate the original deed, evidence of the searches that you have undertaken may become relevant if you become involved in litigation in respect of the trust.

If you cannot find the trust deed consider making enquiries with:
  • Any other current and former trustees and directors;
  • Beneficiaries of the trust;
  • Any professional service providers who may have a copy or have used the deed at some point. These could include lawyers, financial advisers including financial planners, accountants, auditors and business advisers;
  • Banks, building societies, title registries; and
  • Safes and other storage facilities where a copy may have been placed.

What if you can’t find the trust deed?

If you have already conducted a thorough search and have not been able to locate either the original or a copy of the trust deed, the next steps you take will depend on the type of deed that has gone missing and the urgency of obtaining a replacement deed.

For example, it is very difficult to effectively manage a Self Managed Super Fund (SMSF) without a trust deed so you will need to act quickly to rectify the situation.

Options for dealing with a lost trust deed include:
  • Court intervention – Asking the Court to confirm the trust deed or provide directions as to how the trust should be conducted in the absence of the trust deed is generally considered the safest and least risky option for the trustee as they can reference the orders made to support any decisions they make. Court intervention is also the most expensive option;
  • Unexecuted copies of the trust deed confirmed by the Court – If you are able to locate an unexecuted copy of the deed the Court may be able to confirm and ratify the copy in place of the executed trust deed. For this to occur you will need to produce evidence to support the fact that the copy accurately reflects the original deed including evidence that the trust was properly established, any terms of the lost deed, the assets that are in the trust fund and any searches already undertaken to locate the original executed deed;
  • Executing a Deed of Variation – It is possible for beneficiaries, by agreement, to agree to a Deed of Variation. However, the cost and work involved in this option will increase significantly depending on the number of beneficiaries, possible future beneficiaries and if any beneficiaries are minors. This approach is also dependent on obtaining agreement from the beneficiaries on the terms of the original deed and being able to provide sufficient evidence of the terms of the original deed;
  • Deed of Confirmation or Restatement – If a copy of the original deed is found it may be possible to restate or confirm the terms of the original deed;
  • Terminating the trust and rolling over the assets – It may be possible to end the trust and roll the assets over into a new trust fund. This is particularly relevant for SMSFs and family trusts. However, potential problems with this approach include the potential to incur substantial Capital Gains Tax and stamp duty liabilities.

Seek legal advice as soon as possible

If you are dealing with a lost trust deed it is important to seek legal advice as soon as possible. We are able to assist you in deciding the most cost-effective option for your particular circumstances including the possible taxation implications of any approach, the responsibilities of the trustees and the rights of any beneficiaries to the trust.

If you or someone you know wants more information or needs help or advice, please contact Ian Tait on 08 9422 8111 or email

Leave to proceed against company in liquidation

The insolvency of a company often leads to its liquidation whether instigated voluntarily or by court order.

A liquidator is appointed to ascertain and bring in company assets (if any) and convert those assets into cash for distribution amongst the company’s creditors in accordance with the Corporations Act 2001 (Cth) (the Act).

The liquidator has broad powers to take over the company’s affairs. The liquidator will ascertain debts, pay creditors, enter arrangements, bring or defend proceedings on the company’s behalf, dispose of property and, eventually, wind up and dissolve the company.

Section 471B of the Act provides that whilst a company is in liquidation, a person cannot without leave of the court, commence or proceed against the company or its property, or continue enforcement proceedings in relation to company property. This means that litigation proceedings on foot are suspended and proceedings cannot be commenced against the company generally, or to recover or enforce a debt unless the court approves. Similar provisions are contained in s 500(2) in the case of a creditors’ voluntary winding-up.

The usual process to claim a debt owed by a liquidated company is for creditors to lodge a proof of debt with the liquidator. The proof of debt is considered amongst the claims of other creditors. Distributions, if any are then made according to priorities set out in the Act. Creditors often only receive a portion of the amount owed.

Generally, lodging a proof of debt is the preferred (or only) option of claiming against the liquidated company. However, it may be desirable to seek leave of the court to commence or continue proceedings against the company. In doing so, the court must be convinced of certain facts, and the decision must be carefully balanced with the expense of litigation and likely success of such an application.

Why the prohibition on pursuing a company in liquidation?

In considering an application for leave to proceed against a liquidated company it is important to understand the purpose of the prohibitions which are essentially policy-driven.

Courts are hesitant to allow proceedings that take attention away from the task of liquidation, rather than the uniform and orderly winding up of the company as a whole.

The lodgement of a proof of debt (by each creditor) to be verified by a liquidator as opposed to individual claims is no doubt a more efficient and cost-effective process. Consideration of separate proceedings would deplete the pool of assets otherwise available to all creditors.

What does the court consider in granting leave?

The Act does not set out the factors to be considered in granting leave to proceed against a liquidated company. Accordingly, case law is the ultimate source for determining these applications.

The court’s discretion is broad but exercised cautiously. There must be a serious question to be tried and the applicant must show good reason to commence litigation and depart from the usual process.

The matter of Swaby v Lift Capital Partners Pty Ltd [2009] FCA 749 summarised several factors established through previous cases. Some of these included:
  • The nature of the claim, the amount and the complexity of legal and factual issues. An applicant must establish that the contemplated proceedings are serious and complex. If the subject of the proceedings can be dealt with by the proof of debt process, then leave is unlikely to be granted.
  • Whether proceedings have already commenced and, if so, the stage to which they have progressed.
  • The likely prejudice to creditors should the proceedings be allowed. The court is unlikely to allow proceedings that will be expensive and onerous on the liquidator to the extent that creditors will be unduly prejudiced as a whole. Where a proof of debt lodged by the proposed applicant has already been accepted in full and the anticipated proceedings will dissipate funds available to all creditors, leave will not be granted.
  • The court will be hesitant to grant leave where proceedings are sought by third parties which are likely to delay the liquidation and make the winding-up process contingent upon the outcome or progress of the contemplated proceedings.

When has leave been granted?

Leave has been granted when proceedings have been necessary to establish and submit the proof of debt. However, leave will not be granted if, all things considered, the proceedings would be fruitless in that the defendant company would be unable to satisfy a successful judgment for the applicant.

A creditor with a secured interest or proprietary claim against an insolvent company may be granted leave to apply. For example, a recent case involved a submission that money held by a third party on trust for the claimant (and subsequently given to the liquidated company), should have been subject to the same trust terms on behalf of the claimant.

Finally, leave may be granted to proceed against the liquidated company, joining its insurer who has not denied liability for anticipated proceedings. This is on the basis that any judgement ordered against the company will be satisfied by the insurer, without prejudice to the creditors. The purpose of the prohibition on proceedings is not to protect an insurer.

In all cases, leave must be considered in light of the particular circumstances, the available assets in the winding up and the interests of the creditors.


The liquidation of a company poses a general embargo against proceeding or carrying on litigation.

If you have a claim against a company in liquidation it may be desirable or necessary to seek leave to continue or commence proceedings in support of that claim. The threshold is generally high and the decision to do so should take into account careful consideration of a costs / benefit ratio.

If you would like further information, please contact Ian Tait on 08 9422 8111 or email

What happens to employee entitlements when a business is sold

There is much to consider when buying or selling a business. Of significant importance is, what happens to the employees of the enterprise once it is sold?

The sale of a business can be a curious time for existing employees and the incoming business owner – it is likely that neither parties have previously worked together and are unfamiliar with each other’s leadership and expertise.

Personalities and attributes aside, it is important for the parties to a business transaction to understand their legal rights and responsibilities regarding the existing employees and the financial cost of terminating and / or transferring employees.

This article explains the employee position when a business is sold in its entirety. (This may be compared to the sale of shares in a company which would result in a change of fundamental ownership but not affect the employee arrangements of the business.)

What happens when a business is sold?

Typical questions asked when a business is transferred include:
  • What are the responsibilities of the buyer and seller?
  • Who is responsible for accrued or ongoing employee entitlements?
  • What are the rights of the existing employees?

The Fair Work Act 2009 (Cth) defines the circumstances under which a transfer of business occurs for the purposes of dealing with employee entitlements.

A business is transferred for this purpose when an employee commences work with the new employer within three months of ending his or her employment with the previous employer, the employee’s duties are substantially the same as they were previously, and either:
  • the assets of the business are sold;
  • the employers are associated entities (i.e. one has a controlling interest in the other); or
  • the previous employer outsources the work of its employees to the new employer.

The future of employees on a transfer of business

A contract of employment is personal between the employer and employee. The contract cannot be transferred to a new employer without the employee’s consent and certain terms under the existing contract must be dealt with before a transfer takes place.

When purchasing a business, a buyer will need to determine its ongoing needs and decide whether to offer employment to any or all of the existing employees. The buyer may:
  • not offer an existing employee employment with the new business;
  • offer employment but not recognise the employee’s prior service in the business;
  • offer employment and recognise the employee’s prior service in the business.

In each case, the buyer and seller will have legal obligations to the employees and financial adjustments will be made on settlement to reflect the negotiations.

No offer of employment by the buyer

If the buyer does not offer employment to an existing employee, the employment will terminate when the business is transferred. The position will become redundant and the seller will need to pay out the non-transferring employee’s accrued entitlements (annual leave, termination notice and long service leave) as well as entitlements for a genuine redundancy, if applicable.

An existing employee who rejects an offer of employment made on terms and conditions that are substantially similar to, and no less favourable than the employee’s previous working conditions, and where the employee’s prior service with respect to redundancy would be recognised by the new employer, is not entitled to a redundancy payment.

Offers of employment by the buyer

If the employee is offered and accepts a position with the new employer, the buyer must recognise the employee’s prior service with the outgoing employer with respect to entitlements for sick and carer’s leave, requests for flexible working arrangements and parental leave.

Provided the buyer is not an associated entity of the seller, it is not required to recognise the employee’s prior service with respect to redundancy, annual leave, long service leave, unfair dismissal and notice of termination.

If the buyer makes an offer of employment but does not recognise the prior service of the employee, the seller will need to pay out the transferring employee’s accrued entitlements up to the completion date with respect to wages, salaries, commissions and bonuses and long service leave (if payable).

  • Annual leave is paid to the date of termination and reset from the start date with the new employer.
  • Long service leave (if payable) is paid out on a pro rata basis up to the date of termination and all previous years’ service with the old employer must be recognised by the new employer. This means that if the employee qualifies for long service leave in the future, the new employer will be liable for the difference between the employee’s full entitlement and what was already paid out when he or she transferred.
  • Provided the new employer is not an associated entity of the previous employer, written notice may be provided to the transferring employees that the new employer will not recognise previous service for the purposes of probationary periods and unfair dismissal action. In other words, the clock is reset from the time the employee transfers to the new business.

If the buyer makes an offer of employment and the buyer recognises prior service, then the appropriate adjustments are made between the buyer and seller on settlement and the buyer becomes responsible to the employee for all accrued entitlements not taken or paid out at the date of termination of the old employer.

Practical aspects

Generally, the contract for sale of business will set out a process for the seller and buyer to follow when dealing with employees. The following steps are typical:
  • The seller must, before completion, provide the buyer with details of all employees including their commencement date, applicable award, remuneration and bonuses, rostered days, superannuation contributions and accrued annual and long service leave as at the settlement date.
  • The buyer will determine which employees, if any, it wishes to employ.
  • The seller will notify its employees that the business has been sold and that their employment will effectively cease on a specified date.
  • Simultaneous with the notice, the buyer will make an offer of employment (to those employees it wishes to retain) setting out the terms and conditions and confirming (if relevant) the accrued entitlements (during the employee’s service to the seller) that the buyer agrees to recognise.

The appropriate adjustments are made on settlement between the buyer and seller to reflect the negotiations.


Whether you are selling or buying a business, arrangements for existing employees and the parties’ respective obligations must be carefully considered.

Employee entitlements can have a significant financial impact on the adjusted sale price and it is important these are factored into negotiations.

If you or someone you know wants more information or needs help or advice, please contact Ian Tait on 08 9422 8111 or email

The scope of fiduciary duties as a director once you resign

A director is a fiduciary of the company and must act in good faith and in the company’s best interests. The personal interests of a director must not conflict with those of the company.

These duties arise in equity, at common law and under statute and do not cease upon a director’s termination. However, the scope and duration of an ongoing duty is not always apparent, posing the question of when it will be permissible for an outgoing director to compete with the company.

Advanced Fuels Technology Pty Ltd v Blythe Ors [2018] VSC 286 determined that such questions are answered on the facts and individual circumstances of each case, including the conduct of the parties.


Mr Blythe and Mr Thompson were directors and equal shareholders, through their respective companies, of Advanced Fuels Technology (AFT). Mr Thompson died unexpectedly, and his shares were acquired by his widow, Mrs Thompson.

Mr Blythe remained director and chief executive officer for two years until he resigned following ongoing disputes with Mrs Thompson regarding AFT’s future direction, leading to a deadlock.

Mr Blythe then took up consultancies with some of AFT’s clients.

In April 2013, Mr O’Leary, a friend of Mr Blythe’s, registered NGV Group Pty Ltd (NGV). Mr Blythe was sole director and held a 20% share. The remaining shares were held:
  • 70% as to Envirotrans Pty Ltd which was owned and controlled by Mr Blythe;
  • 10% as to a company associated with the father of an AFT technical employee, Mr Wilson.

Mr Wilson subsequently resigned from AFT after emailing to himself a list of business and personal contacts and copying some AFT documents to a SkyDrive. He joined Mr Blythe at NGV, canvassing for business opportunities in competition with AFT. NGV was successful in its endeavours, winning various tenders, but in different forms than those previously secured by AFT.

AFT brought proceedings for breaches under the common law and the Corporations Act 2001 (Cth). AFT alleged that Mr Blythe and Mr Wilson had colluded dishonestly and fraudulently by setting up NGV, and misused confidential information wrongfully retained after resigning, to usurp AFT’s business opportunities.


The Supreme Court dismissed all of AFT’s claims.

Concluding that ‘Mr Wilson held no fiduciary office with AFT nor was he subject to the statutory duty of good faith (not being an ‘officer’ of the company)’, the Court went on to consider any wrongdoing of Mr Blythe. In particular, had he ‘impermissibly pursued business opportunities that had been maturing for AFT while he was still in employment’.

Mr Blythe

The Court confirmed that a director’s statutory and fiduciary duties are not extinguished upon resignation. Ascertaining the scope and duration of such duties, and ‘when a former director might properly begin to compete with the company’ must be considered ‘by reference to the particular factual context in which it arises…’

The following matters were relevant in the Court’s conclusion:
  • The events leading to Mr Blythe’s resignation were pertinent in assessing his conduct. Rather than conducting a dishonest scheme of self-interest to the detriment of AFT, Mr Blythe was forced to employ his skills and experience elsewhere after having been unable to resolve a deadlock with an unforeseen incoming business partner.
  • There was no evidence of misuse of information through which NGV competed against AFT to secure a particular contract almost five months after Mr Blythe had resigned.
  • The alleged lost business opportunities of AFT were considered unrealistic and quite out of its reach. The Court reflected on one such contract that AFT had lost ‘because of its behaviour over the allegedly ageing and unsafe equipment’ and ‘high-handed manner almost calculated to destroy its success’.
  • Mr Blythe’s consultancy arrangements, including with former clients of AFT, were quite distinct to previous dealings and arrangements and considered not comparable to ‘any potential deal on offer to AFT’.
  • Mr Blythe (and Mr Wilson) were not subject to any contractual restraints of trade arising from their respective engagement or employment with AFT. There was also no evidence of either acting in their own self-interests or to the detriment of AFT leading to their respective resignations.
  • AFT’s record keeping was poor and it generally failed to produce evidence to support any of its allegations.

Mr Wilson

As noted, Mr Wilson did not owe a fiduciary duty to AFT. He was however subject to s 183(1) of the Corporations Act 2001 (improper use of information). Whilst the Court found Mr Wilson to be in breach of that provision by retaining and using certain AFT documents, there was no proof of AFT suffering any incidental loss from that breach. The contact details retained by Mr Wilson were considered to lack the necessary characteristics to constitute information confidential to AFT.


There is no doubt that the fiduciary duty of a director will survive his or her resignation. The scope and duration of that duty will be considered in light of the circumstances relevant to each case and the parties’ conduct.

Companies should include appropriate restraint of trade provisions in employment and consultancy arrangements and maintain comprehensive records should these be called upon as evidence in a future dispute.

If you or someone you know wants more information or needs help or advice, please contact Ian Tait on 08 9422 8111 or email

The process of obtaining Probate

Probate is a grant made by a Court that ‘proves’ the Will of a deceased person and vests title to estate assets in the executor/s. This is the official process that allows the executor to deal with the deceased’s estate.

As the legal personal representative of the estate, the executor must determine the assets and liabilities, liaise with debtors, creditors and beneficiaries, sell, transfer and distribute assets and finalise the estate in accordance with the Will.

The executor is often guided by a lawyer who provides professional advice to ensure protection from liability and to deal with any complications or claims made on the estate.

If the deceased died without a valid Will or the Will appointed an executor who is unable to fulfil that position, an interested person (usually a spouse, partner or child) may apply for letters of administration.

This article explains the process of obtaining a grant of probate where there is a valid Will, and what is involved in administering the estate.

Is a grant of probate necessary?

There is no statutory requirement to obtain probate and a grant may not be necessary for small estates. Property held jointly can be transferred to the name of the surviving owner/s by lodging the appropriate documents with the relevant authority.

Banks, financial institutions and share registries will generally release modest amounts without probate on production of the death certificate and proof of those entitled to the funds, and an indemnity releasing them from future claims. The relevant enquiries should be made with each entity.

A grant of probate is always required to transfer real estate that is not subject to a joint tenancy.

Unless the estate is small, simple and there is no risk of a claim being made against it, an executor will generally seek an application for a grant of probate.


The following documents must be filed with the Court:
  • Motion for a Grant of Probate;
  • Affidavit with Statement of Assets and Liabilities;
  • Original Will and Death Certificate.

The affidavit sets out the date of birth, date and place of death of the testator, and his or her usual place of residence. It identifies the Will and death certificate and includes additional information regarding the testator’s marital status and the witnesses to the Will. The affidavit will also explain any irregularities such as different spellings of names or the death of a beneficiary named in the Will.

Sometimes additional documents will need to be prepared to explain unusual circumstances and an estate lawyer can advise in this respect.

The executor has an ongoing duty to disclose the assets and liabilities of the estate.

Once probate is granted, the executor may commence administration of the estate.

If assets are held outside of Western Australia, the grant of probate will need to be ‘resealed’ in the relevant jurisdiction to deal with those assets. This is a procedural matter in which a copy of the original grant, application and supporting documentation is filed with the relevant Court in the jurisdiction where those assets are held.

Protecting executors

Executors may be liable for losses sustained by beneficiaries through negligence or delay in administering an estate but must also ensure that all claims are considered before distributing estate assets.

The executor is not required to advertise an intention to apply for probate or to distribute an estate however in doing so may protect himself / herself from creditor’s claims. By publishing a notice in a major Western Australian publication, stating that the executor intends to distribute the estate after a specified date and calling for any claims to be notified by that date, the executor will be protected from liability for any claims that are not lodged.

Exemption from liability however does not apply to a family provision claim whereby eligible applicants generally have six months from the date of the grant of probate to apply. Accordingly, it is prudent for executors to wait for six months from the grant before distributing the estate.

A lawyer can explain the relevant timeframes and the most appropriate means of protecting you as executor, from liability.

Administering the estate

The Will should be examined to ensure the distribution is in accordance with its provisions. Understanding the correct interpretation of a Will’s terms can be confusing and it may be prudent to seek legal advice on the proper construction of the Will.

The executor and beneficiaries should receive appropriate legal or financial advice when transferring / receiving assets to ensure that stamp duty, capital gains, land tax and other taxes are considered.

Executors should also be mindful of their duty to protect and preserve estate assets and to ensure that appropriate insurance, where relevant, is in place.

Estates that include business interests will require additional attention – the business may need to be wound up, or the interests sold or transferred to a beneficiary.

Prior to distributing assets, the executor will need to be certain that:
  • the debts of the estate have been ascertained and paid in accordance with the statutory order for payment of debts;
  • funds are retained in the estate for contingent expenses such as taxes and other fees;
  • all beneficiaries have been identified and provision (if relevant) made for holding a minor beneficiary’s share in trust;
  • the estate is not distributed until all creditors are identified and the requisite timeframe has expired for an eligible person to make a family provision claim;
  • a proposed distribution statement has been prepared and approved, particularly where there are multiple beneficiaries;
  • beneficiaries who are receiving insurable assets have arranged insurance cover in their own names before cancelling existing policies.


Applying for probate and administering an estate is an important function, and for many executors and beneficiaries, the process can seem tedious and daunting.

However, these processes are in place to ensure that executors and beneficiaries are protected and that the testamentary wishes of a deceased person are properly carried out.

Your lawyer can also assist with your own estate planning to reduce the risk of a family provision claim against your estate. If you require any additional information or would like a confidential discussion, please call Ian Tait on 08 9422 8111 or email

How to keep your legal costs down – our top tips

If your business is involved in a commercial dispute, your biggest concerns are likely to be the financial losses that your organisation and its officers could suffer, and the size of your legal bill.

Commercial disputes can be disruptive, emotional and exhaust resources that should otherwise be spent for the advancement of the enterprise. By following the tips below however, you can help keep a lid on your legal costs while assisting your lawyer to provide considered and relevant advice tailored to your circumstances.

Consider the lawyer / client relationship

Your lawyer is there to assist and advise and will need to cut through a myriad of information to extract the relevant legal issues. The easier you can make this, the less time your lawyer will need to spend sorting through irrelevant details.

Compiling accurate information and presenting it in an organised manner has cost-saving benefits. For example, for a contract dispute your lawyer will need a copy of the relevant contract and any emails and correspondence surrounding the negotiations when making it. If you are claiming a financial loss, you may need to provide evidence of how this is calculated such as quotes, invoices and valuations. Getting the required information to your lawyer promptly and doing some research yourself keeps your matter on track and can help reduce costs.

If you provide information in bits and pieces, or if your lawyer needs to constantly chase you for it, your legal costs are likely to increase. Similarly, if you provide numerous documents without screening them for their relevance to your case, your lawyer will need to spend time (at your cost) sorting through them to ascertain what is pertinent.

Manage communications and meetings

Before calling or meeting with your lawyer, consider the relevant matters that need to be discussed and, write down any questions so communications can be kept on track and the information exchanged is valuable and useful to your matter.

Unnecessary detail merely complicates the facts and adds time to discussions. Having said that, you do need to understand advice and options so do not hesitate to ask for clarification or explanations of anything that is unclear.

Prepare a summary of your case

A well prepared, chronological list of facts and events can be of great benefit to you and your lawyer. Most clients have an intimate knowledge of their dispute, however your lawyer is coming into the matter from a fresh perspective and will need relevant details to identify the legal issues and recommend the most appropriate action.

A chronology also helps to identify inconsistencies or vague areas where additional information or evidence may be required, and may also be used to prepare Court documents if this becomes necessary down the track.

Documents should be prepared in a Word format so soft copies can be provided to your lawyer and amended, or information extracted as necessary.

Explore alternative dispute resolution processes

There are various processes available for resolving disputes before, or without, resorting to litigation. In most cases, your lawyer will recommend using one of these processes in the first instance.

Negotiation and mediation can save time and money and provide more flexible outcomes than what may be available through the Courts. There can be greater opportunity for commercial parties to preserve their relationship, which is particularly beneficial where ongoing business arrangements are in place.

For some matters, urgent Court proceedings should be commenced, for example where real property is at risk or there is immediate danger of losing assets or money. In such cases, you should make this clear to your lawyer so proceedings, such as an application for an injunction or the lodgement of a caveat, can be initiated immediately.

Be clear about what you want to achieve

Understanding the commercial drivers behind the objectives you wish to achieve provides focus and clarity when embarking on negotiations to resolve a commercial dispute. Generally, a strategic and pragmatic solution that avoids expensive litigation, if possible, and mitigates financial and other loss will be the desired outcome.

Corporate disputes can be complex and may involve several areas of law and the most appropriate remedy will be influenced by a range of factors including:

  • the relevant facts and the issues in dispute;
  • the parties’ respective legal and financial positions;
  • the strengths and weaknesses of each side including the available evidence;
  • whether the parties’ business dealings are to continue.

An experienced lawyer will step you through these matters so the most appropriate commercial objective in light of the circumstances can be identified.

Obtain legal advice promptly

It may be tempting to try to resolve a dispute without legal assistance, however if negotiations become protracted or the other party is non-responsive, the sooner you know your legal rights the better.

Legal action must be pursued against the correct entity and based on an identified breach of contract, legislation or general law which should be communicated to the other party or articulated in Court pleadings. Evidence, in acceptable format, must be available or accessible to support the case.

Consulting a lawyer early can help you to identify the correct legal basis for your claim or applicable defences available and understand the full extent of your legal rights without wasting valuable time and resources.

Understand Court processes and stick to timeframes

If your matter becomes litigated, the Court will issue a timetable for the management of your case. Practice directions will set out the correct processes to follow and applicable documents to be used.

Failure to comply with formal Court processes and adhere to the deadlines for attending directions hearings and filing documents is essential to avoid costs orders being made against you.


The complexity of a commercial dispute can be daunting and the potential for legal costs to escalate is real when a matter is not properly managed. Fortunately, clients can take steps to keep legal costs down while assisting their lawyer to provide sound advice to help resolve their dispute.

If you or someone you know wants more information or needs help or advice, please contact Ian Tait on 08 9422 8111 or email

Anti-Phoenixing Laws and Director Penalty Notices Important Updates for Directors

Company directors should note new laws increasing their exposure to personal liability for certain debts and creating new criminal offences and civil penalties under the Corporations Act 2001 (Cth).

The Treasury Laws Amendment (Combating Illegal Phoenixing) Act 2020, as the title suggests, targets phoenix activities that rob the Australian economy and place companies engaging in illegal conduct at an unfair advantage. Below we summarise some key provisions and their impact on company directors.

Director Penalty Notices (DPNs) may now be issued for unpaid / unreported GST

Company officers would be aware that the Australian Taxation Office (ATO) can issue a DPN for unremitted Pay As You Go (PAYG) deductions and Superannuation Guarantee Charges (SGCs) for which directors may become personally liable.

If the DPN issues as a result of an unpaid liability reported within three months of the due date, the director must either pay the debt, appoint an administrator or cause the company to be wound up within 21 days. If the DPN issues as a result of an unreported liability or a liability reported after three months of the due date, the director is unable to avoid personal liability by having the company wound up.

The DPN regime now also applies to Goods and Services Tax (GST), Wine Equalisation Tax (WET) and Luxury Car Tax (LCT), with potential to make directors personally liable for unpaid amounts in certain circumstances.

After lodgement of an activity statement, the ATO may issue a 21-day GST DPN if the liability remains unpaid within three months of the due date. Directors must either pay the GST liability or place the company in administration or liquidation.

If a director causes a company to fail to lodge an activity statement within three months after the due date, the ATO can issue a Lockdown GST DPN. In such cases, the ATO may estimate the net amount of GST due and personal liability by a director cannot be avoided by placing the company in administration.

Additionally, the Commission of Taxation may withhold tax refunds to satisfy prospective tax obligations if a taxpayer fails to lodge a return or provide certain information pertaining to an estimated refund.

Spotlight on phoenix activities

Phoenixing may take various forms but essentially involves activities orchestrated by company officers aimed at avoiding liability for company debt. In such cases, assets may be transferred for below-market value or no consideration from an original company to a newly created entity. The original company is then wound up, leaving behind unpaid taxes, creditors and employees, while the new company begins its new life, trading under a different name, but usually under the same management.

Additional powers to combat creditor-defeating dispositions

The reforms enable the Australian Securities and Investments Commission (ASIC), either on its own initiative or upon application of a liquidator, to order the recovery of creditor-defeating dispositions of property.

A creditor-defeating disposition is one having the effect of ‘preventing the property from becoming available for the benefit of the company’s creditors in the winding up of the company, or hindering or significantly delaying the process of making the property available for the benefit of the company’s creditors in the winding up of the company.’

Dispositions of property that may be considered ‘creditor-defeating’ include property for which the consideration was less than market value, or the best price reasonably obtainable in the circumstances.

To facilitate a recovery order, the disposition must have been made while the company was insolvent, or 12 months before the company entered administration or liquidation, or have caused the company’s insolvency.

New criminal offences and civil penalty provisions

Additional provisions under the Corporations Act 2001 introduce criminal offences and civil penalties for company officers that fail to prevent a company from making creditor-defeating dispositions, as well as ‘other persons’ that facilitate the making of a creditor-defeating disposition.

The inclusion of ‘other persons’ who must not procure, incite, induce or encourage the company to make such a disposition has potential to expose professionals such as lawyers, accountants and insolvency advisors to liability.

Defences may be available for an alleged contravention of the new offences, such as legitimate restructuring activities or transactions under a deed of company arrangement or scheme of arrangement.

The safe harbour provisions presently in place for offences under insolvent trading provisions will also apply.

Restrictions on resignations – improving the accountability of directors

The laws restrict company officers from improperly backdating resignations and preclude a single (last) director of a company from resigning or being removed by a resolution of members, unless the company is being wound up.

The restrictions aim to minimise misconduct by preventing resignations aimed to obscure a director’s involvement in company decisions or to shift accountability to other directors, in particular, ‘paper’ directors that have no real involvement in the management of the company.

Resignations reported to ASIC more than 28 days after the ‘purported resignation’ will now take effect on the day of lodgement unless the company or a director applies to ASIC or the Court to fix the purported date of resignation. The applicant must establish that the director stopped being a director on the purported resignation date and it must be just and equitable to give effect to that date, taking into account any conduct, act or omission of the applicant with respect to notifying ASIC of the resignation and the reasons for the delay.


Directors should comply with their GST and other reporting requirements to minimise the risk of personal liability for unpaid amounts. Business Activity Statements should be lodged within the required timeframes and professional advice sought by directors if a company is facing insolvency or other issues likely to expose them to liability.

Directors in receipt of a DPN should seek urgent advice on their options to avoid personal liability or to lodge a defence.

If you or someone you know wants more information or needs help or advice, please contact Ian Tait on 08 9422 8111 or email

Accessing digital assets – estate planning essentials

The recent death (or purported death) of Gerald Cotton, former Chief Executive Officer of Canadian cryptocurrency exchange company, Quadriga CX, emphasises the importance of planning your electronic after-life.

Mr Cotton’s death in India at the age of 30, has not only raised suspicion as to its authenticity (and allegations of an exit scam), but reiterated the chaos that can be created if digital assets have not been considered in an estate plan.

Mr Cotton was the sole custodian of encrypted passwords ‘protecting’ over $200 million worth of digital assets. His untimely death has left numerous Quadriga customers unable to access their assets with trading on the Quadriga platform suspended while authorities try to work out where to next.

Mr Cotton’s widow states that she played no role in the running of Quadriga and, despite efforts, has been unable to unlock the laptop used by Mr Cotton nor access any of his accounts.

The digital assets referred to in the Quadriga saga comprise cryptocurrency (virtual currency created and stored electronically such as Bitcoin, Litecoins and Ethereum). The cryptocurrency system is decentralised and not subject to a governing authority, raising unique challenges in identifying and ‘locating’ the assets.

Regardless of how the Quadriga saga unfolds, it is a timely reminder of how important it is to consider what happens (or should happen) to our digital assets when we die.

What are digital assets?

A person’s ‘digital life’ may encompass a range of online transactions, activities and accounts such as:
  • cryptocurrency;
  • financial assets including online bank accounts and shares;
  • intellectual property attached to domain names or online literary works;
  • online sporting and gaming accounts;
  • loyalty programs such as Flybuys, Rewards and Frequent Flyers;
  • online shopping accounts such as eBay and Amazon;
  • personal / business social media accounts such as email, Facebook, Linked-In.

All should be considered, and included, in an effective estate plan.

Issues unique to certain digital assets

Traditional cash-based assets such as money deposited in a bank, shares or other paper-based investments are held by title to the owner and can be transferred to the beneficiary of a deceased person with the relevant documentation. Ownership of digital assets like Bitcoin, however, is anonymous with owners accessing their cryptocurrency with private keys which are used to unlock and deal with the assets. This information may be held on a computer device (via a digital wallet), on a USB, or printed separately. These assets can easily be overlooked or ‘keys’ misplaced, representing unique challenges when it comes to administering an estate.

Many digital assets are also held globally and may therefore raise jurisdictional issues from an estate planning perspective. In most instances, there is no uniform legislation governing access to a deceased person’s online accounts, so it is imperative that these matters are dealt with specifically in an estate plan.

Following are some steps you can take to ensure your online life is appropriately dealt with when you are gone.

Identify your digital assets

You should start by making a list of your digital assets (including online accounts) and determining what you would like to happen to them when you die.

Keep records of your online accounts and subscriptions including user names and passwords and store this information in a secure place.

Remember your online accounts and login details are likely to change frequently and your list should be updated accordingly.

Understand your online accounts

Understanding how various accounts are dealt with by service providers will help to determine the type of action you would like taken when you die.

For example, Facebook account holders can advise in advance whether their account is to be deleted or memorialised. A memorialised account can provide a place for family and friends to share memories after a person dies on the deceased’s profile, and any content shared by the deceased person remains visible to those with whom it was shared. Nobody can log into a memorialised account.

Some loyalty programs such as Frequent Flyers may not be transferrable or redeemable after a person dies, so it may be wise to keep tabs on these types of accounts to utilise benefits regularly.

Include digital assets in your Will and appoint a technology custodian

Your Will should provide executors and trustees with appropriate directions and powers to deal with digital assets.

Assign your executor or other trusted person, who is familiar with technology, the role of managing your online life after you die and ensure this direction is included in your Will.

Record your after-life technology instructions with respect to each account separately and ensure these instructions are secure, but accessible to your technology custodian. Never disclose passwords in your Will.

Online maintenance

Online accounts contain personal information which should be protected. Technology presents a real risk of identity fraud and unmonitored accounts can be particularly vulnerable. Regular monitoring and unsubscribing or deleting unused accounts can help minimise risk and keep your technology life tidy.

Regularly downloading photos and videos from your mobile to a storage device can ensure that memories are accessible to your family when you die.

Consider incapacity

It is also important to consider what happens to your online life in the event that you are incapacitated. Appointing a trusted person to manage your online affairs and including specific instructions in an enduring power of attorney is a logical step to ensure the appropriate management of your digital wealth if you are incapacitated.

The instrument making the appointment should be specific to the jurisdiction in which the assets are held, and in this respect, more than one document may be required.

Consider trusts

It may also be beneficial to hold substantial digital assets through a trust structure, if possible, for greater protection and better taxation outcomes. In doing so, the trust must be considered and dealt with under the Will, which should nominate trustees of the trust or shares in the trustee company and include provisions to ensure the trust can achieve the desired objectives.


It has become increasingly difficult for executors, lawyers and family members to ascertain and access online assets after a person dies, with many financial and other institutions operating in a ‘paperless’ environment. Certain digital assets such as cryptocurrency can present additional problems for a deceased’s family.

Inaccessible online accounts make it difficult to identify assets, and leaving online accounts open indefinitely raises concerns of potential identity theft.

Good online management and ensuring your digital assets are included in your estate plan will help your executors and family manage your online life after you are gone.

If you or someone you know wants more information or needs help or advice, please contact Ian Tait on 08 9422 8111 or email

Asset Protection


A lot of people don’t think of doing anything about asset protection until they are in the midst of a legal battle or have fallen behind financially and are at risk of losing their assets. By then it is often much too late to do anything effective. Asset protection works best when you are proactive and plan ahead.

We encourage people to think of asset protection as a kind of insurance – hopefully you won’t ever need it, but it will bring you peace of mind if you do. Also try and think of asset protection before you acquire your assets, as capital gains tax and stamp duty can often cause expensive problems if you rearrange your assets after you have acquired them.
There are many prudent and practical things you can do to protect your assets against future financial setbacks such as business failure, insolvency, relationship breakdown and litigation.

Consider the following to assist you in protecting your hard earned assets:

Separately held assets

It can be a good idea, if you are married or in a de facto relationship, for the assets to be held in the name of the lower risk partner. This means that if the high risk partner loses everything, the assets held in the name of the lower risk partner stay protected. This can provide some protection if the high risk partner goes bankrupt or is sued. Of course, the success of this strategy is dependent on the relationship with the lower risk partner remaining intact.

Financial Agreements

It is possible for persons who are married or in a de facto relationship to agree how their assets will be dealt with in the event of separation. By doing so they can avoid unexpected consequences in the event their relationship comes to an end.

Use of trusts

A trust is, very simply, a structure where a person or entity (known as the trustee) holds an asset on behalf of another person or entity (known as the beneficiary). Discretionary (family) trusts are very helpful in asset protection, because the beneficiaries of the trust do not legally own or have an interest in the trust property, and any distribution to them of the trust property by the trustee is solely at the trustee’s discretion. This means that a creditor can’t get at the trust property if they are going after a beneficiary.

Use of Companies

A company is a separate legal entity to the persons that own the shares in it. Conducting business through a company means that you are able to limit your liability to a certain extent (because it is a separate entity to yourself) and provides another step of removal from you personally against any issues that may be encountered

Please contact us for information or assistance with your asset protection needs.

Power of Attorney Abuse

A Power of Attorney is a legal document authorising a person to act for you and make binding decisions on your behalf.  A Power of Attorney is usually prepared:
  • to facilitate and complete transactions when you are unavailable to do so, for example while travelling;
  • to get help with essential activities such as managing finances, withdrawing funds, paying bills and arranging goods and services, particularly as you become older and less mobile;
  • to ensure somebody you trust can look after your financial and legal affairs if you become physically or mentally incapacitated.

Most jurisdictions in Australia accept a Power of Attorney validly made in another state or territory. Legislation however differs in each, so it is important to understand the effect of a Power of Attorney (or similar document) made under the relevant law.

A person who makes a Power of Attorney is usually referred to as the principal or donor and the person accepting the appointment is known as the attorney.

What is Power of Attorney abuse?

Attorneys must act in the best interests of the principal, maintain separate accounts and records and avoid a conflict of interest. The relationship between the principal and attorney should be one of implicit trust, particularly as attorneys are neither supervised nor required to report to a specific authority regarding the principal’s affairs.

Attorneys who act without proper consent, outside the scope of authority permitted by the Power of Attorney, misappropriate a principal’s assets or fail to act in his or her best interests are abusing their position. Examples include situations where an attorney may:
  • neglect paying for necessities on behalf of the principal;
  • make decisions and take action without consulting the principal or, in the case of an incapacitated principal, fail to consult with those who are close to the principal;
  • use the principal’s funds for his or her personal gain or to benefit somebody else;
  • sell or transfer the principal’s assets for his or her financial benefit or to benefit somebody else.

Unfortunately, this form of financial abuse is too common and there are several cases where attorneys have misused their authority to the detriment of a principal. This often (but not always) occurs when the principal is aged and restricted in his or her capacity, and / or has granted an enduring Power of Attorney which continues to operate when the principal becomes incapacitated.

Although unimaginable to most, the perpetrator of this betrayal is often a family member or supposed close friend. The consequences can be financially and emotionally devastating for somebody who has placed enormous trust in an attorney to protect his or her interests. Family members and close friends who witness such abuse are also impacted.

Attorneys who abuse their power may be required to account to the principal for any loss sustained and face criminal penalties. Unfortunately, in cases where the abuse has been going on for some time, financial losses may not be able to be recovered.

Protecting yourself from Power of Attorney abuse

Choosing the right person to be your attorney and understanding your rights is important to help minimise the potential for Power of Attorney abuse. The following points may assist:
  • Only appoint somebody you trust (even if that person is not a family member) and don’t be pressured into signing documents without understanding the nature of what you are signing and obtaining independent legal advice.
  • If you no longer feel comfortable with your appointed attorney, talk to somebody you trust. You can revoke a Power of Attorney at any time provided you have legal capacity. The revocation should be in writing and you should ensure that your attorney receives the document. Also provide copies to any financial institutions or other entities the attorney has dealt with on your behalf.
  • Have a Power of Attorney prepared by a lawyer to ensure it is valid and works with any other estate planning documents. Your lawyer should explain the different types of powers of attorney you can make, the scope of authority you will be giving, and when and in what circumstances your attorney may exercise that authority.

What to do when a Power of Attorney is abused

If you suspect your attorney is misusing his or her authority, you should obtain legal advice immediately. Your attorney may become evasive when you ask about receipts for transactions or query bank balances. If something doesn’t sound right, there’s a good chance that it isn’t right. Speak up, tell somebody you trust or call a support service.

If the principal is incapacitated and the Power of Attorney is enduring the process is a little more involved. An enduring Power of Attorney continues to be effective if a principal becomes incapacitated due to disability or illness and may not, unless through specific orders, be revoked.

If you are concerned that a Power of Attorney is being abused, then you will need to take action on behalf of the principal to protect his or her interests. Each Australian jurisdiction has protective laws in such cases.

Government bodies in each state / territory (State and Administrative Tribunals, Public Guardian Offices and / or Courts) have powers to investigate, intervene, suspend a Power of Attorney, and to make a range of orders with respect to Power of Attorney disputes and guardianship matters. For example, a Power of Attorney can be reviewed by a Tribunal and orders made to declare that the principal did not have the mental capacity to make the document and it is therefore invalid. In such cases, a substitute attorney may be appointed to manage the principal’s affairs.

Other legal remedies may also be appropriate, such as lodging a caveat over real estate to prevent a transfer of property and starting proceedings to reverse the transfer, or for compensation for loss incurred.

Fraudulent conduct by an attorney may also be reported to the police.


Granting a Power of Attorney is an effective way to appoint somebody you trust to manage your legal and financial (and, in some jurisdictions, health and lifestyle) affairs for a limited time, or indefinitely, if you become incapacitated.

Appointing an attorney, and accepting the appointment, should be made with the utmost of trust and with each party understanding their respective legal positions.

Clearly, attorneys must act in the best interests of a principal however may face conflict with family members or uncertainty when carrying out their duties. If you are an attorney and are unsure of your role, or involved in a challenging situation, you should seek legal advice.

If you or somebody you know requires assistance to revoke a Power of Attorney and / or recover misappropriated funds, or if you want more information or advice, please contact Ian Tait on 08 9422 8111 or email