The Bulletin - October 2019 edition

THE

BULLETIN THE LAW SOCIETY OF SA JOURNAL

VOLUME 41 – ISSUE 9 – OCTOBER 2019

INSIDE

Do proposed foreign fighter laws violate human rights?

Why SA should recognise foreign lawyers Protecting international lawyers from state-sanctioned harm

INTERNATIONAL RELATIONS

This issue of The Law Society of South Australia: Bulletin is cited as (2019) 41 (9) LSB(SA). ISSN 1038-6777

CONTENTS INTERNATIONAL RELATIONS 6

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REGULAR COLUMNS

Do we need to fight for human rights in light of the Foreign Fighters Bill?

By Sangeeta Sharmin & Alexandra Lontos

The ‘clearly inappropriate forum’ test for international disputes

By Dr Ricky J Lee

The importance of international participation by lawyers in SA

By Arthur Moses SC Giving human rights law meaning in SA: Why language matters

By Dr Sarah Moulds

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International Wills, Succession and Inheritance – By Roy Hasda

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Endangered Lawyers need international protection

By Professor Yasushi Higashizawa

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The foreign influence transparency scheme: What’s it all about?

By Laura Giaretto

Executive Members President: A Nikolovski President-Elect: T White Vice President: R Sandford Vice President: M Frayne SC Treasurer: F Bell Immediate Past President: T Mellor Council Member: E Shaw Council Member: S Hooper Metropolitan Council Members T Dibden M Tilmouth M Janus A Lazarevich S Hooper T Vozzo V Gilliland F Bell M Mackie M Boyle M Smith E Shaw R Shaw J Stewart-Rattray J Marsh C Charles Country Members S Minney (Northern and Western Region) P Ryan (Central Region) J Kyrimis (Southern Region)

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From the Editor

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President’s Message

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Young Lawyers: Golden Gavel wrap-up

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Risk Watch: Another important case about solicitors’ file notes

By Grant Feary

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Wellbeing & Resilience: Seven secrets to a healthy mind

By Sarah El Sayed

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Tax Files: Discretionary Trusts: Distributions in specie – By Paul Ingram

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Bookshelf

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Family Law Case Notes

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Gazing in the Gazette

FEATURES & NEWS 22

Max Basheer calls time on famous career

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Long-serving Magistrate Michael Ardlie retires

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Vale: Amanda Tsouondarou

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“Liquidated” and “Unliquidated” Claims: Default judgments in the Supreme, District & Magistrates Courts – By Nick Anderson

KEY LAW SOCIET Y CONTACTS Chief Executive Stephen Hodder stephen.hodder@lawsocietysa.asn.au Executive Officer Rosemary Pridmore rosemary.pridmore@lawsocietysa.asn.au Chief Operations Officer Dale Weetman dale.weetman@lawsocietysa.asn.au Member Services Manager Michelle King michelle.king@lawsocietysa.asn.au Director (Ethics and Practice) Rosalind Burke rosalind.burke@lawsocietysa.asn.au Director (Law Claims) Geoff Thomas gthomas@lawguard.com.au Manager (LAF) Annie MacRae annie.macrae@lawsocietysa.asn.au

Junior Members R Piccolo

Programme Manager (CPD) Natalie Mackay Natalie.Mackay@lawsocietysa.asn.au

Ex Officio Members The Hon V Chapman, Prof R Sarre, Prof M de Zwart, Prof T Leiman

Programme manager (GDLP) Desiree Holland Desiree.Holland@lawsocietysa.asn.au

THE BULLETIN Editor Michael Esposito bulletin@lawsocietysa.asn.au Editorial Committee A Bradshaw P Wilkinson S Errington T Shueard D Sheldon J Arena G Hagias G Mottillo The Law Society Bulletin is published monthly (except January) by: The Law Society of South Australia, Level 10-11, 178 North Tce, Adelaide Ph: (08) 8229 0200 Fax: (08) 8231 1929 Email: bulletin@lawsocietysa.asn.au All contributions letters and enquiries should be directed to The Editor, The Law Society Bulletin, GPO Box 2066, Adelaide 5001.

Views expressed in the Bulletin advertising material included are not necessarily endorsed by The Law Society of South Australia.

No responsibility is accepted by the Society, Editor, Publisher or Printer for accuracy of information or errors or omissions.

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FROM THE EDITOR

As the world gets smaller, international relations becomes more important

IN THIS ISSUE

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MICHAEL ESPOSITO, EDITOR INTERNATIONAL SUCCESSION

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t the time of writing, Federal Member for Chisolm Gladys Liu still has her job. This is despite a number of reports suggesting she has had long-term associations with agencies that have direct links to the ruling Communist party in China.

While PM Scott Morrison has assured us that Ms Liu’s loyalties lie firmly with Australia’s interests, this episode does raise issues about the potential for foreign actors to have a significant influence on national policy.

The Federal Government, in an effort to curb undue foreign influence, introduced the Foreign Influence Transparency Scheme last year. The introduction of the scheme followed the demise of former Labor senator Sam Dastyari’s political career after it was revealed he accepted financial benefits from a Chinese billionaire.

The scheme aims to make transparent any activities from foreign entities which could influence governmental or policy decision-making.

Laura Giaretto, writing for the Bulletin in this internationally themed edition, explains how the scheme works.

As we have seen with States using foreign nationals to help spread influence and propaganda, the globalisation of industry poses serious challenges for democracy.

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But is clearly in Australia’s interests to interact and transact with foreign nations, particularly with major trading partner China. It is one reason why Law Council President Arthur Moses SC writes in this month’s Bulletin that the South Australian legal profession would benefit from joining the rest of Australia in formally recognising foreign lawyers.

Mr Moses says: “Australia’s experience is that the internationalisation of the Australian legal profession benefitted from a regulatory framework that provides the flexibility for local and foreign lawyers and law firms to enter into commercial association on terms that suit their business needs.”

Elsewhere in this very topical edition of the Bulletin, the Australian Lawyers for Human Rights scrutinises the controversial Foreign Fighters Bill with reference to Australia’s international obligations.

Tokyo-based Professor Yasushi Higashizawa, Human Rights Chair for of LAWASIA, highlights the dangers that lawyers face across the world just for doing their job, and calls for greater international protection for at-risk lawyers.

There’s plenty more to digest in this edition which explores the dynamics between global relations and local interests.

Enjoy! B

Claiming inheritances across international borders

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MAX BASHEER RETIRES SA's longest-serving lawyer calls time on remarkable career

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FOREIGN INFLUENCE Explaining the Foreign Influence Transparency Scheme

PRESIDENT’S MESSAGE

Reflecting on the legacy of the Society AMY NIKOLOVSKI, PRESIDENT, LAW SOCIETY OF SOUTH AUSTRALIA

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ext month we celebrate the 140th anniversary of the Law Society. I hope that you can join me on 15 November at the Treasury.

The Law Society was first established as an unincorporated association on 13 October 1879, the first committee (the equivalent to our current Council) was made up of Messrs Bundey (Chair), Ayers, Moulden, Labatte, Barlow, Bakewell, Sheridan and Hardy.

Although South Australia gave women the vote and the ability to stand for parliament in 1894, it wasn’t until 1911 that the Female Law Practitioners Act was passed, allowing women to practice law in our State for the first time.

Mary Kitson took up this opportunity and was the first woman to be admitted to the Bar in SA in 1917. By this time the Law Society had approximately 120 members.

Despite South Australia’s progressive history with regards to women’s rights it took almost 120 years before we had a female president, the first being Lindy Powell QC in 1998.

The Honourable Dame Roma Mitchell QC had in fact been elected to Vice President in 1963, however she was unable to take on the role of President because of her appointment to the bench.

Over the course of the Society’s 140-year history, there has been many prominent lawyers to hold the role as President, many of whom have been appointed to the Bench, Silk and taken up parliamentary positions.

In 2012, former President Christopher Kourakis SC was appointed to the role of Chief Justice of the Supreme Court of Australia, 10 years after his Presidential term at the Society.

This year is also one for the history books. Not only am I the youngest female to hold the role of President, but the first to give birth during her term - an Australian first.

As time goes on one would hope that women in positions of power within the legal profession will be so common that the birth of a baby isn’t uncommon. Following the gender equity reforms voted in at the 2015 Law Society AGM, we should expect to see more women in the role of President over time.

It has been a privilege to serve as President and to be included in the Society’s history. I’m looking forward to celebrating the 140th anniversary - we have so much to be proud of. B

A roundup of recent Society meetings & conferences ROSEMARY PRIDMORE, EXECUTIVE OFFICER 24 JULY 2019 SA Council of Community Legal Services my Nikolovski, President, Dr Anna Finizio, Policy Lawyer and Communications Manager, Michael Esposito met with Catherine McMorrine, Chair, and Ippei Okazak, Sector Development Manager of the SA Council of Community Legal Services. Matters discussed included the Federal Government’s proposal for a National Legal Assistance Partnership, in particular the need for it to include funding for interpreters; the Legal Services Commission’s provision of legal aid and of domestic violence services; the need for continued advocacy for State-based funding; and the impact on the homeless of the closure of the Housing Legal Clinic.

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12 AUGUST 2019 The Honourable Justice President Dolphin Co- Chairs of the Accident

Compensation Committee, Paul Black and Guy Biddle and Chair of the Industrial Relations Committee, Brian Austin met with the Honourable Justice President Dolphin of the SA Employment Tribunal. The status of listings and judgments; and a variety of matters relating to the operation of the Tribunal were discussed with his Honour.

2 SEPTEMBER 2019 Major Indictable Reform Review Meeting Craig Caldicott, Co-Chair of the Criminal Law Committee represented the Society at a meeting convened by the Honourable Brian Martin AO QC in relation to his review of Major Indictable Reform. The Chair and representatives of the Victorian Law Reform Commission (VLRC) were in attendance to learn about the South Australian experience and share their findings to date in the VLRC’s reference on Committals, to the mutual advantage of both reviews.

5 SEPTEMBER 2019 Joint Rules Advisory Committee President-Elect, Tim White, the Chair of the Civil Litigation Committee, Alexander Lazarevich and Mr Philip Adams were joined by the Deputy Chair of the Costs Committee, Mr Graeme Arnold at a meeting of the Joint Rules Advisory Committee. A proposal by the Society for a tiered approach to the Supreme Court Scale was discussed; and the JRAC commenced its work of drafting a set of Uniform Civil Rules to apply (across the Supreme, District and Magistrates Court) at the commencement of the Electronic Court Management System in the civil jurisdiction (scheduled to occur in late February 2020). The Society will receive a consultation draft of the Uniform Civil Rules in due course, for provision to Members and relevant Committees for comment. B October 2019 THE BULLETIN

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DO WE NEED TO FIGHT FOR HUMAN RIGHTS IN LIGHT OF THE FOREIGN FIGHTERS BILL? SANGEETA SHARMIN, SECRETARY, AUSTRALIAN LAWYERS FOR HUMAN RIGHTS, AND ALEXANDRA LONTOS, SOUTH AUSTRALIAN CONVENOR, AUSTRALIAN LAWYERS FOR HUMAN RIGHTS

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his article explores the implications of Australia’s “Foreign Fighters Bill” on Australian citizens and their family members (particularly children) in the context of Australia’s obligations under international law. In particular, the right to enter your own country and the rights of the child. It demonstrates how the Bill raised various human rights concerns which now present potential human rights violations as it was passed in July 2019 and now forms enshrined law.

In February 2019, the Minister for Home Affairs introduced the Counter Terrorism (Temporary Exclusion Orders) Bill 2019 (the Bill). The Bill effectively enabled authorities to delay and then control the return and re-entry of Australian citizens thought to be foreign fighters back into the Australian community. The Bill created a regime of ‘temporary exclusion orders’ (TEOs) that prevented the return of Australian citizens to Australia and ‘return permits’ that enabled pre-entry and post-entry conditions to be imposed on returning individuals.

THE RIGHT TO ENTER YOUR OWN COUNTRY Article 12(4) of the International Covenant on Civil and Political Rights (ICCPR) provides that “no one shall be arbitrarily deprived of the right to enter his own country”. The Bill’s Statement of Compatibility with Human Rights used the return permit scheme to justify the regime and its non-arbitrary nature. However, this justification was weak.

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The Bill created a scheme whereby the TEOs could temporarily exclude an Australian citizen from entering Australia for up to two years with conditions on their re-entry into Australia capable of being imposed for up to 12 months.

Effectively, a TEO may be issued if the Minister ‘suspects on reasonable grounds’ that a TEO would prevent support or assistance to a terrorist organisation or if ASIO has assessed such a person as a risk to security.

No independent decision-maker is involved in the decision-making process. After the TEO has been issued a reviewing authority can overturn the Minister’s decision if it is ‘legally flawed’.

The Minister is not required to give consideration to procedural fairness requirements and there is no merits review mechanism. Whilst a TEO applies for a two-year maximum period, there is no limit to the number of successive orders that may be issued to the same person.

The Minister is able to attach a broad range of conditions on a return permit if granted. For example, if an affected person intends to use ‘specified forms of telecommunication or other technology’ they must notify a specific person of the intended use and provide information to identify the telecommunication, account or device to be identified. This could apply to phone numbers, emails, social media accounts and computers.

The Bill has the effect of prohibiting an Australian citizen from legally entering

Australia for longer than two years. It may also prohibit such a person from entering any other country if they do not have dual citizenship, rendering them stateless.

Any limitation on a human right must be lawful, necessary to achieve a legitimate objective and proportionate. It remains unclear how the Bill’s objective satisfies an existing gap in Australia’s national security regime, which currently includes the operation of approximately 75 anti-terrorism legislative pieces. The threshold test for the imposition of a TEO is dangerously low and the decisionmaking process appears to lack procedural fairness and adequate judicial oversight in circumstances where a TEO candidate does not have to been proven to have engaged in any illegal behaviour.

We must question whether prohibiting an Australian citizen to re-enter their country of origin for up to two-years or longer, even if they have no right to remain elsewhere, and then imposing conditions on a return permit for up to a year with those conditions involving significant curtailments on their liberty, is proportionate to the objective of excluding citizens from Australia who are merely “suspected” of aiding terrorist activity overseas.

It has been stated that “there are few, if any, circumstances in which deprivation of the right to enter one’s own country could be reasonable” (CCPR General Comment No. 27). The Bill’s arbitrary nature is not only a contravention of

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WE FULLY RECOGNISE THAT SUCH RIGHTS MUST BE BALANCED WITH NATIONAL INTERESTS SUCH AS THE PROTECTION OF NATIONAL SECURITY. October 2019 THE BULLETIN

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Article 12(4) of the ICCPR but also a limitation on the well-known right to leave and return to your own country (Article 13 of the UDHR). Such a contravention must be lawful and proportionate.

THE RIGHTS OF THE CHILD Children enjoy all rights guaranteed by the ICCPR in addition to particular and special protections under the Convention on the Rights of the Child (CRC). The Bill presents two particular concerns for the rights that children are to be afforded under international law. The first of these is that children as young as fourteen years old could be subject to a TEO in largely the same way as adults are.

The Bill states that before making a TEO or imposing a condition on a return permit, the Minister must have regard to the protection of the community as the “paramount consideration” and the best interests of the person as a “primary consideration”. Accordingly, the protection of the community supersedes the best interests of the child as a consideration. It is questionable whether this complies with Article 3 of the CRC which emphasises the best interests of the child.

The impact of the CRC was illustrated in the High Court case of Minister of State for Immigration & Ethnic Affairs v Ah Hin Teoh [1995] HCA 20 which concerned the impact that a father’s deportation from Australia would have on his children. The High Court held that Mr Teoh should have been invited to make submissions with respect to the deportation order.

It is concerning that the Bill does not provide any protections, or obvious distinctions, for how children are to be treated. This is contrary to the nature of our own Criminal Code which provides special rules and safeguards for children such as preventative control orders and the power to appoint a lawyer.

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The Bill also provides no mechanism for a child to be heard in the decisionmaking process to issue a TEO. Therefore, a child of a parent who is a TEO candidate could be excluded from any investigation process. This is contrary to Article 12 of the CRC which provides the right for a child who is capable of forming and expressing their own view to participate in the decision-making process.

Secondly, a child’s family unit will likely be divided geographically if their parent/s are the subject of a TEO. Having a family member prohibited from residing in Australia for two years or longer and returning with stringent conditions which likely curtail the family’s right to privacy, impinges on the rights of the child to family relations and family life.

The only protection afforded to children is that certain factors are to be considered for TEO candidates aged 14-17 years old such as their age, health, having a meaningful relationship with their family and their right to education and religion. However, these protections are limited by provisions only requiring them to considered to the extent that they are known by the Minister (who appears to have no obligation to investigate them) and to the extent ‘relevant’.

Given that these protections are superseded by the protection of the community as the paramount consideration, there is a risk that these factors will not be afforded the consideration required under international law. The Bill presents potential violations of the rights of children including those reflected under Articles 8(1), 9(1), 16(1) and 20(1) of the CRC.

MOVING FORWARD The content of the Bill, and newly enacted legislation, is likely to have a significant impact upon the fundamental human rights of affected Australian

citizens. Such rights are recognised by international human rights instruments and include the right to enter your own country, the right to family, the rights of children, the right to liberty, the right to a fair trial and the freedoms of association and movement.

We fully recognise that such rights must be balanced with national interests such as the protection of national security.

However, such a balancing act must be undertaken where it is demonstrated that the curtailment of such rights is lawful, necessary and proportionate to respond to the threat of terrorism.

The regime created by the Bill affords far reaching discretionary power to the Executive and raises various issues. These include constitutional validity, the absence of judicial authorisation, accountability and oversight mechanisms, the specific prohibition of procedural fairness and the lack of criminal jurisdiction exercised over persons suspected of engaging in terrorism.

This highlights the need for a federal human rights Act and demonstrates why legislative protection for our common law freedoms has now become a matter of urgency. Australia is the only developed Western democracy without a human rights Act or bill of rights. There are an increasing number of examples of legislative overreach in Australia including the Data Retention Act, the Espionage and Foreign Interference Act, laws expanding detention for questioning and secrecy laws applicable to offshore detention and security operations. A federal human rights Act would give greater power to the courts to ensure common law freedoms are protected and Australia’s international human rights law obligations are incorporated into domestic law. It is the next vital step to contemporary democracy. B

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THE IMPORTANCE OF INTERNATIONAL PARTICIPATION BY LAWYERS IN SOUTH AUSTRALIA ARTHUR MOSES SC, PRESIDENT, LAW COUNCIL OF AUSTRALIA

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here is an enormous, and growing, international appetite for Australian goods and services. The majority of Australia’s export goods are produced in regional areas. Services, especially those related to tourism, are also exported from regional areas. Australian brands and products, particularly food and agriculture products, are known for their reliable quality and attract high prices in foreign markets.

The potential value of goods and services produced here by clients of Australian law firms can only be assessed in the context of global trade in goods and services, which is characterised by global value chains and increasingly interdependent national economies.

In all states and territories except South Australia, Australia’s arrangements for foreign lawyers encourage and facilitate the internationalisation of legal services and the legal services sector by acknowledging the practice of foreign law by foreign lawyers as an important and formally recognised aspect of legal practice in Australia.

The strength of international demand for Australian goods and services presents an important market opportunity for small and medium businesses in South Australia and regional areas throughout Australia to expand.

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Exporters also receive a range of other important benefits that improve their competitiveness. According to Austrade, “Exporting companies have better growth prospects, highly skilled, highly productive staff and tend to adapt technology and best practice techniques faster.”

For the legal profession, increased international participation by clients in Australia’s regions is a growth opportunity for lawyers in those regions.

There are opportunities for regional lawyers to succeed by expanding their service offering to meet the increasing range and complexity of services that their regionally-based clients require to successfully compete in global markets.

The ability to provide these services is crucial given the range of laws, regulations, standards and procedures that exporters need to navigate to successfully do business in the Asia-Pacific region. Layered on top of these formal requirements is a diverse range of languages, cultures and social values. These present incredible opportunities for the well-informed and well-advised, but will quickly defeat the unprepared.

In this complex transnational setting, trade and investment cannot take place in a legal vacuum.

The starting point must be to ensure

that regulations allow both local and foreign lawyers to work together, flexibly and in the interests of sophisticated international clients, to deliver comprehensive crossjurisdictional legal advice.

For example, the Legal Profession Uniform Law contains the following objective: “to encourage and facilitate the internationalisation of legal services by providing a framework for the regulation of the practice of foreign law in this jurisdiction by foreign lawyers as a recognised aspect of legal practice in this jurisdiction.”1 Australia’s experience is that the internationalisation of the Australian legal profession benefitted from a regulatory framework that provides the flexibility for local and foreign lawyers and law firms to enter into commercial association on terms that suit their business needs.

Implementing a non-restrictive and flexible regulatory regime has allowed local law firms to begin to work jointly with foreign law firms in serving Australian corporations and other clients in their export-import or foreign investment initiatives in the region and beyond.

However, South Australia does not have a detailed legislative scheme such as

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exists in the other States and Territories for registration and regulation of the provision of legal advice and services in relation to foreign law, by foreign legal practitioners.

In South Australia, section 3A of the Legal Practitioners Act 1981 (SA) (the Act) provides that “A person will not be taken to be practising the profession of the law by reason only of the fact that the person provides legal advice or legal services relating to the law of a place outside Australia”. Although the Act does not prevent a foreign legal practitioner from being an employee of, or a consultant to, a law practice, that person cannot be held out to be a legal practitioner. This is because a foreign legal practitioner is not a “legal practitioner” within the definition provided by the Act. A corollary of foreign lawyers not being considered legal practitioners under South Australian law is that local and foreign lawyers cannot form partnerships.

Overseas, the lack of availability of fully integrated legal services is commonly caused by regulatory systems that ban or restrict foreign legal services. These systems often either fail to account for foreign lawyers entirely (for example by requiring nationality as a precondition to practicing law in a jurisdiction) or impose

severe restrictions on the running of legal businesses. Restrictions can include lengthy minimum residency requirements, equity limits, creation of a limited range of special business structures for use by foreign lawyers, rules to prevent or limit joint work with local lawyers, heavy registration fees.

In addition to regulatory restrictions, legal services often face a range of “behind the border” barriers. These can include bureaucratic and non-transparent application and approval processes, lengthy processing times and incidental issues such as availability of appropriate visas.

In the absence of domestically available and fully integrated legal services, clients are forced to look elsewhere for legal services or take the risk of not being adequately advised before entering into international transactions. Both of these factors add unnecessary transaction costs to international trade and investment.

Unfortunately, much effort on behalf of foreign lawyers focusses too closely on what foreign lawyers want, and what foreign lawyers stand to gain from newly opened legal services markets. While profit from trade in legal services is important to individual lawyers and firms, this is not sufficient to ensure that foreign lawyer regulations support the availability of fully

integrated legal services (i.e. legal services that integrate advice on local, foreign and international law).

Gains made by foreign lawyers may be perceived as being at the expense of the local profession. This in turn causes local regulators to adopt a restrictive approach to foreign legal practice which aims to protect the local profession and limit the benefits of legal services liberalisation to local lawyers.

We must ensure the conversation also includes the mutual benefits of liberalising legal services and provide balanced and practical guidance on how regulations about foreign lawyers should be framed.

This was the approach adopted in the Law Council’s 2016 Best Practice Principles for the Regulation of Foreign Lawyers and Transnational Law Practice.

Clients engaged in transnational business are best served when local and foreign lawyers are able to work together to deliver consolidated legal advice. This advice enables clients to appropriately manage risks and seize opportunities presented by international trade with confidence. Services of this kind should be available locally, in the region where goods and services for export are produced.

Endnotes 1 Legal Profession Uniform Law s 58.

October 2019 THE BULLETIN

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Giving Human Rights Law meaning in SA: why language matters DR SARAH MOULDS, LECTURER IN LAW, UNIVERSITY OF SOUTH AUSTRALIA

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n many accounts, South Australia has a strong track record of upholding international human rights law obligations including those contained in the Convention Against Torture1 and the Convention on the Rights of the Child.2 The South Australian courts and Parliament often go about this work without reference to international conventions to which Australia is a party, or to decisions or recommendations of international human rights bodies. Instead they more commonly refer to concepts drawn from our common law tradition – such as the idea of a ‘fair trial’ or access to judicial review of decision – or from our deep commitment to the sometimes competing ideas of parliamentary sovereignty and the separation of powers.

Often, particularly in Parliament, the discussion centres on the concept of giving everyone a ‘fair go’ or the opportunity to share equally in the benefits of our society. For South Australians, it seems, the statements being made and complaints being heard in Geneva and New York are generally not part of our lawmaking discourse. Our ‘community’ is local, our rights come from the common law and if there’s a gap, it’s up to our Parliament to fill it – keeping a close eye on how this will play out in the pubs and footy fields in Adelaide rather than on the world stage.

For many rights advocates, these observations give rise to despair and become a powerful justification for structural change in terms of the way human rights are protected in our State. Calls are made for a statutory or even constitutional Charter of Human Rights based on international human rights instruments that would require Parliament, the Executive and the Courts to engage directly with the language of international human rights law, with varying suggestions for what the consequences should be for transgressions of those rights.3 These calls have been backed up by examples of individual cases of rights abrogation that could have been avoided or mitigated should such reforms have been implemented.4 Compelling and persuasive as these claims are, the political reality is that they are unlikely to be heeded anytime soon in South Australia. So what do we do in the meantime? Forget about international human rights concepts in South Australia,

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or find another way to achieve the protective end rights advocates seek?

This article suggests that they might be another way. It argues that there may be benefit in developing our own distinctly South Australian discourse on rights as an alternative pathway to achieving substantive legal protection for the rights of vulnerable South Australians.

This approach can readily coexist with a commitment to the normative significance of internationally recognised human rights.

It does not advocate rejecting human rights discourse, but rather suggests embracing and building upon the language and values that our Parliaments already feel comfortable with has the potential to have rights-enhancing outcomes for South Australians.

During 2015-2018 I studied Commonwealth parliamentary debates and committee deliberations in some detail for my PhD research, looking to see how parliamentarians from all political stripes discussed and engaged with rights-related ideas and principles.5 During the same period I worked at the South Australian Law Reform Institute and was engaged in an audit of South Australian laws with a view to uncovering deficiencies in rights compliance.6 These two experiences revealed something important to me that changed my perspective on the extent to which international human rights law language is capable of infiltrating and influencing legislative decision making at the Federal and State level.

By examining the way the Commonwealth Parliament undertakes it rights scrutiny task in the form of committee work, and by reflecting on the way the Parliament discusses its rights scrutiny functions when debating proposed laws, I discovered that that the Federal Parliament may already be in the process of developing its own set of rights scrutiny principles that – when coupled with other parliamentary processes such as committee review – were having important rights enhancing impacts on the content of legislation.7 These rights scrutiny principles centre around the doctrine of parliamentary sovereignty and parliamentary oversight of executive action. They include principles relating to: • the need for new executive powers to be clearly drafted so their precise scope and policy aim is clear to Parliament; • the requirement to accompany the expansion of executive power with procedural fairness guarantees such as access to legal representation, preservation of common law privileges and access to judicial review; • the need to ensure Parliament has access to information about how executive officers and agencies are using their powers.; • the inclusion of mandated Parliamentary review of powers introduced to respond to extraordinary circumstances to determine ongoing necessity and so that any unintended consequences can be readily identified;

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• adherence to basic criminal law principles when introducing new offences, including clearly defined physical and mental elements, allocation of the burden of proof to the prosecution and non- retrospectivity; • the requirement to accompany any restriction on free speech with exceptions or safeguards, with a view to enabling debate on matters of public interest; • the requirement to accompany any restrictions on freedom of association and the right to privacy with safeguards relating to information sharing and use immunity, and independent reporting and oversight; and • a general acceptance that the rights of children require special protection.8 These scrutiny principles feature prominently in the work of Commonwealth parliamentary committees and have a particularly strong connection to the scrutiny criteria applied by the Commonwealth Scrutiny of Bills Committee.9 They also align closely with

the features and functions of both the South Australian and Federal Parliament and the so-called common law ‘bill of rights’ articulated by Spigelman.10 Many may dismiss this list of rights scrutiny principles as nothing more than strategic political rhetoric in parliamentary debates, void of any substantive impact on the rights and interests of individuals on the ground whose rights may be being curtailed by the laws being enacted.11 Others may argue that the narrow focus of this list of principles (centred strongly around legal and political rights rather than economic and social rights) highlights the severe deficit within the Australian system when it comes to protecting the rights and interests of the most vulnerable in our community.12 Both of these criticisms are compelling and are reasons to continue to advocate for structural change in the form of a Charter or Bill of Rights.

However, these criticisms should not be used to completely dismiss the significance of this emerging rights scrutiny culture, particularly when it comes to developing

advocacy strategies for rights- enhancing local law reform. This is because my research suggests that these scrutiny principles can give rise to important legislative changes that operate to improve rights protection for vulnerable people and transcend party-political lines. For example, my research suggests that these principles were integral to securing the inclusion of important safeguards within Australia’s counter-terrorism framework, and to the legislative design of oversight bodies that have in turn improved the rights-compliance of these laws, including the Independent National Security Legislation Monitor.13 Critically for current purposes, these scrutiny principles appear to be shared even by parliamentarians who are openly sceptical about the role and value of international human rights law in the Australian context.14 My findings also suggest that the application and discussion of these principles has a far stronger influence on legislative outcomes than discussion or application of international human rights law concepts,

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such as those applied by the specialist Joint Parliamentary Committee on Human Rights (PJCHR). This is not intended as a criticism of the PJCHR – but rather an observation designed to encourage rights advocates to think carefully about the language they choose when seeking to advocate for reform or persuade key decision makers to pursue alternative, less rights-intrusive legislative options when seeking to implement their policy aims.

In my role at the South Australian Law Reform Institute, I saw the findings of my Commonwealth-based research reflected to varying degrees in the State Parliament.

While very significant differences characterise the process of rights scrutiny across the two parliaments (the lack of a Human Rights Committee at the state level being just one), the rights scrutiny culture has important similarities. For example, State parliamentarians across the political divide appear genuinely keen to ensure that the enacted laws are actually going to work in practice, and not have any unintended consequences.15 They care about how much proposed laws might ‘cost’ – both from an economic and community-impact perspective.16 They often (but not always) seek to balance intrusive executive power with increased independent oversight or reporting to enable parliament to keep an eye on how these powers are used.17 Again, this emerging rights-scrutiny culture is not immune from attack on the grounds that it is simply a disguise for political expediency when it comes to implementing popular (but rights intrusive) policy agendas. But at the very least this existing rights scrutiny culture provides an important insight for those seeking to improve the quality of law making in South Australia from a rights perspective. It suggests that utilising this type of language might have a more persuasive impact across a broader range of key decision makers – at least until there is political appetite to canvass more radical structural reform.

For example, if we want to see the Optional Protocol to the Convention Against Torture implemented in South Australia to improve protection for the rights of prisoners and other detainees,18 we may do better to adopt the language of ‘improved parliamentary oversight’, ‘executive accountability’, ‘improved efficiency’ and ‘risk mitigation’ rather than drawing upon concepts relating to the individual freedoms and dignity of those

14 THE BULLETIN October 2019

being detained. It also suggests that when thinking about how to improve the rights compliance of South Australian laws, we should lean in to parliamentary models of rights scrutiny – in particular models such as the Commonwealth Scrutiny of Bills Committee – that embrace and build upon common law ideas and values that are already shared by a broad spectrum of parliamentarians, before adopting scrutiny criteria that derived from international human rights law source, or investing the courts with powers to instruct or overrule parliament when it comes to the rights compliance.

This thinking is nothing new. It has parallels with the findings made in 2006 by Evans and Evans in their study on parliamentary engagement with rights issues,19, and with many of the recommendations made following the National Consultation on Human Rights in 2010.20 Applied to the South Australian context it points to a way forward for rights advocates and for those sick of waiting for more direct incorporation of international human rights law into our legal system. It suggests that ‘talking the talk’ is of central importance. It encourages a lean in approach that builds upon the existing emerging rights scrutiny culture in Australian Parliaments to advance a substantive rights agenda at the local level. B Endnotes 1 Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment (open for signature on 10 December 1984 ([1989] ATS 21).

2 Convention on the Rights of the Child (open for signature on 20 November 1989 ([1991] ATS 4).

3 See e.g. Julie Debeljak, ‘Does Australia Need a Bill of Rights?’ in Paula Gerber and Melissa Castan (eds) Contemporary Perspectives on Human Rights In Australia (Lawbook Co, 2013) 37-70; Megan Davis and George Williams, ‘A Statutory Bill of Rights for Australia? Lessons from the United Kingdom’ (2002) 22(1) University of Queensland Law Journal 1; Pamela Tate, ‘Human rights in Australia: what would a federal charter of rights look like?’ (2009) (13) Southern Cross University Law Review 1; George Williams, A Charter of Rights for Australia (University of New South Wales Press, 2007).

4 See e.g. George Williams, (2016) 16(2) ‘The legal assault on Australian democracy’ Queensland University of Technology Law Review 19; Carolien Van Ham and Louise Chappell, ‘Democracy and human rights: a tripartite conceptual framework’ (2017) 23(2) Australian Journal of Human Rights, 143; Gillian Triggs, ‘Overreach of executive and ministerial discretion: a threat to Australian democracy’ (2017) 7(1) Victoria University Law and Justice Journal 8; Hilary Charlesworth, ‘Who Wins Under a Bill of Rights?’

(2006) 25 University of Queensland Law Journal 39.

5 Sarah Moulds, The Rights Protecting Role of Parliamentary Committees: The Case of Australia’s Counter-Terrorism Laws (PhD Thesis, University of

Adelaide) available at https://digital.library.adelaide. edu.au/dspace/handle/2440/115212 6 South Australian Law Reform Institute, Audit Report: Discrimination on the Grounds of Sexual Orientation, Gender, Gender Identity and Intersex Status in South Australian Legislation (Report, September 2015) available at https://law.adelaide.edu.au/system/ files/media/documents/2019-01/audit_report_ lgbtiq_sept_2015.pdf 7 Sarah Moulds, The Rights Protecting Role of Parliamentary Committees: The Case of Australia’s Counter-Terrorism Laws (PhD Thesis, University of Adelaide) available at https://digital.library.adelaide. edu.au/dspace/handle/2440/115212 8 Sarah Moulds, The Rights Protecting Role of Parliamentary Committees: The Case of Australia’s Counter-Terrorism Laws (PhD Thesis, University of Adelaide) available at https://digital.library.adelaide. edu.au/dspace/handle/2440/115212 9 Senate, Parliament of Australia, Standing Order 24(2) (a) (29 November 2017).

10 James Spigelman, ‘The Common Law Bill of Rights’ (Speech delivered at the University of Queensland, Brisbane, 10 March 2008); See also Robert French, ‘The Common Law and the Protection of Human Rights’ (Speech, Anglo Australasian Lawyers Society, Sydney, 4 September 2009) 2; Jeffrey Goldsworthy, Parliamentary Sovereignty: Contemporary Debates (Cambridge University Press, 2010) 17. The Common Law Bill of Rights is also reflected in what the current Attorney General Brandis describes as ‘traditional rights and freedoms’.

11 See eg Greg Carne, ‘Prevent, detain, control and order? Legislative process and executive outcomes in enacting the Anti-Terrorism Act (No 2) 2005 (Cth)’ (2007) 10(1) Flinders Journal of Law Reform 1779, 43.

12 See eg. Julie Debeljak, ‘Does Australia Need a Bill of Rights?’ in Paula Gerber and Melissa Castan (eds) Contemporary Perspectives on Human Rights In Australia (2013, Lawbook Co) 37.

13 See Sarah Moulds ‘Committees of Influence: Parliamentary Committees with the Capacity to Change Australia’s Counter-terrorism Laws’, (2016) 31(2) Australasian Parliamentary Review 46; Sarah Moulds, ‘Forum of choice? The legislative impact of the Parliamentary Joint Committee of Intelligence and Security’ (2018) 29(4) Public Law Review 287.

14 Ibid.

15 See eg Vickie Chapman, ‘How Laws are Made’ (2019) 40(1) Adelaide Law Review 227, 229-231 16 Ibid, 228-9.

17 For further discussion of these themes see Laura Grenfell and Sarah Moulds, ‘The Role of Committees in Rights Protection in Federal and State Parliaments in Australia’, (2018) 41(1) University of New South Wales Law Review 40; Laura Grenfell and Sarah Moulds, ‘Legislative review: Youth treatment orders bill highlights ad hoc approach to rights-scrutiny of bills’ (2019) 41(4) Bulletin (Law Society of South Australia.

18 For further information about the challenges and opportunities associated with implementing the Optional Protocol to the Convention Against Torture in Australia see Richard Harding, ‘Australia’s circuitous path towards the ratification of OPCAT, 2002-2017: the challenges of implementation.

19 Carolyn Evans and Simon Evans, ‘Evaluating the Human Rights Performance of Legislatures’ (2006) 6 Human Rights Law Review 545; Carolyn Evans and Simon Evans, Australian Parliaments and the Protection of Human Rights, Parl Paper No 47 (2007).

20 National Human Rights Consultation, National Human Rights Consultation: Report (2009) Recommendation 5, xxx–xxxi.

INTERNATIONAL LAW

International Wills, Succession and Inheritance ROY HASDA, HASDA LEGAL

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oday’s world sees families who have lived in or come from various countries. In multi-national Australia, people may have been born in Australia or an overseas country and hold dual citizenship.

Immigrant families have left grandparents or other members of their families in foreign countries and those members have assets in ‘the old country’.

Unfortunately, most of the general public and many in the legal profession remain unaware or unsure of how to claim or obtain those inheritances.

This is a specialist area. As in the European Union (EU) and many other Civil Law jurisdictions, it is important that Australians or Australian residents, who find themselves in this position, are aware of two fundamental facts: • almost certainly it will be necessary for you to engage a notary public; and • it will also be important to engage a notary who understands foreign civil law jurisdictions and the way in which the Law of Succession operates in those legal systems.

National rules on inheritance in the EU member states vary considerably. They cover a myriad of issues including but not limited to who inherits, in what portions and reserved shares, the extent (if any) of testamentary freedom and how the estate is to be administered. But the fundamental rule remains that the law of the State in which the assets are located will determine the issue of succession.

In Civil Law jurisdictions it is the Notary who deals with the succession, determines which documents are needed to comply with the National Laws of Succession and determines distribution.

Without a Notary’s involvement, even

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within a single State, beneficiaries may not obtain their inheritance.

The office of a notary public has a long and distinguished history. It is the oldest branch of the legal profession.

Notaries have been around longer than Christianity. But still there remains a great deal of misunderstanding of the role of Notaries Public in South Australia, among the general public, and, worryingly, among the legal profession. I had hoped that with the passing of the Notaries Public Act 2016 a better understanding and knowledge of Notaries generally would occur.

All Notaries are lawyers but not all lawyers are Notaries.

But before we turn to international succession, we should briefly look at the concept of an “International Will”. This can now be used to deal with assets both in SA and in other countries.

THE INTERNATIONAL WILLS CONVENTION On 10 March 2015, the Australian Government acceded to The Convention Providing a Uniform Law on the Form of an International Will (Washington, D.C., 1973) (“the Convention”). The convention seeks to harmonise and simplify the formalities for wills that have international characteristics. It does this by establishing a uniform law introducing a new form of will known as an International Will.

The provisions of the Convention were introduced in Australia by the passing of amendments to wills and succession legislation in all Australian state jurisdictions. The amendments allow for the making of International Wills in Australia and the acceptance of International Wills made outside of Australia into Australia for the administration of Estate assets located in Australia.

Under the Convention, to be a valid International Will, a Will must: • be made in writing, although it need not be written by the testator in his/ her own hand and it can be written in any language; and • be signed and dated by the testator in the presence of two witnesses.

In addition, a certificate must be attached to the end of the International Will, signed by an authorised person, attesting that the requirements and procedures for drafting and execution of an International Will have been satisfied.

It should be noted here that the International Will, if used, does not replace any existing form of will in Australia and the Convention has no effect on state and territory laws governing: • succession: • the construction and interpretation of wills; and • the revocation of wills But International Wills are accepted only in countries where legislation supporting the Convention is in force.

These countries are Australia, Belgium, Bosnia-Herzegovina, Croatia, Cyprus, Ecuador, France, Italy, Libya, Niger, Portugal and Slovenia and some US States (Due to the federal nature of the United States, individual states also had to enact the Convention – 23 states and the District of Columbia have done so).

INTERNATIONAL SUCCESSION So how does a South Australian resident (either an Australian national or a foreign national resident in SA), who does not have the capacity to travel overseas, obtain or acquire an inheritance from a foreign jurisdiction?

INTERNATIONAL LAW

In almost every instance, the host Nation will require from the SA resident either: • a Power of Attorney appointing someone in the host nation to act for them in the succession; or • a Certificate of Hereditary or Statutory Declaration proving the line of succession from the deceased; or • both above.

Sometimes other documents such as A Declaration of Succession (like our Probate) or a Declaration of Acceptance or Renouncing of an Inheritance may be asked for. Again, these documents need to be certified by a notary, not attested by a lawyer or a Justice of the Peace (JP).

Unfortunately, in my experience there continue to be both JP’s and practicing members of the legal profession who seek to certify documents for use internationally.

Very often, documents proving the identity of the beneficiaries will need to be annexed. These also must be certified only by a notary public. I have been privy to a few cases where SA lawyers have sought to attest those documents only to have them returned as void.

Another important factor is that many countries will require these documents in their own language. For a Notary who is not fluent in that language the documents will need to be translated by a NAATI qualified translator.

What many local practitioners also do not know or understand is that even if notarised, those documents must be “Legalised”. Just as the first act of the Notary is to verify the identity of the beneficiary; the Notary must be verified by our Department of Foreign Affairs (DFAT).

Notarial acts and certificates are recognised in all countries of the British Commonwealth and some other countries without the need for further certification from DFAT. For other countries, once the Notary has completed the act of Notarisation, they must obtain either an Authentication or an Apostille stamp from DFAT. This will not occur unless the signature and seal of the Notary is on the database of DFAT. An Apostille is the act of certification required by countries subscribing to the 1961 Hague Convention Abolishing the Requirement for Legalisation for Foreign Public Documents. The 1961 Convention became operative in Australia in 1995. The Convention abolishes the requirement of Legalisation of a foreign country document where that country is a signatory.

For countries not signatories to the Hague Convention, the old legalisation is still required. The completed notarial act needs to have an Authentication from DFAT, following which the document is submitted to the foreign High Commission, Consulate or Embassy for another “legalisation” stamp.

These countries include, inter alia, the UAE, Iraq, Lebanon and Vietnam. Some countries impose restrictions on how an authentication is affixed. For example, you may not be allowed to have an Australian notary certify your foreign document as a true copy for the purposes of having an authentication affixed.

This is a legal process. DFAT will only issue an authentication or apostille once satisfied that the signature, stamp or seal on the document of a Notary is not fraudulent.

As with our Probate Rules, the Law of Succession of most Civil Law countries

have rules as to time limits and who and in what shares beneficiaries may inherit. In many cases a time limit of one year from the date of death of the deceased applies to either accept or reject the inheritance. In many countries’ inheritance taxes or death duties still apply, and some can be quite high. If you accept the inheritance you are liable for the taxes, if you renounce you do not have to pay.

Civil Law succession rules are like our rules of intestacy. In most instances the laws of succession determine who and in what proportions family members inherit.

And in many cases only family members must inherit. For example, the Law of Succession in Italy prescribes that if there is a surviving spouse (not divorced) and no issue, the spouse takes all; if there is one child it is half to the spouse and half to the child; more than one child, one third to the spouse and the other two thirds are shared equally by the children. Until September 2015, only legitimate children of the deceased were recognised but now by amending legislation all proven children can share in the estate.

Many of the Civil Law countries have very similar rules as to who may inherit and in what proportion. The laws of some countries even provide for these rules of succession to override testamentary dispositions. These things should be known and advised to potential beneficiaries when discussing international succession.

It is beyond the scope of this article to discuss all the possible intricacies or exigencies of international succession.

But as I hope I have shown, a very good start would be to seek the advice of a Notary well versed in the laws of the country in which the potential inheritance is located. B October 2019 THE BULLETIN

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Endangered Lawyers need International Protection YASUSHI HIGASHIZAWA, CO-CHAIR OF THE HUMAN RIGHTS SECTION OF LAWASIA; PROFESSOR, FACULTY OF LAW, MEIJI GAKUIN UNIVERSITY, TOKYO

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he unduly harsh sentence against the prominent Iranian human rights lawyer, Nasrin Sotoudeh, shocked the global community of lawyers early this year. It has been reported that her representation of dissenting activists, including women prosecuted for removing their mandatory headscarf, resulted in 38 years’ imprisonment and 148 lashes by the Islamic Revolutionary Court in Tehran.1 Major international organisations of lawyers immediately responded with strong statements of concern against such oppression of lawyers and their duties.2 Unfortunately, attacks on lawyers for carrying out their professional duties are nothing new and still pervasive.

LAWASIA, an association of lawyers that advocates for the interests and concerns of the Asia Pacific legal profession, has published numerous statements since 2015 in support of endangered lawyers in China, Turkey, Pakistan, the Philippines

18 THE BULLETIN October 2019

and the Maldives.3 More generally, the Council of Bars and Law Societies of Europe (CCBE) reported that it has had to intervene in support of almost 800 cases where lawyers were subject to threats and violence, acts of reprisal, hindrance, intimidation, harassment, prosecution, torture and murder for merely carrying out their professional duties.4 Those interferences against lawyers came not only from government authorities, but also from social groups such as religious or ethnic extremists, powerful political figures, adversarial parties (including business powers) and even the media. Lawyers are in danger wherever governments target them or fail, whether intentionally or not, to take measures to protect the professional activities of lawyers.

Are there any international rules to address those situations or to hold such aggressive or negligent governments to

account? Are the rules, if any, binding on states as part of International Human Rights Law (IHRL)? The answers are not simple. The IHRL does not distinguish lawyers from other individuals. Roles of lawyers are, however, implied in order to guarantee individuals’ rights to access justice and to a fair hearing.5 Thus, human rights documents have correctly pointed out that “the administration of justice --- especially, an independent judiciary and legal profession in full conformity with applicable standards contained in international human rights instruments, are essential to the full and nondiscriminatory realization of human rights and indispensable to the processes of democracy and sustainable development.6” With this understanding, the United Nation Congress on Crime Prevention and Criminal Justice (the UN Congress), held every five years, adopted the Basic Principles on Role of Lawyers (the Basic

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Principles) at the 8th UN Congress in 1990.7 The Basic Principles consist of 29 principles, including, Principle 16, which provides that governments shall ensure lawyers: • are able to perform all of their professional functions without intimidation, hindrance, harassment or improper interference; and • shall not suffer, or be threatened with, prosecution or administrative, economic or other sanctions for any action taken in accordance with recognized professional duties, standards and ethics.

The Basic Principles, on the surface, provide international guidelines for protecting lawyers and their professional activities. So why do lawyers around the world suffer from interferences and attacks? Why do governments often fail to acknowledge these international rules? I would suggest that there are several flaws in the rules.

First and foremost, the Basic Principles, as a resolution of the UN Congress, are by no means a binding instrument of international law. There have been no successful initiatives or keen interest from states to incorporate rules of the Basic Principles into a binding treaty. Thus, it still continues to be a “soft law” incorporated on a voluntary basis. Secondly, the Basic Principles were provided without any monitoring or implementing systems. The UN Congress, or the UN Commission on Crime Prevention and Criminal Justice which succeeded the legislative function of the UN Congress in the early 1990s, continues to fail to discuss such systems . Thirdly, the Basic Principles themselves do not include a suitable provision on the institutional protection of lawyers. Instead, that is within the ambit of independent bar associations or law societies (Bars) to function as a safeguarding body of their members.

I would like to discuss the last point further. Clearly, in order to protect lawyers, it is crucial to recognise the role of

independent Bars and to empower them to protect their members. The 7th UN Congress in 1985 had once resolved on that point that it is: “[a]ware that bar associations and other professional associations of lawyers have a vital role and responsibility to strive to protect and defend their members against improper restrictions or infringement, as well as to uphold their professional ethics.”8 Nevertheless, the Basic Principles adopted thereafter limit the role of Bars to protecting lawyers’ “professional integrity” by cooperating “with Governments” (Principles 24 and 25). They were silent on the Bars’ role to protect and defend their members against improper restrictions or infringement.

Although the Basic Principles have the aforementioned flaws, they have been relied upon by several UN human rights bodies. Committees of human rights conventions have referred to the Basic Principles from time to time when addressing situations of state parties. A recent example involves China and the Committee against Torture (CAT) of the body that monitors the implementation of the Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment. The CAT, expressing its concerns about “the unprecedented detention and interrogation of, reportedly, more than 200 lawyers and activists since 9 July 2015,” recommended that the Chinese government “stop sanctioning lawyers for actions taken in accordance with recognized professional duties.”9.

Also, there exists a monitoring mechanism in the form of a Special Rapporteur on the Independence of Judges and Lawyers, at the UN Human Rights Council, originally established in 1994.

The successive Special Rapporteurs have produced annual reports on the independence of lawyers since 1995.

In her recent activities, the Special Rapporteur, Ms. Mónica Pinto, reported

that, among communications she sent to states and one entity from August 2015 to February 2016, “a dozen communications contained allegations of violations of the rights and independence of lawyers, which included killings, attacks, threats, intimidation, harassment and detention, as well as undue restrictions on their work.”10 Another recent publication on Bar associations was a report in 2018 by the Special Rapporteur, Mr. Diego GarciaSayan. In his report, he said: “it is the duty of all State authorities to respect the role of bar associations in protecting their members, so as to ensure that they are able to carry out their professional activities without any intimidation, hindrance, harassment or improper interference.”11 That recommendation might urge the Basic Principles to be more comprehensive by including a clear role of Bars to protect lawyers and impose duties on governments to respect and maintain the role of Bars.

The final question is how lawyers and the global community could respond to situations where lawyers are in danger as a result of their professional activities.

First, there are many collective initiatives among national, regional and international associations of lawyers.

An example is The Day of the Endangered Lawyer, held annually on 24 January, which highlights the plight of endangered lawyers all over the world and focusses on a specific country every year12.

Secondly, the Council of Europe is drafting a European convention on the profession of lawyer.13 The proposed convention intends to impose binding obligations on state parties in relation to prior recommendations on the legal profession,14 to establish an earlywarning mechanism to respond to immediate threats to lawyers’ safety and independence, and to open the future convention to non-member states. If successful, the proposed convention would provide a binding international text to protect lawyers.

October 2019 THE BULLETIN

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INTERNATIONAL LAW

Lastly, it is worth reflecting on the origin of the Basic Principles. The next 14th UN Congress will take place in Kyoto, Japan next April (the Kyoto UN Congress).15 That will be the 30th anniversary of the Basic Principles. While the UN Congress ceased to adopt new international instruments long ago, it is a good opportunity to revisit the Basic Principles and convince states to fully implement and even expand these rules.

The Japan Federation of Bar Associations (JFBA) announced its position on the Basic Principles. It urges all participating States to “consider international mechanisms to ensure that basic principles are observed in each state.” It also urges the expansion of the Basic Principles to include the role of Bars to protect and defend their members and to guarantee the Bars’ role under national law. This should be achieved by a consolidated voice of lawyers and the global community to guarantee lawyers over the world can engage in

their professional duties, particularly with regards to defending human rights, without interference or fear.

I would not say that it is an easy task, or that mere written rules could improve the situation. That task requires struggles and solidarity over borders, every day and everywhere. Nevertheless, I hope that current initiatives can be a good start to change the situation of the legal profession, particularly in the Asia Pacific region. B Endnotes 1 “Husband of Iranian human rights lawyer says she is sentenced to 38 years, 148 lashes,” REUTERS, March 11, 2019.

2 Eg. Statements of the IBA on 15 March 2019, the UIA on March 16 2019 and the LAWASIA on 9 May 2019.

3 See those statements at https://www.lawasia.asn. au/resources-publications/advocacy-documents.

4 The CCBE, “Threats to the Legal Profession,” February 18, 2019.

5 Eg. art. 10 0f the Universal Declaration of Human Rights and art. 14 of the International Covenant on Civil and Political Rights (ICCPR).

6 ‘Vienna Declaration and Programme of Action,’ A/CONF.157/23 (1993), Part I, para. 27.

7 Adopted by the Eighth United Nations Congress on the Prevention of Crime and the Treatment of Offenders, Havana, Cuba, 27 August to 7 September 1990.

8 ‘Seventh United Nations Congress on the Prevention of Crime and the Treatment of Offenders, (A/CONF.121/22/Rev.1, Milan, 26 August – 6 September 1985), ‘I. DECISIONS OF THE CONGRESS,’‘E. Other resolutions and decision adopted by the Congress,’‘18. Role of Lawyers,’ Preamble para.4 (pp.87-8).

9 Concluding observations of the Committee against Torture on China, CAT/C/CHN/CO/5 (2015), paras.18-9.

10 A/HRC/32/34(2016), paras.10-12.

11 A/73/365(2018), para.106.

12 http://dayoftheendangeredlawyer.eu/ foundation/ 13 http://assembly.coe.int/nw/xml/XRef/XrefXML2HTML-EN.asp?fileid=24466&lang=en 14 Council of Europe, Recommendation Rec (2000)21 of the Committee of Ministers to member states on the freedom of exercise of the profession of lawyer.

15 http://www.un-congress.org

YOUNG LAWYERS

Young Lawyers’ Premium Dinner

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he 2019 Young Lawyers’ annual Premium Dinner was held on Tuesday 3 September at Borsa Pasta Cucina. The intimate crowd of early career professionals enjoyed a night of networking, socialising, what seemed like never-ending Italian food, and a rousing speech from the night’s guest speaker, her Honour Judge Penelope Kari.

Guests arrived to an array of canapés and took the opportunity to socialise with each other and Judge Kari, who made sure to get around to each table. Following main courses, her Honour spoke about what it takes to have a career in the law and that the making of a good practitioner

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(or person, for that matter) starts with three key attributes: kindness, honesty and bravery. Her Honour’s very honest and witty account of juggling law with life outside of the law no doubt provided tips that the room of young lawyers will carry with them through their careers.

Her Honour’s speech was followed by a mouth-watering dessert spread.

The Young Lawyers’ Committee would like to thank Judge Kari for her time, our major sponsor, Burgess Paluch Legal Recruitment for their continued support, and Borsa Pasta Cucina for their incredible hospitality and, as always, sending all guests home very happy and extremely full.

YOUNG LAWYERS

facebook.com/YLCSA

Not for the first time: Lawyer X Inspires Famous Victory PATRICK KERIN, LYNCH MEYER LAWYERS

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n Thursday, 22 August 2019, a 1,000 strong crowd assembled at the Rhino Room on Pirie Street to spectate the 2019 South Australian Golden Gavel competition.

The judging panel comprised the Honourable Dr Robyn Layton AO QC, Mr Tim Mellor and Mr Paul Burgess.

Thank you to all three of our judges who provided witty insight into the strange minds of our competitors. The judges hardly made a mistake, apart from their plainly misinformed criticism of the quality of one of the questions.

Fresh off his afternoon bottle of sparkling San Pellegrino and kissing the Lipman Karas crocodile for good luck, Seamus Brand kicked off the evening in a vibrant fashion with his topic “Chief Justice Kiefel, will you accept this rose?” The Pros and Cons of Dating a Lawyer. Seamus (perhaps somewhat unfairly) drew the ire of the judges in part for his failure to work many Kiefel CJ references into his very humorous presentation.

Daniel Pallaras, Partner at Pallaras Legal and eventual runner-up on the evening, presented a well thought-out analysis of his topic, “Meghan Markle – From Paralegal to Princess: My 10-year plan”. Daniel is rumoured to have spent 20 of his 24 hours’ preparation time binge watching seasons 1-3 of popular legal television documentary “Suits”. He is now said to be an avid Daniel Hardman fan, and has been quoted as saying “I like the cut of his jib”.

Polina Asmalovskaya of Woodburn & Co took us on an interesting journey with her topic “At least I’m not a parking inspector” – Explaining Your Legal Career Choice to Others.

In summing up, Dr Layton remarked that, in any event, perhaps young lawyers may be better off employed as parking inspectors than as lawyers in the current market.

After helpfully being let out of work several hours early, Callum Macleod of Minter Ellison got off to a good start on the night with his gag: “What kind of lawyer has it toughest?”, “A probate lawyer – because it requires “will”-power”.

However, a poorly written topic – “Sure I’ll do it, if you change the pension laws for me”: Legal Recruitment in the Modern Age – unfortunately cost Callum Macleod his shot at gold. The author of the question has since been reprimanded.

In a tightly contested affair, Alexandra Douvartzidis of HWL Ebsworth was crowned champion for her presentation of “Hey Officer, you’ll never guess what Tony did”: Lawyer X’s Guide to Legal Ethics. Alex included several references to her Greek and Italian heritage, much to the delight of approximately 50% of the attendees which seemingly comprised the entire Adelaide office of HWL Ebsworth and all of Alex’s extended family, including her 4th cousin Ioannis who had flown in from Icaria especially for the event. The judges unanimously approved of Alex’s proposed

trust accounting reform of securing clients’ monies underneath concrete slabs in the backyard.

Alex has often been overheard claiming to be “Adelaide’s Greatest Solicitor” (on occasion prior to her admission) – but it seems as though she can at least now officially lay claim to the illustrious title of “Adelaide’s Funniest Solicitor (under the age of 35)”.

By all accounts, Alexandra represented SA with distinction at the National Golden Gavel in Darwin on 6 September 2019.

Unfortunately Alex could not complete the double and finished in second place. In her runner-up acceptance speech, Alex quoted her hero, Buzz Aldrin, who once famously mused, “second comes right after first”.

Thank you to our major sponsor Burgess Paluch Legal Recruitment and Mr Paul Burgess for their continued support of the Young Lawyers.

Special mention must also go to Kate Walkley and Amelia Garreffa for all of their work in organising and co-ordinating the event.

October 2019 THE BULLETIN

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RETIREMENT

Basheer calls time on a famous career

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fter 68 years of continuous service, Max Basheer finally called full-time on his long and illustrious legal career.

Max has been an enduring figure of both the legal and football worlds in South Australia for many years, and holds the record for longest-serving lawyer in SA. The son of Lebanese immigrants, Max was born in Kalangadoo in rural South Australia in 1927. As a boy, Max was obsessed with sport – with a fixation on football, cricket and tennis taking priority over his studies.

Max played in the first XVIII at Princes from the time he was in second year high school. He went on to win a blue in football at the University of Adelaide and receive All Australian Amateur status, earning accolades such as best afield for South Australia against Western Australia in 1950.

Max’s close friend Kevin Duggan AM QC described him as an “outstanding” footballer.

His long association with the law, his other lifelong passion, began in 1947 when Max articled to Povey and Waterhouse as a law student. The legendary Elliot Johnson QC mentored the young Max, teaching him about legal practice and forming a close friendship that was to last for years.

Max’s early days of practice were a time when the culture of the South Australian legal profession was vastly different than it is today, as he reflected in a recent speech given at his retirement function in June.

“In those early days, the profession was small in number. Everyone knew everyone else. Just imagine it, especially you young lawyers,” he said.

Max went on to list the necessities of a modern law firm that were not a part of 1950s practice – computers, emails, mobile phones and photocopiers. In those early times, Max worked on Saturday mornings – but said Friday afternoons were often the time for the “legendary” long legal lunch and afternoons on the golf course.

It was a culture that Max described as “fantastic”, compared to the relentless pace of the modern legal profession.

Max said that it was common in the early days of his career to practice in a variety of areas.

“In those early days there was little specialisation and you were expected to do everything from drafting wills, going to

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Max Basheer flanked by his daughter Jayne and Peter Pedler

Amy Nikolovski speaking at Max Basheer’s retirement function

court in criminal matters, commercial and civil work and matrimonial cases,” he said.

By 1954, Max had taken the opportunity to become partner of the firm, which was renamed to Povey, Waterhouse and Basheer.

Max said the name change came after he “cheekily” asked the firm about adding his name, surprised by their decision to do so.

The long-standing association between the Basheer name and the law in South Australia had begun. By 1966, he became the sole partner of Povey, Waterhouse and Basheer, the beginning of a significant period of growth for the firm. From the early 1990s Max practised with Peter Humphries and David Tillett under the banner of Reilly Basheer Downs and Humphries, before amalgamating with Duncan & Hannon to form Duncan Basheer Hannon.

The rest, Max says, “is history.”

Away from the office or the courts, Max played a vital role in the South Australian football scene. He has been involved in South Australian football since 1954, when he became Commissioner of the South Australian Amateur League.

From this time, he has occupied various

roles within the SANFL over 42 years, as well as other organisations and committees.

In 1978, Max became the SANFL president, a position he held for 25 years until 2003. He was instrumental in the establishment of Football Park at West Lakes and the entry of the Adelaide Crows into the national competition.

“He has dominated South Australian football administration for over 40 years,” said Kevin Duggan. “No one has ever doubted his determination to provide players and spectators with the best facilities. No one has done more for the welfare of the game in South Australia.”

Max has been bestowed a number of honours during his long career, including the Order of Australia and inductions into the SANFL and AFL Hall of Fame.

His name has been immortalised in large grey lettering on Adelaide Oval’s eastern grandstand - the Max Basheer Stand.

“I find it quite surreal when I attend football at Adelaide oval, sit on the western side and see my name on the stand. I often wonder what my Lebanese parents, who migrated here with nothing

RETIREMENT

in the 1920’s would make of it. It really is a dream come true,” Max said.

After 68 years of legal practice, Max said his two daughters, Anna and Jayne, were pleased he has made the decision to retire. But Max said they think he’ll miss being constantly surrounded by people – he knows he’ll miss it too.

“People from all ages and walks of life

gravitate to him,” said David Edwardson QC. “Going to the football with Max is unlike anything I have experienced before.

He’s the elderly rock star of the football world.

“You cannot get from Max’s prearranged personal car park to table number one for lunch or dinner without

multiple people wanting to interact and acknowledge him as he makes his way to the pre-match entertainment.”

In his own speech, Max neatly summed up the philosophy he has lived and which has earned him so many friends over 68 years of legal practice.

“I have often said that without people you are nothing.” B

Long-serving Magistrate Michael Ardlie retires ELIZABETH OLSSON

O

n 9 August, 2019, Deputy President Magistrate Michael Ardlie retired from the South Australian Employment Tribunal after 17 years. Appointed to the Industrial Court of South Australia on 1 July, 2002, His Honour has seen a great deal of change both to the structure of the Court, now Tribunal, and to the jurisdictions over which he presided. The workload of the Tribunal has also dramatically increased, particularly the Return to Work jurisdiction.

Born in Naracoorte, His Honour attended high school at Pulteney School, before studying law at the University of Adelaide. He was articled to Kevin Lynch at Lee & Partners and worked for a suburban firm before establishing Ardlie Alvaro Lawyers with Paul Alvaro. After 10 years, the firm merged with Wallmans Lawyers, of which His Honour was a partner for about six years.

However, the bench had always interested His Honour, particularly the jurisdiction to which he was appointed, having as it did, the variety of industrial law, criminal law (in the work health and safety jurisdiction) and workers compensation.

When he was first appointed, His Honour made the decision to always set a date for the delivery of his judgment after a hearing, thereby giving himself a date to work towards that was not too distant for the litigants. “I managed to do that for many years” said His Honour, smiling wryly, “but in recent times, the work has become so voluminous that it was just not possible to maintain.”

During his time as an Industrial

Retiring Magistrate Michael Ardlie

Magistrate, His Honour has dealt with some difficult cases, one of which being the prosecution relating to an explosion at a factory near Gladstone. “That was pretty challenging and a horrific set of circumstances,” he said. “Any death at work is appalling and I have dealt with too many cases where it has occurred.” He is a strong supporter of the need for training and preventative measures being taken by employers.

One particular aspect of his time on the bench that has brought His Honour great satisfaction has been his position as President of the Health Practitioners Tribunal for the last six years. The Tribunal is a separate entity from the SAET and presides over the registration and regulation of health practitioners, with each area of practice having its own Board as part of AHPRA. This has been very interesting and challenging work, with hearings often being complex and lengthy – a recent case of alleged misconduct ran for 20 days.

In the course of this work, His Honour advised that he had some very capable counsel appear before him. “This significantly aids us in coming to a sensible solution to the problem before us,” he said.

His Honour was also fulsome in his praise for his long-term Judicial Support Officer, Nikki Pascoe. “She has been brilliant in assisting me through my time at the Court, she is very capable and intelligent.”

When asked if there could be improvement from the profession, His Honour was quick to answer. “Preparation is the key,” he said. “I take the view that when

you first see a client to take instructions, you should take a comprehensive statement whilst the incident or event is still fresh in their mind. This serves as a blueprint for the file from the beginning because it gives you time to explore and follow up issues that affect the case, rather than they only come up shortly before the hearing.”

Technology has aided the SAET, particularly the new case management system that is soon to be introduced.

“The expansion of the jurisdiction of the Tribunal and the complex issues still to be determined with regard to the Return to Work Act has meant that the current volume of work in the SAET is quite overwhelming,” he opined. “It has been of great benefit that my successor (Deputy President Magistrate Cole) was appointed in advance to aid the transition.”

His Honour has greatly enjoyed his time on the bench but time and the age of “statutory senility” (70) comes to everyone.

“I will miss the intellectual stimulus,” he reflected “but it will be nice to have some free time to discover other interests. And I will enjoy sleeping in!” (His Honour’s dedication to fitness and running prior to preparing for the working day have meant he has had very early starts during his working life).

One interest he is pursuing is the guitar, but His Honour also wants to see more of Australia. And there is no doubt that he will continue to devote time at the Norwood Oval watching his beloved Red Legs.

We wish His Honour a very happy retirement! B October 2019 THE BULLETIN

23

RISK WATCH

The song remains the same – another important case about solicitors’ file notes GRANT FEARY, DEPUTY DIRECTOR, LAW CLAIMS

T

he importance of file notes is an oft repeated refrain in the offices of Law Claims. An interesting and recent NSW case - Lemongrove Services Pty Ltd v Rilroll Pty Ltd [2019] NSWCA 174 - again demonstrates the critical importance of making good and detailed file notes so that you can protect yourself in the event of a claim.

Anthony Brischetto, a solicitor in a NSW firm, acted for Mr & Mrs Hanshaw in relation to the purchase of land at Huntleys Cove on the Parramatta River and a café business conducted on that land. The Hanshaws wished to purchase the land and business, however wanted to have included in the Contract for Sale, which Mr Brischetto was negotiating on their behalf, a “subject to finance” clause.

On 19 November, 2014, Mr Brischetto wrote to the Vendors seeking that such a clause be included. The following day, the solicitors for the Vendors wrote back to Mr Brischetto saying that their clients would not agree to making the contract “subject to finance” and would not insert the requested clause into the contract. Mr Brischetto met with the Hanshaws on 27 November, 2014 and the contracts were later exchanged without the inclusion of any “subject to finance” clause.

Mr & Mrs Hanshaw were unable to obtain the necessary finance and were unable to complete the purchase. They were sued by the Vendors and agreed to pay the Vendors’ damages which were ultimately agreed at some $272,000. The Hanshaws cross-claimed against their solicitors alleging that Mr Brischetto was in breach of retainer and duty in that he had not told them that the Vendors had not agreed to include the “subject to finance” clause in the contract. They alleged that, had they known that, they would not have exchanged contracts. Mr Brischetto denied that there had been a breach and said that he had told the Hanshaws at their meeting on 27 November, 2015 that

24 THE BULLETIN October 2019

the Vendors had not agreed to include the relevant clause.

The case therefore came down to a narrow question of fact – did Mr Brischetto on 27 November, 2014 tell the Hanshaws about the Vendors’ refusal to include the clause, or did he not?

Mr Brischetto’s case was that his oral evidence that he had told the Hanshaws about the Vendors’ position on 27 November, 2014 was corroborated by his detailed handwritten notes. It was said that these notes confirmed that he went through the Contract in detail with his clients.

The Trial Judge and the Court of Appeal examined in detail the evidence given by Mr Brischetto, Mr & Mrs Hanshaw and Mr Brischetto’s file note as to what occurred on the 27 November, 2014. The evidence of the Hanshaws was, in effect, that they had no recollection of ever being told that the “subject to finance” clause had not been agreed and that, given the obvious importance of that clause to them, this was something that they would have remembered. They also said that in the absence of being explicitly told that the clause had not been agreed they assumed that it had been agreed.

Mr Brischetto’s notes (made shortly after the meeting) record that: “Loan with NAB – Val wouldn’t be done until after exchange – will lend 70% of Val – John [Mr Hanshaw] is okay with this – can put in more if Val is short” His submission was that this note confirmed that he had raised the absence of the “subject to finance” clause with the Hanshaws before they signed the contract because it was implicit in the statement that the Hanshaws could make up a shortfall that they knew the contracts were not “subject to finance”.

One of the key factors in the reasoning of all Judges in rejecting Mr Brischetto’s

defence was that nowhere in Mr Brischetto’s file (either in correspondence or in file notes) was there an unequivocal statement advising the Hanshaws that the “subject to finance” clause was not included in the Contract. Critically the Court of Appeal (Payne JA, with whom Bell P and Simpson AJA agreed) held as follows: “[38] The primary judge was entitled to conclude that a competent solicitor would formally communicate such a rejection promptly to his or her clients. Sometimes powerful proof or evidentiary support for a proposition is provided by the absence of something that would reasonably be expected to be present.

[39] The absence of a letter or email communicating the rejection of the clause by the vendors is consistent with it having been overlooked by Mr Brischetto. A solicitor, in circumstances where there had been an explicit request for the inclusion of a detailed clause, which had been immediately rejected the following day, would be expected to communicate that rejection to his or her clients in writing. Were the rejection to be communicated orally, a careful file note of that conversation would be expected to be made. There was neither here.”

This was not a case therefore where the solicitor had no notes at all of the relevant attendance, as is too often the case. Needless to say, had there been no notes at all the position of the solicitor would have been even worse.

The problem here was that the notes did not deal adequately with the critical issue. The Risk Management lesson is obvious – not only do file notes need to be made, they need to properly deal with all matters of importance, otherwise your defence of a subsequent claim will be compromised.

WELLBEING & SUPPORT

Seven secrets to a healthy mind SARAH EL SAYED, MEMBER, WELLBEING & RESILIENCE COMMITTEE

W

ith great success, The Law Society’s Wellbeing and Resilience Committee held the annual R U OK event at the Law Society of South Australia on 12 September.

This year’s event included a two-hour interactive workshop hosted by Clinical Psychologist, Dr Tom Nehmy of Healthy Minds Education and Training.

The Workshop aimed at arming attendees with the psychological skills such as helpful thinking, stress management, regulating emotion and self-compassion to assist them to effectively self-manage their wellbeing and prevent the onset of symptoms of anxiety and depression.

The workshop was well received by everyone who attended and described as a somewhat cathartic experience with personal reflection and gratitude journaling. Dr Nehmy revealed the seven secrets to a healthy mind: Life is not perfect and, and there is value in imperfection – Reject perfectionism and embrace the benefits of

challenges, mistakes and failure!

Thoughts affect how you feel, but aren’t always accurate – Thinking errors are common.

Emotions are natural and have evolved to help us – They are like the weather, it’s only a problem if we get stuck.

Stress is neither good nor bad, it’s about having the right amount.

Emotions do not control our behaviour, our choices do – Identify unhelpful reaction urges and use psychological muscle. Use the Magic Question: What is the helpful thing to do now?

Learn and live the Helpful Thinking Process –Use the Helpful Thinking Process template to work through your thoughts and feelings in challenging situations or when you feel ‘stuck’.

The most important relationship in your life is the one you have with yourself – Apply self-compassion rather than selfcriticism.

F ISHE R BRENNAN CON SULTING

LITIGATION AND PRE-LITIGATION ADVICE AND EXPERT REPORTS EXPERT WITNESS SERVICES - CONSTRUCTION Magistrates Court District Court Supreme Court COMMERCIAL AND RESIDENTIAL PROPERTY DISPUTES ALTERNATIVE DISPUTE RESOLUTION: Facilitated Negotiation Mediation Expert Determination

Chair of the Wellbeing & Resilience Committee Toni Vozzo (left), Dr Tom Nehmy of Healthy Minds Education & Training, Sarah El Sayed and Gianna Di Stefano.

What you focus on, you amplify in your awareness – Attitude counts –practice gratitude!

Dr Nehmy also revealed a complimentary eighth secret that he describes as potentially the most important of them all and that is to seek support when you need it.

To access the Society’s Wellbeing and Support Resources available, visit: www. lawsocietysa.asn.au/Public/Lawyers/ Practitioner_Support/MHWB_ Resources.aspx

Building Consultants Project Managers

FISHER BRENNAN CONSULTING PO Box 690 Unley SA 5052 Guy Fisher guy@fisherbrennan.com.au

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PROPERTY CONDITION REPORTS: Practical Completion End of Lease – Defects And Making Good Dilapidation Surveys October 2019 THE BULLETIN

25

TAX FILES

Discretionary Trusts: Distributions in specie PAUL INGRAM, PARTNER, MINTER ELLISON

A

reasonably common method of extracting an asset from a discretionary trust is to distribute it in specie to one of the beneficiaries. This can be done either during the life of the trust, or on vesting/winding-up.

In the case of a distribution in specie made by the trustee during the life of the trust, the practical issues will include: • is there power to make an interim capital distribution, and to satisfy that distribution by transferring an asset in specie (and if so, what requirements must be followed?)

• is the proposed recipient an eligible beneficiary of the distributing trust?

For example: • in recent times, it has become increasingly common to exclude foreign persons and entities from ever benefiting under the trust, due to the preponderance of Federal (eg. FIRB) and State (stamp duty and land tax) rules that otherwise treat trusts as ‘foreign persons’.

This can be particularly problematic when considering distributions to other trusts; • some trust deeds only allow distributions to other trusts where the transferee trust vests prior to the transferor trust. (Such provisions are an aspect of the ‘rule against perpetuities’. Even in South Australia, where that rule has been repealed, it is important to note that the repealing legislation did not have the effect of overriding these provisions, so they still apply); • are there any issues in relation to creditors, or fairness between beneficiaries?

In the case of a distribution in specie on vesting/winding-up of the trust, there are some additional issues that need to be borne in mind: • the fact that the trust has reached its ‘vesting date’ does not necessarily mean that the trust itself has come to an end1.

• in practice, what happens on the ‘vesting date’ will depend on the terms

26 THE BULLETIN October 2019

of the particular trust deed that is before you. Some deeds will make a particular beneficiary or beneficiaries immediately entitled to the trust assets.

Other trust deeds may give the trustee a discretion to distribute to any one or more of a defined class, but with rules as to ‘takers-in-default’ if that discretion is not exercised (or at least not exercised within a particular time period). It really is a case of ‘read the deed’.

CGT ISSUES CGT Event The distribution of an asset in specie to a beneficiary will generally result in the trustee making a capital gain, although there is some complexity as to which CGT Event applies, and the timing and other issues that flow from that.

In some cases, CGT Event E5 may be triggered before the date of the transfer, as the making of the resolution to distribute may itself result in the recipient beneficiary becoming ‘absolutely entitled’ to the asset as against the trustee. This potentially means that the CGT Event and the actual transfer may occur in different years.

But it is important to note that CGT Event E5 will not always apply. As set out in Draft Taxation Ruling 2004/D25 (which has never been finalised), the Commissioner takes a reasonably narrow view of ‘absolute entitlement’, particularly where two or more beneficiaries are involved: ‘8. The main CGT provisions to which the concept of absolute entitlement is relevant apply if a beneficiary is (or becomes) absolutely entitled to a CGT asset of the trust as against the trustee (disregarding any legal disability): see section 106-50 and CGT event E5 in section 104-75. …

10. The core principle underpinning the concept of absolute entitlement in the CGT provisions is the ability of a beneficiary, who has a vested and indefeasible interest in the entire trust asset, to call for the asset to

be transferred to them or to be transferred at their direction. This derives from the rule in Saunders v. Vautier applied in the context of the CGT provisions... The relevant test of absolute entitlement is not whether the trust is a bare trust. …

20. The most straight forward application of the core principle is one where a single beneficiary has all the interests in the trust asset.

Generally, a beneficiary will not be absolutely entitled to a trust asset if one or more other beneficiaries also have an interest in it. …

23. If there is more than one beneficiary with interests in the trust asset, then it will usually not be possible for any one beneficiary to call for the asset to be transferred to them or to be transferred at their direction. This is because their entitlement is not to the entire asset.’

So in Private Binding Ruling 1012 254 771 092 (which is understood to relate to the well-known litigation concerning the Rinehart family), the Commissioner took the view that ‘absolute entitlement’ was not present, even though the trust had reached its vesting date, as there was a number of children who were entitled to the trust assets as tenants-in-common.

There may also be other reasons why ‘absolute entitlement’ does not exist at a particular point in time, so that CGT Event E5 is not triggered.2 However, where CGT Event E5 has not been triggered prior to the date of the actual transfer, then that transfer will itself trigger either CGT Event A1 or E7.3 CGT Concessions To the extent that the Trustee does incur a capital gain, consideration will need to be given to whether it can claim any of the CGT concessions.

TAX FILES

A detailed review of those concessions is beyond the scope of this article, but it should be noted that there are a few issues with applying the CGT Small Business Concessions to distributions in specie: • as mentioned earlier, the time of the CGT Event may depend upon which CGT Event applies, and this may have implications for satisfying the various significant individual requirements (and in particular whether the in specie distribution itself needs to be taken into account in applying those requirements); • proceeding by way of distribution in specie may also complicate the application of the payment rules of the Small Business 15 Year Exemption

of Subdivision 152-B, and the Small Business Retirement Exemption of Subdivision 152-D; • the use of a distribution in specie might also endanger the ability of the relevant taxpayers to access the ‘concessional CGT cap’ that is sometimes available for payments that flow from Subdivisions 152-B and 152-D for superannuation purposes4.

There has also been some suggestion that a trustee making an in specie distribution might be able to rely on the Small Business Restructure Relief (SBRR) of Subdivision 328-G. But there are a number of issues that need to be considered in this regard: a. the first point is that the SBRR is about business assets:

•

the transferred asset must be an active asset; and • each party to the transfer must pass one of the ‘Small Business Entity’ tests. b. the second point is that under section 328-430(1)(c), it is a condition of the SBRR that the transaction must not have the effect of materially changing: • which individuals have ‘ultimate economic ownership’ of the asset; and • if there is more than one such individual, each individual’s share of that ultimate economic ownership.

The term “ultimate economic ownership” is not actually defined, although the EM indicates that a tracing

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exercise is required. Importantly, for present purposes, it would appear that this requirement could not ordinarily be satisfied where a discretionary trust is involved (either as transferor or transferee).5 However, there is an alternative rule in section 328-440 which may offer some assistance. The drafting is somewhat obscure, but it appears that where the transferring trust has made a family trust election, the trustee may be able to transfer to individuals in the family group, or even entities they control, without breaking the ultimate economic ownership requirement.6 So perhaps there is some flexibility here; c. but even if you can get through the above points, the SBBR still requires that the transaction is part of a genuine restructure of an ongoing business: section 328-430(a). It is clear from Law Companion Guideline LCG 2016/3 that the ATO believes that this is a fairly narrow concept: ‘6. A ‘genuine restructure of an ongoing business’ is one that could be reasonably expected to deliver benefits to small business owners in respect of their efficient conduct of the business. It can encompass a restructure of the way in which business assets are held where that structure is likely to have been adopted had the business owners obtained appropriate professional advice when setting up the business. However, it is a composite phrase emphasising that the SBRR is not available to small business owners who are restructuring in the course of winding down or realising their ownership interests. …

10.

Other factors which tend to indicate that a restructure is not a ‘genuine restructure of an ongoing business’ include: – where the restructure is a preliminary step to facilitate the economic realisation of assets, or takes place in the course of a winding down to transfer wealth between generations…’

The reference to ‘transfer wealth between generations’ suggests that a transfer which is essentially being undertaken to divide up ownership and/or control of trust assets may struggle to qualify as a ‘genuine

28 THE BULLETIN October 2019

restructure’. This is made even clearer in Example 6 in the LCG. But that is not actually the end of the matter. Section 328-435 provides for a ‘safe harbour’, under which the genuine restructure requirement is deemed to be satisfied if, in the 3 year period after the restructure: • there is no change in the ultimate economic ownership of any significant assets of the business (other than trading stock) that were transferred; • those significant assets continue to be active assets; and • there is no significant or material use of those significant assets for private purposes.

This indicates that a trustee could make a transfer to (for example) a second trust with very similar beneficiaries, claim the SBRR, and then just ensure that none of the relevant changes occur for at least 3 years. However, advisers should note that the LCG suggests that Part IVA might need to be considered in these circumstances7.

STAMP DUTY It should be remembered that following legislative reforms in recent years, stamp duty in South Australia now only applies to: • certain types of land, namely: • residential land; • primary production land; • some vacant land; • interests in such land; and • items ‘fixed’ to such land.

Accordingly, if the assets that are to be transferred to the recipient fall outside those categories, then no duty can be payable.

To the extent that there is dutiable property, the section 71(5)(f) exemption will apply if the following conditions are satisfied: • the beneficiary is a natural person and is taking in his or her own capacity (not as trustee); • the trust was created wholly or principally for the benefit of that beneficiary or a family group of which that beneficiary is a member); and • there is no consideration for the distribution (and in this regard, it is currently unclear whether the

assumption of mortgage obligations, or entering into other related debt arrangements, may be seen as consideration which denies the 71(5)(f) exemption).

The family farm exemption of section 71CC is also a possibility, but only where the transferring trust (and if the recipient is also a trust, that trust) has a class of beneficiaries that has been restricted in accordance with the section (which may be unlikely). However, advisers should bear in mind that it may be possible to do a ‘double shuffle’ – that is: • distribute the primary production land to a qualifying individual under the section 71(5)(f) exemption; and • then have that individual transfer the primary production land to a qualifying trust under section 71CC. Section 71CC(1)(d) does exclude transfers that ‘arise from arrangements or a scheme devised for the principal purpose of taking advantage of the benefit of this section’, but it appears that RevenueSA currently has no problems with the ‘double shuffle’, as long as all other requirements of the exemptions are satisfied.

Tax Files is contributed on behalf of the South Australian based members of the Taxation Committee of the Business Law Section of the Law Council of Australia. B Endnotes 1 Refer paras 11-14 of Taxation Ruling TR 2018/6.

2 Such as the existence of a power sale, or the trustee’s right of indemnity: refer Kafataris [2008] FCA 1454, Oswal [2013] FCA 745, Walrut B, ‘Trustee’s Right of Indemnity’, STEP Australia Conference, May 2019.

3 There is some confusion in the ATO materials as to which CGT Event applies. Private Ruling 1012 789 440 077 seems to treat CGT Event A1 as applying. But both TR 2018/6 (at para 21) and Private Ruling 1012 916 689 897 treat CGT Event E7 as applying. And it can make a difference – for example, CGT Event A1 only gives the trustee a capital gain, whereas CGT Event E7 can also give the beneficiary a capital gain (albeit in family limited circumstances).

4 Refer Ingram P, ‘Trust Restructuring’, Tax Institute Darwin Seminar, 2 August 2019 5 Refer para 107 of LCG 2016/3.

6 Refer the EM at para 1.36, and Example 12 in LCG 2016/3. If the recipient is itself a trust, it would appear that it must have made a Family Trust Election specifying the same test individual as the transferring trust.

7 Refer Example 10

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125TH ANNIVERSARY OF WOMEN’S SUFFRAGE LUNCHEON THURSDAY, 31 OCTOBER 2019 • 12NOON - 3PM • HILTON ADELAIDE R EG I STRAT ION FORM Contact Name

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IN HONOUR

Amanda Tsoundarou: a dedicated advocate who will be remembered for her compassion and fighting spirit

I

n June 2019, Amanda Tsoundarou, solicitor and advocate for access to justice, sadly lost her battle with cancer.

Born in Adelaide in 1974, Amanda attended Immanuel College, graduating in 1991. After graduating high school, Amanda attended The Travel Academy and became qualified as a Travel Consultant.

Working in the travel industry for 13 years, Amanda was able to indulge in her love of travel and travelled the world, visiting numerous countries and cultures.

In 2000, Amanda entered and won an essay writing competition resulting in her undertaking work experience in Russia with the Australian Institute of International Affairs.

She married her husband of over 16 years, Dr Paul Tsoundarou, on 29 September 2002.

Through her love of politics and her desire to help people, Amanda began her law degree at the University of Adelaide.

She eventually graduated with a Bachelor of Law and a Graduate Diploma in Law Practice, along with a Bachelor of Arts with Honours in History and Politics and a Diploma in Languages in French and Japanese.

Wanting to assist the vulnerable and disadvantaged, Amanda began working at the Welfare Rights Centre (SA) Inc, a community legal centre, in 2007 as an Outreach Case worker assisting those facing social security matters. Through the years, she became the coordinator and champion for the Centre’s Housing Legal Clinic, SA’s equivalent of the Homeless Persons’ Legal Clinic. Through this role, Amanda tirelessly advocated for those facing or experiencing homelessness. In 2017, Amanda took on the role of Principal Solicitor and Manager.

Throughout her roles, Amanda campaigned to improve access to justice for some of our most disadvantaged communities in South Australia. Amanda presented papers at numerous national conferences, including the National

Association of Community Legal Centres Conference, National Access to Justice and Pro Bono Conferences and the National Social Security Rights Network Conference. Several of her publications were published in the South Australian Law Society’s The Bulletin, including an opinion piece on Centrelink’s “Robodebt” titled “Technology Fail: The Centrelink fiasco and the impact on vulnerable people.” As a member of the Law Society’s Justice to Access Committee (February 2016 to February 2019) and the Administrative Law Committee (January 2019 to April 2019), Amanda continued to fight for a more equitable society.

At the time of her death Amanda was also working towards a PhD at the University of Adelaide, on the topic of “Homelessness in 1979-89: What Policies worked or Failed in the UK and the US, What lessons can we learn?

Through her employment at the Welfare Rights Centre (SA) Inc, Amanda travelled regularly to regional areas, including the APY Lands, to facilitate clinics providing pro bono legal advice to those experiencing homelessness and those at risk of becoming homeless in remote and rural areas in South Australia. She was an essential part in the implementation of a programme to provide access to justice to individuals living in the Apara-Makiri-Punti-Alkara Indigenous Protected Area.

The programme focused on educating indigenous communities on their legal rights regarding social security and on building confidence and trust in the legal system and empowering the community to promote greater access to justice. This pioneering work included organising a number of community organisations and government bodies to accompany the Welfare Rights Centre to the APY Lands and to assist in the developing of the legal assistance and education programme. This was the first time such a co-ordinated approach to access to justice in relation to Social Security matters had been undertaken

in the APY Lands. Much of Amanda’s work on this programme was outside of her responsibilities and requirements as a member of staff at the Welfare Rights Centre.

In 2015 Amanda received the Law Society of South Australia’s Justice Award for her outstanding, compassionate approach and work regarding legal education and access to justice for those living in remote and indigenous communities throughout South Australia.

In January 2019 Amanda moved to a new role as an Early Resolution Officer with the Commonwealth Ombudsman. She saw this as an opportunity to further her work assisting vulnerable people to navigate the complexities of government agencies, systems and processes and prevent further injustice for already-disadvantaged people.

Amanda was a dedicated and supportive mentor to many young lawyers and a revered colleague.

In addition to her contributions to the legal sector, Amanda was a talented cook, a devoted dessert connoisseur and keen gardener. She was a loving wife, an attentive daughter and a true fighter for the most disadvantaged. She will be greatly missed. B October 2019 THE BULLETIN

31

INTERNATIONAL RELATIONS

THE FOREIGN INFLUENCE TRANSPARENCY SCHEME ACT: WHAT’S IT ABOUT? LAURA GIARETTO, SENIOR LEGAL COUNSEL, LEGAL & RISK BRANCH, UNIVERSITY OF ADELAIDE

F

oreign influence, when conducted in an open, lawful and transparent manner, contributes to our vibrant and robust democracy by ensuring that decision makers and the public are exposed to diverse opinions and voices from all sectors of society. However, when foreign actors seek to exert influence in a way that is hidden or not transparent, this can have serious implications for Australia.

In order to provide the public and government decision-makers with visibility of the nature, level and extent of foreign influence on Australia’s government and political processes, the Australian Government has enacted the Foreign Influence Transparency Scheme Act 2018 (Cth) (the Act).

The Act commenced on 10 December 2018, and established the Foreign Influence Transparency Scheme (the Scheme).

WHAT DOES THE SCHEME DO? The Scheme establishes registration obligations for individuals and entities that undertake certain activities on behalf of a “foreign principal”.

The types of activities that are registrable are: • parliamentary lobbying – lobbying a member of Federal Parliament or their staff on behalf of a foreign principal; • general political lobbying – covers lobbying activities on behalf of a foreign principal directed towards Commonwealth public officials, departments, agencies or authorities of the Commonwealth registered political parties, or candidates in federal elections; • communications activity - covers all circumstances in which information or material are disseminated, published,

32 THE BULLETIN October 2019

disbursed, shared or made available to the public on behalf of a foreign principal and for the purpose of political or government influence; and • disbursement activity - includes the distribution of money or things of value on behalf of a foreign principal.

WHO IS A FOREIGN PRINCIPAL? The term “foreign principal” is defined to include: • a foreign government - ranging from the government of a foreign country or a part of it (agencies, departments, etc) to a foreign local or regional government body. The definition seeks to capture all levels of government.

• a foreign political organisation includes a foreign political party or a foreign organisation primarily concerned with pursuing political objectives.

• a foreign government-related individual (FGRI) – is an individual who is not an Australian citizen or Australian permanent resident and a foreign government, foreign government-related entity or foreign political organisation is able to exercise total or substantial control over the individual.

• a Foreign government-related entities (FGRE) – an entity will be considered a FGRE if it is either: οο A company where either a foreign government or political organisation holds more than 15% of share capital/voting rights; or appoints at least 20% of the board of directors who usually acts according to instruction or wishes (by formal or informal obligation);

or the foreign government or political organisation is in a position to exercise total or substantial control over the company. οο An entity that is not a company and either its executive members, for whatever reason, act in accordance with the directions, instructions or wishes of a foreign government or foreign political organisation; or the foreign government or political organisation is in a position to exercise total or substantial control over the entity. οο An entity is not a body politic and its directors or employees are required to be members of a foreign political organisation and that requirement is contained in a law, constitution, rules or governing documents by which the entity operates.

WHEN IS AN ACTIVITY UNDERTAKEN ON BEHALF OF A FOREIGN PRINCIPAL? A person or entity undertakes a registrable activity “on behalf of ” a foreign principal if: • there is an arrangement with the foreign principal; • it is conducted in the service of the foreign principal; • it is conducted on the order or at the request of the foreign principal; or • it is conducted under the direction of the foreign principal.

Regardless of the nature of the relationship, both the foreign principal and the person (or entity) must have intended or expected that the person might or would undertake the registrable activities on behalf of the foreign principal.

INTERNATIONAL RELATIONS

WHAT IS THE PURPOSE OF THE FOREIGN PRINCIPAL’S ACTIVITY? The term “for the purpose of ” refers to the reason behind undertaking the activity. The Scheme captures any activity where the sole, primary or a substantial reason for undertaking the activity is to influence a political or government process.

The concept of “influencing” a political or government process includes any attempt by a foreign principal to influence any persons, entities, structures or processes that are part of Australia’s federal political and governmental architecture, as well as any attempt to influence the Australian public’s opinion about Australian political and government processes.

The Scheme captures activities that are inherently political in nature, such as parliamentary lobbying, as well as more nebulous activities undertaken on behalf of a foreign principal where the purpose, though less obvious, is to influence an aspect of Australia’s democratic system (e.g. processes of government including the creation of laws and policies, the practices of Parliament and the conduct of federal elections).

TO REGISTER OR NOT TO REGISTER? Simply put: Any person who undertakes registrable activities on behalf of a foreign principal in Australia is required to register under the scheme, unless they are exempt.

It is the responsibility of the person undertaking the activities to determine whether they are required to register. It

is an offence not to register if you are required to do so, and penalties apply.

EXEMPTIONS FROM REGISTRATION The Scheme includes numerous exemptions which apply in very specific circumstances. If any of the exemptions apply, a potential registrant may not need to register even if they undertake activities on behalf of a foreign principal. Those seeking to rely on the exemptions should consider their circumstances carefully. Some examples of exemptions include: • providing humanitarian aid or assistance; • providing legal advice; • providing legal representation in judicial, criminal or civil inquiries, investigations or proceedings; • providing legal representation related to government administration processes involving the foreign principal; • undertaking a registrable activity on behalf of a foreign principal while employed as an officer of a foreign government and the activity is undertaken in the name of the foreign government; • undertaking a registrable activity on behalf of a foreign government-related entity, the activity is a commercial or business pursuit, the activities are undertaken by the individual are in their capacity as a director, officer or employee of the foreign governmentrelated entity, and it is clear that the person is undertaking the activity in their official capacity; • where a registered charity undertakes certain registrable activities on behalf of a foreign principal in pursuit of the charity’s purpose; and

•

where a person is undertaking a registrable activity on behalf of a foreign principal and the activity relates to the arts or to a person’s artistic purpose.

PENALTIES The Scheme imposes a number of criminal penalties for non-compliance. Most of the obligations are owed by the registrant.

The maximum penalties for offences under the Scheme range from six months to five years imprisonment, depending on the seriousness of the conduct.

Refer to part 5 of the Act for more information on enforcement and penalties.

THE TRANSPARENCY REGISTER The Transparency Register (the Register) provides a list of all registered activities by: • Registrant Name, • Activity Type, • Foreign Principal, • Foreign Principal country, and • Start & End dates.

At the time of writing, there were 171 entries on the Register.

The Register can be accessed at: https://transparency.ag.gov.au/

MORE INFORMATION The Attorney-General’s Department has developed a comprehensive suite of guidance documents designed to help people understand how the Scheme works, and help people determine whether they need to register. Those resources can be accessed at: https://www.ag.gov.au/ Integrity/foreign-influence-transparencyscheme/Pages/Resources.aspx B October 2019 THE BULLETIN

33

INTERNATIONAL LAW

The 'clearly inappropriate forum' test for international disputes DR RICKY J LEE, MEMBER OF THE INTERNATIONAL LEGAL PRACTICE COMMITTEE, LAW SOCIETY OF SOUTH AUSTRALIA

S

ince the decision of the High Court in Voth v. Manildra Flour Mills Pty. Ltd., an Australian court would only order a permanent stay of a proceeding if it considered itself to be a “clearly inappropriate forum” to resolve the dispute.

This “clearly inappropriate forum test” is now nearly 30 years old.

In the joint majority judgment in Voth, Mason C.J., Deane, Dawson, and Gaudron JJ. adopted the “clearly inappropriate forum” test applied by Deane J. in Oceanic Sun Line Special Shipping Co. Inc. v. Fay, in which the other Justices each favoured a different approach to the same problem.

Further, the judgment expressed favour with the discussion of “connecting factors” and “legitimate personal or juridical advantage” of Lord Goff of Chieveley in Spiliada Maritime Corp. v. Cansulex Ltd. These “connecting factors” are: 1. factors affecting convenience or expense, such as availability of witnesses; 2. the law governing the relevant transaction; 3. the places where the parties respectively reside and/or carry on business;1 and 4. “the substantive law of the forum is a very significant factor in the exercise of the court’s discretion, but the court should not focus upon that factor to the exclusion of all others”.2 After dismissing the contentions of there being legitimate personal and juridical advantages for the plaintiff in pursuing their claims in New South Wales, Mason C.J., Deane, Dawson, and Gaudron JJ. concluded that the appeal ought to be allowed and for the proceeding to be stayed permanently.3 Since then, the courts have applied consistently the “clearly inappropriate test” in applications for permanent stays, with surprising inconsistent results except in one context, which is that concerning cross-border contractual disputes.

APPLICATION OF THE TEST In most international contractual disputes, the contract between commercial parties would contain an exclusive

34 THE BULLETIN October 2019

jurisdiction clause by which the parties bound themselves to have any dispute between them litigated in a particular jurisdiction. Generally, the parties would be held to their bargain in agreeing to an exclusive jurisdiction clause, as the respective courts did in Huddart Parker Ltd. v. The Ship “Mill Hill”;4 Compagnie des Messageries Maritimes v. Wilson;5 Lopez v. H.B.S. (P.N.G.) Ltd.;6 Gonzalez v.

Agoda Co. Pte. Ltd.;7 Venter v. Ilona M.Y. Ltd.; Ilona M.Y. Ltd. v. M.D. Engineering G.m.b.H.;8 and F.A.I. General Insurance Co. Ltd. v. Ocean Marine Mutual Protection & Indemnity Association Ltd.9 As Bell P. noted in Australian Health & Nutrition Association Ltd. v. Hive Marketing Group Pty. Ltd. earlier this year,10 other common law jurisdictions have adopted similar approaches to these clauses, including England,11 Canada,12 New Zealand,13 Singapore,14 and the United States.15 In Australia and New Zealand, this is particularly the case in matters involving a contest between an Australian court and a New Zealand court, as courts are bound by the respective Trans-Tasman Proceedings Acts 2010 to give effect to any exclusive choice of jurisdiction agreed between the parties, regardless of any other relevant factor that the court is meant to take into account at common law or by statute.16 The greater difficulty arises when not all parties to the dispute are party to a contract with an exclusive jurisdiction clause, as was the case in Australian Gourmet Pastes Pty. Ltd. v. I.A.G. New Zealand Ltd.,17 or when there may be two commercially connected contracts between the same parties but they specify different jurisdictions as the exclusive forum for litigation, as was the case in Australian Health.18 In Australian Gourmet Pastes, the Australian plaintiff brought a proceeding in the County Court of Victoria against a New Zealand defendant, Endeavour Packaging Pty. Ltd., and its insurer, which is also a corporation registered in New Zealand, and Judge Anderson considered himself bound by statute to stay the proceeding because the insurance policy contained an exclusive jurisdiction clause

that nominated New Zealand courts.19 On appeal to the Court of Appeal, Tate J.A. (with whom Santamaria and Beach JJ.A. agreed) held that, as the plaintiff was not personally a party to the contract of insurance, the exclusive jurisdiction clause had no application to it.20 Tate J.A. went on further to find that, as most of the witnesses are located in New South Wales and Victoria and the differences between Australian law and New Zealand law being insignificant on the issue of product liability, the factors refusing a stay outweighed those in favour of it, and held accordingly.21 In Australian Health, the dispute involved involving Australian Health & Nutrition Association Ltd. (Sanitarium) and Rebel Sport Ltd. (Rebel), both Australian corporations and the plaintiffs, and Emirat Ltd. (Emirat) of the United Kingdom and Hive Marketing Group Pty. Ltd. (Hive) of Australia as defendants. There was one contract involving all parties other than Rebel that was governed by English law and contained an exclusive jurisdiction clause for England, while another contract involving all parties other than Emirat that was governed by New South Wales law and contained a non-exclusive jurisdiction clause for New South Wales.22 In such cases as well as cases involving exclusive jurisdiction clauses generally, Bell P. (with whom Bathurst C.J. and Leeming J.A. agreed) noted:23 In such cases, two very powerful policy considerations may be in play and, depending on the facts, in tension.

They are, on the one hand, the desire to and importance of holding commercial parties to their bargain, and, on the other hand, trying to ensure that all aspects of a dispute between all parties (including, relevantly, non-contracting parties) be resolved in one place at the one time, the rationale for this being not only judicial “tidiness” and “efficiency” but, perhaps more profoundly, the high desirability of minimising the possibility or prospect of different courts reaching different

INTERNATIONAL LAW

decisions (whether as to the facts or the law or both) in relation to the same dispute, a consequence apt to undermine confidence in the rule of law were it to materialise.

to the terms of their bargain if the terms of their agreement contain a choice of an exclusive jurisdiction, especially in a case involving a contest between Australian and New Zealand jurisdictions; 2. lawyers need to exercise care in negotiating and drafting governing law and exclusive jurisdiction clauses in multiple and related contracts involving different parties; and 3. there is need for caution in representing multiple parties in the same proceeding where the position(s) and knowledge of the respective parties are not aligned in entirety. B

In the circumstances of the case, the Court of Appeal upheld the stay of proceeding granted by McDougall J. at first instance as between the plaintiffs and Emirat,24 on the basis that Sanitarium was bound by the exclusive jurisdiction clause in the contract between it and Emirat to litigate their dispute in England.25 What was notable in this case was that Rebel, which was not party to the contract containing the exclusive jurisdiction clause for England, was in effect compelled into making an election between joining Sanitarium in having the entirety of the dispute litigated in England, or limit its monetary claim to that against Hive (as it had pleaded) and continue in New South Wales, which appeared to have been motivated, at least in part, by the knowledge that Rebel must have had regarding the exclusive jurisdiction clause involving Emirat as Rebel and Sanitarium shared the same firm of solicitors.26

Endnotes 1 [1987] A.C. 460 at 478.

2 Above n. 1, at 566 per Mason C.J., Deane, Dawson, and Gaudron JJ. 3 As above, at 571.

4 (1950) 81 C.L.R. 502 (Dixon J.).

5 (1954) 94 C.L.R. 577 (Dixon C.J., McTiernan, Fullagar, Kitto, and Taylor JJ.).

6 [2018] A.C.T.S.C. 190 (McWilliam As.J.).

7 [2017] N.S.W.S.C. 1133 at [34] per Button J. 8 [2012] N.S.W.S.C. 1029 (Rein J.).

9 (1997) 41 N.S.W.L.R. 559 at 569 per Giles C.J. Comm. D. 10 (2019) 367 A.L.R. 146 (Bathurst C.J., Bell P., and Leeming J.A.).

11 Donohue v. Armco Inc. [2002] 1 All E.R. 749 (Lord Bingham of Cornhill, Lord Mackay of Clashfern, Lord Nicholls of Birkenhead, Lord Hobhouse of Woodborough, and Lord Scott of Foscote).

12 Z. I. Pompey Industrie v. E.C.U.-Line N.V. [2003] 1 S.C.R. 450 (McLachlin C.J., Gonthier, Iacobucci, Major, Bastarache, Binnie, and LeBel JJ.).

SOME OBSERVATIONS It is apparent from Australian Gourmet Pastes and Australian Health: 1. contracting parties are usually held

13 Kidd v. Van Heeren [1998] 1 N.Z.L.R. 324 (Allan J.).

14 Vinmar Overseas (Singapore) Pte. Ltd. v. P.T.T. International Trading Pte. Ltd. [2018] S.G.C.A. 65 (Sundaresh Menon C.J., Andrew Phang Boon Leong, Judith Prakash, Tay Young Kwang, and Steven Chong JJ.A.).

15 M/S Bremen v. Zapata Off-Shore Co (The Chaparral) (1971) 407 U.S. 1 (Burger C.J., Douglas, Brennan, Stewart, White, Marshall, Blackmun, Powell, and Rehnquist JJ.).

16 Trans-Tasman Proceedings Act 2010 (Cth.), ss. 17-20; and Trans-Tasman Proceedings Act 2010 (N.Z.), ss.

22-24. See Australian Gourmet Pastes Pty. Ltd. v.

I.A.G. New Zealand Ltd. (2017) 321 F.L.R. 345 (Tate, Santamaria, and Beach JJ.A.).

17 Above n. 19.

18 Above n. 13.

19 Australian Gourmet Pastes Pty. Ltd. v. Endeavour Packaging Pty. Ltd. [2016] V.C.C. 455 (Judge Anderson).

20 Above n. 19, at 345.

21 As above, at 365-367. Although the relevant test in the proceeding, as prescribed by the TransTasman Proceedings Act, was a “more appropriate forum” test, it is the author’s contention that if a New Zealand court cannot be said to be a “more appropriate forum”, it can hardly be said that the County Court of Victoria was a “clearly inappropriate forum”. See also Re Douglas Webber Events Pty. Ltd. (2014) 291 F.L.R. 173 (Brereton J.).

22 Above n. 21, at 153 per Bell P. 23 Above n. 21, at 164. See also Incitec Ltd. v.

Alkimos Shipping Corp. (2004) 138 F.C.R. 496 (Allsop J.); and Donohue v. Armco Inc. [2002] 1 All E.R. 749 (Lord Bingham of Cornhill, Lord Mackay of Clashfern, Lord Nicholls of Birkenhead, Lord Hobhouse of Woodborough, and Lord Scott of Foscote).

24 [2018] N.S.W.S.C. 1236 (McDougall J.).

25 Above n. 13, at 170.

26 As above.

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COURT RULES

“Liquidated” and “Unliquidated” Claims: Default judgments in the Supreme, District and Magistrates Courts NICK ANDERSON, MEMBER, CIVIL LITIGATION COMMITTEE

D

efault Judgments are relatively common, especially in the Magistrates Court. Approximately 25,000 civil actions are filed in the Magistrates Court each year of which about 25% are resolved by way of default judgment.

The percentage of minor civil matters resulting in default judgments is even higher. Approximately 50% of minor civil claims result in default judgment.1 The Rules and procedures for obtaining default judgment in South Australia differ depending on the Court, whether the claim seeks relief under Federal legislation2, and whether the claim is “for a liquidated sum”, or is for an “unliquidated claim”, or is a claim for property damage, or is a claim for recovery of premises or ejectment and includes a claim for mesne profits.

A review of the Courts Rules is currently underway for the purpose of the introduction of the Electronic Court Management System (ECMS). The review is likely to result in new Rules.

As such, this article might become redundant soon after it is published, but until then, here is an overview of the current Rules and procedures in relation to default judgments in South Australian Courts.

MAGISTRATES COURT – DEFAULT JUDGMENT PROVISIONS (FAILURE TO FILE A DEFENCE7) The default judgments provisions are found in MCR60, MCR61 and MCR62.

In basic terms, MCR60 sets out when an application for default judgment can be made, MCR61 specifies the types of claim where judgment can be entered for a specific sum, and MCR62 sets out the process and requirements for claims where the quantum of damages has to be assessed.

MAGISTRATES COURT – INITIATING FORMS

MCR60 If a claim is filed and served and a defence is not filed within 218 days after service, then the Plaintiff can ask the Registrar to enter default judgment9. A Plaintiff does this by completing and filing Form 18.

To enter default judgment under MCR60, the Registrar has to first satisfy themselves that service has been affected and of the date of service.

How to calculate the date of service is not as simple as it might first appear as it depends on the method of service. In relation to default judgments for failure to file a defence, the Plaintiff and the Registrar have to have regard to both MCR52 and MCR60(3). Requirements in relation to service10 and the issue of whether there has been effective service are beyond the scope of this article.

• Leaving aside special types of actions3 minor civil claims are to be filed using Form 34.

• Form 3 does not ask a minor civil claimant to nominate whether the claim is liquidated or unliquidated.

• General claims in the Magistrates Court are to be filed using Form 25.

• Form 2 seemingly requires6 the plaintiff to nominate whether the claim is liquidated or unliquidated.

• Neither “liquidated claims” nor “unliquidated claims” are defined in the Magistrate Court Rules. The expression “liquidated” first appears in the Rules in MCR61 which relates to the procedures available for default judgments for certain types of claims.

MCR61 or MCR62?

Assuming that MCPD7 and Form18A are not applied11 the Registrar considering an application for default judgment has to pay close attention to the provisions of MCR61 and MCR62.

MCR61 and MCR62 prescribe what orders can be made in relation to applications for default judgments depending on which of five categories the claim falls into: • where the claim is for a debt MCR61(1)(a) • where the claim is for a liquidated sum - MCR61(1)(a) • where the claim is in relation to property damage and any consequential loss - MCR61(1)(b) • any other types of claims - MCR62

36 THE BULLETIN October 2019

A Registrar who applies the wrong categorisation may fall into jurisdictional error.

As noted in paragraph [4] above, a Plaintiff filing a claim in Form 2 is asked to nominate whether their claim is liquidated or unliquidated. Form 2 is to be compared to MCR61(1)(a), which does not refer to “liquidated claims”, but refers to claims for liquidated sums.

The detail sought in Form 2 must be a short hand reference and asking the Plaintiff to nominate whether their claim is “for a liquidated sum” as referred to in MCR61. That is, Form 2 is not asking a Plaintiff to nominate whether their claim is a liquidated claim at common law.

Irrespective of the Plaintiff ’s selection on Form 2, ultimately it is for the Court to determine which category the claim actually falls into. A Registrar who relies on a Plaintiff ’s nomination in Form 2 could very easily fall into jurisdictional error.

There are some useful authorities in relation to MCR61 and MCR62.

Jaffer v Chakasa In Jaffer v Chakasa PTY LTD [2003] SASC 123, the claim in question was for “$7,500 damages” being the difference between the sale price of a car ($18,500), and the minimum price that the appellant said that the respondent had promised to sell the car for ($26,000).

At [19-20] Perry J set aside the default judgment for $7,500 because His Honour considered that default judgment application in relation to a claim for “$7,500 damages” should have been dealt with under MCR62 and not MCR61(1).

His Honour did not express any view on what the approach would have been if the claim had simply said “$7,500” and had not referred to any claim for “damages”.

Hamilton-Smith v Bernsteen In Hamilton-Smith v Bernsteen Pty Ltd (In Liq) [2004] SASC 212 (22 July, 2004) the claim was for $27,723.29 being the balance of money due for goods sold and delivered under a contract.

COURT RULES

At [13-17] Anderson J agreed with a Magistrate’s assessment that a claim was a claim for a liquidated amount, and therefore found that it was appropriate for the Magistrate to have entered default judgment in a specific sum under MCR61 and appropriate to not have proceeded under MCR62.

Marmanidis v Germein In Marmanidis v Germein & Anor [2017] SASC 103 (7 July, 2017) the claim was for $2,080 for damages, being $1,589 for repairs to a car and $491 for a hire car. In August 2013, default judgment was entered for the full amount of the claim. In July, 2016, and when Dr Marmanidis’ property was on the brink of sale following steps taken to enforce the judgment, Dr Marmanidis brought an application to set aside the default judgment. In October, 2016 the application to set aside the default judgment was dismissed. In October, 2016 an application for judicial review was brought in the Supreme Court with the Attorney-General intervening.

At [123] Hinton J considered MCR61.

At [127] His Honour found that the applicable default judgment procedure was MCR61(1)(b).

Having found that MCR61(1)(b) applied, His Honour found that to obtain default judgment in a specific amount, the Plaintiff also had to show compliance with the requirements in MCR61(2). Since MCR61(2) had not been fully complied with, His Honour found [at 135 and 136] that the judgment was irregular and His

Honour [at 173 and 179] quashed the default judgment.

However, the unfortunate saga of a $2,000 car bingle was not over and Justice Hinton’s decision was appealed (AttorneyGeneral (SA) v Marmanidis [2019] SASCFC 3 (17 January, 2019)) The appeal raised many issues in relation to the appropriateness of judicial review of minor civil decisions, including the most appropriate way to correct any jurisdictional error. Those considerations are beyond the scope of this article.

However, the appeal did touch upon the operation of MCR60, MCR61 and MCR62.

MCR61(1)(a) or MCR 61(1)(b)?

Both Mr Germein and the AttorneyGeneral argued that the claim could and should have been treated as a claim for a liquidated sum under MCR61(1)(a).

Blue J at [77], Tilmouth AJ at [179] with Nicholson J agreeing [at 156] all found that the claim fell under MCR61(1)(b).

Tilmouth and Nicholson JJ did not provide any reasons, but at [77 to 79] Justice Blue set out his reasoning as to why the claim did not fall under MCR61(1) (a). In his reasons, Justice Blue referred to the common law distinction between liquidated and unliquidated claims as well as to the definitions in the Supreme Court Rules. At [79] His Honour concluded that MCR61 and MCR62: “preserve the traditional dichotomy between a claim for a liquidated sum and an unliquidated sum, with one qualification. If the claim is for property damage and the plaintiff serves

with the Claim the requisite evidence of the quantum of damages, the plaintiff can obtain judgment for the amount claimed. In this respect the position is equated to the position in respect of a liquidated sum but ex hypothesis it is not for a liquidated sum. The construction of rule 61 advanced by the Attorney-General and Mr Germein would undermine and subvert the trichotomy created by rules 61 and 62.”

What is Any Relevant Evidentiary Material as referred to in MCR61(2)?

The Full Court (and Justice Hinton at first instance) all found that in order for default judgment to be entered in a specific amount under MCR61(1)(b), the Plaintiff had to prove that “any relevant evidentiary material” had been served at the same time as serving the claim.

At first instance Hinton J had found that MCR61(2) had to be strictly complied with, namely because of the use of the word “only” in Rule 61(2). The Full Court agreed that at the very least, a failure to provide any record of the hire car costs meant that the Registrar’s entry of default judgment was irregular.

Justice Blue at [85 to 91] found that the insurer’s internal summary of repair costs were not sufficient and that source records (or material capable of proving the quantum) were required to satisfy MCR61(2).

Tilmouth and Nicholson JJ at [180 to 182] held that the insurer’s summary of repair costs were sufficient for the purpose of MCR61(2) so as to allow a Registrar to enter default judgment in a specific sum, but with the word of caution that:

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COURT RULES

“litigants would be better advised to rely upon and include in their claims, copies of primary documents of the very kind mentioned in MCR61(2).”

Summary of the Cases What appeared to be a claim for a liquidated sum in Jaffer was treated as an unliquidated claim because “damages” were mentioned.

What might have been pursued as a claim for damages for breach of a contract in Hamilton-Smith was considered as a claim for a liquidated sum because the claimant claimed for a specific figure (and seemingly did not make any claim for “damages” or other relief).

What appeared to be an unliquidated claim in Marmanidis in respect of property damage but for which a specific amount was claimed, was not considered under MCR61(1)(a) because the nature of the claim brought it under the provisions of MCR61(1)(b).

An analysis of MCR60, MCR61, MCR62 and the cases, leads to a hypothetical question: Can a Plaintiff with a Magistrates Court Claim, which is unliquidated at common law, but which does not come under MCR61(1)(b) nominate a specific sum and then (if the claim is served but undefended) seek default judgment for a specific sum instead of seeking default judgment with damages to be assessed?

For reasons which follow, I think that they can: • It seems to be exactly what happened in Hamilton-Smith.

• The majority of the Court in AttorneyGeneral (SA) v Marmanidis [2019] SASCFC 3 (17 January, 2019) did not address the operation of MCR61(1)(a) because it appears the claim clearly fell under MCR61(1)(b).12 • At common law, there is no doubt that a Plaintiff cannot convert an unliquidated claim into a liquidated claim merely by nominating a specific amount - Abbey Panel and Sheet Metal v Barson Products [1948] 1 KB 493 and as applied in Environmental Systems Pty Ltd v Peerless Holdings Pty Ltd [2008] VSCA 26 (26 February 2008) at [81]. However there is no reason why a Court cannot set Rules that depart from the common law.

• The expression “claim for a liquidated sum” is not defined. The phrase should be given its natural and ordinary

38 THE BULLETIN October 2019

•

•

•

•

•

•

meaning. If MCR61 meant to refer to “liquidated claims” at common law it would have used that expression.

I think it is dangerous to consider the Supreme Court definition of liquidated claims and unliquidated claims when interpreting and applying MCR61 and its concept of a claim for a liquidated sum. MCR12(1) is of no particular assistance in this regard because the Rules in the Supreme and District Court in relation to default judgments are significantly different from the Rules in the Magistrates Court.

Even if the Supreme Court definition of “liquidated claims” should be applied to the Magistrates Court concept of “claims for a liquidated sum”, the definitions and the Court Rules do not repeat the common law they appear to modify the common law.

It is better to construe the Rules not by reference to common law concepts but by reference to their own text, context and purpose13. As set out in [11] above MCR61 and MCR62 do not preserve the common law dichotomy. Instead they create a five-category regime.

The text in MCR61 should take precedence over the shorthand text in Form 2 - which can only be a reference to the concepts in MCR61 and MCR62.

Given the number of applications for default judgment14 it makes sense that the Magistrates Court Rules might have been drafted so as to encourage claimants to nominate specific sums.

Claims for specific sums also make it easier to apply the Magistrates Court’s Costs Rules as well as simplifying the steps, time and resources required in the event of an application for default judgment.

It goes without saying that default judgments are entered without reference to the actual merit of the claim. A Rule which allows a Plaintiff to claim a specific sum, which rule only ever has application in the context of default judgment and which Rule does not prejudice the Defendant15, seems perfectly acceptable as a matter of fairness and efficiency.

As a matter of principle, the regime created by MCR61 and MCR62 already allows for the entry of default judgment in a specific sum to what

otherwise would be an unliquidated claim at common law. Perhaps this is just an illustration that the Magistrate Court Rules do not seek to preserve the common law, but seek to change it.16 The approach is consistent with MCR3 – an expeditious, economical and just resolution of an action.

Noting that the conclusion in [18] above is not consistent with Blue J’s reasons in ATTORNEY-GENERAL (SA) v MARMANIDIS I make the following further observations: Mr Germein’s claim could not possibly have been under 61(1)(a) – not because it was not a claim for a liquidated sum, but because the claim for a liquidated sum was clearly of the type referred to in MCR61(1)(b).

In light of Justice Blue’s reasons, it would take a courageous litigant to seek to argue the issues raised in this article17 and/ or to seek default judgment in a specific sum in relation to a claim which is an unliquidated claim at common law.

Consequence of the Categorisation Assuming that the Registrar or a Magistrate has correctly characterised the claim, then the balance of the default judgment procedure is easy enough to understand - but difficult to apply in practice: MCR61 and MCR62 Category 1 - If the claim falls under MCR61(1)(a) (a claim for debt) - judgment can be entered for the amount specified.

Category 218 - If the claim falls under MCR61(1)(a) (a claim for a liquidated sum and which does not fall into any other category) - judgment can be entered for the amount specified.

Category 3 - If the claim falls under MCR61(1)(b) (property damage) - in order to get judgment in a specific amount for property damage claims, the Plaintiff must also demonstrate compliance with MCR61(2) and prove (to the Registrar for the purpose of seeking administrative default judgment) that relevant evidentiary material (on which the Plaintiff intended to rely for proving quantum) was served on the Defendant at the same time as the action was served on the Defendant.

A Plaintiff seeking to rely on MCR61(1)(b) has to take pre-emptive steps at the time of serving the claim. As noted

COURT RULES

by the Full Court, litigants would be better advised to rely upon and include in their claims, copies of primary documents of the very kind mentioned in MCR61(2) if they intend to rely on MCR61(1)(b) and seek default judgment in a specific sum.

A Plaintiff providing relevant evidentiary material in a pre-action notice will not strictly satisfy MCR61(2) because such materials are not served at the same time as the claim.

Category 5 - In any other case the matter is to be set down for assessment of damages and costs (MCR62).

There are many examples of what might constitute “any other case”, but applying Master Blumberg’s approach (see [35] below) a claim which does not fall into any one category (for example, because it consists of a combination of liquidated and unliquidated claims) might be sensibly considered as “any other case”.

MCR62 – Process and Timeframes for Assessment of Damages If the Court cannot enter default judgment in a specific sum, then MCR62 sets out the process to be followed for damages to be assessed: • After entering default judgment, the Registrar must fix a date, time and place for the assessment of damages or such other order, remedy or relief as the action may require, and give at least 21 days’ notice in writing of the hearing to the parties.19 • Under MCR62(2) the party who has signed judgment must serve on all other parties at least 21 days before the hearing date: 1. a notice in Form 1920; and 2. a copy of any affidavit evidence to be relied upon, and 3. a written schedule of costs sought.

A party hoping to comply with MCR62(2) has to act very quickly to prepare and serve 2 further and substantial documents and to ensure that such documents are served at least 21 days before the hearing date (a date which the Plaintiff will have no particular way of knowing what it is until it is set by the Registry).

A substantial amount of time and paperwork is required to obtain judgment in a specific sum relating a claim which, by definition the Defendant has already been served with but which claim the Defendant has failed or refused to answer.

Having got your taste buds tingling on the Magistrates Court Rules, now is time to digest the equivalent Supreme Court Rules (SCRs) and District Court Rules (DCRs).

The SCRs and DCRs, in relation to default judgment provisions are identical, so for simplicity sake I will just refer to the DCRs. In contrast to the Magistrates Court Rules: • There is no equivalent to Section 4 of Form 2 - a Plaintiff is not required to nominate at the time of filing whether their claim is liquidated or unliquidated.

• There is no equivalent of MCR61(1) (b) and MCR61(2) – a Plaintiff with an unliquidated claim for property damage cannot nominate a specific sum in their claim and obtain judgment in a specific sum by establishing that they served “evidence” of loss at the time as they served the claim.

The relevant time frame from service is 28 days not 21.

• Category 1 - Claims for specific amounts – refer DCR229(1)(a) and DCR229(3) • Category 2 - Claims for amounts that can be precisely calculated – refer DCR229(1)(a) and DCR229(3) • Category 3 - Claims for an amount that requires assessment by the Court – refer DCR229(1)(b) and DCR229(3) • Category 4 - Claims in relation to the detention of goods – refer DCR229(1)(c) The same sort of interesting22 hypothetical question arises in relation to DCR229(1)(a) and 229(3) as arises in relation to MCR61(1)(a), namely Can a Plaintiff with a District Court Claim, who has an unliquidated common law claim make a claim for a specific amount, and thereby bring their claim within the definition of a liquidated claim under DCR229(3), and thereby proceed under DCR229(1)(a) in event of application for default judgment, instead of proceeding under DCR229(1) (b) or DCR229(1)(c)? For similar reasons as set out in paragraph [18] above, I consider that the answer to the question is “Yes”.

DCR229 The relevant Rule is DCR229, which provides that if a defendant does not file a defence to a claim within 28 calendar days after service, then: • DCR229(1)(a) - if a liquidated claim, the plaintiff may enter judgment for an amount not exceeding the amount of the liquidated sum plus interest; • DCR229(1)(b) - if an unliquidated claim, the plaintiff may enter judgment for an amount to be assessed; • DCR229(1)(c) - if a claim for the detention of goods, the plaintiff may enter judgment for delivery of the goods or for the value of the goods to be assessed.

Unlike the Magistrates Court Rules, the DCRs do define liquidated claims and unliquidated claims.21 • DCR229(3) - a liquidated claim is a claim for a specific amount or a claim for an amount that can be precisely calculated; • DCR229(3) - an unliquidated claim is a claim for an amount that requires assessment by the Court.

So, rather than the five categories found in the Magistrates Court, the DCRs identify four categories of claim for the purpose of proceeding towards default judgment.

DCR240(2)(a) and DCR229 – How to Apply for Default Judgment in the District Court All applications for default judgment In the District Court must be done the same way – by way of administrative request to the Registrar.23 A Plaintiff seeking default judgment in the District Court has to pay particular attention to ensure that the form of the default judgment that they are seeking is consistent with the provisions of DCR229.

• Category 1 - Claims for specific amounts – the request can be to enter judgment for an amount not exceeding the amount of the liquidated sum plus interest.

• Category 2 - Claims for amounts that can be precisely calculated – the request can be to enter judgment for a liquidated sum [presumably with details of how it has been precisely calculated] plus interest.

• Category 3 - Claims for an amount that requires assessment by the Court – the request can be to enter judgment for an amount to be assessed.

• Category 4 - Claims in relation to the detention of goods – the request can be to enter judgment for delivery of the goods or for the value of the goods to be assessed.

DISTRICT & SUPREME COURT

October 2019 THE BULLETIN

39

COURT RULES

If the Plaintiff seeks judgment in terms which are not consistent with DCR229 and if the Registrar grants judgment in terms which are not consistent with DCR229, any default judgment entered runs the risk of being an irregular and unenforceable judgment.

Rule 229 is silent on what approach ought to be taken in default judgment where there are both liquidated and unliquidated aspects of a claim.

• In Homestead Homes Pty Ltd v Horizon Lifestyle Development24 the claim was for unpaid invoices (claims for a specific amount of $96,422.00) as well as a claim for damages for lost profits (estimated at $73,330.40).

• The Plaintiff sought and obtained default judgment in a specific sum of $169,752.40.

• Several months later, during attempts to enforce the judgment, the Defendant applied to have the judgment set aside on the basis that it was irregular.

• The Plaintiff cross-applied to amend the default judgment so that it was reduced to the sum of the unpaid invoices only with the balance for damages to be assessed.

• There is no doubt that where a judgment has been incorrectly entered on the basis that the claim is liquidated it can be amended to one for damages to be assessed - Gemini Investments v Woodards Investments Pty Ltd [2000] SASC 210. However, amending an irregular default judgment is a matter of discretion for the Court.

• In Homestead Homes Pty Ltd v Horizon Lifestyle Development the learned Master exercised his discretion, refused to amend the default judgment, and set the default judgment aside.

• In the course of his reasons, the learned Master noted that in circumstances where a claim consists of both liquidated and unliquidated claims, the safe and best course for a litigant would be to seek a judgment for an assessment of damages under

40 THE BULLETIN October 2019

DCR229(1)(b), but to include a liquidated component at the time of the assessment.

CONCLUSION & OBSERVATIONS • The Magistrates Court Rules are overly complex and difficult to apply at a practical, administrative and judicial level.

• There is no good reason for the Courts to preserve the complexities of the common law and the common law dichotomy of “liquidated or unliquidated” in relation to default judgments.

• It is likely that an insurer’s summary of repair costs incurred or to be incurred are sufficient to satisfy MCR61(2) to obtaining default judgment in a specific sum, but litigants claiming a specific sum and who might want to seek default judgment in a specific sum in respect of property damage are better advised to serve primary source documents when serving their claim.

• The regime created by MCR61 and MCR62 is a 5 category regime.

• The regime created by DCR229 is different and is a 4 category regime.

• The requirements in MCR62(2) create a lot of work for a Plaintiff and the Court to do to assess damages in relation to a claim which has been served but unanswered.

• A conservative approach to obtaining default judgment in the Magistrates Court in respect of claims for specific sums which are not liquidated at common law and which don’t fall under MCR61(1)(b) or 61(4) is to seek default judgment with damages to be assessed.

The conservative approach adds substantial cost to the default judgment process for a Plaintiff and is a waste of valuable Court resources.

The introduction of the ECMS is a perfect opportunity to simplify and rationalise the process and rules in relation to default judgments across all South Australian Courts. B

Endnotes 1 ATTORNEY-GENERAL (SA) v MARMANIDIS [2019] SASCFC 3 (17 January 2019) at [214] 2 Refer to Magistrates Court Practice Direction 7 and Form 18A. However MCPD7 and Form 18A are not actively applied, and the Magistrates Court Registry accepts requests for default judgments in Form 18 in relation to Federal matters.

3 Forms 3A-3G 4 MCR25(1) and MCR5(2).

5 MCR25(1) and MCR5(2).

6 Section 4 of Form 2 - Query what the Registry would do if this section is not completed.

7 Note that under MCR101 the Court can enter default judgment if a party fails to attend any interlocutory hearing.

8 For the purpose of this article, any additional time allowed for defences to be filed where service is effected outside of South Australia is not considered.

9 MCR60.

10 Such as MCR43(1), MCR44, MCR47 to MCR52 11 Refer footnote 2.

12 ATTORNEY-GENERAL (SA) v MARMANIDIS [2019] SASCFC 3 (17 January 2019) at [179] 13 RULE CHAMBERS PTY LTD v BADGE CONSTRUCTIONS (SA) PTY LTD [2009] SASC 70 (16 March 2009) at [26] 14 About 25% of the Court’s civil proceedings and about 50% of the minor civil proceedings.

15 Plaintiffs have to establish service of the claim to obtain default judgment. Defendants can seek to set aside default judgments for a specific sum just the same as they can seek to set aside default judgments with damages to be assessed. Further, a specific sum which has no basis could always be set aside as an abuse of process.

16 Whilst it might have been the intent of the Rules to preserve the common law dichotomy but to introduce two exceptions, MCR3 provides guidance as to how the Rules should be applied, and intent is not a factor.

17 This article is not a substitute for specific legal advice and no-one should rely on it.

18 Applying Justice Blue’s reasons, this category would be claims which are liquidated at common law 19 MCR62(1) 20 Note that Form 19 is not available on the Court’s website and in practice, the Registrar serves the Form 19 when fixing the hearing for the assessment of damages.

21 These definitions are not to be confused with the definition of a liquidated debt claim as defined in Supplementary Rule 4 for the purpose of the possible application of Supplementary Rule 74.

22 If you have got this far into the article, and read this footnote, at least the question is of interest to you.

23 refer DCR240(2)(a). The appropriate form is Form 56.

24 unreported decision of Master Blumberg, Decision 23 of 2011

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41

FAMILY LAW

Family Law Case Notes ROB GLADE-WRIGHT, THE FAMILY LAW BOOK Property – No error in Court’s treatment of non-commutable military pension as a financial resource (income stream) n Carron & Laniga [2019] FamCAFC 115 (8 July 2019) the Full Court (Aldridge, Kent & Austin JJ) considered a property case where the wife had been made redundant from the Australian Defence Force and had interests in the Military Superannuation Benefits Scheme. The first was in the growth phase and the second was in the payment phase as a noncommutable pension of $520 per fortnight.

At trial, neither party sought a splitting order. The wife’s expert provided a notional capital valuation of the pension interest of $230,148, but otherwise confirmed that this amount could not be “cashed out” in any way. Judge Egan treated the wife’s growth phase interest as property, but found that the pension interest was a financial resource. The husband appealed, arguing that both interests were “property”.

The Full Court said (from [29]):

I

“The wife opposed her MSBS pension being attributed any notional capitalised value because it could not be commuted and the husband did not seek any … splitting order in relation to it, as the trial judge correctly recognised. ( … ) [36] In property settlement proceedings, there is no need to ascertain the capitalised value of a superannuation interest, much less one in the payment phase being paid in the form of a non-commutable pension, unless a … splitting order is sought in relation to the interest (Welch & Abney [2016] FamCAFC 271 … At trial, neither party sought a … splitting order in respect of the wife’s MSBS pension.

42 THE BULLETIN October 2019

[37] The Act only provides that a superannuation interest must be valued before it is amenable to a splitting order (s 90XT(2)) ( … ) [39] Relevantly, the wife’s entitlement to the MSBS pension crystallised in 2000 following her redundancy from employment in the armed services, shortly after the parties’ marriage in 1998. She is entitled to receive the pension for life, during which time it cannot be commuted or alienated.

While it will continue to be a modest income stream for her, it will not be enough alone to sustain her and she will always need to supplement it with other income from paid work. Such features of the pension made it readily identifiable as a financial resource rather than an asset. …”

Children – Judge erred by restraining overseas travel without considering relevant matters set out by Full Court in Line & Line In DeLuca & Farnham and Anor [2019] FamCAFC 100 (13 June 2019) Le Poer Trench J had ordered that neither party remove the children from Australia without the written consent of the other or an order and that the children’s names be placed on the watch list. The mother appealed so as to facilitate visits to family in Europe by the children.

The Full Court (Strickland, Kent & Watts JJ) said (from [34]): “ … The primary judge had an obligation to give adequate reasons which allowed the parties to understand why his Honour assessed the risk of flight as being too great …

(Bennett … [1990] FamCA 148 … ) [35] In Line & Line [1996] FamCA 145

… the Full Court set out … relevant matters … : 4.49 The … degree of risk that the departing parent … will … choose not to return. In assessing that, … considerations are the existence (or otherwise) of continuing ties … the existence and strength of possible motives not to return ( … ) 4.50 … [W]hether the country … is … a signatory to the [Hague Child Abduction Convention] … [although] there may be little to prevent him or her … travelling on to a non-convention country.

4.51 [T]he financial circumstances of both parties, … hardship … the departing parent would suffer by the imposition of security at a particular level as compared with the hardship which the non-departing parent would suffer if the security were fixed at a lower level. …

[36] The primary judge did not discuss why he assessed the risk of flight of the parties … as too great, and why he put the travel restriction in place until 2027. Most of the considerations referred to in Line were not explored. ( … ) The Full Court re-exercised discretion, making an order for overseas travel.

Property – Wife was refused leave to rely on her shadow expert as an adversarial expert In Forsburg & Stubbs [2019] FCCA 1884 (12 June 2019) a single expert (“Valuer A”) appointed by the parties valued Town C property at $265,000. A gross value of $425,000 was reduced by $160,000 of “deductions” to account for

FAMILY LAW

the property being land with “modest improvements” such as “an older style caravan”, “a non-approved sceptic system”, “an older-style … patio” and “some concrete tanks” ([18]). The deductions included “costs [of] upgrading vehicular access”, “professional studies re bushfire flora and fauna” and “risk associated with obtaining consent for the site to be utilised as a single home site” ([19]). Disputing that valuation, the wife applied for leave to rely on a valuation by shadow expert (“Valuer D”) of $430,000 without deductions.

In dismissing that application, Judge Betts said (from [20]): “[T]he wife … did not instruct her [lawyer] to write to Valuer A to put questions … Rather, she engaged Valuer D to conduct a shadow valuation for litigation purposes.

[21] [Her] instructions … to Valuer D … contained … factual assertions that were not agreed and are in dispute.

[They] were prepared solely by the wife’s solicitors, unlike the single expert’s instructions. The instructions to the shadow expert … were partisan and entirely one-sided. ( … ) [26] In good faith, the husband permitted the shadow expert access to the property for the valuation … on the … basis that Valuer D was being engaged by the wife as a shadow expert only. ( … ) [46] The wife could have engaged Valuer D to undertake the shadow report as they did do and questions could then have been put to Valuer A based on what Valuer D had said. But that is not what the wife wants to do. She wants … to engage an expert in a partisan way

as a shadow expert and then call them as an adversarial expert. But a shadow expert and an adversarial expert are two very different experts. Real questions of natural justice and procedural fairness arise when adversarial evidence is contemplated. ( … ) [55] In short, I do not consider it appropriate that the single expert be provided with a copy of the Valuer D report. … [I]f the wife wishes to challenge the Valuer A by using information provided to her by Valuer D then [she] should pose specific questions to Valuer A. [56] In the event the wife wished to call Valuer D as an adversarial expert, I consider that the instructions they have already provided are so tainted as to render such a report of lesser, if not of no, weight.” B

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Take charge of your investment options ANDREW PROEBSTL, CHIEF EXECUTIVE, LEGALSUPER The super investment options choices you make – or do not make – will have a significant impact on how much super you have in retirement.

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ne of the most important decisions you make when joining a super fund are the investment options in which your super is invested.

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DIFFERENT INVESTMENT OPTIONS WILL BE SUITABLE AT DIFFERENT CAREER AND LIFE STAGES Your decision to choose investment option(s) is not a “set and forget” decision.

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44 THE BULLETIN October 2019

OPTION

RETURN OBJECTIVE (NET OF FEES)

LIKELIHOOD OF NEGATIVE RETURNS

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Outperform Bloomberg Ausbond Bank Bill Index over rolling 5 year periods

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Outperform CPI +2.0% over rolling 10 year periods

1 to 2 years in every Low to 20 years Medium

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CALCULATOR INVESTMENT OPTION

BALANCE AT AGE 67

Cash Conservative Moderate Balanced Growth High growth

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Assumptions: Starting age: 40, Income: $80,000, Retirement age: 67, Super balance: $45,000, Contributions: 9.5% employer, Fund fees level: Medium, All other standard assumptions unchanged.

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3 AUG 2019 – 2 SEPT 2019 ACTS PROCLAIMED Statutes Amendment (SACAT) Act 2019 (No 14 of 2019) Commencement except Parts 2-15; 17-19; 21-25; 27-31: 9 August 2019 Gazetted: 8 August 2019, Gazette No. 39 of 2019 Victims of Crime (Offender Service and Joinder) Amendment Act 2019 (No 15 of 2019) Commencement: 2 September 2019 Gazetted: 22 August 2019, Gazette No. 42 of 2019 Statutes Amendment (SACAT) Act 2019 (No 14 of 2019) Commencement Part 11: 2 September 2019 Commencement Part 4; 17; 23 and 24: 1 October 2019 Gazetted: 29 August 2019, Gazette No. 43 of 2019

ACTS ASSENTED TO Director of Public Prosecutions (Pension

ANDREW PROEBSTL is Chief Executive of legalsuper, Australia’s industry super fund for the legal community. He can be contacted on ph 03 9602 0101 or via aproebstl@ legalsuper.com.au. B Endnotes 1 See https://www.moneysmart.gov.au/ superannuation-and-retirement/how-superworks/super-investment-options 2 See https://www.moneysmart.gov.au/ superannuation-and-retirement/how-superworks/super-investment-options 3 See https://www.moneysmart.gov.au/tools-andresources/calculators-and-apps/superannuationcalculator 4 See https://www.moneysmart.gov.au/ superannuation-and-retirement/how-superworks/super-investment-options

A MONTHLY REVIEW OF ACTS, APPOINTMENTS, REGULATIONS AND RULES COMPILED BY MELLOR OLSSON’S ELIZABETH OLSSON.

Entitlements) Amendment Act 2019, No. 18 of 2019 Gazetted: 8 August 2019, Gazette No. 39 of 2019 Education and Children’s Services Act 2019, No. 19 of 2019 Gazetted: 8 August 2019, Gazette No. 39 of 2019 Fire and Emergency Services (Volunteer Charters) Amendment Act 2019, No. 20 of 2019 Gazetted: 8 August 2019, Gazette No. 39 of 2019

APPOINTMENTS Master of the District Court of South Australia effective from 12 August 2019 Elizabeth Christina Olsson Gazetted: 8 August 2019, Gazette No. 39 of 2019 Legal Services Commission, Member:

from 28 August 2019 until 30 November 2019 Lucinda Kirsty Byers Gazetted: 22 August 2019, Gazette No. 42 of 2019

RULES Magistrates Court Rules 1992 Amendment 76 Gazetted: 8 August 2019, Gazette No. 39 of 2019 Magistrates Court Rules 1992 Amendment 76 REPUBLISHED Gazetted: 13 August 2019, Gazette No. 40 of 2019 Magistrates Court Rules 1992 Amendment 77 Gazetted: 22 August 2019, Gazette No. 42 of 2019 Magistrates Court Rules 1992 Amendment 78 Gazetted: 29 August 2019, Gazette No. 43 of 2019

REGULATIONS PROMULGATED (3 JULY 2019 – 2 AUGUST 2019) REGULATION NAME

REGULATION NO.

DATE GAZETTED

Subordinate Legislation Act 1978 Development Act 1993 Development Act 1993 South Australian Local Government Grants Commission Act 1992 Victims of Crime Act 2001 Anangu Pitjantjatjara Yankunytjatjara Land Rights Act 1981 Spent Convictions Act 2009

199 of 200 of 201 of 202 of 203 of 204 of 205 of

15 August 2019, Gazette No. 41 of 2019 15 August 2019, Gazette No. 41 of 2019 15 August 2019, Gazette No. 41 of 2019 22 August 2019, Gazette No. 42 of 2019 22 August 2019, Gazette No. 42 of 2019 29 August 2019, Gazette No. 43 of 2019 29 August 2019, Gazette No. 43 of 2019

2019 2019 2019 2019 2019 2019 2019

October 2019 THE BULLETIN

45

CLASSIFIEDS

FIRE & EXPLOSION INVESTIGATION Over 6 years forensic experience on behalf of the Insurance Industry and Legal Profession throughout Australia.

Mr Ben Cox B.E. (Chem) Grad. Cert. (Fire Investigation)

Take Your Business Mobile boylen.com.au

P (08) 8233 9433 A Level 3, 47 South Tce,

Adelaide SA 5000

Ben Cox & Associates PO Box 205, Marden, SA 5070 Phone: 0437 325 112 E: ben@bcafireforensics.com.au www.bcafireforensics.com.au

Business valuations Simple, clear, unbiased advice, without fear or favour. t. +61 8 431 80 82

Hugh McPharlin FCA d m e w

Andrew Hill Investigations

Andrew Hill Investigations

ABN 68 573 745 238 Investigating: • workplace conduct • fraud • unprofessional conduct • probity Support services: Andrew Hill • forensic computing analysis • transcription services • information sessions, particularly for HR practitioners on the investigative process • policy development.

PO Box 3626

m. +61 401 712 908 +61 8 8139 1130

+61 419 841 780 e. ahi@andrewhillinvestigations.com.au hmcpharlin@nexiaem.com.au nexiaem.com.au

NORWOOD SA t.

5067 +61

8 431 80 82 m. +61 401 712 908 e. ahi@andrewhillinvestigations.com.au Fellow AIPI

Consulting Engineers We provide independent, hands-on, personalised and professional advice in an open and communicative way.

Our expertise covers: • Preparation of independent expert witness reports in relation to site contamination matters (under instruction from lawyers) • Appearance in court to provide independent expert witness in relation to site contamination matters • Site Contamination Auditing under the South Australian Environment Protection Act (1993), including Restricted Scope Audits Adrian Hall MA DipEd FIEAust CPEng NER Environmental Auditor +61 457 516 329 GPO Box 2305 Adelaide SA 5001 adrian@esheres.com www.esheres.com

Australian Technology Pty Ltd for expert opinion on: • Vehicle failure and accidents • Vehicle design • Industrial accidents • Slips and falls • Occupational health and safety • Statistical analysis W. Douglass R. Potts MAOQ, FRAI, FSAE-A, FIEAust, CPEng, CEng, FIMechE

8271 4573 0412 217 360

wdrpotts@gmail.com

Licensed Investigation Agents & Process Servers Servicing the Mid North, Yorke & Eyre Peninsula`s and Outback of South Australia with: • Process Serving • Property Lockouts • Investigations • Missing Persons

OUTBACK BUSINESS SERVICES

P.O. Box 591, PORT AUGUSTA. 5700 P: 0418 838 807 info@outbackbusinessservices.com.au

Family Law - Melbourne LITIGATION ASSISTANCE FUND The Litigation Assistance Fund (LAF) is a non-profit charitable trust for which the Law Society acts as trustee. Since 1992 it has provided funding assistance to approximately 1,500 civil claimants.

LAF receives applications for funding assistance from solicitors on behalf of civil claimants seeking compensation/ damages who are unable to meet the fees and/or disbursements of prosecuting their claim. The applications are subjected to a means test and a merits test. Two different forms of funding exist – Disbursements Only Funding (DOF) and Full Funding.

LAF funds itself by receiving a relatively small portion of the monetary proceeds (usually damages) achieved by the claimants whom it assists. Claimants who received DOF funding repay the amount received, plus an uplift of 100% on that amount. Claimants who received Full Funding repay the amount received, plus 15% of their damages. This ensures LAF’s ability to continue to provide assistance to claimants.

LAF recommends considering whether applying to LAF is the best course in the circumstances of the claim. There may be better methods of obtaining funding/ representation. For example, all Funding Agreements with LAF give LAF certain rights including that funding can be withdrawn and/or varied.

For further information, please visit the Law Society’s website or contact Annie MacRae on 8229 0263.

46 THE BULLETIN October 2019

CONSULTING ACTUARIES

LawCare

The LawCare Counselling Service is for members of the profession or members of their immediate family whose lives may be adversely affected by personal or professional problems.

If you have a problem, speak to the LawCare counsellor Dr Jill before it overwhelms you. Dr Jill is a medical practitioner highly qualified to treat social and psychological problems.

The Law Society is pleased to be able to cover the gap payments for two consultations with Dr Jill per patient per financial year.

All information divulged to the LawCare counsellor is totally confidential. Participation by the legal practitioner or family member is voluntary.

To contact Dr Jill 08 8110 5279 8am-8pm, 7 days a week LawCare is a member service made possible by the generous support of Arthur J. Gallagher

Marita Bajinskis

formerly of Howe Martin & Associates is a Principal at Blackwood Family Lawyers in Melbourne Marita is an Accredited Family Law Specialist and can assist with all family law matters including: • • • •

matrimonial and de facto property settlements superannuation children’s issues

3/224 Queen Street Melbourne VIC 3000 T: 03 8672 5222

Marita.Bajinskis@ blackwoodfamilylawyers.com.au www.blackwoodfamilylawyers.com.au

FOR PROFESSIONAL ACTUARIAL ADVICE ON

- Personal Injury - Workers Compensation - Value Of Superannuation Contact

Geoff Keen or Bruce Watson 08 8232 1333 contact@brettandwatson.com.au

Ground Floor 157 Grenfell Street Adelaide SA 5000

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