Brief November 2018

VOLUME 45 | NUMBER 10 | NOVEMBER 2018

Mental Health in the Legal Profession

See inside Meet the Nominees for the 2019 Law Society Council Election In Pursuit of Knowledge: The Advantage of Being a ‘Generalist’ The Ipso Facto Reforms The Adaptability of the Common Law to Change

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Volume 45 | Number 10 | November 2018

17

CONTENTS

08

FOLLOW US lawsocietywa.asn.au LawSocietyWA @LawSocietyWA

26

30

ARTICLES 06

2019 Council Nominations

08

Good Mental Health as an Essential Component of the 'Good Lawyer'

14

The Ipso Facto Reforms

17

Asked to be an Executor? What are the Income Tax Liabilities of an Executor/Legal Personal Representative?

21

Trustees’ Rights of Indemnity – a Right of Retention?

22

How Will the Duties Amendment (Additional Duty for Foreign Persons) Act 2018 (WA) Affect Discretionary Trusts? When Will a Discretionary Trust be Considered a ‘Foreign Trust’?

DISCLAIMER: The views and opinions expressed in Brief and the claims made in advertisements published within it, are not to be taken as those of, or as being endorsed by the Law Society of Western Australia (Inc.) or the Brief Editorial Committee. No responsibility whatsoever is accepted by the Society, or the Editorial Committee for any opinion, information or advertisement contained in or conveyed by Brief.

COPYRIGHT: Readers are advised that the materials that appear in Brief Journal are copyright protected. Copyright is retained by the author.

Readers wanting to cite from or reference articles in Brief Journal should reference as follows: (Month and Year) Brief Magazine (Perth: The Law Society of Western Australia) at page __). Readers wanting to reproduce a substantial part of any article in Brief Journal should obtain permission from individual authors. If an author’s name is not provided, or if readers are not able to locate an author’s contact details, readers should contact the Law Society of Western Australia (Inc.).

The trade mark BRIEF is the subject of registered trade mark 1253722 and is owned by the Law Society of Western Australia (Inc). Trade mark 1253722 is registered for Western Australia.

Published monthly (except January) Advertising enquiries to Manager Marketing and Communications: Madeleine McErlain Tel: (08) 9324 8650 | Email: mmcerlain@lawsocietywa.asn.au Senior Communications and Media Officer: Andrew MacNiven

26

In Pursuit of Knowledge: The Advantage of Being a ‘Generalist’

Communications and Design Officer: Charles McDonald

30

Evidence in Family Law Proceedings

Editor: Jason MacLaurin

34

The Adaptability of the Common Law to Change

44

Eulogy for the Honourable John Wickham QC

Brief is the official journal of the Law Society of Western Australia Level 4, 160 St Georges Tce Perth WA 6000 Phone: (08) 9324 8600 | Fax: (08) 9324 8699 Email: brief@lawsocietywa.asn.au | Web: lawsocietywa.asn.au ISSN 0312 5831

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Editorial Committee: Gregory Boyle, Thomas Camp, Dr Rebecca Collins, Natalie Connor, The Hon John McKechnie QC, Dr Pat Saraceni, Robert Sceales, Verginia Serdev-Patterson, Eu-Min Teng

Submission of articles: Contributions to Brief are always welcome.

For details, contact brief@lawsocietywa.asn.au

President: Hayley Cormann Senior Vice President: Greg McIntyre SC

02 President's Report

41 Drover's Dog

04 Editor's Opinion

42 Law Council Update

13 Ethics Column

43 Cartoon

38 Family Law Case Notes

47 Professional Announcements

39 Quirky Cases

47 New Members

40 Ex Juris: Travel Tales from the Legal Profession

47 Classifieds

Junior Vice President & Treasurer: Jocelyne Boujos Immediate Past President: Alain Musikanth Ordinary Members: Brahma Dharmananda SC, Elisabeth Edwards, Ante Golem, Emma Griffiths, Karina Hafford, Eric Heenan, Fiona Low, Marshall McKenna, Denis McLeod, Jodie Moffat, Nicholas van Hattem, Paula Wilkinson Junior Members: Zoe Bush, Sarah O’Brien-Smith, Brooke Sojan Country Member: Kerstin Stringer Chief Executive Officer: David Price

48 Events Calendar

01

PRESIDENT'S REPORT Hayley Cormann President, The Law Society of Western Australia

Welcome to the November edition of Brief.

Unlawfully Engaging in Legal Work – Fact Sheet Published

Voting Open for Elections to 2019 Law Society Council

A recommendation from the Law Society’s discussion paper ‘People Unlawfully Engaging in Legal Work: Protecting the Community’ was that guidelines be published on unqualified legal practice. A fact sheet is now available at lawsocietywa.asn.au/forthe-public. The fact sheet sets out the provisions of the Legal Profession Act prohibiting a person from engaging in legal work unless the person is an Australian Legal Practitioner. It also addresses the purpose of the prohibition; the meaning of ‘legal practice’; and examples of actions that are, and are not, classified as legal practice.

Voting is now open in the election of the 2019 Law Society Council and will close at midnight on Wednesday, 21 November 2018. All members eligible to vote were sent an electronic ‘vote now’ message on 30 October through independent voting services organisation CorpVote, and there will be periodic reminder emails sent as we approach the closing date.

Members are asked to vote to select a President for a term of one year, two Vice Presidents for a term of one year and six Ordinary Members for a term of two years.

Congratulations to Demi Swain, Zoe Bush and Brooke Sojan, who were each elected unopposed as Junior Members for a term of one year. Please refer to pages 6 and 7 of this edition of Brief for a full list of the nominees for Council.

Law Society Submission on Use of the Term ‘Special Counsel’ On 6 August 2018, the Legal Practice Board of Western Australia published a “Notice to Profession – Use of Title ‘Special Counsel’” noting it had sought advice from Senior Counsel who, on balance, recommended the prohibition of the title. In response, the Law Society made a submission recommending no changes to the use of the title, noting it has been in use for decades across Australia and overseas and that prohibiting a widely used title only in Western Australia is itself likely to cause confusion.

The Law Society supports development by the Legal Practice Board, in consultation with the Law Society and WA Bar Association, of educational material for solicitors about the risk of engaging in misleading or deceptive conduct through using the title 'Special Counsel’ and the distribution of information to the public about engaging legal practitioners and the titles they use. You can read the Law Society’s submission at lawsocietywa. asn.au/submissions.

02 | BRIEF NOVEMBER 2018

New Solicitor General The Law Society congratulates Joshua Thomson SC on his appointment as Solicitor General of Western Australia.

The appointment fills the vacancy left by the Hon Justice Peter Quinlan, who was appointed Chief Justice of Western Australia in August.

Mr Thomson has been a valued member of the Law Society since first joining in 2001. He has served as a member of the Law Society’s Administrative, Constitutional and Migration Law Committee and Continuing Professional Development – General and Commercial Litigation Committee, and the Law Council of Australia’s Insolvency and Reconstruction Committee. Mr Thomson has also made a valuable contribution to the Law Society’s Continuing Professional Development programme, providing guidance to fellow practitioners on topics including advocacy.

The Law Society wishes Mr Thomson every success in this important new role.

The Law Society has always maintained an excellent working relationship with the Solicitor General and looks forward to this continuing with Mr Thomson’s appointment.

Aged Care Royal Commission The Law Society welcomes the appointment of the Hon Justice Joseph McGrath to the Royal Commission

into Aged Care Quality and Safety. His Honour’s role will be very important over the coming months, as the Royal Commission seeks to ascertain the extent to which the aged care sector has been affected by serious problems, and what can be done to improve the situation.

Justice McGrath has been a member of the Law Society since commencing legal practice in 1991. His Honour is a former Deputy Convenor of the Law Society’s Continuing Professional Development – General and Commercial Litigation Committee, and a former member of the Law Society’s Ethics and Brief Editorial Committees.

Annual General Meeting A reminder that the Law Society’s Annual General Meeting will be held Thursday, 22 November 2018 at 5.15pm at the offices of Herbert Smith Freehills on Level 36, QV1 Building, 250 St Georges Terrace, Perth. In accordance with Rule 40 of the Law Society’s Constitution, members will be provided with a Notice of Meeting and links to the Agenda for the AGM, together with the Annual Report and Financial Statements via email on 12 November.

The information will also be available on the Law Society’s website from that date.

Law Society Professional Standards Scheme The Law Society has applied to the Professional Standards Councils to commence a new Professional Standards Scheme from 1 July 2019. The new Scheme incorporates recommendations made by the Professional Standards Authority and NSW Crown Solicitor. For more information about the Scheme, please visit lawsocietywa.asn.au/pss.

End of Year Celebration Bookings are now open for the Law Society’s End of Year Celebration, to be held on Wednesday, 5 December 2018 at The Westin, 480 Hay Street, Perth. I look forward to seeing you there as we celebrate another successful year in the company of friends and colleagues.

Bookings can be made at lawsocietywa. asn.au/event/end-year-celebration.

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EDITOR'S OPINION Jason MacLaurin Editor, Brief | Barrister, Francis Burt Chambers

Brief has regular items about mental health, and for good reason. It is a focus of the Law Society and a pressing issue for the profession.

The feature article, Alan Cameron’s “Good Mental Health as an Essential Component of the ‘Good Lawyer’”, provides insight into research on the topic here and internationally, and across professions.

It also describes guidelines for the management of mental health issues.

Last month’s Editorial referred to Shakespeare’s Seven Ages of Man. It is unclear how many ages the practice of the law has (and they probably follow more closely the Seven Deadly Sins from the movie Seven, though not in that order). 1 However, all stages of legal practice carry their own challenges from a mental health perspective. Few practitioners have not been touched in some way or another by mental health issues, including seeing colleagues grapple with such issues, sadly, on occasion, to a tragic degree.

The feature article also addresses the real issues confronting junior practitioners and those studying law. This again is a focus of the Law Society, and not only in respect to mental health issues.

This edition has the Honourable Chief Justice Peter Quinlan’s first official address as Chief Justice, to the UWA Senate Community: “In Pursuit of Knowledge: The Advantage of Being a ‘Generalist’” which also deals with legal education and what best prepares a young practitioner for the practice of law.

WWI gave some prominence to a NSW barrister Henry Normand MacLaurin (no [idea if he really is a] relation). 3 If readers can forgive the indulgence, CEW Bean, sometime lawyer and famed war correspondent, described Colonel Henry MacLaurin as a person of “lofty ideals, direct, determined, and an educated man of action of the best type” (which may lead readers to doubt any hereditary relationship with the Editor).

MacLaurin was recorded as vaulting excitedly up the stairs of his Cairo hotel when told of the opportunity to land at Gallipoli4 showing, in retrospect, somewhat misplaced enthusiasm. He was shot dead by a sniper on a ridge just beyond Gallipoli beach, his active service lasting about two days. A memorial on what is named MacLaurin Hill was established.

Lasting two days on a campaign isn’t that bad given its almost as long as the current Australian test cricket team’s matches last, and is just shy of the time Eagles supporters celebrated the Grand Final win, without sleeping.

And, if US Senator, 2020 Presidential aspirant, and Trump sparring partner Elizabeth Warren’s example is to be followed on matters of native heritage, if the Editor can demonstrate between a 1/64th and 1/1,024th relationship to the late Henry MacLaurin this might provide a basis for a claim over a share of MacLaurin Hill, Gallipoli, or at least a hefty discount from the MacLaurin Hill Bed and Breakfast and gift shop.

Last month’s Editorial looked at the military service of some judicial officers. In the course of researching for this Editorial, it was found that the oldest soldier to die in WWI was an English barrister, Jasper Myers Richardson from the Inner Temple, who was killed at the age of 68.2

One aspect of modern practice that does place real pressure upon practitioners of all ages (and those studying law) are deadlines. Some relief (comic as well) is found in the decision of Magistrate Judge Crocker of the US District Court in Hyperphrase Technologies LLC v Microsoft Corporation, being Hyperphrase’s application to strike out Microsoft's motion, because Microsoft had filed documents at 12.04.27am (4 minutes 27 seconds late, given, technically, a midnight deadline) some supporting documents trickling in as late as 1.11.15am.

And, to show that delving into history often turns up personally surprising facts, an article on Australian barristers serving in

The Judge stated he couldn’t personally vouch for those times “because I was home sleeping” adding “Microsoft’s

Without derogating from the challenges facing younger lawyers and millennials, or being unduly militaristic, November 2018 is of special historical significance, the 11th being the 100th anniversary of the armistice ending WWI.

04 | BRIEF NOVEMBER 2018

insouciance so flustered Hyperphrase that nine of its attorneys [then named] promptly filed a motion” and Hyperphase’s Counsel “used bolded italics to make their point, a clear sign of grievous iniquity by one’s foe”.

His Honour emphasised he had previously made an order that “the parties not flyspeck each other” but “how could such an order apply to a motion filed almost five minutes late? Microsoft’s temerity was nothing short of a frontal assault on the precept of punctuality so cherished by and vital to this court”. If there was a bolded font called “Dripping Sarcasm Antiqua” it seems the Judge would have used it.

His Honour continued: “Wounded though this court may be by Microsoft’s four minute and twenty-seven second dereliction of duty, it will transcend the affront and forgive the tardiness. Indeed, to demonstrate the even-handedness of its magnanimity, the court will allow Hyperphrase on some future occasion in this case to e-file a motion four minutes and thirty seconds late, with supporting documents to follow up seventy-two minutes later” and “having spent more than that amount of time on Hyperphrase’s motion, it is now time to move on to the other Gordian problems confronting this court.”

Perhaps the concept of “flyspecking” might join that of “pettifogging” in the lexicon of modern case management.

One of the most heroic flyspeckings comes from France in 1790 when the Marquis de Favras, convicted of offences concerning protecting the royal family, remarked, when shown his order of execution: “I see that you have made three spelling mistakes.”

NOTES: 1.

This is a (probably misconceived) attempt to appeal to younger readers, as the Sins were first enumerated

by Pope Gregory I (the Great) in the 6th Century and elaborated upon by St Thomas Aquinas in the 13th, and, come to think of it, the movie Seven was released way back in 1995.

2.

“The Barrister killed in WW1 at the age of 68”, J Copping, www.telegraph.co.uk (9/2/14).

3.

“Barristers in the First World War: Taking up the Cause: Rabaul, Gallipoli and the Home Front”, T Cunneen, NSW Bar News Winter 2014.

4.

Staying at a hotel in the middle of a sphere of war sounds a bit closer to the hereditary mark.

Brief welcomes your thoughts and feedback. Send all letters to the editor to brief@lawsocietywa.asn.au.

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2019 Council Nominations President – One to be elected for a one year term Greg McIntyre SC

Jocelyne Boujos

A primary endeavour I aspire to focus upon during my Presidency is for the Society to be a strong advocate in support of the recommendations in the report of the Law Council of Australia Justice Project chaired by the Hon Robert French AC. The recommendations speak of ways to improve the legal system to better provide justice to the 13 identified groups of the most vulnerable and disadvantaged members of our society. I will also maintain an eye on ensuring that legal practitioners are supported in their role as professionals and as guardians of the Rule of Law.

I am currently Vice President and Treasurer and fully engaged in operational aspects of the Law Society and Law Mutual (WA) principally through the Finance and Audit, Professional Indemnity Insurance Management and QPS Committees. As a principal of Sceales Lawyers practising in commercial and taxation law for over 25 years, I advise private and commercial clients including indigenous organisations and the Law Society. Additionally, I have had a long involvement with professional education including lecturing at UWA and Notre Dame in Master of Tax and Article Training programs. I am on the taxation committees of the Law Council and Law Society, and, am a trustee of the Graduate Women Education Trust.

As President I will provide Council the expertise and diversity of experience gained as a practising solicitor and make a valuable contribution to the future of the Law Society at a time of emerging change within the legal profession.

Vice Presidents – Two to be elected for a one year term Eric Heenan

Rebecca Lee*

I seek election as a Vice President so that I may continue to contribute to the Society and serve the profession. I am keen to ensure that the Society strongly represents the views of the profession to government and the community, and that it serves and advances the interests of its members.

Rebecca Lee practices at Francis Burt Chambers, using advocacy, negotiation and strategy skills. As counsel, she has resolved disputes in areas as diverse as construction, taxation, employment law and wills & estates. She holds a BSc (pure mathematics), LLB and LLM from UWA. Admitted in 1994, Rebecca moved to the Bar in 2004, winning the inaugural Chief Justice's Prize, WABA’s Bar Readers' Course. In March 2016, she was named WLWA’s Senior Woman Lawyer of the Year.

Believing in ‘lifting as you climb’, Rebecca has served 2 years as a councillor of The Law Society of Western Australia; one year on WABA’s Council, three years on the Legal Practice Board of Western Australia; as a Past President of Australian Women Lawyers and Women Lawyers WA; and for three years as editor of Brief. In 2011, Rebecca attended the Harvard Negotiation Institute, and in 2016 undertook Leadership WA’s Signature Leadership Program.

Nicholas van Hattem*

Denis McLeod

In the five years I’ve served on Council, I’ve seen an increasing consensus of members wanting the same things:

As a Council member for the last 11 years, I have endeavoured to understand and serve the interests of Law Society members. It seems time now to put that experience to greater use as a member of the Executive, and it is for that reason I am nominating for one of the Vice President positions. I would in that position continue to emphasise the Society’s role as advocate for and protector of the interests of members at all levels, being acutely aware of the obstacles and pressures that I, my colleagues and family members, male and female, have faced and continue to face at various stages of their lives in the legal profession.

• • • •

Better access to justice.

A more inclusive profession.

Better use of technology.

Taking better care of ourselves and our colleagues.

I believe the profession has never been more open to explore and deliver new ways to do our work better. I’d like to contribute to a Law Society which works with all lawyers (and future lawyers) to improve our profession – both for the community we serve and for each other.

Ordinary Members – Six to be elected for a two year term Nicholas van Hattem

Rebecca Lee

In the five years I’ve served on Council, I’ve seen an increasing consensus of members wanting the same things:

Rebecca Lee practices at Francis Burt Chambers, using advocacy, negotiation and strategy skills. As counsel, she has resolved disputes in areas as diverse as construction, taxation, employment law and wills & estates. She holds a BSc (pure mathematics), LLB and LLM from UWA. Admitted in 1994, Rebecca moved to the Bar in 2004, winning the inaugural Chief Justice's Prize, WABA’s Bar Readers' Course. In March 2016, she was named WLWA’s Senior Woman Lawyer of the Year.

• • • •

Better access to justice.

A more inclusive profession.

Better use of technology.

Taking better care of ourselves and our colleagues.

I believe the profession has never been more open to explore and deliver new ways to do our work better. I’d like to contribute to a Law Society which works with all lawyers (and future lawyers) to improve our profession – both for the community we serve and for each other.

Believing in ‘lifting as you climb’, Rebecca has served 2 years as a councillor of The Law Society of Western Australia; one year on WABA’s Council, three years on the Legal Practice Board of Western Australia; as a Past President of Australian Women Lawyers and Women Lawyers WA; and for three years as editor of Brief. In 2011, Rebecca attended the Harvard Negotiation Institute, and in 2016 undertook Leadership WA’s Signature Leadership Program.

Joanna Knoth

Daniel Coster

I am a Senior Associate at MDC Legal.

Since my admission in November 2012, I have had the great fortune to work under the guidance of a number of pre-eminent lawyers, and have gained a deep appreciation of the benefits of a collegial and mentoring environment on both personal and professional development.

I am also keenly aware of the increasing pace of technological change and the effect of this on legal practice. I believe the profession should adopt new technologies to adapt to changing client demands, reducing our environmental footprint, and modernising the practice of law.

I also believe the legal profession has an obligation to continue lobbying government regarding funding for legal aid.

If elected to the Council for 2019, I will advocate for: • Increased support programmes for junior practitioners.

• Ongoing mental health awareness programmes.

• Increased education for practitioners about relevant new technologies and emerging cybersecurity risks facing the profession.

• The mandatory use of the Oxford comma.

I completed my articles at Jackson McDonald and worked for HLS Legal before joining MDC Legal in November 2015. I have been practising in WA for nearly 10 years.

I have volunteered at the Employment Law Centre and served as a committee member and secretary of Subsea Energy Australia, the peak industry association representing Australian subsea interests.

It is a great time to be practising law in WA. More of us want the same things: • • • •

A more inclusive profession Better use of technology Better access to justice Taking better care of ourselves and our colleagues

We close 2018 with a Law Society engaged with the profession, Judiciary and Attorney General. I would like to continue this trend and contribute to an Executive that works with all lawyers, including future lawyers, to improve our profession for each other and the community we serve.

06 | BRIEF NOVEMBER 2018

Council Nominations 2019 Ordinary Members – Six to be elected for a two year term Mark Hemery

Gary Mack

Since 1927, our Law Society has played a vital role, through membership services, to equip the profession to serve the WA community, along with the courts, in the administration of justice. As members of a privileged group, who benefit financially from a monopoly on legal practice, I believe WA’s lawyers should repay their debt to society by taking on responsibility as guardians of democracy and the rule of law. I strongly support, therefore, the Law Society’s long-standing advocacy work on social and political issues where members’ interests are directly affected, where the rule of law itself is under perceived threat, or to protect fundamental rights and liberties. I am a partner in a mid-sized CBD practice and have been in practice since 1986. It would be my privilege to serve on the Law Society’s council and to continue its important work, and I would welcome your vote.

I will work hard in Council to represent your interests. To advance the influence of your Society and the interests of lawyers in the modern era of globalisation, technology and disruption. My goals are: improving access to justice particularly for the disadvantaged; ensuring adequate remuneration for legal aid work; support new entrants to the profession; improve mental health support for lawyers and ensure good governance of your Society. I am currently the Convenor of the Law Society’s Access to Justice Committee, member of the Professional Affairs Committee and CPD Committee of the Legal Practice Board. A member of FLPA’s Law Reform Committee. I volunteer at Sussex Street and Fremantle Community Legal Centres. Lawyer of the Year for 2013. I am a Senior Associate at Leach Legal committed to ADR with involvement in 40 mediations this year. I serve on the Boards of All Saints College and Carlisle Primary School.

Shayla Strapps

Matthew Howard SC

I am a solicitor with 15 years experience in government, private and CLCs.

I was admitted in December 1989, joined the Bar in 1996 and took silk in 2009.

I practise predominantly in commercial and public/administrative law.

I began my career in 2003 at a private firm, later moving to work at Legal Aid WA and the Women’s Law Centre of WA working in criminal and family law.

From 2007 I was CEO and Principal Solicitor of The Humanitarian Group. In 2010, I founded the establishment of the Judicial Review Asylum Seeker Project in conjunction with the Federal Court, Law Access and the WA Bar Association, a project which helped hundreds of asylum seekers access justice and representation. It was in this role that I was awarded the Lawyer of the Year Award in 2011.

I have also worked as an Arbitrator at WorkCover WA hearing and deciding disputes under the Workers Compensation Act. In 2017 I opened Chisholm Law and I also work part time as co-CEO of the Mental Health Law Centre.

I have served as a director of the Law Council of Australia, the Chair of the Mental Health Law Centre, a councillor of the WA Bar's Bar Council and as a director of the Australian Bar Association (including treasurer).

I believe that the legal profession occupies an important and privileged position in our community. The things which I would give priority to as councillor of the Law Society are: access to justice; furthering the inclusiveness and diversity of the legal profession; the culture and well-being of the profession; and engagement with the public and government on policy matters.

Nathan Ebbs

Ante Golem

After the last 12 months away from Council to focus on family, I look forward to the opportunity to return in 2019/20 if elected.

I am a partner of Herbert Smith Freehills, in the Disputes team. I seek election as an Ordinary Member of the Council. If elected to the Council I would:

In the 4 years I previously spent on Council (3 of those as an ordinary member and 1 as Treasurer), I gained a real appreciation of the issues and matters of importance to the profession and the essential role of the Society in ensuring the interests of all members are properly considered and represented.

• support and build on the work the Society does to raise awareness and understanding of the nature and impact of mental health issues across the profession; • listen and consult with members of the Society as to the changing market for legal services and the challenges that creates for the profession; and • encourage Council to continue and promote its commitment to pro bono initiatives. Such work plays an important part in ensuring that the broader community can access our justice system and in enhancing the standing and authority of the legal profession.

I am committed to ensuring this continues through regular consultation with all stakeholders including the wider community so as to maintain a focus on the most relevant issues to the profession as and when they arise.

Joel Yeldon

Paula Wilkinson

Barrister practicing from Fourth Floor Chambers in Perth.

I am a Founding Director of Kim Wilson & Co, an Accredited Family Law Specialist (NSW), and hold a Master of Applied Law. I acted for five years until 2017 as an Adjunct Lecturer for The College of Law (WA) teaching the Family Law LL.M. I am member of the Law Society Accreditation Committee, the Board of Law Access, and the Professional Indemnity and Insurance Management Committee. I am a member of the WA Law Society Council (1998-2001 and 2017-2018).

Member of the Law Society for many years. Have served/still serving at committee level.

Member of the WA Bar Association. Served/still serving on the WA Bar Council.

My areas of particular interest include: • • • • • •

My continued involvement as a board member of Law Access; Policy Development and Law Reform; CPD Programs; The interests of Young Lawyers; Member Services; and Family Law.

If elected I will continue to represent the interests of all members to the best of my ability.

Junior Members – Three for a one year term – ELECTED UNOPPOSED Demi Swain

Zoe Bush

I graduated from the University of Notre Dame in 2017 and commenced as a Graduate Lawyer at Pragma Legal in 2018. My admission date is set for 2 November 2018. My past legal experience was at a range of boutique firms in Western Australia. I have a passion for raising awareness about social justice issues and assist with the up-and-coming Subiaco Justice Centre Inc.

I am a solicitor at the State Solicitor's Office, a tutor in Torts Law at the University of Western Australia, and former Associate to the Hon. Justice Barker of the Federal Court of Australia. As a Junior Member of Council in 2018, I have been a keen advocate for young women in the profession, as well as for Indigenous legal issues and access to justice more broadly. Recent activities undertaken that demonstrate my commitment to these issues include co-authoring Amnesty International's Report on Indigenous Youth Justice in WA, writing the Society's submissions on justice reinvestment and female Indigenous incarceration, and writing articles for Brief. I served as Women's Officer while at Law School and have been active in Women Lawyers of WA since joining the profession. I hope to continue my advocacy on these issues as a Junior Member of Council.

Having recently graduated from University, I believe I have good insight into the issues, concerns and passions of the future of the legal profession. In particular, I am enthusiastic about promoting and fostering collegiality in the profession, as well as mental health and wellbeing.

I will advocate for: • Functions for law students to receive practical advice from junior lawyers regarding offers day and getting their foot in the door; and • Establishing mentor groups for junior practitioners with senior lawyers.

Brooke Sojan I am a State Prosecutor for the ODPP, working in Perth and the Kimberley region. Prior to this I spent four years at Legal Aid, mostly in the Pilbara Office. Most of my work since becoming a lawyer has involved dealing with disadvantaged victims, accused and indigenous people within the criminal justice system. Through the Law Society, I have been a member of and previously convened the Country Practitioners Committee, and a member of the Young Lawyers Committee. I have been on the Law Society Council for the last three years as a country member and a junior member. I have enjoyed my time on council and I would embrace the opportunity to continue in this role. I have been able to further advocate for issues and raise awareness for matters facing junior and country members of the profession. I would relish the opportunity to continue with this work.

Have your say Ballot papers were electronically transmitted to members eligible to vote on 30 October 2018 by independent voting services organisation CorpVote. Voting will close at 11.59pm on 21 November 2018. *Preferred position as specified by nominee Candidates are listed in order as per the independent ballot draw performed by CorpVote

07

Good Mental Health as an Essential Component of the 'Good Lawyer'

By Alan Cameron AO FAAL Former Chairperson, Minds Count (Previously known as the Tristan Jepson Memorial Foundation) This article was first published in The Future of Australian Legal Education, Thomson Reuters, 2018. Reproduced with permission of Thomson Reuters (Professional) Australia Limited, legal.thomsonreuters.com.au.

Law is not the only profession which appears to put extreme pressure on its members, leading to instances of poor mental health, substance abuse, and even suicide. But poor mental health is a significant problem throughout our profession – not just among the stereotypical young lawyers in large law firms working long hours under pressure to produce thousands of billable hours each year. It extends to small and mid-size firms, sole practitioners, senior lawyers, judicial officers, and those in corporate and government environments. Worse, it appears to start while aspiring lawyers are still in law school. What is it about the law or the practice of law that causes these problems, or do we attract those who are susceptible to these afflictions? How can we reduce or eliminate these instances? The Guidelines issued by the Tristan Jepson Memorial Foundation address these matters.

1. Is there a problem?

Many lawyers, perhaps most lawyers, are content in the work they do and the lives they lead. We know that because published research over many years, and in different jurisdictions, shows that the proportion of lawyers with mental health issues is less than 50 percent.

But not much less.

So, yes, there is a problem. The North American literature has reported on the problem of unhappy lawyers for many years – quoting Benjamin Cardozo – As to being happy, I fear that happiness isn’t in my line. Perhaps the happy days that Roosevelt promises will come to me along with others, but I fear that all trouble is in 08 | BRIEF NOVEMBER 2018

the disposition that was given to me at birth, and so far as I know, there is no necromancy in an act of Congress that can work a revolution there.1 Seligman, Verkuil and Kang drew attention to the work of the New York City Bar Association which focused on the young lawyer’s quality of life, citing their “unhappiness” and seeking to measure its impact. They quote a 1992 survey in which 52 percent of lawyer respondents described themselves as dissatisfied, with many retiring early or leaving the profession. They continued as follows: In many cases, the problem is not financial. Associates at top firms can earn (with bonuses) up to $200,000 per year in their first year of practice.

In the last decade, lawyers have surpassed doctors as the highest-paid professionals. But financial recognition may just be a symptom of the problem. The recent pay increases at large law firms are themselves partially caused by lawyer dissatisfaction.

The euphemistic “retention bonuses” are awarded to ensure that young associates extend their service beyond two or three years. Combating this desire to leave early is among law firms’ highest priorities, since they can only recoup their investment in new lawyers over a longer period of time.

In addition to being disenchanted, lawyers are “in remarkably poor health”. They are at much greater risk than the general population for depression, heart disease, alcoholism and illegal drug use.

For example, researchers at Johns Hopkins University found statistically significant elevations of major depressive disorder (“MDD”) in only three of 104 occupations surveyed. When adjusted for sociodemographic factors, lawyers topped the list, suffering from MDD at a rate 3.6 times higher than employed persons generally. The researchers noted the possibility that the work environments in these at-risk professions were conducive to depression. Further, they proposed that lawyers and secretaries – two of the three highest risk groups –

have little autonomy and control, a factor that has been implicated in depression. These studies confirm the hypothesis that lawyer unhappiness can lead to serious health and social problems that pose a threat to the legal profession.2 The possible causes will be discussed below. The Australian research which quantifies the extent of the issue thoroughly and credibly in this country is Courting the Blues.3 The research reported upon involved 741 students from 13 universities, 924 solicitors and 756 barristers. In short, the “study revealed high levels of psychological distress and risk of depression in the law students and practising lawyers who participated, when compared with Australian community norms and other tertiary student groups.”4 The authors noted that the “law student sample had a higher level of reported distress than other Australian samples for which this measure is available (see Table 12)”. Table 12 is reproduced below.

What the authors call “similar although less extreme comparisons for the practitioner samples”, are reported in Table 13.

You may be struck by the different outcomes between barristers and solicitors. The authors note the barrister sample was predominantly male and older, whereas females and younger age groups tend to have higher levels of reported distress.6 One could waste time and effort trying to analyse whether these detailed results show that North American lawyers are more or less disenchanted, or unhappy, than Australian lawyers. Rather than doing that, I will set out the conclusion in the terms used by the authors, as well as their observations on those conclusions, before turning to the possible causes of this distress.

The primary finding of this Australian survey is to confirm the view, originating from international research, that law students and members of the legal profession exhibit higher levels of

Table 12. Distribution of K-10 scores5 across law students, medical students and a general population sample (percentages) Level of distress

Law Students

Medical Students

General Population (ages 18-34 years)

Low or no psychological distress

31.5

45.2

57.9

Moderate distress

33.3

37

28.8

High distress

21.9

12.3

10.2

Very high distress

13.3

5.5

3.1

Table 13. Distribution of K-10 scores across solicitors, barristers and a general population sample (percentages)

psychological distress and depression than do community members of a similar age and sex.

In drawing this general conclusion, three points should be noted: Firstly, although the samples studied here have shown higher levels of psychological distress than both medical students and samples drawn from the general population, they should not be seen as severely dysfunctional; law students and younger lawyers are like their community peers, but somewhat more distressed.

Secondly, there are some signs that there are barriers to law students and practicing lawyers recognising their psychological distress and seeking help for it. Quite high proportions of the participants said that they would not seek help for depression. Many expressed quite strong negative views about the effectiveness of mental health professionals in assisting people with depression. Additionally, the survey participants agreed with a variety of negative views about depressed people, which might have a detrimental effect on their seeking assistance for their own depression, or in assisting their peers or employees.

Thirdly, despite the above, there are signs that law students and lawyers who do become depressed get help in quite high numbers. This is what would be expected of a group of such generally well-educated, highly employed and economically well-off people. 7

2. Is unhappiness in the legal profession worse than in others, and if so, why would that be (and would that matter)?

In recent months there has been frequent newspaper coverage of the issues to do with depression and overwork in the medical profession.8 So we know we are not alone in having these issues to address.

But it has been argued that there are aspects of our profession which make the problem worse. Seligman and others suggest there are three principal causes of what they call the demoralisation among lawyers.

Level of distress

Solicitors

Barristers

General Population (aged greater than 17 years)

Low or no psychological distress

36.4

56.2

62.9

Moderate distress

31.6

27.2

24.1

High distress

22.3

12.5

9.2

The first is pessimism, not in the colloquial sense, but as a way of explaining the world. This kind of pessimist will view bad events as unchangeable, whereas optimists see setbacks as temporary.

Very high distress

8.7

4.2

3.8

They observe that “while pessimists

09

tend to be losers on many fronts, there is one striking exception: pessimists may fare better in law... Specifically, the pessimists outperformed more optimistic students on traditional measures of achievement, such as grade-point average and law journal success.” They continue that “these data suggest that what is labelled as pessimism is not a detriment and may even be a virtue for lawyers. Pessimism encompasses certain “positive” dimensions; it contains what we call – in less pejorative terms – “prudence”. A prudent perspective, which requires caution, scepticism and “reality-appreciation”, may be an asset for law or other skill-based professions...

Prudence enables a good lawyer to see snares and catastrophes that might conceivably occur in any given transaction. The ability to anticipate a whole range of problems that nonlawyers do not see is highly adaptive for the practicing lawyer. Indeed clients would be less effectively served if lawyers did not so behave, even though this ability to question occasionally leads to lawyers being labelled as deal breakers or obstructionists.”

But this does not necessarily end well – “The qualities that make for a good lawyer, however, may not make for a happy human being. Pessimism is welldocumented as a major risk factor for unhappiness and depression. Lawyers cannot easily turn off their pessimism (i.e. prudence) when they leave the office. Lawyers who can see acutely how bad things might be for clients are also burdened with the tendency to see how bad things might be for themselves.

Pessimists are more likely than optimists to believe they will not make partner, that their profession is a racket, or that the economy is headed for disaster. In this manner, pessimism that might be adaptive in the profession also carries the risk of depression and anxiety in the lawyer’s personal life. The challenge is how to remain prudent professionally and yet contain pessimistic tendencies in domains of life outside the office.”9 The second possible cause may be what they call low decision latitude – a reference to the number of choices one has, or one thinks one has. In the North American context, and in 2001, junior lawyers at major law firms were seen as having this problem, because they had “little voice or control over their work, only limited contact with their superiors, and virtually no client contact”.10 One wonders whether this would still be true today, there, or here.

The third possible factor is what they call the zero sum game aspect of litigation 10 | BRIEF NOVEMBER 2018

– that one side’s gain always moves in lockstep with the other side’s loss.

“Lawyers are trained to be aggressive and competitive precisely because they must win the litigation game.”11 Whether that is strictly true, in these days when lawyers are encouraged and sometimes compelled to pursue settlements, which by definition cannot be zero sum games, is perhaps arguable. It may be even a caricature of days past.

I venture to say that I see little to be gained in debating what activities tend to produce more or less mental illness among those involved. So long as the statistics indicate that the occurrence of depression among our profession is well above the community average, leaders of the profession need to consider what to do about it. Arguably, reaching parity would not be the end of our concern, however, and not just for those individuals whose lives are blighted by their illness. As Professor Laura Rothstein wrote in 2008: Even if the prevalence of mental illness and substance abuse problems are no higher for lawyers compared with the general population, the consequences of such impairment are significant. The stakes are high for lawyers themselves,

who expend significant amounts of time and money obtaining the credentials to practice law. Legal educators, employers, and regulators have a strong interest in protecting clients and the public from adverse events that might result from a lawyer’s impairment. They also have an interest in protecting their credibility by assuring the public that they are appropriately monitoring misconduct.

Clients have the highest stake in ensuring the competence of the lawyer providing the service because clients’ lives are often affected in significant ways by the competence of the lawyers representing them.12

3. What can we do about it.

The Tristan Jepson Memorial Foundation was set up in response to these issues, by the parents of Tristan Jepson, a young lawyer who took his own life as a consequence of severe clinical depression.13 Their intention was not only to create a memorial for their son, but to raise awareness and reduce the stigma about mental illness in the profession.

The Foundation has now hosted twelve annual lectures in Sydney as well as lectures in Melbourne, Canberra,

Brisbane, and Hobart.

It was at the first such lecture, in 2006, that the claim was made that the North American experience was not matched in Australia, which led to the commissioning of the research which underlay Courting the Blues.14 There were Proposals for Change at the conclusion of that paper, including: a. That it should be recognised that this was not a problem for individuals, but for communities – law schools, law firms, solo practitioners, professional associations and so on; b. That institutions (employers, professional bodies) should take on the mental health of their members as an essential institutional goal; c. That mental health problems be seen as legitimate health problems; d. That the occupational health and safety implications of mental health in the workplace be recognised.

Those specifically directed to students included: e. Students must develop differing skills which can be used in the

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professional and personal aspects of their lives; f. In order to address the negativity or pessimism associated with legal practice, students (and practitioners) should be made aware of this kind of thinking, and be aware of their own mental style and of adapting it to different situations; g. The strategies to be adopted in different universities (or other legal institutions) to deal with psychological distress are likely to vary greatly.

Several years ago the Foundation decided to investigate whether it might be possible to promulgate guidance for legal institutions of all kinds as to how they might organise themselves to respond to these concerns. Our attention was drawn to the National Standard Canada: Psychological health and safety in the workplace15, and after considerable debate and discussion the Foundation released its own Guidelines some three years ago. The description which follows is based on the material on our website16: The TJMF Guidelines are 13 workplace (psychosocial) factors which create a workplace where ALL staff feel…

(Organisational culture) there is trust honesty and fairness; (Psychological and social support) supported and able to get help when needed; (Clear leadership and expectations) they know what to do in their work as well as how their efforts contribute to the overall goals of the organisation; (Civility and respect) they are treated with respect and courtesy; (Psychological competencies and requirements) they have a good job fit; (Growth and development) they are encouraged and supported to develop personally and professionally; (Recognition and reward) they are acknowledged appropriately in a timely manner and appreciated appropriately for the work they do; (Good involvement and influence by staff) they are included in discussions about their work and are able to participate in how decisions are made; (Workload management) they are given the time and resources 12 | BRIEF NOVEMBER 2018

necessary to complete their work successfully; (Engagement) their work is meaningful; (Balance) they have choices and opportunities for flexible working arrangements to accommodate their work, family and personal priorities; (Psychological protection) it is safe to speak up and that appropriate action will be taken and protection provided; (Protection of physical safety) their physical safety is protected.

The aim of the guidelines is described as being to prevent injury, create a psychologically safe and healthy workplace, provide a framework for change, and sustain ongoing improvement.

Those not already familiar with the Guidelines may notice at once, that they do not appear to be specific to the legal profession. And they are not.

As the website proclaims, they were adapted by the Foundation from a National Standard, not specific to the legal profession, in Canada17. There are now around 180 signatories ranging from Courts (including the Federal Court and the Victorian Supreme Court), bar associations and law societies, law schools, law student societies, government departments and agencies, in house lawyers, to numerous law firms, ranging from global firms to one person practices. Several are international, and several are not “legal” at all - such as the Queensland Branch of the Australian Medical Association. The ability of the latter and other health related bodies to sign up reflects the generic nature of the guidelines, and their origin. Finally, the guidelines may be applied to all those in the relevant workplace, not just the lawyers.

It is of course strongly arguable that adoption of and adherence to the guidelines is simply good business practice, and in the long term commercial and financial interest of the signatories as well as those of their staff, members or other adherents. With respect to law schools, the Standards promulgated by the Council of Australian Law Deans for Australian Law Schools note that the “law school’s commitment to sound educational methods and outcomes includes a commitment to, and the adoption of practical measures to promote, student well-being, with particular reference to mental health and awareness of mental health issues.”18

The Foundation has not taken on any role of monitoring adherence to the guidelines by signatories. That would be resource intensive, and hopefully not required in any event – peer group pressure at all levels, and self-interest, should operate to ensure that those who consciously sign up will have regard to them in their daily activities. The Foundation has supported and sponsored events at which signatories share the experiences with respect to implementing the guidelines The guidelines serve as a memorial to the memory of one remarkable young man, a lawyer who took his own life, but are also a conscious attempt to make a difference in the lives of those affected by the stresses and strains of their working lives, and minimise the risk of others doing so in future.

A “good” lawyer, in addition to being a good person themselves as discussed by other participants in this session, is surely entitled to work in a place where the guidelines set out above, are in effect, and will then have every chance of being a good lawyer, in every sense.

NOTES 1.

Quoted in M Seligman, P Verkuil and T Kang, “Why Lawyers are Unhappy”, reproduced in (2005) 10 (1) Deakin Law Review 49, originally published in Vol 23 Cardozo Law Review (2001)

2.

M Seligman, n1, 3

3.

N Kelk, G Luscombe, S Medlow and I Hickie, Courting the Blues, Brain and Mind Research Institute: University of Sydney, Camperdown 2009; see also S Medlow, N Kelk and I Hickie, “Depression and the Law: Experiences of Australian Barristers and Solicitors”, (2011) Vol 33 Sydney Law Review 771, and (by the same authors) “Distress and Depression among Australian Law Students: Incidence, Attitudes and the Role of Universities” 2010 Vol 32 Sydney Law Review 113

4.

N Kelk and others, n3 viii

5.

K-10, is the Kessler Psychological Distress Scale, referred to and explained in Kelk, Courting the Blues, n3 10

6.

N Kelk, Courting the Blues, n 3, 11

7.

Kelk, n3 42

8.

For several recent examples, see the Sydney Morning Herald on July 9, July 5, June 27 and June 7, 2017

9.

Seligman, n1, 4

10.

Seligman, n1, 5

11.

Seligman, n1, 7

12.

Rothstein, “Law Students And Lawyers with Mental Health and Substance Abuse Problems: Protecting the Public and the Individual” University of Pittsburgh Law Review, Vol 69 531, 533

13.

This material is based on the account in Kelk, n3, Sydney Law Review 2010 article

14.

N3

15.

CAN/CSA-Z1003-13/BNQ 9700-803/2013 National Standard of Canada: Psychological health and safety in the workplace — Prevention, promotion, and guidance to staged implementation

16.

www.tjmf.org.au

17.

National Standard Canada: Psychological health and safety in the workplace CAN/CSA-Z1003-13/ BNQ 9700-803/2013 National Standard of Canada: Psychological health and safety in the workplace — Prevention, promotion, and guidance to staged implementation http://www.csagroup.org/documents/ codes-and-standards/publications/CAN_CSA-Z100313_BNQ_9700-803_2013_EN.pdf

18.

Available at cald.asn.au

Money for Nothing Gino Dal Pont Professor, Faculty of Law, University of Tasmania

Ethics Column • The common law and statute have sought to address client–lawyer inequality via costs regulation.

• This has not precluded charging cancellation fees for engagements that terminate prematurely.

• The notion that lawyers can charge for work not performed may need some rethinking.

The lawyer-client relationship has from early times been punctuated by inequality, explaining why it has long been acknowledged as fiduciary in nature. Beyond the core obligations of loyalty and unselfishness expected of fiduciaries, as between lawyer and client further initiatives both at common law and under statute have sought to ‘equalise’ the relationship. These have chiefly targeted lawyer charging practices, reflected in a jurisdiction to set aside costs agreements, avenues to review costs (via taxation or assessment) and, more recently, prescribed costs disclosure obligations. No other profession, occupation or endeavour is similarly regulated, which also functions against the spectre of professional discipline for overcharging.

Consistent with the foregoing, in the course of taxation or assessment, a fee is not allowed for work that has proven useless or unnecessary for accomplishing the object the client had in view1. And deliberate lawyer charging for work that is not performed, beyond any civil claim as between client and lawyer, is likely to be branded professional misconduct2. Indeed, in 1856 Jervis CJ branded as ‘very improper conduct’ the act of ‘extorting from the [client] an excessive sum for costs under the false pretext that something had been done which in fact had not been done’3.

Against this backdrop, it would hardly be surprising were the law and regulators to proscribe the charging of cancellation fees by lawyers, namely for the time originally expected to be needed for a case but not in fact required (typically because the case settles before or during the trial). After all, it is difficult to maintain that a cancellation fee has itself generated a benefit for the client; instead the client is paying for something the lawyer has not done.

Yet freedom of contract, in this context as in others, has proven a difficult hurdle to overcome. Provided that the client gives informed consent to the charging of a cancellation fee via a costs agreement, and the fee cannot otherwise be struck down for being

unreasonable, no Australian court to date has interfered.

Nor does there appear any reported instance of a lawyer being disciplined for charging a cancellation fee.

Multiple judges, though, have disparaged the practice of charging cancellation fees. In 1991 Wilcox J opined that, to the extent that this practice (for barristers) rests on the premise that, should a case finish early or not proceed, the barrister will be left without remunerative work, ‘the premise is rarely well-founded in point of fact’, before adding that ‘[a]t a time when legal fees are so onerous as to exclude from significant litigation all but the wealthy and the legally-aided, any new practice which further increases costs requires meticulous justification’4. Two years later Einfeld J decreed that any requirement to pay counsel for work not done ‘is or ought to be as unconscionable in the law as anywhere else’5, but faced with unchallenged evidence that cancellation fees were normal, and needed to secure counsel of choice, upheld the relevant costs agreement.

In 2008, a New South Wales judge, while noting changes in legal practice since Wilcox J uttered the above remarks, accepted that ‘[i]n most cases, and for most counsel, cancellation fees would be unjustifiable’6.

Informing Wilcox J’s rejection of the above premise was that ‘[m]ost established barristers find that their problem is over-employment, not under-employment’.

While competition at the Bar (and indeed the profession generally) has accentuated with the passage of time, it remains logical to assume that lawyers best positioned to negotiate cancellation fees are those in greatest demand, who are in turn likely to ‘suffer’ overemployment. And, as a Family Court judge has recently noted, liability for a cancellation fee could conceivably prove a barrier to settlement, as it reduces the cost saving inducement of compromising the dispute7.

In an environment of civil procedure reforms directed to facilitating the just, quick and cheap resolution of the real issues in legal proceedings, albeit at the risk of tarring all cancellation fee agreements with the same brush, perhaps the time has come, to this end, to review their legitimacy.

Endnotes 1.

2.

3.

4.

5.

6.

7.

The point was established at least as early as Hill v Featherstonehaugh (1831) 7 Bing 569; 131 ER 220.

See, for example, Legal Services Commissioner v Baker (No 2) [2006] 2 Qd R 249 (where the charging of costs and disbursements where none were properly chargeable, inter alia, was held to justify the respondent solicitor being struck off from practice).

Re Eyre (1856) 1 CBNS 151 at 152; 140 ER 64 at 64.

Commissioner of the Australian Federal Police v Razzi (No 2) (1991) 30 FCR 64 at 67.

Stefanou v Fairfeld Chase Pty Ltd [1993] FCA 605 at [55].

Levy v Bergseng (2008) 72 NSWLR 178 at [111] per Rothman J. Foley v Foley [2018] FamCA 319 at [142] per Benjamin J.

13

The Ipso Facto Reforms

By Elisabeth Edwards, Regional Legal Counsel (WA), Multiplex Constructions, Chris Pearce, Partner and Lorna Clarke, Solicitor, Blackwall Legal

On 1 July 2018 the “Ipso Facto” insolvency reforms became effective.1 These reforms, introduced by the Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth), restrict the ability of a counterparty to exercise certain contractual rights that arise by virtue of a counterparty entering into voluntary administration, receivership (or other controllorships) or a scheme of arrangement.

This article explains what an ipso facto clause is, the rationale behind these reforms, the effect of these reforms on contractual arrangements and demonstrates the legislation’s impact on contractual risk allocation using a case study relating to the construction industry. The article concludes by identifying early warning signs of financial distress and provides several practice points for practitioners.

What are ipso facto clauses?

An ipso facto clause creates a contractual right that allows one party to terminate or modify the operation of a contract upon the occurrence of some specific event, even if the other party complies with its primary obligations under the contract (such as payments). Ipso facto clauses can be “self-executing”2 or require action on the part of the counterparty. In an insolvency context, the specific event is usually the other party suffering an insolvencyrelated trigger event.

For example, in a construction context, a clause that entitles a client to terminate, take-out, step-in or otherwise modify a contract in circumstances where a voluntary administrator is appointed to the head contractor or the head contractor suffers another type of insolvency event, regardless of the contractor’s performance, is an ipso facto clause.

Rationale for ipso facto reforms It has been argued that ipso facto clauses hinder successful insolvency related restructures or corporate rescues. The reforms are a component of the Federal Government’s National Innovation and Science Agenda and seek to: 14 | BRIEF NOVEMBER 2018

… allow breathing space for a company to continue to trade during a formal restructure… This will assist in protecting asset values for the benefit of the company, its employees and its creditors which in turn will assist to promote a culture of entrepreneurship and reduce the stigma of failure.3

•

in a scheme of arrangement: from the date on which an announcement or application under section 411 of the Corporations Act is made, until the date that the application is withdrawn or dismissed by the court, or the approved scheme comes to an end or the company is fully wound up;9

•

where a managing controller has been appointed: from the managing controller’s appointment until the managing controller’s control of the company ends;10 and

•

in voluntary administration: from the time the company comes under administration until the administration ends, unless the administration ends because the company is wound up, in which case the stay remains in place until the affairs of the company are fully wound up.11

Operation of the stay From 1 July 2018, there will be a stay placed on the enforcement of ipso facto clauses where a counterparty enters into one of the following specific ‘formal restructures’: 1. an application or announcement for a compromise or scheme of arrangement for the purpose of avoiding being wound up in insolvency;4 2. a managing controller (most commonly receivers and managers) is appointed to the whole, or substantially the whole, of the company’s property;5 or 3. the company enters into voluntary administration.6 The stay operates in respect of rights arising under, or self-executing provisions of, contracts, agreements or arrangements entered into after 1 July 2018,7 so existing contracts will not be affected (except where they are modified, and there are some transitional arrangements in respect of novation and variations discussed below).

The legislation contains so-called “antiavoidance” provisions and makes it clear that ipso facto clauses cannot be invoked merely due to the entity’s financial position whilst in one of these three restructures.8 Note that the stay does not apply to a company if it enters liquidation directly, without first going through an administration or scheme of arrangement process.

Duration of the stay The “stay period” can vary depending on the type of formal restructure process and should be closely considered by practitioners. The stay on enforcement of an ipso facto clause generally runs:

In each case, the court may order an extension of the period of the stay if it is satisfied that it is in the interests of justice to do so.12

Exceptions The stay on enforcement of an ipso facto clause does not apply: •

if written consent is obtained from the administrator, managing controller or scheme administrator;13

•

if the court orders otherwise e.g. it is appropriate in the interests of justice;14

•

to contracts which are entered into after the date of the order approving the scheme, the appointment of the managing controller or the company coming under administration;15

•

to the types of contracts, agreements or arrangements specified in the regulations (Arrangements);16 or

•

to rights of a kind declared by Ministerial Declaration (Rights).17

Examples of some of the types of Arrangements that are currently excluded include: •

contracts, agreements or

arrangements with certain government entities and government licences, permits or approvals; •

•

•

contracts, agreements or arrangements which relate to national security, defence or border protection or which supply goods or services for hospitals, public transport, critical works, public security or shipping charters; various financial and derivative arrangements, including: securities, financial products, debt factoring agreements, agreements for the sale of securities and margin lending facilities; arrangements involving a special purpose vehicle that provide for securitisation or a public-private partnership;

•

arrangements for the escrow of code or passwords;

•

arrangements relating to payment systems and the Payment Systems and Netting Act 1998;

•

•

an arrangement for the novation, variation of assignment of a contract entered into or renewed after 1 July 2018 but before 1 July 2023 where the underlying arrangement was entered into before 1 July 2018; and building contracts, worth at least $1 billion and entered into on or after 1 July 2018 and before 1 July 2023.

Examples of some of the types of Rights that are excluded include: •

the right to change the basis on which an amount is calculated and the right to indemnification;

•

a termination right under a standstill or forbearance arrangement;

•

the right to change the priority or order in which amounts are paid,

distributed or received (a ‘flip clause’); •

rights of set-off;

•

the right to take action to enforce certain rights (e.g. acceleration, right to convert or exchange amounts in different currencies, right to crystallise a security interest);

•

the right to assign, novate or transfer rights (e.g. debt-trading);

•

rights regarding the treatment of circulating assets;

•

step-in rights;

•

rights to enforce a possessory security interest held by authorised deposit-taking institutions; and

•

the right to appoint a controller in specified circumstances.

Ipso facto and construction – case study This construction-based case study will be used to explore how the ipso facto reforms affect contractual risk allocation and enforcement of legal rights.

A typical construction project involves a chain of contracts with contractors and subcontractors as follows: •

a client/owner/principal will engage a head contractor to carry out a certain scope of work;

•

that head contractor will then engage subcontractors to carry out all or segments of that scope of work; and

•

that subcontractor may then engage a sub-subcontractor, and so on.

Despite the subcontracting chain, the head contractor remains responsible to its client for performance, both in terms of quality and time. A failure by

a subcontractor to perform will not generally excuse a head contractor’s late or sub-standard performance.

When a subcontractor enters into an insolvency or restructuring process, it is not uncommon for the progress of construction work to slow or cease, as the subcontractor manages its cash flow and liquidity. An immediate concern of the head contractor is therefore continued, adequate and timely performance.

To manage these risks, head contractors may include the following contractual rights in their downstream subcontracts, permitting the head contractor to: •

terminate the subcontract for convenience;

•

terminate the subcontract for cause or because of the subcontractor’s insolvency or restructuring event;

•

take work out of the subcontractors’ hands (so that it can be performed by someone else) for cause and on insolvency; or

•

suspend an entitlement to further progress payments to the subcontractor for cause or on insolvency.

Prior to the ipso facto reforms, the head contractor was able to mitigate risk of non-performance by relying on one of the above negotiated contractual entitlements. However, following the ipso facto reforms, if a head contractor protects its position by enforcing its rights where the basis for that enforcement is that the subcontractor has entered into a ‘formal restructure’, the head contractor runs the risk that a stay on the ipso facto clause is in place and it has repudiated its subcontract.

This may potentially give rise to a claim for damages by the administrator, a subcontractor or another third party.

15

First, if there are other defaults entitling the head contractor to terminate (such as abandonment or performance failures), those defaults should be relied upon. Secondly, the head contractor should check whether the ipso facto reforms apply and whether an exemption in the Arrangements or Declaration applies. Important excluded Rights in this construction context may include: •

a right of set-off – which may be beneficial in preserving the insolvent subcontractor’s security packages;

•

a right to assign, novate or otherwise transfer rights or obligations – allowing the head contractor to novate its subcontract with the insolvent subcontractor to a new subcontractor and continue to deliver the construction project; and

•

a ‘step-in’ right – allowing the head contractor to itself or through a third

party, step into the shoes of the insolvent subcontractor and perform the work required.

Since a head contractor may be forced to continue the contract with the subcontractor upon entry into a formal insolvency process, monitoring counterparty financial performance will be vital so as to allow for early action if required. It’s possible that rather than allowing “breathing space”, the ipso facto reforms may actually create a perverse incentive to enforce ipso facto rights, particularly in relation to termination, prior to the point of a subcontractor entering a formal restructure. Table 1 contains some early warning signs of financial distress and viability concerns which should put counterparties on notice that a counterparty may be about to enter a formal restructuring arrangement.

Table 1: Early Warning Signs of Financial Distress and Viability Performance and progress

Commercial and contract management

Supply chain

•

•

•

•

• •

•

Slow-down in progress on site for no obvious reason Resource numbers dropping dramatically out of line with program Increase in number of defects Plant, materials and equipment ‘disappearing’ from site Supplies not being delivered on-time/ deliveries stopping

•

• •

Overly aggressive chasing of payments Seeking to negotiate further payments or early release of retention Request for advanced payments for materials Raising spurious or unjustified claims or contra-charges to increase amounts payable

•

•

Large churn of secondary subcontractors/ suppliers Secondary subcontractors and suppliers complaining of nonpayment or late payment Head contractors being approached for direct payment

Market/press

•

•

•

• •

•

Clients may assume they need to delete ipso facto clauses in their entirety. However as discussed above, the reforms do not prohibit the use of ipso facto clauses, but merely stay their operation at particular periods and in particular circumstances.

The exact timing and duration of the stay is important, as is the right to apply to the court to have a stay lifted or imposed in certain circumstances. Clients should be aware of the risks of enforcing ipso facto clauses while they are stayed and the consequences of repudiation of contract and subsequent expensive litigation. Therefore, education of contract administrators and users is critical to ensure that ipso facto clauses are only relied upon in the appropriate circumstances.

It remains to be seen whether the ipso facto reforms will have their intended effect.

Unintended consequences may include: early termination and enforcement of rights which detrimentally affects distressed companies, termination based on other more minor breaches of contract rather than insolvency events or financial position and an increase in court applications relating to stays. Contractual drafting is also likely to adapt to mitigate risk and ensure performance. For practitioners, the reforms are an important addition to the complexity of commercial practice, insolvency and securities law and litigation.

NOTES

Business management

•

As practitioners, on a case-by-case basis we will need to establish whether the ipso facto reforms apply to particular clauses and contracts, or whether exemptions may apply. Note that many exemptions sit in the Regulations and a Ministerial Declaration and these are subject to potentially rapid change.

Conclusion

Employees Unhappy and unmotivated staff Redundancies and dismissals High staff turnover, especially at senior/ leadership levels Staff complaining of non-payment of wages, superannuation, other contributions Head contractor being approached directly to guarantee staff entitlements

Practice points

• • •

16 | BRIEF NOVEMBER 2018

Management structure changes New branding Expedited expansion or deviation from core competencies Company spin offs (including phoenix activity)

• • •

Negative rumours in market/press regarding viability of the entity Involvement in litigation Security of payment adjudications Union interventions/ site entrances

1

Treasury Laws Amendment (2017 Enterprise Incentives No. 2) Act 2017 (Cth) (Amendment Act) Schedule 1 Part 2.

2

See for example Corporations Act 2001 (Cth) (Corporations Act) s415FA or s434LA.

3

Amendment Act Explanatory Memorandum 2.10.

4

Corporations Act ss415D, 415D(5).

5

Corporations Act s434J.

6

Corporations Act s451E.

7

Amendment Act Schedule 1 Part 2, item 17.

8

Corporations Act ss415D(1)(d), 434J(1)(b), 451E(1) (b); Amendment Act Supplementary Explanatory Memorandum 1.4-1.10.

9

Corporations Act s415D(2).

10

Corporations Act s434J(2).

11

Corporations Act s451E(2).

12

Corporations Act ss415D(3), 434J(3), 451E(3).

13

Corporations Act ss415D(8), 434J(7), 451E(7).

14

Corporations Act ss415E, 434K, 451F.

15

Corporations Act ss415D(6)(a), 434J(5)(a), 451E(5)(a).

16

Corporations Regulations 2001 (Cth) reg 5.3A.50.

17

Corporations (Stay on Enforcing Certain Rights) Declaration 2018 (Cth).

Asked to be an Executor?

What are the Income Tax Liabilities of an Executor/Legal Personal Representative?

By John Hockley Barrister, Francis Burt Chambers* Many people take on the role of an executor1/legal personal representative2 of the estate of a deceased person without realising the extent of the duties and liabilities that they have agreed to perform. These duties include lodging a tax return on behalf of the deceased from the beginning of the financial year up to the date of death of the deceased.

The executor also has a duty to ensure that the deceased has paid the correct amount of tax before distributing the estate otherwise the executor becomes personally liable to the ATO to pay the amount of any outstanding tax.

Practical Compliance Guideline 2018/4 On 22 August 2018 this Guideline was published. It was initially released in July 2017 as Draft Practical Compliance Guideline PCG 2017/D12 for comment and discussion and the incorporation of those comments in PCG 2018/4.

In order to provide greater certainty to executors in smaller estates worth less than $5 million the Australian Tax Office (ATO) issued Draft Practical Compliance Guideline PCG 2017/D12 (PCG 2017/ D12). The PCG creates no new obligations on executors but sets out clearly when an executor will be regarded as having notice of a claim by the ATO in determining when the executor can distribute the assets to estate beneficiaries without risk of a personal liability.

It is anticipated that the issues highlighted by PCG 2017/D12 and now in PCG 2018/4 may affect the distribution of estates in Western Australia and other jurisdictions. The early distribution of an estate after the death of the deceased may now need to be reconsidered. Some would-be executors may be reluctant to take that role if they knew beforehand that they may be liable for the unpaid tax debts of the deceased.

Early distributions have been made in an attempt to wind up an estate as soon as possible. Early distributions make it difficult to make a claim against the estate under the Family Provision Act 1972 (WA) as the claimant has to trace the funds through section 653 of the Trustees Act 1962-1978 (WA) and may fail if there has been a material change in position of the recipient of the funds4.

17

The PCG is not a binding ruling but provides guidance and certainty to the executor if it is followed.

The Income Tax Liabilities of the Executor Under Subdivision 260-E of the Taxation Administration Act 1953 (Cth) (TAA 1953), the executor stands in the shoes of the deceased and is treated for tax purposes as the deceased person and owes all the duties and obligations in regard to taxation that the deceased owed. Under s260-140 TAA 1953, in regard to an Administered estate the executor’s duties extend to: 1. Filing of taxation returns that the deceased would have been liable to lodge; 2. Provide any additional returns required by the Commissioner; 3. The discharge of any taxation liability and penalty imposed on the deceased.

If the executor fails to lodge all necessary returns, including a return for the financial year up to the date of death, the Commissioner may make default assessments for which the executor is liable. The executor’s liability as trustee is a personal liability that is limited up to the date of death to the value of the assets in the estate that should have come into the executor’s hands.

The executor was only appointed after the deceased’s death and after the income was derived and thus the executor’s liability is limited as the executor had no means of making provision for the taxation before the deceased’s death5.

There are different rules for an Unadministered estate under s260-145.

If Probate or Letters of Administration are not granted within six months of the deceased’s death the Commissioner may “determine the outstanding tax liabilities that the person had at the time of death”. If so, s260-140 does not apply6. The Commissioner has wide powers of recovery under s 260-150 of the tax payable as assessed7 at the executor’s marginal tax rate.

Executor can be Personally liable for outstanding tax The executor should act with great caution and not distribute the estate of the deceased until they are certain of the deceased’s tax position. If the executor distributes the estate and there are outstanding tax liabilities then 18 | BRIEF NOVEMBER 2018

the executor is personally liable for the outstanding tax. Once an estate has been distributed the Commissioner of Taxation cannot recover that tax from the beneficiary following the decision in Deputy Commissioner of Taxation v Brown (1958) 100 CLR 32. Also s 254(1) (e) of the ITAA 1936 makes the executor/ trustee liable for the income retained or that should have been retained in respect of all of the income which comes to him or her in their representative capacity.

PCG 2018/4

The executor’s liability is not confined to the income tax outstanding at the date of death but extends to any amended assessments of prior year assessments made after the date of death of the deceased under s 170 of the ITAA (1936).

The executor should be conversant with the time limits placed on amended assessments. There is no time limit within which the Commissioner can raise an original assessment.

The purpose of the Guideline is to provide an administrative concession that strikes a balance between appropriately protecting the revenue and allowing executors and administrators to be able to distribute deceased estates without being personally liable. The Guideline provides practical guidance on how the law will generally be administered by the ATO thus reducing the complexity for many estates in determining the deceased’s outstanding tax liabilities up to the date of death.

Time Limits The executor has to consider the three time limits placed on the ATO in regard to the tax paid in respect of the deceased person.

There is a two year limit on amended assessments for individuals after the Commissioner gives notice of an assessment and that person was not a Small Business Enterprise (SBE) or a partner in a partnership that was not an SBE (Pre 2017 SBE income not >$2m; and in 2017 onwards income less than $10m).

There is a four (4) year time limit for amendment of income tax returns in most other cases. In Yazbek v FC of T (2013) ATC 20-371 a four year time limit was applied to a beneficiary in a discretionary trust even though the beneficiary was not assessable on any of the trust net income in that year. The four year time period for amendment also applies if the deceased entered into or carried out a scheme, the sole or dominant purpose of was to obtain a tax benefit (see: s 284-150 of Schedule 1 of the Taxation Administration Act (1953)).

If the deceased has been involved in fraud or evasion then there is an unlimited amendment period.

If the deceased was involved in fraud or evasion in respect of his or her tax liabilities the Executor must act carefully and contact the ATO before distributing the estate.

The Guideline applies to small and less complex estates of less than $5 million.

The Guideline applies to the pre-death period only and does not apply to trusts arising from death.

The Guideline provides greater certainty to an executor as to when the ATO will regard him/her as having ‘notice’ of a claim in respect of the deceased person’s tax affairs.

Who the Guideline applies to?

Paragraph 6 of the Guideline sets out the eligibility to rely on the Guideline to an executor or administrator of a deceased estate provided: 1. In the 4 years before their death: a. the deceased did not carry on a business; b. the deceased was not assessable on a share of the net income of a discretionary trust; c. The deceased was not a member of a self-managed superannuation fund 2. the estate assets consist only of: a. public company shares or other interest in widely held entity; b. death benefit superannuation; c. Australian real property; d. cash and personal assets such as cars and jewellery, and 2. The total market value of the estate at the date of death was less than $5 million; and none of the estate assets are intended to pass to a foreign resident, a tax exempt entity or a complying superannuation entity.

Non-eligibility applies to: i.

where no Probate or letters

of administration have been obtained as executor/LPR not personally liable for deceased’s outstanding tax liabilities and a different collection mechanism applies under ss 260-145 and 260150 of Sch 1 to the TAA; ii.

Owned a business (4 years);

iii.

Discretionary trust distribution (4 years);

iv.

Equity interest in private companies;

v.

Real property outside of Australia;

vi.

Estate valued >$ 5 million;

vii.

If the deceased was a member of a self-managed superannuation fund;

viii.

If the estate assets are intended to pass to a taxadvantaged entity.

A CGT liability arises if market value at date of death exceeds the cost base (valuations needed). cf. No CGT liability arises where the asset is gifted under the deceased’s will if the tax-exempt entity is a deductible gift recipient.

c. tax liabilities in respect of returns which have not been lodged or advised were not necessary, up to the date of death.

The concession granted under the Guideline is that the ATO will not treat the executor as having notice of any further potential ATO claim relating to returns the executor lodged (or advised were not necessary) if: i.

the executor acted reasonably in lodging the deceased person’s outstanding returns (or advising the ATO that they were not necessary); and

ii. the ATO has not given the executor notice that it intends to examine the deceased person’s taxation affairs within 6 months from the lodgement (or advice of nonlodgement) of the last of the outstanding returns.

The ATO will treat the executor/LPR as having notice of a further potential ATO claim in the following situations: i.

The Scope of the Administrative Concession: The executor may have a tax-related liability if the estate assets are distributed to the beneficiaries when there was notice of a potential claim against those assets by the ATO. The notice may take several forms:

ii.

a. existing pre-death tax debts; b. debts on pre-death tax returns not yet assessed;

where within 6 months from the lodgement (or advice of non-lodgement) of the last of the deceased outstanding returns, the ATO gives the executor notice that it intends to examine the deceased person's taxation affairs; where in the course of administering the deceased estate (including the preparation and lodgement of outstanding returns), an executor becomes aware (or should reasonably have become aware) of a material irregularity (or irregularities) in a prior year return. In such a case the ATO will treat the

executor as having notice of a further ATO claim in relation to that irregularity or irregularities.

Note: The ATO will not treat the executor as having notice of a potential ATO claim if the executor brings any irregularity properly to the attention of the ATO in writing (for example, by requesting an amendment) and the ATO does not, within 6 months, issue an amended assessment or indicate that it intends to review the issue.

Where the ATO has decided to review or examine the affairs of a deceased individual it will notify the executor.

Where any tax liability amount arises, such as omissions of rental income from an estate assets, the ATO will promptly amend the relevant returns.

Example: Small Estate Alf died on 1 June 2018; Richard is appointed executor and obtains probate in September 2018.

Alf’s estate consists of a main residence, shares in publicly listed companies and money in a bank account with a total value of less than $1 million.

Up to his death Alf had been receiving a pension.

Alf was advised by the ATO in 2015 that he was not required to lodge further returns.

Richard determines that no return is necessary for the period 1 July 2017 to 1 June 2018 (Date of death) and lodged a Return Not Necessary (RNN) Advice with the ATO on 1 October 2018.

If the ATO does not notify Richard that it intends to review Alf’s tax affairs by

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19

1 April 2019 (6 months from the time Richard lodge the RNN advice), the ATO will treat Richard as not having notice of any claim relating to Alf’s tax affairs allowing Richard to distribute the estate to the beneficiaries without risk of personal liability.

Example: Peter died on 12 December 2017.

Jill is appointed executrix of his will.

Probate obtained in February 2018.

Jill confirmed with the ATO that Peter had lodged all of his income tax returns other than the return for the 2017 tax year.

Jill had to prepare a return for the period from 1 July 2017 to 12 December 2017 (Date of death).

Jill lodges 2017 return and Date of Death (DoD) return on 1 April 2018.

Jill cannot rely on the concession until 6 months after the 2017 return is lodged.

If Jill does not receive notice from the ATO that it is investigating Peter’s taxation affairs before 1 October 2018 she can distribute the estate.

Example: Material irregularity arises Edward died 10 October 2017.

Example: Example: Vincent died on 26 November 2017.

Ben is appointed executor and obtain probate.

To the best of Ben’s knowledge, the assets included in Vincent’s estate consisted of: his main residence; number of rental properties; superannuation lump sum and some money in a bank account.

Based on all of this information including the tax returns of earlier years Ben determined that no return was necessary for the period from 1 July 2017 to 26 November 2017 because Vincent’s income was below the tax-free threshold.

Six (6) months after advising the ATO that no return was necessary Ben proceeded to distribute the estate assets.

In 2019 the ATO received information that Vincent owned further income producing assets the income from which was not disclosed by Vincent or Ben (due to Ben not knowing of their existence).

The ATO is not bound by the PCG from refraining from issuing amended assessments for the 2016 and preceding four (4) years to reflect the income from the further assets.

The ATO will seek to recover the tax related liabilities from Ben up to the value of the further assets that came into Ben’s hands as executor.

Jill is appointed executrix.

ATO advises Jill that Edward had not lodged his 2017 return.

Note:

Jill lodges 2017 return and D of D returns on the 20 February 2018.

The executor is treated as having notice of claim in respect of income from asset;

Jill did not advise the ATO of irregularities in earlier returns where rental income had been omitted.

The six month cap is removed allowing the ATO to claim;

Jill distributes assets - 5 May 2018.

ATO advises that it is reviewing Edward's taxation returns 2015-2016 Tax years.

Jill will be personally liable for any tax as she had notice of the irregularity.

Jill would not have been liable if she had notified the ATO of irregularities when she lodged the returns on 20 February 2018 and if the ATO did not advise Jill within six months that it was intending to review Edward’s assessments for the 2015-2016 Tax years.

In regard to Post Administration Assets:

The executor has to amend the earlier assessments back for the last four (4) years; and The executor is liable up to the value of the further assets.

6. No distribution to occur until at least 6 months after notification to the ATO of last of outstanding returns.

Conclusion: The executor runs the risk of being personally liable for any outstanding tax owed by the deceased if the executor distributes the estate assets and waits six (6) months from the date of lodgement of the last of the deceased’s outstanding returns.

If the executor is risk averse then they should defer distribution until at least six months after notifying the ATO. The executor should adopt practical strategies for risk management.

PCG 2017/D12 •

Positive initiative;

•

streamlined process for simple estates;

•

hopefully the PCG is the first step for all estates to be treated in a similar manner.

The aim of the PCG is to balance protecting the executor and the broader community.

Do you still want to be an Executor?

*John Hockley is a Barrister at Francis Burt Chambers, Level 25, Allendale Square, 77 St. Georges Terrace, Perth, WA, 6000.

The writer would like to thank Lyn Freshwater of ATO Brisbane for helpful comments and suggestions in regard to this Article. In preparing this Article the author relied on: “Practical Compliance Guideline, PCG 2017/D12: Income tax-liability of a legal personal representative of a deceased person.” Australian Government, Australian Taxation Office: http://law.ato.gov.au/ atolaw/view.htm; 2018 Death and Taxes Symposium, Taxation Institute of Australia: Gold Coast: July 2018, Tax Liabilities – “Who is responsible?” presented by Lyn Freshwater, written by Ian Raspin, FCPA, CTA, TEP, Director BNR Partners; and Mark Morris, LL B, B. Comm, CPA, FTIA, BNR Partners; “Recent Guidance from the ATO – Legal Personal Representatives, Tax and Deceased Estates,” Golnar Nekoee, http://ballawyers.com. au2017/09/03tax-deceased-estates.

1. This is the term used in Western Australia. In this article the term executor includes an administrator. The term Legal Personal Representative (LPR) does not appear in any of the Succession Laws in Western Australia (the Wills Act 1970 (WA); The Family Provision Act 1972 (WA); and the Administration Act 1903 (WA).

2. This is the term used in PCG 2017/D12 to refer to an executor or administrator of an intestate estate.

HOW EXECUTORS CAN MANAGE THE RISK

3. See: Newnes M (as he then was) in Pugh v Delgrado as Executor of Estate of Hamiltorn [2006] WASC 267;BC 200610095; Bickford v Bickford [2006] WASC 268; BC 2006610096.

1. Review deceased’s tax history;

4. Section 58(5) (a); (6), (7) and (8).

2. Set aside sufficient funds plus a buffer amount to cover estimated tax liabilities; 3. Lodge outstanding returns or nonlodgement advice; 4. Contact ATO if any uncertainties;

20 | BRIEF NOVEMBER 2018

5. Prior to and conditional upon distribution the executor might obtain a written indemnity from all beneficiaries;

5. Barkworth Olives Management Limited v DFC of T (2010) ATC 20-172; and with bankruptcy see: Stapleton v FCT (1955) 93 CLR 603.

6. This also applies in estates where probate or letters of administration are not required to be obtained. For example in Queensland under the Succession Act 1981, if there is a will, the assets vest automatically with the executor and it may not be necessary to obtain probate.

7. In Unadministered estates often the returns are not lodged.

Trustees’ Rights of Indemnity – a Right of Retention?

By Grahame Young Barrister, Francis Burt Chambers

Justification One of the bedrocks of the law of trusts is that a trust is not an entity; it is a relationship between the owner (trustee), the property and the persons or purposes for whose benefit the property is held.

From that it follows that trustees are personally liable for all liabilities incurred by them in the execution of the trusts whether that liability arises from contract, tort, ownership of trust property or costs of court proceedings.

The obverse of the personal liability is that trustees are entitled to be indemnified for trust liabilities.

The rights against the trust assets are those of reimbursement and exoneration.

Reimbursement is the right of the trustee to apply trust assets to reimburse money already paid by the trustee personally to satisfy trust liabilities.

Exoneration is the right of the trustee to apply trust assets to satisfy trust liabilities directly without having to first satisfy the liabilities from personal assets.

In addition, a trustee may have rights against beneficiaries to indemnify the trustee against trust liabilities1.

Nature of the rights The nature of the rights of reimbursement and exoneration have been considered in a number of High Court cases2. In short, the rights are proprietary, in the nature of an equitable lien, and have priority over the rights of beneficiaries.

A right of retention?

If a trustee has an unsatisfied right of reimbursement or exoneration, then the trustee is not bound to transfer or deliver the trust property to a beneficiary who is otherwise entitled3.

It may be argued this is a power, or a mere incident of the nature of the rights, but for present purposes I will describe the trustee’s power as a right of retention.

The right may be exercised in respect of contingent, as well as actual, liabilities: a common example is an anticipated liability for tax, which will not crystallise until the end of the tax year when the income of the trust estate can be determined, or when a transaction concerning trust property becomes binding or is completed.

However it must not be thought that the right is unlimited. In Kemtron Industries Pty Ltd v Commissioner of Stamp Duties [1984] 1Qd R 576, McPherson J, with whom Andrews SPJ agreed, said at p 5874 “It is therefore not correct to say, ... , that the trustee’s lien at all times attaches to all of the assets. That would have the consequence that the trustee could, as against the beneficiaries, insist on retaining all of the assets in the exercise of his rights of indemnity even though the liability in respect of which that right was exercised was trivial in amount. Such a conclusion would be surprising particularly where, for example, the assets consisted entirely of cash and the liabilities were fixed and their amount capable of precise and immediate determination in money.”

When might the right be important?

The first and most obvious situation is to resist a request for the transfer of trust property, whether to a beneficiary or a newly appointed trustee. Little more needs to be said.

The second concerns the nature of the beneficiary’s interest; while there are unsatisfied rights of indemnity, but subject to the Kemtron gloss, there will be no right to a specific asset5.

beneficiary’s rights where the trust assets comprise dutiable property may not be charged with duty if the beneficiary has no right to the dutiable property itself.

This is an extension of the well-known decision in Livingston v Commissioner of Stamp Duties (1960) 107 CLR 411.

The extent of the trustee’s lien will be determinative.

Care needs to be taken on a subsequent transfer of the dutiable property to the transferee of the beneficiary’s rights.

Concessions available to the beneficiary will not be available to the transferee.

The second relates to land tax. In CPT Custodian a sole unit holder was not the owner for land tax. A beneficiary of a deceased estate may prefer not to be an owner of land in the estate to avoid aggregation. For land tax an owner is defined as a person entitled to an estate in possession. Entitlement is the requirement, not registration.

On the other hand, the beneficiary may wish to be the owner in order to claim the primary residence exemption.

By agreement with the trustee, or application of the Kemtron gloss, it may be possible to achieve whichever is the desired result.

NOTES 1

Hardoon v Belilios [1901] AC 118, Balkin v Peck (1998) 43 NSWLR 706

2

Octavo Investments Pty Ltd v Knight [1979] HCA 61; (1979) 144 CLR 360, Chief Commissioner of Stamp Duties v Buckle [1998] HCA 4; 192 CLR 226, CPT Custodian Pty Ltd v Commissioner of State Revenue [2005] HCA 53; 224 CLR 98

3

CPT Custodian at [41] to [52].

4

This passage was relied on by the High Court in Buckle at [48], and that paragraph was in turn relied on by the court in CPT Custodian at [51].

5

cf CPT Custodian at [51] “Until satisfaction of rights of reimbursement or exoneration, it was impossible to say what the trust fund in question was.”

The second is important in at least two contexts. First, a transfer of the

21

How Will the Duties Amendment (Additional Duty for Foreign Persons) Act 2018 (WA) Affect Discretionary Trusts? When Will a Discretionary Trust be Considered a ‘Foreign Trust’?

By Jim O’Donnell, Jackson McDonald Lawyers Chair of The Society of Trust and Estate Practitioners Western Australia Incorporated

The above Act received Assent on 17 October 2018. It amends the Duties Act 2008 (WA) to introduce a foreign buyers surcharge regime in Western Australia from 1 January 2019.

The surcharge will apply to the dutiable value of residential property purchased by foreign individuals, foreign corporations and trustees of foreign trusts in Western Australia.

This article examines the tests for determining when a discretionary trust will be a foreign trust.

What is a foreign discretionary trust?

Under the new regime, there are two major limbs for determining whether a discretionary trust will be a foreign trust for surcharge duty purposes. Under section 205D, a discretionary trust will be a ‘foreign trust’ where: 1. the trust is controlled by a foreign person (s.205D(1)(a)); or 2. one or more foreign persons that are takers in default, together with their associates, hold at least a 50% interest in the trust (s.205D(1)(b)).

The tests for determining whether someone is a ‘foreign individual’ are not overly stringent. Australian citizens and permanent visa holders are not considered to be foreign individuals even if they live overseas and are not Australian residents for income tax purposes.

22 | BRIEF NOVEMBER 2018

First Limb - Control

individual be in a position of influence?

Under the first limb (s.205D(1)(a)) a discretionary trust is considered to be controlled by a foreign person if a foreign person is in a position to influence, either directly or indirectly, the vesting of the whole or any part of the capital of the trust property, or of the whole or any part of the income from the trust property.

If there is only one other director, arguably in most cases the answer to that question will be ‘yes’. Under a typical constitution, a company with two directors cannot pass resolutions unless both directors agree. However, if there are three or more directors, the position will not be so straightforward.

The concept of being ‘in a position to influence’ is potentially quite broad, especially when both direct and indirect influence are taken into account.

Where a foreign person is the sole shareholder of the trustee company, but is not a director, appointor or guardian, the foreign person will presumably be taken to be in a position to influence trustee distribution decisions, as the shareholder (under the Corporations Act and under most constitutions) will have the power to replace the directors of the trustee company.

The most obvious thing to look for under this limb is the identity of the trustees, or if the trustee is a company, the directors of the trustee company, as well as who holds the positions of guardian, appointor and any other similar positions of control or veto under the trust deed.

Trustees Does the trustee comprise one person or more than one person? Are any of those persons a foreign individual?

Clearly, if there is only one trustee and that person is a foreign individual, the trust will be a foreign trust, no matter who is the appointor or guardian.

If there are multiple individual trustees, the trust will ordinarily be a foreign trust if any trustee is a foreign individual. That is because ordinarily multiple trustees must act jointly unless the terms of the trust say otherwise.

If the trustee is a company and the foreign individual is only one of multiple directors and none of the other directors is a foreign individual, will that foreign

This will also generally be the case when foreign persons hold more than 50% of the voting power of the company, as company constitutions ordinarily allow shareholders to remove and appoint directors by simple majority vote.

You should always check the constitution and any shareholders’ agreement or other governance document, if there is one, to see if there are any special provisions modifying the standard rules. Is a higher voting standard imposed for replacing a director, e.g. 75% or unanimous resolution? Does each shareholder have a right to appoint one director and to remove that director? Are there different classes of shares on issue, conferring different rights and voting powers? What are the quorum requirements for director and shareholder meetings? Is someone

entrenched as a ‘governing director’ under the constitution?

Shareholders’ agreements sometimes require special majority or unanimous shareholder approval of certain company decisions, including trustee distribution decisions.

Appointors and Guardians Sometimes the trust deed requires the consent of another office holder, such as a guardian, appointor, principal or the like, before the trustee can make distributions (especially capital).

Typically, the appointor (or principal) will have the power to replace the trustee (‘the appointor role’), and the guardian will have the power to veto major trustee decisions, including the decision to distribute capital (‘the guardian role’).

However, that will not always be the case. The terms of each trust deed should be examined carefully.

If any person with the guardian role is a foreign individual or foreign corporation, the trust will be a foreign trust under the first limb. If multiple persons have the guardian role, and one or more of them is a foreign person, that may also ordinarily cause the trust to be a foreign trust under the first limb. Ordinarily, a trust deed will require joint decision making where there are multiple guardians, and when that is the case, the power of veto can effectively be exercised even if just one guardian does not consent to the trustee’s decision.

If only a foreign person or persons hold the appointor role, that person or those persons will be in a position to change

the trustee, and therefore influence distribution decisions. If so, the trust will be a foreign trust.

However, what if the appointor role is held by multiple persons, only one or a minority of whom are foreign persons?

It is unclear if that would be sufficient to influence decisions. Trust deeds often require appointor decisions to be joint or unanimous where there is more than one. In that case, it might be possible to argue that a single foreign person who is only one of the appointors is not in a position to influence the trustee, as the trustee can be replaced only if all of the appointors agree.

The terms of the trust deed should be examined closely to determine if this is a reasonable line of argument, as well as the relationship of the foreign person with the other appointors. Some deeds allow majority appointor decision making and others provide quite different approaches.

The phrases ‘in a position to influence’ and ‘directly or indirectly’ suggest that it will not suffice to examine only the legal positions of control. This raises the question whether and to what extent a person who is factually able to exert influence over the distribution decision making of the trust must also be taken into account?

The High Court in Bywater Investments Limited v FCT [2016] HCA 45 recently adopted a substance over form approach in determining the place of central management and control of a foreign incorporated company. The revenue authorities across Australia will

take guidance from this recent decision when looking at the factual matrix affecting decision making of companies (including trustees) in order to determine where the control lies.

While the concept of “influence” is not novel as far as statutory tests go,1 it remains to be seen how widely the Commissioner will be willing to extend the interpretation of the concept of “influence”.

Second Limb – 50% plus takers in default Under the second limb (s.205D(1)(b)), it is necessary to examine the terms of the trust deed in order to identify the takers in default and their respective interests.

Under s.54, a taker in default is a beneficiary of a discretionary trust that has an interest in the discretionary trust in default of an appointment by the trustee, or trustees, of the discretionary trust.

Under s.60(1), the interest of a taker in default in the discretionary trust is (subject to the Commissioner determining otherwise under s.60(2))— (a) the percentage of — (i) the trust income; or (ii) the trust property, that the taker in default would receive in default of appointment by the trustee; or (b) if the taker in default would receive both trust income and trust property in default of appointment by the 23

trustee, the percentage of either the trust income or the trust property that the taker in default would receive that is the greater.

The default beneficiaries under a discretionary trust deed are usually individuals, rather than companies or trustees of other trusts.

The difficult part of this limb is that it is necessary to apply the ‘associate’ definition, which is a broad definition.

Once you identify the takers in default, analysed as at the date of the transaction, the next step is to work out which if any of those persons meet the definition of a foreign person.

In order for a trust to be caught as a foreign trust under this limb, at least one of the takers in default must be a foreign person. You don’t need to start examining who the associates are and what their default interests are unless and until that condition is met.

If one or more taker in default is a foreign person, it will be necessary to then consider whether any of the other takers in default is an associate of any of those foreign persons.

By way of example, the Mum & Dad Family Trust provides that the children of mum and dad are the takers in default.

There are currently 4 children. If each of those children is an Australian citizen, the trust will not be a foreign trust under the second limb. That will be the case even if their uncle Brit is a UK citizen and is not an Australian citizen, or the holder of a permanent visa or a special category visa 24 | BRIEF NOVEMBER 2018

under the Migration Act 1958 (Cth).

However, let’s assume two years later one of the children who was born in the UK, moves back to the UK, marries a UK citizen and renounces their Australian citizenship. In that case, that child, who is a taker in default under the trust deed, is a foreign resident.

The definition of ‘associate’ is broad and includes siblings. The result of one child renouncing their Australian citizenship is that 100% of the taker in default interests under the trust deed will be held by ‘a foreign person and their associates’. As the 50% threshold is exceeded, the Mum & Dad Family Trust will be a foreign trust under the second limb.

It may be possible to prevent this outcome if the relevant child is excluded as a default beneficiary (assuming the trust deed confers such a power) prior to the transaction. However, before doing so, care is advised as such an exclusion could itself give rise to a dutiable transaction, e.g. as a trust acquisition or trust surrender, depending on whether the trust assets include dutiable property, or it may result in a resettlement of the trust.

Conclusion By limiting the analysis of beneficiaries’ interests to the takers in default (under the second limb), the new regime is commendable, as it sidesteps many of the problems confronted by the other States. A major problem in most other States is that their regimes start with the

premise that a discretionary trust will be a foreign trust if any of the potential beneficiaries of the trust (e.g. any of the general beneficiaries) are a foreign person.

While attempts might be made to exploit the 50% threshold under the second limb, the breadth of the control tests under the first limb may prove more difficult to circumvent.

There are a range of controlling roles to consider for discretionary trusts, and a multitude of possible combinations of such roles, that could lead a trust to be considered a ‘foreign trust’ under the first limb.

A methodical approach is recommended when analysing each trust, examining the full suite of governing documents, trustee minutes and, where a company is involved, the corporate register.

Beyond the relatively clear and familiar territory of analysing legal positions of control, there is fuzzy untested ground as to what may constitute ‘influence’, directly or indirectly, at both a legal and factual level.

Taxpayers will look to the Commissioner for practical guidance as to where the boundaries of such concepts begin and end.

NOTES 1

Consider for example the concept of “Associate” under s.318 of the Income Tax Assessment Act 1936, or “sufficient influence” under Part 8 of the Superannuation Industry (Supervision) Act 1993; or “alter ego” and “indirect control” in family law cases.

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25

In Pursuit of Knowledge: The Advantage of Being a ‘Generalist’

By The Hon Justice Peter Quinlan Chief Justice of Western Australia This article is adapted from the Chief Justice’s address to the University of Western Australia Annual Senate Community Dinner on 13 September 2018

It is fitting that the first official address I have been asked to make as Chief Justice should be at the University of Western Australia, the place at which I spent seven years of my life, ultimately graduating in Commerce and Law. Indeed, only this morning I received an invitation to a 25th year reunion of my graduating class from the UWA Law School.

It also feels personally fitting for me to be here at the University. At the time of my appointment as Chief Justice, I had cause to reflect upon the journey that had brought me to that point and the various stages of my legal career, the most significant of which, in both duration and influence, was practising for 16 years as a member of the Independent Bar. And so, in reflecting upon that journey, I expected that my memory would be particularly drawn to that period of my career. What I found, however, somewhat to my surprise was that my memory was primarily drawn back to my time here at the Law School and more generally at this University. I was, in a sense, cast back to the beginning of the journey, when the law was a fresh and strange new endeavour and judges were simply names in the law reports, some of whom assumed a legendary status that appears to be largely confined to law students, but most of whom remained a mystery.

One aspect of life at university that returned to me quite vividly was the diversity of ideas and subjects to which I was exposed. I studied both Commerce and Law, in addition to taking units from Economics, and so in the formal curriculum I encountered a high degree of intellectual diversity: mathematics, economics, history, accounting, criminology, law etc. But it went further than that. I had friends studying medicine, and so would study occasionally in the Medical School library at QEII Medical Centre. A close friend of mine studied English in the Arts faculty and would enthusiastically press upon me books 26 | BRIEF NOVEMBER 2018

by new authors he had discovered and encourage me to come along to lectures that he thought I might enjoy.

And so, in many ways, university life taught me, for the first time, the great advantage and adventure of being what, in the law, we call a “generalist”.

How different that now seems, in many respects, from the state of the professions today, or at least the legal profession, of which I form part and so have been able to observe at close quarters. The legal profession now is not simply a specialised profession (that is, professing the law) but has become what could be described as “hyper-specialised”, a notion to which I will return in a moment.

And this raises, of course, the very notion or purpose of a university and what its ultimate moving principle should be: the perennial debate between knowledge for knowledge’s sake and education as utility.

It is a debate with which those in university teaching and administration will be all too familiar. It is also one which, it seems to me, is essential for the future and vibrancy of the professions as well, particularly the legal profession.

A great contributor to that debate, of course, was John Henry Newman, whose 1852 Treatise The Idea of a University remains a classic in the field. I want to focus on Discourse 7 of The Idea of a University, entitled “Knowledge Viewed in Relation to Professional Skill”.

In the earlier parts of the book Newman had outlined his vision for liberal education within universities and in Discourse 7 turned to his critics. In relation to his fundamental claim that the business of a university should be knowledge for its own sake, Newman said the following.

[Can I interpolate to say that, in the interests of historical accuracy, I have left Newman’s gender specific pronouns as

Universities are, or should be, generalist in nature, where the pursuit of knowledge follows the broadest path possible. It is here that an appreciation for an expansive vision can be born and here that it should take hold.

27

they are, although I should note that I am sure that a mind as open as Newman’s would have had no difficulty with the turn towards properly inclusive language].

Turning back to Newman and his vision of knowledge for its own sake. He said: Now this is what some great men are very slow to allow; they insist that Education should be confined to some particular and narrow end, and should issue in some definite work, which can be weighed and measured. They argue as if every thing, as well as every person, had its price; and that where there has been a great outlay, they have a right to expect a return in kind. This they call making Education and Instruction “useful,” and “Utility” becomes their watchword.

Of these “ultilitarians”, Newman singled out, as their forerunner, John Locke, who Newman quoted, as follows: ‘Tis matter of astonishment that men of quality and parts should suffer themselves to be so far misled by custom and implicit faith. Reason, if consulted with, would advise, that their children’s time should be spent in acquiring what might be useful to them, when they come to be men, rather than that their heads should be stuffed with a deal of trash, a great part whereof they usually never do (‘tis certain they never need to) think on again as long as they live; and so much of it as does stick by them they are only the worse for.

How often do members of the academy have to counter this insistence on the immediate utility of the subject matter of your teaching and curriculum.

What use is this in the real world? Is this going to be in the exam? Etcetera.

Etcetera.

Newman’s riposte, as relevant now as it was then, was that while intellectual culture was its own end: that which has its end in itself has its use in itself also.

Newman drew an analogy with the health of the body and its contribution to manual labour in the following way: Again, as health ought to precede labour of the body, and as a man in health can do what an unhealthy man cannot do, and as of this health the properties are strength, energy, agility, graceful carriage and action, manual dexterity, and endurance of fatigue, so in like manner general culture of mind is the best aid to professional and scientific study, … and the man who has learned to think 28 | BRIEF NOVEMBER 2018

and to reason and to compare and to discriminate and to analyze, who has refined his taste, and formed his judgment, and sharpened his mental vision, will not indeed at once be a lawyer, or a pleader, or an orator, or a statesman, or a physician, or a good landlord, or a man of business, or a soldier, or an engineer, or a chemist, or a geologist, or an antiquarian, but he will be placed in that state of intellect in which he can take up any one of the sciences or callings I have referred to, or any other for which he has a taste or special talent, with an ease, a grace, a versatility, and a success, to which another is a stranger. In this sense then, and as yet I have said but a very few words on a large subject, mental culture is emphatically useful.

Not that Newman thought that this meant that university education ought to be disrespectful to particular studies or vocations. On the contrary. As he continued: In saying that Law or Medicine is not the end of a University course, I do not mean to imply that the University does not teach Law or Medicine.

What indeed can it teach at all, if it does not teach something particular?

It teaches all knowledge by teaching all branches of knowledge, and in no other way. I do but say that there will be this distinction as regards a Professor of Law, or of Medicine, or of Geology, or of Political Economy, in a University and out of it, that out of a University he is in danger of being absorbed and narrowed by his pursuit,…; whereas in a University he will just know where he and his science stand, he has come to it, as it were, from a height, he has taken a survey of all knowledge, he is kept from extravagance by the very rivalry of other studies, he has gained from them a special illumination and largeness of mind and freedom and self-possession, and he treats his own in consequence with a philosophy and a resource, which belongs not to the study itself, but to his liberal education.

In Newman’s time the danger of being absorbed and narrowed by a particular pursuit was the danger of being absorbed by the Law, or by Medicine, or Geology.

Today the problem is far more acute. The degree of specialisation has increased, and increases exponentially.

For many, if not most, lawyers, from the moment they leave Law School, where the reach of their vision extended to the law as a whole, they are diverted and funnelled into narrower and narrower realms of specialisation. No more is it enough to specialise in litigation, one must move to the sub-speciality of commercial litigation, down to corporate litigation, down to insolvency, and ultimately down to being the master of one particular section of the Corporations Act. No doubt this is all in the interests of maximising the value of the individual lawyer as an economic unit and increasing their marketability, thereby contributing to the profitability of the firm as a whole.

But such gains come at a cost. And the costs of such economic efficiency can be found at every level.

At the level of the individual, lawyers become more and more narrow in their range of skills and miss out on the diversity and variety which lends colour to a professional life. Without such variety and work satisfaction, dissatisfaction generally, and stress, can set in. Recent studies have demonstrated alarming levels of poor mental health in the legal profession.

As part of the response to that issue, we should ask ourselves to what extent lack of diversity in work is a contributing factor.

At the level of the firm, the business unit itself, there is the risk that people simply leave and move on to work that is more diverse and more fulfilling. Again, retention of skilled and experienced lawyers, particularly women, is a real and pressing issue for the legal profession.

As part of our efforts to improve and enhance career development, versatility and meaningful work must surely be a major priority.

This brings me back to the problem I identified earlier: of “hyper-specialised” within the legal profession.

At the level of the profession, the common bonds and ethos of a profession begins to break down. Individual members of the profession have less in common with one another, and they are not able to share common stories and experiences to build the ongoing narrative that is essential for a professional ethos to survive.

This is, in my assessment at least, a very real threat to the integrity and the future of the legal profession itself. And it is more pronounced than the threat Newman recognised.

And finally at the level of society, we all become deprived of the opportunity for our laws and their application to be improved and reformed by the crosspollination and synthesis that results from

Notice Newman’s warning about the professional being “in danger of being absorbed and narrowed by [their] pursuit”.

the interaction of different disciplines.

Every area of the law becomes an island by itself and the law as a whole lacks coherence.

So in the end, it may turn out that being a generalist, having our heads “stuffed with a deal of trash” to use Locke’s expression, is actually useful, for all of us, after all.

It is a great paradox, that having been appointed to the Supreme Court of Western Australia, with its wide jurisdiction across almost all areas of criminal and civil law, I am now, as a judge, more of a generalist than I have been for 25 years in legal practice.

Indeed, perhaps the reason my reflections upon my career kept returning to memories of law school, is that the last time my engagement with the law was as wide and as varied as it is now, was when I was a law student. And that can only be a good thing. For me and for the system as a whole.

And just to demonstrate that there is nothing new under the sun, consider this warning from Dr Edward Copleston, quoted by Newman: It is an undisputed maxim in Political Economy that the separation of

professions and the division of labour tend to the perfection of every art, to the wealth of nations, to the general comfort and well-being of the community. This principle of division is in some instances pursued so far as to excite the wonder of people to whose notice it is for the first time pointed out. There is no saying to what extent it may not be carried; and the more the powers of each individual are concentrated in one employment, the greater skill and quickness will he naturally display in performing it.

But, while he thus contributes more effectually to the accumulation of national wealth, he becomes himself more and more degraded as a rational being. In proportion as his sphere of action is narrowed his mental powers and habits become contracted; and he resembles a subordinate part of some powerful machinery, useful in its place, but insignificant and worthless out of it.

For myself, I could not think of a more poignant description of an exceptionally talented young law graduate, with a first class Honours degree, sitting silently at her desk, embarking on yet another tedious exercise sorting discovered

documents into pre-determined categories for weeks and months on end.

As Dr Copleston continued: Society itself requires some other contribution from each individual, besides the particular duties of his profession. And, if no such liberal intercourse be established, it is the common failing of human nature, to be engrossed with petty views and interests, to underrate the importance of all in which we are not concerned, and to carry our partial notions into cases where they are inapplicable, to act, in short, as so many unconnected units, displacing and repelling one another.

This is, of course, where universities come in. Universities are, or should be, generalist in nature, where the pursuit of knowledge follows the broadest path possible. It is here that an appreciation for an expansive vision can be born and here that it should take hold. And so hopefully it is here, within the Universities, that the professions can, in the words of Newman’s great pupil, Gerard Manley Hopkins, return to their “own best being” and so fulfil their own vital roles in the community.

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This course is primarily designed for those who want to become a migration agent and do not have a legal background but it is also suitable for legal practitioners and current migration agents who wish to improve their knowledge and practice in this challenging area of law. For legal practitioners, completion of units in the course can lead to the award of Continuing Professional Development (CPD) requirements.

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available in other online courses. Our small classes with experienced teachers offer great opportunities for problem solving, discussion and the application of the law. This is a complex and challenging area of law that is subject to frequent change. It is important that our graduates have the skills to manage that changing and flexible environment.”- Associate Professor Mary Anne Kenny Students can gain real world experience through our Migration Clinic at SCALES or through a placement with industry. Experiential learning is invaluable for students to learn how to work with clients given in this particular area of law, practitioners need to embed solid ethical approaches when assisting culturally and linguistically diverse clients who can be particularly vulnerable.

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29

Evidence in Family Law Proceedings

By John Hedges Barrister, Francis Burt Chambers

This article is adapted from a paper presented at a Law Society CPD seminar on 23 October 2017.

Synopsis

Once you have established what your client wants and you have assessed whether what is wanted is realistic, you should be in a position to ask the necessary questions to explain to the Court the relevant factual background that supports the making of the orders you seek. Whilst it is helpful to have a fulsome account of the reasons why the relationship failed, it is unhelpful to include assertions of fact that have no relevance to the orders sought.

This article is a guide to presenting essential evidence and overcoming technical difficulties in Family Court proceedings by reference to: 1. The standard of proof, relevant evidence and hearsay.

2. The impact of Division 12A of the Family Law Act 1975 (Cth).

3. The use of Notices to Admit.

4. The importance of corroboration.

5. How and when opinion evidence should be introduced.

6. The use and abuse of digital recordings.

Overview The starting point for every affidavit that is prepared for Family Court proceedings, or for that matter any proceedings, should be certainty about the precise orders that are sought. If you know what is sought on a final basis, then it should follow that you know what orders need to be sought on an interim basis.

30 | BRIEF NOVEMBER 2018

The standard of proof, relevant evidence and hearsay In Section 79 and children’s matters, the standard of proof is the balance of probabilities. It is useful to bear in mind that in children’s matters there is arguably no burden of proof because the Court is required to determine the best interests of the children and make orders accordingly. The maxim “he who asserts must prove” does apply.

It follows that if the proof of a particular fact is necessary to obtain your orders sought then a lot more attention needs

to be focussed upon the evidence necessary to prove that fact than should be focussed upon rebutting a factual assertion that is really a side issue. Often clients are so upset by a scurrilous allegation that it is difficult to ensure that focus is directed to more important issues. A good practice is to compile a check list of the matters that must be proven if your application is to succeed and to review the list before the affidavits are filed. The benefit of compiling the list is that it will also serve as the skeleton of your closing submissions. The textbooks say that you should draft your closing submissions before you determine your course of cross-examination. The same approach applies to the preparation of affidavits.

The rule against hearsay developed because people rarely recall accurately the actual words spoken in any given conversation and it follows that it is unsafe to rely upon a secondhand account of what a third person said at any given time without that person being made available to confirm or deny the words attributed to them. It goes without saying that

the weight that will be attributed to uncorroborated evidence of a conversation is almost always quite limited. I suggest that unless the conversation is necessary to establish an important fact, it is not only fairly pointless to include but can distract you from obtaining evidence that will prove the relevant point.

In property proceedings it is often necessary to adduce evidence from documents that are in the possession of third parties. The rule against hearsay limits the admission into evidence of these documents although they are commonly annexed to affidavits.

The matter for judgment is whether it is necessary to call the author of the document to prove the fact that the document will establish. Often the ultimate destination of moneys is irrelevant to issues to be determined and the time and effort directed to overcome the rule against hearsay is hard to justify.

The impact of Division12A of the Family Law Act 1975 I have annexed the most relevant provisions of Division 12A of the Family Law Act. Annexure (1) – Section 69ZM provides relevantly that the Division applies to proceedings that are wholly childrelated and, if the parties consent, to the part of the proceedings that are not under Division 12A. In particular this means that if the parties consent, proceedings under Section 79 can be conducted without the constraints of the usual rules of evidence.

Annexure (2) – Section 69ZN provides relevantly that the Court is to actively direct, control and manage the proceedings without undue delay and with as little formality, and legal technicality and form, as possible.

Annexure (3) – Section 69ZT provides relevantly that certain provisions of the Evidence Act 1995 (Cth) do not apply to child-related proceedings. These provisions, in short, deal with the rules against hearsay, opinion and the proof of documents.

Section 69ZT(2) provides relevantly that the Court may give such weight as it thinks fit to evidence admitted as a consequence of a provision of the Evidence Act 1995 not applying.

Section 69ZT(3) provides that the Court may decide to apply one or more of the excluded provisions of the Evidence Act if it is satisfied that the circumstances

are exceptional, taking account of the overall significance of the evidence.

As the Family Court of Western Australia does not apply the Evidence Act 1995 (Cth) the Family Court Act 1997 (WA) is the relevant legislation.

Annexure (4) – Section 202H of the Family Court Act 1997 provides relevantly that the “excluded rules of evidence” means such provisions of the Evidence Act 1906 (WA) and the rules of evidence as most closely correspond to the provisions of the Evidence Act 1995 (Cth) referred to in section 69ZT of the Family Law Act. Annexure (5) – Section 69ZX provides relevantly that the Court may closely control the evidence gathering and delivery in the proceedings and, if it considers that expert evidence is required, give directions about the adducing of that evidence.

For a trial lawyer, the impact of Division 12A is that there is no need to file and serve objections to evidence because, in theory, everything is admissible and it is simply a matter of weight for the judge to determine. In practice, it remains a sound practice to consider the admissibility of the evidence if the customary rules are applied. You are then alerted to the strengths and weaknesses of the evidence of each party. There is provision for the strict rules of evidence to be applied. The expectation is that the application would be made in a case involving more serious allegations of child abuse where admissions to third parties are properly explored. For an example of an exceptional case, see Janssen & Janssen [2016] FamCA 345.

For the most part, the relaxation of the rules of admissibility has facilitated a simple means of establishing what should be non-contentious facts such as medical treatment and psychological intervention. The downside of the abolition of the rule against hearsay arises from the failure of legal representatives to focus upon the fundamentals and instead include volumes of irrelevant documents from third parties.

In general, the Court does not have the resources to closely manage children’s cases in the manner envisaged by Division 12A. For this reason, it is unusual for a party to seek orders for the management of the case in accordance with Division 12A or for specific issues to be determined at an

early stage of the proceedings. There is no reason why orders of that nature should not be sought and argued in a case where determination of a preliminary issue may well lead to a settlement of the whole proceedings.

An important and barely understood area of children’s proceedings relates to the intersection of Rule 15 and in particular to Rule 15.41 relating to the introduction of expert evidence and Division 12A. Annexure (6) – Rule 15.41 of the Family Law Rules 2004 provides relevantly that Part 15.5 of the Family Law Rules does not apply to evidence from a medical practitioner or other person who has provided or is providing treatment for a party or child if the evidence only relates to the description of any treatment carried out or recommended and expressions of opinion limited to the reasons for carrying out or recommending treatment.

The potential overlap between the opinion of a treating psychologist, psychiatrist or other health professional and a single expert requires attention prior to the appointment of a single expert and the use of treating professionals’ evidence is a matter often overlooked.

The use of Notices to Admit Facts and Authenticity of Documents The purpose of a Notice to Admit Facts and Authenticity of Documents (NTA) is primarily to limit the exercise of proving uncontroversial facts. If a party who is called upon to admit a fact places the fact in issue and the Court ultimately finds the fact established, then the cost of proving the fact should be paid by the unsuccessful party. For an example of this in practice, see the judgment of O’Brien J in Demara v Demara (Costs) [2017] FCWA 40.

At the risk of stating the obvious, this potentially allows you to put into evidence in section 79 proceedings documents from third parties including medical reports, wills, records from bank managers and records from accountants. Part of the checklist in preparing for trial needs to include an NTA. Very often values cease to be in issue as a result of a timely NTA. In my opinion, an NTA relating to valuations should be based upon a third party’s assessment of value. An assessment by a real estate agent would usually be sufficient foundation for an NTA. If you receive an NTA, the first thing you must do is diarise the 14 day time limit.

31

To preserve your position, there is no reason not to place the facts in issue on the basis that when you have had time to obtain the information necessary to decide whether to admit or dispute the fact you will advise the other side. It is appropriate, given enough time before evidence needs to be obtained, to ask the other side not to spend money on the issue until you have reverted to them.

There is a further substantial use of an NTA which is as an aid to crossexamination. There has rarely been a more truthful saying than “a picture is worth a thousand words”. In these days when just about everyone can operate the camera on their mobile telephone, it is surprising how rarely relevant photographs are the subject of an NTA. Photographs depicting happy children in the care of someone portrayed as an axe murderer are not relevant. At the stage of settling an affidavit, the question to ask yourself is “Will this photograph assist the Court in understanding what the deponent is saying about a fact in issue?” Very often the answer is “No”.

More importantly, at the stage of preparation of cross-examination, the cross- examiner should be asking the question “Will a photograph set the stage for the point I am making?”

Very often the answer is “Yes”.

There are difficulties in ambushing a witness with photographs they have not previously seen and we all know that the angle and panorama make a difference to what is depicted. We also know a

32 | BRIEF NOVEMBER 2018

photograph of a bus shelter taken in June 2017 may be quite different from a photo of the same bus shelter taken in July. Enter the NTA! Once you are aware of the point you wish to make, you should ask either your assistant or your client to obtain photographs. An example, to pick up the bus shelter, is the other side alleging your client is unaware of age- appropriate protective measures for handing over a four year old because she is allowed to walk or run unaccompanied ten metres to the changeover point at a bus shelter which is on a busy road. Photographs or videos of an actual handover are generally unhelpful unless they relate to a specific handover in issue and I will discuss that later. Photographs of the relevant bus shelter which depict the proximity to the road are very likely to be helpful. A timely NTA will facilitate the use of the photographs.

For another example of the potential use of an NTA, see the judgment of O’Brien J in Jarbin and Yabes (Costs) [2017] FCWA 73. What this decision points to is the expectation, which I anticipate will increase, that an NTA needs to be considered and used at the outset of proceedings. This is particularly the case in long marriages where it is or should be obvious that contribution will be assessed as equal.

The importance of corroboration Independent witnesses who can confirm your client’s version of an important point can make your case.

Independent witnesses, if they are like most people, will not want to become involved. There are a number of approaches to these witnesses. If you provide them with context, they will usually at least provide you with a proof of evidence. That can then form the subject of an NTA which may obviate the need to call them. If their evidence is important enough, and it can be, then a subpoena to give evidence and produce documents will often prompt co-operation in the hope that it will not be necessary to appear.

There is a fine line between corroboration and compurgation. In children’s matters, it is of assistance to the Court to see that a party has the support of family and friends.

Evidence of availability to spend time with the party and children, particularly based on recent history, can provide a contrast to a party who does not call evidence from supporters. Very often family and friends provide their opinions about the quality of the party’s parenting and relationship with the children.

This evidence does not assist the Court and hence takes attention away from factual matters that have some probity.

How and when opinion evidence should be introduced Rule 15 prescribes how opinion evidence should be introduced. My observations about the use of an NTA suggest that conclusions in relation to matters properly the subject of opinion evidence can be admitted by consent.

Opinion evidence is necessary when a witness has sufficient experience and/ or qualifications to express an opinion about a substantially established area of knowledge that goes beyond a mere fact finding exercise. It is necessary to ensure that an expert is asked the correct questions. That requires an understanding of both parties’ cases. Whilst it is not your role to ask questions that will help the other side, an understanding of their case should help you to frame your questions. This highlights the necessity to either be confident of the factual basis of your questions or to cover the bases should there be scope for different findings.

In children’s cases, expert evidence is called for when there are issues about the capacity of either parent to provide appropriate care and when the parenting styles call into question the longer term benefits of more or less time with one parent. Once an expert gives an opinion, it is difficult to persuade him or her to a different view. The time to be obtaining detailed instructions is in anticipation rather than in response to a report.

If your client does not accept the conclusions of a single expert, then in order to persuade the Court that the conclusions should not be accepted, you are likely to need to obtain leave to call evidence from a similarly qualified expert who has a different opinion based upon the same facts. The Court generally is reluctant to encourage a battle of experts and, before you embark upon the often costly process of seeking a second opinion, it is prudent to reassess the overall strength of your client’s case.

In property proceedings, the most difficult area for expert evidence is the valuation of businesses. If parties have an acrimonious separation, which is

usually why they have ended up with you, it is likely that the trading figures for the family business will plummet in the period between separation and trial.

Sometimes the failing business leads to the breakdown of the marriage. Other times, the true position has not changed but the moneys brought to account are different. What is vital is that the single expert valuer is not instructed until you or your client are aware of the postseparation changes and the reasons for those changes. With clients who have no knowledge of the business, it will be necessary, assuming a turnover that warrants the cost, to instruct an experienced accountant. Sometimes, by the time the client has reached you, it will be apparent that no matter how much time and analysis your accountant devotes to the business, there will be negligible goodwill. In this situation, there is no benefit to your client in pursuing valuation evidence. Your case will be that once the dust has settled, the other side will return to the preseparation level of earnings and that calls for a significant adjustment in your favour.

The use and abuse of digital recordings My experience of the introduction into evidence of digital recordings is that often they do more harm than good. The main shortcoming is that the person or party who is making the recording is naturally on his or her best behaviour and there is a tendency to be somewhat provocative. Absent outrageous behaviour by the innocent party, the inference is that the photographer is more interested in winning the case than acting in the best interests of the child.

There are occasions when digital recordings are probative. The first aspect that must be addressed is whether the recording is admissible.

A recording is admissible if it was reasonably necessary to protect the lawful interests of the person making it. The case of AW v Rayney [2010] WASCA 161 is instructive upon this issue. The Family Court of Australia case of Janssen & Janssen [2016] FamCA 345 largely duplicates the WA Appeal Court decision in Rayney. A party who anticipates that the other party will deny their lawful entitlement, such as time with the children, is entitled to record the conversation. The problem for that party is that the anticipation is only known to be correct after the event and the recording is discoverable and should be disclosed regardless of whether it is admissible. That, in turn, raises the issue of the privilege against self-incrimination and potential difficulties if the client, having told you of the recording, then refuses to consent to disclosure.

The second aspect that must be addressed is the accurate transcription of what is said in the recording. This is best addressed by creating a transcript and sending a copy of the transcript of the recording as part of an NTA. If the transcript is admitted, your crossexamination is simplified, however the context of what is said and how it is said arises from the recording.

It is important that you retain an objective view of the context and overall benefit of the recording before deciding whether it is an exception to the rule that usually there is more detriment than benefit.

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33

The Adaptability of the Common Law to Change

By The Hon Susan Kiefel AC Chief Justice of Australia

This article is an address to the Australasian Institute of Judicial Administration given on 24 May 2018.

It might be thought that there can be no question about the ability of the common law to change – it is its hallmark. Its ability to adapt to change is what is often said to set it apart from codified civilian law.

But what is spoken of here is slow and incremental development.

The change of which I speak today is of a more sudden and substantial kind. It is sometimes said to be necessitated by changes in social conditions, thinking or values. Whatever is understood to be the reason for the need to change existing law, there may be limits to the means by which change can be effected if the common law is not to fragment. It may be questionable whether some landmark cases recognise such a limitation.

34 | BRIEF NOVEMBER 2018

No one can doubt that the common law has developed through change brought about by external and internal influences.

From its earliest inception it has been punctuated by periods of evolution, for example in the late medieval period when its actions and remedies were reshaped.

It has adapted itself over time to the needs of commerce and society, such as the conditions brought about by the industrial revolution. It has bent to the winds of war, including in the 20th century.

And now it must adapt to new technology in the application of some of its rules.

Most of these changes occur over relatively lengthy periods of time, or at least that is how we see it in hindsight.

We tend to think of the common law developing at an orderly, unhurried pace. In Lister v Romford Ice and Cold Storage Co Ltd1 Lord Radcliffe went so

far as to say that its movement may be imperceptible at any distinct point in time. We may not be able to say how it gets from one point to another but somehow by some means, he said, there is a movement which takes place.

I am not entirely sure whether this lack of insight on the part of common law courts is particularly reassuring. It may nevertheless be accepted that the common law is perceived as developing incrementally and that this is seen as a virtue. It is not considered to be desirable for the law to make sudden radical departures from its rules or suddenly to create wholly new ones. This is because it may be productive of feelings of uncertainty about the stability of the law which may lead to a loss of confidence in the courts. It may lead to legislative responses which are not always

consistent with the proper development of the common law.

Nevertheless one would think that there must have been periods when this type of change has been countenanced by the courts. It might be expected that in the period of great change regarding the forms of actions that there were some sudden developments or that, later, rules were promptly put in place to meet particular exigencies of shipping and of commerce. The industrial revolution created many novel situations to which the law was required promptly to respond. And of course during times of emergency, such as the two World Wars of the last century, the courts departed suddenly from their strict views about the liberty of the subject and legislation which interfered with it.

The law of negligence, more so than other areas of law, may be seen as prone to development, to extension and to change. Situations may arise which could not have been foreseen when rules for duty, breach or damages were stated in earlier cases. In Australia there was a period in the mid 1980s and the 1990s in which there were a number of significant decisions in this and as well as other areas of the law. Their significance is confirmed by the introduction in many States of legislation which sought to limit liability in negligence2.

In Jaensch v Coffey3, Justice Deane said that there were rare “landmark” cases in which a final appellate court concludes that it is entitled, indeed obliged, to reassess the content of some rule or rules. A leading example is of course Donoghue v Stevenson4 which held a manufacturer liable in negligence to the ultimate consumer for injury caused by its product. Up to this point, English law had generally limited the manufacturer’s liability to damages suffered by the initial purchaser of the product. This decision was applied the following year in Australia in Australian Knitting Mills Ltd v Grant5. Cases such as these serve to remind us that large decisions often arise from fairly mundane circumstances: in Donoghue v Stevenson the decomposed remains of a snail in the bottle of ginger beer; in Grant’s case woollen underwear.

Lord Atkin is regarded by some as having employed inductive reasoning in his seminal speech in Donoghue v Stevenson. Having observed that it was “remarkable how difficult it is to find in the English authorities statements of general application defining the relations between parties that give rise to the duty [of care]”6, he surveyed decisions dealing with particular facts and circumstances

in order to arrive at the general principle – that a duty of care is owed to a person whom the law would regard as one’s neighbour. We have become so accustomed to this concept that it is difficult for us to appreciate how large a step it may have seemed at the time.

Jaensch v Coffey, which was decided in 1984, was to take the idea of a neighbour even further. It declined to follow previous authority which had stood for nearly 60 years7 and which post-dated Donoghue v Stevenson and Grant’s case and allowed a person who had not been injured in an accident in which another had been injured or been present at the scene of it to recover damages. The plaintiff had suffered nervous shock as a result of being involved in its aftermath.

This new conception of duty was to be based upon a “relationship of proximity”.

It was not to endure8.

There are other examples of developments in the law of negligence in Australia in this period. Applying the concept of proximity, in Bryan v Maloney9 a purchaser of a house was able to recover damages in negligence from the original builder. In the law of tort more generally it was held in Burnie Port Authority v General Jones Pty Ltd10 that there was no further need for the rule regarding the escape of dangerous things, which had been stated long ago in Rylands v Fletcher11.

There were important changes to other areas of the law at this time. The use of promissory estoppel in Waltons Stores v Maher12 comes immediately to mind.

Marion’s case13 concerned the question whether a court could lawfully authorise the sterilisation of an intellectually disabled teenage girl. Teoh’s case14 may not strictly have changed the law, but arguably changed it the frame through which the Court assesses laws when it held that the ratification of international instruments such as the Convention on the Rights of the Child creates a basis for a legitimate expectation15. Of course Mabo (No 2)16 needs no explanation.

That there were so many landmark cases in this period may in part be attributable to the fact that there was at least one very significant event which occurred at this time. One cannot underestimate the importance of the final abolition of appeals to the Privy Council as a driver of change. It was to be regarded as placing the development of an Australian common law in the hands of the High Court for the first time. The need for changes in the law was also explained in cases at this time by reference to changes in society. The answer to the

question whether such social changes are occurring and whether they warrant change to the law depends largely upon the perception of judges. Some may be more sensitive to societal change and more amenable to reform.

In Jaensch v Coffey, Justice Deane said that a final appellate court may be obliged to reassess a legal rule “if the law is not to lose contact with the social needs which justify its existence and which it exists to serve”17. Even Chief Justice Gibbs, who was more often a voice of caution as well as of reason, said in that case that the courts are “not necessarily constrained to follow earlier decisions when they appear to be out of accord with contemporary principles”18.

In Gala v Preston, Justice Brennan said that “[i]n a society where values change and where the relationships affected by the law become increasingly complex, judicial development of the law is a duty of the courts”19. On the other hand he dissented in Bryan v Maloney on the basis that the courts are not suited to consider questions about the economic effects of extending the liability of builders for negligent construction to remote purchasers of buildings20. On that occasion it fell to his colleagues, Chief Justice Mason and Justices Deane and Gaudron, to say that in determining whether a novel category should be recognised by the law of negligence the courts should assess “community standards and demands”21.

It is not difficult to find statements in judgments which recognise the need for the law to be developed to meet changing social and economic conditions and habits of thought22. It has been accepted that the courts deal with substantial areas of the law which remain untouched by statute and that it is for the courts to develop the law in these areas consistently with the needs of modern society23. The social or economic change must be significant to warrant a change to the law. It has been said that a “radical change” may in a clear case justify the court moulding a legal rule to meet the changed conditions24.

Occasionally there may be a case where a court is able to make statements concerning changes in social attitudes.

R v L25, which was heard by the High Court in 1991, was one. The husband in that case was charged with two counts of the rape of his wife. He challenged the validity of the statute creating the offences. The proposition for which he contended was that all Commonwealth legislation relating to marriage, and conjugal rights in particular, preserved 35

the view of the common law that there was a continuing obligation on the part of a spouse to consent to sexual intercourse. This was said to be a legal consequence of marriage. The Court did not have to change the common law in that case to reach a just outcome, one which reflected modern social norms, for the Court did not accept that earlier courts had ever expressed such a view, even if commentators had. The Court observed26: “In any event, even if the respondent could, by reference to compelling early authority, support the proposition that is crucial to his case, namely, that by reason of marriage there is an irrevocable consent to sexual intercourse, this Court would be justified in refusing to accept a notion that is so out of keeping with the view society now takes of the relationship between the parties to a marriage.”

Cases which offer the opportunity for the Court to make an observation of this kind must be relatively rare. The limited nature and extent of disputes coming before the courts will not often provide a forum for debate about societal values or thinking.

They can sometimes be found in decisions involving the criminal law. The judgment of Justice Deane in Dietrich v The Queen27, which was decided in this period, for example, contains statements about social attitudes towards persons being charged with serious criminal offences and having no representation.

But can landmark cases always be said to actually reflect a change in societal values or thinking?

It is somewhat doubtful that English and Scottish societies in 1932 had any attitude towards the liability of a manufacturer to a consumer or that the Australian community in 1984 turned its mind to whether a person who had suffered nervous shock in the aftermath of an accident should be compensated.

The panicked reaction observable in the media to the decision in Mabo (No 2) did not suggest that that decision reflected a view then widely held amongst the community.

Lord Atkin’s reasons in Donoghue v Stevenson might be better understood by reference to his sense of injustice and a belief that society would agree with that view. It is difficult to accept that the rule his Lordship stated can be said to be the product of the individual cases to which he referred. The language employed by Lord Atkin tends to support this analysis. He spoke of providing a 36 | BRIEF NOVEMBER 2018

remedy when there is “so obviously a social wrong”28. A “social wrong” might be understood in context to refer to something which society would regard as a wrong. His allusion to biblical concepts leaves little doubt that he believed that the moral values of society at that time were reflected in the principle he stated.

The Court in Jaensch v Coffey may have reasoned in much the same way, believing that rightthinking members of society would not consider it just to deny compensation to a person in the position of that plaintiff. The Court in Mabo (No 2) may not have felt so certain. It was more likely appealing to a future understanding and acceptance of the decision that it had reached about the common law.

A judge’s belief that society would accept that an injustice would follow if the law was not changed must be based upon some underlying moral or ethical value or standard attributable to society.

Adapting what Sir Owen Dixon famously observed29, the law may be adapted to “meet the demands which changing conceptions of justice and conscience” may require. But, he cautioned, it should be motivated by “deeper, more ordered, more philosophical and perhaps more enduring conceptions of justice” than the political or sociological perspective of the individual judge. Nevertheless it cannot be denied that it is the individual judge who forms an opinion about what society views as just. The judge is the lens through which the common law views society and as such may be long or short in its sightedness.

Justice Brennan had said in Gala v Preston30 that it is sometimes necessary for the courts to develop the law where legislative law reform languishes.

Political will, it may be observed, appears to have followed rather than preceded the decision in Mabo (No 2). What his Honour said points to the question whether, in the circumstance where change is seen to be necessary, it should be made by the courts or by the legislature.

At this point in the process of decisionmaking in a case a conclusion whether the law will be changed should not have been reached. Change to the law requires more than that it may be seen as justified by the injustice which might be wrought in a particular case. In landmark cases the question to which Justice Brennan’s statement points will sometimes be presented not the least because of the substantial nature of the change.

It may be unsurprising that Justice Murphy took the view that there is a

positive duty on the courts to effect change and that it is an abdication of their responsibility to maintain an unjust, inhumane rule. He even went so far as to criticise courts and judges which “justify their inaction by the excuse that the legislature can abolish it”31. He was speaking of a decision of the Court to maintain the rule of the common law that a felony prisoner whose death sentence was commuted to life imprisonment could not sue for a wrong such as defamation during the currency of the sentence. His Honour had some measure of academic support for this view32.

On another occasion33 Justice Murphy observed that traditionally the legislature has left “the evolution of large areas in tort, contract and other branches of the law to the judiciary”. It has done so on the assumption that judges will adapt the law to social conditions.

It is when judges fail to discharge their responsibility that Parliament is required to intervene, he suggested.

This statement perhaps overlooks that Parliament can also be expected on occasions to intervene when it is thought that the courts are changing the law in a particular direction too much or too quickly.

The answer to the question whether the courts should effect the change necessary to meet the demands of justice in a particular case has been said to lie in judicial method. In his wellknown lecture on judicial method34, given at Yale University in 1955, the year before Lord Radcliffe’s observations in Lister v Romford Ice and Cold Storage Co Ltd, Sir Owen Dixon suggested that there were three permissible ways in which the common law could be developed. The first is by extending the application of settled principles to new cases; the second by reasoning from the more fundamental of settled legal principles to a new conclusion; and the third, by deciding that a category is not closed to circumstances which could not have been foreseen but which may be subsumed within the existing category.

His Honour was speaking of limits to the development of the common law which inhere in accepted judicial method and which, it may be inferred, are necessary for the coherence of the law. It may be doubtful that he considered this to be “strict legalism”, given that he would later express regret at using those words35, although others would continue to view his approach in this way.

Another way of identifying the limits necessary for a change to the law in a particular case may be to acknowledge that the development of the law is not,

21

Bryan v Maloney (1995) 182 CLR 609 at 618; [1995] HCA 17.

22

See e.g. Myers v DPP [1965] AC 1001 at 1021.

23

Ninian Stephen, “Judicial Independence – A Fragile Bastion” (1982) 13 Melbourne University Law Review 334 at 344-5.

Jaensch v Coffey (1984) 155 CLR 549 at 599; [1984] HCA 52.

24

State Government Insurance Commission (SA) v Trigwell (1979) 142 CLR 617 at 633; [1979] HCA 40.

4

Donoghue v Stevenson [1932] AC 562.

25

R v L (1991) 174 CLR 379; [1991] HCA 48.

5

Australian Knitting Mills Ltd v Grant (1933) 50 CLR 387; [1933] HCA 35.

26

R v L (1991) 174 CLR 379 at 390; [1991] HCA 48.

27

Dietrich v The Queen (1992) 177 CLR 292 at 336-7 (Deane J); [1992] HCA 57.

28

Donoghue v Stevenson [1932] AC 562 at 583.

29

See e.g. Hill v Van Erp (1997) 188 CLR 159; [1997] HCA 9; Sullivan v Moody (2001) 207 CLR 562; [2001] HCA 59.

Sir Owen Dixon, “Concerning Judicial Method” (1956) 29 Australian Law Journal 468 at 476.

30

Gala v Preston (1991) 172 CLR 243 at 262; [1991] HCA 18.

9

Bryan v Maloney (1995) 182 CLR 609; [1995] HCA 17.

31

10

Burnie Port Authority v General Jones Pty Ltd (1994) 179 CLR 520; [1994] HCA 13.

Dugan v Mirror Newspapers Ltd (1978) 142 CLR 583 at 612; [1978] HCA 54.

32

11

(1868) LR 3 HL 330.

See e.g. A R Blackshield, “The High Court: Change and Decay” (1980) 5 Legal Service Bulletin 107 at 109-110.

12

Waltons Stores (Interstate) Ltd v Maher (1988) 164 CLR 387; [1988] HCA 7.

33

State Government Insurance Commission (SA) v Trigwell (1979) 142 CLR 617 at 651; [1979] HCA 40.

13

Secretary, Department of Health & Community Services v JWB & SMB (1992) 175 CLR 218; [1992] HCA 15.

34

Sir Owen Dixon, “Concerning Judicial Method” (1956) 29 Australian Law Journal 468 at 472.

14

Minister of State for Immigration and Ethnic Affairs v Teoh (1995) 183 CLR 273; [1995] HCA 20.

35

Philip Ayres, Owen Dixon (2003) 222.

36

Mabo v Queensland (No 2) (1992) 175 CLR 1 at 29; [1992] HCA 23.

like its history, necessarily linear and a gradual progression. Some changes to the law have not been and will not be incremental. This is so even if that is a proper description of the common law viewed retrospectively and over a long period of time. On occasions the common law has found it necessary to abolish a rule, to push the boundaries of a conception, to modify existing rules and occasionally to state a new one.

NOTES

This is not to say that there are not limits to the nature and extent of the change which may be effected. Those limits might be seen as imposed by a need to maintain the shape and structure of the common law. In some cases a change to its rules will not be deleterious; it could be advantageous. If its shape and structure can be maintained then the newness of the rule, the extent of the departure or the change in direction should not prevent the common law being adapted. Sir Gerard Brennan accepted that the court was not free to fracture the skeleton of principle which gives the body of our law its shape and internal consistency36. That was said in Mabo (No 2). Views may differ about whether in particular cases the courts exceed the limits of change. And those views in turn may change over time.

8

1

Lister v Romford Ice and Cold Storage Co Ltd [1957] AC 555 at 591–2.

2

See e.g. Civil Liability Act 2002 (NSW); Civil Liability Act 2003 (Qld); Civil Law (Wrongs) Act 2002 (ACT); Civil Liability Act 2002 (WA); Civil Liability Act 2002 (Tas).

3

6

Donoghue v Stevenson [1932] AC 562 at 579.

7

Chester v Waverley Municipal Council (1939) 62 CLR 1; [1939] HCA 25.

15

But compare Re Minister for Immigration and Multicultural Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6; Plaintiff S10/2011 v Minister for Immigration and Citizenship (2012) 246 CLR 636; [2012] HCA 31; Minister for Immigration and Border Protection v WZARH (2015) 256 CLR 326; [2015] HCA 40.

16

Mabo v Queensland (No 2) (1992) 175 CLR 1; [1992] HCA 23.

17

Jaensch v Coffey (1984) 155 CLR 549 at 600; [1984] HCA 52.

18

Jaensch v Coffey (1984) 155 CLR 549 at 555; [1984] HCA 52.

19

Gala v Preston (1991) 172 CLR 243 at 262.

20

Bryan v Maloney (1995) 182 CLR 609 at 644; [1995] HCA 17.

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37

FAMILY LAW CASE NOTES Robert Glade-Wright Former barrister and accredited family law specialist

Property – Notional add backs – Court’s approach to paid legal fees In Trevi [2018] FamCAFC 1773 (6 September 2018) the husband added $175,000 to his property settlement by winning his appeal to the Full Court (Alstergren DCJ, Murphy & Kent JJ) against Thornton J’s refusal to add back to the $9.5m pool the wife’s legal fees of $437,000. The appellant was a partner in a law firm who earned $30,000 weekly and the wife the primary homemaker and parent to their children.

Those fees were paid from the proceeds of sale of the home. Thornton J also declined to add back the husband’s fees as they had been met from his income or “absorbed in-house”, his liability being limited to counsel’s fees and other outlays ([26] and [67]).

Murphy J (with whom Alstergren DCJ and Kent J agreed) said (from [37]): “An order failing to add back legal costs is a pre-emptive decision about one party paying [or contributing to] the other’s legal costs [whereas] [t]he statutorily prescribed default position is that neither party pays all or some of the other party’s costs. ( … ) [41] [Chorn & Hopkins (NHC & RCH) [2004] FamCA 633 (FC)] … draw[s] a distinction between legal costs met from property that would otherwise be available at trial and legal costs met from funds ‘generated by a party post-separation from his or her own endeavours or received in his or her own right (for example, by way of gift or inheritance)’. The proposition there advanced, that such expenditure ‘would generally not be added back’, also needs to be seen as a guideline informing the relevant discretion rather than determining it. A further distinction is suggested in Chorn between funds generated in that manner and ‘[f]unds generated from assets or businesses to which the other party had made a significant contribution or has an actual legal entitlement’.”

Upon the husband’s appeal being allowed it was ordered that the sum payable to the wife be reduced as the result of the notional adding back of her legal fees.

Children – Trial judge misapplied High Court’s test of “unacceptable risk” in M v M [1988] HCA 68 In Sahrawi & Hadrami [2018] FamCAFC

38 | BRIEF NOVEMBER 2018

170 (4 September 2018) the Full Court (Ryan, Aldridge & Watts JJ) allowed the father’s appeal of Gill J’s parenting order.

The parties married and lived in “Country E” before coming to Australia via the mother’s student visa in 2015. Upon separation the mother sought a protection visa, alleging assault and sexual harassment by a neighbour in Country E. She also alleged family violence by the father (allegations he said were fabricated by the mother).

Gill J was not satisfied that such an assault had occurred ([48]) but held ([49]) that the Court could “assign it significance as an uncertain fact” as was “recognised in the seminal High Court case of M v M [[1988] HCA 68]”, Gill J saying ([146]) that M v M (where the High Court held that “the resolution of an allegation of sexual abuse against a parent is subservient … to the court’s determination of what is in the best interests of the child”, informed by whether an unacceptable risk of such abuse is found to exist) had a “more general application to the facts and considerations underlying a conclusion of what is in the best interests of a child”.

Ryan & Aldridge JJ said (at [39]-[40]): “It is a fundamental principle that a party who asserts facts bears the evidentiary onus or burden of proving them to the requisite standard. It is apparent that the mother failed to do so to the satisfaction of the primary judge. As the evidence adduced in support of the allegations was not accepted, it could not therefore continue to have a role to play in the fact-finding process. … [T]he question of whether there is an unacceptable risk to a child still requires that there be actual evidence which at least gives rise to the conclusion that behaviour may have occurred or may occur. ( … ) Children – Expert’s recommendation for no time was first made from the witness box – Procedural fairness In Sagilde & Magee [2018] FamCAFC 143 (6 August 2018) the Full Court (Strickland, Murphy & Kent JJ) heard the mother’s appeal against a parenting order made

by O’Brien J of the Family Court of WA that the parties’ 12 year old child live with the father and spend no time with the mother. The order followed testimony from clinical psychologist, Dr B, who had provided two family reports. At the trial both parents were self-litigants. The ICL

was represented by counsel.

The Full Court said (at [23]): “In neither of her two reports did Dr B express any opinion to the effect that the child is potentially at risk of physical harm in the care of the mother if final orders are made which result in the child living primarily with the father. In neither of those reports did Dr B advance any opinion about the … potential effect upon the child … of an order for no time with his mother … In the second of her reports … [Dr B said] ‘there appears to be no compelling reason for a change in living arrangements’.”

After noting that Dr B was interposed during cross-examination of the mother and that “at no point did counsel for the ICL open any evidence of Dr B that was not contained in her reports”, the Full Court said (from [59]): “The questioning of Dr B … by counsel for the ICL … led to Dr B giving evidence, again a departure from anything in her written reports, that consideration ought be given to the mother’s time being supervised. (…)

[65] There is no suggestion that this expert … ever … canvassed with the child his views about the prospect of orders … [that he have] no time with his mother.

[66] When the mother’s crossexamination was resumed … nothing was put to [her] … about her presenting a … risk of … harm …; nor was the proposition of no time … put to the mother.

[67] … [W]e conclude that this self-represented mother had no reasonable opportunity to meet a case that her mental health was such that she posed a risk of physical harm to the child. ( … )” The appeal was allowed to the extent of the case being remitted for O’Brien J to reconsider ordering that the child spend time with the mother.

Robert Glade-Wright is the founder, principal author and editor of The Family Law Book, a one-volume, looseleaf and online subscription service. thefamilylawbook.com.au. He is assisted by accredited family law specialist Craig Nicol.

The Tale of the Unfortunate Letter

By John McKechnie, QC

The whole trouble occurred through a question put by a Magistrate which it would have been better not to have been put at all.

Mr Albert Amos Kidd fought with honour during the Great War, had been awarded the Military Cross and had shaken the hand of his Majesty King George.

Mr Kidd was hauled before him and after further insults from Mr Kidd, the Magistrate sentenced him to 14 days imprisonment.

After the war, he returned to his trade in the Gascoyne District as a soft drinks maker. So he was much aggrieved by the question posed while he was defending an action in the Carnarvon Local Court.

But as the full court discovered, the Magistrate had made an error. The sentence imposed was for two offences, not one.

As a former military man, Mr Kidd’s first, though regrettable impulse, was to return fire.

This he did in the form of a letter to the Magistrate, Fergus Finbar Horgan, written during an adjournment: F. F. Horgan, Esq. Dear Sir, I did not think that I would live to be so mortified as I was to-day in your Court. Publicly accused of being a party capable of sinking to the depths of so sordid a crime as bribery-against a decrepit woman-to obviate payment of a paltry £20. When His Majesty King George gripped my hand and decorated me with the Military Cross, I did not think it would ever be my dolour to meet one of His Servants capable of so base an act as to prostitute our Dear Emblem-the Scales of Justice. Prematurely judged. British Law is founded on facts fortunately, when administered unbiasedly. To-morrow I have to defend my most priceless possession-my good name-and I will defend it while I have breath in my body.

I am, Sir, yours faithfully. A. A. Kidd, Lieut. M.C. The Magistrate was unimpressed, to put it mildly.

He fined Mr Kidd £10. Mr Kidd was not pleased and it took some time before he was taken to the cells where he remained until the fine was paid some hours later.

The Magistrate also banned the letter from publication.

Mr Kidd was not going to take this lying down. His honour was at stake, or so he believed.

So he posted a copy of the letter in a public place in Carnarvon.

If the Magistrate was angry before, he was incandescent now.

As Justice Draper put it, “The Magistrate unfortunately, fortunately perhaps for Mr Kidd, took the wrong procedure.”

The court agreed on the result but as sometimes happens, got there by different routes. The Chief Justice thought the publication was not in the face of the court and the Magistrate had no jurisdiction.

Justice Draper thought it was contempt but the wrong procedure.

Justice Rooth thought he would wait until the question arose before opining if it was a contempt.

As for Mr Kidd, he continued to live a quiet life in Carnarvon manufacturing aerated waters. Six years later, he and his wife took a holiday in the South.

On 20 May 1938, his many friends were pleased to learn that after four weeks of serious illness, Mr Kidd was now convalescent and well on the road to recovery (Northern Times).

Unfortunately, recovery was short lived and he died on 27 July 1938.

As for the Magistrate, he had only been in Carnarvon for a short time. However, he was busy with a Gilbertian Pooh-Bah list of duties as acting stipendiary Magistrate for the Gascoyne District Magistrate of the Carnarvon Local Court, Chairman of the Gascoyne Licensing Court, Warden of the Ashburton and Gascoyne Goldfields Treasury Paymaster and Clerk of Courts.

F F Horgan returned to Perth in 1929 to take up the position as Special Magistrate to the Children’s Court, where he served faithfully for many years.

He lived to nearly 100, dying at the age of 97 in 1965.

Adapted from Kidd v Horgan (1930 32 WAR 117)

39

Bali, Indonesia

Ex Juris: Travel Tales from the Legal Profession Bali

Australians are great travellers and lawyers are no different. Each month a reader of Brief tells us about their favourite travel destination.

As one of our closest off shore destinations, Bali is a popular choice for Perth tourists with limited leave. So it was that I found myself stepping into the humid heat at the newly redeveloped Denpasar airport. Soon enough we were in our taxi on the chaotic streets with horns tooting all around us. So began my holiday in the putative relaxing land of Bali.

Bali, Indonesia's “Island of the Gods”, is continually developing to meet the changing needs of the plethora of tourists who visit each year. While many Western Australians travel to Bali each year, there seems to be an increasing amount of Americans, European and Japanese tourists as well. They are provided for by a burgeoning array of world class hotels, bars and restaurants.

Your correspondent hopes that the flood of tourist money that enters Bali is working its way to the people who need it most (my own suggestion is to tip early and tip often).

For all the tourism and development, it seems remarkable that a journey down an alley adjoining one of Seminyak's main streets reveals a rice paddy.

Indeed, agricultural lots survive the tourism driven change throughout Bali's most popular areas and there are still a few traditional Warungs and food markets. My own journey into one such

40 | BRIEF NOVEMBER 2018

market exposed me to an incredible array of overpowering scents; sweet fruits, thousands of incense sticks, butchered chicken and fish left provoked by warmth of the day. Let me say, this was not the best idea for someone with a hangover.

Our group also drove out to Uluwatu Temple on Bali's southern tip. This stunning Hindu temple adorns the top of impressively high limestone cliffs overlooking the Indian Ocean. It was our first time to the temple and we were lucky to be warned to take off all of our headwear and glasses before we explored. The reason for this caution are the gangs of rogue monkeys who are delightfully skilled at stealing hats and glasses off the heads of unsuspecting tourists.

While much of Bali is very beautiful, there is a disturbing amount of rubbish that litters the streets and pollutes the creeks, rivers and drains of the Island.

Even the grove of trees that surround the temple at Uluwatu is full of discarded plastic. It is a reminder that for all the high class hotels and restaurants this is an island in a country where the citizens may struggle for their next meal, and things like organised waste disposal are extremely low on the list of priorities. Yet in spite of that, the Balinese people are only too happy to help if you ever want for anything and will go out of their way for complete strangers.

Another reason that so many far flung tourists fly for hours to visit is that, for a small island, Bali does have something for everyone. If you venture away from the South there are the Volcanic sands and slower pace of Lovina in Bali’s North which offers a more immersive Balinese experience, the remarkable mountain scenery around Ubud and lesser known central locations which are perfect locations for a rejuvenating get away.

In short, this wasn’t my first visit and I doubt it will be my last.

Tell us about your favourite (or not so favourite) destinations and why you travel there. Please send your contributions to brief@lawsocietywa.asn.au

Dr ver's Dog Send your submissions to the Dog via brief@lawsocietywa.asn.au

At the time of writing your Dog is happily trotting around parts of the United Kingdom and France, paying particular attention to golf courses of Scotland, and cycling and eating in France.

Scottish golf courses are in a class of their own, with pot bunkers galore, gorse, grass which entraps errant golf balls, wind and rain. Even the language can be puzzling, when “a firm putt” is pronounced as four syllables: as in “a firrum putt”! A bit like voice recognition in elevators!

France claims to be the third biggest seller of bicycles in Europe, the Netherlands and Germany being the leaders. Under the Environment Code it is obligatory that bicycling must be paid as much attention as motorised transport.

To combat theft, regarded as a major obstacle to cycling development in urban areas, a marking system engraved on the frame identifies the owner of a bicycle with the bicycle number and a personal password. Theft must be reported on a dedicated website and a complaint registered with the police. Cycle tourism is promoted through a National Mission for Cycleways and Greenways, the objective being to achieve a 20,000 kilometre network by 2020, of which two-thirds would be right of way. Even roads along the Seine have been reserved for bicycles in part.

The Cycle Tourism Scheme is designed to promote France as the primary cycle tourism destination in Europe.

The estimated economic benefits from the promotion of the cycling trade, including bicycle construction, cycling and cyclotourism are said to be €45 billion, creating an estimated 35,000 jobs, of which 19,000 are in the tourism trade. Part of the cycling plan is an integrated “EuroVelo 6”, a European route extending from the Atlantic to the Black Sea. One wonders what similar initiatives might be taken in Western Australia, and the benefits that could flow as a result.

At Chenonceau Castle, I was struck by the description of Louise Dupin (1706 to 1799). Madame Dupin recruited Rousseau to help her achieve the major project on which she had set her heart: to produce an encyclopedia of women to demonstrate once and for all the natural equality between men and women. Her work required considerable research as she planned to use all possible sources from medicine to history, from politics to anthropology, from law to religion. The archivist (Elizabeth Badinter) describes the research which she used to show that inequality between the sexes was due to male oppression. It is remarkable that 300 years later the issues as to gender do not seem to have been resolved!

Another gem, not previously known to your Dog, is a recount of the song ‘Blackbird’ by Paul McCartney, sparked by a bird song he had heard while learning meditation in Rishikesh, in India (The Life of a Song, Ian McCann). The melody was based on J S Bach’s ‘Bourré in E Minor’. McCartney cited the Little Rock Nine as an inspiration for ‘Blackbird’. In 1957, nine black students attempted to enrol at a segregated school in Arkansas. State Governor Orval Faubus banned the nine and deployed the National Guard to stop them entering the school. President Eisenhower intervened taking control of the Arkansas National Guard. The wrangle between Faubus and the Federal Government endured until August 1959.

In the course of these travels, your Dog has been amused to learn that police on the Isle of Man are kept busy by wallabies, which are involved in car crashes, and one of which had to be rescued from the sea. It appears that about 160 wallabies live on the Island after a pair escaped from a wildlife park in 1965. There have been nine police incidents involving these animals in the past five years.

In one case, a couple in a car swerved to avoid a wallaby and hit

a wall. In another, officers waded into the sea to rescue a wallaby with a broken leg. A Twitter post attributed to Sergeant Tony Lawler of the Isle of Man Police records “Only on the Isle of Man can you go from a foot chase and arrest to finding a wallaby sitting in the middle of the road”. Imagine the look on the face of a Manx cat (no tail) meeting a Tasmanian wallaby!

Another interesting snippet is that sweat bees in the Ledmore and Migdale Wood in Sutherland, so named because the tropical variety lick salt from people’s skin, have been compared with English bees in Cornwall in a study coordinated by Edinburgh University. English bees live in well organised communities with the queen bee served by workers. Conversely, in Scotland the bees live solitary lives with each female making a burrow of its own. In Scotland all bees are equal, with no queens or workers.

Royalty is out.

Mr George Anderson of the Woodland Trust is reported to have said: To live a Royal life, the bees seem to need the longer summer season found in the South. This gives a queen a chance to raise an army of workers.

With their help, she can then raise more queens later in the year. The bees are ready to emerge the following Spring to start the process over again. Shorter seasons in the North mean the insects don’t have enough time for the cycle of reproduction. Citizen bee meets citizen bee to produce thoroughly republican offspring.

Your Dog was interested to read an exchange in The Times (Saturday, 8 September 2018) as to the shortest letter to have been published in The Times.

In 1986, The Times published a letter from Rev John Ticehurst recording common girl’s names of a hundred years earlier which had fallen into disuse. He was curious to know whether anyone knew of a modern Kerenhappuch (being the name of one of the three daughters of Job). In response The Times received a reply, published as follows: Sir, Yours faithfully, Caroline Sofia Kerenhappuch Parks (aged 7).

Standing in the queue at Waitrose, your Dog was amused by a discussion between a customer and her husband, who reminded her not to forget to buy a dozen Royal Gala apples… “as the pony loves them”.

At the time of writing, there has been much speculation in the press as to the identity of an individual involved with or working at the White House, who has allegedly made a report as to the goings on in the administration.

It reminded your Dog of Sir Humphrey Appleby, who said to the Prime Minister: The identity of the official is not shrouded in quite such impenetrable obscurity as certain previous disclosures may have led you to assume, but not to put to a fine a point on it, the individual in question is, it may surprise you to learn, one whom your present interlocutor is in the habit of defining by means of the perpendicular pronoun.

41

Law Council Update

2018 Young Lawyer Award honours Tamsin Webster for her outstanding pro bono work 32-year-old Melbourne lawyer Tamsin Webster has won the 2018 Australian Young Lawyer Award for her continuous and outstanding contribution to the legal profession and the community through pro bono work.

Ms Webster joined Maddocks as a graduate in 2011 and immediately immersed herself in the pro bono and volunteering opportunities offered by the firm. She is currently a Senior Associate in the Employment, Safety & People team.

From 2012, Ms Webster has been involved in an impressive range of pro bono matters, including running a number of judicial review cases for asylum seeker clients in the Federal Circuit Court and Federal Court.

She has volunteered at the Asylum Seeker Resource Centre, coordinated the Refugee Legal program at Maddocks, and made a significant contribution to the work of the Refugee and Immigration Legal Centre.

“Tamsin's desire to apply her considerable skills to benefit those who most need them is clear from her impressive pro bono record,” said Law Council of Australia President Morry Bailes.

“Her extensive pro bono efforts are made all the more impressive through the fact that she has simultaneously been running a full-time practice in Maddocks’ Employment, Safety and People team.

“Those who have had the benefit of her efforts speak highly of her and with genuine affection.

“The judging panel was also impressed by the way she has played a pivotal mentoring and leadership role in the Maddocks pro bono program.

“She has organised training for young lawyers, and represented her firm in its relationship with Refugee Legal and Justice Connect.

We understand Tamsin’s enthusiasm for pro bono work is infectious and she is a wonderful mentor.

“Tamsin has already achieved so much, but she is certainly one to watch for the future.

We will be watching her career develop with interest,” Mr Bailes said.

Uncertainty about side-stepping warrants and detention must be resolved under encryption bill The Australian Government’s encryption access bill raises serious questions about the ability of law enforcement and intelligence agencies to access encrypted private information without a warrant, as well as the power to detain individuals in certain circumstances.

42 | BRIEF NOVEMBER 2018

Law Council of Australia President-elect, Arthur Moses SC, told a Parliamentary Committee that while there was significant value in allowing law enforcement and national security agencies faster access to encrypted information, the proposed Telecommunications and Other Legislation Amendment (Assistance and Access) Bill 2018 needed considerable amendment.

“The Bill will authorise the exercise of intrusive covert powers with the potential to significantly limit an individual’s right to privacy, freedom of expression, and liberty,” Mr Moses said.

“It would allow law enforcement agencies and ASIO to make ‘technical assistance requests’ or ‘voluntary assistance requests’ on designated communications providers.

“Under these requests a provider may be asked to undertake certain acts or things, including telecommunications interception, for which authorities would otherwise require a warrant.

“It is our strong concern that these requests could side-step the need for a warrant.

“Where law enforcement or intelligence agencies would otherwise require judicial or Administrative Appeals Tribunal, or Ministerial authorisation or approval, they should not be able to make a voluntary assistance request or a technical assistance request.

“It is hard to imagine an internet provider refusing a written ‘request’ from law enforcement.”

Among other concerns raised by Mr Moses were proposed new powers that would allow law enforcement or ASIO to effectively detain individuals if they were required to provide compulsory assistance.

“If a person is required to attend a place to provide information or assistance this may arguably amount to detention of that person, particularly as they may be arrested on suspicion of an offence if they attempt to leave,” Mr Moses said.

“Appropriate safeguards need to be in place for detention. Detained people should be allowed to contact a lawyer or family member, for example.

“There should also be prescribed maximum periods for giving assistance, requiring an explanation of legal rights and responsibilities, and the availability of interpreters where required.”

Mr Moses also alerted the committee to other concerns, including that for computer access warrants, agencies may obtain telecommunications interception on the basis of lower thresholds than those that currently apply. They may also have an ability to use force against persons or things to engage in telecommunications interception.

Legal profession calls for immediate removal of asylum seeker children from Nauru The Australian legal profession has called for asylum seeker children and their families to be moved off Nauru as a matter of urgency.

Law Council of Australia President, Morry Bailes, said its concerns echoed those of the medical profession, where respected bodies such as the Australian Medical Association, The Royal Australasian College of Physicians and The Royal Australian College of General Practitioners have raised alarm over the welfare of refugee and asylum seeker children held on Nauru.

“When you have the leading medical bodies in Australia saying unequivocally that the physical and mental health of children is deteriorating dangerously as a result of detention then urgent attention is required,” Mr Bailes said.

“Removing asylum seeker children from the Nauru is not just medically necessary, it is also consistent with Australia’s obligations under domestic and international law.

“The United Nations Convention on the Rights of the Child requires that in all actions concerning children, the best interests of the child be the primary consideration.

“Indefinite detention of children for the purpose of determining their immigration status will never comply with this Convention.

“Australia must acknowledge its responsibility for the health and safety of those asylum seekers that have been transferred to other countries for offshore processing and assessment,” Mr Bailes said.

Mr Bailes said the Law Council’s Asylum Seeker Policy and Regional Processing Policy sets out Australia’s obligations regarding the detention of children and promotes policies that have the goal of ending long-term detention for those seeking asylum.

“If children must be detained as part of the immigration process, they should be detained only as a measure of last resort and for the shortest appropriate period of time,” Mr Bailes said.

“If necessary as a last resort, community-based detention should be used for children and families, provided that it includes appropriate access to services and facilities, including healthcare and education.

“The current crisis again highlights that Australia needs a stronger commitment towards a cooperative, regional approach that meets its international obligations.

"Long-term, indefinite detention on Nauru is simply no place for any child. The Australian Government, in recognising this simple truth, should act with the appropriate urgency,” Mr Bailes said.

43

Eulogy for the Honourable John Wickham QC Guildford Grammar School Chapel 3 October 2018

The Hon John Wickham QC 1919-2018

By Jonathan Wickham

This photograph was used on the cover of the Order of Service for Mr Wickham's Memorial Service and is reproduced with permission.

The Honourable John Wickham QC was a Judge of the Supreme Court of Western Australia from 1969 to 1983, one of the founding members of the independent bar and Chancellor of Murdoch University. He was a Councillor of the Law Society of Western Australia from 1946 to 1951, Vice President from 1968 to 1969 and was awarded Life Membership in 1996.

The Honourable John Wickham QC died on 24 September 2018 aged 99 years 3 months.

At a substantial farm near Borden, just north of Albany, Thursday, 5 June 1919, dawned cold and raining. The owner, my grandfather Percy, spent the day doing some fencing and checking his sheep. In his farm diary that evening he recorded the day as follows: “…wet and cold, fencing in morning, Betty had a boy, checked ewes. 18 points of rain...”

Many years later on reading that diary my father commented that Betty could easily have been a farm animal but in fact was his mother, and the boy was himself. In diary terms it was hardly an auspicious beginning, wedged between a fence and some old ewes.

For the next nine years my father lived on the farm, doing small boy farm things and enjoying holiday visits from his older and school age half sister Mary and brother Tony. Initially he was home schooled by his mother, and then became a foundation student at the newly opened Borden state school, with one teacher and seven pupils. The first teacher was driven out by the unruly children – with only seven of them hunting as a pack!

The replacement teacher was the much loved and successful Miss Bilston. In 1977 for the 50th anniversary of the school’s foundation my father attended, and so did Miss Bilston. She told him that he was an absolute nightmare to teach, but he seemed to have done quite well in life.

At the age of nine my father entered the Prep School here at Guildford Grammar

44 | BRIEF NOVEMBER 2018

School as a boarder. I am not too sure that he enjoyed it – homesick, not particularly gregarious, not a naturally talented sportsman, but intelligent and an excellent reader. In spite of his early doubts, this was the beginning of an extremely strong attachment to, indeed love of, this School, and one that was to last all his life. It is, therefore, appropriate that this Memorial Service is held in the Chapel, and I thank the Headmaster Stephen Webber, Richie Longson and David Williams for their willing and effective help in arranging it.

My father always was known as Wick in the family, at school, amongst his friends, in the legal profession and here in the Guildford community. His three Wickham great grandsons now carry that nickname in their Sydney school – Big Wick, Middle Wick and Little Wick.

Wick had a good career at Guildford – rowed and swam for the School, although unsurprisingly beaten at the swimming Inters by one Percy Oliver, later an Olympian. He captained a winning team in the Inter-school shooting, was captain of St George’s House, and matriculated to the University.

Wick then joined Joseph Muir and Williams, the legal firm that seemed to be all Guildford lawyers. As a young boy I used to visit the office to fix red stickers in the WA Law Reports, earning sixpence an hour. I enjoyed being there – Red Burt was my godfather and always good to me, but my hero was Bill Elphick, who convinced me that he kept a loaded pistol in the top drawer of his desk – “In case of

trouble…”, he told me. It was one way of guaranteeing very steady work from a ten year old doing the Law Report stickers.

In 1939 Wick was training in the army camp on Rottnest Island, where he met Peggy Vance, the young lady he was to marry and who became my mother. He always claimed that she crawled through the barbed wire entanglements to find him – I suspect that this is somewhat doubtful and a fine example of Rottnest Romantics.

They were married in 1942 and enjoyed a long and happy life together.

Two years after he left school Wick was the secretary of the Old Guildfordians’ Association, then later President, then an Honorary Life Member, and until his death the Patron. His contribution to the School was extraordinary – he was a Member of Council for 21 years and Chairman between 1956 and 1959. He also coached rowing – a winning first four and the pinnacle in 1962 with a win in the Head of the River. He coached many other crews, often made up of young beginners to the sport.

As a father to my sister Jacquie and me he was fully committed, keen for us to do well in all that we attempted and interested in our activities. Life for us in Victoria Avenue was fun – White Beach was close by, we had a sailing dinghy and made good use of it. I slowly realised that the suggestion from Wick that we go fishing in the dinghy was actually code for: “You, Jono, you row from White Beach to Point Walter and back, while

I sit in the stern with a spinner to catch our dinner.”

Well – there was a lot of rowing, some complaining, and to the fish absolutely no threat.

In 1962 he and his good friend Red Burt set up the Independent Bar, then in 1967 he was appointed a Queen’s Counsel.

Shortly after this he was elevated to the Bench and served as a Supreme court Judge for 14 years. I have been told that he was a fair judge, careful in his judgments, usually polite, and encouraging to young barristers before him. He did not, however, tolerate fools gladly, and expected those arguing the case to have read all the relevant precedents. His judgments were impeccably written, never verbose and always grammatically correct.

One of his favourite stories on becoming a judge concerned his early dealings with the Director of Public Works.

He asked for a small refrigerator to be installed in his Chambers.

“No”, came back the reply, “Only Senior Public Servants qualify for a refrigerator.”

“Fair enough”, replied the new judge, “just put one in and I will pay for it.”

After three months came back the reply.

“Only Senior Public Servants can have a refrigerator.”

So he phoned Boans and had his own fridge delivered and installed the next day One irony of all this is that when he was appointed Chairman of the Official Corruption Commission in 1989 he was provided with not one fridge but two, a respectable number of champagne glasses, but no champagne. Perhaps the bureaucrats realised that the first person that they needed to look after was the Chairman of the Corruption Commission.

While he was on the Bench he was appointed to be the Foundation Chancellor of the new Murdoch University.

For him this was fascinating – bulldozers, architects, buildings going up, academic staff to be appointed, and it was all successful. Emeritus Professor Geoffrey Bolton referred to him as “a humane, thoughtful and fair minded jurist, and an excellent choice as the University’s first Chancellor.”

Then in 1983, aged 64, Wick retired and he and my mother built a modest beach house at Eagle Bay. What a good decision – a wonderful place to live, a strong community, plenty of bridge players, and a great attraction to his four grandchildren – and their parents – all living in Sydney.

Inevitably, Wick was given some responsibility there – membership of the

Eagle Bay Progress Association, whose main aim was anything but progress. Then he was a judge of the annual sand castle competition – he would have taken that seriously, but with a light heart. Fortunately he was not there when some of his great grandchildren participated in the competition, building a fantastic sand octopus – with seven legs!

My parents found plenty of time to visit Sydney, staying in Randwick with Jacquie, Paul and the granddaughters Pip and Cathy, supporting them in their activities, staying with Sally and me and the two grandsons Jamie and Tim at our small farm near Bathurst. They also enjoyed staying at The King’s School with us, watching rugby or rowing or cricket. Wick was a good grandfather, happy to read to small children, happy to play cards and board games, quite at home on our farm, particularly trout fishing in our creek with our younger son Tim. Good memories – wonderful memories, and then the next generation comes along with more reading, more games and great holidays at Eagle Bay. In the last decade or so Peg and Wick lived at Alfred Carson Lodge in Claremont.

After my mother died Wick stayed there.

Once when we were visiting he was not in his room – a quick search and there he was, coming down the passage, bottle of wine in hand and two glasses:

For the world of the law, his insistence on high intellectual standards, his support of those starting in the profession, his passion for the correct spoken and written use of the language, his whimsical sense of humour, his role in the establishment of the Independent Bar and his dignified presence.

For this School, a life of service through the Old Guildfordians’ Association, through the School Council as a long time member and Chairman, along with a steady and sometimes spectacular contribution to the coaching of rowing. But let us never forget his avid and thorough research into the conflict between the School and the Church Property Trust over the use of revenue from the Cloisters Trust. It is a complex matter well covered in his book Merging Streams.

The outcome resulted in the separate incorporation of the School, and now a regular income stream that gives the School considerable financial security in the future. The impact of this should not be underestimated.

So, a good life very well led, leaving many memories and significant legacies. He will be sorely missed.

Many thanks to you all for attending this memorial service – Wick would be honoured by your presence.

***

“Just found an old girlfriend – wonderful place!”

Then there was the occasion, often re-told and probably apocryphal, of a fire drill at Alfred Carson requiring all the inmates to gather in the foyer for a headcount. Wick’s room was adjacent – seeing an elderly lady struggling a bit he offered her a chair in his room.

“Oh”, she said, “That is very kind. What is your name?”

“John Wickham”, he replied.

“What”, she cried, “I used to know you – I would rather be in the fire!”

He was, however, very well looked after at Alfred Carson, and on behalf of the family I thank them for their excellent care throughout his time there.

***

Photograph of The Hon John Wickham QC provided by the Supreme Court of Western Australia

So, after life in Borden, Guildford, Claremont, Eagle Bay, Crawley – what is his legacy?

For his family, four grandchildren, eight great grandchildren, each of whom will be inspired by his love of each of them, his life of service, his careful use of English, his love of books and reading, and his absolute modesty.

45

46 | BRIEF NOVEMBER 2018

Classifieds

Missing Will

Missing Will

Missing Will

Any person or firm having knowledge of any Will made by ARTHUR JOHN BIGGS of Forrestfield born on 16 December 1936 died on 22 May 2018.

Please contact: Danielle Bechelet, Avon Legal, Lawyers and Public Notary, Suite 7, 9 The Avenue MIDLAND, WA, 6056.

Phone 9274 1977 Fax 9274 1988

Eric Tan of Robertson Hayles Lawyers is the limited administrator of the estate of John Arthur Fowler, later of 9 Robinson Terrace, Daglish, born on 23 February 1939, who died on or before 24 November 2017. Anyone knowing the existence or whereabouts of the last Will made by John Arthur Fowler, please contact Eric Tan at: Robertson Hayles Lawyers PO BOX Z5403, Perth WA 6831 Tel: (08) 9325 1700 Email: etan@robertsonhayles.com

Any person holding or knowing the whereabouts of the last Will and Testament of the late PATRICK GORDON (died 11.10.16) late of Juniper St David’s Residential Care, 17/19 Lawley Crescent, Mount Lawley, please contact Garry Same on (08) 9325 8266 or email: gsame@taylorsmart.com.au within one month of the date of publication of this advertisement.

Missing Will

Missing Will

Any person holding or knowing the whereabouts of the last Will and Testament of the late GERARD ANTHONY PARKER, or who acted for him re purchase/mortgage of his home 6 Kirke Cove, Merriwa, please contact next of kin or email Graeme Dennett on graeme@graemedennett.co.nz within one month of the date of publication of this advertisement.

Any person having any information, holding or knowing the whereabouts of the last Will and Testament prepared around 2010 of the late ALICIA (LEE) COLUMBINE PHILLIPS (Date of Birth: January 1939) is requested to contact Owen Phillips on 0422 229 444 or email Owen.Phillips@health.wa.gov.au

New Members New members joining the Law Society (October 2018) Ordinary Membership Ms Linda Keane Office of the Director of Public Prosecutions - State

Professional Announcements Calverley Johnston Family Lawyers

IRDI Legal

The Directors of Calverley Johnston Family Lawyers are pleased to welcome our most recently appointed professional staff members.

IRDI Legal is pleased to announce the appointment of Zoltan Kozma as a Senior Lawyer in their Litigation team.

Natalija Macura joined the Firm as a Solicitor on 30 July 2018. She has almost 1.5 years post-admission experience in Family Law and several years of Law Clerk experience prior to her admission.

Zoltan, recently of Separovic Injury Lawyers, brings over 28 years of legal experience to the firm.

Jeremy Heenan joined the Firm as a Solicitor on 13 August 2018. He was admitted in November 2017 and has gained experience in family law and wills and estates since this time.

Natalija Macura

Jeremy Heenan

Mr Jamon Phelan-Badgery Minter Ellison Mr Lin Qing Ji DLA Piper Australia

Restricted Practitioner Ms Lily Woods Hotchkin Hanly Zoltan Kozma

Sceales Lawyers

Associate Membership Kimberley Cartwright Murdoch University - School of Law Miss Thilini Meemanage University of Notre Dame Australia

Perth-based tax advisory law firm Sceales Lawyers is pleased to announce the appointment of Sam Radici as a Senior Associate of the firm with effect from 25 September 2018.

Ms Christine Nyeboer University of Notre Dame Australia Mr Adam Versaci Jackson McDonald

47

Events Calendar

With thanks to our CPD partner

Stay up-to-date with the latest Law Society member events and CPD seminars

NOVEMBER 2018 Membership Events Friday, 9 November YLC Mixed Netball Competition Wednesday, 28 November Welcome to the Profession Breakfast Thursday, 29 November Sole Practitioner and Small Firm Forum CPD Seminars Wednesday, 7 November Legal Project Management Essentials Thursday, 8 November Risk Management for Family Lawyers Friday, 9 November Ethics on Friday: LPCC Investigations and/or Disciplinary Proceedings – Disclosure Obligations Monday, 12 November Creating the Optimal General Counsel / Outside Counsel Relationship WEBINAR

Tuesday, 13 November Leading in Law - Leading through persuasive influence Wednesday, 14 November Strata Titles Act & Community Title Schemes Wednesday, 14 November Creating and Managing Precedents WEBINAR Wednesday, 14 November ASIC Series – Enhancing Australia’s Statutory Whistleblower Regime Thursday, 15 November Superannuation and Estate Planning Wednesday, 21 November A View from the Bench Wednesday, 28 November Looking to America: Lessons for a Western Australian Mental Health Court Thursday, 29 November Managing a Peak Performing Team: Motivate, Engage and Deliver Outstanding Results

DECEMBER 2018 Membership Events Wednesday, 5 December End of Year Celebration The Westin, Perth

For all CPD-related enquiries please contact cpd@lawsocietywa.asn.au or (08) 9324 8640.

For all membership-related enquiries please contact membership@lawsocietywa.asn.au or (08) 9324 8692.

For all upcoming events and further information please visit lawsocietywa.asn.au

48 | BRIEF NOVEMBER 2018

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