Remember the days of the ‘old (school) law’ **

Following on from last week’s post concerning conflicts of law, a similar area of potential difficulty relates to where governments replace existing legislation with a new act.

For example, in many states of Australia, the state governments have removed the previous 'Stamp Acts' and replaced them with 'Duties Acts' in recent years.

In very simple terms, the new Duties Acts effectively replace the previous Stamp Acts in their entirety as and from a particular date.

Practically however there can often be difficulties with this approach.

Recently, for example, we had a situation where a client became aware of an historical transaction that, while not subject to duty under the current Duties Act, would probably have been subject to stamp duty under the relevant Stamp Act.

It appeared that the only reason duty had not been paid was because the relevant documentation had not been lodged with the Stamps Office at the time.

Even though the relevant Stamp Act has been repealed for over ten years, it became necessary to review the provisions of that Stamp Act in detail as well as various court decisions that we had otherwise assumed had been consigned to the history books.

** For the trainspotters, ‘Remember the Days of the Old School Yard’ is a song by Cat Stevens from 1977.

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Shake it off and Conflict of Laws **

The concept of ‘conflict of laws’ is one that comes up regularly in estate planning exercises and essentially relates to is determining which rules apply when there are two or more potential jurisdictions in relation to a certain set of circumstances.

Conflict of law issues can come up in a wide range of situations. One recent example related to a trust where the controllers of the trust wanted the laws of South Australia to apply, even though there were no substantial assets held in South Australia and the trustee company was registered in New South Wales.

The attraction of having the South Australian laws apply was that it would mean (potentially) that the trust could last forever due to the effective abolishment of the perpetuity rules in South Australia some years ago.

Broadly, so long as certain steps are followed, it is generally possible to have a trust with assets in any other Australian state regulated by South Australian law.

** For the trainspotters, ‘Shake it off’ by Taylor Swift is the number one hit on Google for songs about from 2014.

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‘Where’s the proof man?’ Powers of Attorney and Conflicts of Law **

Continuing the theme over recent weeks of conflicts of law between various jurisdictions, the way in which the powers of attorney provisions operate in each Australian state are very relevant.

Effectively, while each state has its own legislation (and completely unique forms) for powers of attorney, there is also legislation that is designed to ensure that each state will acknowledge each other state’s documentation.

While this theoretical position is comforting, practically the situation is anything but satisfactory.

For example, the enduring power of attorney document in New South Wales is less than five pages. The equivalent document in Queensland runs to around 20 pages.

For third parties (including banks), who are used to (in New South Wales) seeing a very short document, they will often be quite unsettled to be presented with the much longer Queensland version.

In a practical sense, we quite often therefore arrange for enduring powers of attorney to be prepared in each state where the client has substantive investments, particularly if they own real property in more than one jurisdiction.

A more detailed explanation of how to craft multiple, complementary, powers if attorney is explored in our previous post. Please contact me if you would like access to this and can not easily locate it.

** For the trainspotters, ‘Where’s the proof man?’ is a line from Lou Reed’s song from 1989, ‘Dirty Boulevard’.

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