The Australian Korean Business Council is hosting the event launching the celebration of 50 years of Friendship between the two nations.
We cordially invite you to attend this great event and celebrate with us.
Consolidated Lawyers’ is very active in building and maintaining relationships with the Korean Community in finding practical and cost effective legal solutions for your business.
It will be a great opportunity for you to hear the speakers and meet delegates from Australia and Korea. Come meet our team.
Please send your registration papers to our firm as you will be attending as our guest free of charge by 4:00pm on Tuesday, 28 June 2011.
Everyone has a right to dispose of their property and assets to whomever and however they wish and such wishes are generally documented in a will. The law generally upholds that person’s wishes, whether those wishes are fair or not. However, in circumstances where the law considers the will to be grossly unfair with respect to particular persons, it allows those persons aggrieved to challenge the will. The court will only intervene where it is clear that inadequate provision has been made in the will for an eligible family claimant.
The law that governs this area of law is the Succession Act 2006 (NSW) (“the Act”) which outlines the law in relation to family provision orders. Section 57 of Act sets out a list of eligible persons who are entitled to make a claim against your estate as follows:
1.A husband or wife of the deceased person at the time of the deceased person’s death, including a person who was living in a de facto relationship with the deceased;
2.A child of the deceased person, or if the deceased person, was at the time of his or her death, a party to a domestic relationship, a person who is, for the purposes of the Property (Relationships) Act 1984 (NSW), a child of that relationship;
3.A former wife or husband of the deceased person;
4.A person who was, at any particular time, wholly or partly dependent on the deceased person and who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member; and
Making a claim against an estate is not as simple as it sounds – a person must have sufficient grounds and capacity in order to do so. Section 60 of the Act sets out the matters which are to be considered by the Court in granting a family provisions order, which may include but are not limited to:
(a)any family or other relationship between the applicant (eligible person) and the deceased person, including the nature and duration of the relationship;
(b)the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person’s estate;
(c)the nature and extent of the deceased person’s estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered;
(d)the age of the applicant when the application is being considered; and
(e)whether any other person is liable to support the applicant.
An application may be made by an eligible person who has sufficient grounds, provided that the application is made not later than 12 months after the date of death of the deceased person, unless the Court otherwise orders. An application may be made whether or not administration of the estate of the deceased person has been granted.
It is recommended that you regularly review your will to avoid any such applications.
Speak to one of our lawyers today to discuss your current will, obtain advice in respect of your estate planning needs and/or update your will in order to avoid any applications for a family provision order against your estate.
A case study on Making a Claim against an Estate is included in this newsletter.
If you would like to know more about making a claim against an estate, please contact Graham Fullick (Director, Senior Lawyer) or Melissa Hoffmann (Lawyer) on (02) 9283 2566.
The next 3 months to Christmas are generally the most intense for a law practice. This is because our work is completely synchronised with our clients’ needs. Our litigation division is busy preparing matters for hearings prior to the judges breaking up mid December for their Christmas-New Year period.
There will be a seasonal Spring pick up in the real estate sector with many clients having transactions to be completed by Christmas. What happens to the real estate market generally is however dampened by the prospect of further official interest rate rises. The banks have been passing on not only those, but adding on their own margin increases.
The anomaly in some states like NSW and Perth is that some leading Economists have predicted the housing market will increase by up to 20% over the next 3 years.
However with another official interest rate rise predicted for next November and beyond I am not that optimistic.
Another interesting observation is that while interest rates (cash rate 4.5% presently) are relatively low compared to the mark reached in the past 20 years they are higher than any other country with a decent credit rating.
This combined with a robust mining sector is boosting demand for the Australian dollar which is at an all time high.
The volatilities of international and local economies continue to play a vital role in the future investment and productivity decisions of all our clients.
In this Newsletter we outline some key legislative changes that may impact on your future decision making for you or your business.
1. Advance Care Directives;
2. Time limits in Personal Injury Claims;
3. Making a Claim against an Estate plus feature case study;
4. Proposed changes to Vendor Disclosure;
5. ATO acts against the Corporate Phoenix;
6. Capital Maintenance now replaced by solvency based test company dividends; and
7. Case Study: Making a Claim against an Estate.
Announcements
Graham Fullick
On Friday 8 October 2010, we announce the appointment of Graham Fullick who has previously been an Associate of Consolidated Lawyers as a new Director and member of the board of Consolidated Lawyers. Graham joins existing board member Theresa Assaker and myself. Graham joined Consolidated Lawyers on 29 May, 2005.
He is a hard hitting litigator who prepares civil trials to maximise judicial impact and the credibility of clients’ cases. Graham is in his 11th year of post-admission practice and has 24 years legal experience. Because of this vast experience, he has an holistic, comprehensive approach to legal matters. Mr Fullick will add rigour to our Board and ensure services are directed to results for you.
Graham heads up our Corporate and Commercial Division and supervises a team of lawyers and paralegals. He focuses on Corporate and Commercial litigation, insolvency (personal and company), building and construction disputes, lease disputes, insurance motor vehicle litigation and commercial recoveries. He is a member of the City of Sydney Law Society and Australian Institute of Credit Management. Graham is a regular face before the higher courts of NSW and Australian jurisdictions.
I endorse most emphatically the strategic advice and assistance Graham can bring for your personal and business needs. Please do not hesitate to contact him on 0411 272 200 or 9283 2566.
Theresa Assaker
I am pleased to announce Theresa Assaker has been granted Accredited Specialisation by the Law Society of NSW. Theresa is a Director of Consolidated Lawyers and manages and supervises our Parramatta office.
She is a specialist in compensation, insurance law and civil ligation.
Please do not hesitate to contact her on 0404 069 157 or 9762 0400.
During the last quarter we have undertaken a series of exciting cases for clients. True to Consolidated Lawyers’ philosophy we have aimed at an effective personal and business solution rather than simply proceeding to expensive court hearings. Some of these cases are reported in our case studies section.
Lara Wentworth
Consolidated Lawyers in conjunction with Omni Wealth will be holding a seminar on Tuesday, 26 October 2010 at Macquarie Bank, Sydney.
The event is titled “Prince Charming isn’t coming” and will feature 3 guest speakers including Lara Wentworth Senior Associate of our firm, specialising in Wills; Estates and Family Law related matters.
The objective of the seminar is to empower women with the information they need to start their own financial plan for themselves against the back drops of the legal framework which may impact any decisions they make. If your single J or want the latest Investment and legal tips this is a seminar you shouldn’t miss.
Tickets are $27.00 single or $50.00 for a pair.
I’m told Lara has limited tickets to giveaway. The first 20 to send her an email laraw@consolidatedlawyers.com will receive the tickets for free!
MTA (NSW)
I am pleased to announce that Consolidated Lawyers is now a supplier of legal services to the NSW Motor Traders’ Association. The association has just celebrated its centenary. There is a new Motor Trade and Consumer regime coming into place in NSW and Australia. The various motor trades organisations are working towards national harmonisation across a number of areas including motor vehicle repairs and write-offs. Our team of specialist lawyers is looking forward to working with the CEO and members of NSW Motor Traders’ Association. We have designed a special VIP service for members across the state. Members have telephone access to Consolidated Lawyers at any time. It is like having a ‘lawyer in your back pocket’ to solve any problems before they arise.
AIBC
We are also undertaking work for the Australia-India Business Council and are looking forward to developing further professional liaisons with business and industry associations for mutual aid. If you are interested in setting up in India or getting in touch with any industry at a private, public or government level please do not hesitate to give me a call.
Wishing you all the best for the reminder of the calendar year!
Our client was an elderly widower in his late 80’s whose wife passed away approximately two years ago. Hers was a second marriage to our client and she had one child who predeceased her and two grandchildren. These were our client’s step-grandchildren. During the course of the deceased wife’s later years of life she deteriorated with dementia. She made her will which effectively left her estate to her grandchildren without making adequate provision for her husband of 51 years. The granddaughter, in 2004, had been given power of attorney over the deceased’s affairs after the deceased’s daughter’s death.
Proceedings
The elderly widower contacted us after he was not satisfied with the legal services he was being provided by another law firm. He instructed that some of the wife’s estate and shareholdings acquired during her lifetime had been squandered by the step-granddaughter who had power of attorney. Our client instructed that he had not received any dividends from the investment portfolio in the deceased’s name worth hundreds of thousands of dollars. There was no accounting for or disclosure of gifts during the testator’s lifetime to her granddaughter who held the power of attorney.
The proceedings were highly contentious and had the potential to be acrimonious. We uplifted the client’s file from his previous solicitor after an unsuccessful compulsory court mediation. The deceased had also made a fourth will in early 2007 where she gave all her real estate and assets to her husband of 51 years with monetary legacies to her two nieces. The problem with this later will was her mental ability (testamentary capacity) to make her will. It was alleged that she was of unsound mind. The matter was set down for a 3 day hearing. We engaged in intense negotiations at the outset of the hearing. Our Managing Director, a senior lawyer and counsel were involved simultaneously in various aspects of the negotiations.
Result
A settlement was reached where our client obtained freehold title to a property and a $250,000.00 improvement on the unsuccessful mediation. The result was obtained without having to deal with proving the later will where testamentary capacity was an issue. Consent orders were made by the trial judge with the comment “Having read the affidavit evidence of the parties, I am satisfied that the orders made by consent are appropriate and justified”. Our client was very pleased with the result.
If you would like to know more about making a claim on a deceased estate, or if your have received such a claim, please contact Graham Fullick (Director, Senior Lawyer) or Melissa Hoffmann (Lawyer) on (02) 9283 2566.
CAPITAL MAINTENANCE RULE NOW REPLACED BY THE SOLVENCY-BASED TEST FOR PAYMENT OF COMPANY DIVIDENDS
On 24 June 2010, the Federal Parliament passed the Corporations Amendment (Corporate Reporting Reform) Bill 2010 (Cth) (“the Bill”) which replaces the capital maintenance rule that a company can only pay dividends out of profits. The amendments will come into effect for reports for the 30 June 2010 Financial Year, subject to Royal Assent being granted.
Currently, section 254T of the Corporations Act 2001 (Cth) (“the Act”) provides that dividends may only be paid out of the profits of a company. The Bill now allows a company to pay a dividend other than out of profits on the condition that certain criteria are met. The Bill:
1.replaces the “profits” test for company dividends with a new solvency-based test;
2.introduces a number of new measures to improve financial reporting; and
3.reduces the regulatory burden of reporting obligations under the Act.
The amendments to section 254T of the Act will prohibit a company paying a dividend unless:
1.its assets exceed its liabilities immediately before the dividend is declared and the excess is sufficient for the payment of the dividend; and
2.if the payment of the dividend is fair and reasonable to the company’s shareholders as a whole; and
3.the payment of the dividend is not materially prejudicial to the company’s ability to pay creditors.
The company’s assets and liabilities will be calculated in accordance with the accounting standards in force at the relevant time the dividend is declared.
Notwithstanding that the Bill has introduced amendments to section 254T of the Act to allow the payment of dividends to shareholders out of share capital, the procedures for other share capital reductions and buy-backs as set out in Part 2J of the Act remain unchanged and the duty of directors to prevent insolvent trading in section 588G will continue to apply.
What this means for You
You will need to:
1.Establish how the Bill will impact the preparation of reports for the 30 June 2010 Financial Year and beyond;
2.Consider how the Bill will apply to any proposed reductions of capital or planned dividend payments; and
3.Review your company and scheme constitutions to ensure compliance with the new laws.
4.Speak to one of our Legal Advisers. We can also put you in touch with a great Accountant.
For more information on the above, please contact our Mr. Bechara Shamieh (Managing Director, Senior Lawyer) or Ms Melissa Hoffmann (Lawyer) on (02) 9283 2566.
Everyone has a right to dispose of their property and assets to whomever and however they wish and such wishes are generally documented in a will. The law generally upholds that person’s wishes, whether those wishes are fair or not. However, in circumstances where the law considers the will to be grossly unfair with respect to particular persons, it allows those persons aggrieved to challenge the will. The court will only intervene where it is clear that inadequate provision has been made in the will for an eligible family claimant.
The law that governs this area of law is the Succession Act 2006 (NSW) (“the Act”) which outlines the law in relation to family provision orders. Section 57 of Act sets out a list of eligible persons who are entitled to make a claim against your estate as follows:
1.A husband or wife of the deceased person at the time of the deceased person’s death, including a person who was living in a de facto relationship with the deceased;
2.A child of the deceased person, or if the deceased person, was at the time of his or her death, a party to a domestic relationship, a person who is, for the purposes of the Property (Relationships) Act 1984 (NSW), a child of that relationship;
3.A former wife or husband of the deceased person;
4.A person who was, at any particular time, wholly or partly dependent on the deceased person and who is a grandchild of the deceased person or was, at that particular time or at any other time, a member of the household of which the deceased person was a member; and
Making a claim against an estate is not as simple as it sounds – a person must have sufficient grounds and capacity in order to do so. Section 60 of the Act sets out the matters which are to be considered by the Court in granting a family provisions order, which may include but are not limited to:
(a)any family or other relationship between the applicant (eligible person) and the deceased person, including the nature and duration of the relationship;
(b)the nature and extent of any obligations or responsibilities owed by the deceased person to the applicant, to any other person in respect of whom an application has been made for a family provision order or to any beneficiary of the deceased person’s estate;
(c)the nature and extent of the deceased person’s estate (including any property that is, or could be, designated as notional estate of the deceased person) and of any liabilities or charges to which the estate is subject, as in existence when the application is being considered;
(d)the age of the applicant when the application is being considered; and
(e)whether any other person is liable to support the applicant.
An application may be made by an eligible person who has sufficient grounds, provided that the application is made not later than 12 months after the date of death of the deceased person, unless the Court otherwise orders. An application may be made whether or not administration of the estate of the deceased person has been granted.
It is recommended that you regularly review your will to avoid any such applications.
Speak to one of our lawyers today to discuss your current will, obtain advice in respect of your estate planning needs and/or update your will in order to avoid any applications for a family provision order against your estate.
A case study on Making a Claim against an Estate is included in this newsletter.
If you would like to know more about making a claim against an estate, please contact Graham Fullick (Director, Senior Lawyer) or Melissa Hoffmann (Lawyer) on (02) 9283 2566.
VENDOR DISCLOSURE FOR RESIDENTIAL PROPERTY SALES IN NSW
Matt Brown, MP, in NSW has supported a review of the vendor disclosure requirements so far as they relate to pre-purchase reports, including building and pest inspection reports.
The review will consider the viability of requiring a vendor to provide certain pre-purchased reports with the contract for the sale of land to enable a purchaser to be better informed about the condition of the property before contracting to buy it.
CURRENT SITUATION
In NSW, the vendor’s disclosure duty is set out in section 52(a) of the Conveyancing (Sale of Land) 2000 regulations stipulating the prescribed documents which must be annexed to the contract for sale including:
1.A title search;
2.Sewerage diagram;
3.Section 149 certificate; and
4.Dealings registered on the title.
Currently this does not include any pre-purchase inspection reports.
At the moment, a purchasers wanting to satisfy themselves as to the physical condition of the property must commission their own pre-purchase report to better inform themselves. The cost of the reports are typically $500.00 per property depending on the nature of the report requested. If you are a potential purchaser on a house hunting mission, you may spend considerable amounts on pre-purchase inspections without buying the house you wish to call “Home”.
PROPOSED CHANGES
The NSW government is having a review to see whether they will adopt the Australian Capital Territory (ACT) legislation where the vendor has the onus of providing a building and compliance inspection report, a pest inspection report if the building has been occupied, an energy efficiency rating statement and an asbestos report/advice.
Once obtained, these reports will be annexed to the standard contract for sale. Upon completion of the contract the purchaser reimburses the vendor for the cost of the reports. This process standardises the minimum content of the report and all inspections must be consistent with Australian standards.
CONCLUSION
The Minister is accepting submissions for and against the proposed legislative changes. For now we will have to wait and see the outcome once gazetted.
For any further information please contact Anna Hahm, Senior Lawyer, and head of our property division on (02) 9283 2566 or by email to annah@consolidatedlawyers.com.
Personal Injury Law is always changing, but one of the most important changes that persons bringing such claims need always to be mindful of is: “How long do I have to bring a claim or commence court proceedings?”
Understanding the rules about when you need to lodge a claim or start an action in Court can be completely baffling and significantly different depending on how you sustained your injuries.
There are many different types of personal injury matters including motor vehicle accidents, work accidents, medical negligence and public liability claims (slips and falls), and different time limits apply for each of these matters.
For example, in the Motor Accidents Compensation Act you must notify the police of an accident within 28 days and you must lodge the Personal Injury Claim Form against the Insurer at fault within 6 months from the date of the accident. For work injury claims you need to let your employer know immediately and you must a lodge a claim form within 28 days, and no later than 6 months from the date of injury. If you are injured in an aircraft accident or making a victim’s compensation claim, then you have 2 years from the date of injury to lodge a claim form.
Generally speaking, there is a maximum 3 year limitation period to commence court proceedings in most negligence claims, and a 2 year stop limit. Each case is dependent on the circumstances of injury, and therefore seeking prompt and early legal advice is crucial.
There are situations, however where the Court can and has granted extensions of time to persons under the relevant provisions of the Limitation Act 1969 (NSW), for bringing proceedings outside the prescribed statutory time limits. Even so, the court has to look at each case based on its own facts and often takes a strict approach.
In the recent NSW Supreme Court decision of Hume J in the case of Harris v Woolworths Limited [2010] NSWSC 25, the plaintiff sought leave to commence public liability proceedings outside the 3 year limitation period. She alleged that she slipped and fell in a Woolworth’s aisle and sustained an injury to her ankle (broken ankle). Court proceedings commenced 4.5 years following the accident, which was outside the three year post-discoverability limitation period provided by s 50C of the Limitation Act 1969 (NSW). The plaintiff mounted an argument that she did not know how serious her injury or the effects of her injury were until 4.5 years later. The court had to consider and interpret the relevant sections of the Limitation Act. The term “sufficiently serious to justify the bringing of an action on the cause of action” received consideration by the Court of Appeal in Baker-Morrison v New South Wales[2009] NSWCA 35. Basten JA regarded it as involving the person obtaining medical and legal advice because a consideration of whether an injury is sufficiently serious to justify the bringing of an action requires the exercise of both legal and medical expertise (at [41]). He found further support for this:
… (F)rom the fact that a number of statutory regimes contain floors or caps on recovery of damages, or both: see, eg, Civil Liability Act, s 16. No proper view could be formed about the justification for bringing an action, absent information of that kind.
The Court in this case however was not prepared to take a broad view of the relevant section and formed the opinion that the 3 year post-discoverability limitation period does not commence to run only from the time the plaintiff knows (or ought to know) the precise extent to which the injury is serious, and/or the heads of damages under which a claim can be made, and/or the quantum of damages that may be recoverable. For example, consideration of whether the legal costs may be capped because damages might not exceed a certain amount is no part of the statutory test.
Ultimately, in the case of Harris the court was not satisfied that it would have taken the plaintiff 4.5 years to know that her injury was serious enough, and held she ought to have known the seriousness of her injuries at least 18 months post accident – therefore with enough time to make a decision about commencing proceedings against the defendant within 3 years.
As demonstrated above, time limits in personal injury claims can be very confusing and complicated. So don’t try figuring it out for yourself. Seek legal advice promptly and as soon as you have sustained an injury, rather than waiting to see if you will recover from the injury.
For further information, please contact Theresa Assaker (Director, Senior Lawyer), and Head of our Personal Injury Division on (02) 9762 0400.
Every company director should know that a company’s debt liabilities effectively die with them upon liquidation or entering into administration. Every financial year, thousands of private proprietary companies cease their operations. We like to think that all of these companies that cease to trade or exist do so on terms that settle all accounts with creditors or failing to do so, make an honest attempt at meeting the company’s debts. The sad reality, as has been recognised by the Australian Taxation Office (“ATO”) and the Australian Securities and Investments Commission (“ASIC”) is that this is not always true.
The phenomenon of registering a company with the intention of accruing debts and then “closing the doors”, or in some circumstances, merely closing the doors without the intention to repay any debt, is called a Phoenix. In essence the company is set up solely to incur debts and the directors are protected by the veil of incorporation. Once the debts are incurred and the commercial benefit obtained, the directors leave the company in its ashes. The directors rise like the mythical phoenix from the company ashes form a new company and repeat the process.
Recent Media Attention
Although a “Phoenix operation” is not a new concept in business, new powers being provided to the ATO to counteract such operations have recently attracted media attention (see Marsha Jacobs and Michaela Whitburn, Small-business fears on phoenix laws, The Australian Financial review, 30 June 2010, P3). This media attention is justified. The new laws, operational since 1 July 2010, grant the ATO the ability to levy upon any business (including any small business), a cash deposit requirement to be held as security by the ATO against any possible debts – including tax debts to the ATO.
Common Law Approach
The common law has for several hundred years recognised that a director who sets up a company for the purpose of creating a debt without the intention of re-paying it, or continues recklessly to incur debt will be liable for the damage they cause. Companies which are registered by the director for the above purposes are called ‘shams’. The legal distinction (the corporate veil) between the company as a legal person and the director as a natural person is said to be “lifted” and the director can be made personally liable for the debt to protect creditors against sham company operations.
The changes
The major new powers that will be exerciseable by the ATO are
1.Director’s penalty notices will be issued
2.Director’s penalty notices will be considered served when sent, not when received.
3.Any agreement reached with the ATO to pay by installments will not remove the penalty notice. This will still apply to the director until all unremitted payments are duly and fully paid to the ATO.
4.When a director is served a director’s penalty notice, a Federal or State Supreme Court has no jurisdiction to grant relief or excuse under section 1318 of the Corporations Act 2001 (Cth)
5.The Commissioner for Taxation may require cash security for any business
(a)that they think will only operate for a limited time, and
(b)when the commissioner thinks it is fit to require such security.
Difficulties of the New Laws
At a time when small business is still recovering from the Global Financial Crisis (“GFC”) and company taxation, Business Activity Statements, Goods and Services Tax and Superannuation remittances, are already creating difficulties on businesses, further ATO imposition on business cashflow would be most unwelcome. This is without statutory penalties that may emanate from being charged by the ATO for breaching a director’s duty or failure to duly remit taxation payments to the ATO. In our view, small business in capital and labour intensive industries such as the building industry will be affected adversely by any heavy handed application of the ATO’s new powers.
How to Respond
The best way to ensure that the ATO does not consider your business to be a Phoenix or vehicle designed for tax and creditor evasion is to develop and practice a regime of firstly, strict corporate compliance, and secondly, operational and financial prudence.
Corporate compliance
1.Know your Corporations Act 2001 (Cth) duties and obligations as a company director.
2.Have a business plan that sets out how you will comply with your director’s duties.
3.Know your company structure.
4.Have legitimate purposes for each company you establish.
Operational and Financial Prudence
1.Monitor cashflow.
2.Use an ATO-approved accounting method, such as Accounting Standard 2000 for the building and construction industry.
3.Remit what is due to be remitted on time.
4.Maintain clear records. Time spent record keeping can save time discussing issues with the ATO or wasting your resources answering an ATO audit.
5.Demonstrate continuity of work.
6.Avoid setting up companies which are not necessary.
7.Pay all creditors on time.
8.Declare all income.
9.Declare estimates of income to insurers in full. This demonstrates honesty.
10.Claim all deductions and maintain accurate records.
11.Record all directors’ loans so that any money removed form the business by the director will be correctly accounted for and not appear as tax evasion.
Further assistance
Should you require further assistance with your corporate structure, contracts administration and taxation scheduling, contact Consolidated Lawyers’ Corporate and Commercial Division, Bechara Shamieh (Managing Director, Senior Lawyer), or Graham Fullick (Director, Senior Lawyer) on (02) 9283 2566.
Advance Care Directives and the right to refuse medical treatment
A study of 2 recent cases in relation to an individual’s right to determine their own fate.
An Advance Care Directive (ACD) is a document allowing a person to specify medical treatment that they wish to receive or do not wish to receive in situations where they are unable to provide their consent due to mental incapacity. If the ACD is made by a mentally capable adult and is clear and unambiguous, it must be respected. ACDs have not as yet been given legislative standing in NSW.
This is the same for situations where you suffer sudden injury or illness. If you or a relative is in palliative care or disability care, such a direction gives peace of mind to you and next of kin about what are the correct decisions for your medical treatment.
An ACD should be seen as part of preparation for good treatment or a peaceful death- whatever eventuates. It is not morbid. Our clients in these situations use legal means such as a will and power of attorney in conjunction with such a Directive. As one client said “It is part of getting ready to meet my maker with love.”
These legal measures are only adjuncts to palliative and residential care services such as pain relief, occupational therapy, diversion therapy, respite care, chaplaincy, counselling, visitation, physical care, massage and other measures. Australia leads the world in this type of systematic and compassionate care.
Where there is doubt as to a patient’s intention, it is always resolved in favour of preservation of life.
Unwanted Dialysis
The recent decision of Hunter and New England Area Health Service v A [2009] NSWSC 761handed down in August 2009 reaffirmed that a direction to refuse medical treatment (by a patient with capacity) did not have to be “sensible”, “rational” or well considered to some minds in the community. Unless the presumption of capacity at the time of making the ACD is rebutted, the individual’s right must be respected. Just because people disagreed with Mr A’s choice did not mean he was irrational or lacked mental capacity.
In this case a Jehovah’s Witness, Mr A, was admitted to hospital unconscious with renal failure and was kept alive by mechanical ventilation and kidney dialysis. An ACD prepared earlier clearly expressed a refusal of dialysis. Jehovah’s Witnesses do not believe in receiving blood transfusions and blood products. The court held that the ACD was valid even though refusal of dialysis would result in the death of the patient. The court clarified that this was not a case concerned with a ‘right to die’ or euthanasia. It was rather the recognition of his right to refuse medical treatment.
It follows that any treatment provided to Mr A, contrary to his ACD would create a claim under a tort such as battery (assault causing him bodily harm). The health professionals would be liable for their unauthorised conduct. Connecting him to dialysis would be a trespass to his body.
Starving to Death: Forced Surgical Tube Feeding
In the case of Brightwater Care Group (Inc) v Rossiter [2009] WASC 229, the patient (as distinguished from Mr A) was conscious and capable of giving consent and instructions at the time of administering the treatment, though suffering from spastic quadriplegia. By refusing the treatment, Rossiter would starve to death whilst in hospital. The court held that Rossiter was entitled to refuse specific treatment even if it would result in his death, as he was provided with adequate information as to the consequences of his refusal. His directive did not need to have been made on what we might call a “rational” basis. Mr. Rossiter had suffered progressive severe physical injuries over 20 years. It is probably the high point of case law in this area.
Factually, the two cases are different in that one patient lacked mental capacity and the other didn’t. Both cases recognise “a competent adult is generally entitled to reject specific treatment, even if the decision may result in serious risks such as death or appear mistaken in the eyes of the medical profession and the community”. Informed individual autonomy is the key criterion the courts use in these cases.
Natural Death distinguished from Euthanasia
The patients were merely choosing a natural death without unnecessary or burdensome medical intervention, even where their lives could have been saved or lengthened. This is very different to current talk of Euthanasia which is a choice deliberately to take one’s own life (killing oneself or hastening death) by medical intervention eg administration of lethal poison in assisted suicide.
Summary
If properly drafted, an Advance care directive reflects the individual’s settled intention in an emergency in relation to their treatment. It acts as a very persuasive tool to support the individual’s right to refuse certain medical treatment even and especially if the refusal is based on religious, social or moral convictions.
The Estate Planning team at Consolidated Lawyers can assist you in drafting an Advance Care Directive that can give clear and unambiguous expression of your intentions and preserve your right to decide your own treatment and the extent of medical intervention.
For further information or to make an appointment, please contact Lara Wentworth, (Associate, Senior Lawyer) Head of our Wills and Probate Division on (02) 9762 0400.