That Will is not right

People make mistakes and sometimes that extends to mistakes being made in a will. Usually the mistake is only found after the will maker has died. If this happens – what can be done about it?

Section 27 of the Succession Act, 2006 may hold the answer. It states:-

27 Court may rectify a will

(1) The Court may make an order to rectify a will to carry out the intentions of the testator, if the Court is satisfied the will does not carry out the testator’s intentions because:
(a) a clerical error was made, or
(b) the will does not give effect to the testator’s instructions.
(2) A person who wishes to make an application for an order under this section must apply to the Court within 12 months after the date of the death of the testator.
(3) However, the Court may, at any time, extend the period of time for making an application specified in subsection (2) if:
(a) the Court considers it necessary, and
(b) the final distribution of the estate has not been made.

Mediation

There are two ways that parties can resolve their disputes:

  1. by agreement
  2. by Court ruling

Mediation is all about helping the parties reach their own agreement. Mediation involves an independent third party called the Mediator. It is the Mediator’s role to assist the parties in reaching a voluntary agreement. The Mediator does not decide how the dispute should be resolved.

Mediation has a number of advantages over litigation:

  • mediation is less expensive and less time consuming
  • mediation is confidential whereas litigation is public
  • mediation leaves control of the outcome in the hands of the disputing parties rather than in the hands of a Judge
  • mediation may allow solutions that a Court cannot offer
  • mediation can extend beyond restrictive legal issues and may allow parties to repair or preserve ongoing relationships.

Best Practice Lawyers can offer qualified mediators as well as trained and experienced lawyers to represent parties at mediation.

Recovering unpaid strata levies

Strata Plan committees or their managing agents are often required to recover unpaid strata levies from unit owners. This can be costly and time consuming. The costs for doing so should not have to be borne by the other unit holders so the system, within reason, allows the reasonable costs of doing so to be recovered from the recalcitrant unit owner.

They are known as Section 81 expenses and can include the legal fees and disbursements incurred in recovering the unpaid levies. It is not unlimited. In other words, you cannot incur $5000 in legal costs in seeking to recover $1000 in unpaid levies but only what is reasonable.

It ensures that the unit owners who do the right thing and pay their levies are not lumbered with the costs involved in having to chase their fellow unit owners who don’t do the right thing and pay their levies when required.

Acting for strata managers has allowed us to develop best practice and cost effective systems to recover unpaid strata levies. Let us know if we can assist you.

What is the oppression remedy

S. 232 of the Corporations Act (the oppression remedy) is one of the most important remedies that a member of a company has against a company. It is a very broad provision which seeks to protect members of companies from commercially unfair conduct carried on the company or the people that control the company.

Frequently breaches by directors of s. 181 (duty to act in good faith), s. 182 (duty to not use the position for improper purpose) s. 183 (Duty not to use information improperly) can amount to conduct which is not in the interests of the members of the company as a whole.

What is oppression?

Oppression includes unfairness where the unfairness results from abuse of majority power or control. This in practice can be a difficult concept. The Court’s have noted that:

  • the mere subordination of the wishes of the minority by the exercise of the voting power of the majority is not oppressive;
  • the acts of oppression must result from some overbearing act or attitude on the part of the oppressor;
  • oppression may occur even though all members of a company may be treated equally;
  • the mere fact that a member of a company has lost confidence in the manner in which a company’s affairs are conducted does not lead to the conclusion that he is oppressed; nor can resentment at being outvoted nor mere dissatisfaction with or disapproval of the conduct of the company’s affairs, whether on grounds relating to policy or to efficiency, however well founded.

What is unfairness and how important is it? The Court’s consider unfairness to be the most important issue to trigger s. 232. It has been said that unfairness may lie in harm suffered as a result of conduct of management and any prejudice caused by such conduct, a lack of reasonable commercial justification for the course undertaken, or simply in the company’s decision making processes.

The test for unfairness is whether the eyes of the commercial bystander the conduct would be seen to be so unfair that if reasonable directors were to consider the matter they would not have considered the matter fair.

Unfairness may be inferred where the transaction does not provide sufficient commercial value to the company to outweigh any possible conflict of interest on the part of directors of the company. It may also arise in circumstances where directors seek to conduct the company’s business in such a way as to advance their own interests or the interests of others of their choice to the detriment of the company or of other shareholders. It may also arise where a director may be excluded from management or in circumstances where the relationships between directors have irretrievably broken down and are no longer functional.

Examples of oppression

  • Refusing to attend directors meetings
  • Freezing out a director from management
  • Appointing a voluntary administrator in an attempt to close the business and harm the minorities interests
  • An unfair dividend policy and or the failure or refusal to revise a dividend policy
  • Failure to call meetings
  • Preventing minority shareholders from participating in meetings
  • Attempting to dilute shareholder’s interests
  • Cancellation of membership to try and prevent a person’s election to the board
  • Payments to directors
  • Misappropriation of a business opportunity

What can the Courts do about oppression?

The Courts can make the following orders:-

  • That the company be wound up
  • That the company’s constitution be modified or repealed
  • That the company’s future conduct be regulated
  • What the value of a person’s shares are and that a person’s shares be purchased and that the company’s share capital be reduced
  • That the company or that someone on the company’s behalf, institute, prosecute, discontinute or defend proceedings
  • Appointing a receiver or a receiver and manager to any or all of the company’s property
  • Restraining a person from engaging in specified conduct – for example the holding of a meetingRequiring a person to do a specified act – for example requiring a company or its directors to convene a meeting.

Who can apply for an order?

  • A member of a company
  • A person improperly removed from the register of members of the company
  • A person whom ASIC thinks is appropriate having regard to an investigation that ASIC is conducting into the company’s affairs or relating to the company’s affairs.

Conclusion

This is a very powerful and useful remedy in circumstances particularly in small proprietary companies where directors and or shareholders have fallen into dispute or their relationships have irretrievably broken down.