When a person dies without a valid will and leaves assets in New South Wales, the next of kin may need to apply to the Supreme Court of NSW for a grant of letters of administration. The process raises further legal and tax questions when the deceased estate is located outside Australia and the entitled relatives reside overseas, making advice from wills and estate planning lawyers at LawBridge particularly valuable.

This article explains how overseas next of kin can obtain letters of administration in NSW, the choice between a fresh grant and a reseal of an existing foreign grant, and the tax consequences of a non-resident administrator for the estate.

Interactive Tool: See If You Qualify for a Reseal or Need a Fresh Grant

The Process for Overseas Beneficiaries to Obtain Letters of Administration in NSW

Eligibility Requirements & Time Limits for Next of Kin

An application for letters of administration should be filed within six months of the date of death. Part 78 Rule 16 of the Supreme Court Rules 1970 (NSW) (‘Supreme Court Rules‘) requires an explanation for a later filing, either in the administrator’s affidavit or a separate affidavit of delay.

Under Chapter 4 of the Succession Act 2006 (NSW) (‘Succession Act‘), the next of kin entitled to apply is identified through the rules of intestacy. The order usually begins with:

• spouse or de facto spouse, who takes the whole estate where all children of the deceased are also children of that spouse;
• children, where there is no surviving spouse or where a child is not also a child of the surviving spouse;
• parents;
• brothers and sisters;
• grandparents; and
• aunts and uncles.

Each category must be exhausted before the next category is considered. People in the same category may apply jointly. If only some entitled relatives apply, the others must provide consent or receive notice of the intention to apply.

The Appointment of an Attorney in NSW for Representation

A person entitled to a share of the estate may use a power of attorney where that person lives outside NSW. The Supreme Court of New South Wales may make a grant of administration to the appointed attorney, allowing the attorney to manage the deceased estate locally.

The grant is limited and is expressed to be for the use and benefit of the entitled person. This arrangement allows an overseas beneficiary or next of kin to obtain authority to deal with assets in New South Wales without applying personally from outside Australia.

The Choice Between a New NSW Grant & a Reseal for Foreign Estates

Eligibility Criteria for a Commonwealth Realm Reseal

A foreign grant may be resealed by the Supreme Court of NSW where it was issued by a court in a Commonwealth Realm country in which the Queen is, or was when the grant was issued, the Head of State. 

Under Section 107 of the Probate and Administration Act 1898 (NSW) (‘Probate and Administration Act‘), resealing allows the foreign grant to take effect in NSW for assets located in NSW.

Eligible countries include:

• The United Kingdom, including England, Scotland, Wales and Northern Ireland; and
• New Zealand, Papua New Guinea and the Solomon Islands.

The original grant, an exemplification, or a court-sealed and certified copy must be produced to the Supreme Court of NSW. Once resealed, the foreign grant has the same force and effect in NSW as if it had been granted by the Supreme Court of NSW.

Scenarios Requiring a Fresh Grant of Administration

A fresh grant in NSW may be required when the foreign grant comes from a country that is not eligible for resealing. The Supreme Court of NSW cannot reseal recent grants from:

• Malta;
• South Africa;
• Pakistan;
• India;
• Sri Lanka;
• Fiji;
• Hong Kong; or
• the Republic of Ireland.

The form of the NSW application depends on the original foreign grant and whether the deceased left a will. 

A foreign probate grant may require an application for a grant of probate in NSW, while an overseas grant of administration with the will annexed may require probate or administration with the will annexed based on a copy of the will. If the deceased died without a will, a fresh grant of administration in NSW is required.

Tax Residency Rules for Deceased Estates Administered from Abroad

The Distinction Between a Resident Trust & a Non-Resident Trust

For Australian tax purposes, a deceased estate is treated as a trust and is classified as either a resident trust or a non-resident trust. This classification depends mainly on the residency of its executor, administrator or trustee and the location of its central management and control.

Under the Income Tax Assessment Act 1936 (Cth) (‘Income Tax Assessment Act‘):

• an estate is a resident trust if at least one trustee is an Australian tax resident at any time during the relevant income year; and
• an estate may be treated as a non-resident trust where probate or a grant of administration is given to an executor or administrator who is not an Australian resident.

The Importance of Central Management & Control in Australia

An estate may still qualify as a resident trust if its central management and control occurs in Australia during the relevant income year. This concerns where high-level decisions about matters such as selling or investing estate assets are made.

The Australian Taxation Office may require evidence that those decisions occurred in Australia. Instructions given by Australian family members to an overseas executor may support this position; however, records must demonstrate that the estate’s high-level decisions and management were made in Australia.

Financial & Tax Consequences of a Non-Resident Administrator

Loss of the Capital Gains Tax Discount & Tax-Free Threshold

A deceased estate administered by a non-resident administrator may be treated as a non-resident trust for Australian tax purposes. This can revoke access to the 50% capital gains tax discount that may otherwise apply when estate assets have been held for at least 12 months.

The estate may also lose the $18,200 tax-free threshold available during the first three income years after the deceased’s death. Investment income earned in Australia may then result in a higher tax liability because the estate is taxed as a non-resident.

The Impact of the Foreign Resident Capital Gains Tax Withholding Regime

When a foreign resident administrator sells Australian land, the foreign resident capital gains tax withholding regime may apply regardless of the contract price. The purchaser must withhold 15% of the purchase price and remit it to the Australian Taxation Office as non-final withholding tax.

The estate’s final capital gains tax liability is determined when the administrator lodges the estate’s tax return. A refund may be available if the amount withheld exceeds the final liability.

Practical Strategies for Attorneys & Families to Minimise Estate Taxes

The Benefits of an Australian Resident Administrator

Appointing an Australian resident administrator can allow a deceased estate to be treated as an Australian resident trust for tax purposes. The administrator may be a family member, trusted individual, licensed trustee company, accountant or lawyer.

As explained above, resident trust status preserves key concessions including the 50% capital gains tax discount and the $18,200 tax-free threshold. An Australian resident administrator may also obtain an Australian Taxation Office clearance certificate, which can remove the purchaser’s obligation to withhold tax when estate property is sold.

Conclusion

A NSW application for letters of administration requires careful attention to eligibility, the six-month filing period, and the correct form of representation. The choice between a fresh grant and a reseal can affect how authority is obtained, while administrator residency may affect the estate’s tax treatment and available concessions.

With these issues considered together, contact wills and estate planning lawyers at LawBridge to discuss the estate, including overseas beneficiaries, NSW Court applications, reseals and cross-border tax concerns. Legal advice can help clarify the appropriate grant, representation arrangements and steps for managing the deceased estate.

Frequently Asked Questions

An administrator who obtains letters of administration performs the same estate-management work as an executor, but without a Will that contains a remuneration clause. Section 86 of the Probate and Administration Act 1898 (NSW) (‘Probate and Administration Act’) gives the Supreme Court of New South Wales power to allow commission for an administrator’s pains and trouble.

This article explains how an administrator can seek commission, the process of passing accounts, and when beneficiary agreement can avoid a formal Court application.

Interactive Tool: See If You Can Claim Commission as an Estate Administrator in NSW

The Right to Claim Commission for Administrators

The Legal Basis for Remuneration

An administrator may apply for commission for the time and effort involved in administering an estate. 

Under Section 86 of the Probate and Administration Act, the Supreme Court of NSW may allow a commission or percentage from the estate’s assets for the administrator’s endeavour, if the amount is just and reasonable.

However, the commission is not automatic. Section 86 of the Probate and Administration Act also provides that no allowance may be made where an administrator, without good reason, fails to pass the accounts relating to the deceased estate as required by the applicable rules or a court order.

Differences Between an Executor and an Administrator

An executor is appointed by a Will and may have a Will-based entitlement to payment, such as a remuneration clause or a legacy connected with accepting the role. 

By contrast, an administrator obtains authority through a grant of letters of administration, including administration with the Will annexed, rather than through appointment under the Will.

An administrator may perform substantial work to protect assets, pay debts and distribute the estate, even though the Will does not provide a charging clause for that work, and wills and estate planning lawyers advising on deceased estate administration and administrator remuneration can help clarify the position. 

Section 74A of the Probate and Administration Act gives an administrator the same rights and liabilities, and makes the administrator accountable in the same way, as if the administrator were the executor of the deceased person.

Reaching an Agreement with Beneficiaries 

Obtaining Informed Consent from Beneficiaries

An administrator may resolve payment of commission through agreement with the affected beneficiaries, rather than applying to the Supreme Court of New South Wales. 

The agreement should cover a fair amount for the time and effort involved in the administration of the estate.

All affected beneficiaries, usually the residuary beneficiaries, must:

• be adults with legal capacity; and
• agree to the proposed payment.

If those beneficiaries consent to the commission, the administrator does not need formal Court approval before being paid from the estate.

The Impact of Beneficiary Agreement on Estate Costs

A beneficiary agreement can avoid the legal costs involved in an application to pass accounts and apply for commission. Those costs can be substantial and are normally paid from the estate, reducing the amount available for distribution to the residual beneficiaries.

A formal application also requires time for the administrator to prepare documents and for the Court to consider the request. This may delay the final distribution of the estate to the beneficiaries.

The Process of Passing Accounts for Administrators 

The Obligation to Keep & File Probate Accounts

An administrator must:

• protect the estate;
• collect the assets of the deceased;
• pay funeral and testamentary expenses and debts; and
• distribute the balance under the Will or intestacy laws.

The administrator must also keep probate accounts recording how the estate was managed and report to the beneficiaries.

In addition, under Section 85 of the Probate and Administration Act, verified accounts must be filed in specified circumstances, including where:

• the administrator is a creditor of the estate;
• the administrator is guardian of a minor beneficiary; or
• the estate substantially passes to a charity or public benevolent institution.

Applying to the Supreme Court to Pass Accounts

Proceedings to pass accounts must be commenced by filing a notice of motion in the parent proceedings under Part 78 Rule 76 of the Supreme Court Rules 1970 (NSW) (‘NSW Supreme Court Rules). The motion and supporting affidavit are prepared using UCPR Form 150, with the filing fee payable where formal verification and passing are sought.

Under Part 78 Rule 79 of the NSW Supreme Court Rules the administrator must publish a notice on the New South Wales Online Registry at least 14 days before commencing the proceedings.

The Registrar may require further evidence or documents and may pass the accounts if satisfied they are correct under Part 78 Rule 83 of the NSW Supreme Court Rules.

How the Supreme Court Determines Commissions

Assessing Pains and Trouble in Estate Administration

The Supreme Court may allow an administrator commission for the “pains and trouble” involved in administering a deceased estate under Section 86 of the Probate and Administration Act

The two terms are understood as follows:

• “Pains” refers to the responsibility, anxiety and worry associated with the administration of the estate.
• “Trouble” refers to the actual work completed by the administrator, such as dealing with estate assets, completing required tasks and arranging distribution.

Key Factors Influencing the Commission Award

Commission is discretionary and depends on the circumstances of each estate. The Registrar may consider:

• the size and complexity of the estate;
• the complexity of the Will or distribution scheme;
• the promptness, efficiency and diligence shown;
• the number and nature of routine and complex tasks;
• the amount of work completed and time spent;
• the level of responsibility involved;
• problems encountered during administration; and
• the number of administrators sharing the work.

An administrator seeking commission should provide evidence addressing the work performed, time spent and any difficulties encountered. The assessment focuses on the administration of the estate and the responsibilities carried by the administrator.

Standard Commission Rates and Percentages

Section 86 of the Probate and Administration Act does not guarantee a particular rate of commission. The Registrar may allow commission as a lump sum or percentage, with the following ranges serving only as a guide:

• 0.25% to 1.25% of the value of assets transferred in specie;
• 0.25% to 2.5% on income from capital realisations; and
• 1% to 5% on income collections.

The appropriate amount depends on the work performed, the responsibility involved and the circumstances of the deceased estate. These percentage ranges do not replace the Registrar’s assessment of what is just and reasonable.

Potential Reductions or Denials of Commission for Administrators

Disentitling Conduct & Breach of Trust

Commission is discretionary, so an administrator does not have a guaranteed entitlement to payment. As noted above, Section 86 of the Probate and Administration Act bars any allowance where an administrator, without good reason, fails to pass the accounts as required by the rules or a Court order.

The decision in Re Estate Gowing; Application for Executor’s Commission [2014] NSWSC247 (‘Re Estate Gowing‘) indicates that commission may also be denied where conduct involves neglect, breach of trust or disregard of fiduciary obligations. 

In addition, section 86A of the Probate and Administration Act empowers the NSW Supreme Court, of its own motion or on the application of any person interested in the estate, to review any commission or other amount charged or proposed to be charged respecting the estate. If the Court considers the amount excessive, it may reduce it, notwithstanding any provision in the will authorising the charge.

Deductions for Non-Professional Work Charged by Professionals

The Registrar checks professional bills submitted in the accounts and may disallow charges for work that is executorial rather than professional. This includes work that forms part of the administrator’s ordinary responsibility in administering the deceased estate.

If estate funds paid a solicitor or another professional for non-professional executorial work, the administrator may be ordered to reimburse the estate for those amounts. Furthermore, the Registrar may also moderate the amount properly payable from the estate for professional work undertaken.

Case Study on Costs & Delays in Estate Administration

Background of the Estate of David Patrick Roche Frost

In Estate of David Patrick Roche Frost [2025] NSWSC994 (‘Estate of Frost‘), a beneficiary applied for orders:

• requiring the executor to verify, file and pass the deceased estate’s accounts; and
• requiring the executor to personally pay the legal costs of the application on an indemnity basis, alleging delays in the estate administration.

The executor later consented to filing and verifying the accounts. The estate involved disputed information concerning shares, insurance and other financial matters, with some delay arising from both the executor’s conduct and the beneficiary’s responses.

The Court Ruling on Indemnity Costs & Administrator Conduct

The Court found that the executor’s overall management of the estate was reasonable and attentive, despite some delays. The delays were not sufficiently serious or improper to justify requiring the executor to personally pay the beneficiary’s legal costs.

Applying the negative test, the Court considered whether the executor’s expenses were incurred unreasonably or improperly. The Court ordered that each party bear their costs, while also referring the accounts to the Registrar for certification under Part 78 Rule 84 of the NSW Supreme Court Rules.

Conclusion

An administrator who obtains letters of administration may seek commission under Section 86 of the Probate and Administration Act for the pains and trouble involved in estate administration. The claim remains discretionary, and accurate accounts, proper conduct and informed agreement from adult beneficiaries can affect whether a Court application is needed and what amount may be allowed.

If an estate administration involves an unresolved commission claim, contact LawBridge’s wills and estate planning lawyers. LawBridge can provide clear guidance on beneficiary consent, accounts and the steps required to pursue payment while protecting the estate’s remaining assets.

Frequently Asked Questions

When a person dies without a valid will in New South Wales, the Succession Act 2006 (NSW) (‘Succession Act‘) governs how their estate is divided among next of kin under the rules of intestacy. Beneficiaries who hold or are seeking Letters of Administration may prefer to alter the distribution rather than accept the statutory formula.

A Deed of Family Arrangement enables all entitled parties to agree to vary the distribution of an intestate deceased estate without resorting to litigation. This article sets out the legal requirements, taxation and duty consequences, and protections for the administrator, so families can make informed choices before the estate is distributed.

Interactive Tool: See If Your Family Can Use a Deed of Family Arrangement

The Purpose of a Deed of Family Arrangement for Beneficiaries & Family Members

Alteration of the Statutory Intestacy Formula

When a deceased person dies without a valid will, the rules of intestacy determine which family members are entitled to the estate and the share each beneficiary receives. However, those statutory entitlements may not reflect the family’s preferred distribution of the deceased estate.

A Deed of Family Arrangement is a legally binding agreement that allows the beneficiaries to record a different arrangement. The deed may vary the distribution of estate assets from the outcome produced by intestacy, such as where family members agree to divide the estate differently.

Resolution of Estate Disputes Without Court Proceedings

A formal family arrangement allows beneficiaries to address disagreements about the distribution of an estate through an agreed document. 

It can provide flexibility where the circumstances of the family have changed or where a beneficiary is dissatisfied with the proposed distribution.

A Deed of Family Arrangement may also record an enforceable settlement of an estate dispute, including a dispute about a will or a potential family provision claim. Reaching agreement can:

• avoid lengthy and expensive litigation;
• help preserve family relationships; and
• give the executor a clear basis for administering the estate.

Essential Requirements for a Valid Family Arrangement in NSW

Requirement for Unanimous Consent from All Entitled Parties

A Deed of Family Arrangement requires the consent and agreement of every party entitled to an inheritance under the will or the rules of intestacy. Each beneficiary must agree to the deed’s terms before it can vary the proposed distribution of the estate.

This includes every person whose entitlement may be affected, including a beneficiary who may receive a different share of the estate or agree to transfer part of their entitlement to another person. Without unanimous agreement, the deed cannot record a binding variation among all affected parties.

Provisions for Minors & Beneficiaries Lacking Mental Capacity

A person under 18 or a beneficiary who lacks capacity cannot enter into a Deed of Family Arrangement without the required approval. The arrangement may require an application to the Supreme Court of New South Wales before it can proceed.

Court approval is also relevant where a deed changes the entitlement of:

• a minor;
• an incapacitated beneficiary; or
• another person who cannot provide informed consent.

The court’s involvement protects the affected beneficiary’s interests before the estate distribution is altered.

The Necessity of Independent Legal Advice

Each party should obtain independent legal advice before signing a Deed of Family Arrangement. Separate advice allows every beneficiary to receive an objective explanation of:

• the deed’s legal merits;
• its proposed terms; and
• the possible effect on their share of the estate.

A wills and estate planning lawyer involved in drafting the deed can explain the proposed distribution and prepare the document accurately. Each affected beneficiary should have the opportunity to obtain advice from a separate lawyer before agreeing to vary the estate distribution.

Tax & Duty Consequences for Beneficiaries Who Alter an Intestate Estate

Transfer Duty on Variations Not in Conformity

Under Section 63 of the Duties Act 1997 (NSW) (‘Duties Act‘), the $100 applies to certain transfers of dutiable property from the legal personal representative of a deceased person to a beneficiary, including where the transfer is made under and in conformity with the trusts contained in the will or arising on intestacy.

A Deed of Family Arrangement that changes a beneficiary’s statutory entitlement means the transfer is not in conformity. Standard ad valorem transfer duty may apply to the portion received above the beneficiary’s original entitlement. 

Transactions involving a variation to the distribution under a will, including a transfer under a deed of family arrangement, must be lodged with Revenue NSW for assessment via eDuties rather than processed through Electronic Duties Returns (EDR).

Property Valuation & Surcharge Purchaser Duty

A professional property valuation report is required when a variation changes the share of property received by a beneficiary. Revenue NSW uses the valuation to calculate duty on the varied portion, with duty calculated by reference to the higher of the amount paid or the market value where applicable.

A foreign person is exempt from surcharge purchaser duty when property passes strictly in conformity with the deceased person’s will or intestacy laws. 

Surcharge purchaser duty may apply to the dutiable value of a residential property share acquired through a deed that changes the original entitlement.

Capital Gains Tax Implications for the Deceased Estate

Changing the distribution of a deceased estate may have Capital Gains Tax (CGT) consequences. Under the Australian Taxation Office’s guidance, How CGT applies to inherited assets, an asset may pass to a beneficiary under a deed of arrangement where:

• the deed settles a claim to participate in the deceased estate; and
• the only consideration is the variation or waiver of a claim to estate assets.

The deed should ordinarily be entered into before the legal personal representative completes the estate administration. Where these conditions are satisfied, the asset is treated as having passed to the beneficiary, allowing the legal personal representative to disregard any capital gain or capital loss arising from the transfer.

Protection Mechanisms for Administrators of a Deceased Estate

Inclusion of a Release & Indemnity Clause

A Deed of Family Arrangement should include a release and indemnity clause protecting the administrator from future lawsuits or claims about the distribution of the estate. The beneficiaries agree to:

• release the administrator from claims connected with the distribution; and
• indemnify the administrator against related liability.

This clause records the beneficiaries’ agreement about how the estate is to be distributed. It can give the administrator a clearer basis for completing estate administration after the deed has been signed.

Publication of a Notice of Intended Distribution

An administrator may publish a Notice of Intended Distribution through the NSW Online Registry before distributing any part of the estate. The notice gives creditors 30 days to notify the administrator of a claim.

Publication is not mandatory. However, the notice may provide protection from personal liability for unknown claims, subject to compliance with the relevant requirements, under the following provisions:

• Section 92 of the Probate and Administration Act 1898 (NSW); and
• Section 93 of the Succession Act.

Part 78 Rule 93(a) of the Supreme Court Rules 1970 (NSW) provides that a notice of intended distribution relating to the estate of a deceased person for which a grant of representation has been made or resealed by the Court must be published on the New South Wales Online Registry website.

Management of Creditors & Estate Debts

An administrator must call in the assets of the deceased person and pay the deceased’s debts before distributing the estate. This includes unpaid accounts and any required tax returns.

The administrator holds the estate as trustee for the beneficiaries until distribution. The administrator must:

• act in good faith;
• act with due care and diligence; and
• keep estate property separate from personal property.

Failure to administer the estate properly may result in personal liability to repay or compensate the estate.

Conclusion

A Deed of Family Arrangement can give beneficiaries a formal way to change how an intestate estate is shared when the statutory outcome does not reflect the family’s agreed position. Independent legal advice, transfer duty and capital gains tax consequences, creditor claims, estate debts and the administrator’s responsibilities should be considered before the estate is distributed.

With these issues in mind, contact LawBridge’s wills and estate planning lawyers to request a consultation about drafting or reviewing the arrangement. The team can provide practical legal guidance to help beneficiaries and administrators address the agreement, taxation issues and estate administration steps with greater clarity.

Frequently Asked Questions

When a person dies without a valid will in NSW, obtaining Letters of Administration gives an administrator the legal authority to manage and distribute the estate. This role increasingly involves identifying and securing digital assets such as cryptocurrency, online accounts, and intellectual property — holdings that Australian courts now recognise as property.

This article outlines the key duties of an administrator, from discovering digital wallets and preserving private keys to handling platform requests and managing capital gains tax obligations. It provides practical guidance for securely administering a digital legacy under NSW intestacy laws.

Interactive Tool: Check If You’re Ready to Handle the Estate’s Digital Assets

Device & Digital Wallet Discovery Methods

An administrator’s first task is to identify the deceased’s smartphones, digital accounts and cryptocurrency wallets. Crypto assets may be stored in:

• a software wallet, including one held through a trading platform; or
• a hardware wallet.

A hardware wallet stores private keys on a secure device that is not connected to the internet. Physical discovery is therefore essential because the wallet may not be identifiable through online account searches. 

Each wallet has a private key that authorises transactions, and losing that key usually means losing access to the cryptocurrency.

Identification of Online Businesses & Intellectual Property

The digital asset search should also cover:

• online businesses;
• domain names;
• cloud files; and
• related digital records.

These assets may contain financial value, business information or material needed to maintain the estate’s interests.

Administrators should record any copyright, trade marks and other intellectual property connected with the deceased or an online business. 

The search should also identify relevant accounts, renewal details and service arrangements so that domains, business operations and intellectual property are not overlooked during estate administration.

Device Access & Private Key Preservation for Executors

Solutions for Passcode & Biometric Lockouts

Apple iPhones are designed to prevent access without the correct passcode or biometric unlock. After death, Face ID or Touch ID may no longer provide access, leaving an executor unable to review:

• digital records;
• email accounts;
• password manager vaults; or
• authentication tools.

Apple requires a Legacy Contact or a court order before an administrator can obtain access to a locked device. Possession of the iPhone alone may not be enough to recover information held on it, including records relevant to the estate administration.

Protection of Hardware Wallets & Authentication Apps

A hardware wallet stores cryptocurrency private keys on a secure device that is not connected to the internet. This can make it harder for hackers to access the wallet, but the device and its access details still require careful protection during estate administration.

Each wallet uses a private key to authorise transactions on the blockchain network. If the private key is lost, the cryptocurrency is usually lost permanently because crypto systems have no central data bank.

Authentication apps should also be preserved because they may hold codes needed to access online accounts and cryptocurrency holdings.

Legal Frameworks & Platform Requests for Administrators

The Impact of Unclear Statutory Guidance in NSW

NSW does not have clear statutory guidance specifically governing access to a deceased person’s digital assets and records. Relevant areas may include:

• intellectual property;
• privacy;
• contract;
• crime;
• estate administration; and
• wills and succession law.

This creates uncertainty about access, control and inheritance.

Social Media Policies & Legacy Contact Procedures

Social media accounts may form part of an estate, but an administrator’s access can depend on the platform’s terms of service and internal procedures. 

The NSW Law Reform Commission identified these policies, together with privacy protections and jurisdictional issues, as matters relevant to any access scheme.

An administrator may need to provide evidence of the following before a platform considers a request:

• the deceased’s death;
• their legal authority; and
• their relationship to the estate.

Estate planning can also address these issues by:

• identifying digital accounts;
• recording access details; and
• appointing a digital executor.

However, a platform’s own procedure may still control whether an account is transferred, memorialised or closed.

Valuation, Capital Gains Tax & Documentation for Beneficiaries

Market Valuation Requirements for Crypto Assets

Crypto assets should be recorded at their market value in Australian dollars at the date of the deceased person’s death. This valuation supports probate reporting, estate administration and later tax calculations.

Administrators should keep records for each cryptocurrency and transaction, including:

• the asset’s value or cost;
• the date of acquisition; and
• costs incurred by the legal personal representative or beneficiary.

Each crypto asset is treated as a separate CGT asset. Accurate records can help establish the asset’s value and cost base when it is later transferred or disposed of.

Capital Gains Tax for Inherited Estates

A legal personal representative can disregard a capital gain or capital loss when a CGT asset owned by the deceased immediately before death passes to a beneficiary, including under the laws of intestacy. 

However, the beneficiary may face CGT if they later sell, exchange, gift or otherwise dispose of the inherited cryptocurrency.

CGT may apply at the deceased’s death when an asset passes to a foreign resident or a tax-advantaged entity, such as a charity, subject to the conditions described by the Australian Taxation Office.

When the legal personal representative sells an estate asset while winding up the estate, the resulting capital gain or loss is subject to the normal CGT rules.

Asset Transfer & Digital Legacy Distribution Rules

The Difference Between Asset Ownership & Digital Licences

An estate may contain both owned digital assets and digital services accessed under a licence or service agreement. Ownership may allow an asset to pass to a beneficiary, while a licence may only provide permission to use an account, platform or digital content.

The deceased’s terms of service may control whether access can be:

• transferred;
• continued; or
• closed.

Administrators should check the relevant agreement before treating an online account, digital content or other digital asset as transferable property.

Distribution Guidelines Under NSW Intestacy Rules

Digital assets form part of the estate where they are property owned by the deceased. When a person dies without a valid will, NSW intestacy rules determine which beneficiaries are entitled to receive the estate, including qualifying cryptocurrency and other transferable digital assets.

Before distribution, the administrator should:

• identify each asset;
• confirm its ownership;
• preserve access details; and
• record its value.

A cryptocurrency holding may be transferred to an entitled beneficiary or sold so its value can be shared as part of distributing the estate.

Conclusion

Managing a digital estate after Letters of Administration requires careful control of devices, wallets, private keys, online accounts and intellectual property. Accurate Australian-dollar valuations, transaction records and attention to capital gains tax support the administration and later distribution of cryptocurrency and other digital assets under NSW intestacy rules.

The next step is to contact LawBridge for a consultation about the estate. For practical legal guidance on digital asset management, cryptocurrency holdings and intellectual property, contact our wills and estate planning lawyers at LawBridge to help deal with the estate’s digital records and distribution responsibilities.

Frequently Asked Questions

Superannuation does not automatically form part of a deceased estate when a member dies. The super fund trustee decides who receives the death benefit payment, considering any existing nominations and identifying eligible dependants.

This article explains how death benefit claims are processed when no valid will exists, who qualifies as a beneficiary under superannuation law, and the steps executors and families must take to secure the benefit payment.

Interactive Tool: See If You Can Claim a Super Death Benefit

The Fate of a Super Death Benefit Without a Valid Will

The Role of Binding & Non-Binding Nominations

A superannuation death benefit does not automatically become part of the deceased estate. The super fund trustee first checks whether the deceased member made a valid death benefit nomination and considers the fund’s governing rules.

• A valid binding nomination requires the trustee to pay the benefit to the nominated eligible beneficiary or beneficiaries, subject to the nomination remaining valid.
• A non-binding nomination guides the trustee but does not require a particular outcome.

If there is no nomination, or a binding nomination is invalid, the trustee uses discretion to decide which eligible dependant or dependants should receive the benefit payment.

Payment to the Legal Personal Representative

The trustee may decide to pay the super death benefit to the deceased person’s legal personal representative. The legal personal representative is the executor of the will or the administrator of the deceased estate.

Payment to the legal personal representative places the death benefit into the deceased estate for distribution through the estate administration process, where advice from wills and estate planning lawyers at LawBridge may help. This may occur where:

• there is no valid binding nomination;
• the nomination directs payment to the estate; or
• the trustee considers payment to the legal personal representative appropriate under the fund’s governing rules.

Eligible Beneficiaries for Australian Families & Executors

Dependants Under Superannuation Law

Under the Superannuation Industry (Supervision) Act 1993 (Cth) (‘SIS Act‘), a dependant who may receive a superannuation death benefit includes:

• the deceased member’s spouse or de facto spouse;
• a child of any age; or
• a person in an interdependency relationship with the deceased member at the time of death.

An interdependency relationship requires all the following:

• a close personal relationship;
• living together;
• financial support from one or both people; and
• domestic support and personal care from one or both people.

In addition, a super fund may also pay the benefit to the deceased person’s legal personal representative. 

A person who was financially dependent on the deceased at the time of death may qualify as a dependant for SIS purposes and, subject to the fund’s governing rules, may therefore be eligible to receive the death benefit.

Dependants Under Taxation Law

The tax law definition of a dependant differs from the definition used to determine who may receive a superannuation death benefit. For tax purposes, a dependant may include:

• a current or former spouse or de facto spouse;
• a child under 18 years old;
• a person financially dependent on the deceased; or
• a person in an interdependency relationship.

A child over 18 years old is generally treated as a dependant for tax purposes only if the child was financially dependent on the deceased at the time of death. 

This distinction affects the tax treatment of the benefit payment, including whether a lump sum death benefit is tax free or contains a taxable component.

Steps for Executors & Beneficiaries to Claim the Benefit Payment

How to Locate the Super Fund & Initiate the Claim

To locate the super fund, you can:

• Check the deceased person’s paperwork for superannuation statements, letters from the super fund, or payslips;
• Contact the deceased person’s employer, who may be able to confirm which super fund received contributions; and
• Notify the Australian Taxation Office (ATO), if you are the authorised legal personal representative (LPR), that you are managing the deceased estate and request the deceased estate tax and super information package. The ATO may provide information it holds about the deceased person’s superannuation accounts, including lost or ATO-held super, to the authorised LPR or an appropriately appointed representative.

Once the super fund is identified, contact it to notify the fund of the member’s death and begin the superannuation death benefit claim. 

The claimant or legal personal representative can ask for the required forms and documents, expected timeframes, and details of how the benefit payment will be assessed.

How to Provide Required Documentation & Proof of Identity

The super fund may request a death certificate or other accepted proof of death, proof of identity, and evidence of the claimant’s relationship with the deceased person, such as a marriage certificate. 

A legal personal representative may also need to provide probate or letters of administration if the death benefit is to be paid to the deceased estate.

When managing the documentation process:

• Keep copies of every form and document, together with submission dates, contact names, and reference numbers.
• Before sending documents, ask whether the super fund requires originals or certified copies.
• If a document is not immediately available, ask what alternative evidence the fund accepts and when the remaining documents can be supplied.

Fund Assessment Processes & Dispute Resolution for Australian Families

The Claim Staking Process & Beneficiary Objections

Claim staking is a discretionary process that allows a super fund trustee to notify potential beneficiaries of a proposed death benefit payment. 

The notice explains who the trustee proposes to pay and the proposed amounts, giving each relevant beneficiary an opportunity to object.

A claimant usually has 28 days to object. If an objection is received, the trustee must:

• notify the other claimants;
• consider any further information; and
• review the proposed decision.

However, Australian Securities and Investments Commission (ASIC)’s review found that claim staking added about 95 days to the median claims handling time across the reviewed trustees. As a result, trustees may waive the process for lower-risk claims.

How to Escalate Disputes to the Australian Financial Complaints Authority

A disagreement about a death benefit payment starts through the fund’s internal dispute resolution (IDR) process. The trustee must then provide a written IDR response explaining the outcome and the 28-day timeframe for lodging a complaint with the Australian Financial Complaints Authority (AFCA).

AFCA cannot consider a death benefit payment complaint until the IDR process has started and the claimant has received a response. 

Tax Implications for Beneficiaries & Deceased Estates

Tax-Free Payments for Dependants

A lump sum death benefit paid directly to a dependant under taxation law is entirely tax-free. This applies whether the benefit includes a taxed element, an untaxed element, or both.

Similarly, a lump sum death benefit paid to the trustee of a deceased estate is also tax-free when all beneficiaries who benefit from that payment are dependants of the deceased. 

Ultimately, the tax treatment depends on the status of the people who ultimately benefit from the payment.

Taxable Components for Non-Dependants

A lump sum superannuation death benefit paid in respect of a non-dependant may comprise tax-free and taxable components. The tax-free component is not subject to tax.

The taxable component may include a taxed element and/or an untaxed element, and the applicable tax treatment depends on whether the benefit is paid directly to the non-dependant individual or to the deceased’s legal personal representative (LPR) for distribution through the estate.

Where the benefit is paid directly to a non-dependant individual, the taxable component is generally subject to tax at a maximum rate of:

• 17% on the taxed element, comprising 15% tax plus the 2% Medicare levy; and
• 32% on any untaxed element, comprising 30% tax plus the 2% Medicare levy.

Where the benefit is instead paid to the LPR or trustee of the deceased estate, and is attributable to non-dependant beneficiaries, the taxable component is generally taxed at:

• 15% on the taxed element; and
• 30% on any untaxed element.

The Medicare levy does not apply to the estate in this context. Accordingly, the 15% and 30% rates should not be treated as the final effective rates where a death benefit is paid directly to an Australian-resident non-dependant individual.

A non-dependant must receive a superannuation death benefit as a lump sum; they cannot receive it as a death benefit income stream. Where an estate benefits both dependants and non-dependants, the taxable components are allocated proportionately according to the extent to which each beneficiary benefits from the death benefit.

Recourse for Australian Families Against Superannuation Delays

Common Causes of Trustee Delays

A death benefit claim may take longer when:

• documents are missing or incomplete;
• multiple people claim the benefit;
• the super fund must identify potential beneficiaries; or
• probate or letters of administration are required before payment to the deceased estate.

ASIC Report 806 identified other causes of delay, including:

• risk-averse procedures;
• unclear claim processes;
• poor record-keeping;
• inadequate staff training; and
• weak coordination with service providers.

Support for Claimants Experiencing Financial Hardship

Under Regulation 6.21(2)(a) of the Superannuation Industry (Supervision) Regulations 1994 (Cth) (‘SIS Regulations‘), a trustee may cash a deceased member’s benefits as an interim lump sum followed by a final lump sum. The regulation permits that form of payment; it does not make financial hardship a statutory condition for an interim payment.

In practice, subject to the fund’s trust deed, governing rules and the trustee’s assessment of the relevant payment risks, an interim payment may be made to assist an eligible beneficiary facing urgent financial need.

ASIC Report 806 observed that many trustees had procedures to expedite certain low-risk death-benefit claims involving financial hardship and, in some circumstances, to release part of the account balance as an interim payment. ASIC noted, for example, that this could occur where the claimant was the nominated beneficiary and had an urgent monetary need.

An interim payment may assist with:

• funeral, burial or cremation expenses;
• rent;
• mortgage payments; and
• other basic costs.

The availability and amount of an interim payment are not prescribed by Regulation 6.21(2)(a) of the SIS Regulations They depend on the fund’s governing rules, the terms of any binding death-benefit nomination, the identity and entitlement of the claimant, competing claims, the amount of the benefit then ascertainable, and the trustee’s risk assessment and procedures.

Conclusion

A superannuation death benefit does not automatically form part of a deceased estate, as the super fund trustee must assess nominations, eligible beneficiaries and the fund’s governing rules. Claimants and legal personal representatives should provide the required documents, monitor the claim, address delays promptly and consider the tax treatment of any benefit payment.

After a death benefit claim begins, contact LawBridge to request a consultation if legal guidance is needed. Our wills and estate planning lawyers at LawBridge provide clear, practical support to help families and estate representatives manage beneficiary issues, documentation requirements and disputes involving superannuation death benefits.

Frequently Asked Questions

When a sole director and sole shareholder of a proprietary company dies without leaving a valid will, the company is left without a director authorised to make management decisions. The business continues to exist as a separate legal entity, but bank accounts may be frozen and the company may be unable to trade until a replacement director is appointed.

This article explains how family members can apply to the Supreme Court of NSW for Letters of Administration and use Section 201F of the Corporations Act 2001 (Cth) (“Corporations Act”) to appoint a new director. It also outlines the practical steps needed to keep the company running while the estate is administered.

Interactive Tool: Check Your Company’s Next Legal Step After a Director Dies

Immediate Consequences for the Company & Shareholders

The Separation of Directorship & Share Ownership

Directorship and share ownership are separate legal roles. A director of a company holds a personal office that ends automatically when the director dies. The role does not pass to an executor, beneficiary or family member.

Shares are property and form part of the deceased’s estate. Under Section 1072A of the Corporations Act, shares can pass by transmission to the deceased’s legal personal representative once probate or letters of administration have been granted. The estate may later:

• transfer the shares to a beneficiary;
• sell them; or
• retain them while the estate is administered.

Operational Paralysis & Frozen Bank Accounts

A company remains a separate legal entity when its sole director dies, but it may be unable to make management decisions without an authorised person, so businesses may need advice from commercial and business lawyers on company governance and continuity. A proprietary company with a sole director and sole shareholder can be left without anyone able to:

• sign contracts;
• pay suppliers; or
• continue to manage the company.

Banks may freeze an account or decline further instructions where the deceased was the sole authorised signatory. This can interrupt payroll, supplier payments and other business obligations.

However, existing authorised signatories may still operate the account, depending on the bank mandate and its response to the death.

The Legal Process for Family Members & Executors

Application for Letters of Administration in NSW

Without a Will, an eligible relative will usually need to apply to the Supreme Court of New South Wales for Letters of Administration, often with advice from wills and estate planning lawyers on estate administration. 

The grant appoints an administrator to collect assets, pay debts and administer the deceased estate. That authority is also needed before the administrator can take the steps required to manage the company.

The Supreme Court of NSW states that an application should generally be filed within six months from the date of death. Where a first application for probate or letters of administration is filed later than six months after the death, the supporting affidavit must include an explanation for the delay, either within the affidavit itself or in a separate Affidavit of Delay, pursuant to Part 78, rule 16 of the Supreme Court Rules 1970 (NSW) (NSW Supreme Court Rules).

The process may take weeks or months, leaving the company without someone authorised to make management decisions during that period.

Appointment of a Replacement Director

Under Section 201F of the Corporations Act, the personal representative appointed to administer the estate of a person who was the sole director and sole shareholder of a proprietary company may appoint a replacement director. 

The personal representative may appoint themselves or another eligible person, and the appointed person holds office as if appointed through the usual process.

In this sense, the appointment can occur only once the personal representative has been formally appointed through probate or Letters of Administration. The replacement director must consent to the appointment and must be legally eligible to act. 

Once appointed, the new director can manage the company and exercise the director’s powers under the Corporations Act.

Transmission of Shares & Corporate Governance

Transfer of Shares to the Legal Personal Representative

Shares owned by a deceased shareholder form part of the deceased estate. As noted above, under Section 1072A of the Corporations Act, the shares pass by transmission to the deceased’s legal personal representative.

The shares generally remain registered in the deceased’s name until the legal personal representative provides evidence of their appointment and requests registration. 

Once registered, the legal personal representative may hold the shares for the estate before they are sold or transferred to beneficiaries, subject to the company constitution and any applicable shareholders agreement.

Updates to ASIC Records & The Company Register

The company must maintain a register of members and update it to reflect any valid transmission or transfer of the deceased member’s shares, including the registration of the legal personal representative where applicable and any subsequent change in ownership.

Section 168 of the Corporations Act requires a company to set up and maintain a register of members. Section 169 of the Corporations Act specifies the information that must be recorded, including each member’s name, address, date of entry, and, for a company with share capital, details of the shares held and related share information.

A proprietary company must notify the Australian Securities and Investments Commission (ASIC) of relevant changes, including:

• changes to its member register, pursuant to sections 178A and 178D of the Corporations Act, generally within 28 days after the company adds or alters the relevant particulars in the register; and
• the appointment or cessation of a director or company secretary, or a change to their personal details, pursuant to section 205B of the Corporations Act, generally within 28 days after the relevant event or change.

In summary, if a director dies, the company must notify ASIC of the director’s cessation within 28 days after the cessation, which will ordinarily be the date of death. If a replacement director is appointed, the company must separately notify ASIC of that appointment within 28 days after the effective date of appointment.

Complications Involving Trusts & Personal Guarantees

Impact on Corporate Trustees & Family Trusts

A company acting as trustee of a family trust may become unable to operate effectively when its sole director dies. Until an authorised person can act for the corporate trustee, the trust may be unable to:

• make distributions to beneficiaries;
• enter transactions; or
• manage trust property.

The trust deed should be reviewed for provisions dealing with the appointment and removal of trustees and the succession of the appointor. An alternate appointor or successor may be identified in the deed.

If the company cannot act as trustee, the trust’s administration may be disrupted even though the company itself remains a separate legal entity.

The Continuation of Personal Guarantees & Debts

Personal guarantees signed by the deceased director for company debts do not end when the director dies. Guarantees may cover obligations such as:

• commercial leases;
• bank facilities; and
• trade accounts.

Creditors may claim against the deceased estate if the company does not meet the guaranteed obligation. The estate should identify all guarantees, loans and security arrangements before assets are distributed.

A director may also have personal exposure for liabilities incurred by a company acting as trustee under Section 197 of the Corporations Act where the statutory conditions apply.

Proactive Steps for Business Owners & Company Directors

Creation of a Valid Will & Succession Plan

A professionally drafted Will should:

• identify the company shares;
• name a suitable executor; and
• state how the estate should be administered.

This gives the executor authority to manage the estate and, where relevant, take the steps needed to appoint a new director to the company.

A written business succession plan should also address whether the business will:

• continue;
• be sold; or
• be transferred to beneficiaries.

It should also identify key company records, banking details, contracts and other information needed to keep the company running if the sole director dies without leaving a valid Will.

Review of the Company Constitution & Shareholders Agreements

The company constitution should be reviewed for provisions dealing with the following:

• the death of a shareholder;
• director appointments;
• share transfers;
• voting rights; and
• pre-emption requirements.

A current review can identify rules that may affect how shares are transferred or whether a beneficiary can participate in company decisions.

A shareholders agreement may set out:

• a buy/sell process;
• a valuation method; and
• funding arrangements for a shareholding transition.

Business owners should consider whether the agreement aligns with the Will and constitution, and whether shares are transferred to beneficiaries or offered to existing shareholders after the estate is administered.

Conclusion

When a sole director and sole shareholder dies without a will, the company remains a separate legal entity, but its operations may stall until an authorised replacement director is appointed. Letters of Administration, transmission of shares, ASIC updates and reviews of guarantees, trusts and company documents are central to administering the estate and protecting the business.

The appropriate next step is to contact LawBridge to request a consultation about the estate and company structure. You can contact LawBridge’s business lawyers for advice on business succession to keep the company’s affairs organised while the estate is administered.

Frequently Asked Questions

When a person dies and letters of administration have been issued in another Australian state or territory, the administrator may need to have that grant resealed by the Supreme Court of NSW to manage assets located in New South Wales. This process is authorised under Section 107 of the Probate and Administration Act 1898 (NSW) (‘Probate and Administration Act‘).

This article explains the reseal process for interstate letters of administration, including the jurisdictions recognised, the documents required, and the steps for lodging an application with the Supreme Court of NSW.

The Need for a Reseal in NSW

Identification of Assets That Require a Reseal

A reseal is required when the deceased owned real estate in New South Wales and the executor or administrator holds a grant issued by an Australian court or an eligible overseas court. 

Under Section 107 of the Probate and Administration Act, a resealed grant has the same force and operation in New South Wales as the original grant.

Other NSW assets may not always require a reseal or fresh grant. Banks and other asset holders may release funds after receiving a declaration of entitlement or indemnity.

Life insurance proceeds and superannuation death benefits usually fall outside the estate, although the relevant trustee may require a grant or reseal before releasing the funds.

Differences Between Probate and Letters of Administration

Each form of grant gives the executor or administrator authority to deal with estate assets. The three main types are:

• Probate: granted where a valid will appoints an executor.
• Letters of administration: apply where the deceased died without a will.
• Letters of administration with the will annexed: apply where a will exists but probate is not granted to a named executor.

Where the original grant was probate or administration with the will annexed, the issuing court retains the original will. The NSW application must then rely on a copy of the will contained in the grant. 

A reseal of probate or reseal of another grant may allow the interstate executor or administrator to deal with NSW assets without applying for an entirely new grant.

Eligible Jurisdictions for a NSW Reseal

Recognised Australian States & Territories

Under Section 107 of the Probate and Administration Act, the Supreme Court of NSW may reseal a grant issued by an Australian state or territory court. The recognised Australian states and territories are:

• Victoria
• Queensland
• South Australia
• Western Australia
• Tasmania
• Northern Territory
• Australian Capital Territory

A grant of probate or letters of administration issued by a court in one of these jurisdictions may support an application for a reseal where the estate includes assets in NSW.

Commonwealth Realm Countries

The Supreme Court of NSW may also reseal grants from countries classified as Commonwealth Realm countries, where the Queen is, or was when the grant was made, the Head of State. The listed countries include:

• United Kingdom, including England, Scotland, Wales and Northern Ireland
• New Zealand
• Papua New Guinea
• Solomon Islands

A foreign grant from a country outside this recognised group cannot be resealed through this process. The executor or administrator may instead need to apply for a fresh grant in NSW, depending on the circumstances of the estate and the grant issued overseas.

Current Application Fees 

Supreme Court of NSW Application Fees

The current filing fee for an uncontested probate or reseal application depends on the sworn gross value of the estate. The Supreme Court of NSW filing fees applying from 1 July 2026 are:

• Under $100,000: no fee
• $100,000 to under $250,000: $960
• $250,000 to under $500,000: $1,303
• $500,000 to under $1,000,000: $1,999
• $1,000,000 to under $2,000,000: $2,663
• $2,000,000 to under $5,000,000: $4,439
• $5,000,000 or more: $7,399

The Step by Step Reseal Application Process

Publication of the Notice of Intended Application

Under Sections 42 and 109 of the Probate and Administration Act, at least 14 days’ notice must be published before a summons for a reseal is filed. The notice of intended application is published through the NSW Online Registry, as required by Part 78 of the Supreme Court Rules 1970 (NSW) (‘Supreme Court Rules‘).

The notice serves several purposes, including:

• giving creditors an opportunity to submit claims against the estate;
• alerting relatives who may seek a family provision order; and
• notifying anyone who may challenge the validity of the will or identify a later will.

Lodgement of the Application & Responses to Requisitions

An uncontested reseal application is made online through the Probate Service. After the documents have been signed, the applicant must upload the following and pay the applicable filing fee:

• the summons;
• the reseal form;
• the inventory of property;
• the affidavit;
• the original grant or exemplification; and
• a certified copy of the grant.

An incomplete or incorrect application may result in requisitions from the Court by email. The applicant must answer each requisition by re-filing a form or submitting a separate affidavit.

The Court will not issue the reseal until the requisition has been answered. The application may be dismissed if no response is filed or additional time is not requested.

Situations That Require a Fresh NSW Grant

Ineligible Overseas Grants

The Supreme Court of NSW cannot reseal every foreign grant. As discussed above, under Section 107 of the Probate and Administration Act, resealing is limited to grants from Australian courts and certain Commonwealth Realm countries.

Grants made in the following countries cannot be resealed in NSW:

• Malta
• South Africa
• Pakistan
• India
• Sri Lanka
• Fiji
• Hong Kong
• Republic of Ireland

Where an overseas grant is ineligible, the executor or administrator may need to apply for a fresh grant in NSW. The type of new grant depends on the original grant and the deceased’s circumstances:

• A foreign grant of probate may support an application for a fresh grant of probate based on a copy of the will.
• A foreign grant of administration with the will annexed may require probate, or administration with the will annexed, of a copy of the will.
• If the deceased died without a will, the applicant may need a fresh grant of administration.

Informal Administration as an Alternative

A reseal or fresh grant may not be required for every NSW asset. Depending on the asset, its value and the requirements of the asset holder, a bank or another institution may release funds after the executor or administrator signs a declaration of entitlement or an indemnity protecting the asset holder against a later claim.

Each asset holder sets its requirements. Real estate held solely by the deceased or as a tenant in common requires a grant, while a death certificate may be sufficient to transfer real estate held in joint tenancy to the surviving joint tenant.

Wills and estate planning lawyers can assist with assessing whether informal estate administration, a reseal or a fresh grant is appropriate.

Conclusion

An interstate grant may need a reseal before an executor or administrator can deal with real estate and other assets in NSW, while some asset holders may accept a declaration, indemnity or death certificate instead. Under Section 107 of the Probate and Administration Act, the application depends on an eligible jurisdiction, the correct original grant or exemplification, certified documents, online notice and responses to any requisitions.

With the right documents prepared, LawBridge can assess whether a reseal, fresh grant or informal estate administration is appropriate. Contact our wills and estate planning lawyers at LawBridge for practical guidance on preparing the application and dealing with estate assets in New South Wales.

Frequently Asked Questions

An incorporated association in NSW must follow specific rules for conducting meetings to ensure proper governance and legal compliance, a key aspect of NFP & charity governance and ACNC compliance. General meetings, including the Annual General Meeting (AGM) and special general meetings, are fundamental to an association’s operations, providing the formal structure for members to make valid decisions under the Associations Incorporation Act 2009 (NSW) (‘Associations Act’).

This article outlines the key procedures for committee members and public officers managing a NSW incorporated association. It covers notice requirements, quorum rules, how members can vote, the process for passing an ordinary or special resolution, and the legal obligations for keeping minutes for members to inspect.

Interactive Tool: Check If Your Meeting Notice & Voting Rules Are Compliant

Types of Meetings for Committee Members of an Incorporated Association in NSW

The Annual General Meeting

An incorporated association in NSW must hold an Annual General Meeting (AGM) to provide members with reports on its activities and finances. Under Section 37 of the Associations Act, the first AGM must occur within 18 months of registration. Subsequent AGMs must be held within six months after the close of the association’s financial year. 

The primary business conducted at an AGM for an incorporated association includes:

• Confirming the minutes from the previous AGM and any special general meetings held since.
• Receiving reports from the committee detailing the association’s activities over the last financial year.
• Electing office-bearers and ordinary members of the committee.
• Considering the association’s financial statements and, if applicable, the auditor’s report.

Special General Meetings

Special general meetings are convened to address specific or time-critical matters that fall outside the scope of an AGM. Therefore, an incorporated association may call a special general meeting to handle business that cannot wait until the next scheduled annual general meeting.

These meetings are typically held for a distinct purpose, including:

• Considering an appeal from a member against a committee decision; or
• Making an urgent choice that requires the approval of the general membership.

Furthermore, the business discussed is limited to the matters for which the meeting was called.

Committee Meetings

Committee meetings are held for the governing body of an incorporated association to manage its day-to-day affairs. These meetings allow the committee to exercise its powers and carry out its functions, which are not required to be handled by the association in a general meeting.

According to Section 28 of the Associations Act, an incorporated association must establish a committee with at least three members. In addition, each committee member must be 18 years of age or older, and a minimum of three members must ordinarily reside in Australia.

Notice Requirements for a General Meeting for NSW Non-Profit Administrators

Timeframes for an Annual General Meeting

An incorporated association in NSW must provide members with adequate notice before an Annual General Meeting (AGM). 

The specific timeframe is governed by the association’s constitution. If an association has adopted the model constitution, clause 30 of Schedule 3 of the Associations Incorporation Regulation 2022 (NSW) (‘Associations Regulation’) sets out the minimum notice periods.

Under the model constitution, the secretary must give each member notice of a general meeting as follows:

• at least 14 days before the meeting for ordinary business; and
• at least 21 days before the meeting if a special resolution is to be proposed.

This 21-day requirement for a special resolution is also mandated by Section 39 of the Associations Act. The notice must include the exact terms of the proposed special resolution and state that it is intended to be passed as such. 

Ultimately, this ensures members have sufficient time to consider significant decisions before they vote.

Giving Notice for Special General Meetings

Special general meetings are convened to address specific or urgent matters that cannot wait until the next AGM. The notice requirements for these meetings are just as important to ensure the validity of any decisions made.

In addition, the association’s constitution will specify the exact procedures for calling and notifying members of a special general meeting.

The notice for a special general meeting must clearly state the purpose of the meeting. According to clause 30 of the model constitution in Schedule 3 of the Associations Regulation, the notice must specify:

• the place, date, and time of the meeting; and
• the nature of the business to be transacted.

Only the business specified in the notice can be addressed at the meeting. The notice period is the same as for an AGM, requiring at least 14 days for ordinary business and at least 21 days if a special resolution is on the agenda, as required by Section 39 of the Associations Act.

Quorum Rules & Procedures for Governance Advisers

Establishing a Quorum at AGMs

A quorum is the minimum number of members that must be present for a general meeting to proceed and make valid decisions, a critical component of NFP & charity governance and ACNC compliance.

For an incorporated association in NSW, the constitution must specify the quorum for general meetings, as required by Schedule 1 of the Associations Act. Therefore, no business can be lawfully conducted at an annual general meeting (AGM) unless a quorum is present.

Under clause 31 of the model constitution in Schedule 3 of the Associations Regulation, the quorum for a general meeting is five members who are present and entitled to vote. 

While many organisations adopt this number, an incorporated association can set a different requirement in its constitution. For instance, larger associations often stipulate a minimum percentage of the total membership rather than a fixed number.

Managing Adjourned Meetings

If a quorum is not present within half an hour of the scheduled start time for a general meeting, specific procedures must be followed.

According to clause 31 of the model constitution in Schedule 3 of the Associations Regulation, the meeting’s outcome depends on how it was called:

• Convened by members: The meeting is dissolved.
• Convened in any other case: The meeting is adjourned to the same day, time, and place in the following week.

The member presiding at the meeting can specify a different location for the adjourned meeting at the time of adjournment. Alternatively, written notice of a new venue can be given to members at least one day before the rescheduled meeting. 

In essence, if a quorum is still not present within half an hour of the start time of the adjourned meeting, the members who are present will constitute a quorum, provided there are at least three.

How General Members Vote & Use a Proxy at a General Meeting

Standard Voting Methods

At a general meeting for an incorporated association in NSW, members can vote on motions using several standard methods. The specific procedures are determined by the association’s constitution and the member presiding at the meeting.

Common methods for casting a vote include:

• Show of hands: The chairperson asks members who support a motion to raise a hand, followed by those who oppose it, which is a common method for straightforward decisions where a precise count is not initially required.
• Standing: Similar to a show of hands, members stand to indicate their vote, making counting easier in a larger meeting.
• Voice: The chairperson asks members to say “Aye” for a vote in favour and “No” for a vote against, with the outcome decided based on which side is audibly louder.
• Written ballot: For more formal or contentious matters, a written ballot may be used to ensure a precise and often confidential vote count. Clause 34 of the model constitution in Schedule 3 of the Associations Regulation allows for this if the presiding member or at least five members request it.

Electronic & Postal Ballots

An incorporated association in NSW can conduct a vote by postal, electronic, or a combined ballot, but only if its constitution permits it. Under Section 38 of the Associations Act, this method can be used to pass an ordinary or special resolution without holding a physical general meeting.

The process for these ballots is detailed in Schedule 2 of the Associations Regulation and involves several key steps:

• Preparing a statement: The committee must prepare a statement detailing the matter to be decided and appoint a returning officer, who cannot be a committee member.
• Preparing a roll: The returning officer prepares a roll of all members entitled to vote.
• Distributing ballot papers: Each eligible member receives a ballot paper with instructions, the question to be determined, and information on the closing date. For a special resolution, this must be provided at least 21 days before the ballot closes.
• Managing returns: The returning officer is responsible for securely storing the returned ballots, rejecting any informal votes, and ascertaining the result.
• Recording the result: After the ballot closes, the returning officer provides a signed statement of the result to the association’s secretary, who must record it in the minute book.

Rules for Proxy Voting

A member of an incorporated association can appoint another person as a proxy to attend and vote on their behalf at a general meeting only if the association’s constitution explicitly allows it. Moreover, the Associations Act requires that an association’s constitution must state whether members are entitled to vote by proxy.

It is important to note that clause 34 of the model constitution, found in Schedule 3 of the Associations Regulation, expressly prohibits proxy voting. Therefore, an incorporated association that has adopted the model constitution without modification does not permit members to vote by proxy.

If an association wishes to allow proxy voting, it must formally amend its constitution to include specific rules and procedures for appointing and using a proxy.

Passing a Special Resolution & Ordinary Resolution for Committee Members

Requirements for an Ordinary Resolution

An ordinary resolution is a formal decision passed by an incorporated association in NSW through a majority vote. Under Section 38 of the Associations Act, a resolution is passed as an ordinary resolution if it receives support from more than half of the votes cast by members who are entitled to vote.

This type of resolution can be passed through several methods, including:

• at a general meeting of the incorporated association; or
• through a postal, electronic, or combined ballot.

Additionally, the specific procedures for conducting a ballot are outlined in the Associations Regulation.

Notice & Voting Rules for a Special Resolution

A special resolution is required for significant decisions within an incorporated association, such as altering its constitution or name. The process for passing a special resolution is more stringent than for an ordinary resolution, as detailed in Section 39 of the Associations Act.

The key requirements for passing a special resolution at a general meeting in NSW include:

• Notice Period: Members must be given at least 21 days’ notice before the meeting where the special resolution is to be proposed.
• Notice Content: The notice must specify the exact terms of the proposed resolution and include a statement that it is intended to be passed as a special resolution.
• Voting Threshold: The resolution must be supported by at least three-quarters (75%) of the votes cast by members who are entitled to vote on the matter.

In addition, a special resolution can also be passed through a postal, electronic, or combined ballot if the association’s constitution allows for it. In specific circumstances where a meeting or ballot is impractical, the Secretary of NSW Fair Trading may direct an alternative manner for passing the resolution.

Keeping Minutes to Inspect & Record Meeting Outcomes for Public Officers

Formalisation of Annual General Meeting Minutes

An incorporated association in NSW must keep minutes of its general meetings, including the Annual General Meeting (AGM), under Section 50 of the Associations Act. The secretary is typically responsible for ensuring an accurate record of the proceedings is created and confirmed at the next meeting.

The minutes serve as the official record of the AGM and should be drafted with clarity and precision. Key details to include are as follows:

• Meeting logistics: The date, time, and location of the meeting.
• Attendance: The names of members present and any apologies received.
• Quorum: Confirmation that a quorum was present.
• Previous minutes: Confirmation of the minutes from the previous AGM and any special general meetings.
• Motions and resolutions: The exact wording of every motion and resolution, including the names of the members who moved and seconded them.
• Voting outcomes: The outcome of each vote, including the method used, such as a show of hands or a written ballot.
• Committee reports: A summary of reports presented by the committee, including financial statements.
• Elections and appointments: Details of all elections and appointments of office-bearers and committee members.

Under clause 18 of the model constitution in Schedule 3 of the Associations Regulation, the minutes must be signed by the presiding member at the meeting or the member presiding at the subsequent meeting to verify their accuracy.

Record Storage for Member Inspection

An incorporated association must keep its records, including minutes and financial documents, for at least five years, as required by Regulation 15 of the Associations Regulation. These records can be stored in either written or electronic form, provided the electronic records can be converted to a hard copy.

Members of an incorporated association in NSW have the right to inspect these records. Clause 43 of the model constitution in Schedule 3 of the Associations Regulation states that documents must be available for members to inspect free of charge at a reasonable time, including:

• Constitution: The association’s constitution;
• Meeting minutes: Minutes from all committee meetings and general meetings; and
• Other documentation: All other records, books, and documents relating to the association.

The association’s constitution must specify where these documents are kept. According to clause 42 of the model constitution in Schedule 3 of the Associations Regulation, records must be kept in NSW, either at the association’s main premises or its official address, in the custody of the public officer or another designated member. 

Furthermore, members may also obtain a copy of these documents, though the association may charge a small fee per page.

Conclusion

An incorporated association in NSW must follow specific rules for conducting any general meeting, including the AGM, to ensure legal compliance under the Associations Act. These obligations cover everything from providing correct notice and meeting a quorum to the specific methods required to vote on and pass an ordinary or special resolution.

Adhering to the Associations Act and your constitution is fundamental for maintaining good governance for your incorporated association. For tailored guidance on managing your general meetings and passing resolutions correctly, contact LawBridge’s experienced not-for-profit lawyers today to ensure your operations remain compliant.

Frequently Asked Questions

Suspected criminal conduct inside a not-for-profit or incorporated association can lead to a serious internal dispute. These situations, which may involve anything from fraud to harassment, require a structured approach to protect the organisation and its members from legal and reputational harm.

This guide explains the essential steps for effective dispute resolution when faced with such allegations. It covers how to investigate the conduct properly, manage the internal dispute, and navigate the necessary legal and reporting obligations to achieve a fair settlement and ensure compliance.

Interactive Tool: See Your Next Steps for Internal Criminal Conduct & Disputes

How to Identify Criminal Conduct & Internal Disputes in a NFP

Definition of Criminal Conduct for a NSW Incorporated Association

Criminal conduct involves any action that breaks a law for which a criminal penalty can be applied. For a not-for-profit or an incorporated association, such conduct can create a serious internal dispute that requires a formal resolution process—a situation often requiring legal advice for an incorporated association.

In addition, it is important to recognise that some actions, or even failures to act, can constitute both a crime and a separate civil matter. This dual nature can potentially lead to claims for damages or compensation.

Common Types of Criminal Offences & Disputes

Various types of criminal conduct can occur within a not-for-profit organisation, often leading to a complex internal dispute. Consequently, the effective management of such a dispute is critical for the organisation’s stability and legal compliance.

Common offences that may arise include:

• Fraud, stealing, and embezzlement, which involves the dishonest appropriation of funds or assets, such as an employee authorising fraudulent payments to themselves or a committee member misusing organisational funds.
• Criminal damage to property, referring to the intentional or reckless destruction of or damage to the organisation’s property.
• Assaults, including sexual assaults, which are serious offences involving physical harm or unwanted sexual contact, creating an unsafe environment and a significant internal dispute.
• Stalking and harassment, including behaviour that causes fear or distress to another person, such as repeated unwanted contact or threats.
• Failures to report incidents, where an organisation or its officers may commit a crime by failing to report certain incidents as required by law, such as child abuse or notifiable issues under work health and safety laws.

Immediate Steps to Resolve an Internal Dispute Over Suspected Crime

Fact Assessment & Evidence Preservation

When an internal dispute arises from suspected criminal conduct, a not-for-profit organisation should begin with initial fact-finding steps. This preliminary review is essential to understand the situation before taking further action, with the primary goals being to:

• Aim to gather information objectively to properly assess the situation.
• Take steps to secure any relevant materials that may be needed later.

Important actions during this phase include:

• Documenting concerns: It is important to create file notes of conversations or incidents related to the dispute, and ask relevant individuals to provide written accounts of what happened in their words.
• Reviewing records: Examine financial statements or other documents to see if they support the suspicions, such as checking for missing funds or inappropriate reimbursement claims.
• Securing evidence: Take steps to preserve any evidence related to the allegations to ensure it is not lost or altered during the dispute resolution process.
• Assessing immediate risk: Determine if there is any immediate risk of harm to individuals or the organisation and act accordingly.

Internal Policy Review for Dispute Resolution

An organisation must review its existing policies and procedures to guide the dispute resolution process. If the not-for-profit has a harassment or whistle-blower policy, it is critical to follow the steps outlined for reporting and investigating a complaint.

In essence, these policies are designed to ensure fair treatment and protection for everyone involved in the internal dispute. For instance, a whistle-blower policy may require the organisation to protect the identity of the person who reported the conduct and shield them from any negative consequences.

Failing to follow established procedures can lead to serious concerns, as affected parties might:

• Question the procedural fairness of the entire process.
• Challenge the impartiality of the investigation regarding the dispute.
• Raise potential privacy issues concerning the individuals involved.

Conducting an Investigation for a NSW Incorporated Association

The Appropriate Investigation Approach

The process for investigating alleged criminal misconduct is not uniform for every internal dispute; it should be proportionate to the conduct in question. 

An incorporated association may find it appropriate for an impartial person within the organisation to conduct the investigation. In other situations, particularly for a serious dispute, engaging an independent external party is the necessary path for dispute resolution.

When deciding on the right approach for your not-for-profit, consider these factors:

• Existing policies: Review any internal policies to see what procedures they mandate for investigations.
• Seriousness and complexity: The more severe and intricate the allegations, the more likely an external investigation will be required to properly resolve the dispute.
• Internal impartiality: Assess whether there is someone within the objective organisation, has the right training, and can conduct the investigation without bias.
• Seniority of the individual: If the person being investigated is a senior employee or committee member, an external investigator is often more appropriate to ensure fairness and objectivity in the dispute settlement.

Confidentiality During the Dispute Settlement

Investigations into suspected criminal conduct must be handled with strict confidentiality. This is a critical component of the dispute resolution process for any not-for-profit.

The board or committee of management should be kept informed about the internal dispute, but it is wise to seek legal advice on the timing and extent of this communication. General staff and volunteers should not be told about the investigation. Informing them could jeopardise the entire process and expose the incorporated association to significant legal risk.

Legal & Insurance Actions for Dispute Resolution

Contacting the Police & Insurers

If a situation within the not-for-profit is an emergency or there is a risk of harm, call 000 immediately. Alternatively, for non-emergency police assistance related to the internal dispute, the correct number to call is 131 444.

It is also a critical step in the dispute resolution process to contact the organisation’s insurer. An incorporated association may have policies that cover criminal conduct, such as:

• Fidelity or fraud insurance.
• Directors’ and officers’ insurance.

The insurer must be notified immediately when an incident occurs, as a delay could result in the claim being denied. Moreover, it is essential not to admit liability for the matter to anyone outside the organisation without first consulting a lawyer and the insurer, as this could also lead to coverage being refused.

Seeking Legal Advice to Resolve the Dispute

Engaging lawyers early in an internal dispute is highly advisable to ensure the matter is handled correctly. Ultimately, legal advice helps an organisation manage the dispute resolution process while complying with privacy obligations and procedural fairness requirements.

A lawyer can also confirm the not-for-profit’s reporting obligations. For example, charities registered with the Australian Charities and Not-for-profits Commission (ACNC) must notify the ACNC if they believe there has been:

• A significant breach of the Australian Charities and Not-for-profits Commission Act 2012 (Cth) (‘ACNC Act’).
• A failure to comply with ACNC Governance or External Conduct Standards.

Additionally, other reporting duties may also exist under different laws or to other regulators.

Case Studies of Fraud & Dispute Settlement in Charities

Misuse of Funds & Failure to Investigate at RSL NSW

An independent inquiry into the RSL NSW Branch revealed significant misconduct by its former President, Mr Donald Rowe. Specifically, his actions included:

• Misusing over $465,000 on an RSL credit card for personal expenses, including mortgage repayments and flights for his family.
• Permitting his son to live in RSL-owned accommodation rent-free for seven years.

When the RSL NSW State Council became aware of the misuse of funds, it failed to conduct a proper investigation into the internal dispute. Consequently, the council’s mishandling of the situation involved:

• Failing to report the matter to the police.
• Allowing Mr Rowe to resign without pursuing a formal dispute resolution process, misleadingly citing health reasons for his departure.

In practice, this failure to act led to enforcement undertakings to improve governance and financial management.

Unauthorised Payments by the CEO of Katungul

In the case of Aboriginal and Torres Strait Islander Corporations v Damien Matcham (No 2) [2014] FCA 27, the CEO of Katungul Aboriginal Corporation, Mr Matcham, made unauthorised payments to himself exceeding $700,000.

This misconduct was uncovered after a board member raised concerns, which led to an audit by a government funder. During the investigation, several alarming details emerged:

• The finance manager had failed to verify Mr Matcham’s timesheets.
• At one point, these timesheets claimed he worked more than 24 hours a day.

The court found that Mr Matcham had abused his position of trust, which had a severe financial impact on the not-for-profit organisation and deprived the community of essential health services. As a result of the dispute settlement, the court ordered him to:

• Repay $705,905.07 to the corporation.
• Pay a penalty of $500,000 to the Commonwealth.
• Be disqualified from managing Aboriginal and Torres Strait Islander corporations for 15 years.

Conclusion

When an internal dispute arises from suspected criminal conduct, a not-for-profit must take structured steps, including identifying the issue, securing evidence, and conducting a fair investigation. Properly managing the dispute resolution process also involves notifying insurers, seeking legal advice, and fulfilling reporting obligations to protect the incorporated association.

If your not-for-profit is facing a complex internal dispute, contact Law Bridge’s experienced not-for-profit lawyers for tailored legal guidance. Our Legal Team provides practical support to help your incorporated association navigate the dispute resolution process and protect your organisation from legal and reputational harm.

Frequently Asked Questions

Internal disputes can disrupt an incorporated association’s operations and threaten its governance, making effective conflict management essential. For board members, founders, executives, and legal or governance professionals of NSW incorporated associations considering restructuring into a company limited by guarantee, the process is governed by the association’s constitution and the Associations Incorporation Act 2009 (NSW) (‘Associations Act‘).

This article explains the procedures for member discipline and dispute resolution. It covers the steps from internal processes, such as mediation and arbitration, to the final resort of court action, including potential winding-up orders or the appointment of a receiver.

Interactive Tool: Check Your Next Step for Member Discipline & Disputes

The Legal Framework

The Constitution as a Legally Binding Contract

An incorporated association’s constitution is the primary legal document governing its internal affairs. Under Section 26 of the Associations Act, the constitution functions as a legally binding contract between the association and its members. In essence, this framework establishes the rights and obligations that all parties must follow.

This contractual relationship forms the legal basis for managing internal disputes. For board members, founders, executives, and legal or governance professionals of NSW incorporated associations considering restructuring into a company limited by guarantee, this document provides the essential rules for governance and conflict resolution. 

Furthermore, it outlines the agreed-upon procedures for handling disagreements and disciplinary matters.

Key Constitutional Requirements for Dispute Resolution

The Associations Act requires that an association’s constitution address several key matters to ensure proper governance. Schedule 1 of the Associations Act mandates the inclusion of specific mechanisms for managing member conduct and resolving conflicts. As a result, these provisions are critical for maintaining order and fairness within the organisation.

Essential constitutional components for dispute resolution include:

• General meetings: Procedures for calling and conducting general meetings, including rules for notifying members and establishing a quorum, are necessary for making binding decisions on disputes and appeals.
• Disciplining of members: The constitution must set out the formal procedure for taking disciplinary action against a member. It must also include a mechanism for members to appeal any disciplinary measures taken against them.
• Internal disputes: A clear process must be defined for resolving internal NFP disputes that arise between members in their capacity as members, or between a member and the association itself.
• The committee: The constitution must detail the committee’s composition, functions, election process, and terms of office for its members, which is foundational to its authority in dispute matters.

The Process to Discipline or Expel a Member

Committee Resolutions & Formal Notification Requirements

For an incorporated association in NSW, the process for disciplinary action begins when a complaint is made to the committee. Under clause 7 of the model constitution, found in Schedule 3 of the Associations Incorporation Regulation 2022 (NSW) (‘Associations Regulation‘), a complaint can be lodged if a member has failed to comply with the constitution or has acted in a way that is prejudicial to the association’s interests.

Once a complaint is received, the committee must follow a formal procedure. This process is critical for board members, founders, executives, and legal or governance professionals of NSW incorporated associations considering restructuring into a company limited by guarantee to manage correctly. The steps include:

• Serving notice: The committee must serve a notice of the complaint on the member in question.
• Allowing submissions: The member must be given at least 14 days from the date of service to make submissions to the committee regarding the complaint.
• Committee consideration: The committee is required to consider any submissions made by the member before deciding.

If, after this process, the committee is satisfied that the complaint is proven and warrants action, it may pass a resolution to expel the member or suspend their membership. 

Following this resolution, the secretary has a duty under clause 7(5) of the model constitution to provide the member with a written notice within seven days. This notice must detail the action taken, the committee’s reasons, and the member’s right to appeal.

The Right of Appeal & General Meeting Votes

A member facing disciplinary action has a right of appeal under clause 8 of the model constitution. To initiate this process, the member must lodge a notice of appeal with the association’s secretary within seven days of being served with the committee’s decision.

Upon receiving a notice of appeal, the committee is obligated to convene a general meeting within 28 days. This meeting is held specifically to address the appeal, and the procedure is structured to ensure a fair hearing as follows:

• The disciplined member is provided an opportunity to present their case, either orally or in writing.
• The committee is also provided the opportunity to state its case and reasons for the disciplinary action.
• The members present at the meeting then vote by secret ballot on whether to confirm or revoke the committee’s resolution.

The outcome of the appeal is determined by a simple majority of votes cast by the members present. This voting process ensures that the final decision rests with the broader membership of the association.

Procedural Fairness & Natural Justice Requirements

Provision of Proper Notice & Fair Hearings

When an association takes disciplinary action against a member, it must ensure the process adheres to the principles of natural justice, also known as procedural fairness. This is a fundamental requirement to ensure any decision made is legally sound. 

Therefore, board members, founders, executives, and legal or governance professionals of NSW incorporated associations considering restructuring into a company limited by guarantee must embed these principles in their procedures.

A critical component of natural justice is providing the member with proper notice. To achieve this, the association must ensure the following steps are taken:

• Clearly informing the member of the specific grounds for the proposed disciplinary action against them; and
• Providing the member with a fair and reasonable opportunity to be heard, allowing them to present their case and respond to the allegations.

The Necessity for an Unbiased Decision Maker

Decisions regarding disciplinary action must be made by an unbiased party. This means that the individuals responsible for the decision, typically the committee, should be impartial and free from any pre-judgment or personal interest in the outcome of the matter.

Failing to provide natural justice can have serious consequences for the association. If a member can show that they were not given proper notice, a fair hearing, or that the decision-maker was biased, the following outcomes may occur:

• Any disciplinary action taken against the member could be overturned by a court; and
• The association could be left liable for the member’s legal costs.

Pathways for the Resolution of Internal Disputes

Mandatory Mediation through a Community Justice Centre

Before resorting to court action, an incorporated association must follow the dispute resolution procedures outlined in its constitution. It is essential to adhere to these internal mechanisms first for key stakeholders of NSW incorporated associations considering restructuring into a company limited by guarantee, including:

• board members;
• founders;
• executives; and
• legal or governance professionals.

If an association’s constitution does not contain a specific process, the model constitution set out in Schedule 3 of the Associations Regulation applies. Under clause 9 of the model constitution, specific conflicts must first be referred to a Community Justice Centre for mediation, including any dispute:

• between members in their capacity as members; or
• between a member and the association.

In summary, this step is a mandatory prerequisite before further action can be taken.

Progression to Arbitration for Unresolved Conflicts

If mediation at a Community Justice Centre does not resolve the internal dispute within three months of the referral, the matter must proceed to the next stage. Specifically, clause 9(2) of the model constitution requires that the unresolved dispute be referred to arbitration.

This formal arbitration process is governed by the Commercial Arbitration Act 2010 (NSW) (‘Commercial Arbitration Act‘), as specified in clause 9(3) of the model constitution. As a result, this structured pathway ensures that all internal avenues for resolution are exhausted before any party considers initiating legal proceedings in court.

Supreme Court Intervention & Case Study Analysis

Court Orders for Winding Up or Receivership

When internal dispute resolution fails, the NSW Supreme Court can intervene as a final resort. For board members, founders, executives, and legal or governance professionals of NSW incorporated associations considering restructuring into a company limited by guarantee, it is important to know that a member, creditor, or the association itself can apply for a court order to wind up the association.

Under Section 63 of the Associations Act, the Supreme Court may issue a winding-up order on several grounds, including if the association has:

• Conducted its affairs to provide pecuniary gain to its members;
• Engaged in activities inconsistent with its objects;
• Acted in a way that is unfair or unjust to its members; or
• Operated in the interests of the committee rather than in accordance with its objects.

As an alternative to winding up, the court may appoint a receiver to manage the association’s affairs and resolve the dispute. This option aims to preserve the organisation, as a court-appointed receiver can be given specific powers to manage the conflict. These powers may include the authority to:

• Administer and supervise an election;
• Call and hold a general meeting;
• Determine which members are eligible to vote; and
• Approve or reject new membership nominations.

Case Study of Sengthong v Lao Buddhist Society of NSW Incorporated

The case of Sengthong v Lao Buddhist Society of NSW Incorporated [2016] NSWSC 1408 (‘Sengthong v Lao Buddhist Society‘) demonstrates how the NSW Supreme Court may intervene to resolve a severe internal dispute. The conflict began with a contentious election that led to two rival factions claiming to be the legitimate management committee, which ultimately resulted in paralysing the association’s governance.

When the matter reached the Supreme Court, an application was made to wind up the society. However, the court decided against this, determining that dissolving the organisation would disrupt important community and religious activities. 

Moreover winding up would have displaced monastic residents and deprived members of their temple.

Instead of issuing a winding-up order, the court appointed a receiver to resolve the dispute. The receiver was granted specific powers to address the conflict, including determining membership eligibility and conducting a court-supervised election for a new management committee. 

As a final point, this case highlights the court’s preference for remedies that preserve an association’s purpose and assets where possible.

Conclusion

Effectively managing a member dispute requires strict adherence to the procedures in your association’s constitution, from internal resolution pathways to potential court intervention. For board members, founders, executives, and legal or governance professionals of NSW incorporated associations considering restructuring into a company limited by guarantee, following these steps and ensuring procedural fairness is essential to resolving conflict while protecting the organisation.

If your NFP incorporated association is facing a complex member dispute that requires legal guidance, contact the experienced not-for-profit lawyers at LawBridge. Our Legal Team provides trusted expertise to help you handle the case correctly and protect your organisation’s interests.

Frequently Asked Questions