28/10/2016

It is important that before proposed transactions are entered into, appropriate legal and financial advice is sought. But if it's not, then comes the job of undoing that which should not have been done.

Legal documents are more than just pieces of paper.  They affect legal rights and have legal effect when they’re signed.  It is not possible at law to simply tear them up or ignore them if you find that they’re somehow wrong. They may have had tax or state duty ramifications and those revenue bodies will be keen to enforce them if necessary to prosecute their revenue entitlements. Any attempt to simply destroy the documents could be an offence.

How do you deal with documents that are wrong?

Firstly, ensure they’re not wrong in the first place. It is wise to obtain advice prior to entering into complex transactions as it may be difficult, if not impossible, to reverse the transaction once it has been effected (including any detrimental tax and stamp duty effects).

We can provide a formal written advice in advance which can be relied on by a client and satisfy the requirements of third parties for independent legal advice to be sought.  

A written advice is also an integral part of record-keeping, which can provide support and justification to third parties at a future date if questions are raised about the transaction.

But if the documents are wrong then talk to us about the best way to remedy the problem.

Some examples of documents we have prepared for clients are:

•    deeds of rectification relating to any typographical errors or discrepancies contained in trust deeds at the request of a bank;

•    loan documents relating to unpaid present entitlements of a corporate beneficiary of a discretionary trust; and

•    deeds of release or deeds of unwinding.

Whatever you do, don’t ignore the issue and don’t delay.  Time is of the essence so act speedily to resolve the issue.

If you would like us to provide a quote in relation to the preparation of a formal advice or specific documentation, please contact Townsends Business and Corporate Lawyers on (02) 8296 6222 with a summary of the details and circumstances of your transaction.  

If you are seeking financial advice, as lawyers we are unable to provide this and you will need to contact a qualified financial adviser to assist you with that aspect of the transaction.