4. Securing contributions with a charge over real property

4.1 - Taking a charge where the applicant has real property

• A legally aided person who owns real property will be required to give a charge over the property to secure the total costs and expense of providing the legal service where the dispute is about the property OR the value of the property is 200,000 or more and it is an expensive matter – this includes family law court proceedings, criminal indictable matters including EAGP and trials, and higher court civil proceedings.
• Taking a charge over the property will be a condition of the grant of aid.
• A title search must be obtained to ensure the client has an interest in the land.
• You must give your client the information sheet about giving a Charge.
• The client must sign the charge within 28 days of the grant of aid being made and, where a client refuses to sign the charge, legal aid must be terminated (see Termination policy and guidelines).

Note: The requirement for the legally aided person to give a charge over real property also applies to any financially associated person (see Means Test 2.1). See also Means Test 5.2: Assets test in all other matters.

Note: There is discretion not to take a charge where Legal Aid NSW is satisfied there are exceptional circumstances. Only Directors have the delegation not to take a charge.

4.2 - Important points when preparing a Charge

• The Charge is sent to the client by Grants.
• The standard terms of the Charge should not be varied.
• The Charge must be signed by the chargor and dated and witnessed.
• Any amendments or insertions made must be initialled by the chargor and the witness.
• It can be witnessed by any person aged 18 or over; the witness does not have to be a lawyer or a Justice of the Peace.
• A Charge taken by Legal Aid NSW is an equitable charge. It is a form of security over land similar to a mortgage except that it does not convey or assign any legal title in the property.
• The Charge gives Legal Aid NSW a caveatable interest under the Real Property Act 1900 (NSW). The effect of a caveat is to place a notice of Legal Aid NSW’s interest on the Certificate of Title so that any prospective dealing with the property cannot be registered without prior notice to Legal Aid NSW.
• If the property is owned by two or more persons:
  • As tenants in common, the Charge only applies to the client's undivided share of the property
  • As joint tenants, the Charge applies to the whole of the property, even if the other joint tenant or tenants have not executed the Charge.

Note: All charges are managed by the In-house Counsel Unit. Once a charge is executed it must be sent to the IHC.

4.3 - Guidance on exercising the discretion not to take a charge

This is not intended to be exhaustive but the following circumstances could be taken into account when exercising this discretion:

• it is not appropriate, in all the circumstances, to take a charge, or
• the applicant and any Financially Associated Person do not have the capacity to understand what is being asked, or
• where Legal Aid NSW is satisfied that the matter has been conducted in the public interest, and a public benefit will be achieved in conducting the matter.

Capacity

Capacity will generally only be a concern in criminal law matters because clients in civil and family will have tutor/case guardians. There will be obvious cases in crime where capacity is an issue (not fit to plead) but there will also be other cases where the client may have significant cognitive impairment which can mean they become fixated etc and refuse to sign the charge: where the continued refusal to sign the charge could impact on a person’s right to a fair trial and/or the administration of justice.

When it would not be appropriate in the circumstances to take a charge

This could arise in a variety of circumstances. For example, it could be where the real property has been purchased using money received in reparation for being part of the stolen generation.

What is in the public interest?

The following are guiding principles for determining whether the "public interest" requirement is satisfied:

• Public interest is something of serious concern common to the public at large or a significant section of the public, such as a disadvantaged or marginalised group.
• For something to be of 'public interest' it must amount to more than a private right or individual interest, although the two may coincide.
• For something to be of 'public interest' it must amount to more than something merely 'of interest to the public', although again, the two may coincide.

There may be competing public interests in any one case that have to be weighed against each other.

4.4 - Determining whether a charge must be given

Legal Aid NSW will take a charge where:

• the value of the property is $200,000 or over, and
• it is an expensive matter - this includes all criminal indictable matters (EAGP, trials and higher court appeals), Commonwealth and state family law court proceedings and civil law matters in higher courts, OR
• the legal dispute is about the property.

See also: Contributions policy 5: Matters where the charge policy does not apply

Date last published: 1 August 2024