The Bankruptcy Amendment (Discharge from Bankruptcy) Bill 2023 (“Bill”) has been agreed to by both the House of Representative and the Senate and will now be presented to the Governor-General.
The Bill seeks to amend the Bankruptcy Act 1966 (Cth) (“the Act”) to provide legal certainty on the calculation of bankruptcy discharge dates, aligning the Act with current practices, by confirming that the discharge date is determined from when the Statement of Affairs is accepted, rather than when it was initially presented.
Why the change?
The amendment follows recent bankruptcy cases, such as Docherty v Porter, in the matter of Docherty (Bankrupt) [2021] FCA 1227, which have raised a point of contention regarding the calculation of discharge dates for bankrupts. The cases uncovered that there was a disparity between the Australian Financial Security Authority (“AFSA”) administrative process associated with the lodgment of a key bankruptcy document, the Statement of Affairs (“SOA”), and the process outlined in the Bankruptcy Act.
Under the Act, a person becomes discharged from bankruptcy three years and one day after their SOA is filed. However, the practice of AFSA (since 1992) is to link the filing date of a SOA to when it was accepted, rather than initially presented. Therefore, when the filing date of the document is different to the date that AFSA accepts the document, a conflict arises over the correct date for the individual’s discharge from bankruptcy.
The changes
The Bill seeks to address this point of contention by confirming that the filing date of a SOA is the date on which the document is accepted, rather than the date that it is initially presented by the individual. These changes validate current the practices of AFSA and should therefore not affect any former or current discharge dates.
The Explanatory Memorandum proposes inter alia the following:
What does the change mean?
Once passed, these amendments will confirm AFSA’s longstanding practice and position, and it will operate retrospectively to validate and regularise decisions (except in relation to past criminal convictions). The Bill will also provide legal certainty for all parties that engage with the bankruptcy system and who have acted in reliance on the dates contained within the National Personal Insolvency Index.
If you have any questions relating to the bankruptcy process and dealing with AFSA, please contact Mr Stipe Vuleta or Ms Sayward McKeown of our office.
This article was prepared with the assistance of Claire Smith.
The plaintiff in Shaw v Insurance Australia Group Limited t/as NRMA Insurance [2023] NSWSC 1273 was involved in a motor vehicle accident wherein he sustained injuries to his lumbosacral spine and right hip. The insurer conceded the plaintiff suffered an injury to his lumbosacral spine which equated to a 10% whole person impairment rating in accordance with DRE III (Diagnosis-Related Estimate Category III) lumbosacral category rating.
The motor accidents scheme in New South Wales only permits plaintiffs with whole person impairment ratings of above 10% to seek and recover damages for non-economic loss.
The plaintiff later lodged an application for resolution of a medical dispute with the Personal Injury Commission. The insurer’s reply to the application annexed a document which confirmed the insurer conceded the spinal injury amounted to 10% whole person impairment.
The plaintiff was subsequently examined by a Medical Assessor who certified the injuries sustained in the motor vehicle accident resulted in 12% permanent impairment, 10% in respect of the spinal injury and 2% in relation to the right hip injury.
The insurer lodged an application for review of the medical assessment on the basis that the decision was incorrect in a material way as the Medical Assessor failed to undertake his own measurements of the percentage of the compression of the vertebra from radiological imaging, rather than depend upon percentages contained in radiology reports.
The Delegate of the President of the Personal Injury Commission agreed with the insurer’s submissions that the medical assessment was incorrect in a material way and referred the matter to a review panel.
The plaintiff sought judicial review of the decision of the Delegate of the President on three grounds:
The matter was heard before Rothman J of the Supreme Court of New South Wales on 1 March 2023. The judgment was handed down on 27 October 2023. His Honour rejected the plaintiff’s first ground on the basis that a medical dispute must exist only at the time that the matter is referred to a Medical Assessor and confirmed that no dispute need exist at the time of referral to a review panel. His Honour also rejected the third ground as the plaintiff had not established same in his evidence and submissions.
Rothman J accepted the second ground. His Honour referred to the insurer’s failure to provide evidence questioning the extent of the spinal injury with its review application. His Honour reasoned that the insurer’s concession and the failure to provide evidence meant that no reasonable decision maker would find cause to suspect the medical assessment was incorrect in a material way.
His Honour’s conclusion was stated at [97] as follows:
“In those circumstances and given the nature of the agreement as to the minimum level of compression by the applicant for review and the evidence available to the Medical Assessor, it cannot be said that there is, on the material presented to the President, reasonable cause to suspect that the medical assessment was incorrect in a material respect (or an immaterial respect). Given the most peculiar circumstances of the medical assessment, the decision of the Delegate to the President was a decision, in the absence of evidence of the effect of the methodology on the assessment itself, to which no reasonable decision-maker could have come.”
His Honour found in favour of the plaintiff and made an order quashing the decision of the Delegate of the president. The application was remitted back to the Personal Injury Commission to decide in accordance with law. The insurer was ordered to pay the plaintiff’s costs of the proceedings.
If you have been medically assessed by a Medical Assessor appointed by the Personal Injury Commission and have cause to suspect the assessment is incorrect, contact Chamberlains Law Firm for an expert legal opinion.
*This article was prepared with the assistance of Sarah Farhat.
If you have been left out of a Will, given a smaller provision than expected, or did not receive any inheritance due to the rules of intestacy, you may be able to bring what is known as a family provision claim. The basis of a family provision claim is that the deceased person did not adequately provide for a person, to whom they owed a moral obligation to make proper provision for.
The South Australian Supreme Court has recently handed down a decision in Karbowiak & Ors v Mitolo & Anor [2023] SASC 168 which considers this type of claim, brought by a sibling of the deceased.
“Eligible persons” may apply to the Court for a provision order, though the criteria for eligible persons differs between each State and Territory. In certain jurisdictions, siblings fall into a distinct category of eligible persons. For example, under s6(j) of the Inheritance (Family Provision) Act 1972 (SA), a brother or sister of the deceased may be eligible where they can prove that they “cared for, or contributed to the maintenance of” the deceased person.
In other states of territories, siblings may be able to rely on other categories of eligible persons, such as where they had a ‘close personal relationship’ at the time of the deceased’s death (s75(f) of the Succession Act 2006 (NSW)), were a member of the same household as the deceased (s90 of the Administration and Probate Act 1958 (Vic)), or were dependant on the deceased prior to their death (s41(1) of the Succession Act 1981 (QLD)).
If a person is considered eligible to make a family provision claim, they must then prove the deceased had a moral obligation to provide for them, and that adequate and proper provision has not been made. This is a discretionary matter decided by the Court, and can take into consideration various elements including the nature of the relationship, the value of the estate, the deceased’s testamentary intentions, the financial needs of the persons claiming as well as of any competing claims.
In the recent case of Karbowiak & Ors v Mitolo & Anor [2023] SASC 168, the South Australian Supreme Court considered an application for provision from the estate, where the estate would otherwise, under the rules of intestacy, pass entirely to the deceased’s mother. Maurizio Mimmo Mitolo (the deceased), died without a Will on 18 December 2019. He was survived by his mother, his partner and her son, and his brother. He was not otherwise survived by another spouse or biological child.
The deceased’s partner and her son brought a claim for provision before the Court, and the deceased’s brother’s then made an application to be joined to the application for an order for provision. This decision considered the order sought by the deceased’s partner and her son to dismiss the deceased’s brother’s claim.
In its decision, the Court considered the eligibility of the brother to claim against the deceased’s estate, whether the deceased had a moral duty to provide for the brother, and if the brother had demonstrated his need for provision. In order for a sibling to make a claim in South Australia, they must be able to prove that they cared for, or contributed to the maintenance of the deceased, beyond that ‘ordinarily expected in the relationship between two caring siblings’.
Ultimately, the Court dismissed the application by the brother to be joined to the family provision claim, finding that he did not prove the existence of a moral duty on the deceased to provide for him, and did not demonstrate a relevant need for provision.
However, the Court stated that, as a person eligible under s6(j) of the Inheritance (Family Provision) Act 1972, the brother could renew his application at a later time should he have proof of the above missing elements.
At Chamberlains, our team of estates lawyers are familiar with the relevant law and experienced in conducting these cases and we invite you to engage our expertise to give you the best opportunity for a successful outcome.
This article was prepared with the assistance of Monica Hoswell.
A family provision claim occurs where an eligible person is contesting a Will on the basis that they consider what has been provided for them in the deceased’s Will is not adequate and proper in the circumstances. There are limitations on these claims, such as who can apply and within what timeframe – this differs depending on the law of the State of Territory where the claim is considered.
Who can apply?
One of the limitations on family provision claims is that the applicant must be considered an ‘eligible person’. Determining who is eligible will depend on the law of the State of Territory where the claim is considered. Generally, eligible people include partners, children, and dependents. For example, the eligible persons to bring a claim can be found in:
After eligibility is established, it is considered whether or not adequate provision for proper maintenance, education, or advancement in life was made for the applicant.
What does the Court consider?
In a family provision claim, the Court will consider various factors to establish if the deceased had a moral obligation to provide for the person, and also if the applicant has been left without adequate provision for their proper maintenance and support. This commonly includes:
Case Study – In the Matter of the Estate of the Late Sofia Fraiia [2023] QDC 218
In the case of the Estate of the Late Sofia Fraiia, the deceased died at age 44 and was survived by her parents and a close friend she had appointed as executor in her Will. Her mother made an application to the Court requesting further provision from the Estate, as a dependent of her daughter, having relied on her daughter for assistance to attend medical appointments, prepare meals and provide her a place to live. Having found the mother to be eligible to make a claim on the estate, the Court then considered the provision made for the mother. In doing so, the Court considered:
The Court ultimately placed considerable weight upon compromise of the parties reflected in a Deed of Settlement. The Court ultimately found that adequate provision had not been made and made an order giving provision. This order followed the draft order prepared by the parties and took the form of $196,000.00 (inclusive of costs) given to the mother, in lieu of her original entitlement to $100,000.00 from the deceased’s superannuation.
If you feel you have not been adequately provided for in a Will, contact the Private Wealth Team at Chamberlains.
*This article was prepared with the assistance of Monica Hoswell.
The issue of a stay in proceedings has arisen again in the decision of the Victorian Court of Appeal in Alan Weiden v YZ (a pseudonym) and Beit Habonim Pty Ltd (ACN 051 827 984) as Trustee of The Association of Parents & Friends of Zionist Youth (No 2) [2023] VSCA 294.
For a detailed background of the case, please see our earlier article entitled ‘Security for Costs in Abuse Claims’ (Security for Costs in Abuse Claims – Chamberlains Law Firm).
In this matter, the plaintiff, YZ, commenced proceedings seeking compensation for sexual abuse that allegedly occurred when he was a member of a youth organisation between 1974 and 1975. The abuse was allegedly perpetrated by Alan Weiden, who was also a member. Mr Weiden sought a permanent stay of the proceedings which was dismissed initially by Irving AsJ, then again by Tsalamandris J, both of the Supreme Court of Victoria.
Mr Weiden appealed against the decision of Tsalamandris J and made the following submissions before the Court of Appeal:
Mr Weiden submitted to the Court of Appeal that YZ’s proceeding was an abuse of process and that he had established same before the lower courts, which erred in concluding otherwise.
At [66] Beach, MaCaulay and Lyons JJA of the Court of Appeal applied the principles set out in the recent High Court decision in GLJ v The Trustees of the Roman Catholic Church for the Diocese of Lismore [2023] HCA 32, which they summarised as follows:
Their Honours agreed that Mr Weiden’s allegations that the alleged inconsistencies in YZ’s accounts of the sexual assaults and the vagueness of some of YZ’s allegations do not meet the level of exceptional at [69] and [70]. The same finding was applied to the fact that medical records dealing with the injuries suffered by the plaintiff were lost at [71].
The Court concluded that Mr Weiden bore the onus of proving that YZ’s proceeding was an abuse of process and that he failed to discharge that burden. Leave to appeal was consequently refused.
The employer has an implied duty to remunerate the employee for work performed. However, in today’s day and age it has become quite common for employers to make mistakes. Whether it be because of technical failures in payroll systems or human error, the question remains.
The short answer is, yes, where the employer inadvertently makes payments over and above the employee’s entitlement, the employer may be able to recover the amount.
However, what happens in instances where the context has changed, and the repayment would be unconscionable or unfair? It’s possible that by the time you realized the mistake had occurred you may have changed jobs, made promises and arrangements in reliance of that amount or even simply already spent the money, this is referred to as a change of position.
In Civil Aviation Authority v Jorm (1994) 56 IT 89, the Defendant (Jorm) had been overpaid by a large margin. It was established in court that Jorm knew of the overpayment, yet never reported it. Instead, Jorm purposefully changed his position in reliance of the overpayment and then claimed it was unconscionable to request repayment. The ACT Supreme Court found in favor of the employer. Given the circumstances, it was not unjust for them to recover the amount.
So what is a justifiable instance? Based upon recent caselaw a valid change of position is established when a defendant, acting in good faith, irreversibly changes their position in reliance on the receipt of a benefit. This was established in the case of Palmer v Blue Circle Southern Cement Ltd (1999) 48 NSWLR 31 when an employee relied on a compensation order in his decision not to claim social security benefits. Bell J stated at 34 & 35:
“The circumstance that the award payments were applied to meet the appellant’s ordinary living expenses seems to me to overlook the detriment suffered by the appellant in not claiming social security benefits in reliance on the receipt of the workers’ compensation payments. […] The defence of change of position assumes good faith on the part of the recipient.”
Hence if you suspect you have been overpaid it is always best to first address it with your employer and ensure the mistake is reversed. If you genuinely did not realise the mistake had been made and end up changing your position in reliance of that mistake, you may argue that recovering the amount is unjust.
In doubt on your rights and workplace entitlements? Please ensure to contact Chamberlains Law Firm’s experience workplace law team when in need. Chamberlains will be able to provide you with advice and accompany you through any process.
We all at some point have been stuck in the work experience paradigm; that is, where a person is not able to apply for positions due to lack of experience but cannot obtain such experience for the same reasons.
Hence in today’s competitive job market, Internships have always been key to getting a foot in the door. These arrangements, where the employer incurs low expense and risk in exchange for training have raised significant legal and ethical debates. While some argue that such experiences provide invaluable learning opportunities, others contend that they exploit vulnerable jobseekers by sidestepping fair compensation practices and labour laws.
A nationally representative study of internships in 2016 found about 60% of Australians aged between 18 and 29 had participated in at least one stint of unpaid work experience in the five years prior. Whether these were arranged as trial periods for positions or as internship for educational accreditation, the question remains: Do they create legal relations as per an employment contract?
At Common Law:
As for any contract to be enforceable there need to be:
Assuming the first two are agreed upon, what constitutes an intention to create a legal relationship in a workplace arrangement? We have reviewed some caselaw below:
In Pacesetter Homes Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA Branch) (1994) 57 IR 449 unemployed school leavers were given the opportunity to gain work experience for up to six months but were under no obligation to attend on any particular day. This lack of ‘mutuality of obligation’ or the intention to create legal relations led to the denial of an employment contract that the school leavers claimed. Hence in circumstances where the arrangement is informal with little obligations, it is likely that it will be construed as not an enforceable contract.
On the other hand, instances have arisen where employment contracts were recognised. The case of Cossich v G Rossetto & Co [2001] SAIRC 37 serves as an example, where the true nature of the relationship was determined to be that of an employment contract, regardless of how the arrangement was initially described. The key difference in this case was the long-term nature of the arrangement.
What does the Fair Work Act 2009 say?
Under section 12, the Fair Work Act does not consider students as employees and hence describes student internships as ‘vocational’ placements. A vocational placement is defined as a placement that is undertaken without remuneration, as a requirement of an education or training course; and authorised under a law or an administrative arrangement of the Commonwealth. These are treated as lawfully unpaid experiences by the Fair Work Act and are now common practice in certain industries. Generally speaking, if payment is offered for the work of the student, the arrangement would then be construed as an enforceable contract.
There has since been intense scrutiny by the Fair Work Ombudsman (FWO), especially concerning unpaid work experiences falling outside the ‘vocational placement’ exception under the Fair Work Act. In 2019, the FWO took action against the fashion start-up ‘Her Fashion Box Pty Ltd’ and its director, Kathleen Purkis, for underpaying three employees by a total of $40,543 between 2013 and 2015. The employees were denied various entitlements, including minimum wages and leave. The court imposed penalties amounting to $329,133, emphasizing the seriousness of the contraventions and the need to deter similar behaviour in the future. The Ombudsman warned against the misclassification of workers as interns to avoid paying lawful entitlements.
Are there any other relevant laws?
Some states such as Queensland have since adopted their own specific legislation to tackle the concept of unpaid work. The Education (Work Experience) Act 1996 (Qld) provides that a student undertaking work experience arranged by an educational establishment, other than as a mandatory or assessable part of a higher education course ‘is taken not to be the employee of the work experience provider and the provider is taken not to be the employer of the student’.
However, most states continue to rely on Commonwealth legislation to cover regulation over placements.
Key takeaways:
Internships are a great opportunity for jobseekers and students to gain practical experience. However, it is important to determine the nature of the placement prior to engaging in any form of work. This means that an internship without compensation should still be documented to make the terms of the relationship clear.
Chamberlains Law Firm’s experienced workplace team can help you better understand your rights and responsibilities as an employer dealing with placements. Book a consultation today.
In the dynamic landscape of Australian workplace law, the intricacies of bonus and incentive schemes have garnered increasing attention, especially regarding their fairness, implementation, and regulation. Understanding the nuances of these schemes is pivotal for both employees and employers to ensure a balanced and equitable work environment.
In various industries, employees may encounter diverse remuneration methods, often blending base salaries with performance-driven elements such as commissions and bonuses. Sales professionals frequently receive a base salary along with a percentage of sales proceeds or bonuses linked to specific targets.
Similarly, executives and professionals might be eligible for discretionary cash payments or share allocations, linked to individual performance, divisional achievements, or overall organisational success.
While these incentive schemes offer an avenue for recognising and rewarding exceptional performance, the discretionary nature of such rewards necessitates a balance between employer prerogative and employee rights. It’s crucial to note that though employees might not possess an explicit right to receive a bonus, employers are bound by an implied obligation not to wield discretion arbitrarily or irrationally, as upheld in landmark cases below:
In the case of Silverbrook Research Pty Ltd v Lindley [2010] NSWCA 357 the Court found that the employer breached the service agreement by not reviewing the employee’s remuneration or assessing her entitlement to an annual bonus. The court ordered the employer to pay the employee $74,000 in damages for the loss of the bonus opportunity, which was later reduced to $25,834.87 after an ex-gratia payment of $48,165.13 was considered.
More broadly, the case of Mckeith v Royal Bank of Scotland [2016] NSWCA 36 discussed promises from an employer. The NSW Court of Appeal found that if a promise could be established, it could in some circumstances be found to be a binding contractual offer. Hence if an employer makes a promise for a bonus, depending on the circumstances, it may crystallise as an entitlement.
In O’Sullivan Partners (Advisory) Pty Ltd v Foggo [2012] NSWCA 40 the court found that a discretionary bonus payment to the employee could not be revoked once decided.
You may also ask, if these bonus payments are so discretionary, wouldn’t this open the floodgates for dodgy behaviour?
In response to concerns, namely over excessive executive bonuses and termination payouts, Australia’s regulatory landscape has witnessed notable interventions. The Corporations Amendment (Improving Accountability on Director and Executive Remuneration) Act 2011 was implemented following the Productivity Commission’s comprehensive report. This Act introduced a ‘two-strikes’ rule, enabling shareholders to trigger a board spill if a company’s remuneration report receives 25% disapproval at consecutive AGMs.
Few cases explore the meaning of an excessive bonus, however the case of Hewlett Packard Australia Pty Ltd v Subasic [2021] ACTCA 3 saw the court rule in favour of an ‘overperforming’ employee who had sought to enforce her incentive program. In that case the employer had capped the bonus amounts and claimed discretionary powers to do so, however the Court found that this was contrary to their duty to act in good faith.
Chamberlains Law Firm is experienced with assisting employers and employees with understanding their rights and obligations under bonus and incentive schemes. Our experienced team of legal professionals is equipped to offer comprehensive guidance on navigating the complexities of workplace law and ensuring that employees receive their rightful dues within the bounds of the law.
Contact Chamberlains Law Firm today for further information.
If you have been left out of a Will, or have been given a smaller provision than expected, you may be able to bring what is known as a family provision claim. The basis for this claim is that the deceased did not adequately provide for a person, for whom they had a moral obligation to make proper provision.
The New South Wales Supreme Court has recently handed down a decision in Papantoniou v Foundouradakis [2023] NSWSC 1374 which considers this type of claim, brough by a grandchild of the deceased.
What is a family provision claim?
A Court will consider making a family provision order where an eligible person is contesting a Will on the basis that what has been provided for them in the deceased’s Will (or lack thereof) is not adequate and proper in the circumstances. That is, the Will does not adequately provide for their maintenance, education, or advancement in life.
Eligibility and Adequate Provision
Only “eligible persons” may apply to the Court for these types of orders. The eligibility criteria differ between the States and Territories. In certain jurisdictions in Australia, grandchildren may fall under a distinct category allowing them to bring a family provision claim. In New South Wales, s57(1)(e)(ii) Succession Act NSW (2006) provides that a grandchild may be eligible where that person “was, at that particular time or at any other time, a member of the household of which the deceased person was a member”.
If a person is considered eligible to make a family provision claim, they must then prove that adequate and proper provision has not been made for them. This is a discretionary matter decided by the Court, and takes into consideration various elements including financial needs of the persons claiming and any competing claims.
Case Study – Papantoniou v Foundouradakis [2023] NSWSC 1374
In the case of Papantoniou v Foundouradakis [2023] NSWSC 1374, Papantonious was a grandchild of the deceased and applied to the court for provision from the deceased’s estate following her death. The deceased’s estate, of which the main asset was her $1.6m house, was left under Will to her three children. However, Papantonious argued that adequate provision was not made for him, having resided with his grandmother for lengthy periods of his life.
In determining this claim, the Court considered several factors, including the plaintiff’s eligibility to apply, and his financial circumstances. The Court awarded Papantonious’ the sum of $70,000 but required these funds be placed into a trust due to his gambling addiction. These funds were to be used to provide for his maintenance, education or advancement in life.
Contact Chamberlains
If you feel you have not been adequately provided for in a Will, contact the Chamberlains Private Wealth Law team who can assist you.
The plaintiff commenced proceedings against the State of New South Wales, Mr Geoffrey Croft and Mrs Sandra Croft, in relation to personal injuries arising from sexual abuse.
The plaintiff became a ward of the State in 1967 and was discharged in 1980 upon reaching the age of 18 years. When she was approximately 16 years old, the plaintiff was fostered to Mr and Mrs Croft. The plaintiff alleged she was sexually assaulted at least ten times during her stay with the Crofts.
The plaintiff reported the assaults to the police twice.
The allegations were investigated by the police. Mr Croft was later charged and prosecuted. He was found guilty of two counts of rape and three counts of assault female and commit an act of indecency in respect of the plaintiff. Mr Croft was also found guilty of indecently assaulting another victim. Mr Croft was sentenced to 22 years imprisonment and died of metastatic melanoma, while in custody awaiting the outcome of his application for special leave to appeal to the High Court of Australia in relation to the criminal proceedings.
The case against Mrs Croft was that she, as the plaintiff’s carer, owed the plaintiff a duty of care. On 15 June 2023, Mrs Croft filed a notice of motion seeking a permanent stay of the proceedings against her.
On 4 September 2023, the notice of motion was heard before Garling J of the Supreme Court of New South Wales. His Honour found that:
Consequently, His Honour was unpersuaded that Mrs Croft’s arguments constituted an exceptional case, the type necessary to justify an order being made for a permanent stay. Mrs Croft’s notice of motion was dismissed and she was ordered to pay the plaintiffs costs in respect of the notice of motion.