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  • Mutuals making money

    Mutuals Making Money: Introducing Mutual Capital Investments

    Mutual enterprises have, traditionally, been restricted in the ways they could raise capital to avoid triggering the demutualisation provisions. However, on 6 April 2019 the Federal government introduced the Treasury Laws Amendment (Mutual Reforms) Bill 2019 introducing a new way of capital raising for mutual entities.

    A mutual capital investment or an MCI, is a “security” or a “financial product” regulated under the Corporations Act 2001 (“Corps Act”). MCIs allow mutual entities to raise money without relying solely on debt or compromising its member owned or mutual status. As such, issuing MCIs are governed by the same provisions which apply to the issue of shares. These provisions include the fundraising and disclosure requirements of the Corporations Act.

    To be capable of issuing MCIs, the entity must be a ‘mutual entity’ within the definition of s.167AC of the Corps Act, and specifically it must be an ‘MCI mutual entity’. A mutual entity will be eligible if they:

    • are a public company;
    • do not have voting shares (other than MCIs) quoted on a prescribed financial market;
    • are not a registered entity within the meaning of the Australian Charities and Not-for-profits Commission Act 2012.

    For an instrument to be an MCI the security must have certain class rights attached to it and a number of constitutional amendments are required. These amendments include (but are not limited to):

    • a clause which states that the entity is intended to be an MCI mutual entity for the purposes of the Corps Act;
    • a clause which only allows MCIs to be issued only as a fully paid share;
    • a clause which outlines that dividends in respect of MCIs are non-cumulative;
    • a clause which sets out the rights attached to the MCI with respect to participation in surplus assets and profits; and
    • a clause which only allows dividends to be issued in respect of the MCIs in the event the payment of the dividend is fair and reasonable to its members as a whole.

    Further, for an entity which is not yet an MCI Mutual entity, there is a specific process which must be followed in order to make the necessary constitutional amendments to conform. It is important to note that there is a time limit placed on when these amendments can be made.[1]

    Once a company has passed the necessary constitutional amendments and it has registered those amendments with ASIC, it is able to issue MCIs. Depending on the nature of the offer of MCIs, a company may be required to follow certain disclosure requirements.

    If you have any questions about how best to implement MCIs in your company, rules of disclosure or governance regarding dividend decisions, please contact the Business Team at BAL Lawyers.

    By Katie Innes with the assistance of Nicole Harrowfield.

    [1] The necessary amendments need to be made before 5 April 2022.

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  • bringing latent personal injury minors

    Bringing latent personal injury claims on behalf of minors in the ACT

    Personal injury claims, particularly those arising from exposure to Asbestos, dust disease, and lead poisoning, are not always easily identifiable and health complications can take considerable time to manifest and evolve, specifically in minors.

    Minors, under the age of five, are at a greater health risk, if exposed to a metal such as lead. Lead can be hazardous, especially if swallowed or breathed in, though is still a common feature in old ACT buildings. In an air-borne state, lead exposure can permanently lead to intellectual impairment or brain damage in young children who are still in the developmental stages of their life[1].

    Injuries that occur in a public place, such as a school or community hall, may arise as a result of negligence of either a person or an entity responsible for the facility. If that is the case, and a breach of duty can be established, then a claim for damages can be brought in either the ACT Magistrates or ACT Supreme Court, depending on the severity of the injury sustained. The monetary threshold for litigating a claim in the ACT Magistrates Court is up to $250,000, anything over that threshold is litigated in the ACT Supreme Court.

    The main piece of legislation that governs public liability and product liability claims in the ACT is the Civil Law (Wrongs) Act 2002 ACT (the Wrongs Act). Chapter 5 of the Wrongs Act specifically requires certain pre-court procedures for bringing personal injuries claims to be complied with, though some complications can arise if a potential claimant is exposed to a potentially harmful substance, though its consequences may take years to materialise. This can be especially the case for children, when bodies are still developing.

    A claim for damages, arising from a personal injury, normally needs to be commenced within three years from the date of injury, in accordance with section 16B of the Limitation Act 1985 ACT (the Limitation Act). However, in the case of injured minors, special provisions apply pursuant to section 30A of the Limitation Act. Specifically, if the injury is, or includes, a disease or disorder, the relevant period for bringing a claim is six years after the day the minor’s (plaintiff’s) parent or guardian first knows that the child has suffered an injury, or that the injury is related to someone else’s act or omission. In any other case, it is six years after the day the accident giving rise to the injury occurred. The limitation period for which a claim is statute barred is three years after a minor reaches its majority, being 18 years of age. It is therefore important to be aware of the limitation period, as when it expires, the claim may become statute barred.

    As discussed above, personal injury claims in minors arising from exposure to chemicals or other toxic or hazardous materials are not immediately ascertainable. However, that does not mean that precautionary steps cannot be taken early on by either a concerned parent or litigation guardian if their child has been exposed to a hazardous substance such as lead.

    The preliminary steps to be taken are as follows:

    1. Notify the owner or occupier of the premises, as soon as possible, of the injury and complete a notification of injury form, if one is available.
    2. Complete an ACT Law Society Personal Injury Claim Notification Form, which can be found on the ACT Law Society website and provide it to the respondent or the respondent’s insurer, if known. For example, in case of a public school in the ACT, the respondent would be the Territory, thus the Form can be sent for the attention of the ACT Government Solicitor.
    3. Obtain details of any witnesses to an alleged injury and take photographs and records of the premises or place of injury.
    4. If you notice symptoms develop in your child, then seek immediate medical attention and keep records of all your medical appointments, as well as receipts for any treatment obtained and medication purchased, so that in due course reimbursement can be sought from the relevant insurer, once proceedings are commenced.

    The taking of such steps, at the earliest occasion, can mean that should there be a need to carry through with a claim in later years, the necessary evidence for a claimant to succeed on his or her claim will not have been lost later with the passing of time.

    If you have any questions in respect of this article, or require any legal assistance, please contact Bill McCarthy, Special Counsel, within the Litigation Team at BAL Lawyers.

    [1] “Lead exposure and your health”,

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  • prevention notices and reasonable suspicion

    Essential Guide to Local Government Law: Prevention Notices and "Reasonable Suspicion"

    The Protection of the Environment Operations Act 1997 (POEO Act) provides for the issue of a range of notices, collectively referred to as ‘environment protection notices’.[1] These notices are an important regulatory tool for councils and their use will often require an appreciation of the statutory terms and legal concepts that underpin them to ensure they are enforceable. Previous court judgments illustrate how specific terms have been construed by the courts and how the relevant legal concepts have been applied. 

    This Essential Guide discusses the concept of “reasonable suspicion” under the POEO Act as it applies to the giving of a prevention notice in the context of a pollution issue.

    When can a council issue a prevention notice?

    Focusing as it does on pollution prevention and control, the POEO Act provides that a council, or other appropriate regulatory authority, may issue a prevention notice when it “reasonably suspects” that an activity has been or is being carried on in an environmentally unsatisfactory manner, at any place, by any person.[2]

    Before giving a prevention notice, or any of the other notices requiring a “reasonable suspicion” under the POEO Act; it is crucial for a council to consider whether they can establish that they have the requisite “reasonable suspicion”.

    What is a “reasonable suspicion”?

    The cases that that have considered the concept of “reasonable suspicion” for the purposes of the POEO Act have described this pre-condition as being partly subjective and partly objective. The ‘subjective criterion is the mental state of suspicion as to the existence of the required state of affairs and the objective criterion is whether the suspicion is reasonable’.[3]

    In Kempsey Shire Council v Slade,[4] Biscoe J summarised the test for establishing “reasonable suspicion” as follows:[5]

    1. The public authority must have formed a genuine suspicion that a particular person (or persons) caused the pollution incident.
    2. A reasonable suspicion involves less than a reasonable belief but more than a possibility.
    3. The public authority’s suspicion must be reasonable in that there is some objective and factual basis for the suspicion, which would create in the mind of a reasonable person in the position of the public authority figure an apprehension that the person caused the pollution incident to which the [notice] relates. A reasonable suspicion may be based on hearsay material or material that is inadmissible in evidence but it must have some probative value.
    4. The objective circumstances do not have to establish, on the balance of probabilities, that the person in fact caused the pollution incident nor that there has in fact been a pollution incident.

    This two-part approach to “reasonable suspicion” commences with establishing that a suspicion has been formed.

    The Subjective element

    While there must be an ‘objective and factual basis’[6] for the suspicion, the suspicion itself is a subjective state of mind. Less proof is required to form the suspicion than is needed to create a belief. In establishing the test in Kempsey, Biscoe J referenced the common law principles citing Lord Devlin in Hussein v Chong Fook Kam[7] where his Lordship stated, ‘the facts which can reasonably ground a suspicion may be quite insufficient reasonably to ground a belief, yet some factual basis for the suspicion must be shown’.[8] Additionally, Kitto J, in Queensland Bacon Pty Ltd v Rees,[9] is cited in Kempsey as saying ‘[a] suspicion … is more than a mere idle wondering…; it is a positive feeling of actual apprehension or mistrust…’.[10]

    The Objective element

    Having formed the suspicion, the question as to whether it is reasonable is an objective test. To determine whether the suspicion is reasonable the Court applies what Biscoe J described in Kempsey as the “reasonable person test”: would a reasonable person in the position of the public authority, confronted with the same facts, suspect that the person in question has caused, or could cause, a pollution incident? If so, the suspicion is reasonable.

    The facts to be applied in applying the reasonable person test will be context specific. For a pollution issue this may include establishing that a pollution incident has occurred or was likely to occur through one or more documented site inspections observing pollution or a set of circumstances that could give rise to a pollution incident.  Additionally, other specific and documented investigations could also be used to evidence that a suspicion is reasonable.

    Hossein Yamini v The Council of the City of Sydney

    The recent decision of the Land and Environment Court in Hossein Yamini v The Council of the City of Sydney[11] re-affirmed the Kempsey test. While unsuccessful on other grounds, the Council successfully argued that a prevention notice it had issued was within power because the Council had formed the requisite “reasonable suspicion”.

    Mr Yamini contended, unsuccessfully, that the Council could not possibly have formed the reasonable suspicion that an environmentally unsatisfactory activity was taking place, either at his premises or by him. Mr Yamini submitted ‘that the reasonable suspicion the Council was required to have related to current and not future actions’[12] for the prevention notice to be within power. The Council successfully argued that its knowledge of past events gave rise to the suspicion that a pollution incident may re-occur in the future and that in light of those past events such a suspicion was reasonable. The Council submitted that the prevention notice relied on past events to give rise to the suspicion that a pipe leak might re-occur and their prevention notice sought to ensure the source of the leak had been appropriately treated so that the same event did not occur in the future. It did so by reciting ‘the past events comprising the escape of waste water from the premises and that the rectification of that leak was, contrary to the requirements of …[an earlier]… Clean-up Notice, not undertaken by a licensed plumber, but by a combination of clean up works by the Appellant and plumbing work by a licensed air conditioning plumber’.[13]  

    Duggan J applied the Kempsey test in Yamini, accepting the Council’s prevention notice as evidence of the factual basis for the suspicion.  Her Honour considered that the notice was ‘directed to a future risk’ and identified ‘past events comprising the escape of waste water from the premises’.[14] Her Honour further noted that attempts to rectify the leak were not conducted by a licensed plumber as required by the Clean-up notice and stated that:

    ‘In the circumstances, those past actions are sufficient to give rise to a reasonable suspicion that the escape of waste water may occur again if the repairs were not appropriately carried out.’[15]

    Referencing the Kempsey test, her Honour also noted that the belief that the event may happen again due to the poor repair work was ‘on the evidence more than a possibility’.[16] Her Honour considered that the suspicion held by the Council was ‘reasonable in the circumstances as it is based upon an objective factual basis which would create in the mind of a reasonable person an apprehension that the Leak may re-occur and waste water may leave the premises by the same route as had previously occurred’.[17]

    Before giving a prevention notice

    If you are unsure whether you have the necessary “reasonable suspicion” to give a prevention notice under the POEO Act, consider the Kempsey test. The two-part description of “reasonable suspicion” established by Biscoe J in Kempsey is a useful tool to ensure your inspections and/or investigations are directed at establishing the requisite objective evidence to support the subjective suspicion that has brought the matter to your attention in the first place. When drafting notices, councils should also include the reasonable grounds on which they suspect that a pollution incident has occurred or is likely to occur.

    Setting out, in the prevention notice itself, details of what the Council suspects has happened, and why, will help to establish the reasonable suspicion on which the prevention notice is based and will assist the Council to ensure that the prevention notice is not liable to be set aside on the ground that the requisite “reasonable suspicion” under the POEO Act did not exist.

    For more information on “reasonable suspicion” and notices under the POEO Act, contact us.

    The content contained in this Essential Guide is, of course, general commentary only. It is not legal advice. Readers should contact us and receive our specific advice on the particular situation that concerns them. If you would like advice or assistance with specific issues arising out of this Essential Guide, please contact the Planning, Environment & Local Government Team at BAL Lawyers.  You can contact a member of the team directly by phone on (02) 6274 0821.

    Please note that the law detailed in this Essential Guide is correct as at 19 August 2020.

    [1] POEO Act, s.90).

    [2] POEO Act, s.96(1).

    [3] Kempsey Shire Council v Slade [2015] NSWLEC 135 (Kempsey) [23].

    [4] Ibid.

    [5] Ibid [22].

    [6] [2015] NSWLEC 135 [22].

    [7] (1970) AC 942.

    [8] (1970) AC 942, 948.

    [9] (1966) 115 CLR 266.

    [10] (1966) 115 CLR 266, 303.

    [11] Hossein Yamini v The Council of the City of Sydney [2020] NSWLEC 26 (Yamini).

    [12] Ibid [49].

    [13] Ibid [50].

    [14] Ibid [50].

    [15] Ibid.


    [17] Ibid.


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  • Estates Team at BAL

    Doyle’s Guide recognises BAL Lawyers

    BAL Lawyers is delighted to announce that our Estates & Estate Planning Team has again been recognised as a first tier law firm.  The 2020 rankings feature the Team in both categories being a Leading Wills & Estates Litigation Law Firm, and a Leading Wills, Estates & Succession Planning Law Firm.

    Doyle’s Guide is an independent body that publishes rankings predominantly based on peer review and client feedback.

    “Our focus is always the individual needs of our clients and their families, but it is a collegiate practice area and it is good to know our ACT colleagues think we do it well,” Ellen Bradley, a Director in the Team said today.

    A number of our solicitors have also been named individually in the 2020 listings.

    • Keith Bradley AM is recognised in the preeminent category across both Wills & Estates Litigation, and Wills, Estates & Succession Planning;
    • Christine Harvey is recognised in the recommended category across both Wills & Estates Litigation, and Wills, Estates & Succession Planning;
    • Jill McSpedden is recognised in the recommended category for Leading Wills, Estates & Succession Planning Lawyers; and
    • Ellen Bradley is recognised in the recommended category for Leading Wills & Estates Litigation Lawyers.

    Our solicitors assist clients at what is often the most difficult period in their lives.  While a knowledge of the law and its processes are necessary, equally important is empathy and an understanding of family dynamics.

    Estates Team at BAL

    (L-R) Ellen Bradley, Christine Harvey, Keith Bradley AM and Jill McSpedden.


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  • Annual General Meeting

    Annual General Meetings in the time of COVID-19

    Annual General Meeting season is here and so it is time to reflect on the achievements of your organisation.  Your AGM is an opportunity for input from members on the organisation’s future and (more practically) appointing/removing directors and approving financial reports.

    Annual General Meetings (AGMs) are a fundamental aspect of running companies, co-operatives, associations and mutuals. For organisations with a financial year ending on 30 June, an AGM must be held by 30 November, and there is every chance your 2020 AGM will not be “business as usual”.  As Australia faces down a second wave of COVID-19 cases, social distancing measures are likely to stay in place for some time. Now is the time to develop a contingency plan to ensure you can achieve quorum and transact business.

    Some organisations will have the ability to manage the notification and holding of an AGM via the use of technology – this is determined largely by their constituting documents (Rules or Constitution). Those organisations that have this ability should start considering now how they will manage this process – investigating available technologies that allow members to really engage in the AGM and ensure notices contain sufficient details on how members can access and use the technology.

    For those organisations whose constituting documents do not provide for the use of technology you will need to start preparations now, although there may be some relief.

    On 6 May 2020, temporary modifications to the Corporations Act 2001 (Cth) took effect providing practical mechanisms for companies and mutuals incorporated under the Corporations Act 2001 (Cth)[1]. The key modifications made by the Determination include:

    • A meeting may be held using one or more technologies to allow people to participate without being physically present. “Participate” includes a requirement that those attending must be able to speak in real time;
    • Persons attending the meeting via technology are taken to be present at the meeting for the purposes of reaching and achieving quorum;
    • Votes at such a meeting must be taken on a poll that allows people to participate in real time or, where practicable, records their vote in advance;
    • A proxy may be appointed using technology specified in the notice to members; and
    • The notice of meeting (and any related information) may be provided to those entitled to receive the notice using one or more technologies. The notice must explain how members are able to vote and ask questions and include any other information they need to know to participate in the meeting.

    These modifications will expire at 11.59pm on 5 November 2020[2].

    For associations, the Associations Incorporation Act 1991 (ACT) has also recently been amended to include a new section 70AA, which:

    • allows a committee to authorise a general meeting to be held using a method of communication, or a combination of methods of communication; and
    • allows members who take part to hear or otherwise know what other members taking part say without being in each other’s presence.[3]

    Members will be taken, for all purposes to be present at the meeting and may vote by proxy. This provision overrides any inconsistency in an association’s rules. Examples of “method of communication” include a phone, satellite or internet link, or in writing.

    For co-operatives, the Co-operatives National Law doesn’t specifically allow for AGMs (or even special general meetings) to be called or held using technology, however the Model Rules (which are often used) do allow for the use of technology when giving notice to members. If your Rules do not contain the right to use technology to give notice or hold a meeting then we recommend you investigate potential venues with the capacity to hold at least a quorum of your members (along with the directors and auditor), detail the social distancing measures you expect from all those attending to protect members, so that you can proceed with your AGM without difficulty. You might also consider proposing amendments to your Rules to allow for the use of technology in the future.

    Despite the temporary modifications to the Corporations Act and the Associations Incorporation Act, an AGM held virtually may still breach members’ rights if the meeting is held in such a way that members are not provided a reasonable opportunity to effectively participate; those rights will still be enforceable at common law.

    If you have any questions about how best to prepare for your upcoming AGM under these new measures, please contact Katie Innes or the Business Team at BAL Lawyers.

    Written by Katie Innes who is grateful for the assistance of Nicole Harrowfield.

    [1] Pursuant to the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Determination).

    [2] Unless the Determination is withdrawn or reissued beforehand.

    [3] This section is only applicable when, due to COVID-19, a state of emergency has been declared under s 156 of the Emergencies Act 2004 or an emergency has been declared under s 119 of the Public Health Act 1997.

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  • Residential tenancies declaration

    Real Estate Alert: Tenants given the right to terminate under new COVID-19 Emergency Response Declaration

    On 22 July 2020, the Residential Tenancies (COVID-19 Emergency Response) Declaration 2020 (No 2) became effective. Wasn’t there already a Declaration you may ask? Well yes, but that has been revoked and replaced (see “(No 2)”) … with little notice. Though in substance the new Declaration substantially reflects the old, the ACT Government has tactfully incorporated a new provision, which we expect landlords in the ACT will take issue with.

    The new Residential Tenancies Declaration extends the moratorium period to 22 October 2020 (and rightly so) and reserves the right for the Minister to extend the moratorium period for a further three (3) months.

    What is surprising is that the Declaration now allows a tenant living in an impacted household, pursuant to a fixed term residential tenancy agreement, to terminate the agreement upon giving the lessor written notice. That notice must:

    • Be for a period of at least three (3) weeks; and
    • Contain evidence that the tenant is a member of an impacted household.

    Where a tenant terminates a residential tenancy agreement in accordance with the new Declaration, the lessor is not entitled to any compensation or break fee payable under the agreement or the Residential Tenancies Act 1997 (ACT). This is the case even where the residential tenancy agreement was signed by the tenant after the commencement of the moratorium period (22 April 2020).

    So what should landlords and/or their managing agent do? Well, fortunately the Declaration does not limit the ‘evidence’ that must be provided by a tenant and it would be prudent for landlords and/or their managing agent to require more than one (1) of the following (also listed as examples in the new Declaration):

    • A statutory declaration attesting to the status of the premises being an ‘impacted household’;
    • Evidence of a household member’s eligibility for the JobKeeper or JobSeeper payment from the Commonwealth;
    • Letter from an employer attesting to a change in a tenant’s employment status; or
    • Evidence of a reduction in household income.

    For further information, please contact the Real Estate Team at BAL Lawyers.

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