Part 5Claims against Fidelity Fund

Part 5—Claims against Fidelity Fund 60—Claims (1) Subject to this Part, where— (a) a person suffers loss as a result of a fiduciary or professional default; and (b) there is no reasonable prospect of recovering the full amount of that loss (otherwise than under this Part), the person may, by instrument in writing served on the Society, claim compensation under this Part. (1a) In determining whether there is a reasonable prospect of recovering the full amount of a loss for the purposes of subsection (1)(b), potential action for the recovery of the amount that would not be taken by an ordinarily prudent, self‑funded litigant is to be disregarded. (2) The amount of a claim cannot exceed— (a) the actual pecuniary loss suffered by the claimant in consequence of the fiduciary or professional default (including the reasonable costs of making the claim); less (b) any amount that the claimant has received, or may reasonably be expected to recover (otherwise than under this Part) in reduction of that loss. (3) If a valid claim has not been satisfied as provided by this Part at the expiration of 12 months from the day on which it was lodged with the Society it is then, to the extent to which it has not been satisfied, increased by interest at a prescribed rate calculated from the expiration of that period. (4) No claim can be made under this Part— (a) in respect of a fiduciary or professional default occurring before 4 December, 1969; or (ab) in respect of a fiduciary or professional default occurring outside this State unless it occurs in the course of, or incidentally to— (i) legal work arising from instructions taken in this State; or (ii) legal work substantially carried out in this State; or (b) in respect of a liability for which indemnity is provided under a scheme of professional indemnity insurance under Division 13 of Part 3. (5) Despite the other provisions of this section— (a) a claim can only be made in relation to a fiduciary or professional default by— (i) an interstate legal practitioner; or (ii) an incorporated legal practice that is not required to be insured under a scheme established under section 52, in circumstances provided for by an agreement or arrangement made by the Society with the approval of the Attorney‑General under section 95AA; and (b) an agreement or arrangement so made under section 95AA may prescribe limitations or conditions in respect of any such claim. 60A—Personal representative may make claim The personal representative of a person (including a deceased person) is entitled to make a claim under this Part on behalf of the person or the person's estate. 61—Limitation of claims (1) The Society may, by notice published in a newspaper circulating generally throughout the State, fix a day, not earlier than 6 months after the publication of the notice, on or before which claims in respect of a fiduciary or professional default, or a series of professional or fiduciary defaults, referred to in the notice, must be made. (2) Where a notice is published under subsection (1), a claim that is not made within the time prescribed by the notice is barred unless the Society otherwise determines. (3) No action in defamation lies in respect of the publication, in good faith, of a notice under this section. 62—Power to require evidence (1) The Society may, in considering any claim made under this Part, by notice in writing served on any person, require that person, within the time specified in the notice, to deliver up any document in his or her possession or power relevant to the determination of the claim. (2) A person must not fail duly to comply with a notice served on him or her pursuant to subsection (1). Maximum penalty: $1 250. 63—Establishment of validity of claims (1) Where a claim is made under this Part, the Society must determine— (a) whether the claim is a valid claim; and (b) the amount payable under this Part in, or towards, satisfaction of the claim. (2) The Society must, by notice in writing, inform the claimant of any determination made by it under subsection (1). (3) A notice under subsection (2) must be served— (a) on the claimant or the claimant's personal representative; or (b) where the claimant is dead and has not left a personal representative known to the Society, or where the whereabouts of the claimant is unknown—by publication in the Gazette. (4) A claimant who is aggrieved by a determination of the Society under this section may appeal to the Supreme Court against the determination. (5) On an appeal under subsection (4), the Supreme Court may reverse or vary the determination of the Society and may make such further orders as it considers just in the circumstances. (6) An appeal against a determination of the Society under this section must be instituted within three months after the day on which notice of the determination is served under this section but the Court may, if satisfied that proper cause to do so exists, dispense with the requirement that the appeal be so instituted. (7) In any proceedings under this section, evidence of an admission or confession is admissible to prove a fiduciary or professional default, notwithstanding that the person by whom the admission or confession was made is not a party to the proceedings. (8) If in any proceedings under this section the Society is satisfied, on the balance of probabilities, that a fiduciary or professional default has been committed, it may determine the claim accordingly notwithstanding that the fiduciary or professional default constitutes a criminal offence and the evidence would not be sufficient to establish the guilt of a person charged with that offence. 64—Satisfaction of claims (1) The Society must satisfy any valid claim under this Part, to the extent determined by the Society or the Supreme Court, out of the Fidelity Fund. (2) Where the Society has published a notice under this Part in respect of a specified fiduciary or professional default, or a specified series of fiduciary or professional defaults, the maximum amount that may be applied towards satisfaction of all claims to which the notice relates is a percentage (which must not be less than 20%) prescribed by regulation for the purposes of this subsection of the balance of the Fidelity Fund (calculated to the nearest $1 000) as disclosed in the accounts of the Fidelity Fund last audited before the proposed application of money towards satisfaction of the claims. (3) Where the maximum amount that may be applied to satisfy claims made in respect of a fiduciary or professional default, or a series of fiduciary or professional defaults, does not permit the full satisfaction of the claims, the Society must apportion that amount between the various claims in such manner as it thinks just. (4) The Society, in apportioning payments under this section, must take into account the relative degrees of hardship suffered or likely to be suffered by the various claimants as a result of non-payment of the full amount of the claim for compensation. (5) Where the Society apportions payments under this section, the claims in respect of which the payments are made are discharged notwithstanding that they may not have been satisfied in full. (6) The Society may, with the approval of the Attorney-General, make further payments to any person— (a) whose claim has not been satisfied in full by reason of the operation of subsection (2), or for any other reason; or (b) whose claim is barred, but any payment so made does not revive or reinstate a claim. 64A—Advance payments (1) The Society may, at its absolute discretion, make payments to a claimant in advance of the determination of a claim if satisfied that— (a) the claim is likely to be allowed; and (b) payment is warranted to alleviate hardship. (2) A payment may be made under this section even if there is some prospect that the whole or a part of the claimant's pecuniary loss will be recovered from another source. (3) Any payments made in advance are to be taken into account when the claim is determined. (4) Payments under this section are to be made from the Fidelity Fund. (5) If the claim is disallowed, the amounts paid under this section are recoverable by the Society as a debt due to the Fidelity Fund. (6) If the claim is allowed but the amount payable is less than the amount paid under this section, the excess paid under this section is recoverable by the Society as a debt due to the Fidelity Fund. 65—Rights of the Society (1) Subject to this section, where the Society has made any payment to a claimant under this Part, the Society is, to the extent of the payment, subrogated to the rights of the claimant against any person liable at law or in equity for the fiduciary or professional default in respect of which the payment was made. (2) This section does not confer on the Society any right to recover money from a person whose liability in respect of a fiduciary or professional default does not arise from a wrongful or negligent act or omission on that person's part. 66—Claims by legal practitioners and incorporated legal practices (1) A legal practitioner or incorporated legal practice who has paid compensation to any person for pecuniary loss suffered in consequence of a fiduciary or professional default by a partner, director, clerk, officer or employee of the legal practitioner or legal practice may make a claim under this Part in respect of the payment provided that, in the case of a fiduciary or professional default by a partner or a legal practitioner director, the default consisted of a defalcation, misappropriation or misapplication of trust money or dishonest conduct. (2) A claim of a kind referred to in subsection (1) is not a valid claim for the purposes of this Part unless the Society is satisfied that— (a) all legal or equitable claims in respect of the fiduciary or professional default (other than this claim against the Fidelity Fund) have been fully satisfied; and (b) the legal practitioner or incorporated legal practice acted honestly and without negligence. 67—Insurance in respect of claims against Fidelity Fund (1) The Society may, with the approval of the Attorney-General, insure the Fidelity Fund to such extent as the Society thinks fit against claims under this Part. (2) The premium on a policy of insurance entered into under this section must be paid out of the Fidelity Fund. 67A—Annual report (1) The Society must, on or before 31 October in each year, report to the Attorney-General on the administration of this Part during the preceding financial year. (2) The report must— (a) state the amount of the payments from the Fidelity Fund during the financial year and the nature of the claims in respect of which payments were made; and (b) contain the audited statement of accounts of the Fidelity Fund for the period to which the report relates. (3) The Attorney-General must, within 12 sitting days after receiving a report under this section, cause copies of the report to be laid before both Houses of Parliament.