The personal and financial suffering that a victim of a serious physical crime can go through, and the costs of pursuing justice, are displayed incidentally in this bankruptcy related decision of the Administrative Appeal Tribunal (AAT).
The victim successfully sued her assailant for damages, and recovery of his assets, and was awarded over $500,000. He ended up bankrupt, and in jail for a long time. She ended up with $6,000.
Her last chance at recovering any further money was to apply to the Inspector-General in Bankruptcy to cancel $30,000 in government charges payable in his bankruptcy. The IGB refused and she applied to the AAT to challenge this decision.
The woman’s father represented her at the hearing “because she did not feel she could face attending in person”. For reasons of her safety, the Tribunal made an order prohibiting the publication or of anything concerning her identity.
The woman had suffered
“serious, permanent injuries in a horrific assault … she remains physically and psychologically scarred. The attack changed her life”.
She sued her assailant and was awarded $295,000 in damages for personal injury. She had also sought a freezing order over his home but did not pursue this on his undertaking not to sell the property. But he went ahead and transferred the property regardless. She had to then take further proceedings for recovery of the property, in which she succeeded. She was awarded costs of $214,120.
She lodged a claim for over $514,000 in his bankruptcy.
After payment of the trustee’s remuneration and legal expenses, and allowing $30,230 on account of the government realisations charge, the dividend paid to her from the bankruptcy was $293,630.
After payment of all her legal and associated costs, she was left with $6,000.
The AAT decision
The decision of the AAT was about a little used, and less successfully pursued, provision, section 283(2) of the Bankruptcy Act, that allows the Inspector-General in Bankruptcy to remit the realisations charge in cases of “undue hardship”.
With such a background the legal issues seem unimportant. Suffice to explain that she as a creditor had standing to apply under s 283; that the undue hardship must flow from the failure to remit the realisations charge – notwithstanding the severity of hardship suffered, a compensatory approach cannot be taken; that while, as the IGB argued, every person might suffer hardship as a result of their bankruptcy, the issue is whether the failure to remit the realisations charge would cause hardship that is “inappropriate, unjustifiable, unwarranted, excessive, or disproportionate” beyond that which would ordinarily be suffered as a creditor.
The AAT senior member, “doing my best”, remitted half the government charge, $15,000, which was then payable to the woman.
KTXP and Inspector-General in Bankruptcy (Taxation)  AATA 1278 (16 August 2017).