Have you accidentally transferred money to the wrong account?

Table of Contents What to do if you have mistakenly transferred money 1. Contact your bank immediately ePayments Code[1] administered by ASIC The ePayments Code is a voluntary code of practice that banks and other electronic payments providers subscribe to.  Typically, in the terms and conditions between you and your bank, there will be a clause in which the bank is obliged to comply with the ePayments Code and therefore a contractual right that you can enforce against the bank[2]. Relevantly, amongst other things, the ePayments Code prescribes the rules which determine who pays for unauthorised transactions and the how mistaken internet payments can be recovered. The ePayments Code applies to a wide range of electronic payments provided by banks[3]: (a) electronic card transactions, including ATM, EFTPOS, credit card and debit card transactions that are not intended to be authenticated by comparing a manual signature with a specimen signature, (b) telephone banking and bill payment transactions, (c) pay anyone banking facility transactions, (d) online transactions performed using a card number and expiry date, (e) online bill payments (including BPAY), (f) transactions using facilities with contactless features and prepaid cards, not intended to be authenticated by comparing a manual signature with a specimen signature, (g) direct debits, (h) transactions using electronic toll devices, (i) transactions using mobile devices, (j) transactions using electronic public transport ticketing facilities, (k) mail order transactions not intended to be authenticated by comparing a manual signature with a specimen signature, and (l) any other transaction specified by ASIC under clause 44 as a transaction to which the ePayments Code applies. There are exceptions and modifications which apply to low value facilities, small businesses, and BPAY payments. Three categories of payments Banks can deposit money into the wrong account for various different reasons and it is important to distinguish between the different categories of mistaken bank transfers. In all cases it is important that you contact your bank immediately. Mistaken internet payments This page is primarily concerned with mistaken internet payments i.e. funds transmitted using a pay anyone banking facility that are sent to an unintended recipient. There are various important obligations upon banks which relate to disclosure of terms and conditions (clause 26), on screen warnings (clause 27), reporting (clause 28), and investigation (clause 29). The applicable process depends on whether or not there are sufficient funds in the recipient’s bank account to repay you, and how quickly you make your report to the bank: Process where sufficient funds are available and report is made within 10 business days[4] In short, if a report is made within 10 business days of making the mistaken internet payment, and there are sufficient funds available in the recipient’s account to repay the mistaken payment, then the recipient’s bank must return the funds to your bank within 5 – 10 business days of receiving a request from your bank. If your bank is not satisfied that a mistaken internet payment has occurred, then it can still seek the consent of the unintended recipient to return the funds. Process where sufficient funds are available and report is made between 10 business days and 7 months[5] The process is less easy if more time has passed. In short, if a report is made between 10 business days and 7 months after making the mistaken internet payment, and there are sufficient funds available in the recipient’s account to repay the mistaken payment, the receiving bank must: –    complete its investigation into the reported mistaken payment within 10 business days of receiving a request. –    Prevent the unintended recipient from withdrawing the funds for 10 further business days –    Notify the unintended recipient that it will withdraw the funds from their account, if the unintended recipient does not establish that they are entitled to the funds within 10 business days commencing on the day the unintended recipient was prevented from withdrawing the funds If the unintended recipient does not establish that they are entitled to the funds within 10 business days then the recipient’s bank must return the funds to your bank within 2 business days thereafter. Process where sufficient funds are available and report is made after 7 months[6] The process if a report is made after 7 months basically relies upon the consent of the unintended recipient. Process where sufficient funds are not available[7] If both your bank and the recipient’s bank are satisfied that there has been a mistaken internet payment, the recipient’s bank must exercise discretion[8], based on an appropriate weighing of interests of both the sending consumer and unintended recipient and information reasonably available to it about the circumstances of the mistake and the unintended recipient, in deciding whether it should: (a) pursue the return of funds to the total value of the mistaken internet payment, (b) pursue the return of funds representing only a partial amount of the total value of the mistaken internet payment, or (c) not pursue any return of funds (whether partial or total). The recipient’s bank has a discretion to for example seek the repayment of funds by instalments under clause 34.4 and clause 34.6 guides on the exercise of that discretion. Internal complaints There are requirements on banks at clauses 35 and 36 to inform bank account holders of the outcome of their reported mistaken internet payment and their right to complain to the bank internally. If the bank account holder is not satisfied about the outcome of a complaint, they can complaint to AFCA about the bank (covered below). between the different categories of mistaken bank transfers. In all cases it is important that you contact your bank immediately. Unauthorised transactions Unauthorised transactions are treated differently. An unauthorised transaction means a transaction that is not authorised by a user. It does not include any transaction that is performed by a user themselves or by anyone who performs a transaction with the knowledge and consent of a user.[9] Clause 10 of the ePayments Code stipulates various circumstances when a bank

Valuation of Minority Interests in Shareholder Oppression Claims

In Australia, shareholders who feel oppressed or unfairly treated by the company or its directors can seek remedies under various statutory provisions. Here are some of the remedies available to shareholders: Oppression proceedings under the Corporations Act 2001 (Cth): Under section 232 of the Corporations Act, shareholders can apply to the court for relief if they believe that the company’s affairs are being conducted in a manner that is oppressive, unfairly prejudicial, or discriminatory to them. The court has broad powers to make orders to remedy the situation, including ordering the company to buy back the shareholder’s shares, ordering the company to pay compensation, or ordering the company to amend its constitution or replace its directors. Derivative actions under the Corporations Act: Shareholders can bring derivative actions under section 236 of the Corporations Act if they believe that the directors have breached their duties to the company. In such actions, the shareholder sues on behalf of the company to recover damages from the directors for any losses suffered by the company as a result of their breaches. Personal actions against directors under the Corporations Act: Shareholders can also bring personal actions against directors under section 180 of the Corporations Act if the director has breached their duty of care and diligence. This may occur if a director has made a decision that causes harm to the company, such as approving a risky investment without proper research or due diligence. Compulsory acquisition of shares under the Corporations Act: In some cases, shareholders may be able to force the company to buy their shares under section 461 of the Corporations Act. This may occur if the shareholder can show that they have been unfairly treated, and that it would be just and equitable for the company to buy their shares. The amount that is awarded will depend on the particular facts of the case.  In BAM Property Group Pty Ltd as trustee for BAM Property Trust v Imoda Group Holdings Pty Ltd [2019] FCA 1192, the Federal Court of Australia provided guidance on the principles that should be applied in valuing company shares in shareholder oppression claims. The following are some of the key principles: Compensation for oppression: The purpose of granting a remedy between parties in an oppression case is to “to compensate the oppressed shareholder for the oppression which has taken place”. Wide discretion: In cases where the relief to be granted is the compulsory purchase of shares, that object is achieved by the Court having a wide discretion to fix a price that “represents a fair value in all the circumstances”. That does not necessitate fixing a price only by reference to ordinary valuation principles. The question is to identify the price which should be paid in the circumstances. No benefit to oppressor for oppression: Where shares are to be valued as a starting point for determining the price which should be paid, the usual date for valuation is the date of the filing of the proceedings, but that is by no means a universal approach. The valuation does not value the shares at that date as if nothing but the ordinary course of business had preceded it. That would effectively allow the oppressing party the benefit of the wrongful conduct as, inevitably, that conduct has diminished the value of the oppressed party’s interest in the company before the proceedings are commenced. In Scottish Co-operative Wholesale Society v Meyer [1959] AC 324 , Lord Keith identified (at 364) that the valuation process must negate the effects of the oppressive conduct. His Lordship said the amount to be determined was: … what would have been the value of the shares at the commencement of the proceedings had it not been for the effect of the oppressive conduct of which complaint was made. This is clearly not a matter on which a calculation can be made with mathematical accuracy or by the application of strict accounting principles … Fair price to put applicant into position as if no oppression: A fair price would be the value which the shares would have had at the date of the petition, if there had been no oppression. In relation to the claim for oppression, when the court is valuing the oppressed shareholder’s interest in the determination of the relief to be awarded for oppression, the aim is to put the applicant in the position as if there had been no oppression. There are different methods of valuation that might be deployed, and there is no one size fits all answer.  Quite often, the outgoing shareholder will have been excluded from management, leaving the remaining shareholders / directors “in control”.  It is clear however from the authorities that the oppressors will not be entitled to benefit from the relevant oppression. Our corporate lawyers in Sydney specialise in dispute resolution relating to shareholder disputes and directors duties.  Be prepared to have to issue proceedings before the other parties properly come to the negotiating table.