Insolvency and related law and policy, and more

Michael Murray is an Australian author and commentator on corporate and personal insolvency law and related issues, in Australia and internationally. He has a strong law and policy background, is independent of any connections, and his views are his own. He gives no legal advice. 

The need to pick up the phone….

An appeal court has confirmed a finding that a liquidator who did not telephone a director to inquire about  money apparently transferred by the company before its liquidation had breached his duties to the company under s 180(1) of the Corporations Act; but because the company suffered no loss as a consequence, no compensation was payable under s 1317H: Asden Developments Pty Ltd (in liq) v Dinoris [2017] FCAFC 117.

“the test is an objective one. It requires an assessment as to whether [a liquidator’s] conduct as a professional liquidator demonstrated the requisite degree of care and diligence that was reasonable in all the relevant circumstances. That assessment is to be made at the time of [the liquidator’s] alleged breach and not with the benefit of hindsight. It is to have regard to the degree of care and diligence expected of a skilled and professional accountant performing the role of a liquidator. It also requires care to be taken to distinguish between conduct amounting to a breach of the statutory duty and that amounting to a mistake or error of judgment”.

Perhaps an instructive lesson for all practitioners.

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