NZ’s Insolvency Practitioners Regulation Act is due to commence over the next year introducing a licensing and regulatory regime for insolvency practitioners (IPs) under a co-regulatory arrangement similar to that introduced in the UK in 1986.
While many relevant details are yet to be developed, some initial thoughts are offered in relation to Australian IPs taking appointments in NZ.
Australian IPs in New Zealand
Australian IPs will now be able to be appointed to an ‘insolvency engagement’ in NZ as if they were licensed in NZ but they will need to apply for a licence under s 9 from an accredited body within 10 days of their appointment. The authorisation is in respect of “the type of insolvency engagements that correspond to the type of insolvency work that the person is entitled to carry out in the person’s home jurisdiction”: s 10. “Home jurisdiction” refers to Australia or a recognised jurisdiction, with the latter group yet to be defined. The Australian IP will be deemed to be a member of the accredited body in NZ.
The accredited body must be satisfied that the Australian IP meets NZ’s prescribed minimum standards and is otherwise a fit and proper person to hold a licence. Although the accredited bodies are yet to be determined, it is expected that they will be CAANZ and RITANZ.
Intersection with Australian insolvency regulation
This may raise some intersections with Australian law. While it is expected that Australian registered liquidators and trustees would be able to be readily licensed in NZ, that licence must be in relation to the sort of work they do in Australia. The separate registration of bankruptcy trustees and company liquidators in Australia, and their separate regulation, should mean that an Australian liquidator could not take a NZ bankruptcy and an Australian trustee could not take a NZ liquidation. While that may be as expected from our peculiar Australian perspective, it is some limitation including in appearance. The licences of Australian IPs can be subject to conditions, including for example, to administer only receiverships.
Fit and proper
An Australian IP will need to meet a ‘fit and proper’ requirement. Again, that need not be an issue in most cases. But in assessing that, there may be a question as to whether information in Australia about an IP’s conduct, and any pending discipline actions, could be disclosed to the NZ Registrar. Information about the misconduct of an Australian IP may be confidential at least until it is released by legal authority.
In relation to CAANZ and ARITA, they are each an authorised ‘industry body’ under Australian law with authority to pass on and receive confidential IP information but only to and from nominated other Australian bodies and regulators. ASIC and AFSA, the two Australian regulators, have constraints in relation to their use of confidential information. Australian law only requires disclosure of a disciplinary show-cause notice under s 40-40 when it is referred to a discipline committee. Little is disclosed but enough to prompt an inquiry. The outcome of the discipline process need not be disclosed.
There may be an issue as to whether CAANZ is wearing two hats, in relation to its responsibilities under the Australian law and also under NZ law. A CAANZ member on an Australian discipline committee may release confidential information pursuant to IPSB s 50-35 but is not lawfully able to otherwise, one exception being to assist a similar discipline process in an overseas country.
As to the accredited bodies, relevant ones will apply for registration. Both CAANZ and RITANZ themselves proactively put a regime in place in anticipation of this new law. Nevertheless, the Registrar may want to know how CAANZ has taken up its insolvency regulation responsibilities under Australian law, granted to it and others by the Insolvency Law Reform Act 2016 in March 2017. On the public record there is little if anything shown; nor about the peer review process of IPs which it conducts.
Co-regulation and government regulation models
But the fundamental difference between Australia and NZ is that NZ’s is a co-regulatory model akin to the UK, with responsibility expected to be given to relevant professional bodies. They would be expected to have proper internal discipline and registration processes that are open and transparent, and reported as required by the Act. The Registrar is to oversight and regulate their attention to their licensing and discipline activities.
In contrast, although ARITA, CAANZ, CPA and others were given responsibilities under the ILRA, there are in no sense regulated in respect of their discharge of those responsibilities, or otherwise.
Two or more hats
Care would also be required where an Australian IP is in effect also wearing two hats in NZ – as an IP of an Australian company and as an IP of a relevant NZ company. A NZ court should be able to make orders against that Australian IP licensed under the NZ 2019 Act on the basis that she or he is deemed to be a NZ IP. This might be contrasted with an earlier cross-border insolvency case where the NZ High Court was not inclined to make orders against Australian liquidators who were involved in misconduct while wearing hats both as Australian liquidators and as appointed NZ liquidators.
Applicable law and codes
The further issue may be what law and codes binds the Australian IP licensed and operating in NZ. Either way, APES 110 applies universally.
The other question is whether Australia will reciprocate by allowing NZ insolvency practitioners to take appointments in Australia. In such a case, presumably, the NZ IP would be made answerable to the relevant Australian courts, regulator and professional accounting body (if any) but not to ARITA.
It is early days yet and no doubt many such and other issues are being considered for addressing in the drafting of the regulations in support of the Act.
 As to overseas practitioners, see further details in subpart 6.
 Section 50-35(2)((v) of the Schedules relieves a CAANZ member from confidentiality restrictions in s 50-35(1) if they disclose the information to enable or assist an authority or person in a foreign country to perform a duty similar to that performed by the committee in Australia.
 ANZ National Bank Ltd v Sheahan and Lock  NZHC 3037;  1 NZLR 674. See also Lock, in the matter of Cedenco JV Australia Pty Ltd (in liq) (No 2)  FCA 93 at .