This report of two insolvency practitioner disciplinary decisions in Australia will be brief because the decisions, or their publicly released versions, comprise 12 words each.
Two named liquidators were referred to disciplinary committees. The law in Australia requires such referrals to be publicly disclosed, and they were, but no more, on the ASIC website. The law does not require or perhaps allow the names of the disciplinary committee members to be disclosed, although they each must meet, and be seen to meet, certain experience and independence and other requirements. Committee members are also required to maintain confidentiality, but there are listed exceptions: IPSC s 50-35.
The disciplinary hearing is private as well as details of its timing and location.
The committee must make at least one decision, from a number of statutory options, ranging from a confirmation of the practitioner’s registration through to termination of their registration. One option is that the committee can decide that information about its decision and its reasons should be published by the regulator, ASIC.
In the cases in question, published ‘decisions’ of each committee concerning the two named liquidators were that “The Committee did not decide that ASIC should publish the Committee’s decision”: see Registered liquidator disciplinary decisions | ASIC – Australian Securities and Investments Commission
The committees therefore did not give reasons for not deciding that ASIC should publish whatever decisions the committees made.
The Law
Apart from this website, there is limited legal reporting and guidance on the particular process rules that apply to insolvency practitioner registration and regulation under both the Bankruptcy Act and the Corporations Act.[1] Although the important rules of procedural fairness apply, the regime itself is quite peculiar.[2]
A recent High Court of New Zealand decision on the good standing of a NZ applicant for licensing as a liquidator drew on the law concerning lawyers’ disciplinary processes, making useful comparisons between the two professions. As a court process, The High Court decision was public and detailed reasons were given: see Licensing of insolvency practitioners – decision making principles from New Zealand
A new Australian textbook – Lawyer Discipline[3] – provides some guidance on disciplinary processes generally, which, taking guidance from New Zealand, might be applied to insolvency practitioners. In chapter 9, on the merits of any tribunal giving reasons for any decision it makes, the book quotes one court saying,[4] in the context of a solicitor complaints tribunal:
“245 With a tribunal like this, the purpose of expressing, preferably publishing, sufficient reasons for such a decision … [is] to satisfy the public that the tribunal is properly discharging its role. This tribunal generally conducts its proceedings in public. Because of the public significance of its determinations, which relate to those to be held out as fit to practise as solicitors, it is important that interested members of the public have the opportunity to come to know of the tribunal’s justification for any decision it may make, and thereby satisfy themselves that the disciplinary process is being carried through properly”.
‘Interested members of the public’ and others can find further information about the two Australian liquidators’ matters in Insolvency News Online.
2021
The existing discipline regime will apply to the proposed small business restructuring practitioner liquidators, who are proposed to be “recognised accountants”, that is, members of one of three accounting bodies – CAANZ, CPA and IPA – that have responsibility under the law to regulate the conduct of existing liquidators and trustees, and now, the new category of liquidator.[5]
Confused? Try harder.
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[1] IPSC IPSB Div 40.
[2] Bodies Everywhere (2018) INSLB 94, Murray
[3] Lawyer Discipline, LexisNexis, 2020, Gino dal Pont
[4] Attorney-General v Kehoe [2001] 2 Qd R 350; [2000] QCA 222 at [3], [4] (paragraph break omitted).
[5] See footnote 2.
2 Responses
The question then arises what is the purpose of ARITA if the accounting bodies are to be regulating the conduct of the second tier regulators. In essence all those students that completed the Advanced Certificate in Insolvency need to question why did they even study for that course.
I propose that the Government at least give these students that have successfully completed the Advanced Certificate in Insolvency be first of the rank for accreditation for the second tiers Liquidators.
I think you are responding to my previous post, about the proposed small business restructuring practitioners?