Michael.1
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. 

Liquidator’s registration suspended not cancelled, by agreement

In A liquidator disciplinary decision – some regulatory insights | Murrays Legal Commentary , I reported an AAT decision refusing a liquidator’s application for a stay of a 13 December 2019 discipline committee decision to cancel his registration but granting a stay of the publication of the committee’s reasons for decision.

That was nearly a year ago. 

Suspension not cancellation

Now, on 7 January 2021, the AAT has decided by consent that the liquidator’s (Mr Kukulovski) registration only be suspended for a period of three years from 15 January 2020; and also by consent, that the December 2019 decision of the disciplinary committee to cancel his registration be set aside.

Joint appointments only

Along with the suspension, the AAT decision also imposed a condition on Mr Kukulovski’s registration that, during the further 3 year period from 15 January 2023 to 14 January 2026, he must not take on any liquidator role unless on a ‘joint’ basis with another registered liquidator.

ASIC’s concerns

The AAT also ordered that a summary of ASIC’s concerns be published.

These related to 3 matters going back to the period 2009-2013 where moneys of those administrations were used to pay unrelated expenses in other matters, and where the moneys were not deposited into their respective liquidation bank accounts.  Mr Kukulovski also failed to report the receipt of these monies to creditors and he lodged misleading forms about those moneys.  A subsequent review of his other files up to 2020 also found problems, including non-lodgement of forms and issues related to notices and minutes of meetings of creditors and timing of lodgements.

Download the AAT decision and a summary of ASIC’s concerns

The AAT’s authority

Section 42C of the AAT Act allows the AAT to make consent orders if the parties agree but it retains a residual discretion to assess the lawfulness and propriety of the decision: see Williamson and National Disability Insurance Agency [2019] AATA 2944.

In this case, the AAT would therefore have decided it could and should make the orders, including the requirement for joint appointments extending well into the future.  There are financial and remuneration issues concerning joint appointments about which the AAT would have been advised.  It is not shown and must be assumed that Mr Kukulovski was represented before the AAT when the orders were agreed.

The circumstances may appear odd in that there was an independent discipline committee which included an officer of ASIC, the decision of which was challenged by the liquidator by way of de novo review to the AAT, after which ASIC agreed with the liquidator to have the AAT make a different decision.   The law supports such a process and the same would apply in bankruptcy.

 

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