Insolvency Practitioner Registration and Disciplinary Committees

I am pleased to have been appointed by the government as a part‑time member to the Ministerial pool for the Corporate Insolvency Practitioner Registration and Disciplinary Committees, for a three‑year period beginning on 2 March 2024. Appointments – members, Insolvency Practitioner Registration and Disciplinary Committees | Treasury Ministers.

These committees sit as required to determine applications for registration as a liquidator, and disciplinary matters concerning liquidator conduct.  Comparable committees sit in relation to bankruptcy trustees.

This committee process had its early origins with the Bankruptcy Bill 1908 becoming the Bankruptcy Act 1924 under which persons who wished to become registered as a trustee had to apply to the then new Federal Court of Bankruptcy, with evidence of their qualifications and experience, and integrity and fitness to act as a trustee, supported by a report based upon an interview and assessment by the Official Receiver. [1] The Judge would then assess them as required in open court. 

As explained in one of the early cases,[2] the application had to be advertised “so that the public may know of them” indicating that “matters which affect the public interest” were involved. [3]

In that case – “Mr J” – while he had over 50 affidavits sworn in support of his application, objections were also made, the undisclosed detail of which caused him to withdraw his application. The Court agreed, saying that it “ought to require a very high standard of character and conduct on the part of any person applying to be registered” as a trustee.[4]

A similar arrangement may well have applied to liquidators but for the withdrawal of the parallel federal Companies Bill 1908 in light of difficulties with the extent of the corporations power under the Constitution.  The process of registration and regulation of liquidators was then left to the idiosyncratic laws of the states for several decades. 

In bankruptcy, the report to the court was then changed in the 1980s with the Official Receiver assisted at the interview by a government officer and a representative of the then professional body, the Insolvency Practitioners’ Association of Australia, now ARITA.

In 1996 the need for court approval of the registration of trustees was dispensed with altogether with that responsibility passing to the Inspector-General in Bankruptcy.  The process of interview of applicants was retained. Discipline matters were heard by similarly constituted committees. Rights of review to the Administrative Appeals Tribunal were provided.[5]

The Court was not seen as necessary, there being “nothing of particular importance about bankruptcy trustees which makes it appropriate in point of principle or practice that the Court should be the registration authority. Tax agents and company liquidators and auditors, for example are subject to administrative registration and disciplinary procedures, and trustees under the Act are a similar type of profession”.[6] Necessarily the Court remained for challenges to the registration process and for matters of serious misconduct.

Meanwhile, corporate insolvency had ignored these successful bankruptcy processes until the 2010 Senate Committee inquiry found much of corporate insolvency registration and regulation processes lacking in comparison to personal insolvency. The same interview processes were then introduced in 2017 for the registration and regulation of liquidators.  The relevant Minister was given the right to appoint suitably qualified persons to these committees, alongside the ASIC/AFSA representative, and a liquidator/trustee chosen by ARITA.   Other enhancements were made for both personal and corporate. The committees operate under rules of process including requirements to provide natural justice.  See IPSC Div 20, 40, 50.

I am also appointed at times as the Attorney-General’s nominee to the parallel committees that operate in personal insolvency: see IPSB Div 20, 40, 50.

See generally Australian Insolvency Practitioners as Unique Professionals: An Examination of the History of Liquidators and Trustees, C Symes and M Murray (2023) 31 Insolv LJ 97.

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[1] Practice Note 7 December 1929 (1929) 2 ABC 19.

[2] Re J (1928) 1 ABC 15.

[3] Re J (1928) 1 ABC 15, 17.

[4] Re J (1928) 1 ABC 15, 16.

[5] Explanatory Memorandum, Bankruptcy Legislation Amendment Bill 1996 (Cth), 138–140.

[6] Explanatory Memorandum, Bankruptcy Legislation Amendment Bill 1996 (Cth), [62].