ASIC is seeking feedback on a proposal to simply release a new information sheet on its discretionary power to appoint a “reviewing liquidator” to a company in external administration. Its Reviewing Liquidator Panel comprises liquidators who can be appointed. In 2024-2025, ASIC funded the appointment one reviewing liquidator. ASIC consults on guidance to appoint a reviewing liquidator | ASIC
The draft Information Sheet 000 Corporate insolvency: ASIC’s power to appoint reviewing liquidators (draft INFO 000) explains how to apply, what factors ASIC will consider when deciding on the application, and the next steps if ASIC appoints a reviewing liquidator.
The draft also outlines circumstances when ASIC is less likely to appoint a reviewing liquidator, matters that can be reviewed and expectations of external administrators.
The guidance is only intended to provide greater clarity to liquidators and potential applicants about the process for applying to ASIC for appointment of a reviewing liquidator, and the factors that ASIC takes into account in assessing applications.
ASIC’s power to appoint registered liquidators to act as a reviewing liquidator came into effect in 2017, under the ILRA 2016 reforms. From 1 July 2024, ASIC appointed a new Reviewing Liquidator Panel comprising liquidators who can be appointed.
An earlier 2024 review
In October 2024, I reported on Reviewing liquidators – under review? – Murrays Legal. It is a long review. Some only of the points made were:
- The reviewing liquidator role is consistent with the ILRA 2016’s emphasis on better informing and involving creditors and improving the regulatory structure. The reviewing liquidator is in effect a delegation to the private sector of ASIC’s regulatory tasks.
- Equivalent roles were not needed in personal insolvency given the greater public sector involvement of the Official Receiver and Inspector-General in Bankruptcy.
- Also, the Inspector-General can review a trustee’s remuneration, a role that is expensively reserved to the courts or a reviewing liquidator in corporate insolvency. As to the remuneration role in corporate insolvency, see Nobody expects the reviewing liquidator! Current approaches to contested remuneration, (2019) 20(2) INSLB 25, by Sam Kingston.
- I report on the low numbers appointed over the years since. ASIC’s 2024-2025 annual report showed ASIC funded the appointment one reviewing liquidator in that period.
Case law
In only one court decision is the role of the revieing liquidator examined, and in comparison with the role of a special purpose liquidator: Lewis v Battery Mineral Resources Ltd (in liq) [2021] FCA 963 (17 August 2021).
The court noted that there appeared to be no reported case in which a reviewing liquidator had been sought to be appointed to review the general conduct of external administrators; and there appeared to only be one decided case in which a party had made an application for the appointment to investigate the remuneration of the incumbent liquidator.
In the absence of case law, relevant factors to be considered were nevertheless explained by the Judge.
In that case, the appointment was sought to investigate an urgent sale process and a decision to admit a certain creditor to vote. But there was no suggestion that the administrators had breached their duties nor that they had acted in bad faith. These were commercial decisions made with the assistance of external advisors.
“It is not the Court’s role to supervise the commercial decision-making of external administrators acting in good faith…”.
The appointment of a reviewing liquidator was refused.
ASIC
In light of the limited use of reviewing liquidators, some might question ASIC’s actions. Nevertheless, ASIC says it hopes to issue revised guidance by 30 June 2026.
