druthers

Lehrmann v Network Ten Pty Limited (Trial Judgment) [2024] FCA 369 (15 April 2024) (austlii.edu.au)

ASIC’s review of offence reporting – RG 16

My 2019 article – Offence reporting by insolvency practitioners (2019) 20(4&5) INSLB 88 was written at a time of “ongoing tension between ASIC and the corporate insolvency profession about offence referrals by liquidators”. Offence reporting by insolvency practitioners — (2019) 20(4&5) INSLB 88 (1) The profession refers many breaches of the law to ASIC – […]

“Thousands and thousands of pounds have been lost …”

The regulation of insolvency practitioners (IPs) might come in for scrutiny in light of two current matters involving apparent missing funds – a liquidator and $2.5 million taken over six years, that only now is coming to a regulatory conclusion; and a bankruptcy trustee where close to $2m is said to be missing, with freezing […]

Bankruptcy and mental ill health

Justice John Logan of the Federal Court has raised some interesting issues in an otherwise straightforward bankruptcy judgment concerning the court’s ability to organise mental health assistance for a bankrupt – a single mother “in a spiralling situation of debt” and “in quite some despair”. LL was made bankrupt by the Federal Circuit Court on […]

Small business sole trader insolvencies

A recent newspaper report on the trend of insolvencies in small business was interesting for the reason that it acknowledged that many or most businesses are run by individual people and not by inanimate companies, and that even if there is a company involved, corporate veil protection of the owners has its limits: Insolvencies up […]

AFCA financial compensation scheme of last resort

The federal government has announced [1] that a compensation scheme for victims of financial services misconduct will start from 2 April 2024, including a Compensation Scheme of Last Resort (CSLR) in the event that the financial service provider is unable to pay a compensation determination against it made by the Australian Financial Complaints Authority (AFCA). […]

Insolvency practitioners as employees

Updated on 5 March 2024 to refer to a 1996 Explanatory Memorandum in bankruptcy which says that, despite the case law, a person’s status as an employee, rather than a partner, should not preclude a person from obtaining registration as a trustee.  ====== A liquidator disciplinary committee has decided that conditions should be imposed on a […]

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 […]

Report on the Franchising Code of Conduct – and insolvent franchisors

Further to my comments of September 2023 below as to a review of the franchising code of conduct, that review has been completed and on 8 February 2024 a report was released. Review of the Franchising Code of Conduct Final Report | Treasury.gov.au, Dr Michael Schaper (“Report”). As I indicated earlier, a review of franchising […]

Offence referrals by liquidators

Offence referrals to ASIC by liquidators continue to be contentious and perhaps distracted by the issue of claimed automated decision-making by ASIC itself, although the main issue of law reform remains in focus. Parliamentary Joint Committee on Corporations and Financial Services At a 3 November 2023 PJC inquiry,[1] Senator Deborah O’Neill, as chair, referred to […]

Cancellation of a bankruptcy trustee’s registration and freezing orders obtained

The registration of Australian bankruptcy trustee Mr Paul Leroy was cancelled by the Inspector-General in Bankruptcy (IGB) on 2 February 2024, effective from 5 February. Federal Court proceedings have been commenced and freezing orders obtained on 2 February appointing Micheletto and Carrafa as joint and several trustees of the bankrupt estate of Katherine Jackson, until […]

Punishment for bankruptcy – wearing a yellow and brown bonnet in the public square

A recent book, Re-examining insolvency law and theory – perspectives for the 21st century, comprises chapters on a wide range of theoretical perspectives on insolvency law – from those of morality, liberalism, tax law, human rights, competing goals and creditor rights, property rights, feminism, and the psychology of law reform.  In one chapter – A […]

Personal insolvency figures – December 2023

Numbers of personal insolvencies in Australia continue to fall with the December 2023 figure down to 805 compared with 853 in November 2023.  However, December does generally tend to have lower figures.  These insolvencies were in the broadly usual proportions of 63% (509) bankruptcies, 36% (289) debt agreements, and 1% (7) personal insolvency agreements. A […]

New corporate definitions of director, officer and asset

Following the ALRC’s work on Ch 7 of the Corporations Act, attention has already been given to legislative changes tidying up the Act across a range of sections.  There are consequential changes made in other laws, but not those that fall outside the Treasury portfolio. See the Treasury Laws Amendment (2023 Law Improvement Package No. […]

Corporations Act redrafting – ch 5?

Some years ago, I suggested to a Treasury officer that Ch 5 of the Corporations Act be redrafted and simplified.  The curt response was, “you think Ch 5’s difficult – check out Ch 7”. That was no doubt correct. Chapter 7 is the subject of the ALRC’s Confronting Complexity: Reforming Corporations and Financial Services Legislation – […]

The new Administrative Review Tribunal and law for the relief of insolvent debtors

On 7 December 2023, the government introduced legislation that would abolish the Administrative Appeals Tribunal (AAT) and establish what it terms “a new, fit-for purpose administrative review body, to be named the Administrative Review Tribunal (the ART)”.  Parliamentary committees are inquiring into the relevant Bills with the safeguards against political appointees to the ART coming […]

A winding up vs an administration – s 440A(2)

Wildes Meadow

The situation where a creditor applies for a winding up of a company under the Corporations Act, and while that is pending, the directors appoint an administrator under Part 5.3A, has led to some odd law, under s 440A(2) of the Act.  Broadly, the one petitioning creditor’s intent to wind up the company will often […]

Insolvency statistics 2023

Each of our insolvency regulators, ASIC for corporate, AFSA for personal, has issued its statistics for 2022-2023 right on the eve of Christmas,[1] each presenting its [2] separate perspectives, with few connections offered, for example in relation to small business insolvencies. [originally issued 24.12.23; updated 30.12.23]. Personal insolvency Some brief* points are: There were just […]

Law reform – small business redundancy exemption removed

Among the many changes introduced by the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 are those in Schedule 1 Part 2 that address the “anomalous consequences of the small business redundancy exemption in insolvency contexts by providing an exception to its operation when a larger business downsizes to become a smaller business employer due […]

The AFCA financial complaints scheme and bankruptcy – no appeal

Further to my case comment below, AFSA has, belatedly, advised that it is not appealing this decision of Justice Rares of 11 October 2023. Nevertheless, it is “carefully considering the implications of the judgment [for] the Official Trustee’s management of estates”, that a compensation claim taken through the Australian Financial Complaints Authority (AFCA) by a […]

NOCLAR – accountants’ reporting of offences

Some while ago, I took an interest in the professional obligation that accountants decided to impose on themselves to respond to and as necessary refer observed legal misconduct – NOCLAR “non-compliance with laws and regulations” – to the police or other authorities.  This obligation commenced through changes made to the accountant’s ethics code, APES 110. […]

Bankruptcy statistics – more of the same

With the annual personal insolvency statistics for 2022-2023 not yet released, AFSA has released figures for October 2023, showing 951 new personal insolvencies, falling marginally from 978 in September. Of these, 543 were bankruptcies, 392 were debt agreements, 15 were personal insolvency agreements, and 1 was an insolvent deceased estate. Where AFSA could identify the […]

NZ insolvency practitioner sanctioned

A sanction of a New Zealand liquidator for the poor handling of his matters provides an illustration of New Zealand’s relatively new licensing and co-regulation regime for insolvency practitioners, which contrasts with direct government regulation in Australia.  The NZ regime is one of co-regulation, through NZICA, CAANZ, RITANZ and the Registrar of Companies, under the […]

Language please….!

“Finally on the subject of language, the Commission staff are not to be blamed for the archaic forms of syntax “a number of people was” and use of the subjunctive “if he were” throughout the report. That is my doing; my staff did their best to correct what they were convinced were errors, only to […]